IPAA Investor Presentation April 2014

Transcription

1 IPAA Investor Presentation April 14

2 Forward Looking Statement This presentation includes forward-looking statements within the meaning of Section 7A of the Securities Act of 19, as amended (the Securities Act ), and Section 1E of the Securities Exchange Act of 194, as amended (the Exchange Act ). All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Gulfport expects or anticipates will or may occur in the future, including statements relating to the proposed transactions, future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of Gulfport s business and operations, plans, market conditions, references to future success, reference to intentions as to future matters and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by Gulfport in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with Gulfport s expectations and predictions is subject to a number of risks and uncertainties, general economic, market, business or weather conditions; the opportunities (or lack thereof) that may be presented to and pursued by Gulfport; competitive actions by other oil and gas companies; changes in laws or regulations; and other factors, many of which are beyond the control of Gulfport. Specifically, Gulfport cannot assure you that the proposed transactions described in this presentation will be consummated on the terms Gulfport currently contemplates, if at all. Information concerning these and other factors can be found in the company s filings with the Securities and Exchange Commission, including its Forms 1-K, 1-Q and 8-K. Consequently, all of the forward-looking statements made in this presentation are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by Gulfport will be realized, or even if realized, that they will have the expected consequences to or effects on Gulfport, its business or operations. We have no intention, and disclaim any obligation, to update or revise any forwardlooking statements, whether as a result of new information, future results or otherwise. Prior to 1, the Securities and Exchange Commission generally permitted oil and gas companies, in their filings, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Beginning with year-end reserves for 9, the SEC permits the optional disclosure of probable and possible reserves. We have elected not to disclose our probable and possible reserves in our filings with the SEC. We may use the terms unrisked resource potential, unrisked resource, contingent resource, or EUR, or other descriptions of volumes of hydrocarbons to describe volumes of resources potentially recoverable through additional drilling or recovery techniques that the SEC s guidelines prohibit us from including in filings with the SEC. Unrisked resource potential, unrisked resource, contingent resource, or EUR, do not reflect volumes that are demonstrated as being commercially or technically recoverable. Even if commercially or technically recoverable, a significant recovery factor would be applied to these volumes to determine estimates of volumes of proved reserves. Accordingly, these estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the Company. The methodology for unrisked resource potential, unrisked resource, contingent resource, or EUR, may also be different than the methodology and guidelines used by the Society of Petroleum Engineers and is different from the SEC s guidelines for estimating probable and possible reserves.

3 Gulfport Today Company Overview Primary Areas of Operation (1) Ticker: Market Cap () : $6.1 Billion Enterprise Value () : $5.9 Billion Niobrara Shale Acreage: 7,481 Net Acres Proved Reserves:.1 MMBoe Probable Reserves:.7 MMBoe Grizzly (4) Acreage: 7,495 Net Acres Proved Reserves: Net MMBbl Probable Reserves: 51. Net MMBbl Contingent Resource: 778. Net MMBbl Utica Shale Acreage: 165,4 Net Acres Proved Reserves:.5 Net MMBoe Probable Reserves: 6.46 Net MMBoe Permian Market Value (5) : ~$7 Million Thailand Onshore Concession Blocks Southern Louisiana Acreage: 11,41 Net Acres Proved Reserves: 5.76 MMBoe Probable Reserves: 7.84 MMBoe (1) Utica Shale acreage as of /6/14 and all other acreage figures as of 1/1/1 () Market capitalization calculated as of the close of the market on /1/14 at a price of $71.18 per share using shares outstanding from the Company s 4Q financial statements () Enterprise value calculated as of the close of the market on /1/14 at a price of $71.18 per share using shares outstanding, short-term debt, long-term debt, and cash and cash equivalents from the Company s 4Q financial statements (4) Reserve and resource estimates based on Gulfport s 4.9% interest in Grizzly Oil Sands ULC. For important qualifications and limitations relating to these oil sands reserves and resources, please see page 41 of this presentation (5) Market value calculated as of the close of market on /1/14 at a price of $67.1 per share using.4 million of Diamondback Energy s total shares outstanding

