Gulfport Posts Third Quarter Results
Gulfport has reported financial and operating results for the third quarter of 2008. For the third quarter of 2008, Gulfport reported net income of $14.1 million on revenues of $36.9 million, or $0.33 per diluted share. EBITDA (as defined below) for the third quarter of 2008 was $24.8 million. Cash flow from operating activities before changes in operating assets and liabilities was $23.9 million.
Net production was 361,318 barrels of oil, 134,959 thousand cubic feet ("MCF") of natural gas and 16,540 barrels of natural gas liquids ("NGL"), or 400,351 barrels of oil equivalent ("BOE"), for the third quarter of 2008. Realized price, which includes transportation, for the quarter was $95.08 per barrel of oil, $9.91 per MCF of natural gas and $73.55 per barrel of NGL, or total equivalent of $92.19 per BOE.
In the third quarter of 2008, approximately 130,000 BOE of production was lost due to hurricane shut-ins. Less the impacts of the hurricanes, net production for the third quarter of 2008 would have been approximately 5,765 barrels of oil equivalent per day ("BOEPD").
Net production for the third quarter of 2008 by region was 318,101 BOE in Southern Louisiana, 63,632 BOE in the Permian Basin and 18,618 BOE in the Bakken.
In Southern Louisiana, Gulfport has drilled eight wells at West Cote Blanche Bay ("WCBB") year-to-date. Of these eight wells, seven wells were completed as producers with one non-productive "Halo Well" drilled as a requirement to maintain acreage. Gulfport also performed nine recompletions at WCBB in the third quarter. From October 22 to November 4, 2008, WCBB produced for a fourteen-day average of 3,943 net BOEPD.
At Hackberry, all four wells drilled during the summer of 2008 have been completed and are strong producers. From October 22 to November 4, 2008, Hackberry produced for a fourteen-day average of 785 net BOEPD.
Gulfport's year-to-date drilling activity at WCBB and Hackberry combines for a 92% drilling success rate in Southern Louisiana.
In the Permian Basin, 29 gross wells have been spud year-to-date. Of these 29 wells, 25 have been completed and fracture treated, with 14 of the completions being performed in September and October. One well is currently drilling while three wells are in various stages of completion. From October 22 to November 4, 2008, Gulfport's Permian assets produced for a fourteen-day average of 874 net BOEPD.
Gulfport's acreage position in the Bakken has been expanded to 17,660 acres in the play, with approximately 26% located in Mountrail County. Year-to-date, Gulfport has participated, or committed to participate, in approximately 50 gross wells. Proposed working interests total approximately 1.3 net wells at a total cost of approximately $7.0 million as of October 31, 2008.
As previously reported, the Whitmore 1-6H reported an IP rate of 1,830 BOEPD from the Bakken formation in the Parshall area of Mountrail County, North Dakota. To date, cumulative production from this well is approximately 75,034 gross BOE for a 72 day period. Gulfport owns a 15.5% working interest in the well.
The Whitmore 1-7H tested at an IP rate of 2,205 BOEPD from the Bakken formation in the Parshall area of Mountrail County, North Dakota. To date, cumulative production from the well is approximately 30,865 gross BOE for a 21 day period. Gulfport owns a 3.9% working interest in the well.
Canadian Oil Sands
In Canada, Gulfport has an approximate 25% interest in Grizzly Oil Sands ("Grizzly"), a Canadian oil sands company. Grizzly holds the sixth largest land position in the Alberta oil sands 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 third quarter of 2008, Grizzly appointed John Pearce, formerly of Devon Canada, to the position of Chief Executive Officer. Mr. Pearce possesses a wealth of knowledge and experience in thermal heavy oil, having been responsible for lease selection, preliminary design, permitting, project management and operations engineering functions for the 35,000 barrel per day ("BPD") Jackfish project, currently in operation, as well as for the 35,000 BPD Jackfish 2 project, which recently received regulatory approval. Under the guidance of Mr. Pearce, Grizzly is moving forward with the permitting of its winter drilling program to begin in late 2008.
Chief Executive Officer Jim Palm said, "At this point, we have an identified capital expenditure budget of $35 million in 2009 with approximately $5 million allocated to Grizzly and the remainder split evenly between Southern Louisiana and the Permian and Bakken. The Southern Louisiana budget will focus on recompletions. With this budget, we expect to produce in the range of approximately 1.9 to 2.1 million BOE and generate approximately $100 - $110 million of EBITDA at $70 WTI and $120 - $130 million of EBITDA at $90 WTI."
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