Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three months ended March 31, 2022 and provided an update on its
2022 development plan and financial guidance.
First Quarter 2022 and Recent Highlights
- Delivered total net production of 1,008 MMcfe per day
- Reported $492.0 million of net loss and $235.3 million of
adjusted EBITDA(1)
- Generated $253.7 million of net cash provided by operating
activities and $116.8 million of free cash flow(1)
- Repurchased approximately 748 thousand shares of common stock
for a total of $63 million as of May 2, 2022
- Expanded common stock repurchase program from $100 million to
$200 million
Updated Full Year 2022 Outlook
- Increased expected capital expenditures to approximately $400
million(2)
- Increased forecasted free cash flow generation to a range of
$375 million to $425 million at current strip prices
"Gulfport reported strong first quarter 2022 results, driven by
the continued outperformance of our 2021 development program,
excellent uptime during the winter months and the addition of five
new SCOOP wells performing above expectations. As a result, we
generated significant free cash flow, which allowed us to begin
executing on our common stock repurchase program while maintaining
a strong financial position and leverage below 1.0x," commented Tim
Cutt, CEO of Gulfport.
"Our outlook for free cash flow continues to improve, despite
the growing inflationary effects that has led us to increase our
capital outlook for the year. Our development program builds during
the second quarter, before peaking in the third, which results in
executing a high percentage of our program at higher service
rates."
"We continue to prioritize the return of capital to shareholders
and are pleased to announce the expansion of our common stock
repurchase program, which is now authorized up to $200 million
during 2022."
A company presentation to accompany the Gulfport earnings
conference call can be accessed by clicking here.
- A non-GAAP financial 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.
- Assumes midpoint of 2022 guidance.
Expanded Common Stock Repurchase Program Gulfport's board
of directors recently expanded the Company's previously announced
common stock repurchase program and Gulfport is now authorized to
repurchase up to $200 million of its outstanding shares of common
stock through December 31, 2022. 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. The repurchase program may be
suspended from time to time, modified, extended or discontinued by
the board of directors at any time.
As of May 2, 2022, the Company had repurchased 748 thousand
shares of common stock at a weighted-average share price of $84.26
during 2022, totaling approximately $63 million in aggregate.
Operational Update The table below summarizes Gulfport's
operated drilling and completion activity for the first quarter of
2022:
Quarter Ended March 31,
2022
Gross
Net
Lateral Length
Spud
Utica(1)
5
5.0
16,910
SCOOP
4
2.8
10,320
Drilled
Utica
5
4.0
14,170
SCOOP
4
2.5
10,250
Completed
Utica
3
1.7
8,570
SCOOP
5
4.8
9,880
Turned-to-Sales
Utica
—
—
—
SCOOP
5
4.8
9,880
(1) Includes 5 gross wells spud with a
top-hole rig
Gulfport’s net daily production for the first quarter of 2022
averaged 1,008.1 MMcfe per day, primarily consisting of 779.1 MMcfe
per day in the Utica and 228.9 MMcfe per day in the SCOOP. For the
first quarter of 2022, Gulfport’s net daily production mix was
comprised of approximately 92% natural gas, 6% natural gas liquids
("NGL") and 2% oil and condensate.
