Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three months and six months ended June 30, 2021 and provided its
2021 development plan and financial guidance.
Second Quarter 2021 Highlights(1)
- Emerged from restructuring process on May 17, 2021
- Right-sized firm transportation commitments and negotiated new,
cost-competitive midstream agreements to better align with
operating plan
- Reduced total debt by more than $1.2 billion and reduced annual
cash interest expense by over $90 million
- Reported $87.3 million of Net Cash Provided by Operating
Activities
- Delivered $74.4 million of Free Cash Flow (non-GAAP
measure)
2021 Full Year Forecast
- Intend to invest $290 million to $310 million of capital
- Expect to deliver full year net production of 975 MMcfe to
1,000 MMcfe per day
- Forecast to reduce total per unit expense(2) by more than 23%
when compared to 2020
- Plan to generate approximately $290 million to $310 million of
Free Cash Flow (non-GAAP measure)
"During the second quarter 2021, we emerged from our
restructuring process with a continuous improvement mindset,
focused on cost effective production and capital discipline,
supported by a strong balance sheet. We are fully committed to
safely executing in the field and improving our Environmental,
Social and Governance performance. We flattened our corporate
structure, reduced overhead and are focused on optimizing our
development program to deliver the highest returns possible to our
investors," commented Tim Cutt, Interim CEO of Gulfport.
"We plan to develop our assets in a disciplined manner,
investing approximately $300 million of capital to deliver 1.0 Bcfe
per day of production and targeting sustainable cash flow
generation of roughly $300 million per year. We believe that our
ability to deliver substantial free cash flow, with top-quartile
operating costs and leverage, provides a unique opportunity for
investors."
A company presentation to accompany the Gulfport earnings
conference call can be accessed by clicking here.
- Second quarter highlights and full year outlook reflect the
combination of Successor and Predecessor company results, unless
otherwise noted. The Company refers to the post-emergence
reorganized company as the Successor for periods subsequent to May
18, 2021, and to the pre-emergence company as the Predecessor for
periods on or prior to May 17, 2021.
- Includes lease operating expense, midstream transportation,
gathering and processing expense, taxes other than income,
recurring general and administrative expense and interest.
Fresh Start Accounting and Predecessor and Successor
Periods
On May 17, 2021 ("Emergence Date"), Gulfport successfully
completed its restructuring process and emerged from Chapter 11
protection. In connection with the Company's emergence from
bankruptcy, the Company qualified for and applied fresh start
accounting on the Emergence Date. As a result of the application of
fresh start accounting, the consolidated financial statements after
May 17, 2021, are not comparable with the consolidated financial
statements on or prior to that date. References to “Successor”
refer to the Gulfport entity after emergence from bankruptcy on the
Emergence Date. References to “Predecessor” refer to the Gulfport
entity prior to emergence from bankruptcy.
2020 Corporate Sustainability Report
Gulfport today released its 2020 Corporate Sustainability
Report. The report highlights Gulfport’s commitment to
environmental excellence, managing and reducing risks, and our
commitment to the well-being of our employees and the communities
in which we operate. The report is available at
gulfportenergy.com/sustainability.
Operational Update
For the second quarter of 2021, the Company spud one gross
operated well in the Utica with a planned lateral length of 12,100
feet and two gross operated wells in the SCOOP with planned lateral
lengths of 9,700 feet. In addition, Gulfport turned-to-sales two
gross operated wells in the Utica and eight gross operated wells in
the SCOOP. The average lateral length for the wells turned-to-sales
was approximately 13,000 feet in the Utica and 9,300 feet in the
SCOOP.
Gulfport’s net daily production for the second quarter of 2021
averaged 989.1 MMcfe per day, primarily consisting of 744.3 MMcfe
per day in the Utica and 244.4 MMcfe per day in the SCOOP. For the
second quarter of 2021, Gulfport’s net daily production mix was
comprised of approximately 91% natural gas, 6% natural gas liquids
("NGL") and 3% oil.
