Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the
“Company”) today reported financial and operational results for the
three-months ended March 31, 2019 and provided an update on
its 2019 activities. Key information includes the following:
- Net production averaged 1,263.6 MMcfe per day during the first
quarter of 2019.
- Net income of $62.2 million, or $0.38 per diluted share, for
the first quarter of 2019.
- Adjusted net income (as defined and reconciled below) of $53.2
million, or $0.33 per diluted share, for the first quarter of
2019.
- Adjusted EBITDA (as defined and reconciled below) of $206.8
million for the first quarter of 2019.
- Gulfport drilled six gross (5.6 net) operated wells in the
Utica Shale and four gross (3.1 net) operated wells in the SCOOP
and had three gross wells in various stages of drilling at the end
of the first quarter of 2019.
- Gulfport completed 25 gross and net operated wells in the Utica
Shale and seven gross (6.7 net) operated wells in the SCOOP during
the first quarter of 2019 and had eight gross wells in various
stages of completion at the end of the first quarter of 2019.
- Gulfport turned-to-sales six gross and net operated wells in
the Utica Shale and three gross (2.8 net) operated wells in the
SCOOP during the first quarter of 2019, which includes six gross
and net wells turned-to-sales after March 25, 2019.
- Repurchased 3.8 million shares of the Company's common stock
through May 1, 2019.
- Reaffirmed 2019 total capital expenditures to be in the range
of $565 to $600 million and funded entirely within cash flow.
- Reiterated 2019 full year net production to average 1,360 MMcfe
to 1,400 MMcfe per day.
- Forecasted 2019 full year free cash flow in excess of $100
million.
- Maintained large 2019 hedge position of approximately 1,254
BBtu per day of natural gas fixed price swaps at an average fixed
price of $2.83 per MMBtu.
- Increased oil hedge position to approximately 4,104 barrels per
day of oil fixed price swaps at an average fixed price of $60.72
per barrel in 2019 and 6,000 barrels per day at an average fixed
price of $59.82 per barrel in 2020.
Chief Executive Officer and President, David M.
Wood, commented, "Gulfport is off to a strong start in 2019,
beginning the year active in our core asset areas and remaining on
track to deliver on our previously announced 2019 capital budget,
operational outlook and commitment to free cash flow generation.
Capitalizing on our drilled uncompleted well inventory, we began
the year active on the ground and as previously mentioned, we
forecast this robust level of activity will lead to a heavy turn in
line schedule during the second quarter of 2019. We plan to
progressively turn to sales in excess of 30 gross wells during the
quarter, leading to solid production growth and positioning us well
as we continue to execute on our 2019 program."
Mr. Wood continued, "In addition, we continue to
simplify the portfolio through non-core asset monetizations and
recently entered into an agreement to monetize a small footprint of
Marcellus formation rights overlying a portion of our acreage in
the Utica Shale of Eastern Ohio. Consistent with our previous
comments on our ongoing stock repurchase program, the anticipated
proceeds of this transaction allowed Gulfport to repurchase
approximately $30 million of Gulfport common stock during the first
quarter of 2019, reducing our shares outstanding by approximately
2%. In addition, we expect to launch a process to divest certain
water infrastructure assets Gulfport holds across our SCOOP
position in the coming weeks, including water handling and water
recycling facilities, and we plan to provide further details on the
monetization process when appropriate. All in all, our 2019 program
is off to a strong start and we remain focused on disciplined
capital allocation, cash flow generation and enhancing shareholder
returns going forward."
Stock Repurchase ProgramAs of
May 1, 2019, the Company has repurchased 3.8 million shares
totaling approximately $30 million during 2019.
In January 2019, Gulfport's board of directors
authorized the Company to acquire up to $400 million of its
outstanding common stock within a 24 month period and approximately
$370 million remains available under the current
authorization. Purchases under the repurchase program may be
made from time to time in open market or privately negotiated
transactions, and will be subject to market conditions, applicable
legal requirements, contractual obligations and other factors. The
repurchase program does not require the Company to acquire any
specific number of shares. The Company intends to purchase shares
under the repurchase program opportunistically with available funds
while maintaining sufficient liquidity to fund its 2019 capital
development program. This repurchase program may be suspended from
time to time, accelerated, modified, extended or discontinued by
the board of directors at any time.
First Quarter of 2019 Financial
ResultsFor the first quarter of 2019, Gulfport reported
net income of $62.2 million, or $0.38 per diluted share, on
revenues of $320.6 million. For the first quarter of 2019,
EBITDA (as defined and reconciled below for each period presented)
was $215.9 million and cash flow from operating activities before
changes in operating assets and liabilities (as defined and
reconciled below for each period presented) was $177.3
million. Gulfport’s GAAP net income for the first quarter of
2019 includes the following items:
- Aggregate non-cash derivative gain of $4.8 million.
- Aggregate gain of $4.3 million in connection with Gulfport's
equity interests in certain equity investments.
