Eclipse Resources Corporation Announces Second Quarter 2018 Operational and Financial Results STATE COLLEGE, Pa.
Eclipse Resources Corporation (NYSE:ECR) (the “Company” or “Eclipse
Resources”) today announced its second quarter 2018 financial and
operational results, along with reaffirming guidance for full year 2018.
In conjunction with this release, the Company has posted an updated
corporate presentation in the Investor Center section of its website at www.eclipseresources.com.
Second Quarter 2018 Highlights:
-
Average net daily production was 305.5 MMcfe per day, consisting of
72% natural gas and 28% liquids.
-
Realized an average natural gas price, before the impact of cash
settled derivatives and firm transportation expenses, of $2.72 per
Mcf, a $0.08 per Mcf discount to the average monthly NYMEX settled
natural gas price during the quarter.
-
Realized an average oil price, before the impact of cash settled
derivatives, of $61.64 per barrel, a $6.43 per barrel discount to the
average daily NYMEX WTI oil price during the quarter.
-
Realized an average natural gas liquids (“NGL”) price, before the
impact of cash settled derivatives, of $22.99 per barrel, or
approximately 34% of the average daily NYMEX WTI oil price during the
quarter.
-
Per unit cash production costs (including lease operating,
transportation, gathering and compression, production and ad valorem
taxes) were $1.47 per Mcfe, including $0.41 per Mcfe in
firm transportation expenses.
-
Net loss for the second quarter of 2018 was ($19.0) million and
Adjusted EBITDAX1 for the second quarter of 2018 was $51.1
million.
1 Non-GAAP measure. See reconciliation for details
Benjamin W. Hulburt, Chairman, President and CEO, commented on the
Company’s second quarter 2018 results, “This was another solid earnings
report with our continued focus on execution, innovation and efficiency,
which resulted in the Company delivering what we believe to be another
tremendous quarter with cash flows above expectations, capital
expenditures below expectations, production above the top end of our
guidance range, operating expenses below the low end of our guidance and
continued strong well performance in both the dry gas and condensate
areas of our acreage.
We have continued our relentless pursuit for industry leading
innovation, and have set a new internal record for production on our
recent Rolland C 5H “super-lateral”, which we drilled to a total
measured depth of 26,027 feet with a 15,285 foot completable lateral in
our Utica Dry Gas area. This well was initially turned to sales late in
the second quarter of 2018 and flowed at a target rate of approximately
40 Mmcf per day before recently being shut in for offset operator
activity. In addition, we continue to be excited with the potential for
our Flat Castle acreage in north central Pennsylvania and are currently
in the final stages of completion operations on our first operated well,
the Painter 2H, which we intend to place into sales during the third
quarter of 2018.
For the second quarter of 2018, the Company was able to achieve revenue
of $103.6 million, a 20% increase over the second quarter of 2017, while
also posting a 29% increase in adjusted EBITDAX1 over the
second quarter of 2017, which came in at $51.1 million. We continued to
capitalize on our industry leading well costs and operational
capabilities, while our per unit cash production costs of $1.47 were
better than our second quarter 2018 guidance. From a capital spending
perspective, the Company is continuing to manage its plan consistent
with the revised $250 million guidance that was previously provided and
we believe that our proven operational performance, continued gain in
efficiency and financial flexibility leave us well positioned to deliver
upon the full year 2018 production guidance that we have issued.
Our strategic and financial review process continues. As we have
previously discussed, there is no timetable for the completion of the
strategic review process nor any assurance that the review process will
result in a transaction or other strategic alternative. The Company will
provide further information when and if disclosure is appropriate or
required.”
