Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the
“Company”) today reported financial and operational results for the
three-months and six-months ended June 30, 2019 and provided
an update on its 2019 activities. Key information includes
the following:
- Net production averaged 1,359.0 MMcfe per day during the second
quarter of 2019.
- Net income of $235.0 million, or $1.47 per diluted share, for
the second quarter of 2019.
- Adjusted net income (as defined and reconciled below) of $33.3
million, or $0.21 per diluted share, for the second quarter of
2019.
- Adjusted EBITDA (as defined and reconciled below) of $194.5
million for the second quarter of 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.
- Maintained large hedge position of approximately 1,380 BBtu per
day of natural gas fixed price swaps at an average fixed price of
$2.81 per MMBtu and approximately 5,500 barrels per day of oil
fixed price swaps at an average fixed price of $60.81 per barrel
for the remainder of 2019.
- Completed certain non-core asset divestitures.
- Repurchased $105 million principal amount of the Company's
senior notes outstanding for a total cash spend of $80 million in
July 2019.
Chief Executive Officer and President, David M.
Wood, commented, "This was a successful quarter for Gulfport as we
delivered results in line with expectations, highlighted by another
active three months in both our Utica Shale and SCOOP asset areas
and high single digit production growth over the first quarter of
2019. We remain on track to deliver on our 2019 production
guidance, while adhering to our previously provided capital budget,
and expect to begin significant free cash flow generation during
the third quarter of 2019."
Mr. Wood continued, "In addition, Gulfport
continued to make progress on our strategic goals set at the
beginning of the year, today announcing several non-core asset
divestitures not contemplated within our current development plan.
Furthermore, the monetization process of certain water
infrastructure assets Gulfport holds across our SCOOP position is
ongoing. As expected, this process has been very competitive and we
are comfortable with a minimum value of what we expect to realize
on the transaction. Taking this into consideration, we took
advantage of an attractive opportunity to retire senior debt at a
meaningful discount and we recently repurchased and retired a
portion of our senior notes outstanding. As we look towards the
remainder of 2019 and beyond, we will remain disciplined in our
allocation of capital, focusing both on maintaining a strong
balance sheet and enhancing shareholder value."
Non-Core Asset
DivestituresGulfport recently closed the sale of its
Southern Louisiana assets to a third party for a total
consideration of approximately $54.1 million. Gulfport received
approximately $9.2 million in cash and retained overriding royalty
interests worth up to approximately $7.7 million based on current
strip pricing. In addition, Gulfport could also receive contingent
payments of up to $6.8 million based on commodity prices
exceeding certain thresholds over the next two years. The buyer
agreed to assume all plugging and abandonment liabilities
associated with these assets, which totaled approximately $29.0
million and Gulfport will receive approximately $1.4 million in
insurance premium reimbursement due to the sale of these assets.
Net production from the assets averaged 1.5 MBoe per day during the
six-months ended June 30, 2019, less than 1% of the Company's
production during that period. The effective date of the
transaction is August 15, 2018 and the transaction closed on July
3, 2019.
In addition, Gulfport closed the sale of its
remaining interest in Tatex Thailand II to a third party
for approximately $1.9 million in cash. No production is
included in this transaction and the transaction closed during the
second quarter of 2019.
Balance Sheet and LiquidityAs
of June 30, 2019, Gulfport had cash on hand of approximately
$20.8 million. As of June 30, 2019, Gulfport’s $1.4 billion
revolving credit facility, under which Gulfport has an elected
commitment of $1.0 billion, had outstanding borrowings of
$155.0 million and outstanding letters of credit totaling $251.5
million. The Company's total liquidity as of June 30, 2019 was
approximately $614.3 million, which included cash on hand and
borrowing capacity of approximately $593.5 million under the
Company's revolving credit facility.
In July 2019, Gulfport repurchased and retired
approximately $105 million principal amount of its senior notes for
a total cash spend of approximately $80 million.
Stock Repurchase ProgramIn
January 2019, Gulfport's board of directors authorized the Company
to acquire a portion of its outstanding common stock within a
24-month period. As of August 1, 2019, the Company had
repurchased 3.8 million shares totaling approximately $30 million
during 2019.
Second Quarter of 2019 Financial
ResultsFor the second quarter of 2019, Gulfport reported
net income of $235.0 million, or $1.47 per diluted share, on
revenues of $459.0 million. For the second quarter of 2019,
EBITDA (as defined and reconciled below for each period presented)
was $216.8 million, cash provided by operating activity was $123.9
million and cash flow from operating activities before changes in
operating assets and liabilities (as defined and reconciled below
for each period presented) was $164.2 million. Gulfport’s
GAAP net income for the second quarter of 2019 includes the
following items:
- Aggregate non-cash derivative gain of $147.8 million.
