GPOR up on sale of midstream assets for cash

[dan_s]

OKLAHOMA CITY, April 26, 2018 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) (“Gulfport” or the “Company”) today announced that it has entered into a definitive agreement for EQT Midstream Partners, LP (EQM) (“EQT Midstream Partners”) to acquire Gulfport’s 25% equity interest in Strike Force Midstream LLC (“Strike Force Midstream”).

Gulfport has agreed to sell its 25% interest in Strike Force Midstream for a purchase price of $175 million in an all cash transaction to EQT Midstream Partners. Upon completion of the transaction, Gulfport anticipates its capital obligations associated with Strike Force Midstream during 2018 will be eliminated and forecasts its non-D&C capital expenditures for full year 2018 to be reduced by approximately $20 million from its previously provided guidance. No impact to Gulfport’s midstream gathering and processing expense is expected as a result of this transaction. The transaction is expected to close on May 1, 2018, subject to customary closing conditions.

Strike Force Midstream is a midstream joint venture between Gulfport and EQT Corporation (EQT) consisting of natural gas gathering assets to support dry gas Utica Shale development in Belmont and Monroe Counties, Ohio. The system gathered approximately 0.9 billion cubic feet per day of volume during the first quarter of 2018 and includes approximately 67 miles of natural gas gathering pipeline and 17,000 horsepower of compression. As of March 31, 2018, net of distributions and including the contribution of an 11 mile-long, 12-inch diameter gathering line in 2016 valued at $22.5 million, Gulfport has invested $78.9 million in Strike Force Midstream.

About Gulfport
Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America and is one of the largest producers of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds an acreage position along the Louisiana Gulf Coast, has an approximately 25% equity interest in Mammoth Energy Services, Inc. (TUSK) and has a position in the Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil Sands ULC. For more information, please visit www.gulfportenergy.com.

[dan_s]

Cash from this sale + cash flow from operations should more than cover Gulfport's capital expenditure budget for 2018, which is now $750 to $815 million. This year's capex program should increase their production by 18% to 20% year-over-year.

Gulfport also has a significant stake in Grizzly Oil Sands up in Canada. With oil at $50/bbl the Grizzly oil sands project had no value. With oil moving over $65/bbl it becomes a much more valuable asset.

Gulfport is one of the most profitable companies in the Sweet 16:
$2.38 = Earnings per share for 2017
$3.45 = Operating cash flow per share for 2017

It is a "gasser" that also sells a lot of NGLs.