1 Non-GAAP measure. See reconciliation for details
Operational Discussion
The Company’s production for the three and six months ended June 30,
2018 and 2017 is set forth in the following table:
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Production:
|
|
|
|
|
|
|
|
|
Natural gas (MMcf)
|
|
19,985.4
|
|
20,127.8
|
|
40,328.7
|
|
39,509.4
|
NGLs (Mbbls)
|
|
813.6
|
|
662.1
|
|
1,586.2
|
|
1,327.1
|
Oil (Mbbls)
|
|
489.1
|
|
347.8
|
|
1,054.6
|
|
801.9
|
Total (MMcfe)
|
|
27,801.6
|
|
26,187.2
|
|
56,173.5
|
|
52,283.4
|
|
|
|
|
|
|
|
|
|
Average daily production volume:
|
|
|
|
|
|
|
|
|
Natural gas (Mcf/d)
|
|
219,620
|
|
221,185
|
|
222,810
|
|
218,284
|
NGLs (Bbls/d)
|
|
8,941
|
|
7,276
|
|
8,764
|
|
7,332
|
Oil (Bbls/d)
|
|
5,375
|
|
3,822
|
|
5,827
|
|
4,430
|
Total (MMcfe/d)
|
|
305.5
|
|
287.8
|
|
310.4
|
|
288.9
|
|
|
|
|
|
|
|
|
|
Market Conditions
Prices for various quantities of natural gas, NGLs and oil that we
produce significantly impact our revenues and cash flows. Prices for
commodities, such as hydrocarbons, are inherently volatile. The
following table lists average daily, high, low and average monthly
settled NYMEX Henry Hub prices for natural gas and average daily, high
and low NYMEX WTI prices for oil for the three and six months ended
June 30, 2018 and 2017:
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
NYMEX Henry Hub High ($/MMBtu)
|
|
$
|
3.08
|
|
$
|
3.27
|
|
$
|
6.24
|
|
$
|
3.71
|
NYMEX Henry Hub Low ($/MMBtu)
|
|
|
2.74
|
|
|
2.85
|
|
|
2.49
|
|
|
2.44
|
Average Daily NYMEX Henry Hub ($/MMBtu)
|
|
|
2.85
|
|
|
3.08
|
|
|
2.96
|
|
|
3.05
|
Average Monthly Settled NYMEX Henry Hub ($/MMBtu)
|
|
|
2.80
|
|
|
3.18
|
|
|
2.90
|
|
|
3.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NYMEX WTI High ($/Bbl)
|
|
$
|
77.41
|
|
$
|
53.38
|
|
$
|
77.41
|
|
$
|
54.48
|
NYMEX WTI Low ($/Bbl)
|
|
|
62.03
|
|
|
42.48
|
|
|
59.20
|
|
|
42.48
|
Average Daily NYMEX WTI ($/Bbl)
|
|
|
68.07
|
|
|
48.10
|
|
|
65.55
|
|
|
49.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Discussion
Revenue for the three months ended June 30, 2018 totaled $103.6 million,
compared to $86.2 million for the three months ended June 30, 2017.
Adjusted Revenue2, which includes the impact of cash settled
derivatives and excludes brokered natural gas and marketing revenue,
totaled $100.8 million for the three months ended June 30, 2018 compared
to $83.6 million for the three months ended June 30, 2017. Net Loss for
the three months ended June 30, 2018 was ($19.0) million, or ($0.06) per
share, compared to Net Income of $11.5 million, or $0.04 per share, for
the three months ended June 30, 2017. Adjusted Net Income2
(Loss) for the three months ended June 30, 2018 was $2.5 million, or
$0.01 per share, compared to $(2.8) million, or $(0.01) per share, for
the three months ended June 30, 2017. Adjusted EBITDAX2
was $51.1 million for the three months ended June 30, 2018 compared to
$39.6 million for the three months ended June 30, 2017.
2 Adjusted Revenue, Adjusted Net Income (Loss) and
Adjusted EBITDAX are non-GAAP financial measures. Tables reconciling
Adjusted Revenue, Adjusted Net Income (Loss) and Adjusted EBITDAX to the
most directly comparable GAAP measures can be found at the end of the
financial statements included in this press release.
