Gulfport Energy Corp. CEO Michael Moore has resigned after the company said he racked up more than $600,000 in costs over five years for the unauthorized use of a chartered aircraft.
In a regulatory filing Thursday, Gulfport said the board’s audit committee was made aware of the unauthorized spending, and Moore stepped down on Oct. 29. The company is seeking reimbursement for $649,200 in charges, including hourly charter fees, flight fees and fuel expenses, among other things.
According to the filing, Moore for years also made personal charges on his Gulfport credit card, ranging from a low of $808 to a high of $347,164. While the charges were periodically repaid and the company reported them, Gulfport said the charges may have constituted personal loans that were not permissible under the Sarbanes-Oxley Act of 2002.
After an in-depth review of the spending, the board directed the company to change its policies for using corporate aircraft and corporate credit cards. No other Gulfport executives used the chartered aircraft for personal purposes, the regulatory filing said.
Moore, 62, who joined the company as CFO in 2000 and was appointed CEO in 2014, is to receive $400,000 in separation payments. He earned $4.7 million in compensation last year, according to company disclosures.
Moore’s leadership has led to efficiency and production gains in the core Utica Shale properties and its $1.85 billion entry into the South Central Oklahoma Oil Province (SCOOP).
COO Donnie Moore, unrelated to Michael Moore, was appointed interim CEO. He said during a third quarter earnings call on Friday that there is little more to share about his predecessor’s departure as the company was transparent in its filing with the Securities and Exchange Commission.
Strong core production from the Utica and the SCOOP again helped Gulfport increase volumes in the third quarter, even though it turned fewer wells to sales than analysts had expected.
Gulfport produced 1.428 Bcfe/d in the third quarter, up 19% from the year-ago period and 7% from 2Q2018. Despite ongoing activity in the SCOOP, the production mix remained dry, with natural gas accounting for 89% of the quarter’s volumes.
The company turned its Miller 8 well in the SCOOP to sales during the period, targeting the Upper Sycamore formation. It was the second Sycamore well placed online since Gulfport entered the Oklahoma play early last year. The Miller 8, management said, has a strong liquids cut at 46% oil on a two stream basis and 63% liquids on a three-stream basis.
Gulfport’s primary SCOOP target is the Woodford Shale. The Sycamore is sandwiched between the Woodford and Springer, and is similar in age to the Meramec and Osage formations that are being developed to the north of Gulfport’s position. The company is planning more Sycamore development next year based on results from its first two wells.
Average prices also were up during the third quarter to $2.75/Mcfe, compared with $2.41/Mcfe in the year-ago period and $2.09/Mcfe in 2Q2018, when the company recorded a noncash derivatives loss of $76.8 million. Year/year revenue also increased to $361 million from $265.5 million.
Gulfport reported net income of $95.2 million (55 cents/share) for the third quarter, compared with net income of $18.2 million (10 cents) in the year-ago period.