- Aggregate gain of $0.1 million attributable to net insurance
proceeds in connection with legacy environmental litigation
settlement.
- Aggregate loss of $125.6 million in connection with Gulfport's
equity interests in certain equity investments.
Excluding the effect of these items, Gulfport’s
financial results for the second quarter of 2019 would have been as
follows:
- Adjusted oil and gas revenues of $311.2 million.
- Adjusted net income of $33.3 million, or $0.21 per diluted
share.
- Adjusted EBITDA of $194.5 million.
Six-Months Ended June 30, 2019
Financial ResultsFor the six-month period ended
June 30, 2019, Gulfport reported net income of $297.2 million
or $1.84 per diluted share, on revenues of $779.6 million. For the
six-month period ended June 30, 2019, EBITDA (as defined and
reconciled below for each period presented) was $432.7 million,
cash provided by operating activity was $309.0 million and cash
flow from operating activities before changes in operating assets
and liabilities (as defined and reconciled below for each period
presented) was $341.5 million. Gulfport’s GAAP net income for
the six-month period ended June 30, 2019 includes the
following items:
- Aggregate non-cash derivative gain of $152.6 million.
- Aggregate gain of $0.1 million attributable to net insurance
proceeds in connection with legacy environmental litigation
settlement.
- Aggregate loss of $121.3 million in connection with Gulfport's
equity interests in certain equity investments.
Excluding the effect of these items, Gulfport’s
financial results for the second quarter of 2019 would have been as
follows:
- Adjusted oil and gas revenues of $627.0 million.
- Adjusted net income of $86.5 million, or $0.54 per diluted
share.
- Adjusted EBITDA of $401.3 million.
Production and Realized
PricesGulfport’s net daily production for the second
quarter of 2019 averaged approximately 1,359.0 MMcfe per day. For
the second 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 second
quarter of 2019 were $3.38 per Mcf of natural gas, $75.14 per
barrel of oil and $0.57 per gallon of NGL, resulting in a total
equivalent price of $3.71 per Mcfe. Gulfport's realized prices for
the second quarter of 2019 include an aggregate non-cash derivative
gain of $147.8 million. Before the impact of derivatives, realized
prices for the second quarter of 2019, including transportation
costs, were $2.02 per Mcf of natural gas, $56.85 per barrel of oil
and $0.45 per gallon of NGL, for a total equivalent price of $2.33
per Mcfe.
|
GULFPORT ENERGY CORPORATION |
PRODUCTION SCHEDULE |
(Unaudited) |
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
Production
Volumes: |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
Natural gas (MMcf) |
111,603 |
|
108,236 |
|
213,682 |
|
|
210,278 |
|
Oil (MBbls) |
649 |
|
744 |
|
1,261 |
|
|
1,501 |
|
NGL (MGal) |
57,189 |
|
58,512 |
|
113,019 |
|
|
124,268 |
|
Gas equivalent (MMcfe) |
123,668 |
|
121,061 |
|
237,394 |
|
|
237,038 |
|
Gas equivalent (Mcfe per
day) |
1,358,989 |
|
1,330,342 |
|
1,311,567 |
|
|
1,309,602 |
|
|
|
|
|
|
|
|
|
Average Realized
Prices |
|
|
|
|
|
|
|
(before
the impact of derivatives): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (per Mcf) |
$ |
2.02 |
|
$ |
2.15 |
|
$ |
2.35 |
|
|
$ |
2.29 |
|
Oil (per Bbl) |
$ |
56.85 |
|
