Eclipse Resources Corporation (NYSE:ECR) (the “Company” or
“Eclipse Resources”) today is pleased to announce fourth quarter
and full year 2018 production results along with year-end 2018
proved reserves.
Fourth Quarter and Full Year 2018
Results
The Company reported fourth quarter 2018 average net production
of 404.5 MMcfe per day and reported full year 2018 average net
production of 343.2 MMcfe per day, which were both above the high
end of the Company’s previously issued guidance and analyst
consensus estimates. For the fourth quarter of 2018, the Company’s
production mix was 72% natural gas, 16% natural gas liquids
(“NGLs”) and 12% oil, while the production mix for the full year
2018 was 72% natural gas, 17% NGLs and 11% oil.
Proved Reserves
The Company has recently received its annual reserve report as
prepared by its independent reservoir engineering firm, Software
Integrated Solutions (SIS) Division of Schlumberger Technology
Corporation, which estimated the Company’s proved reserves (based
on SEC pricing) at December 31, 2018 to be 1.86 Tcfe, a 28%
increase compared to proved reserves at December 31, 2017. The
composition by product of the year-end 2018 reserves was 82%
natural gas, 7% oil and 11% NGLs. This increase in reserves was
driven predominately by an increase in proved developed producing
reserves which increased by 68% to 665 Bcfe related to new wells
coming into production during 2018 and from the addition of
incremental proved undeveloped reserves. SEC prices for reserves
were calculated as of December 31, 2018 and among other items
calibrated for quality, energy content and market differentials
with the average adjusted product price weighted by production over
the remaining lives of the properties being $59.12 per Bbl for oil,
$2.99 per Mcf for natural gas, and $26.41 per Bbl of NGLs.
Utilizing SEC pricing as of December 31, 2018, the PV101 of
the Company’s total proved reserves increased by 87% to
approximately $1.37 billion, and the PV101 of the Company’s proved
developed producing reserves increased by 72% to approximately $671
million, compared to the Company’s respective reserves at December
31, 2017.
For the year 2018, the Company estimates that its drill-bit only
finding and development cost, excluding revisions, was $0.47 per
Mcfe. The all sources finding and development cost for estimated
proved reserve additions, including revisions was $0.70 per Mcfe,
which included the Company’s acquisition of the “Flat Castle”
acreage in Pennsylvania. The finding and development costs are
based on the Company’s preliminary and unaudited 2018 capital
costs. Final capital costs will be provided in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2018 and may
differ materially from the Company’s estimates. Additional
disclosure can be found at the end of this press release.
1 Non-GAAP measure. See disclosures in this press release for
details.
Non-GAAP Disclosure
Year-end pre-tax PV10 value is a non-GAAP financial measure as
defined by the SEC. Eclipse Resources believes that the
presentation of pre-tax PV10 value is relevant and useful to the
Company’s investors because it presents the discounted future net
cash flows attributable to Eclipse Resources’ reserves prior to
taking into account corporate future income taxes and the Company’s
current tax structure. Eclipse Resources further believes investors
and creditors use pre-tax PV10 value as a basis for comparison of
the relative size and value of the Company’s reserves as compared
with other companies.
The GAAP financial measure most directly comparable to pre-tax
PV10 is the standardized measure of discounted future net cash
flows ("Standardized Measure"). Eclipse Resources is not yet able
to provide a reconciliation of pre-tax PV10 to Standardized Measure
because the discounted future income taxes associated with the
Company’s reserves is not yet calculable. Eclipse Resources
expects to include a full reconciliation of pre-tax PV10 to
Standardized Measure in its Annual Report on Form 10-K for the year
ended December 31, 2018.
