Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three months ended June 30, 2023 and provided an update on its 2023
development plan and financial guidance.
Second Quarter 2023 and Recent Highlights
- Delivered total net production of 1,039.3 MMcfe per day, above
analyst consensus expectations
- Reported $93.7 million of net income and $144.5 million of
adjusted EBITDA(1), above analyst consensus expectations
- Per unit operating costs(2) totaled $1.16 per Mcfe, below
analyst consensus expectations
- Incurred capital expenditures of $129.3 million, below analyst
consensus expectations
- Completed and turned to sales 13 gross wells, including 11
wells in the Utica and 2 wells in the SCOOP
- Commenced drilling on Marcellus delineation test in Belmont
County, Ohio and plan to turn to sales during the fourth quarter
2023
- Completed secondary equity offering of 1.5 million shares of
common stock, increasing public equity float by approximately
18%
- Repurchased approximately 441.5 thousand shares for
approximately $41.4 million at a weighted average price of $93.67
per share during second quarter 2023
- Repurchased approximately 3.8 million shares of common stock
for approximately $325.0 million(3) since the inception of the
repurchase program
Updated Full Year 2023 Outlook
- Raising full year 2023 net production guidance to 1,035 MMcfe -
1,055 MMcfe per day, an increase of 1% to 3% based upon the
Company’s previously issued guidance range
- Reducing per unit operating costs(2) to $1.16 - $1.24 per Mcfe,
an improvement of approximately 4% based upon the midpoint of the
Company’s previously issued guidance range
- Revising realized natural gas liquids guidance to 35% - 40% of
WTI, an update to reflect market impacts to pricing realized to
date and the Company's expectations for the remainder of the
year
- Reaffirming guidance for total base capital expenditures of
$425 million – $475 million, consisting of drilling and completion
expenditures of $375 million - $400 million and maintenance
leasehold and land investment of $50 million - $75 million
- Reiterating plans to allocate substantially all 2023 adjusted
free cash flow(1) towards common share repurchases after
discretionary acreage acquisitions
- Planning to allocate approximately $40 million to targeted
discretionary acreage acquisitions
John Reinhart, President and CEO, commented, "This was another
solid quarter for Gulfport, delivering outperformance relative to
analyst consensus estimates for production, per unit operating
costs, adjusted EBITDA and capital expenditures. We continued to
exhibit strong operational execution and realized consistent cycle
time improvements on the operational planning, drilling and
completions front. These efficiencies resulted in accelerated turn
in line dates for all 13 gross wells brought online during the
second quarter, with the 11 gross Utica wells averaging a pad
turn-in-line date two weeks ahead of schedule. The team’s focus on
efficiencies and continuous improvements, in addition to our base
production performance, contributed to the second quarter
production results and led us to positively update our full year
production and per unit operating expense guidance. Subsequent to
June 30, the drilling team spud Gulfport's first Marcellus
delineation pad in Belmont County, Ohio. We look forward to
bringing this pad online during the fourth quarter of 2023 and
further discussing this development later in the year."
Reinhart continued, "The current natural gas environment
reinforces the importance of developing our assets in an efficient
and sustainable manner. Our team is focused on enhancing margins,
optimizing efficiencies, and protecting the financial strength of
the Company. This, in addition to the enhancement of our already
attractive acreage portfolio and a robust shareholder return
strategy, will further improve our strong positioning going
forward. We continue to prioritize the return of capital to our
shareholders through common stock repurchases, as further evidenced
by the concurrent repurchase alongside the secondary equity
offering in June 2023. Since initiating the program, we have
reduced our outstanding common shares by over 13%(3). For the
remainder of the year, we plan to continue allocating substantially
all of our adjusted free cash flow to common share repurchases
after accounting for discretionary acreage acquisitions. We are
actively pursuing these acquisition opportunities and intend to
allocate approximately $40 million from our robust 2023 adjusted
free cash flow to this acreage in the form of discretionary acreage
acquisitions that extend our high-quality inventory by
approximately 1.5 years and provide optionality for near term
development."
A company presentation to accompany the Gulfport earnings
conference call can be accessed by clicking here.
1.
A non-GAAP financial measure.
Reconciliations of these non-GAAP measures and other disclosures
are provided with the supplemental financial tables available on
our website at www.gulfportenergy.com.
2.
Includes lease operating expense,
transportation, gathering, processing and compression expense and
taxes other than income.
3.
As of July 27, 2023.
Operational Update
The table below summarizes Gulfport's operated drilling and
completion activity for the second quarter of 2023:
Quarter Ended June 30,
2023
Gross
Net
Lateral Length
Spud
Utica
2
1.7
18,700
SCOOP
—
—
—
Drilled
Utica
7
6.3
14,800
SCOOP
1
0.9
8,500
Completed
Utica
11
10.2
12,100
SCOOP
2
1.7
8,600
Turned-to-Sales
Utica
11
10.2
14,200
SCOOP
2
1.7
8,600
Gulfport’s net daily production for the second quarter of 2023
averaged 1,039.3 MMcfe per day, primarily consisting of 769.2 MMcfe
per day in the Utica and 270.1 MMcfe per day in the SCOOP. For the
second quarter of 2023, Gulfport’s net daily production mix was
comprised of approximately 91% natural gas, 7% natural gas liquids
("NGL") and 2% oil and condensate.
