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Eclipse Former Top Driller in M-U Becomes Top Driller in Ukraine

Oleg Tolmachev

For years we wrote about Oleg Tolmachev, chief driller at Eclipse Resources. He was the guy who figured out how to drill those record-breaking, super long onshore laterals–some of the longest on record (see our stories mentioning Oleg Tolmachev here). Eclipse was sold to, and merged in with, Montage Resources. Montage was then sold to and merged in with Southwestern Energy. Somewhere along the way Tolmachev departed. Some 16 months ago Tolmachev was hired by Ukraine to help that country figure out how to drill and frack wells so it can wean itself off Russian natural gas and oil. Prescient because Russia invaded Ukraine in February. Tolmachev and the company he works for, Naftogaz, is making an appeal to the U.S. and Canada to send technology, expertise, and most of all, money to help Ukraine begin its own fracking program.
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Former Top M-U Driller Works in Ukraine to Keep NatGas Flowing

Oleg Tolmachev

For years we wrote about Oleg Tolmachev, chief driller at Eclipse Resources. He was the guy who figured out how to drill those record-breaking, super long onshore laterals–some of the longest on record (see our stories mentioning Oleg Tolmachev here). Eclipse was sold to and merged in with Montage Resources. Montage was then sold to and merged in with Southwestern Energy. Somewhere along the way Tolmachev departed. Some 13 months ago Tolmachev was hired by Ukraine to help that country figure out how to drill and frack wells so it can wean itself off Russian natural gas and oil. Today Tolmachev is working to keep the natural gas flowing in the country, a country besieged by Russian invaders.
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Judge Overrules Biden O&G Permit Moratorium on Federal Lands

On Joe Biden’s first day occupying the White House, he signed an Executive Order (EO) suspending new oil and gas leasing on all federal while the Interior Department reviews existing leases and permitting practices for 60 days (see How Biden’s Drilling Ban on Federal Lands Affects the M-U). A few weeks later he extended the timeframe for the so-called moratorium, turning it into an ongoing ban (see Biden Continues Attack on O&G with New EO – Industry Fights Back). A federal judge in Louisiana yesterday put a stop to Biden’s “moratorium,” telling the administration to restart federal leases forthwith. You may think this issue only affects those big tracts of federal land in the Western U.S., but you would be wrong.
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Weekly Shale Drilling Permits for PA, OH, WV: May 10-16

All three M-U states received permits to drill new shale wells last week. Pennsylvania received a sizable 14 new permits (after receiving 18 permits the previous week). The majority of those permits were for wells on three pads in northeastern PA. Ohio received 3 new permits last week all in one county (Greene) for one driller (Eclipse, now owned by Southwestern Energy) on one well pad. And West Virginia received a sizable 13 new permits with 9 of them split between two well pads for different drillers (Northeast Natural Energy and Tug Hill).
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Federal Judge Blocks Permits to Drill in OH’s Wayne Natl Forest

Location of Wayne National Forest

On Monday a federal judge with the U.S. District Court in Ohio put a temporary hold on issuing any more oil and gas drilling permits to drill on previously issued leases in the (mostly privately-owned) Wayne National Forest (WNF) in Ohio. The judge cited the Biden administration’s hold on all federal leasing/drilling permits until it completes its political analysis first. The only good news is that the judge refused to toss WNF leases entirely, as was requested by rabid anti-fossil fuel nutters. The antis are still thrilled with the ruling. The judge’s action in blocking new permits directly affects Eclipse Resources (now Southwestern Energy) which owns leases they can now not drill on.
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Another 655 Acres in Ohio Wayne Natl Forest Auctioned for $1.3M

The federal Bureau of Land Management (BLM) recently announced the winners of Utica Shale mineral rights for 14 parcels of land, adding up to ~655 acres, located in Wayne National Forest (WNF). The 14 properties netted the government $1.326 million and all 14 were purchased by two (possibly more) Utica Shale drillers. Average price per acre paid across the entire lot: $2,024. Who did the leasing? You have to be a subscriber to find out. 🙂
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Blue Ridge Merges with Eclipse, Renamed to Montage Resources

Yesterday was an eventful day for the former Blue Ridge Mountain Resources (nee Magnum Hunter Resources) and Eclipse Resources. We’ve been telling you since last August that the two companies are merging, with Blue Ridge Mountain essentially buying out Eclipse. The deal is done as of yesterday and there is A LOT of news to share–including a name change for the newly combined entity.
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Blue Ridge Mountain Resources Shareholders Approve Eclipse Merger

Last August Eclipse Resources announced it had sold itself to Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources (see Eclipse Resources Merging with Former Magnum Hunter). Although Eclipse shareholders have approved the deal, not until today was there official approval by the shareholders of Blue Ridge Mountain Resources.
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ODNR Releases Ohio Utica O&G Production for 3Q18 – Top 25 Wells

The Ohio Dept. of Natural Resources (ODNR) issued third quarter 2018 production numbers for Utica shale oil and gas production yesterday. And what a report it is! Natural gas production was up an amazing 31% over the same period last year (after being up 42% in 2Q18). Utica natgas production broke another record, hitting a new all-time high of 605 billion cubic feet (Bcf) in 3Q18. But perhaps the biggest story was Utica oil production. In 1Q18 Utica oil production was down 3.6%. In 2Q18 Utica oil production was up 11%. But in 3Q18, Utica oil production soared, going up 32%.
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Eclipse Resources 3Q18: Production Down, Stock Price Soars

