From Seneca Resources:
Total Production for Fiscal Year 2013 Increased 45%
Total Proved Reserves Reached 1,549 Bcfe
(Oct. 21, 2013) WILLIAMSVILLE, N.Y. – Seneca Resources Corporation (“Seneca”), the
wholly owned exploration and production subsidiary of National Fuel Gas Company (NYSE:
NFG) (“National Fuel” or the “Company”) reports that production volumes for the fiscal
year’s fourth quarter ended September 30, 2013, totaled 33.2 billion cubic feet equivalent
(“Bcfe”), a 35% increase over the prior year’s fourth quarter. Total production for fiscal
year 2013 was 120.7 Bcfe, which was a 45% increase over fiscal year 2012. Additionally,
Seneca’s proved natural gas and crude oil reserves as of September 30, 2013, increased
24% to a record high of 1,549 Bcfe.
Seneca’s total production of 33.2 Bcfe, or 361 million cubic feet equivalent (“MMcfe”)
per day, was driven by the continued success of Seneca’s Marcellus Shale development
program in Lycoming County, Pa. Natural gas production increased 42%, to a total of 28.9
Bcf, despite nearly 3 Bcf of price-related curtailments. Crude oil production totaled 717,000
barrels, which was an increase of 1.6% from the prior year’s fourth quarter. Growth in
crude oil production was limited primarily as a result of a continued constraint in a thirdparty
pipeline used to transport associated natural gas production within the Sespe Field.
This is expected to be resolved by the end of January 2014.
Reserves Update (Preliminary)
During fiscal year 2013, Seneca replaced 351% of production to reach a total of
1,549 Bcfe of proved reserves as of September 30, 2013. Seneca’s success through the
drill bit in the Marcellus Shale led to a 311 Bcf, or 31%, increase in natural gas reserves,
which totaled 1,300 Bcf at fiscal year end. Crude oil reserves, which decreased by 3%
largely due to production, totaled 41.6 million barrels at September 30, 2013.
Of the total reserves, 71% were classified as proved developed reserves. This is an
increase from 67% proved developed reserves as of September 30, 2012. Proved
undeveloped (“PUD”) reserves totaled 29% of the total reserves at the end of the fiscal
Finding and development costs are expected to be approximately $1.31 per Mcfe for
fiscal 2013. Seneca’s three-year average finding and development costs are expected to be
$1.67 per Mcfe, which is down from the $1.87 three-year average in fiscal 2012.
As a result of continued better than projected performance of its Marcellus Shale
assets, the Company is increasing its fiscal 2014 production guidance to a range of 145 to
165 Bcfe, or a 20% to 37% increase over fiscal 2013. The previous guidance range was
134 to 146 Bcfe. This increase is primarily a result of decreased spud to sales timing in
Lycoming and Tioga counties within Seneca’s Eastern Development Area (“EDA”), increased
EUR assumptions, and a base of producing properties projected to decline at a slower rate
in part due to the start-up of compression within its DCNR Tract 100 acreage in Lycoming
Seneca’s delineation efforts in the Western Development Area (“WDA”) are ongoing.
During the fourth quarter of fiscal 2013, Seneca tested two additional wells in its Owl’s Nest
area of Elk County. Both of these wells utilized a reduced cluster spacing (“RCS”)
completion design and achieved 24-hour peak production rates of 6.1 and 3.4 MMcfe per
day. The second well was completed using linear gel to place larger proppant near the
wellbore. Seneca believes longer laterals and standard RCS completion design are more
representative of expectations for this area. Both wells are currently shut-in awaiting the
completion of production infrastructure. Below is a summary of the delineation wells
completed in the WDA during fiscal 2013.
Rich Valley Cameron 42 6,372’ Yes 8.1 7.8 Producing
Clermont (9H) Elk 37 5,500’ Yes 11.4 10.0 Producing
Clermont (10H) Elk 23 5,565’ No 8.1 7.3 Producing
Ridgway Elk 37 5,537’ Yes 7.1 6.4 Tested
Church Run Elk 29 4,435’ Yes 4.8 4.5 Tested
Owl’s Nest (54H) Elk 41 6,139’ Yes 6.1 5.8 Tested
Owl’s Nest (59H) Elk 36 5,370’
3.4 3.1 Tested
Tionesta Forest 35 5,100’ Yes Completed
On DCNR Tract 100 in Lycoming County, Pa., Seneca brought a new five-well pad on
line during the quarter. These wells achieved 24-hour peak production rates ranging from
14.8 to 22.1 MMcf per day. Over its first 30 days, this five-well pad produced 2.3 Bcf of
In the Utica Shale, Seneca tested a dry gas well at its Mt. Jewett prospect area in
McKean County. This well had a treatable lateral length of 5,777’ and was completed using
38 RCS stages. The 24-hour peak production rate was 8.5 MMcf per day and the well
averaged 6.8 MMcf per day over a seven-day period.
Ronald J. Tanski, President and Chief Executive Officer of National Fuel, stated, “The
fourth quarter capped off an outstanding year for Seneca. We achieved tremendous growth
in both production and proved reserves, and our delineation program in the Western
Development Area of the Marcellus Shale demonstrates the vast potential of our acreage
position. As we move into fiscal 2014, Seneca and our midstream businesses will be
executing a coordinated plan to develop our resources and install the infrastructure needed
to bring our production to market.”
Additional information on the Company’s operations and financial results will be
discussed during the 4
th Quarter Fiscal 2013 Teleconference, which is scheduled for Friday,
November 8, 2013, at 11 a.m. 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
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