Excluding the effect of these items, Gulfport’s
financial results for the first quarter of 2019 would have been as
follows:
- Adjusted oil and gas revenues of $315.8 million.
- Adjusted net income of $53.2 million, or $0.33 per diluted
share.
- Adjusted EBITDA of $206.8 million.
Production and Realized
PricesGulfport’s net daily production for the first
quarter of 2019 averaged approximately 1,263.6 MMcfe per day. For
the first quarter of 2019, Gulfport’s net daily production mix was
comprised of approximately 90% natural gas, 7% natural gas liquids
("NGL") and 3% oil.
Gulfport’s realized prices for the first quarter
of 2019 were $2.54 per Mcf of natural gas, $52.35 per barrel of oil
and $0.52 per gallon of NGL, resulting in a total equivalent price
of $2.82 per Mcfe. Gulfport's realized prices for the first quarter
of 2019 include an aggregate non-cash derivative gain of $4.8
million. Before the impact of derivatives, realized prices for the
first quarter of 2019, including transportation costs, were $2.70
per Mcf of natural gas, $53.10 per barrel of oil and $0.58 per
gallon of NGL, for a total equivalent price of $3.00 per Mcfe.
|
GULFPORT ENERGY CORPORATION |
PRODUCTION SCHEDULE |
(Unaudited) |
|
Three months ended |
|
March 31, |
Production
Volumes: |
2019 |
|
2018 |
|
|
|
|
Natural gas (MMcf) |
102,079 |
|
102,042 |
Oil (MBbls) |
612 |
|
757 |
NGL (MGal) |
55,830 |
|
65,756 |
Gas equivalent
(MMcfe) |
113,726 |
|
115,977 |
Gas equivalent (Mcfe
per day) |
1,263,617 |
|
1,288,631 |
|
|
|
|
Average
Realized Prices: |
|
|
|
(before the
impact of derivatives): |
|
|
|
|
|
|
|
Natural gas (per
Mcf) |
$ |
2.70 |
|
$ |
2.44 |
Oil (per Bbl) |
$ |
53.10 |
|
$ |
60.36 |
NGL (per Gal) |
$ |
0.58 |
|
$ |
0.71 |
Gas equivalent (per
Mcfe) |
$ |
3.00 |
|
$ |
2.95 |
|
|
|
|
Average
Realized Prices: |
|
|
|
(including cash-settlement of derivatives and excluding
non-cash derivative gain or loss): |
|
|
|
|
Natural gas (per
Mcf) |
$ |
2.45 |
|
$ |
2.60 |
Oil (per Bbl) |
$ |
53.13 |
|
$ |
54.72 |
NGL (per Gal) |
$ |
0.59 |
|
$ |
0.67 |
Gas equivalent (per
Mcfe) |
$ |
2.78 |
|
$ |
3.02 |
|
|
|
|
Average
Realized Prices: |
|
|
|
|
|
|
|
Natural gas (per
Mcf) |
$ |
2.54 |
|
$ |
2.35 |
Oil (per Bbl) |
$ |
52.35 |
|
$ |
48.27 |
NGL (per Gal) |
$ |
0.52 |
|
$ |
0.75 |
Gas equivalent (per
Mcfe) |
$ |
2.82 |
|
$ |
2.81 |
|
|
|
|
|
|
The table below summarizes Gulfport’s first quarter of 2019
production by asset area:
|
GULFPORT ENERGY CORPORATION |
PRODUCTION BY AREA |
(Unaudited) |
|
Three Months Ended |
|
March 31, |
|
2019 |
2018 |
Utica Shale |
|
|
Natural gas
(MMcf) |
85,700 |
87,196 |
Oil
(MBbls) |
66 |
78 |
NGL
(MGal) |
23,336 |
35,738 |
Gas
equivalent (MMcfe) |
89,428 |
92,772 |
|
|
|
SCOOP |
|
|
Natural gas
(MMcf) |
16,366 |
14,832 |
Oil
(MBbls) |
398 |
497 |
NGL
(MGal) |
32,480 |
30,008 |
Gas
equivalent (MMcfe) |
23,394 |
22,103 |
|
|
|
Southern Louisiana |
|
|
Natural gas
(MMcf) |
— |
7 |
Oil
(MBbls) |
135 |
169 |
NGL
(MGal) |
— |
— |
Gas
equivalent (MMcfe) |
812 |
1,021 |
|
|
|
Other |
|
|
Natural gas
(MMcf) |
13 |
7 |
Oil
(MBbls) |
13 |
12 |
NGL
(MGal) |
15 |
9 |
Gas
equivalent (MMcfe) |
92 |
82 |
|
|
|
First Quarter 2019 Capital
ExpendituresDuring the first quarter of 2019, Gulfport’s
drilling and completion ("D&C") capital expenditures totaled
$254.9 million and land capital expenditures totaled $20.1
million. According to plan, the 2019 capital program is
weighted to first half of 2019 and Gulfport reaffirmed its
previously provided expectation that 2019 total capital
expenditures will be approximately $565 million to $600
million.
