Q3 2023 Gulfport Energy Corporation Earnings Call

Greetings and welcome to the Gulf War Energy Corporation third quarter 2023 earnings Conference call. At this time all participants are the listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operate assistance during the conference Police Quest Star zero on your telephone keypad.

As a reminder, this confidence being recorded it is now my pleasure to introduce your host Jessica Angela. Thank you you may begin.

Thank you and good morning, welcome to Gulf War Energy Corporation third quarter of 2023 earnings Conference call I Am Jessica Angela Vice President of Investor Relations speakers on today's call include John Rinehart, President and C. E O Michael Hodges as executive Vice President and CFO. In addition, and we also have Matt Rucker Senior Vice.

President of operations here will be available for the Q and a portion of today's call.

I would like to remind everybody that during the conference call. The company may make certain forward looking statements relating to the financial condition results of operations plans objectives. Here's your performance in business. We caution you that actual results could differ materially from those that are indicated in these forward looking statements and due to a variety of factors information concerning.

These factors can be found in the company's filings with the SEC In addition, we may reference non-GAAP measures reconciliations to the comparable GAAP measures will be posted on our web site and updated Gulfport presentation was posted yesterday evening to the website in conjunction with the earnings announcement. Please review at your leisure at this time I would like to turn the call over.

John Rinehart pregnant and C E O.

Thank you Jessica and thank you to everyone for listening to our goal.

I'm pleased to provide highlights today on the company's third quarter results as we continued to make steady progress.

Demonstrated by our strong production profile robust margins improvement in operational efficiencies high quality inventory additions and they continued focus on returning capital shareholders Stewart common share repurchase program.

Move into our third quarter results are financial performance remains strong generating 160 million of adjusted EBITDA and 49 million of adjusted free cashflow, excluding discretionary acreage acquisitions.

Our average daily production totaled 1.056 billion cubic feet equivalent per day ahead of analysts expectations and driven by improves cycle times accelerating the timing of wells brought online in the quarter.

As well as the continued strong well performance from a development program.

During the third quarter, if the company spud five gross wells, all within Ohio, including two Marcellus Wells and Belmont County.

This Marcellus pad was drilled and completed during the quarter marketing the company's first operated Marcellus development on our stack they acreage.

We began flowback operations in late October and look forward to further discussing the results as well as potential future Marcellus development as we gain meaningful production history from the current wells.

As a reminder, we see significant upside value here with our Marcellus acreage holding the potential to unlock approximately 40 to 50 wells of incremental inventory for the company.

When the completions front, we brought on line five gross wells during the quarter all targeting the Utica. These wells returned in line 17 days ahead of our original budget.

We continued to deliver strong operational execution and realized consistent cycle time improvements on both the drilling and completion is front and a third quarter.

On the drilling side, we experienced a 13% quarter over quarter improvement and footage drove per day and when compared to here in 2022, we have increased our footage drove per day by over 45%.

The team recently completed the most efficient well in Gulf ports, Utica history relative to lateral lengths greater than 15000 feet.

Achieving a record 22 days spud to rig release performance on a Utica well that reached approximately 21000 feet of lateral.

On the completion side, we continue to see significant efficiency improvements and the frack and drill out phases of our operations improving average frack pumping hours per day by 16% in the third quarter, an average plugged his drill per day by almost 90%.

Resulting in quarterly average of 18.4, Frac pumping hours per day, and 35 plugs drilled out per day. These.

These efficiencies and corresponding cycle time reductions play an integral role in our corporate level returns significantly improving turn in line timing and ultimately accelerating cash flows drill.

Driven by the teams outstanding performance, what's driving efficiencies up and costs down we forecast the company has realized over $35 million in capital savings on our full year 2023 drilling and completion budget. We believe these improvements will result in lower maintenance capital expenditures going forward.

And translate into meaningful capital efficiency gains for 2000 2004 program.

As we have mentioned before we continue to focus on our pressure manage production approach, which is generating strong results with minimal average initial pressure drawdown.

And the Utica our recent wells.

Continued to outperform and we currently forecast the average EUR estimates for 2023 development program will be in excess of 2.2 billion cubic feet per 1000 feet of lateral representing a 60% improvement since 2020 is shown in our investor presentation on <unk>.

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We firmly believe our development planning with optimize well spacing enhanced stimulation treatments and pressure manage flowback will lead to longer production plateau periods shallower declines.

Improved eur's and improved economics, and capital efficiencies relating to right sizing of production facilities and compression.

And the Scoop. Our development program also continues to respond very positively to our pressure manage production reproach with higher than expected oil yields and lower average initial pressure drawdown.

Looking at slides 14 of our Investor deck, you can see our program average you are per 1000 feet of lateral and the school has improved by over 80% since 2020.

Our operation and reservoir teams have been actively reviewing our historical development practices for improvements and we are confident in our ability to take our Utica efficiency gains realize this year and apply meaningful efficiency improvements to our upcoming development program and the scoop.

In terms of current activity as noted above are operating teams high level of efficiency and cost reduction focus has resulted in over $35 million capital savings year to date, and we have elected to reinvest these savings into the development of our high quality assets.

As mentioned last quarter through our ongoing maintenance leasing efforts applying a portion of the savings has facilitated the company's ability to improve our average working interest and nearly every well in our 2023 program. This results in an increase in our network counts and further contributes to our expected production and drilling and.

Completion capital results for the year.

In addition, we have elected to accelerate future planned activity predominantly focused in the liquids area of both the Utica and the skew during the fourth quarter of 2023.

Specifically the company is accelerating planned drilling operations of four wells in the Utica two of which will be completed in the fourth quarter.

Also commencing drilling of a three wells scoop pad.

And lastly, initiate fracturing operations on a multi well pad and the Utica.

Even with this acceleration of activity the benefit of which will be realized in 2024 and beyond we are pleased to be in a position to further lower our 2023 total capital budget, while also increasing our 2023 production guidance again, highlighting the strong operational <unk>.

Four months, our team is delivering quarter over quarter.

We now forecast a full year drilling incompletion capital guidance range of $385 million to $395 million in full year production to be in the range of 1.045 1.055 billion cubic feet equivalent per day, an increase of approximately.

7% when compared to full year 2022 production levels.

Turning to land expenditures, we lowered our 2000 twenty-three guidance and now plan to allocate $50 million to $60 million on maintenance leasehold and land investment.

This spend has focused on bolstering our 2023 and 2024 drilling programs and facilitating increases in our working interest and lateral footage and units we plan to drill near term.

