Seneca Notes Results of Marcellus Wells, JV Opportunity

Seneca 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 (MMcfd) 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," said Matthew D. Cabell, President of Seneca. "The 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 ½-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."

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

"The 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," said David F. Smith, Chairman and Chief Executive Officer of National Fuel. "Now 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."