Greetings and welcome to the Gulfport Energy Corporation Fourth Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow formal presentation. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Jessica Wills, Director of IR. Thank you. You may begin.

Thank you and good morning. Welcome to Gulfport Energy Corporation's fourth quarter and full-year 2017 earnings conference call. I am Jessica Wills, Director of Investor Relations. Speakers on today's call include Mike Moore, Chief Executive Officer and President; Donnie Moore, Chief Operating Officer; and Keri Crowell, Chief Financial Officer. In addition, with me today available for the question-and-answer portion of the call are Paul Heerwagen, Senior Vice President of Corporate Development and Strategy; and Ty Peck, Senior Vice President of Midstream and Marketing. I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance and business. We caution you that the actual results could vary materially from those that are indicated in these forward-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 make reference to other non-GAAP measures. If this occurs, the appropriate reconciliations to the GAAP measures will be posted on our website. Yesterday afternoon, Gulfport reported full-year 2017 net income of $435.2 million or $2.41 per diluted share. These results contain several non-cash items, including an aggregate non-cash derivative gain of $188.8 million, an expense of $2.4 million in connection with the SCOOP acquisition, and a loss of $5.3 million in connection with Gulfport's interest in certain equity investments. Comparable to analyst estimates, our adjusted net income for the full year of 2017, which excludes all of the previous mentioned items, was $254 million or $1.41 per diluted share. An updated presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review at your leisure. At this time, I would like to turn the call over to Mike Moore, CEO of Gulfport Energy.

Thank you, Jessica. Welcome, everyone, and thank you all for joining us this morning. First, I'd like to welcome Donnie Moore to the call today. This is Donnie's first earnings call as Gulfport's COO and we are very pleased to have him as part of the Gulfport team. As announced in the press release yesterday evening, for full-year 2017, Gulfport reported approximately $254 million of adjusted net income on $1.1 billion of adjusted oil and natural gas revenues, generating approximately $730.2 million of adjusted EBITDA and $631.7 million of operating cash flow. 2017 was a pivotal year for Gulfport. Our Utica asset provided reliable, repeatable growth throughout the year, and we began the journey of increasing recoveries and further delineating the underappreciated multi-zone opportunities across our newly acquired SCOOP position. We experienced a year of strong production growth, increasing 51% over 2016, and exiting the year at 1.26 billion cubic feet of gas equivalent per day, propelling Gulfport to a significant size and scale as we enter 2018. Our focus on efficiencies throughout the year continued to improve our cost structure and we witnessed another year of our per-unit operating expenses trending lower, which includes LOE, production tax, midstream gathering and processing and G&A, decreasing 8% over 2016 and exiting the year at approximately $0.99 per Mcfe. Furthermore, when our expense reductions are coupled with the realized pricing uplift received from our liquids portfolio during 2017, largely driven by our liquids-rich SCOOP assets, we expanded our EBITDA margin by approximately 16% over 2016, increasing our overall corporate returns for the year. On the operations front, 2017 marked an active year in the field for Gulfport and, in the Utica, we spud 94 gross wells utilizing just under six operated rigs. The wells released had an average drilled lateral length of…

Thanks, Mike, and good morning to all those on the call. Let me start by saying how excited I am to be joining the Gulfport team. As many know, Gulfport has a high-quality asset base, underpinned by a talented team, and I look forward to sharing my experiences and contributing to the future success of the company. As Mike mentioned, our 2018 capital program is centered around capital discipline and maximizing returns with every dollar we invest. We have laid out a well-thought-out budget dedicated to those principles, and I will spend a bit of time walking through the details of the program and how the team plans to execute in the field. As it relates to activity, we have been actively working with our service providers for several months now at locking in prices and services to adhere to our 2018 capital budget. We have contracts in place and services secured for the majority of our anticipated activity in both the Utica and SCOOP. And it's important to note, we have tailored and negotiated those contracts to follow our forecasted levels of activity for the year. In the Utica, our program will be centered around the dry gas window of the play, with a focus on maximizing lateral lengths and realizing economies of scale on our per-foot metrics. We entered 2018 operating full rigs in the play, have three rigs running today and plan to release a rig at the beginning of March. We will run on average 2.5 rigs during 2018. We forecast this level of activity will generate 36 to 40 gross wells in the Utica during 2018. In addition, we intend to participate in non-operated activities taking place on our acreage that will provide approximately seven to eight horizontal wells net to Gulfport's interest. On the…

