Eclipse Resources Third Quarter 2015 Operational and Financial Results
Eclipse Resources Corporation (NYSE:ECR) (the “Company”) today announced
its third quarter 2015 financial and operational results. Highlights for
the quarter include:
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Third quarter of 2015 net production averaged 225.2 MMcfe/d, which was
approximately 5% above the high end of the Company’s previously issued
guidance range for the quarter and represents a 163% increase to the
third quarter of 2014 and a 13% sequential increase over the second
quarter 2015. For the third quarter 2015, the production mix was
approximately 65% natural gas, 19% NGL’s and 16% oil
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The Company drilled 9 gross (4.8 net) wells, completed 15 gross (7.2
net) wells and turned 22 gross (6.4 net) wells to sales in the third
quarter
-
Third quarter 2015 Adjusted Revenue1 grew to $71.3 million,
representing a 98% increase relative to the third quarter of 2014;
third quarter revenue grew to $71.2 million
-
Adjusted EBITDAX1 grew to $29.6 million for the third
quarter of 2015 representing a 126% increase relative to the third
quarter of 2014
-
Third quarter 2015 Operating Expense2 of $1.22 per Mcfe is
approximately 10% below the low end of the Company’s previously issued
guidance range for the quarter
-
Realized natural gas price before the impact of cash settled
derivatives and excluding firm transportation expenses was $2.86 per
Mcf, a $0.10 premium to NYMEX during the quarter. Realized natural gas
price before the impact of cash settled derivatives and including
transportation costs averaged $2.56 per Mcf, a $0.20 per Mcf discount
to NYMEX during the quarter. Realized natural gas price after the
impact of cash settled derivatives and including transportation costs
averaged $3.20 per Mcf, a $0.44 premium to NYMEX during the quarter
-
Realized oil price before the impact of cash settled derivatives
averaged $37.52 per barrel, a $9.29 per barrel discount to WTI oil
price during the quarter. Realized oil price after the impact of cash
settled derivatives averaged $38.98 per barrel, a $7.83 per barrel
discount to WTI during the quarter
-
Realized natural gas liquids price, including transportation costs,
averaged $4.16 per barrel, or approximately 9% of the average WTI oil
price during the quarter ($5.75 per barrel on operated properties, and
$0.89 per barrel on non-operated properties)
-
The Company increased its natural gas hedges for 2016 to 135 MMbtu/d
with an average weighted floor price of $3.11
-
Subsequent to the end of the quarter, the Company’s borrowing base
under its revolving credit facility was reaffirmed at $125 million and
remains undrawn. The Company’s liquidity position at the end of the
third quarter stood at $325 million3
-
The Company raised its full year 2015 production guidance by
approximately 3% to 202-205MMcfe/d and decreased its full year 2015
capital expenditure guidance by approximately 6% to $330 million.4
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1
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Non-GAAP measure. See reconciliation for details
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2
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Excludes firm transportation, DD&A, Exploration and General &
Administrative expenses
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3
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Consisting of $228 million of cash and cash equivalents and $97
million of availability on the Company’s $125 million revolving
credit facility after taking into effect the impact of $28 million
of letters of credit
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4
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Includes delay rental payments which are classified as
exploration expense for financial reporting purposes
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Operational Discussion
For the third quarter of 2015, net production averaged 225.2 MMcfe/d.
This level of production represents a 163% increase relative to average
daily net production for the third quarter of 2014 and sequential
quarterly growth of 13% over average daily net production for the second
quarter of 2015. The third quarter of 2015 production consisted of
approximately 65% natural gas, 19% natural gas liquids and 16% oil.
During the third quarter of 2015, the Company commenced drilling 5 gross
(4.5 net) operated Utica Shale wells, completed 7 gross (6.5 net) wells,
and turned-to-sales 4 gross (3.4 net) wells. Additionally, the Company
participated in the drilling of 4 non-operated gross (0.3 net) wells,
the completion of 8 non-operated gross (0.8 net) wells and had 18 gross
(3.0 net) non-operated wells turned to sales during the third quarter of
2015.
Commenting on the third quarter results, Benjamin W. Hulburt, Eclipses
Resources’ Chairman, President and CEO said, “During the third quarter,
we were able to continue to set record quarterly production levels,
producing over 225 MMcfe/d, while lowering our per unit operating
expenses. I continue to be impressed with our team’s strong execution,
especially as we 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. During the quarter, the team’s
operating tempo has kept us on schedule to deliver robust production
results, allowing us to increase our annual production guidance for the
year. Perhaps more important in this environment, this was done while
lowering our expected capital expenditure guidance at the same time. In
the next two weeks, we expect to commence bringing to sales 7 gross
wells in our Dry Gas East type curve area with an average lateral length
of 8,900 feet, which we expect will provide another significant
production increase. We are continuing to hone in on what we believe
will be the optimal lateral spacing, well completion design and
production methodology in the Utica Shale while keeping a close eye on
every aspect of our costs.
