Gulfport Energy Corp. on Monday said it has cut 13% of its workforce and suspended a share repurchase program as part of ongoing efforts to boost shareholder value.
Oklahoma City-based Gulfport, which operates primarily in Ohio’s Utica Shale and the South Central Oklahoma Oil Province, employed 350 people at the end of last year, according to its annual report.
The board authorized a share repurchase program in January that was to be completed over the next two years. By August, Gulfport had repurchased $30 million of stock, but it has made no buybacks since.
“Gulfport’s board and management team are committed to taking timely and decisive action to build long-term sustainable value for all shareholders,” said CEO David Wood. “To that end, following discussions with our large shareholders and other stakeholders, we decided that accretive repurchases of our unsecured notes at discount represent an attractive allocation of our capital in the current market environment.
“We have also been taking a hard look at how to be more efficient across all areas of our business, and as part of this effort, recently reduced our staffing levels.”
The company said it would continue discounted repurchases of its unsecured senior notes to help cut debt and improve cash flow through reduced interest expense.
Board members Craig Groeschel and Scott Streller are also expected to step down by the end of the year, while long-time director and chairman David Houston won’t seek reelection at the annual meeting next year.
Gulfport produced 1.527 Bcfe/d in the third quarter, more than 90% weighted to natural gas. As prices have flagged, gas producers have come under pressure to sap more value from their day-to-day operations and asset bases.
Under Wood, who took the helm last year, the company has been searching for greater efficiencies, while management has aimed to cut spending and improve the balance sheet. Gulfport has dumped noncore assets throughout this year, including a legacy position on the Gulf Coast, interests in an overseas exploration and production company, Marcellus Shale rights overlying a portion of its Utica acreage and royalty interests in the Bakken Shale.
The company had total debt of more than $2.7 billion at the end of the third quarter, while its liquidity stood at $626.5 million, including cash on hand and borrowing capacity under its revolving credit facility.
The company’s latest moves also come after pushback from some of its larger shareholders, including Shah Capital, which called in September for steep spending cuts next year. The job losses at Gulfport are the industry’s latest as the year comes to a close and the sector has been squeezed by volatile commodity prices.