GULFPORT ENERGY CORP Q4 FY2024 earnings call

• 2025 Development Program: Reflects efficiency gains and portfolio capital allocation optimizations, aiming for flat total capital spend while growing liquids production by 30%. Adjusted free cash flow is estimated to more than double compared to 2024 at current commodity prices.
• 2024 Performance: Gulfport achieved strong financial results, repurchased ~7% of common shares, maintained a strong balance sheet, and made inventory additions in Utica Lean condensate. Operational efficiencies were seen in drilling (over 9% year-over-year cycle time improvement) and completion (25% improvement in frac pumping hours per day, 46% improvement in plugs drilled per day).
• Acreage Expansion: The company invested $45 million in 2024 to expand acreage, targeting Utica Lean condensate acreage, adding over a year of core liquids rich locations, and accumulating over four and a half years of high-margin liquids rich inventory through delineation and acquisitions.

In 2025, Gulfport Energy's development program aims for a 30% year-over-year growth in liquids production while maintaining flat total capital invested. Total equivalent production is expected to be relatively flat to 2024, with liquids production in the range of 18.0 to 20.5 thousand barrels per day. The 2025 program focuses on Appalachia liquids, sustaining natural gas exposure, and delivering hydrocarbon diversification. Operationally, the company achieved efficiencies in drilling and completion, with a 20% reduction in annual operated drilling and completion capital per foot of completed lateral compared to 2024.

• Adjusted free cash flow for 2025 is expected to more than double compared to 2024, with capital spend flat in the range of $370 million to $395 million.
• Liquids production is projected to increase over 30% year over year. Net leverage is expected to decline organically, strengthening free cash flow yield relative to peers.
• Substantially all adjusted free cash flow excluding discretionary acreage acquisitions will be returned to shareholders via common stock repurchases, with approximately $407 million available under the $1.0 billion share repurchase program.

Factors that could materially affect actual results from forward-looking statements, as outlined in the company's filings with the SEC, were mentioned, including various factors that could cause actual results to differ from forward-looking statements.

Q: New liquids volume that's 30% higher, is it sustainable, and how does it affect bolt-ons?

A: Liquids growth is sustainable. For bolt-ons, the company is attracted to sizable undeveloped portions of opportunities, using its execution prowess to extract value.

Q: Front-loaded capex program and capital efficiencies?

A: Front-loaded capital programs are conducive to driving capital efficiencies, and capital efficiency has been a mainstay, with the team focused on maintaining this in future years.

Q: Capital allocation and repurchases?

A: The framework of returning substantially all adjusted free cash flow excluding discretionary acreage acquisitions via repurchases is effective, and the company assesses opportunities but prioritizes repurchases.

Q: Lake Seven pad and Utica development?

A: Results from Lake Seven pad are used to tweak Utica development, with expectations of adjusting type curve shape moving forward.

Q: Marcellus allocation and inventory?

A: Marcellus development will occur over 5-7 years, with corporate inventory life considered, and development pace in specific areas based on various factors.

Q: Production cadence and remaining capital efficiency opportunities?

A: Production is positioned well for Q3/Q4, and there are always opportunities for continuous efficiency improvements as the industry evolves.

Q: Slide 6 and NGL realizations?

A: Slide 6 shows the company's potential, and NGL realizations are due to contract terms, marketing negotiations, and a new Marcellus agreement providing favorable terms.