Gulfport Energy Corporation (ticker: GPOR) has announced that:
- 2018 CapEx budget will be funded within cash flow,
- $100 million outstanding common stock will be repurchased this year,
- 2018 operational outlook forecasts 1,250 MMcfe/d
2018 CapEx and production guidance
The 2018 budget includes approximately $630-$685 million for D&C activities and approximately $140-$150 million for non-D&C activities, including midstream capital expenditures associated with investment in Strike Force Midstream LLC and leasehold activities in 2018.
With this level of capital spending, Gulfport said it forecasts its 2018 average daily net production will be in the range of 1,250 MMcfe to 1,300 MMcfe per day, an increase of approximately 15% to 19% over 2017.
Gulfport CEO and President Michael G. Moore said, “In the current environment, we are dedicated to strict capital discipline and are in the position to be able to generate free cash flow for our shareholders while also providing strong production growth.
“Based on current strip pricing, Gulfport forecasts our full-year 2018 total capital program to be funded entirely within cash flow while growing production approximately 15% to 19% over 2017.
“Furthermore, our robust hedge portfolio underpins our 2018 capital program with approximately 80% of our expected 2018 natural gas production priced at over $3.05 per MMBtu, providing a high degree of certainty surrounding the cash flow profile of our 2018 program.
“In addition to our planned operational activity for 2018, we are pleased to announce our board has recently approved a stock repurchase program. We intend to opportunistically repurchase our stock during 2018 and will utilize our available liquidity, which will include forecasted free cash flow generated and, potentially, proceeds from the sale of certain investments. The plan authorizes up to $100 million of share repurchases, which at today’s share price represents approximately 5% of the company’s outstanding shares,” Moore said.
The table below summarizes the company’s full-year 2018 guidance:
GULFPORT ENERGY CORPORATION | ||||||
COMPANY GUIDANCE | ||||||
Year Ending | ||||||
12/31/2018 | ||||||
Low | High | |||||
Forecasted Production | ||||||
Average Daily Gas Equivalent (MMcfepd) | 1,250 | 1,300 | ||||
% Gas | ~ 89% | |||||
% Natural Gas Liquids | ~ 7% | |||||
% Oil | ~ 4% | |||||
Forecasted Realizations (before the effects of hedges) | ||||||
Natural Gas (Differential to NYMEX Settled Price) – $/Mcf | $ | (0.58) | $ | (0.72) | ||
NGL (% of WTI) | 45% | 50% | ||||
Oil (Differential to NYMEX WTI) $/Bbl | $ | (3.00) | $ | (3.50) | ||
Projected Operating Costs | ||||||
Lease Operating Expense – $/Mcfe | $ | 0.17 | $ | 0.19 | ||
Production Taxes – $/Mcfe | $ | 0.06 | $ | 0.08 | ||
Midstream Gathering and Processing – $/Mcfe | $ | 0.57 | $ | 0.63 | ||
General and Administrative – $/Mcfe | $ | 0.12 | $ | 0.14 | ||
Depreciation, Depletion and Amortization – $/Mcfe | $ | 0.95 | $ | 1.05 | ||
Total | ||||||
Budgeted D&C Expenditures – In Millions: | ||||||
Operated | $ | 490 | $ | 525 | ||
Non-Operated | $ | 140 | $ | 160 | ||
Total Budgeted D&C Capital Expenditures | $ | 630 | $ | 685 | ||
Budgeted Non-D&C Expenditures – In Millions: | $ | 140 | $ | 150 | ||
Total Capital Expenditures – In Millions: | $ | 770 | $ | 835 | ||
Net Wells Drilled | ||||||
Utica – Operated | 26 | 29 | ||||
Utica – Non-Operated | 7 | 8 | ||||
Total | 33 | 37 | ||||
SCOOP – Operated | 10 | 11 | ||||
SCOOP – Non-Operated | 4 | 5 | ||||
Total | 14 | 16 | ||||
Net Wells Turned-to-Sales | ||||||
Utica – Operated | 33 | 37 | ||||
Utica – Non-Operated | 9 | 10 | ||||
Total | 42 | 47 | ||||
SCOOP – Operated | 16 | 18 | ||||
SCOOP – Non-Operated | 2 | 3 | ||||
Total | 18 | 21 | ||||
2018 operational update
Utica Shale
During 2018, Gulfport plans to run on average 2.5 operated horizontal rigs in the Utica Shale. Gulfport has budgeted to drill approximately 36 to 40 gross (26 to 29 net) horizontal Utica wells with an average lateral length of 11,200 feet. In addition, Gulfport plans to turn-to-sales 33 to 37 gross and net horizontal Utica wells with an average lateral length of 8,000 feet.
