Strong performance from the company’s “base production wedge” in Ohio’s Utica Shale and new wells turned to sales in the South Central Oklahoma Oil Province (SCOOP) during the first quarter have prompted Gulfport Energy Corp. to increase its full-year production guidance, management said Wednesday.
The company has increased its production forecast from a previous range of 1.25-1.3 Bcfe/d to 1.310-1.340 Bcfe on the outperformance. The company’s recent move to sell its 25% interest in an Ohio midstream joint venture to EQT Midstream Partners LP for $175 million has also cut costs further and led to a $20 million reduction in this year’s capital spending. The budget is now forecast at $750-835 million instead of the $770-835 million Gulfport guided for in January.
The company, which beat Wall Street consensus for most of 2017 after entering the SCOOP early in the year, during the first quarter again topped analyst estimates, reporting more than 1.288 Bcfe/d of production. That’s compared to 849.6 MMcfe/d in the year-ago quarter and 1.263 Bcfe/d in 4Q2017.
“The production beat was primarily on the liquids front, driven by strong production results out of the SCOOP, increasing total oil production 4% over the fourth quarter of 2017 and total [natural gas liquids] production 7% quarter-over-quarter,” CFO Keri Crowell told analysts during a call on Wednesday to discuss first quarter earnings.
The Utica, where production increased 37% year/year, continued to support the company’s overall volumes. Gulfport produced more than 1 Bcfe/d in the play during the first quarter. The SCOOP accounted for 245.6 MMcfe/d of the period’s production, an increase of 19% from 1Q2017. The company’s legacy properties on the Gulf Coast in Southern Louisiana produced 11.3 MMcfe/d.
COO Donnie Moore added that the company plans to spud one more Sycamore test well this summer in Oklahoma to target the upper portion of that formation. Gulfport’s primary SCOOP target is the Woodford Shale. It spud its first Springer Shale and Sycamore wells last year. The Sycamore is sandwiched between the Woodford and Springer, and the company’s first well came online with a promising 24-hour initial production rate of 15.7 MMcfe/d.
Gulfport’s average realized prices decreased slightly in the first quarter to $2.81/Mcfe from $2.96/Mcfe in 1Q2017. Revenue was also down to $325.4 million from $333 million over the same time.
The company reported first quarter net income of $90.1 million (50 cents/share), compared to net income of $154.5 million (91 cents) in the year-ago quarter.