Press Releases

Gulfport Energy Corporation Reports Third Quarter 2017 Results

OKLAHOMA CITY, Nov. 01, 2017 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (NASDAQ:GPOR) (“Gulfport” or the “Company”) today reported financial and operational results for the quarter and nine-months ended September 30, 2017 and provided an update on its 2017 activities.  Key information for the third quarter of 2017 includes the following:

  • Net production averaged 1,199.6 MMcfe per day.
  • Reiterated 2017 full-year production guidance of 1,065 MMcfe to 1,100 MMcfe per day.
  • Net income of $18.2 million, or $0.10 per diluted share.
  • Adjusted net income (as defined and reconciled below) of $58.0 million, or $0.32 per diluted share.
  • Adjusted EBITDA (as defined and reconciled below) of $195.0 million.
  • Reduced unit lease operating expense for the third quarter of 2017 by 17% to $0.18 per Mcfe from $0.22 per Mcfe for the second quarter of 2017.
  • Reduced unit general and administrative expense for the third quarter of 2017 by 9% to $0.12 per Mcfe from $0.13 per Mcfe for the second quarter of 2017.
  • Added 10,700 acres in the Utica Shale, 4,100 acres in the SCOOP and increased NRI on over 5,000 acres by approximately 8% in the Utica Shale during the nine-months ended September 30, 2017.
  • Additional leasehold acquisition and acreage trading efforts year-to-date have increased working interest on wells spud during 2017, totaling an incremental 22.0 net wells spud in 2017 when compared to the midpoint of the previously provided guidance range.
  • Budgeted 2017 total capital expenditures now forecasted to be approximately $1.16 billion.
  • Gulfport's lead lenders have proposed an increase to Gulfport's borrowing base from $1.0 billion to $1.2 billion, subject to the approval of the additional banks within the syndicate, with elected commitments to total $1.0 billion.
  • Increased hedge position to approximately 629 BBtu per day of natural gas fixed price swaps during 2017 at an average fixed price of $3.19 per MMBtu and a large base level of 898 BBtu per day of natural gas fixed price swaps during 2018 at an average fixed price of $3.06 per MMBtu.

Chief Executive Officer and President, Michael G. Moore, commented, "Gulfport produced approximately 1.2 billion cubic feet of gas equivalent per day during the third quarter of 2017, representing 16% production growth over the second quarter of 2017 and 63% growth over the third quarter of 2016. Our solid production results year-to-date are driven by the continued strong performance of both our Utica Shale and SCOOP assets and bolstered by an active turn-in-line schedule year-to-date in both plays. As we head into 2018, we are committed to a disciplined capital program and remain focused on cash flow neutrality for the 2018 calendar year, aligning drilling and completion capital to operational cash flow, which at today’s strip price, we continue to estimate would generate approximately 30% growth year-over-year."

Third Quarter Financial Results
For the third quarter of 2017, Gulfport reported net income of $18.2 million, or $0.10 per diluted share, on revenues of $265.5 million.  For the third quarter of 2017, EBITDA (as defined and reconciled below for each period presented) was $155.2 million and cash flow from operating activities before changes in operating assets and liabilities (as defined and reconciled below for each period presented) was $168.1 million.  Gulfport’s GAAP net income for the third quarter of 2017 includes the following items: 

  • Aggregate non-cash derivative loss of $37.0 million.
  • Aggregate expense of $33.0 thousand in connection with the acquisition of oil and natural gas assets from Vitruvian II Woodford, LLC ("Vitruvian").
  • Aggregate loss of $2.7 million in connection with Gulfport's equity interests in certain equity investments.

Excluding the effect of these items, Gulfport’s financial results for the third quarter of 2017 would have been as follows:

  • Adjusted oil and gas revenues of $302.5 million.
  • Adjusted net income of $58.0 million, or $0.32 per diluted share.
  • Adjusted EBITDA of $195.0 million.

Year-To-Date 2017 Financial Results
For the nine-month period ended September 30, 2017, Gulfport reported net income of $278.6 million, or $1.56 per diluted share, on revenues of $922.5 million.  For the nine-month period ended September 30, 2017, EBITDA was $612.2 million and cash flow from operating activities before changes in operating assets and liabilities was $434.8 million.  Gulfport's GAAP net income for the nine-month period ended September 30, 2017 includes the following items:

  • Aggregate non-cash derivative gain of $129.7 million.
  • Aggregate expense of $2.4 million in connection with the acquisition of oil and natural gas assets from Vitruvian.
  • Aggregate loss of $20.9 million in connection with Gulfport's equity interests in certain equity investments.

