GPOR - Earnings call 1 2023 | Gulfport Energy Corporation

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Operator

Hello, and welcome to the Gulfport Energy Corporation First Quarter 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to your host, Jessica Antle, Director of Investor Relations. Please go ahead, Jessica.

Jessica Wills

Thank you, Kevin, and good morning. Corporation's XXXX Energy Conference Gulfport to First Earnings Quarter Call. Welcome Investor Jessica Antle, am Relations. Director I of

Speakers on and include Michael today's call Hodges, Executive and Executive Officer; Chief Vice President Chief Officer. John Financial Reinhart, President

Matthew for Q&A available addition, will today's the Rucker, of portion President In Operations, Vice be call. of Senior

that We results everybody statements variety performance during forward-looking those the to factors these statements conference like Information you actual the of plans, the materially are future call, that caution conditions, objectives, operations, would business. I from these that SEC. participants in results could due differ company's indicated in to and the filings can relating concerning company's of forward-looking be found remind this a with may certain financial to make factors.

to yesterday may An website our to on non-GAAP Reconciliations we be measures leisure. posted to website. in comparable review with addition, earnings make was those evening will presentation measures. announcement. GAAP In Please the at posted your conjunction our updated Gulfport reference

would time, CEO. and over call John to this turn the like President At Reinhart, to I

John Reinhart

which Thank pleased you, which today EBITDA provide operational estimates, capital adjusted thank strong productivity high Jessica, times the realizations, for first in well facilitate on of to the performance confidence free and company's cycle in highlights flow our includes our call. XXXX expectations, production, to exceeding analyst listening quarter. everyone to and adjusted cash I'm program. and you all cost deflation outpacing

as financial with the gas his brings Matthew with much the would industry open, career in Gulfport Anadarko like and seasoned oil operating team. first the Michael leader, experience XX of and Basins. I in over Appalachian to expertise companies and of to and Michael welcome spent deep years To a

many the improve at efficiencies combined and continue and role operating margins. when and efforts and of plays I've of experienced to had experience opportunities executing for on of focused leadership, a of And Basin a also capital proven working individuals low-cost our integral in as operational Michael operational is talented Appalachian team with for support knowledge a and we both excellence the improvement Matthew. holds pleasure and decade execution holds substantial known creates which record possesses Matthew an enhance and track basins, the on that maximize identifying operational that is both extremely Gulfport, value. with

quality attractive utilizing will flow and company our capital on actions for and facilitate our the development and The company enhance optimize within that programs, shareholder focused success. balance quartile inventory, sheet the top free margins position an returns maintaining remain while sustainable efficiencies to our cash enhance of all yield

shareholders our Returning generated during $XX.X flow $XXX position improving our strong quarter continue to first decrease financial to returning quarter, to while The capital cash of million to us already our adjusted and allowing financial ratio our evidenced leverage X.Xx. as the of by company reduction of million our highlights. free debt a

our average day driven quarter XXXX the continued base production. development cubic of ahead daily for totaled billion of production well analyst X.XXX strong expectations per outperformance feet Our and by programs, productivity, the equivalent

the which in were first gross During company released rig Utica. drilled quarter, X wells, X the the and of

area. flowing the County, turn which during accelerating operational planning, our completion schedule. located began pad weeks in the wells Utica the in in Monroe the Barber with and the was ahead X-well wells first encouraging results our on X in improvements team we the in during April to early Ridge X compared pad of historic line quarter, time front This resulted within side, On which same completed first the efficiency realized quarter, gross all Cycle were drilling Utica. completions

development of minimal an areas the managed wells of in and pressure average line Monroe continues basis play. approach production on yield with be strong to these per to to lateral we results, forecast The rates County has developments company's and our contributed completions pad other top-tier EUR consistent in foot repeatable, drawdown. approach production a initial Optimized pressure with

of In remain on approximately and look X to Belmont XXXX. Gulfport's quarter terms running rig the for in about year, forward of We we are XX first X currently in Ohio, wells XX wells which to inventory potential activity, more during additions incremental drilling later the of discussing County, to spud this development track company. Ohio the has to third Marcellus unlock in

