Gulfport Energy Corporation (NYSE: GPOR) (“Gulfport” or the
“Company”) today reported financial and operating results for the
three and twelve months ended December 31, 2023 and provided its
2024 outlook.
Fourth Quarter 2023
- Delivered total net production of 1,063.3 MMcfe per day, above
analyst consensus expectations
- Reported $245.7 million of net income and $190.8 million of
adjusted EBITDA(1), above analyst consensus expectations
- Generated $155.5 million of net cash provided by operating
activities and $85.4 million of adjusted free cash flow(1),
excluding discretionary acreage acquisitions
- Incurred capital expenditures, excluding discretionary acreage
acquisitions, of $82.9 million
- Utilized adjusted free cash flow(1) for discretionary acreage
acquisitions totaling $23.1 million
- Repurchased 490 thousand shares of common stock for
approximately $66.0 million
Full Year 2023 Highlights and Recent Highlights
- Delivered total net production of 1,054.3 MMcfe per day, at the
high end of the Company's increased guidance range
- Reported $1.5 billion of net income and $725.0 million of
adjusted EBITDA(1), above analyst consensus expectations
- Generated $723.2 million of net cash provided by operating
activities and $198.9 million of adjusted free cash flow(1),
excluding discretionary acreage acquisitions
- Incurred capital expenditures, excluding discretionary acreage
acquisitions, of $443.4 million
- Maintained a strong balance sheet and low financial leverage,
with liquidity at December 31, 2023 totaling $720.1 million
- Expanded common stock repurchase authorization in February 2023
and October 2023, to a total of $650 million with approximately
$236 million(2) remaining
- Returned substantially all full year adjusted free cash
flow(1), excluding discretionary acreage acquisitions, to
shareholders by repurchasing 1.5 million shares of common stock for
approximately $148.9 million
- Allocated $48.0 million toward discretionary acreage
acquisitions, expanding high-quality resource base and adding over
1.5 years of inventory at current development pace
- Developed first Marcellus two-well pad in Belmont County, Ohio
with promising initial results, delineating approximately 50 to 60
locations, representing multiple years of additional liquids-rich
drilling inventory
- Achieved significant operational efficiencies, with average
drilling footage per day and completion hours pumped per day
improving by 60% and 30% year-over-year, respectively
Full Year 2024 Outlook
- Expect to deliver relatively flat year-over-year net production
with a range of 1,045 MMcfe to 1,080 MMcfe per day
- Plan to invest total base capital expenditures of $380 million
to $420 million, including $50 million to $60 million on
maintenance leasehold and land investment, a decrease of
approximately 10%(3) compared to full year 2023 and focused on more
liquids-rich development in the Utica and SCOOP
- Forecast delivering a significantly more capital efficient
program associated with longer laterals and continued cycle time
improvements; plan to deliver similar net completed lateral footage
compared to 2023 while turning to sales 20% fewer gross wells
- Plan to continue to allocate substantially all adjusted free
cash flow(1), excluding acquisitions, toward common share
repurchases
"Gulfport's 2023 results delivered on all fronts, highlighted by
our quality resource base and the continued improvement of
development efficiencies throughout the year. The Company delivered
net production at the high end of the updated guidance range, and
well above our initial guidance provided in February 2023. This was
accomplished while staying within our initial capital budget range,
despite the incremental activity accelerated during the fourth
quarter of 2023, as previously disclosed. The company augmented our
attractive acreage portfolio by strategically acquiring
liquids-rich Utica acreage that extended our inventory base by ~1.5
years and by delineating ~2 years of liquids rich Marcellus
locations overlying our Utica acreage at no incremental land cost.
This additional inventory provides fundamental value to the company
as well as expanded optionality to our go-forward development
plans. The 2023 development program led to meaningful adjusted free
cash flow generation, and after adjusting for cash flow utilized
for attractive discretionary acreage acquisitions, we allocated
approximately 99% of our adjusted free cash flow to repurchasing
our common stock during 2023. All of this was achieved while
maintaining our strong balance sheet, ample liquidity and financial
leverage below one times," commented John Reinhart, CEO of
Gulfport.