Non-GAAP Combined
Predecessor
Three Months Ended June 30,
2021
Three Months Ended June 30,
2020
Production
Natural gas (Mcf/day)
895,101
933,936
Oil and condensate (Bbl/day)
4,971
4,577
NGL (Bbl/day)
10,687
10,945
Total (Mcfe/day)
989,053
1,027,065
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
2.71
$
1.66
Impact from settled derivatives
($/Mcf)
(0.12)
0.99
Average price, including settled
derivatives ($/Mcf)
$
2.59
$
2.65
Oil:
Average price without the impact of
derivatives ($/Bbl)
$
62.95
$
20.14
Impact from settled derivatives
($/Bbl)
—
97.12
Average price, including settled
derivatives ($/Bbl)
$
62.95
$
117.26
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
29.89
$
10.29
Impact from settled derivatives
($/Bbl)
—
—
Average price, including settled
derivatives ($/Bbl)
$
29.89
$
10.29
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
3.09
$
1.70
Impact from settled derivatives
($/Mcfe)
(0.11)
1.33
Average price, including settled
derivatives ($/Mcfe)
$
2.98
$
3.03
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.12
$
0.14
Taxes other than income ($/Mcfe)
$
0.10
$
0.07
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
1.07
$
1.22
Recurring general and administrative
expenses ($ millions) (non-GAAP)
$
0.12
$
0.16
Interest expenses ($/Mcfe)
$
0.13
$
0.35
Capital Investment
Capital investment was $67.8 million (on an incurred basis) for
the second quarter of 2021, of which $67.6 million related to
drilling and completion (“D&C”) activity and $0.2 million
related to leasehold and land investment.
For the six-month period ended June 30, 2021, capital investment
was $140.5 million (on an incurred basis), of which $136.2 million
related to D&C activity and $4.3 million to leasehold and land
investment.
Financial Position and Liquidity
As of June 30, 2021, the Company had $9.4 million of cash and
cash equivalents, $105.0 million of borrowings under its revolving
credit facility, $180.0 million of borrowings under its term loan,
$114.8 million of letters of credit outstanding and $550 million of
outstanding 2026 senior notes. The Company was in compliance with
the covenants under its credit agreement.
The Company’s liquidity at June 30, 2021 totaled approximately
$150 million, comprised of the $9.4 million of cash and cash
equivalents and approximately $141 million of available borrowing
capacity under our revolving credit facility, after adjusting for
the $40 million liquidity blocker.
On June 30, 2021, the company paid dividends on its New
Preferred Stock, which included 1,006 shares of New Preferred Stock
paid in kind and approximately $25,000 of cash-in-lieu of
fractional shares.
2021 Development Plan and Financial Guidance
Gulfport released operational guidance and outlook for the full
year 2021, including full-year expense estimates and projections
for production and capital expenditures. Gulfport's 2021 guidance
assumes commodity strip prices as of July 7, 2021, adjusted for
applicable commodity and location differentials, and no property
acquisitions or divestitures.
Year Ending
12/31/21
Low
High
Production
Average Daily Gas Equivalent (MMcfepd)
975
1,000
% Gas
~90%
Realizations (before hedges)
Natural Gas (Differential to NYMEX Settled
Price) ($/Mcf)
$(0.10)
$(0.20)
NGL (% of WTI)
45%
50%
Oil (Differential to NYMEX WTI)
($/Bbl)
$(3.00)
$(4.00)
Operating Costs
Lease operating expense ($/Mcfe)
$0.13
$0.15
Taxes other than income ($/Mcfe)
$0.11
$0.13
Transportation, gathering, processing and
compression(1) ($/Mcfe)
$0.92
$0.96
Recurring general and administrative(2,3)
(in millions)
$45
$47
(1) Assumes rejection of TC Energy &
Rover firm transportation agreements.
(2) Recurring G&A includes
capitalization. It excludes non-cash stock compensation and
expenses related to certain legal and restructuring charges.
Total
Capital Expenditures (incurred)
(in millions)
D&C
$270
$290
Leasehold and Land
$20
Total
$290
$310
Free Cash Flow(3)
$290
$310
(3) This is a non-GAAP measure.
Reconciliations of these non-GAAP measures and other disclosures
are provided with the supplemental financial tables available on
our website at www.gulfportenergy.com.
