GPOR - Earnings call transcript Q1 2022 | Gulfport Energy Corporation

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Operator

Hello and welcome to the Gulfport Energy Corporation First Quarter 2022 Earnings Conference Call and Webcast. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jessica Antle, Director of Investor Relations. ahead. go please Jessica,

Jessica Antle

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

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

Tim Cutt

to followed Thanks, an call. thank morning highlights turning Jessica the operational and this you good update morning, the to will by call I financials. of the quarter and Bill the first begin for joining with summary before discuss a

We with $XXX board an ratio began million of gas of X and million, day $XXX $XXX As had cash very equivalent cash which share billion XX% recently expected flow. approximately you to taking a free over million. quarter flow. cubic additional approved and has strong from our of the program executing program feet million exited liquidity represents of per a X.X We buyback $XXX the saw delivering of we quarter our and leverage the free release,

Turning to production.

continued SCOOP quarters five the development time development decline outperformance the third during second by expectations. months of the above driven program, excellent uptime performing was winter production quarter growing the expect new fourth program, XXXX wells of and the quarter. significantly our we in addition before during first to production strong Our of Giving our the and

As have in Utica, support to continuous forward. drilling a and previously year-on-year mentioned, a which the more profile we production production expected moved program consistent modest growth to is moving

adding the With critical equipment. and efficiencies half to well year consider operational grow in day than Overall, and additional above stay production the drive equivalent expect second will XXXX. help encouraging cubic the crews and X retain in year, X% throughout SCOOP, feet we of by results the we also billion per next activity to more year-on-year to

and historical designs both costs per and SCOOP to and Turning spacing results to report Utica completion of I'm program. wells. is wider development our in focused that results. Mcfe remain delivering our yielding more continue on the to We outperform intensive our pleased strong peer-leading development implementation

organic sustainable position of to is beyond back increase production growth which opportunities growth, Utica to On strong the see a the these additional our we contemplated. land in to presents path results, currently leading what

appears were quarter, This than approach flowing production the – failed Charlotte our casing has we fracking experience the O'Neal rates design to the recent pressures, In pump resulted and X.X-inch follow-up pad, did XXXX it turned completion developments sustained similar this SCR expected in in-line from failure, the than spacing while higher more on excited higher and online year. wells and in as to SCOOP. SCOOP the means a for our and stronger seam in even experienced During used come oil the optimizing well Building wells. results of results overall to in recoveries. pad desired These are line we support have Utica, and turned the strong Nelda to strong approach pipe. scheduled welded the our later the what we on we our a development Utica, about the we five in casing

run X.X-inch caution the on do not Clark for happened, our that wells wells We this are back from remaining liners frac additional guidance the When end on liners may each the of process have the completed in put the shipment. released months, in achieve of an to of the three in get abundance pressure three production ability pipe crew complete our higher to same expect we and the similar Clark contains several wells out pad crew and running to of three Charlotte which range. we the of

XXXX. casing the We range. would on note that capital, much updates our discussed timing purely repair On previously by We guidance of end better should August frac and will us work in planned pushed in has the the further is the remediation time. rate the our to understand call the schedule the in provide and not quarter capital second at original impact Utica time higher will impact that this exit of

are and short-term rig have sand seen we In addition, XX%. above of inflationary experiencing to rates. increases our up we Fuel, and and on due pipe assumptions have in substantially costs pressures moved contracts original frac being

XX%. inflation updating $XXX environment. to expected current XX% – to in million these Together, of we're capital resulted midpoint to now the of guidance XX% result, the have a items our As in be

offset in of However, this in than forecasted flow improvements our increase price have an free cash in impact more resulting XXXX.

due winterizing to and identifying a costs we the leading delivering LOE by driven We a $X.XX declines. per offset compression cost total associated increase of cost development on turned effective company. in-lines costs capital slight discipline of operating production, our recent focus remain Mcfe. primarily in base total We and equipment, pure delivered and Mcfe, In a per hauling continue with represents which water to from increase addition increased the XXXX, operating help our to summary, are focused per on across unit production taxes improvement efficiencies and increased improving seasonal

results. We have designs, implemented spacing deliver intensive to strong continue more wider and completion which

flow leverage capital significant should increasing with cash our organically business, repurchase to grow the program free along results. which returning our expected us approximately be to XX% cash of to Our share low flow Bill has returning now pleased shareholders. company to by the significant I'm while to XXXX $XXX million, call financial I'll free to over the discuss turn the allow shareholders.