Thank you, Donnie, and good morning to all. As announced in our budget release, for 2018, Gulfport's board of directors has approved a capital budget of approximately $770 million to $835 million, which, as Mike mentioned, we forecast will be funded entirely within cash flow at current strip pricing. This budget includes approximately $630 million to $685 million on our drilling and completion activities, of which is allocated approximately 70% to the Utica and 30% to our SCOOP asset. In addition, we forecast $140 million to $150 million will be invested in our non-D&C activities, including capital invested in the midstream build-out associated with Strike Force and capital expenditures associated with leasehold activities during 2018. At this level of capital spend, Gulfport forecasts its 2018 average daily production to be approximately 1.25 billion to 1.3 billion cubic feet per day, an increase of 15% to 19% over 2017. As Donnie mentioned, the completion program in the Utica resumed during the first quarter of 2018, and we currently forecast turn-in-line activity in the play to be weighted to the second and third quarters of 2018. Taking this into account, we expect first quarter of 2018 average daily production to be relatively flat to the fourth quarter of 2017. With regard to realizations, before the effect of hedges and including transportation expense, the company expects basis differentials to range from $0.58 to $0.72 per Mcf of NYMEX monthly settled price for natural gas. This differential is derived based upon our current firm portfolio, including both Utica and SCOOP, and forecasted 2018 production at current strip prices and current basis marks. In addition, Gulfport expects to realize approximately 45% to 50% of WTI for natural gas liquids, and approximately $3 to $3.50 of WTI for oil. In terms of cash expenses, we continue…

Thank you, Keri. In closing, we are committed to strict capital discipline and recognizing value for our shareholders. During 2018, we are aligning total capital spend to cash flow, delivering peer-leading growth from our quality asset base, generating free cash flow at current strip pricing and reinvesting in our undervalued stock. As we plan for 2018, we're also focused on the effects of this year's program on 2019 and beyond. Our 2018 program positions Gulfport to realize both year-over-year and exit-to-exit growth. And while we have not provided specific outer-year expectations, as we look toward 2019, we project low-double-digit growth within cash flow at current strip prices. Furthermore, as we head into 2019, we expect an increase in capital efficiency, both operationally and as the vast majority of our non-D&C spending is eliminated beyond 2018. And by leveraging our large DUC inventory we have in Utica, we see a significant decrease in the amount of capital invested on non-revenue-generating items. Lastly, we are eager to initiate our share repurchase program as we have come out of restriction following earnings and see significant value in reinvesting in our stock at today's prices. While the board authorization for the repurchase is through year-end 2018, we plan to be aggressive at repurchasing our shares and expect to complete this plan before then if market conditions permit. At today's share price, should we receive proceeds earlier or greater than anticipated from the sale of certain equity investments, we would certainly consider expanding the size of the repurchase program beyond where it sits today. This concludes our prepared remarks. Thank you again for joining us for our call today and we look forward to answering your questions. Operator, please open up the phone lines for questions from the participants.

Thank you. Our first question is from Neal Dingmann from SunTrust. Please go ahead.

Morning, all.

Morning.

Mike, for you or Donnie, question just on the SCOOP. Given that notable returns look so positive, why drop any rigs there s for the rest of the year? I'm just wondering your drilling plans going forward.

Well, I think you've got to consider that we have these two great basins. We certainly are delivering good returns in the SCOOP, but we're mostly held there. So we certainly don't have that priority that we have to consider. Utica, we're still delivering good returns in that dry gas window there. We do continue to have some acreage that we need to hold there. So we just tried to find a balance, Neal, between the two basins of a little less activity, so that we could generate the best returns possible with our program and achieve all the goals that we needed to achieve in both basins.

And Mike, just a last follow-up maybe just on for the rest of the year. How flexible is the CapEx or is it more directed towards the free cash flow? Is that really what the number one sort of incentive is, or is that CapEx a bit flexible for the rest of the year? Thanks.

Well, I'm not – flexible in what sense? I mean, our CapEx program this year is definitely front-end loaded. But our turn-in-lines are more mid-year weighted, certainly. So we are targeting free cash flow. Keep in mind, we're 80% hedged at $3.06 this year, Neal. We are locked and loaded on our program this year. You are not going to see us changing our program. We're going to stay focused and disciplined and stay on track for the program that we've announced.

Thanks.

Thank you.

Our next question is from Ron Mills from Johnson Rice. Please go ahead. Ronald E. Mills - Johnson Rice & Co. LLC: Good morning, Mike.

Morning. Ronald E. Mills - Johnson Rice & Co. LLC: Just to dig down a little bit on the SCOOP wells just a little bit. Can you provide a little bit of color on not just the IP rates that look like they're 30-plus-percent above the type curve IP rates, but also the flatness of the declines, including the Sycamore? Can you talk about how those relate to what your expectations are and do you think you may even continue to see improvements on that?

