While Ohio’s Utica Shale might be a bust on the oil front, causing several major producers to back out of the play, Gulfport Energy (GPOR) has hit the liquid sweet spot in the state.
Gulfport continues to find the right acreage in the state, causing the company to realize a full 93% of its production coming from NGLs and shale oil. That focus on NGLs rather than oil — which producers like Chesapeake (CHK) hoped the Utica would contain in spades — could put GPOR in the driver’s seat as rivals continue to pack up their things and leave the region.
Already, Gulfport has drilled some of the best wells in the play for NGLs, but it continues to spend more on the region — nearly $500 million of its $580 million capex budget will go into developing its acreage there. That success as the NGL kingpin could be why BP Capital added 125,000 shares during the first quarter.
Investors might want to follow suit as the firm’s small market cap could make it a prime buyout target as larger companies look to bolster their production. Of course, even if that doesn’t happen, Gulfport’s more profitable production mix could be a big winner over the long haul.