GPOR - Earnings call transcript Q4 2021 | Gulfport Energy Corporation

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Operator

Greetings. Welcome to the Gulfport's Fourth 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 this conference is being recorded. conference your the Jessica turn now over host, to Antle. I'll you. Thank

begin. You may

Jessica Antle

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

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

Timothy Cutt

operational this an with summary by of financials. a Thank you, of Bill before Jessica. I highlights, to Good morning, call and to followed thank morning the call. will the you for turning joining begin discuss the year the end update

$XXX target of at guidance. achieved very full-year release, increased cash from quarter saw a the We million and leverage end our flow, free results our and significantly you top Xx. As of liquidity of below strong generated over had delivered we

which to the at the repurchase which driven in X translated positioned well SCOOP able the end at evaluating and was was of of and average are low opportunities. contribution this share a approximately $XXX by per guidance. CapEx both return program to was our spend gas from strong XXXX, production into now end an of million million We programs. with high are of development of begin guidance were capital achieve performance and announced Utica additional on over $XXX day, previously strong Bcf executing equivalent This We

Turning development continue to Utica to I to program. results both pleased that the wells. our historical our and am outperform in SCOOP report

our gross spacing online IR averaged are delivering Angelo We you focused development cubic results. and intensive our costs per Utica find and on recent million feet to designs was yielding The On completion production deck, Mcf, wider implementation from the per of XXXX pad XX program. peer-leading and strong brought is day. has of results more will late equivalent October XXX date, Slide

of an single IRR to prices. day, that target the the favorable cubic per online, approximately equivalent PV-XX or the We rate with XXX reservoir XXX% feet gas wells generate quality strip $XXX pad am are than is I given current since these to above it greater produced report a pad greater well the pad has of very pleased XX This market. Bcf. expected million Angelo as than at the flowing million as bringing

expected outperforming to The this have decline average to foot X XX quarter. production also The Gehrig per production in are pressures, also area. first and Bcf in would be our exceeded X.X historical Monroe Morris well. per the the only the began over high recently we following expect the decline expectations and wells of thousand periods expected to approximately Southern months, to have months County plateau and to wells accumulate plateau and acreage wells and wells with the well Given performed rates by of extremely current the to end Shannon X begin Hendershot

XX% will the on the Page from per of on by costs reserves developed see almost development have in XXXX per Utica Mcfe to deck You $X.XX. we that since IR lower XX $X Mcfe

Our spacing more, side The step the shows shops. of frac be the performance, wider forward Slide utilizing frac the the design. and continues $X.XX new in on chart using going intense to target XX right-hand below well change

We are pads performing that results seeing similar XX than SCOOP in three the deck are Slide SCOOP. the the better new the anticipated. positive demonstrates of in

foot of to XXXX more wells are production. Mcf after compared per historical the days completions, XX% lateral As cumulative delivering XXX

developed. to we development drive during development in costs $X.XX SCOOP. down continue XXXX, Mcfe the And We of per lowered costs

improvement unit of total XX% operating We per $X.XX budget identifying focus the the of represents cost year-on-year. improving was $X.XX to per company. a total which reduction are costs for across on LOE operating at brought and on year efficiencies a Mcfe. per continue our Mcfe, delivered We

to we XXXX, higher full inflation trend conditions, water take to compression the our advantage market For adding additional do LOE related along with to expect disposal. slightly through current primarily of

and overhead to XXXX in G&A guidance reducing $XX came full-year continue focus in our on We at corporate million. below

G&A expect to of below quartile the top We maintain full-year for of or Mcfe $X.XX per XXXX. cost

by performance combined substantially to we significant led our X.X price, At lower in strong reserves. to XX% XXXX, a commodity in additions grew with asset year-end year-end, our higher Our and Tcfe. SEC proved cost proved structure reserves

$X.X XXXX PV-XX tax was value before total Our billion. for

$X.X our is current before double enterprise than our a for compelling, Even tax higher PDP our than of is current more proxy the enterprise value. PV-XX more total XX% PV-XX more billion As than value. value, value

designed $XXX Utica and with effects. to driven is wells program turned our gross development gross XX% drive increase X activity to TD-XX the be the The turned just rig and the gross by gross TD the about XX to Utica program inflationary around along Looking help efficiencies. at XXXX, wells The mentioned, approximately wells XXXX XX sales Utica is for continuous the Capital the is spend plan million. to program in in by level this incremental centered per I from year We approximately is expected and to of in anticipate is flow of the our approximately timing approximately back-end depend generate we X% production cash the on development free in activity program wells XXXX. land program to The the growing SCOOP. to buildup in heavily to projected X $XXX the million will production Bcfe XXXX, deliver where of sale the in day actual is XXXX. development Similar range guidance in last loaded, from delivery. year, ultimately

balance on Slide capital production back discipline, are In new shown we to production As decline summary, as the supported expect to the turned grow year improved in by our XXXX, two XX, quarters of wells sales. and on XX through and the we cost-effective during first half focused remain sheet. during much

committed in the improving performance. and safely executing field and social our environmental, fully We to are governance

possible flattened our our call structure, deliver investors. the optimizing our results. to now turn focus have to development I'll reduced corporate We our to highest Bill discuss financial overhead returns program the over and our to on

