OKLAHOMA CITY, Nov. 11 /PRNewswire-FirstCall/ -- Gulfport Energy
Corporation (OTC:GPOR) (BULLETIN BOARD: GPOR) , reported record
financial results for the quarter ended September 30, 2005. For the
three months ended September 30, 2005, Gulfport generated net
income of $6,045,000 ($0.19 and $0.18 per basic and fully diluted
common share, respectively), operating cash flow of $7,896,000 (as
defined below), cash provided by operating activities of $7,690,000
and EBITDA of $7,911,000 (as defined below) on revenues of
$11,519,000. This compares with net income of $1,206,000 ($0.08 per
share basic and diluted), on total revenues of $5,430,000 for the
quarter ended September 30, 2004. The improvement in earnings was
the result of an increase in the average price received for oil to
$54.04 per barrel for the quarter ended September 30, 2005 from
$38.26 per barrel for same period in 2004. In addition, there was a
net increase in oil and gas production to 219 thousand barrels of
oil equivalents (MBOE) for the quarter ended September 30, 2005
from 143 MBOE for the same period in 2004. Production for the
quarter ended September 30, 2005 was net of production down time of
approximately 13 days from both Hurricanes Katrina and Rita. West
Cote Blanche Bay Field Drilling Program Gulfport commenced its West
Cote Blanche Bay ("WCBB") drilling program in March 2005 and has
drilled 14 wells with another 25 wells scheduled to be drilled
along with 18 recompletions over the next 18 months. The Company
projects the total estimated cost of this drilling and recompletion
program to be consistent with prior guidance. The new wells will
primarily target proved undeveloped reserve locations which we
expect will also result in the addition of new proved reserves.
Since March 2005, Gulfport has successfully completed ten wells and
nine recompletions in WCBB at a total cost of approximately $14.0
million. Of the 14 wells drilled, nine are producing, three are
waiting on completion, one is waiting on side-tracking and one was
unsuccessful. The one unsuccessful well was a shallow exploratory
well that allowed the Company to satisfy requirements to maintain
undeveloped acreage within State Lease 340 WCBB. As of September
21, 2005, prior to Hurricane Rita, the nine new wells and nine
recompletions were producing an aggregate of 570 net barrels of oil
per day and 1,093 net mcf of gas per day. As of September 21, 2005,
prior to Hurricane Rita, net oil production at WCBB was 2,026
barrels of oil per day, an increase of 51% from December 31, 2004.
WCBB net gas production was 2,030 Mcf of gas on September 21, 2005,
an increase of 19% from December 31, 2004. East Hackberry Field
Seismic Shoot Gulfport recently completed the field data
acquisition phase of its proprietary three-dimensional (3-D)
seismic survey of the East Hackberry Field located in Cameron
Parish, Louisiana. The seismic survey covers 42 square miles in and
around the East Hackberry Field. Since this portion of the East
Hackberry salt dome has never been included in a 3-D seismic
survey, the Company anticipates the shoot will reveal undrilled
fault blocks that will allow Gulfport to drill new wells to both
shallow and deep targets in the field. In addition, the company
believes the 3-D seismic data will allow Gulfport to drill existing
proved undeveloped reserves as well as drill deeper in existing
boreholes to encounter previously unknown fault blocks. The
Company's outside engineers, Netherland, Sewell & Associates,
Inc. ("NSA"), had previously assigned 2 MMBO and 2.8 BCFG (net) to
the proved undeveloped reserve category in the East Hackberry field
at December 31, 2004. Gulfport anticipates that this will result in
more reserve additions as well as reduced drilling costs as less
boreholes will be required to capture those reserves. The total
cost of the seismic shoot is estimated to be $5 million, the
majority of which has already been funded. The final processed
seismic data was received in October 2005 and the Company
anticipates selecting drilling targets before year-end with
commencement of drilling scheduled for the second quarter 2006. As
of September 21, 2005, prior to Hurricane Rita, net production at
Hackberry was 272 barrels of oil per day and 168 Mcf of gas per
day. Facilities Update The Company has previously reported that it
sustained damage to both its Hackberry field located in Cameron
Parish, Louisiana and its West Cote Blanche Bay field (WCBB)
located in St. Mary Parish, Louisiana as a result of Hurricane
Rita. Repair and restoration operations have been underway to
return both fields to production. Subject to the repair of a gas
sales line for WCBB and the repair of our facilities, the Company
will begin intermittently placing its tank batteries back on line.
Tank Battery 1A, which prior to the storm handled approximately 50%
of the WCBB field production, is expected to be back on line by the
end of November 2005. The Company anticipates that Tank Battery 2A,
which handles approximately 30% of the WCBB total production, will
be back on line by the end of December 2005. Drilling operations in
the WCBB field resumed September 29, 2005, and the Company
continues with its previously announced drilling program.
Currently, the Company has set pipe on five new wells drilled since
drilling operations resumed after Hurricane Rita and will complete
those wells as soon as the production facilities are repaired. The
Company is currently producing approximately 60 net barrels of oil
per day from its Hackberry fields, none from its WCBB fields and
approximately 1,000 net Mcf of gas per day from its non-Louisiana
production. The Company has an insurance program in place, which it
believes will adequately cover damage to its platform and
facilities and some of the effect of the interruption to its
business operations. 2005 and 2006 Guidance Gulfport anticipates
that its expanded drilling program will enhance production in 2006.
Due to Hurricane Rita, however, the Company's fourth quarter 2005
production may be off previously anticipated levels by as much as
75% and as a result, operating results for the period will be
materially and adversely affected and its fiscal 2005 operating
results will be less than originally expected. The Company
currently believes, however, subject to the repair of its
facilities and a gas sales line, the damage caused by Hurricane
Rita will have little impact on its total 2006 projections. 2006 *
2006 production estimate of 1,450,000 to 1,600,000 BOE with
production increasing during the year * Capital expenditures in the
range of $45 million to $60 million for 2006 * Lease operating
expenditures of $5.50 to $6.00 per BOE for 2006 * Selling, general
and administrative expenses of $1.40 to $1.60 per BOE for 2006
Gulfport intends to fund this activity with the remaining net
proceeds from the sale of common stock in February 2005, cash flows
from operations and borrowings under its $30,000,000 million credit
facility with Bank of America if needed. No borrowings are
currently outstanding under this facility, and the Company had
initial availability of $18,000,000 which on November 1, 2005, was
increased to $23,000,000. As of November 9, 2005, the Company had
available cash of $5.0 million. Three Months Ended September 30,
2005 Net Income $6,045,000 Interest expense 54,000 Accretion
expense 116,000 Depreciation, depletion, and amortization 1,696,000
EBITDA $7,911,000 Three Months Ended September 30, 2005 Cash
provided by operating activity $7,690,000 Adjustments: Changes in
assets and liabilities 206,000 Operating Cash Flow $7,896,000
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.
About Gulfport Gulfport is an independent oil and gas exploration
and production company with its principal producing properties
located along the Louisiana Gulf Coast. The Company seeks to
achieve revenue growth and increase cash flow by undertaking
drilling programs each year. 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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