Eclipse Resources Corporation Announces the Closing of its Previously Announced Utica Shale Drilling Joint Venture
December 27 2017 - 4:05PM
Business Wire
Eclipse Resources Corporation (NYSE:ECR) (the “Company” or
“Eclipse Resources”) announced today that it has, through certain
subsidiaries, entered into definitive agreements with Sequel Energy
Group LLC (“Sequel”) (an affiliate of GSO Capital Partners LP, or
“GSO”) on December 22, 2017 to establish the previously announced
drilling joint venture on the Company’s Utica Shale acreage in
Guernsey and Monroe Counties in southeast Ohio (the “Drilling Joint
Venture”).
Drilling Joint Venture Highlights:
- Committed funding from Sequel of up to
$285 million to fund its proportionate share of two drilling
programs comprising 34 gross wells in aggregate, commencing with
wells currently in progress and extending through wells expected to
be commenced through the end 2018. This committed funding amount
reflects the Company’s working interest election in the first
program.
- A mutual option for an additional third
well program consisting of approximately 16 wells, which would
increase the committed funding.
- Eclipse Resources shall be the operator
of all wells drilled within each well program.
- Eclipse Resources shall retain 50% of
its pre-carry working interest in the first program and shall have
the option until January 31, 2018 to adjust its pre-carry working
interest in the second program and, if applicable, the third well
program to between 30% to 70% until such program is commenced.
- A 15% carried interest on drilling and
completion capital expenditures incurred in each well program,
proportionately reduced to Eclipse Resources retained pre-carry
working interest.
- A significant portion of Sequel’s
working interest in each well program will revert to Eclipse
Resources once a certain return is realized by Sequel in each
program.
Benjamin W. Hulburt, Chairman, President and CEO, commented on
the Company’s joint venture agreement, “We believe that the
drilling joint venture agreement we have entered into with Sequel,
an affiliate of GSO, speaks to both the quality of our assets and
our industry leading operational performance. The Company has
elected to retain a 50% pre-carry working interest in the first
program and anticipates making its election into the second
program, along with announcing the Company’s 2018 Capital budget,
during the first quarter of 2018. The structure of the drilling
joint venture allows us to maintain an efficient, two rig operating
program while providing flexibility to manage capital spending to a
level that is appropriate depending on the strength of the forward
commodity curves. We are extremely pleased with the final terms and
structure outlined by the agreement with Sequel and the high degree
of confidence that our partner has in our assets and operational
capabilities.”
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 3, 2017 (the “2016 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; Drilling Joint Venture with
Sequel, including the expected benefits of such transaction and its
impact on the Company’s business, operations and assets; financial
strategy, liquidity and capital required for developing its
properties and timing related thereto; realized natural gas,
natural gas liquids 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-look
statements are subject to all of the 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 recent significant decline of
the price of natural gas, NGLs, and oil, inflation, lack of
availability of drilling, production and processing equipment and
services, our failure to realize the expected benefits of the
Drilling Joint Venture with Sequel and to effectively implement
such transaction, 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 2016 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.
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Eclipse Resources CorporationDouglas Kris, 814-325-2059Investor
Relationsdkris@eclipseresources.com
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