Average realized price calculations for the three and six months ended
June 30, 2018 and 2017 are set forth in the table below:
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Average realized price (excluding cash settled derivatives and
firm transportation)
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf)
|
|
$
|
2.72
|
|
$
|
2.98
|
|
$
|
2.80
|
|
$
|
3.07
|
NGLs ($/Bbl)
|
|
|
22.99
|
|
|
16.84
|
|
|
24.24
|
|
|
21.26
|
Oil ($/Bbl)
|
|
|
61.64
|
|
|
43.57
|
|
|
58.89
|
|
|
45.02
|
Total average prices ($/Mcfe)
|
|
|
3.71
|
|
|
3.29
|
|
|
3.80
|
|
|
3.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled derivatives,
excluding firm transportation)
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf)
|
|
$
|
2.84
|
|
$
|
2.86
|
|
$
|
2.94
|
|
$
|
2.94
|
NGLs ($/Bbl)
|
|
|
22.99
|
|
|
16.38
|
|
|
23.64
|
|
|
20.23
|
Oil ($/Bbl)
|
|
|
51.94
|
|
|
43.57
|
|
|
52.12
|
|
|
45.11
|
Total average prices ($/Mcfe)
|
|
|
3.62
|
|
|
3.19
|
|
|
3.76
|
|
|
3.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including firm transportation,
excluding cash settled derivatives)
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf)
|
|
$
|
2.16
|
|
$
|
2.52
|
|
$
|
2.33
|
|
$
|
2.56
|
NGLs ($/Bbl)
|
|
|
22.99
|
|
|
16.84
|
|
|
24.24
|
|
|
21.26
|
Oil ($/Bbl)
|
|
|
61.64
|
|
|
43.57
|
|
|
58.89
|
|
|
45.02
|
Total average prices ($/Mcfe)
|
|
|
3.31
|
|
|
2.94
|
|
|
3.46
|
|
|
3.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled derivatives and
firm transportation)
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf)
|
|
$
|
2.27
|
|
$
|
2.41
|
|
$
|
2.47
|
|
$
|
2.43
|
NGLs ($/Bbl)
|
|
|
22.99
|
|
|
16.38
|
|
|
23.64
|
|
|
20.23
|
Oil ($/Bbl)
|
|
|
51.94
|
|
|
43.57
|
|
|
52.12
|
|
|
45.11
|
Total average prices ($/Mcfe)
|
|
|
3.22
|
|
|
2.84
|
|
|
3.42
|
|
|
3.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per unit cash production costs, which include $0.41 per Mcfe of firm
transportation expense, were $1.47 per Mcfe for the second quarter of
2018 and increased by 8% compared to the second quarter of 2017. The
Company’s cash production costs (which include lease operating,
transportation, gathering and compression, production and ad valorem
taxes) are shown in the table below.
General and administrative expense was $10.7 million for each of the
three months ended June 30, 2018 and 2017 and is shown in the table
below. Cash general and administrative expense3, which
exclude stock-based compensation expense, were $8.7 million and $8.4
million for the three months ended June 30, 2018 and 2017 respectively.
General and administrative expense per Mcfe was $0.38 in the three
months ended June 30, 2018 compared to $0.41 in the three months ended
June 30, 2017. Cash general and administrative expense3
per Mcfe was $0.31 in the three months ended June 30, 2018 compared to
$0.32 in the three months ended June 30, 2017.
3 Cash general and administrative expense is a
non-GAAP financial measure. A table reconciling cash general and
administrative expense to the most directly comparable GAAP measure can
be found at the end of the financial statements included in this press
release.
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Operating expenses (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
|
|
$
|
7,324
|
|
$
|
4,568
|
|
$
|
16,714
|
|
$
|
6,911
|
Transportation, gathering and compression
|
|
|
31,371
|
|
|
28,969
|
|
|
59,060
|
|
|
61,846
|
Production and ad valorem taxes
|
|
|
2,178
|
|
|
2,033
|
|
|
4,623
|
|
|
3,964
|
Depreciation, depletion and amortization
|
|
|
32,760
|
|
|
25,152
|
|
|
63,916
|
|
|
51,341
|
General and administrative
|
|
|
10,697
|
|
|
10,730
|
|
|
20,454
|
|
|
20,862
|
Operating expenses per Mcfe:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
|
|
$
|
0.26
|
|
$
|
0.17
|
|
$
|
0.30
|
|
$
|
0.13
|
Transportation, gathering and compression
|
|
|
1.13
|
|
|
1.11
|
|
|
1.06
|
|
|
1.19
|
Production and ad valorem taxes
|
|
|
0.08
|
|
|
0.08
|
|
|
0.08
|
|
|
0.08
|
Depreciation, depletion and amortization
|
|
|
1.18
|
|
|
0.96
|
|
|
1.14
|
|
|
0.98
|
General and administrative
|
|
|
0.38
|
|
|
0.41
|
|
|
0.36
|
|
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
Second quarter 2018 capital expenditures were $69.3 million, including
$65.6 million for drilling and completions, $5.2 million for midstream
expenditures, $(1.9) million for land-related expenditures (which
include proceeds associated with the sale of acreage), and $0.4 million
for corporate-related expenditures.
During the second quarter of 2018, the Company commenced drilling 6
gross (2.2 net) operated Utica Shale wells, commenced completions of 9
gross (4.2 net) operated wells and turned to sales 9 gross (6.2 net)
operated wells.