2019 Financial Position and
LiquidityAs of March 31, 2019, Gulfport had cash on
hand of approximately $18.0 million. As of March 31, 2019,
Gulfport’s $1.4 billion revolving credit facility, under which
Gulfport has an elected commitment of $1.0 billion, had
outstanding borrowings of $45.0 million and outstanding letters of
credit totaling $271.1 million.
2019 Capital Budget and Production
GuidanceGulfport reaffirms its expectation that its 2019
total capital expenditures will be in the range of $565 million to
$600 million, which will be funded entirely within cash flow at
current strip pricing. With this level of capital spend, Gulfport
continues to forecast its 2019 average daily net production will be
in the range of 1,360 MMcfe to 1,400 MMcfe per day.
Based on actual results during the first quarter of 2019 and
utilizing current strip pricing at the various regional pricing
points at which the Company sells its natural gas, Gulfport
reiterates its natural gas differential guidance and forecasts that
its realized natural gas price, before the effect of hedges and
inclusive of the Company’s firm transportation expense, will
average in the range of $0.49 to $0.66 per Mcf below NYMEX
settlement prices in 2018. In addition, Gulfport reiterates its oil
differential guidance and forecasts that its 2019 realized oil
price will be in the range of $3.00 to $3.50 per barrel below WTI.
With respect to its expected realized NGL price, based on actual
results to date and utilizing current strip pricing, Gulfport now
forecasts its 2019 realized NGL price, before the effect of hedges
and including transportation expense, will be approximately 40% to
45% of WTI.
The table below summarizes the Company’s updated
full year 2019 guidance:
|
GULFPORT ENERGY CORPORATION |
COMPANY GUIDANCE |
|
Year Ending |
|
2019 |
|
Low |
|
High |
Forecasted
Production |
|
|
|
Average Daily Gas
Equivalent (MMcfepd) |
1,360 |
|
1,400 |
%
Gas |
~90% |
% Natural
Gas Liquids |
~7% |
%
Oil |
~3% |
|
|
|
|
Forecasted
Realizations (before the effects of hedges) |
|
|
|
Natural
Gas (Differential to NYMEX Settled Price) - $/Mcf |
$(0.49) |
|
$(0.66) |
NGL (% of
WTI) |
40% |
|
45% |
Oil
(Differential to NYMEX WTI) $/Bbl |
$(3.00) |
|
$(3.50) |
|
|
|
|
Projected
Operating Costs |
|
|
|
Lease
Operating Expense - $/Mcfe |
$0.15 |
|
$0.17 |
Production Taxes - $/Mcfe |
$0.06 |
|
$0.07 |
Midstream
Gathering and Processing - $/Mcfe |
$0.53 |
|
$0.58 |
General
and Administrative - $/Mcfe |
$0.09 |
|
$0.11 |
|
|
|
|
|
Total |
Budgeted
D&C Expenditures - In Millions: |
$525 |
|
$550 |
Budgeted Land
Expenditures - In Millions: |
$40 |
|
$50 |
Total Capital
Expenditures - In Millions: |
$565 |
|
$600 |
|
|
|
|
Net Wells
Drilled |
|
|
|
Utica -
Operated |
10 |
|
11 |
Utica -
Non-Operated |
2 |
|
3 |
Total |
12 |
|
14 |
|
|
|
|
SCOOP -
Operated |
7 |
|
8 |
SCOOP -
Non-Operated |
1 |
|
2 |
Total |
8 |
|
10 |
|
|
|
|
Net Wells
Turned-to-Sales |
|
|
|
Utica -
Operated |
40 |
|
45 |
Utica -
Non-Operated |
2 |
|
3 |
Total |
42 |
|
48 |
|
|
|
|
SCOOP -
Operated |
14 |
|
15 |
SCOOP -
Non-Operated |
1 |
|
2 |
Total |
15 |
|
17 |
|
|
|
|
Operational UpdateThe table
below summarizes Gulfport's activity for the three-month period
ended March 31, 2019 and the number of net wells expected to
be drilled and turned-to-sales for the remainder of 2019:
|
GULFPORT ENERGY CORPORATION |
ACTIVITY SUMMARY |
(Unaudited) |
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
March 31, |
Remaining Wells |
Guidance(1) |
|
|
2019 |
2019 |
2019 |
Net Wells Drilled |
|
|
|
|
Utica -
Operated |
|
5.6 |
4.9 |
10.5 |
Utica - Non-Operated |
|
0.3 |
2.2 |
2.5 |
Total |
|
5.9 |
7.1 |
13.0 |
|
|
|
|
|
SCOOP -
Operated |
|
3.1 |
4.4 |
7.5 |
SCOOP - Non-Operated |
|
0.3 |
1.2 |
1.5 |
Total |
|
3.4 |
5.6 |
9.0 |
|
|
|
|
|
Net Wells Turned-to-Sales |
|
|
|
|
Utica -
Operated |
|
6.0 |
36.5 |
42.5 |
Utica - Non-Operated |
|
— |
2.5 |
2.5 |
Total |
|
6.0 |
39.0 |
45.0 |
|
|
|
|
|
SCOOP -
Operated |
|
2.8 |
11.7 |
14.5 |
SCOOP - Non-Operated |
|
— |
1.5 |
1.5 |
Total |
|
2.8 |
13.2 |
16.0 |
|
|
|
|
|
(1) Utilizes mid-point of publicly provided 2019
guidance |
|
Utica ShaleIn the Utica Shale,
during the first quarter of 2019, Gulfport spud six gross (5.6 net)
operated wells. The wells drilled during the first quarter of 2019
had an average lateral length of approximately 10,600 feet.
