Gulfport strikes $1.85-billion deal to enter SCOOP

Gulfport Energy Corp., Oklahoma City, has agreed to acquire 46,400 net surface acres in the core of the South Central Oklahoma Oil Province (SCOOP) from Vitruvian II Woodford LLC, a portfolio company of Houston private equity firm Quantum Energy Partners, for $1.85 billion.

The contiguous position totals 85,000 net effective acres, which includes rights to 46,400 Woodford acres and 38,600 Springer acres, in Grady, Stephens, and Garvin counties in Oklahoma, with 80% held by production.

The properties are primarily in the over-pressured liquids-rich to dry gas windows of the play, with production of 183 MMcfd of gas equivalent in October and total estimated proved reserves of 1.1 tcf of gas equivalent at Sept. 30.

The deal includes 48 producing horizontal wells and an additional interest in more than 150 nonoperated horizontal wells. Four rigs are currently operating on the acreage. Gulfport plans to maintain a four-rig program in the play during 2017 and add two more rigs at the beginning of 2018.

Gulfport says it has identified stacked-pay potential on the acreage with 1,750 gross drilling locations, including more than 775 gross locations with internal rates of return of 75%, targeting the Woodford and Springer intervals. The firm sees upside potential through infill drilling and additional prospective zones.

The purchase price comprises $1.35 billion in cash and 18.8 million in shares of Gulfport common stock privately placed to the sellers, subject to adjustment. The deal is expected to close in February 2017.

Expanding beyond the Utica

“Combining Vitruvian’s high-quality SCOOP position with our prolific Utica assets will transform our company and solidify Gulfport with core positions in two of North America’s high-return natural gas basins,” commented Michael G. Moore, Gulfport chief executive officer and president.

The announcement comes a week after Gulfport reported it had agreed to buy 2,600 net undeveloped acres in northern Monroe County, Ohio, from an undisclosed third party for $87 million. That deal is expected to close this month.

Gulfport currently has some 211,000 net acres focused on the core of the dry, wet gas and condensate windows of the Utica Point Pleasant. Company production in the region averaged 713 MMcfed during the third quarter and reserves total 1.7 net tcfe.

It has four operated rigs active in the Utica and has contracted its fifth and sixth horizontal rigs to respectively begin operations in November and December.

Quantum’s activity this year includes the formation of Sentinel Peak Resources LLC and its subsequent $742-million purchase of Freeport-McMoRan Inc.’s onshore oil and gas properties in California (OGJ Online, Oct. 14, 2016).

Contact Matt Zborowski at matthewz@ogjonline.com.

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