For the year, Gulfport reported net income of $27.8 million, a 155% increase compared to 2005. Earnings per diluted share for the year was $0.82 on revenues of $60.4 million. EBITDA (as defined below) for 2006 was $43 million, a 157% improvement compared to 2005. Cash flow from operating activities before changes in working capital for 2006 totaled $41.9 million, a 154% increase from 2005.
For the fourth quarter, Gulfport reported net income of $5.4 million, compared to a $90,000 loss for the same prior-year period. Earnings per diluted share for the fourth quarter was $0.16 on revenues of $17.6 million. EBITDA (as defined below) for the quarter was $10.6 million, compared to approximately $0.5 million in the fourth quarter 2005. Cash flow from operating activities before changes in working capital for fourth quarter 2006 totaled $10.1 million, compared to approximately $0.4 million in fourth quarter 2005.
Production and Operational Highlights for 2006
Net production was 270,322 barrels of oil and 124,373 million cubic feet ("Mcf") of natural gas, or 291,051 barrels of oil equivalent ("BOE"), for the fourth quarter 2006. For the year, Gulfport reported record annual net production of 869,728 barrels of oil and 676,817 Mcf of natural gas, or 982,531 BOE. Production increased in 2006 by 60% compared to 2005 annual net production of 612,840 BOE.
During 2006, Gulfport drilled 25 productive wells out of 28 wells drilled, an 89% success rate. The company also performed 19 recompletions, all at the West Cote Blanche Bay (``WCBB'') field. In Thailand, Gulfport owns a 0.7% interest in the Phu Horm field which commenced selling gas in the fourth quarter and is currently producing approximately 100 MMcf per day. Gulfport also entered into the Canadian oil sands in 2006 by taking a 25% interest in Grizzly Oil Sands for which it is the operator. During the year, Grizzly acquired 315,000 acres in the Athabasca Oil Sands and commenced evaluation of the acreage with an initial 62 well core hole drilling program.
Total proved reserves, P1 reserves, which consists of Proved Developed Producing (PDP), Proved Developed Non-Producing (PDNP) and Proved Undeveloped (PUD) were 23.2 million BOE at December 31, 2006. The PDP reserves were 1.6 million BOE, PDNP reserves were 4.0 million BOE and PUD reserves were 17.6 million BOE. In addition to the company's proved reserves, independent engineers have assigned probable reserves, P2 reserves, of 3.8 million BOE to the company's WCBB field and 1.7 million BOE to its interest in the Phu Horm field in Thailand and possible reserves, P3 reserves of 8.9 million BOE net to Gulfport's interest in the Phu Horm field.
In 2006, Gulfport's capital expenditures associated with the exploration and development of its oil and gas properties were approximately $55 million. This amount includes $50.4 million associated with exploratory and development drilling and $4.2 million for recompletions.
2007 Operation Update
The company has drilled 6 wells year-to-date 2007 in southern Louisiana; four development wells at the WCBB field and two exploratory wells at East Hackberry. The company has also drilled and logged 62 wells in Alberta on its Canadian oil sand acreage.
The production facility barge for the East Hackberry field is on location and secured to its pad. Initial tie-in and start-up activities are under way and the connection of flow lines from the initial East Hackberry wells (2006 No. 1, 2007 No. 1 & No. 2) is in progress.
Gulfport's 2007 guidance remains as previously stated on November 9, 2006 with total net production to be in the range of 1.7 million to 1.9 million barrels of oil equivalent. Capital expenditures are estimated in the range of $60 million to $65 million. Operationally, Gulfport plans to drill between 26 to 28 new wells and perform 18 recompletions, similar to its 2006 activity level. The production and capital targets for 2007 exclude our exploratory efforts at Hackberry.
Lease operating expense is projected to be in the range of $7.00 to $8.00 per barrel of oil equivalent for 2007. Selling, general and administrative expenses are estimated to be between $2.00 to $2.50 per barrel of oil equivalent for 2007.
Gulfport Energy Corporation is an Oklahoma City based independent oil and natural gas exploration and production company with its principal producing properties located along the Louisiana Gulf Coast. Gulfport recently acquired an acreage position in the Alberta oil sands in Canada and drilled core samples this winter. In addition, Gulfport also has an interest in the producing Phu Horm gas field in Thailand.
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