Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three months ended September 30, 2022 and provided an update on its
2022 development plan and financial guidance.
Third Quarter 2022 and Recent Highlights
- Delivered total net production of 914.9 MMcfe per day
- Completed four-well Extreme pad in the Utica and brought online
at a combined gross peak production rate of approximately 140 MMcfe
per day
- Reported $18.5 million of net loss and $172.7 million of
adjusted EBITDA(1)
- Generated $167.9 million of net cash provided by operating
activities and $11.1 million of free cash flow(1)
- Reaffirmed borrowing base of $1.0 billion with elected
commitments to remain at $700 million
- Returned approximately $232.8 million of capital to
shareholders through the repurchase of approximately 2.7 million
shares of common stock through October 27, 2022
- Issued 2022 Corporate Sustainability Report and remain
committed to delivering clean, low-carbon energy in a safe,
environmentally responsible manner
"The third quarter marked the most active quarter of Gulfport's
2022 operational plan, as we completed 18 wells across our
operating areas. Our third quarter production came in as expected,
turning to sales nine wells in total, six of which occurred during
September providing minimal production uplift for the quarter. Our
base production and 2022 turn in lines continue to perform at or
above expectations and we remain on track to bring online an
additional 11 wells during the fourth quarter. We forecast a strong
quarter over quarter production increase of more than 15%, and we
reiterate our previously provided production guidance," commented
Tim Cutt, CEO of Gulfport.
"To improve the efficiency of our 2023 development program, we
have elected to add a top hole drilling rig in the Utica during the
fourth quarter of 2022. This will accelerate our drilling program
as we enter 2023 and begin drilling seven additional wells during
2022. The accelerated activity will enable us to execute a
continuous completion program in the Utica, eliminating the risk of
releasing crews in today's tight service market and providing the
opportunity for increased efficiencies and cost savings. This
additional capital, coupled with the recent decrease in commodity
prices and widening of basis differentials, has resulted in an
update to our full year 2022 free cash flow guidance to
approximately $300 million."
"We continue to prioritize the return of capital to our
shareholders through common stock repurchases, repurchasing a total
of 2.7 million shares since initiating the program, reducing our
outstanding common shares by over 10% compared to the start of the
program. Consistent with 2022, we expect to return our 2023 free
cash flow to shareholders, excluding acquisitions, while
maintaining a conservative leverage ratio."
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.
2022 Corporate Sustainability Report
Gulfport today released its 2022 Corporate Sustainability
Report. The report is a direct reflection of Gulfport’s continuous
improvement culture and incorporates numerous ESG data points. The
Company continues prioritizing the delivery of low-emission
hydrocarbons the world needs while maintaining our position as a
responsible producer. The report is available at
gulfportenergy.com/sustainability.
Common Stock Repurchase Program
Gulfport's Board of Directors previously authorized the Company
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 October 27, 2022, the Company had repurchased
approximately 2.7 million shares of common stock at a
weighted-average share price of $87.37 during 2022, totaling
approximately $232.8 million in aggregate.
Operational Update
The table below summarizes Gulfport's operated drilling and
completion activity for the third quarter of 2022:
Quarter Ended September 30,
2022
Gross
Net
Lateral Length
Spud
Utica
4
3.8
17,950
SCOOP
—
—
—
Drilled
Utica
3
2.6
14,250
SCOOP
2
1.5
10,150
Completed
Utica
12
11.7
15,000
SCOOP
6
3.7
10,200
Turned-to-Sales
Utica
7
6.8
14,850
SCOOP
2
1.2
10,000
Gulfport’s net daily production for the third quarter of 2022
averaged 914.9 MMcfe per day, primarily consisting of 615.6 MMcfe
per day in the Utica and 299.2 MMcfe per day in the SCOOP. For the
third quarter of 2022, Gulfport’s net daily production mix was
comprised of approximately 89% natural gas, 8% natural gas liquids
("NGL") and 3% oil and condensate.