We have commenced our budgeting process for 2016 and intend on taking a
disciplined and financially prudent approach in order to preserve our
financial strength. As part of this effort, and in light of current
commodity prices and our projected near term production levels,
beginning this month we will be suspending our operated drilling
activity until the end of the first quarter of 2016. Given what we know
today, we currently expect next year’s capital budget will be materially
below this year’s budget while still providing substantial production
growth and preserving our ability to significantly ramp our activity and
future production when commodities recover. Additionally, we have taken
several steps to reduce our staffing levels and general administrative
expenses which we expect will result in a reduction our annual cash G&A
expenses moving into 2016.”
The Company’s production for the three months ended September 30, 2015
and 2014 is set forth in the following table:
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Three Months Ended September 30,
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Change
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2015
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2014
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Production:
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Natural gas (MMcf)
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13,412.4
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6,190.3
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7,222.1
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NGLs (Mbbls)
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663.2
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116.4
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546.8
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Oil (Mbbls)
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554.6
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166.9
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387.7
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Total (MMcfe)
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20,719.2
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7,890.0
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12,829.2
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Average daily production volume:
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Natural gas (Mcf/d)
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145,787
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67,286
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78,501
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NGLs (Bbls/d)
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7,209
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1,265
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5,944
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Oil (Bbls/d)
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6,028
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1,814
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4,214
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Total (Mcfe/d)
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225,209
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85,761
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139,448
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Financial Discussion
Revenues for the third quarter of 2015 totaled $71.2 million,
representing a 99% increase as compared to revenues for the third
quarter of 2014. Adjusted Revenue, which includes the impact of cash
settled derivatives, totaled $71.3 million, representing a 98% increase
over Adjusted Revenue of $36.0 million the third quarter of 2014. The
net loss for the third quarter of 2015 was $81.5 million, or $0.37 per
share. Adjusted net loss for the third quarter of 2015 was $46.4
million, or $0.21 per share. Adjusted EBITDAX was $29.6 million for the
third quarter of 2015, or $0.13 per share, a 126% increase year over
year. Adjusted Revenue, Adjusted Net Loss and Adjusted EBITDAX are
non-GAAP financial measures. Tables reconciling Adjusted Revenue,
Adjusted Net Loss and Adjusted EBITDAX can be found at the end of the
financial statements include in this release.
The Company’s average realized price received during the third quarter
of 2015, including the impact of cash settled derivatives and natural
gas firm transportation expenses, was $3.25 per Mcfe compared to $4.27
per Mcfe in the third quarter of 2014.
Average realized price calculations are set forth in the table below:
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For the Three Months
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Ended September 30,
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2015
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2014
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Change
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Average Sales Price (excluding cash settled derivatives)
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Natural gas ($/Mcf)
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$
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2.86
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$
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2.78
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$
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0.08
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NGLs ($/Bbl)
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4.16
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44.09
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(39.93
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)
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Oil ($/Bbl)
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37.52
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80.06
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(42.54
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)
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Total average prices ($/Mcfe)
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2.99
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4.53
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(1.54
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)
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Average Realized Price (including cash settled derivatives)
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Natural gas ($/Mcf)
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$
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3.50
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$
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2.44
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$
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1.06
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NGLs ($/Bbl)
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4.16
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44.09
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(39.93
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)
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Oil ($/Bbl)
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38.98
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80.06
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(41.08
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)
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Total average prices ($/Mcfe)
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3.44
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4.27
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(0.83
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)
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Average Realized Price (including firm transportation)
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Natural gas ($/Mcf)
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$
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2.56
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$
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2.78
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$
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(0.22
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)
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NGLs ($/Bbl)
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4.16
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44.09
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(39.93
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)
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Oil ($/Bbl)
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37.52
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80.06
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(42.54
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)
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Total average prices ($/Mcfe)
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2.80
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4.53
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(1.73
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Average Realized Price (including cash settled derivatives and
firm transportation)
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Natural gas ($/Mcf)
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$
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3.20
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$
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2.45
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$
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0.75
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NGLs ($/Bbl)
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4.16
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44.09
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(39.93
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Oil ($/Bbl)
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38.98
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80.06
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(41.08
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Total average prices ($/Mcfe)
