Eclipse Resources Provides Update on Utica Shale Activity

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From Seeking Alpha's transcript of Eclipse Resources' 1st-quarter earnings call:
Our team has also recently completed the drilling of the company's first Utica Shale well in Pennsylvania in our Flat Castle project area. This well has a total metric depth of 25,017 feet with a horizontal lateral extension of 13,900 feet. We drilled it on time and on cost. And we continue to be excited by the potential we see in the Flat Castle area. We look forward to bringing this initial well online late in the third quarter of 2018. As we have discussed in our recent Analyst Day event, the company made the strategic decision to reorder our drill schedule and focus on the condensate portion of our acreage. This decision has allowed us to take advantage of the improvement in the near-term oil pricing while, additionally, allowing us to achieve increased commodity product diversification. For the first quarter of 2018, all 5 of the wells that we turned to sales were condensate-rich wells. 
These wells included our first 2 operated Marcellus wells and 3 Utica Condensate wells. This decision drove a quarter-over-quarter increase in our liquids revenue of approximately 36% to become approximately 47% of the company's total unhedged revenue. We believe this percentage to be one of the highest in our Appalachian peer group. 
Based on recent data from the Ohio Division of Natural Resources Eclipse has drilled 8 of the top 10 oil-producing wells in the Utica Shale during the fourth quarter of 2017. With the additional revenue from the liquids production, our all-in realized price before hedging was $3.88 per Mcfe for the first quarter of 2018, a level not achieved since the fourth quarter of 2014. Additionally, when coupled with improvements in our operating expenses, we achieved a sequential quarter-over-quarter increase in cash operating margin of 27% to $2.22 per Mcfe. We believe this liquids focus has led to our well productivity being the best as compared to our Appalachian peers when measured on gross revenue per lateral foot basis, which ultimately leads to higher full-cycle corporate returns, above our corporate cost of capital. 
As we focus on achieving attractive full-cycle returns, we are committed to appropriately managing our growth levels and liquidity, with an eye towards managing cash flows as opposed to focusing solely on production growth. Our belief remains that we are charged by our shareholders to be good stewards of capital; and therefore, given the somewhat depressed medium-term output for natural gas prices, we are lowering our capital expenditure forecast for the second half of 2018 considerably. We will take this step by executing on one of two approaches. First, considering our Utica Shale drilling joint venture, as we move into the third quarter, we will have drilled the last of the remaining wells to be drilled in the first 2 programs in the joint venture. We have entered into discussions with our partner, Sequel Energy, to design a third program, which will commence in the third quarter and will be expected to include approximately 20 gross wells.
Click here to read the whole transcript.

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