we we The in program average more in activity historic production billion base In recently currently quarter improvements XXXX a asset turn leave our full line and forecasted in in to million to active time and performance continuation cycle in Strong expected X.X concluded crews of to over year. feet our in XX% drilling the year. to are currently towards per expected has XXXX of the range areas of XXXX our the SCOOP, in full second both to day XXXX. this of the high productivity, the company the end Oklahoma for reiterating forecast return of XXXX and of level range our guidance year, equivalent us production for for X.XX company activity cubic confident and frac realizing plan and well expects the

primarily guidance operational services. modest range realize mid-single-digit expected cost company our the capital XXXX in reductions to the high year full $XXX savings combined certain our for efficiency expenditure And capital program, on improvements, facilitates The in to with confidence spin beginning relating range million. million service is of in to completion $XXX

a translate expected And that will quarters. In XXXX. in updates Slide future are on in included provide focus we our on our The capital investor deck XX, more we into have team cadence. will continue expected to and improvements outlook on production to savings further detailed operational XXXX

operating feet volumes Lease and expenditures the and disposal equivalent. production. $X.XX were quarter year for for of to the million quarter higher-than-forecasted the by cubic range primarily below nonoperated water costs Production guidance strong per by $X.XX associated full driven cubic first midpoint per charges our our were costs million equivalent, feet of $X.XX driven

costs unit during operating improve reduce The opportunities teams the LOE work optimize costs both per to continued aggressively to year. midstream to on our and and

our During the per company G&A the maintained G&A equivalent. reoccurring top our cash quartile cubic million $X.XX totaling spend quarter, with feet

executing accretive future As company that our provide leasehold previously opportunities our the resource plans. on is to development increase discussed, depth and optionality

to actively the we'll are pursuing We we progress these opportunities, provide update an throughout and efforts our year. as

sustainable commodity reinforces strength company. the development to of current importance efficient enhance the financial the environment our and margins, closing, of of of our protect In focus efficiencies the responsible, and assets optimize and the team

flow common share repurchases shareholders our of acquisitions company's for to through cash after in to our adjusted is accounting accretive intention further leasehold Our return the to all substantially ahead. the of development years support free opportunistic opportunities

financially results, and company quarter positions providing operationally first deliver XXXX results strong to while the attractive strategic optionality Our beyond. both and throughout

financial Now Michael call to discuss our I'll results. over to the turn

Michael Hodges

and Thank everyone. morning, you, good John,

the during by quarter, and of of Funding continued operating strong first million $XXX $XX.X first the capital the activities every stock. of almost totaled During company of expenditures, results area Net cash million million the in common $XXX total achieve reduction to repurchase quarter. provided the business. debt

flow of as of John analyst up We $XXX And sequentially million cash generated quarter. significantly the free expectations above adjusted mentioned, prices reported period, the during quarter-over-quarter. despite and same lower $XX EBITDA million for adjusted

environment. adjusted generated respectively, price and we of The and have over cash flow to be remains track free million impressive results free $XXX EBITDA softer as power deliver cash of gas now $XXX our flow, business adjusted XXXX, million EBITDA and past much natural generate is months, shaping to we to XX on despite the and a similar are what in up cash

quarter the cash per before during settled and price impact the Our all-in Mcfe was firm realized first $X.XX derivatives transportation. of

prices, position provide the the downside current of for cash the for our hedging XXXX ample was gain gas in should our minimal protection, hedging levels. remain While should despite prices remainder at quarter volatility

per was Mcfe our price price NYMEX year than Our average which to analyst of range. below the differential end and compared daily hedges the during guidance natural settled low before better full the gas was $X.XX quarter, expectations negative

before reaffirm to to increasing below per gas Driven the the progress hedges and pricing we $X.XX average by we seasonality NYMEX year, natural $X.XX year. strip differential our as full guidance for through Mcf

