Gulfport Energy (GPOR) - Stifel's take on Q2 results

dan_s · Post by **dan_s** » Fri Aug 02, 2019 9:53 am

Gulfport Energy Corporation (GPOR, $3.49, Buy; Target $6.80) by Jane Trotsenko

Rocky Quarter but Outlook Is Unchanged

We view yesterday's press release as net neutral. While 2Q19 earnings are not stellar given lower than anticipated CFPS and higher capex, 2019 guidance is still intact. The company continues to target full-year capex spend within budget and projects FCF generation in 3Q and 4Q that it intends to spend on share repurchases. Additionally, Gulfport continues to execute on non-core asset sales and opportunistically repurchased $105 mm in senior notes at a deep discount. The management team is highly confident that they will execute the SCOOP water asset sale soon, which should serve as a near term positive catalyst for the stock. Looking forward, the stock's performance will be a function of delivering on 2019 production targets, capex budget, and asset sales.
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MY TAKE: The macro-environment is not good for the gassers and there is not much hope out there for an improvement. We should see some improvement in NGL prices by Q4. Gulfport should survive and they continue to improve the balance sheet.