Financial Position and Liquidity
As of June 30, 2018, the Company’s liquidity was $143.4 million,
consisting of $12.0 million in cash and cash equivalents and $131.4
million in available borrowing capacity under the Company’s revolving
credit facility (after giving effect to outstanding letters of credit
issued by the Company of $33.6 million and $60 million in outstanding
borrowings).
Matthew R. DeNezza, Executive Vice President and Chief Financial
Officer, commented, “We are again pleased with the level of EBITDAX
generated in the second quarter and continue to anticipate strong cash
flow growth in the full year 2018. From a pricing perspective, the gas
marketing team was able to capture a strong differential through the
optimization of our natural gas, while continuing to assume an increase
during the second half of 2018 in our operating expenses associated with
the Company’s Rover pipeline capacity being fully utilized. As a means
of providing additional certainty of cash flows, the majority of our
estimated 2018 natural gas production is hedged with an average floor
price of $2.93 per MMbtu.”
Commodity Derivatives
The Company engages in a number of different commodity trading program
strategies as a risk management tool to attempt to mitigate the
potential negative impact on cash flows caused by price fluctuations in
natural gas, NGL and oil prices. Below is a table that illustrates the
Company’s hedging activities as of June 30, 2018:
Natural Gas Derivatives
|
|
Volume
|
|
|
|
Weighted Average
|
Description
|
|
(MMBtu/d)
|
|
Production Period
|
|
Price ($/MMBtu)
|
Natural Gas Swaps:
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
July 2018 – March 2019
|
|
$
|
2.90
|
|
|
|
20,000
|
|
July 2018 – December 2018
|
|
$
|
2.80
|
|
|
|
20,000
|
|
July 2018 – September 2018
|
|
$
|
2.81
|
|
|
|
40,000
|
|
October 2018 – December 2019
|
|
$
|
2.80
|
|
|
|
50,000
|
|
January 2019 – December 2019
|
|
$
|
2.87
|
|
Natural Gas Three-way Collars:
|
|
|
|
|
|
|
|
|
Floor purchase price (put)
|
|
30,000
|
|
July 2018 – March 2019
|
|
$
|
3.00
|
|
Ceiling sold price (call)
|
|
30,000
|
|
July 2018 – March 2019
|
|
$
|
3.40
|
|
Floor sold price (put)
|
|
30,000
|
|
July 2018 – March 2019
|
|
$
|
2.50
|
|
Floor purchase price (put)
|
|
40,000
|
|
July 2018 – December 2018
|
|
$
|
3.11
|
|
Floor purchase price (put)
|
|
60,000
|
|
July 2018 – December 2018
|
|
$
|
2.80
|
|
Ceiling sold price (call)
|
|
100,000
|
|
July 2018 – December 2018
|
|
$
|
3.36
|
|
Floor sold price (put)
|
|
100,000
|
|
July 2018 – December 2018
|
|
$
|
2.50
|
|
Floor purchase price (put)
|
|
20,000
|
|
October 2018 – December 2019
|
|
$
|
2.75
|
|
Ceiling sold price (call)
|
|
20,000
|
|
October 2018 – December 2019
|
|
$
|
3.10
|
|
Floor sold price (put)
|
|
20,000
|
|
October 2018 – December 2019
|
|
$
|
2.30
|
|
Floor purchase price (put)
|
|
57,500
|
|
January 2019 – December 2019
|
|
$
|
2.72
|
|
Ceiling sold price (call)
|
|
57,500
|
|
January 2019 – December 2019
|
|
$
|
3.02
|
|
Floor sold price (put)
|
|
57,500
|
|
January 2019 – December 2019
|
|
$
|
2.30
|
|
Natural Gas Call/Put Options:
|
|
|
|
|
|
|
|
|
Call sold
|
|
40,000
|
|
July 2018 – December 2018
|
|
$
|
3.75
|
|
Call sold
|
|
30,000
|
|
January 2019 – March 2019
|
|
$
|
3.50
|
|
Call sold
|
|
30,000
|
|
April 2019 – December 2019
|
|
$
|
3.00
|
|
Call sold
|
|
10,000
|
|
January 2019 – December 2019
|
|
$
|
4.75
|
|
Basis Swaps:
|
|
|
|
|
|
|
|
|
Appalachia - Dominion
|
|
12,500
|
|
April 2019 – October 2019
|
|
$
|
(0.52
|
)
|
Appalachia - Dominion
|
|
12,500
|
|
April 2020 – October 2020
|
|
$
|
(0.52
|
)
|
Appalachia - Dominion
