Last week Eclipse Resources, a pure play driller focused on the Marcellus/Utica (headquartered in State College, PA) announced that the value of its proved reserves (what it can prove is in the ground, waiting to be extracted) is going down 58% over what it was at the end of 2014. Not because there’s now somehow less in the ground waiting to be extracted, but because of the price they can get for what they could extract. The company also announced it will take an “impairment” charge of $750-$850 million for 2015. An impairment is a permanent, irreversible devaluing of the company’s assets (see A Basic Guide to Understanding “Impairments” for Marcellus/Utica). We doubt Eclipse will be the last to make such announcements about year-end 2015 numbers. Here’s the announcement from Eclipse explaining the latest…
