One of Gulfport's large shareholders agrees with me that the share price is way too low. I also agree with them that the company should be doing more to promote their share price. It is trading at less than 2X operating cash flow per share, which is insane for a company this profitable.
Gulfport has been in the Sweet 16 since 1-1-2010. I have tried repeatedly to get Gulfport to host luncheons for us in Houston and/or Dallas. They even rejected an idea to host an event at the University of Oklahoma that is just a few miles from their office in OKC. IMO the IR department has not been doing a good job of telling their story and gaining the confidence of the Wall Street Gang. This is not a small company. Daily production is approaching 240,000 Boe per day. At the end of 2017 they had 5.4 TCFE of proven reserves.
A $500 million share repurchase would reduce outstanding shares by over 30% at today's share price. I do expect Gulfport to report some very good Q4 results, above the current First Call EPS estimate. I also expect the new CEO to have a positive impact on the share price. - Dan
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News on January 17, 2019
BOSTON (Reuters) - Firefly Value Partners said on Thursday that it wants Gulfport Energy Corp. (GPOR.O) to buy back $500 million worth of shares, an action the hedge fund argues could help double the stock price of the natural gas and oil company.
The New York-based hedge fund, in a public letter, criticized how Oklahoma City-based Gulfport, which has a market capitalization of $1.5 billion, has allocated capital and complained that current board members may not be committed to pushing for improvements.
"The current board does not seem up to the task of fixing the company's capital allocation strategy and regaining investors' trust," wrote Firefly, which owns 8.1 percent of the company.
Its prescription for change begins with a call for share repurchases and a moratorium on issuing more shares, a practice that it says has diluted the company's value over the last years.
The hedge fund also wrote that it may be time to add a shareholder to the board who could energize the group to push for these changes.
"We propose an action plan that we believe allows Gulfport to create at least $9 per share of value for stockholders (over 100 percent of the current market capitalization) over the next 12 months," the letter said. Rising commodity prices would make the impact of the share buybacks even bigger.
The company's shares, which traded at $8.70 on Thursday morning, have tumbled 32 percent in the last year.
A Gulfport spokesman did not have an immediate comment.
This is the time of year investors who are pushing for change traditionally write public letters to companies that detail their complaints. Later they may run a proxy contest to seat newcomers on the board.
Firefly has been invested in Gulfport since 2013 and there have been private discussions, the hedge fund acknowledged.
A year ago the company authorized share repurchases of $200 million but stopped after having bought back $110 million worth of stock. Even if the program were revived, the buying would not "be nearly enough," the hedge fund said.
There was turmoil at the company late last year. In December it appointed David Wood as chief executive to replace Michael Moore, who resigned after having misused the company's chartered aircraft and a company credit card.
Gulfport Energy (GPOR) Update - Jan 17
Gulfport Energy (GPOR) Update - Jan 17
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Gulfport Energy (GPOR) Update - Jan 17
More from Bloomberg: https://finance.yahoo.com/news/gulfport ... 30380.html
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Gulfport Energy (GPOR) Update - Jan 17
OKLAHOMA CITY, Jan. 17, 2019 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) today issued the following comments from the Company’s President, Chief Executive Officer and Board member, David M. Wood:
“I have received Firefly’s letter this morning, which followed dialogue we have had since my appointment to Gulfport last month regarding our mutual interest in enhancing and delivering value to all Gulfport shareholders.”
Mr. Wood continued, “Separately, the board of directors has a previously scheduled meeting today, after which Gulfport looks forward to providing further information to investors concerning the Company’s plans for 2019.”
About Gulfport
Gulfport 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 22% 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.
“I have received Firefly’s letter this morning, which followed dialogue we have had since my appointment to Gulfport last month regarding our mutual interest in enhancing and delivering value to all Gulfport shareholders.”
Mr. Wood continued, “Separately, the board of directors has a previously scheduled meeting today, after which Gulfport looks forward to providing further information to investors concerning the Company’s plans for 2019.”
About Gulfport
Gulfport 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 22% 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 Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Gulfport Energy (GPOR) Update - Jan 17
It looks like the BOD listened.
Gulfport Energy Corp. (GPOR) on Thursday announced the completion of a $200 million stock repurchase program and the authorization for a new $400 million stock repurchase plan.
Gulfport said the board approved a new plan that authorizes the company to purchase up to $400 million of the company's outstanding common stock within the next 24 months.
Gulfport said the earlier program reduced shares outstanding by over 10% in 2018.
Earlier Thursday, Firefly Value Partners, LP released a letter to Gulfport suggesting the board initiate a $500 million share buyback and calling for a moratorium on further shares issuances.
In response, Gulfport president, chief executive and board member David M. Wood said, "I have received Firefly's letter this morning, which followed dialogue we have had since my appointment to Gulfport last month regarding our mutual interest in enhancing and delivering value to all Gulfport shareholders."
Mr. Wood also said, "The new program will be funded through organically generated free cash flow and anticipated monetizations of certain non-core assets held in the portfolio today."
On Thursday, Gulfport also announced it budgeted 2019 total capital expenditures of $565 million to $600 million, which the company said would be funded entirely within cash flow. It also forecast 2019 full-year free cash flow in excess of $100 million.
--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com
Gulfport Energy Corp. (GPOR) on Thursday announced the completion of a $200 million stock repurchase program and the authorization for a new $400 million stock repurchase plan.
Gulfport said the board approved a new plan that authorizes the company to purchase up to $400 million of the company's outstanding common stock within the next 24 months.
Gulfport said the earlier program reduced shares outstanding by over 10% in 2018.
Earlier Thursday, Firefly Value Partners, LP released a letter to Gulfport suggesting the board initiate a $500 million share buyback and calling for a moratorium on further shares issuances.
In response, Gulfport president, chief executive and board member David M. Wood said, "I have received Firefly's letter this morning, which followed dialogue we have had since my appointment to Gulfport last month regarding our mutual interest in enhancing and delivering value to all Gulfport shareholders."
Mr. Wood also said, "The new program will be funded through organically generated free cash flow and anticipated monetizations of certain non-core assets held in the portfolio today."
On Thursday, Gulfport also announced it budgeted 2019 total capital expenditures of $565 million to $600 million, which the company said would be funded entirely within cash flow. It also forecast 2019 full-year free cash flow in excess of $100 million.
--Write to Stephen Nakrosis at stephen.nakrosis@wsj.com
Re: Gulfport Energy (GPOR) Update - Jan 17
Outstanding response!
Based on my forecast model for Gulfport, which you can view on our website, the company should generate over $900 million cash flow from operations in 2019. More than enough FREE CASH FLOW to fund the entire stock repurchase plan.
As I have posted here many times, Gulfport is an extremely profitable company. It has just done a terrible job of telling their story. I told their IR person once that they cannot hide up in OKC and expect the Wall Street Gang to notice them.
Actual results for 2018 s/b approximately EPS of $2.30 and operating cash flow per share of $4.84. < Does this sound like a company that should trade at less than $10/share???
Based on my forecast model for Gulfport, which you can view on our website, the company should generate over $900 million cash flow from operations in 2019. More than enough FREE CASH FLOW to fund the entire stock repurchase plan.
As I have posted here many times, Gulfport is an extremely profitable company. It has just done a terrible job of telling their story. I told their IR person once that they cannot hide up in OKC and expect the Wall Street Gang to notice them.
Actual results for 2018 s/b approximately EPS of $2.30 and operating cash flow per share of $4.84. < Does this sound like a company that should trade at less than $10/share???
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group