|
|
20,000
|
|
January 2020 – December 2020
|
|
$
|
(0.59
|
)
|
|
|
|
|
|
|
|
|
|
Oil Derivatives
|
|
Volume
|
|
|
|
Weighted Average
|
Description
|
|
(Bbls/d)
|
|
Production Period
|
|
Price ($/Bbl)
|
Oil Swaps:
|
|
|
|
|
|
|
|
|
|
1,000
|
|
July 2018 – March 2019
|
|
$
|
61.00
|
Oil Three-way Collars:
|
|
|
|
|
|
|
|
Floor purchase price (put)
|
|
4,000
|
|
July 2018 – December 2018
|
|
$
|
45.00
|
Ceiling sold price (call)
|
|
4,000
|
|
July 2018 – December 2018
|
|
$
|
53.47
|
Floor sold price (put)
|
|
4,000
|
|
July 2018 – December 2018
|
|
$
|
35.00
|
Floor purchase price (put)
|
|
2,000
|
|
January 2019 – December 2019
|
|
$
|
50.00
|
Ceiling sold price (call)
|
|
2,000
|
|
January 2019 – December 2019
|
|
$
|
60.56
|
Floor sold price (put)
|
|
2,000
|
|
January 2019 – December 2019
|
|
$
|
40.00
|
|
|
|
|
|
|
|
|
Guidance
The Company has also reaffirmed full year 2018 guidance as set forth in
the table below:
|
|
|
|
|
FY 2018
|
Production MMcfe/d
|
|
325 - 335
|
% Gas
|
|
72% - 75%
|
% NGL
|
|
13% - 17%
|
% Oil
|
|
10% - 13%
|
Gas Price Differential ($/Mcf)1,2
|
|
$(0.25) - $(0.35)
|
Oil Differential ($/Bbl)1
|
|
$(6.25) - $(7.25)
|
NGL Prices (% of WTI)1
|
|
30% - 35%
|
Cash Production Costs ($/Mcfe)3
|
|
$1.55 - $1.60
|
Cash G&A ($mm)4
|
|
$35 - $37
|
CAPEX ($mm)
|
|
~$250
|
|
|
|
|
1
|
|
Excludes impact of hedges
|
|
2
|
|
Excludes the cost of firm transportation
|
|
3
|
|
Includes lease operating, transportation, gathering and
compression, production and ad valorem taxes
|
|
4
|
|
Non-GAAP measure which excludes non-cash compensation, see
reconciliation to the most comparable GAAP measure at the end of
the financial statements included in this press release
|
|
|
|
|
Conference Call
A conference call to review the Company’s financial and operational
results is scheduled for Friday, August 3, 2018 at 10:00 a.m. Eastern
Time. To participate in the call, please dial 877-709-8150 or
201-689-8354 for international callers and reference Eclipse Resources
Second Quarter Earnings Call. A replay of the call will be available
through October 3, 2018. To access the phone replay dial 877-660-6853 or
201-612-7415 for international callers. The conference ID is 13681846. 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)
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
12,049
|
|
$
|
17,224
|
|
Accounts receivable
|
|
|
112,166
|
|
|
77,609
|
|
Assets held for sale
|
|
|
—
|
|
|
206
|
|
Other current assets
|
|
|
7,263
|
|
|
12,023
|
|
Total current assets
|
|
|
131,478
|
|
|
107,062
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT AT COST
|
|
|
|
|
|
|
|
Oil and natural gas properties, successful efforts method:
|
|
|
|
|
|
|
|
Unproved properties
|
|
|
547,963
|
|
|
459,549
|
|
Proved oil and gas properties, net
|
|
|
716,292
|
|
|
647,881
|
|
Other property and equipment, net
|
|
|
6,949
|
|
|
6,942
|
|
Total property and equipment, net
|
|
|
1,271,204
|
|
|
1,114,372
|
|
|
|
|
|
|
|
|
|
OTHER NONCURRENT ASSETS
|
|
|
|
|
|
|
|
Other assets
|
|
|
3,117
|
|
|
2,093
|
|
TOTAL ASSETS
|
|
$
|
1,405,799
|
|
$
|
1,223,527
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
111,230
|
|
$
|
76,174
|
|
Accrued capital expenditures
|
|
|
13,689
|
|
|
10,658
|
|
Accrued liabilities
|
|
|
49,326
|
|
|
41,662
|
|
Accrued interest payable
|
|
|
21,891
|
|
|
21,100
|
|
Total current liabilities
|
|
|
196,136
|
|
|
149,594
|
|
|
|
|
|
|
|
|
|
NONCURRENT LIABILITIES
|
|
|
|
|
|
|
|
Debt, net of unamortized discount and debt issuance costs
|
|
|
496,397
|
|
|
495,021
|
|
Credit facility
|
|
|
60,000
|
|
|
—
|
|
Asset retirement obligations
|
|
|
6,554
|
|
|
6,029
|
