Business & Finance
Business and Finance
Business and Finance
Tue, December 9, 2008
Mon, December 8, 2008 SJI Announces Agreement to Develop Marcellus Shale Acreage
FOLSOM, N.J.--([ BUSINESS WIRE ])--South Jersey Industries (NYSE: SJI) today announced that Potato Creek, LLC has entered into a lease agreement with an experienced exploration and production company to develop the deep mineral rights on over 21,000 acres of property in the Marcellus Shale in western Pennsylvania. SJI's wholly owned subsidiary, South Jersey Resources Group, LLC, is a minority partner in Potato Creek.
In addition to receiving an upfront lease payment, Potato Creek has retained certain royalty and carried working interest rights that provide an opportunity to boost returns based on natural gas production on the property. The upfront lease payment will add an estimated 15 cents to SJI's earnings per share over the life of the lease.
"Currently we have a successful commodity marketing and shallow well program at Potato Creek in western Pennsylvania," explained Edward Graham, SJI's Chairman and CEO. "Leasing the deep mineral rights that we control to an experienced E&P company enables us to begin realizing the value of this asset for our shareholders without incurring the risks and costs associated with drilling this acreage ourselves," continued Graham.
Penn State University geoscientist Terry Engelder said early in November that, based on several common industry assumptions, he estimates 363 trillion cubic feet of natural gas could be recovered over the next few decades from the 31-million-acre core area of the Marcellus region, which includes southern New York, Pennsylvania, West Virginia, eastern Ohio and western Maryland. Engelder's study of Potato Creek's acreage suggests that, due to a very high accessibility factor, recoverable natural gas could range from 275 billion cubic feet to 725 bcf, potentially providing a significant royalty and working interest income stream from future natural gas production to SJI.
Forward-Looking Statement
This news release contains forward-looking statements. All statements other than statements of historical fact included in this press release should be considered forward-looking statements made in good faith by the Company and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. When used in this press release words such as "anticipate," "believe," "expect," "estimate," "forecast," "goal," "intend," "objective," "plan," "project," "seek," "strategy" and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. These risks and uncertainties include, but are not limited to, the following: general economic conditions on an international, national, state and local level; weather conditions in our marketing areas; changes in commodity costs; the timing of new projects coming online; changes in the availability of natural gas; "non-routine" or "extraordinary" disruptions in our distribution system; regulatory, legislative and court decisions; competition; the availability and cost of capital; costs and effects of legal proceedings and environmental liabilities; the failure of customers, suppliers or business partners to fulfill their contractual obligations; and changes in business strategies. SJI assumes no duty to update these statements should actual events differ from expectations.
About South Jersey Industries
South Jersey Industries (NYSE: SJI) is an energy services holding company for utility and non-regulated businesses. A member of the KLD Global Climate 100 Index, SJI offers solutions to global warming through renewable energy, clean technology and efficiency. South Jersey Gas, one of the fastest growing natural gas utilities in the nation, strongly advocates the efficient use of energy while safely and reliably delivering natural gas in southern New Jersey. South Jersey Energy Solutions, the parent of SJI's non-regulated businesses, provides innovative, environmentally friendly energy solutions that help customers control energy costs. South Jersey Energy acquires and markets natural gas and electricity for retail customers and offers energy-related services. Marina Energy develops and operates energy projects including thermal facilities serving hot and chilled water for casinos, cogeneration facilities and landfill gas-to-electricity facilities. South Jersey Resources Group provides wholesale commodity marketing and risk management services. South Jersey Energy Service Plus installs, maintains and services heating, air conditioning and water heating systems, services appliances, installs solar systems and performs energy audits. For more information about SJI and its subsidiaries, visit [ http://www.sjindustries.com ].
