Gulfport Energy (GPOR) Forecast

[dan_s]

I am updating the GPOR forecast model now for the new info in this press release. - Dan

OKLAHOMA CITY, Jan. 29, 2018 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) (“Gulfport” or the “Company”) today announced its 2018 capital budget, its 2018 operation outlook and that its board of directors has approved a stock repurchase program to acquire up to $100 million of its outstanding common stock during 2018. Key information includes the following:

Budgeted 2018 total capital expenditures of $770 million to $835 million to be funded within cash flow.
Forecasted 2018 full year net production is estimated to average 1,250 MMcfe to 1,300 MMcfe per day, an increase of approximately 15% to 19% over 2017.
Stock repurchase program to acquire up to $100 million of outstanding common stock.

Michael G. Moore, Chief Executive Officer and President, commented, “In the current environment, we are dedicated to strict capital discipline and are in the position to be able to generate free cash flow for our shareholders while also providing strong production growth. Based on current strip pricing, Gulfport forecasts our full-year 2018 total capital program to be funded entirely within cash flow while growing production approximately 15% to 19% over 2017. Furthermore, our robust hedge portfolio underpins our 2018 capital program with approximately 80% of our expected 2018 natural gas production priced at over $3.05 per MMBtu, providing a high degree of certainty surrounding the cash flow profile of our 2018 program.

In addition to our planned operational activity for 2018, we are pleased to announce our board has recently approved a stock repurchase program. The repurchase program underscores the confidence we have in our business model, financial performance and top-tier asset base and further demonstrates our commitment to creating value for our shareholders. We intend to opportunistically repurchase our stock during 2018 and will utilize our available liquidity, which will include forecasted free cash flow generated and, potentially, proceeds from the sale of certain investments. The plan authorizes up to $100 million of share repurchases, which at today’s share price represents approximately 5% of the Company’s outstanding shares.”

2018 Capital Budget and Production Guidance
For 2018, Gulfport estimates its total capital expenditures will be approximately $770 million to $835 million, which will be funded within cash flow at current strip pricing. The 2018 budget includes approximately $630 million to $685 million for D&C activities and approximately $140 million to $150 million for non-D&C activities, including midstream capital expenditures associated with its investment in Strike Force Midstream LLC and leasehold activities during 2018. With this level of capital spend, Gulfport forecasts its 2018 average daily net production will be in the range of 1,250 MMcfe to 1,300 MMcfe per day, an increase of approximately 15% to 19% over 2017.

Utilizing current strip pricing at the various regional pricing points at which the Company sells its natural gas, Gulfport forecasts 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 $0.58 to $0.72 per Mcf below NYMEX settlement prices in 2018. Gulfport expects its 2018 realized NGL price, before the effect of hedges and including transportation expense, will be approximately 45% to 50% of WTI and its 2018 realized oil price will be in the range of $3.00 to $3.50 per barrel below WTI.

[dan_s]

On January 30, 2018 (after the company's operations update) five Wall Street Firms updated their forecast/valuation models for GPOR. All five rated the stock a BUY with price targets of $15 to $19.

My forecast/valuation model, which is very close to the current First Call estimates for revenue, EPS and operating CFPS, comes to a valuation of $20.00/share. It will be posted to the EPG website this afternoon.

Investors remain very negative on the "gassers" and that fact is unlikely to change anytime soon. However, Gulfport has solid earnings per share and cash flow from operations locked in for 2018, thanks to their aggressive hedging program.

For 2018, Gulfport should have the following locked in:
$1.3 to $1.4 Billion revenues < Up from $1.26 billion in 2017
$1.30 to $1.40 earnings per share
$4.00 to $4.40 operating CFPS < enough to fund their entire 2018 capex program and generate more than 15% YOY production growth.

Only 4% of Gulfport's production is crude oil, so oil prices have almost no impact on the valuation.