|
Other liabilities
|
|
|
3,348
|
|
|
529
|
|
Total liabilities
|
|
|
762,435
|
|
|
651,173
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Preferred stock, 50,000,000 authorized, no shares issued and
outstanding
|
|
|
—
|
|
|
—
|
|
Common stock, $0.01 par value, 1,000,000,000 authorized,
302,325,028 and 262,740,355 shares issued and outstanding,
respectively
|
|
|
3,040
|
|
|
2,637
|
|
Additional paid in capital
|
|
|
2,061,365
|
|
|
1,967,958
|
|
Treasury stock, shares at cost; 1,661,915 and 992,315 shares,
respectively
|
|
|
(3,236
|
)
|
|
(2,096
|
)
|
Accumulated deficit
|
|
|
(1,417,805
|
)
|
|
(1,396,145
|
)
|
Total stockholders' equity
|
|
|
643,364
|
|
|
572,354
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
1,405,799
|
|
$
|
1,223,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECLIPSE RESOURCES CORPORATION
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas, oil and natural gas liquids sales
|
|
$
|
103,257
|
|
|
$
|
86,194
|
|
|
$
|
213,441
|
|
|
$
|
185,625
|
|
Brokered natural gas and marketing revenue
|
|
|
365
|
|
|
|
(3
|
)
|
|
|
373
|
|
|
|
2,428
|
|
Total revenues
|
|
|
103,622
|
|
|
|
86,191
|
|
|
|
213,814
|
|
|
|
188,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
|
|
|
7,324
|
|
|
|
4,568
|
|
|
|
16,714
|
|
|
|
6,911
|
|
Transportation, gathering and compression
|
|
|
31,371
|
|
|
|
28,969
|
|
|
|
59,060
|
|
|
|
61,846
|
|
Production and ad valorem taxes
|
|
|
2,178
|
|
|
|
2,033
|
|
|
|
4,623
|
|
|
|
3,964
|
|
Brokered natural gas and marketing expense
|
|
|
430
|
|
|
|
6
|
|
|
|
477
|
|
|
|
2,466
|
|
Depreciation, depletion and amortization
|
|
|
32,760
|
|
|
|
25,152
|
|
|
|
63,916
|
|
|
|
51,341
|
|
Exploration
|
|
|
9,620
|
|
|
|
8,997
|
|
|
|
24,898
|
|
|
|
20,577
|
|
General and administrative
|
|
|
10,697
|
|
|
|
10,730
|
|
|
|
20,454
|
|
|
|
20,862
|
|
Accretion of asset retirement obligations
|
|
|
162
|
|
|
|
128
|
|
|
|
317
|
|
|
|
252
|
|
(Gain) loss on sale of assets
|
|
|
(1,553
|
)
|
|
|
6
|
|
|
|
(1,820
|
)
|
|
|
1
|
|
Total operating expenses
|
|
|
92,989
|
|
|
|
80,589
|
|
|
|
188,639
|
|
|
|
168,220
|
|
OPERATING INCOME (LOSS)
|
|
|
10,633
|
|
|
|
5,602
|
|
|
|
25,175
|
|
|
|
19,833
|
|
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on derivative instruments
|
|
|
(16,577
|
)
|
|
|
18,177
|
|
|
|
(20,792
|
)
|
|
|
43,274
|
|
Interest expense, net
|
|
|
(13,092
|
)
|
|
|
(12,285
|
)
|
|
|
(26,043
|
)
|
|
|
(24,747
|
)
|
Other income (expense)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(19
|
)
|
Total other income (expense), net
|
|
|
(29,669
|
)
|
|
|
5,892
|
|
|
|
(46,835
|
)
|
|
|
18,508
|
|
INCOME (LOSS) BEFORE INCOME TAXES
|
|
|
(19,036
|
)
|
|
|
11,494
|
|
|
|
(21,660
|
)
|
|
|
38,341
|
|
INCOME TAX BENEFIT (EXPENSE)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
NET INCOME (LOSS)
|
|
$
|
(19,036
|
)
|
|
$
|
11,494
|
|
|
$
|
(21,660
|
)
|
|
$
|
38,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) PER COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.06
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.15
|
|
Diluted
|
|
$
|
(0.06
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
301,936
|
|
|
|
262,423
|
|
|
|
297,717
|
|
|
|
261,768
|
|
Diluted
|
|
|
301,936
|
|
|
|
264,420
|
|
|
|
297,717
|
|
|
|
264,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Revenue
Adjusted revenue is a non-GAAP financial measure. The Company defines
adjusted revenue as follows: total revenues plus net cash receipts or
payments on settled derivative instruments less brokered natural gas and
marketing revenue. 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 total revenues.