Eclipse stock price soars – click for larger version

Eclipse Resources CEO Ben Hulburt yesterday gave what will be his last quarterly update at the helm of his company. Eclipse is being bought out by and merged with Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources, by the end of this year (see Eclipse Resources Merging with Former Magnum Hunter). Hulburt, along with pretty much all of Eclipse’s top brass, is leaving the company post-merger. All except for Oleg Tolmachev, the guy who figures out how to drill those record-breaking, super long onshore laterals. As for 3Q18, the company hit a new high in revenues of $130 million, making a $4 million profit (swinging into the black). That bit of good news sent Eclipse’s stock price soaring 11%.
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Eclipse Resources Stock Hits New 1-Yr Low – $1.17/Share

We typically don’t report on the ups and downs of the stock price for Marcellus/Utica companies, primarily because the per-share price goes up, then it goes, down, then it goes up again…You get the picture. However, today we’re reporting on the share price for Eclipse Resources (as of last Friday) because it hit a new one-year low of $1.17 per share, before closing at $1.28/share. Bumping around the bottom of the barrel. Why pick on Eclipse about their stock price? Because they’re in the middle of getting bought out and merged into Blue Ridge Mountain Resources, the former Magnum Hunter Resources (see Eclipse Resources Merging with Former Magnum Hunter). And because it’s a shame the stock price is that low, given that Eclipse has had a stellar record of drilling long laterals–currently the record-holder for longest onshore laterals in the world! (All drilled in the Ohio Utica Shale.) We hate to see a star performer like Eclipse under-perform financially. It doesn’t seem to balance on the scales of cosmic justice. What now seems obvious, in retrospect, is that Eclipse has been in a financial pickle for some time–hence their sale to Blue Ridge Mountain…
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Eclipse’s Top Brass Not Sticking Around After Blue Ridge Merger

MDN brought you the big news yesterday that Eclipse Resources is merging with Blue Ridge Mountain Resources (see Eclipse Resources Merging with Former Magnum Hunter). We noted that nowhere in the announcement and paperwork we read that Eclipse co-founder and CEO Ben Hulburt would be staying with the newly merged company. We now have confirmation that Hulburt is leaving when the deal closes. We also have confirmation that pretty much all of Eclipse’s top brass is leaving–except for Oleg Tolmachev, who will become the senior vice president and COO of the newly merged company. In addition to Hulburt’s departure, Eclipse executive VP/general counsel Christopher Hulburt is leaving, and executive VP/CFO Matthew DeNezza will also exit stage right. All three are being paid more than $1 million (Ben Hulburt more than $3 million) to leave…
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Eclipse Resources Merging with Former Magnum Hunter

Blue Ridge/Eclipse combined acreage location – click for larger version

Some big news breaking from yesterday: After months of teasing by Eclipse Resources that it’s working on selling itself–it finally has. The buyer is Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans (see Magnum Hunter Emerges from Bankruptcy with CEO Gary Evans Gone). Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017 (see Magnum Hunter Changes Its Name, Leaves the Bankrupt Past Behind). Blue Ridge, headquartered in Texas, has 99,000 acres of leases (mostly undeveloped) in the Marcellus and Utica Shale plays. Eclipse, on the other hand, is headquartered in State College, PA and has 128,000 acres–focused 100% on the Marcellus/Utica. Eclipse is renown for having drilled the world’s longest onshore lateral wells. Why do we say Blue Ridge is buying Eclipse when the announcement talks about a merger and on paper Blue Ridge will become a subsidiary of Eclipse? Because Eclipse is doing a 15 to 1 reverse stock split (combining shares to boost the per share value) and Eclipse CEO Ben Hulburt is nowhere to be found in the management structure of the newly combined company. Blue Ridge President and CEO John Reinhart will become President and CEO of the newly combined company. Eclipse’s top engineer Oleg Tolmachev–the guy who figures out how to drill those super-long laterals–will become Executive Vice President and COO of the combined company. No word yet on which name (or new name) they will use for the newly merged company…
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Eclipse 2Q18: Drilled More Long Wells, Progress on Sale/Merger

Eclipse Resources, a Marcellus/Utica pure play driller headquartered in State College, PA, is one of the smaller but (in our opinion) more important drillers in our region. Eclipse has drilled the reigning record-holders for longest on-shore lateral wells drilled…in the world (almost 20,000 feet long!). Last week Eclipse issued their second quarter update. Among the items discussed: The company lost $19 million vs. making $11.5 million in 2Q17. They produced an average of 305.5 million cubic feet equivalent per day (MMcfe/d), up a tad from 2Q17’s 287.8 MMcfe/d. Production was 72% natural gas and 28% liquids. They drilled 6 wells with an average lateral length of approximately 15,900 feet. So far the company has drilled 17 “super lateral” wells with an average lateral length of over 18,300 feet–which is why they are an important driller. The company, as we previously reported, is going through a “strategic review process” in which they are looking to combine with, or sell out to, another company (see Eclipse Resources Board Considering Either Merger or Acquisition). Ben Hulburt, CEO, had this to say about progress with the buyout/merger process: “As you all know, we announced that our Board of Directors has initiated a process to evaluate and consider a full range of strategic, operational and financial alternatives to maximize shareholder value. And while we’re pleased to say that substantial progress continues to be made, as we’ve previously stated, there is no definitive timetable for completion of this evaluation nor can there be any assurances that any initiatives will be announced or completed in the future.” In other words, there’s something coming, but we can’t talk about it, so stay tuned…
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