4 Key Investment Highlights Most levered to the core of the Utica Shale of eastern Ohio with approximately 165,4 net acres under lease today Acreage in one of the most promising up-and-coming plays in North America Actively drilling horizontal wells; produced 1,71 BOEPD during the fourth quarter of 1 Development expected to provide further catalyst for reserves and production growth Canadian oil sands provides net exposure to over 86 million barrels of oil resource including 16.7 million barrels of proved reserves, 67.7 million barrels of probable reserves and 778 million barrels of best case contingent resource net to Gulfport (1) Two thirds of current leased oil sands acreage remains unexplored Steam injection commenced in January 14 at initial SAGD facility at Algar Lake and first production is expected in the first quarter of 14 Rail takeaway in Grizzly owned rail cars to enhance production netbacks May River acquisition adds significant resource and potential for production growth South Louisiana oil production provides strong base of cash flows for resource play expansion Produced 5,888 BOEPD during the fourth quarter of 1; high quality Louisiana Sweet crude priced at a premium to WTI Strong balance sheet and cash flow expected to allow Gulfport to continue to drive production growth Estimated 14 production of 5, 6, BOEPD Low leverage and strong cash flow provides significant optionality Exposure to high quality, oil-levered assets in prolific Permian Basin Wolfberry play, one of the major producing oil play in North America Our equity interest in Diamondback offers exposure to one of the most concentrated high quality acreage positions in the Permian Basin Diamondback has over 67, net acres with over 6.6 MMBoe of proved reserves (as of 1/1/1) and a significant percentage of acreage deemed eligible for horizontal drilling 4 (1) Reserve and resource estimates based on Gulfport s 4.9% interest in Grizzly Oil Sands ULC. For important qualifications and limitations relating to these oil sands reserves and resources, please see page 41 of this presentation.

5 Production (MBoepd) Fourth Quarter 1 Highlights Highlights Consistent production growth Total company production grew 15% during the fourth quarter over the fourth quarter of 1 Utica Shale production increased 49% during the fourth quarter over the third quarter of 1 Continuing our asset growth Continued to add acreage in the Utica Shale bringing our total acreage to 167,7 gross (165,4 net) acres (1) under lease Developing our resources Currently running a 7 rig drilling program in the Utica Shale and two rigs in Southern Louisiana 1 wells were spud in the Utica Shale and 1 wells in Southern Louisiana during the quarter Cash costs decreasing during the quarter LOE per barrel of oil equivalent decreased to $5.45, or 11% during the fourth quarter over the third quarter of 1 Proved reserve growth Proved reserves grew 177% during 1 over year end 1 Fourth Quarter 1 Production Growth Q1 1Q1 Q1 Q1 4Q1 Utica S. Lousiana / Other 5 (1) Utica acreage figure as of /6/14. Includes acreage acquisitions to /6/14

6 Gulfport 14 Guidance Forecasted Production Year Ending 1/1/14 Utica - Boepd 44,5 54,5 South Louisiana - Boepd ~5,5 Average Daily Oil Equivalent Midpoint Boepd 5, 6, Grizzly $ E E&P CAPEX (in millions) S. Louisiana $69. Oil Equivalent - MMBoe Projected Cash Operating Costs Lease Operating Expense $/Boe $. $. Transportation, Processing & Marketing - $/Boe $.5 $.5 Production Taxes - % of Revenue 4.% 6.% Utica $614. General Administrative - $/Boe $1.5 $.5 Interest Expense - $MM/Quarter $4. - $.4.5 Depreciation, Depletion, and Amortization - $/Boe $1. $4. Budgeted E&P Capital Expenditures in Millions: Utica $594 $64 Southern Louisiana $66 $71 Grizzly $15 $ Total Budgeted E&P Capital Expenditures $675 $75 Budgeted Leasehold Capital Expenditures in Millions: $5 $75 6 Note: Guidance for the year ended 1/1/14 is based on multiple assumptions and certain analyses made by the Company in light of its experience and perception of historical trends and current conditions and may change due to future developments. Actual results may not conform to the Company s expectations and predictions. Please refer to page for more detail of forward looking statements.

7 Continued Growth in is a transformational year for Gulfport Record production growth is forecasted as we develop the Utica Shale Focused on the harvest phase of Utica Shale Reserves will continue to be unlocked as we delineate our acreage in the Utica Shale Average Net Daily Production (MBoepd) Net Proved SEC Reserves (MMBoe) E (1) Contribution of Permian Basin interests 1.9 MMboe S. Louisiana Utica Other 7 (1) Guidance for the year ended 1/1/14 is based on multiple assumptions and certain analyses made by the Company in light of its experience and perception of historical trends and current conditions and may change due to future developments. Actual results may not conform to the Company s expectations and predictions. Please refer to page for more detail of forward looking statements.

