GPOR
Re: GPOR
With natural gas prices going up it makes no sense for GPOR to selloff.
They are generating more than enough cash flow to make their interest payments and Q4 operating cash flow should be over $100 million.
None of their senior debt is due until 2023. The revolving credit facility was reduced, but the Company should not need to draw anymore on it.
From the last 10Q: "As of June 30, 2020, $123.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $324.1 million letters of credit, was $252.9 million. The Company’s wholly owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.
At June 30, 2020, amounts borrowed under the revolving credit facility bore interest at a weighted average rate of 2.44%.
The Company was in compliance with its financial covenants under the revolving credit facility at June 30, 2020."
They are generating more than enough cash flow to make their interest payments and Q4 operating cash flow should be over $100 million.
None of their senior debt is due until 2023. The revolving credit facility was reduced, but the Company should not need to draw anymore on it.
From the last 10Q: "As of June 30, 2020, $123.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $324.1 million letters of credit, was $252.9 million. The Company’s wholly owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.
At June 30, 2020, amounts borrowed under the revolving credit facility bore interest at a weighted average rate of 2.44%.
The Company was in compliance with its financial covenants under the revolving credit facility at June 30, 2020."
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GPOR
The only news is (S Alpha):
Shah Capital Management has filed an SC 13D/A form with SEC disclosing ownership of 12,266,335 shares of Gulfport Energy (NASDAQ:GPOR).
This represents 7.66% ownership of the company.
Shares +10% premarket.
(Hard to see how this would account for collapse.)
Shah Capital Management has filed an SC 13D/A form with SEC disclosing ownership of 12,266,335 shares of Gulfport Energy (NASDAQ:GPOR).
This represents 7.66% ownership of the company.
Shares +10% premarket.
(Hard to see how this would account for collapse.)
Re: GPOR
Over 60 days, Zacks Rank for Gulfport Energy is #2 (Buy) and it has seen the Zacks Consensus Estimate for 2020 surge 220%.
GPOR is listed as one of Zacks Top 5 picks for natural gas.
The Zacks Analyst Blog Highlights: Range Resources, CNX, Gulfport, Comstock and Cabot
October 14, 2020
Read: https://finance.yahoo.com/news/zacks-an ... 05465.html
Zacks Top 5 for natural gas:
Range Resources Corp (RRC).: The company, carrying a Zacks Rank #1, has a strong footing in the prolific Appalachian Basin. In the gas-rich resource, the upstream firm has huge inventories of low-risk drilling sites that are likely to provide production for several decades. About 70% of the company’s total output is natural gas.
Over 60 days, Range Resources has seen the Zacks Consensus Estimate for 2020 surge 128.6%. The stock has soared 92.5% over the past six months.
CNX Resources Corp.: CNX Resources is a leading operator in the Appalachian basin — the most- prolific domestic gas basin — with more than 1.1 million net acres. About 96% of the company’s total output is natural gas. While the company’s low-cost, high-quality inventory should ensure long-term output growth, cash flows will also receive some downside protection from attractive hedges.
The 2020 Zacks Consensus Estimate for this Zacks Rank #1 company indicates 134.6% earnings per share growth over 2019. The stock has gained 9.2% over the past six months.
Gulfport Energy Corp.: The company's asset base — primarily focused on natural gas — is concentrated on the Utica Shale of Ohio and the SCOOP play in Oklahoma. Gulfport has a combined inventory in excess of 3,000 gross drilling locations in its two primary plays. Of Gulfport’s total output, nearly 90% comprises natural gas. Robust execution and strong performance should aid Gulfport’s performance going forward.
Over 60 days, Zacks Rank #2 (Buy) has seen the Zacks Consensus Estimate for 2020 surge 220%. The stock has lost 14.8% over the past six months.
Comstock Resources, Inc.: Comstock is a leading operator in the Haynesville shale — a premier natural gas basin — with 307,000 net acres. About 98% of the Zacks Rank #2 company’s total output is natural gas. A low-cost provider, the company’s leadership position in Haynesville provides it access to the Gulf Coast and attractive pricing advantage.
Over 60 days, Comstock has seen the Zacks Consensus Estimate for 2020 increase 25.9%. The stock has lost 15.2% over the past six months.
Cabot Oil & Gas Corp.: Cabot is an independent gas exploration company with producing properties mainly in the continental United States. The company — with a Zacks Rank of 3 — owns 174,000 net acres in the dry gas window of the Marcellus play. Cabot boasts one of the strongest balance sheets among the natural gas-focused E&P group. The company's total assets are almost double that of its total liabilities, reflecting safety regarding debt payments, robust financing power and the ability to increase stock repurchases.