In addition, we announced last quarter, we continued to actively pursue attractive discretionary acreage acquisition opportunities funded through a robust adjusted free cash flow.

Through September 30th 2023, we have invested roughly $25 million in these acquisition opportunities primarily targeting the liquids rich area of the Utica. These.

These acquisitions expand our high quality resource step, which is predominantly held longterm by production and we will provide further optionality to our near term development plans. We continued to forecast approximately $40 million of discretionary acreage acquisitions during 2023 with expectations to add roughly one.

Five years of core liquids rich drilling inventory at our current development pace with an average cost of approximately $1.5 million per location.

In closing looking ahead to 2024 are strong financial foundation improve capital efficiency lower cost structure and strong well performance provides us with significant flexibility as we finalize our plans for 2024 development program.

We look forward.

Two returning to our liquids rich scoop asset and given the increase in liquids pricing. We have witnessed during 2023, we have significant optionality and the Utica to continue development of our natural gas acreage. While also augmenting our development plan with several liquids rich Utica locations as part of our 24 <unk>.

Programmes the company will.

Will continue to prioritize the return of capital to our shareholders through common stock repurchases as evidenced by the recent expansion of our share repurchase authorization by 63% and plan to continue allocating substantially all of our adjusted free cash flow to common share repurchases after discretionary acreage acquisitions.

Now I will turn the call over to Michael to discuss our financial results.

Thank you John and good morning, everyone.

During the quarter with continued volatility in the commodity backdrop. The company achieved strong results in almost every area of the business net.

Net cash provided by operating activities before changes in working capital totaled approximately $147 million during the third quarter more than funding our capital expenditures in our common share repurchases, while maintaining our balance sheet strength.

We reported adjusted EBITDA of $160 million during the quarter and generated adjusted free cash flow of $49 million for the same period better than analyst expectations, driven by our strong production and operating costs performance.

With less than 20% of our combined base DNC and maintenance leaf hold and land spending left to occur in 2023, and and improving commodity price environment as we exit the shoulder season, we forecast meaningful cash flow generation during the fourth quarter, providing a strong tailwind for our business as we enter 2000.

2004.

Production cost for the third quarter totaled $1.12 per million cubic feet equivalent better than analysts consensus expectations and below our full year 2000, and 2003 guidance range the.

The improvement is primarily a result of lower per unit <unk> in midstream expenses driven by the companies continued focus to optimize and reduce costs in the field and are strong production performance driving or per unit expenses lower.

For full year 2000, 2003, we reaffirm our per unit operating cost guidance, which includes LLE midstream and taxes other than income of $1.16.

To $1.24 per Mcse and currently anticipate averaging at the low end of the annual guidance range.

The company maintained our top quartile G&A during the quarter with a recurring cast G&A totaling 12 per million cubic feet equivalent.

Are all and realized pricing for the third quarter was $2.84 per mcse, including the impact of cash settled derivatives.

This realized units price is 29 cents above Nymex Henry have index price highlighting the benefit of golf course diverse marketing portfolio for natural gas and the pricing uplift from our liquids portfolio in both of our asset areas.

We realized cash hedging gains of approximately $49 million for the quarter, demonstrating the strength of our hedge book and its impact on our cash flows.

Natural gas price differential before hedges was negative 57 per mcf compared to the average daily Nymex settled price during the quarter driven by demand seasonality, resulting in pressure on local pricing, especially in the northeast.

We expect our fourth quarter differential to narrow as we enter the colder months of the year and we reaffirm our natural gas differential before hedges guiding to an average of 20 to 35 per Mcf the low Nymex for the full year with expectations to average toward the wide end of the provided range on a full year basis.

In addition to reflect market impact to pricing realize the date and the company's expectations for the remainder of the year, we have revised our realized oil differential guidance and anticipate realizing $3.50 to three to $4.50 off W for the calendar year.

On the capital front incurred capital expenditures before discretionary acreage acquisitions totaled $81.4 million relating to drilling and completion activity and $8.4 million related to maintenance Lee filled in land investment.

Our operational efficiency improvements robust hedge position healthy balance sheet and strong cash margins provides significant flexibility as we enter 2024 and plan our activity and what we believe will be a stronger commodity price environment.

Before I move on to discuss our hedge book I wanted to take this opportunity to recap the outstanding financial performance of Gulfport This year as.

As John mentioned, we raised the midpoint of our full year production guidance and lowered the midpoint of our full year capital expenditure guidance as part of our earnings announcement yesterday, we now expect to deliver 3% more production for 2000 2003 than our original guidance at a lower level of capital expenditures, and then originally announced and with 4%.

Lower cash operating costs than initially indicated.

The financial results. Our team is delivered for 2000 2003 have been exceptional and we are poised to capitalize on the improving gas macro in 2024 and beyond.

With respect to our current hedge position, we're pleased to have downside protection covering roughly 550 million cubic feet per day in 2024 at an average floor price of $3.77 per Mcf, we believe both the scale and quality of our natural gas hedge book for 2024 provided derisk.

Foundation for free cash flow generation that differentiates gulfport from its peers.

We have also be kind of operative begun opportunistically layering and hedges for 2025, and currently have natural gas swap and caller contracts totaling approximately 250 million cubic feet per day, and an average floor price of $3 89 per Mcf on the basis front, we have locked in around 40% of our remaining.

2000, 2003, natural gas basis basis exposure and a similar portion of our anticipated 2002 thousand for exposure, providing pricing security at our largest sales points and he gets in addition to the risk mitigation offered by our diverse portfolio of firm transportation.

We continue to believe there are better days ahead for natural gas and we believe Gulf War delivers a differentiated combination of free cash flowed generation capacity and downside protection over the next two to three years.

Turning to the balance sheet, our financial position remains very strong with trailing 12 months net leverage exiting the quarter at 0.9 times and our liquidity totaling $746 million comprised of $8.3 million in cash plus $738 $2 million of borrowing base availability, we recently completed our.

Fall borrowing base Redetermination and our lenders unanimously reaffirmed our borrowing base of $1.1 billion with the elected lender commitments remaining at $900 million or liquidity today is more than sufficient to fund any development needs. We might have for the fifth stable future and provides tremendous flexibility from a financial perspective going.

Forward as we are positioned to be opportunistic should situations arise that allow us to capture value for our stakeholders.

As we close out 2023, and look ahead to 2024, we forecast continued significant free cash flow generation and common share repurchases will remain a key part of our return of capital strategy given the unrecognized value. We believe remains in our equity.

During the third quarter as John mentioned previously our board of directors increased our common stock repurchase authorization by 63% to $650 million as of October 26, we had repurchased approximately 3.9 million shares of our common stock at an average share price of $86.14.