$ |
66.26 |
|
$ |
55.03 |
|
|
$ |
63.29 |
|
NGL (per Gal) |
$ |
0.45 |
|
$ |
0.71 |
|
$ |
0.51 |
|
|
$ |
0.71 |
|
Gas equivalent (per Mcfe) |
$ |
2.33 |
|
$ |
2.67 |
|
$ |
2.65 |
|
|
$ |
2.81 |
|
|
|
|
|
|
|
|
|
Average Realized
Prices: |
|
|
|
|
|
|
|
(including cash-settlement of derivatives and excluding
non-cash derivative gain or loss): |
|
|
|
|
|
|
|
|
Natural gas (per Mcf) |
$ |
2.20 |
|
$ |
2.32 |
|
$ |
2.32 |
|
|
$ |
2.46 |
|
Oil (per Bbl) |
$ |
57.42 |
|
$ |
55.29 |
|
$ |
55.34 |
|
|
$ |
55.00 |
|
NGL (per Gal) |
$ |
0.51 |
|
$ |
0.64 |
|
$ |
0.55 |
|
|
$ |
0.66 |
|
Gas equivalent (per Mcfe) |
$ |
2.52 |
|
$ |
2.72 |
|
$ |
2.64 |
|
|
$ |
2.87 |
|
|
|
|
|
|
|
|
|
Average Realized
Prices: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (per Mcf) |
$ |
3.38 |
|
$ |
1.86 |
|
$ |
2.98 |
|
|
$ |
2.10 |
|
Oil (per Bbl) |
$ |
75.14 |
|
$ |
33.46 |
|
$ |
64.08 |
|
|
$ |
40.93 |
|
NGL (per Gal) |
$ |
0.57 |
|
$ |
0.45 |
|
$ |
0.54 |
|
|
$ |
0.61 |
|
Gas equivalent (per Mcfe) |
$ |
3.71 |
|
$ |
2.09 |
|
$ |
3.28 |
|
|
$ |
2.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below summarizes Gulfport’s second quarter of 2019
production by asset area:
|
GULFPORT ENERGY CORPORATION |
PRODUCTION BY AREA |
(Unaudited) |
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
2019 |
2018 |
|
2019 |
2018 |
Utica
Shale |
|
|
|
|
|
Natural gas (MMcf) |
92,301 |
|
92,670 |
|
|
178,002 |
|
179,866 |
|
Oil (MBbls) |
57 |
|
81 |
|
|
122 |
|
160 |
|
NGL (MGal) |
20,827 |
|
26,845 |
|
|
44,163 |
|
62,583 |
|
Gas equivalent
(MMcfe) |
95,616 |
|
96,994 |
|
|
185,044 |
|
189,766 |
|
|
|
|
|
|
|
SCOOP |
|
|
|
|
|
Natural gas
(MMcf) |
19,283 |
|
15,536 |
|
|
35,649 |
|
30,367 |
|
Oil (MBbls) |
446 |
|
407 |
|
|
844 |
|
905 |
|
NGL (MGal) |
36,342 |
|
31,640 |
|
|
68,822 |
|
61,649 |
|
Gas equivalent
(MMcfe) |
27,149 |
|
22,500 |
|
|
50,543 |
|
44,603 |
|
|
|
|
|
|
|
Southern
Louisiana |
|
|
|
|
|
Natural gas
(MMcf) |
— |
|
4 |
|
|
— |
|
11 |
|
Oil (MBbls) |
132 |
|
223 |
|
|
268 |
|
392 |
|
NGL (MGal) |
— |
|
— |
|
|
— |
|
— |
|
Gas equivalent
(MMcfe) |
793 |
|
1,340 |
|
|
1,606 |
|
2,360 |
|
|
|
|
|
|
|
Other |
|
|
|
|
|
Natural gas
(MMcf) |
19 |
|
26 |
|
|
31 |
|
34 |
|
Oil (MBbls) |
15 |
|
33 |
|
|
28 |
|
45 |
|
NGL (MGal) |
19 |
|
27 |
|
|
34 |
|
36 |
|
Gas equivalent
(MMcfe) |
110 |
|
227 |
|
|
201 |
|
309 |
|
|
|
|
|
|
|
|
|
|
|
2019 Capital ExpendituresFor
the six-month period ended June 30, 2019, Gulfport’s operated
drilling and completion ("D&C") capital expenditures totaled
$367.7 million and non-operated D&C activities totaled $68.3
million. In addition, land capital expenditures totaled $23.2
million for the six-month period ended June 30, 2019.
Gulfport's operated capital expenditures for the
six-month period ended June 30, 2019 are on budget with the
Company's previously provided 2019 budget. Capital expenditures
incurred on non-operated activity in the Utica Shale have resulted
in larger-than-anticipated spend for the six-month period ended
June 30, 2019 and Gulfport intends to recover a portion of
these costs through trades or the monetization of certain
non-operated interests during the second half of 2019. The Company
reaffirmed its previously provided expectation that 2019 total
capital expenditures will be in the range of $565 million to $600
million.
