Gulfport Energy(US:GPOR)2023-11-01 19:19Financial Data and Key Metrics Changes - The company generated $160 million of adjusted EBITDA and $49 million of adjusted free cash flow, excluding discretionary acreage acquisitions [6][38] - Net cash provided by operating activities before changes in working capital totaled approximately $147 million during the third quarter [16] - Production costs for the third quarter totaled $1.12 per million cubic feet equivalent, better than analyst consensus expectations [17] - The company raised the midpoint of its full year production guidance and lowered the midpoint of its full year capital expenditure guidance [20] Business Line Data and Key Metrics Changes - Average daily production totaled 1.056 billion cubic feet equivalent per day, ahead of analyst expectations [6] - The company spud five gross wells during the quarter, including two Marcellus wells [29] - The average EUR estimates for the 2023 development program will be in excess of 2.2 billion cubic feet per 1,000 feet of lateral, representing a 60% improvement since 2020 [32] Market Data and Key Metrics Changes - The NYMEX Henry Hub Index price highlighted the benefit of the company's diverse marketing portfolio for natural gas [18] - The company expects its fourth quarter differential to narrow as it enters the colder months, guiding to an average of $0.20 to $0.35 per Mcf below NYMEX for the full year [19] Company Strategy and Development Direction - The company plans to allocate $50 million to $60 million on maintenance, leasehold, and land investment to bolster its drilling programs [13] - The company is focused on optimizing well spacing, enhanced stimulation treatments, and pressure managed flowback to improve production efficiency [10] - The company will continue to prioritize the return of capital to shareholders through common stock repurchases [37] Management's Comments on Operating Environment and Future Outlook - Management believes there are better days ahead for natural gas and that the company delivers a differentiated combination of free cash flow generation capacity and downside protection [21] - The company is positioned to capitalize on the improving gas macro in 2024 and beyond [69] - Management expressed confidence in the operational successes of 2023 delivering best-in-class free cash flows for the years to come [23] Other Important Information - The company has approximately $315 million of availability under the $650 million share repurchase program [22] - The company has begun layering in hedges for 2025, currently having natural gas swap and collar contracts totaling approximately 250 million cubic feet per day at an average floor price of $3.89 per Mcf [42] Q&A Session Summary Question: What is the company's strategy for creating shareholder value? - The company believes that developing its attractive asset base in a prudent manner will deliver high-quality margins and generate free cash flow [24] Question: Can you elaborate on the efficiency improvements? - The company has seen significant efficiency improvements across drilling and completion operations, with record performance in lateral drilling [50][62] Question: What is the outlook for liquids production? - The company is considering a pivot towards higher liquid skew in production based on economic decisions and market conditions [53][79] Question: How does the company view its hedge position? - The company has a strong hedge position covering roughly 550 million cubic feet per day in 2024 at an average floor price of $3.77 per Mcf [69] Question: What are the expectations for capital expenditures in 2024? - The company anticipates a similar strategy for capital allocation in 2024 as in 2023, focusing on free cash flow generation and share repurchases [97]