From Gulfport Energy today:



OKLAHOMA CITY, Feb. 26, 2014 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (Nasdaq:GPOR) today reported financial and operational results for the quarter and year ended December 31, 2013 and provided an update on its 2014 activities.



Financial and Operational Highlights




Produced full-year oil and natural gas sales volumes of 4,118,131 barrels of oil equivalent ("BOE"), or 11,283 BOE per day ("BOEPD"), during 2013, as compared to 2,572,618 BOE, or 7,029 BOEPD in 2012.

Recorded net income of $153.2 million, or $1.97 per diluted share, in 2013, as compared to $68.4 million, or $1.21 per diluted share, in 2012.

Reported adjusted net income of $4.5 million, or $0.05 per diluted share, in the fourth quarter of 2013.

Generated $388.4 million of EBITDA in 2013, as compared to $191.4 million in 2012.

Reduced unit lease operating expense for 2013 to $6.48 per BOE, as compared to $9.45 in 2012.

Reported year-end 2013 total proved reserves of 38.43 million BOE, as compared to 13.88 million BOE in 2012.

Increased its acreage position 18,080 net acres in the Utica Shale, bringing the company's total acreage position to approximately 165,430 net acres under lease.

Entered into a marketing services agreement with BP North America Gas & Power for the marketing of its Utica Shale production.

Grizzly Oil Sands ULC ("Grizzly"), a company in which Gulfport holds an approximate 25% equity interest, achieved first steam at its first SAGD facility at Algar Lake.

Nine rigs are currently active in Gulfport's core operating areas, with seven horizontal rigs in the Utica Shale and two rigs in Southern Louisiana.


Financial Results



For the fourth quarter of 2013, Gulfport reported net income of $24.3 million on oil and gas revenues of $68.3 million, or $0.30 per diluted share. For the fourth quarter of 2013, EBITDA (as defined below) was $90.7 million and cash flow from operating activities before changes in working capital was $39.7 million.



For full year 2013, Gulfport reported net income of $153.2 million on oil and gas revenues of $262.2 million, or $1.97 per diluted share. For 2013, EBITDA (as defined below) was $388.4 million and cash flow from operating activities before changes in working capital was $170.8 million.



Gulfport's 2013 fourth quarter financial results include an aggregate non-cash loss of $16.9 million due to a hedge ineffectiveness. Excluding the impact of the hedge ineffectiveness, oil and natural gas revenues for the fourth quarter of 2013 would have been $85.2 million. Gulfport's 2013 fourth quarter financial results also include an aggregate gain of $54.7 million in connection with Gulfport's equity interest in Diamondback Energy, Inc. ("Diamondback"), a NASDAQ Global Select Market listed company. Associated with this taxable income was $3.0 million of income tax expense. Excluding the effects of these items, adjusted net income for the fourth quarter of 2013 would have been $4.5 million, or $0.05 per diluted share. Adjusted net income for the fourth quarter of 2013 was negatively impacted by higher than anticipated general and administrative expense, increased interest expense and lower oil realizations.



Production



For the fourth quarter of 2013, net production was 674,504 barrels of oil, 4,175,096 thousand cubic feet ("MCF") of natural gas and 6,851,332 gallons of natural gas liquids ("NGL"), or 1,533,480 BOE. Net production for the fourth quarter of 2013 by region was 984,528 BOE in the Utica Shale, 346,736 BOE at West Cote Blanche Bay, 195,002 BOE at Hackberry and an aggregate of 7,214 BOE in the Bakken, Niobrara and other areas. For 2013, Gulfport recorded net production of 2,316,827 barrels of oil, 8,891,183 MCF of natural gas and 13,416,485 gallons of NGL, or 4,118,131 BOE.



Gulfport's 2013 fourth quarter realized prices include an aggregate non-cash loss of $16.9 million due to a hedge ineffectiveness. Before the impact of derivatives, realized prices for the fourth quarter of 2013, including transportation costs, were $96.35 per barrel of oil, $3.45 per MCF of natural gas and $1.35 per gallon of NGL, for a total equivalent of $57.82 per BOE. Before the impact of derivatives, realized prices for the full-year 2013, including transportation costs, were $104.50 per barrel of oil, $3.73 per MCF of natural gas and $1.27 per gallon of NGL, for a total equivalent of $70.99 per BOE.




