Operational UpdateThe table
below summarizes Gulfport's activity for the six-month period ended
June 30, 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 |
Three months ended |
|
|
|
March 31, |
June 30, |
Remaining Wells |
Guidance(1) |
|
2019 |
2019 |
2019 |
2019 |
Net Wells
Drilled |
|
|
|
|
Utica - Operated |
5.6 |
|
3.8 |
|
1.1 |
|
10.5 |
|
Utica -
Non-Operated |
0.3 |
|
0.5 |
|
1.7 |
|
2.5 |
|
Total |
5.9 |
|
4.3 |
|
2.8 |
|
13.0 |
|
|
|
|
|
|
SCOOP -
Operated |
3.1 |
|
2.6 |
|
1.8 |
|
7.5 |
|
SCOOP -
Non-Operated |
0.3 |
|
0.3 |
|
0.9 |
|
1.5 |
|
Total |
3.4 |
|
2.9 |
|
2.7 |
|
9.0 |
|
|
|
|
|
|
Net Wells
Turned-to-Sales |
|
|
|
|
Utica -
Operated |
6.0 |
|
25.0 |
|
11.5 |
|
42.5 |
|
Utica -
Non-Operated |
— |
|
1.1 |
|
1.4 |
|
2.5 |
|
Total |
6.0 |
|
26.1 |
|
12.9 |
|
45.0 |
|
|
|
|
|
|
SCOOP -
Operated |
2.8 |
|
5.9 |
|
5.8 |
|
14.5 |
|
SCOOP -
Non-Operated |
— |
|
0.3 |
|
1.2 |
|
1.5 |
|
Total |
2.8 |
|
6.2 |
|
7.0 |
|
16.0 |
|
|
|
|
|
|
(1)
Utilizes mid-point of publicly provided 2019 guidance |
|
Utica ShaleIn the Utica Shale,
during the second quarter of 2019, Gulfport spud five gross (3.8
net) operated wells and turned-to-sales 25 gross and net operated
wells.
During the second quarter of 2019, net
production from Gulfport’s Utica acreage averaged approximately
1,050.7 MMcfe per day.
For the six-month period ended June 30,
2019, Gulfport spud 11 gross (9.4 net) operated wells. The wells
drilled during this period had an average lateral length of
approximately 10,900 feet. Normalizing to an 8,000 foot lateral
length, Gulfport's average drilling days from spud to rig release
totaled approximately 17.9 days, a decrease of 8% over full year
2018. In addition, Gulfport turned-to-sales 31 gross and net
operated wells with an average stimulated lateral length of
approximately 8,800 feet during the six-month period ended
June 30, 2019.
At present, Gulfport has one operated horizontal
drilling rig running in the play.
SCOOPIn the SCOOP, during the
second quarter of 2019, Gulfport spud three gross (2.6 net)
operated wells and turned-to-sales six gross (5.9 net) operated
wells.
During the second quarter of 2019, net
production from Gulfport's SCOOP acreage averaged approximately
298.3 MMcfe per day.
For the six-month period ended June 30,
2019, Gulfport spud seven gross (5.7 net) operated wells. The wells
drilled during this period had an average lateral length of
approximately 9,300 feet. Normalizing to a 7,500 foot lateral
length, Gulfport's average drilling days from spud to rig release
totaled approximately 52.1 days, a decrease of 17% over full year
2018. In addition, Gulfport turned-to-sales nine gross (8.7 net)
operated wells with an average stimulated lateral length of
approximately 7,100 feet during the six-month period ended
June 30, 2019.
At present, Gulfport has one operated horizontal
drilling rig running in the play.
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 six-month
period ended June 30, 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 2019. Gulfport
reiterates its guidance with respect to its expected 2019 realized
NGL price and oil price, and forecasts that its 2019 realized NGL
price, before the effect of hedges and including transportation
expense, will be approximately 40% to 45% of WTI and its 2019
realized oil price will be in the range of $3.00 to $3.50 per
barrel below WTI.
The table below summarizes the Company’s 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 |
|
|
|
|
|
|
|
|
|
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 July 31, 2019.
