After a nearly three-month nationwide search for a new CEO, Gulfport Energy Corp. on Wednesday named in-house candidate Michael G. Moore to fill the position after an interim period of success since he took over the role from James Palm, who retired in February.
The move was billed as a smart one by financial analysts, who have been optimistic about Gulfport’s growing operations in Ohio’s Utica Shale, where the company is expected to capitalize on the momentum and narrow its focus all the more now that the void has been filled at the top of its management.
“We believe this was the right move, and it was as expected given Mr. Moore’s experience at [Gulfport] and his successful handling of the company over the last few months as interim CEO,” said Wunderlich Securities analyst Jason Wangler in a note to clients. He added a bullet point to “watch for portfolio management to help focus even more capital, time and activity in the Utica.”
Ohio’s Utica Shale once again seems to be earning significant attention (see Shale Daily, April 15) as initial production rates soar and incremental midstream and processing capacity is being added or planned at a steady clip.
The play’s pecking order, though, seems to be wavering. In recent weeks, operators such as PDC Energy Inc. and Antero Resources Corp. have issued either conservative type curves or revised theirs lower in both the wet gas and condensate windows as capacity constraints and production data have dictated (see Shale Daily, April 21; April 14).
Gulfport, however, has remained at the top. The company has a considerable acreage position in the Canadian oilsands and it has a patchwork of assets in the Permian Basin, Niobrara Shale and properties along the Louisiana Coast. But above all, it has a large swath of land under lease in southeast Ohio leveraged to the play’s core that is widely believed to be among some of the best acreage of any operator in the Utica Shale.
That position has grown. Gulfport began 2013 with 106,000 net acres in the play. Today it has 165,430 net acres and plans to spend nearly 90% of its capital budget in the Utica this year, according to the company’s most recent presentation.
Wangler that said unlike some operators, Gulfport had the foresight to know the Utica’s condensate window would present challenges and has consistently maintained a type curve of 1-1.5 million boe, which is below its 3.1-3.9 million boe estimated ultimate recovery (EUR) in the play’s wet gas window, but still “nothing to sneeze at,” he said.
Wangler expects Gulfport to issue an EUR for the dry gas window, which he said “could be huge,” estimating that it could range from 20 to 25 Bcfe. He added that multiple transactions, including the potential monetization of its small Niobrara position and a transaction with its 25% ownership stake in Grizzly Oil Sands ULC, which has significant holdings in Alberta, Canada, could be imminent given its strong focus and results in the Utica as of late.
In addition to Moore’s appointment as CEO, Gulfport said he would join the company’s board as well. He joined Gulfport in 2000 as its CFO and was appointed company president last August.
J. Ross Kirtley, who joined the company from Sandridge Energy Inc. in September to serve as COO of Ohio activities (see Shale Daily, Dec. 13, 2013), was also promoted to COO of the company. Michael Reddin, currently CEO of Davis Petroleum Corp., was named to the Gulfport’s board of directors as well.
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