Eclipse Resources to Minimize Utica Drilling in 2016
STATE COLLEGE, Pa. — Eclipse Resources Corp. says it will curtail natural gas production in the Utica shale this year while minimizing new drilling and completion operations.
Oil and gas prices remain depressed, leaving energy companies few alternatives other than cutting output and reducing capital expenditures for additional exploration activities.
“The company continues to closely monitor the commodity price environment, and the company currently plans to minimize its drilling and completion activity until commodity prices improve,” Eclipse said in an operational update.
Eclipse placed all seven of its Utica Fuchs/Dietrich wells in production during the fourth quarter of 2015. The wells were drilled with lateral lengths ranging from approximately 7,450 feet in length to 10,520 feet, and were completed with what the company believes is an optimized hydraulic fracturing design.
The company estimates that it ended 2015 with $281 million in liquidity derived from its undrawn credit facility and cash on hand of approximately $184 million.
Eclipse also reported that the company estimates it is on pace to exceed its initial production guidance range for the fourth quarter and full year 2015. The company estimates that it exited 2015 with production of approximately 268 billion cubic feet per day. During the fourth quarter, production averaged 236 billion cubic feet per day, while the 2015 average net production in 2015 should be roughly 206 billion cubic feet per day.
“Given the lower current market prices for both natural gas and oil, coupled with the uncertain outlook in the near term, the company is focusing its initial 2016 plan on limiting cash outlays on drilling while allowing for greater productivity as prices rebound. To implement this strategy, the company has begun voluntarily reducing its aggregate operated production to attempt to maintain net production at approximately the same level as its 2015 average.”
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