|
GULFPORT ENERGY CORPORATION |
COMMODITY DERIVATIVES - HEDGE POSITION |
(Unaudited) |
|
3Q2019 |
|
4Q2019 |
Natural
gas: |
|
|
|
Swap contracts
(NYMEX) |
|
|
|
Volume (BBtupd) |
1,380 |
|
|
1,380 |
|
Price ($ per MMBtu) |
$ |
2.81 |
|
|
$ |
2.81 |
|
|
|
|
|
Swaption contracts
(NYMEX) |
|
|
|
Volume (BBtupd) |
30 |
|
|
30 |
|
Price ($ per MMBtu) |
$ |
3.10 |
|
|
$ |
3.10 |
|
|
|
|
|
Basis Swap contracts
(Transco Zone 4) |
|
|
|
Volume (BBtupd) |
60 |
|
|
60 |
|
Price ($ per MMBtu) |
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
Oil: |
|
|
|
Swap contracts
(WTI) |
|
|
|
Volume (Bblpd) |
5,500 |
|
|
5,500 |
|
Price ($ per Bbl) |
$ |
60.81 |
|
|
$ |
60.81 |
|
|
|
|
|
NGL: |
|
|
|
C2 Ethane Swap
contracts |
|
|
|
Volume (Bblpd) |
1,000 |
|
|
1,000 |
|
Price ($ per Gal) |
$ |
0.44 |
|
|
$ |
0.44 |
|
|
|
|
|
C3 Propane Swap
contracts |
|
|
|
Volume (Bblpd) |
4,000 |
|
|
4,000 |
|
Price ($ per Gal) |
$ |
0.69 |
|
|
$ |
0.69 |
|
|
|
|
|
C5 Pentane Swap
contracts |
|
|
|
Volume (Bblpd) |
1,000 |
|
|
1,000 |
|
Price ($ per Gal) |
$ |
1.28 |
|
|
1.28 |
|
|
|
|
|
|
2019(1) |
|
2020 |
Natural
gas: |
|
|
|
Swap contracts
(NYMEX) |
|
|
|
Volume (BBtupd) |
1,380 |
|
|
204 |
|
Price ($ per MMBtu) |
$ |
2.81 |
|
|
$ |
2.77 |
|
|
|
|
|
Swaption contracts
(NYMEX) |
|
|
|
Volume (BBtupd) |
30 |
|
|
— |
|
Price ($ per MMBtu) |
$ |
3.10 |
|
|
$ |
— |
|
|
|
|
|
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) |
5,500 |
|
|
6,000 |
|
Price ($ per Bbl) |
$ |
60.81 |
|
|
$ |
59.82 |
|
|
|
|
|
NGL: |
|
|
|
C2 Ethane Swap
contracts |
|
|
|
Volume (Bblpd) |
1,000 |
|
|
— |
|
Price ($ per Gal) |
$ |
0.44 |
|
|
$ |
— |
|
|
|
|
|
C3 Propane Swap
contracts |
|
|
|
Volume (Bblpd) |
4,000 |
|
|
— |
|
Price ($ per Gal) |
$ |
0.69 |
|
|
$ |
— |
|
|
|
|
|
C5 Pentane Swap
contracts |
|
|
|
Volume (Bblpd) |
1,000 |
|
|
— |
|
Price ($ per Gal) |
$ |
1.28 |
|
|
$ |
— |
|
|
|
|
|
(1) July 1 - December 31,
2019 |
|
|
|
|
|
|
|
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.
Investors should note that Gulfport announces financial information
in SEC filings, press releases and public conference calls.
Gulfport may use the Investors section of its website
(www.gulfportenergy.com) to communicate with investors. It is
possible that the financial and other information posted there
could be deemed to be material information. Information on the
Company’s website does not constitute a portion of this press
release.
Conference CallGulfport will
hold a conference call on Friday, August 2, 2019 at 8:00 a.m.
CDT to discuss its second 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 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; Gulfport’s ability to achieve the anticipated benefits
of its strategic initiatives, including the
potential divestiture of certain water infrastructure assets
Gulfport holds across its SCOOP position; 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), insurance proceeds, 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), insurance
proceeds, and (income) loss from equity method investments. The
Company has presented EBITDA, adjusted EBITDA, adjusted net income
and cash flow from operating activities before changes in operating
assets and liabilities 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 Contact:Jessica Antle
– Director, Investor
Relationsjantle@gulfportenergy.com405-252-4550
Media Contact:Adam Weiner /
Cameron NjaaKekst CNCadam.weiner@kekstcnc.com /
cameron.njaa@kekstcnc.com212-521-4800
GULFPORT ENERGY
CORPORATIONCONSOLIDATED BALANCE
SHEETS (Unaudited)
|
June 30, 2019 |
|
December 31, 2018 |
|
|
|
(In thousands, except share data) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
