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Gulfport (GPOR) Q4 Earnings Miss Due to Soft Gas Realizations

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Gulfport Energy Corporation (GPOR - Free Report) witnessed lower-than-expected results in fourth-quarter 2019 as both earnings and sales lagged estimates.

This Oklahoma-based company reported fourth-quarter adjusted net earnings per share (EPS) of 5 cents, missing the Zacks Consensus Estimate of 18 cents. Moreover, the bottom line was below the year-ago EPS of 46 cents a share amid weaker year-over-year natural gas price realizations and higher costs.

Further, revenues of $281.2 million fell short of the Zacks Consensus Estimate of $316 million. The top line also plunged from the year-ago figure of $416 million.

Production & Realized Prices

Gulfport’s total oil and gas production decreased to 123,866 million cubic feet equivalent (MMcfe) from 128,139 MMcfe in the corresponding period of last year. Of the total output, 92.4% comprised natural gas. Gas production from the Utica Shale declined 2.3% year over year to 100,324 MMcfe. Nearly 81% of the output came from the Utica acreage. Output from SCOOP came in at 23,451 MMcfe, lower than the year-ago level of $24,406 MMcfe.

Average realized natural gas price (before the impact of derivatives) during the fourth quarter was $1.78 per thousand cubic feet, lower than the year-ago period’s $3.16. Average realized natural gas liquids price was 49 cents per gallon, down from the year-ago quarter’s 67 cents. Gulfport fetched $53.23 per barrel of oil during the quarter, down from the year-ago figure of $58.45. Overall, the company realized $2.03 per thousand cubic feet equivalent in the quarter compared with $3.45 a year ago.

Gulfport Energy Corporation Price, Consensus and EPS Surprise

Gulfport Energy Corporation Price, Consensus and EPS Surprise

Gulfport Energy Corporation price-consensus-eps-surprise-chart | Gulfport Energy Corporation Quote

Costs, Capex and Balance Sheet

Total expenses in the quarter under review amounted to $1.72 billion, higher than $259.5 million in the prior-year period. This rise is mainly attributed to higher general and administrative costs, depreciation, and impairment and restructuring charges incurred in the reported quarter. Depreciation costs flared up 7.2% from the prior-year quarter to $143.45 million.

In the reported quarter, Gulfport spent $123.4 million on drilling and completion. As of Dec 31, this natural gas-weighted energy explorer had $6.06 million in cash and cash equivalents. Gulfport had a long-term debt of $1,978 million, representing a debt-to-capitalization ratio of 60.07%.

2020 Guidance

This upstream player expects current-year capex in the band of $285-$310 million, indicating 50% decline from the figure reported in 2019. It projects full-year production within 1,100-1,150 MMcfe/d. The company expects natural gas price realizations (before the effects of hedges and including transportation) between 70 cents and 80 cents per thousand cubic feet in 2020.

Zacks Rank & Key Picks

Gulfport has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are Contango Oil & Gas Company , Noble Energy Inc. and Earthstone Energy, Inc. (ESTE - Free Report) , each carrying a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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