of front XXXX, capital well to million for as On $XX.X our and drilling $XXX.X our will the half front, quarters of year The are as and and be the activity XX% relates the capital we budget year. the the to investment. weighted land capital completion to of the XXXX expect XX% guidance of the trajectory approximately to we and drilling incurred drilling for completion and remain capital leasehold remainder X expenditure expenditures the first of we during to within it and to of capital our year related positioned related occur to completion capital million full year

strong balance program rightsized activity toggle to hedge program capital conditions pleased cash our are us roughly to protection per current and our $X.XX in average our protection healthy feet gas that as environment. the flexibility per to XXX downside is approximately Mcf. XXXX XX% confidence the the and covering $X.XX change, in price margins XXXX per an position, capital an our robust at hedge floor maintain price cubic have at we price With average floor macro give downside production respect of remaining current While we levels of natural day industry for Mcf position, of million of sheet

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

remainder XXXX yet to for and On there our XX% for future largest natural to and the better incremental security in hedging natural in exposure, layer flows gas at year. primarily disciplined plans cash We are hedges, in of sales of XXXX XXXX days themselves. committed amounts have gas, believe basis the of targeted as we with to ahead our basis the approach our we front, present a pricing around opportunities locked points providing remain

amendment side business, to in redetermination amended our Perhaps $XXX most credit revolving commitments spring resulted borrowing an of increase financial on billion our million. increase base the we million things, and The $XXX concluded billion $X.X among from base recently to to from $X.X facility. our other and elected importantly borrowing in, our an

added X company participating the financial the bank to addition, total XX. to financial company's institutions bringing institutions the group, the credit revolving facility In in

company of to of the months XXXX, XX more May than maturity pushing outstanding the the debt by extended facility we credit maturity to XXXX. Lastly, the for earliest any X,

of capacity by of of Pro end million revolver. of forma at borrowing increased cash the million, $XXX.X for $XXX amendment the Gulfport's million and totaled first our million $XXX.X quarter, and under the $X.X consisting liquidity

price by group very of as opportunistically resource current results pleased natural our base greatly we the driven underlying to of of the support despite We are bank redetermination, successful deliver gas our We value was company which to position to stakeholders. appreciate this value announce environment. our the high-quality the the

prices during the million revolving capital the $XXX quarter by end debt their outstanding current of borrowings no and mentioned the at leverage positive with through we peers, during approximately depressed levels. of Xx our cash even reduced on the ended Consistent the credit end our than $XX the remain quarter, benefit as gas expect of we XXXX million converted with XXXX, previously, into our with as mentioned to of we facility. strip realized less high I first financial quarter. working of we levered commodity at move at As John X.Xx quarter the natural our impact and a prices

a to capture should that are financial we positioned value arise from forward, perspective for flexibility tremendous to have situations and going our us opportunistic stakeholders. allow be We

quarter, repurchase stock at during Finally, common continued common price we our program which of first $XX.XX. we average XXX,XXX during shares repurchased execute an the approximately to

by we approximately of of price April million approximately repurchased XX%. $XX.XX at lowering common of had shares average an As our XX, stock count X.X share share cumulatively our

million shareholders stock availability common excluding and have $XXX free acquisitions currently under repurchases. return to of leasehold substantially program continue to flow of cash accretive $XXX in We plan all approximately million to our our XXXX, through

we we ability In summary, This be outperform solid highlight progress and time and part to forward. our exciting an move the a of off to year's both forward look operationally expectations, as is to first financially Gulfport. company's start, is and continued to results program this quarter

will the open operator over to turn With the call up the questions. that, call I to back for

Operator

Our Neal Dingmann Instructions] question coming Securities. [Operator from today Truist first is from

Neal Dingmann

My question, hedges. maybe, you on first Michael, for just is

out wondering, have, all plans the you the you sheet there have late everybody add where in thinking 'XX. and more outlook about year potential think gas is for years? I'm I might prices, for next and certain come the balance you John if improved materially obviously, certainly certain you price can in about talk levels the then and would see you to just positive is And hedges in? Given levels