"As we move into 2024, the current natural gas pricing
environment is challenged and reinforces the importance of
developing our assets in an efficient and sustainable manner.
Building on the momentum from 2023, we plan to remain focused on
further optimizing our development programs cycle times and
operating costs, and we laid out a program today expected to
deliver similar production year over year on 10% less capital
invested. Furthermore, our development program will focus on more
liquids-rich development in both the Utica and SCOOP, ultimately
improving margins and supporting our robust expected adjusted free
cash flow generation, despite today's challenging commodity
backdrop. We plan to continue the return of capital to our
shareholders and, excluding acquisitions, expect to allocate
substantially all our full year 2024 adjusted free cash flow
towards common stock repurchases."
A company presentation to accompany the Gulfport earnings
conference call can be accessed by clicking here.
- A non-GAAP financial measure. Reconciliations of these non-GAAP
measures and other disclosures are provided with the supplemental
financial tables available on our website at
www.gulfportenergy.com.
- As of February 26, 2024.
- Assumes midpoint of 2024 guidance.
Operational Update
The table below summarizes Gulfport's operated drilling and
completion activity for the full year of 2023:
Year Ended December 31,
2023
Gross
Net
Lateral Length
Spud
Utica & Marcellus
20
17.9
17,100
SCOOP
5
3.2
11,800
Drilled
Utica & Marcellus
22
20.2
15,400
SCOOP
2
1.7
8,600
Completed
Utica & Marcellus
22
20.2
14,000
SCOOP
2
1.7
8,600
Turned-to-Sales
Utica & Marcellus
22
20.2
14,000
SCOOP
2
1.7
8,600
Gulfport’s net daily production for the full year of 2023
averaged 1,054.3 MMcfe per day, primarily consisting of 783.8 MMcfe
per day in the Utica and Marcellus and 270.4 MMcfe per day in the
SCOOP. For the full year of 2023, Gulfport’s net daily production
mix was comprised of approximately 91% natural gas, 7% natural gas
liquids ("NGL") and 2% oil and condensate.
Three Months Ended
December 31, 2023
Three Months Ended
December 31, 2022
Year Ended
December 31, 2023
Year Ended
December 31, 2022
Production
Natural gas (Mcf/day)
976,820
934,763
959,743
883,195
Oil and condensate (Bbl/day)
3,498
4,959
3,733
4,412
NGL (Bbl/day)
10,923
14,520
12,018
12,281
Total (Mcfe/day)
1,063,341
1,051,637
1,054,251
983,354
Average Prices
Natural gas:
Average price without the impact of
derivatives ($/Mcf)
$
2.37
$
5.45
$
2.37
$
6.20
Impact from settled derivatives
($/Mcf)
$
0.54
$
(2.88
)
$
0.42
$
(3.11
)
Average price, including settled
derivatives ($/Mcf)
$
2.91
$
2.57
$
2.79
$
3.09
Oil and condensate:
Average price without the impact of
derivatives ($/Bbl)
$
73.47
$
79.27
$
73.27
$
91.58
Impact from settled derivatives
($/Bbl)
$
(3.32
)
$
(16.89
)
$
(2.53
)
$
(24.32
)
Average price, including settled
derivatives ($/Bbl)
$
70.15
$
62.38
$
70.74
$
67.26
NGL:
Average price without the impact of
derivatives ($/Bbl)
$
26.65
$
30.85
$
27.29
$
41.26
Impact from settled derivatives
($/Bbl)
$
2.72
$
0.92
$
2.07
$
(2.80
)
Average price, including settled
derivatives ($/Bbl)
$
29.37
$
31.77
$
29.36
$
38.46
Total:
Average price without the impact of
derivatives ($/Mcfe)
$
2.69
$
5.64
$
2.73
$
6.49
Impact from settled derivatives
($/Mcfe)
$
0.51
$
(2.63
)
$
0.40
$
(2.94
)
Average price, including settled
