American Oil and Gas Reporter - July 2016 - 61

Operations Update:
Eclipse Resources'
Drilling Activity Increases

STATE COLLEGE, PA.-On June
28, Eclipse Resources issued an operations update, which included announcing increased 2016 capital expenditures and releasing information on the initial performance of
the Purple Hayes superlateral.
During the first 45 days of production, Purple Hayes produced
a cumulative 583 million cubic feet
of natural gas equivalent and exhibited very shallow pressure declines of 50 psi a week, according
to the company. The well continued to produce at its managed
choke target rates with flat production and no change in the condensate yield to date, which
Eclipse Resources said it believed
was "indicative of better-than-anticipated performance."
Eclipse also reported a $28
million increase to its $168 million
capital budget for 2016, and revealed that it expected to cease its
voluntary production curtailment
program at the end of the third
quarter.
"The company has made the
decision to accelerate our operated drilling and completion activity," comments Ben Hulburt,
chairman, president and chief
executive officer. "Looking at
forward strip prices, we anticipate
lifting our self-imposed production
curtailment program and bringing
our production back on line at the
end of the third quarter. We expect to continue to complete our
drilled but uncompleted wells
through the remainder of the

year and into the first quarter of
2017, and to continue to run our
operated rig continuously going
forward."
For full-year 2016, Eclipse Resources planned to spud 10-12 net
wells and complete 21-24 net
wells, including 16-19 net DUCs
(drilled, uncompleted) in inventory, according to the release. As it
drills and completes new wells, and
re-establishes flowing producing
wells at normal type-curve rates,
Eclipse said it anticipated production increasing to an average of 240
MMcfe/d for the fourth quarter
and continuing to grow next year.
"We forecast production
growth in 2017 between 40 and
60 percent compared with our
2016 forecast production," Hulburt notes.
The company also reported
expanding its 2017 hedged oil and
gas production to include 170,000
MMBtu/d of gas (75 percent of
its expected production) at an average floor price of $2.84 an
MMBtu and 3,500 bbl/d of oil (75
percent of its expected production) at an average floor price of
$46 a barrel.
"While we can never completely eliminate commodity risk,
we believe we have significantly reduced that risk next year by substantially increasing our hedge
position, while at the same time
structuring our hedge portfolio to
not eliminate our exposure to further commodity price increases,"
Hulburt concludes.
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JULY 2016 61
American Oil and Gas Reporter - July 2016

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