Gulfport Energy Reports First Quarter 2007 Results and Announces First Production and Expanded Drilling Program At Hackberry Field
OKLAHOMA CITY, May 14, 2007 (PRIME NEWSWIRE) -- Gulfport Energy Corporation (Nasdaq:GPOR) today reported financial and operating results for the first quarter of 2007. The company also announced first production and the expansion of its exploratory drilling activities in the Hackberry field.
For the first quarter of 2007, Gulfport reported net income of $7.3 million on revenues of $20.4 million, or $0.21 per diluted share. Net income increased 158% compared to the first quarter of 2006.
EBITDA (as defined below) for the first quarter of 2007 was $13.8 million, an increase of 225% from the first quarter of 2006 due to increased production levels. Cash flow from operating activities before changes in working capital was $13.3 million.
Production and Operational Highlights
Net production was 341,526 barrels of oil and 157,903 million cubic feet ("MCF") of natural gas or 367,844 barrels of oil equivalent ("BOE") for the first quarter of 2007. Realized price, which includes transportation, for the quarter was $56.38 per barrel of oil, $7.02 per MCF of natural gas or total equivalent of $55.36 per BOE.
Year-to-date, Gulfport drilled 11 wells in southern Louisiana. The company drilled seven wells at West Cote Blanche Bay ("WCBB"), four of the wells are producing, one well is awaiting completion and two wells are non-productive. The company drilled four wells at the Hackberry Field, one well is producing, two wells have been completed and are awaiting gas pipeline interconnects and one is awaiting completion. The company also performed 18 recompletions, all at the West Cote field.
Initial Production and Test Rates at Hackberry Field
The following table sets forth the initial production and test rates from our exploratory activities at the Hackberry field:
Gross Test Rates
-----------------
Flow Shut-in
Tubing Tubing
Well No. Status BOPD MCF/D Choke Pressure Pressure
---------- ------- ---- ----- ----- -------- --------
2006 No. 1 Testing - - - - -
2007 No. 1 Tested 140 3,126 11/64 4,625 4,750
2007 No. 2 Producing 384 30 - 186 450
2007 No. 3 Drilled - - - - -
2007 No. 4 Tested 196 2,020 15/64 2,173 3,900
Updated 2007 Capital Budget
Due to the successful drilling results, Gulfport intends to expand its 2007 drilling program in the Hackberry field. In addition to the four wells drilled this year at the Hackberry field, Gulfport now plans on drilling approximately 8 to 10 more wells in Hackberry during 2007. Year-to-date, we have spent approximately $25 million on drilling and production facilities at Hackberry. We anticipate spending an additional $35 to $45 million at Hackberry during the remainder of 2007 resulting in $60 to $70 million of estimated total capital expenditures at Hackberry during 2007. As a result of the additional Hackberry drilling, Gulfport is increasing its total estimated 2007 capital expenditure budget to $120 to $130 million.
Conference Call
Gulfport Energy will host a conference call today at 11:00 a.m. Eastern time to discuss its first quarter 2007 financial and operational results. Interested parties may listen to the call via Gulfport's website at www.gulfportenergy.com or by calling 1-866-713-8310. The passcode for the call is 47225152. A replay of the call will be available for two weeks at 1-888-286-8010. The replay passcode is 72981422. The webcast will be archived for 30 days on the company's website.
About Gulfport
Gulfport Energy Corporation is an Oklahoma City based independent oil and natural gas exploration and production company with its principal producing properties located along the Louisiana Gulf Coast. Gulfport, through a joint venture, recently acquired an acreage position in the Alberta oil sands in Canada and drilled core samples this winter. In addition, Gulfport also has an indirect interest in the producing Phu Horm gas field in Thailand.