Successor
Three Months Ended September
30, 2022
Production
Natural gas (Mcf/day)
815,660
Oil and condensate (Bbl/day)
4,366
NGL (Bbl/day)
12,172
Total (Mcfe/day)
914,888
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
7.80
Impact from settled derivatives
($/Mcf)
(4.72
)
Average price, including settled
derivatives ($/Mcf)
$
3.08
Oil and condensate:
Average price without the impact of
derivatives ($/Bbl)
$
89.75
Impact from settled derivatives
($/Bbl)
(22.49
)
Average price, including settled
derivatives ($/Bbl)
$
67.26
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
39.61
Impact from settled derivatives
($/Bbl)
(2.53
)
Average price, including settled
derivatives ($/Bbl)
$
37.08
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
7.91
Impact from settled derivatives
($/Mcfe)
(4.35
)
Average price, including settled
derivatives ($/Mcfe)
$
3.56
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.18
Taxes other than income ($/Mcfe)
$
0.20
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
1.06
Recurring cash general and administrative
expenses ($/Mcfe) (non-GAAP)
$
0.12
Interest expenses ($/Mcfe)
$
0.18
Capital Investment
Capital investment was $141.4 million (on an incurred basis) for
the third quarter of 2022, of which $133.3 million related to
drilling and completion (“D&C”) activity and $8.1 million
related to leasehold and land investment.
For the nine-month period ended September 30, 2022, capital
investment was $346.7 million (on an incurred basis), of which
$322.5 million related to D&C activity and $24.2 million to
leasehold and land investment.
Financial Position and Liquidity
As of September 30, 2022, Gulfport had approximately $8.3
million of cash and cash equivalents, $179.0 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 September 30, 2022, totaled
approximately $416 million, comprised of the $8.3 million of cash
and cash equivalents and approximately $407.8 million of available
borrowing capacity under its credit facility.
In September 2022, the company paid approximately $1.3 million
in cash dividends on its preferred stock.
Fall Borrowing Base Redetermination
On October 31, 2022, Gulfport completed its semi-annual
borrowing base redetermination during which the borrowing base was
reaffirmed at $1.0 billion with the elected commitments to remain
at $700 million.
Updated Full Year 2022 Guidance
Gulfport has updated its forecasted capital expenditures for
D&C activity to include the addition of a top hole drilling rig
in the Utica during the fourth quarter of 2022. This increased
level of activity will allow for Gulfport to execute a continuous
completion program during 2023, ultimately providing the
opportunity for increased efficiencies and cost savings. Including
this incremental activity, Gulfport now expects to invest in
approximately $415 million on D&C capital during 2022. The
Company continues to finalize the details of its 2023 development
plan but assuming approximately 1.5 rigs in the Utica and a
continuous rig program in the SCOOP, we are currently forecasting
an increase of less than 5% in D&C capital for 2023 over
2022.
Gulfport has updated its guidance for its expected realized
natural gas differential, before hedges, to $(0.30) to $(0.40) off
NYMEX from a range of $(0.15) to $(0.25) previously. The widening
differential is driven by actual settled prices during the months
of September and October as well as current expectations for the
remainder of the fourth quarter of 2022.
Taking into account the previously mentioned updates, Gulfport
has also updated its free cash flow guidance for the year to
approximately $300 million.
Gulfport's 2022 guidance assumes commodity strip prices as of
October 10, 2022, adjusted for applicable commodity and location
differentials, and no property acquisitions or divestitures.
Year Ending
December 31, 2022
Low
High
Production
Average daily gas equivalent (MMcfepd)
975
1,000
% Gas
~90%
Realizations (before hedges)
Natural gas (differential to NYMEX settled
price) ($/Mcf)
$(0.30)
$(0.40)
NGL (% of WTI)
45%
55%
Oil (differential to NYMEX WTI)
($/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
$415
Leasehold and land
35
Total
$450
Free cash flow(3)
$300
(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.
Third Quarter 2022 Conference Call
Gulfport will host a teleconference and webcast to discuss its
third quarter of 2022 results beginning at 9:30 a.m. ET (8:30 a.m.
CT) on Wednesday, November 2, 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 November 3, 2022 to
November 17, 2022, by calling 877-660-6853 domestically or
201-612-7415 internationally and then entering the replay passcode
13731701.
Financial Statements and Guidance Documents
Third 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20221101006127/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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