Normalizing to an 8,000 foot lateral length, Gulfport's average
drilling days during the first quarter of 2019 from spud to rig
release totaled approximately 17.7 days, a decrease of 9% over full
year 2018. In addition, Gulfport turned-to-sales six gross and net
operated wells with an average stimulated lateral length of
approximately 8,200 feet during the first quarter of 2019, which
includes four gross and net wells turned-to-sales after March 25,
2019.
During the first quarter of 2019, net production
from Gulfport’s Utica acreage averaged approximately 993.6 MMcfe
per day.
At present, Gulfport has one operated horizontal
drilling rig running in the play.
SCOOPIn the SCOOP, during the
first quarter of 2019, Gulfport spud four gross (3.1 net) operated
wells, which includes three gross wells targeting the Woodford
formation and one gross well targeting the Sycamore formation. The
wells drilled during this period had an average lateral length of
approximately 8,000 feet. Normalizing to a 7,500 foot lateral
length, Gulfport's average drilling days from spud to rig release
totaled approximately 63.2 days, in line with the Company's full
year 2018 results. In addition, Gulfport turned-to-sales
three gross (2.8 net) operated wells with an average stimulated
lateral length of approximately 7,000 feet during the first quarter
of 2019, which includes two gross and net wells turned-to-sales
after March 25, 2019.
During the first quarter of 2019, net production
from Gulfport's SCOOP acreage averaged approximately 259.9 MMcfe
per day.
At present, Gulfport has two operated horizontal drilling rigs
active in the play.
DerivativesGulfport has hedged
a portion of its expected production to lock in prices and returns
that provide certainty of cash flow to execute on its capital
plans. The table below sets forth the Company's hedging positions
as of May 1, 2019.
|
GULFPORT ENERGY CORPORATION |
COMMODITY DERIVATIVES - HEDGE
POSITION |
(Unaudited) |
|
2Q2019 |
|
3Q2019 |
|
4Q2019 |
Natural
gas: |
|
|
|
|
|
Swap contracts
(NYMEX) |
|
|
|
|
|
Volume (BBtupd) |
1,180 |
|
|
1,380 |
|
|
1,380 |
|
Price ($ per MMBtu) |
$ |
2.82 |
|
|
$ |
2.81 |
|
|
$ |
2.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Swaption
contracts (NYMEX) |
|
|
|
|
|
|
|
|
|
|
|
Volume (BBtupd) |
30 |
|
|
30 |
|
|
30 |
|
Price ($ per
MMBtu) |
$ |
3.10 |
|
|
$ |
3.10 |
|
|
$ |
3.10 |
|
|
|
|
|
|
|
Basis Swap
contracts (Transco Zone 4) |
|
|
|
|
|
Volume (BBtupd) |
60 |
|
|
60 |
|
|
60 |
|
Price ($ per
MMBtu) |
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
Oil: |
|
|
|
|
|
Swap contracts
(WTI) |
|
|
|
|
|
Volume (Bblpd) |
5,000 |
|
|
5,500 |
|
|
5,500 |
|
Price ($ per Bbl) |
$ |
60.64 |
|
|
$ |
60.81 |
|
|
$ |
60.81 |
|
|
|
|
|
|
|
NGL: |
|
|
|
|
|
C2 Ethane Swap
contracts |
|
|
|
|
|
Volume (Bblpd) |
1,000 |
|
|
1,000 |
|
|
1,000 |
|
Price ($ per Gal) |
$ |
0.44 |
|
|
$ |
0.44 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
C3 Propane Swap
contracts |
|
|
|
|
|
Volume (Bblpd) |
4,000 |
|
|
4,000 |
|
|
4,000 |
|
Price ($ per Gal) |
$ |
0.69 |
|
|
$ |
0.69 |
|
|
$ |
0.69 |
|
|
|
|
|
|
|
C5 Pentane Swap
contracts |
|
|
|
|
|
Volume (Bblpd) |
835 |
|
|
1,000 |
|
|
1,000 |
|
Price ($ per Gal) |
$ |
1.28 |
|
|
$ |
1.28 |
|
|
1.28 |
|
|
|
|
|
|
|
|
2019 |
|
2020 |
|
|
Natural
gas: |
|
|
|
|
|
Swap contracts
(NYMEX) |
|
|
|
|
|
Volume (BBtupd) |
1,254 |
|
|
204 |
|
|
|
Price ($ per
MMBtu) |
$ |
2.83 |
|
|
$ |
2.77 |
|
|
|
|
|
|
|
|
|
Swaption
contracts (NYMEX) |
|
|
|
|
|
Volume (BBtupd) |
35 |
|
|
— |
|
|
|
Price ($ per
MMBtu) |
$ |
3.11 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Basis Swap
contracts (OGT) |
|
|
|
|
|
Volume (BBtupd) |
— |
|
|
10 |
|
|
|
Differential ($ per
MMBtu) |
$ |
— |
|
|
$ |
(0.54 |
) |
|
|
|
|
|
|
|
|
Basis Swap
contracts (Transco Zone 4) |
|
|
|
|
|
Volume (BBtupd) |
60 |
|
|
60 |
|
|
|
Differential ($ per
MMBtu) |
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
Oil: |
|
|
|
|
|
Swap contracts
(WTI) |
|
|
|
|
|
Volume (Bblpd) |
4,104 |
|
|
6,000 |
|
|
|
Price ($ per Bbl) |
$ |
60.72 |
|
|
$ |
59.82 |
|
|
|
|
|
|
|
|
|
NGL: |
|
|
|
|
|
C2 Ethane Swap
contracts |
|
|
|
|
|
Volume (Bblpd) |
1,000 |
|
|
— |
|
|
|
Price ($ per Gal) |
$ |
0.44 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
