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Eclipse Resources Corp (ECR) SEC Filing 8-K Material Event for the period ending Wednesday, May 2, 2018

Eclipse Resources Corp

CIK: 1600470 Ticker: ECR

Exhibit 99.1

Eclipse Resources Corporation Announces First Quarter 2018 Operational and Financial Results and Updated Guidance

STATE COLLEGE, PA- May 2, 2018- (BUSINESS WIRE) - Eclipse Resources Corporation (NYSE:ECR) (the “Company” or “Eclipse Resources”) today announced its first quarter 2018 financial and operational results, along with updated guidance for the second quarter and full year 2018. In conjunction with this release, the Company has posted an updated investor presentation to its website at www.eclipseresources.com.

First Quarter 2018 Highlights:

 

Average net daily production was 315.2 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 $2.87 per Mcf, a $0.13 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 $56.52 per barrel, a $6.39 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 $25.55 per barrel, or approximately 41% 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 $1.39 per Mcfe, including $0.27 per Mcfe in firm transportation expenses.

 

Net loss for the first quarter of 2018 was ($2.6) million; and Adjusted EBITDAX1 for the first quarter of 2018 was $63.0 million.

 

Established second quarter 2018 guidance and updated full year 2018 guidance including the reduction in the capital expenditure budget by approximately $60 million to now reflect approximately $250 million in estimated capital expenditures for the full year 2018.

 

1

Non-GAAP measure. See reconciliation for details

 

Benjamin W. Hulburt, Chairman, President and CEO, commented on the Company’s first quarter 2018 results, “This was another solid quarter for the Company and the execution of our 2018 plan is off to a strong start as we exceeded our production and cash flow expectations while expanding our margins by keeping our operating expenses and our general and administrative expenses low.

As was detailed during our analyst day presentation, we continue to focus on liquids development during 2018, with all 5 gross (3.7 net) wells that were turned to sales during the first quarter 2018 generating a significant liquids production.  These wells included our first two operated Marcellus wells and three Utica Condensate wells. Our production on a per Mcfe basis was 28% liquids for the first quarter 2018, and given the current commodity pricing environment, this liquids production aided in an increase in our year over year liquids revenue of approximately 36% and equating to approximately 47% of our total unhedged revenue.

We have recently completed drilling our first Utica Shale well in Pennsylvania in our “Flat Castle” project area. This well was drilled to 25,017 feet of total measured depth with a horizontal lateral of 13,857 feet.  Additionally, during the first quarter of 2018, we brought on our second completions crew to accelerate completions on our backlog of wells created by our two rig drilling program. The completions team has had a highly productive quarter averaging over 6.5 stages per day with minimal downtime despite the harsh winter environment.  

As we continue to analyze our capital plan for the full year 2018, the Company intends on taking a disciplined and financially prudent approach designed to preserve our financial strength. As part of this effort, and in light of current outlook for natural gas prices, we are lowering our capital expenditure forecast for 2018 by approximately 20% reflecting our plan to reduce our net capital expenditures in the second half of the year.  This plan will be executed through one of two approaches currently under consideration. As we near


completion of our first two drilling programs in our Utica Shale drilling joint venture with Sequel Energy Group, LLC we are actively discussing the optional third program with our partner.  As an alternative to continuing the drilling joint venture, we are also reviewing the merits of releasing one of our rigs in the third quarter.   With either of these options the Company will continue to fund a one net rig program as we are today. As such, we are revising our guidance on our full year 2018 capital expenditures plan to approximately $250 million, materially below the Company’s initial 2018 guidance of $300-$320 million.

As we look forward to 2019, at current forward natural gas prices, we would expect to maintain our current activity and spending levels, which is significantly lower than what is reflected in analyst consensus estimates.  While these changes are expected to result in slightly reduced production in 2018, and a projected year-over-year growth rate of approximately 10-15% in 2019, we forecast a significantly reduced outspend given current commodity prices.  We are confident that this level of spending can be internally funded while maintaining prudent management of our balance sheet.  Additionally, as we continue to look for ways to expand margins and improve full cycle returns, we are revising our cash general and administrative expense guidance downward by approximately 8% to between $35 and $37 million for the full year 2018.

Our strategic and financial review process continues as we evaluate a full range of potential opportunities to maximize long-term shareholder value.  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 and the Company will provide further comment when disclosure is required.”

