Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three months ended June 30, 2022 and provided an update on its 2022
development plan and financial guidance.
Second Quarter 2022 and Recent Highlights
- Delivered total net production of 959.1 MMcfe per day
- Reported $256.6 million of net income and $204.5 million of
adjusted EBITDA(1)
- Generated $129.5 million of net cash provided by operating
activities and $80.3 million of free cash flow(1)
- Increased borrowing base to $1.0 billion from $850 million with
a $700 million elected commitment
- Repurchased approximately 2.2 million shares of common stock
for a total of $189.3 million as of July 28, 2022
- Expanded common stock repurchase program from $200 million to
$300 million
"Gulfport delivered another strong quarter, driven by the
continued outperformance of our historical development program and
the robust productivity from our 2022 SCOOP turn in lines. We
generated a significant amount of free cash flow during the first
six months of 2022, allowing us to return capital to our
shareholders while also maintaining our strong financial position,
exiting the quarter with a conservative leverage ratio below 1.0x.
We have repurchased a total of 2.2 million shares since initiating
and expanding the program, decreasing our common shares outstanding
by roughly 8% compared to the start of the program," commented Tim
Cutt, CEO of Gulfport.
“As we enter our period of peak activity in the third quarter,
the inflationary effects impacting the industry have led us to
increase our capital outlook for the year. In addition, the
required casing remediation we discussed in the previous quarter
caused us to release our Utica frac unit and delay the completion
program in 2022. After an approximately 45-day delay, we returned
to executing the Utica completion program and plan to bring the
next pad online in mid-August. This impacted our ability to achieve
the high end of our previously provided production guidance range,
despite the very strong start to the year."
"Our outlook for free cash flow remains strong with our free
cash flow guidance unchanged and we continue to prioritize the
return of capital to our shareholders through common stock
repurchases while also evaluating all additional opportunities of
return of capital. Our commitment to returning capital to
shareholders is further demonstrated by the Board’s $100 million
increase to the share repurchase program.”
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.
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 $300 million of its
outstanding shares of 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. The repurchase program may be
suspended from time to time, modified, extended or discontinued by
the board of directors at any time.
As of July 28, 2022, the Company had repurchased approximately
2.2 million shares of common stock at a weighted-average share
price of $86.59 during 2022, totaling approximately $189.3 million
in aggregate.
Operational Update
The table below summarizes Gulfport's operated drilling and
completion activity for the second quarter of 2022:
Quarter Ended June 30,
2022
Gross
Net
Lateral Length
Spud
Utica
2
1.3
13,400
SCOOP
2
1.5
10,290
Drilled
Utica
8
7.5
14,760
SCOOP
2
1.5
10,300
Completed
Utica
—
—
—
SCOOP
—
—
—
Turned-to-Sales
Utica
3
1.7
8,570
SCOOP
—
—
—
Gulfport’s net daily production for the second quarter of 2022
averaged 959.1 MMcfe per day, primarily consisting of 654.8 MMcfe
per day in the Utica and 304.3 MMcfe per day in the SCOOP. For the
second quarter of 2022, Gulfport’s net daily production mix was
comprised of approximately 90% natural gas, 7% natural gas liquids
("NGL") and 3% oil and condensate.
