Gulfport Energy (GPOR) Update - August 23

[dan_s]

This will help explain why First Call estimates don't mean too much until way after a quarter, especially for the smaller companies. The "gassers" are getting close to zero attention from the Wall Street Gang.

Included in the First Call price target and the Revenue, EPS and CFPS forecasts for Gulfport are 25 reports from analysts submitted to Reuters. Only 1 of the reports has been updated since the company reported Q2 results. Gabriele Sorbara at Williams Capital (a very good energy sector analyst) sent in a new report on 8/2/2018 (the day of GPOR's Q2 press release). He rates GPOR a BUY with a valuation of $16.00/share.

GPOR is trading today at $11.50.

1. GPOR is a "gasser", but it has growing liquids production in STACK
2. GPOR is one of the most profitable companies in the Sweet 16. It has the lowest PE ratio based on 2017 actuals and my 2018 forecast.
3. The outlook for natural gas is much better today than it was on the date of every analysts report submitted to Reuters; even the one that Mr. Sorbara sent in.
4. GPOR has been in the Sweet 16 for over eight years; I have a very high level of confidence in my forecast model for this one.

We will be sending out an updated profile on GPOR in the morning.

[dave_n]

Dan, thank you for this recommendation. They are a solid management team. Very disciplined. I'm also surprised that Wall Street hasn't factored in 13BCFPD improved takeaway coming online through 2020 in Utica Shale. They're already seeing improved spreads and that will only get better over time. Amazing they make money in today's world with the current spread differential. I can't imagine how well they'd do with complete access to NYMEX or Henry Hub pricing points!!!!

For those who are interested, stats are on Slide 16 of Q2 update:
https://content.equisolve.net/_8b068181 ... AL_Web.pdf

For a full index of all pipeline capacity coming online, see page 31!

[dan_s]

Gulfport was put into the Wall Street "penalty box" when several members of the gang commented that they paid too much for their big stake in SCOOP a couple of years ago. This happened at the same time natural gas prices were very weak. IMO the critics were too harsh. Gulfport is getting strong well results in SCOOP, although I was hoping for more oil production and a faster pace of development drilling.

Bottom Line: Gulfport is profitable and will be very profitable if natural gas moves firmly over $3.00/MMBtu.

For Example:
2017 Actuals: $2.38 EPS with $3.45 Operating Cash Flow Per Share (CFPS)
2018 Forecast: $1.98 EPS with $4.64 CFPS
2019 Forecast: $1.44 EPS with $5.06 CFPS < assuming natural gas at HH averages $2.50/MMBtu
2019 Forecast: $3.22 EPS with $7.40 CFPS < assuming natural gas at HH averages $3.50/MMBtu

GPOR has a strong balance sheet and lots of running room in two very good plays. The stock price should be AT LEAST 6X CFPS.