Lowering our share count by 13% at a weighted average price and more than 30% below our current share price.

We currently have approximately $315 million of availability under the $650 million share repurchase program and plan to continue to return substantially all of our adjusted free cash flow to shareholders through common share repurchases, excluding the discretionary acreage acquisition John mentioned earlier for the first.

Vehicle future.

To better highlight the free cash flow generation potential of Gulfport with provided additional details on slide seven of our investor presentation, illustrating the pure leading free cash flow potential and capacity of Gulfport to return value to shareholders over the next five years, all before taking into account the significant upside opportunities.

<unk> on the slide in short the operational successes of 2023 should deliver best in class free cash flows for the years to come and we have both the desire and the resources to continue returning cash to shareholders for the foreseeable future in.

In summary, this is an exciting time to be a part of Gulfport. This year's program is delivering on all fronts and we look forward to continued progress both operationally and financially as we move forward. We are delivered more with less and we believe our best days are still ahead of us and perhaps most importantly, we generate premium free cash flow yields that deliver value to our inverse.

<unk> and we have the five year free cash flow capacity capable of retiring our market cap at its current level with that I will turn the call back over to the operator to open up the call for questions.

Thank you we will know conduct a question and answer session. If you would like to ask a question. Please press start one on your telephone keypad.

Formation told to indicate your lines in a question Q you might start to if you would like to be moved to questions from the queue.

Speaker equipment, it may be necessary to pick up your handset before pressing the snarky one moment, while we pulse offers question.

My first question comes from Bert tons with two of Securities. Please proceed.

Hi, Good morning, guys just wanted to get your thoughts on the M&A space and you know.

You guys created a discount maybe you guys would be the next one for consolidation in northeast Secondly, if you're considering out of basin opportunities. Thanks.

Hi.

Yeah. Thanks, Bert I appreciate the question.

As as we focus I guess twofold first of all.

Inwardly as far as the company goes to create value for our shareholders and we fundamentally believe bye take.

Taking what we believe is a highly attractive asset base and developed in this in a very prudent manner.

Delivering some high quality margins generated free cash flow positions accompany very attractively not only from Ah from us smaller scale space that have a very good free cash flow capability and quite frankly, just an overall.

Values kind of opportunity in the general space. So.

We're very focused on optimizing the free cash flow position accompany keeping it healthy which gives us optionality to actually look strategically and tactically of things as far as a general space. We're very pleased as far as the discussions that are happening in general about consolidation I think overall, we certainly believe that consolidation just across the U S is gone.

Happen and we will continue to happen and.

And we want a position to company as best as we can in the future to be able to take advantage of anything that's going to meaningfully enhanced the shareholder value for the company.

Thanks.

The second question just on efficiencies you guys continue do very very well could you just speak to maybe.

Is it more on just to completion side is it is it on the sort of the pad design, maybe can you give me a little bit more color because again, it certainly continue to be newly improved.

Over the last several quarters, which is great to see it I'm just wondering.

Where do you think most of that will continue to come from.

Yeah. Thanks. This is Matt I will take that one we're certainly seeing it really across the board.

And our drilling side as John mentioned.

We set records kind of subsequent to the quarter round the longest lateral driven the company and also the fastest days over 15000 feet, we've seen meaningful improvement there with the teams.

On the Frack side in the drill outside we continued quarter over quarter of just enhance the capabilities there.

Really to my knowledge some of the best hours in the base and I think you'll see across the board on pumping hours and then drill out 35 plug the day or 6300 feet per day is is pretty meaningful impactful and all of those things together help us reduce those cycle times and generate that cash flow much faster. So I've been really pleased with the.

A lot of changes here the new teams with the first full quarter under their belt of really delivered we continue to focus on ways to continue to optimize the.

Great to hear thank you all.

The next question comes from Tim Redmond with Keybanc capital. Please proceed.

Good morning, everybody and thanks for taking my question Uhm I wanted to start on what seems to be.

This started a pivot into more hired liquid skew in your production. We noticed three Q I think you were about eight per cent liquids, which was the lowest do we seen post restructuring.

Just trying to understand John is that a well level returns decision is that an inventory kind of opportunity set decision are you a little more less bullish on gas and maybe some others just trying to understand what's driving that that pivot and how maybe I know you're not going to get 2024 guidance, but how we can think about the liquid skew.

Sort of growing and it's probably going to outpace total production just trying to understand how that looks over the next one to two years and what's driving that that decision.

Yeah. Thanks, Tim.

I appreciate the question appreciate your participation on the call.

We're in a very fortunate position at the company to have many different toggles.

We can pull on we have a very good high quality liquids rich we have some very high quality liquids woods, Utica as well as some new Marcellus and some great drygas. So as a company sits today, there's just not a lot of external two motivators for us outside of economics to drill one way or the other meaning we don't have a lot of owners.

We don't have a lot of Mvc's, we're not out there Holden acreage so for us as we tend to look at capital allocation, it's truly an economic perspective.

This is this is a process that we go through.

Of course every budget time and even during the year. So as we had these many different options. It is more of an economic decision with the current pricing looking out one to two years, what that will deliver.

And the great thing about having all these toggles as we move forward into 2004 and into twenty-five as we see certainly the gas backwardation kind of be realized in higher prices that will most definitely lean towards our leaning and probably more on gas in the future. So for us it's purely economics oils had a good run late.

Operator: Greetings and welcome to the Gulfport Energy Corporation's third quarter 2023 earnings conference call. At this time, our participants aren't even listening only mode. A brief question at the session will follow the formal presentation.

Operator: If anyone to require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference being recorded, it is down my pleasure to introduce your host, Jessica Antle.

We feel very confident in the well results in the high quality asset base and the economics. So we're going to lean in on that more than likely when we come out with their 2004 plan here in February but.

But certainly we are open to adjusting and moving forward too depending on what commodity prices doing where economic status.

Operator: Thank you. You may begin.

Tim This is Michael I might just add as far as the production profile going forward I think 2024, a lot of activity that John's describing likely doesn't impact our actual production until the second half of the year. So do you think about to your comments around the the.

Jessica Antle: Thank you and good morning. Welcome to Gulfport Energy Corporation's third quarter 2023 earnings conference call. I am Jessica Antle, Vice President of Investor Relations. Speakers on today's call include John Reinhart, President and CEO, Michael Hodges, Executive Vice President and CFO. In addition, we also have Matt Rucker, Senior Vice President of Operations, who will be available for the Q&A portion of today's call.

