Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three months ended September 30, 2023 and provided an update on its
2023 development plan and financial guidance.
Third Quarter 2023 and Recent Highlights
- Delivered total net production of 1,056.9 MMcfe per day, above
analyst consensus expectations
- Reported $608.4 million of net income and $160.0 million of
adjusted EBITDA(1), above analyst consensus expectations
- Generated $156.3 million of net cash provided by operating
activities and $48.9 million of adjusted free cash flow(1),
excluding discretionary acreage acquisitions and above analyst
consensus expectations
- Incurred capital expenditures, excluding discretionary acreage
acquisitions, of $89.8 million, below analyst consensus
expectations
- Utilized adjusted free cash flow(1) for discretionary acreage
acquisitions totaling $19.4 million
- Per unit operating costs(2) totaled $1.12 per Mcfe, below
analyst consensus expectations
- Expanded common stock repurchase authorization by 63 percent to
$650 million
- Repurchased 3.9 million shares of common stock for
approximately $334.6 million(3) since the inception of the
repurchase program
- Reaffirmed borrowing base of $1.1 billion with elected
commitments to remain at $900 million
- Completed Marcellus two-well pad in Belmont County, Ohio and
recently began flowback operations in October 2023
- Issued 2023 Corporate Sustainability Report and remain
committed to delivering cleaner, lower carbon energy in a safe,
environmentally responsible manner
Updated Full Year 2023 Outlook
- Raising full year 2023 net production guidance to 1,045 MMcfe -
1,055 MMcfe per day
- Reducing guidance for total base capital expenditures to $435
million – $455 million, consisting of drilling and completion
expenditures of $385 million - $395 million and maintenance
leasehold and land investment of $50 million - $60 million,
excluding discretionary acreage acquisitions
John Reinhart, President and CEO, commented, "Gulfport continued
to make steady progress in the third quarter, demonstrated by our
strong production profile, robust margins, improvement in
operational efficiencies and cycle times and the continued return
of capital to shareholders through our common share repurchase
program. Our operations teams continue to perform at a high level
of efficiency and as a result, we forecast the Company has realized
over $35 million in capital savings on our full year 2023 drilling
and completion budget. We have elected to reinvest these savings
into our high-quality assets, increasing our operated working
interests and adding incremental activity in both the Utica and
SCOOP. We plan to accelerate drilling on seven additional wells,
two of which will complete drilling during the fourth quarter, as
well as initiate completion operations on a three-well Utica pad.
This activity is predominantly focused in our liquids rich areas,
benefiting our 2024 program and positioning us well as we enter
next year. Including this additional activity, we are lowering our
2023 capital budget while also increasing our 2023 production
guidance, delivering total net production approximately 3% above
our initial 2023 guidance provided in February.”
Reinhart continued, "We continue to prioritize the return of
capital to our shareholders through common stock repurchases, as
further evidenced by the recent increase in the size of the program
in place by 63% to $650 million. We plan to continue allocating
substantially all of our adjusted free cash flow to common share
repurchases after accounting for discretionary acreage
acquisitions. Through September 30, we have invested roughly $25
million in discretionary acreage acquisition opportunities during
2023 and remain on target to allocate $40 million of our robust
2023 adjusted free cash flow to be invested in extending our
high-quality inventory by approximately 1.5 years and provide
optionality for near term development."
A company presentation to accompany the Gulfport earnings
conference call can be accessed by clicking here.
1. A non-GAAP financial measure. Reconciliations of these
non-GAAP measures and other disclosures are provided with the
supplemental financial tables available on our website at
www.gulfportenergy.com. 2. Includes lease operating expense,
transportation, gathering, processing and compression expense and
taxes other than income. 3. As of October 26, 2023.
Operational Update
The table below summarizes Gulfport's operated drilling and
completion activity for the third quarter of 2023:
Quarter Ended September 30,
2023
Gross
Net
Lateral Length
Spud
Utica/Marcellus
5
5.0
17,300
SCOOP
—
—
—
Drilled
Utica/Marcellus
2
2.0
11,900
SCOOP
—
—
—
Completed
Utica/Marcellus
6
5.3
16,100
SCOOP
—
—
—
Turned-to-Sales
Utica/Marcellus
5
4.9
11,300
SCOOP
—
—
—
Gulfport’s net daily production for the third quarter of 2023
averaged 1,056.9 MMcfe per day, primarily consisting of 812.0 MMcfe
per day in the Utica and 244.9 MMcfe per day in the SCOOP. For the
third quarter of 2023, Gulfport’s net daily production mix was
comprised of approximately 92% natural gas, 6% natural gas liquids
("NGL") and 2% oil and condensate.