8 8 Asset Overview

9 Utica Shale Overview Point Pleasant Thickness (Isopatch Mapping) Point Pleasant TOC (Organic Carbon) Utica Shale Summary 1 1 Erie 1 Erie Ashtabula Lake 1 Ashtabula Lake Warren Warren 7 7 Forest 8 Geauga Forest 9 Trumbull Trumbull 11 Mercer 1 Clarion Mahoning Mahoning Lawrence 14 1 Lawrence Butler Butler Ashland Crawford Armstrong 14 Stark Wayne Stark Richland Beaver 11 Coshocton Delaware Harrison Westmoreland Washington Licking Ohio Ohio 11 Guernsey Guernsey Belmont Muskingum Somerset Fayette Marshall Fayette Marshall 1 Somerset Belmont 1 1 Muskingum Greene Greene Perry 1 Noble Monroe Monroe Wetzel Marion Washington Tyler Pleasants Preston Tyler Pleasants Mineral Taylor Athens Doddridge Monongalia Morgan Hocking Preston Washington Monongalia Wetzel Marion Vinton Perry Noble 1 Morgan Fairfield Fairfield Hocking Vinton Wood Mineral Harrison Doddridge 1 1 Taylor Athens Harrison Wood Ritchie Ritchie Barbour Tucker Barbour Tucker Grant Meigs Grant Meigs 1 The Point Pleasant formation, a submember of the lower part of the Utica interval, is the primary target of the play Westmoreland Allegheny Washington 1 1 Licking Jefferson Tuscarawas Knox Brooke Harrison Allegheny 1 1 Carroll Holmes Morrow Hancock 1 1 Coshocton Jefferson Hancock Carroll Knox Delaware Indiana Indiana Tuscarawas Beaver 1 4 Holmes Morrow Columbiana Columbiana 1 14 Armstrong 1 Brooke 1 Jefferson Summit Medina Jefferson Ashland Clarion Portage Huron Portage 1 Wayne Horizontal drilling, combined with multistage hydraulic fracturing to create permeable flow paths from wellbores into shale units, has unlocked the resource potential of the play Mercer 1 1 Summit Medina Venango Venango 1 1 Huron Lorain Erie Geauga 1 11 Richland Ottawa Cuyahoga Cuyahoga Lorain Erie Crawford Crawford Ottawa 1 The Utica Shale has a recoverable potential of 94 million barrels of oil and 8. trillion cubic feet of natural gas (1) Crawford Thermal Maturity Overlapping Sweet Spot Erie Ashtabula Lake McKean Warren Potter Lucas Crawford Fulton Williams Ottawa Cuyahoga Forest Geauga Cameron Elk Lorain Erie Venango Henry Defiance Sandusky Wood Trumbull Mercer Clarion Paulding Portage Huron Seneca Jefferson Summit Medina Putnam Hancock Clearfield Mahoning Lawrence Butler Van Wert Ashland Crawford Wyandot Armstrong Wayne Allen Stark Richland Columbiana Hardin Beaver Mercer Marion Auglaize Indiana Carroll Holmes Morrow Jefferson Tuscarawas Logan Hancock The interval Gulfport targeted in the Point Pleasant is an interval greater than 1 feet thick, at a depth shallower than 9,5 feet but deeper than 7,5 feet, with an average TOC content greater than % located predominantly within the wet gas and volatile oil phases of the hydrocarbon system Allegheny Blair Cambria Knox Shelby Union Huntingd Westmoreland Coshocton Delaware Brooke Harrison Darke Washington Champaign Licking Miami Ohio Bedford Guernsey Somerset Belmont Franklin Clark Fulton Muskingum Madison Fayette Marshall Greene Preble Montgomery Fairfield Noble Perry Greene Monroe Pickaway Monongalia Morgan Fayette Wetzel Morgan Hocking Butler Marion Warren Ross Pleasants Highland Hampshire Harrison Doddridge Vinton Mineral Taylor Athens Hamilton Berkel Preston Tyler Washington Clinton Wood Clermont Barbour Ritchie Pike Tucker Grant Meigs Jackson Hardy Brown Wirt Adams Lewis Upshur Gallia Gilmer Upshur Jackson Scioto Randolph Mason Roane Braxton Pendleton Lawrence Putnam Webster Clay Cabell Nicholas Kanawha Pocahontas Wayne Lincoln Fayette Boone 9 Note: Images sourced from Ryder and others, 1998, modified from Wallace and Roen, 1989, industry data from peer company presentations, and internal company data (1) USGS National Assessment of Oil & Gas published September 1 Greenbrier Logan Raleigh Mingo Summers Wyoming Monroe Mercer McDowell

