Gulfport Energy Corporation (GPOR - Free Report) recently released capital expenditure budget and production forecast for 2019. The Oklahoma-based upstream player expects 2019 capex in the band of $565-$600 million, lower than the 2018 level of $814 million. Notably, majority of the spending in 2019 will be directed toward drilling and completion activities, and around $40-$50 million will be allocated for land activities. Moreover, the company expects 2019 free cash flow to exceed $100 million.
Backed by its rich drilling inventory position in the Utica Shale and SCOOP Basin, Gulfport has recorded remarkable production growth over the last five years. The company’s yearly volumes increased at an impressive 100% CAGR since 2013. A combination of robust execution and strong performance is expected to help Gulfport maintain the strong production momentum. In fact, robust output from the Utica Shale helped the company to deliver stronger-than-expected results in each of the trailing four quarters, with average positive earnings surprise of 30.91%.
Owing to solid operations in Utica and SCOOP basins, the company projects 2019 production within 1,360-1,400 million cubic feet equivalent per day (MMcfe/d). This is almost consistent with the fourth-quarter 2018 output level of 1,392.8 million. Notably, full-year 2018 output averaged 1,360.3 MMcfe/d.
Gulfport, which is committed in returning value to its shareholders, announced the completion of $200-million stock buyback program in 2018. Bringing in pleasant news for investors, its board of directors authorized the repurchase of an additional $400 million of shares of the company’s common stock over the next two years. The company expects to fund the program by the generation of free cash flows and monetization of the non-core assets of the firm.
Zacks Rank and Key Picks
Gulfport currently carries a Zacks Rank #3 (Hold).
Meanwhile, investors interested in the same industry can opt for Approach Resources Inc. (AREX - Free Report) , Bonanza Creek Energy, Inc. (BCEI - Free Report) and CNX Resources Corporation (CNX - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Approach Resources expects 2019 earnings to record year-over-year growth of 41.67%.
Bonanza Creek’s 2019 earnings are likely to increase 57.31% on a year-over-year basis.
CNX Resources’ earnings are projected to grow 2.57% year over year in 2019.
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