Seneca Resources Corporation Provides Initial Results from recent Marcellus Shale Drilling
May 19 2009 - 11:43AM
Business Wire
Seneca Resources Corporation (�Seneca�), a wholly owned
subsidiary of National Fuel Gas Company (NYSE: NFG) (�National
Fuel� or the �Company�), today announced that a Marcellus Shale
well operated by its joint-venture partner, EOG Resources, was flow
tested at an average rate of over 3.0 million cubic feet per day
(�MMcfd�) for 7 days. Seneca holds a 50 percent working interest
and a 60 percent net revenue interest in the well.
Matthew D. Cabell, President of Seneca, stated, �This flow test
confirms our expectations for the potential of our Marcellus Shale
position, most of which is fee mineral acreage, where we pay no
royalty. This is a tremendous opportunity for Seneca, and as the
primary focus of our E&P activities, we expect the Marcellus
Shale to provide significant growth in production and reserves for
many years. We are currently fracture-stimulating another well and
expect flare testing to begin by the end of the month. Later in the
summer, we expect to discuss the results from that next well, and,
once we have more data-in-hand, we may be in a position to discuss
an estimate for the range of Marcellus Shale resource potential
across our extensive acreage position.� Seneca plans to operate 10
vertical wells and two to three horizontal wells in fiscal 2009,
and participate in another eight to 10 wells to be operated by EOG
Resources.
David F. Smith, Chief Executive Officer of National Fuel, added,
�This successful well completion and the initial flow rates confirm
the Marcellus Shale opportunity across our acreage. We will
continue to focus our efforts � and our resources � on the
Appalachian region in general and the Marcellus Shale in
particular. Seneca will continue to expand drilling in this play
through both our joint venture with EOG Resources and our
Seneca-operated horizontal drilling program that will begin this
July. Along with Seneca�s activities, our Midstream Company is
already designing and building infrastructure projects to transport
both Seneca and third-party production; and our Pipeline and
Storage segment looks to expand its services to move natural gas
produced from this vast resource to adjacent markets.�
Seneca, the exploration and production segment of National Fuel,
explores for, develops and purchases natural gas and oil reserves
in California, the Appalachian region and in the Gulf Coast region
of Texas and Louisiana. Currently, Seneca�s efforts are focused on
evaluating, exploring and developing reserves in the Appalachian
basin, economically producing reserves in California and exploiting
opportunities in the shallow waters of the Gulf of Mexico.
Additional information about Seneca and National Fuel is available
at www.nationalfuelgas.com or through the Company�s 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: financial and economic conditions, including the
availability of credit, and their effect on the Company�s ability
to obtain financing on acceptable terms for working capital,
capital expenditures and other investments; occurrences affecting
the Company�s ability to obtain financing under credit lines or
other credit facilities or through the issuance of commercial
paper, other short-term notes or debt or equity securities,
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 terrorist activities, acts of war, major
accidents, fires, hurricanes, other severe weather, pest
infestation or other natural disasters; changes in 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; changes in demographic
patterns and weather conditions; changes in the availability and/or
price of natural gas or oil and the effect of such changes on the
accounting treatment of derivative financial instruments or the
valuation of the Company�s natural gas and oil reserves;
impairments under the SEC�s full cost ceiling test for natural gas
and oil reserves; uncertainty of oil and gas reserve estimates;
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,
weather conditions, shortages, delays or unavailability of
equipment and services required in drilling operations, and the
need to obtain governmental approvals and permits and comply with
environmental laws and regulations; significant differences between
the Company�s projected and actual production levels for natural
gas or oil; changes in the availability and/or price of derivative
financial instruments; changes in the price differentials between
oil having different quality and/or different geographic locations,
or changes in the price differentials between natural gas having
different heating values and/or different geographic locations;
inability to obtain new customers or retain existing ones;
significant changes in competitive factors affecting the Company;
changes in laws and regulations to which the Company is subject,
including tax, environmental, safety and employment laws and
regulations; governmental/regulatory actions, initiatives and
proceedings, including those involving acquisitions, financings,
rate cases (which address, among other things, allowed rates of
return, rate design and retained natural gas), affiliate
relationships, industry structure, franchise renewal, and
environmental/safety requirements; unanticipated impacts of
restructuring initiatives in the natural gas and electric
industries; significant differences between the Company�s projected
and actual capital expenditures and operating expenses and
unanticipated project delays or changes in project costs or plans;
the nature and projected profitability of pending and potential
projects and other investments, and the ability to obtain necessary
governmental approvals and permits; ability to successfully
identify and finance acquisitions or other investments and ability
to operate and integrate existing and any subsequently acquired
business or properties; significant changes in tax rates or
policies or in rates of inflation or interest; significant changes
in the Company�s relationship with its employees or contractors and
the potential adverse effects if labor disputes, grievances or
shortages were to occur; changes in accounting principles or the
application of such principles to the Company; 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 hereof.
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