Major Investor Lectures Gulfport Energy to Cut 2020 Budget by 29%

Shah Capital, which owns three million shares (about 1.9%) of Gulfport Energy stock, last week sent an open letter to the Gulfport board strongly recommending the company trim next year’s budget by 29% (maybe more) in an effort to generate more cash for investors. Gulfport Energy, one of the biggest drillers in the Ohio Utica Shale (210,000 acres), concentrates its drilling in the Ohio Utica and the Oklahoma SCOOP plays.
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Rice Addresses Belmont County, OH Landowners in Town Hall Mtg

EQT’s new CEO Toby Rice made the rounds and conducted four town hall-style meetings with landowners (see Road Trip! EQT CEO Toby Rice Talks to Landowners in Town Hall Mtgs). We found and brought you local media coverage for both the first and third meetings–in Waynesburg, PA and Bridgeport, WV, respectively (see EQT CEO Toby Rice Hits a Home Run with Landowner Meetings and EQT CEO Toby Rice Explains Combo Drilling at WV Town Hall Mtg). There was a meeting in between those two, held in Belmont County, OH. We’ve been accused of bias for not writing about that meeting.
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Gulfport 2Q: Drills 4 New Utica Wells, Completes 25 Utica Wells

Gulfport Energy, one of the biggest drillers in the Ohio Utica Shale (210,000 acres), concentrates its drilling in the Ohio Utica and the Oklahoma SCOOP plays. The company released its operating and financial update for 2Q19 last week. As we told you in May, 2019 is “the year of the DUC” for Gulfport (see Gulfport Energy Sells “Small” Marcellus Leasehold in SE Ohio). And so it has been.
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Gulfport Energy Sells “Small” Marcellus Leasehold in SE Ohio

Gulfport Energy, one of the biggest drillers in the Ohio Utica Shale (210,000 acres) with record production in the Utica last year, announced last week (as part of its first quarter update) it has sold a “small footprint” of Marcellus drilling rights on some of their Utica acreage in southeastern Ohio for $30 million. Gulfport concentrates its drilling in the Ohio Utica and the Oklahoma SCOOP plays. Piecing together the company’s plans for this year, we’re calling 2019 the “Year of the DUC” for Gulfport.
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Are Marcellus/Utica Shale Drillers Financially Healthy?

We read on a regular basis in mainstream media that shale companies spend more money than they bring in, and that investors are growing tired of pumping money into companies without a return on their investment. We’ve recently noticed a renewed commitment on the part of major drillers to get their financial houses in order–spend less and drill less in order to make more money. We spotted an article by Reuters on the “shale drillers aren’t profitable/healthy” meme which got us investigating the financial health (or lack thereof) for Marcellus/Utica drillers. What we found may interest you.
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Trend: Marcellus/Utica Drillers Will Drill Less in 2019

There’s just no getting around the obvious–that the shale industry is once again heading into something of a dip. We’re not just talking about shale oil drillers scaling back drilling new wells in places like Texas and North Dakota. We’re talking about big gas drillers in the Marcellus/Utica who are signaling that 2019 will see less spending and less drilling, although production won’t decline.
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Gulfport’s Largest Investor Not Happy with Board or Management

Another situation is brewing with Gulfport Energy not unlike the situation at EQT. One of (we’re pretty sure THE) largest shareholders in Gulfport, investment firm Firefly Value Partners, is not happy with either the board of directors or current management, saying very publicly (via a letter, below) that the current board lacks “necessary skills and experience” to turn the company’s poorly performing stock around. Ba boom!
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Utica Driller Gulfport Energy Appoints New CEO/President

In early November, Gulfport Energy, an independent oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma, canned their CEO Michael Moore following allegations that he used a company credit card, and the company chartered jet, for personal uses (see Shakeup: Gulfport CEO Michael Moore Fired, Interim CEO Appointed). Gulfport appointed COO Donnie Moore (no relation to Michael) to be interim CEO while they figured out next steps. Those steps are now figured out. After a nationwide search, Gulfport has appointed David M. Wood to become the new president & CEO. Donnie Moore will revert to his role of COO, answering to Wood.
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Shakeup: Gulfport CEO Michael Moore Fired, Interim CEO Appointed

Michael Moore – out as CEO of Gulfport Energy

Last week Gulfport Energy, an independent oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma, issued its full third quarter 2018 update. Gulfport previously issued an operational update several weeks ago (see Gulfport 3Q18 Operations Update: 11 New Utica Wells). Gulfport didn’t issue the full update, with financials, until last week. Perhaps we now know why: the company canned their CEO, Michael G. Moore, following allegations that he used a company credit card, and the company chartered jet, for personal uses. Gulfport appointed COO Donnie Moore (no relation to Michael) to be interim CEO while they figure out next steps.
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Gulfport 3Q18 Operations Update: 11 New Utica Wells

