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For the second quarter of 2012, Gulfport reported net income of
Financial Highlights
Production
For the second quarter of 2012, net production was 608,468 barrels of oil, 216,081 thousand cubic feet ("MCF") of natural gas and 804,063 gallons of natural gas liquids ("NGL"), or 663,626 BOE. Net production for the second quarter of 2012 by region was 308,028 BOE at
Realized price for the second quarter of 2012, which includes transportation costs, was
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| Production Schedule | ||||
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| Production Volumes: | 2Q2012 | 2Q2011 | YTD 2012 | YTD 2011 |
| Oil (MBbls) | 608.5 | 492.7 | 1,203.5 | 964.8 |
| Gas (MMcf) | 216.1 | 330.6 | 426.8 | 495.4 |
| NGL (MGal) | 804.1 | 819.2 | 1,428.8 | 1,427.8 |
| Oil Equivalents (MBOE) | 663.6 | 567.3 | 1,308.7 | 1,081.4 |
| Average Realized Price: | ||||
| Oil (per Bbl) |
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| Gas (per Mcf) |
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| NGL (per Gal) |
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| Oil Equivalents (BOE) |
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Subsequent to the second quarter of 2012, net production for the month of July averaged approximately 7,121 BOEPD.
Recent Operational Highlights
Operational Update
Utica Shale
In the
Permian
In the Permian, Gulfport's first horizontal well in the play, the Janey 1-16H was completed during the second quarter of 2012. The Janey 1-16H tested at a peak rate of 618 BOEPD and subsequently produced at a sustained rate of 486 BOEPD during its first 30 days of production. The well was drilled to a total vertical depth of 8,850 feet with a 4,037 foot horizontal lateral and completed with a 16-stage hydraulic fracture treatment. During the second quarter of 2012, nine gross (3.4 net) wells were drilled on Gulfport's acreage. At present, one rig is active on Gulfport's acreage in the Permian, drilling ahead on the seventeen gross (7.3 net) well of 2012.
Canadian Oil Sands
In the Canadian Oil Sands, Grizzly's first SAGD facility at
At
WCBB
At WCBB, Gulfport spud nine wells during the second quarter of 2012, completing four wells as productive. Two wells were waiting on completion and one well was being drilled at the end of the quarter. In addition, Gulfport performed thirteen recompletions at the field. At present, Gulfport has one rig active at WCBB drilling ahead on the eighteenth well of 2012 at the field.
Niobrara
In the Niobrara, Gulfport began drilling its first well during the second quarter of 2012 utilizing the 3-D seismic survey shot last year. The well is currently waiting on completion. At present, Gulfport plans to spud its second Niobrara well of 2012 by the end of August.
2012 Guidance
As a result of revised timing assumptions surrounding completion procedures in the
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| 2012 GUIDANCE | |
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Year Ending |
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| Forecasted Production | |
| Oil Equivalent - BOE | 2,900,000 - 3,100,000 |
| Average Daily Oil Equivalent - BOEPD | 7,923 - 8,470 |
| Projected Year-Over-Year Production Increase¹ | 24% - 33% |
| Projected Cash Operating Costs per BOE | |
| Lease Operating Expense - $/BOE |
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| Production Taxes - % of Revenue | 10.0% - 10.5% |
| General and Administrative - $/BOE |
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| Depreciation, Depletion and Amortization per BOE |
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| Budgeted Capital Expenditures - In Millions:² | |
| West Cote Blanche Bay |
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| Hackberry |
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| Permian |
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| Niobrara |
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| Grizzly |
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| Utica |
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| Total Budgeted Capital Expenditures |
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| ¹ Based upon 2011 actual production of 2.33 million BOE and the 2012 forecasted production | |
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² Excludes amounts for infrastructure, vertical integration projects and acquisitions and does not give effect to the previously announced potential contribution of our |
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In addition to its 2012 budgeted exploration and production capital expenditures, Gulfport plans to spend approximately
Presentation
An updated presentation has been posted to the Company's website. The presentation can be found at www.gulfportenergy.com under the "Webcasts & Presentations" section on the "Investor Relations" page. Information on the Company's website does not constitute a portion of this press release.
Conference Call
Gulfport will host a conference call on
About Gulfport
Forward Looking Statements
This press 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 press release that address activities, events or developments that Gulfport expects or anticipates will or may occur in the future, including such things as Gulfport's previously announced potential contribution of all of its oil and gas interests in the
Non-GAAP Financial Measures
EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus interest expense, income tax expense, accretion expense and depreciation, depletion and amortization. Cash flow from operating activities before changes in operating assets and liabilities is a non-GAAP financial measure equal to cash provided by operating activities before changes in operating 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 business. 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 cash flow from operating activities before changes in operating assets and liabilities 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 cash flow from operating activities before changes in operating assets and liabilities 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 cash flow from operating activities before changes in operating assets and liabilities 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.
