Gulfport Energy issues $650M in senior notes, boosts credit line

Gulfport Energy (OTC:GPORQ) Corporation (NYSE:GPOR) has finalized a significant private placement of senior notes and expanded its credit facility, according to a recent SEC filing. On Monday, the company announced the completion of a $650 million private placement of 6.750% Senior Notes due in 2029. This financial move is aimed at bolstering the company's capital structure and providing additional liquidity.

The notes, issued by Gulfport Energy Operating Corporation, a wholly owned subsidiary, were sold to qualified institutional buyers and non-U.S. persons in accordance with applicable securities regulations. Interest on these notes will be payable semi-annually, with the first payment due on March 1, 2025.

In conjunction with the notes issuance, Gulfport Energy also entered into an agreement on Thursday, September 12, to increase its borrowing base under its senior secured reserve-based revolving credit facility from $900 million to $1.0 billion. The borrowing base was reaffirmed at $1.1 billion, and the maturity date of the credit facility was extended by four years from the date of the amendment.

The indenture governing the notes contains customary covenants that limit the company's ability to engage in certain activities, such as incurring additional debt, making investments, and disposing of assets. These covenants are designed to protect the interests of the note holders by maintaining the financial health and stability of the company.

Gulfport Energy, with its primary business in the exploration and production of crude petroleum and natural gas, has taken these steps to enhance its financial flexibility and support its ongoing operations.

The details of the transactions are outlined in the Form 8-K filed with the SEC, which contains further information regarding the terms and conditions of the notes and the amendment to the credit facility. The company's actions reflect its strategic financial planning in the current economic climate within the energy sector.

In other recent news, Gulfport Energy Corporation has been making significant financial strides. The company reported a robust $164 million in adjusted EBITDA and a substantial $20 million in adjusted free cash flow during its Second Quarter 2024 Earnings Call.

Gulfport Energy also set the purchase price for its tender offer to buyback all outstanding 8.0% Senior Notes due in 2026, a move facilitated by its subsidiary, Gulfport Energy Operating Corporation.

Adding to these developments, Gulfport Energy upsized its private placement offering of 6.75% Senior Notes due 2029 from $500 million to $650 million. The proceeds from this offering are planned to fund the buyback of its 8.0% Senior Notes due 2026, with any remaining funds aimed at debt repayment and general corporate purposes.

KeyBanc has raised Gulfport Energy's share price target to $165, citing the company's strong free cash flow generation and potential for organic earnings growth. The analyst also increased the estimated 2025 EBITDA by 3% to $891 million and the forecast for the company's 2025 repurchase program by 60% to $160 million. These recent developments underscore Gulfport Energy's strategic financial management and commitment to shareholder returns.

InvestingPro Insights

In light of Gulfport Energy Corporation's recent financial maneuvers, InvestingPro data provides a snapshot of the company's current market standing. With a market capitalization of $2.59 billion and a low price-to-earnings ratio of 3.5, Gulfport appears to be valued favorably in terms of earnings. The low P/E ratio is consistent with the last twelve months as of Q2 2024, suggesting a stable valuation over time.

However, the company faces challenges, as reflected in a significant revenue decline of 48.3% over the last twelve months as of Q2 2024. Despite this, Gulfport maintains a strong gross profit margin of 56.26%, indicating effective cost management relative to its revenues. InvestingPro Tips highlight that analysts have revised earnings expectations downwards and anticipate a sales decline in the current year, which could be a concern for potential investors. Moreover, the company's short-term obligations exceeding its liquid assets may pose a liquidity risk.

For those interested in Gulfport's performance prospects, InvestingPro offers additional insights. There are currently 7 more InvestingPro Tips available, which could provide a deeper understanding of the company's financial health and future outlook. These tips, along with real-time metrics, can be found on InvestingPro's dedicated Gulfport page (https://www.investing.com/pro/GPOR).

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