GULFPORT ENERGY CORP Q1 FY2025 earnings call

Gulfport started 2025 with strong momentum. In the first quarter, the average daily production was 929 Mcfe, keeping on track with the full-year production guidance. The company updated its drilling plan, including a four-well dry gas Utica pad in 2025 and deferring a four-well Marcellus pad to 2026 while reaffirming the capital guidance. As of March 31, 2025, about $11 million was invested in land maintenance. Thirteen gross wells were completed drilling in Ohio during the first quarter. Seven gross Utica wells were brought online in March, with the cage development in Southwest Harrison County outperforming the Lake VII Pad. The Marcellus Hendershot Pad wells showed strong oil EURs. Drilling and completion efficiencies improved, with a 28% improvement in footage drilled per day in the Utica and new records in frac operations.

Gulfport's average daily production in the first quarter totaled 929 million cubic feet equivalent per day, aligning with company expectations and on track to deliver the full-year production guidance of 1.04 million to 1.065 million cubic feet equivalent per day. Adjusted EBITDA for the quarter was approximately $218 million, and adjusted free cash flow was $36.6 million. Cash operating costs for the first quarter were $1.31 per million cubic feet equivalent. The all-in realized price for the first quarter was $4.11 per Mcfe, which was $0.45 or 12% above the NYMEX Henry Hub index price. The company reaffirmed the full-year operated drilling and completion capital guidance of $335 million to $355 million and the per-unit operating cost guidance of $1.2 to $1.29 per Mcfe.

The company reaffirmed the full-year operated drilling and completion capital guidance of $335 million to $355 million. The full-year per-unit operating cost guidance of $1.2 to $1.29 per Mcfe was reaffirmed. Based on current strip pricing, adjusted free cash flow is forecasted to grow significantly in the coming quarters. The company remains committed to returning substantially all adjusted free cash flow, excluding discretionary acreage acquisitions, to shareholders through share repurchases.

Commodity price volatility could have an impact on financial results. There are operational execution risks related to drilling and completion schedules. Uncertainties in market conditions may affect capital allocation decisions.

Q: Tim Rezvan asked about the front end loaded capital program and land opportunities.

A: John Reinhart stated that they are sensitive to the commodity environment, the shift towards dry gas will accelerate cash flows, and the land teams continuously assess attractive opportunities.

Q: Zach Parham asked about the outperformance of the cage pad.

A: Matthew Rucker said it was due to frac design, sand/water loading, cluster spacing, and reservoir understanding.

Q: Noah Hungness asked about drilling efficiencies and pipeline projects.

A: Matthew Rucker said efficiencies were modeled in the CapEx guidance, and Gulfport assesses pipeline projects on a netback basis.

Q: Gabe Daoud asked about Utica D&C per foot and M&A.

A: Matthew Rucker said current costs were in line with the guidance, and Gulfport assesses M&A opportunities based on return on capital.

Q: Carlos Escalante asked about the pivot to dry gas and hedging.

A: John Reinhart said the macro was favorable for gas in 2026, and Michael Hodges said the hedging strategy remained consistent.

Q: Jacob Roberts asked about the subsequent plan for the cage pad.

A: Matthew Rucker said learnings would be taken for future pads, and John Reinhart said there would be a focus on wet and dry gas in 2026.