Excluding the effect of these items, Gulfport’s financial results for the nine-month period ended September 30, 2017 would have been as follows:

  • Adjusted oil and gas revenues of $792.8 million.
  • Adjusted net income of $172.3 million, or $0.96 per diluted share.
  • Adjusted EBITDA of $505.9 million.

Production and Realized Prices
Gulfport’s net daily production for the third quarter of 2017 averaged approximately 1,199.6 MMcfe per day. For the third quarter of 2017, Gulfport’s net daily production mix was comprised of approximately 88% natural gas, 8% natural gas liquids ("NGL") and 4% oil.

Gulfport’s realized prices for the third quarter of 2017 were $2.21 per Mcf of natural gas, $36.32 per barrel of oil and $0.41 per gallon of NGL, resulting in a total equivalent price of $2.41 per Mcfe. Gulfport's realized prices for the third quarter of 2017 include an aggregate non-cash derivative loss of $37.0 million. Before the impact of derivatives, realized prices for the third quarter of 2017, including transportation costs, were $2.28 per Mcf of natural gas, $45.90 per barrel of oil and $0.57 per gallon of NGL, for a total equivalent price of $2.61 per Mcfe.

GULFPORT ENERGY CORPORATION
PRODUCTION SCHEDULE
(Unaudited)
  Three months ended   Nine Months Ended
  September 30,   September 30,
Production Volumes: 2017   2016   2017   2016
               
Natural gas (MMcf) 97,825     58,151     247,012     164,233  
Oil (MBbls) 685     521     1,849     1,675  
NGL (MGal) 59,008     43,837     162,483     117,217  
Gas equivalent (MMcfe) 110,367     67,541     281,318     191,026  
Gas equivalent (Mcfe per day) 1,199,636     734,144     1,030,468     697,174  
               
Average Realized Prices:              
(before the impact of derivatives):              
               
Natural gas (per Mcf) $ 2.28     $ 2.10     $ 2.46     $ 1.66  
Oil (per Bbl) $ 45.90     $ 41.81     $ 46.15     $ 36.31  
NGL (per Gal) $ 0.57     $ 0.33     $ 0.55     $ 0.29  
Gas equivalent (per Mcfe) $ 2.61     $ 2.35     $ 2.78     $ 1.92  
               
Average Realized Prices:              
(including cash-settlement of derivatives and excluding non-cash derivative gain or loss):
               
Natural gas (per Mcf) $ 2.41     $ 2.31     $ 2.49     $ 2.44  
Oil (per Bbl) $ 50.26     $ 43.43     $ 49.07     $ 42.73  
NGL (per Gal) $ 0.54     $ 0.33     $ 0.54     $ 0.29  
Gas equivalent (per Mcfe) $ 2.74     $ 2.54     $ 2.82     $ 2.65  
               
Average Realized Prices:              
               
Natural gas (per Mcf) $ 2.21     $ 2.67     $ 3.01     $ 1.39  
Oil (per Bbl) $ 36.32     $ 45.09     $ 52.90     $ 36.52  
NGL (per Gal) $ 0.41     $ 0.34     $ 0.51     $ 0.28  
Gas equivalent (per Mcfe) $ 2.41     $ 2.87     $ 3.28     $ 1.69  
                               

The table below summarizes Gulfport’s third quarter of 2017 and the nine-month period ended September 30, 2017 production by asset area:

 
 
GULFPORT ENERGY CORPORATION
PRODUCTION BY AREA
(Unaudited)
 
  Three months ended   Nine Months Ended
  September 30,   September 30,
  2017   2017
Utica Shale      
Natural gas (MMcf) 85,275     219,076  
Oil (MBbls) 113     367  
NGL (MGal) 34,076     105,759  
Gas equivalent (MMcfe) 90,822     236,383  
       
SCOOP(1)      
Natural gas (MMcf) 12,505     27,852  
Oil (MBbls) 303     682  
NGL (MGal) 24,958     56,623  
Gas equivalent (MMcfe) 17,888     40,030  
       
Southern Louisiana      
Natural gas (MMcf) 35     57  
Oil (MBbls) 256     763  
NGL (MGal)      
Gas equivalent (MMcfe) 1,571     4,637  
       
Other      
Natural gas (MMcf) 11     27  
Oil (MBbls) 13     38  
NGL (MGal) (26 )   101  
Gas equivalent (MMcfe) 86     267  
       
(1) SCOOP production included from closing date of the Vitruvian acquisition on February 17, 2017.

