Seneca Purchases Marcellus Stake
Seneca, a wholly owned subsidiary of National Fuel, announced its acquisition of oil and gas properties in the Covington Township area of Tioga County, Pa., from EOG for a purchase price of $23 million. The properties are producing natural gas from the Marcellus Shale and are also prospective for additional Marcellus reserves.
EOG had contributed this acreage to the Marcellus joint venture between Seneca and EOG that was formed in 2006. Seneca has been the operating partner on this portion of the joint venture acreage and has acquired EOG's interest in these properties, continuing to act
as the operator of all existing and future wells. The Seneca/EOG joint venture will continue, and EOG will continue to act as operator in the joint venture acreage west of Tioga County. As a result of this transaction, Seneca will add approximately 42 billion cubic feet equivalent (Bcfe) of proved natural gas reserves.
"The acquisition of EOG's position in our Tioga County operations is another step in our Marcellus Shale growth plan," said Matthew D. Cabell, President of Seneca. "This transaction will have an immediate positive impact on our production and proved reserves, and it provides us with additional upside in an area where we continue to have great success."
With this transaction, the Company's production forecast for the entire 2011 fiscal year has been increased to a range between 65 and 75 Bcfe, up from the previously announced range between 60 and 70 Bcfe. In addition, the Company's capital spending in the Exploration and Production segment for fiscal 2011 is now expected to be in the range of $485 to $560 million, up from the previously announced range of $425 to $500 million.