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National Fuel Announces Marcellus Shale Well Results and Exploration of Joint-Venture Opportunities

^{Published on 2010-09-22 09:31:21 - Market Wire}
 

WILLIAMSVILLE, N.Y.--([ BUSINESS WIRE ])--Seneca Resources Corporation (aSenecaa), a wholly owned subsidiary of National Fuel Gas Company (NYSE: NFG) (aNational Fuela or the aCompanya), today announced the results of two new Marcellus Shale wells, as well as its plans to explore joint-venture opportunities in the Marcellus Shale. A Seneca-operated well on DCNR Tract 100 in Lycoming County, Pa., was tested at a 24-hour rate of 15.8 million cubic feet per day (aMMcfda) on a 28/64-inch choke. Also, a Clearfield County, Pa., well operated by its joint-venture partner, EOG Resources, flowed at a 24-hour rate of 8.9 MMcfd. Seneca holds a 100 percent working interest in the Lycoming County well and a 50 percent working interest in the Clearfield County well.

"The DCNR Tract 100 well was the first test of our acreage in Lycoming County"

aThe DCNR Tract 100 well was the first test of our acreage in Lycoming County,a said Matthew D. Cabell, President of Seneca. aThe high flow rate is one of the best to date of any well drilled by the industry in the Marcellus and we plan to drill approximately 80 wells in this area over the next three to four years. The well in Clearfield County was the first EOG-operated joint-venture well completed using 5 -inch casing. We had been expecting that this larger casing size, which allows for a higher pump rate during fracture stimulation, would lead to a significant improvement in well performance. This well confirms our expectations for high rate wells on our legacy acreage position.a

Additionally, Seneca has engaged Jefferies & Company, Inc. to explore joint-venture opportunities across a broad portion of its Marcellus Shale acreage.

aThe results we have seen from these two most recent wells demonstrate the quality of our acreage and the ability of the Seneca team to execute our plan,a said David F. Smith, Chairman and Chief Executive Officer of National Fuel. aNow that we have substantially de-risked our acreage, we are prepared to consider entering into a new joint-venture in order to further accelerate our current Marcellus Shale development plans. In conjunction with those plans, we will continue to expand our investment in the infrastructure required to timely deliver gas into major markets. As I have said before, however, we will consider a joint-venture only if we feel we can significantly enhance the value of our position and be fully aligned with our new partner.a

Seneca Resources Corporation, 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. Currently, Senecaa™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 Resources and National Fuel Gas Company is available at [ www.nationalfuelgas.com ] or through the Companya™s investor information service at 1-800-334-2188.

Certain statements contained herein, including those that are identified by the use of the words aanticipates,a aestimates,a aexpects,a aforecasts,a aintends,a aplans,a apredicts,a aprojects,a abelieves,a aseeks,a awill,a amaya and similar expressions, are aforward-looking statementsa 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 Companya™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 occurrences affecting the Companya™s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Companya™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 the Companya™s products and services; economic disruptions or uninsured losses resulting from terrorist activities, acts of war, major accidents, fires, severe weather or natural disasters; changes in the availability and/or price of natural gas or oil; impairments under the SECa™s full cost ceiling test for natural gas and oil reserves; uncertainty of oil and gas reserve estimates; factors affecting the Companya™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, insufficient gathering, processing and transportation capacity, and the need to obtain governmental approvals and permits and comply with environmental laws and regulations; significant differences between the Companya™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 natural gas having different heating values and/or different geographic locations; changes in laws and regulations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, and exploration and production activities such as hydraulic fracturing; significant differences between the Companya™s projected and actual capital expenditures and operating expenses, and unanticipated project delays or changes in project costs or plans; inability to obtain new customers or retain existing ones; significant changes in competitive factors affecting the Company; governmental/regulatory actions, initiatives and proceedings, including those involving environmental and safety requirements; 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.