Leasehold Acquisition Update
As of November 1, 2017, Gulfport has acquired approximately 10,700 acres within its core dry gas operating area during 2017. In addition, as previously announced, during 2017 the Company completed an acquisition of mineral interests, increasing its net revenue interest (NRI) on over 5,000 acres by approximately 8%. As of November 1, 2017,  Gulfport has increased its leasehold position by approximately 4,100 net acres within its core operating area in the SCOOP during 2017.

2017 Capital Budget and Production Guidance Update
For the nine-month period ended September 30, 2017, Gulfport’s drilling and completion capital expenditures totaled $846.0 million, midstream capital expenditures totaled $39.4 million and leasehold capital expenditures totaled $98.0 million. For 2017, Gulfport now estimates 2017 capital expenditures to be approximately $1.16 billion. The updated 2017 budget includes approximately $985 million for drilling and completion activities, approximately $45 million for midstream capital expenditures associated with its investment in Strike Force Midstream LLC with Rice Energy and approximately $130 million for leasehold activities during 2017.

Mr. Moore commented, "This year, we elected to include additional exploratory activity in the SCOOP during 2017 to potentially organically delineate additional resource across the acreage. In addition, throughout 2017 we have been active on the technical side in the SCOOP, acquiring additional 3-D seismic, well cores and geophysical and geological studies in the play. On the leasehold front, we have been very successful this year adding leasehold organically on the ground within units scheduled in our near-term development plan. When combined with our active trading efforts, this activity has led to a significant increase in our working interests on 2017 wells spud, and we now estimate to spud an incremental 22.0 net wells when compared to the midpoint of our previously provided guidance range. We expect this additional spend will be partially offset by a reduction in approximately 2.4 net turn-in-lines. Reflecting these dynamics, we have updated our 2017 budget to reflect an additional $35 million in connection with our delineation activities in the SCOOP and an incremental $75 million in connection with the increase in working interests on 2017 wells spud and related leasehold spend."

Gulfport reiterates its 2017 production guidance and currently forecasts that 2017 average daily net production will be in the range of 1,065 MMcfe to 1,100 MMcfe per day, an increase of 48% to 53% over its 2016 average daily net production of 719.8 MMcfe per day.  Mr. Moore stated, "While we do expect a slight reduction in turn-in-lines, we currently forecast 2017 full-year production to be trending towards the upper-end of the previously increased guidance range, highlighting the continued strong production performance from both our Utica Shale and SCOOP assets."

As previously announced, based on actual results during the nine-month period ended September 30, 2017 and utilizing current strip pricing at the various regional pricing points at which the Company sells its natural gas, Gulfport reiterates its realized natural gas price differential, before the effect of hedges and inclusive of the Company’s firm transportation expense, will average in the range of $0.62 to $0.68 per Mcf below NYMEX settlement prices in 2017. Gulfport updated its expected realized NGL price and realized oil price and now forecasts that its 2017 realized NGL price, before the effect of hedges and including transportation expense, will be approximately 45% to 50% of WTI and its 2017 realized oil price will be in the range of $3.25 to $3.75 per barrel below WTI.

The table below summarizes the Company’s updated full year 2017 guidance:

 
GULFPORT ENERGY CORPORATION
COMPANY GUIDANCE
  Year Ending
    2017
  Low   High
Forecasted Production      
Average Daily Gas Equivalent (MMcfepd)   1,065     1,100  
% Gas ~88%
% Natural Gas Liquids ~8%
% Oil ~4%
       
Forecasted Realizations (before the effects of hedges) (1)      
Natural Gas (Differential to NYMEX Settled Price) - $/Mcf $ (0.62 )   $ (0.68 )
NGL (% of WTI) ~ 45% - 50%
Oil (Differential to NYMEX WTI) $/Bbl $ (3.25 )   $ (3.75 )
       
Projected Operating Costs      
Lease Operating Expense - $/Mcfe $ 0.18     $ 0.23  
Production Taxes - $/Mcfe $ 0.08     $ 0.09  
Midstream Gathering and Processing - $/Mcfe $ 0.55     $ 0.62  
General and Administrative - $/Mcfe $ 0.15     $ 0.17  
       
Depreciation, Depletion and Amortization - $/Mcfe $ 0.85     $ 0.90  
       
  Total
Budgeted D&C Expenditures - In Millions:      
Operated $860
Non-Operated $125
Total Budgeted E&P Capital Expenditures $985
   
Budgeted Midstream Expenditures - In Millions: $45
   
Budgeted Leasehold Expenditures - In Millions: $130
   
Total Capital Expenditures - In Millions: $1,160
       
Net Wells Drilled      
Utica - Operated   91
Utica - Non-Operated   8
Total   99
   