derivatives ($/Mcfe)
$
3.20
$
3.01
$
3.13
$
3.55
Selected operating metrics
Lease operating expenses ($/Mcfe)
$
0.17
$
0.18
$
0.18
$
0.18
Taxes other than income ($/Mcfe)
$
0.08
$
0.15
$
0.09
$
0.17
Transportation, gathering, processing and
compression expense ($/Mcfe)
$
0.91
$
0.99
$
0.91
$
1.00
Recurring cash general and administrative
expenses ($/Mcfe) (non-GAAP)
$
0.15
$
0.13
$
0.12
$
0.12
Interest expenses ($/Mcfe)
$
0.16
$
0.17
$
0.15
$
0.17
Capital Investment
Capital investment was $443.4 million (on an incurred basis) for
the full year of 2023, of which $388.6 million related to drilling
and completion (“D&C”) activity and $54.8 million related to
maintenance leasehold and land investment. In addition, Gulfport
invested approximately $48.0 million in discretionary acreage
acquisitions.
Common Stock Repurchase Program
Gulfport repurchased approximately 490 thousand shares of common
stock during the fourth quarter for approximately $66.0 million. As
of February 26, 2024, the Company had repurchased approximately 4.5
million shares of common stock at a weighted average price of
$92.41 per share since the program initiated in March 2022,
totaling approximately $413.6 million in aggregate. The Company
currently has approximately $236.4 million of remaining capacity
under the share repurchase program.
Financial Position and Liquidity
As of December 31, 2023, Gulfport had approximately $1.9 million
of cash and cash equivalents, $118.0 million of borrowings under
its revolving credit facility, $63.8 million of letters of credit
outstanding and $550 million of outstanding 2026 senior notes.
Gulfport’s liquidity at December 31, 2023, totaled approximately
$720.1 million, comprised of the $1.9 million of cash and cash
equivalents and approximately $718.2 million of available borrowing
capacity under its revolving credit facility.
During 2023, the Company paid $4.8 million of cash dividends to
holders of its preferred stock.
2024 Guidance
Gulfport released operational guidance and outlook for the full
year 2024, including full year expense estimates and projections
for production and capital expenditures. Gulfport's 2024 guidance
assumes commodity strip prices as of February 13, 2024, adjusted
for applicable commodity and location differentials, and no
property acquisitions or divestitures.
Year Ending
December 31, 2024
Low
High
Production
Average daily gas equivalent
(MMcfe/day)
1,045
1,080
% Gas
~92%
Realizations (before hedges)
Natural gas (differential to NYMEX settled
price) ($/Mcf)
$
(0.20
)
$
(0.35
)
NGL (% of WTI)
35
%
40
%
Oil (differential to NYMEX WTI)
($/Bbl)
$
(4.75
)
$
(5.75
)
Expenses
Lease operating expense ($/Mcfe)
$
0.17
$
0.19
Taxes other than income ($/Mcfe)
$
0.08
$
0.10
Transportation, gathering, processing and
compression ($/Mcfe)
$
0.90
$
0.94
Recurring cash general and
administrative(1,2) ($/Mcfe)
$
0.11
$
0.13
Total
Capital expenditures (incurred)
(in millions)
D&C
$
330
$
360
Maintenance leasehold and land
$
50
$
60
Total base capital expenditures
$
380
$
420
(1) Recurring cash G&A includes
capitalization. It excludes non-cash stock compensation and
expenses related to the continued administration of our prior
Chapter 11 filing.
(2) This is a non-GAAP measure.
Reconciliations of these non-GAAP measures and other disclosures
are provided with the supplemental financial tables available on
our website at www.gulfportenergy.com.
