Energy Prospectus

Gulfport's operations may have caught some by surprise but I was expecting a dip in production from Q3 to Q4 because of the deal with Diamondback (FANG). They transferred all of their Permian production to FANG for a large equity stake.

Some delays in getting the Utica Shale wells on-line should be expected. Three are now on-line and seven more will be tied into sales by early April. The oil and gas isn't going anywhere.

Markwest (MWE) is a first class midstream company. They will get the wells tied into their facilities.

What the market seemed to miss is the progress being made up in Canada by Grizzly.
Effective December 31, 2012, third party engineers GLJ Petroleum Consultants Ltd. ("GLJ") provided an assessment report to Grizzly Oil Sands ULC ("Grizzly"), a company in which Gulfport holds an approximate 25% equity interest, estimating that Grizzly has 67 million barrels of proved reserves, 71 million barrels of probable reserves, and 3.1 billion barrels of best estimate (P50) contingent resource.

GPOR's investment in Grizzly is about to become very rewarding.

In the Canadian Oil Sands, Grizzly's Algar Lake SAGD Project is currently in the final stages of construction and Grizzly expects to begin commissioning by the end of the first quarter of 2013 with first production mid-year 2013.

Grizzly is currently conducting a 25 well delineation program at May River, with 14 wells completed to date. Following the 2012/2013 winter exploration program, Grizzly's May River property will have been explored to a sufficient level so as to support the filing of an initial 12,000 barrel per day ("bpd") SAGD project regulatory application.

Grizzly has entered into a memorandum of understanding that outlines the rate structure for a 10 year agreement with Canadian National Railway Company ("CN") to transport its bitumen to the U.S. Gulf Coast via CN's rail network. This arrangement is expected to provide consistent access to Brent-based pricing from Grizzly's Algar Lake project.

Grizzly is also pursuing the design, permitting and construction of rail terminals in northern Alberta and on the Lower Mississippi, with scalable capacity to accommodate unit trains to ship and receive up to 100,000 bpd. Grizzly anticipates beginning to transport the company's bitumen starting in the fourth quarter of 2013.

I've made some minor adjustments to my forecast model and posted it under the Sweet 16 Tab.

COVERAGE REITERATED: Gulfport Energy (GPOR) reiterated by C.K. Cooper. Reiterated rating Buy. 02/07 08:33 AM
PT raised from 45 >> 60

Buy the dips on this one. Q1 won't be very impressive but their production should really start ramping up starting in Q2 to an exit rate north of 25,000 boepd. MWE is working out the midstream issues and they will be connecting wells to sales in bunches this year. Each Utica Shale well should come on at high rates.

had this been previously announced?

Gulfport Energy Corporation Launches Common Stock Offering

OKLAHOMA CITY, Feb. 11, 2013 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) today announced the commencement of an underwritten public offering of 7,750,000 shares of its common stock, subject to market and other conditions. The underwriters will have an option to purchase up to an additional 1,162,500 shares from Gulfport solely to cover over-allotments. Gulfport intends to use the net proceeds from this offering to fund its previously announced pending acquisition of oil and gas assets in the Utica Shale in Ohio and for general corporate purposes, which may include expenditures associated with Gulfport's 2013 drilling programs.

Credit Suisse Securities (USA) LLC is acting as sole book-running manager in the offering. Copies of the preliminary prospectus supplement for the offering may be obtained on the website of the Securities and Exchange Commission, www.sec.gov, or by contacting Credit Suisse Securities (USA) LLC, Prospectus Department, at One Madison Avenue, New York, New York 10010, or by telephone at (800) 221-1037.

The common stock will be issued and sold pursuant to an effective automatic shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. This offering may only be made by means of a prospectus supplement and related base prospectus.

this is an additional share offering from the one in dec at $38. hope they price this one higher.

they keep adding acreage in the utica. now at 128k net acres.

you'd a thought they'd ask a buck or two more than last time. well we're stuck here until some real good news comes along.
hurry up grizzly!

Gulfport Energy Corporation Announces Pricing of Common Stock Offering
Press Release: Gulfport Energy Corporation

OKLAHOMA CITY, Feb. 12, 2013 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) today announced the pricing of an underwritten public offering of 7,750,000 shares of its common stock at a price to the public of $38.00 per share. The underwriters have an option to purchase up to an additional 1,162,500 shares from Gulfport at the public offering price per share (less the underwriting discount) solely to cover over-allotments. Net proceeds to Gulfport from the sale of the 7,750,000 shares, after underwriting discounts and estimated expenses, will be approximately $282.3 million. Gulfport intends to use the net proceeds from this offering to fund its pending acquisition of oil and gas assets in the Utica Shale in Ohio and for general corporate purposes, which may include expenditures associated with Gulfport's 2013 capital development plan. The offering is expected to close on February 15, 2013, subject to customary closing conditions.

Another day--another strange Gulfport Energy related party transaction

I woke up this morning to the news that Gulfport Energy (NASDAQ:GPOR) is buying another 22 thousand net acres in the Utica Shale from Windsor Ohio - an affiliate of Wexford Capital. The price is about $10 thousand an acre. This is funded by a large equity raise.

This is very similar to a transaction in December 2012 where 37 thousand acres were purchased from Windsor Ohio for $372 million. That was also funded by an equity raise. The 8K describing that transaction contained the following disclosure:

Mike Liddell, Gulfport’s Chairman of the Board, is the operating member of Windsor Ohio. All distributions made by Windsor Ohio are first paid to the Wexford members in accordance with their respective ownership interests in Windsor Ohio until they have received amounts equal to their respective capital contributions. Thereafter, distributions are made 90% to the Wexford members in accordance with their respective ownership interests and 10% to Mr. Liddell. Upon closing of the Acquisition, Mr. Liddell received approximately $2.9 million in distributions from Windsor Ohio corresponding to his 10% interest described above.

It is an open question as to how much money from this equity raise will find its way into Mr Liddell's pocket. The Gulfport Energy press releases do not broach this question.

However - on a cursory look - it appears that the Windsor Ohio members have already received back their capital contributions and on a literal reading of the above quoted 8K a full ten percent of the money paid for this acreage will flow personally to the Chairman of Gulfport Energy.

$22,000,000 is not a bad pay day. I know it is a guess - but hey - Gulfport do not disclose this detail in their press release. Nor is it disclosed in their prospectus for the offering. I telephoned Paul K. Heerwagen IV (the IR officer and contact on the press releases) and asked him the question directly. He hung up on me and did not answer return calls.

But dear Gulfport shareholders - you should have no discomfort: the press release assures us that "the transaction was approved by a special committee of Gulfport’s Board of Directors."

John
Bronte Capital
Disclosure: short Gulfport

ghrcap, this is of serious concern. are you "John" of bronte capital?

if not can you give us the source for the story?

jim

I don't know anything about this arrangement but the background of some of the Board of Directors has always intrigued me. The Chairman has a BS (bachelor of science) degree in education; one director, a man in the insurance business, has a masters degree in athletic administration; and one, the founding pastor of LifeChurch.tv, has a bachelor's degree in business marketing and a Masters of Divinity. Bill Gates and Steve Jobs never picked up any degrees but, still, those strike me as unusual backgrounds for directors of an E&P company.