SCOOP - Operated   18
SCOOP - Non-Operated   1
Total   19
   
Net Wells Turned-to-Sales  
Utica - Operated   61
Utica - Non-Operated   9
Total   70
   
SCOOP - Operated   16
SCOOP - Non-Operated   1
Total   17
     

Operational Update
The table below summarizes Gulfport's activity for the nine-month period ended September 30, 2017 and the number of net wells expected to be drilled and turned-to-sales for the remainder of 2017: 

 
GULFPORT ENERGY CORPORATION
ACTIVITY SUMMARY
(Unaudited)
 
    Three Months    Three Months    Three Months         
    ended   ended   ended       Updated
    March 31,   June 30,   September 30,   Remaining Wells   Guidance
    2017   2017   2017   2017   2017
Net Wells Drilled                    
Utica - Operated   24     26     23     18     91  
Utica - Non-Operated   2     2     1     3     8  
Total   26     28     24     21     99  
                     
SCOOP - Operated   4     2     6     6     18  
SCOOP - Non-Operated   0.5     0.3
        0.2     1  
Total   5     2     6     6     19  
                     
Net Wells Turned-to-Sales                    
Utica - Operated   5     27     18     11     61  
Utica - Non-Operated   1     4     2     2     9  
Total   6     31     20     13     70  
                     
SCOOP - Operated       1     6     9     16  
SCOOP - Non-Operated   0.2
    0.1     0.4
    0.3     1  
Total       1     6     10     17  
                     

Utica Shale
In the Utica Shale, during the third quarter of 2017, Gulfport spud 23 gross (23.0 net) operated wells. During the third quarter of 2017, net production from Gulfport’s Utica acreage averaged approximately 987.2 MMcfe per day, an increase of 15% over the second quarter of 2017 and an increase of 38% over the third quarter of 2016.

For the nine-month period ended September 30, 2017, Gulfport spud 77 gross (72.1 net) operated wells. For the nine-month period ended September 30, 2017, net production from Gulfport’s Utica acreage averaged approximately 865.9 MMcfe per day.

For the nine-month period ended September 30, 2017, the wells drilled had an average lateral length of approximately 7,882 feet.   Normalizing to an 8,000 foot lateral length,  Gulfport's average drilling days during the nine-month period ended September 30, 2017 from spud to rig release totaled approximately 19.3 days. In addition, Gulfport turned-to-sales 53 gross (49.3 net) operated wells with an average stimulated length of approximately 7,736 feet. For the nine-month period ended September 30, 2017, Gulfport's well costs averaged approximately $1,122 per foot of lateral in the Utica Shale. Mr. Moore commented, "Our average well cost during the first nine months of 2017 reflects shorter lateral lengths during the summer months, however we expect to see lateral lengths increase in the field during the fourth quarter of 2017, realizing economies of scale and resulting in an improvement in our per foot of lateral well cost."

At present, Gulfport has 4 operated horizontal drilling rigs active in the play.

SCOOP
In the SCOOP, during the third quarter of 2017, Gulfport spud 7 gross (6.1 net) operated wells. During the third quarter of 2017, net production from the acreage averaged approximately 194.4 MMcfe per day, an increase of 20% over the second quarter of 2017.

For the nine-month period ended September 30, 2017, Gulfport spud 15 gross (12.7 net) operated wells. For the nine-month period ended September 30, 2017, net production from the acreage averaged approximately 177.1 MMcfe per day.

For the nine-month period ended September 30, 2017, the wells drilled had an average lateral length of 7,174 feet.  Normalizing to a 7,500 foot lateral length, Gulfport's average drilling days during the nine-month period ended September 30, 2017 from spud to rig release totaled approximately 69.0 days. In addition, Gulfport turned-to-sales 8 gross (6.7 net) operated wells with an average stimulated length of approximately 7,517 feet.

As previously announced, during the third quarter of 2017 Gulfport turned-to-sales 6 gross (5.6 net) Woodford wells located in the wet gas window in central Grady County, Oklahoma.

Following 30 days of production, the EJ Craddock 8-28X21H has cumulatively produced 350.4 MMcf of natural gas and 20.8 thousand barrels of oil. Based upon the composition analysis, the gas being produced is 1,171 BTU gas and yielding 47.0 barrels of NGLs per MMcf of natural gas and results in a natural gas shrink of 16%. On a three-stream basis, the EJ Craddock 8-28X21H produced at an average 30-day production rate of 17.3 MMcfe per day, which is comprised of approximately 57% natural gas, 24% oil, and 19% natural gas liquids.

