GPOR

[Wolfdog2]

Gulfport Energy acquisition mixed, says Wells Fargo
After Gulfport announced the acquisition of private equity backed Vitruvian II Woodford for $1.85B, Wells Fargo says that the deal gives Gulfport another positive catalyst while diversifying its .assets and "alleviating concerns over inventory." Wells, however, warns that the Street could view the move as signaling "potential growth constraints, or inability to grow drilling inventory," and the firm says that the deal eliminates Gulfports status as a high quality dry gas Utica pure play. Wells expects the shares to be pressured in the near-term , but it keeps an Outperform rating, saying that the company's Utica strategy remains intact. :theflyonthewall.com

[dan_s]

Presentation about GPOR's acquisition: http://www.gulfportenergy.com/news/presentations

I am updating my forecast model for GPOR and will post it to the EPG website this afternoon.

[mkarpoff]

Wow, between gpor and lone, this is becoming a tough way to make money

[dan_s]

I have posted my forecast/valuation model to the EPG website. I like the acquisition because it adds another "Core Area" of growth for GPOR. At closing their production will increase by about 30,500 BOPD. See the presentation on the GPOR website for details.

My valuation of the common stock dips $5 to $40.00, primarily because of the increased share count.

It will take awhile for the Wall Street Gang to figure this deal out.

Gulfport's daily production:
2014A = 39,948 BOE per day
2015A = 91,219 BOE per day
2016E = 119,600 BOE per day
2017E = 180,000 BOE per day (30,500 added the day of closing) < 83% natural gas, 20% NGLs and 7% crude oil

Even at today's oil, gas and NGL prices the well level economics are VERY GOOD in SCOOP. If natural gas and NGL prices go where I think they are heading, my valuation for GPOR will go a lot higher

[TexAg82]

Whack - 21.50 - Great news for existing shareholders! I think my Jan calls are TOAST with no butter, not even crumbs left. Thanks Gulfport!

OKLAHOMA CITY, Dec. 15, 2016 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) (“Gulfport”) announced today the pricing of an underwritten public offering of 29,000,000 shares of its common stock at a price to the public of $21.50 per share. The underwriters have a 30-day option to purchase up to an additional 4,350,000 shares from Gulfport at the public offering price per share (less the underwriting discount). The offering is expected to close on December 21, 2016, subject to customary closing conditions. Net proceeds to Gulfport from the sale of the 29,000,000 shares will be approximately $608 million, after deducting underwriting discounts, commissions and estimated offering expenses. Gulfport intends to use the net proceeds from this offering, together with the net proceeds from its concurrent debt offering, (i) primarily to fund the cash portion of the purchase price for its previously announced pending acquisition of certain assets of Vitruvian II Woodford, LLC and (ii) for general corporate purposes, which may include the funding of a portion of its capital development plans. If the pending acquisition is not consummated, or to the extent that the purchase price is reduced due to a purchase price adjustment under the related purchase agreement, Gulfport intends to use any such proceeds for general corporate purposes, including the funding of a portion of its capital development plans.

[jb2257]

You can have all the great fundamentals but if Wall Street is negative on the sector you're not going to make money. Most of my losses for the year have been in the Sweet 16.

[dan_s]

As of December 10, the Sweet 16 was up 56.9% YTD.

[jb2257]

I guess it depends on which ones you pick and the price you pay. It seems that the rise in interest rates may not help the small cap energy stocks, but will not affect the large caps that much. It would be nice to see some stability in the oil and gas prices which might reduce some of the volatility in the stock prices.

[dan_s]

Oil was up $1.04/bbl today but most of the Sweet 16 finished the day in the red. As I have posted here many times, never read anything into one day moves, especially this time of year.

Hedge fund managers want to lock in gains before Christmas, because they get paid management fees based on their gains for the year or quarter. The typical management fee is 20% of annual gains in the portfolio.

Plus, this is option expiration day. That also causes some weird moves in share prices.

As I have also posted many times, the oil & gas industry has changed quite a bit in the last few years. It is now EXTREMELY CAPITAL INTENSE. The shale plays are controlled by the larger companies because it takes big acreage blocks to drill those long horizontal wells. You need two sections (1,280 acres) to drill a two mile long lateral. Permian Basin leasehold is now over $20,000/acre. Small-caps cannot afford the "cost of admission" to this club.

Small-caps have more potential, but they have A LOT MORE RISK. My rule is that the "retirement money" is in the large-caps (like our Elite Eight) and the "casino money" is in the small-caps.

Based on many of the posts here, I think you guys are expecting to find "ten baggers" with some of the small-caps. Just understand that there is a lot of risk in that game.

If my Macro View is correct, that oil, gas and NGL prices will be much higher in 2017, the Sweet 16 has a lot of upside for us next year.

[setliff]

dan, i believe 12-20, tuesday, is expiration date for jan contract.

http://quotes.ino.com/charting/?s=NYMEX_CL.F17.E

[dan_s]

I think today was the expiration date for puts and calls on stocks. That was what I was talking about.