Over 60 days, Cabot has seen the Zacks Consensus Estimate for 2020 increase 14.8%. All of Cabot’s production is natural gas. The stock has edged up 0.2% over the past six months.
GPOR is listed as one of Zacks Top 5 picks for natural gas.
The Zacks Analyst Blog Highlights: Range Resources, CNX, Gulfport, Comstock and Cabot
October 14, 2020
Read: https://finance.yahoo.com/news/zacks-an ... 05465.html
Zacks Top 5 for natural gas:
Range Resources Corp (RRC).: The company, carrying a Zacks Rank #1, has a strong footing in the prolific Appalachian Basin. In the gas-rich resource, the upstream firm has huge inventories of low-risk drilling sites that are likely to provide production for several decades. About 70% of the company’s total output is natural gas.
Over 60 days, Range Resources has seen the Zacks Consensus Estimate for 2020 surge 128.6%. The stock has soared 92.5% over the past six months.
CNX Resources Corp.: CNX Resources is a leading operator in the Appalachian basin — the most- prolific domestic gas basin — with more than 1.1 million net acres. About 96% of the company’s total output is natural gas. While the company’s low-cost, high-quality inventory should ensure long-term output growth, cash flows will also receive some downside protection from attractive hedges.
The 2020 Zacks Consensus Estimate for this Zacks Rank #1 company indicates 134.6% earnings per share growth over 2019. The stock has gained 9.2% over the past six months.
Gulfport Energy Corp.: The company's asset base — primarily focused on natural gas — is concentrated on the Utica Shale of Ohio and the SCOOP play in Oklahoma. Gulfport has a combined inventory in excess of 3,000 gross drilling locations in its two primary plays. Of Gulfport’s total output, nearly 90% comprises natural gas. Robust execution and strong performance should aid Gulfport’s performance going forward.
Over 60 days, Zacks Rank #2 (Buy) has seen the Zacks Consensus Estimate for 2020 surge 220%. The stock has lost 14.8% over the past six months.
Comstock Resources, Inc.: Comstock is a leading operator in the Haynesville shale — a premier natural gas basin — with 307,000 net acres. About 98% of the Zacks Rank #2 company’s total output is natural gas. A low-cost provider, the company’s leadership position in Haynesville provides it access to the Gulf Coast and attractive pricing advantage.
Over 60 days, Comstock has seen the Zacks Consensus Estimate for 2020 increase 25.9%. The stock has lost 15.2% over the past six months.
Cabot Oil & Gas Corp.: Cabot is an independent gas exploration company with producing properties mainly in the continental United States. The company — with a Zacks Rank of 3 — owns 174,000 net acres in the dry gas window of the Marcellus play. Cabot boasts one of the strongest balance sheets among the natural gas-focused E&P group. The company's total assets are almost double that of its total liabilities, reflecting safety regarding debt payments, robust financing power and the ability to increase stock repurchases.
Over 60 days, Cabot has seen the Zacks Consensus Estimate for 2020 increase 14.8%. All of Cabot’s production is natural gas. The stock has edged up 0.2% over the past six months.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GPOR
I will call them on Friday.
Based on the Q2 press release and the sharp increase in natural gas prices, I can't see why the creditors would force bankruptcy. However, debt holders do stupid stuff.
Gulfport is generating FCF from operations today. Most of their revenues come from natural gas sales. Based on the low end of the production guidance they announced to the market on August 4, the Company should generate ~$120 million of cash flow from operations in Q4 net of interest expense. This compares to capex of ~$75 million per quarter, so FCF should be $45 million in Q4.
Sometimes these selloffs are just one big fund dumping shares.
Based on the Q2 press release and the sharp increase in natural gas prices, I can't see why the creditors would force bankruptcy. However, debt holders do stupid stuff.
Gulfport is generating FCF from operations today. Most of their revenues come from natural gas sales. Based on the low end of the production guidance they announced to the market on August 4, the Company should generate ~$120 million of cash flow from operations in Q4 net of interest expense. This compares to capex of ~$75 million per quarter, so FCF should be $45 million in Q4.
Sometimes these selloffs are just one big fund dumping shares.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GPOR
News from SA:
<<Firefly Value Partners reported via Form-4 filing that as of October 13, 2020, they ceased to collectively beneficially own 10% or more of Gulfport Energy’s (NASDAQ:GPOR) outstanding shares of common stock.
Fund sold 68M shares at $0.4064 on Oct. 13, thereby reducing its stake to 14.1M shares.
In another filing, the Company entered into a 30-day grace period and defer making the interest payment due October 15, 2020 with respect to its 6.000% senior unsecured notes due 2024.>>
<<Firefly Value Partners reported via Form-4 filing that as of October 13, 2020, they ceased to collectively beneficially own 10% or more of Gulfport Energy’s (NASDAQ:GPOR) outstanding shares of common stock.