Gulfport intends to participate in non-operated activities taking place on its acreage by other operators that plan to drill approximately 7 to 8 horizontal wells and turn-to-sales 9 to 10 horizontal wells, in each case net to Gulfport’s interest.
SCOOP
During 2018, Gulfport plans to run on average approximately 3 operated horizontal rigs in the SCOOP. Gulfport has budgeted to drill approximately 15 to 16 gross (10 to 11 net) horizontal SCOOP wells with an average lateral length of 8,900 feet. In addition, Gulfport plans to turn-to-sales 20 to 22 gross (16 to 18 net) horizontal SCOOP wells with an average lateral length of 8,600 feet.
Gulfport also intends to participate in non-operated activities taking place on its acreage by other operators that plan to drill approximately 4 to 5 horizontal wells and turn-to-sales 2 to 3 horizontal wells, in each case net to Gulfport’s interest.
Southern Louisiana
During 2018, Gulfport plans to run one recompletion rig at its West Cote Blanche Bay and Hackberry fields.
Stock repurchase program
The board of directors has approved a stock repurchase program to acquire up to $100 million of outstanding common stock during 2018. Purchases under the repurchase program may be made from time to time in open market or privately negotiated transactions, the company said.
According to Gulfport, the repurchase program does not require the company to acquire any specific number of shares. The company intends to purchase shares under the repurchase program opportunistically with available funds while maintaining sufficient liquidity to fund its 2018 capital development program.
This repurchase program is authorized to extend through December 31, 2018 and may be suspended, modified, extended or discontinued by the board of directors at any time, the company said.
Q4 2017
Fourth quarter 2017 capital expenditures
For the quarter ended December 31, 2017, Gulfport estimates total capital expenditures to be approximately $262 million, including approximately $220 million on drilling and completion capital expenditures, $7 million on midstream capital expenditures and $35 million on leasehold capital expenditures. Higher than expected capital expenditures were driven by spending associated with prior activity during the year and spending related to preparation for our 2018 development activities.
Q4 production
Gulfport’s net production for the fourth quarter of 2017 averaged 1,263.3 MMcfe per day, a 5% increase over the third quarter of 2017 and 61% increase versus the fourth quarter of 2016. Gulfport’s net daily production mix was comprised of approximately 89% natural gas, 7% natural gas liquids and 4% oil.
Q4 2017 production and realized prices chart
GULFPORT ENERGY CORPORATION | ||||||||||||
PRODUCTION SCHEDULE | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
December 31, | December 31, | |||||||||||
Production Volumes: | 2017 | 2016 | 2017 | 2016 | ||||||||
Natural gas (MMcf) | 103,049 | 63,362 | 350,061 | 227,594 | ||||||||
Oil (MBbls) | 730 | 451 | 2,579 | 2,126 | ||||||||
NGL (MGal) | 61,555 | 44,345 | 224,038 | 161,562 | ||||||||
Gas equivalent (MMcfe) | 116,225 | 72,404 | 397,543 | 263,430 | ||||||||
Gas equivalent (Mcfe per day) | 1,263,319 | 786,998 | 1,089,159 | 719,753 | ||||||||
Average Realized Prices | ||||||||||||
(before the impact of derivatives): | ||||||||||||
Natural gas (per Mcf) | $ | 2.32 | $ | 2.34 | $ | 2.42 | $ | 1.85 | ||||
Oil (per Bbl) | $ | 53.71 | $ | 45.15 | $ | 48.29 | $ | 38.18 | ||||
NGL (per Gal) | $ | 0.76 | $ | 0.56 | $ | 0.61 | $ | 0.37 | ||||
Gas equivalent (per Mcfe) | $ | 2.80 | $ | 2.67 | $ | 2.78 | $ | 2.13 | ||||
Average Realized Prices: | ||||||||||||
