GPOR - Earnings call transcript Q3 2021 | Gulfport Energy Corporation

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Operator

Greetings. Welcome to the Gulfport Energy Corp Third Quarter 2021 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. conference your the Tommy turn now over host, to Renouard. I’ll

begin. may You

Tommy Renouard

make participants relating objectives, Information Renouard, condition, Investor everybody you, performance filings be to include Buese, earnings can Vice like of you Tommy Welcome may good statements Tim would are results conference these statements Officer. of I President differ the and with during Analyst in Energy caution indicated the found I'm SEC. Thank this Officer; financial morning. conference forward-looking the Executive company's that forward-looking quarter Cutt, Gulfport Chief and and could today's Speakers call, due certain to We from Relations. on these results Corporation's that operations, future that company's Executive third factors. the call. and remind Senior to concerning factors call, those Financial of Bill in to XXXX of materially a plans, actual business. variety Chief

addition, the in be announcement. to comparable measures. the website. Tim yesterday GAAP Reconciliations with was evening at website earnings review over we At leisure. conjunction I'd your time, like to to An to posted the will on our our posted non-GAAP Please measures may this call In Gulfport updated presentation reference turn CEO. Cutt,

Tim Cutt

full highlights guidance. the the to quarter updates joining I'll turning our year begin call. to third Bill the by this update good for a financial and discuss you Tommy with summary thank XXXX and over Thanks, of and morning, an of call morning the before followed operational

XXX progress facility the XXX the We from that day. feet our the flowing in of our by demonstrated put a accelerates at to as earnings a was million in by steady on rate completed fronts cubic numerous during credit program. saw per Angelo share quarter. and ability liquidity As place increases shareholders, our new repurchase million release, $XXX we announced which to capital is Utica, The you six-well million pad return currently made

resolved and litigation announced the post-bankruptcy Finally, this with exposure the company's Pressure to pleased we standing can have us company to that largest I'm litigation with so fully Stingray litigation opportunities September. the behind its Pumping Settlement relating tremendous own moving in focus its Agreement on TC Energy forward.

quarter gas from driven our the during We million performance quarter. equivalent the of Production in an the to increase driven Moving quarter, Angelo total strong slightly expectations, contribution SCOOP fourth million Gulfport in feet third and Utica programs. above operational cubic from invested pad. the during per development XXX day the results. by strong quarter, anticipate by average reservoir $XX third the production capital of both

to identify lower We opportunities and costs. our completion total continue to drilling

Mcfe peer-leading primarily However, produced. we delivering per cost focused remained development on

approximately to maintenance-level of level continue is Utica we deliver to guidance, This forward, from moving flat and resulting longer a spacing in provide of ways to Moving continuous formal drilling less cost designs periods development both this day us spend improved and molecules of improve allowing per expected million target of spend per Financial more potentially one-rig XXXX by – guiding in new to our efficiency completion SCOOP. exploring program with opportunity, capital. the we're and capital time service $XXX roughly year, despite Bcf a performance equivalent inflation. X well production, results cost

been plateau. deck, recent remained online months you'll eight from that pleased results and our find Turning approximately SCOOP both wells to the results. XXXX and Utica IR XX for On our the historical are outperforming development to program. program, results page on and of report for now Hendershot our I'm The Utica development Shannon have

located same in how compared early historic Morris months, addition, and their to with in are encouraged the similar rapid target promising schedule. are portion wells wells we we the southern several time in ahead finally, as and for these In online the wells the seeing very are of our and have been of pads production you Monroe data. and play performing And Gehrig build County, rates can area. to of are indoor wells see the These

slide we This most On Hendershot program relatively driven our We pressure. XXXX Angelo program performance is its by December development have and our wider our today. frac production to development the the to XX, expect the is Utica highlighted optimize start pad new Shannon line through in approach the move as spacing that strong substantial XX believe development. jobs. to through of We stay November and flat decline test for and wells

