Energy Prospectus

Gulfport Energy Corporation Reports Fourth Quarter and Year-End 2016 Results
GlobeNewswire•February 13, 2017

OKLAHOMA CITY, Feb. 13, 2017 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) (“Gulfport” or the “Company”) today reported financial and operational results for the quarter and year ended December 31, 2016 and provided an update on its 2017 activities. Key information includes the following:

Year-end 2016 total proved reserves grew to 2.3 Tcfe, as compared to 1.7 Tcfe at year-end 2015, an increase of 36% year-over-year.
Net production during 2016 averaged 719.8 MMcfe per day.
Net loss of $979.7 million, or $7.97 per diluted share, for 2016.
Adjusted net income (as defined and reconciled below) of $109.8 million, or $0.89 per diluted share, for 2016.
Adjusted EBITDA (as defined and reconciled below) of $418.8 million for 2016.
Reduced unit lease operating expense for 2016 by 25% to $0.26 per Mcfe from $0.35 per Mcfe for 2015.
Reduced unit midstream gathering and processing expense for 2016 by 9% to $0.63 per Mcfe from $0.69 per Mcfe for 2015.
Reduced unit production tax expense for 2016 by 32% to $0.05 per Mcfe from $0.07 per Mcfe for 2015.
Reduced unit general and administrative expense for 2016 by 21% to $0.16 per Mcfe from $0.21 per Mcfe for 2015.
Budgeted 2017 drilling and completion expenditures are $845 million to $915 million.
Budgeted 2017 total capital expenditures are $1.0 billion to $1.1 billion.
Forecasted 2017 full year net production is estimated to average 1,045 MMcfe to 1,100 MMcfe per day, an increase of approximately 45% to 53% over the average daily net production of 719.8 MMcfe per day during 2016.
Expected per unit operating cost for 2017, including lease operating expense, midstream gathering and processing expense and production tax expense, is estimated to be $0.81 to $0.94.
Due to increased efficiencies in 2016, Gulfport has decreased its total expected well costs for 2017 by approximately $750,000 per well, relative to the previously provided estimates.
Increased hedge position to approximately 555 MMcf per day of natural gas fixed price swaps for 2017 at an average fixed price of $3.18 per Mcf, securing approximately 60% of its anticipated natural gas production at a favorable average price.

complete story here-------------
https://finance.yahoo.com/news/gulfport ... 00672.html

looks like a good report---waiting for dan's review

BIG INCREASE in proven reserves is the best news.

Production in Q4 was very close to my forecast.

Production guidance for 2017 is above what I had in my forecast.

I will update my forecast model tonight.

For the fourth quarter of 2016, Gulfport reported a net loss of $240.4 million, or $1.86 per diluted share, on oil and natural gas revenues of $63.4 million. For the fourth quarter of 2016, EBITDA (as defined and reconciled below) was negative $44.4 million and cash flow from operating activities before changes in operating assets and liabilities was $86.1 million. Gulfport’s GAAP net loss for the fourth quarter of 2016 includes the following items:

Aggregate non-cash unrealized hedge loss of $139.3 million.
Aggregate loss of $113.7 million in connection with the impairment of oil and gas properties.
Aggregate gain of $2.0 million attributable to net insurance proceeds in connection with a 2014 legacy environmental litigation settlement.
Aggregate loss of $23.8 million associated with the debt extinguishment of Gulfport's senior notes due 2020.
Aggregate loss of $8.4 million in connection with Gulfport's equity interests in certain equity investments.
Associated adjusted taxable benefit of $0.6 million.
Excluding the effect of these items, Gulfport’s financial results for the fourth quarter of 2016 would have been as follows:

Adjusted oil and natural gas revenues of $202.7 million. < Compares to my forecast of $202.6 million
Adjusted net income of $44.3 million, or $0.34 per diluted share. < Compares to my forecast of $0.23 per fully diluted share
Adjusted EBITDA of $125.1 million. < Compared to my forecast of $124.8 million

I have updated my forecast model for GPOR's guidance and I am staying with my valuation of $40.00/share.

I need to spend more time on the model, but it looks like operating cash flow per share will be $3.50 to $4.00 in 2017 and $5.00 to $6.00 in 2018. This compares to actual operating cash flow per share of $2.83 in 2016.

YOY production growth s/b 45% to 50% in 2017 and another 20% to 25% in 2018.

A company with this much running room should trade for at least 10X operating cash flow per share, therefore $35 to $40 is a reasonable valuation.

First Call's price target is $31.61, which s/b going up now that the company has provided more detailed guidance.