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Eclipse Resources Encouraged By First Pennsylvania Utica Well

Eclipse Resources Corp. said Thursday that its first Utica Shale well in north-central Pennsylvania came online at 32 MMcf/d and has continued to perform at that rate for more than 30 days, exceeding the company’s expectations in an underdeveloped part of the play. 

“After initial cleanup, the well’s production quickly achieved our target rate of approximately 32 MMcf/d, which was expected to continue for an initial flat period of 30 days,” said CEO Benjamin Hulburt. “The well’s production continued at this level after reaching the 30-day period, which is encouraging to us and we will be continuing to monitor this well’s performance closely.”

The Painter 2H is the latest Utica well to come online in Tioga County, hundreds of miles east of the Utica core in southeast Ohio. Eclipse brought the well online during the third quarter, nearly a year after it announced the 44,500 net acre acquisition of its Flat Castle area in Tioga and Potter counties. The well was completed with a lateral length of 13,800 feet.

Hulburt also said the company’s all-stock merger with Blue Ridge Mountain Resources Inc. (BRMR) remains on track to close by the end of this year. BRMR would become an Eclipse subsidiary under the deal.

Earlier this week, BRMR, which operates in southeast Ohio and northern West Virginia, updated full-year guidance and is now calling for 187-212 MMcfe/d of production. As a result, Eclipse said the combined company is forecast to produce 560-600 MMcfe/d of production in the fourth quarter instead of the previously forecast range of 500-560 MMcfe/d.

During the third quarter, Eclipse produced 346.4 MMcfe/d, a decline from 353 MMcfe/d in the year-ago period, but up from 305.5 MMcfe/d in 2Q2018. The company cut spending earlier this year and lowered its annual guidance as a result.

The company reported record revenue of $130.1 million in the third quarter, a 42% increase from the year-ago quarter, as prices increased on more takeaway in the Appalachian Basin. Including cash settled derivatives and firm transportation, Eclipse earned $3.34/Mcfe during the period, compared to $2.59/Mcfe a year ago.

Eclipse reported net income of $4 million (1 cent/share) for the third quarter, versus a net loss of $16.7 million (minus 6 cents) in 3Q2017.

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