Three Months Ended September
30, 2023
Three Months Ended September
30, 2022
Production
Natural gas (Mcf/day)
971,352
815,660
Oil and condensate (Bbl/day)
3,195
4,366
NGL (Bbl/day)
11,061
12,172
Total (Mcfe/day)
1,056,887
914,888
Average Prices
Natural Gas:
Average price without the impact of
derivatives ($/Mcf)
$
1.99
$
7.80
Impact from settled derivatives
($/Mcf)
$
0.54
$
(4.72
)
Average price, including settled
derivatives ($/Mcf)
$
2.53
$
3.08
Oil and condensate:
Average price without the impact of
derivatives ($/Bbl)
$
77.90
$
89.75
Impact from settled derivatives
($/Bbl)
$
(7.25
)
$
(22.49
)
Average price, including settled
derivatives ($/Bbl)
$
70.65
$
67.26
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
26.49
$
39.61
Impact from settled derivatives
($/Bbl)
$
2.62
$
(2.53
)
Average price, including settled
derivatives ($/Bbl)
$
29.11
$
37.08
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
2.34
$
7.91
Impact from settled derivatives
($/Mcfe)
$
0.50
$
(4.35
)
Average price, including settled
derivatives ($/Mcfe)
$
2.84
$
3.56
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.16
$
0.18
Taxes other than income ($/Mcfe)
$
0.07
$
0.20
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
0.89
$
1.06
Recurring cash general and administrative
expenses ($/Mcfe) (non-GAAP)
$
0.12
$
0.12
Interest expenses ($/Mcfe)
$
0.15
$
0.18
Capital Investment
Capital investment was $89.8 million (on an incurred basis) for
the third quarter of 2023, of which $81.4 million related to
drilling and completion (“D&C”) activity and $8.4 million
related to maintenance leasehold and land investment. In addition,
Gulfport invested approximately $19.4 million in discretionary
acreage acquisitions.
For the nine-month period ended September 30, 2023, capital
investment was $360.6 million (on an incurred basis), of which
$319.2 million related to D&C activity and $41.4 million
related to maintenance leasehold and land investment. In addition,
Gulfport invested approximately $24.9 million in discretionary
acreage acquisitions.
Common Stock Repurchase Program
Gulfport repurchased approximately 76.2 thousand shares of
common stock during the third quarter of 2023 at an average price
of $113.97. As of October 26, 2023, the Company had repurchased
approximately 3.9 million shares of common stock at a
weighted-average share price of $86.14 since the program initiated
in March 2022, totaling approximately $334.6 million in aggregate.
The Company currently has approximately $315.4 million of remaining
capacity under the share repurchase program.
Financial Position and Liquidity
As of September 30, 2023, Gulfport had approximately $8.3
million of cash and cash equivalents, $95.0 million of borrowings
under its revolving credit facility, $66.9 million of letters of
credit outstanding and $550 million of outstanding 2026 senior
notes.
Gulfport’s liquidity at September 30, 2023, totaled
approximately $746.4 million, comprised of the $8.3 million of cash
and cash equivalents and approximately $738.1 million of available
borrowing capacity under its credit facility.
Credit Facility Borrowing Base Redetermination
On October 27, 2023, Gulfport completed its semi-annual
borrowing base redetermination during which the borrowing base was
reaffirmed at $1.1 billion with the elected commitments remaining
at $900 million.
Full Year 2023 Guidance
The Company is providing updated full year 2023 guidance
(changes in italics) as set forth in the table below:
Year Ending
December 31, 2023
Low
High
Production
Average daily gas equivalent
(MMcfe/day)
1,045
1,055
% Gas
~90%
Realizations (before hedges)
Natural gas (differential to NYMEX settled
price) ($/Mcf)
$
(0.20
)
$
(0.35
)
NGL (% of WTI)
35
%
40
%
Oil (differential to NYMEX WTI)
($/Bbl)
$
(3.50
)
$
(4.50
)
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
$
385
$
395
Maintenance leasehold and land
$
50
$
60
Total base capital expenditures
$
435
$
455
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.
Third Quarter 2023 Conference Call
Gulfport will host a teleconference and webcast to discuss its
third quarter of 2023 results beginning at 9:00 a.m. ET (8:00 a.m.
CT) on Wednesday, November 1, 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 November 2, 2023 to
November 16, 2023, by calling 877-660-6853 domestically or
201-612-7415 internationally and then entering the replay passcode
13742014.
Financial Statements and Guidance Documents
Third 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 and Marcellus formations 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 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/20231031213608/en/
Jessica Antle – Vice President, Investor Relations
jantle@gulfportenergy.com 405-252-4550
Gulfport Energy (NYSE:GPOR)
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