National Fuel Provides Third Quarter Update for Exploration & Production Operations
National Fuel Provides Third Quarter Update for Exploration & Production Operations
WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)-- Seneca Resources Corporation ("Seneca"), the wholly owned exploration and production subsidiary of National Fuel Gas Company (NYS: NFG) ("National Fuel" or the "Company") reports that its production volumes for its fiscal third quarter ended June 30, 2013 totaled 34.1 billion cubic feet equivalent ("Bcfe"), a 54% increase over the prior year's third quarter. This was also an 18% increase over the quarter ended March 31, 2013.
Seneca's total production of 34.1 Bcfe, or 374 million cubic feet equivalent ("MMcfe") per day, was driven by significant natural gas production growth from its new Marcellus Shale wells in Lycoming County, Pa. Natural gas production increased 67%, to a total of 29.8 Bcf, while crude oil production totaled 709,000 barrels, which was a decrease of 1.6% from the prior year. The decrease in crude oil production is a result of a continued constraint in a third-party pipeline used to transport associated natural gas production within the Sespe Field. This is expected to be resolved by the end of December 2013.
As a result of better than projected performance of its Marcellus Shale assets, the Company is increasing its fiscal 2013 production guidance to a range of 118 to 124 Bcfe. The previous guidance range was 110 to 118 Bcfe. The Company is also increasing its fiscal 2014 production guidance to a range of 134 to 146 Bcfe, which is an increase from the previous range of 132 to 142 Bcfe. Seneca expects production will remain relatively flat quarter to quarter until the second half of fiscal year 2014 when several new pads are turned into sales.
As part of its Marcellus Shale delineation drilling program in fiscal 2013, Seneca previously tested one well in the Rich Valley prospect area in Cameron County, Pa., with a peak 7-day production rate of 7.8 MMcf per day, which at the time represented the highest rate of a Seneca Marcellus well within its legacy acreage. This well had a treatable lateral length of 6,372' and was completed utilizing a reduced cluster spacing ("RCS") design.
During the third quarter of fiscal 2013, Seneca tested four additional wells in three geographically distinct locations. These wells achieved 24-hour peak production rates ranging from 4.8 to 8.9 MMcfe per day. They are currently shut-in awaiting the completion of production infrastructure. At this time, three additional delineation wells still await testing. Details on each of the wells in the fiscal 2013 Marcellus delineation drilling program can be found in the table below.
Two of the wells tested during the third quarter are located in the Clermont prospect area in Elk County, Pa. This is adjacent to the Rich Valley prospect area where the previously mentioned delineation well is located.
The two Clermont wells were drilled side-by-side in order to test the effectiveness of the RCS completion design. The well completed with RCS tested at a peak 24-hour production rate of 8.9 MMcf per day and the well completed without RCS tested at a peak 24-hour production rate of 6.6 MMcf per day.
(MMcfe per 1,000')
|Owl's Nest (54H)||Elk||41||6,137'||Yes||Completed|
|Owl's Nest (59H)||Elk||36||5,370'||Yes||Completed|
Ronald J. Tanski , President and Chief Executive Officer of National Fuel, stated, "Third quarter production was outstanding, and exceeded our projections. Well results continue to improve, and our operational efficiencies allowed us to bring multi-well pads on more quickly than forecasted. This success has allowed us to increase our production guidance for fiscal 2013 and 2014. Additionally, initial delineation results in our Western Development Area were very positive. Along with the first well in our Rich Valley prospect area, these four newly tested wells further our confidence in a successful long-term Marcellus development program across our vast legacy acreage position in Pennsylvania."
Additional information on the Company's operations and financial results will be discussed on the 3rd Quarter Fiscal 2013 teleconference which is scheduled for Friday, August 9, 2013 at 11:00 AM ET.
National Fuel is an integrated energy company with $6.3 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.
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 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 taxes, safety, 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; governmental/regulatory actions, initiatives and proceedings; 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 performance of the Company's key suppliers counterparties; 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.
National Fuel Gas Company
Timothy J. Silverstein, 716-857-6987
Karen L. Merkel, 716-857-7654
KEYWORDS: United States North America New York
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