Gulfport Energy to Buy More Utica Shale Assets, Unveils Share Offering

Gulfport Energy Corp. plans to acquire around $300 million in additional oil and gas assets in the Utica Shale, and is planning a stock offering to fund the purchase.

Gulfport has agreed to take over about 30,000 net acres in the Utica Shale in Eastern Ohio from Windsor Ohio LLC, an affiliate of Wexford Capital LP, for about $300 million. The deal raises Gulfport's leasehold interests in the Utica Shale to an estimated 137,000 gross acres. The transaction excludes 14 existing wells, along with certain acreage surrounding each well.

The deal, scheduled to close before the end of the year, will increase Gulfport's working interest in the acreage to 72.5%.

The company said it will publicly offer nine million shares and plans to use the proceeds, together with funds from a possible private placement of high-yield notes, to pay for the Utica Shale assets acquisition and for general corporate purposes, which might include expenditures associated with Gulfport's drilling programs next year. The company had 55.7 million shares outstanding as of Nov. 1.

Meanwhile, Grizzly Oil Sands ULC, in which Gulfport holds a roughly 25% interest, said it has submitted a resource application to the Alberta Energy Resources Conservation Board to develop a 12,000-barrel-per day oil-sands project at Thickwood. The Thickwood Thermal project is expected to produce 12,000 barrels per day of bitumen for up to 40 years utilizing both steam-assisted gravity drainage and cyclic steam stimulation recovery technologies.

Gulfport also said that it has expanded its commodity hedging program for next year. It now consists of fixed-price swaps for January through June of 5,000 barrels per day at a weighted average price of $101.96 and fixed-price swaps for July through December of 5,000 barrels per day at a weighted average price of $99.86.

The energy company lowered its full-year guidance for production to the range of 2.55 million to 2.6 million barrels of oil equivalent, from 2.7 million to 2.8 million BOE forecast in November. Production for 2013, though, is expected to be in the range of 7.4 million to 7.7 million BOE, up from the earlier view of 6.5 million to 6.8 million BOE. Capital expenditures for exploration and production activities during 2013 are estimated to be between $390 million and $410 million, excluding potential capital expenditures relating to Grizzly.

Last month, Gulfport reported that its third-quarter profit slumped 98% as it logged a $15.5 million income-tax expense related to its oil and natural-gas interests in the Permian Basin.

Shares were up 31 cents at $39.02 at Monday's close. The stock has more than doubled over the past six months.


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