Energy Prospectus

We are going to hear a lot more about the Utica Shale play in eastern Ohio as the year rolls on. GPOR and EVEP are two companies with large stakes in this emerging resource play.

Despite its name, oil-focused Gulfport Energy (Market Cap $1.8 billion, EV $1.7 billion as of 2/1/2012) is aggressively targeting the Utica in 2012 -- with 33% (or $74 million) of the year's CAPEX going to the play; the largest allocation in the company's portfolio. Gulfport is targeting the wet gas/retrograde condensate and mature oil windows and is continuing leasing. A status update:

Gulfport Energy Utica / Point Pleasant Shale Quick Statistics (as of November 2, 2011)
Note: Point Pleasant member of Utica is similar to Eagle Ford

> Acreage 125,000 gross (62,500 net), 100% operated
> $/Acre $2,850/acre
> EUR / Well 455,000 to 910,000 bbl oil
> Completed Well: $6.5 to $7.5 million
> Locations: 781 existing locations based on 160-acre spacing
> GPOR Plans: Drill 20 gross wells in 2012 and additional leasing

Dan:
What near term impact, if any, do you think MHRs Utica acreage will have on their performance??
Thanks
GJ

MHR is very low on our radar screen right now. We are focused on the Sweet 16 year-end reserve reports and financial results. Plus, I intend to make some changes to the Sweet 16, so I am looking at several growth companies on the Watch List.

My forecast for MHR is available under the Watch List tab.
> It is going to report another loss for Q4
> Keep an eye on their exit rate. It needs to be over 10,000 boepd and shifting to more liquids
> 2012 CapEx is way above my cash flow forecast
> It is currently trading above my Fair Value estimate (but it does have a ton of growth potential)

MHR will remain on our Watch List and we will update the forecast model by the end of March.

2011 exit rate was around 12,500, and they have raised guidance for 2012 exit rate to 15,000.

I promise to take a hard look at MHR by the end of March. There are just too many reports flying at us right now to look at everything.

If you download our forecast models to Excel you can play with production and commodity prices at the bottom and the Fair Value estimate will change automaticly. There are macros built into the spreadsheets and most of the revenue and expenses are tied to production volumes and commodity prices. Our spreadsheets are really neat tools.

Also, go to http://www.derrickpetroleum.com/ and do a search on the Utica Shale. This is a fantastic website.