Eclipse Resources Reports Proved Reserves, Operational and Financial Update

STATE COLLEGE, Pa.–(BUSINESS WIRE)–Eclipse Resources Corporation (NYSE:ECR) (the “Company” or “Eclipse
Resources”) today, in advance of the Company’s 2018 Analyst Day,
provided an update on its fourth quarter and full year 2017 production
and announced its year-end 2017 proved reserves, 2018 capital budget,
and first quarter and full year 2018 guidance.

Highlights of the release include:

• Net production for the fourth quarter 2017 averaged 311.7 MMcfe per
  day, a 22% increase over fourth quarter 2016 production
• Net production for the full year 2017 averaged 310.7 MMcfe per day, a
  36% increase over 2016 full year production
• Year-end 2017 proved reserves increased by 211% to 1.46 Tcfe based on
  SEC pricing, and by 19% to 1.46 Tcfe based on forward strip pricing,
  in each case, as compared to year-end 2016 proved reserves
• Preliminary 2017 drill bit only finding and development costs are
  estimated to be $0.26 per Mcfe and all sources finding and development
  costs are estimated to be $0.31 per Mcfe
• During the full year 2017, the Company drilled 29 gross wells with an
  average lateral length of approximately 13,600 feet, which included
  eight wells with a lateral length greater than 19,000 feet
• The Company has updated its “type well” assumptions for 2018,
  including extending the average lateral length for all of its Utica
  Shale wells to 16,000 feet, updating service cost assumptions and
  adjusting its initial flow assumption on its Utica Shale Dry gas
  wells, which the Company expects will accelerate production over its
  previous expectations
• Subsequent to year-end, the Company executed an amendment to one of
  its gas gathering agreements covering the majority of its Dry Gas
  Utica Shale wells in Ohio which, among other provisions, resulted in a
  reduction to the gathering rate of approximately 20%
• The Company has established an initial capital budget for the full
  year 2018 of approximately $300 – $320 million. Eclipse Resources has
  elected to retain 30% of its pre-carry working interest in the second
  program of its Utica Shale drilling joint venture agreement with
  Sequel Energy
• The Company issued first quarter 2018 and full-year 2018 guidance,
  including a production guidance range for the full-year 2018 of 335
  MMcfe per day to 355 MMcfe per day, and estimated year- over-year
  condensate growth of approximately 42%, which reflects the Company’s
  objective of increasing its oil and liquids exposure as a percentage
  of its total production for 2018

Production

The Company reported fourth quarter 2017 average net production of 311.7
MMcfe per day. The Company also reported full year 2017 average net
production of 310.7 MMcfe per day, which represents 36% growth on a
year- over- year basis. For the fourth quarter of 2017, the Company’s
production mix was 74% natural gas, 15% natural gas liquids (“NGLs”) and
11% oil, while the production mix for the full year 2017 was 77% natural
gas, 14% NGLs and 9% oil.

Commenting on the operational activity, Benjamin W. Hulburt, Eclipse
Resources Chairman, President and CEO, said the following, “Our full
year 2017 average net production of approximately 311 MMcfe per day was
slightly below the low end of our previously revised higher guidance.
This was the result of shut-in or curtailed production during offsetting
completion operations, as well as the conscious decision to reorder our
drilling schedule towards our condensate wells (which can have a
negative effect on an Mcfe basis using the traditional 6:1 ratio, but
results in higher cash flow). Given our heavy condensate weighted turn
to sales schedule in the early portion of 2018, we believe our increased
liquids exposure as part of our commodity mix will allow us to increase
revenue on a per unit basis despite the backwardation of the natural gas
strip. With the closing of the Sequel joint venture during the fourth
quarter of 2017, we believe we will continue to capture the operational
efficiencies gained from our current two gross rig development program.
We anticipate the 2018 capital budget of $300 – $320 million will allow
Eclipse to achieve production growth targets of approximately 8% to 14%
on an Mcfe basis and over 40% growth in oil (condensate) production in
2018, in each case as compared to 2017 production, while maintaining the
operational flexibility as we move into the second half of the year to
lower capital expenditures by approximately $50-$75 million if commodity
prices do not support this level of spending.

“In addition, the Company recently began the process of turning to sales
two operated Marcellus wells on its ‘stacked pay’ pad composed of three
Utica Dry gas and the two Marcellus wells. Based on the initial results
of these wells, this area could be a focus area for incremental
condensate rich activity and contains 78 potential drilling locations
with an anticipated return profile that could be highly competitive with
the rest of our portfolio. The Company will continue to evaluate these
wells as it looks to develop multi-formation pads in this area of its
acreage.”

