Seneca Resources Corp. and IOG CRV-Marcellus LLC have agreed to a modified extension of their 2015 joint development agreement, which includes a commitment to develop additional Marcellus Shale natural gas assets located in Elk, McKean, and Cameron counties in north-central Pennsylvania, USA.
Under the terms of the revised joint development agreement, Seneca and IOG will jointly participate in a program that will develop a total of 75 Marcellus wells located in the Clermont/Rich Valley area in Pennsylvania. In December 2015, IOG initially committed to developing 42 wells with an option to participate in 38 additional wells if elected prior to July 1, 2016. The total number of wells and pad locations included in the revised joint development agreement were modified to reflect changes in Seneca’s drilling and completions schedule resulting from adjustments to gathering infrastructure plans and other operational factors. To date, 39 of the 75 joint development wells have been either completed and turned to sales or drilled and in the process of being completed, leaving an additional 36 wells to be developed under the revised joint development agreement. IOG was also granted an option to participate in a 7-well Marcellus pad that will be completed prior to December 31, 2017. Should IOG choose to participate in the 7-well Marcellus pad, the total commitment under the joint development agreement would reach 82 wells.
IOG continues to hold an 80% working interest in all of the joint development wells, with the remaining 20% working interest held by Seneca.
Seneca will continue to be the program operator, allowing it to maintain planned activity levels and further optimize Marcellus drilling and completion efficiencies. Production from all joint development wells will be gathered by National Fuel’s gathering segment’s Clermont Gathering System. IOG will also continue to share in Seneca’s contracted firm sales and firm transportation capacity, including the 490,000 dekatherms per day of capacity on National Fuel’s Pipeline & Storage segment’s Northern Access project that is expected to be placed in-service by November 2017.
Seneca Resources Corp. is a wholly owned exploration and production subsidiary of National Fuel Gas Company. IOG CVR-Marcellus LLC is an affiliate of IOG Capital LP.
National Fuel is a diversified energy company headquartered in Western New York that operates an integrated collection of natural gas assets across five business segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. IOG Capital LP is a Dallas, Texas, based energy investment firm that manages oil and gas real assets partnered with funds managed by affiliates of Fortress Investment Group LLC and other institutional investors.