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3.25
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4.27
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(1.02
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For the third quarter of 2015, total operating expenses, excluding
interstate firm transportation expense, depreciation, depletion and
amortization expense and general and administrative expense, were $25.2
million, or $1.22 per Mcfe, below the low end of the Company’s
previously issued guidance. Interstate firm transportation expense was
approximately $4.0 million, or $0.19 per Mcfe. A full breakout of
operating expenses is listed in the table below:
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Three Months Ended September 30,
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Change
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2015
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2014
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Operating expenses (in thousands):
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Lease operating
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$
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3,212
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$
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2,077
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$
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1,135
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Transportation, gathering and compression
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22,811
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6,857
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15,954
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Production and ad valorem taxes
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3,175
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2,132
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1,043
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Depreciation, depletion and amortization
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67,172
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29,983
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37,189
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General and administrative
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13,710
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11,897
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1,813
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Rig termination
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174
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—
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174
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Operating expenses per Mcfe:
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Lease operating
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$
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0.16
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$
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0.26
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$
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(0.10
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Transportation, gathering and compression
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1.10
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0.87
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0.23
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Production, severance and ad valorem taxes
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0.15
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0.27
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(0.12
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Depreciation, depletion and amortization
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3.24
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3.80
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(0.56
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General and administrative
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0.66
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1.51
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(0.85
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Rig termination
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0.01
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—
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0.01
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Financial Position & Liquidity
As of September 30, 2015, the Company had liquidity of approximately
$325 million consisting of approximately $228 million in cash and cash
equivalents, and available borrowing capacity under the Company’s
revolving credit facility of $97.2 million (after giving effect to
outstanding letters of credit issued by the Company of $27.8 million).
Third quarter 2015 capital expenditures were $51.7 million. These
expenditures included $48.3 million for drilling and completions
(operated drilling and completions of $43.7 million and non-operated
drilling and completions of $4.6 million), $0.1 million for midstream
requirements, $3.2 million for land related expenditures4 ,
and $0.1 million of other expenditures.
Subsequent to the end of the quarter, the Company completed the
regularly scheduled, semi-annual borrowing base redetermination process
with its lending group under its revolving credit facility. Following
that process, the lending group determined that the Company’s borrowing
base will remain at $125 million. The next redetermination under the
revolving credit facility is scheduled to occur in the spring of 2016
under the terms of the agreement.
Mathew DeNezza, Executive Vice President and Chief Financial Officer,
commented, “We currently anticipate our total capital expenditures for
the year will be approximately $330 million, a 6% reduction from our
previous guidance, and inclusive of an estimated $19.9 million of delay
rental payments included in our exploration expense. Additionally, we
expect to exit the year with approximately $155 million of cash. Based
upon the recent revolving credit facility redetermination and our
estimated year end cash position, we anticipate entering 2016 with
approximately $253 million of liquidity.”
Commodity Derivatives
The Company engages in a number of different commodity trading program
strategies as a risk management tool to mitigate the potential negative
impact on cash flows caused by price fluctuations in natural gas and oil
prices. During the quarter, the Company added to its natural gas
derivative portfolio for an additional portion of its projected 2016
production for a total average hedged volumes of 135,000 MMbtu per day,
with a weighted average price of $3.11. The Company expects to continue
to opportunistically add to this natural gas, natural gas liquids and
crude oil derivative portfolio. Below is a table that illustrates The
Company’s current hedging activities:
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Natural Gas Derivatives
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Volume
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Weighted Average
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Description
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(MMBtu/d)
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Production Period
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Price ($/MMBtu)
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Natural Gas Swaps:
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60,000
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October 2015—December 2015
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$
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3.77
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7,000
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October 2015
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$
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2.84
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40,000
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November 2015 – December 2015
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$
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2.85
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65,000
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January 2016—December 2016
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$
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3.28
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Natural Gas Collar:
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Floor purchase price (put)
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30,000
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January 2016—December 2017
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$
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3.00
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Ceiling sold price (call)
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30,000
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January 2016—December 2017
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$
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3.50
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Natural Gas Three-way Collars:
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Floor purchase price (put)
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15,000
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October 2015—December 2015
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$
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3.60
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Ceiling sold price (call)
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15,000
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October 2015—December 2015
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$
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3.80
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Floor sold price (put)
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15,000
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October 2015—December 2015
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$