Successor
Non-GAAP Combined
Three Months Ended June 30,
2022
Three Months Ended June 30,
2021
Production
Natural gas (Mcf/day)
858,481
895,101
Oil and condensate (Bbl/day)
4,678
4,971
NGL (Bbl/day)
12,093
10,687
Total (Mcfe/day)
959,106
989,053
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
6.90
$
2.71
Impact from settled derivatives
($/Mcf)
(3.70
)
(0.12
)
Average price, including settled
derivatives ($/Mcf)
$
3.20
$
2.59
Oil and condensate:
Average price without the impact of
derivatives ($/Bbl)
$
105.72
$
62.95
Impact from settled derivatives
($/Bbl)
(33.55
)
—
Average price, including settled
derivatives ($/Bbl)
$
72.17
$
62.95
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
49.17
$
29.89
Impact from settled derivatives
($/Bbl)
(4.73
)
—
Average price, including settled
derivatives ($/Bbl)
$
44.44
$
29.89
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
7.31
$
3.09
Impact from settled derivatives
($/Mcfe)
(3.53
)
(0.11
)
Average price, including settled
derivatives ($/Mcfe)
$
3.78
$
2.98
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.16
$
0.12
Taxes other than income ($/Mcfe)
$
0.19
$
0.10
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
1.01
$
1.07
Recurring cash general and administrative
expenses ($ millions) (non-GAAP)
$
0.12
$
0.12
Interest expenses ($/Mcfe)
$
0.16
$
0.11
Capital Investment
Capital investment was $105.2 million (on an incurred basis) for
the second quarter of 2022, of which $95.2 million related to
drilling and completion (“D&C”) activity and $10.0 million
related to leasehold and land investment.
For the six-month period ended June 30, 2022, capital investment
was $205.6 million (on an incurred basis), of which $189.5 million
related to D&C activity and $16.0 million to leasehold and land
investment.
Financial Position and Liquidity
As of June 30, 2022, Gulfport had approximately $6.6 million of
cash and cash equivalents, $124.0 million of borrowings under its
credit facility, $113.2 million of letters of credit outstanding
and $550 million of outstanding 2026 Senior Notes.
Gulfport’s liquidity at June 30, 2022, totaled approximately
$469 million, comprised of the $6.6 million of cash and cash
equivalents and approximately $462.8 million of available borrowing
capacity under its credit facility.
In June 2022, the company paid approximately $1.4 million in
cash dividends on its preferred stock.
Spring Borrowing Base Redetermination
Gulfport completed its spring borrowing base redetermination
during the second quarter of 2022 and on May 2, 2022, the Company
entered into the first amendment to its credit agreement (the
“Amendment”) governing the credit facility. The Amendment, among
other things, increased the borrowing base under the 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.
Updated Full Year 2022 Guidance
Driven by inflationary effects, Gulfport has updated its
forecasted capital expenditures for D&C activity and expects to
invest in a range of $375 million to $405 million during 2022. In
addition, based on activity to date and planned activity, Gulfport
has increased its forecasted leasehold and land investment by
approximately $10 million during 2022.
Delays associated with the casing remediation in the Utica has
deferred the expected turn-in-line dates for several wells and
Gulfport has narrowed its expected full year net production to a
range of 975 MMcfe per day to 1,000 MMcfe per day.
Taking into account the previously mentioned updates, Gulfport
has also updated its transportation, gathering, processing and
compression expense per Mcfe for 2022.
Despite these changes, Gulfport maintained its free cash flow
guidance for the year.
Year Ending
December 31, 2022
Low
High
Production
Average daily gas equivalent (MMcfepd)
975
1,000
% Gas
~90%
Realizations (before hedges)
Natural gas (differential to NYMEX settled
price) ($/Mcf)
$(0.15)
$(0.25)
NGL (% of WTI)
45%
55%
Oil (differential to NYMEX WTI)
($/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)
$0.96
$1.00
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
$375
$405
Leasehold and land
$35
Total
$410
$440
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.
Second Quarter 2022 Conference Call
Gulfport will host a teleconference and webcast to discuss its
second quarter of 2022 results beginning at 9:00 a.m. ET (8:00 a.m.
CT) on Wednesday, August 3, 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 866-682-6100
domestically or 404-267-0373 internationally. A replay of the
conference call will be available on the Gulfport website and a
telephone audio replay will be available from August 4, 2022 to
August 18, 2022, by calling 877-660-6853 domestically or
201-612-7415 internationally and then entering the replay passcode
13731632.
Financial Statements and Guidance Documents
Second 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 and other return of capital plans, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220802005984/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
Gulfport Energy (NYSE:GPOR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Gulfport Energy (NYSE:GPOR)
Historical Stock Chart
From Jul 2023 to Jul 2024