Following 30 days of production, the Pauline 6-27X22H has cumulatively produced 391.9 MMcf of natural gas and 24.8 thousand barrels of oil. Based upon the composition analysis, the gas being produced is 1,216 BTU gas and yielding 57.4 barrels of NGLs per MMcf of natural gas and results in a natural gas shrink of 22%.  On a three-stream basis, the Pauline 6-27X22H produced at an average 30-day production rate of 19.6 MMcfe per day, which is comprised of approximately 52% natural gas, 25% oil, and 23% natural gas liquids.

Following 30 days of production, the Pauline 5-27X22H has cumulatively produced 384.0 MMcf of natural gas and 23.7 thousand barrels of oil. Based upon the composition analysis, the gas being produced is 1,216 BTU gas and yielding 57.4 barrels of NGLs per MMcf of natural gas and results in a natural gas shrink of 22%. On a three-stream basis, the Pauline 5-27X22H produced at an average 30-day production rate of 19.1 MMcfe per day, which is comprised of approximately 52% natural gas, 25% oil, and 23% natural gas liquids.

Following 30 days of production, the Pauline 4-27X22H has cumulatively produced 316.9 MMcf of natural gas and 19.0 thousand barrels of oil. Based upon the composition analysis, the gas being produced is 1,212 BTU gas and yielding 57.3 barrels of NGLs per MMcf of natural gas and results in a natural gas shrink of 18%. On a three-stream basis, the Pauline 4-27X22H produced at an average 30-day production rate of 16.1 MMcfe per day, which is comprised of approximately 54% natural gas, 24% oil, and 22% natural gas liquids.

Following 30 days of production, the Pauline 3-27X22H has cumulatively produced 162.0 MMcf of natural gas and 8.8 thousand barrels of oil. Based upon the composition analysis, the gas being produced is 1,212 BTU gas and yielding 57.3 barrels of NGLs per MMcf of natural gas and results in a natural gas shrink of 18%. On a three-stream basis, the Pauline 3-27X22H produced at an average 30-day production rate of 8.0 MMcfe per day, which is comprised of approximately 55% natural gas, 22% oil, and 23% natural gas liquids.

At present, Gulfport has 4 operated horizontal drilling rigs active in the play.

The table below summarizes the Company’s recent SCOOP well results:

 
GULFPORT ENERGY CORPORATION
SCOOP WELL RESULTS SUMMARY
(Unaudited)
 
          NGLs                
    Phase Stimulated Wellhead Per   Product Mix(1) Average Prod. Rates (Mmcfepd)
   County Window  Lateral BTU MMcf %
Shrink
Gas NGLs Oil 24-Hr 30-
Day
60-
Day
90-
Day
EJ Craddock 8-28X21H Central Grady Woodford Wet Gas 7,961 1,171 47.0 16 % 55 % 19 % 26 % 19.7   17.3      
Pauline 3-27X22H Central Grady Woodford Wet Gas 4,322 1,212 57.3 18 % 49 % 21 % 30 % 8.8   8.0      
Pauline 4-27X22H Central Grady Woodford Wet Gas 7,978 1,212 57.3 18 % 52 % 22 % 26 % 17.3   16.1      
Pauline 5-27X22H Central Grady Woodford Wet Gas 7,929 1,216 57.4 22 % 50 % 22 % 28 % 22.2   19.1      
Pauline 6-27X22H Central Grady Woodford Wet Gas 7,273 1,216 57.4 22 % 50 % 22 % 28 % 22.9   19.6      
Pauline 8-27X22H Central Grady Woodford Wet Gas 7,658 1,210 58.8 19 % 51 % 22 % 27 % 18.4   18.6      
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  
                           
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.
 

Southern Louisiana
At its West Cote Blanche Bay and Hackberry fields, during the third quarter of 2017, Gulfport spud 6 wells and performed 9 recompletions at the fields. Net production during the third quarter of 2017 totaled approximately 17.1 MMcfe per day.

For the nine-month period ended September 30, 2017, Gulfport spud 15 wells and performed 77 recompletions at the fields. Net production during the nine-month period ended September 30, 2017 totaled approximately 17.0 MMcfe per day.

Expected Borrowing Base Increase to $1.2 Billion
In connection with the scheduled fall redetermination of Gulfport's revolving credit facility, Gulfport's lead lenders have proposed an increase to Gulfport's borrowing base from $1.0 billion to $1.2 billion, subject to the approval of the additional banks within the syndicate. Elected commitments under the facility are anticipated to total $1.0 billion.

