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Gulfport Lowers 2013 Exit Rate on Drilling Delays

Gulfport Energy Corp. continues to expand its position in the Utica Shale, but the Oklahoma City-based operator's 2013 exit rate has been adversely impacted by delays associated with drilling.

Gulfport reported 3Q2013 production of 2.98 Bcf of natural gas, 590,187 bbl of oil and 4.48 million gallons of natural gas liquids (NGL), compared with 0.31 Bcf of natural gas, 579,288 bbl of oil and 1 million gallons of NGLs in 3Q2012. Total 3Q2013 production was 1.19 million boe, including 662,333 boe in the Utica Shale, 351,171 boe at West Cote Blanche Bay, 167,520 boe at Hackberry and an aggregate of 12,784 boe in the Bakken, Niobrara and other areas, the company said. While most regions saw increases compared to 3Q2012, the largest increase by far came in the Utica, which produced 17,764 boe in 3Q2012.

Last month, Gulfport lowered its 3Q2013 production guidance from 14,000-15,000 boe/d to 12,250-12,750 boe/d, citing pipeline infrastructure delays and higher than expected downtime from simultaneous operations (see Shale Daily,Sept. 18). The company said one of its wells, Irons 1-4H, was supposed to be flowing into a sales pipeline by mid-August, but permitting delays with a third party midstream provider delayed the well from coming online until the end of October. Gulfport said its full-year production guidance for 2013, 5-6 million boe, remained unchanged.

Gulfport anticipates exiting 2013 with production of 27,000-32,000 boe/d, down from the previous estimate of 37,000-40,000 boe/d. With the Utica still in the early stages of development, "drilling/infrastructure delays should not be entirely unexpected in our view, and the longer term thesis remains intact," according to Wells Fargo analysts.

During the third quarter, Gulfport increased its acreage position in the core of the Utica, adding approximately 9,000 gross acres, bringing its total acreage position to about 154,000 gross (144,500 net) acres under lease in the play. Last month, the company said it had placed three wells targeting the Utica in Harrison County, OH, into production by connecting them to sales pipelines.

In August, Gulfport executed a firm 10-year transportation agreement with Dominion East Ohio (DEO) and Dominion Transmission Inc. for up to 100,000 Dth/d of processed gas originating from MarkWest Utica's Cadiz processing complex for delivery to the ANR pipeline at Lebanon, OH, via DTI's interconnection with DEO at Harlem Springs, OH (see Shale Daily,Sept. 30).

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