WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--Mar. 24, 2014--
National Fuel Gas Company's (NYSE:NFG) (“National Fuel” or the
“Company”) wholly-owned exploration and production subsidiary, Seneca
Resources Corporation ("Seneca"), today provided an operational update
and announced initial results from its first Geneseo Shale well located
in Lycoming County, Pa. The Company also confirmed its capital
expenditure and production guidance ranges for fiscal years 2014 and
2015.
Operational Update
Seneca's first Geneseo Shale well drilled in Lycoming County, Pa.,
achieved a peak 24-hour production rate of 14.1 million cubic feet
("MMcf") per day and averaged 8.6 MMcf per day during its first 30 days.
The well was drilled to a lateral length of 4,920 feet and completed
with 33 stages. The initial estimated ultimate recovery ("EUR") for this
well is 7.0 billion cubic feet ("Bcf").
Also in Pennsylvania, within its Greater Clermont Area located in Elk
and Cameron counties, Seneca has drilled all nine Marcellus Shale wells
on its first multi-well development pad in the Western Development Area
("WDA") and is drilling the sixth and final Marcellus well on its second
pad. These wells are scheduled to begin production in the fourth quarter
of fiscal 2014, which coincides with the in-service date for the
Clermont Gathering System.
Production Guidance
The Company is reiterating its production forecast range for the entire
2014 and 2015 fiscal years of 145 to 165 billion cubic feet equivalent
(“Bcfe”) and 180 to 220 Bcfe, respectively. At the midpoint of these
forecasted ranges, production growth for each of fiscal 2014 and 2015 is
estimated to be 28% and 29%, respectively.
Firm Sales Update
For the last nine months of fiscal 2014, at the midpoint of the current
guidance range, approximately 75% of Appalachian volumes are committed
to firm sales agreements. In fiscal 2015, approximately 45% of
Appalachian volumes are already committed under firm sales agreements.
The Company continues to pursue incremental firm sales agreements and
will add new positions when contract terms and pricing are favorable.
Specific details of the Company's hedging program and firm sales
agreements can be found in the current investor presentation available
on the Company's website.
Capital Expenditure Guidance
The Company is reiterating its consolidated capital expenditure forecast
range for the entire 2014 and 2015 fiscal years of $855 to $1,035
million and $1,065 to $1,275 million, respectively. These forecasts
assume a consistent operation of three horizontal drilling rigs in
Seneca's East Division.
“We are pleased with the initial production from Seneca's first Lycoming
County Geneseo Shale well, and are planning additional Geneseo drilling
in fiscal 2015 to confirm the potential for our acreage,” said Ronald J.
Tanski, President and Chief Executive Officer of National Fuel. “In
addition to approximately 2,000 projected Marcellus Shale well locations
that are economic between $2.00 and $4.00 per Mcfe, both the Utica and
Geneseo shales look to hold significant long-term development potential.
We continue to believe our current pace of development is appropriate
despite the challenging basis differentials across Appalachia. We remain
focused on securing long-term firm transportation and sales contracts
for Seneca's production and our midstream businesses are developing
infrastructure expansion projects not only for Seneca, but for many of
the other producers facing similar constraints."
The Company will be participating in the Howard Weil 42nd Annual Energy
Conference starting today, March 24, 2014. Supporting materials and
additional disclosures have been furnished to the Securities and
Exchange Commission and are available on the Company’s investor website
at investor.nationalfuelgas.com.
National Fuel is an integrated energy company with $6.3 billion in
assets comprised of the following five operating segments: Exploration
and Production, Pipeline and Storage, Gathering, Utility, and Energy
Marketing. Additional information about National Fuel is available at www.nationalfuelgas.com.
Certain statements contained herein, including statements identified by
the use of the words “anticipates,” “estimates,” “expects,” “forecasts,”
“intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,”
“may” and similar expressions, and statements which are other than
statements of historical facts, 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 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;
regulatory actions, initiatives and proceedings, including those
involving environmental and safety requirements; changes in the price of
natural gas or oil; changes in price differentials between similar
quantities of natural gas or oil at different geographic locations, and
the effect of such changes on commodity production, revenues and demand
for pipeline transportation capacity to or from such locations; other
changes in price differentials between similar quantities of natural gas
or oil having different quality, heating value, hydrocarbon mix or
delivery date; 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 the
availability, price or accounting treatment of derivative financial
instruments; 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; or
economic disruptions or uninsured losses resulting from major accidents,
fires, severe weather, natural disasters, terrorist activities, acts of
war or cyber attacks. 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
Analysts:
Timothy
J. Silverstein, 716-857-6987
or
Media:
Karen
L. Merkel, 716-857-7654