NFG/Seneca Qtly Update: Production Inches Up, Profits Up Too
National Fuel Gas Company (NFG) covers the full span of the oil and gas business–from upstream (with its wholly-owned drilling subsidiary Seneca Resources), to the midstream (with wholly-owned subsidiary Empire Pipeline) to downstream (NFG’s natural gas utility service to 740,000 customers in NY and PA). Big company. Diverse operations. Late last week NFG issued what they call their fourth quarter update (everyone else’s third quarter update), covering July through September. NFG’s CEO Ronald Tanski said lower natural gas prices and higher temperatures didn’t help. However, the company improved. In NFG’s 4Q15 the company lost $188 million–but this year they made $37.5 million. That’s a significant $225 million improvement in just one year’s time. However, NFG ended the full year in the red–losing $291 million (an improvement from losing $379 million last year). As for Seneca’s performance, it was a good year overall, with banner production. Seneca’s production was 161.1 Bcfe (billion cubic feet equivalent) in fiscal 2016, an increase of 3.3 Bcfe, or 2%, versus fiscal 2015. Seneca voluntarily curtailed an estimated 34.6 Bcf (billion cubic feet) of net natural gas production in fiscal 2016. Seneca’s average realized natural gas and oil prices, after the impact of hedging, was $3.02 per Mcf and $57.91 per Bbl, respectively, a decrease of $0.36 per Mcf and $12.45 per Bbl, versus fiscal 2015. Below is the NFG update for all of their subsidiaries including Seneca and Empire, along with a copy of the latest PowerPoint slide deck…
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We can’t say enough good things about Rusty Braziel and 
There is a new development in the case of an illegal ban on injection wells passed by Highland Township in Elk County, PA. In 2013 the radical leftist PA-based group Community Environmental Legal Defense Fund (CELDF) convinced ignoramuses in Highland Township to pass a so-called Community Bill of Rights. Seneca Resources, a driller with leases and an active drilling program in Elk, had planned to drill an injection well on their own property to dispose of their own flowback and produced water. The CELDF-inspired ordinance Highland Twp prevented it, and Seneca threatened to sue the town (see 
Last week MDN reported on National Fuel Gas Company’s quarterly recently-filed quarterly report (see 
National Fuel Gas (NFG), the Buffalo-based utility giant with both a drilling subsidiary (Seneca Resources) and a midstream/pipeline subsidiary (Empire Pipeline) filed an application with the Federal Energy Regulatory Commission (FERC) in March 2015 for a pipeline project they call Northern Access 2016 (later renamed to simply Northern Access Project, dropping the “2016” part). The $455 million project includes building 97 miles of new pipeline along a power line corridor from northwestern Pennsylvania up to Erie County, NY. The project also calls for 3 miles of new pipeline further up, in Niagara County, along with a new compressor station in the Town of Pendleton (see 
Last Friday MDN brought you the news about a professor who devised a clever formula for evaluating the overall environmental impact of 20 Marcellus drillers (see 
Yesterday National Fuel Gas Company, the utility giant headquartered in Buffalo, NY and parent of Marcellus driller Seneca Resources, announced that Seneca has partnered up with energy investor IOG Capital to essentially fund Seneca’s Marcellus drilling program in Elk, McKean and Cameron counties in north-central Pennsylvania. The outlines of the deal are thus: IOG will provide the cash and Seneca will do the drilling on up to 80 Marcellus wells on 10,500 acres in the Clermont/Rich Valley area of PA. IOG will get an 80% working interest in the wells. In addition to drilling the wells, National Fuel’s midstream subsidiary will connect the wells and get the gas to market. What this deal means is that Marcellus drilling activity in the Clermont/Rich Valley area will pick up over the few years. Here’s the details of this somewhat complicated deal…