Gulfport Energy Corporation (NYSE: GPOR) is an independent, natural gas-weighted exploration and production company with a strong focus on the Appalachian and Anadarko basins. The company has established itself as a leader in the industry, leveraging its operational expertise and strategic asset positioning to drive sustainable growth and shareholder returns.
Business Overview and History
Gulfport Energy was incorporated in the state of Delaware in July 1997 and has since grown to become a significant player in the domestic energy landscape. The company's principal properties are located in eastern Ohio, targeting the Utica and Marcellus formations, as well as in central Oklahoma, where it focuses on the SCOOP Woodford and Springer formations.
In November 2020, Gulfport and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The Chapter 11 cases were administered jointly, and the Bankruptcy Court confirmed Gulfport's reorganization plan in April 2021. The company successfully emerged from bankruptcy protection on May 17, 2021, and began trading on the NYSE under the symbol GPOR.
Prior to the bankruptcy filing, Gulfport faced several challenges that impacted its business. The company was highly leveraged and struggled with low commodity prices, which led to significant impairment charges and asset sales. Gulfport also encountered issues with certain firm transportation agreements, which it was able to resolve through the bankruptcy process.
Following its emergence from bankruptcy, Gulfport focused on strengthening its balance sheet, improving operational efficiencies, and optimizing its asset portfolio. The company divested non-core assets and worked to enhance its drilling and completion techniques in its key operating areas. Gulfport also made strategic acquisitions of acreage in the Utica and Marcellus plays to bolster its development inventory.
Over the years, Gulfport has demonstrated a strong track record of operational excellence and capital discipline. The company's emergence from bankruptcy allowed it to strengthen its balance sheet and position itself for future growth.
Financial Snapshot
As of December 31, 2024, Gulfport reported total assets of $2.87 billion, with $1.75 billion in stockholders' equity. The company's net debt stood at $701.38 million, reflecting a strong financial position and ample liquidity to fund its ongoing operations and development activities.
For the full year 2024, Gulfport reported total revenue of $928.60 million and a net loss of $261.38 million. This net loss was primarily due to non-cash impairment charges of $373.21 million, related to the decline in commodity prices during the year. However, the company's adjusted EBITDA for the year was $421.11 million, showcasing its operational efficiency and ability to generate substantial cash flow.
Gulfport's free cash flow for 2024 was $195.94 million, allowing the company to continue its shareholder-friendly capital allocation strategy, which includes a $1.0 billion share repurchase program. As of February 20, 2025, Gulfport had repurchased 5.6 million shares, or approximately 17% of its outstanding common stock, at a weighted average price of $105.57 per share.
In the fourth quarter of 2024, Gulfport reported revenue of $284.83 million and a net loss of $273.24 million. The decrease in net income for the quarter was primarily due to a non-cash ceiling test impairment of $342.7 million, partially offset by realized gains on commodity derivatives.
As of December 31, 2024, Gulfport had total proved reserves of 4.0 Tcfe, with a Standardized Measure of $1.75 billion and a PV-10 of $1.76 billion. The company's 5-year CAGR for production is estimated at 2-3%.
Liquidity
Gulfport's strong financial position is further evidenced by its ample liquidity. As of December 31, 2024, the company had $1.5 million in cash and cash equivalents and $898.2 million of borrowing base availability under its $1.0 billion credit facility, providing total liquidity of $899.7 million. The company's debt-to-equity ratio stood at 0.40, with a current ratio and quick ratio both at 0.67.
The balance sheet restructuring through the bankruptcy process has provided Gulfport with increased financial flexibility and a more sustainable capital structure. This improved liquidity position allows Gulfport to pursue its growth initiatives and navigate potential market volatility with greater confidence.
Operational Highlights and Outlook
Gulfport's 2025 development program reflects its commitment to operational excellence and capital efficiency. The company's 2025 capital expenditure budget is expected to be in the range of $370 million to $395 million, which includes $35 million to $40 million of maintenance land and leasehold investment. This is relatively flat compared to the 2024 capital expenditures of approximately $385 million.
The 2025 plan includes drilling approximately 17 gross (17.0 net) operated horizontal wells in the Utica, 8 gross (8.0 net) operated horizontal wells in the Marcellus, and 2 gross (1.8 net) operated horizontal wells in the SCOOP. This balanced approach is expected to result in approximately 1.04 to 1.065 billion cubic feet equivalent per day of total production for the full year 2025, which is relatively flat compared to full year 2024 production of 1.05 billion cubic feet equivalent per day.
