From Eclipse Resources on Tuesday:



STATE COLLEGE, Pa.--(BUSINESS WIRE)--Eclipse Resources Corporation (NYSE: ECR) (the “Company” or “Eclipse Resources”) today is pleased to provide the following operational update, revised capital expenditure plan for 2016 and amended guidance.




During the second quarter, the Company recommenced its operated drilling program and is currently drilling its second well in the program in the dry gas area of Monroe County, Ohio. Additionally, the Company commenced completion operations on its drilled but uncompleted wells and has completed two wells in the ongoing program to date

The Company intends to spud a total of 10 to 12 net wells for the full year 2016

The Company intends to complete a total of 21 to 24 net wells for the full year 2016, which includes 16 to 19 net wells of drilled but uncompleted wells that are currently held in inventory

Given current forward commodity prices, the Company expects to cease its voluntary production curtailment program at the end of the third quarter of 2016

For the full year 2016, the Company is raising its production guidance to approximately 205 to 210 MMcfe per day as it expects to reestablish flowing its wells at normal type curve rates during the fourth quarter of 2016 and now anticipates fourth quarter 2016 production to average approximately 240 MMcfe per day

The Company’s board of directors has approved an increase to the Company’s capital expenditure budget of approximately $28 million, which budget was previously set at $168 million

During the second quarter of 2016, the Company has continued to add to its hedge position with:


Approximately 170,000 MMBtu per day of natural gas hedged at an average floor price of $2.84 per MMBtu in 2017 which represents approximately 75% of expected production based on the midpoint of the Company’s production guidance for 2017

Approximately 3,500 Bbls per day of oil hedged at an average floor price of $46.00 per Bbl in 2017 which represents approximately 75% of expected production based on the midpoint of the Company’s production guidance for 2017





The Company released additional information on the initial performance of its first “Super-Lateral” well, the Purple Hayes well. During the first 45 days of production, the well has produced cumulative production of approximately 583 MMcfe and has exhibited very shallow pressure declines of approximately 50 Psi per week. The well continues to produce at its managed choke target rates with flat production and no change in the condensate yield to date. The Company believes this to be indicative of better than anticipated performance and remains optimistic with the results to date, although no assurances can be given as to the long-term performance of the well at this juncture.


Benjamin W. Hulburt, Chairman, President & CEO commenting on the operations, “The Company has recently made the decision to accelerate our operated drilling and completion activity, ahead of our previously announced third quarter 2016 original start. Looking at current forward strip prices, we anticipate lifting our self-imposed production curtailment program and bringing our production back on line at the end of the third quarter of 2016. Based on where current forward strip prices are, we expect to continue to complete our drilled uncompleted wells through the remainder of the year and into the first quarter of 2017, and to continue to run our operated rig continuously going forward. We continue to forecast production growth in 2017 between 40% to 60% as compared to our forecasted production for 2016. Since recommencing our drilling in the Dry Gas area of our acreage, we have already finished drilling the Holliday A 1H well with a 10,000 foot completed lateral length in 18 days from spud to TD, and I remain extremely proud of our team’s operational excellence, along with the efficiency and cost structure they can provide. Lastly, while we can never completely eliminate commodity risk, we believe we have significantly reduced that risk next year by substantially increasing our hedge position, while at the same time structuring our hedge portfolio to not eliminate our exposure to further commodity price increases.”



Guidance



The Company issued the following amended second quarter and full year 2016 guidance in the table below:







 

 


Q2 2016




 

FY 2016



Production Mmcfe/d

 

~200

 

205 - 210



% Gas

 

70% - 80%

 

70% - 80%



% NGL

 

15% - 17%

 

14% - 18%



% Oil

 

8% - 10%

 

7% - 11%



Gas Price Differential1

 

$(0.20) - $(0.30)

 

$(0.15) - $(0.25)



FT Expense

 

$(0.40) - $(0.50)

 

$(0.35) - $(0.45)




Gas Price Differential with FT expense1




 

$(0.60) - $(0.80)

 

$(0.50) - $(0.70)



Oil Differential1

 

$(10.00) - $(13.00)

 

$(10.00) - $(13.00)



NGL Prices (% of WTI)1

 

20% - 25%

 

20% - 30%




Projected Operating Costs:




 

 

 

 



Operating Expenses ($/Mcfe)2

 

$1.20 - $1.30

 

$1.20 - $1.30



Cash G&A ($mm)

 

$8 - $9

 

$30



Cash Exploration ($mm)

 

$5

 

$23 - $27



CAPEX ($mm)3

 

$30 - $35

 

$196




Operational Metrics:




 

 

 

 



Net Wells Spud

 

 

 

10 - 12



Net DUCs Completed

 

 

 

16 – 19



Net Wells TTS

 

 

 

12 - 15





1. Excludes impact of hedges

2. Excludes firm transportation, DD&A, exploration, and general and administrative expenses

3. Excludes land and producing asset acquisitions



About Eclipse Resources



Eclipse Resources is an independent exploration and production company engaged in the acquisition and development of oil and natural gas properties in the Appalachian Basin, including the Utica and Marcellus Shales. For more information, please visit the Company’s website at www.eclipseresources.com.