William Buese

and everyone. good morning, Thank Tim, you,

Q&A. his opening quarter provide As and capital liquidity of portfolio the on results, brief my had update solid an another annual and for morning recent the Tim return on quarter providing fronts. remarks, in updates financial our a call spend I'll suggested up improved of position before both our and and we to initiatives derivative overview financial fourth operational time this our

key with the adjusted net quarter. was and $XXX million $XXX three-month commodity driver $XXX net income a of period million the XX, income generated we our gain of of derivatives A million For during XXXX, portfolio ending associated the EBITDA. reported December unrealized

same quarter, For the million adjusted and ending of we we reported generated totaled December the by period $XXX we $XXX generated used $XXX and XX-month which during of repay income cash Net on facility. cash primarily XX, $XXX of net provided to the borrowings XXXX, credit fourth period, million flow the free million for activities EBITDA. million operating

million into cash ensure we compared million For our cash for going the $XX of derivative full-year enter XXXX. free our program the to the ability and of we full-year roughly flow XXXX, generated fourth contracts forward, To fund continue during commodity to quarter. to generate flow capital free $XXX

gas average December Mcf collar of floor approximately and approximately swap and of per million XXXX. had cubic gas per million totaling we $X.XX per an floor XXXX day price day and natural cubic XXX Mcf feet swap As an for XX, per at contracts of contracts collar $X.XX feet at average for price natural XXX totaling

options contracts sold We to in late also layer our XXXX derivative XXXX restructured additional XXXX for capacity in provide incremental in to call several the of future.

derivative All and and on made just of the the on Overall, our portfolio for in are the we derivative our modify our continue updates add have details portfolio. contracts emergence, to with pleased XX-K additional to were restructurings see I included future. Please in portfolio associated Form with since we will we provided. progress our the the derivative

consisting $X.X total revolver million of billion, At the end sheet. on the notes. balance outstanding approximately were $XXX million was senior million, the gross to and assets total debt approximately while fourth Turning $XXX $XXX of our quarter, of

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

On fourth of liquidity borrowing of exited of under front, of revolver. made approximately $X the $XXX we up million $XXX the million with liquidity and quarter cash capacity total approximately the million the

$XXX increased a our credit the As quarter by million facility. during reminder, liquidity fourth through October our to the amendment

of million $X $XXX revolver. made $XXX under liquidity February cash capacity million had up of borrowing we of XX, million total of of As approximately the and

metric and result, successfully quarter the suggested we return we call, a of Xx. goal the during leverage continue achieved repayment front, as to On capital during earnings third debt our quarter our of prioritize fourth as

another in Slide Following our our we the which dividend shares permitted on IR was the the capital dilutive option dividend were of a credit quarter, quarterly outlined forward. preferred of PIK to need facility, as milestone basis deck. return during positive on utilize X This amendment initiate to going paying of a on process cash to the our the payment a eliminated more

a the of price, through approved stock at valid executed company's authorization XX is represent program X% common repurchase As place of with late XXXX. $XXX Board remains the our a today's would The outstanding authorization share October. If reminder, shares. million in approximately December in common the and share

fourth to are begin above repurchase utilized we our quarter, free eager forward. the program executing as the While flow we discussed cash in going

capital will and preferred executing common on base flow, free return all to we of cash efficient summary, company capital dividend. that we return continue positioned XX shareholders the our with the share buyback considering the asset evaluate opportunistic its to program, of well well. peer-leading and begin program, addressing In believe addition, increasing our top-tier In shares repurchase ways years the share as additional including of share inventory, size to a options, potentially of to over while are delivering is instituting

Our manner delivering remains to free more $XXX a while cash our developing million annually. assets committed flow than plan of disciplined in business

for up ability it opportunity provides we free With that greatly and peer-leading now We that open deliver the to cash a call that, an are underappreciated our investors. confident questions. is yield excellent flow for will

Operator

be first At will you. session. question [Operator from Neal proceed Please is your this Dingmann Thank Instructions] time, Securities. we Our a conducting question. with Truist question-and-answer of