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3.00
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Floor purchase price (put)
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40,000
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January 2016 – December 2016
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$
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2.90
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Ceiling sold price (call)
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20,000
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January 2016 – December 2016
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$
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3.25
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Ceiling sold price (call)
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20,000
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January 2016 – December 2016
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$
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3.22
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Floor sold price (put)
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40,000
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January 2016 – December 2016
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$
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2.35
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Natural Gas Call/Put Options:
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Put sold
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16,800
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October 2015—December 2015
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$
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3.35
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Put sold
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16,800
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October 2015
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$
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2.87
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Put purchased
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16,800
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October 2015
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$
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3.35
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Put sold
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16,800
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January 2016—December 2016
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$
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2.75
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Call sold
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40,000
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January 2018—December 2018
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$
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(3.75
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Basis Swaps:
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25,000
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October 2015
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$
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(1.21
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20,000
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November 2015– March 2016
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$
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0.83
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Oil Derivatives
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Volume
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Weighted Average
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Description
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(Bbls/d)
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Production Period
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Price ($/Bbl)
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Oil Collar:
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Floor purchase price (put)
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3,000
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October 2015—February 2016
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$
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55.00
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Ceiling sold price (call)
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3,000
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October 2015—February 2016
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$
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61.40
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Oil Three-way Collar:
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Floor purchase price (put)
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1,000
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March 2016—December 2016
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$
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60.00
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Ceiling sold price (call)
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1,000
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March 2016—December 2016
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$
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70.10
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Floor sold price (put)
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1,000
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March 2016—December 2016
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$
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45.00
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Subsequent to September 30, 2015, the Company entered into the following
derivative instruments to mitigate exposure to propane prices:
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Weighted Average
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Natural Gas:
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(Gal/d)
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Production Period
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Price ($Gal)
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NGL Swaps:
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Propane
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42,000
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January 2016—December 2016
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$
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0.46
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Propane
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21,000
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January 2016—June 2016
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$
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0.44
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Propane
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10,500
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July 2016—September 2016
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$
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0.46
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The Company issued the following amended full year guidance in the table
below:
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Q4 2015
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FY 2015
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Production Mmcfe/d
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225 ‐ 235
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|
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202 ‐ 205
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% Gas
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68% ‐ 74%
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64% ‐ 66%
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% NGL
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16% ‐ 18%
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18% ‐ 20%
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% Oil
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10% ‐ 14%
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15% ‐ 17%
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Gas Price Differential1
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$(0.12) ‐ $(0.22)
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$(0.12) ‐ $(0.15)
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FT Expense
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$(0.38) ‐ $(0.49)
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$(0.30) ‐ $(0.34)
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Gas Price Differential with FT expense1
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$(0.50) ‐ $(0.71)
|
|
|
$(0.42) ‐ $(0.49)
|
Oil Differential1
|
|
|
$(11.00) ‐ $(13.00)
|
|
|
$(11.25) ‐ $(12.25)
|
NGL % WTI
|
|
|
15% ‐ 25%
|
|
|
20% ‐ 24%
|
Operating Expenses ($/Mcfe)2
|
|
|
$1.32 ‐ $1.37
|
|
|
$1.28 ‐ $1.33
|
Cash G&A ($mm)3
|
|
|
$10 ‐ $12
|
|
|
$45 ‐ $47
|
CAPEX ($mm)4,5
|
|
|
|
|
|
$330
|
|
|
|
|
|
|
|
1.
|
|
Excludes impact of hedges
|
2.
|
|
Excludes firm transportation, DD&A, exploration, and general
and administrative expenses
|
3.
|
|
Excludes costs associated with rig terminations
|
4.
|
|
Includes routine lease acquisition, land related expenses, and
net of projected midstream reimbursements; excludes land and
producing asset acquisitions
|
5.
|
|
Includes delay rental payments which are classified as
exploration for financial reporting purposes
|
|
|
|
Conference Call
A conference call to review the Company’s financial and operational
results is scheduled for Thursday, November 12, 2015 at 10:00am Eastern
Time. To participate in the call, please dial 877-709-8150 or
201-689-8354 for international callers and reference Eclipse Resources
Third Quarter 2015 Earnings Call. A replay of the call will be available
through January 12, 2016. To access the phone replay dial 877-660-6853
or 201-612-7415 for international callers. The conference ID is
13622491. A live webcast of the call may be accessed through the
Investor Center on the Company’s website at www.eclipseresources.com.
