Gulfport Energy Corporation Reports Updates on Drilling Program and Effects of Hurricane Rita
February 17 2006 - 5:32PM
PR Newswire (US)
OKLAHOMA CITY, Feb. 17 /PRNewswire-FirstCall/ -- Gulfport Energy
Corporation (OTC:GPOR) (BULLETIN BOARD: GPOR) , reports update on
Drilling Program and Effects of Hurricane Rita. Hurricane Rita /
Facilities Update On September 26, 2005, Gulfport Energy
Corporation ("Gulfport") announced that it had sustained damage to
both its Hackberry field located in Cameron Parish, Louisiana and
its WCBB field located in St. Mary Parish, Louisiana as a result of
Hurricane Rita, a Category 5 hurricane which hit land on September
24, 2005. On September 21, 2005, in preparation for the hurricane,
both of Gulfport's fields were shut-in. On February 5, 2006,
Gulfport began bringing some of its WCBB production back on-line.
Gulfport believes its insurance coverage will adequately cover the
damage to its facilities and platform. At Hackberry, production
prior to shutting in for Hurricane Rita was approximately 282 net
barrels of oil equivalent per day ("BOEPD"). Production was
reestablished in November 2005, and during January 2006 the wells
averaged approximately 238 net BOEPD with only one small facility
still needing repair. At WCBB, production prior to shutting in for
Hurricane Rita was approximately 2,144 net BOEPD. Repairs have been
made to our main tank battery and the gas sales line at WCBB, and
11 of 57 active wells in the field are currently producing.
Gulfport has completed repairs to the facilities that handle
approximately 50% of the Company's production and it is anticipated
that the balance of Gulfport's production facilities will be
brought on line in the second quarter of 2006. As a result of the
hurricane damage to the production facilities, nine wells that were
drilled during 2005 and 2006 have not been completed. Production
casing has already been run on these wells and Gulfport expects to
finalize their completion and bring the new wells' production
online beginning in Quarter 2. West Cote Blanche Bay Field Drilling
Program Gulfport owns a 100% gross working interest ("GWI") and
79.44% net revenue interest ("NRI) in West Cote Blanche Bay
("WCBB") within its 5,522 acre State Lease 340 through all
productive intervals to the base of the 13,900' Sand and a 40.4%
GWI and 29.95% NRI below the 13,900' Sand. WCBB has produced
approximately 230 million barrels of oil equivalent ("BOE) since
its discovery in 1940. During 2005, Gulfport drilled 17 wells and
recompleted nine existing wells at WCBB. Of the 17 wells drilled in
2005, nine were completed as producing wells with approximately
1,283 feet of apparent net pay, six are currently waiting on
completion due to Hurricane Rita with approximately 640 feet of
apparent net pay, one is waiting on side-tracking, and one, a
shallow wildcat drilled to hold acreage, was unsuccessful. Gulfport
currently anticipates drilling 22 wells and 18 recompletions in
WCBB during 2006. To date, Gulfport has drilled three deep wells
and one shallow well at WCBB. Gulfport expects the three deeper
wells (total depth 8,927' to 9,400') will be productive with
approximately 262 feet of apparent net pay. The fourth well, a
shallow (2,500') test well, was dry. Most of the wells to be
drilled during 2006 will be oil wells, which are also expected to
produce associated gas, and have a measured drilling depth of
approximately 9,500' or less. During the Summer 2006, Gulfport
anticipates drilling a wildcat 12,000' test targeting the
higher-pressure gas zones in the field at a total anticipated well
cost of approximately $5.5 million assuming no problems. If
successful, the deeper test is expected to be followed by
additional deep drilling during 2007. East Hackberry 2006 Drilling
Program Gulfport owns a 100% GWI and an approximate 78.7% NRI
interest in about 3,150 acres in the Hackberry Field which has over
30 productive formations and has produced approximately 120 million
BOE since it was discovered in 1927. During 2005, Gulfport shot a
proprietary 42 square mile 3-D seismic survey at Hackberry at a
total cost of approximately $6.0 million. Given that the production
of the Hackberry Field was produced without the benefit of modern
seismic information, Gulfport is optimistic that the newly acquired
3-D data will significantly enhance the probability of drilling
success. The newly processed 3-D seismic data suggests a number of
drilling locations, with six locations currently scheduled to be
drilled during 2006 at a measured depth of approximately 13,000'
using directional drilling techniques. The 3-D seismic data also
suggests the possibility of deep gas production and, as a result,
Gulfport intends to drill a deep wildcat well during 2007 at a
total anticipated well cost of approximately $4.0 million. If
productive, multiple offset locations could be drilled. 2006
Guidance On September 16, 2005, Gulfport announced its guidance for
2006. As a result of the damage and interruption caused by
Hurricane Rita, Gulfport is providing the following updated
guidance for 2006: * 2006 production estimate of 1,300,000 to
1,400,000 BOE with production increasing during the year, as
compared with its previous estimate of 1,450,000 to 1,600,000 BOE.
This change is mainly related to lower than expected production for
the first quarter of 2006 as a result of Hurricane Rita * Capital
expenditures in a range of $45 to $60 million for 2006 remain
unchanged. Gulfport has spent $4.8 million in capital expenditures
year-to-date. * Lease operating expenditures of $6.00 to $7.00 per
BOE for 2006, up from the previously expected $5.50 to $6.00 per
BOE mainly related to lower than expected production for the first
quarter of 2006 as a result of Hurricane Rita * Selling, general
and administrative expense of $1.40 to $1.60 per BOE for 2006
remains unchanged Liquidity Gulfport intends to fund its 2006
drilling activity with current cash of approximately $2.0 million,
cash flows from operations and borrowings under its $30.0 million
credit facility with Bank of America. As of this date, Gulfport has
outstanding borrowings of $12.5 million under the credit facility.
About Gulfport Gulfport is an independent oil and gas exploration
and production company with its principal producing properties
located along the Louisiana Gulf Coast. Gulfport seeks to achieve
revenue growth and increase cash flow by undertaking drilling
programs each year. The Gulfport website is
http://www.gulfportenergy.com/ . 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, 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. FCMN Contact: mmoore@gulfportenergy.com DATASOURCE:
Gulfport Energy Corporation CONTACT: Jim Palm of Gulfport Energy
Corporation, +1-405-848-8807, Ext. 179 Web site:
http://www.gulfportenergy.com/
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