Well, first off I'll say and then I'll let Donnie jump in here too, we're very pleased with what we're seeing from our SCOOP wells. We delivered some really good wells in 2017 and as you can see that they are all tracking above our type curves. Certainly, we want to get some more activity under our belt this year and we've got a nice program to do that. The Sycamore well, as you know, our first Sycamore well that we drilled last year continues to perform very well. We always liked the rock. We did an extensive geological evaluation before we purchased the SCOOP. We liked the rock. We like it even better now. We liked the resource. We liked the liquids component and the diversity that it gives us. And I think we're going to have a lot of opportunity for improvement this year. Donnie, what would you add to that?

Yeah. Thanks, Mike. I mean, you said it. I mean, strong well performance, and I think the key there is repeatable. I mean, we continued to see strong well performance well-after-well. Early on, we're establishing this baseline. I think we've led the way with these enhanced completions. And we're never done learning. We'll continue to look at optimizing, add more value. Ronald E. Mills - Johnson Rice & Co. LLC: Okay. Great. And then, you mentioned some alternative sources of capital as you think about the buyback and continued focus on that on the capital discipline side, especially in light of EQT's announcement yesterday. What could the potential steps be in terms of realizing value via some sort of drop-down or some other activity on Strike Force? I guess what I'm trying to get a sense of is, I know there's a big acreage dedication, what kind of EBITDA is that generating or do you think it will generate to try to create some sort of roadmap of valuation for that 25% interest?

Well, I think I'll take Strike Force first. Certainly, you've heard EQT is messaging the past few days and I can't speak for EQT or the exact timing of that drop-down, but it's clear that we now have confirmation that it should be a 2018 event. So we were happy to see that. For the TUSK shares, certainly we'll continue to evaluate the market. We will be a thoughtful seller if we decide to sell. We don't want to do anything to disrupt the stock. But I'm excited that we have confirmation on at least one of those liquidity events confirmed in writing that our contractual tag right will be exercised in 2018. And then, Ron, when we have some idea on specific timing of either of those events, then the management team and the board can consider what's appropriate at that time. But, certainly, where our stock is today, it would seem that buying back more stock would make a lot of sense for us. Ronald E. Mills - Johnson Rice & Co. LLC: And from a timing, can you start the buy – have you already started the buyback or when can you actually start buying back, given potential blackout periods and such? And then I'll jump off.

Yeah. That's a good question. So, really we're locked out, blacked out until 48 hours after earnings. So, that would be next Monday. After that, we certainly can start buying back our stock.

Our next question is from Tim Rezvan from Mizuho Securities. Please go ahead.

Hi. Good morning, folks.

Hey, Tim.

I was hoping to drill in a little bit more on some of the SCOOP commentary you provided and I wanted to make sure I heard things correctly. Did you say that on spud-to-rig release was 71 days in 2017? And I believe you talked about a 90% geosteering success. I was wondering if you could kind of talk about what is baked in for 2018 and how you think you can kind of improve on those numbers.

Yeah. Tim, this is Donnie. I think I'll take a stab at that. Yeah, 2017 was roughly 71, 72 days spud-to-rig release. But for 2018, we're looking at about 60 to 70 days is what we've included in our plan, so on average 65 days. We've seen a number of our most recent wells in that 45- to 50-day range, so for a 7,500-foot lateral. Certainly, I'll remind you that's with 40 wells are left that we've drilled, so tremendous improvement in a short amount of time. So, right now, we're focused on consistency, continuing to get better at what we do. You talked about the success rate and target. I think our subsurface understanding is really helping us identify these geologic features in the pre-planning phase as well as real-time. And then our drilling team's done a fantastic job of adjusting and coming up with different recipes depending on the whole section, and we're really making great progress there. So, look forward to this year continuing to see those numbers come down.

And, Tim, I'll just add real quick that I'm pretty excited about the opportunity set this year. With the things we've already seen, the leading-edge wells, I think we've been very conservative in the way that we've modeled expectations out of the SCOOP for 2018. But it certainly feels like we have a great opportunity to be more efficient and reduce drill days and, therefore, reduce cost as well. So I can't say enough about the efforts of our folks out there. Also though, on the geology side, the reinterpretation of the 3-D seismic has been tremendous and is allowing us to steer very efficiently. We land in the zone, we stay in the zone, as we cross these faulted, fractured systems here that we have subsurface in the SCOOP. So, very excited about the opportunity set we have ahead of us.

Okay. No, I appreciate that response. And then, just as one more on the completion side. I know the enhanced completion uplift was a big driver of the rationale to get into the SCOOP. Given that you have a handful of wells under your belt, how dialed-in are you now on sort of what your standard completion is and how much tinkering on the margin are you doing to dial-in that?