Derivatives
Gulfport enters into commodity derivative contracts on a portion
of its expected future production volumes to mitigate the Company's
exposure to commodity price fluctuations. For details, please refer
to the "Derivatives" section provided with the supplemental
financial tables available on our website at
ir.gulfportenergy.com.
Estimated Proved Reserves
Gulfport reported year end 2023 total proved reserves of 4.2
Tcfe, consisting of 3.7 Tcf of natural gas, 18.6 MMBbls of oil and
62.8 MMBbls of natural gas liquids. Gulfport’s year end 2023 total
proved reserves increased approximately 4% when compared to its
2022 total proved reserves.
The table below provides information regarding the components
driving the 2023 net proved reserve adjustments:
Total (Bcfe)
Proved Reserves, December 31,
2022
4,048
Extensions and discoveries
996
Revisions of prior reserve estimates
(445
)
Current production
(385
)
Proved Reserves, December 31,
2023
4,214
Proved developed reserves totaled approximately 2,203 Bcfe as of
December 31, 2023 or approximately 52% of Gulfport’s proved
reserves. Proved undeveloped reserves totaled approximately 2,011
Bcfe as of December 31, 2023.
The table below summarizes the Company’s 2023 net proved
reserves:
December 31, 2023
Oil
(MMBbl)
Natural Gas
(Bcf)
NGL
(MMBbl)
Total
(Bcfe)
Utica & Marcellus
Proved developed(1)
2
1,520
7
1,576
Proved undeveloped(1)
10
1,421
17
1,585
Total proved(1)
13
2,941
24
3,160
SCOOP
Proved developed
4
459
24
627
Proved undeveloped
2
325
15
426
Total proved
6
785
39
1,053
Total
Proved developed
6
1,980
31
2,203
Proved undeveloped
12
1,746
32
2,011
Total proved
19
3,725
63
4,214
Totals may not sum or recalculate due to
rounding.
_____________________
(1) Includes approximately 17 Bcfe and 108
Bcfe of net developed and undeveloped reserves, respectively,
located in the Marcellus target formation.
The following table reconciles the standardized measure of
future net cash flows to the PV-10 value of Gulfport’s proved
reserves:
Proved Developed
Proved Undeveloped
Total Proved
($ in millions)
Estimated future net revenue(1)
$ 2,535
$ 2,235
$ 4,769
Present value of estimated future net
revenue (PV-10)(1)
$ 1,590
$ 819
$ 2,409
Standardized measure(1)
$ 2,383
Totals may not sum due to rounding.
_____________________
(1) Estimated future net revenue
represents the estimated future revenue to be generated from the
production of proved reserves, net of estimated production and
future development costs, using prices and costs under existing
economic conditions as of December 31, 2023, and assuming commodity
prices as set forth below. For the purpose of determining prices
used in our reserve reports, we used the unweighted arithmetic
average of the prices on the first day of each month within the
12-month period ended December 31, 2023. The prices used in our
PV-10 measure were the average West Texas Intermediate Spot price
of $78.21 per barrel and the average Henry Hub Spot price of $2.64
per MMBtu, before basis differential adjustments. These prices
should not be interpreted as a prediction of future prices, nor do
they reflect the value of our commodity derivative instruments in
place as of December 31, 2023. The amounts shown do not give effect
to non-property-related expenses, such as corporate general and
administrative expenses and debt service, or to depreciation,
depletion and amortization. The present value of estimated future
net revenue typically differs from the standardized measure because
the former does not include the effects of estimated future income
tax expense of $26 million as of December 31, 2023.
Management uses PV-10, which is calculated
without deducting estimated future income tax expenses, as a
measure of the value of the Company's current proved reserves and
to compare relative values among peer companies. We also understand
that securities analysts and rating agencies use this measure in
similar ways. While estimated future net revenue and the present
value thereof are based on prices, costs and discount factors which
may be consistent from company to company, the standardized measure
of discounted future net cash flows is dependent on the unique tax
situation of each individual company. PV-10 should not be
considered in isolation or as a substitute for the standardized
measure of discounted future net cash flows or any other measure of
a company's financial or operating performance presented in
accordance with GAAP.