Neal Dingmann

the to being morning, just there's when somewhat is tableau, I million. of you you're of nicely. on to strong. Good at specifically sort of that very really $XXX my been have And at Angelo – you, number Thanks it that able Despite I sheet you're for you're stat say secondly, do question on think a obviously balance pad It's growth over first look very being been probably companies grow, Tim. for that given the details. continuing gave production all. – now production Bill, being growth, what I'd looking

like able to not we're my production value Angelo do is, pad, this So boost Tim? why question guess and I pads if more create

Timothy Cutt

Thanks, question. growth. projection XXXX. the to think we're Neal. grow Neal, talk I a is We on a into X% news, good about good That's And

out and Our going unitization came lead really doing generally be we when back XXXX bankruptcy. in plans the knew time getting of was you in place, that we for point. at were about we XXXX in think the When what permits to set

more in may up and a will still the market. do in built in more. end the growth Utica. make more more and It to I we've room Utica though, We cause to mean SCOOP. some continue watch prices bit XXXX, XXXX, into the to sustain, sense going Going back have a do into quite we it the bit can if the

So news I we don't good rush think that in decision. have the is to

a of We are the about growth period. five-year the growing next and through kind in year, we talked steady

pads difference that it's a matter So make profile. a two growth And following just or one big that. in of can

really way the So our specifics that's about I we'd work through the be the as think XXXX, year, of we probably that. think time considering

Neal Dingmann

been huge to at am selling And just I'm now a my to sense SCOOP, But Okay. mentioned I'd we're Utica, hear you look that like time. it to wondering, the that, some great does make love you either for get the or order And about around anything guess, in, I kind obviously, obviously on just you're when hands anything all I'm environment the in you'd the that. from look secondly, bolt-ons I or side, talk question SCOOP is, part have that? you fan M&A, there it build of of wells does the around of getting things, I boost then selling the too? Utica potentially just your or make long there. from guess a given just wondering now even at from sense, could

Timothy Cutt

I are similar we its SCOOP, really point; mean this economics the we at liquid talked Utica. about the Yes. that The like rich. very to

size this the anything. point, and something end before lined off we always we anxious consider that when that. seriously to M&A do up would of have but look to the to back not have We're scale, you and open to at So Neal, at activity, we're come –

Neal Dingmann

Okay. in would Bill, on that have pay know lot don't all Maybe you very topic two, early your I but the last there. something a about that's on shareholder out, a little out of know And talked some have call bit, for it's and you I formulaic, take it of know this percentage, set for to could have more out that? – line I quarter far that to it but that maybe you sneak put want down now I form as go on the another their you just been wanting one a if or now plan if I one Bill. established just would love to the guys number others as they're like of I plan, return.

Timothy Cutt

we as repurchase with you moving our come of prescriptive the program I Board. believe in. share use out extensively far can And cash We're can the the best It's this Bill right as that a talking more we we'll we But start with off highest have. have anticipate about capital yes, now add here, on is forward. forward. priority return should going capital

Neal Dingmann

you. Thank good. Very

William Buese

Neal. Thanks

Timothy Cutt

Thanks Neal.

Operator

question proceed Our Mariani from your KeyBanc. Leo question. with next of Please is

Leo Mariani

little guys on the of Wanted you follow-up of guys. just a bit to kind Hey, alternatives out a there. other handful return threw capital of plans,

retiring the about talked preferred. kind a also cash certainly You potentially dividend, but of

get to sounds to eager $XXX maybe as at Just you Or it, out you to buyback year. in alternatives know about on premiums And preferred. you Is there? any a get going here. I have a end it's some wanted the of do of, of on you'd to give sense talk us taking Can do kind look that million authorized? XXXX? something it maybe just in do sense the only the you're involved like like to of expect the calls kind to there terms the What other that? are complete or here of authorized that that that's of

Timothy Cutt

start it Bill on hand the I'll off to about talk the to then preferred. Yes, buyback and

ready we'll Leo, going year. to the we it But buying can. buy. as on see liquidity go. start done to as hope there get all We're buyback, is to to would this how soon we're We So much yes,

We so we're to see million. of up. down head to restricted We're $XXX end the this. and path And we see going effect to that we'll want soon, where not

substantial. that later be make up. And will then decisions So it if we we on top think can we

So about yes, Bill I'll But that's something it we're very to. preferred. turn to the committed to talk

William Buese

said, there's equally just don't this share going has everything could forward, dividend. just It million at – but be as Yes. a been Tim kind talking The clear, point. approved, could I it about or mean, we're I repurchase. preference larger And the to of we and know be that be a Leo, don't $XXX preferred a

of sure the one all around preferred you're there's redemption. kind That it. mean, preferred with had front, kind I I for some make a I'm restrictions of mean, On agreement. it familiar would it. share it

