What: Shares of Gulfport Energy (NASDAQ:GPOR) dropped by nearly 20% last month. The main culprit was continued commodity price weakness, although the company's third-quarter report and its future outlook were also weak.
So what: For the third quarter, Gulfport Energy reported an adjusted loss of $8.7 million, or $0.08 per share, largely due to weak commodity prices. In fact, as a result of those weak prices, the company plans to curtail about 100 MMcfe per day of production, which started on Nov. 1. That's a big chunk of the company's production, given that it averaged 706.3 MMcfe per day in October.
In curtailing production Gulfport is joining a growing number of gas producers that have chosen to shut down wells until prices improve. National Fuel Gas (NYSE:NFG), for example, is voluntarily curtailing 13 Bcf of production due to weak prices. That's having a noticeable impact on National Fuel Gas' production, with the company's Seneca Resources division reporting an 8.3 Bfce year-over-year decline in its production to just 37.6 Bcfe last quarter. To put it another way, that's almost 20% of Natural Fuel Gas' daily output.
Now what: Weak pricing is forcing natural gas producers to not only put a lid on production growth, but actually artificially lower production by keeping gas underground. It's a situation that will continue to weigh down producers until gas prices recover and these wells are put back online.