Liquids waiting I think you start to see that change a little bit late in the year, but really it's in 2025, where you're likely see the impact and a little bit more of a liquids waited production profile for the company. So I would say relatively similar in 24 to 23 gas versus liquids and then you'll start to see a little bit of hidden in 25, most likely.

Jessica Antle: I would like to remind everybody that during this conference call, the company may make certain forth-looking statements relating to the financial conditions, results of operations, plans, objectives, future performance and business. We caution you that actual results could differ materially from those that are indicated in these forth-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we may reference non-GAT measures. Reconciliation to the comparable GAT measures will be posted on our website. An updated Gulfport presentation was posted yesterday evening to the website in conjunction with the earnings announcement. Please review at your leisure.

Okay. Okay, I appreciate that that color and.

And then as we think about hedging you have a pretty optimal position. It seems you about roughly half Heche next year at at $4.

As you look out beyond.

2024, you know you have a pretty a more attractive strip.

Roughly $4 again, you've been hedging at that level, you see 50% is kind of that target level, but or as you get kind of bigger than your balance sheet strengthens.

John Reinhart: At this time, I would like to turn the call over to John Reinhart, President and CEO. Thank you, Jessica, and thank you to everyone for listening to our call. I'm pleased to provide highlights today on the company's third quarter results as we continue to make steady progress. Demonstrated by our strong production profile, robust margins, improvement in operational efficiencies, high-quality inventory additions, and the continued focus on returning capital shareholders through our Common Share Repurchase Program.

You feel less of a need to hedge just trying to understand how you're thinking about that longer term yeah. Yeah. Great question. So I think.

I think as a as a business we feel really good about where the balance sheet fits with the low leverage profile I think we feel really good about the fixed cost John mentioned that we don't have.

A lot of external factors that force us into decisions and so certainly that derisked the operational side of the business a little bits I think to your point, we feel like 2024 is it's looking better than twenty-three, but also a bit of a transition year for natural gas. So we do have what we feel like it's a very attractive hedge book.

John Reinhart: Moving to our third quarter results, our financial performance remains strong, generating 160 million of adjusted EBITDA in 49 million of adjusted free cash flow, excluding discretionary acre jackquisitions. Our average daily production totaled 1.056 billion cubic feet equivalent per day ahead of analyst expectations, and driven by improved cycle times accelerating the timing of wells brought on line in the quarter, as well as the continued strong well performance from our development program. During the third quarter, the company sped five gross wells all within Ohio, including two Marcellus wells in Belmont County.

In place and we've increased it slightly over the last quarter, but feel pretty good about where it says for 2025 I think we're more bullish on on gas we've talked publicly before about wanting to be in a range of of hedging percentages something in that 30% to 70% I think to the extent that we're bullish and there's opportune.

<unk> for gas prices to look strong we may lean a little bit towards the lower side, but.

As I mentioned in my comments, we have added some hedges in 2025, just to make sure that we're being prudent and protecting at least a certain amount of our cash flow. So I guess I would say I'd bias us a little bit towards the low end of our of our range, but certainly going to be monitoring in a macro and if things start to change will take the opportunity to adjust those decisions going forward.

John Reinhart: This Marcellus pad was drilled and completed during the quarter, marking the company's first operated Marcellus development on our stack pay acreage. We began flowback operations in late October, and looked forward to further discussing the results, as well as potential future Marcellus development, as we gain meaningful production history from the current wells. As a reminder, we see significant upside value here, with our Marcellus acreage holding the potential to unlock approximately 40 to 50 wells of incremental inventory for the Committee.

Okay I appreciate the comments thank you.

Thank you. Our next question comes from Doug look it with Bank of America. Please proceed.

Good morning, guys first of all I think we've got to acknowledge the step change that you promised the market on.

Efficiency is obviously showing up <unk> compared to legacy Golf course, I'm curious whoever wants to take this how much further do you think you have to go in and where do you think you are on.

John Reinhart: On the completions front, we brought on line five gross wells during the quarter, all targeting the Utica. These wells returned in line 17 days ahead of our original budget. We continue to deliver strong operational execution and realize consistent cycle time improvements on both the drilling and completions front in a third quarter. On the drilling side, we experienced a 13% quarter over quarter improvement in footage drill per day and when compared to year in 2022, we have increased our footage drill per day by over 45%.

In terms of about trajectory of your done 35% on both basins at this point, what's the aspirational target.

Well I think as we look at the efficiency gains we're very pleased with the progress to your point here today and I appreciate the comment.

Is the team start to mature and gel. This team has been together probably less to say nine months, probably seven months in the field.

Would probably say, we're 40% to 50% into the efficiency kind of cycles as we see opportunities to further improve there's certainly some more wood to chop here as we move forward.

John Reinhart: The team recently completed the most efficient well in Gulfport's Utica history relative to lateral lengths greater than 15,000 feet. Achieving a record 22 days spud to rig release performance on a Utica well that reached approximately 21,000 feet of lateral. On the completion side, we continue to see significant efficiency improvements in the fracked and drill out phases of our operations, improving average fracked pumping hours per day by 16% in the third quarter and average plugs drill per day by almost 90%.

Service costs addressing service costs renegotiating contracts farther kind of.

Eliminating dead time in between cycles, and just overall kind of shrinking that cycle time that spud to turn to sales time. So again prescience your comments in acknowledgement on the improvements that there are certainly some more opportunities that we feel like especially looking down in the scoop as we've started.

John Reinhart: Resulting in quarterly average of 18.4 fracked pumping hours per day and 35 plugs drilled out per day. These efficiencies and corresponding cycle time reductions play an integral role in our corporate level returns, significantly improving turn in line timing and ultimately accelerating cash flows. Driven by the team's outstanding performance with driving efficiencies up and costs down, we forecast the company has realized over 35 million and capital savings on our full year 2023 drilling and completion budget.

Is we're looking forward to actually developing that asset. This year, we're very happy about taking the learnings that we've learned from the Utica and applying those to the scoop to make what is already an attractive asset and very good returns a lot better so more to come on that this year as we start development in the school.

Well as you can imagine there's there's an agenda behind my question and then it's basically your definition of maintenance capital. The 434 55, so what what I'm really trying to get onto loners.

If you deliver if you'd only halfway through what you think your your efficiency gains could be what does that imply then for the the level of capital necessary to meet your program.

John Reinhart: We believe these improvements will result in lower maintenance capital expenditures going forward and translate into meaningful capital efficiency gains for a 2024 program. As we have mentioned before, we continue to focus on our pressure managed production approach, which is generating strong results with minimal average initial pressure drawdown. In the Utica, our recent wells continue to outperform and we currently forecast the average EUR estimates for our 2023 development program will be in excess of 2.2 billion cubic feet per 1,000 feet of lateral, representing a 60% improvement since 2020 as shown in our investor presentation on slide 13.