Proved Reserves

The Company has recently received its annual reserve report as prepared
by its independent reservoir engineering firm, Netherland, Sewell &
Associates, Inc., which estimated the Company’s proved reserves at
December 31, 2017 to be 1.46 Tcfe, a 211% increase compared to proved
reserves at December 31, 2016. This increase in reserves was driven
mainly by an increase in proved developed producing reserves related to
new wells coming into production during 2017 and from the addition of
incremental proved undeveloped reserves. The Company’s longer lateral
development and enhanced completion design has been instrumental in
adding value and we believe will provide for progressively larger
reserve additions. SEC prices for reserves were calculated as of
December 31, 2017 and among other items calibrated for quality, energy
content and market differentials with the average adjusted product price
weighted by production over the remaining lives of the properties being
$51.34 per Bbl for oil, $2.98 per Mcf for natural gas, and $21.83 per
Bbl of NGLs.

Utilizing SEC pricing as of December 31, 2017, the PV101
value would be approximately $730 million and the proved reserve volumes
would be 1.46 Tcfe. This represents a value increase of $524 million, or
approximately 254%, and a volume increase of approximately 990 Bcfe, or
211%, relative to the Company’s reserves at year-end 2016 using year-end
2016 SEC prices.

Utilizing forward New York Mercantile Exchange (“NYMEX”) pricing as of
December 31, 2017, the PV101 value would be approximately
$738 million and the proved reserve volumes would be 1.46 Tcfe. This
represents a value increase of $130 million, or approximately 21%, and a
volume increase of approximately 237 Bcfe, or 19%, relative to the
Company’s reserves at year-end 2016 using year-end 2016 NYMEX forward
prices.

For the year 2017, the Company estimates that its drill bit only finding
and development cost, excluding revisions, was $0.26 per Mcfe while the
all sources finding and development cost for estimated proved reserve
additions, including revisions was $0.31 per Mcfe. The finding and
development costs are based on the Company’s preliminary and unaudited
2017 capital costs. Final capital costs will be provided in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2017 and may differ materially from the Company’s estimates.

2018 Capital Budget

The Company has established an initial capital budget for 2018 of
between $300 – $320 million, allocated approximately 84% for drilling
and completions activities, 8% for midstream activities, 6% for land
activities and 2% for other capital requirements. This budget
incorporates the Company’s drilling joint venture with Sequel Energy, in
which the Company made a pre-carry working interest election of 50% in
the first 16 well program and a pre-carry working interest election of
30% in the second 17 well program. The initial capital budget assumes
the drilling of 17 net (33 gross) horizontal Utica Shale wells and the
completion of 18 net (35 gross) horizontal Utica Shale wells, including
the drilling and completion of 1 net (1.0 gross) Flat Castle area well.
The wells to be drilled in 2018 are expected to average over 16,800 feet
in lateral length.

Guidance

The Company issued the following first quarter and full year 2018
guidance in the table below:

Analyst Day

Eclipse Resources will host its 2018 Analyst Day on Wednesday, January
31st at the JW Marriot Hotel in Houston, Texas. A live audio webcast of
the event will begin at 9:00 am (Central Time) and can be accessed via
the “Investors” section of Eclipse Resources’ website at www.eclipseresources.com.
The Company plans to post the Analyst Day Presentation to the
“Investors” section of the Company’s website prior to the event.

Non-GAAP Disclosure

Year-end pre-tax PV10 value is a non-GAAP financial measure as defined
by the SEC. Eclipse Resources believes that the presentation of pre-tax
PV10 value is relevant and useful to the Company’s investors because it
presents the discounted future net cash flows attributable to Eclipse
Resources’ reserves prior to taking into account corporate future income
taxes and the Company’s current tax structure. Eclipse Resources further
believes investors and creditors use pre-tax PV10 value as a basis for
comparison of the relative size and value of the Company’s reserves as
compared with other companies.

The GAAP financial measure most directly comparable to pre-tax PV10 is
the standardized measure of discounted future net cash flows
("Standardized Measure"). Eclipse Resources expects to include a full
reconciliation of pre-tax PV10 to Standardized Measure in its Annual
Report on Form 10-K for the year ended December 31, 2017.

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.

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 Exchange Commission on March 3, 2017 (the
“2016 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
natural gas, natural gas liquids and oil 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; the costs, terms and
availability of gathering, processing, fractionation and other midstream
services; general economic conditions; 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.

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 recent
significant decline of the price of natural gas, NGLs, and oil,
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,
the timing of development expenditures, and the other risks described
under the heading “Risk Factors” in the 2016 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.

Contacts

Eclipse Resources Corporation
Douglas Kris, Investor Relations,
814-325-2059
[email protected]