We This operation days versus the deck. using just XX per we of of the XX the XX of complete above a IR record fracking of days day and operation average picture simul-frac enable stages techniques. nine page are an day versus the days completed in by have provided six to normal historical wells our We us XX. over multiple fact that per stages XX day encouraged a achieved and on

of fuel spreads pleased for operations, which future for and and XXX% plan fracking lower will rigs operations produced environmental very and to frack reuse are achieve We performance. costs to water improve utilize dual

accelerated snubbing days. which grow by well commodity high You Angelo units startup see on XX simultaneously, XX a we will out slide to that production into environment two price utilize the

pad, target As the ahead consistent estimated brought are online shown new opportunity The drilling a complete improvement. schedule period. to remain development for there's rates production plateau expected XX, extended at with our applying additional learned $XXX on when was costs and foot to and slide approaches for from on Angelo of is lessons

during development quarter, SCOOP XX% we the the production increase results, of from asset experienced quarter. second strong the from an the to Moving

slide today. wells. rate much In performance addition, resulting historical wider laterals XX, results the see to are longer better spacing the a performing can from improved are in declining you attributed as slower than pleased budgeted, with the Gulfport wells We and cumulative and rates at than

to the XXXX. of in running currently fracking rig one run plan operations are return We January SCOOP to and in --

improving on focus efficiency. cost to continue company's the We

the of is substantial guidance have improves was and cash up expected $X at provided full discussed costs. the Mcfe $X.XX the holding per decline year-on-year, previous remained forward. are sustainable for moving last provide cash in free to per costs due As management during expected margins, XX% corporate slightly, recurring primarily key year for quarter which $X.XX increase million water August. for flow the consistent LOE a we to initiative But XXXX. the guidance guide remains G&A team our Reducing to or and by call, to overhead Mcfe generation compared midpoint our by significantly and lowered

and G&A of $X.XX Mcfe executing this maintain closing, the social always, for program top our the and governance with rate now In quartile improving committed to financial We our for reduce and year to performance corporate XXXX safely in call the per the XXXX to turn our guidance. our development as run highest possible returns investors. full are focused achieve to on over costs structure, expect results environmental, fully overhead and to deliver optimizing XXXX. are and I'll field into discuss we Bill

Bill Buese

good Thank everyone. morning you, Tim, and

his updates quarter a some liquidity to authorization, opening providing our our our solid before I will results, this and had position, Q&A. share remarks, XXXX, perspective. a financial suggested a my in morning another details third operationally Tim credit improved spend recent and surrounding our time both financial repurchase up call quarter, overview facility guidance As we brief from for of amendment,

the million period For loss capital activities loss free cash operating $XX quarter. driving the we flow portfolio. $XXX into $XXX program derivative To provided and associated net contracts to generate reported and flow of cash and million during we during the net cash going of million the generated by unrealized September three-month EBITDA, forward, our ending we $XXX period. quarter of to the generated free XXXX, same million a fund loss our XXth, $XXX derivatives with commodity ability our continue ensure enter totaled million adjusted of commodity Net for

Mcf. & XXX per contracts For totaling with the natural three cubic remaining of hold per $X.XX we floor million XXXX, in swap collar average gas approximately an feet price day months currently

& contracts feet at contracts $X.XX floor per our $X.XX our Please XXXX Mcf average of derivative natural totaling XXXX. on XXX at for portfolio. We details feet price day approximately gas swap for XX an per cubic cubic see have also of approximately price additional day totaling collar an floor per average Form million for million and XX-Q

under to Turning million billion, the $X.X at the sheet, million our end of total loan, while approximately outstanding notes. third $XXX of $XXX our was were assets of balance and $XXX outstanding our term revolver, million quarter, $XX approximately debt million, senior outstanding consisting gross under total

quarter. also the and letters of end $X of the cash million million We of $XXX credit at outstanding had of

borrowing leverage borrowing ability made announced commitments financial The the floor liquidity, availability the exit and decreasing XXX comprehensive through we and the facility, to term third rate to elimination liquidity It $XXX the borrowings from to a a the shareholders maturity elimination with points as blocker, to things, provides the point basis our XXXX. the each points million repurchase last date facility. $XXX time. our approximately the return new and front, equal X.XX increase aggregate price announced of capacity On the utilization. repayment We level by facility. and $X base, million necessary amendment to provides our a million $XXX million recently of for the agreement October million ongoing need to our maintain of reduces facility flexibility of October total $XXX a the and the of LIBOR The under the million, On cash million current one the of under quarter funded $XXX ratio extension that we quarter, restatement $XX credit XXth, in amendment exited believe approximately under loan ratio of basis our of the applicable basis we the less amendment amendment of other accelerated evidenced business by company for, of grade XXX lender to also capital $XXX of times plan. as of requires execute net day XX an of elected than the by million equal in among or or by program. each greater The up than at to