Derivatives The following below details Gulfport's
hedging positions as of August 5, 2021:
3Q2021
4Q2021
2021(1)
2022
Natural Gas Contract Summary
(NYMEX):
Fixed Price Swaps
Volume (BBtupd)
245
198
222
141
Weighted Average Price ($/MMBtu)
$
2.75
$
2.85
$
2.79
$
2.88
Fixed Price Collars
Volume (BBtupd)
540
610
575
407
Weighted Average Floor Price ($/MMBtu)
$
2.56
$
2.59
$
2.58
$
2.58
Weighted Average Ceiling Price
($/MMBtu)
$
2.91
$
3.02
$
2.97
$
2.91
Fixed Price Calls Sold
Volume (BBtupd)
—
—
—
153
Weighted Average Price ($/MMBtu)
$
—
$
—
$
—
$
2.90
Rex Zone 3 Basis
Volume (BBtupd)
50
83
67
25
Differential ($/MMBtu)
$
(0.23
)
$
(0.12
)
$
(0.16
)
$
(0.10
)
Oil Contract Summary (WTI):
Fixed Price Swaps
Volume (Bblpd)
3,500
3,000
3,250
2,104
Weighted Average Price ($/Bbl)
$
57.09
$
57.67
$
57.35
$
66.23
Fixed Price Collars
Volume (Bblpd)
—
—
—
1,500
Weighted Average Floor Price ($/Bbl)
$
—
$
—
$
—
$
55.00
Weighted Average Ceiling Price ($/Bbl)
$
—
$
—
$
—
$
60.00
NGL Contract Summary:
C3 Propane Fixed Price Swaps
Volume (Bblpd)
3,100
3,100
3,100
496
Weighted Average Price ($/Bbl)
$
27.80
$
27.80
$
27.80
$
27.30
(1) July 1 - December 31, 2021
Second Quarter 2021 Conference Call
Gulfport will host a teleconference and webcast to discuss its
second quarter of 2021 results beginning at 9:00 a.m. ET (8:00 a.m.
CT) on Friday, August 6, 2021.
The conference call can be heard live through a link on the
Gulfport website, www.gulfportenergy.com. In addition, you may
participate in the conference call by dialing 866-373-3408
domestically or 412-902-1039 internationally. A replay of the
conference call will be available on the Gulfport website and a
telephone audio replay will be available from August 6, 2021 to
August 20, 2021, by calling 877-660-6853 domestically or
201-612-7415 internationally and then entering the replay passcode
13721683.
Financial Statements and Guidance Documents
Second quarter of 2021 earnings results and supplemental
information regarding quarterly data such as production volumes,
pricing, financial statements, and non-GAAP reconciliations are
available on our website at ir.gulfportenergy.com/.
Non-GAAP Disclosures
This news release includes non-GAAP financial measures. Such
non-GAAP measures should be not considered as an alternative to
GAAP measures. Reconciliations of these non-GAAP measures and other
disclosures are provided with the supplemental financial tables
available on our website at ir.gulfportenergy.com/.
About Gulfport
Gulfport is an independent natural gas-weighted exploration and
production company focused on the exploration, acquisition and
production of natural gas, crude oil and NGL in the United States
with primary focus in the Appalachia and Anadarko basins. Our
principal properties are located in Eastern Ohio targeting the
Utica formation and in central Oklahoma targeting the SCOOP
Woodford and SCOOP Springer formations.
Forward Looking Statements
This 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 Securities Exchange Act of
1934. Forward-looking statements are statements other than
statements of historical fact. They include statements regarding
Gulfport’s current expectations, management's outlook guidance or
forecasts of future events, projected cash flow and liquidity, its
ability to enhance cash flow and financial flexibility, future
production and commodity mix, plans and objectives for future
operations, the ability of our employees, portfolio strength and
operational leadership to create long-term value, the rejection of
certain midstream contracts and the assumptions on which such
statements are based. Gulfport believes the expectations and
forecasts reflected in the forward-looking statements are
reasonable, Gulfport can give no assurance they will prove to have
been correct. They can be affected by inaccurate or changed
assumptions or by known or unknown risks and uncertainties.
Important risks, assumptions and other important factors that could
cause future results to differ materially from those expressed in
the forward-looking statements are described under "Risk Factors"
in Item 1A of Gulfport’s annual report on Form 10-K for the year
ended December 31, 2020 and any updates to those factors set forth
in Gulfport's subsequent quarterly reports on Form 10-Q or current
reports on Form 8-K (available at
https://ir.gulfportenergy.com/all-sec-filings). Gulfport undertakes
no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events.
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. The information on
Gulfport’s website is not part of this filing.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805006115/en/
Investor Contact: Jessica Antle – Director, Investor
Relations jantle@gulfportenergy.com 405-252-4550 Media
Contact Reevemark Hugh Burns / Paul Caminiti / Nicholas Leasure
212-433-4600
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