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National Fuel Tests Marcellus Shale Well and Announces Sustained Flows Through Covington Gathering System

^{Published on 2009-12-22 08:25:21 - Market Wire}
 

WILLIAMSVILLE, N.Y.--([ BUSINESS WIRE ])--Seneca Resources Corporation (" Seneca") a wholly owned subsidiary of National Fuel Gas Company (NYSE: NFG) ("National Fuel" or the "Company") announced today that its third Seneca-operated horizontal Marcellus Shale well flowed at an initial 24-hour rate of over 10 million cubic feet per day ("Mmcfd") and averaged 9.5 Mmcfd over seven days. In addition, the Company's wholly owned subsidiary, National Fuel Gas Midstream Corporation ("Midstream"), began flowing gas on its Covington Gathering System ("Covington") in November 2009.

"We continue to make considerable progress on our Marcellus related initiatives. The successful completion of our third Seneca-operated horizontal Marcellus well and our ability to complete the Covington project in such an efficient manner demonstrates our ability to execute on our Marcellus strategy."

Matthew D. Cabell, President of Seneca, stated, "Our 7-day initial production rates for our Tioga County horizontals are averaging 6.7 Mmcfd, far above the industry average. With three high-rate wells drilled and completed, we are more confident than ever in our ability to efficiently and effectively develop our substantial acreage position. We now have two Seneca-operated horizontal rigs running and anticipate drilling 50-70 horizontal wells during fiscal 2010, including those operated by EOG Resources in our joint venture."

Located in Tioga County, Pennsylvania, construction on Covington began in July 2009 and gas began flowing on November 17, 2009. Midstream's Covington system consists of eight miles of mostly 12-inch high-pressure gathering lines, dehydration facilities and an interconnection to the Tennessee Gas Pipeline system operated by El Paso Corporation. Covington will serve natural gas producers in the region, including Seneca, with daily capacity of up to 100 million cubic feet. Midstream will continue to expand Covington throughout the upcoming winter.

David F. Smith, President and Chief Executive Officer of National Fuel Gas Company added, "We continue to make considerable progress on our Marcellus related initiatives. The successful completion of our third Seneca-operated horizontal Marcellus well and our ability to complete the Covington project in such an efficient manner demonstrates our ability to execute on our Marcellus strategy."

National Fuel is an integrated energy company with $4.8 billion in assets comprised of the following four operating segments: Exploration and Production, Pipeline and Storage, Utility, and Energy Marketing. Seneca, the exploration and production segment of National Fuel Gas Company, 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. Midstream was formed to build, own and operate natural gas processing and pipeline gathering facilities in the Appalachian region. Additional information about National Fuel and its operations is available at [ www.nationalfuelgas.com ] or by calling its Investor Service at 1-800-334-2188.

*Certain statements contained herein, including 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; 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, or other natural disasters; changes in the availability and/or price of natural gas; 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; 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; 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; or the cost and effects of legal and administrative claims against the Company. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.