Three Months Ended June 30,
2023
Three Months Ended June 30,
2022
Production
Natural gas (Mcf/day)
945,910
858,481
Oil and condensate (Bbl/day)
3,533
4,678
NGL (Bbl/day)
12,036
12,093
Total (Mcfe/day)
1,039,323
959,106
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
1.85
$
6.90
Impact from settled derivatives
($/Mcf)
$
0.57
$
(3.70
)
Average price, including settled
derivatives ($/Mcf)
$
2.42
$
3.20
Oil and condensate:
Average price without the impact of
derivatives ($/Bbl)
$
70.30
$
105.72
Impact from settled derivatives
($/Bbl)
$
1.15
$
(33.55
)
Average price, including settled
derivatives ($/Bbl)
$
71.45
$
72.17
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
23.80
$
49.17
Impact from settled derivatives
($/Bbl)
$
2.47
$
(4.73
)
Average price, including settled
derivatives ($/Bbl)
$
26.27
$
44.44
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
2.20
$
7.31
Impact from settled derivatives
($/Mcfe)
$
0.56
$
(3.53
)
Average price, including settled
derivatives ($/Mcfe)
$
2.76
$
3.78
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.17
$
0.16
Taxes other than income ($/Mcfe)
$
0.08
$
0.19
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
0.91
$
1.01
Recurring cash general and administrative
expenses ($/Mcfe) (non-GAAP)
$
0.11
$
0.12
Interest expenses ($/Mcfe)
$
0.15
$
0.16
Capital Investment
Capital investment was $129.3 million (on an incurred basis) for
the second quarter of 2023, of which $110.6 million related to
drilling and completion (“D&C”) activity and $18.7 million
related to leasehold and land investment.
For the six-month period ended June 30, 2023, capital investment
was $276.2 million (on an incurred basis), of which $237.7 million
related to D&C activity and $38.5 million to leasehold and land
investment.
Common Stock Repurchase Program
Gulfport repurchased approximately 441.5 thousand shares of
common stock during the second quarter of 2023 at an average price
of $93.67. As of July 27, 2023, the Company had repurchased
approximately 3.8 million shares of common stock at a
weighted-average share price of $85.51 since the program initiated
in March 2022, totaling approximately $325.0 million in aggregate.
The Company currently has approximately $75.0 million of remaining
capacity under the share repurchase program.
Financial Position and Liquidity
As of June 30, 2023, Gulfport had approximately $5.3 million of
cash and cash equivalents, $99.0 million of 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 June 30, 2023, totaled approximately
$731.9 million, comprised of the $5.3 million of cash and cash
equivalents and approximately $726.6 million of available borrowing
capacity under its credit facility.
Full Year 2023 Guidance
The Company is providing updated full year 2023 guidance
(changes in italics) as set forth in the table below:
Year Ending
December 31, 2023
Low
High
Production
Average daily gas equivalent
(MMcfe/day)
1,035
1,055
% Gas
~90%
Realizations (before hedges)
Natural gas (differential to NYMEX settled
price) ($/Mcf)
$(0.20)
$(0.35)
NGL (% of WTI)
35%
40%
Oil (differential to NYMEX WTI)
($/Bbl)
$(3.00)
$(4.00)
Expenses
Lease operating expense ($/Mcfe)
$0.16
$0.18
Taxes other than income ($/Mcfe)
$0.10
$0.12
Transportation, gathering, processing and
compression ($/Mcfe)
$0.90
$0.94
Recurring cash general and
administrative(1,2) ($/Mcfe)
$0.11
$0.13
Total
Capital expenditures (incurred)
(in millions)
D&C
$375
$400
Maintenance leasehold and land
$50
$75
Total base capital expenditures
$425
$475
Discretionary acreage acquisitions
~$40
(1) Recurring cash G&A includes
capitalization. It excludes non-cash stock compensation and
expenses related to the continued administration of our prior
Chapter 11 filing.
(2) 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 2023 Conference Call
Gulfport will host a teleconference and webcast to discuss its
second quarter of 2023 results beginning at 9:00 a.m. ET (8:00 a.m.
CT) on Wednesday, August 2, 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 August 3, 2023 to
August 17, 2023, by calling 877-660-6853 domestically or
201-612-7415 internationally and then entering the replay passcode
13739877.
Financial Statements and Guidance Documents
Second 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 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, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801427181/en/
Jessica Antle – Director, Investor Relations
jantle@gulfportenergy.com 405-252-4550
Gulfport Energy (NYSE:GPOR)
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