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
$ thousands
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Total revenues
|
|
$
|
103,622
|
|
|
$
|
86,191
|
|
|
$
|
213,814
|
|
|
$
|
188,053
|
|
Net cash receipts (payments) on derivative instruments
|
|
|
(2,488
|
)
|
|
|
(2,644
|
)
|
|
|
(2,347
|
)
|
|
|
(6,633
|
)
|
Brokered natural gas and marketing revenue
|
|
|
(365
|
)
|
|
|
3
|
|
|
|
(373
|
)
|
|
|
(2,428
|
)
|
Adjusted revenue
|
|
$
|
100,769
|
|
|
$
|
83,550
|
|
|
$
|
211,094
|
|
|
$
|
178,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income (Loss)
Adjusted net income (loss) represents income (loss) before income taxes
adjusted for certain non-cash items as set forth in the table below. We
believe adjusted net income (loss) is used by many investors and
published research in making investment decisions and evaluating
operational trends of the Company and its performance relative to other
oil and gas producing companies. Adjusted net income (loss) is not a
measure of net income (loss) as determined by GAAP. See the table below
for a reconciliation of adjusted net income (loss) and net income (loss).
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
$ thousands
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Income (loss) before income taxes, as reported
|
|
$
|
(19,036
|
)
|
|
$
|
11,494
|
|
|
$
|
(21,660
|
)
|
|
$
|
38,341
|
|
(Gain) loss on derivative instruments
|
|
|
16,577
|
|
|
|
(18,177
|
)
|
|
|
20,792
|
|
|
|
(43,274
|
)
|
Net cash receipts (payments) on derivative instruments
|
|
|
(2,488
|
)
|
|
|
(2,644
|
)
|
|
|
(2,347
|
)
|
|
|
(6,633
|
)
|
Dry hole and other
|
|
|
2
|
|
|
|
79
|
|
|
|
96
|
|
|
|
942
|
|
Stock-based compensation
|
|
|
1,979
|
|
|
|
2,348
|
|
|
|
3,960
|
|
|
|
4,429
|
|
Impairment of unproved properties
|
|
|
6,971
|
|
|
|
4,125
|
|
|
|
13,667
|
|
|
|
8,250
|
|
Other (income) expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
(Gain) loss on sale of assets
|
|
|
(1,553
|
)
|
|
|
6
|
|
|
|
(1,820
|
)
|
|
|
1
|
|
Loss before income taxes, as adjusted
|
|
|
2,452
|
|
|
|
(2,769
|
)
|
|
|
12,688
|
|
|
|
2,075
|
|
Adjusted net income (loss)
|
|
$
|
2,452
|
|
|
$
|
(2,769
|
)
|
|
$
|
12,688
|
|
|
$
|
2,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.06
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.15
|
|
Diluted
|
|
$
|
(0.06
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.01
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.04
|
|
|
$
|
0.01
|
|
Diluted
|
|
$
|
0.01
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.04
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
301,936
|
|
|
|
262,423
|
|
|
|
297,717
|
|
|
|
261,768
|
|
Diluted
|
|
|
301,936
|
|
|
|
264,420
|
|
|
|
297,717
|
|
|
|
264,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 or loss before interest expense; income taxes;
impairments; depreciation, depletion and amortization (“DD&A”); 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 other
unusual or infrequent items set forth in the table below. Adjusted
EBITDAX is not a measure of net income or loss as determined by GAAP.
