Gulfport Energy Corporation Announces Record Earnings for Quarter Ended March 31, 2005 and Commencement of Drilling Program
May 16 2005 - 9:38PM
PR Newswire (US)
Gulfport Energy Corporation Announces Record Earnings for Quarter
Ended March 31, 2005 and Commencement of Drilling Program OKLAHOMA
CITY, May 16 /PRNewswire-FirstCall/ -- Gulfport Energy Corporation
(OTC:GPOR) (BULLETIN BOARD: GPOR) , reported record financial
results for the quarter ended March 31, 2005. For the three months
ended March 31, 2005, Gulfport generated net income available to
common shareholders of $1.9 million ($0.07 per fully diluted common
share), operating cash flow of $3.6 million (defined as cash flow
from operating activities before changes in assets and
liabilities), cash provided by operating activities of $3.4 million
and EBITDA of $3.7 million (defined as net income, plus provision
for income taxes, interest expense, other debt related expenses,
accretion, depreciation, depletion and amortization) on revenue of
$6.8 million. This compares with net income of $40,000, on total
revenue of $4.4 million for the three months ended March 31, 2004.
The improvement in earnings was the result of an increase in the
average price received for oil to $41.41 compared to $32.56 for the
three months ended March 31, 2004 together with an increase in
production. The oil and gas production rose 22% to 166 Thousand
Barrels of Oil Equivalents (MBOE) for the quarter ended March 31,
2005 compared to 136 MBOE for the same period in 2004. Gulfport
commenced an approximately 20 well drilling program at the West
Cote Blanche Bay Field in St. Mary Parish, Louisiana during March
2005. The wells to be drilled will target proved undeveloped
reserve locations. Gulfport will also explore for possible and
probable reservoirs by going deeper and directionally guiding the
bit for untapped fault blocks. As of the date of this press
release, Gulfport has drilled two wells, which are waiting on
completion, and commenced drilling a third well at West Cote
Blanche Bay. The Company believes the first two wells have a
combined nine potentially productive zones with 130 feet of net
pay. Gulfport has also recently recompleted an additional well in
the field that has tested at 365 barrels of oil and 240 mcf of
natural gas per day. In Gulfport's East Hackberry Field located in
Cameron Parish, Louisiana, the Company has completed seismic
permitting and received final regulatory approval for a forty-three
square mile, proprietary three-dimensional (3-D) seismic survey
which is estimated to cost approximately $4,500,000. Gulfport began
the seismic data acquisition during the second quarter of 2005 and
hopes to have the final processed seismic data during the third
quarter 2005. Since this portion of the East Hackberry dome has
never been included in a 3-D seismic survey, the Company believes
the shoot could reveal undrilled fault blocks that will allow
Gulfport to drill new wells to both shallow and deep targets in the
field. The drilling program in East Hackberry is expected to
commence during the fourth quarter of 2005. During February 2005,
the Company entered into two stock purchase agreements with certain
accredited investors providing for the issuance by the Company of
an aggregate of 4,000,000 shares of the Company's common stock at a
price of $3.50 per share for gross proceeds to the Company of
$14,000,000. In addition, during the three months ended March 31,
2005, the holders of the Company's Series A Preferred warrants
elected to purchase 7,736,621 shares of the Company's common stock
for an exercise price of $1.19 per share resulting in gross
proceeds to the Company of $9.2 million. Also during the three
months ended March 31, 2005, the Company used the proceeds from the
exercise of the warrants, along with a portion of the proceeds from
the sale of common stock, to redeem 14,133 shares of the 14,292
shares of the Company's outstanding Series A preferred stock for an
aggregate of $14.1 million, including accrued but unpaid dividends.
