Energy Prospectus

when stocks such as gpor and geoi arrive at your fair value, are they then subject to being taken off the sweet 16?

Yes, however before I decide to remove them I will take a hard look at the multiples I'm using in the model.

I remain very bullish on what GPOR has in the Utica Shale. If CHK and Devon report strong drilling results in the Utica it will draw a lot of attention to GPOR. Keep in mind that my Fair Value estimates are based on cash flow per share. Since GPOR currently does not have Utica Shale production there is no value placed on it by my model, therefore a higher multiple may be deserved. GPOR also has incredible upside in Thailand and Canada.

I may increase my Fair Value for GEOI when I see their 3rd quarter results. I anticipate very good news from their Eagle Ford drilling program. Take a look at ROSE is doing today as a result of their Eagle Ford results.

Once I get caught up on all the 3rd quarter results, I will be ranking all the companies on the Watch List and I plan to move several up to the Sweet 16 in late December.

Why I remain very high on GPOR.

http://seekingalpha.com/article/305950- ... urce=yahoo

Gulfport has 125,000 gross (62,500 net) acres under lease in the Utica Shale. They are focused within the wet gas/retrograde condensate and mature oil windows of the Utica/Point Pleasant Formation. To quote management “not all Utica acreage is created equal” and “we are in the sweet spot of the Point Pleasant.” GPOR continues to pursue acreage acquisition possibilities. GPOR engaged an outside engineering firm to study their acreage. The results show that the Point Pleasant thickness appears to be essentially constant and thick across all of the GPOR acreage. The study also showed that the Point Pleasant is similar to the Eagle Ford Shale. Water saturation is only 5%, porosity is a little tighter and the permeability is better than the Eagle Ford.

Gulfport will start drilling their acreage in early January. The plan is to drill 20 gross (10 net) operated wells next year. They estimate a cost of $6.5 – 7 million per well with total capex in the Utica next year of $72-76 million. They intend to add a second rig as early as April. Initial thought is they will target a vertical depth of 7,500 – 9,000 feet with 5,000 – 7,000 foot laterals. There will be one frac stage for each 250 feet of lateral. Management says permitting in Ohio is “the wild, wild east” and that a permit can be processed in a couple of days.

They have been deluged with inquiries concerning joint ventures, sales and other monetization proposals from industry players, institutions and private equity firms. Therefore they have engaged a financial advisor to advise them in line with their fiduciary duties and responsibilities to shareholders