Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operational results for the
three months ended March 31, 2023 and provided an update on its
2023 development plan and financial position.
First Quarter 2023 and Recent Highlights
- Delivered total net production of 1,057.4 MMcfe per day, above
analyst consensus expectations
- Reported $523.1 million of net income and $229.7 million of
adjusted EBITDA(1), above analyst consensus expectations
- Generated $304.1 million of net cash provided by operating
activities and $63.1 million of adjusted free cash flow(1)
- Reduced total debt outstanding by $145.0 million as compared to
December 31, 2022 and had no borrowings under the revolving credit
facility as of March 31, 2023
- Completed spring borrowing base redetermination of revolving
credit facility, which resulted in (1) borrowing base increase from
$1.0 billion to $1.1 billion, (2) elected commitments increase from
$700 million to $900 million, (3) addition of two financial
institutions to the bank group and (4) extension of the maturity to
May 2027
- Repurchased 459.1 thousand shares for $32.9 million at a
weighted average price of $71.61 per share during first quarter
2023
- Repurchased 55.0 thousand shares of common stock for $4.4
million subsequent to the end of first quarter 2023; repurchased
3.4 million shares of common stock for $288.1 million(2) since the
inception of the repurchase program
John Reinhart, President and CEO, commented, “We generated
significant free cash flow during the first quarter despite the
weaker commodity price environment, allowing us to continue to
return capital to our shareholders while improving our already
strong financial position as evidenced by our debt reduction of
$145 million and the improvement of our leverage ratio. The current
natural gas environment reinforces the importance of efficient and
sustainable development of our assets and the focus of our team to
enhance margins, optimize efficiencies, and protect the financial
strength of the Company will further improve our strong positioning
going forward. Our intention is to return substantially all of our
adjusted free cash flow to our shareholders through common share
repurchases after accounting for opportunistic acquisitions of
accretive leasehold opportunities that high-grade our resource
depth and provide optionality for our future development
plans."
Reinhart continued, “On the operational front, we are keenly
focused on optimizing the development of our high-quality asset
base in order to maximize the fundamental value of our company
while protecting our balance sheet and prioritizing cash flow
generation. In the first quarter of 2023, the Company delivered
operational and financial performance better than analyst consensus
estimates for both production and adjusted free cash flow while
reducing cycle times and increasing capital efficiency. The team’s
focus on efficiencies and continuous improvements in well
productivity position us well as we enter the second quarter and
continue to execute on our planned activity for the remainder of
the year. In addition to our initial operational cadence
improvements, we are also beginning to realize cost reductions in
our capital program which reinforce our full-year guidance range
for capital expenditures of $425 million to $475 million. We are
focused on delivering additional savings in the current environment
and will provide an update in future quarters. Our strong first
quarter performance, both financially and operationally, positions
the Company to deliver exceptional results while providing
strategic optionality throughout the remainder of 2023.”
A company presentation to accompany the Gulfport earnings
conference call can be accessed by clicking here.
1. 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. 2. As of April 26, 2023.
2023 Guidance
The Company is reaffirming its 2023 guidance previously issued
on February 28, 2023. Gulfport expects approximately 60% to 65% of
its drilling and completion ("D&C") capital expenditures for
2023 to occur in the first half of 2023 due to the higher level of
development activity experienced early in the year. In addition,
driven by strong production performance and efficiency gains
achieved to date, the Company currently forecasts total net
production to be trending to the high end of the previously
provided guidance range of 1,000 MMcfe to 1,040 MMcfe per day.
Operational Update
The table below summarizes Gulfport's operated drilling and
completion activity for the first quarter of 2023:
Quarter Ended March 31,
2023
Gross
Net
Lateral Length
Spud
Utica
6
5.3
14,500
SCOOP
2
1.5
8,600
Drilled
Utica
7
6.6
13,500
SCOOP
1
0.7
8,700
Completed
Utica
5
4.8
15,800
SCOOP
—
—
—
Turned-to-Sales
Utica
—
—
—
SCOOP
—
—
—
Gulfport’s net daily production for the first quarter of 2023
averaged 1,057.4 MMcfe per day, primarily consisting of 738.5 MMcfe
per day in the Utica and 318.9 MMcfe per day in the SCOOP. For the
first quarter of 2023, Gulfport’s net daily production mix was
comprised of approximately 89% natural gas, 8% natural gas liquids
("NGL") and 3% oil and condensate.
