Three Reasons to Buy Gulfport Energy Corporation (GPOR)

Page 1 of 2

Liquids-focused driller Gulfport Energy Corporation (NASDAQ:GPOR) is a very interesting energy company. Unlike most North American production companies, Gulfport doesn’t produce a lot of natural gas. In fact, last year 93% of its production was oil and NGLs, which provide the company with high-margin cash flow. Investors are starting to take notice and the stock has more than doubled over the past year. However, I see three very compelling reasons to own Gulfport.

Very oily production
As I mentioned, 93% of Gulfport Energy Corporation (NASDAQ:GPOR)’s production last year consisted of oil and NGLs. That’s very impressive when you consider that most producers would love it if just half of their production were liquids. For perspective, despite investing heavily to grow its liquids production, 74% of Chesapeake Energy Corporation (NYSE:CHK)‘s production is still natural gas. Even Devon Energy Corp (NYSE:DVN)‘s natural gas production is still more than half at 59% despite double-digit oil production growth.

Gulfport Energy Corporation (NASDAQ:GPOR) produces oil and NGLs from a diverse portfolio of assets including the Canadian oil sands, the Utica Shale, Louisiana and the Permian Basin through its 21.4% ownership interest in Diamondback Energy Inc (NASDAQ:FANG). In the year ahead, Gulfport expects to produces 21,370 to 22,192 barrels of oil equivalent per day, which is growth of more than 200% over last year. The company has a visible path to further liquids rich production growth with several opportunities for additional upside across its portfolio.

Rock-solid balance sheet
Because Gulfport Energy Corporation (NASDAQ:GPOR) has been focused on high-margin liquids, its balance sheet is very strong. The company has $226 million in cash and just $299 million of it in debt to go with an undrawn credit facility. For a company with a market capitalization of just under $4 billion, those are very strong numbers. For perspective, Devon Energy Corp (NYSE:DVN)’s net debt to capital ratio is one of the best at 22%. Meanwhile, Gulfport has virtually no leverage, which is nearly unheard of in the industry. That strength will go a long way in helping the company fully develop its oil sands assets as well as its position in the Utica.

Utica sweet spot
While the Utica is loaded with potential, it has not developed into the top-tier oil play that Devon Energy Corp (NYSE:DVN) and Chesapeake Energy Corporation (NYSE:CHK) had hoped. That’s caused Devon to decide to exit its position in the play while Chesapeake is looking to reduce its position. Gulfport Energy Corporation (NASDAQ:GPOR), on the other hand, has found the best spot in the play and is increasing its acreage. That’s no surprise when you consider that its first 14 wells averaged an initial rate of 3,055 barrels of oil equivalent per day. While those wells were certainly more gassy than expected, Gulfport sees the Utica as a catalyst to substantially increase its production and reserves.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 9 Most Dangerous Countries for Tourists to Visit

Reign of Terror: The 10 Most Ruthless Politicians in History

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!