Appalachian operator Eclipse Resources Corp. is raising its 2016 production guidance by 7% after increasing its net daily production by 19% year/year during the second quarter, the company said Monday.
The State College, PA-based exploration and production (E&P) company posted total net production of 236.1 MMcfe/d for 2Q2016, which was also a 17% increase over the first quarter. Second quarter production was 71% weighted to gas, with the E&P averaging 168.1 MMcf/d in natural gas output, 7,537 b/d in natural gas liquids (NGL) and 3,793 b/d in oil.
Eclipse resumed drilling activity in 2Q2016 after announcing last November that it would be idling its one rig drilling program through the first quarter (see Shale Daily, Nov. 12, 2015). Looking to take advantage of an improving natural gas strip, Eclipse said last month that it would also be upping its 2016 capital expenditure (capex) budget to $196 million from $128 million (see Shale Daily, June 29).
Earlier this month, Eclipse completed a public offering of 37.5 million shares of common stock, raising $123 million to fund its capex plans through 2017, the company said.
Eclipse said it drilled two gross (two net) operated Utica Shale wells during the quarter after restarting its program, with a third well in the dry-gas Utica currently being drilled. The E&P completed another four gross (3.9 net) wells averaging 10 stages per day in its liquids-rich Utica acreage during the quarter.
“I continue to be impressed with our team’s strong execution, especially as we continue to extend the lateral length on our wells in the higher pressure, deeper and more technically challenging portion of our acreage position in the Utica dry gas area,” CEO Benjamin Hulburt said.
“Additionally, the Purple Hayes well [see Shale Daily, May 18]continues to produce at its managed choke target rates with flat production, shallower pressure declines, 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.”
Sales prices for the quarter, before the effects of hedging, averaged $1.56/Mcf for gas, $13.60/bbl for NGLs and $36.74/bbl for oil. After accounting for hedges and firm transportation costs, prices averaged $1.86/Mcf, $13.43/bbl and $41.38/bbl respectively. The company said it has 85% of its anticipated 2017 gas production hedged at a $2.84/MMBtu floor price.
Eclipse has scheduled a conference call for Aug. 3 to discuss its 2Q2016 earnings.