The webcast will be archived for replay on the Company’s website for six
months.
|
|
|
|
|
ECLIPSE RESOURCES CORPORATION
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands, except share and per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2015
|
|
2014
|
ASSETS
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
227,869
|
|
|
$
|
67,517
|
|
Accounts receivable
|
|
|
23,607
|
|
|
|
46,378
|
|
Assets held for sale
|
|
|
3,162
|
|
|
|
20,673
|
|
Other current assets
|
|
|
26,710
|
|
|
|
19,711
|
|
|
|
|
|
|
Total current assets
|
|
|
281,348
|
|
|
|
154,279
|
|
PROPERTY AND EQUIPMENT, AT COST
|
|
|
|
|
Oil and natural gas properties, successful efforts method
|
|
|
|
|
Unproved properties
|
|
|
934,844
|
|
|
|
1,044,469
|
|
Proved properties, net
|
|
|
879,850
|
|
|
|
670,255
|
|
Other property and equipment, net
|
|
|
8,381
|
|
|
|
8,103
|
|
|
|
|
|
|
Total property and equipment, net
|
|
|
1,823,075
|
|
|
|
1,722,827
|
|
OTHER NONCURRENT ASSETS
|
|
|
|
|
Debt issuance costs, net of $1.0 million and $2.5 million of
amortization, respectively
|
|
|
13,294
|
|
|
|
6,058
|
|
Other assets
|
|
|
1,462
|
|
|
|
1,782
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
2,119,179
|
|
|
$
|
1,884,946
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
Accounts payable
|
|
$
|
57,208
|
|
|
$
|
137,415
|
|
Accrued capital expenditures
|
|
|
13,830
|
|
|
|
51,360
|
|
Accrued liabilities
|
|
|
24,484
|
|
|
|
13,576
|
|
Accrued interest payable
|
|
|
11,542
|
|
|
|
25,187
|
|
Deferred income taxes
|
|
|
6,404
|
|
|
|
5,246
|
|
|
|
|
|
|
Total current liabilities
|
|
|
113,468
|
|
|
|
232,784
|
|
NONCURRENT LIABILITIES
|
|
|
|
|
Debt, net of unamortized discount of $11.2 million and $8.5 million,
respectively
|
|
|
538,802
|
|
|
|
414,016
|
|
Pension obligations
|
|
|
—
|
|
|
|
1,321
|
|
Asset retirement obligations
|
|
|
19,092
|
|
|
|
17,400
|
|
Other liabilities
|
|
|
1,610
|
|
|
|
—
|
|
Deferred income taxes
|
|
|
13,109
|
|
|
|
66,714
|
|
|
|
|
|
|
Total liabilities
|
|
|
686,081
|
|
|
|
732,235
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
Preferred stock, 50,000,000 shares authorized, no shares issued and
outstanding
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.01 par value, 1,000,000,000 shares authorized,
222,674,270 and 160,031,115 shares issued and outstanding,
respectively
|
|
|
2,227
|
|
|
|
1,600
|
|
Additional paid in capital
|
|
|
1,827,896
|
|
|
|
1,391,004
|
|
Accumulated deficit
|
|
|
(396,886
|
)
|
|
|
(239,345
|
)
|
Accumulated other comprehensive loss
|
|
|
(139
|
)
|
|
|
(548
|
)
|
|
|
|
|
|
Total stockholders’ equity
|
|
|
1,433,098
|
|
|
|
1,152,711
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
2,119,179
|
|
|
$
|
1,884,946
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECLIPSE RESOURCES CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas sales
|
|
|
$
|
61,928
|
|
|
|
$
|
35,702
|
|
|
|
$
|
173,526
|
|
|
|
$
|
87,445
|
|
Brokered natural gas and marketing
|
|
|
|
9,244
|
|
|
|
|
—
|
|
|
|
|
15,913
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
|
71,172
|
|
|
|
|
35,702
|
|
|
|
|
189,439
|
|
|
|
|
87,445
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
|
|
|
|
3,212
|
|
|
|
|
2,077
|
|
|
|
|
10,147
|
|
|
|
|
6,511
|
|
Transportation, gathering and compression
|
|
|
|
22,811
|
|
|
|
|
6,857
|
|
|
|
|
57,896
|
|
|
|
|
10,710
|
|
Production and ad valorem taxes
|
|
|
|
3,175
|
|
|
|
|
2,132
|
|
|
|
|
8,353
|
|
|
|
|
3,187
|
|
Brokered natural gas and marketing
|
|
|
|
9,262
|
|
|
|
|
—
|
|
|
|
|
20,057
|
|
|
|
|
—
|
|
Depreciation, depletion and amortization
|
|
|
|
67,172
|
|
|
|
|
29,983
|
|
|
|
|
170,245
|
|
|
|
|
51,967
|
|
Exploration
|
|
|
|
3,244
|
|
|
|
|
3,057
|
|
|
|
|
22,940
|
|
|
|
|
16,897
|
|
General and administrative
|
|
|
|
13,710
|
|
|
|
|
11,897
|
|
|
|
|
38,370
|
|
|
|
|
28,720
|
|
Rig termination
|
|
|
|
174
|
|
|
|
|
—
|
|
|
|
|
7,597
|
|
|
|
|
—
|
|
