National Fuel Gas (NFG) held a conference call on February 5, 2010, to discuss its fourth quarter of 2009 earnings, and updated investors on its activity in the Marcellus Shale. The company added 18,000 net acres to its position in the Marcellus Shale, and has completed three horizontal wells to date.
Marcellus Shale Completions
“We have had two Seneca operated Marcellus wells producing into the Covington system since early December. These two wells had a combined average rate of about 8.5 million cubic feet per day for the month of December. Since our last earnings call we have fraced two more wells in Tioga county. The first floated in an initial rate of over 10 million cubic feet per day an average 9.5 million a day over seven days. Our average seven day IP over our first three Seneca operated horizontals is 6.7 million cubic feet per day.
Marcellus Shale Leasing
“Last month, we participated in the Pennsylvania DCNR lease sale. We were the high bidder on two blocks. Our total high bids were $71.8 million. Bidding was very close such that we left only $3.6 million on the table. These two new blocks add 18000 acres in Tioga and Potter Counties not far from our Covington area activity.”
“Our strategy for lease acquisitions in the Marcellus. We acquire acreage that is a adjacent to our exiting acreage. That makes sense to acquire. And we also will look at large contiguous blocks in an area that we think may in someway be superior to some of our existing acreage.”
Source: Seeking Alpha