company. facility an other good credit of credit key for the the amendment Overall, items of should million give at some Pro was positive agreement, and the feel the $XXX outcome amendment new to a are million of approximately you the of to million addressed. million, for by $XXX think we there under borrowing increased XXth available comprised capacity for While modifications $XXX the extremely September this facility. $X.X cash forma liquidity

over of We represent outstanding through applicable increasing and valid at is restrictions, amount shares credit December factors. and shares, We opportunistically requirements, share Board size outstanding liquidity As repurchase agreement our believe announced using in largely be the of million credit today's share in potentially be and including first program Any is authorized new share conditions, additional development the driven yesterday's up X% in program repurchase XXXX. The future The commitment which release, XXst, program execute of to options, dividend instituting down a of the will market timing all authorization liquidity, to stock. common would repurchase program legal capital and repurchases covers. of funds, evaluate price available utilize and the debt. by meaningful company's shareholders. step our $XXX any common initiatives the repurchase will the a of liquidity pay to will quarters. governed to share while facility subject the marketed to available our intend program to other our sufficient maintaining to executed to share return company capital is continue The common

X,XXX total to on feet production guidance XXXX day. to guidance. Moving XXX to equivalent million narrowed per We our cubic

$X.XX per for Our per Mcfe LOE XXXX respectively. unchanged $X.XX at expense guidance to to remained Mcfe and and GP&T $X.XX $X.XX

range was at a XXXX compared expense top is which $X.XX Our million, to $XX to $XX Mcfe. quartile million is of guide midpoint G&A recurring XX% in performance per lower and the XXXX for of lowered with to line

associated approximately $XX activity, unchanged activities. $XXX XXXX to divestiture of $XXX capital for land capital million our and leasehold and with million acquisition with million remain investment guidance Excluding at

XXXX of will to two-thirds budget the ago. year capital allocated over the little As be

potential to release our Finally, million year pricing. a $XXX Please midpoint the to million we see that for XXXX $XXX investment believe details XXXX our asset by guidance continues return In and of full on support current cash range earnings efficient our the a free share shareholders. to a base flow $XX additional to we at few our low of increased summary, strong million guidance. at rate for capital

significant we largely and peer cash to under Our best XXXX free is our free the still generate yield ability group cash flow flow believe in forward appreciated. remains that our going

our approximately annual $X.XX manner, flow in roughly deliver a remains a million disciplined developing billion $XXX of investing per X million equivalent than capital plan more feet assets to free at price. day $XXX cubic of production, cash targeting business natural Our gas to while committed of

Finally, has expect as our better we largely facility, amended credit get liquidity the business while even improved, due it to plan. we to execute

free stated our opportunity quarter, that a last leading deliver provides pure cash investors. As unique we for ability believe to flow

plans still questions. we priorities eager the While With the we will and program are near to recently additional excited returning future to plan now in by capital in for repayment announced to repurchase up share term, our that, debt our we we're for shareholders share call quarters. open

Operator

Truist. [Operator first of Thank from Instructions] with Dingmann line Our comes question you. the Neal

question. your with proceed may You

Neal Dingmann

mine -- when of all question. activity the and you more would plan wise? most most both Utica shareholder When be, -- that's question of sort important shareholder wise Midcon or course is maybe to think run off return, one guess -- investors. I’m I my Tim, the with Hi, most about think particularly, in efficient in the these guess and both typically, the Bill, I the return -- is you guess balance maybe the which you rig days good growth morning, again, When wondering, to kind do think how is talk just running that, efficient of I way plan, may the the efficient the about early you over by blended comments. most be each a for run, your all. more appreciate about

Tim Cutt

have and the was perfect cash to designed program improvement. my touched low budget during a that’s a we shareholders return -- gas a I it maximize prepared at to flow And question. the Neal, designed on it was Right during very that price. ultimately comments. with now,

it opportunities at opens more up look think efficient development I to a program.

and for be and where For can risk quite up, instance, we do to in time And And SCOOP, start going in -- fracking. in by is drilling that hard market we're the supply stop to that doing that. services build start Utica both the drilling costs of are inefficient. a periods acquire, today, are stop you're when like -- you

reason So our about that but we're guidance preference we be the a to what's more our put program, potentially the formal at of opportunity from didn't We're consistent run out. more is to board, looking obviously part standpoint going to talk that’s the operating as consistent.

great think So I that's a question.

