multi-year development potential with exploratory...
TRANSCRIPT
2September 2006
Forward-Looking Statements
This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of
1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). All statements, other than statements of historical facts, included in this presentation that address
activities, events or developments that Gulfport Energy, a Delaware corporation (“Gulfport” or the “Company”),
expects or anticipates will or may occur in the future, including such things as net revenues from oil and natural gas
reserves and the price and value thereof, future capital expenditures (including the amount and nature thereof),
business strategy and measures to implement strategy, competitive strength, goals, expansions and growth of
Gulfport’s business and operations, plans, references to future success, reference to intentions as to future matters
and other such matters are forward-looking statements. These statements are based on certain assumptions and
analyses made by Gulfport in light of its experience and its perception of historical trends, current conditions and
expected future developments as well as other factors it believes are appropriate in the circumstances. However,
whether actual results and developments will conform with Gulfport’s expectations and predictions is subject to a
number of risks and uncertainties, general economic, market or business conditions; the opportunities (or lack
thereof) that may be presented to and pursued by Gulfport; competitive actions by other oil and natural gas
companies; changes in laws or regulations; hurricanes and other natural disasters and other factors, many of which
are beyond the control of Gulfport. Consequently, all of the forward-looking statements made in this presentation are
qualified by these cautionary statements and there can be no assurances that the actual results or developments
anticipated by Gulfport will be realized or even if realized, that they will have the expected consequences to or effects
on Gulfport, its business or operations. We have no intention, and disclaim any obligation, to update or revise any
forward-looking statements, whether as a result of new information, future results or otherwise.
3September 2006
Gulfport Today
� Asset Portfolio Highlights � Behind Pipe Reserves Provide Production Foundation � Large Inventory of Low-Risk Booked and Unbooked PUD’s� Enhanced Exploration / Exploitation Planned for Hackberry Field� High-impact potential with strategic investment in Oil Sands
� Operational Metrics � 23 MMBOE Proved Reserves (FY2005)
� $457 million PV-10 Value (FY2005)
� Daily Production Average: 4,300 BOE/D, ~ 85% Oil (Aug 2006)
� Corporate Stats � $400 million Market Cap� Living within Cash Flow, Low Debt to Total Cap � Monetizing $100 million historical NOL’s
4September 2006
Multi-Year South Louisiana Inventory Drives Production Growth
3-D seismic driven deep gas targets target 10–40 Bcfe
$8.0-$20.0 million to D&C(potential reserve adds)
12,000 - 15,000’ gas prospects target 4–20 Bcfe
$5.0-$8.0 million to D&C(potential reserve adds)
2,000’ – 13,000’ oil prospects“up-dip” to production
150 MBOE $1.5 million to D&C on average
RiskProfile
ReserveImpact
3.3 MMBOE behind pipe reserves Recompletions
122 PUD locations (in reserve report)
100+ unbooked locations +
Horizontal wells (potential reserve adds)
Multiple offsetwith success
3-D identified locations
Evaluating2009 or later
5September 2006
Increasing Drilling Activity Drives Growth
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WCBB Hackberry Wells Drilled
2004 2005
8wells
17wells
30wells
2006
� Increased drilling pay immediate dividends � 176% production growth from Jan 2004 to Aug 2006
� 1,559 BOE/D to 4,300 BOE/D
6September 2006
Core Assets – South Louisiana
� West Cote Blanche Bay
� Active “attic” oil development program
� Natural gas exploration upside
� East Hackberry Field
� 3-D seismic recently shot and processed
� Oil development drilling to commence in Q406
� Established Gulfport fields with substantial cumulative production and remaining reserves
Gulfport Salt Dome Asset Characteristics
100% owned and operated
100% owned infrastructure
Limited execution risk
Intel gathered from every recompletion
7September 2006
West Cote Blanche Bay
� 5,668 gross acres
� 100% ownership – surface to base of 13900 Sand (-11,320’)
� 40.4% ownership – all zones below 13900 Sand
� Discovered in 1940’s by Texaco
� Historical cumulative production: 232 MMBOE
� Historical field success rate of 90%
� 3-D reprocessed by Gulfport in 1999, 2004 & 2005
WCBB Production Growth of 70% Y-o-Y
� August 2005: 2,323 BOE/D
� August 2006: 3,950 BOE/D
Field Characteristics
Shallow water
Multiple well heads
100% owned infrastructure
8September 2006
West Cote Blanche Bay – Multiple Pay Zones
� 3.3 MMBOE of behind pipe reserves
� Each dot is a productive zone
� 80 Major Pay Zones – 100+ Total Pay Zones to develop for cash flow plus exploration potential in 13900 Sand and deeper
� Historically productive from all intervals
� 18-20 recompletions for 2006
9September 2006
Directional Drilling Drives Field Development
� New wells often prove up new opportunities
� Wells drilled to 10,000‘cost approximately $1.5 million with reserve potential of approximately 150 MBOE
� Complex faulting
� Wells optimized through directional drilling
Salt Dome
10September 2006
East Hackberry - Overview
� 3,147 acre blocks held by production
� 100% ownership of all depths
� Historical asset – East Hackberry discovered in 1926 by Gulf Oil Co.
