GPOR

[dan_s]

Gulfport Energy (GPOR) held an investor meeting last week: The event included a technical presentation in Pittsburgh by several members of GPOR’s management team, followed by a trip to the company’s first well in the play, the Wagner#1-28H currently drilling in the wet gas/condensate window in Harrison County, Ohio. GPOR is concentrating on this window of the play and at this point has some questions regarding permeability/pressure as you move further west into the oil window. The company is also focused on the Point Pleasant, which lies below the Utica, and expects ~90% of its activity to target the Point Pleasant. The Point Pleasant has a higher carbonate content and lower clay content than the Utica, which have been important factors in successful deliverability of Eagle Ford Shale wells in a similar thermal window. The Point Pleasant appears to be uniformly thick across GPOR’s acreage at 120-130 ft., with good permeability and porosity. Resistivity is high, resulting in very little water. The Wagner #1 is currently drilling below 5200 ft. towards an expected vertical depth of ~7800-7900 ft., followed by a lateral of ~8,000 ft with up to 30 frac stages. The lateral will go toward the southeast and actually end in Belmont County. GPOR plans to core ~180 ft., primarily in the Point Pleasant. The well should reach TD in late March/early April and is tentatively scheduled to be completed in May. Bids on completion services have been competitive due to the recent slowdown in the nearby Marcellus. GPOR hopes to get similar results from the Wagner as the Chesapeake (CHK, $24.21-N-$29) Buell #8H, which IP'd at 9.5 MMcf/d, plus 1,425 bbls/d of liquids, approximately half of which was condensate. The next 2 wells to be drilled by GPOR, as named on their most recent corporate presentation, are the Brushy Fork #1 and Boy Scout #1, not necessarily in that order. The company has 5 Ohio Utica wells permitted, with plans to drill ~20 gross wells this year. GPOR has 125,000 gross/62,500 net Utica Shale acres in Ohio, and success in the play could be a meaningful driver for the stock.