LNG

Williams Companies, a leading US natural gas pipelines operator, reported strong third-quarter results and a 10 percent increase in net profits as projects progressed including the provision of feed-gas to Gulf Coast LNG export plants.

Gulfport Energy Corp, a US natural gas exploration and production company with significant acreage in the Utica Shale of eastern Ohio and the Woodford and Springer Scoop plays in Oklahoma, has become the latest US energy operator to file for Chapter 11 bankruptcy protection.

As part of a restructuring plan, Gulfport said it expected to eliminate about $1.25 billion in funded debt and significantly reduce annual cash interest expenses.

Gulfport, whose headquarters are in Oklahoma City, said it had filed petitions for Chapter 11 relief under of the US Bankruptcy Code in the Court for the Southern District of Texas.

Weak demand due to the Covid-19 pandemic and the oil price plunge and economic slowdowns have depressed the liquidity and values of energy company assets around the world.

Gulfport said it intended to use the proceedings to strengthen its balance sheet, restructure certain debt obligations, significantly reduce its midstream cost structure and achieve a more sustainable capital structure.

The company stated that it intended to continue to operate in the ordinary course of business during the restructuring process.

As a result of the current commodity price environment, Gulfport was one of many companies that said earlier in 2020 that had made a strategic decision to defer near-term production to later periods in 2020 and early 2021 when natural gas prices were expected to be higher.

The Utica Shale is located in the Appalachian Basin of the US and is located a few thousand feet below the Marcellus Shale.

Natural gas output in the Utica Shale accounted for 77 percent of Gulfport’s total net quarterly production.

The company said its proved reserves in the Utica amounted to 3.2 trillion feet equivalent net. Its activities are focused on 205,000 net acres within the core of the dry gas, wet gas and condensate windows of Utica’s Point Pleasant formation.

In a statement, Gulfport said it has secured $262.5 million in debtor-in-possession financing from its existing lenders under its revolving credit facility, including $105M in new money that will be available upon court approval.

Gulfport is also present in the South Central Oklahoma Oil Province (Scoop) play of Oklahoma, which is located in the southeast portion of the prolific Anadarko Basin.

The company has 1.3 Tcf equivalent of net proved reserves and 76,000 net reservoir acres.

David M. Wood, President and Chief Executive of Gulfport, explained that since the leadership team was reconstituted in 2019, it had taken decisive actions to streamline the business and strengthen the balance sheet.

“Despite these efforts, our large legacy debt burden in addition to significant legacy firm transportation commitments created a balance sheet and cost structure that was unsustainable in the current market environment,” stated Wood.

“After working diligently to explore all strategic and financial options available, Gulfport’s Board of Directors determined that commencing a Chapter 11 process is in the best interest of the company and its stakeholders,” he added.