Eclipse Resources Corp., State College, Pa., and Blue Ridge Mountain Resources Inc., Irving, Tex., have agreed to merge in an all-stock transaction. The combine, with an enterprise value of $1.4 billion, will create a large, top-tier Appalachian energy company with 227,000 net effective undeveloped core acres across its Utica and Marcellus footprint with liquids-rich and dry gas optionality with added “stacked pay†development opportunities.
Blue Ridge’s second-quarter reporting showed 99,000 net effective undeveloped core acres in Ohio and West Virginia, 122 MMcfed (81% natural gas, 19% liquids) production, and 4,888 bcfe of total resource potential. Yearend 2017 proved reserves were 357 bcfe (22% liquids). For its second quarter report, Eclipse noted 128,000 net effective undeveloped core acres (54% held by production) and 306 MMcfed (72% natural gas) production.
The merger “checks all the boxes†upon first glance, said Seaport Global Securities analysts in an Aug. 27 note. “The combo solves a lot of issues for [Eclipse]—meaningfully improves leverage, accelerates organic growth, cuts unit costs, and adds higher-quality acreage that steps up inventory years.â€
Combined, the company expects 735 net locations, an 94% increase for Eclipse and a 106% increase for Blue Ridge.
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