Gulfport Energy (GPOR) - Update

[dan_s]

Gulfport's Q1 production beat my forecast and increased liquids production combined with better oil & NGL prices should make revenues top my forecast. Their natural gas prices, including cash settlements on their hedges ($2.60/mcf) was exactly what I forecast. They are on-track to generate 18% to 20% YOY production growth. Q1 earnings per share s/b close to First Call's estimate of $0.41/share and cash flow from operations for the quarter should be approximately $1.10/share.
After the press release below, two Wall Street firms issued BUY recommendations with $14.00 price targets. Natural gas producers, including AR, RRC and GPOR, remain extremely out-of-favor with investors. All three of our "gassers" have a very high percentage of their gas production hedged at good prices (over $3.00/mcf). - Dan
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OKLAHOMA CITY, April 19, 2018 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) (“Gulfport” or the “Company”) today provided an update for the quarter ended March 31, 2018. Key information for the first quarter of 2018 includes the following:
•Net production averaged 1,288.6 MMcfe per day, a 2% increase over the fourth quarter of 2017 and 52% increase versus the first quarter of 2017.
•Realized natural gas price, before the impact of derivatives and including transportation costs, averaged $2.44 per Mcf, a $0.54 per Mcf differential to the average trade month NYMEX settled price.
•Realized oil price, before the impact of derivatives and including transportation costs, averaged $60.36 per barrel, a $2.54 per barrel differential to the average WTI oil price.
•Realized natural gas liquids price, before the impact of derivatives and including transportation costs, averaged $0.71 per gallon, equivalent to $29.92 per barrel, or approximately 48% of the average WTI oil price.
•Gulfport turned-to-sales 3 gross and net operated wells in the Utica Shale on March 31, 2018 and 7 gross (6.3 net) operated wells in the SCOOP throughout the first quarter of 2018.

[mattreue]

$14 price targets are pretty low.

[dan_s]

The "gassers" are getting no love from Wall Street these days despite being quite profitable. MY OPINION is that demand forecasts are way too low for gas. Yes, there are some big pipelines coming online later this year, but utilities have a lot of work to do to rebuild storage levels before next winter.

GPOR is profitable and it should generate over $4.00 operating cash flow per share this year. My valuation of $24.70 is based on 6X operating cash flow per share 2017 to 2019.

Yes, First Call's PT of $14.00 looks low but that's because none of their clients have any faith in the "gassers".