Fund sold 68M shares at $0.4064 on Oct. 13, thereby reducing its stake to 14.1M shares.
In another filing, the Company entered into a 30-day grace period and defer making the interest payment due October 15, 2020 with respect to its 6.000% senior unsecured notes due 2024.>>
Re: GPOR
The last sentence usually means that they are working on a debt restructuring plan. However, with natural gas and NGL prices on the rise they should be able to get the debt holders to back off and let it play out. Gulfport knows that the balance sheet ratios will be out of compliance with the debt covenants (my guess) and they doubt or have been told that the debt holders won't grant them another wavier.
The problem is once the lawyers/restructuring gang gets called in, it is difficult to stop the process. I worked on a Chapter 11 case for two years after I left Hess in 2001, I saw first hand how the lawyers work it to maximize their fees.
I did call Gulfport, but investor relations did not answer and they have not returned my call.
The problem is once the lawyers/restructuring gang gets called in, it is difficult to stop the process. I worked on a Chapter 11 case for two years after I left Hess in 2001, I saw first hand how the lawyers work it to maximize their fees.
I did call Gulfport, but investor relations did not answer and they have not returned my call.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GPOR
Post from another chat board.
My understanding of the current situation: GPOR is currently in Specified Default. The occurance of the Default is a result of reduction in credit limit notified on 10/8/20, somewhat “unexpected” by the company. The limit was $700M before the date and was reduced to $580M since. Current GPOR used loan amounts of $355,456,759, and has commitments of $ 243,713,839, total of $599,170,598. As a result, it is in Special Default. To meet its current obligations (including bond coupon payments) GPOR needs $10M from the credit facility. And the Lender agrees to lend that amount and forebears from taking actions over the Special Default (starting 10/15/20).
What’s the possible outcome? Three scenarios from optimistic to pessimistic:
1) Income from gas sales within grace period allows the company to reduce credit balance to under $580M;
2) The balance could not be reduced under the limit and company requests another amendment to buy time;
3) The company feels that the near term sales figure could not bridge the gap or the Lender decides to pull the plug after the first forebearance agreement, thus BK.
My guess is that 1) has the highest probability given the recovery of NG price. And 3) is the lowest since both parties don’t want see BK. Keep in mind that GPOR only requested $10M. So there is a reasonably good chance that it might survive this and it feels that its current order book is likely to make it after the grace period. Regardless we now know exactly what it means by “HANGING BY A THREAD” for GPOR investors. Over this hurdle it could be a bright world. Or ?
----------------------------
MY TAKE: Debt holders never win if a company elects to go through the Chapter 11 process. Lawyers make a killing. With natural gas and NGL prices now likely to go a lot higher, IMO the debt holders should ride this out and just tell Gulfport to keep making the interest payments, which it appears they have the operating cash flow to do.
My understanding of the current situation: GPOR is currently in Specified Default. The occurance of the Default is a result of reduction in credit limit notified on 10/8/20, somewhat “unexpected” by the company. The limit was $700M before the date and was reduced to $580M since. Current GPOR used loan amounts of $355,456,759, and has commitments of $ 243,713,839, total of $599,170,598. As a result, it is in Special Default. To meet its current obligations (including bond coupon payments) GPOR needs $10M from the credit facility. And the Lender agrees to lend that amount and forebears from taking actions over the Special Default (starting 10/15/20).
What’s the possible outcome? Three scenarios from optimistic to pessimistic:
1) Income from gas sales within grace period allows the company to reduce credit balance to under $580M;
2) The balance could not be reduced under the limit and company requests another amendment to buy time;
3) The company feels that the near term sales figure could not bridge the gap or the Lender decides to pull the plug after the first forebearance agreement, thus BK.
My guess is that 1) has the highest probability given the recovery of NG price. And 3) is the lowest since both parties don’t want see BK. Keep in mind that GPOR only requested $10M. So there is a reasonably good chance that it might survive this and it feels that its current order book is likely to make it after the grace period. Regardless we now know exactly what it means by “HANGING BY A THREAD” for GPOR investors. Over this hurdle it could be a bright world. Or ?
----------------------------
MY TAKE: Debt holders never win if a company elects to go through the Chapter 11 process. Lawyers make a killing. With natural gas and NGL prices now likely to go a lot higher, IMO the debt holders should ride this out and just tell Gulfport to keep making the interest payments, which it appears they have the operating cash flow to do.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: GPOR
Dan, months ago I raised the alarm about bk here. Can you explain?
As recently as October 13th, when you quoted the last 10Q, GPOR was in compliance with its financial covenants :
<<From the last 10Q: "As of June 30, 2020, $123.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $324.1 million letters of credit, was $252.9 million. The Company’s wholly owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.
