GPOR Adds More Acreage in Ohio

OKLAHOMA CITY (AP) -- Gulfport Energy Corp. is adding to its property in the Utica Shale, which is believed to hold enormous reserves of natural gas and oil.

The oil and gas producer said Monday that it will buy about 22,000 acres in the Utica Shale in eastern Ohio for about $220 million from Windsor Ohio, an affiliate of investment firm Wexford Capital. It's paying for the deal with help from a stock offering of 7.8 million shares, also launched Monday.

In December Gulfport acquired 37,000 acres from Windsor Ohio. The new deal, expected to close before the end of the month, would bring Gulfport's interest in the Utica Shale to about 128,000 acres.

The Utica lies beneath the Marcellus Shale, where energy companies have drilled thousands of unconventional gas wells in recent years. The Marcellus is considered to be one of the richest natural gas reserves in the world. Drillers are just beginning to tap into the deeper Utica.

Gulfport estimated that it would produce 21,370 to 22,192 barrels of oil equivalent per day, including the acquisition, this year.

Views: 1026

▶ Reply to This

Replies to This Discussion

Permalink Reply by Joseph-Ohio on February 13, 2013 at 1:49am

There's Eastern Ohio.

There's Southeastern Ohio.

Thinking the new acreage is in Southeastern Ohio.

Am I correct ?

 

Permalink Reply by Roger Pyle on February 13, 2013 at 2:47am

I cannot find exactly where it is.  But I did find this interesting tidbit:

From Bronte Capital (an indivdual blog):

 woke up this morning to the news that Gulfport Energy (NASDAQ:GPOR) is buying another 22 thousand net acres in the Utica Shale from Windsor Ohio - an affiliate of Wexford Capital. The price is about $10 thousand an acre. This is funded by a large equity raise.

This is very similar to a transaction in December 2012 where 37 thousand acres were purchased from Windsor Ohio for $372 million. That was also funded by an equity raise. The 8K describing that transaction contained the following disclosure:

Mike Liddell, Gulfport’s Chairman of the Board, is the operating member of Windsor Ohio. All distributions made by Windsor Ohio are first paid to the Wexford members in accordance with their respective ownership interests in Windsor Ohio until they have received amounts equal to their respective capital contributions. Thereafter, distributions are made 90% to the Wexford members in accordance with their respective ownership interests and 10% to Mr. Liddell. Upon closing of the Acquisition, Mr. Liddell received approximately $2.9 million in distributions from Windsor Ohio corresponding to his 10% interest described above.

It is an open question as to how much money from this equity raise will find its way into Mr Liddell's pocket. The Gulfport Energy press releases do not broach this question.

However - on a cursory look - it appears that the Windsor Ohio members have already received back their capital contributions and on a literal reading of the above quoted 8K a full ten percent of the money paid for this acreage will flow personally to the Chairman of Gulfport Energy.

$22,000,000 is not a bad pay day. I know it is a guess - but hey - Gulfport do not disclose this detail in their press release. Nor is it disclosed in their prospectus for the offering. I telephoned Paul K. Heerwagen IV (the IR officer and contact on the press releases) and asked him the question directly. He hung up on me and did not answer return calls.

But dear Gulfport shareholders - you should have no discomfort: the press release assures us that "the transaction was approved by a special committee of Gulfport’s Board of Directors."

Permalink Reply by gary SWF on February 13, 2013 at 2:58am

The deal within the deal........never surprised with what goes on between groups that are not disclosed.............While I have no problem with most any deal, non disclouser is very much a concern/problem to me...........most landowners are hard working/trusting people, that I have great concerns for, please let us know "ALL" of the information... great research, Thank You....Keep the information flowing...........All IMHO

Permalink Reply by Bluflame on February 13, 2013 at 4:30am

Roger,

  Windsor Ohio was an investor with GPOR on their 128,000 acre leasehold purchase in SE Ohio in 2011. Most of the acreage is in Belmont, Guernsey and Harrison Counties. GPOR has been the operator all along. GPOR is merely purchasing Windsor's interest in the acreage, albeit at a tidy profit to Windsor. This acreage was originally leased by Patriot and one other organization whose name escapes me. They "flipped" it to Gulfport, who took on Windsor Ohio to mitigate financial risk in the deal. I don't know what GPOR/Windsor paid, but Patriot and the other entity were offering in the $1700/acre range to landowners. As we know, GPOR has produced several prolific horizontal wells on this acreage, and is now buying out Windsor's stake.

BluFlame

Permalink Reply by Bluflame on February 13, 2013 at 4:36am

Roger,

  BTW, even Aubrey McClendon would tip his hat to Gulfport's CEO for concluding a sweet deal for himself like this! Must be something in the water in Oklahoma City.

BluFlame

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service