Gulfport Energy, an independent oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma, issued its third quarter operational (not financial) update yesterday. Gulfport is one of those companies that delivers its operational news first, and a few weeks later issues its financial news. Gulfport reports production continued to climb to new highs, averaging 1,427.5 million cubic feet equivalent (MMcfe) per day, a 7% increase over 2Q18 and 19% increase over 3Q17. Said another way, 1.43 Bcf/d.
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By the Numbers – Revenue & Profitability for M-U Drillers

The expert analysts at RBN Energy have just published their “fourth and final” in a series of posts looking in detail at E&Ps (exploration & production companies, or “drillers”). One of the groups of E&Ps they examine are “gas-weighted” E&Ps–or drillers who mostly extract natural gas. In looking through the list, you immediately realize every one of them has operations in the Marcellus and/or Utica Shale region. Yes, a few also have operations in other plays, but they all have at least some operations here. The real value in the article is an accompanying spreadsheet comparing various financial metrics (apples to apples)–things like total revenue, lifting costs, production costs, and “pre-tax income,” meaning profitability. How do our drillers compare with each other?
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3 Counties, 5 Drillers Led OH’s 50% Increase in 2Q Gas Production

The Pareto Principle is alive and well in the Buckeye State. You may know it as the 80/20 rule, or in this case, the 75/25 rule. The rule that states roughly 80% of the results come from 20% of the effort. Last week MDN brought you the latest update from the Ohio Dept. of Natural Resources–their second quarter 2018 report showing all production coming from the Ohio Utica Shale (see Top 25 Producing Gas & Oil Wells in Ohio Utica for 2Q18). While MDN provided you with Top 25 lists showing the best-performing wells (both gas and oil) during 2Q, and while we provided you with a better spreadsheet to view the information than that provided by the ODNR itself, our analysis was basic and high level. Utica natgas production was up a big 42% over the same period last year, and Utica oil production was up 11%–a cumulative 50% increase when you convert it all into equivalents. The experts at S&P Global Platts have done a deep dive into the numbers and have found that three counties represent 75% of all production in 2Q18, and five drillers represent 75% of all production in 2Q18. Which counties and which drillers? Read on…
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Gulfport Energy 2Q18: 970 MMcfe/d in Utica; Drilled 9 Ohio Wells

Gulfport Energy, an independent oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma, issued its second quarter update yesterday. The company made $111 million in profit (net income) in 2Q18, vs. making $106 million in 2Q17. They produced an average of 1.33 billion cubic feet equivalent per day (Bcfe/d) across all of the plays where they are active. Of that, the vast majority of production (73%) came from the Ohio Utica Shale, which was 970 million cubic feet equivalent per day (MMcfe/d). During Q2, Gulfport drilled nine Utica wells, giving it a total of 21 Utica wells drilled so far this year (out of 35 planned for 2018). They operate two rigs in the OH Utica currently. Here’s the complete update from Gulfport…
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Financial Checkup for Marcellus/Utica Drillers

RBN Energy, headed by founder Rusty Braziel (co-founder of Bentek Energy), is, in our opinion, the premier oil and gas analytics firm out there. Smart people working at RBN. And they offer up some amazing content on their blog site–for free! At least it’s free for a while, then it goes behind a paywall. A few days ago RBN published a blog post on the financial health for the 44 major publicly-traded U.S. exploration and production companies (drillers). RBN groups them into three categories: Oil-Weighted, Diversified, and Gas-Weighted. We found the Gas-Weighted list of 10 companies and the information revealed about them to be fascinating and worth studying. Each of the companies has major operations in the Marcellus/Utica–some of them totally focused on our region. Among the data points shared: revenue, production costs, lifting costs and more. We think of the following as a handy financial health scorecard/checkup for 10 of the biggest drillers in the M-U, including Antero Resources, Cabot Oil & Gas, Chesapeake Energy, CNX Resources, EQT, Gulfport Energy, National Fuel Gas (Seneca Resources), Range Resources, Southwestern Energy, and Ultra Petroleum…
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Gulfport Energy 1Q18: “We Love SCOOP” but Spends 70% on Utica

In April Gulfport Energy released an initial look at the company’s first quarter operations (see Gulfport 1Q18 Update: Utica Production Up 37%, SCOOP Up 198%). The April operational update did not include financial performance. Gulfport is an “independent” oil and gas driller with significant acreage positions in the Utica Shale of eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. Yesterday Gulfport dropped the other shoe–the financial report for 1Q18. The company reported $90 million of net income for 1Q18 vs. $154 million in 1Q17–a 42% drop. Much of the update focused on Gulfport’s activity in the Oklahoma SCOOP, which seems to have turned Gulfport’s head. However, there is continued strong activity in the Ohio Utica. Gulfport reports drilling 13 wells in the Utica in 1Q18 with an average lateral length of 9,000 feet (11% longer than 2017’s laterals). They averaged just over 1 billion cubic feet per day (Bcf/d) of production in the Utica. And Gulfport CEO Michael Moore said on an analyst conference call, in response to a question, that the company is still spending 70% of its capital budget on Utica drilling in 2018…
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