After the sale of the common stock, the exercise of the warrants
and the redemption of the preferred stock, Gulfport received net
proceeds of $9.1 million. Gulfport redeemed the remaining 159
shares of the preferred stock outstanding during the second quarter
of 2005. As of the three months ended March 31, 2005, the Company
had 31,883,187 shares of common stock outstanding. Gulfport will
fund its 2005 activities with the net proceeds from the sale of
common stock that occurred during the first quarter of 2005, cash
flows from operations and borrowings under its new $30.0 million
credit facility ($18.0 million initial availability) with Bank of
America, which was closed and available as of March 11, 2005. To
date the Company has not drawn against the credit facility. The
Company's cash balance as of March 31, 2005 was $11,826,000. Mike
Liddell, Chief Executive Officer of Gulfport Energy said, "Gulfport
is entering a very exciting period. At West Cote Blanche Bay we are
involved in the largest drilling program in our history and have
recently started the 3-D seismic shoot at East Hackberry. We now
have the capital to accelerate the conversion of our proved
reserves to production at West Cote Blanche Bay and the completion
of the East Hackberry seismic shoot will significantly increase our
prospect inventory." Since 2001, Gulfport has engaged the
engineering firm of Netherland, Sewell & Associates, Inc. of
Houston, Texas to render its reserve report. The reserve report for
the year ended December 31, 2004 reflected total net proved
reserves of 24,765 MBOE for Gulfport with 1,974 MBOE (8%)
categorized as proved developed producing reserves, 3,431 MBOE
(14%) classified as proved developed non-producing reserves and
19,360 MBOE (78%) shown as proved undeveloped reserves. The reserve
report assigned a present value of estimated future net revenues
discounted at 10% (PV10) of approximately $361.5 million for total
proved reserves using the SEC required Company year- end pricing of
$43.29 a barrel for oil and $6.04 per MMBTU for natural gas. Three
Months Ended March 31, 2005 Net Income $1,930,000 Interest Expense
58,000 Interest Expense - preferred stock 272,000 Accretion Expense
117,000 Depreciation, depletion, and amortization 1,300,000 EBITDA
$3,677,000 Three Months Ended March 31, 2005 Cash provided by
operating activity $3,451,000 Adjustments: Changes in assets and
liabilities 168,000 Operating Cash Flow $3,619,000 EBITDA is a
non-GAAP financial measure equal to net income, the most directly
comparable GAAP financial measure, plus provision for income taxes,
interest expense, other debt related expenses, accretion,
depreciation, depletion and amortization. Operating cash flow is a
non-GAAP financial measure equal to cash flow from operating
activities before changes in assets and liabilities. The Company
has presented EBITDA because it uses EBITDA as an integral part of
its internal reporting to measure its performance and to evaluate
the performance of its senior management. EBITDA is considered an
important indicator of the operational strength of the Company's
business. EBITDA eliminates the uneven effect of considerable
amounts of non-cash depletion, depreciation of tangible assets and
amortization of certain intangible assets. A limitation of this
measure, however, is that it does not reflect the periodic costs of
certain capitalized tangible and intangible assets used in
generating revenues in the Company's businesses. Management
evaluates the costs of such tangible and intangible assets and the
impact of related impairments through other financial measures,
such as capital expenditures, investment spending and return on
capital. Therefore, the Company believes that EBITDA provides
useful information to its investors regarding its performance and
overall results of operations. EBITDA and operating cash flow are
not intended to be performance measures that should be regarded as
an alternative to, or more meaningful than, either net income as an
indicator of operating performance or to cash flows from operating
activities as a measure of liquidity. In addition, EBITDA and
operating cash flow are not intended to represent funds available
for dividends, reinvestment or other discretionary uses, and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. The EBITDA and
operating EBITDA measures presented in this press release may not
be comparable to similarly titled measures presented by other
companies, and may not be identical to corresponding measures used
in the Company's various agreements. Gulfport is an independent oil
and gas exploration and production company with its principal
properties located in the Louisiana Gulf Coast area. The Company
seeks to achieve reserve growth and increased cash flow from
operations through low risk development activities on its existing
properties and other acquisition opportunities. This news release
includes "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). All statements other than statements
of historical facts, included in this news release that address
activities, events or developments that Gulfport Energy Corporation
("Gulfport" or the "Company"), a Delaware corporation, expects or
anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature
thereof), business strategy and measures to implement strategy,
competitive strength, goals, expansion and growth of Gulfport's
business and operations, plans, references to future success,
reference to intentions as to future matters and other such matters
are forward-looking statements. These statements are based on
certain assumptions and analyses made by Gulfport in light of its
experience and its perception of historical trends, current
conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However,
whether actual results and developments will conform with
Gulfport's expectations and predictions is subject to a number of
risks and uncertainties, general economic, market, or business
conditions; the opportunities (or lack thereof) that may be
presented to and pursued by Gulfport; competitive actions by other
oil and gas companies; changes in laws or regulations; and other
factors, many of which are beyond the control of Gulfport.
Consequently, all of the forward-looking statements made in this
news release are qualified by these cautionary statements and there
can be no assurances that the actual results or developments
anticipated by Gulfport will be realized, or even if realized, that
they will have the expected consequences to or effects on Gulfport,
its business or operations. We have no intention, and disclaim any
obligation, to update or revise any forward-looking statements,
whether as a result of new information, future results or
otherwise. DATASOURCE: Gulfport Energy Corporation CONTACT: Mike
Liddell of Gulfport Energy Corporation, +1-405-848-8807, ext. 106
Web site: http://www.gulfportenergy.com/
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