Net production averaged 1,038.4 MMcfe per day, a 22% increase over the first quarter of 2017 and a 56% increase versus the second quarter of 2016.
Net income of $105.9 million, or $0.58 per diluted share.
Adjusted net income (as defined and reconciled below) of $60.4 million, or $0.33 per diluted share. < Compares to my forecast of $0.25 EPS
Adjusted EBITDA (as defined and reconciled below) of $167.3 million.
Reduced unit lease operating expense for the second quarter of 2017 by 13% to $0.22 per Mcfe from $0.25 per Mcfe for the first quarter of 2017.
Reduced unit general and administrative expense for the second quarter of 2017 by 21% to $0.13 per Mcfe from $0.16 per Mcfe for the first quarter of 2017.
Increased 2017 full-year production guidance and now forecast 2017 average daily net production will be in the range of 1,065 MMcfe to 1,100 MMcfe per day.
Reiterate budgeted 2017 total capital expenditures of $1.0 billion to $1.1 billion.
Recently spud both a Springer and Sycamore location in the SCOOP.
Increased hedge position to approximately 629 MMcf per day of natural gas fixed price swaps during 2017 at an average fixed price of $3.19 per Mcf and a large base level of 775 MMcf per day of natural gas fixed price swaps during 2018 at an average fixed price of $3.06 per Mcf.
Gulfport Energy Q2 Results
Gulfport Energy Q2 Results
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Gulfport Energy Q2 Results
After listen to the Gulfport conference call, I have updated my forecast model for GPOR. My valuation adjusts to $38.00, which compares to First Call's price target of $21.69.
My take from the CC:
> They needed to upgrade two of the rigs in SCOOP and they have. Six rigs drilling in SCOOP today, but two of the rigs will be released by the end of August.
> 5-8 SCOOP wells will be completed in Q3, which should give us a much better idea of the overall potential they have in SCOOP.
> The Sycamore and Springer test wells in SCOOP are VERY IMPORTANT as they will significantly increase the potential within Gulfport's leasehold.
> Lots of Utica wells completed in Q2 will boost production in second half of this year.
> The company has not provided production guidance for 2018, but they said their goal is 30% annual production growth so that is what I am using in my forecast.
> Since they should exit the year with production over 220,000 Boepd, using 234,000 Boepd for 2018 seems a bit too low to me.
> The market for their Utica gas in rapidly improving with more takeaway capacity from new pipelines, so realized gas prices s/b going up.
> Realized commodity prices in Oklahoma are much better, so as SCOOP ramps up production Gulfport's overall oil, gas and NGL price realizations should go up.
> Most important point: Future drilling and completion budgets s/b fully funded by cash flow from operations.
Gulfport has a history for strong production growth (31.5% in 2016 and more than 50% in 2017). If 30% annual production and proven reserve growth can be funded from operating cash flows, it should be trading at a much higher multiple. Operating cash flow s/b $3.50/share this year and near $5.00/share in 2018.
My take from the CC:
> They needed to upgrade two of the rigs in SCOOP and they have. Six rigs drilling in SCOOP today, but two of the rigs will be released by the end of August.
> 5-8 SCOOP wells will be completed in Q3, which should give us a much better idea of the overall potential they have in SCOOP.
> The Sycamore and Springer test wells in SCOOP are VERY IMPORTANT as they will significantly increase the potential within Gulfport's leasehold.
> Lots of Utica wells completed in Q2 will boost production in second half of this year.
> The company has not provided production guidance for 2018, but they said their goal is 30% annual production growth so that is what I am using in my forecast.
> Since they should exit the year with production over 220,000 Boepd, using 234,000 Boepd for 2018 seems a bit too low to me.
> The market for their Utica gas in rapidly improving with more takeaway capacity from new pipelines, so realized gas prices s/b going up.
> Realized commodity prices in Oklahoma are much better, so as SCOOP ramps up production Gulfport's overall oil, gas and NGL price realizations should go up.
> Most important point: Future drilling and completion budgets s/b fully funded by cash flow from operations.
Gulfport has a history for strong production growth (31.5% in 2016 and more than 50% in 2017). If 30% annual production and proven reserve growth can be funded from operating cash flows, it should be trading at a much higher multiple. Operating cash flow s/b $3.50/share this year and near $5.00/share in 2018.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group