GULFPORT ENERGY CORPORATION



PRODUCTION SCHEDULE



(Unaudited)















Production Volumes:

4Q2013

4Q2012

2013

2012















Oil (MBbls)

674.5

540.6

2,316.8

2,323.4



Natural Gas (MMcf)

4,175.1

366.3

8,891.2

1,107.7



NGL (MGal)

6,851.3

289.7

13,416.5

2,714.1



Oil equivalents (MBOE)

1,533.5

608.5

4,118.1

2,572.6















Average Realized Prices (before the impact of derivatives):

















Oil (per Bbl)

$ 96.35

$ 103.81

$ 104.50

$ 106.11



Natural Gas (per Mcf)

$ 3.45

$ 3.00

$ 3.73

$ 2.91



NGL (per Gal)

$ 1.35

$ 1.01

$ 1.27

$ 0.98



Oil equivalents (BOE)

$ 57.82

$ 94.51

$ 70.99

$ 98.12















Average Realized Prices:





















Oil (per Bbl)

$ 84.62

$ 101.89

$ 96.75

$ 104.46



Natural Gas (per Mcf)

$ 0.48

$ 3.00

$ 2.36

$ 2.91



NGL (per Gal)

$ 1.35

$ 1.01

$ 1.27

$ 0.98



Oil equivalents (BOE)

$ 44.56

$ 92.80

$ 63.68

$ 96.63




Subsequent to the fourth quarter of 2013, net production for the month of January 2014 averaged approximately 21,745 BOEPD. As of February 25, 2014, production for the month of February averaged approximately 25,771 BOEPD. Gulfport continues to estimate first quarter of 2014 average production to be relatively flat to the Company's 2013 exit rate of 27,780 BOEPD.



Derivatives



The table below sets forth the company's hedging positions as of February 26, 2014.




















GULFPORT ENERGY CORPORATION



COMMODITY DERIVATIVES - HEDGE POSITION AS OF FEBRUARY 26, 2014



(Unaudited)

















Quarter Ending





1Q2014

2Q2014

3Q2014

4Q2014



Oil (MBbls):









Swap Contracts









Volume

360

182

184

184



Price

$ 104.75

$ 101.50

$ 101.50

$ 101.50















Natural Gas (MMcf):









Swap Contracts









Volume

8,210

11,830

14,260

14,260



Price

$ 4.02

$ 4.05

$ 4.07

$ 4.07

















Year Ending







2014

2015

2016





Oil (MBbls):









Swap Contracts









Volume

910

--

--





Price

$ 102.79

--

--

















Natural Gas (MMcf):









Swap Contracts









Volume

48,560

54,750

9,380





Price

$ 4.06

$ 4.08

$ 4.02

















Swap Contracts











Volume

--

9,125

3,025





Price

--

$ 4.10

$ 4.10






Year-End 2013 Reserves



Gulfport reported year-end 2013 total proved reserves of 38.43 million BOE, consisting of 14.02 million barrels ("MMBBL") of oil and natural gas liquids and 146.45 billion cubic feet ("BCF") of natural gas. At year-end 2013, 64.8% of Gulfport's proved reserves were classified as proved developed reserves. Gulfport's year-end total proved reserves increased 177% over 2012. See "General Reserve Information" below.


















GULFPORT ENERGY CORPORATION



DECEMBER 31, 2013 NET RESERVES



(Unaudited)















Oil

Natural Gas

Oil Equivalent





MMBBL

BCF

MMBOE













Proved Developed Producing

6.51

93.55

22.10



Proved Developed Non-Producing

2.63

1.00

2.80



Proved Undeveloped

4.88

51.89

13.53



Total Proved Reserves

14.02

146.44

38.43













Probable Reserves

15.94

170.62

44.38













Total Proved and Probable Reserves

29.96

317.06

82.81




The following table provides Gulfport's 2013 total proved reserves by major operating areas:
















GULFPORT ENERGY CORPORATION





DECEMBER 31, 2013 TOTAL PROVED RESERVES



(Unaudited)