So generate is going $XXX call it. year, But I And extent. that table, of that everything million cash aware key get $XXX only creative than we'd on kind we've accounted to more though, and the think, have of the free well we're for, of we're million some this is around to to point. it,

don't plan guys in on on out more We'll we color at with more give May So plan sitting some a come robust cash. and point. you here that

Leo Mariani

program? Okay. in a talk about That's XXXX. helpful of of nature in how costs inflation, to And to the to in a internal sure. here the improvements there's into, kind that plans, bit were for that guys the of little you we know that and I well obviously, of some well the lower go kind terms improvements course back maybe of on of targets can over continuous guess just more translate see will kind out, have lower maybe obviously, you maybe operational lead expect if Maybe cost? I but that some into say,

Timothy Cutt

Leo, think, have one to talked we a concerns. of to program the going execute very we sure back the environment important of those market, of market, right? the we I this things supply in up the a them drop very, pick market. call, service Then about rigs, more can in last most program, on it I in make tight continuous When Utica

job to So one, Job that's that. number that's number probably two. going

to Second that just is the efficiency.

– think seeing get to done have a can forward, but saying through all that continue XXXX, of if to inflation. to offset would I'm about not offset you efficiencies. in it I already discontinuous get X% program, we're we're Right crews. you you going able improvement continuous a So get It probably different on is We've program. when inflation. XX% have step and extraordinarily into hard now,

in of we're up the good surprised programs programs, another you you've Again, and kind inflation, XX% up kind typically the things and an that market. people ideas consistent of got being can continuous in do. inflationary start. improvement offset experience we come a of with My If can end

So that forward against. we we better can deliver we than single that. we – day, a plan every then put I try and think And do

Leo Mariani

for that basis, to XXXX. the just XXXX in guys. And a guide Okay. that GP&T, versus noticed That's On guys helpful. here fall in expecting XXXX you then BOE I just are you lastly for on per

Just of that? of sense kind want a to what's driving get

Timothy Cutt

Yes.

Leo. primarily think I bankruptcy noise, it's

first first than going forward, so The was quarter little last year. of a higher quarter

Leo Mariani

Okay.

So one just quarter kind of that noise.

guys. Thanks, Okay.

Timothy Cutt

you. Thank Thanks, Leo. Yes.

Operator

your of Parham with Zach from question. is question next JPMorgan. Please proceed Our

Zachary Parham

Hi, guys. natural be little seen question. deals you gas in of of use a a Can see bolt-ons inventory Are on Or depth? about first, guess, how number you Thanks market earlier? for talk talked focused taking that trade participating? you my just a We've A&D. I the bit cash recently. could Gulfport you with comfortable free your about flow

Timothy Cutt

we're It's Zach. Yes, this we position. lot. about turn the We've mean, question. in been inventory, is a of A&D, we a to the that XX deck something M&A. a talk in about wells. years, type I XX% very very than When have greater always we good open We put solid think over

that And to us smart things. so allows do

course, to look environment. by price come the – they as bolt-ons Of going current we're at

in unleased Some And in can be mind of especially to keep of acreage lot a that sure. difficult. in We – thing that's for the to Utica want the is overpay, acreage. other the that don't

We're increasing And also looking at as that a way to our build leasing. inventory. we so are

you transaction want aggressive more another to strategy. idea So really be with get window. your though far don't an a be have through of through can to too absolute ahead It five-year leasing it company. bit doesn't is just The

– to are trying looking we all comfort but opportunities. bolt-on we're those you have that at we're should looking at So together, things balance

Zachary Parham

flow taxes. how for cash how I free And taxes And Thanks there? any it. cash over you guidance, in the cash so, much? In one factored color. $XXX million just taxes see are if do there Got guess follow-up cash trending on that time?

William Buese

pay We is subject each of we taxes does NOL This to That expect bit, become would billion does years. nothing in topic, creeping in are $XX as thing. minimal. a change material. to don't question. our flow prices year Good I three-year as cash those our four free extent the It little But there guess, material $X.X well, cash gone very the in is the up start next up. But we hot type the be maybe as million Yes. offset following XX-K. reported And a cash have plan to number. that's have taxes, but

the incur that tax of bleed would to very this does which year, sort million So we any minimal. include $XXX – is cash plan

Zachary Parham

it. guys. Got Thank

William Buese

Thank you.

Timothy Cutt

Thank you.

Operator

and I the the to reached end turn Cutt closing remarks. call will back have session, We Tim of over for the now question-and-answer

Timothy Cutt

We All time appreciate interest and right. your really Thank very you much. today.

follow-up our Bye. to Thank you you don't questions, concludes to Relations call. if always, hesitate reach much. Investor very As team. have This out the

Operator

This concludes today's conference.

Thank You a your great this at lines and your may time. disconnect you participation, for day. have

Gulfport Energy (GPOR) 1 Mar 222021 Q4 Earnings call transcript