(including cash-settlement of derivatives and excluding non-cash derivative gain or loss): | ||||||||||||
Natural gas (per Mcf) | $ | 2.50 | $ | 2.49 | $ | 2.49 | $ | 2.45 | ||||
Oil (per Bbl) | $ | 51.93 | $ | 45.37 | $ | 49.88 | $ | 43.29 | ||||
NGL (per Gal) | $ | 0.70 | $ | 0.55 | $ | 0.58 | $ | 0.36 | ||||
Gas equivalent (per Mcfe) | $ | 2.91 | $ | 2.80 | $ | 2.85 | $ | 2.69 | ||||
Average Realized Prices: | ||||||||||||
Natural gas (per Mcf) | $ | 3.26 | $ | 0.41 | $ | 3.08 | $ | 1.12 | ||||
Oil (per Bbl) | $ | 32.04 | $ | 32.41 | $ | 46.99 | $ | 35.65 | ||||
NGL (per Gal) | $ | 0.63 | $ | 0.52 | $ | 0.54 | $ | 0.35 | ||||
Gas equivalent (per Mcfe) | $ | 3.42 | $ | 0.88 | $ | 3.32 | $ | 1.46 | ||||
The table below summarizes Gulfport’s 2017 production by asset area:
GULFPORT ENERGY CORPORATION | |||||
PRODUCTION BY AREA | |||||
(Unaudited) | |||||
Three Months Ended | Twelve Months Ended | ||||
December 31, | December 31, | ||||
2017 | 2017 | ||||
Utica Shale | |||||
Natural gas (MMcf) | 90,374 | 309,450 | |||
Oil (MBbls) | 107 | 473 | |||
NGL (MGal) | 33,875 | 139,634 | |||
Gas equivalent (MMcfe) | 95,854 | 332,238 | |||
SCOOP(1) | |||||
Natural gas (MMcf) | 12,648 | 40,501 | |||
Oil (MBbls) | 401 | 1,083 | |||
NGL (MGal) | 27,660 | 84,283 | |||
Gas equivalent (MMcfe) | 19,008 | 59,038 | |||
Southern Lousiana | |||||
Natural gas (MMcf) | 19 | 75 | |||
Oil (MBbls) | 210 | 974 | |||
NGL (MGal) | – | – | |||
Gas equivalent (MMcfe) | 1,280 | 5,917 | |||
Other | |||||
Natural gas (MMcf) | 8 | 35 | |||
Oil (MBbls) | 12 | 50 | |||
NGL (MGal) | 20 | 121 | |||
Gas equivalent (MMcfe) | 84 | 351 | |||
(1) SCOOP production adjusted for closing date of February 17, 2017. |
Recent well results chart
GULFPORT ENERGY CORPORATION | |||||||||||||||||
SCOOP WELL RESULTS SUMMARY | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Phase | Stimulated | Wellhead | NGLs | % | Product Mix(1) | Average Prod. Rates (Mmcfepd) | |||||||||||
County | Window | Lateral | BTU | Per MMcf | Shrink | Gas | NGLs | Oil | 24-Hr | 30-Day | 60-Day | 90-Day | |||||
Lauper 4-26H | SE Grady | Springer Oil | 4,527 | 1,418 | 120.8 | 34 | % | 10 | % | 11 | % | 79 | % | 4.7 | – | – | – |
Serenity 5-22H | S Grady | Sycamore | 5,980 | 1,143 | 39.2 | 13 | % | 70 | % | 19 | % | 11 | % | 15.7 | – | – | – |
EJ Craddock 8-28X21H | Central Grady | Woodford Wet Gas | 7,961 | 1,171 | 47.0 | 16 | % | 55 | % | 19 | % | 26 | % | 19.7 | 17.3 | 16.1 | 15.2 |
Pauline 3-27X22H | Central Grady | Woodford Wet Gas | 4,322 | 1,212 | 57.3 | 18 | % | 49 | % | 21 | % | 30 | % | 8.8 | 8.0 | 7.4 | 6.8 |
Pauline 4-27X22H | Central Grady | Woodford Wet Gas | 7,978 | 1,212 | 57.3 | 18 | % | 52 | % | 22 | % | 26 | % | 17.3 | 16.1 | 15.0 | 14.1 |
Pauline 5-27X22H | Central Grady | Woodford Wet Gas | 7,929 | 1,216 | 57.4 | 22 | % | 50 | % | 22 | % | 28 | % | 22.2 | 19.1 | 17.4 | 16.0 |
Pauline 6-27X22H | Central Grady | Woodford Wet Gas | 7,273 | 1,216 | 57.4 | 22 | % | 50 | % | 22 | % | 28 | % | 22.9 | 19.6 | 17.7 | 16.2 |
Pauline 8-27X22H | Central Grady | Woodford Wet Gas | 7,658 | 1,210 | 58.8 | 19 | % | 51 | % | 22 | % | 27 | % | 18.4 | 18.6 | 17.6 | 16.6 |
Vinson 2-22X27H | SE Grady | Woodford Wet Gas | 8,539 | 1,118 | 35.7 | 11 | % | 79 | % | 19 | % | 2 | % | 16.5 | 15.7 | 14.4 | 13.4 |
Vinson 3R-22X27H | SE Grady | Woodford Wet Gas | 8,475 | 1,118 | 35.7 | 11 | % | 79 | % | 19 | % | 2 | % | 19.0 | 18.7 | 17.3 | 16.3 |
Winham 7-22H | S Grady | Woodford Wet Gas | 4,898 | 1,146 | 40.0 | 13 | % | 64 | % | 18 | % | 18 | % | 23.4 | – | – | – |
Note: All well results presented are based upon three-stream production data and assume contractual ethane recovery. | |||||||||||||||||
1. Product mix calculated utilizing 24-hr initial production rate. |