Bill Buese

Thank everyone. and good you, Tim, morning,

high our remarks, price supported solid we Tim by As a larger development program the before and few a in both our by first of I'll his financial return now driven to quarter another quarter on Q&A. outperformance liquidity the minutes operational up level had for on overview redetermination capital provide the initiatives improved update spring of XXXX results financial of and call opening and continued a commodity position, process environment. and take strong fronts, our suggested

reported and $XXX the our three-month for XXXX, XX, net million $XXX the commodity we driver key associated and driven for we activities credit the ongoing ended quarter the repay unrealized during during We $XXX net generated of program. flow period to quarter million used the totaled first majority loss of prices For fund March million million repurchase of same common commodity in period. by large to million derivative $XXX loss the our borrowings cash Net portfolio was on free facility the with period. EBITDA. free $XXX share the by and a generated loss our of our operating cash flow adjusted A provided cash of increase the

opportunistically quarter hedge to commodity front, entered derivative the On contracts and generation. into the future in first during we flow derivative free cash lock

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

layering XXXX price gas in currently and contracts $X.XX average Mcf. per for per of floor We feet cubic also began at XX have totaling derivatives approximately an million day natural swap

in to contracts. swap Finally, capacity a sold our incremental we continue collar positions and of restructure call additional to to portion provide layer XXXX

and All for portfolio. Please see details of additional with XX-Q I have shared the numbers associated in contracts updated table the included included our the the restructurings Form our earlier. were been in on XX-Q the derivative in

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

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

effective May agreement, completed $XXX first the first of $XXX credit revolver. the we We front, and amendment into liquidity quarter base entered of our million liquidity the cash million borrowing facility. we credit On of million the governing recently with and up exited to made process spring redetermination available under $X approximately our the X, total

from while believe increased to million Our our lenders improved million. the assets, approved $X commitments keep borrowing commodity to an We increase sheet in our borrowing market. balance base $XXX reflects we and $XXX base billion, current elected strength the of at the lender the chose our

In for LIBOR and limitations from addition, covenants the positive and to the the the related governing Amendment eased redetermination transition we amendment certain for think company. hedging, requirements and to restricted extremely Overall, SOFR a provides benchmark. outcomes a payments were certain amended the

program fourth began our quarter initial million On capital we the share during of repurchase on $XXX indicated the during quarter. return our common front, as earnings executing call,

of to to $XX.X we XXX,XXX of As continued of million. March authorization. repurchased total we And for left repurchased the cost average of approximately of in price had $XX.XX a a shares we This common $XX.XX under shares as $XX the million end approximately repurchase of approximately average an common have XX, for $XX XXX,XXX original shares. common at repurchase quarter, an total share total our X, May of cost at Subsequent price million.

provides The of represents million XX% our a just shares his program. our authorized repurchase common outstanding share to mentioned added repurchased, to year. cash through shares Tim of share Board the of additional approximately $XXX executed price. The generation common of with repurchased be shares our And of free million December in XX% approximately increase at have flow $XXX As in XXst program total XXXX. common combined this when today's for the an be our already to repurchase comments, increased

to or any to factors. as available subject authorization, the well the repurchases timing requirements, share liquidity, of conditions, with continues be other market legal and case and applicable As the amount initial

free options, to increase the continue repurchase In repurchase shares share program. dividend. flow, and to continued future has return the to us to to share begin all will addressing facility preferred the generate majority evaluate our potentially continuing credit pay our of which we stock down and program, common of our cash our significant of of on We summary, allowed capital a size executing including instituting

improve to effects that spend increased continues the for flow Our capital outlook cash for despite to growing an free XXXX. has led inflationary

