Gulfport Energy Corporation this week reported financial and operating results for the three and twelve months ended December 31, 2023 and provided its 2024 outlook.

Fourth Quarter 2023

• Delivered total net production of 1,063.3 MMcfe per day, above analyst consensus expectations
• Reported $245.7 million of net income and $190.8 million of adjusted EBITDA, above analyst consensus expectations
• Generated $155.5 million of net cash provided by operating activities and $85.4 million of adjusted free cash flow, excluding discretionary acreage acquisitions
• Incurred capital expenditures, excluding discretionary acreage acquisitions, of $82.9 million
• Utilized adjusted free cash flow for discretionary acreage acquisitions totaling $23.1 million
• Repurchased 490 thousand shares of common stock for approximately $66.0 million

Full Year 2023 Highlights and Recent Highlights

• Delivered total net production of 1,054.3 MMcfe per day, at the high end of the Company's increased guidance range
• Reported $1.5 billion of net income and $725.0 million of adjusted EBITDA, above analyst consensus expectations
• Generated $723.2 million of net cash provided by operating activities and $198.9 million of adjusted free cash flow, excluding discretionary acreage acquisitions
• Incurred capital expenditures, excluding discretionary acreage acquisitions, of $443.4 million
• Maintained a strong balance sheet and low financial leverage, with liquidity at December 31, 2023 totaling $720.1 million
• Expanded common stock repurchase authorization in February 2023 and October 2023, to a total of $650 million with approximately $236 million remaining
• Returned substantially all full year adjusted free cash flow, excluding discretionary acreage acquisitions, to shareholders by repurchasing 1.5 million shares of common stock for approximately $148.9 million
• Allocated $48.0 million toward discretionary acreage acquisitions, expanding high-quality resource base and adding over 1.5 years of inventory at current development pace
• Developed first Marcellus two-well pad in Belmont County, Ohio with promising initial results, delineating approximately 50 to 60 locations, representing multiple years of additional liquids-rich drilling inventory
• Achieved significant operational efficiencies, with average drilling footage per day and completion hours pumped per day improving by 60% and 30% year-over-year, respectively

Full Year 2024 Outlook

• Expect to deliver relatively flat year-over-year net production with a range of 1,045 MMcfe to 1,080 MMcfe per day
• Plan to invest total base capital expenditures of $380 million to $420 million, including $50 million to $60 million on maintenance leasehold and land investment, a decrease of approximately 10% compared to full year 2023 and focused on more liquids-rich development in the Utica and SCOOP
• Forecast delivering a significantly more capital efficient program associated with longer laterals and continued cycle time improvements; plan to deliver similar net completed lateral footage compared to 2023 while turning to sales 20% fewer gross wells
• Plan to continue to allocate substantially all adjusted free cash flow, excluding acquisitions, toward common share repurchases

John Reinhart, CEO of Gulfport, commented:
"Gulfport's 2023 results delivered on all fronts, highlighted by our quality resource base and the continued improvement of development efficiencies throughout the year. The Company delivered net production at the high end of the updated guidance range, and well above our initial guidance provided in February 2023. This was accomplished while staying within our initial capital budget range, despite the incremental activity accelerated during the fourth quarter of 2023, as previously disclosed. The company augmented our attractive acreage portfolio by strategically acquiring liquids-rich Utica acreage that extended our inventory base by ~1.5 years and by delineating ~2 years of liquids rich Marcellus locations overlying our Utica acreage at no incremental land cost. This additional inventory provides fundamental value to the company as well as expanded optionality to our go-forward development plans. The 2023 development program led to meaningful adjusted free cash flow generation, and after adjusting for cash flow utilized for attractive discretionary acreage acquisitions, we allocated approximately 99% of our adjusted free cash flow to repurchasing our common stock during 2023. All of this was achieved while maintaining our strong balance sheet, ample liquidity and financial leverage below one times."

"As we move into 2024, the current natural gas pricing environment is challenged and reinforces the importance of developing our assets in an efficient and sustainable manner. Building on the momentum from 2023, we plan to remain focused on further optimizing our development programs cycle times and operating costs, and we laid out a program today expected to deliver similar production year over year on 10% less capital invested. Furthermore, our development program will focus on more liquids-rich development in both the Utica and SCOOP, ultimately improving margins and supporting our robust expected adjusted free cash flow generation, despite today's challenging commodity backdrop. We plan to continue the return of capital to our shareholders and, excluding acquisitions, expect to allocate substantially all our full year 2024 adjusted free cash flow towards common stock repurchases."

Production and Estimated Proved Reserves

Gulfport’s net daily production for the full year of 2023 averaged 1,054.3 MMcfe per day, primarily consisting of 783.8 MMcfe per day in the Utica and Marcellus and 270.4 MMcfe per day in the SCOOP. For the full year of 2023, Gulfport’s net daily production mix was comprised of approximately 91% natural gas, 7% natural gas liquids ("NGL") and 2% oil and condensate.

Gulfport reported year end 2023 total proved reserves of 4.2 Tcfe, consisting of 3.7 Tcf of natural gas, 18.6 MMBbls of oil and 62.8 MMBbls of natural gas liquids. Gulfport’s year end 2023 total proved reserves increased approximately 4% when compared to its 2022 total proved reserves.