WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--Sep. 27, 2012--
Seneca Resources Corporation (“Seneca”), the wholly owned exploration
and production subsidiary of National Fuel Gas Company (NYSE: NFG)
(“National Fuel” or the “Company”) today provided an update on recent
well results within the Marcellus Shale. Also, Seneca announced a
pending farm-in agreement on properties near its existing crude oil
assets in California, as well as its initial entry into the
Mississippian Lime crude oil play in Kansas.
In the Marcellus Shale, Seneca has brought on three more wells on its
DCNR Tract 100 acreage in Lycoming County, Pa., two of which utilized a
reduced cluster spacing (RCS) completion design. The two RCS wells had
peak 24-hour production rates of 13.4 and 14.9 million cubic feet
(“MMcf”) per day of natural gas and the third well had a peak rate of
11.3 MMcf per day. To date, Seneca has tested eight wells on Tract 100,
with IP rates ranging from 10.5 to 16.1 MMcf per day. In Seneca’s Rich
Valley prospect in its Western Development Area in Cameron County, Pa.,
one horizontal well was drilled and tested utilizing the RCS completion
design and reached a peak 24-hour rate of 6.3 MMcf per day of natural
gas.
In the Utica Shale, Seneca has recently finished the completion of two
horizontal wells, one each in McKean and Forest counties, Pa. The
Tionesta well in Forest County had all stages successfully completed. As
a result of an operational challenge, unrelated to the quality of the
reservoir, the Mt. Jewett well in McKean County was only partially
completed with three frac stages. Currently, both Utica wells are
shut-in for a period of 60 days and are expected to begin production in
November.
In California, Seneca has reached an agreement in principle with Chevron
U.S.A. (“Chevron”) for a portion of Chevron’s assets in the East
Coalinga Field. As part of the agreement, Seneca would gain operatorship
of the field in early 2013, while Chevron would retain a royalty on
incremental development and full interest in the existing production.
Also, Seneca has recently established a new position within the
Mississippian Lime crude oil play, with approximately 9,300 net acres
(23,000 gross acres) in Pratt County, Kan. Seneca will be the operator
on 4,600 net acres and will have a non-operating interest on the
remaining net acreage position. Seneca is expected to participate in
three to eight horizontal wells in fiscal year 2013.
The activity anticipated as a result of these oil property acquisitions
is included in the Company’s preliminary fiscal year 2013 capital
expenditure forecast of $555 to $710 million and production forecast
range of 92 to 105 billion cubic feet equivalent (“Bcfe”).
“We are very excited about these new opportunities to further enhance
our highly successful crude oil operations,” said
David F. Smith
,
Chairman and Chief Executive Officer of National Fuel. “With our history
of successfully integrating and growing mature properties in California,
we believe that the East Coalinga Field fits nicely with our existing
operations and will help Seneca to continue growing crude oil production
in California. Our initial footprint in the Mississippian Lime play,
although modest in size, provides us a position in an emerging play that
we believe has significant potential and additional running room.
“Over the past several years, Seneca has transitioned from an
exploration company focused on conventional plays to a development
company focused on resource plays. I am quite confident that we have the
technical and operational team in place to continue our development in
California and Appalachia and to be successful in our entry into the
Mississippian Lime. With the growth of our Appalachian properties over
the last few years and the resulting shift to a higher percentage of
natural gas production, the acquisition of additional oil development
opportunities will keep us on the path towards our ongoing goal of
maintaining a significant contribution to the Company from our
oil-producing properties.”
National Fuel is an integrated energy company with $5.8 billion in
assets comprised of the following four operating segments: Exploration
and Production, Pipeline and Storage, Utility, and Energy Marketing.
Additional information about National Fuel is available at www.nationalfuelgas.com
or through its investor information service at 1-800-334-2188.
Certain statements contained herein, including those regarding estimated
future earnings, and statements that are identified by the use of the
words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,”
“plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and
similar expressions, are “forward-looking statements” as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve risks and uncertainties, which could cause actual
results or outcomes to differ materially from those expressed in the
forward-looking statements. The Company’s expectations, beliefs and
projections contained herein are expressed in good faith and are
believed to have a reasonable basis, but there can be no assurance that
such expectations, beliefs or projections will result or be achieved or
accomplished. In addition to other factors, the following are important
factors that could cause actual results to differ materially from those
discussed in the forward-looking statements: factors affecting the
Company’s ability to successfully identify, drill for and produce
economically viable natural gas and oil reserves, including among others
geology, lease availability, title disputes, weather conditions,
shortages, delays or unavailability of equipment and services required
in drilling operations, insufficient gathering, processing and
transportation capacity, the need to obtain governmental approvals and
permits, and compliance with environmental laws and regulations; changes
in laws, regulations or judicial interpretations to which the Company is
subject, including those involving derivatives, taxes, safety,
employment, climate change, other environmental matters, real property,
and exploration and production activities such as hydraulic fracturing;
changes in the price of natural gas or oil; impairments under the SEC’s
full cost ceiling test for natural gas and oil reserves; uncertainty of
oil and gas reserve estimates; significant differences between the
Company’s projected and actual production levels for natural gas or oil;
changes in demographic patterns and weather conditions; changes in the
availability, price or accounting treatment of derivative financial
instruments; governmental/regulatory actions, initiatives and
proceedings, including those involving rate cases (which address, among
other things, allowed rates of return, rate design and retained natural
gas), environmental/safety requirements, affiliate relationships,
industry structure, and franchise renewal; delays or changes in costs or
plans with respect to Company projects or related projects of other
companies, including difficulties or delays in obtaining necessary
governmental approvals, permits or orders or in obtaining the
cooperation of interconnecting facility operators; financial and
economic conditions, including the availability of credit, and
occurrences affecting the Company’s ability to obtain financing on
acceptable terms for working capital, capital expenditures and other
investments, including any downgrades in the Company’s credit ratings
and changes in interest rates and other capital market conditions;
changes in economic conditions, including global, national or regional
recessions, and their effect on the demand for, and customers’ ability
to pay for, the Company’s products and services; the creditworthiness or
performance of the Company’s key suppliers, customers and
counterparties; economic disruptions or uninsured losses resulting from
major accidents, fires, severe weather, natural disasters, terrorist
activities, acts of war, cyber attacks or pest infestation; changes in
price differential between similar quantities of natural gas at
different geographic locations, and the effect of such changes on the
demand for pipeline transportation capacity to or from such locations;
other changes in price differentials between similar quantities of oil
or natural gas having different quality, heating value, geographic
location or delivery date; significant differences between the Company’s
projected and actual capital expenditures and operating expenses;
changes in laws, actuarial assumptions, the interest rate environment
and the return on plan/trust assets related to the Company’s pension and
other post-retirement benefits, which can affect future funding
obligations and costs and plan liabilities; the cost and effects of
legal and administrative claims against the Company or activist
shareholder campaigns to effect changes at the Company; increasing
health care costs and the resulting effect on health insurance premiums
and on the obligation to provide other post-retirement benefits; or
increasing costs of insurance, changes in coverage and the ability to
obtain insurance. The Company disclaims any obligation to update any
forward-looking statements to reflect events or circumstances after the
date thereof.
Source: National Fuel Gas Company
National Fuel Gas Company
Analyst:
Timothy J.
Silverstein, 716-857-6987
or
Media:
Donna L. DeCarolis,
716-857-7872