2017 Financial Position and Liquidity
As of September 30, 2017, Gulfport had cash on hand of approximately $125.3 million. As of September 30, 2017, $365.0 million was outstanding under Gulfport’s revolving credit facility with outstanding letters of credit totaling $237.5 million. In October 2017, the Company issued $450 million of its 6.375% senior notes due 2026. After giving pro forma effect to this offering and the application of a portion of the net proceeds to repay the outstanding borrowings under the revolving credit facility, at September 30, 2017 Gulfport would have had cash on hand of approximately $205 million and the revolving credit facility would have been undrawn.

Derivatives
Gulfport has hedged a portion of its expected production to lock in prices and returns that provide certainty of cash flow to execute on its capital plans. Since August 8, 2017, the Company has added approximately 123 BBtupd of natural gas fixed price swaps for 2018 and 55 BBtupd of natural gas fixed price swaps for 2019.

The table below sets forth the Company's hedging positions as of November 1, 2017.

 
GULFPORT ENERGY CORPORATION
COMMODITY DERIVATIVES - HEDGE POSITION
(Unaudited)
 
  4Q2017        
Natural gas:          
Swap contracts (NYMEX)          
Volume (BBtupd) 765          
Price ($ per MMBtu) $ 3.19          
           
Swaption contracts (NYMEX)          
Volume (BBtupd) 65          
Price ($ per MMBtu) $ 3.11          
           
Basis Swap Contract  (Tetco M2)          
Volume (BBtupd)          
Differential ($ per MMBtu) $          
           
Basis Swap Contract  (NGPL MC)          
Volume (BBtupd) 50          
Differential ($ per MMBtu) $ (0.26 )        
           
Oil:          
Swap contracts (LLS)          
Volume (Bblpd) 1,500          
Price ($ per Bbl) $ 53.12          
           
Swap contracts (WTI)          
Volume (Bblpd) 4,500          
Price ($ per Bbl) $ 54.89          
           
NGL:          
C3 Propane Swap Contracts          
Volume (Bblpd) 3,000          
Price ($ per Gal) $ 0.63          
           
C5+ Swap Contracts          
Volume (Bblpd) 250          
Price ($ per Gal) $ 1.17          
               
  2017   2018   2019
Natural gas:          
Swap contracts (NYMEX)          
Volume (BBtupd) 629     898     112  
Price ($ per MMBtu) $ 3.19     $ 3.06     $ 3.01  
           
Swaption contracts (NYMEX)          
Volume (BBtupd) 60     103     135  
Price ($ per MMBtu) $ 3.12     $ 3.25     $ 3.07  
           
Basis Swap Contract  (Tetco M2)          
Volume (BBtupd) 12          
Differential ($ per MMBtu) $ (0.59 )        
           
Basis Swap Contract  (NGPL MC)          
Volume (BBtupd) 38     12      
Differential ($ per MMBtu) $ (0.26 )   $ (0.26 )   $  
           
Oil:          
Swap contracts (LLS)          
Volume (Bblpd) 1,748     753      
Price ($ per Bbl) $ 51.97     $ 53.91     $  
           
Swap contracts (WTI)          
Volume (Bblpd) 3,353     3,779      
Price ($ per Bbl) $ 54.98     $ 52.20     $  
           
NGL:          
C3 Propane Swap Contracts          
Volume (Bblpd) 2,545     3,500      
Price ($ per Gal) $ 0.64     $ 0.67     $  
           
C5+ Swap Contracts          
Volume (Bblpd) 250     500      
Price ($ per Gal) $ 1.17     1.11      
                       

Presentation
An updated presentation has been posted to the Company’s website. The presentation can be found at www.gulfportenergy.com under the “Company Information” 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 hold a conference call on Thursday, November 2, 2017 at 8:00 a.m. CST to discuss its third quarter of 2017 financial and operational results and to provide an update on the Company’s recent activities.

Interested parties may listen to the call via Gulfport’s website at www.gulfportenergy.com or by calling toll-free at 866-373-3408 or 412-902-1039 for international callers.  A replay of the call will be available for two weeks at 877-660-6853 or 201-612-7415 for international callers.  The replay passcode is 13622396.  The webcast will also be available for two weeks on the Company’s website and can be accessed on the Company’s “Investor Relations” page.

About Gulfport
Gulfport is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America and is one of the largest producers of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds an acreage position along the Louisiana Gulf Coast, a position in the Alberta Oil Sands in Canada through its approximately 25% interest in Grizzly Oil Sands ULC and has an approximately 25% equity interest in Mammoth Energy Services, Inc. (NASDAQ: TUSK). For more information, please visit www.gulfportenergy.com.

