Gulfport Energy (GPOR)
Posted: Thu May 05, 2016 5:17 pm
Gulfport reported another quarter of production growth. This is one of our "gassers", so oil prices do not have much impact on the company's results. They also have more than 80% of this year's natural gas production hedge with SWAPS at $3.20/MMbtu. A lot of their gas has high btu content which also helps offset the low gas prices at the wellhead in Eastern Ohio. Gulfport's actual realized natural gas price in Q1 was $2.49/mcf. Their realized gas price should drift higher as we move through the year.
I have updated my forecast model and it will be available on the EPG website tomorrow.
I have increased my valuation of GPOR by $4.80 to $45.50/share. My valuation compares to First Call's Price Target of $33.90.
Gulfport's production mix this year is approximately 85% natural gas, 10% NGLs and just 5% crude oil.
Hurting them now is super low NGL prices. Q1 NGLs sold for $9.66/bbl, compared to $46.03/bbl in 2014. I am expecting the NGL market to improve in the back half of this year.
Gulfport will generate approximately $400 million cash flow from operations this year, which will cover most of this year's capital budget. Production will be up ~30% this year. This is a rock solid management team with a strong balance sheet. BUY the dips because the "gassers" should draw more attention in about six months.
Capital Markets Activity
On March 15, 2016, Gulfport closed an upsized underwritten public offering of 16,905,000 shares of the Company's common stock, including shares the Company issued to the underwriters under a 30-day option to purchase additional shares. The Company received net proceeds of approximately $411.9 million after underwriting discounts, commissions and estimated offering expenses. Gulfport intends to use the net proceeds from this offering primarily to fund a portion of its 2017 capital development plan and for general corporate purposes.
Financial Position and Liquidity
As of March 31, 2016, Gulfport had cash on hand of approximately $454.4 million. In addition, as of March 31, 2016, Gulfport’s revolving credit facility of $700 million was undrawn and had $472.2 million available for future borrowing after giving effect to outstanding letters of credit totaling $227.8 million.
I have updated my forecast model and it will be available on the EPG website tomorrow.
I have increased my valuation of GPOR by $4.80 to $45.50/share. My valuation compares to First Call's Price Target of $33.90.
Gulfport's production mix this year is approximately 85% natural gas, 10% NGLs and just 5% crude oil.
Hurting them now is super low NGL prices. Q1 NGLs sold for $9.66/bbl, compared to $46.03/bbl in 2014. I am expecting the NGL market to improve in the back half of this year.
Gulfport will generate approximately $400 million cash flow from operations this year, which will cover most of this year's capital budget. Production will be up ~30% this year. This is a rock solid management team with a strong balance sheet. BUY the dips because the "gassers" should draw more attention in about six months.
Capital Markets Activity
On March 15, 2016, Gulfport closed an upsized underwritten public offering of 16,905,000 shares of the Company's common stock, including shares the Company issued to the underwriters under a 30-day option to purchase additional shares. The Company received net proceeds of approximately $411.9 million after underwriting discounts, commissions and estimated offering expenses. Gulfport intends to use the net proceeds from this offering primarily to fund a portion of its 2017 capital development plan and for general corporate purposes.
Financial Position and Liquidity
As of March 31, 2016, Gulfport had cash on hand of approximately $454.4 million. In addition, as of March 31, 2016, Gulfport’s revolving credit facility of $700 million was undrawn and had $472.2 million available for future borrowing after giving effect to outstanding letters of credit totaling $227.8 million.