� Cumulative production of more than 56 MMBOE
� Developed with only 3 lines of 2-D seismic data before recent 3-D proprietary shoot by Gulfport
� 3-D analysis has identified multiple drilling opportunities which should dramatically increase Hackberry production
11September 2006
East Hackberry – Proprietary 3-D Seismic Shoot
� New drilling opportunities on flanks of salt dome and more shallow fault blocks over crest
� 42 square miles have been shot and processed
[Scale: 5 mi x 8.4 mi]
12September 2006
East Hackberry – Multiple Pay Zones
� Each dot is a productive zone
� Over 30 known producing horizons to develop for cash flow
� Producing sands are Lower Miocene and Upper Oligocene in age
� Depths to producing horizons are 5,000’ and 12,200’
� Exploratory gas potential in the Hackberry sand zone at 15,000’
13September 2006
East Hackberry – Initial Drilling Program
� First 8 drilling locations have been identified
� Estimated cost of $2.6 million for 13,000’ well
� Expected reserve potential of 300 + MBOE per well
� 4 wells planned in 2006
16September 2006
In-situ Recovery Using Steam Assisted Gravity Drainage (SAGD)
SAGD consists of 2 lateral wells 600-1000m long separated by 5m vertically. These well pairs are typically spaced about 100m apart.
Source EnCana Corp.
17September 2006
Alberta Oil Sands – 2nd Largest Oil Resource in World
� 175 billion barrels represents 14% of world’s reserves
� Current oil sands production > 1 MMbopd
� Strategic proximity to the US (world’s largest oil market)
� Substantial unconventional resource with modest geologic risk
� Rapidly developing infrastructure
� Technology improving recovery rates
� Stable political environment with favorable royalty rates and lease terms
� Each 10,000 bopd project has reserve potential of approximately 100 MMboover 30 years
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Source: CAPP.
World Reserves(billions of barrels)
Source US Dept of Energy.
18September 2006
Attractive Investment in Canadian Oil Sands Play
� Strategic investment in Grizzly Oil Sands ULC.
� GPOR acquired 25% for $8.0 million
� Grizzly Oil Sands overview:
� Assembled 237,000 acres in Athabasca oil sands for $32 million
� Potential for multiple 10,000+ bopd projects
� Ownership: 75% Wexford25% Gulfport
� Lease acquisition criteria:
� Acquisition cost < 1¢ per barrel of estimated bitumen in place (based on internal estimates)
� Bitumen in place supports opportunity for 10,000 bopd projects or larger
� Thick/continuous bitumen-bearing zones with good permeability
� Avoid “thief zones” - water, gas, or interbedded shale layers
Gulfport Leases
19September 2006
Silvertip & Ells River Prospect Area
� Chevron’s Ells River Project(1):
� Estimated to hold 7.5 billion barrels of oil
� 80 – 100 well appraisal drilling program to commence in 2006/2007 winter season
� Leases purchased over last 12 months for approximately $75 million
Chevron Ells River07-95N-15W
Gulfport Silvertip23-95N-15W
(1) Source: Financial Post, September 2, 2006.