We our to to questions. continue one-time. up production allow strong a that will low continue that the With maintaining leverage while capital believe base for open shareholders supports returning us reinvestment a efficient below now we financial to and position call that, portfolio, will rate asset

Operator

Thank you.

be We from is conducting Our will first today Dingmann Truist. question session. now Neal [Operator a coming from question-and-answer Instructions]

now line Your live. is

Neal Dingmann

Tim, just and consider just allocating Utica Good morning run program I'm balanced would just to continue continues have to Would maybe wondering if demand. the a wondering bit more to question just first sort to guys a the considering asset maybe on you of all you sort order to program, efficiency? Midcon balanced? will the inflation if you see the all. service continue continue nice be you or of as or capital pent-up in that allocation market little specifically, then to Or initially

Tim Cutt

to to the going year, drilling our now, balanced, we I dropping kind and mid-year mean, through SCOOP. Right inventory then I the of see, on to my in see opportunity that that – potentially rig. next as in a an on. remarks, a have continue looking more do program do we to with We carry in I I will go be continuous but said think program the opportunity have

Utica the picking I those think I moving a will Dropping in in rigs, out multiple market, having back very become think SCOOP in in can and lot. continuous help the and up, us frac a units problematic. the current rig

talk program. we growth organic when keep to of type So of in that rig think is kind kind two I about

Neal Dingmann

interested of comment lastly, bit little Okay. And on looking on just was at maybe your a acreage. I then

look You seem to the acreage when have position, at of you one – all you definitely, bigger plays. both especially

talked on about thoughts, on is that more Maybe that on had comment you your what expand that just about M&A or just acreage you why have again or Just considered just addition? further talk bit. even either bolting a maybe more little

Tim Cutt

Yes.

gas think ability additional prices wet these is portfolio. acreage the certainly window. to liquid we've open the the especially the We been anything up the the gas prices, would of of acreage Utica. be move in that I in would we that see the see pick saying It being in extremely strong We basin. with out competitive kind

And so simple so, outcomes, just that's economic we're looking about the is as Neal. at most it as

Neal Dingmann

And on given on shareholder starting one, how the on then be. stick returns, job to maybe third just would it I'll buybacks, and throw continues the obviously one the stock you anytime soon dividends cheap that buybacks to thoughts in on just mix just a but great will

Tim Cutt

I'll turn out to Bill.

Bill Buese

deserves to NAV approved time share. – all being mean, we the continue Yes, we for is for trading the the stock compared as and I said, our just all and but I Neal, our way consider alternatives, still

for I Neal. – internally think We is every on the – all and short-term, it everything on the repurchase we we'll still board frequently but so. share table, still still meeting discussed focus

Neal Dingmann

No to hear Thank agree Thanks. you, Bill. with that. you. Glad

Tim Cutt

Thanks, Neal.

Operator

Thank you.

Next Parham question coming Zach today from JPMorgan. is from

Your line now is live.

Zach Parham

for something do issue you you my more on future? color more the you Maybe if if casing were the is a the the run guys. the a What just give taking into experienced this again us could little you think Hi, you in drivers little Utica. in on, question. think could failure of and maybe Thanks

Tim Cutt

logging of and we've we've yet. good I been ERW and understand a of there. pipe an Everything that We cause well. the the well we all – is well That's for years can what be we on extensive we good in It haven't did root This of shape. pumping questions, manufacturing, good our within After failure Zach. itself. else of seam that don't range as just for the is board, the number news pressures the that we in we had failure, went doing last studied is mean, It's be back full suite pipe can a years. pipes the number determined everything. used

wanted going didn't situation just that have to forward. for similar already we the abundance pipe. we sure that same repeat So, had wells installed and caution make a the add an We

all We to in of of the are going use chance well reoccurring. sections vertical this seamless any avoid pipe to our

operator. in So of We’ve we we’ve run think X.X-inch prude wells. pipe done three already as the Charlotte thing and size right

those associated the the completed wells of also at had of issue. We’ve been installed right and then the And ERW of basically on plan pipe. well. But to with run have right We’re think frac And – the we’re wells a and a we’d got for are we good we it’s drilling in spending that those we’ll frac we’ve Those those out us. end just going the program, wells, of of are issue It caution that the bit ahead pipe ahead forward. the procuring the we of inside as abundance But pipe go process was crew money. timing liners already out when Part an a dollars of now. had X.X-inch once towards that of available, we the pipe. it’s go end that costs and seamless Clark decided wells. program

