GPOR Q1 production beats my forecast

[dan_s]

First Quarter 2015 Production

Gulfport produced oil and natural gas sales volumes of 424.4 MMcfe per day during first quarter 2015, exceeding the Company's previously estimated guidance of approximately 378 MMcfe per day to 390 MMcfe per day. For the first quarter of 2015, Gulfport's production mix was approximately 68% natural gas and 32% oil and natural gas liquids. Gulfport's first quarter 2015 production represented an 11% increase over fourth quarter 2014 production of 381.9 MMcfe per day and a 161% increase over first quarter 2014 production of 162.5 MMcfe per day. Gulfport's first quarter 2015 Utica Shale production was 396.0 MMcfe per day, or 93% of our aggregate net production, as compared to 93% and 78% of our aggregate production during the fourth quarter of 2014 and the first quarter of 2014, respectively.

This morning STIFEL raised their price target by $10/share"
"Raising Target Price On Utica Upside Potential
Despite continuing to have a downward bias to our natural gas price forecast
(currently at $3/MMBtu and $3.50/MMBtu for 2015 and 2016), we continue to see
NAV upside potential for GPOR. After taking into account the significant dry Utica
NAV upside potential, strong balance sheet, top-tier well economics, and strong
hedge and firm transportation portfolio, we are reiterating our Buy
recommendation and increasing our target price to $60/share."

[dan_s]

I have updated my forecast model for GPOR. Raising my Fair Value Estimate to $68.75.

GPOR is a "gasser", but they continue to increase their liquids production. First quarter crude oil and NGL production was way over my forecast.

Year-over-year production growth should be approximately 95% and they have plenty of running room. If natural gas prices firm up heading into year-end, this one has a lot of upside for us. Also, NGL prices have been hammered. I do expect them to stay depressed this year, but rally into year-end is possible.

[jb2257]

GPOR has pulled back to the 200 day MA which looks like a good entry IMO. Are you still positive on their future? They report next Tuesday.

[dan_s]

The fundamentals for GPOR are fine, but they are a "gasser" and I think natural gas prices will remain depressed until next winter. Production should be over 90,000 boe per day by year-end (74% natural gas, 10% crude oil and 16% NGLs).

GPOR's production growth has been "stunning" the last few years, up from 11,250 boe per day in 2013.

I think now is a good time to accumulate GPOR, but I do not expect a significant move higher until the outlook for natural gas improves.