Gulfport Energy(GPOR)2022-08-03 16:40Financial Data and Key Metrics Changes - The company reported a net income of 205 million of adjusted EBITDA during Q2 2022 [21] - Free cash flow for the same period was 469 million at the end of the quarter [6][24] - The leverage ratio was reported at a conservative 0.8x [6] Business Line Data and Key Metrics Changes - Production for the quarter was 960 million cubic feet equivalent per day, driven by the 2021 development program and strong performance from the SCOOP Nelda pad [6][8] - The company expects production to decline slightly in Q3 before significant growth in Q4, with a full-year production guidance range adjusted to 975 million to 1,000 million cubic feet equivalent per day [10][28] Market Data and Key Metrics Changes - The company is experiencing inflationary pressures, now expecting inflation to be up 20% to 25% for the year, an increase from previous estimates [15] - The company has layered on derivative contracts for 2024, including natural gas swap contracts and collar contracts [22] Company Strategy and Development Direction - The company is focused on cost-effective production and capital discipline, with a commitment to returning capital to shareholders through share repurchase programs [17][18] - Plans to implement a continuous rig program in the Utica and potentially in the SCOOP in 2023 to improve drilling efficiency [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in generating significant free cash flow in future quarters, allowing for continued capital returns to shareholders while maintaining a strong financial position [30] - The company is optimistic about production growth in 2023, expecting to exceed 5% growth over 2022 [10][28] Other Important Information - The Board approved an additional 300 million [7][26] - The company repurchased approximately 1.4 million common shares at an average price of $90.3 during Q2 2022 [25] Q&A Session Summary Question: Overall free cash flow strategy and shareholder returns - Management believes it can balance shareholder returns through buybacks while also pursuing growth opportunities [35] Question: Efficiency with the top-hole rig and regional capital allocation - The company plans to implement a top-hole rig to enhance drilling efficiency and maintain a continuous fracking program [36][37] Question: Future activity split between Utica and SCOOP - Management indicated that while the long-term split will remain, they are encouraged by results in the SCOOP and are evaluating how to maximize production there [39][40]