C3 Propane Swap
contracts |
|
|
|
|
|
Volume (Bblpd) |
3,815 |
|
|
— |
|
|
|
Price ($ per Gal) |
$ |
0.69 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
C5 Pentane Swap
contracts |
|
|
|
|
|
Volume (Bblpd) |
836 |
|
|
— |
|
|
|
Price ($ per Gal) |
$ |
1.28 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
PresentationAn updated
presentation has been posted to the Company’s website. The
presentation can be found at www.gulfportenergy.com under the
“Company Information” section on the “Investor Relations”
page. Information on the Company’s website does not
constitute a portion of this press release.
Conference CallGulfport will
hold a conference call on Friday, May 3, 2019 at 8:00 a.m. CDT
to discuss its first quarter of 2019 financial and operational
results and to provide an update on the Company’s recent
activities.
Interested parties may listen to the call via
Gulfport’s website at www.gulfportenergy.com or by calling
toll-free at 866-373-3408 or 412-902-1039 for international
callers. A replay of the call will be available for two weeks
at 877-660-6853 or 201-612-7415 for international callers.
The replay passcode is 13686821. The webcast will also be
available for two weeks on the Company’s website and can be
accessed on the Company’s “Investor Relations” page.
About GulfportGulfport is an
independent natural gas and oil company focused on the exploration
and development of natural gas and oil properties in North America
and is one of the largest producers of natural gas in the
contiguous United States. Headquartered in Oklahoma City, Gulfport
holds significant acreage positions in the Utica Shale of Eastern
Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma.
In addition, Gulfport holds an acreage position along the Louisiana
Gulf Coast, has an approximately 22% equity interest in Mammoth
Energy Services, Inc. (NASDAQ:TUSK) and has a position in the
Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil
Sands ULC. For more information, please
visit www.gulfportenergy.com.
Forward Looking StatementsThis
press release includes “forward-looking statements” for purposes of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act. All statements, other
than statements of historical facts, included in this press release
that address activities, events or developments that Gulfport
expects or anticipates will or may occur in the future, future
capital expenditures (including the amount and nature thereof),
business strategy and measures to implement strategy, competitive
strength, goals, expansion and growth of Gulfport's business and
operations, plans, market conditions, references to future success,
reference to intentions as to future matters and other such matters
are forward-looking statements. These statements are based on
certain assumptions and analyses made by Gulfport in light of its
experience and its perception of historical trends, current
conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However,
whether actual results and developments will conform with
Gulfport's expectations and predictions is subject to a number of
risks and uncertainties, general economic, market, credit or
business conditions that might affect the timing and amount of the
repurchase program; the opportunities (or lack thereof) that may be
presented to and pursued by Gulfport; Gulfport’s ability to
identify, complete and integrate acquisitions of properties and
businesses; competitive actions by other oil and gas companies;
changes in laws or regulations; and other factors, many of which
are beyond the control of Gulfport. Information concerning these
and other factors can be found in the Company's filings with the
Securities and Exchange Commission, including its Forms 10-K, 10-Q
and 8-K. Consequently, all of the forward-looking statements made
in this press release are qualified by these cautionary statements
and there can be no assurances that the actual results or
developments anticipated by Gulfport will be realized, or even if
realized, that they will have the expected consequences to or
effects on Gulfport, its business or operations. Gulfport has no
intention, and disclaims any obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future results or otherwise.