Operational Discussion

The Company’s production for the three months ended March 31, 2018 and 2017 is set forth in the following table:

  

 

Three Months Ended

March 31,

 

 

 

2018

 

 

2017

 

Production:

 

 

 

 

 

 

 

 

Natural gas (MMcf)

 

 

20,343.3

 

 

 

19,381.6

 

NGLs (Mbbls)

 

 

772.7

 

 

 

665.0

 

Oil (Mbbls)

 

 

565.4

 

 

 

454.1

 

Total (MMcfe)

 

 

28,371.9

 

 

 

26,096.2

 

 

 

 

 

 

 

 

 

 

Average daily production volume:

 

 

 

 

 

 

 

 

Natural gas (Mcf/d)

 

 

226,037

 

 

 

215,351

 

NGLs (Bbls/d)

 

 

8,586

 

 

 

7,389

 

Oil (Bbls/d)

 

 

6,282

 

 

 

5,046

 

Total (MMcfe/d)

 

 

315.2

 

 

 

290.0

 

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 months ended March 31, 2018 and 2017:

 

 

Three Months Ended

March 31,

 

 

 

2018

 

 

2017

 

NYMEX Henry Hub High ($/MMBtu)

 

$

6.24

 

 

$

3.71

 

NYMEX Henry Hub Low ($/MMBtu)

 

 

2.49

 

 

 

2.44

 

Average Daily NYMEX Henry Hub ($/MMBtu)

 

 

3.08

 

 

 

3.02

 

Average Monthly Settled NYMEX Henry Hub ($/MMBtu)

 

 

3.00

 

 

 

3.32

 

 

 

 

 

 

 

 

 

 

NYMEX WTI High ($/Bbl)

 

$

66.27

 

 

$

54.48

 

NYMEX WTI Low ($/Bbl)

 

 

59.20

 

 

 

47.00

 

Average Daily NYMEX WTI ($/Bbl)

 

 

62.91

 

 

 

51.62

 


Financial Discussion

Revenue for the three months ended March 31, 2018 totaled $110.2 million, compared to $101.9 million for the three months ended March 31, 2017.  Adjusted Revenue2, which includes the impact of cash settled derivatives and excludes brokered natural gas and marketing revenue, totaled $110.3 million for the three months ended March 31, 2018 compared to $95.4 million for the three months ended March 31, 2017.  Net Loss for the three months ended March 31, 2018 was ($2.6) million, or ($0.01) per share, compared to Net Income of $26.8 million, or $0.10 per share, for the three months ended March 31, 2017. Adjusted Net Income2 for the three months ended March 31, 2018 was $10.2 million, or $0.03 per share, compared to an Adjusted Net Income $4.8 million, or $0.02 per share, for the three months ended March 31, 2017. Adjusted EBITDAX2 was $63.0 million for the three months ended March 31, 2018 compared to $50.2 million for the three months ended March 31, 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 months ended March 31, 2018 and 2017 are set forth in the table below:

 

 

Three Months Ended

March 31,

 

 

 

2018

 

 

2017

 

Average realized price (excluding cash settled derivatives

   and firm transportation)

 

 

 

 

 

 

 

 

Natural gas ($/Mcf)

 

$

2.87

 

 

$

3.17

 

NGLs ($/Bbl)

 

 

25.55

 

 

 

25.66

 

Oil ($/Bbl)

 

 

56.52

 

 

 

46.13

 

   Total average prices ($/Mcfe)

 

 

3.88

 

 

 

3.81

 

 

 

 

 

 

 

 

 

 

Average realized price (including cash settled derivatives,

   excluding firm transportation)

 

 

 

 

 

 

 

 

Natural gas ($/Mcf)

 

$

3.05

 

 

$

3.01

 

NGLs ($/Bbl)

 

 

24.33

 

 

 

24.07

 

Oil ($/Bbl)

 

 

52.30

 

 

 

46.28

 

   Total average prices ($/Mcfe)

 

 

3.89

 

 

 

3.66

 

 

 

 

 

 

 

 

 

 

Average realized price (including firm transportation,

   excluding cash settled derivatives)

 

 

 

 

 

 

 

 

Natural gas ($/Mcf)

 

$

2.49

 

 

$

2.60

 

NGLs ($/Bbl)

 

 