See the table below for a reconciliation of Adjusted EBITDAX to net
income or net loss.
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
$ thousands
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
Net income (loss)
|
|
$
|
(19,036
|
)
|
|
$
|
11,494
|
|
|
$
|
(21,660
|
)
|
|
$
|
38,341
|
|
Depreciation, depletion and amortization
|
|
|
32,760
|
|
|
|
25,152
|
|
|
|
63,916
|
|
|
|
51,341
|
|
Exploration expense
|
|
|
9,620
|
|
|
|
8,997
|
|
|
|
24,898
|
|
|
|
20,577
|
|
Stock-based compensation
|
|
|
1,979
|
|
|
|
2,348
|
|
|
|
3,960
|
|
|
|
4,429
|
|
Accretion of asset retirement obligations
|
|
|
162
|
|
|
|
128
|
|
|
|
317
|
|
|
|
252
|
|
(Gain) loss on sale of assets
|
|
|
(1,553
|
)
|
|
|
6
|
|
|
|
(1,820
|
)
|
|
|
1
|
|
(Gain) loss on derivative instruments
|
|
|
16,577
|
|
|
|
(18,177
|
)
|
|
|
20,792
|
|
|
|
(43,274
|
)
|
Net cash receipts (payments) on settled derivatives
|
|
|
(2,488
|
)
|
|
|
(2,644
|
)
|
|
|
(2,347
|
)
|
|
|
(6,633
|
)
|
Interest expense, net
|
|
|
13,092
|
|
|
|
12,285
|
|
|
|
26,043
|
|
|
|
24,747
|
|
Other (income) expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19
|
|
Adjusted EBITDAX
|
|
$
|
51,113
|
|
|
$
|
39,589
|
|
|
$
|
114,099
|
|
|
$
|
89,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash General and Administrative Expenses
Cash General and Administrative Expenses is a non-GAAP financial measure
used by the Company in the Guidance Table to provide a measure of
administrative expenses used by many investors and published research in
making investment decisions and evaluating operational trends of the
Company. See the table below for a reconciliation of Cash General and
Administrative Expenses and General and Administrative Expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance
|
|
|
For the Three Months
|
|
|
For the Three Months
|
|
|
For the Year Ending
|
$ thousands
|
|
Ended June 30, 2018
|
|
|
Ended June 30, 2017
|
|
|
December 31, 2018
|
General and administrative expenses, estimated to be reported
|
|
$
|
10,697
|
|
|
$
|
10,730
|
|
|
$43,500-$47,500
|
Stock-based compensation expense
|
|
|
(1,979
|
)
|
|
|
(2,348
|
)
|
|
(8,500 - 10,500)
|
Cash general and administrative expenses
|
|
$
|
8,718
|
|
|
$
|
8,382
|
|
|
$35,000-$37,000
|
|
|
|
|
|
|
|
|
|
|
|
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 and Exchange Commission on March 3, 2018
(the “2017 Annual Report”), and in “Item 1A. Risk Factors” of Eclipse
Resources’ Quarterly Reports on Form 10-Q.
Forward-looking statements may include, but are not limited to,
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
prices for natural gas, NGLs and oil and the volatility of those prices;
write-downs of its natural gas and oil asset values due to declines in
commodity 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; marketing of natural gas, NGLs and oil; leasehold and
business acquisitions and joint ventures; the expiration of primary
terms of oil and gas leases before production can be established and as
costs to extend such terms; the costs, terms and availability of
gathering, processing, fractionation and other midstream services;
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, including, without
limitation, the guidance set forth herein..
Eclipse Resources cautions you that all these forward-looking
statements are subject to risks and uncertainties, most of which are
difficult to predict and many of which are beyond the Company’s 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
significant decline of the price of natural gas, NGLs, and oil from
historical highs, 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, risks associated with the Company’s level of
indebtedness, the timing of development expenditures, and the other
risks described under the heading “Risk Factors” in the 2017 Annual
Report and in “Item 1A. Risk Factors” of Eclipse Resources’ Quarterly
Reports on Form 10-Q.
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. Except as otherwise required by
applicable law, Eclipse Resources disclaims any duty to update any
forward-looking statements to reflect events or circumstances after the
date of this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180802005894/en/ Copyright Business Wire 2018
Source: Business Wire
(August 2, 2018 - 4:12 PM EDT)
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