NGI The Weekly Gas Market Report / NGI All News Access

Gulfport's Utica 'Good as Best Part of Eagle Ford,' Says CEO

November 12, 2012
/ Print
| Share More
/ Text Size+

Gulfport Energy Corp. has spud some of the largest producing wells in the Utica Shale to date, and the play continues to be the Oklahoma City-based operator's "primary focus area," according to CEO James Palm.

"Based on an "interpretation of the rock properties, the pressure regime and the product phased windows, we believe that our position in the Utica could be as good as the best part of the Eagle Ford, based upon the overall productivity and economics." Palm told analysts during a conference call that he had "rarely encountered anything like what we are seeing today in the Utica. With each new well that we test, I continue to be impressed by the sheer magnitude of the production and the consistency of the resource across our acreage."

With a recent senior notes issuance, as well as contributing Permian Basin assets to a Diamondback Energy initial public offering, "we've freed up significant capital to be redirected toward the development of this once-in-a-lifetime play. The Utica Shale is absolutely a company changer for Gulfport, and we intend to devote the necessary capital to allow to develop to its full potential."

In October Gulfport reported the best producing well to date in the Utica, according to initial production data (see NGI, Oct. 15). The Shugert 1-1H well in Belmont County, OH, near Kirkwood Township recently tested for 32 hours at a maximum rate of 20 MMcf/d of natural gas, 144 b/d of condensate and 2,002 b/d of natural gas liquids. The well is expected to begin flowing to sales by early December. Shugert topped an earlier Gulfport well, the Wagner 1-28H in Harrison County, which was brought online in August after testing at a gross peak of 17.1 MMcf/d and 432 b/d of condensate.

The latest big well, BK Stephens 1-16H, was drilled to a vertical depth of 8,225 feet, with a 5,276-foot horizontal lateral and completed with a 19-stage hybrid hydraulic fracturing (fracking) treatment of about 550,000 pounds of sand per stage. The well tested at a peak rate of 1,224 bbl/d of condensate and 6.9 MMcf/d of gas on a 32/64-inch choke. The recent Stutzman 1-14H well was drilled to a true vertical depth of 9,020 feet, with an 8,634-foot horizontal lateral and a total measured depth of 17,282 feet.

"The Stutzman 1-14 is now the longest lateral and total measured depth with any well Gulfport has drilled," said the CEO. "We are big proponents of longer laterals and shorter frack intervals, which we believe will benefit us in the long run by providing higher overall estimated ultimate recoveries." Gulfport plans to run two rigs through the winter, with a third rig expected in early March. "We will likely add one rig every two or three months following, ultimately peaking at about five to six rigs running at the Utica to exit the year."

Net income in 3Q2012 was $500,000 ($0.01/share) on oil and natural gas revenues of $60.5 million. A year ago the company earned $77.45 million ($1.63/share) on revenues of $160.3 million. Operating cash flow was $43.76 million versus $119.77 million a year earlier. The latest results included one-time costs related to its contribution of Permian assets to Diamondback. Adjusted net income was $16 million (28 cents/share) versus $68 million ($1.21).

©Copyright 2012 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus