Energy Prospectus

Gulfport Energy (ticker: GPOR) made its second sizable acquisition in three months on June 9, 2015, landing 45,163 gross acres (33,426 net) in the Utica Shale from American Energy – Utica, LLC (AEU), a subsidiary of privately held American Energy Partners. The current purchase price is $387.2 million, but a deal for an additional 4,950 gross (net acres) is in place “if AEU completes the acquisition of such acreage within 30 days of the closing of the Monroe acquisition,” says the news release. If the shoe-in asset purchase is completed, GPOR’s total purchase price will be approximately $406.6 million

OKLAHOMA CITY, June 10, 2015 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) ("Gulfport") announced today the pricing of an underwritten public offering of 10,000,000 shares of its common stock at a price to the public of $43.25 per share. The underwriters have a 30-day option to purchase up to an additional 1,500,000 shares from Gulfport at the public offering price per share (less the underwriting discount). The offering is expected to close on June 12, 2015, subject to customary closing conditions. Net proceeds to Gulfport from the sale of the 10,000,000 shares will be approximately $417.2 million, after deducting underwriting discounts, commissions and estimated offering expenses. Gulfport intends to use the net proceeds from this offering (i) to fund a portion of the purchase price for its previously announced acquisition of certain acreage and other assets in the Utica Shale in Ohio from American Energy—Utica, LLC and (ii) for general corporate purposes, including the funding of a portion of its 2015 capital development plans.

I have updated my forecast model for GPOR to include the new share count. As a result, my Fair Value Estimate dropped $3.40/share to $61.60, compared to First Call's Price Target of $57.67.

GPOR is a "gasser". 2015 production mix is 72% natural gas, 18% NGLs and 10% crude oil. If you attended yesterday's luncheon, you know that I now believe the outlook for natural gas prices could be much higher heading into 2016. The slides I spoke from are now available on the EPG website (see slides 13-17).

If natural gas and NGL prices rebound in 2016, there is SIGNIFICANT upside to my valuation for GPOR.