Nine four.

It's a great question, what I would what I would say is we're pleased with the results here today, we certainly see there's some more improvement as we look forward into 24 and beyond.

Right now we're in the middle of finalizing some contract negotiations with regards to service price.

So as far as us coming out with what that will look like next year that we'll have to wait until February when we roll out to twenty-four plan, but to your point, we feel very comfortable that the capital efficiencies that were gain this year will be carried into next year with further improvement.

It felt as if you don't mind can squeeze in a third one is a very quick one you made the comment about your cumulative free cash flow you could retire your market capitalization obviously.

John Reinhart: We firmly believe our development planning with optimized well spacing, enhanced simulation treatments, and pressure managed flowback will lead to longer production plateau periods, shallower declines, improved EURs, improved economics, and capital efficiencies relating to right sizing of production facilities and compression. In the scoop, our development program also continues to respond very positively to our pressure managed production approach with higher than expected oil yields and lower average initial pressure drawdown. Looking at slide 14 of our investor deck, you can see our program average EUR per 1,000 feet of lateral in the scoop has improved by over 80% since 2020.

That's a big statement, how realistic how aggressive do you really think you're gonna be giving you a hedge position.

2000 forward in particular.

Leads to buy box and that sort of capital I Hope you get there.

Yeah, Hey, Doug This is Michael I'll take a shot at that we appreciate the question I think 2024 again, a little early on any guidance, but as we sit here today, a similar strategy Luckily for the company is what we employed in 2023. So we go through a very rigorous process with our board of directors and evaluate all the potential uses of our free cash flow.

Whether that be additional acreage opportunities, whether it be share repurchases opportunities on the balance sheet side to improve their and I think as.

As we sit here today are shares we feel are undervalued and we feel like that's an extremely attractive use a free cash flow.

John Reinhart: Our operation and reservoir teams have been actively reviewing our historical development practices for improvements, and we are confident in our ability to take our Utica efficiency gains, realize this year, and apply meaningful efficiency improvements to our upcoming development program in the Scoop. In terms of current activity, as noted above, our operating teams high level of efficiency and cost reduction focus has resulted in over 35 million in capital savings here to date, and we have elected to reinvest these savings into the development of our high quality assets.

So I would expect that 2024 is very similar to 2023 from that strategy perspective, and if we can capture opportunities like the discretionary acreage acquisitions. We did this year. That's also very interesting and attractive to us but to the extent that there.

Those are not available I think our shares become one of our most exciting opportunities to return value. So I think long story short likely very similar to where we sit today.

Okay. Thank you guys appreciate the answers.

Once again, ladies and gentlemen to ask a question. Please press star one on your telephone keypad. Our next question comes from Chris Baker with Evercore ISI. Please proceed.

John Reinhart: As mentioned last quarter through our ongoing maintenance leasing efforts, applying a portion of these savings has facilitated the company's ability to improve our average working interest in nearly every well in our 1023 program. This results in an increase in our net well counts and farther contributes to our expected production and drilling and completion capital results for the year. In addition, we have elected to accelerate future planned activity, predominantly focused in the liquids area of both the Utica and the Scoop during the fourth quarter of 2023.

Hey, good morning, a lot of good questions asked already but I just wanted to touch on the strategic acquisition opportunity set from here just in terms of what you are seeing beyond what's already been identified.

I guess you know is this should we think about this is a recurring piece of the story. Thanks.

John Reinhart: Specifically, the company is accelerating planned drilling operations of four wells in the Utica, two of which will be completed in the fourth quarter. Also commencing drilling of a three wells Scoop had and lastly initiate fracturing operations on a multi well pad in the Utica. Even with this acceleration of activity, the benefit of which will be realized in 2024 and beyond, we are pleased to be in a position to further lower our 2023 total capital budget while also increasing our 2023 production guidance.

Yeah, Chris that's a really good question I think we've been very fortunate this year and very pleased with the results here to date with the 40 million targeted spin that we announced earlier in the year with the progress. We've made this is really good high quality liquids rich acreage that we've targeted this year.

I wouldn't call. It a unique offered opportunities said that it was a very good position that was that allowed us to block up a lot of chunky positions to facilitate near term drilling as we move forward I think we will certainly be mindful and aware of some of those opportunities, but I wouldn't necessarily classified as an annual reoccurring.

Kind of land spend these acquisitions as a as a pop up and they they are an opportunity for the company to take advantage of certainly the board and management will consider the value proposition that proposes inconsiderate, but as far as moving forward I would I would definitely assume.

John Reinhart: Again, highlighting the strong operational performance our team is delivering quarter over quarter. We now forecast a full year drilling and completion capital guidance range of 385 million to 395 million and full year production to be in the range of 1.045 to 1.055 billion cubic feet equivalent per day. An increase of approximately 7% when compared to full year 2022 production levels. Turning to land expenditures, we lowered our 2023 guidance and now planned to allocate 50 to 60 million on maintenance, leasehold and land investment.

Normal cadence land spin that typical 50% to $60 million of maintenance type land as we move forward. So hopefully that answer your question.

There are no further questions in queue at this time I would like to turn the call back over to Mister John Rinehart Foreclosing comments. Please.

Thank you for everyone to for the time to take and join our call today. The team continues to improve business fundamentals, which further positions Gulfport energy as an attractive investment with Optionality tactically and strategically for continuing value enhancement should you have any questions. Please don't hesitate to reach out to our Investor Relations team.

John Reinhart: This spend is focused on bolstering our 2023 and 2024 drilling programs and facilitating increases in our working interest and lateral footage and units. We plan to drill near term. In addition, we announced last quarter we continue to actively pursue attractive discretionary acreage acquisition opportunities funded through our robust adjusted free cash flow. Through September 30, 2023, we have invested roughly 25 million in these acquisition opportunities, primarily targeting the liquids rich area of the Utica.

Thank you. This does conclude today's teleconference. You may disconnect. Your lines at this time and thank you for your participation and have a great day.

John Reinhart: These acquisitions expand our high quality resource depth, which is predominantly held long term by production and will provide further optionality to our near term development plan. Alliance. We continue to forecast approximately 40 million of discretionary acreage acquisitions during 2023 with expectations to add roughly 1.5 years of core liquids-rich drilling inventory at our current development pace with an average cost of approximately 1.5 million dollars per location.