25.55

 

 

 

25.66

 

Oil ($/Bbl)

 

 

56.52

 

 

 

46.13

 

   Total average prices ($/Mcfe)

 

 

3.61

 

 

 

3.39

 

 

 

 

 

 

 

 

 

 

Average realized price (including cash settled derivatives

   and firm transportation)

 

 

 

 

 

 

 

 

Natural gas ($/Mcf)

 

$

2.67

 

 

$

2.44

 

NGLs ($/Bbl)

 

 

24.33

 

 

 

24.07

 

Oil ($/Bbl)

 

 

52.30

 

 

 

46.28

 

   Total average prices ($/Mcfe)

 

 

3.62

 

 

 

3.23

 


Per unit cash production costs, which include $0.27 per Mcfe of firm transportation expense, were $1.39 per Mcfe for the first quarter of 2018 and decreased by 3% compared to the first quarter of 2017.  The Company’s cash production costs (includes lease operating, transportation, gathering and compression, production and ad valorem taxes) are shown in the table below.

General and administrative expense was $9.8 million for the three months ended March 31, 2018 compared to $10.1 million for the three months ended March 31, 2017 and is shown in the table below. General and administrative expense per Mcfe was $0.34 in the three months ended March 31, 2018 compared to $0.39 in the three months ended March 31, 2017. General and administrative expense includes $2.0 million and $2.1 million of stock-based compensation expense for the three months ended March 31, 2018 and 2017, respectively.

 

  

 

Three Months Ended

March 31,

 

 

 

2018

 

 

2017

 

Operating expenses (in thousands):

 

 

 

 

 

 

 

 

Lease operating

 

$

9,390

 

 

$

2,343

 

Transportation, gathering and compression

 

 

27,689

 

 

 

32,877

 

Production and ad valorem taxes

 

 

2,445

 

 

 

1,931

 

Depreciation, depletion and amortization

 

 

31,156

 

 

 

26,189

 

General and administrative

 

 

9,757

 

 

 

10,132

 

Operating expenses per Mcfe:

 

 

 

 

 

 

 

 

Lease operating

 

$

0.33

 

 

$

0.09

 

Transportation, gathering and compression

 

 

0.97

 

 

 

1.27

 

Production and ad valorem taxes

 

 

0.09

 

 

 

0.07

 

Depreciation, depletion and amortization

 

 

1.10

 

 

 

1.00

 

General and administrative

 

 

0.34

 

 

 

0.39

 

Capital Expenditures

First quarter 2018 capital expenditures were $71.7 million, including $59.9 million for drilling and completions, $5.7 million for midstream expenditures, $5.8 million for land-related expenditures, and $0.3 million for corporate-related expenditures.

During the first quarter of 2018, the Company commenced drilling 8 gross (3.7 net) operated Utica Shale wells, commenced completions of 8 gross (5.8 net) operated wells and turned to sales 5 gross (3.7 net) operated wells.  

Financial Position and Liquidity

As of March 31, 2018, the Company’s liquidity was $148.2 million, consisting of $21.8 million in cash and cash equivalents and $126.4 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 $65 million in outstanding borrowings).

Subsequent to the end of the first quarter 2018, the Company completed its semi-annual borrowing base redetermination of its revolving credit facility, which resulted in its borrowing base remaining unchanged at $225 million. The Company has made a subsequent repayment of $20 million to the revolving credit facility, with the current amount drawn on this facility of $45 million.  The next redetermination of the borrowing base under the Company’s revolving credit facility is scheduled for October of 2018.

Matthew R. DeNezza, Executive Vice President and Chief Financial Officer, commented, “We are thrilled by the record level of EBITDAX generated in the first quarter and continue to anticipate strong cash flow growth in the full year 2018. We believe the Company’s liquidity position in combination with our reduction in capital spending and our drilling joint venture gives us the flexibility to navigate the currently challenging natural gas market, while continuing to focus on keeping our leverage ratios low.  As a means of providing additional certainty of cash flows the majority of our 2018 natural gas production is hedged with an average floor price of $2.93 per MMbtu. Additionally, we continue to actively hedge 2019 production. .”