10 Utica Shale Overview Asset Overview Net proved reserves of.5 MMBoe (1) Net probable reserves of 6.46 MMBoe (1) ~ 167,7 gross (165,4 net) acres () Focused within the wet gas/retrograde condensate and mature dry gas windows of the Utica/Point Pleasant 5 year lease terms that are extendable with 5 year options ~98.6% interest / 1% operated () ~1,48 gross locations () 1 Activities Update (4) Currently running seven rigs Average net production of 1,71 Boepd during the fourth quarter ~64% of Gulfport s total net production 14 Planned Activities () Plan to drill approximately 85 to 95 gross (64 to 71 net) wells CAPEX (net): $594 $64 million 1 Note: Please refer to page for detail on forward looking statements (1) As of 1/1/1 () As of /6/14 () Based on Gulfport gross acreage and 16-acre spacing (4) During the three months ended 1/1/1

11 Utica Shale Activity Map Lyon 7H Pad GustinaBear H Pad Stout 8H Pad Clay 4H Pad Milliken #1-4H - Drilling Groh #1-1H PDC Energy Onega Commissioners 14-5H Peak Rate of 1,796 Boepd PDC Energy Detweiler 4-H Peak Rate of,197 Boepd Carrizo Rector 1H Peak Rate of,69 Boepd (~75% Liquids) Rex Energy Noble 1H Rate of,97 Boepd (~55% Liquids) Rex Energy Guernsey H 4-hour Test Rate of,114 Boepd (~57% Liquids) Antero Miley Unit Wells average,61 Boepd (~66% Liquids) Antero Wayne Unit wells average 5,6 Boepd (~67% Liquids) BK Stephens 16H Pad PDC Energy Garvin 1H 4-Hour flow rate of 1,5 Boepd Ryser 5H Pad CONSOL NBL 16A Peak rate of 968 Boepd (~79% Liquids) Chesapeake Stuart Henderson #1H Peak rate 87 Boepd (~6% Liquids) Antero Yontz 1H 9,99 Boepd (~9% Liquids) Antero Norman 1H 6,11 Boepd (~9% Liquids) Chesapeake Henderson South #5H Peak rate 1,68 Boepd (~61% Liquids) Chesapeake Buell #8H,8 Boepd (~47% Liquids) Inherst 14H Pad Magnum Hunter Stalder #UH Peak rate.5 MMcfpd Amanda 14H Pad Drilling Boy Scout H Pad CONSOL / Hess Athens A 1H-4 Peak rate of,71 Boepd (~1% Liquids) Wagner 8H Pad Hess Capstone H-9 Peak rate of,4 Boepd (~4% Liquids) Family H Pad Shugert 1H Pad Shugert 1H Pad McCort 8H Pad Drilling Stutzman 14H Pad Darla H Pad Drilling Hess Porterfield C 1H-7 Peak rate of,41 Boepd (~1% Liquids) Eagle Creek 6H Pad Drilling Hayes 1H Pad Irons 4H Pad Perkins 4H Pad - Drilling Bolton 9H Pad Wesley 8H Pad Acreage Overview Per Window (1) Gulfport has approximately 167,7 gross acres (165,4 net) under lease in the Utica Shale Acreage estimated in each phase window: Oil - ~ 7% Condensate - ~ 5% Wet Gas - ~ % Dry Gas - ~ 48% 11 (1) As of /6/14

12 Utica Shale Wet Gas Type Curve Logarithmic Type Curves Classifications Total EUR (MMBoe) (1).1.9 Total EUR (Bcfe) (1) % Liquids (1) ~ 46% Lateral Length (ft): ~ 8, Well Cost ($MM) $9.6 BTU Range: 1,1 1,5 Bcf / 1,: ~ 1.4 Bcfe / 1,: ~.6 Number of Wells Time Zero 1 Days 9 6 Days 6 9 Days 6 1 Days 6 15 Days 4 18 Days 4 1 Days 4 Days 1 1 Note: Individual well results will differ. Please see page for more information on estimates. (1) Assumes full ethane recovery. () All Gulfport wells normalized to time zero, production for each well normalized to 8, lateral length.

13 Utica Shale Condensate Type Curve Logarithmic Type Curves Classifications Total EUR (MMBoe) (1) Total EUR (Bcfe) (1) % Liquids (1) ~ 66% Lateral Length (ft): ~ 8, Well Cost ($MM) $9.6 BTU Range: > 1,5 Bcf / 1,: ~. Bcfe / 1,: ~ 1. Number of Wells Time Zero Days 6 Days 9 Days 17 1 Days Days 1 18 Days 7 1 Days 6 4 Days 6 7 Days 1 Note: Individual well results will differ. Please see page for more information on estimates. (1) Assumes full ethane recovery. () All Gulfport wells normalized to time zero, production for each well normalized to 8, lateral length.