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John Reinhart: In closing, looking ahead to 2024, our Strong Financial Foundation improved capital efficiency, lower cost structure, and strong well performance provides us with significant flexibility as we finalize our plans for our 2024 development program. We look forward to returning to our liquids-rich scoop asset and given the increase in liquids pricing, we have witnessed during 2023. We have significant optionality in the eutica development to continue development of our natural gas acreage while also augmenting our development plan with several liquids-rich eutica locations as part of our 24 program.

John Reinhart: The company will continue to prioritize the return of capital to our shareholders through common stock repurchases as evidenced by the recent expansion of our share repurchase authorization by 63 percent and plan to continue allocating substantially all of our adjusted free cash flow to common share repurchases after discretionary acreage acquisitions.

Michael Hodges: Now, I will turn the call over to Michael to discuss our financial results. Thank you, John, and good morning, everyone. During a quarter with continued volatility in the commodity backdrop, the company achieved strong results in almost every area of the business.

Michael Hodges: Net cash provided by operating activities before changes in working capital totaled approximately $147 million during the third quarter, more than funding our capital expenditures and our common share repurchases while maintaining our balance sheet strength. We reported adjusted EBIDA of $160 million during the quarter and generated adjusted free cash flow of $49 million for the same period, better than analyst expectations driven by our strong production and operating cost performance. With less than 20 percent of our combined base DNC and maintenance leaf hold and land spending left to occur in 2023 and an improving commodity price environment as we exit the shoulder season, we forecast meaningful cash flow generation during the fourth quarter, providing a strong tailwind for our business as we enter 2024.

Michael Hodges: Production costs for the third quarter total $1.12 per million cubic feet equivalent, better than analyst consensus expectations and below our full year 2023 guidance range. The improvement is primarily a result of lower per unit, LLE and midstream expenses driven by the company's continued focus to optimize and reduce costs in the field and our strong production performance driving our per unit expenses lower. For full year 2023, we reaffirm our per unit operating cost guidance, which includes LLE, midstream and taxes other than income of $1.16 to $1.24 per MCFE and currently anticipate averaging at the low end of the annual guidance range.

Michael Hodges: The company maintained our top quartile GNA during the quarter with our recurring cash GNA totaling $0.12 per million cubic feet equivalent. Our all-in realize pricing for the third quarter was $2.84 per MCFE, including the impact of cash settled derivatives. This realized unit's price is $0.29 above NIMEX Henry Hub Index price, highlighting the benefit of Gulfport's diverse marketing portfolio for natural gas, and the pricing uplift from our liquid portfolio in both of our asset areas.

Michael Hodges: We realized cash hedging gains of approximately $49 million for the quarter, demonstrating the strength of our hedge book and its impact on our cash flows. Our natural gas price differential before hedges was negative $0.57 per MCF compared to the average daily NIMEX settled price during the quarter, driven by demand seasonality resulting in pressure on local pricing, especially in the Northeast. We expect our fourth quarter differential to narrow as we enter the colder months of the year, and we reaffirm our natural gas differential before hedges, guiding to an average of 20 cents to 35 cents per MCF below NIMEX for the full year, with expectations to average toward the wide end of the provided range on a full year basis.

Michael Hodges: In addition, to reflect market impacts to pricing, we realized to date, and the company's expectations for the remainder of the year. We revised our realized oil differential guidance, and anticipate realizing $3.50 to $4.50 off WTI for the calendar year. On the capital front, incurred capital expenditures before discretionary acreage acquisitions, totaled $81.4 million relating to drilling and completion activity, and $8.4 million related to maintenance leased in land investment. Our operational efficiency improvements, robust hedge position, healthy balance sheet and strong cash margins provide significant flexibility as we enter 2024, and plan our activity in what we believe will be a stronger commodity price environment.

Michael Hodges: Before I move on to discuss our hedge book, I wanted to take this opportunity to recap the outstanding financial performance of Gulfport this year. As John mentioned, we raised the midpoint of our full year production guidance and lowered the midpoint of our full year capital expenditure guidance as part of our earnings announcement yesterday. We now expect to deliver 3 percent more production for 2023 than our original guidance at a lower level of capital expenditures than originally announced, and with 4 percent lower cash operating costs than initially indicated.

Michael Hodges: The financial results our team has delivered for 2023 have been exceptional, and we are poised to capitalize on the improving gas macro in 2024 and beyond. With respect to our current hedge position, we are pleased to have downside protection covering roughly 550 million cubic feet per day in 2024 at an average floor price of $3.77 per MCF. We believe both the scale and quality of our natural gas hedge book for 2024 provide a de-risk foundation for free cash flow generation that differentiates Gulfport from its peers.

Michael Hodges: We have also begun opportunistically layering in hedges for 2025 and currently have natural gas swap and color contracts totaling approximately 250 million cubic feet per day at an average floor price of $3.89 per MCF. On the basis front we have locked in around 40 percent of our remaining 2023 natural gas basis exposure and a similar portion of our anticipated 2024 exposure, providing pricing security at our largest sales points. In addition to the risk mitigation offered by our diverse portfolio of firm transportation Foundation.

Michael Hodges: We continue to believe there are better days ahead for natural gas, and we believe Gulfport delivers a differentiated combination of free cash flow generation capacity and downside protection over the next two to three years. Turning to the balance sheet, our financial position remains very strong with trailing 12 months net leverage, exiting the quarter at 0.9 times, and our liquidity totaling $746 million, comprised of $8.3 million cash plus $738.2 million of borrowing base availability.

Michael Hodges: We recently completed our fall borrowing base redetermination and our lenders unanimously reaffirmed our borrowing base of $1.1 billion, with the elected lender commitments remaining at $900 million. Our liquidity today is more than sufficient to fund any development needs we might have for the foreseeable future and provides tremendous flexibility from a financial perspective going forward, as we are positioned to be opportunistic should situations arise that allow us to capture value for our stakeholders.

Michael Hodges: As we close out 2023 and look ahead to 2024, we forecast continued significant free cash flow generation and common share repurchases will remain a key part of our return of capital strategy, given the unrecognized value we believe remains in our equity. During the third quarter, as John mentioned previously, our Board of Directors increased our common stock repurchase authorization by 63% to $650 million. As of October 26th, we had repurchased approximately 3.9 million shares of our common stock at an average share price of $86.14, lowering our share count by 13% at a weighted average price more than 30% below our current share price.

