Gulfport Energy (GPOR) Updates on Utica Shale, Grizzly Thickwood; Provides Outlook
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Financial Fact:
INCOME BEFORE INCOME TAXES: -160.7M
Today's EPS Names:
FRSB, DGICA, UXIN, More
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Gulfport Energy Corporation (Nasdaq: GPOR) today announced its proposed acquisition of additional working interests in the Utica Shale and provided an operational update.
Utica Shale
Gulfport has entered into a definitive agreement to purchase approximately 30,000 net acres in the Utica Shale in Eastern Ohio from Windsor Ohio LLC, an affiliate of Wexford Capital LP, for approximately $300 million, increasing Gulfport's leasehold interests in the Utica Shale to approximately 137,000 gross (99,000 net) acres. The transaction excludes 14 existing wells, along with certain acreage surrounding each well. The proposed transaction, which is expected to close prior to year-end, will increase Gulfport's working interest in the acreage to 72.5%. Gulfport will continue to serve as operator of its acreage in the Utica Shale. The transaction was approved by a special committee of Gulfport's Board of Directors. Tudor Pickering Holt & Co acted as advisor to the special committee.
Grizzly Thickwood Thermal Application
Grizzly Oil Sands ULC ("Grizzly"), a company in which Gulfport holds an approximate 25% interest, announced today that it has submitted a resource application to the Alberta Energy Resources Conservation Board ("ECRB") for the development of a 12,000 barrel per day ("bpd") oil sands project at Thickwood. Grizzly's Thickwood Thermal project is expected to produce 12,000 bpd of bitumen for up to 40 years utilizing both steam-assisted gravity drainage ("SAGD") and cyclic steam stimulation ("CSS") recovery technologies. The project will consist of:
a plant site consisting of two 6,000 bpd central processing facilities;
four SAGD well pads (split pads) and up to 33 CSS well pads; and
associated facilities and infrastructure.
Grizzly expects to file an environmental assessment with the Alberta Environment and Sustainable Resource Development ("AESRD") in January 2013. Grizzly expects receipt of approvals from the ERCB and AESRD for the Thickwood Thermal Project within 12 to 18 months of application submission. Following approval, Grizzly anticipates the period leading up to first production to be approximately 18 months.
Grizzly's independent engineering firm, GLJ Petroleum Consultants, estimated the Thickwood Thermal Project will ultimately recover approximately 107 million barrels of bitumen in their report dated December 31, 2011. With the submission of this application, Grizzly expects that a significant portion of the contingent resource assigned to the Thickwood property will be reclassified as probable reserves by GLJ Petroleum Consultants.
The Thickwood Thermal Project area is located approximately 58 kilometers northwest of Fort McMurray and near an established SAGD oil sands development at Southern Pacific McKay. Grizzly discovered the Thickwood Thermal Project area during the 2006 – 2007 winter drilling season and has subsequently drilled a total of 59 core holes and shot 3-D seismic on the acreage.
2013 Commodity Hedges
Gulfport recently expanded its 2013 hedging program, consisting of fixed price swaps for January 2013 through June 2013 of 5,000 barrels of oil per day at a weighted average price of $101.96 and fixed price swaps for July 2013 through December 2013 of 5,000 barrels of oil per day at a weighted average price of $99.86.
Guidance
Gulfport estimates its 2012 production to be in the range 2.55 million to 2.60 million BOE. Gulfport currently expects 2013 production to be in the range 7.40 million to 7.70 million BOE. Capital expenditures for exploration and production activities during 2013 are estimated to be in the range of $390 million to $410 million, excluding potential capital expenditures relating to Grizzly.
For 2013, Gulfport projects lease operating expense to be in the range of $5.00 to $6.00 per BOE, general and administrative expense to be between $1.50 and $2.50 per BOE, production taxes to be between 8% and 9% of revenues, and depreciation, depletion and amortization expense to be in the range of $33.00 to $35.00 per BOE.
Utica Shale
Gulfport has entered into a definitive agreement to purchase approximately 30,000 net acres in the Utica Shale in Eastern Ohio from Windsor Ohio LLC, an affiliate of Wexford Capital LP, for approximately $300 million, increasing Gulfport's leasehold interests in the Utica Shale to approximately 137,000 gross (99,000 net) acres. The transaction excludes 14 existing wells, along with certain acreage surrounding each well. The proposed transaction, which is expected to close prior to year-end, will increase Gulfport's working interest in the acreage to 72.5%. Gulfport will continue to serve as operator of its acreage in the Utica Shale. The transaction was approved by a special committee of Gulfport's Board of Directors. Tudor Pickering Holt & Co acted as advisor to the special committee.
Grizzly Thickwood Thermal Application
Grizzly Oil Sands ULC ("Grizzly"), a company in which Gulfport holds an approximate 25% interest, announced today that it has submitted a resource application to the Alberta Energy Resources Conservation Board ("ECRB") for the development of a 12,000 barrel per day ("bpd") oil sands project at Thickwood. Grizzly's Thickwood Thermal project is expected to produce 12,000 bpd of bitumen for up to 40 years utilizing both steam-assisted gravity drainage ("SAGD") and cyclic steam stimulation ("CSS") recovery technologies. The project will consist of:
a plant site consisting of two 6,000 bpd central processing facilities;
four SAGD well pads (split pads) and up to 33 CSS well pads; and
associated facilities and infrastructure.
Grizzly expects to file an environmental assessment with the Alberta Environment and Sustainable Resource Development ("AESRD") in January 2013. Grizzly expects receipt of approvals from the ERCB and AESRD for the Thickwood Thermal Project within 12 to 18 months of application submission. Following approval, Grizzly anticipates the period leading up to first production to be approximately 18 months.
Grizzly's independent engineering firm, GLJ Petroleum Consultants, estimated the Thickwood Thermal Project will ultimately recover approximately 107 million barrels of bitumen in their report dated December 31, 2011. With the submission of this application, Grizzly expects that a significant portion of the contingent resource assigned to the Thickwood property will be reclassified as probable reserves by GLJ Petroleum Consultants.
The Thickwood Thermal Project area is located approximately 58 kilometers northwest of Fort McMurray and near an established SAGD oil sands development at Southern Pacific McKay. Grizzly discovered the Thickwood Thermal Project area during the 2006 – 2007 winter drilling season and has subsequently drilled a total of 59 core holes and shot 3-D seismic on the acreage.
2013 Commodity Hedges
Gulfport recently expanded its 2013 hedging program, consisting of fixed price swaps for January 2013 through June 2013 of 5,000 barrels of oil per day at a weighted average price of $101.96 and fixed price swaps for July 2013 through December 2013 of 5,000 barrels of oil per day at a weighted average price of $99.86.
Guidance
Gulfport estimates its 2012 production to be in the range 2.55 million to 2.60 million BOE. Gulfport currently expects 2013 production to be in the range 7.40 million to 7.70 million BOE. Capital expenditures for exploration and production activities during 2013 are estimated to be in the range of $390 million to $410 million, excluding potential capital expenditures relating to Grizzly.
For 2013, Gulfport projects lease operating expense to be in the range of $5.00 to $6.00 per BOE, general and administrative expense to be between $1.50 and $2.50 per BOE, production taxes to be between 8% and 9% of revenues, and depreciation, depletion and amortization expense to be in the range of $33.00 to $35.00 per BOE.
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