Gulfport Energy to acquire 46,400 net surface acres in core of SCOOP, Oklahoma

Gulfport Energy Corporation has entered into a definitive agreement with Vitruvian II Woodford to acquire nearly 46,400 net surface acres at the core of SCOOP (South Central Oklahoma Oil Province), Oklahoma, at a consideration of $1.85bn.

The acquired area yielded 183 million cubic feet equivalent (mmcfe) per day in October.

The acquisition includes multiple producing zones such as the Woodford and Springer formations, in Grady, Stephens and Garvin Counties, Oklahoma.

Within the acquired area, Gulfport Energy has identified 1,750 gross drilling locations with substantial upside potential through infill drilling and additional prospective zones present within the acreage.

The acquired properties are situated generally in the over-pressured liquids-rich to dry gas windows of the play.

The transaction also comprises 48 producing horizontal wells with an additional interest in more than 150 non-operated horizontal wells.

Four rigs are currently operating at the site where Gulfport plans to maintain the operation level next year. In 2018, it intends to add two rigs at the site.

The acquired site is estimated to host proved reserves of around 1.1 trillion cubic feet equivalent (tcfe).

Gulfport Energy president and CEO Michael G. Moore said: “Today is a defining day for Gulfport Energy. 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.

“In Vitruvian, we believe we have found a prolific stacked pay resource with strong production history, a multi-year, high-return drilling inventory, an opportunity with significant upside from both a resource and operational perspective.

“The asset consists of a low-risk, substantially contiguous acreage position in the core of the SCOOP.

"This acquisition is not only additive to our company, but in our opinion truly one-of-a-kind. The transaction is expected to be accretive to cash flow and net asset value per share and provides us with a blocky, sizeable and scalable footprint in a new operating area.”

Gulfport will pay $1.35bn in cash with approximately 18.8 million shares as consideration for this acquisition. It is planning to fund the acquisition through potential debt and equity financings prior to closing.

Vitruvian president and CEO Richard F. Lane said: “We are pleased to be part of this significant transaction, both for the complimentary asset it represents for Gulfport and for the achievement it represents for Vitruvian’s employees and stakeholders. We plan to work closely with the Gulfport team to ensure a seamless transition of the asset to Gulfport.”

For this transaction, BofA Merrill Lynch acted as financial advisor and Akin Gump Strauss Hauer & Feld as legal counsel to Gulfport.

Vitruvian took financial advice from Jefferies and hired Vinson & Elkins as legal counsel.

Expected to be closed by February next year, the acquisition is subject to customary closing conditions.