Impairment of proved oil and gas properties
|
|
|
|
—
|
|
|
|
|
4,605
|
|
|
|
|
—
|
|
|
|
|
4,605
|
|
Accretion of asset retirement obligations
|
|
|
|
412
|
|
|
|
|
198
|
|
|
|
|
1,197
|
|
|
|
|
575
|
|
Gain on sale of assets
|
|
|
|
290
|
|
|
|
|
—
|
|
|
|
|
(5,183
|
)
|
|
|
|
—
|
|
Gain on reduction of pension obligations
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2,208
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
123,462
|
|
|
|
|
60,806
|
|
|
|
|
331,619
|
|
|
|
|
120,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING LOSS
|
|
|
|
(52,290
|
)
|
|
|
|
(25,104
|
)
|
|
|
|
(142,180
|
)
|
|
|
|
(33,519
|
)
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on derivative instruments
|
|
|
|
23,679
|
|
|
|
|
5,572
|
|
|
|
|
31,527
|
|
|
|
|
1,098
|
|
Interest expense, net
|
|
|
|
(11,774
|
)
|
|
|
|
(10,066
|
)
|
|
|
|
(40,196
|
)
|
|
|
|
(35,320
|
)
|
Loss on extinguishment of debt
|
|
|
|
(59,392
|
)
|
|
|
|
—
|
|
|
|
|
(59,392
|
)
|
|
|
|
—
|
|
Other income (expense)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
400
|
|
|
|
|
1,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense, net
|
|
|
|
(47,487
|
)
|
|
|
|
(4,494
|
)
|
|
|
|
(67,661
|
)
|
|
|
|
(32,637
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME TAXES
|
|
|
|
(99,777
|
)
|
|
|
|
(29,598
|
)
|
|
|
|
(209,841
|
)
|
|
|
|
(66,156
|
)
|
INCOME TAX BENEFIT (EXPENSE)
|
|
|
|
18,309
|
|
|
|
|
10,544
|
|
|
|
|
52,300
|
|
|
|
|
(83,997
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
|
$
|
(81,468
|
)
|
|
|
$
|
(19,054
|
)
|
|
|
$
|
(157,541
|
)
|
|
|
$
|
(150,153
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
$
|
(0.37
|
)
|
|
|
$
|
(0.12
|
)
|
|
|
$
|
(0.73
|
)
|
|
|
$
|
(1.08
|
)
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
222,537
|
|
|
|
|
160,000
|
|
|
|
|
216,332
|
|
|
|
|
139,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed
consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue
Adjusted Revenue is a non-GAAP financial measure. The Company defines
Adjusted Revenue as follows: oil and natural gas sales and gain (loss)
on cash settled derivative instruments. The Company believes Adjusted
Revenue provides investors with helpful information with respect to the
performance of the Company's operations and management uses Adjusted
Revenue to evaluate its ongoing operations and for internal planning and
forecasting purposes. See the table below which reconciles Adjusted
Revenue and GAAP revenue.
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Oil and natural gas sales
|
|
$
|
71,172
|
|
|
$
|
35,702
|
|
$
|
189,439
|
|
|
$
|
87,445
|
|
Net cash receipts (payments) on derivative instruments
|
|
|
9,332
|
|
|
|
340
|
|
|
23,754
|
|
|
|
(2,032
|
)
|
Brokered natural gas and marketing
|
|
|
(9,244
|
)
|
|
-
|
|
|
(15,913
|
)
|
|
-
|
|
Adjusted revenue
|
|
$
|
71,260
|
|
|
$
|
36,042
|
|
$
|
197,280
|
|
|
$
|
85,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Loss
Adjusted Net Loss means, for any period, the sum of net loss for the
period plus the following expenses, charges or income, in each case, to
the extent deducted from or added to net loss in the period: unrealized
losses from financial derivatives, dry hole expenses, disposals of
assets, impairment and other one-time or nonrecurring charges, minus all
gains from unrealized financial derivatives, disposal of assets and
deferred income tax benefits added to net loss. Adjusted Net Loss is
used as a financial measure by Eclipse Resources management team and by
other users of its financial statements to analyze its financial
performance without regard to non-cash deferred taxes and non-cash
unrealized losses or gains from oil and gas derivatives. Adjusted Net
Loss is not a calculation based on GAAP financial measures and should be
considered as an alternative to net loss in measuring the Company’s
performance. See the table for a reconciliation of Adjusted Net Loss to
Loss.