Yeah. Tim, this is Donnie again. I mean, we're very pleased with kind of where we started here. We've been fairly consistent with our completion design again, but we have about eight wells with 90 days or more. So it's still early on yet. We're seeing the tremendous performance out of these wells and repeatable performance. So we're going to continue to watch it and establish that baseline. And next evolution is kind of de-risking up whole the additional zones we have as well, the Sycamore well recently that just came on. So, a fantastic well. So, a lot of upside, lot more optimization to do here, but very pleased with where we're at.

So, just in terms of proppant loadings, are you in that kind of the 2,400, 2,500 pounds per foot? Is that the...

Yeah. 2,500 pounds per foot is our standard design.

Okay. Okay. Thank you.

Okay.

Our next question is from Jason Wangler from Imperial Capital. Please go ahead.

Hey. Good morning.

Hey, Jason.

Mike, it looked like on the slides, and you've been picking up some acreage in the SCOOP, but looked like the location count went up pretty nicely on a net basis. We're just curious if that was just getting some more acreage in or if there had been some other things that you'd seen as you've got more familiar with the position?

Not really. It's just a result of that extra acreage that our guys were successful in adding last year, Jason.

Okay. And as you're looking at that, I guess both what you picked up and what you're looking at going forward, is there a certain area that you're kind of more focused on within the plan? Obviously, you're focused in the Woodford on the wet gas side, but is that kind of where we should think about the focus on that endeavor as well?

Well, I think the focus for us for the next few years is just infill acreage around our existing units. As you know, we're focused on the Woodford wet gas for 2018, just like we were in 2017. We do have, I think, two dry gas wells scheduled and then, as Donnie mentioned, the Sycamore well. But it would be in-field leasing around those units. We don't really have, I'd say, an aggressive leasing program going on right now. Same thing in Utica, just normal fill in acreage. But I will tell you that for our units this year, they're pretty robust units already. And so there's not probably going to be a need to add a lot of in-field acreage because I think we've got close to a 100% working interest in a lot of our units already this year. So, a lot less activity probably.

Okay. I appreciate. I'll turn it back.

Thank you.

Our next question is from David Deckelbaum from KeyBanc Capital Markets. Please go ahead.

Thanks. Good morning, everyone. Thanks for taking my question.

Yes. Hi, David.

Mike, I wanted to revisit your comments in your prepared remarks. You kind of said you're thinking about 2019 and production growth still in the low-double-digits, which I guess echoes a lot of what you said last quarter on what your thoughts were on 2019 before you guys kind of reduced your growth objectives in 2018. So I just was hoping you could provide a little bit more color on how you're thinking about that. And then, I guess, in the context of you said you'd become more capital efficient. I guess with the Utica now effectively filling your firm commitments, should we expect a more balanced capital program in terms of dollars between SCOOP and Utica in 2019?

Okay. So, for 2019, I want to make sure that we are clear on that. Certainly, when we were thinking about 2018, we were also thinking about 2019, 2020, and 2021. We don't model in a bubble. The intent was and the idea is that we are committed to capital discipline going forward, not just for 2018, and we want to generate free cash flow. So, just trying to find that program that works. But for 2019, our current expectations with our model is that we could deliver double-digit growth. So, that's low- to mid-teen growth in 2019, which I think is at least comparable to our peers, if not better. And then, we would expect similar kind of growth beyond that as well. So I think the thing for Gulfport is we are about at the end of our spends for leasehold and certainly midstream with the drop-down expectation this year. So, for 2019, you should see a much smaller leasehold budget, maybe a third of what we've had historically, and then no midstream spend. So we should become much more capital efficient as we again move into 2019 and beyond. Does that answer your question?

It does. And then I guess also, I mean just on the balance between I guess SCOOP and Utica then, you look at the returns that you all plot right now, and SCOOP is outpacing Utica by maybe 5% or so.

Yes.

And I guess, with your learnings there, and it sounds like on the operational side you're improving on your cycle times, seems like there's more room for efficiency gains there. Should we be seeing a greater portion of dollars in the SCOOP in 2019, especially as you don't have incremental firm commitments to fill in the Utica?

So the answer to that, quite frankly, is yes. You saw that we changed our returns slide this time to reflect current pricing in both areas. And what you see from that slide is that we're getting a little better return in the wet gas window in the SCOOP. So we actually did allocate a little more capital to the SCOOP this year. I think we're 70%/30% Utica-SCOOP, and last year we were 80%/20%. You probably would expect to continue to see that trend a little bit more towards the SCOOP going forward. Now, keep in mind, for 2018, we still had some acreage holding that we needed to do. But beyond 2018-2019, we'll have most of that done. And so I think, to your point, the SCOOP is proving to be a good basin, a really good basin actually. And as long as those returns stay above Utica, we could allocate more capital. We'll just have to see. It's hard to say at this point certainly, but right now it's looking certainly that direction.

