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Gulfport 1Q Production Declines but Volumes Poised to Increase Through End of Year
Gulfport Energy Corp.’s production dipped in the first quarter following a slower operational period in late 2018 that the company anticipated ahead of a ramp in activity that started earlier this year.
Gulfport produced 1.264 Bcfe/d in 1Q2019, down from 1.287 Bcfe/d in the year-ago period and 1.393 Bcfe/d in 4Q2018.
“Gulfport’s first quarter of 2019 production came in as expected following a muted level of activity during the fourth quarter of 2018,” said CEO David Wood, who added that the company is still on track to deliver within its 1.360-1.400 Bcfe/d guidance range for the year.
“We began 2019 very active in both our core basins, running on average approximately 3.4 horizontal drilling rigs and 4.4 complection crews,” he said of activity in Ohio’s Utica Shale and the South Central Oklahoma Oil Province (SCOOP).
Given the outlook for natural gas prices, Gulfport significantly cut its capital spending budget for 2019 and is forecasting flat production this year. The company is also starting to shift more capital from the Utica to the SCOOP, where it can earn higher prices from the liquids-rich assets.
Gulfport has long been a mainstay in the Utica, which has accounted for the bulk of its production and about 70% of its capital last year. The company plans to spend about half its budget in the Midcontinent this year and the other half in the Utica.
The company turned to sales just nine gross wells in the Utica and SCOOP during the first quarter. It drilled 10 gross wells in both plays during the period, but completed more than 30 gross wells, setting it up for increased volumes.
“We forecast this robust level of activity will lead to an active turn-in-line schedule in the coming months as we expect to turn to sales in excess of 30 wells” during the second quarter of 2019, “leading to strong quarter-over-quarter growth” for most of the year, Wood said.
Gulfport’s realized prices during the first quarter, including derivatives, increased slightly year/year to $2.82/Mcfe from $2.81/Mcfe in the year-ago period. The company’s realized prices for the quarter included a non-cash derivative gain of $4.8 million.
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