Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three months and nine months ended September 30, 2021 and provided
an updated 2021 development plan and financial guidance.
Highlights(1)
- Amended credit facility increasing liquidity by more than $160
million
- Authorized stock repurchase program to acquire up to $100
million of outstanding common stock(2)
- Completed six-well Angelo pad in the Utica during the third
quarter and subsequently brought online at a combined gross
production rate of 250 MMcfe per day
- Reported $126.3 million of Net Cash Provided by Operating
Activities
- Delivered $69.7 million of Free Cash Flow (non-GAAP
measure)
- Reduced 2021 full year Recurring Cash General and
Administrative Expense (non-GAAP measure) guidance to total $42 to
$44 million, a $3 million decrease from the previous midpoint
- Increased expected 2021 full year Free Cash Flow (non-GAAP
measure) guidance to $345 million to $365 million, a $55 million
increase from previous midpoint
"Gulfport delivered strong third quarter 2021 results, driven by
reservoir outperformance and operational execution. In addition,
the six-well Angelo pad was completed and subsequently brought
online ahead of expectations. The efficiencies realized across the
enterprise to date have enabled us to improve our 2021 guidance,
narrowing the outlook for full year net production and reducing our
forecasted G&A expense to the expected 2022 run rate. These
improvements, coupled with the recent strength in commodities,
resulted in another quarter of free cash flow generation and
positions the Company to deliver significant free cash flow going
forward," commented Tim Cutt, CEO of Gulfport.
"We recently amended the Company's credit facility, increasing
our liquidity by more than $160 million. The amendment provides the
financial flexibility to execute our ongoing business plan and
accelerates our ability to begin returning capital to shareholders,
as demonstrated with today's announcement of the stock repurchase
program."
A company presentation to accompany the Gulfport earnings
conference call can be accessed by clicking here.
- 2021 full year outlook reflects 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.
- Subject to available liquidity, market conditions and
restrictions under the credit facility.
Stock Repurchase Program
Gulfport announced today that its board of directors has
approved a stock repurchase program to acquire up to $100 million
of its outstanding common stock. Purchases under the repurchase
program may be made from time to time in open market or privately
negotiated transactions, and will be subject to available
liquidity, market conditions, credit agreement restrictions,
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
capital development program. This repurchase program is authorized
to extend through December 31, 2022 and may be suspended from time
to time, modified, extended or discontinued by the board of
directors at any time.
Operational Update
For the third quarter of 2021, the Company spud two gross
operated wells in the Utica with a planned average lateral length
of approximately 15,920 feet and two gross operated wells in the
SCOOP with a planned average lateral length of approximately 9,880
feet. In addition, Gulfport turned-to-sales two gross operated
wells in the Utica with an average lateral length of approximately
13,700 feet.
Gulfport’s net daily production for the third quarter of 2021
averaged 973.3 MMcfe per day, primarily consisting of 699.0 MMcfe
per day in the Utica and 273.8 MMcfe per day in the SCOOP. For the
third quarter of 2021, Gulfport’s net daily production mix was
comprised of approximately 89% natural gas, 8% natural gas liquids
("NGL") and 3% oil.
Subsequent to the third quarter of 2021, Gulfport agreed to
monetize certain overriding royalty interests associated with
assets held in the Bakken to a third party for approximately $3.8
million in cash. Net production from the assets averaged
approximately 50 Boe per day, comprised of approximately 92% oil.
The effective date of the transaction is August 1, 2021 and the
transaction is expected to close in the fourth quarter of 2021.
Successor
Predecessor
Three Months Ended September
30, 2021
Three Months Ended
September 30, 2020
Production
Natural gas (Mcf/day)
866,446
902,660
Oil and condensate (Bbl/day)
5,371
4,840
NGL (Bbl/day)
12,434
10,047
Total (Mcfe/day)
973,281
991,983
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
3.78
$
1.87
Impact from settled derivatives
($/Mcf)
(1.04
)
0.38
Average price, including settled
derivatives ($/Mcf)
$
2.74
$
2.25
Oil:
Average price without the impact of
derivatives ($/Bbl)
$
67.37
$
35.96
Impact from settled derivatives
($/Bbl)
(8.77
)
(3.38
)
Average price, including settled
derivatives ($/Bbl)
$
58.60
$
32.58
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
39.47
$
20.37
Impact from settled derivatives
($/Bbl)
(5.23
)
—
Average price, including settled
derivatives ($/Bbl)
$
34.24
$
20.37
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
4.24
$
2.08
Impact from settled derivatives
($/Mcfe)
(1.04
)
0.33
Average price, including settled
derivatives ($/Mcfe)
$
3.20
$
2.41
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.15
$
0.15
Taxes other than income ($/Mcfe)
$
0.13
$
0.07
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
0.94
$
1.21
Recurring cash general and administrative
expenses ($ millions) (non-GAAP)
$
0.11
$
0.14
Interest expenses ($/Mcfe)
$
0.18
$
0.38
Capital Investment
Capital investment was $80.9 million (on an incurred basis) for
the third quarter of 2021, of which $77.8 million related to
drilling and completion (“D&C”) activity and $3.1 million
related to leasehold and land investment.
For the nine-month period ended September 30, 2021, capital
investment was $221.5 million (on an incurred basis), of which
$214.0 million related to D&C activity and $7.5 million to
leasehold and land investment.
Amended and Restated Credit Facility
On October 14, 2021, Gulfport announced that it has entered into
the Third Amended and Restated Credit Agreement (“Amendment”),
which amends and refinances the Company’s Credit Agreement, dated
as of May 17, 2021 (“Exit Facility”). The Amendment provides for,
among other things, an increase in aggregate elected lender
commitments from $580 million to $700 million, the repayment of the
term loan under the Exit Facility, the elimination of the $40
million availability blocker and a maturity date extension to
October 2025 from May 2024.
Financial Position and Liquidity
As of September 30, 2021, Gulfport had approximately $4.5
million of cash and cash equivalents, $200.6 million of borrowings
under its Exit Facility, $115.5 million of letters of credit
outstanding and $550 million of outstanding 2026 senior notes.
Pro forma for the Amendment, Gulfport’s liquidity at September
30, 2021, totaled approximately $388 million, comprised of the $4.5
million of cash and cash equivalents and approximately $384 million
of available borrowing capacity under its new revolving credit
facility.
On September 30, 2021, the company paid dividends on its
Preferred Stock, which included 2,065 shares of New Preferred Stock
paid in kind and approximately $30,000 of cash in lieu of
fractional shares.
2021 Guidance Update
Driven by reservoir outperformance and operational execution in
the Utica coming in ahead of expectations, Gulfport has narrowed
its 2021 full year net production guidance range to average 980
MMcfe to 1,000 MMcfe per day.
Gulfport increased guidance for its expected realized natural
gas liquids price, before hedges, as a percent of WTI to 55% to 60%
from a range of 45% to 50% previously. The increase was driven by
strong realizations reported during the nine-month period ended
September 30, 2021 and expectations for continued strong
fundamentals to result in higher prices during the fourth quarter
of 2021.
Recurring cash general and administrative expense ("G&A")
(non-GAAP measure) guidance was reduced to total $42 million to $44
million for full year 2021, a decrease of $3 million from the
previous midpoint, reflecting the Company's continued focus on
reducing costs to target top-quartile G&A and in line with its
expected 2022 run rate.
As a result of all the previously mentioned updates combined
with a significant increase in commodity prices, Gulfport has
increased its forecasted free cash flow (non-GAAP measure) guidance
for 2021 to $345 to $365 million.
Year Ending
12/31/21
Low
High
Production
Average Daily Gas Equivalent (MMcfepd)
980
1,000
% Gas
~90%
Realizations (before hedges)
Natural Gas (Differential to NYMEX Settled
Price) ($/Mcf)
$(0.10)
$(0.20)
NGL (% of WTI)
55%
60%
Oil (Differential to NYMEX WTI)
($/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 cash general and
administrative(2,3) (in millions)
$42
$44
(1) Assumes rejection of Rover firm
transportation agreement.
(2) Recurring cash 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)
$345
$365
(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 ir.gulfportenergy.com.
Derivatives
Gulfport hedges portions of its expected future production
volumes to mitigate the Company's exposure to commodity price
fluctuations. For details, please refer to the "Derivatives"
section provided with the supplemental financial tables available
on our website at ir.gulfportenergy.com.
Third Quarter 2021 Conference Call
Gulfport will host a teleconference and webcast to discuss its
third quarter of 2021 results beginning at 9:00 a.m. ET (8:00 a.m.
CT) on Wednesday, November 3, 2021.
The conference call can be heard live through a link on the
Gulfport website, ir.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 November 4, 2021 to
November 18, 2021, by calling 877-660-6853 domestically or
201-612-7415 internationally and then entering the replay passcode
13724300.
Financial Statements and Guidance Documents
Third 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,
share repurchases, 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/20211102006091/en/
Investor Contact: Jessica Antle – Director, Investor
Relations jantle@gulfportenergy.com 405-252-4550
Thomas Renouard - Senior Analyst, Investor Relations
trenouard@gulfportenergy.com 405-252-4550
Media Contact Reevemark Hugh Burns / Paul Caminiti /
Nicholas Leasure 212-433-4600
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