Seneca Resources Corporation, a wholly owned subsidiary of National Fuel Gas Company, announced that a Marcellus Shale well operated by its joint-venture partner, EOG Resources, was flow tested at an average rate of over 3.0 million cubic feet per day ("MMcfd") for 7 days. Seneca holds a 50 percent working interest and a 60 percent net revenue interest in the well.
Matthew D. Cabell, President of Seneca, stated, "This flow test confirms our expectations for the potential of our Marcellus Shale position, most of which is fee mineral acreage, where we pay no royalty. This is a tremendous opportunity for Seneca, and as the primary focus of our E&P activities, we expect the Marcellus Shale to provide significant growth in production and reserves for many years. We are currently fracture-stimulating another well and expect flare testing to begin by the end of the month. Later in the summer, we expect to discuss the results from that next well, and, once we have more data-in-hand, we may be in a position to discuss an estimate for the range of Marcellus Shale resource potential across our extensive acreage position." Seneca plans to operate 10 vertical wells and two to three horizontal wells in fiscal 2009, and participate in another eight to 10 wells to be operated by EOG Resources.
David F. Smith, Chief Executive Officer of National Fuel, added, "This successful well completion and the initial flow rates confirm the Marcellus Shale opportunity across our acreage. We will continue to focus our efforts -- and our resources -- on the Appalachian region in general and the Marcellus Shale in particular. Seneca will continue to expand drilling in this play through both our joint venture with EOG Resources and our Seneca-operated horizontal drilling program that will begin this July. Along with Seneca's activities, our Midstream Company is already designing and building infrastructure projects to transport both Seneca and third-party production; and our Pipeline and Storage segment looks to expand its services to move natural gas produced from this vast resource to adjacent markets."
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