Eclipse Resources: Will A Disappointing IPO Turn Into A Success Story?
- The 35% decline in Eclipse’s share price since the IPO has lead to a more realistic, albeit still “aspirational,” valuation for the stock.
- Eclipse’s most recent well results appear in line or above the company’s model assumptions and execution is progressing on schedule.
- While the wide basis differential in the Marcellus South will create a strong headwind in the current quarter, the company’s production should be in line or above guidance midpoint.
- Eclipse will need to beat its model assumptions for well performance and drilling returns for the stock to “grow into” its premium valuation and move higher.