Gulfport EllsRiver
20September 2006
Grizzly Oil Sands Project Development
� Incremental $16 million investment expected during 2006/2007 winter drilling program� 2 rigs projected to drill approximately 50 wells
� Each test well costs $235,000/well (gross)
� 3-D seismic projected to cost $2.7 million (gross)
� Incremental $4 million investment net to Gulfport
� Initial test wells will provide core holes for 3 prospect areas
� Plan to submit regulatory application by 2008 or earlier
� Initial production anticipated in early 2010
� Projected to cost $200 million
[Insert project timeline]
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Winter Drilling Program
First 10,000 bopd Project
Resource Evaluation
Environmental Planning
Regulatory Process
Engineering/Procurement/Construction
Initial Steam Injection
Production
Preliminary Project Time Table
23September 2006
Gulfport Energy – APICO Thailand
� Gulfport has ~2% ownership in APICO Thailand
� APICO Thailand – 35 +% ownership of Phu Horm Gas Field –Flow test 100 + MMcfd rate from 3 wells operated by Amerada Hess
� 3 million acre contiguous concession block
� Gas sales contract in place – expect production rate of 85-100 MMcfd in 2006
� Drill 2 additional wells in 2006
� Phu Horm gas field – 0.48 Tcf proved reserves. Gulfport interest proved reserves equal to 3.36 Bcfe or 560 MBOE and is currently unbooked
� Additional exploratory projects with multi-Tcf potential
25September 2006
Historical Operating Results
0
5
10
15
20
2003 2004 200580.0%
90.0%
100.0%
Wells Drilled Success Rate
87.5%
100.0%
94.1%
0
5
10
15
20
25
30
2003 2004 2005$0.0
$3.0
$6.0
$9.0
$12.0
$15.0
2003 2004 2005 First Half of 2006
0
200
400
600
800
1000
1200
2003 2004 2005 2006E
(1) Based upon estimated mid-point of 2006 guidance.
Drilling Success Rate Production (Net MBOE)
Reserves (Net MBOE) Net Income ($MM)
Production Range
26September 2006
Positioned to Resume Production Growth
� Production was significantly impacted by the effects of Hurricanes Rita
� Shut-in reserves back on-line
� 2006E production guidance of 1,050-1,200 MBOE represents 100% increase over 2005
2005 – 2006 Quarterly Production (Net Mboe)
0
50
100
150
200
250
300
350
400
450
500
Q105 Q205 Q305 Q405 Q106 Q206 Q306E Q406E
Production shut-in beginning in September for Hurricane
Rita
Production Range
27September 2006
Drilling Capex
WCBB $ 31,835
East Hackberry 12,500
Recompletions and Side Tracks
WCBB 1,400
East Hackberry 750
Facilities Capex
WCBB 5,965
East Hackberry 8,075
Investments in Canadian Oil Sands & Thailand 10,000
2006 Totals $ 70,525
2006 Capital Expenditure Estimates
2006 Capital Expenditures (including Canadian Oil Sands)
Canadian Oil Sands &
Thailand14%
Recompletions3%
Facilities20%
Drilling63%
($ in 000s)
East Hackberry30%
Canadian Oil Sands & Thailand
14%
WCBB56%
By Category
By Location
28September 2006
Capitalization Table & Public Guidance
Strong Financial Flexibility($ in 000s)
Wells to Drill 26 – 30 Recompletions 18 – 20 Capital Expenditures $45 – $60 million (excludes Canadian Oil Sands & Thailand)
Production 1.05 – 1.20 MBOE LOE $8.00 – $9.00 per BOE G&A $2.50 – $3.00 per BOE Hedges for 2006 45,000 bbl/month at $64.05 (approx. 40% of daily production)
2006 Public Guidance
Cash $6,978Total Debt 17,948Shareholder’s Equity 101,277Net Book / Net Book Cap 9.7%
As of June 30, 2006
29September 2006
Investment Summary
� Historical Louisiana focus� two legacy assets – salt domes with historical cumulative production of over 288 MMBOE
� With “resource play” like characteristics
� behind pipe reserves provide production foundation
� 8 year drilling inventory from 122 PUD locations and 100+ unbooked locations
� historic success of 90%
� Provides “line of sight” organic production and reserve growth from expanding drilling program
� from 8 wells in 2004, 17 wells in 2005, and 30 planned wells in 2006
� 2006 production guidance for 2006 is almost twice 2005 actual
� Oil focus with long-lived reserves relative to many Gulf Coast players
� 84% oil and developed R/P of 8.2 years
� Strategic investment in attractive oil sands region
� provides significant reserve potential with minimal near-term capital requirements
� Experienced management and technical team
� ongoing prospect generating efforts will add to current inventory of locations
� Strong financial flexibility
� low debt to total capitalization
� drilling program funded out of cash flow