Non-GAAP Financial
MeasuresEBITDA is a non-GAAP financial measure equal to
net income, the most directly comparable GAAP financial measure,
plus interest expense, income tax (benefit) expense, accretion
expense and depreciation, depletion and amortization. Adjusted
EBITDA is a non-GAAP financial measure equal to EBITDA less
non-cash derivative loss (gain) and (income) loss from equity
method investments. Cash flow from operating activities before
changes in operating assets and liabilities is a non-GAAP financial
measure equal to cash provided by operating activity before changes
in operating assets and liabilities. Adjusted net income is a
non-GAAP financial measure equal to pre-tax net income less
non-cash derivative loss (gain) and (income) loss from equity
method investments. The Company has presented EBITDA and adjusted
EBITDA because it uses these measures as an integral part of its
internal reporting to evaluate its performance and the performance
of its senior management. These measures are considered important
indicators of the operational strength of the Company's business
and eliminate the uneven effect of considerable amounts of non-cash
depletion, depreciation of tangible assets and amortization of
certain intangible assets. A limitation of these measures, however,
is that they do not reflect the periodic costs of certain
capitalized tangible and intangible assets used in generating
revenues in the Company's business. Management evaluates the costs
of such tangible and intangible assets and the impact of related
impairments through other financial measures, such as capital
expenditures, investment spending and return on capital. Therefore,
the Company believes that these measures provide useful information
to its investors regarding its performance and overall results of
operations. EBITDA, adjusted EBITDA, adjusted net income and cash
flow from operating activities before changes in operating assets
and liabilities are not intended to be performance measures that
should be regarded as an alternative to, or more meaningful than,
either net income as an indicator of operating performance or to
cash flows from operating activities as a measure of liquidity. In
addition, EBITDA, adjusted EBITDA, adjusted net income and cash
flow from operating activities before changes in operating assets
and liabilities are not intended to represent funds available for
dividends, reinvestment or other discretionary uses, and should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. The EBITDA, adjusted
EBITDA, adjusted net income and cash flow from operating activities
before changes in operating assets and liabilities presented in
this press release may not be comparable to similarly titled
measures presented by other companies, and may not be identical to
corresponding measures used in the Company's various
agreements.
Investor & Media
Contact:Jessica Wills – Director, Investor
Relationsjwills@gulfportenergy.com405-252-4550
|
GULFPORT ENERGY CORPORATION |
CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
|
|
March 31, 2019 |
|
December 31, 2018 |
|
(In thousands, except share data) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
17,996 |
|
|
$ |
52,297 |
|
Accounts
receivable—oil and natural gas sales |
144,996 |
|
|
210,200 |
|
Accounts
receivable—joint interest and other |
24,580 |
|
|
22,497 |
|
Prepaid
expenses and other current assets |
12,560 |
|
|
10,607 |
|
Short-term
derivative instruments |
17,958 |
|
|
21,352 |
|
Total
current assets |
218,090 |
|
|
316,953 |
|
Property and
equipment: |
|
|
|
Oil and
natural gas properties, full-cost accounting, $2,877,001 and
$2,873,037 excluded from amortization in 2019 and 2018,
respectively |
10,312,124 |
|
|
10,026,836 |
|
Other
property and equipment |
96,204 |
|
|
92,667 |
|
Accumulated
depletion, depreciation, amortization and impairment |
(4,757,814 |
) |
|
(4,640,098 |
) |
Property and
equipment, net |
5,650,514 |
|
|
5,479,405 |
|
Other assets: |
|
|
|
Equity
investments |
244,119 |
|
|
236,121 |
|
Inventories |
11,018 |
|
|
4,754 |
|
Operating
lease assets |
29,795 |
|
|
— |
|
Operating
lease assets - related parties |
58,659 |
