Gulfport Energy Corp. (NASDAQ: GPOR) reported its fourth-quarter earnings this week, as well as an update on its proved reserves. The company had 933.6 billion cubic feet equivalent (BCFE) of proved reserves, an increase of 305% from the year-end 2013 total. The fourth-quarter financial results were $0.12 in adjusted earnings per share (EPS) on $267.7 million in revenue. As a result, analysts weighed in and adjusted their price targets.

Adjusted EPS of $0.12 exceeded Sterne Agee at -$0.02 and the consensus estimate of -$0.01.

Sterne Agee mentioned that there is lots to like with these earnings, and accordingly reiterated a Buy rating for Gulfport. The firm further expects Gulfport to break out as execution, asset quality and takeaway optionality come to fruition as anticipated. According to Sterne Agee, Gulfport continues to post best-in-basin pricing on natural gas and natural gas liquids, which is attributed to its takeaway optionality from the Cadiz processing complex in Ohio.

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Sterne Agee commented on Gulfport’s hedge:

Gulfport’s strong 2015 hedge profile (62% of 2015E gas hedged at $4.03/mcf) and comprehensive takeaway optionality should preserve $3+/mcf realizations this year, based on our $2.70/mcf Henry Hub forecast. The company is also keeping some growth in its back pocket with an inventory of ~25 uncompleted wells, yet still expecting strong growth.

The firm expects that the backlog of 25 operated uncompleted wells at year-end 2014 should be maintained in 2015 as the company defers growth until pricing improves. The company estimates modest incremental unit cost reductions, but with the pivot toward natural gas largely done, Sterne Agee thinks most cost components are bottoming.

At the end of 2014, Gulfport had $574 million in net debt. Sterne Agee is still fine-tuning its 2015 estimates, but the firm believes a free cash flow deficit of over $225 million is likely, which could push year-end 2015 leverage to 2.2 times.

Other analysts made similar calls:

• Canaccord Genuity raised its price target to $54 from $46.
• Deutsche Bank raised its price target to $55 from $50.
• Wunderlich has a Buy rating for Gulfport Energy and raised its price target to $60 from $50.

Following the earnings report, shares jumped on Thursday to a high of $48.00 before settling to a close of $45.66. On that day alone, the stock gained 3.6%.

Shares of Gulfport Energy were up 1% at $46.11 in Friday’s late morning trading. The stock has a consensus analyst price target of $54.93 and a 52-week trading range of $35.00 to $75.75.

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