Gulfport Energy Corporation Q1 FY2026 earnings call

New Leadership: Nick DeLosso will join as President and Chief Executive Officer beginning May 28. ### Financial Results: Strong first quarter with adjusted EBITDA and free cash flow driven by strong commodity pricing and high quality asset base. ### Acreage Acquisition: Completed discretionary acreage acquisition program, adding high-quality inventory. ### Balance Sheet: Strong financial position, completed spring borrowing base redetermination, liquidity increased. ### Share Repurchase: Active share repurchase program, repurchased significant shares. ### Operational Highlights: Completed drilling of eight gross wells, released a rig, had active completion and turn in line schedule, zero recordable incidents or spills, achieved drilling efficiency gains in various areas including Utica, Marcellus, and Scoop.

In the first quarter, the company generated $264 million of adjusted EBITDA and $119 million of adjusted free cash flow. Average production totaled 997 million cubic feet equivalent per day. Cash operating costs for the first quarter total $1.38 per million cubic feet equivalent. For full year 2026, reaffirming per unit operating cost guidance of $1.23 to $1.34 per MCFE. Incurred $118 million related to drilling and completion activity and $4 million related to maintenance land and seismic investment. Wrapped up discretionary acreage program, investing approximately $102 million over the past four quarters to add more than two years of high-quality inventory. Trailing 12-month net leverage exiting the quarter was approximately 0.9 times. Repurchased 866,000 shares of common stock for approximately $172.8 million in the first quarter, with nearly $1.1 billion of capital returned to shareholders over the past four years.

Full Year Production: Reaffirming full year production guidance of 1.03 to 1.055 billion cubic feet equivalent per day. ### Per Unit Operating Costs: Reaffirming per unit operating cost guidance of $1.23 to $1.34 per MCFE for full year 2026. ### Share Repurchases: Expect share repurchases to remain an attractive capital allocation priority and plan to maintain an active repurchase program through 2026, supported by adjusted free cash flow and available revolver capacity, while maintaining leverage at or below one times. ### Discretionary Acreage: Continue to monitor opportunities to further strengthen leasehold footprint and increase resource debt, with plans to update on this later in the year.

Q: On capital allocation, how to think about allocating for further discretionary acreage, stock buybacks and using debt if needed?

A: It's a combination of capturing high-quality locations, considering equity undervaluation, and using revolver if opportunities exist for good value, with a dynamic approach.

Q: On marketing strategy and constraints if wanting to crank up production?

A: No constraints around midstream or downstream markets, strong firm transportation portfolio allows selling additional gas, and strategy is to maximize free cash flow.

Q: On drilling gains in different areas?

A: Drilling gains in Utica, Marcellus, and Scoop, with efficiency improvements in top hole drilling, footage drilled per day, and cycle times.

Q: On inflation and service prices?

A: Seeing impact in diesel market, but efficiencies help offset, keeping an eye on it and working with service providers.

Q: On share repurchases targets?

A: Previously gave targets in certain quarters due to specific circumstances, going forward more dynamic, considering annual basis and free cash flow later in year.

Q: On liquids skew?

A: Will become more liquids heavy in the back half of the year, likely low teens liquids percentage, with option to adjust further.

Q: On North Marcellus pad appraisal?

A: Two-well approach to confirm assumptions and liquid composition for negotiation with midstream providers.

Q: On hedges for 2027?

A: Targeting 30% to 40% hedge coverage, flexible, will nibble at opportunities as they arise.

Q: On scoop asset capital allocation?

A: Need consistency in drilling execution, evaluate results of current wells and consider flexing more in later years.

Q: On liquid hedging?

A: Added swaps for oil and propane in 2027 as market improved, will monitor and adjust hedge percentage.

Q: On gas pricing differentials?

A: Bullish on differentials overall, with northeast demand lifting long-term view, full year guide still appropriate.

Q: On Marcellus pad learnings?

A: Learned from previous pads to optimize economics, confirmed spacing assumptions, and applied learnings to current pad.

Q: On transport agreements and cost structure?

A: Maybe small improvements in cost structure, but no wholesale strategic shift.

Q: On discretionary land program for 2026 and forward?

A: Continue to monitor opportunities, likely to have something to share mid-year, with smart allocation of capital to enhance economics.