20,777 |
|
|
$ |
52,297 |
|
Accounts receivable—oil and natural gas sales |
131,675 |
|
|
210,200 |
|
Accounts receivable—joint interest and other |
46,645 |
|
|
22,497 |
|
Prepaid expenses and other current assets |
9,474 |
|
|
10,607 |
|
Short-term derivative instruments |
134,920 |
|
|
21,352 |
|
Total current assets |
343,491 |
|
|
316,953 |
|
Property and equipment: |
|
|
|
Oil and natural gas properties, full-cost accounting, $2,836,441
and $2,873,037 excluded from amortization in 2019 and 2018,
respectively |
10,510,427 |
|
|
10,026,836 |
|
Other property and equipment |
96,413 |
|
|
92,667 |
|
Accumulated depletion, depreciation, amortization and
impairment |
(4,882,729 |
) |
|
(4,640,098 |
) |
Property and equipment, net |
5,724,111 |
|
|
5,479,405 |
|
Other assets: |
|
|
|
Equity investments |
119,307 |
|
|
236,121 |
|
Long-term derivative instruments |
5,036 |
|
|
— |
|
Deferred tax asset |
179,331 |
|
|
— |
|
Inventories |
9,001 |
|
|
4,754 |
|
Operating lease assets |
19,334 |
|
|
— |
|
Operating lease assets - related parties |
53,579 |
|
|
— |
|
Other assets |
12,280 |
|
|
13,803 |
|
Total other assets |
397,868 |
|
|
254,678 |
|
Total assets |
$ |
6,465,470 |
|
|
$ |
6,051,036 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued liabilities |
$ |
493,830 |
|
|
$ |
518,380 |
|
Short-term derivative instruments |
198 |
|
|
20,401 |
|
Current portion of operating lease liabilities |
17,999 |
|
|
— |
|
Current portion of operating lease liabilities - related
parties |
20,817 |
|
|
— |
|
Current maturities of long-term debt |
615 |
|
|
651 |
|
Total current liabilities |
533,459 |
|
|
539,432 |
|
Long-term derivative
instruments |
210 |
|
|
13,992 |
|
Asset retirement
obligation—long-term |
88,491 |
|
|
79,952 |
|
Deferred tax liability |
3,127 |
|
|
3,127 |
|
Non-current operating lease
liabilities |
1,335 |
|
|
— |
|
Non-current operating lease
liabilities - related parties |
32,762 |
|
|
— |
|
Long-term debt, net of current
maturities |
2,198,678 |
|
|
2,086,765 |
|
Total liabilities |
2,858,062 |
|
|
2,723,268 |
|
Commitments and
contingencies |
|
|
|
Preferred stock, $0.01 par value;
5,000,000 shares authorized (30,000 authorized as redeemable 12%
cumulative preferred stock, Series A), and none issued and
outstanding |
— |
|
|
— |
|
Stockholders’ equity: |
|
|
|
Common stock - $0.01 par value, 200,000,000 shares authorized,
159,396,017 issued and outstanding at June 30, 2019 and 162,986,045
at December 31, 2018 |
1,594 |
|
|
1,630 |
|
Paid-in capital |
4,202,599 |
|
|
4,227,532 |
|
Accumulated other comprehensive loss |
(48,615 |
) |
|
(56,026 |
) |
Accumulated deficit |
(548,170 |
) |
|
(845,368 |
) |
Total stockholders’ equity |
3,607,408 |
|
|
3,327,768 |
|
Total liabilities and stockholders’ equity |
$ |
6,465,470 |
|
|
$ |
6,051,036 |
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
(In thousands, except share data) |
Revenues: |
|
|
|
|
|
|
|
Natural gas sales |
$ |
225,257 |
|
|
$ |
232,695 |
|
|
$ |
501,273 |
|
|
$ |
482,094 |
|
Oil and condensate sales |
36,910 |
|
|
49,319 |
|
|
69,392 |
|
|
95,005 |
|
Natural gas liquid sales |
25,687 |
|
|
41,271 |
|
|
57,812 |
|
|
88,107 |
|
Net gain (loss) on natural gas, oil, and NGLs derivatives |
171,140 |
|
|
(70,545 |
) |
|
151,095 |
|
|
(87,074 |
) |
|
458,994 |
|
|
252,740 |
|
|
779,572 |
|
|
578,132 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
Lease operating expenses |
22,388 |
|
|
22,912 |
|
|
42,195 |
|
|
41,818 |
|
Production taxes |
8,098 |
|
|
7,659 |
|
|
16,019 |
|
|
14,513 |
|
Midstream gathering and processing expenses |
72,015 |
|
|
71,440 |
|
|
142,297 |
|
|
135,633 |
|
Depreciation, depletion and amortization |
