Gulfport Energy Corp. continued to lean on the Utica Shale, which helped it to outperform expectations and beat guidance during the first quarter, when it got to work on building a new core asset into its portfolio in the South Central Oklahoma Oil Province (SCOOP).
The company produced 849.6 MMcfe/d during the period, up from 692.2 MMcfe/d in the year-ago quarter and 787 MMcfe/d in 4Q2016. First quarter production beat Wall Street's consensus of about 834 MMcfe/d. Production consisted of 87% natural gas, 9% natural gas liquids (NGL) and 4% oil.
The company closed on its acquisition of 46,400 net SCOOP acres in February. It plans to get familiar with the play this year and has been running four rigs since it completed the deal. The company also recently ramped up to six rigs in the Utica.
"Our first quarter production of 849.6 MMcfe/d came in above expectations, driven by the continued strong performance of our Utica Shale assets and the team's ability to track ahead of expectations for the scheduled turn-in-lines during the quarter," said CEO Michael Moore. "In addition, during the quarter, we commissioned field level compression in an affected gathering area in the Utica Shale and the initial results performed above expectations."
Some financial analysts had modeled even higher production for the period, given the SCOOP acquisition and more activity in the Utica. But completions that came late in the quarter, along with the new Utica compression, enhanced SCOOP completions and a more robust turn-in-line schedule have the company set up for more growth in the coming quarters.
Gulfport's prices continued to firm during the period. Excluding hedges, the company reported an all-in natural gas price of $3.05/Mcfe, sequentially higher from $2.67/Mcfe in 4Q2016.
In addition, the company secured foundation shipper status on the Midship Project to carry Oklahoma reserves during the first quarter. Cheniere Energy Inc. subsidiary Midship Pipeline Co. LLC launched a binding open season last month for the 200-mile pipeline.
The project would create up to 1.4 million Dth/d of firm capacity to connect production from the SCOOP and STACK (Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties) with Gulf Coast and Southeast markets. Midship is targeting an early 2019 in-service date.