Eclipse Resources Corp. has drilled what could be the world’s longest onshore lateral in Ohio’s Guernsey County.

The company drilled, completed and turned to sales the Purple Hayes 1H during the first quarter. It’s a massive Utica Shale well, with a lateral of 18,544 feet that was drilled in just 18 days and completed with a slickwater frack of 124 stages spaced at 150-feet.

“We have been told by our service company partners that they believe this to be the longest onshore lateral ever drilled in the United States, if not the world,” CEO Benjamin Hulbert told financial analysts on Thursday during a call to discuss the company’s first quarter results. “From a cost perspective, this translates into a step reduction in total costs per lateral foot, which is almost 30% better than our lowest cost well previously drilled.”

The company has been testing extended reach laterals, but the Purple Hayes is on an entirely different level. The goal of the well, management said, is to enhance the return profile of the Utica by determining the technical limits of lateral length in the liquids portion of its acreage. The Purple Hayes was drilled in the company’s condensate window to confirm total costs and assess recoverability per lateral foot compared to more traditional lateral lengths of 8,000-10,000 feet in the play.

Hulburt said the well cost about $15.8 million to drill and complete, which is 5% less than the company estimated. He added that the company believes it can actually drill longer laterals and said the techniques should translate well across the Ohio pure-play’s acreage.

COO Thomas Liberatore said the well was put to sales on Tuesday (May 3) on managed choke. After the first 24 hours of flowback, the well was producing 5 MMcf/d and 1,200 b/d of condensate. The gas rate is expected to increase as the well cleans up, and Eclipse said it expects 80-90 bbl of natural gas liquids per MMcf and another 175-180 bbl of condensate per MMcf once the well stabilizes.

Despite the Purple Hayes milestone, Eclipse said it would again idle its sole rig until late summer when it prepares to ramp-up its operations ahead of what it believes will be a rebound in natural gas prices in 2017. Earlier this year, the company said it would idle its drilling program and voluntarily curtail volumes across its acreage to keep production flat at around 200 MMcfe/d to protect its oil and gas and wait for better prices (see Shale Daily, Jan. 5). Other than the Purple Hayes well, the company turned no new wells to sales during the first quarter and it did not participate in any non-operated wells.

The company produced 201.1 MMcfe/d during the period, up from 160 MMcfe/d in the year-ago quarter and down from the 247 MMcfe/d it produced in 4Q2015 on curtailments. Hulburt said challenges are ahead for the company as it believes the second quarter could be the worst this year for natural gas prices. But like other Appalachian operators that reported on Thursday, including Rice Energy Inc. and Gulfport Energy Corp., Hulburt said he remains optimistic that gas prices will begin to increase in 2017 as production across the country continues flattening and demand increases.

“We are executing on our plan, focused on streamlining our operations for maximum efficiency, vigilantly attacking all aspects of our cost structure [and] maintaining balance sheet flexibility to return ourselves to a strong growth trajectory when commodities recover,” he said.

Analysts have said Eclipse could face financing and liquidity strains next year if natural gas prices don’t improve (see Shale Daily, March 3). The company has $233 million in liquidity, including about $135.8 million in cash and $97 million available under its revolving credit facility. Management has said it plans to fund this year’s $168 million budget within cash flows, and added that the company’s costs came down in the first quarter.

Eclipse completed two of its three planned non-core assets sales during the first quarter, netting $9.6 million. It also plans to close on another $4 million non-core sale during the second quarter. The assets are mostly conventional properties, Eclipse said.

Total operating expenses were $17.5 million or 95 cents/Mcfe, 27% below the low end of the company’s guidance. It has also continued to reduce staff, with its general and administrative expenses now forecast for $30 million this year, or 17% below previously announced levels.

Including hedges, the company’s average realized price during the period was $2.89/Mcfe, compared to $3.60/Mcfe in 1Q2015. Along with increased production, that helped push revenue to $49.6 million from $43.8 million over the same time.

Eclipse reported a net loss of $40.7 million (minus 18 cents/share), compared to a net loss of $34.1 million (minus 17 cents/share) in 1Q2015. Low commodity prices once again led to an impairment expense of $17.7 million on proved Marcellus Shale properties and an impairment of $9.4 million to unproved leasehold expirations during the first quarter. Eclipse recorded a $787 million impairment on its proved and unproved properties in 2015.