And Mike, this is Donnie. David, one thing I'll just add, as you think about the SCOOP and the outperformance we're seeing in those wells, I mean, that's really not baked into this whole picture, the upside potential with Sycamore that we're seeing. So, a lot more upside there in the SCOOP. And I think that, as Mike said, right now is get to that consistent delivery of our operations. We're seeing it, now let's just be consistent with it, and that gives us tremendous options.

Thank you, guys. And I just wanted to confirm your comments, Mike, about potentially augmenting that share buyback program. That would be done, I guess, conceptually with proceeds from some of those assets like the Strike Force JV drop-down or potentially TUSK shares, it wouldn't necessarily be willing to add capital beyond what you've already earmarked or dropping activity in order to supplement that.

Yes, you're exactly right. That's correct.

Okay. Thank you, guys.

Thanks, David.

Our next question is from Jeffrey Campbell from Tuohy Brothers. Please go ahead.

Good morning.

Hey, Jeff.

The first question I think is pretty obvious, but I'm going to ask it anyway. Should commodity prices land above Gulfport's plan, is share buyback the preferred use of any windfall cash?

Where we sit today, certainly we're happy with our plan for 2018. We're delivering 15% to 19% growth, which I think is logical, rational growth, and I don't think the market wants anybody to grow crazy growth anymore. We're 80% hedged. So we're pretty locked and loaded on our program this year. So the answer is, yes, if prices improve, that could be a very logical option for us.

Okay. Great. Thank you. Longer laterals and bigger completions have been a successful production enhancer in most of the commercial U.S. resource plays. Zone landing choice is emerging as an important third leg of the stool. If it can, how can further zone landing evolution benefit Gulfport-SCOOP results and in which intervals might this be most visible?

Yeah. Jeff, this is Donnie. I'll take a stab at that one. Yeah, we're early on. We've been fairly consistent with where we're landing these wells. You can see the results here. You got to recall, I mean the SCOOP is very thick, I mean, a very 200-foot, 300-foot thick interval. You think about Sycamore on top of it. So we've got a lot of options here. So we're not only looking at where you land, but also when you think about lateral spacing in these units, it's also on the vertical aspect because of the resource that we have here.

Okay. Great. And if I could sneak one last one in. I know the results are early, but how do you think about Sycamore return potential compared to the Woodford wet gas returns that you've revised in the most recent presentation?

Yeah. I mean, right now, it's pretty much in line with our Woodford wet gas performance. So I would assume it's going to be right in line right now.

Okay. Great. Thank you.

Thank you.

Our last question comes from David Beard from Coker & Palmer. Please go ahead. David Earl Beard - Coker & Palmer, Inc.: Good morning, everyone. Thanks for taking my question.

Morning, David.

Morning. David Earl Beard - Coker & Palmer, Inc.: Just two bigger picture questions. Just can you comment on M&A environment in general and anything surrounding your view on M&A specifically?

We're not looking at anything. We're not talking about anything. We're pretty head-down focused on our plans for 2018 and beyond. We've got a lot of inventory to drill. We've got these other horizons to delineate in SCOOP that we're really excited about. So we've got plenty to do and not really thinking about M&A, David. David Earl Beard - Coker & Palmer, Inc.: No, that's helpful. And then, secondly, just shifting to share buyback. Just can you give us any color relative to if you were to use up this authorization, would you plan on asking the board sort of piecemeal or would you actually try to get a bigger authorization that would be out there for longer, given the variance in asset sales and commodity prices? How should we think about that?

Well, I think, first of all, we're going to have to find out what the timing is on these liquidity events and just evaluate the opportunities at that time. It's hard to say exactly how additional authorization might come about, David. But, certainly, if there is a liquidity event, which it seems there's a lot of certainty around at least the Strike Force event, we'll just have to look at it that time, talk to our board and then message investors appropriately at that time. David Earl Beard - Coker & Palmer, Inc.: Great. Appreciate it. Thank you.

Thank you. This concludes the question-and-answer session. I'd like to turn the floor back over to Mr. Moore for any closing comments.

Thank you. We appreciate your time and interest today. Should you have any questions, please do not hesitate to reach out to our Investor Relations team. This concludes our call.

This concludes today's teleconference. Thank you for your participation. You may disconnect your lines at this time.