A significant focus of the 2025 plan is on increasing the company's exposure to liquids-rich opportunities. Gulfport expects a 30% year-over-year increase in liquids production (combined oil and NGL production), with liquids production totaling 18.0 to 20.5 thousand barrels per day for the full year 2025.
Gulfport's operational teams have continued to deliver impressive results, with cycle time improvements in total footage drilled per day of over 9% year-over-year and over 55% when compared to year-end 2022. Additionally, the company has achieved efficiency gains in the frac and drill-out phases of its operations, improving average frac pumping hours per day by 25% in 2024 and average plugs drilled per day by 46%.
These operational improvements, combined with the company's strategic focus on liquids-rich opportunities, are expected to drive further margin expansion and enhance Gulfport's free cash flow generation capabilities. In 2025, the company anticipates that its adjusted free cash flow could more than double compared to 2024, based on current commodity price strip. Gulfport plans to return substantially all of its 2025 adjusted free cash flow, excluding discretionary acreage acquisitions, through common stock repurchases.
Asset Portfolio
Gulfport's operations are primarily focused on two key segments:
1. Utica-Marcellus Segment: This segment covers the hydrocarbon-bearing rock formations located in the Appalachian Basin. Gulfport has approximately 208,000 net reservoir acres located primarily in Belmont, Harrison, Jefferson, and Monroe Counties in eastern Ohio. The Utica formation ranges in thickness from 600 to over 750 feet. The company has also identified approximately 20,500 net reservoir acres of its existing leasehold for Marcellus development, with 22 proved undeveloped Marcellus locations within its Utica operating area. In 2023, Gulfport drilled, completed, and turned to sales two Marcellus wells and has plans to drill eight Marcellus wells and complete and turn to sales four Marcellus wells in 2025. During 2024, this segment produced approximately 842 MMcfe per day net to Gulfport's interests, accounting for approximately 80% of its total production.
2. SCOOP Segment: The SCOOP (South Central Oklahoma Oil Province) is located within the Anadarko Basin and mainly targets the Devonian to Mississippian aged Woodford, Sycamore, and Springer formations. Gulfport has approximately 73,000 net reservoir acres in this area, comprising approximately 43,000 acres in the Woodford formation and approximately 30,000 acres in the Springer formation. During 2024, this segment produced approximately 212 MMcfe per day net to Gulfport's interests, accounting for approximately 20% of its total production.
Risks and Challenges
As with any oil and gas exploration and production company, Gulfport faces various risks and challenges that could impact its operations and financial performance. These include, but are not limited to, volatility in commodity prices, regulatory changes, operational risks, and competition within the industry.
The company's financial results are heavily influenced by fluctuations in natural gas, oil, and natural gas liquids (NGL) prices, which can be subject to significant market swings. In 2024, Henry Hub natural gas prices ranged from $1.21 to $13.20 per MMBtu, highlighting the volatility in the market. Gulfport's ability to mitigate this risk through its hedging program and operational efficiencies will be key to maintaining its financial resilience.
Additionally, the company's operations are subject to complex environmental, health, and safety regulations, which could lead to increased compliance costs or operational disruptions if not properly managed. Gulfport's strong track record of environmental stewardship and its commitment to sustainability, as evidenced by its recent corporate sustainability report, aim to address these concerns.
Competitive pressures from other E&P companies, as well as the potential development of alternative energy sources, could also pose challenges to Gulfport's market position and growth prospects. The company's focus on operational excellence, capital discipline, and strategic asset positioning will be crucial in navigating these industry dynamics.
Conclusion
Gulfport Energy has demonstrated its ability to navigate the challenges of the upstream oil and gas industry, leveraging its operational expertise and strategic asset base to drive sustainable growth and shareholder value. With a strong financial position, a disciplined capital allocation strategy, and a focus on liquids-rich opportunities, the company is well-positioned to capitalize on the evolving energy landscape and deliver compelling returns for its investors.
As Gulfport continues to execute on its development plans and optimize its operations, investors should closely monitor the company's financial and operational performance, as well as its ability to adapt to the evolving industry dynamics. The company's commitment to returning substantially all of its 2025 adjusted free cash flow through common stock repurchases further underscores its focus on shareholder value creation. Overall, Gulfport's proven track record and forward-looking strategy make it a compelling investment opportunity in the energy sector.