2013







MMBOE





Utica

32.35





Southern Louisiana

5.76





Niobrara

0.21





Other

0.11





Total Proved Reserves

38.43






In accordance with SEC guidelines ("SEC Case"), at year-end 2013, reserve calculations were based on the average first day of the month price for the prior 12 months. The prices utilized for Gulfport's year-end 2013 reserve report were $96.78 per barrel of oil and $3.67 per MMBTU of natural gas, in each case as adjusted by lease for transportation fees and regional price differentials. Utilizing these prices, the present value of Gulfport's total proved reserves discounted at 10% (referred to as "PV-10") was $697 million at December 31, 2013. The PV-10 value of our total proved and probable reserves was $1.3 billion at December 31, 2013. PV-10 is a non-GAAP measure because it excludes income tax effects. Management believes that the presentation of the non-GAAP financial measure of PV-10 provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and gas companies. PV-10 is not a measure of financial or operating performance under GAAP. PV-10 should not be considered as an alternative to the standardized measure as defined under GAAP. We have included a reconciliation of PV-10 of proved reserves to the most directly comparable GAAP measure-standardized measure of discounted future net cash flows. With respect to the pre-tax PV-10 amounts for probable reserves, there does not exist any directly comparable GAAP measure, and such amount does not purport to present the fair value of Gulfport's probable reserves.














GULFPORT ENERGY CORPORATION



DECEMBER 31, 2013 PV-10



(Unaudited)











SEC Case





($MM)



Proved Developed Producing

$ 437



Proved Developed Non-Producing

$ 111



Proved Undeveloped

$ 149









Total Proved Reserves

$ 697









Probable Reserves

$ 577









Total Proved and Probable Reserves

$ 1,274










The following table reconciles the standardized measure of future net cash flows to the PV-10 value of Gulfport's proved reserves:














GULFPORT ENERGY CORPORATION



DECEMBER 31, 2013 PV-10 RECONCILIATION



(Unaudited)











SEC Case





($MM)



Standardized measure of discounted future net cash flows (1)

$ 578



Add: Present value of future income tax discounted at 10%

$ 118



PV-10 value

$ 697















The standardized measure represents the present value of estimated future cash inflows from proved oil and natural gas reserves, less future development, abandonment, production, and income tax expenses, discounted at 10% per annum to reflect timing of future cash flows and using the same pricing assumptions as were used to calculate PV-10. Standardized measure differs from PV-10 because standardized measure includes the effect of future income taxes.




Grizzly Oil Sands Reserves and Resource



Third party engineers GLJ Petroleum Consultants Ltd. ("GLJ") has provided an assessment report to Grizzly estimating that effective December 31, 2013, Grizzly has 67 million barrels of proved reserves, 204 million barrels of probable reserves, and 3.1 billion barrels of best estimate (P50) contingent resource.



The following table summarizes GLJ's determination of Grizzly's reserves and resources effective December 31, 2013.








Reserves and Resources

Grizzly





Working Interest





Recoverable Volumes





(Millions of Barrels)



Proved Reserves

67



Probable Reserves

204



Proved + Probable (2P) Reserves

271









Best Estimate (P50) Contingent Resource

3,112




The GLJ reserve and resource assessment report was prepared in accordance with National Instrument 51-101 using the best practices detailed in the Canadian Oil and Gas Evaluation Handbook and not in accordance with the SEC guidelines. For important qualifications and limitations relating to these oil sands reserves and resources, please see "General Reserve Information" and "Oil Sands Reserves & Resources Notes" below.



Operational Update



Utica Shale



In the Utica Shale, Gulfport spud 52 gross (39 net) wells during 2013 and at present, Gulfport has seven horizontal rigs drilling in the play.



Gulfport has entered into a binding letter of intent with Rhino Resources Partners LP ("Rhino") to acquire approximately 8,200 net acres and approximately 1,000 BOEPD of production in the Utica Shale of Eastern Ohio for a total purchase price of $185 million, subject to closing adjustments. Gulfport plans to purchase all rights, title, and interest in leasehold and mineral interests covered by all oil and gas leases owned by Rhino in the Utica Shale in Eastern Ohio, together with all wells, production, data, equipment, contracts permits and privileges relating to the ownership of such properties. Gulfport is the operator of substantially all of this acreage. Proforma for this transaction, since November 2013 Gulfport has increased its acreage position in the core of the play, adding approximately 18,080 net acres, bringing the company's total acreage position to approximately 165,430 net acres under lease in the Utica Shale. Gulfport plans to fund these acreage acquisitions from existing cash on hand.



Gulfport announced today it has entered into a comprehensive marketing services agreement with BP North America Gas & Power ("BP"), the leading energy marketer in North America. Under the agreement, Gulfport has engaged BP to market all Utica Shale production for the Company through multiple firm outlets while offering access to numerous pricing hubs. Gulfport is provided flow assurance by joining efforts with BP, allowing the Company to focus on core competencies.