Gulfport All Smiles over 56% Net Increase
Gulfport Energy Corporation has reported financial and operating results for the second quarter of 2008.
For the second quarter of 2008, Gulfport reported net income of $14.9 million on revenues of $35.9 million, or $0.35 per diluted share, exceeding consensus estimates of $0.27 per share. Net income increased 56% compared to the second quarter of 2007.
EBITDA (as defined below) for the second quarter of 2008 was $26.1 million, an increase of 53% from the second quarter of 2007 and ahead of street consensus of $21.8 million. Cash flow from operating activities before changes in working capital was $25.3 million.
Production and Operational Highlights
Net production was 398,635 barrels of oil, 202,160 thousand cubic feet ("MCF") of natural gas and 12,307 barrels of natural gas liquids ("NGL"), or 444,635 barrels of oil equivalent ("BOE"), for the second quarter of 2008. Realized price, which includes transportation, for the quarter was $81.85 per barrel of oil, $12.22 per MCF of natural gas and $61.45 per barrel of NGL, or total equivalent of $80.64 per BOE.
Net production for the second quarter of 2008 by region was 394,582 BOE in Southern Louisiana, 43,573 BOE in the Permian Basin and 6,480 BOE in the Bakken.
For the month of July, net production totaled approximately 155,664 BOE, or 5,021 BOE per day including 4,277 BOE per day in Southern Louisiana, 639 BOE per day in the Permian Basin and 105 BOE per day in the Bakken.
Lease operating expense for the second quarter of 2008 was $4.8 million, or $10.81 per BOE, and selling, general and administrative expense was $1.8 million, or $4.13 per BOE.
In Southern Louisiana, Gulfport drilled four wells at Hackberry in the second quarter before releasing the drilling rig. We are pleased to report that all four wells appear to be productive and initial test results and production from the first well are in line with expectations. Meanwhile, second quarter production at West Cote grew by approximately 15% through the normal cycle of up-hole recompletions and increased operational efficiencies.
A barge rig returned to the field the first week of July and spudded the first of an estimated ten wells to be drilled during the second half of 2008. Since its return, the rig has drilled two wells and is currently drilling the third.
Year-to-date in the Permian Basin, Gulfport along with Windsor Energy have drilled 18 gross wells (9 wells net to Gulfport). Of the 18 wells drilled-to-date, twelve wells have been completed and based on the data collected thus far, the new wells are performing according to the type curve. Currently, we have five drilling rigs active on the acreage, and we expect to maintain this number of rigs through 2008. Gulfport expects to meet the previously announced plan to drill 35 to 45 gross wells in the Permian during 2008. Gulfport has a 50% interest in this activity.
In Canada, Gulfport has an approximate 25% interest in Grizzly Oil Sands, a Canadian oil sands company. Grizzly holds the second largest land position in Alberta among independent development-stage oil sands companies with 511,765 net acres of oil sands leases, all of which are owned and operated by Grizzly (127,941 acres net to Gulfport). In the first quarter of 2008, Grizzly concluded its 2007-2008 winter drilling season with the completion of 55 core holes and shot 7.5 square miles of seismic data.
In the Bakken, Gulfport's current acreage position has been increased from approximately 14,000 net acres to 16,500 net acres, and we continue leasing in the area. Year-to-date, Gulfport has participated in 37 wells, which includes 20 wells in Mountrail County, with an average interest of 2.4%. Windsor Energy has moved a rig to the area and set pipe on the first Windsor operated well. Gulfport owns an approximate 15.5% working interest in this well. Three to five miles to the east of this well, EOG has reported wells with peak production rates of 3,744 and 3,225 barrels of oil per day. The rig has since been moved to the second Windsor-operated well and is currently drilling ahead on the vertical leg of the well.
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