Morningstar | Gulfport's Production Dips as Planned; Full-Year Guidance and Budget Unchanged
Gulfport Energy delivered production of 1,264 million cubic feet of equivalent per day in the first quarter, which was 17% lower sequentially and 2% lower year over year. The decrease was not unexpected, following the strategic choice to wind down drilling activity at the end of 2018 to ensure the firm stayed within budget. Only nine wells were turned to sales during the period, and most of these came on line after March 25. But there was a flurry of completion activity, and management plans to bring 30 wells on line during the second quarter. These wells should have a big impact on second-quarter production. The company still intends to hit its previous target of 1,360-1,400 mmcfe/d for the full year, which at the midpoint would be more or less flat with the 2018 average.The 2019 capital budget was unchanged at $565 million-$600 million, and the firm expects $100 million in full-year free cash flows. Gulfport also repurchased $30 million of stock during the first quarter following a noncore asset sale. That leaves $370 million authorized under its current repurchase program, which expires at the end of 2020. With operations proceeding as planned, the firm’s financial results were also as expected. Adjusted EBITDA and adjusted earnings per share were $207 million and $0.33, respectively, compared with consensus forecasts of $209 million and $0.29.
We plan to incorporate these operating and financial results in our model shortly, but after this first look, our fair value estimate and no-moat rating are unchanged.
Gulfport Energy is an oil and natural gas exploration and production company focused on the exploration, exploitation, acquisition and production of natural gas, crude oil and natural gas liquids. The company's principal properties are located in the Utica Shale primarily in Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, among other interests, the company holds an acreage position along the Louisiana Gulf Coast in the West Cote Blanche Bay and Hackberry fields, an acreage position in the Alberta oil sands in Canada through its interest in Grizzly Oil Sands ULC and an equity interest in Mammoth Energy Services, Inc., an oil field services company.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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