Neal Dingmann

And And then, it on just really got to where I the wanted to just go. follow-up.

I you mean, how the for I even versus in with authorization, blend do do you maybe pushing that that, of dividends? Now think bill? the repurchase about about when -- sort and shareholder -- that how mean, thinking

Tim Cutt

Yes.

increase it's is Neal, consistent not XX% in the think. going I'll more first. to I a good mean, a it news to I program. program take the does lot, a cost XX% probably

so, And require months. instance, the in for three Utica,

you not like doubling another schedule, the fracking in, same pad. frack that at all. you're up on stay fill You you It's

think still buyback, at go debt, have us important stay still attractive increase number, levered. And right lot headroom price. flow. So generate dividend, if shareholder a cash That least will is and you you million substantial paying higher, $XXX is now just of to pretty which to about higher, down I can if obviously, think take prices and for down you one-times extremely

very in it's move too for want making, We although if a But in we on increase also, an And that all room think see could see thing. sure of sustain. there's we more positive decision something production, wouldn't doing just think think. I substantial XXXX, to a be in measured quickly. I prices in that, So increase of make And we by to we're that. could do production I XXXX our don't much it

without So I think add, worrying have -- the Anything we of this to think, do I room one plenty do we’re there's Bill? got or about, to consider other. to

Bill Buese

close. take mean, we two These can going there's certainly -- a mutually just credit Yes. we're We right. No, I exactly exclusive. ago, that's amendment don’t to approach, basically and this did measured I weeks are facility think again, room.

have we about and those the in return, active we'll to we and Neal, and more So, one do thing been know we plan the management have can discussions discussions, and in future. on continue certainly board than capital

Neal Dingmann

the much. love I guys Thanks optionality. No, so

Tim Cutt

you. Yeah. Thank

Operator

JPMorgan. next Our Zach from with comes of question Parham the line

with question. You may proceed your

Zach Parham

Hey, talk upside more the inflation bit about guys. a below Thanks cost see and first simul-fracked but for Could the well target. off, Angelo in you taking well doing you my also how your I pad cost question. guess things Utica given positive came on bit trends both the cost on efficiently? including trending pressures, the in XXXX, little a

Tim Cutt

Yes.

think. offsetting each other. of kind Right we're now I

talking We’re numbers, service inflation, seeing, we’re they're obviously, XX% X% or any particular about everybody’s to commodity, change. different but seeing on

maybe So, XX% on it XX% to blended a pressure. basis,

we're are our But for XXX. get those own offset. in to by the So opportunities disposal big system, don't I hold trying the there instance, We things water have basically offset and a effects. Utica. do inflationary could think below

have we water, So fracking and lot. doesn't next not big pads, use a we're to that cost door

bit can be more going And why little it lumpy. So consistent that's we're programs. a considering to

So for have we're we water pads while better through these to well try fracking producing operation. disposal the and of more are place a the new fracking

to $X what I offset we'll yet. be basis those are But able on with next XXX, if Series want year. get of ahead So I where as to C wouldn't prepared I thinking good, because as predicting range think inflationary of see But we the we our to yet foot quote kind is we'll some same per program we're don't going far do to the be effects. stay be around of

Zach Parham

color. for that Thanks

Just one follow-up for me.

do their hedges that were this about, something could Gulfport different longer-dated peers put some restructuring And of you natural look your if your to gas place focus so some potentially that very what hedge price of is in of could talk at something in if a potentially announced on recently like? maybe gas could market? book, One look

Tim Cutt

that. Yes, Bill, take

Bill Buese

Yes.

So how we're next calls update out. And credit work bit but was get on. another we should specifically in reason definitely we are it's quarter, yes, allow to of did a the to until us better more have to to we focused you But to some that, that on on we did on, it's facility, needed that's definitely, early tell something again, XXXX. going that, exactly a we focused play something – counterparties the some

of to the facility of credit to some reason for part again, was the amendment Now, that. allow us address

Zach Parham

That's for Thank you, all guys. me.

Tim Cutt

All right. Thank you.