In this release, Eclipse Resources has provided all sources
finding and development cost per unit for estimated proved reserve
additions, including revisions and drill-bit only finding and
development cost per unit, excluding revisions. These non-GAAP
metrics are commonly used in the exploration and production
industry by companies, investors and analysts in order to measure a
company's ability of adding and developing reserves at a reasonable
cost. The finding and development costs per unit are statistical
indicators that have limitations, including their predictive and
comparative value. In addition, because the finding and development
costs per unit do not consider the cost or timing of future
production of new reserves, such measures may not be adequate
measures of value creation. These reserve metrics may not be
comparable to similarly titled measurements used by other
companies. Calculations for all sources and drill-bit only finding
and development cost per unit are based on costs incurred in 2018.
The calculations for both all sources and drill-bit only finding
and development cost per unit do not include future development
costs required for the development of proved undeveloped
reserves.
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.
Forward-Looking
Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical fact
included in this press release, regarding Eclipse Resources’
strategy, future operations, financial position, estimated revenues
and income/losses, projected costs and capital expenditures,
prospects, plans and objectives of management are forward-looking
statements. When used in this press release, the words “plan,”
“endeavor,” “will,” “would,” “could,” “believe,” “anticipate,”
“intend,” “estimate,” “expect,” “project” and similar expressions
are intended to identify forward-looking statements, although not
all forward-looking statements contain such identifying words.
These forward-looking statements are based on Eclipse Resources’
current expectations and assumptions about future events and are
based on currently available information as to the outcome and
timing of future events. When considering forward-looking
statements, you should keep in mind the risk factors and other
cautionary statements described under the heading “Risk Factors” in
Eclipse Resources’ Annual Report on Form 10-K filed with the
Securities Exchange Commission on March 3, 2018, as amended (the
“2017 Annual Report”), and in “Item 1A. Risk Factors” of Eclipse
Resources’ Quarterly Reports on Form 10-Q.
Forward-looking statements may include, but are not limited to,
statements about Eclipse Resources’ business strategy; reserves;
general economic conditions; financial strategy, liquidity and
capital required for developing its properties and timing related
thereto; realized natural gas, NGLs and oil prices; timing and
amount of future production of natural gas, NGLs and oil; its
hedging strategy and results; future drilling plans; competition
and government regulations, including those related to hydraulic
fracturing; the anticipated benefits under commercial agreements;
marketing of natural gas, NGLs and oil; leasehold and business
acquisitions; the costs, terms and availability of gathering,
processing, fractionation and other midstream services; the costs,
terms and availability of downstream transportation services;
general economic conditions; credit markets; uncertainty regarding
future operating results, including initial production rates and
liquid yields in type curve areas; and plans, objectives,
expectations and intentions contained in this press release that
are not historical, including, without limitation, the guidance set
forth herein.
Eclipse Resources cautions you that all these forward-looking
statements are subject to risks and uncertainties, most of which
are difficult to predict and many of which are beyond the Company’s
control, incident to the exploration for and development,
production, gathering and sale of natural gas, NGLs and oil. These
risks include, but are not limited to, legal and environmental
risks, drilling and other operating risks, regulatory changes,
commodity price volatility and declines in the price of natural
gas, NGLs, and oil, inflation, lack of availability of drilling,
production and processing equipment and services, counterparty
credit risk, the uncertainty inherent in estimating natural gas,
NGLs and oil reserves and in projecting future rates of production,
cash flow and access to capital, the timing of development
expenditures, and the other risks described under the heading “Risk
Factors” in the 2017 Annual Report and in “Item 1A. Risk Factors”
of Eclipse Resources’ Quarterly Reports on Form 10-Q.
All forward-looking statements, expressed or implied, included
in this press release are expressly qualified in their entirety by
this cautionary statement and are based on assumptions that Eclipse
Resources believes to be reasonable but that may not prove to be
accurate. This cautionary statement should also be considered in
connection with any subsequent written or oral forward-looking
statements that Eclipse Resources or persons acting on its behalf
may issue. Except as otherwise required by applicable law, Eclipse
Resources disclaims any duty to update any forward-looking
statements to reflect new information or events or circumstances
after the date of this press release. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof.
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version on businesswire.com: https://www.businesswire.com/news/home/20190214005143/en/
Eclipse Resources CorporationDouglas Kris, Investor
Relations814-325-2059dkris@eclipseresources.com
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