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 March 31, 2018:


Natural Gas Derivatives

Description

 

Volume

(MMBtu/d)

 

 

Production Period

 

Weighted Average

Price ($/MMBtu)

 

Natural Gas Swaps:

 

 

 

 

 

 

 

 

 

 

 

 

 

30,000

 

 

April 2018 – March 2019

 

$

2.90

 

 

 

 

20,000

 

 

April 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

 

 

April 2018 – March 2019

 

$

3.00

 

Ceiling sold price (call)

 

 

30,000

 

 

April 2018 – March 2019

 

$

3.40

 

Floor sold price (put)

 

 

30,000

 

 

April 2018 – March 2019

 

$

2.50

 

Floor purchase price (put)

 

 

40,000

 

 

April 2018 – December 2018

 

$

3.11

 

Floor purchase price (put)

 

 

60,000

 

 

April 2018 – December 2018

 

$

2.80

 

Ceiling sold price (call)

 

 

100,000

 

 

April 2018 – December 2018

 

$

3.36

 

Floor sold price (put)

 

 

100,000

 

 

April 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

 

 

April 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

)

Oil Derivatives

Description

 

Volume

(Bbls/d)

 

 

Production Period

 

Weighted Average

Price ($/Bbl)

 

Oil Swaps:

 

 

 

 

 

 

 

 

 

 

 

 

 

1,000

 

 

July 2018 – March 2019

 

$

61.00

 

Oil Three-way Collars:

 

 

 

 

 

 

 

 

 

 

Floor purchase price (put)

 

 

4,000

 

 

April 2018 – December 2018

 

$

45.00

 

Ceiling sold price (call)

 

 

4,000

 

 

April 2018 – December 2018

 

$

53.47

 

Floor sold price (put)

 

 

4,000

 

 

April 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

 

Subsequent to the End of the First Quarter:

Below is a table that illustrates the Company’s hedging activities subsequent to the end of the first quarter:

Natural Gas:

Description

 

Volume

(MMbtu/d)

 

 

Production Period

 

Weighted Average

Price ($/MMbtu)

 

Basis Swaps:

 

 

 

 

 

 

 

 

 

 

Appalachia - Dominion

 

 

20,000

 

 

January 2020 – December 2020

 

$

(0.59

)


Guidance

The Company has also updated its second quarter and full year 2018 guidance as set forth in the table below:

 

 

Q2 2018

 

FY 2018

Production MMcfe/d

 

290 - 300

 

325 - 335

% Gas

 

73% - 75%

 

72% - 75%

% NGL

 

14% - 16%

 

13% - 17%

% Oil

 

10% - 12%

 

10% - 13%

Gas Price Differential ($/Mcf)1,2

 

$(0.20) - $(0.25)

 

$(0.25) - $(0.35)

Oil Differential ($/Bbl)1

 

$(6.25) - $(6.75)

 

$(6.25) - $(7.25)

NGL Prices (% of  WTI)1

 

25% - 30%

 

30% - 35%

Cash Production Costs ($/Mcfe)3

 

$1.55 - $1.60

 

$1.55 - $1.60

Cash G&A ($mm)4

 

$9 - $10

 

$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 Thursday, May 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 First Quarter Earnings Call.  A replay of the call will be available through July 3, 2018.  To access the phone replay dial 877-660-6853 or 201-612-7415 for international callers.  The conference ID is 13678954.  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)

 

 

 

March 31,

2018

 

 

December 31,

2017

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

21,801

 

 

$

17,224

 

Accounts receivable

 

 

113,208

 

 

 

77,609

 

Assets held for sale

 

 

 

 

 

206

 

Other current assets

 

 

8,350

 

 

 

12,023

 

Total current assets

 

 

143,359

 

 

 

107,062

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT AT COST

 

 

 

 

 

 

 

 

Oil and natural gas properties, successful efforts method:

 

 

 

 

 

 

 

 

Unproved properties

 

 

537,958

 

 

 

459,549

 

Proved oil and gas properties, net

 

 

694,599

 

 

 

647,881

 

Other property and equipment, net

 

 

6,785

 

 

 

6,942

 

Total property and equipment, net

 

 

1,239,342

 

 

 

1,114,372

 

 

 

 

 

 

 

 

 

 

OTHER NONCURRENT ASSETS

 

 

 

 

 

 

 

 

Other assets

 

 

5,617

 

 

 

2,093

 

TOTAL ASSETS

 

$

1,388,318

 

 

$

1,223,527

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Accounts payable

 