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Loss before income taxes, as reported
|
|
$
|
(99,777
|
)
|
|
$
|
(29,598
|
)
|
|
$
|
(209,841
|
)
|
|
$
|
(66,156
|
)
|
(Gain) loss on derivative instruments
|
|
|
(23,679
|
)
|
|
|
(5,572
|
)
|
|
|
(31,527
|
)
|
|
|
(1,098
|
)
|
Net cash receipts (payments) on derivative instruments
|
|
|
8,457
|
|
|
|
584
|
|
|
|
23,754
|
|
|
|
(1,647
|
)
|
Net cash payments on option premiums
|
|
-
|
|
|
|
(244
|
)
|
|
-
|
|
|
|
(385
|
)
|
Rig termination expense
|
|
|
174
|
|
|
-
|
|
|
|
7,597
|
|
|
-
|
|
Gain on reduction of pension obligations
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
(2,208
|
)
|
Dry hole expense
|
|
8
|
|
|
|
796
|
|
|
|
37
|
|
|
|
925
|
|
Stock based compensation
|
|
|
1,237
|
|
|
|
31
|
|
|
|
3,394
|
|
|
|
87
|
|
Impairment of unproven properties
|
|
|
1,037
|
|
|
|
5,105
|
|
|
|
7,081
|
|
|
|
8,771
|
|
Other (income) expense
|
|
-
|
|
|
-
|
|
|
|
(400
|
)
|
|
|
(1,585
|
)
|
Loss on debt extinguishment
|
|
|
59,392
|
|
|
-
|
|
|
|
59,392
|
|
|
-
|
|
Gain on sale of assets
|
|
|
290
|
|
|
-
|
|
|
|
(5,183
|
)
|
|
-
|
|
Loss before income taxes, as adjusted
|
|
$
|
(52,861
|
)
|
|
$
|
(28,898
|
)
|
|
$
|
(145,696
|
)
|
|
$
|
(63,296
|
)
|
Income tax benefit (expense)
|
|
|
6,505
|
|
|
|
10,057
|
|
|
|
36,161
|
|
|
|
(85,544
|
)
|
Adjusted net loss
|
|
$
|
(46,356
|
)
|
|
$
|
(18,841
|
)
|
|
$
|
(109,535
|
)
|
|
$
|
(148,840
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
Adjusted EBITDAX is a supplemental non-GAAP measure that is used by the
Company to evaluate its financial results. The Company defines Adjusted
EBITDAX as Net Income (Loss) before interest expense or interest income;
income taxes; write-down of abandoned leases; impairments; depreciation,
depletion and amortization (“DD&A”); amortization of deferred financing
costs; gain (loss) on derivative instruments, net cash receipts
(payments on settled derivative instruments, and premiums (paid)
received on options that settled during the period); non-cash
compensation expense; gain or loss from sale of interest in gas
properties; exploration expenses; and gain on reduction of pension
liability. Adjusted EBITDAX is not a measure of net income as determined
by GAAP. See the table below for a reconciliation of Adjusted EBITDAX to
net loss.
|
|
|
|
|
|
|
Three Months ended
|
|
Nine months ended
|
|
|
September 30,
|
|
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net loss
|
|
$
|
(81,468
|
)
|
|
$
|
(19,054
|
)
|
|
$
|
(157,541
|
)
|
|
$
|
(150,153
|
)
|
Depreciation, depletion & amortization
|
|
|
67,172
|
|
|
|
29,983
|
|
|
|
170,245
|
|
|
|
51,967
|
|
Exploration expense
|
|
|
3,244
|
|
|
|
3,057
|
|
|
|
22,940
|
|
|
|
16,897
|
|
Rig contract termination
|
|
|
174
|
|
|
|
—
|
|
|
|
7,597
|
|
|
|
—
|
|
Stock-based compensation
|
|
|
1,237
|
|
|
|
31
|
|
|
|
3,394
|
|
|
|
87
|
|
Impairment of oil and gas properties
|
|
|
—
|
|
|
|
4,605
|
|
|
|
—
|
|
|
|
4,605
|
|
Accretion of asset retirement obligations
|
|
|
412
|
|
|
|
198
|
|
|
|
1,197
|
|
|
|
575
|
|
Gain on reduction of pension obligations
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,208
|
)
|
Gain on derivative instruments
|
|
|
(23,679
|
)
|
|
|
(5,572
|
)
|
|
|
(31,527
|
)
|
|
|
(1,098
|
)
|
Net cash received (paid) on derivative instruments
|
|
|
9,332
|
|
|
|
584
|
|
|
|
23,754
|
|
|
|
(1,647
|
)
|
Net cash paid for option premium
|
|
|
—
|
|
|
|
(244
|
)
|
|
|
—
|
|
|
|
(385
|
)
|
Interest expense
|
|
|
11,774
|
|
|
|
10,066
|
|
|
|
40,196
|
|
|
|
35,320
|
|
(Gain) loss on sale of assets
|
|
|
290
|
|
|
|
—
|
|
|
|
(5,183
|
)
|
|
|
—
|
|
Loss on debt extinguishment
|
|
|
59,392
|
|
|
|
—
|
|
|
|
59,392
|
|
|
|
—
|
|
Other income
|
|
|
—
|
|
|
|
—
|
|
|
|
(400
|
)
|
|
|
(1,585
|
)
|
Income tax (benefit) expense
|
|
|
(18,309
|
)
|
|
|
(10,544
|
)
|
|
|
(52,300
|
)
|
|
|
83,997
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
|
|
$
|
29,571
|
|
|
$
|
13,110
|
|
|
$
|
81,764
|
|
|
$
|
36,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About Eclipse Resources
Eclipse Resources is an independent exploration and production Company
engaged in the acquisition and development of oil and natural gas
properties in the Appalachian Basin, including the Utica and Marcellus
Shales. For more information, please visit the Company’s website at www.eclipseresources.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
“Securities Act”) and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). All statements, other than