Michael Hodges

question, great a Yes, I think Neal. that's

think we've program, as started I just on our I XXXX mentioned.

time that I general, in XX% we think a closer years. book the I couple get look XX% to we to something out that as want in we hedge range to think of grow period, to as

about in front like on XXXX think And mentioned here, of the we call with something So I about now. forward right handle good approaching feel I of we're just it. a XX%

date, I been that and think gave get that above, you'll continue So of to time just and $X-ish think We'll some by again, closer we're I But we've the of the used little XX% swaps. some I see sits, some time that to good structures we probably period, inside pretty feeling upside. our look that's add include blend some that XX%. we then think, where so the far, I as retain bit in that to to colors a collars different price and to as we're range about long so us so

Neal Dingmann

Great point.

just think, my maybe wondering, just you for, plans just any Okay. future I at maybe question to talked think about, pad last, for for to pad change John, about maybe X-well Appalachian for I we development. the secondly, then spoke more you could speak And all efficiencies. more pad plans I'm to you size. could on -- I'm -- when help or a get just talk X- wondering, size in

So secondly, that my these then pads. look any if just and pad I you talked in you STACK, And at wondering questions would of when upcoming and think you to the intend guess that these Is incorporate do pads? on is slides any Marcellus pads. Marcellus just these incorporate X about I'm -- in size opportunities. of I you upcoming

John Reinhart

appreciate cycle a have operations certainly plans our do that. it of to I to and big Yes. is it. for sizes, holistic pad regards and pretty we approach review development With a Thanks question. comes the time when part and

say, that a forward at pads of that the with look X-well regards year, look the to employed wells midpoint we're a return about returns this I per the some size as in wells, on perspective, X for we and then pad As of would it's round and wells with. very blend and X capital years to level back out initially X familiar unit that a coming is subsequent pad we

situation. But the exceptions mind, always there's keep in that to on too, just depending land

is we're the in X-well how we is down in first room company. just existing I to We're overall have looking pad. depending to when the X this or area. Marcellus, may current the just -- on regards pretty now may With we're spud think this we So and go it running the beginning X pad, excited on a much of QX Utica to have about in the

at there as it's on where that will -- look PDP we're any the is river Marcellus. So advantage that's current like area bullish pads of least Monroe and to we pads in pad that feel throughout the we in current existing moving we at of the locations eastern pretty to that absolutely our potentially forward Belmont locations feel Northern future close we Marcellus, in prospective and area development take like

development we certainly and we cadence Marcellus would drill certainly Marcellus pace efforts which the consider depends the consider So on those, one and year. the whenever this of of so delineation first and Utica we

at forward those results the in looking to year assessing we're them. So the end getting of

the appreciate I question. So

Operator

from coming is today Tim KeyBanc Markets. question Next Capital Rezvan from

Timothy Rezvan

I opportunistic quarter. I'm X in not thought like first $XX sure to accurately, leasing opportunities. in word the I I regards times million spent counted you but if heard Looks the

the believe, I how where I manage acquisitions? balance $XX You is, it with of ]. on do to sheet curious, million you governor, have a kind guess, those -- budget the $XX [ just what's million for, And

don't EBITDA trying have expect we for a appetite package? with would upper there. of what's can as it Do kind about that. you think understand like at understand leverage real -- we about or Xx uplift think sort the you just like you much Because the sounds inventory. an trying out to Just and bound over to of It to right go

