Energy Prospectus

GPOR was up big yesterday on very high trading volume, over 62 million shares. It is off to a good start this morning again, up over 11% on volume of more than 22 million shares.

No news but someone with deep pockets is loading up.

There are 10 analysts' reports included in the First Call (Reuters) database for Gulfport. None of them are dated in October, so they are based on much lower natural gas prices than we have today. None of the ten analysts rated it a SELL in September. Five rated it as Underpreform and five rated it as HOLD when the stock was trading at more than $0.50.
First Call's EPS and operating CFPS forecasts (average of the ten reports on file) for 2021 are $0.26 EPS and $2.30 operating cash flow per share. First Call's price target is $1.06 TODAY.

Based on the low end of Gulfport's most recent full-year production guidance (1,000 to 1,075 Mmcfe per day), the Company should be profitable in Q3 & Q4 and it should generate over $160 million of cash flow from operations during 2H 2020. BTW over a Bcfe per day of production is a lot.

About 30% of their 2021 ngas is hedged with collars that have $2.81 ceilings, so assuming their realized gas price net of cash settlements on their hedges is $2.90/mcf in 2021 AND ALL THEY DO IS HOLD PRODUCTION FLAT NEXT YEAR: My forecast model shows that GPOR will generate $1.60 EPS and $3.30 operating CFPS in 2021.

If the bank revolver being overdrawn is their only problem, it sure doesn't look like a company that needs to restructure their debt.

Hello Dan, reading your posts I thought GPOR would make it through. But started seeing negative posts on another board, going back and forth like talking to each other, and started wondering if they were giving it a "short whipping".

mrbill: The high trading volume tells me that this is much more than short covering. The natural gas price is surging today, which significantly improves the outlook for GPOR and all of our gassers.

I have updated my forecast/valuation model for Gulfport and posted it to the EPG website.
All I have to do go on is the production guidance that the Company provided on August 4th. See slide 7 of their most recent presentation on the Company's website.
I am using the bottom of the production guidance for both Q3 and full-year and I have increased my operating expense estimates to the high end of their guidance.

~90% of Gulfport's production is natural gas and they have ~44% of their ngas hedged at $2.78/mcf during 2H2020.
On August 4 they had very little of their 2021 gas hedged, which today is a very good thing.

Dan, have you seen this analysis?

https://seekingalpha.com/article/437934 ... uring-risk

https://seekingalpha.com/article/438115 ... tructuring

I had not seen those articles, but they are reasonable if Gulfport does in fact use Chapter 11 for restructuring. Thanks for posting the links.

My take is that with rising natural gas and NGL prices, the debt holders would be foolish to go through the restructuring process where only lawyers are winners. They have a good chance to get paid lots of interest and their debt gradually paid off.

At the bottom of this cycle, in Q2 2020 Gulfport generated $229.9 million of revenues and operating cash flow of $106.5 million of operating cash flow after paying interest of $32.4 million.

Had their credit facility not been reduced, Gulfport could easily make it through "the abyss" until ngas and NGL prices improved, which they already had.

Take a hard look at Column S on my forecast. If ngas prices average $3.00/mcf in 2021, Gulfport should generate over $1.1 Billion of revenues next year and have no problem making interest payments AND generate more than enough operating cash flow to generate single digit production growth.

The problem with the Chapter 11 process is that once it starts the greedy lawyers don't want it to stop. The outlook for natural gas and Gulfport is MUCH BETTER than it was just a few weeks ago.