Michael Hodges: We currently have approximately $315 million of availability under the $650 million share repurchase program and plan to continue to return substantially all of our adjusted free cash flow to shareholders through common share repurchases, excluding the discretionary acreage acquisition that John mentioned earlier for the foreseeable future. To better highlight the free cash flow generation potential of Gulfport, we have provided additional details on slide seven of our investor presentation, illustrating the pure leading free cash flow potential and capacity of Gulfport to return value to shareholders over the next five years, all before taking into account the significant upside opportunities detailed on the slide.

Michael Hodges: In short, the operational successes of 2020 agree should deliver best in class free cash flows for the years to come and we have both the desire and the resources to continue returning cash to shareholders for the foreseeable future.

Michael Hodges: In summary, this is an exciting time to be a part of Gulfport. This year's program is delivering on all fronts and we look forward to continued progress both operationally and financially as we move forward. We have delivered more, with less, and we believe our best days are still ahead of us. And perhaps most importantly, we generate premium free cash flow yields that deliver value to our investors and we have the five year free cash flow capacity capable of retiring our market cap at its current level.

Operator: With that, I will turn the call back over to the operator to open up the call for questions. Thank you.

Operator: We will now conduct a question at the session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue. For participants who use a speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Bertrand Donnes: One moment while we both offer a question Our first question comes from Bert Donnes with through his securities. Please proceed. Hi, good morning guys. Just want to get your thoughts on the M&A space and you guys traded a discount. Maybe you guys would be the next one for consolidation in the Northeast. Secondly, if you're considering out of this and opportunities. Thanks. Hi. Yeah, thanks, Bert. Appreciate the question. You know, as we focus, I guess twofold.

Bertrand Donnes: First of all, inwardly, as far as the company goes to create value for shareholders. And we fundamentally believe by, you know, taking what we believe is a highly attractive asset base and developing this in a very prudent manner, you know, delivering some high quality margins, generating free cashflow positions, the company very attractively. Not only from a from a smaller scale space, but a very good free cashflow capability. And quite frankly, just an overall value kind of opportunity in the general space.

Bertrand Donnes: So we're very focused on optimizing the free cashflow position of company keeping it healthy, which gives us optionality to actually look strategically and tactically at things. As far as the general space, you know, we're very pleased as far as the discussions that are happening in general by consolidation. I think overall, we certainly believe the consolidation just across the U.S, is going to happen and we'll continue to happen. And we want to position the company as best as we can. In the future to be able to take advantage of anything that's going to meaningfully enhance the shareholder value for the company.

Matthew Rucker: Thanks, and just a second question. Just on efficiencies, you guys could do very, very well. Did you just speak to maybe, is it more on just the completion side? Is it on the sort of the pad design? Maybe could you give me a little bit more color because again, it certainly could have been totally improved over the last several quarters, which is great. I'm just wondering, where do you think most of that will continue to come from? Yeah, thanks.

Matthew Rucker: This is Matt. I'll take that one. We're certainly seeing it really across the board. You know, in our drilling side, as John mentioned, we set records kind of subsequent to the quarter around the longest lateral drill in the company and also the fastest days over 15,000 feet. We've seen meaningful improvement there with the teams. On the fractide and the drill outside, we continue quarter of a quarter. Just enhance the capabilities there.

Matthew Rucker: You know, really to my knowledge, some of the best hours in the basin. I think you'll see across the board on pumping hours and then drill out, you know, 35 plugs a day or 6300 feet per day is is pretty meaningful and impactful. And all of those things together help us reduce the cycle times and generate that cash flow much faster. So been really pleased with the, you know, a lot of changes here.

Matthew Rucker: The new teams with the first full quarter under their belt have really delivered. We continue to focus on ways to continue to optimize that. Great to hear.

Matthew Rucker: Thanks, y'all.

Timothy Rezvan: The next question comes from Tim Resvin with key bank capital. Please proceed. Good morning, everybody, and thanks for taking my question. I want to start on what seems to be the start of a pivot into, you know, more higher liquid skew in your production. We notice three queue. I think you're about 8% liquids, which was the lowest we've seen, post re structuring. So just trying to understand, John, is that a well level returns decision?

Timothy Rezvan: Is that an inventory kind of opportunity set decision? Are you a little more less bullish on gas than maybe some others? Just trying to understand what's driving that pivot and how maybe I know you're not going to give 20, 24 guidance, but how we can think about the liquid skew sort of growing. It's probably going to outpace total production. Just trying to understand how that looks over the next one to two years and what's driving that decision.

Timothy Rezvan: Thank you, Tim. Appreciate the question. Appreciate your participation on the call. You know, we're in a very fortunate position at the company to have many different toggles that we can pull on. We have a very good high quality liquids, which we have some very high quality liquids, which Udica, as well as some new Marcellus and some great dry gas. So, as the company fits today, there's just not a lot of external two motivators for us, outside of economics, to drill one way of the other, meaning we don't have a lot of owners, FTE, we don't have a lot of MVCs, we're not out there holding acreage.

Timothy Rezvan: So, for us, as we tend to look at capital allocation, it's truly an economic perspective. This is a process that we go through, you know, of course, every budget time and even during the year. So, as we have these many different options, it is more of an economic decision with the current pricing looking out one to two years, what that will deliver. And the great thing about having all these toggles is we move forward into 24 and into 25 as we see certainly the gas backwardation kind of be realized in higher prices.

Timothy Rezvan: That will most definitely lean towards our leaning in, probably more on gas in the future. So, for us, it's purely economics. Oils had a good run lately, we feel very confident in the well results and the high quality asset based in economics. So, we're going to lean in on that more than likely when we come out with our 24 plan here in February. But certainly, we're open to adjusting and moving forward to dependent on what commodity prices do and where economic stakes is.

Timothy Rezvan: And Tim, this is Michael. I might just add, as far as the production profile going forward, I think in 2024, a lot of the activity that John's describing likely doesn't impact our actual production until the second half of the year. So, as you think about, you know, to your comments around the liquid waiting, I think you start to see that change a little bit late in the year. But really, it's in 2025 where you likely see the impact and a little bit more of a liquid-weighted production profile for the company.

Timothy Rezvan: So, I'd say relatively similar in 24 to 23 gas versus liquids and then you'll start to see a little bit of pivot in 25, most likely. Okay. I appreciate that color. And then as we think about hedging, you have a pretty optimal position in teams. You're about roughly half hedge next year at $4. As you look out beyond 2024, you know, you have a pretty more attractive strip, you know, roughly $4.

Timothy Rezvan: Again, you've been hedging at that level. Do you see 50% is kind of that target level, but or as you get kind of bigger and your balance sheet strengthens, you feel less if you need to hedge. Just trying to understand how you're thinking about that longer term. Yeah. Yeah, great question, Tim. So, I think, I think, you know, as a business, we feel really good about where the balance sheet sits with the low leverage profile.