14 BOEPD BOE Utica Shale Original & Optimized Condensate Wells 1, Condensate Wells Logarithmic Type Curves (1, ) 1,. Condensate Wells Cumulative Type Curves (1, ) ,. 1,. 1,. 1, Months 1.5MM BOE 1.MM BOE Composite BOE Optimized Wells Original Wells Months 1.5MM BOE 1.MM BOE Composite Average Optimized Wells Original Wells Ryser & BK Stephens Units Ryser Unit: Well 1-5H drilled South Wells -5H, -5H & 4-5H drilled North Original Wells completed with hybrid gel fracture stimulation Includes Ryser 1-5H and BK Stephens 1-16H Optimized Wells completed with slick water fracture stimulation and managed through optimal flow program Includes Ryser -5H, Ryser -5H, Ryser 4-5H, BK Stephens -16H and BK Stephens -16H Composite Average includes all condensate wells brought online as of February 6, 14 BK Stephens Unit: Well 1-16H drilled South Wells -16H & -16H drilled North 16 Note: Individual well results will differ. Please see page for more information on estimates. (1) Assumes full ethane recovery. () All Gulfport wells normalized to time zero, production for each well normalized to 8, lateral length.

15 Utica Shale Midstream Crawford Utica Condensate JV Stabilization Facility, Bbl/d Q14 Medina Summit Portage Trumbull Mercer Venango Hopedale Fractionator C+ Fractionation - 6, Bbl/d Complete Clarion Ohio Mahoning Lawrence Butler Cadiz I 1 MMcf/d Complete Holmes Coshocton Wayne Cadiz Complex Interim Refrigeration 65 MMcf/d Complete Cadiz II MMcf/d Q14 De-ethanization 4, Bbl/d 1Q14 Tuscarawas Stark Carroll Harrison Columbiana Hancock Jefferson Brooke Beaver Allegheny Armstrong Westmoreland Muskingum Guernsey Belmont Ohio Washington Morgan Noble MWE Gathering Area MWE Utica Counties MWE Marcellus Counties MWE Plants ATEX Express Pipeline Rich Wood TEPPCO Product Pipeline Mariner Projects Utica MWE NGL Pipelines MWE Purity Ethane Pipeline MWE NGL/Purity Ethane Pipelines Under Construction Washington Pleasants Monroe Ritchie Tyler Doddridge Marshall Wetzel Rich Marcellus Greene Monongalia Marion Taylor Harrison Barbour Fayette Preston West Virginia Seneca Complex Seneca I - MMcf/d Complete Seneca II - MMcf/d Complete Seneca III - MMcf/d Q14 De-ethanization - 8, Bbl/d TBD 15

16 Utica Shale - Fully Integrated Midstream Platform Takeaway Options Increasing Takeaway with Infrastructure Approximately 1 Bcf per day of gas expected to be moving west out of the Utica Shale in 14, growing to just over Bcf per day in 15 Superior Residue Outlets Abundant Takeaway and Processing Options Cadiz Processing Accessible via the Cadiz Plant Dominion East Ohio Dominion Transmission Accessible via the Seneca Plant TETCO Rockies Express Accessible via the MarkWest / Kinder Morgan Plant Tennessee Gas Accessible via the proposed dry gas system TETCO Rockies Express Dominion Transmission Seneca Processing LEGEND GPOR Lease Acreage Existing Pipeline Constructing / Proposed Pipeline 16

17 Utica Shale - Firm Transport and Sales Takeaway Options 17 (1) As of /6/14

18 Utica Shale Rice Energy Joint Development Agreement Highlights In October 1, Gulfport and Rice Energy entered into a Joint Development Agreement covering four townships in the core of the Utica Shale in Belmont County The Joint Development Agreement immediately makes both parties acreage positions more drillable and provides development and unit visibility Both parties will benefit from coordinated efforts and shared learning in development, leasing and infrastructure Flexible term and structure provides both parties the benefit of blocked up acreage while still giving each party flexibility in operations and development Areas: The joint venture is divided up into two areas and each parties participating interest is based on the amount of acreage they own Southern Contract Area: Northern Contract Area: Operator: Gulfport Townships: Washington and Wayne Operator: Rice Energy Townships: Goshen and Smith By operating the areas where each party has the majority participating interest, both parties are aligned and incentivized to maximize results and reduce costs Term: The JV agreements have terms of ten years and are terminable upon 9 days notice by either party Acreage Map North South LEGEND GPOR Lease Acreage Gulfport and Rice Energy Joint Development Area 18

19 Headquarters 141 North May Avenue, Suite 1 Oklahoma City, OK Investor Relations (45) Investor_relations@gulfportenergy.com