Eclipse Resources, Blue Ridge to merge as $1.4bn Utica-focused gas operator

Energy acquisition news : Rival oil and gas companies Eclipse Resources and Blue Ridge Mountain Resources have signed an all-stock merger deal to form a $1.4 billion Utica-focused gas operator.

While Eclipse Resources is headquartered in State College, Pennsylvania, Blue Ridge Mountain Resources is based in Irving, Texas.

The enlarged US oil and gas company through the combination of Eclipse Resources and Blue Ridge Mountain Resources will have 500-560 MMcfe per day production for Q4 2018 and nearly 227,000 net effective undeveloped core acreage providing over 20 years of prolific wet and dry gas inventory.

Eclipse Resources to acquire Blue Ridge Mountain Resources to create an enlarged $1.4bn Utica-focused gas operator. Photo courtesy of Zbynek Burival on Unsplash.

Commenting on Eclipse Resources acquisition of Blue Ridge Mountain Resources, Benjamin W. Hulburt – Chairman, President and CEO of Eclipse Resources, said: “This transaction provides a compelling opportunity for both Eclipse Resources and Blue Ridge shareholders to benefit from the strength of the combined company.

“This combination allows both of us to consolidate premier assets that significantly increase the Company’s production and cash flow, seamlessly fit into a consolidated drilling program and provide for considerable G&A synergies, all while allowing for accelerated growth without adding to the Company’s debt obligations.”

According to the merger terms, shareholders in Blue Ridge Mountain Resources will be issued 4.4259 shares of Eclipse Resources for each share they hold in the Texan oil and gas company. The value of each of the Blue Ridge as per the merger deal stands at $7.44.

After the completion of the merger of the two US oil and gas companies, Eclipse Resources shareholders will own around 57.5% stake with Eclipse Resources shareholders owning the remaining 42.5% or so stake in the combined company.

John Reinhart – President and CEO of Blue Ridge Mountain Resources, commenting on Eclipse Resources acquisition of Blue Ridge Mountain Resources, said: “We are excited about the highly complementary nature of this combination.

“Based on pro forma estimated fourth quarter of 2018 production of 500-560 MMcfe per day, a high performing management team, strong balance sheet, high quality asset base, and expected corporate, operational, and midstream synergies, we believe the combined company will possess a substantial scale advantage and an excellent foundation for significant organic growth with attractive cash flows while maintaining the optionality for bolt-on value-accretive acquisitions within the basin.”

Eclipse Resources will form a new subsidiary that will be merged into Blue Ridge Mountain Resources. This will result in the Texan oil and gas company becoming a wholly-owned subsidiary of its rival Pennsylvanian oil and gas company.

The Eclipse Resources, Blue Ridge merger is expected to be wrapped up in Q4 2018, upon receipt of customary regulatory approvals, approval from shareholders of the Texan oil and gas company and satisfactory meeting of other customary closing conditions.