Zach Parham

And then it. cash return. shifting to Got over maybe

how about bit that the buyback a have obviously you XXXX. be? finish Can At within You going, authorization. aggressive the that clearly forward? current far with you’re aggressive and going plan? buyback to the raise little buyback the you the of by you’ll been the talk thus Is pace relatively plan pace And

Tim Cutt

look going again, us. all that at through the mean, share the XXX, we is now, And to price once best with we decided look Bill easy finish what’s that’s XXX. the We’ll for and thing to the still dividend. XXX. discussion we undervalued to the got move we’re to out carrying a the always next could about as available second just next fairly shareholder. on. at like We said, to a common it’s our as tools know, you the we’re Board first that Zach, going we’ve work believe significantly I the Right Yes. buybacks, it, moving look to at why And do phase,

preferred. We’re always the looking at

kind share And buybacks, me on we’re where is for what to so the at say it it on going would for because of price be really depends hard the be to pace our time.

Zach Parham

Got just it. Thanks The And guys. I’ll may more initial pad on sneak in. SCOOP wells one Nelda outperforming. are the

and running are. about wider fracs there. Just know thoughts I what on just drivers spacing But bigger you additional talked the maybe any color any have. you

Tim Cutt

we those last it’s best that’s think the drilled [ph] in thought wells. I the our No, of be wells ASMO The orientation were on year the SCOOP. called the wells it. would We

these on we bit maybe thinking wells, those. performance a So little completed lower we’d have

We’re is, outperforming the bit it job, the size really we actually wells I spacing right wells these first we’ve getting on how is think and little but seen production. the the are It wells. on the the back, getting ASMO flow sustain A of right.

in peak start a the sustain declining, time. SCOOP, the for whereas of production typically you period and you hit You you production Utica in

As in months our for chart you four in production we here. three, see the see deck, sustained could

for the So obviously bring and be on, performance. wells as we’ll we hopefully looking similar O’Neal SCR

yet, our really SCOOP with the Utica and the pleased planned part our team reservoir fracs haven’t what type that that each super dialing of and telling but the subsurface We of on jobs dialing is in in of performance of us. in

Zach Parham

from it me. guys. Thanks That’s

Tim Cutt

Thank you. right. All

Operator

Steven The Dechert from KeyBanc. Thank coming from next you. question is

Your now line live. is

Steven Dechert

Utica well want in on just is the delayed. you. to color I guys. completions Thank Hey, more why get were some

Tim Cutt

pad. issue the we associated little with earlier have I question on answered that issue the the It’s Charlotte on the Yes. bit a on

those had to Clarks. frac to So process timeout in the run plan a of let bit the liners move online, in a the frac wells. crew unit and originally take we the that basically, of to We procuring six We go that was a same bring crew bag. frac our on Charlotte, – we’re to frac over

that’s timing crew to the feeling and that And change rate the the good performance procured we’ve our that our back the that’s XXXX we’re exiting have business charts. So and on difference, anything we’ll with really run on But the updated soon put why we get potential year. doesn’t about still performance. Hopefully, seeing especially in it about, that’s issue we’re that.

Steven Dechert

me. from it That’s Thanks. Okay.

Operator

question-and-answer Tim further you. Thank our any comments. over end floor reached for turn closing to of We back the the to I’d session. like

Tim Cutt

you and All Thanks call. Thank for right. much. very the your interest joining

As reach please always, any and if team that you you. questions, have concludes our call. Relations to out Investor our Thank

Operator

Thank and webcast. you. conclude That does today’s teleconference

We may disconnect for day. today. your great a line participation your You thank and have you

Gulfport Energy (GPOR) 4 May 222022 Q1 Earnings call transcript