At June 30, 2020, amounts borrowed under the revolving credit facility bore interest at a weighted average rate of 2.44%.
The Company was in compliance with its financial covenants under the revolving credit facility at June 30, 2020.">>
Is the explanation that the reduction of the revolving bank loan going forward creates default?
What does "Guaranteed" mean here? Anything?
As recently as October 13th, when you quoted the last 10Q, GPOR was in compliance with its financial covenants :
<<From the last 10Q: "As of June 30, 2020, $123.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $324.1 million letters of credit, was $252.9 million. The Company’s wholly owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.
At June 30, 2020, amounts borrowed under the revolving credit facility bore interest at a weighted average rate of 2.44%.
The Company was in compliance with its financial covenants under the revolving credit facility at June 30, 2020.">>
Is the explanation that the reduction of the revolving bank loan going forward creates default?
What does "Guaranteed" mean here? Anything?
Re: GPOR
Dan, weeks ago I raised alarm about GPOR and bk. As recently as October 13th you quoted the company’s 10Q about being in compliance:
From the last 10Q: "As of June 30, 2020, $123.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $324.1 million letters of credit, was $252.9 million. The Company’s wholly owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.
At June 30, 2020, amounts borrowed under the revolving credit facility bore interest at a weighted average rate of 2.44%.
The Company was in compliance with its financial covenants under the revolving credit facility at June 30, 2020."
Is the banks’ reduction in revolver the principal explanation the sudden disaster?
What does “guaranteed” mean here?
What does “free cash flow” mean here?
From the last 10Q: "As of June 30, 2020, $123.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $324.1 million letters of credit, was $252.9 million. The Company’s wholly owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.
At June 30, 2020, amounts borrowed under the revolving credit facility bore interest at a weighted average rate of 2.44%.
The Company was in compliance with its financial covenants under the revolving credit facility at June 30, 2020."
Is the banks’ reduction in revolver the principal explanation the sudden disaster?
What does “guaranteed” mean here?
What does “free cash flow” mean here?
Re: GPOR
"guaranteed" just means that all of Gulfport's subsidiaries are also on the line for paying the parent company's debt. Banks requiring controlled subsidiaries to guarantee the parent's debt is common.
"Free Cash Flow" is Operating Cash Flow - Capital Expenditures. Basically, the actual cash the company has to pay down debt or pay dividends.
The bank(s) that provide a line of credit / revolving credit facility, does have the right to lower the credit facility. They usually review the credit facility or line-of-credit just once a year, sometime once every six month.
What is weird about this situation is that on June 30, 2020 (when natural gas and NGL prices were much lower than where they are today), Gulfport still had $252.9 million remaining of undrawn credit and they were generating and continue to generate free cash flow from operations, so they didn't need to draw down anymore cash from the facility.
As my previous post suggests (not my words, but from another chat board), Gulfport may just need some time to raise the $10 million needed to pay down the credit facility to the reduced credit limit. Take a look at my forecast model (row 14 - row 12) and you can see that Gulfport generated cash revenues of $219.3 million in Q1 2020 and $229.9 million in Q2 2020. The next batch of run checks should arrive soon and provide the cash they need to solve the $10 million overdraft problem. My revenue forecast for Q3 2020 (row 14) is $202.3 million. Based on current ngas and NGL prices, Q4 2020 revenues should be over $250 million. First purchaser pay for oil, gas and NGLs sold to them once a month.
The situation certainly doesn't look "dire"; especially with natural gas prices soaring.
"Free Cash Flow" is Operating Cash Flow - Capital Expenditures. Basically, the actual cash the company has to pay down debt or pay dividends.
The bank(s) that provide a line of credit / revolving credit facility, does have the right to lower the credit facility. They usually review the credit facility or line-of-credit just once a year, sometime once every six month.
What is weird about this situation is that on June 30, 2020 (when natural gas and NGL prices were much lower than where they are today), Gulfport still had $252.9 million remaining of undrawn credit and they were generating and continue to generate free cash flow from operations, so they didn't need to draw down anymore cash from the facility.
As my previous post suggests (not my words, but from another chat board), Gulfport may just need some time to raise the $10 million needed to pay down the credit facility to the reduced credit limit. Take a look at my forecast model (row 14 - row 12) and you can see that Gulfport generated cash revenues of $219.3 million in Q1 2020 and $229.9 million in Q2 2020. The next batch of run checks should arrive soon and provide the cash they need to solve the $10 million overdraft problem. My revenue forecast for Q3 2020 (row 14) is $202.3 million. Based on current ngas and NGL prices, Q4 2020 revenues should be over $250 million. First purchaser pay for oil, gas and NGLs sold to them once a month.
The situation certainly doesn't look "dire"; especially with natural gas prices soaring.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group