Seneca Resources had a productive year in 2019.
Rob Boulware, spokesman for Seneca, recently provided an update.
Seneca Resources, the exploration and production segment of National Fuel Gas Company, has been involved in unconventional drilling in this region of Pennsylvania for several years.
“Seneca brought two new natural gas pads online in our last fiscal quarter, one each in our eastern and western development areas,” Boulware said. “Both pads exceeded our expectations.”
He continued, “Seneca is currently operating three rigs in Pennsylvania. However, we plan to release one of those rigs once it completes drilling a six-well pad in Tioga County which should be sometime in spring 2020.
“The company will likely stay at that reduced level of activity for the near future. Even at a 2-rig program, Seneca will see production growth of nearly 15% next year and single-digits the following year,” Boulware said. “As of fiscal 2019, we have now produced over 1 Tcf of gas from our shale acreage in Pennsylvania. Any further activity changes will obviously be dependent on pricing.”
He updated progress on drilling in the Utica shale formation as well.
“Our latest Utica pad located in Rich Valley (Elk / Cameron counties) has now been online for over three months,” Boulware said. “Four out of the five wells on this pad are performing above expectations and they are our best to-date in the WDA. Including this pad, we are now producing from 11 wells along the southern boundary of the Clermont Rich Valley (CRV) area with 10 of these wells producing above our expected averages.”
Boulware said that owning all of the infrastructure used in Seneca’s gathering process has proved a significant economic advantage to National Fuel.
“Seneca’s operational success continues to directly benefit our gathering segment which, on the strength of record throughput, saw a revenue growth of approximately 18% over last year. We expect future gathering throughput will grow in lockstep with Seneca’s production, which should translate into annual revenue growth of approximately 10% on average in the near-term.”
While companies in the region have been struggling with approvals for pipelines needed to transport their product, National Fuel has had some success there as well.
“While you have likely heard about many pipeline projects that have stalled, National Fuel’s Line N extension to Monaca came online during the last fiscal quarter,” Boulware said. “Line N ties the National Fuel Gas Supply Corporation system to Shell’s $6 billion petrochemical facility in Beaver County, Pa. This was approximately a $24.5 million investment.”
Part of the holdings of Seneca Resources is Highland Field Services, a water logistics company that manages the handling of a substantial portion of fluids used in Seneca’s operations. The facility is permitted by the Department of Environmental Protection and includes a centralized storage facility, a treatment plant and a pipeline delivery network. It serves to reduce the amount of freshwater used in Seneca’s operations.
Seneca has plans to expand it as well.
“We expect to announce an expansion of our Mount Jewett / Kane facility in 2020 that will include a $20 million capital investment in the region,” Boulware said. “The investment could increase over the next five years depending on market conditions and position Highland as the premier water handler in the Commonwealth.”
He explained that throughout 2019, Seneca hosted over 100 students, professors, government officials, journalists and industry personnel for tours of Seneca facilities in Pennsylvania.
“We look forward to the 2020 tour season to provide new visitors with a deeper understanding of the science behind the operations, the various safety and environmental controls utilized, and the importance of the energy industry,” he said.
For anyone interested in seeing what construction of a shale wellpad looks like, Seneca has an answer.
“If you’re interested in doing a tour from the comfort of your home or office, we have partnered with Penn State’s Marcellus Center for Outreach and Research (MCOR) to present the first (and only) time-lapse video of well construction from start to finish,” he said. The link is available at https://psu.mediaspace.kaltura.com/media/Senena+Resources+Time+Lapse+Video+Cropped+
Boulware said, “This five-minute video captures our pad development from the first tree cut to bringing the wells online.”
The partners are working on a virtual reality tour in hopes it will be available in 2020 as well.