$

96,048

 

 

$

76,174

 

Accrued capital expenditures

 

 

12,689

 

 

 

10,658

 

Accrued liabilities

 

 

39,423

 

 

 

41,662

 

Accrued interest payable

 

 

10,433

 

 

 

21,100

 

Total current liabilities

 

 

158,593

 

 

 

149,594

 

 

 

 

 

 

 

 

 

 

NONCURRENT LIABILITIES

 

 

 

 

 

 

 

 

Debt, net of unamortized discount and debt issuance costs

 

 

495,707

 

 

 

495,021

 

Credit facility

 

 

65,000

 

 

 

 

Asset retirement obligations

 

 

6,269

 

 

 

6,029

 

Other liabilities

 

 

2,100

 

 

 

529

 

Total liabilities

 

 

727,669

 

 

 

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, 301,771,111

   and 262,740,355 shares issued and outstanding, respectively

 

 

3,033

 

 

 

2,637

 

Additional paid in capital

 

 

2,059,418

 

 

 

1,967,958

 

Treasury stock, shares at cost; 1,499,566 and 992,315 shares, respectively

 

 

(3,031

)

 

 

(2,096

)

Accumulated deficit

 

 

(1,398,771

)

 

 

(1,396,145

)

Total stockholders' equity

 

 

660,649

 

 

 

572,354

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

1,388,318

 

 

$

1,223,527

 


ECLIPSE RESOURCES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

For the Three Months Ended

March 31,

 

 

 

2018

 

 

2017

 

REVENUES

 

 

 

 

 

 

 

 

Natural gas, oil and natural gas liquids sales

 

$

110,184

 

 

$

99,432

 

Brokered natural gas and marketing revenue

 

 

8

 

 

 

2,431

 

Total revenues

 

 

110,192

 

 

 

101,863

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

Lease operating

 

 

9,390

 

 

 

2,343

 

Transportation, gathering and compression

 

 

27,689

 

 

 

32,877

 

Production and ad valorem taxes

 

 

2,445

 

 

 

1,931

 

Brokered natural gas and marketing expense

 

 

48

 

 

 

2,460

 

Depreciation, depletion and amortization

 

 

31,156

 

 

 

26,189

 

Exploration

 

 

15,278

 

 

 

11,581

 

General and administrative

 

 

9,757

 

 

 

10,132

 

Accretion of asset retirement obligations

 

 

155

 

 

 

124

 

(Gain) loss on sale of assets

 

 

(267

)

 

 

(5

)

Total operating expenses

 

 

95,651

 

 

 

87,632

 

OPERATING INCOME (LOSS)

 

 

14,541

 

 

 

14,231

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

Gain (loss) on derivative instruments

 

 

(4,215

)

 

 

25,097

 

Interest expense, net

 

 

(12,952

)

 

 

(12,462

)

Other income (expense)

 

 

 

 

 

(19

)

Total other income (expense), net

 

 

(17,167

)

 

 

12,616

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

(2,626

)

 

 

26,847

 

INCOME TAX BENEFIT (EXPENSE)

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

(2,626

)

 

$

26,847

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE

 

 

 

 

 

 

 

 

Basic

 

$

(0.01

)

 

$

0.10

 

Diluted

 

$

(0.01

)

 

$

0.10

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES

   OUTSTANDING

 

 

 

 

 

 

 

 

Basic

 

 

293,450

 

 

 

261,105

 

Diluted

 

 

293,450

 

 

 

264,215

 


 

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

March 31,

 

$ thousands

 

2018

 

 

2017

 

Total revenues

 

$

110,192

 

 

$

101,863

 

Net cash receipts (payments) on derivative instruments

 

 

141

 

 

 

(3,989

)

Brokered natural gas and marketing revenue

 

 

(8

)

 

 

(2,431

)

Adjusted revenue

 

$

110,325

 

 

$

95,443

 

 

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 March 31,

 

$ thousands

 

2018

 

 

2017

 

Income (loss) before income taxes, as reported

 

$

(2,626

)

 

$

26,847

 

(Gain) loss on derivative instruments

 

 

4,215

 

 

 

(25,097

)

Net cash receipts (payments) on derivative instruments

 

 

141

 

 

 

(3,989

)

Dry hole and other

 

 

94

 

 

 

864

 

Stock-based compensation

 