John Reinhart

Yes. Tim. question, No, I appreciate the

really the all, in window provide base these saying of the future. condensate and toggles First with us gas the in by in condensate in or it's the out Ohio of we're and the now the company, asset whether window I'll dry SCOOP areas all Marcellus, that pleased optionality the of Ohio, lot start

look be we wouldn't as picking the So loaded back of be this use quantity we line that we acreage the at the adding would we'd tier of of buying. the regards with inventory, drilling. front be quality It of more any at us. is to very cash acquisitions good putting because for that a certainly, be it and accretive would up, the just of the QX And

year, already we opportunistic, very regards bolstering like that, underway. year for we these out. inventory move a As those position But thanks certainly tenet go starting efforts but I forward areas. to is with throughout our word kind do this through in to important this as high-quality We the Didn't suppose. catch of are be pointing it

we So of million actionable, million flow free that to we'll the that as acquisitions a tackling for get more spend to and more the versus the some we're acreage, $XX definitive, with probably land blocking $XX use midyear, of regards bifurcating and these closed be currently cash little more undergoing. about bit talking

discussing, move blocking that, use the look We and are second how units, opportunities again, in to opportunities call. free quarter and tackling, flow particular that as well lateral extending accretive as we these actually of near-term of the links filling quantifying it and into pursuing both cash forward in as for kind much

So more have Mike, answers question. your that you hope any comments. if

Michael Hodges

I just to -- I Michael. that. is this Yes, Tim, add might

we really we flexibility I sheet. think I balance have. that this the talk kind about mentioned when is mean, of You

you a the in exciting, is of it's I place. think as this is good leverage, where mentioned, So right? kind

I code depending That the of right think little leverage. a denominator we're that could in strip or EBITDA the and move on the what for up and ZIP to bit happens down calculation.

But I that it's various opportunities the highest cash our and a and it's shareholders our consistent whether our to of of discussion think flow, at cash identify excess look number use Board other best or ways to our uses acreage, flow. it's we whether returning we all internally, cash bolt-on with can a free the

But sheet of think share continue you that's to now, gives certainly, forward, go right and assess some what -- we'll different flexibility that. in us play the we as that really talked to leasehold the is about accretive But of of the acquisitions be way repurchases. in as balance dynamic mentioned, I that So and the kind John we'll areas, continue about kind that. think we to and

Timothy Rezvan

Okay.

That I dig wanted quarter. to a my just Yes. tuned as little follow-up, in Okay. I have stay we'll guess makes And And to sense. to next more.

how You EUR really of terms in in that stages average X-well that possibly about it's of results talked and Bcf Monroe X.X per from early feet. growth strong X,XXX County outperforming XXXX pads kind of

Can wells Monroe that of XXXX of kind XXXX vintage. many like like what refresh directly those pad set? Or around how you wells that are pad? this memory, apples-to-apples are like kind an that's or the versus data ideal my And you just comparison, in feel do

Matthew Rucker

of think, X trailing We year Matt. area, wells X,XXX-foot do the Yes, the in Bcf in results And benchmark. per That's this I Central that kind kind strong sure. from of scary Monroe This question. last nearby into The X.X pads is more it's approximately, the area. year. have appreciate I

pressures, turned so high we initial very John strong low results, And drawdowns. just line, these X wells as mentioned, that very in

what initial these than be look on, productivity very the but We're early of very excited wells wells, about to those were. indications better slightly still

then just bolster as had believe those think help expensive that getting results have. to should attention quite the probably we I which inventory us So to area, it's us, wells and forward is our in online those set in and looking for much markets as it hasn't

pretty to throughout data those get and sharing as more And we so more about forward we're results the look year. excited

Operator

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

John Reinhart

just out close is to I'd company for value. Yes, like positioned the reiterating by well

and [ thing. months out ] a fundamentals gas the improvement and macro look XX we the afore next As very positive is over

cash balance our of the strong debt, low commodity prices. in something quality Our sustainable flow ability to and of sheet frankly, assets, is the on, free generate company for the at variety quite we're a leaning

the the to returns This quality regards inventory. that adds and that and with value company of cash flow to is targeted shareholder for enhancing

we to we appreciate call much. our ] participation planned. Monroe we're the the everybody's lines Thank to terminal the that of [ So have very we excited the quarter about and look you you on and call, on forward update results, expansion year-to-date next

Operator

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

day. this today. may and You We have a disconnect time, you for your wonderful thank participation line your at

Gulfport Energy (GPOR) 3 May 232023 Q1 Earnings call transcript