Timothy Rezvan: I think we feel really good about the fixed cost. John mentioned that we don't have a lot of external factors that force us into decisions. And so, certainly that de-risk the operational side of the business a little bit. So, I think to your point, we feel like 2024 is, you know, it's looking better than 23, but also a bit of a transition year for natural gas. So, we do have what we feel like is a very attractive hedge book in place and we've increased it slightly over the last quarter, but feel pretty good about where it sits.

Timothy Rezvan: For 2025, I think we're more bullish on gas. You know, we've talked publicly before about wanting to be in a range of, you know, of hedging percentages, something in that 30 to 70%. I think, you know, to the extent that we're bullish and there's opportunities for gas prices to look strong. We may lean a little bit towards the lower side, but as I mentioned in my comments, we have added some hedges in 2025 just to make sure that we're being prudent and protecting at least a certain amount of our cash flow.

Timothy Rezvan: So, I guess I would say I'd buy us a little bit towards the low end of our range, but certainly going to be monitoring the macro, and if things start to change, we'll take the opportunity to adjust those decisions going forward. Okay, I appreciate the comments. Thank you.

Douglas Leggate: Our next question comes from Doug Leggate with Bank of America. Please proceed. Good morning, guys. First of all, I think we've got to acknowledge the step change that you promised the market on efficiency is obviously showing up my, you know, compared to legacy Gulfport. I'm curious, whoever wants to take this, how much further do you think you have to go? And where do you think you are in terms of that trajectory of your done 35% on both basins at this point?

Douglas Leggate: What's the aspirational target? Well, I think as we look at the efficiency gains, we're very pleased that the progress to your point here today, and I appreciate the comment. You know, as the team start to mature and gel, this team's been together probably, you know, let's just say nine months, probably seven months in the field. I would probably say we're, you know, 40 to 50% into the efficiency kind of cycles as we see opportunities to further improve.

Douglas Leggate: There's certainly some more wood to chop here as we move forward. You know, service costs, addressing service costs, renegotiating contracts, farther kind of eliminating dead time in between cycles and just overall kind of shrinking that cycle time that that's by the turn to sales time. So again, appreciate your comments and the acknowledgement on the improvements. But there's certainly some more opportunities that we feel like, especially looking down in the scoop is, is we've started, you know, is we're looking forward to actually developing that asset this year.

Douglas Leggate: We're very happy about taking the learnings that we've learned from the Utica and applying those to the scoop to make what is already an attractive asset and very good returns a lot better. So more to come on that this year as we start development in the scoop. As you can imagine, there's an agenda behind my question and then it's basically your definition of maintenance capital, the 435 to 455. So what I'm really trying to get handle on is, if you deliver, if you're only halfway through what you think your, your efficiency gains could be, what does that imply then for the, the level of capital necessary to meet your program?

Douglas Leggate: It's a great question. What I would, what I would say is we're pleased with the results here today. We certainly see there's some more improvement as we look forward into 24 and beyond. You know, and right now we're in the middle of finalizing some contract negotiations with regards to service price. So, you know, as far as us coming out with what that will look like next year, that will have to wait till February when we roll out the 24 plan.

Douglas Leggate: But to your point, we feel very comfortable that the capital efficiencies that were gained this year will be carried in the next year with further improvement. If you don't mind, can I squeeze in a third one is a very quick one. You made the comment about your cumulative free cash flow, you know, you could retire your market capitalization. But obviously that's a, that's a big statement. How realistic, how aggressive do you really think you're going to be given, you know, your hedge position in 24 in particular as it relates to buy back some return of capital?

Douglas Leggate: I'll do it. Director, thanks. Yeah, I hate Doug. This is Michael. I'll take a shot at that one. Appreciate the question. I think 2024, you know, again, a little early on any guidance, but as we sit here today, a similar strategy, likely for the company is what we employed in 2023. So, you know, we go through a very rigorous process with our board of directors and evaluate all the potential uses of our free cash flow, whether that be an additional acreage opportunities, whether it be sharey purchases, opportunities on the balance sheet side to improve there.

Douglas Leggate: And I think, you know, as we sit here today, our shares, we feel are undervalued, and we feel like that's an extremely attractive use of free cash flow. So I would expect that 2024 is very similar to 2023 from that strategy perspective. And, you know, if we can capture opportunities like the discretionary acreage acquisitions, we did this year. That's also very interesting and attractive to us, but to the extent that those are not available, I think our shares become one of our most exciting opportunities to return value.

Douglas Leggate: So I think long story short, likely very similar to where we sit today. Okay, thank you guys. Appreciate the answers. Once again, ladies and gentlemen, to ask a question, please press star one on your telephone keypad.

Chris Baker: Our next question comes from Chris Baker with Evacore ISI. Please proceed.

John Reinhart: Good morning. A lot of good questions asked already, but I just wanted to touch on the strategic acquisition opportunity set from here, just in terms of what you're seeing beyond what's already been identified. I guess, you know, is this, you should be thinking about this as a recurring piece of the story. Thanks. Yeah, now Chris, that's a really good question. I think we've been very fortunate this year and very pleased with the results here today with the 40 million targeted spin that we announced earlier in the year with the progress we made.

John Reinhart: This is really good high quality liquids rich acreage that we've targeted this year. It was, I wouldn't call it a unique opportunity set, but it was a very good position that was that allowed us to block up a lot of chunky positions to facilitate near term drilling. As we move forward, I think we'll certainly be mindful and aware of some of those opportunities, but I wouldn't necessarily classify it as an annual reoccurring kind of land spin.

John Reinhart: These acquisitions as they pop up and they are an opportunity for the company to take advantage of certainly the board and management will consider the value proposition and that proposes and consider it. But as far as moving forward, I would, I would definitely assume more normal cadence land spin that typical 50 to 60 million dollars of maintenance type land as we move forward. So hopefully that answers your question.

Operator: There are no further questions in queue at this time.

John Reinhart: I would like to turn the call back over to Mr. John Reinhardt for closing comments, please.

John Reinhart: Thank you for everyone to for the time to take and join our call today. The team continues to improve business fundamentals, which farther positions golf port energy isn't attractive investment with optionality tactically and strategically for continuing value enhancement. Should you have any questions, please not hesitate to reach out to our investor relations team.

Operator: Thank you.

Operator: This does conclude today's teleconference. You may disconnect your lights at this time and thank you for your participation and have a great. [inaudible] Michael Hodges, John