Forward-Looking Statements
This news release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical facts, included in this news release that address activities, events or developments that Gulfport expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of Gulfport's business and operations, plans, references to future success, reference to intentions as to future matters and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by Gulfport in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with Gulfport's expectations and predictions is subject to a number of risks and uncertainties, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by Gulfport; competitive actions by other oil and gas companies; changes in laws or regulations; and other factors, many of which are beyond the control of Gulfport. Information concerning these and other factors can be found in the company's filings with the Securities and Exchange Commission, including its Forms 10-KSB, 10-QSB and 8-K. Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by Gulfport will be realized, or even if realized, that they will have the expected consequences to or effects on Gulfport, its business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
Non-GAAP Financial Measures
EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus interest expense, income tax expense, accretion expense and depreciation, depletion and amortization. Cash flow from operating activities before changes in working capital is a non-GAAP financial measure equal to cash flows from operating activities before changes in working capital. The Company has presented EBITDA because it uses EBITDA as an integral part of its internal reporting to measure its performance and to evaluate the performance of its senior management. EBITDA is considered an important indicator of the operational strength of the Company's business. EBITDA eliminates the uneven effect of considerable amounts of non-cash depletion, depreciation of tangible assets and amortization of certain intangible assets. A limitation of this measure, however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company's businesses. Management evaluates the costs of such tangible and intangible assets and the impact of related impairments through other financial measures, such as capital expenditures, investment spending and return on capital. Therefore, the Company believes that EBITDA provides useful information to its investors regarding its performance and overall results of operations. EBITDA and cash flow from operating activities before changes in working capital are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, either net income as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. In addition, EBITDA and cash flow from operating activities before changes in working capital are not intended to represent funds available for dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The EBITDA and cash flow from operating activities before changes in working capital measures presented in this press release may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in the Company's various agreements.
GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
-------------------------------
2007 2006
----------- ----------
Revenues:
Gas sales $ 1,108,000 $ 543,000
Oil and condensate sales 19,254,000 3,907,000
Other income 19,000 6,000
----------- ----------
20,381,000 4,456,000
----------- ----------
Costs and expenses:
Lease operating expenses 3,177,000 1,352,000
Production taxes 2,445,000 565,000
Depreciation, depletion,
and amortization 5,670,000 993,000
General and administrative 1,081,000 1,002,000
Accretion expense 138,000 149,000
----------- ----------
12,511,000 4,061,000
----------- ----------
INCOME FROM OPERATIONS 7,870,000 395,000
----------- ----------
OTHER (INCOME) EXPENSE:
Interest expense 640,000 270,000
Business interruption
insurance recoveries -- (2,655,000)
Interest income (110,000) (48,000)
----------- ----------
530,000 (2,433,000)
----------- ----------
INCOME BEFORE INCOME TAXES 7,340,000 2,828,000
INCOME TAX EXPENSE 53,000 --
----------- ----------
NET INCOME $ 7,287,000 $2,828,000
=========== ==========
NET INCOME PER COMMON
SHARE:
Basic $ 0.21 $ 0.09
=========== ==========
Diluted $ 0.21 $ 0.08
----------- ----------
Gulfport Energy Corporation
Reconciliation of EBITDA and Cash Flow
(unaudited)
Three Months Ended
March 31, 2007 March 31, 2006
-------------- --------------
Net Income $7,287,000 $2,828,000
Interest expense 640,000 270,000
Income tax expense 53,000 --
Accretion expense 138,000 149,000
Depreciation, depletion,
and amortization 5,670,000 993,000
------------ -----------
EBITDA $13,788,000 $4,240,000
============ ===========
Three Months Ended
March 31, 2007 March 31, 2006
-------------- --------------
Cash flow from operating
activities $14,056,000 $2,428,000
Adjustments:
Changes in working capital (749,000) 1,720,000
------------ -----------
Cash flow from operating
activities before changes
in working capital $13,307,000 $4,148,000
============ ===========
Gulfport Energy Corporation
Production Schedule
(Unaudited)
Production Volumes: 1Q2007 1Q2006
Oil (MBbls) 341.5 64.3
Gas (MMcf) 157.9 92.0
Oil Equivalents (MBOE) 367.8 79.7
Average Realized Price:
Oil (per Bbl) $56.38 $60.74
Gas (per Mcf) $7.02 $5.90
Oil Equivalents (MBOE) $55.36 $55.86
CONTACT: Gulfport Energy Corporation
Investor & Media Contact:
John Kilgallon, Director, Investor Relations
405-242-4474
jkilgallon@gulfportenergy.com
Released May 14, 2007