|
|
— |
|
Other
assets |
13,314 |
|
|
13,803 |
|
Total other
assets |
356,905 |
|
|
254,678 |
|
Total assets |
$ |
6,225,509 |
|
|
$ |
6,051,036 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts
payable and accrued liabilities |
$ |
568,184 |
|
|
$ |
518,380 |
|
Short-term
derivative instruments |
25,921 |
|
|
20,401 |
|
Current
portion of operating lease liabilities |
27,983 |
|
|
— |
|
Current
portion of operating lease liabilities - related parties |
20,618 |
|
|
— |
|
Current
maturities of long-term debt |
656 |
|
|
651 |
|
Total
current liabilities |
643,362 |
|
|
539,432 |
|
Long-term derivative
instruments |
287 |
|
|
13,992 |
|
Asset retirement
obligation—long-term |
82,900 |
|
|
79,952 |
|
Deferred tax
liability |
3,127 |
|
|
3,127 |
|
Non-current operating
lease liabilities |
1,812 |
|
|
— |
|
Non-current operating
lease liabilities - related parties |
38,041 |
|
|
— |
|
Long-term debt, net of
current maturities |
2,087,714 |
|
|
2,086,765 |
|
Total liabilities |
2,857,243 |
|
|
2,723,268 |
|
Commitments and
contingencies |
|
|
|
Preferred stock, $.01 par
value; 5,000,000 authorized, 30,000 authorized as redeemable 12%
cumulative preferred stock, Series A; 0 issued and outstanding |
— |
|
|
— |
|
Stockholders’ equity: |
|
|
|
Common
stock - $.01 par value, 200,000,000 authorized, 159,421,965 issued
and outstanding at March 31, 2019 and 162,986,045 at December 31,
2018 |
1,594 |
|
|
1,630 |
|
Paid-in
capital |
4,202,023 |
|
|
4,227,532 |
|
Accumulated
other comprehensive loss |
(52,225 |
) |
|
(56,026 |
) |
Accumulated
deficit |
(783,126 |
) |
|
(845,368 |
) |
Total
stockholders’ equity |
3,368,266 |
|
|
3,327,768 |
|
Total liabilities and stockholders’ equity |
$ |
6,225,509 |
|
|
$ |
6,051,036 |
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
(In thousands, except share data) |
Revenues: |
|
|
|
Natural gas sales |
$ |
276,016 |
|
|
$ |
249,399 |
|
Oil and
condensate sales |
32,482 |
|
|
45,686 |
|
Natural gas
liquid sales |
32,125 |
|
|
46,836 |
|
Net loss on
natural gas, oil, and NGL derivatives |
(20,045 |
) |
|
(16,529 |
) |
|
320,578 |
|
|
325,392 |
|
Costs and
expenses: |
|
|
|
Lease
operating expenses |
19,807 |
|
|
18,906 |
|
Production
taxes |
7,921 |
|
|
6,854 |
|
Midstream
gathering and processing expenses |
70,282 |
|
|
64,193 |
|
Depreciation, depletion and amortization |
118,433 |
|
|
111,018 |
|
General and
administrative expenses |
11,558 |
|
|
13,099 |
|
Accretion
expense |
1,067 |
|
|
1,004 |
|
|
229,068 |
|
|
215,074 |
|
INCOME FROM
OPERATIONS |
91,510 |
|
|
110,318 |
|
OTHER (INCOME)
EXPENSE: |
|
|
|
Interest
expense |
34,120 |
|
|
33,965 |
|
Interest
income |
(152 |
) |
|
(37 |
) |
Income from
equity method investments, net |
(4,273 |
) |
|
(13,536 |
) |
Other
income |
(427 |
) |
|
(95 |
) |
|
29,268 |
|
|
20,297 |
|
INCOME BEFORE INCOME
TAXES |
62,242 |
|
|
90,021 |
|
INCOME TAX BENEFIT |
— |
|
|
(69 |
) |
NET
INCOME |
$ |
62,242 |
|
|
$ |
90,090 |
|
NET INCOME PER
COMMON SHARE: |
|
|
|
Basic |
$ |
0.38 |
|
|
$ |
0.50 |
|
Diluted |
$ |
0.38 |
|
|
$ |
0.50 |
|
Weighted average common
shares outstanding—Basic |
162,823,997 |
|
|
180,714,881 |
|
Weighted average common
shares outstanding—Diluted |
163,099,409 |
|
|
180,802,301 |
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
(In thousands) |
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
62,242 |
|
|
$ |
90,090 |
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
Accretion
expense |
1,067 |
|
|
1,004 |
|
Depletion,
depreciation and amortization |
118,433 |
|
|
111,018 |
|
Stock-based
compensation expense |
1,671 |
|
|
1,611 |
|
Income from
equity investments |
(4,132 |
) |
|
(13,495 |
) |
Change in
fair value of derivative instruments |
(4,791 |
) |
|
25,403 |
|
Deferred
income tax benefit |
— |
|
|
(69 |
) |
Amortization
of loan costs |
1,585 |
|
|
1,488 |
|
Gain on sale
of equity investments and other assets |
(43 |
) |
|
— |
|
Distributions from equity method investments |
1,228 |
|
|
— |
|
Changes in
operating assets and liabilities: |
|
|
|
Decrease in
accounts receivable—oil and natural gas sales |
65,204 |
|
|
7,916 |
|
Increase in
accounts receivable—joint interest and other |
