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Gulfport Energy writes down value of oil, gas assets in 2019, report shows

Gulfport Energy's headquarters in Oklahoma City is seen. [OKLAHOMAN ARCHIVES]
Gulfport Energy's headquarters in Oklahoma City is seen. [OKLAHOMAN ARCHIVES]

An expensive write-down contributed to big losses on the year for Gulfport Energy.

After markets closed Thursday, the company issued a report stating it lost about $2.02 billion, or $12.49 per share, on total revenues of about $1.35 billion for the entire year.

Gulfport wrote down the value of its oil and natural gas assets by $2 billion in 2019.

As part of that, the company took an impairment charge on the value of its oil and gas assets of about $2.04 billion.

The Oklahoma City-based company, which owns and operates wells in Ohio’s Utica Shale and Oklahoma’s SCOOP play of the Anadarko Basin, also announced it's cutting the amount of money it expects to spend to drill and complete wells in 2020 to between $285 million and $310 million.

In 2018, the company spent $602.5 million.

In 2018, the company had earned a profit of about $430.6 million, or $2.46 a share, on total revenues of about $1.36 billion.

David M. Wood, Gulfport’s CEO, said the company halved its capital expenditures budget for 2020 because of continued low pricing for natural gas — mostly what the company produces.

“At current strip pricing, our 2020 drilling program will be funded within cash flow, ensuring a very strong liquidity position … with a relatively low amount of revolver draw,” Wood said. “The large decline in spending during 2020 also allows us to retain our high value inventory for a better gas price environment in the future.”

In the Utica Shale in 2019, Gulfport drilled 16 wells and turned 47 wells to sales. Average daily production from its operations there averaged about 1.01 billion cubic feet (equivalent, officials said).

This year, Gulfport intends to run one rig in the play with plans for it to drill 16 wells.

In the SCOOP play of the Anadarko Basin, the company drilled 10 wells and brought 14 wells to sales.

The company stated its average daily production from that field was 274 million cubic feet (equivalent).

For 2020, the company plans to run between one and two rigs in the play and to turn four wells to sales.

“Gulfport took many positive steps in 2019 to address the challenges facing our industry and to better position the company,” Wood said, noting that Gulfport had completed its drilling plans for 2019 on budget and had met its production estimates as well.

At the same time, it sold non-core assets to improve its liquidity, continued to buy back outstanding debt at discounted rates and strengthened both its management team and board of directors.

Just within the past two months, the company added two independent members to its board.

It also covered about 50% of its coming year’s gas production at a hedge of $2.86 per million British thermal units.

“We remain committed to allocating capital in a disciplined manner, focusing on returns and maintaining strong liquidity,” Wood said.

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›