Operator

next Our Tarek Hamid line of question from JPMorgan. comes the with

may with your proceed You question.

Tarek Hamid

Good morning, and my thanks question. for taking

You capital upside sort the and X guess, that to pad certainly of drilling think guess, you but given questions, think year, productivity the at of in plan and and do far just this your go-forward productivity about of Bcf kept go-forward guidance on million XXXX, since volume flat Angelo and this and Neal so $XXX basis? sort you capital of I Zach's there's online broader on that assumptions emergence? the program do follows I how a

Tim Cutt

there. year expected very of out like we're for – I was this think still think, obviously we to. I Bcf a is We And planned performing did close about kind and had rates. it Yes, probably Everything we the is number. good X these

line basic expect doing do. Our what it about to is we

has pretty The have permitting extended process accelerate So Utica ability we're to in process. we a things. not much -- don't

I think don't bring pad but could do have production the late earlier we so the much again, year. bring we year, on in lot of a in to a forward. that And comes flexibility

expect So I much upside. you don't should think

kind XXXX. is have we how we towards level built of the think I

flexibility that. we have plans, much X for around at most stage minus think stay on the or the But think I plus we Bcf. looked we how I more of set

Tarek Hamid

just appreciate I follow-up me. And it. for one

of execute the generate to XXXX. going on timing How pretty you're expect program? think cash ton share could on to you out the the in a in the on to I the should repurchase of slide point Just program. execution deck successfully start you

or You quarter could debt just be of a and out pre-payable period two.

purchases? I your guess, timing to think start about on So, that do share you hand how tip

Bill Buese

share exactly it's market. the question, -- undervalued. But believe what mean, we'll obviously will good opportunistically. Its be on our our I in yes, We be not advantage Yes. doing shares to something are

and going hand that But good So, to do necessarily, we're definitely so. a our it's not but we're at looking we're tip it's excited something investment about.

Tarek Hamid

my it. taking thanks Got for Well, questions.

Bill Buese

Thanks.

Operator

Steven question with Dechert the next KeyBanc. Our comes from line of

You may question. with your proceed

Steven Dechert

prices me. to winter see Hey, just guys, any just Thanks. the guys gas high if this given I consideration have want now? production I right for to you wanted raise with the

Bill Buese

don't opportunities lot We Yes. of a to that. do have

If for have wells did in the been the wells about carefully on those deck them at turn up slide wells, look you we while. Hendershot month and you months. ran Shannon plateau eight for those and and a About ago, look a

dialed without a operational back. trying Some up, I of formations, basically sand issues do just them can what We're them think, saved frac for of few to bringing we went us. creating test

producing we're target our right bit Obviously, think what now. we these rates so XXX are we'd We're XXX, in is the some target with. And on a that pads downtime, pushing stick with we're Angelo at the XXX.

a don't of have can of safely. came turn But what have of the continue and lose great It's making see big of we those having sure to I you it the walls base the we as we don't flatter. mean, We those. get of and What a new things think pad wells, you to one doing as a I have produce fast decline SCOOP. wells, lot Angelo early. want going see -- been confines that. our move and to that in get we to of kind on do in base of bit decline out. the you'll that ability the doing kind So, on, compression the we're decline expect done unlimited we projects. did to we We're could projects I to We've wouldn't whole on do lot possibly within

gave understand of as should quarter. of cautious the And bit kind but think -- we coming be take range a good can we we I to push advantage So, that. that what and of want the trying the question far expect But deck fourth as prices guidance is and on to in about there you the again, the completely. we're we out

Steven Dechert

Got it.

Thanks. great. Okay,

Operator

At this reached the of time, the end session. have question-and-answer we

I the back Tim floor closing for turn Cutt Now, remarks. to over

Tim Cutt

asking that. of want Thanks much. for delivered do appreciate very this say questions, calling out you've in All again, beginning don't Tommy year mainly a thanks contractors, in. calling for well Investor the our listen, and I lot call, hesitate and join we that to and our And since we to Again, lot. who organization, employees, against questions of additional to appreciate very And also and to have once did appreciate right. in your thanks any actually today a the time you and reach Relations to if team. our our

Thank So, that with the you. that, concludes call.

Gulfport Energy (GPOR) 3 Nov 212021 Q3 Earnings call transcript