(2,083 |
) |
|
(23,366 |
) |
Increase in
prepaid expenses and other current assets |
(1,953 |
) |
|
(2,652 |
) |
Decrease in
other assets |
42 |
|
|
14 |
|
(Decrease)
increase in accounts payable, accrued liabilities and other |
(53,339 |
) |
|
27,486 |
|
Settlement
of asset retirement obligation |
(71 |
) |
|
(99 |
) |
Net cash provided by
operating activities |
185,060 |
|
|
226,349 |
|
Cash flows from
investing activities: |
|
|
|
Additions to
other property and equipment |
(3,848 |
) |
|
(3,329 |
) |
Additions to
oil and natural gas properties |
(186,686 |
) |
|
(302,799 |
) |
Proceeds
from sale of oil and natural gas properties |
52 |
|
|
— |
|
Proceeds
from sale of other property and equipment |
56 |
|
|
76 |
|
Contributions to equity method investments |
(432 |
) |
|
(1,569 |
) |
Distributions from equity method investments |
— |
|
|
750 |
|
Net cash used in investing
activities |
(190,858 |
) |
|
(306,871 |
) |
Cash flows from
financing activities: |
|
|
|
Principal
payments on borrowings |
(150,151 |
) |
|
(145 |
) |
Borrowings on line of credit |
150,000 |
|
|
200,000 |
|
Debt
issuance costs and loan commitment fees |
(22 |
) |
|
(280 |
) |
Payments on
repurchase of stock |
(28,330 |
) |
|
(99,997 |
) |
Net cash (used in)
provided by financing activities |
(28,503 |
) |
|
99,578 |
|
Net (decrease) increase in
cash, cash equivalents and restricted cash |
(34,301 |
) |
|
19,056 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
52,297 |
|
|
99,557 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
17,996 |
|
|
$ |
118,613 |
|
Supplemental
disclosure of cash flow information: |
|
|
|
Interest
payments |
$ |
15,266 |
|
|
$ |
7,944 |
|
Income tax
receipts |
$ |
(1,794 |
) |
|
$ |
— |
|
Supplemental
disclosure of non-cash transactions: |
|
|
|
Capitalized
stock-based compensation |
$ |
1,114 |
|
|
$ |
1,074 |
|
Asset
retirement obligation capitalized |
$ |
1,952 |
|
|
$ |
382 |
|
Interest
capitalized |
$ |
766 |
|
|
$ |
843 |
|
Foreign
currency translation gain (loss) on equity method investments |
$ |
3,801 |
|
|
$ |
(5,503 |
) |
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF EBITDA AND CASH
FLOW |
(Unaudited) |
|
|
|
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
(In thousands) |
|
|
|
|
Net income |
$ |
62,242 |
|
|
$ |
90,090 |
|
Interest expense |
34,120 |
|
|
33,965 |
|
Income tax benefit |
— |
|
|
(69 |
) |
Accretion expense |
1,067 |
|
|
1,004 |
|
Depreciation, depletion
and amortization |
118,433 |
|
|
111,018 |
|
EBITDA |
$ |
215,862 |
|
|
$ |
236,008 |
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
(In thousands) |
|
|
|
|
Cash provided by
operating activity |
$ |
185,060 |
|
|
$ |
226,349 |
|
Adjustments: |
|
|
|
Changes
in operating assets and liabilities |
(7,800 |
) |
|
(9,299 |
) |
Operating Cash
Flow |
$ |
177,260 |
|
|
$ |
217,050 |
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED EBITDA |
(Unaudited) |
|
|
|
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
(In thousands) |
|
|
|
|
EBITDA |
$ |
215,862 |
|
|
$ |
236,008 |
|
|
|
|
|
Adjustments: |
|
|
|
Non-cash derivative
(gain) loss |
(4,791 |
) |
|
25,403 |
|
Income from equity
method investments |
(4,273 |
) |
|
(13,536 |
) |
|
|
|
|
Adjusted EBITDA |
$ |
206,798 |
|
|
$ |
247,875 |
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED NET
INCOME |
(Unaudited) |
|
|
|
|
|
Three months ended March 31, |
|
2019 |
|
2018 |
|
(In thousands, except share
data) |
|
|
|
|
Pre-tax net income
excluding adjustments |
$ |
62,242 |
|
|
$ |
90,021 |
|
Adjustments: |
|
|
|
Non-cash derivative
(gain) loss |
(4,791 |
) |
|
25,403 |
|
Income from equity
method investments |
(4,273 |
) |
|
(13,536 |
|
Pre-tax net income
excluding adjustments |
$ |
53,178 |
|
|
$ |
101,888 |
|
|
|
|
|
Adjusted net
income |
$ |
53,178 |
|
|
$ |
101,888 |
|
|
|
|
|
Adjusted net income per
common share: |
|
|
|
|
|
|
|
Basic |
$ |
0.33 |
|
|
$ |
0.56 |
|
Diluted |
$ |
0.33 |
|
|
$ |
0.56 |
|
|
|
|
|
Basic weighted average
shares outstanding |
162,823,997 |
|
|
180,714,881 |
|
Diluted weighted
average shares outstanding |
163,099,409 |
|
|
180,802,301 |
|
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