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, 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, market conditions, 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, credit or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by Gulfport; Gulfport’s ability to identify, complete and integrate acquisitions of properties  (including the properties acquired from Vitruvian II Woodford, LLC) and businesses; 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. Information concerning these and other factors can be found in the Company's filings with the Securities and Exchange Commission, including its Forms 10-K, 10-Q and 8-K. 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. Gulfport has no intention, and disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Non-GAAP Financial Measures
EBITDA is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, plus interest expense, income tax (benefit) expense, accretion expense, depreciation, depletion and amortization and impairment of oil and gas properties. Adjusted EBITDA is a non-GAAP financial measure equal to EBITDA less non-cash derivative (gain) loss, acquisition expense and (income) loss from equity method investments. Cash flow from operating activities before changes in operating assets and liabilities is a non-GAAP financial measure equal to cash provided by operating activity before changes in operating assets and liabilities. Adjusted net income is a non-GAAP financial measure equal to pre-tax net loss less non-cash derivative (gain) loss, acquisition expense, (income) loss from equity method investments and tax expense excluding adjustements. The Company has presented EBITDA and adjusted EBITDA because it uses these measures as an integral part of its internal reporting to evaluate its performance and the performance of its senior management. These measures are considered important indicators of the operational strength of the Company's business and eliminate the uneven effect of considerable amounts of non-cash depletion, depreciation of tangible assets and amortization of certain intangible assets. A limitation of these measures, however, is that they do 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 these measures provide useful information to its investors regarding its performance and overall results of operations. EBITDA, adjusted EBITDA, adjusted net income 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, adjusted EBITDA, adjusted net income 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, adjusted EBITDA, adjusted net income 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.

Investor & Media Contact:
Jessica Wills – Manager, Investor Relations and Research
jwills@gulfportenergy.com 
405-252-4550

                               
GULFPORT ENERGY CORPORATION 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(Unaudited) 
 
  Three months ended
September 30,
  Nine months ended
September 30,
  2017   2016   2017   2016
                               
  (In thousands, except share data)
Revenues:              
Natural gas sales $ 223,340     $ 122,018     $ 606,544     $ 271,873  
Oil and condensate sales 31,459     21,799     85,338     60,799  
Natural gas liquid sales 33,559     14,594     88,985     34,198  
Net (loss) gain on gas, oil and NGL derivatives (22,860 )   35,281     141,588     (44,376 )
  265,498     193,692     922,455     322,494  
Costs and expenses:              
Lease operating expenses 20,020     17,471     60,044     48,789  
Production taxes 5,419     3,525     14,464     9,492  
Midstream gathering and processing 69,372     45,475     176,258     122,476  
Depreciation, depletion and amortization 106,650     62,285     254,887     183,414  
Impairment of oil and natural gas properties     212,194         601,806  
General and administrative 13,065     10,467     37,922     32,941  
Accretion expense 456     269     1,148     777  
Acquisition expense 33         2,391      
  215,015     351,686     547,114     999,695  
INCOME (LOSS) FROM OPERATIONS 50,483     (157,994 )   375,341     (677,201 )
OTHER (INCOME) EXPENSE:              
Interest expense 27,130     12,787     74,797     44,892  
Interest income (37 )   (337 )   (927 )   (822 )
Insurance proceeds     (3,750 )       (3,750 )
Loss (income) from equity method investments, net 2,737     (5,997 )   20,945     25,576  
Other income (345 )   6     (863 )   (3 )
  29,485     2,709     93,952     65,893  
INCOME (LOSS) BEFORE INCOME TAXES 20,998     (160,703 )   281,389     (743,094 )
INCOME TAX EXPENSE (BENEFIT) 2,763     (3,407 )   2,763     (3,755 )
NET INCOME (LOSS) $ 18,235     $ (157,296 )   $ 278,626     $ (739,339 )
NET INCOME (LOSS) PER COMMON SHARE:              
Basic $ 0.10     $ (1.25 )   $ 1.56     $ (6.12 )
Diluted $ 0.10     $ (1.25 )   $ 1.56     $ (6.12 )
Weighted average common shares outstanding—Basic 182,957,416     125,408,866     178,736,569     120,771,046  
Weighted average common shares outstanding—Diluted 183,008,436     125,408,866     179,130,570     120,771,046  

 

GULFPORT ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
  September 30, 2017   December 31, 2016
               