Successor
Predecessor
Three Months Ended
March 31, 2022
Three Months Ended
March 31, 2021
Production
Natural gas (Mcf/day)
924,496
909,240
Oil and condensate (Bbl/day)
3,632
3,822
NGL (Bbl/day)
10,294
8,427
Total (Mcfe/day)
1,008,052
982,729
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
4.87
$
2.88
Impact from settled derivatives
($/Mcf)
(1.34
)
—
Average price, including settled
derivatives ($/Mcf)
$
3.53
$
2.88
Oil and condensate:
Average price without the impact of
derivatives ($/Bbl)
$
92.51
$
53.03
Impact from settled derivatives
($/Bbl)
(24.91
)
—
Average price, including settled
derivatives ($/Bbl)
$
67.60
$
53.03
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
48.88
$
31.35
Impact from settled derivatives
($/Bbl)
(6.20
)
—
Average price, including settled
derivatives ($/Bbl)
$
42.68
$
31.35
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
5.30
$
3.14
Impact from settled derivatives
($/Mcfe)
(1.38
)
—
Average price, including settled
derivatives ($/Mcfe)
$
3.92
$
3.14
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.19
$
0.14
Taxes other than income ($/Mcfe)
$
0.14
$
0.10
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
0.93
$
1.20
Recurring cash general and administrative
expenses ($ millions) (non-GAAP)
$
0.11
$
0.12
Interest expenses ($/Mcfe)
$
0.15
$
0.04
Capital Investment Capital investment was $100.4 million
(on an incurred basis) for the first quarter of 2022, of which
$94.3 million related to drilling and completion (“D&C”)
activity and $6.1 million related to leasehold and land
investment.
Financial Position and Liquidity As of March 31, 2022,
Gulfport had approximately $5.9 million of cash and cash
equivalents, $25.0 million of borrowings under its New Credit
Facility, $113.2 million of letters of credit outstanding and $550
million of outstanding 2026 Senior Notes.
Gulfport’s liquidity at March 31, 2022, totaled approximately
$568 million, comprised of the $5.9 million of cash and cash
equivalents and approximately $561.8 million of available borrowing
capacity under its New Credit Facility.
In March 2022, the company paid approximately $1.5 million in
cash dividends on its preferred stock.
Spring Borrowing Base Redetermination Gulfport recently
completed its spring borrowing base redetermination and on May 2,
2022, the Company entered into the first amendment to its credit
agreement (the “Amendment”) governing the New Credit Facility. The
Amendment, among other things, increased the borrowing base under
the New Credit Facility from $850 million to $1 billion, with
aggregate elected lender commitments to remain at $700 million. In
addition, the Amendment eased certain requirements and limitations
related to hedging, amended the covenants governing certain
restricted payments and provides for the transition from a LIBOR to
a SOFR benchmark. The Amendment increases Gulfport's financial
flexibility to continue to execute our business plan and provides
additional clarity around our ability to return capital to
shareholders.
2022 Guidance Update Driven by increasing inflationary
effects, Gulfport has updated its forecasted capital expenditures
for D&C activity and expects to invest in a range of $355
million to $395 million during 2022. In addition, based on activity
to date and planned activity, Gulfport has increased its forecasted
leasehold and land investment to approximately $25 million during
2022.
Taking into account the previously mentioned updates in
combination with a significant increase in commodity prices,
Gulfport has updated its expected free cash flow (non-GAAP measure)
and forecasted taxes other than income per Mcfe guidance for
2022.
Year Ending
December 31, 2022
Low
High
Production
Average daily gas equivalent (MMcfepd)
975
1,025
% Gas
~90%
Realizations (before hedges)
Natural gas (differential to NYMEX settled
price) ($/Mcf)
$(0.15)
$(0.25)
NGL (% of WTI)
45%
55%
Oil (differential to NYMEX WTI)
($/Bbl)
$(3.00)
$(4.00)
Operating costs
Lease operating expense ($/Mcfe)
$0.16
$0.18
Taxes other than income ($/Mcfe)
$0.15
$0.17
Transportation, gathering, processing and
compression(1) ($/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
$355
$395
Leasehold and land
$25
Total
$380
$420
Free cash flow(3)
$375
$425
(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 Gulfport enters into commodity derivative
contracts on a portion 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.
First Quarter 2022 Conference Call Gulfport will host a
teleconference and webcast to discuss its first quarter of 2022
results beginning at 9:00 a.m. ET (8:00 a.m. CT) on Wednesday, May
4, 2022.
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 May 5, 2022 to May
19, 2022, by calling 877-660-6853 domestically or 201-612-7415
internationally and then entering the replay passcode 13729307.
Financial Statements and Guidance Documents First quarter
of 2022 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, inflation, 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, 2021 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://www.gulfportenergy.com/investors/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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220503006031/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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