Oil Sands Reserves and Resource Notes:
(1) Proved reserves are defined in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook") as those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated Proved reserves.
(2) Probable reserves are defined in the COGE Handbook as those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
(3) Contingent Resources are defined in the COGE Handbook as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies.
(4) Best Estimate as defined in the COGE Handbook is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term is a measure of central tendency of the uncertainty distribution (P50).
(5) It should be noted that reserves and Contingent Resources involve different risks associated with achieving commerciality. There is no certainty that it will be commercially viable for Grizzly to produce any portion of the Contingent Resources.
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| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (Unaudited) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Revenues: | ||||
| Oil and condensate sales | $ 65,020,000 | $ 52,916,000 | $ 129,024,000 | $ 98,112,000 |
| Gas sales | 541,000 | 1,512,000 | 1,154,000 | 2,232,000 |
| Natural gas liquids sales | 694,000 | 1,034,000 | 1,500,000 | 1,693,000 |
| Other income (expense) | 70,000 | 127,000 | 108,000 | 190,000 |
| 66,325,000 | 55,589,000 | 131,786,000 | 102,227,000 | |
| Costs and expenses: | ||||
| Lease operating expenses | 5,714,000 | 4,706,000 | 11,563,000 | 9,359,000 |
| Production taxes | 7,572,000 | 6,732,000 | 15,341,000 | 12,239,000 |
| Depreciation, depletion, and amortization | 23,652,000 | 13,712,000 | 45,047,000 | 25,870,000 |
| General and administrative | 3,263,000 | 2,119,000 | 6,272,000 | 4,175,000 |
| Accretion expense | 177,000 | 164,000 | 353,000 | 323,000 |
| 40,378,000 | 27,433,000 | 78,576,000 | 51,966,000 | |
| INCOME FROM OPERATIONS: | 25,947,000 | 28,156,000 | 53,210,000 | 50,261,000 |
| OTHER (INCOME) EXPENSE: | ||||
| Interest expense | 474,000 | 285,000 | 627,000 | 938,000 |
| Interest income | (4,000) | (37,000) | (31,000) | (75,000) |
| Loss from equity method investments | 360,000 | 642,000 | 628,000 | 958,000 |
| 830,000 | 890,000 | 1,224,000 | 1,821,000 | |
| INCOME BEFORE INCOME TAXES | 25,117,000 | 27,266,000 | 51,986,000 | 48,440,000 |
| INCOME TAX EXPENSE: | -- | 1,000 | -- | 1,000 |
| NET INCOME | $ 25,117,000 | $ 27,265,000 | $ 51,986,000 | $ 48,439,000 |
| NET INCOME PER COMMON SHARE: | ||||
| Basic | $ 0.45 | $ 0.57 | $ 0.93 | $ 1.05 |
| Diluted | $ 0.45 | $ 0.57 | $ 0.93 | $ 1.04 |
| Basic weighted average shares outstanding | 55,656,274 | 47,454,359 | 55,641,241 | 46,097,207 |
| Diluted weighted average shares outstanding | 56,334,095 | 47,898,665 | 56,175,248 | 46,548,414 |
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| RECONCILIATION OF EBITDA AND CASH FLOW | ||||
| (Unaudited) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Net Income | $ 25,117,000 | $ 27,265,000 | $ 51,986,000 | $ 48,439,000 |
| Interest expense | 474,000 | 285,000 | 627,000 | 938,000 |
| Income tax expense | -- | 1,000 | -- | 1,000 |
| Accretion expense | 177,000 | 164,000 | 353,000 | 323,000 |
| Depreciation, depletion, and amortization | 23,652,000 | 13,712,000 | 45,047,000 | 25,870,000 |
| EBITDA | $ 49,420,000 | $ 41,427,000 | $ 98,013,000 | $ 75,571,000 |
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Cash provided by operating activity | $ 30,068,000 | $ 37,113,000 | $ 99,497,000 | $ 65,401,000 |
| Adjustments: | ||||
| Changes in operating assets and liabilities | 19,713,000 | 4,956,000 | 51,000 | 10,626,000 |
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Operating |
$ 49,781,000 | $ 42,069,000 | $ 99,548,000 | $ 76,027,000 |
CONTACT: Investor & Media Contact:
Paul K. Heerwagen
Director, Investor Relations
pheerwagen@gulfportenergy.com
(405) 242-4888
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