A reconciliation of the standardized
measure of discounted future net cash flows to PV-10 is presented
above. Neither PV-10 nor the standardized measure of discounted
future net cash flows purport to represent the fair value of our
proved oil and gas reserves.
Fourth Quarter and Full Year 2023 Conference Call
Gulfport will host a teleconference and webcast to discuss its
fourth quarter and full year 2023 results, as well as its 2024
outlook, beginning at 9:00 a.m. ET (8:00 a.m. CT) on Wednesday,
February 28, 2024.
The conference call can be heard live through a link on the
Gulfport website, www.gulfportenergy.com. In addition, you may
participate in the conference call by dialing 888-428-7458
domestically or 862-298-0702 internationally. A replay of the
conference call will be available on the Gulfport website and a
telephone audio replay will be available from February 28, 2024 to
March 13, 2024, by calling 877-660-6853 domestically or
201-612-7415 internationally and then entering the replay passcode
13744254.
Financial Statements and Guidance Documents
Fourth quarter and full year 2023 earnings results and
supplemental information regarding quarterly data such as
production volumes, pricing, financial statements, and non-GAAP
reconciliations are available on our website at
ir.gulfportenergy.com.
Non-GAAP Disclosures
This news release includes non-GAAP financial measures. Such
non-GAAP measures should be not considered as an alternative to
GAAP measures. Reconciliations of these non-GAAP measures and other
disclosures are provided with the supplemental financial tables
available on our website at ir.gulfportenergy.com.
About Gulfport
Gulfport is an independent natural gas-weighted exploration and
production company focused on the exploration, acquisition and
production of natural gas, crude oil and NGL in the United States
with primary focus in the Appalachia and Anadarko basins. Our
principal properties are located in eastern Ohio targeting the
Utica and Marcellus formations and in central Oklahoma targeting
the SCOOP Woodford and SCOOP Springer formations.
Forward Looking Statements
This press release includes “forward-looking statements” for
purposes of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements are statements other than
statements of historical fact. They include statements regarding
Gulfport’s current expectations, management's outlook guidance or
forecasts of future events, projected cash flow and liquidity,
inflation, share repurchases and other return of capital plans, its
ability to enhance cash flow and financial flexibility, future
production and commodity mix, plans and objectives for future
operations, the ability of our employees, portfolio strength and
operational leadership to create long-term value and the
assumptions on which such statements are based. Gulfport believes
the expectations and forecasts reflected in the forward-looking
statements are reasonable, Gulfport can give no assurance they will
prove to have been correct. They can be affected by inaccurate or
changed assumptions or by known or unknown risks and uncertainties.
Important risks, assumptions and other important factors that could
cause future results to differ materially from those expressed in
the forward-looking statements are described under "Risk Factors"
in Item 1A of Gulfport’s annual report on Form 10-K for the year
ended December 31, 2023 and any updates to those factors set forth
in Gulfport's subsequent quarterly reports on Form 10-Q or current
reports on Form 8-K (available at
https://www.gulfportenergy.com/investors/sec-filings). Gulfport
undertakes no obligation to release publicly any revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events.
Investors should note that Gulfport announces financial
information in SEC filings, press releases and public conference
calls. Gulfport may use the Investors section of its website
(www.gulfportenergy.com) to communicate with investors. It is
possible that the financial and other information posted there
could be deemed to be material information. The information on
Gulfport’s website is not part of this filing.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240227526076/en/
Investor Contact: Jessica Antle – Vice President,
Investor Relations jantle@gulfportenergy.com 405-252-4550
Gulfport Energy (NYSE:GPOR)
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