GPOR's 4th quarter results beat my forecast, primarily due to higher liquids production and a higher realized oil price. I will have an updated forecast for Gulfport Energy up on the website Saturday afternoon. The Utica Shale and their Canadian Oil Sands subsidiary will evolve into the major growth stories for Gulfport. The Utica Shale is going to get a lot of attention from Wall Street this year. - Dan
Operational Update
Utica Shale
Gulfport has spud its first horizontal well in the Utica Shale of Eastern Ohio. Gulfport has contracted the drilling rig for the remainder of 2012 and has filed five drilling permits with the Ohio Department of Natural Resources. Gulfport currently anticipates adding a second drilling rig in April 2012. Gulfport has approximately 125,000 gross (62,500 net) acres under lease in the Utica Shale.
Canadian Oil Sands
In the Canadian Oil Sands, Grizzly's Algar Lake SAGD Project has received regulatory approval and Grizzly continues to be on budget and on track for commissioning in the fourth quarter of 2012 with first production by mid-year 2013. In addition, Grizzly is currently conducting an active winter exploration program. Grizzly has drilled a total of 22 core holes at Thickwood during the current winter drilling season and is currently in the process of conducting a seismic survey over the acreage. Following the 2011/2012 winter exploration program, Grizzly's Thickwood Hills property will have been explored to a sufficient level so as to support the filing of a SAGD project regulatory application.
As previously announced, Grizzly recently entered into an agreement with Petrobank Energy and Resources Ltd. ("Petrobank") to purchase its May River property for Cdn$225 million, subject to customary closing adjustments. The May River property includes 46,720 acres (18,250 hectares) of 100% working interest oil sands leases in the Athabasca oil sands area and 90.6 million barrels of Proved + Probable (2P) reserves and 624.1 million barrels of Best Estimate (P50) Contingent Resource based upon steam assisted gravity drainage ("SAGD") development. Grizzly intends to develop the May River property using SAGD recovery technology and its Advanced, Relocatable, Modular, Standardized("ARMS") development model.
Permian Basin
In the Permian Basin, 39 gross (17 net) wells were drilled on Gulfport's acreage during 2011. Two drilling rigs are currently active on Gulfport's acreage in the Permian and Gulfport anticipates the first horizontal well on its acreage will be spud in March 2012.
Hackberry
At Hackberry, Gulfport drilled 22 wells, completing 17 wells as productive during 2011 with three wells waiting on completion at year-end 2011. In addition, Gulfport performed 24 recompletions at the field. At present, Gulfport has two rigs active at Hackberry drilling ahead on the third and fourth wells of 2012 at the field.
West Cote Blanche Bay ("WCBB")
At WCBB, Gulfport drilled 21 wells, completing 19 wells as productive during 2011 with one well waiting on completion at year-end 2011. In addition, Gulfport performed 68 recompletions at the field. At present, Gulfport has two rigs active at WCBB drilling ahead on the fourth and fifth wells of 2012 at the field.
Niobrara
In the Niobrara, Gulfport drilled three gross (1.5 net) vertical wells during 2011, all of which have tested commercial rates of oil as un-stimulated, natural open-hole completions. Gulfport is currently in the process of inserting slotted liners into each of the three wells. Gulfport has completed a 60 square mile 3-D seismic survey over its Craig Dome prospect and has received a processed version of the 3-D seismic. Gulfport is in the process of selecting drilling locations based upon the results of the 3-D seismic survey and plans to begin drilling in May 2012.
Thailand
Tatex Thailand III, LLC, a company in which Gulfport owns a 17.9% interest, recently conducted the flow test on the TEW-E well. During testing, the TEW-E well produced rates as high as 16 million cubic feet ("MMCF") per day of natural gas for short intervals, but would then fall to a sustained rate of 2 MMCF per day. Flow test results combined with pressure buildup information have confirmed that the TEW-E well lacks sufficient permeability to deliver commercial quantities of gas.