Ohio pure-play Eclipse Resources Corp. plans to significantly increase its capital spend this year, guiding for a $300 million budget that builds on the lessons it learned last year and includes 11 super laterals -- wells with extensions of 15,000 feet or longer.
Eclipse revived its drilling program heading into the second half of 2016 after it was forced to idle rigs and voluntarily curtail volumes amid the downturn, settling on a capital budget of $196 million last year. It has now switched to"third generation" completions, which utilize tighter stage spacing and increased proppant loading, among other things. The super laterals, now more commonplace across the U.S. onshore, come after Eclipse's successful Purple Hayes well last year in Guernsey County that was completed with a record-setting 18,544 foot lateral and 124 stages.
The company said 11 of the 19 Utica wells it plans to drill and complete this year would be super laterals, with three of those in its dry gas area and the others in its condensate area, where the Purple Hayes was completed. So far, the generation three wells have been completed in wetter areas, but Eclipse started to turn to sales in December its first five in the Utica dry gas window.
Based on preliminary results from the wet generation three completions, Eclipse has increased its Utica condensate type curve to 1.1 Bcfe/1,000 feet of lateral from 900 MMcfe. In its rich gas zone, the company has increased estimated ultimate recoveries from 1.8 Bcfe/1,000 feet of lateral to 2.2 Bcfe. Eclipse said its current Utica acreage footprint of 112,000 net acres consists of 41% dry gas, 38% condensate and 8% rich gas.
Eclipse also plans to drill two gross Marcellus Shale wells this year, which rounds out the other 13% of its acreage.
The company produced 255 MMcfe/d in the fourth quarter, up from 247 MMcfe/d in the year-ago period. Full-year volumes were 229 MMcfe/d, up from 207.9 MMcfe in 2015 and above the midpoint of the company's 225-230 MMcfe/d guidance for the year. Fourth quarter volumes were 71% weighted to natural gas, while the production mix for 2016 consisted of 73% natural gas.
Eclipse booked 469 Bcfe of proved reserves last year, up 35% from 2015. Its borrowing base was recently increased to $175 million from $125 million. The company plans to release its year-end results in March.