124,951 |
|
|
121,915 |
|
|
243,384 |
|
|
232,933 |
|
General and administrative expenses |
13,265 |
|
|
14,008 |
|
|
24,823 |
|
|
27,107 |
|
Accretion expense |
1,359 |
|
|
1,015 |
|
|
2,426 |
|
|
2,019 |
|
|
242,076 |
|
|
238,949 |
|
|
471,144 |
|
|
454,023 |
|
INCOME FROM
OPERATIONS |
216,918 |
|
|
13,791 |
|
|
308,428 |
|
|
124,109 |
|
OTHER EXPENSE (INCOME): |
|
|
|
|
|
|
|
Interest expense |
34,880 |
|
|
33,704 |
|
|
69,000 |
|
|
67,669 |
|
Interest income |
(159 |
) |
|
(33 |
) |
|
(311 |
) |
|
(70 |
) |
Insurance proceeds |
(83 |
) |
|
(231 |
) |
|
(83 |
) |
|
(231 |
) |
Gain on sale of equity method investments |
— |
|
|
(122,035 |
) |
|
— |
|
|
(122,035 |
) |
Loss (income) from equity method investments, net |
125,582 |
|
|
(8,888 |
) |
|
121,309 |
|
|
(22,424 |
) |
Other expense (income) |
1,073 |
|
|
(45 |
) |
|
646 |
|
|
(140 |
) |
|
161,293 |
|
|
(97,528 |
) |
|
190,561 |
|
|
(77,231 |
) |
INCOME BEFORE INCOME TAXES |
55,625 |
|
|
111,319 |
|
|
117,867 |
|
|
201,340 |
|
INCOME TAX BENEFIT |
(179,331 |
) |
|
— |
|
|
(179,331 |
) |
|
(69 |
) |
NET INCOME |
$ |
234,956 |
|
|
$ |
111,319 |
|
|
$ |
297,198 |
|
|
$ |
201,409 |
|
NET INCOME PER COMMON
SHARE: |
|
|
|
|
|
|
|
Basic |
$ |
1.47 |
|
|
$ |
0.64 |
|
|
$ |
1.85 |
|
|
$ |
1.14 |
|
Diluted |
$ |
1.47 |
|
|
$ |
0.64 |
|
|
$ |
1.84 |
|
|
$ |
1.13 |
|
Weighted average common shares
outstanding—Basic |
159,324,909 |
|
|
173,623,630 |
|
|
161,064,787 |
|
|
177,158,230 |
|
Weighted average common shares
outstanding—Diluted |
159,506,826 |
|
|
174,140,627 |
|
|
161,590,087 |
|
|
177,737,282 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY
CORPORATIONCONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
|
Six months ended June 30, |
|
2019 |
|
2018 |
|
|
|
(In thousands) |
Cash flows from operating
activities: |
|
|
|
Net income |
$ |
297,198 |
|
|
$ |
201,409 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Accretion expense |
2,426 |
|
|
2,019 |
|
Depletion, depreciation and amortization |
243,384 |
|
|
232,933 |
|
Stock-based compensation expense |
3,379 |
|
|
3,624 |
|
Loss (income) from equity investments |
121,449 |
|
|
(22,322 |
) |
Change in fair value of derivative instruments |
(152,589 |
) |
|
102,248 |
|
Deferred income tax benefit |
(179,331 |
) |
|
(69 |
) |
Amortization of loan costs |
3,191 |
|
|
3,006 |
|
Gain on sale of equity investments and other assets |
(112 |
) |
|
(122,035 |
) |
Distributions from equity method investments |
2,457 |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Decrease in accounts receivable—oil and natural gas sales |
78,525 |
|
|
6,564 |
|
Increase in accounts receivable—joint interest and other |
(24,148 |
) |
|
(16,385 |
) |
Decrease (increase) in prepaid expenses and other current
assets |
1,133 |
|
|
(5,786 |
) |
Increase in other assets |
(296 |
) |
|
(1,517 |
) |
(Decrease) increase in accounts payable, accrued liabilities and
other |
(87,560 |
) |
|
28,184 |
|
Settlement of asset retirement obligation |
(117 |
) |
|
(719 |
) |
Net cash provided by operating
activities |
308,989 |
|
|
411,044 |
|
Cash flows from investing
activities: |
|
|
|
Additions to other property and equipment |
(4,298 |
) |
|
(6,252 |
) |
Additions to oil and natural gas properties |
(417,535 |
) |
|
(579,734 |
) |
Proceeds from sale of oil and natural gas properties |
745 |
|
|
3,762 |
|
Proceeds from sale of other property and equipment |
130 |
|
|
167 |
|
Contributions to equity method investments |
(432 |
) |
|
(1,569 |
) |
Distributions from equity method investments |
1,945 |
|
|
1,196 |
|
Net cash used in investing
activities |
(419,445 |
) |
|
(360,465 |
) |
Cash flows from financing
