Gulfport Energy Corp. said Thursday that it remains dedicated to “capital discipline” and “conservative leverage” in 2016, announcing a plan to cut this year’s budget by up to 43% from 2015 levels and highlighting a strategy that would once again limit its activities to only the Utica Shale’s dry gas window.

The company’s focus in the play in recent years has pushed production up significantly. But in a shift away from the falling prices of natural gas liquids (NGL) that began last year, Gulfport plans to stay in its east and central dry gas windows, which are in Ohio’s Monroe, Belmont and Jefferson counties. The ultimate focus of this year, CEO Michael Moore said, will be the balance sheet.

In one cost-cutting move, Moore said the company will look to better manage its land expenses. Gulfport plans to shift its development program to 1,000-foot interlateral spacing, a step backward from the 750-foot spacing it started employing across much of its Ohio acreage last year (see Shale Daily, Aug. 7, 2015).

“As we manage through this commodity cycle, Gulfport is dedicated to developing our acreage position in the near-term in a way that maximizes returns and minimizes acreage renewals,” Moore said during a conference call on Thursday to discuss the company’s year-end financial results. “With this is mind, our 2016 plan is to focus less on infill development and focus more on minimizing lease expiration and acreage renewals through optimization of our unit development.”

While the move would negatively affect the company’s drilling locations, it would increase its acreage that is held by production and save about $30 million on land renewals, Moore added.

The company said it would cut its 2016 capital expenditures to between $425 million and $475 million. That figure would include up to $375 million for drilling and completion activities. At the high end, the company’s 2016 budget would be 43% less than the $747 million it spent last year, but it has forecast this year’s production at 695-730 MMcfe/d, which would exceed 2015 production by up to 33%. Gulfport plans to run 2.8 rigs for operated and non-operated activity this year.

Gulfport produced 643.8 MMcfe/d during the fourth quarter, a substantial increase from 4Q2014 production of 381.9 MMcfe/d. Fourth quarter production, however, declined slightly from 3Q2015 when the company produced 647.1 MMcfe/d. The company began voluntarily curtailing 100 MMcf/d of natural gas production in November, but those volumes have since started to flow again after a subsidiary of Rice Energy Inc. finished a lateral earlier this month connecting Gulfport’s gathering system in the affected area to interstate pipelines (see Shale Daily, Nov. 9, 2015). The companies formed a midstream joint venture last October (see Shale Daily, Oct. 8, 2015).

Full-year production grew exponentially, going from 240.3 MMcf/d in 2014 to 548.2 MMcfe/d at the end of last year. It consisted of 78% natural gas, 13% NGLs and 9% oil.

Moore said the company exited 2015 with 33 gross wells that have been drilled but are uncompleted (DUC). He added that the company would do the same this year, with plans for a 23-29 DUC inventory to help position the company for 2017.

In the fourth quarter, the company reported an $845.6 million impairment on its oil and gas properties and another $43.6 million impairment in connection with its 25% ownership interest in Grizzly Oil Sands ULC, which has operations in the Canadian oilsands. It also lost another $5.5 million in connection with equity interests.

As a result, the company reported a net loss of $830.9 million (minus $7.67/share) during the period, compared with net income of $101.1 million in 4Q2014. Its oil and gas revenues during the quarter slid from $268 million in the year-ago period to $190.2 million.

For full-year 2015, the company recorded a $1.4 billion impairment on its oil and gas properties and another $101.6 million impairment related to Grizzly. In all, the company lost $1.2 billion in 2015 (minus $12.27/share), compared with a profit of $247.4 million ($2.88/share) in 2014. Its full-year revenue went up slightly to $709 million from $670.8 million in 2014.

The company had $634 million in liquidity at year-end, including $113 million of cash on hand.