Gulfport's production was slightly below what I had in my forecast model because I had assumed the SCOOP acquisition would close at the beginning of February. Since the purchase price will adjust to the Effective Date, it should net to about the same. For those of you "non-accountants", production volumes are reported as of the "Closing Date" but the acquiring company get the cash flow benefit of production back to the "Effective Date". NGL prices came in about $3/bbl above what I was using in the forecast, so it made up most of the difference. Ngas and oil prices realized (net of hedge settlements) were very close to what I used in the forecast.
OKLAHOMA CITY, April 19, 2017 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (GPOR) (“Gulfport” or the “Company”) today provided an update for the quarter ended March 31, 2017. Key information includes the following:
Net production during the first quarter of 2017 averaged 849.6 MMcfe per day, an 8% increase over the fourth quarter of 2016 and a 23% increase versus the first quarter of 2016.
Realized natural gas price, before the impact of derivatives and including transportation costs, averaged $2.68 per Mcf during the first quarter of 2017, a $0.63 per Mcf differential to the average trade month NYMEX settled price. (Realized gas price net of hedge settlement was $2.57)
Realized oil price, before the impact of derivatives and including transportation costs, averaged $47.52 per barrel during the first quarter of 2017, a $4.34 per barrel differential to the average WTI oil price. (Realized oil price net of hedge settlements was $47.68)
Realized natural gas liquids price, before the impact of derivatives and including transportation costs, averaged $0.63 per gallon, equivalent to $26.46 per barrel, during the first quarter of 2017, or approximately 51% of the average WTI oil price. (None of the NGLs were hedged, so realized price same as above.)
Chief Executive Officer and President, Michael G. Moore commented, “Gulfport’s first quarter results reflect the team’s continued focus on execution and our ability to further increase efficiencies in the field and deliver on results ahead of expectations. Our first quarter production of 849.6 million cubic feet per day came in above expectations, driven by the continued strong performance of our Utica Shale assets and the team’s ability to track ahead of expectations for the scheduled turn-in-lines during the quarter. In addition, during the quarter we commissioned field level compression in an affected gathering area in the Utica Shale and the initial results performed above expectations. We closed the acquisition of the SCOOP assets from Vitruvian II Woodford, LLC on February 17, 2017, and since the closing have been running four operated rigs on the acreage and began Gulfport’s first operated completions in the play. The frac design on these wells includes an enhanced completion when compared to historical practices for the area and we recently began flowback on this pad and look forward to providing initial production results in the coming weeks. On the realization front, we posted strong first quarter results, illustrating the benefits of our existing marketing portfolio in the Utica Shale. To further complement this and secure the movement of Gulfport’s anticipated SCOOP production, during the first quarter we executed a firm transportation commitment with Midship Pipeline Company, a wholly owned subsidiary of Cheniere Energy, on the Midship Project, securing foundation shipper status and providing our molecules delivery to premium end-markets beginning in early 2019. Our first quarter production and pricing results were very encouraging and we are excited as we look forward to the remainder of the year, as we integrate a new core asset into the portfolio, providing the investment community with a diversified, high-growth opportunity in two of North America’s lowest cost natural gas basins.”
Well results in SCOOP is what should move this stock's price.
Full Press Release here: http://finance.yahoo.com/news/gulfport- ... 00890.html
Gulfport Energy (GPOR)
Gulfport Energy (GPOR)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Gulfport Energy (GPOR)
I have updated my forecast model for Gulfport and it has been posted to the EPG website.
My valuation stays at $40.00/share and I actually have more confidence in my forecast. On March 3, 2017 Credit Suisse put out a report on GPOR with a valuation of $33.00/share. If you'd like to see the Credit Suisse report, send me an e-mail (dmsteffens@comcast.net)
Gulfport is a classic example of how distortive GAAP accounting rules can be during a period of sharp moves in commodity prices. Gulfport was required to take massive non-cash impairment charges when natural gas prices cratered in 2015 and early 2016. Remember when natural gas dipped to $1.70 and NGL prices went below $10.00/bbl?
"Impairment" is a current period expense (non-cash item) that is a writedown of a company's oil & gas assets: The problem that I have with GAAP rules for impairment is that they cannot be reversed, even if commodity prices quickly bounce back (like they did in 2016). They also do not consider a company's hedges. THIS IS WHY I STRESS SO MUCH THAT INVESTORS NEED TO FOCUS ON OPERATING CASH FLOW PER SHARE, NOT EARNINGS PER SHARE.
Year: GAAP EPS / CFPS
2015A: ($11.31) / $3.07
2016A: ($7.97) / $2.98
Assuming no further impairment charges. Here is what the future looks like.
