Gulfport Energy Corp. said Tuesday it would cut this year’s oil and gas production guidance slightly to reflect shut-ins and deferred completions in anticipation of better commodity prices later this year and next.
The company withdrew its previous production guidance after the first quarter and said Tuesday it is targeting 1-1.1 Bcfe/d for the year, down from 1.1-1.5 Bcfe. Gulfport produces the bulk of its oil and gas volumes in Ohio’s Utica Shale and has shut in a minimal amount of output, including a large number of vertical wells in its other operating area, the South Central Oklahoma Oil Province, or SCOOP. Some non-operated production has been curtailed as well.
The company also said Tuesday it would complete another three gross Utica wells later in the year to help add incremental production into early 2021. It is still guiding for $285-300 million of capital expenditures (capex).
“The savings we are seeing in drilling and completion activities allows us to add this activity and still be at the midpoint of our previously provided capex guidance range,” CEO David Wood said. “We believe these efforts will better position the Company as we enter 2021, adding meaningful value and allowing for higher production in a better forward commodity price environment to maximize returns and cash flow.”
Gulfport also expects to cut deals with third parties for lower midstream costs in both of its operating areas that it estimates would reduce firm transportation expenses by more than $10 million through next year.
Another $2-4 million in general and administrative expense savings are also anticipated to come from the salary reductions of employees and executives, along with furloughs.
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