statements of historical fact included in this press release, regarding
Eclipse Resources’ strategy, future operations, financial position,
estimated revenues and income/losses, projected costs and capital
expenditures, prospects, plans and objectives of management are
forward-looking statements. When used in this press release, the words
“plan,” “endeavor,” “will,” “would,” “could,” “believe,” “anticipate,”
“intend,” “estimate,” “expect,” “project” and similar expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain such identifying words. These
forward-looking statements are based on Eclipse Resources’ current
expectations and assumptions about future events and are based on
currently available information as to the outcome and timing of future
events. When considering forward-looking statements, you should keep in
mind the risk factors and other cautionary statements described under
the heading “Risk Factors” in Eclipse Resources’ Annual Report on Form
10-K filed with the Securities Exchange Commission on March 9, 2015 (the
“2014 Annual Report”), and in “Item 1A. Risk Factors” of Eclipse
Resources’ Quarterly Reports on Form 10-Q.
Forward-looking statements may include statements about Eclipse
Resources’ business strategy; reserves; general economic conditions;
financial strategy, liquidity and capital required for developing its
properties and timing related thereto; realized natural gas, NGLs and
oil prices; timing and amount of future production of natural gas, NGLs
and oil; its hedging strategy and results; future drilling plans;
competition and government regulations, including those related to
hydraulic fracturing; the anticipated benefits under its commercial
agreements; pending legal matters relating to its leases; marketing of
natural gas, NGLs and oil; leasehold and business acquisitions; the
costs, terms and availability of gathering, processing, fractionation
and other midstream services; general economic conditions; credit
markets; uncertainty regarding its future operating results, including
initial production rates and liquid yields in its type curve areas; and
plans, objectives, expectations and intentions contained in this press
release that are not historical.
Eclipse Resources cautions you that these forward-looking statements
are subject to all of the risks and uncertainties, most of which are
difficult to predict and many of which are beyond its control, incident
to the exploration for and development, production, gathering and sale
of natural gas, NGLs and oil. These risks include, but are not limited
to; legal and environmental risks, drilling and other operating risks,
regulatory changes, commodity price volatility and the recent
significant decline of the price of natural gas, NGLs, and oil,
inflation, lack of availability of drilling, production and processing
equipment and services, counterparty credit risk, the uncertainty
inherent in estimating natural gas, NGLs and oil reserves and in
projecting future rates of production, cash flow and access to capital,
the timing of development expenditures, and the other risks described
under the heading “Risk Factors” in the 2014 Annual Report and in “Item
1A. Risk Factors” of Eclipse Resources’ Quarterly Reports on Form 10-Q.
Reserve engineering is a process of estimating underground accumulations
of natural gas, NGLs and oil that cannot be measured in an exact way.
The accuracy of any reserve estimate depends on the quality of available
data, the interpretation of such data and price and cost assumptions
made by reserve engineers. In addition, the results of drilling, testing
and production activities may justify revisions of estimates that were
made previously. If significant, such revisions could change the
schedule of any further production and development drilling.
Accordingly, reserve estimates may differ significantly from the
quantities of natural gas, NGLs and oil that are ultimately recovered.
All forward-looking statements, expressed or implied, included in
this press release are expressly qualified in their entirety by this
cautionary statement. This cautionary statement should also be
considered in connection with any subsequent written or oral
forward-looking statements that Eclipse Resources or persons acting on
the Company’s behalf may issue.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151111006365/en/ Copyright Business Wire 2015
Source: Business Wire
(November 11, 2015 - 4:05 PM EST)
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