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 its production volumes for its fiscal third quarter ended June 30, 2013 totaled 34.1 billion cubic feet equivalent (“Bcfe”), a 54% increase over the prior year’s third quarter. This was also an 18% increase over the quarter ended March 31, 2013.
Seneca’s total production of 34.1 Bcfe, or 374 million cubic feet equivalent (“MMcfe”) per day, was driven by significant natural gas production growth from its new Marcellus Shale wells in Lycoming County, Pa. Natural gas production increased 67%, to a total of 29.8 Bcf, while crude oil production totaled 709,000 barrels, which was a decrease of 1.6% from the prior year. The decrease in crude oil production is a result of a continued constraint in a third-party pipeline used to transport associated natural gas production within the Sespe Field. This is expected to be resolved by the end of December 2013.
As a result of better than projected performance of its Marcellus Shale assets, the Company is increasing its fiscal 2013 production guidance to a range of 118 to 124 Bcfe. The previous guidance range was 110 to 118 Bcfe. The Company is also increasing its fiscal 2014 production guidance to a range of 134 to 146 Bcfe, which is an increase from the previous range of 132 to 142 Bcfe. Seneca expects production will remain relatively flat quarter to quarter until the second half of fiscal year 2014 when several new pads are turned into sales.Operations Update As part of its Marcellus Shale delineation drilling program in fiscal 2013, Seneca previously tested one well in the Rich Valley prospect area in Cameron County, Pa., with a peak 7-day production rate of 7.8 MMcf per day, which at the time represented the highest rate of a Seneca Marcellus well within its legacy acreage. This well had a treatable lateral length of 6,372’ and was completed utilizing a reduced cluster spacing (“RCS”) design.
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