Energy Prospectus

The best news is the progress being made in the Utica Shale. - Dan

OKLAHOMA CITY, Nov. 6, 2012 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) today reported financial and operating results for the third quarter of 2012 and provided an update on its 2012 activities.

For the third quarter of 2012, Gulfport reported net income of $0.5 million on oil and natural gas revenues of $60.5 million, or $0.01 per diluted share. EBITDA (as defined below) for the third quarter of 2012 was $42.6 million and cash flow from operating activities before changes in operating assets and liabilities (as defined below) was $43.8 million.

Gulfport's 2012 third quarter results include a $15.5 million non-cash income tax expense primarily as a result of a taxable gain in connection with Gulfport's contribution of its oil and natural gas interests in the Permian Basin to Diamondback Energy, Inc. ("Diamondback"). Excluding the effects of this non-cash income tax expense, adjusted net income for the third quarter of 2012 would have been $16.0 million, or $0.28 per diluted share.

Financial Highlights

•Produced oil and natural gas sales volumes of 655,437 barrels of oil equivalent ("BOE"), or 7,124 barrels of oil equivalent per day ("BOEPD"), in the third quarter of 2012, an 11% year-over-year increase from the third quarter of 2011
•Generated $60.5 million of oil and natural gas revenues in the third quarter of 2012, a 4% year-over-year increase from the third quarter of 2011

Gulfport currently has fixed price swaps in place for 4,000 barrels of oil per day at $107.29 for the remainder of 2012. Gulfport's hedging program for 2013 currently consists of fixed price swaps for January through June of 4,000 barrels of oil per day at a weighted average price of $103.33 and fixed price swaps for July through December of 3,000 barrels of oil per day at a weighted average price of $100.04.

GPOR has HUGE potential in the Utica Shale. 50 more wells coming in 2013. BTW this is very bullish news for one of the midstream MLPs on our Watch List, Markwest Energy Partners (MWE). You can find our profile on the company under the MLP Tab. - Dan

Gulfport recently tested its sixth horizontal well in the Utica Shale. The BK Stephens 1-16H was drilled to a true vertical depth of 8,225 feet with a 5,276 foot horizontal lateral. Following only a 30-day resting period, the well tested at a gross peak rate of 1,224 barrels of condensate per day and 6.9 MMCF per day of natural gas. Based upon composition analysis, the gas being produced is 1,207 BTU rich gas. Assuming full ethane recovery, the composition above is expected to produce an additional 110 barrels of NGLs per MMCF of natural gas and result in a natural gas shrink of 11%. In ethane rejection mode, the composition is expected to yield 42 barrels of NGLs per MMCF of natural gas and result in a natural gas shrink of 1%. Gulfport currently anticipates the BK Stephens 1-16H will begin flowing into a sales pipeline by the end of January.

In the Utica Shale, Gulfport spud five gross (2.5 net) wells during the third quarter of 2012. At the end of the quarter, two of these gross wells were completed and in their resting period, one gross well was waiting on completion, and two gross wells were being drilled. At present, two rigs are drilling ahead on the eleventh and twelfth wells of 2012 in the play. During 2013, Gulfport has budgeted $215 million to $225 million to drill approximately fifty gross wells in the Utica.

Gulfport currently estimates 2012 production to be in the range 2.7 million to 2.8 million BOE. The reduction to 2012 production guidance takes into effect Gulfport's contribution of its Permian Basin assets to Diamondback, the shut-in and evacuation of WCBB during Hurricane Isaac and the impact resulting from regulatory delays associated with the build out of initial midstream infrastructure in the Utica Shale. Gulfport currently expects to have two wells online in the Utica Shale by the end of December and estimates its exit rate for daily production at the end of 2012 to be in the range of 8,500 to 9,500 BOE per day.

Gulfport will be drilling 50 Utica Shale wells in 2013. They should have more than a dozen wells drilled and completed by year-end. They frac the wells and let them "rest" for a couple months before completing them to sales.

Gulfport's production should ramp up sharply in 2013 as they plan to have 8-10 high rate Utica Shale wells coming on-line per quarter. MWE is working with them to build the gathering system and gas processing facilities.

Gulfport will host a conference call on November 7, 2012 at 12:00 PM Central Time to discuss its third quarter 2012 financial and operational results. Interested parties may listen to the call via Gulfport's website at www.gulfportenergy.com or by calling toll-free at 877-291-1287 or 973-409-9250 for international callers. The passcode for the call is 58478733. A replay of the call will be available for two weeks at 855-859-2056 or 404-537-3406 for international callers. The replay passcode is 58478733. The webcast will be archived on the Company's website and can be accessed on the Company's "Investor Relations" page.

You should all listen to this call. 2013 is shaping up to be a big year for Gulfport. They are now forecasting 140% production growth next year. The Utica Shale wells are expected to produce a lot of high value liquids and high btu gas that will trade at a nice premium to Henry Hub pricing.