  (In thousands, except share data)
Assets      
Current assets:      
Cash and cash equivalents $ 125,271     $ 1,275,875  
Restricted cash     185,000  
Accounts receivable—oil and natural gas 180,106     136,761  
Accounts receivable—related parties 362     16  
Prepaid expenses and other current assets 5,666     3,135  
Short-term derivative instruments 35,332     3,488  
Total current assets 346,737     1,604,275  
Property and equipment:      
Oil and natural gas properties, full-cost accounting, $2,956,732 and $1,580,305 excluded from amortization in 2017 and 2016, respectively 8,867,239     6,071,920  
Other property and equipment 84,225     68,986  
Accumulated depletion, depreciation, amortization and impairment (4,043,879 )   (3,789,780 )
Property and equipment, net 4,907,585     2,351,126  
Other assets:      
Equity investments 279,282     243,920  
Long-term derivative instruments 6,409     5,696  
Deferred tax asset 4,692     4,692  
Inventories 13,908     4,504  
Other assets 18,985     8,932  
Total other assets 323,276     267,744  
Total assets $ 5,577,598     $ 4,223,145  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable and accrued liabilities $ 582,928     $ 265,124  
Asset retirement obligation—current 195     195  
Short-term derivative instruments 29,130     119,219  
Current maturities of long-term debt 570     276  
Total current liabilities 612,823     384,814  
Long-term derivative instrument 19,712     26,759  
Asset retirement obligation—long-term 44,266     34,081  
Long-term debt, net of current maturities 1,958,136     1,593,599  
Total liabilities 2,634,937     2,039,253  
Commitments and contingencies      
Preferred stock, $.01 par value; 5,000,000 authorized, 30,000 authorized as redeemable 12% cumulative preferred stock, Series A; 0 issued and outstanding      
Stockholders’ equity:      
Common stock - $.01 par value, 200,000,000 authorized, 183,081,776 issued and outstanding at September 30, 2017 and 158,829,816 at December 31, 2016 1,831     1,588  
Paid-in capital 4,413,623     3,946,442  
Accumulated other comprehensive loss (40,339 )   (53,058 )
Retained deficit (1,432,454 )   (1,711,080 )
Total stockholders’ equity 2,942,661     2,183,892  
Total liabilities and stockholders’ equity $ 5,577,598     $ 4,223,145  
               

 

GULFPORT ENERGY CORPORATION
RECONCILIATION OF EBITDA AND CASH FLOW
(Unaudited)
               
  Three months ended September 30,   Nine months ended September 30,
  2017   2016   2017   2016
                               
   (In thousands)    (In thousands)
               
Net income (loss) $ 18,235     $ (157,296 )   $ 278,626     $ (739,339 )
Interest expense 27,130     12,787     74,797     44,892  
Income tax expense (benefit) 2,763     (3,407 )   2,763     (3,755 )
Accretion expense 456     269     1,148     777  
Depreciation, depletion and amortization 106,650     62,285     254,887     183,414  
Impairment of oil and gas properties     212,194         601,806  
EBITDA $ 155,234     $ 126,832     $ 612,221     $ 87,795  
               
               
               
               
  Three months ended September 30,   Nine months ended September 30,
  2017   2016   2017   2016
                               
   (In thousands)    (In thousands)
               
Cash provided by operating activity $ 205,080     $ 102,551     $ 491,733     $ 245,275  
Adjustments:              
Changes in operating assets and liabilities (37,018 )   6,563     (56,928 )   35,521  
Operating Cash Flow $ 168,062     $ 109,114     $ 434,805     $ 280,796  
                               

 

GULFPORT ENERGY CORPORATION
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
       
  Three Months ended   Nine Months Ended
  September 30, 2017   September 30, 2017
               
   (In thousands)
       
EBITDA $ 155,234     $ 612,221  
       
Adjustments:      
Non-cash derivative loss (gain) 36,974     (129,693 )
Acquisition expense 33     2,391  
Loss from equity method investments 2,737     20,945  
       
       
Adjusted EBITDA $ 194,978     $ 505,864  
       

 

GULFPORT ENERGY CORPORATION
RECONCILIATION OF ADJUSTED NET INCOME
(Unaudited)
         
    Three Months ended   Nine Months Ended
    September 30, 2017   September 30, 2017
                 
     (In thousands, except share data)
         
Pre-tax net income excluding adjustments   $ 20,998     $ 281,389  
Adjustments:        
Non-cash derivative loss (gain)   36,974     (129,693 )
Acquisition expense   33     2,391  
Loss from equity method investments   2,737     20,945  
Pre-tax net income excluding adjustments   $ 60,742     $ 175,032  
         
Tax expense excluding adjustments   2,763     2,763  
         
Adjusted net income   $ 57,979     $ 172,269  
         
Adjusted net income per common share:        
         
Basic   $ 0.32     $ 0.96  
         
Diluted   $ 0.32     $ 0.96  
         
Basic weighted average shares outstanding   182,957,416     178,736,569  
         
Diluted weighted average shares outstanding   183,008,436     179,130,570  


Source: Gulfport Energy Corporation