Gulfport Energy’s (NYSE: GPOR) Q1 2024 results, highlighted solid performance with production surpassing internal expectations by a slight margin. Although the company deferred some Q2 2024 activities due to current market conditions, it remains confident in meeting its 2024 production targets.
Q1 2024 Results
Gulfport achieved a production rate of 1.054 billion cubic feet equivalent (Bcfe) per day in Q1 2024, in line with analyst consensus and exceeding planned production targets by a couple of percentage points.
The company also managed to keep its capital expenditures slightly below the budgeted amount for the quarter.
Financial Performance
During Q1 2024, Gulfport realized a negative $0.11 differential to NYMEX for natural gas, which was better than anticipated. Looking ahead, the company expects wider differentials later in 2024 due to seasonal factors and higher NYMEX gas prices.
Despite this, Gulfport reaffirmed its full-year guidance, projecting a negative $0.20 to negative $0.35 differential for the entire year. Current modeling suggests a slightly narrower full-year differential of negative $0.25, reflecting the company’s operational adjustments.
Gulfport reported approximately $39 million in adjusted free cash flow for Q1 2024, bolstered significantly by $65 million in realized hedging gains. Given its front-loaded capital expenditures in the first half of 2024, Gulfport anticipates higher free cash flow generation in the latter half of the year.
Hedging Strategy
Gulfport has taken proactive steps to mitigate market risks through strategic hedging. As of now, the company has hedged around 38% of its projected 2025 natural gas production using swaps and collars. These financial instruments provide Gulfport with price certainty and stability amid fluctuating market conditions.
With current 2025 strip prices indicating positive trends, Gulfport estimates potential free cash flow of approximately $400 million before hedges for 2025, with hedging activities potentially boosting this figure to $440 million.
Updated 2024 Outlook
While Gulfport has deferred some development and completion (D&C) activities from Q2 2024 to the latter half of the year due to prevailing natural gas prices, the company has reaffirmed its full-year guidance. Gulfport anticipates minimal impact on its overall 2024 production despite the adjustments.
Based on current market strip prices for 2024, Gulfport projects oil and gas revenue of approximately $1.037 billion.
This includes adjustments for narrower natural gas differentials as previously mentioned. The company estimates the value of its 2024 hedges to be around $226 million, contributing to a projected free cash flow of $298 million for the year. This projection is heavily weighted towards the second half of 2024.
Share Repurchase Program
Gulfport remains committed to enhancing shareholder value through its ongoing share repurchase program. In Q1 2024 alone, the company repurchased approximately 0.21 million shares at an average price of $140.39 per share, amounting to $29.5 million in share repurchases.
This represents about 76% of the adjusted free cash flow generated during the quarter. As of the end of Q1 2024, Gulfport had $221 million in remaining capacity under its $650 million share repurchase program.
$300 Million Cash flow Generation
Looking forward, Gulfport Energy anticipates generating approximately $300 million in free cash flow for 2024, driven primarily by its robust hedging strategies amidst challenging market conditions.
With promising projections for 2025 and ongoing improvements in operational efficiency, Gulfport’s estimated valuation suggests good potential upside for investors. For those seeking exposure to the energy sector amid evolving market dynamics, Gulfport Energy presents an intriguing opportunity.
DISCLAIMER
You should read and understand this disclaimer in its entirety before joining or viewing the website or email/blog list of SmallCapStocks.com (the “Publisher”). The information (collectively the “Advertisement”) disseminated by email, text or other method by the Publisher including this publication is a paid commercial advertisement and should not be relied upon for making an investment decision or any other purpose. The Publisher is engaged in the business of marketing and advertising the securities of publicly traded companies in exchange for compensation. The track record, gains, upside, and/or losses mentioned in the Advertisement, if any, should not be considered as true or accurate or be the basis for an investment. The Publisher does not verify the accuracy or completeness of any information included in the Advertisement. While the Publisher does not charge for the SMS service, standard carrier message and data rates may apply. To unsubscribe from receiving promotional text messages to your phone sent via an autodialer, using your phone reply to the sender’s phone number with the word STOP or HELP for help.
The Advertisement is not a solicitation or recommendation to buy securities of the advertised company. An offer to buy or sell securities can be made only by a disclosure document that complies with applicable securities laws and only in the states or other jurisdictions in which the security is eligible for sale. The Advertisement is not a disclosure document. The Advertisement is only a favorable snapshot of unverified information about the advertised company. An investor considering purchasing the securities, should always do so only with the assistance of his legal, tax and investment advisors. Investors should review with his or her investment advisor, tax advisor or attorney, if and to the extent available, any information concerning a potential investment at the web sites of the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov; the Financial Industry Regulatory Authority (the "FINRA") at www.FINRA.org, and relevant State Securities Administrator website and the OTC Markets website at www.otcmarkets.com. The Publisher cautions investors to read the SEC advisory to investors concerning Internet Stock Fraud at www.sec.gov/consumer/cyberfr.htm, as well as related information published by the FINRA on how to invest carefully. Investors are responsible for verifying all information in the Advertisement. As an advertiser, we do not verify any information we publish. The Advertisement should not be considered true or complete.
The Publisher does not offer investment advice or analysis, and the Publisher further urges you to consult your own independent tax, business, financial and investment advisors concerning any investment you make in securities particularly those quoted on the OTC Markets. Investing in securities is highly speculative and carries an extremely high degree of risk. You could lose your entire investment if you invest in any company mentioned in the Advertisement. You acknowledge that we are not an investment advisory service, a broker-dealer or an investment adviser and we are not qualified to act as such. You acknowledge that you will consult with your own independent, tax, financial and/or legal advisers regarding any decisions as to any company mentioned here. We have not determined if the Advertisement is accurate, correct or truthful. The Advertisement is compiled from publicly available information, which include, but are not limited to, no cost online research, magazines, newspapers, reports filed with the SEC or information furnished by way of press releases. Because all information relied upon by us in preparing an advertisement about an issuer comes from a public source, it is not reliable, and you should not assume it is accurate or complete.
By your subscription to our profiles, the viewing of this profile and/or use of our website, you have agreed and acknowledged the terms of our full disclaimer and privacy policy which can be viewed at the following link: www.SmallCapStocks.com/Disclaimer and www.SmallCapStocks.com/Privacy-Policy
By accepting the Advertisement, you agree and acknowledge that any hyperlinks to the website of (1) a client company, (2) the party issuing or preparing the information for the company, or (3) other information contained in the Advertisement is provided only for your reference and convenience. The advertiser is not responsible for the accuracy or reliability of these external sites, nor is it responsible for the content, opinions, products or other materials on external sites or information sources. If you use, act upon or make decisions in reliance on information contained in any disseminated report/release or any hyperlink, you do so at your own risk and agree to hold us, our officers, directors, shareholders, affiliates and agents harmless. You acknowledge that you are not relying on the Publisher, and we are not liable for, any actions taken by you based on any information contained in any disseminated email or hyperlink.
Faith is an enthusiastic freelancer and regular contributor to numerous finance blogs, creating valuable pieces to educate individuals on finance and fintech options. As a skilled writer, Faith has created content for diverse industries—if it exists, she’s likely written about it!
