This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

National Fuel Updates Its Marcellus Shale Operations

Stocks in this article: NFG

Seneca Resources Corporation (“Seneca”), the wholly owned exploration and production subsidiary of National Fuel Gas Company (NYSE: NFG) (“National Fuel” or the “Company”) today provided an update on the status of its Marcellus Shale joint venture with EOG Resources, Inc. (“EOG”), as well as anticipated changes to capital expenditures and production forecasts for its 2013 fiscal year.

Under a joint venture agreement (“JV”) between EOG and Seneca, EOG has the opportunity to earn an interest in Seneca acreage by drilling a minimum number of wells per year in a defined area of mutual interest. EOG has advised Seneca that it does not expect to meet the minimum drilling target for calendar 2012 specified in the JV. Should it not meet that minimum, EOG would no longer have the right to earn additional acreage from Seneca. However, both parties would retain their respective working interests in wells previously drilled and the parties could drill additional JV wells on the acreage that has been earned. As of July 21, 2012, EOG has earned a 50 percent working interest in approximately 34,000 gross acres contributed by Seneca to the joint venture.

“The joint venture with EOG has been successful in achieving the goals we identified when the agreement was signed in 2006,” said David F. Smith, Chairman and Chief Executive Officer of National Fuel. “With a minimal initial investment, we evaluated our acreage and learned from an experienced shale gas operator, simultaneously developing a talented Marcellus Shale operations team that has grown our Marcellus production substantially from the program’s inception. While we expect a modest impact to our near-term growth outlook, having full control of our largely royalty-free, contiguous acreage position unencumbered by a JV further enhances the long-term value of our Appalachian assets.”

As a result of this indicated reduction in JV activity, Seneca anticipates very little drilling or completion activity on JV acreage in fiscal 2013. This will lead to an inventory of previously drilled wells that likely will remain uncompleted until natural gas prices reach an acceptable level. Even though Seneca had already discussed its plans to limit participation in future JV wells to its 20 percent overriding royalty interest, the change in EOG’s JV activity will further reduce Seneca’s previously announced capital expenditure and production guidance for its 2013 fiscal year. Capital spending is expected to decrease by approximately $50 million, largely as a result of EOG’s anticipated postponement of completion activity, to a range of $400 to $500 million. Consequently, production is now expected to be in the range of 92 to 105 billion cubic feet equivalent (“Bcfe”), reduced from the previous guidance of 100 to 115 Bcfe.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs