Eclipse Resources Corp. has completed the sale of 9,900 net acres in Southeast Ohio for $63.8 million to an undisclosed buyer in a deal that the company said could help fund a second operated rig next year.
Earlier this year, management said it was looking to boost liquidity through a noncore acreagesale or a joint venture, saying it preferred the former. The Ohio pure-play had been working to divest between 8,000 and 10,000 acres. It sold undeveloped assets in Noble and Monroe counties with production of just 1 MMcfe/d.
CEO Benjamin Hulburt said the acreage was not in the company's "near-term drilling program, did not permit us to drill wells with lateral lengths that meet our internal planning requirements and would have required future lease extension payments." Prior to the sale, the company had 209,000 net acres in Noble, Guernsey, Monroe, Belmont and Harrison counties.
At the end of the third quarter, Eclipse said it was moving forward with its next generation completion design on all of its wells to utilize what it had learned from the Purple Hayes 1H "super lateral" in the Utica Shale condensate window. At that time, it was completing its first next generation well in the dry gas window on a five well pad with average lateral lengths of 10,891 feet. The Purple Hayes has an 18,544 foot lateral and 124 stages.
The company also said this week that it has "taken advantage" of more favorable gas prices to add hedges for 2017 and 2018. The increased position, coupled with proceeds from the sale, Hulburt said, have made the company "increasingly confident in our ability to fund the addition of a second operated rig during 2017." Eclipse is still working on its 2017 budget, but it has thus far laid out plans for a one-rig program with plans to go to two next year if its liquidity and market conditions allow.
In any event, the company said proceeds from the sale would go toward funding its operations and for general corporate purposes.