2017E: $1.01 / $3.59 < First Call's CFPS estimate is $3.67 for 2017
2018E: $1.91 / $5.43 < First Call's CFPS estimate is $5.14 for 2018
I have been following and modeling Gulfport Energy for over ten years. I have an extremely high level of confidence in the management team and in my forecast model. They have consistently met or exceeded their production guidance year-after-year. More than 50% of their 2017 natural gas is hedged at $3.18/MMBtu, so they have solid cash flow from operations locked in. The only risk that I see here is if their SCOOP wells are crap and come on way below the pre-drill type curves. Since they have a top shelf technical team, I think the risk here is remote. Obviously, if natural gas prices crater again that is a risk but for 2017 & 2018 I see little chance of that happening a better chance that ngas prices go above what I'm using in my forecast models.
Gulfport is holding with their 2017 production guidance of 1,045,000 to 1,100,000 Mcfepd (88% natural gas, 8% NGLs and 4% crude oil). They are running four operated rigs in SCOOP all year and they should have completed well reports soon.
BTW, just for fun I took the oil price in my forecast model to zero for all future periods and my valuation went all the way down to $35.00/share. GPOR is a "gasser", so when the share price dips because of a small drop in the oil price, that's when you buy it.
My valuation stays at $40.00/share and I actually have more confidence in my forecast. On March 3, 2017 Credit Suisse put out a report on GPOR with a valuation of $33.00/share. If you'd like to see the Credit Suisse report, send me an e-mail (dmsteffens@comcast.net)
Gulfport is a classic example of how distortive GAAP accounting rules can be during a period of sharp moves in commodity prices. Gulfport was required to take massive non-cash impairment charges when natural gas prices cratered in 2015 and early 2016. Remember when natural gas dipped to $1.70 and NGL prices went below $10.00/bbl?
"Impairment" is a current period expense (non-cash item) that is a writedown of a company's oil & gas assets: The problem that I have with GAAP rules for impairment is that they cannot be reversed, even if commodity prices quickly bounce back (like they did in 2016). They also do not consider a company's hedges. THIS IS WHY I STRESS SO MUCH THAT INVESTORS NEED TO FOCUS ON OPERATING CASH FLOW PER SHARE, NOT EARNINGS PER SHARE.
Year: GAAP EPS / CFPS
2015A: ($11.31) / $3.07
2016A: ($7.97) / $2.98
Assuming no further impairment charges. Here is what the future looks like.
2017E: $1.01 / $3.59 < First Call's CFPS estimate is $3.67 for 2017
2018E: $1.91 / $5.43 < First Call's CFPS estimate is $5.14 for 2018
I have been following and modeling Gulfport Energy for over ten years. I have an extremely high level of confidence in the management team and in my forecast model. They have consistently met or exceeded their production guidance year-after-year. More than 50% of their 2017 natural gas is hedged at $3.18/MMBtu, so they have solid cash flow from operations locked in. The only risk that I see here is if their SCOOP wells are crap and come on way below the pre-drill type curves. Since they have a top shelf technical team, I think the risk here is remote. Obviously, if natural gas prices crater again that is a risk but for 2017 & 2018 I see little chance of that happening a better chance that ngas prices go above what I'm using in my forecast models.
Gulfport is holding with their 2017 production guidance of 1,045,000 to 1,100,000 Mcfepd (88% natural gas, 8% NGLs and 4% crude oil). They are running four operated rigs in SCOOP all year and they should have completed well reports soon.
BTW, just for fun I took the oil price in my forecast model to zero for all future periods and my valuation went all the way down to $35.00/share. GPOR is a "gasser", so when the share price dips because of a small drop in the oil price, that's when you buy it.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Gulfport Energy (GPOR)
Wells Fargo rates GPOR as "Outpreform".
"SCOOP. With 4 rigs running, GPOR is utilizing an enhanced frac design on initial completions relative to those historically
done in the area with results expected in the coming weeks. Adjusted for timing of acquisition, daily production translates to
172 MMcfe/d vs. 183 MMcfe/d when the deal was announced."
Gulfport Energy Corporation (GPOR)
Price as of 4/18/2017: $15.44
FY 17 EPS: $0.94 < This is slightly below my forecast
FY 18 EPS: $1.33
Shares Out.: 178.0 MM
Market Cap.: $2,748.32 MM
Rating Basis Information:
GPOR Thesis: Gulfport Energy is a Utica pureplay with 213,000 net acres and recently acquired SCOOP asset driving
production and reserve growth potential. We believe that investors will benefit as well economics continue to improve in this
emerging play.
"SCOOP. With 4 rigs running, GPOR is utilizing an enhanced frac design on initial completions relative to those historically
done in the area with results expected in the coming weeks. Adjusted for timing of acquisition, daily production translates to
172 MMcfe/d vs. 183 MMcfe/d when the deal was announced."
Gulfport Energy Corporation (GPOR)
Price as of 4/18/2017: $15.44
FY 17 EPS: $0.94 < This is slightly below my forecast
FY 18 EPS: $1.33
Shares Out.: 178.0 MM
Market Cap.: $2,748.32 MM
Rating Basis Information:
GPOR Thesis: Gulfport Energy is a Utica pureplay with 213,000 net acres and recently acquired SCOOP asset driving
production and reserve growth potential. We believe that investors will benefit as well economics continue to improve in this
emerging play.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group