 

1,981

 

 

 

2,081

 

Impairment of unproved properties

 

 

6,696

 

 

 

4,125

 

Other (income) expense

 

 

 

 

 

19

 

(Gain) loss on sale of assets

 

 

(267

)

 

 

(5

)

Loss before income taxes, as adjusted

 

 

10,234

 

 

 

4,845

 

Adjusted net income (loss)

 

$

10,234

 

 

$

4,845

 

 

 

 

 

 

 

 

 

 

Net income (loss) per Common Share

 

 

 

 

 

 

 

 

Basic

 

$

(0.01

)

 

$

0.10

 

Diluted

 

$

(0.01

)

 

$

0.10

 

 

 

 

 

 

 

 

 

 

Adjusted net income (loss) per Common Share

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

 

$

0.02

 

Diluted

 

$

0.03

 

 

$

0.02

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding

 

 

 

 

 

 

 

 

Basic

 

 

293,450

 

 

 

261,105

 

Diluted

 

 

293,450

 

 

 

264,215

 

 

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

March 31,

 

$ thousands

 

2018

 

 

2017

 

Net income (loss)

 

$

(2,626

)

 

$

26,847

 

Depreciation, depletion and amortization

 

 

31,156

 

 

 

26,189

 

Exploration expense

 

 

15,278

 

 

 

11,581

 

Stock-based compensation

 

 

1,981

 

 

 

2,081

 

Accretion of asset retirement obligations

 

 

155

 

 

 

124

 

(Gain) loss on sale of assets

 

 

(267

)

 

 

(5

)

(Gain) loss on derivative instruments

 

 

4,215

 

 

 

(25,097

)

Net cash receipts (payments) on settled derivatives

 

 

141

 

 

 

(3,989

)

Interest expense, net

 

 

12,952

 

 

 

12,462

 

Other (income) expense

 

 

 

 

 

19

 

Adjusted EBITDAX

 

$

62,985

 

 

$

50,212

 

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

$ thousands

 

For the Three Months Ended March 31, 2018

 

 

For the Three Months Ending June 30, 2018

 

For the Year Ending December 31, 2018

General and administrative expenses, estimated to be

   reported

 

$

9,757

 

 

$10,500-$13,500

 

$43,500-$47,500

Stock-based compensation expense

 

 

(1,981

)

 

(1,500 - 3,500)

 

(8,500 - 10,500)

Cash general and administrative expenses

 

$

7,776

 

 

$9,000-$10,000

 

$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; 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 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.

Contact:

Eclipse Resources Corporation

Douglas Kris, Investor Relations

814-325-2059

dkris@eclipseresources.com

 

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 2, 2018

 

Eclipse Resources Corporation

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-36511

46-4812998

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

2121 Old Gatesburg Road, Suite 110

State College, Pennsylvania

 

16803

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (814) 308-9754

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


Item 2.02Results of Operations and Financial Condition.

 

On May 2, 2018, Eclipse Resources Corporation (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1, announcing its financial and operational results for the first quarter ended March 31, 2018.

 

Item 7.01Regulation FD Disclosure.

 

On May 2, 2018, the Company posted an updated corporate presentation in the Investor Center section of the Company’s website at: www.eclipseresources.com.

 

The information in this Current Report, including Exhibit 99.1, is being furnished pursuant to Items 2.02 and 7.01 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act unless specifically identified therein as being incorporated therein by reference.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit

Number

 

Description

99.1

 

Press Release, dated May 2, 2018.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

ECLIPSE RESOURCES CORPORATION

 

 

 

 

 

 

 

 

Date: May 2, 2018

 

By:

/s/ Christopher K. Hulburt

 

 

Name:

Christopher K. Hulburt

 

 

Title:

Executive Vice President, Secretary and

General Counsel

 

 

 

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Eclipse Resources Corp provided additional information to their SEC Filing as exhibits

Ticker: ECR
CIK: 1600470
Form Type: 8-K Corporate News
Accession Number: 0001564590-18-010322
Submitted to the SEC: Wed May 02 2018 4:22:21 PM EST
Accepted by the SEC: Wed May 02 2018
Period: Wednesday, May 2, 2018
Industry: Crude Petroleum And Natural Gas
Events:
  1. Earnings Release
  2. Financial Exhibit
  3. Regulated Disclosure

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