activities: |
|
|
|
Principal payments on borrowings |
(345,350 |
) |
|
(150,285 |
) |
Borrowings on line of credit |
455,000 |
|
|
225,000 |
|
Debt issuance costs and loan commitment fees |
(114 |
) |
|
(624 |
) |
Payments for repurchase of stock |
(30,600 |
) |
|
(104,997 |
) |
Net cash provided by (used in)
financing activities |
78,936 |
|
|
(30,906 |
) |
Net (decrease) increase in cash,
cash equivalents and restricted cash |
(31,520 |
) |
|
19,673 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
52,297 |
|
|
99,557 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
20,777 |
|
|
$ |
119,230 |
|
Supplemental disclosure
of cash flow information: |
|
|
|
Interest payments |
$ |
67,472 |
|
|
$ |
59,915 |
|
Income tax receipts |
$ |
(1,794 |
) |
|
$ |
— |
|
Supplemental disclosure
of non-cash transactions: |
|
|
|
Capitalized stock-based compensation |
$ |
2,252 |
|
|
$ |
2,416 |
|
Asset retirement obligation capitalized |
$ |
6,230 |
|
|
$ |
535 |
|
Interest capitalized |
$ |
1,771 |
|
|
$ |
2,351 |
|
Foreign currency translation gain (loss) on equity method
investments |
$ |
7,411 |
|
|
$ |
(8,867 |
) |
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF EBITDA AND CASH FLOW |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
(In thousands) |
|
(In thousands) |
|
|
|
|
|
|
|
|
Net income |
$ |
234,956 |
|
|
$ |
111,319 |
|
|
$ |
297,198 |
|
|
$ |
201,409 |
|
Interest expense |
34,880 |
|
|
33,704 |
|
|
69,000 |
|
|
67,669 |
|
Income tax benefit |
(179,331 |
) |
|
— |
|
|
(179,331 |
) |
|
(69 |
) |
Accretion expense |
1,359 |
|
|
1,015 |
|
|
2,426 |
|
|
2,019 |
|
Depreciation, depletion and
amortization |
124,951 |
|
|
121,915 |
|
|
243,384 |
|
|
232,933 |
|
EBITDA |
$ |
216,815 |
|
|
$ |
267,953 |
|
|
$ |
432,677 |
|
|
$ |
503,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
(In thousands) |
|
(In thousands) |
|
|
|
|
|
|
|
|
Cash provided by operating
activity |
$ |
123,929 |
|
|
$ |
184,695 |
|
|
$ |
308,989 |
|
|
$ |
411,044 |
|
Adjustments: |
|
|
|
|
|
|
|
Changes in operating
assets and liabilities |
40,263 |
|
|
(932 |
) |
|
32,463 |
|
|
(10,231 |
) |
Operating Cash Flow |
$ |
164,192 |
|
|
$ |
183,763 |
|
|
$ |
341,452 |
|
|
$ |
400,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED EBITDA |
(Unaudited) |
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30, 2019 |
|
June 30, 2019 |
|
2019 |
|
2019 |
|
|
|
(In thousands) |
|
|
|
|
EBITDA |
$ |
216,815 |
|
|
$ |
432,677 |
|
Adjustments: |
|
|
|
Non-cash derivative gain |
(147,798 |
) |
|
(152,589 |
) |
Insurance proceeds |
(83 |
) |
|
(83 |
) |
Loss from equity method
investments |
125,582 |
|
|
121,309 |
|
|
|
|
|
Adjusted EBITDA |
$ |
194,516 |
|
|
$ |
401,314 |
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED NET INCOME |
(Unaudited) |
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30, 2019 |
|
June 30, 2019 |
|
|
|
|
|
(In thousands, except share data) |
|
|
|
|
Pre-tax net income excluding adjustments |
$ |
55,625 |
|
|
$ |
117,867 |
|
Adjustments: |
|
|
|
Non-cash derivative gain |
(147,798 |
) |
|
(152,589 |
) |
Insurance proceeds |
(83 |
) |
|
(83 |
) |
Loss from equity method
investments |
125,582 |
|
|
121,309 |
|
Pre-tax net income excluding
adjustments |
$ |
33,326 |
|
|
$ |
86,504 |
|
|
|
|
|
Adjusted net
income |
$ |
33,326 |
|
|
$ |
86,504 |
|
|
|
|
|
Adjusted net income
per common share: |
|
|
|
Basic |
$ |
0.21 |
|
|
$ |
0.54 |
|
Diluted |
$ |
0.21 |
|
|
$ |
0.54 |
|
|
|
|
|
Basic weighted average shares
outstanding |
159,324,909 |
|
|
161,064,787 |
|
Diluted weighted average
shares outstanding |
159,506,826 |
|
|
161,590,087 |
|
|
|
|
|
|
|
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