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Gulfport Outlines Utica Midstream Plans, Outlook in 2Q

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   |    Friday,August 01,2014

Gulfport Energy Corporation has reported an update on its midstream activities in the Utica Shale of Eastern Ohio, announces second quarter 2014 production and schedules second quarter 2014 financial and operational results conference call.

Dry Gas Gathering Update

To capture development synergies within the area of mutual interest of the previously announced joint development agreement between Gulfport and Rice Energy Inc., Gulfport and Rice have entered into a letter of intent and are finalizing definitive agreements whereby Rice will construct and operate gas gathering pipelines associated with Gulfport's Utica Shale interests in Smith Township and portions of Goshen, Wayne and Washington Townships in Belmont County, Ohio. In conjunction with these agreements, Gulfport and MarkWest Energy Partners, LP have executed a letter of intent and are finalizing definitive agreements pursuant to which MarkWest will construct gas gathering facilities to gather Gulfport's dry gas production from portions of Wayne and Washington Townships in Belmont County, Ohio, Sunsbury Township in Monroe County, Ohio and portions of adjacent townships.

The agreements announced today are intended to ensure the efficient deliverability of Gulfport's product to the market. Together, MarkWest's and Rice's dry gas systems will have the capacity to provide over 1 Bcf per day of natural gas into multiple interconnections including, Rockies Express Pipeline and Texas Eastern Transmission Co. pipeline.

Rockies Express Pipeline and ANR Pipeline

To secure the movement of Gulfport's Utica Shale production out of the basin, the Company recently entered into a firm transportation agreement with Rockies Express Pipeline beginning in mid-2015 for a term of 20 years for 175,000 MMBtu/day of gas originating from Gulfport's acreage position in Belmont County, Ohio. In connection with this arrangement, Gulfport has entered into firm agreements with ANR Pipeline via the Rockies Express Pipeline connection for delivery of its gas to the premium markets in both the Midwest and Gulf Coast. Gulfport continues to actively build its firm transportation portfolio to ensure the deliverability of its production and position the Company to continue to capitalize on strong price realizations for its Utica Shale production.

Second Quarter 2014 Production

Gulfport produced oil and natural gas sales volumes of 2,431,955 barrels of oil equivalent, or 26,725 barrels of oil equivalent per day, in line with the company's previously estimated guidance of approximately 27,100 BOEPD. For the second quarter of 2014, net production was 709,484 barrels of oil, 8,972,137 thousand cubic feet of natural gas and 9,538,843 gallons of natural gas liquids, or 2,431,955 BOE. Net production for the second quarter of 2014 by region was 1,930,139 BOE in the Utica Shale, 483,910 BOE in Southern Louisiana and an aggregate of 17,906 BOE in the Bakken, Niobrara and other areas.

Gulfport's 2014 second quarter realized prices include an aggregate non-cash gain of $2.2 million due to a hedge ineffectiveness. Before the impact of derivatives, realized prices for the second quarter of 2014 were $99.40 per barrel of oil, $4.43 per MCF of natural gas and $1.14 per gallon of NGL, for a total equivalent of $49.81 per BOE. Gulfport's second quarter natural gas realized price before the impact of derivatives of $4.43 per Mcf represents a price realization of approximately 95% of the NYMEX settlement prices for the second quarter.