Gulfport Energy subsidiary plans $500 million note offer

OKLAHOMA CITY - Gulfport Energy (OTC:GPORQ) Corporation (NYSE: GPOR) announced that its subsidiary, Gulfport Energy Operating Corporation, intends to offer $500 million of Senior Notes due 2029 in a private placement aimed at qualified institutional buyers and non-U.S. persons. The notes will be guaranteed by Gulfport and certain of its other wholly owned subsidiaries.

The offering is designed to facilitate the repurchase of the company's existing 8.0% Senior Notes due 2026 through a tender offer. Gulfport Operating plans to use the proceeds from this offering, along with available cash and credit facilities, to fund the tender offer and related expenses. Any remaining funds may be used to redeem any outstanding Tender Notes before May 17, 2025, or for general corporate purposes, which could include reducing existing credit facility borrowings.

The sale of the notes and related guarantees will be conducted in accordance with Rule 144A and Regulation S under the Securities Act of 1933, meaning they will not be registered under the Securities Act or any state securities laws. Consequently, the notes may not be offered or sold in the U.S. without registration or an applicable exemption from these requirements.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall it constitute an offer to purchase or a solicitation to sell any of the Tender Notes. The tender offer is only being made through the Offer to Purchase dated Tuesday, September 3, 2024.

Gulfport is an independent natural gas-weighted exploration and production company with a primary focus on the Appalachia and Anadarko basins. It targets the Utica and Marcellus formations in eastern Ohio and the SCOOP Woodford and SCOOP Springer formations in central Oklahoma.

The company has made forward-looking statements regarding the note offering and tender offer, which are subject to risks and uncertainties that could cause actual results to differ from those anticipated. These statements are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

The information for this article is based on a press release statement.

In other recent news, Gulfport Energy has been the subject of several important developments. KeyBanc has raised Gulfport Energy's share price target to $165, citing the company's robust free cash flow generation and the 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.

In its Second Quarter 2024 Earnings Call, Gulfport Energy reported an impressive $164 million in adjusted EBITDA and a significant $20 million in adjusted free cash flow. The company also narrowed its full-year production guidance, with an average daily production of 1.05 billion cubic feet equivalent per day. Operational improvements have led to capital savings and the company plans to resume drilling activities in the SCOOP area in the final quarter of 2024.

Gulfport Energy's strong financial position, including a trailing 12-month net leverage below 1x and liquidity of $707 million, has allowed the company to plan for an expansion of its share repurchase program. The company also anticipates allocating around $45 million of its adjusted free cash flow to discretionary acreage acquisitions throughout the year. Despite a projected reduction in oil percentage in their commodity mix, Gulfport Energy maintains a firm delivery of 10% to 15% of its natural gas to premium markets.

InvestingPro Insights

As Gulfport Energy Corporation (NYSE: GPOR) navigates a strategic financial maneuver with its Senior Notes offering, it's valuable for investors to consider the company's current financial health and market performance. According to InvestingPro data, Gulfport exhibits a compelling valuation with a P/E Ratio (Adjusted) for the last twelve months as of Q2 2024 at 3.45, indicating a potentially undervalued stock compared to industry peers.

InvestingPro Tips reveal that analysts have revised their earnings expectations downwards for the upcoming period and anticipate a sales decline in the current year. This is particularly relevant for investors considering the impact of the company's debt restructuring on its future earnings potential. Additionally, analysts predict the company will be profitable this year, which could be a positive sign for those looking at the long-term viability of the company despite the expected net income drop.

Furthermore, Gulfport's market capitalization stands at $2.63 billion, reflecting its size and significance in the sector. The company's stock generally trades with low price volatility, which might appeal to investors looking for stability in their portfolios. It's also noteworthy that Gulfport does not pay dividends, which could influence investment decisions for income-focused shareholders.

For those seeking a deeper dive into Gulfport's financial metrics and additional analyst insights, InvestingPro offers a comprehensive list of tips, with a total of 7 additional InvestingPro Tips available at https://www.investing.com/pro/GPOR.

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