Three Months Ended March 31,
2023
Three Months Ended March 31,
2022
Production
Natural gas (Mcf/day)
944,408
924,496
Oil and condensate (Bbl/day)
4,729
3,632
NGL (Bbl/day)
14,096
10,294
Total (Mcfe/day)
1,057,359
1,008,052
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
3.32
$
4.87
Impact from settled derivatives
($/Mcf)
$
—
$
(1.34
)
Average price, including settled
derivatives ($/Mcf)
$
3.32
$
3.53
Oil and condensate:
Average price without the impact of
derivatives ($/Bbl)
$
72.16
$
92.51
Impact from settled derivatives
($/Bbl)
$
(1.04
)
$
(24.91
)
Average price, including settled
derivatives ($/Bbl)
$
71.12
$
67.60
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
31.46
$
48.88
Impact from settled derivatives
($/Bbl)
$
0.77
$
(6.20
)
Average price, including settled
derivatives ($/Bbl)
$
32.23
$
42.68
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
3.71
$
5.30
Impact from settled derivatives
($/Mcfe)
$
—
$
(1.38
)
Average price, including settled
derivatives ($/Mcfe)
$
3.71
$
3.92
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.21
$
0.19
Taxes other than income ($/Mcfe)
$
0.11
$
0.14
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
0.92
$
0.93
Recurring cash general and administrative
expenses ($/Mcfe) (non-GAAP)
$
0.10
$
0.11
Interest expenses ($/Mcfe)
$
0.14
$
0.15
Capital Investment
Capital investment was $147.0 million (on an incurred basis) for
the first quarter of 2023, of which $127.2 million related to
drilling and completion (“D&C”) activity and $19.8 million
related to leasehold and land investment.
Common Stock Repurchase Program
Gulfport's board of directors previously authorized the Company
to repurchase up to $400 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 April 26, 2023, the Company had repurchased 3.4 million
shares of common stock at a weighted-average share price of $84.38
since the program initiated in March 2022, totaling approximately
$288.1 million in aggregate.
Spring Borrowing Base Redetermination
Gulfport recently completed its spring borrowing base
redetermination and on May 1, 2023, the Company entered into the
3rd amendment to its credit agreement (the “Amendment”) governing
the Company's revolving credit facility. The Amendment, among other
things, increased the borrowing base under the credit facility from
$1 billion to $1.1 billion, with aggregate elected lender
commitments increasing from $700 million to $900 million. The
Company added two additional financial institutions to the bank
group, bringing the total financial institutions participating in
the Company’s revolving credit facility to 16. In addition, the
Amendment extended the maturity of the credit facility by more than
18 months to May 1, 2027. The Amendment increases Gulfport's
financial flexibility to continue to execute its business plan and
return capital to shareholders.
Michael Hodges, Gulfport’s CFO, commented, “We are pleased to
announce the results of our successful spring borrowing base
redetermination, which was driven by the underlying value of our
high-quality resource base despite the current natural gas price
environment. We greatly appreciate the support of our bank group as
we position the Company to opportunistically deliver value to our
stakeholders.”
Financial Position and Liquidity
As of March 31, 2023, Gulfport had approximately $3.5 million of
cash and cash equivalents, no outstanding borrowings under its
revolving credit facility, $74.4 million of letters of credit
outstanding and $550 million of outstanding 2026 senior notes.
Gulfport’s liquidity at March 31, 2023, totaled approximately
$629.1 million, comprised of the $3.5 million of cash and cash
equivalents and approximately $625.6 million of available borrowing
capacity under its revolving credit facility. Pro forma for the
Amendment, Gulfport's liquidity at March 31, 2023 increases by
approximately $200 million.
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 2023 Conference Call
Gulfport will host a teleconference and webcast to discuss its
first quarter of 2023 results beginning at 9:00 a.m. ET (8:00 a.m.
CT) on Wednesday, May 3, 2023.
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 4, 2023 to May
18, 2023, by calling 877-660-6853 domestically or 201-612-7415
internationally and then entering the replay passcode 13738078.
Financial Statements and Guidance Documents
First quarter of 2023 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, 2022 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/20230502006093/en/
Investor Contact: Jessica Antle – Director, Investor
Relations jantle@gulfportenergy.com 405-252-4550
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