National Fuel’s stock jumped by almost 5 percent Tuesday after the Amherst-based energy company said five of the new wells it has drilled in the Marcellus Shale were producing natural gas at the highest rate of any of the wells the company has drilled in Pennsylvania.
The new wells, among six that the company recently completed in Lycoming County, are expected to begin full production by the end of the month and have peak production rates that could yield 107 million cubic feet of natural gas during a 24-hour period, the company said.
“The success we are achieving in Lycoming County validates the prolific nature of the Marcellus in this area,” said David F. Smith, National Fuel’s chairman and chief executive officer, in a statement. “These wells represent some of the most productive wells ever drilled in the Marcellus by any operator.”
National Fuel’s stock rose by $2.53, or 4.94 percent, to $53.74, its highest level since mid-December.
Together, the six wells had peak production rates that averaged 17.8 million cubic feet during a 24-hour period. The most prolific well had a peak 24-hour production rate of 21.4 million cubic feet, and five of the six wells had peak rates of at least 17.7 million cubic feet.
National Fuel, through its Seneca Resources oil and gas drilling business, currently has two drilling rigs operating in Lycoming County.
The latest wells are expected to be connected to the company’s Trout Run natural gas gathering system by the end of the month, allowing the gas produced at those wells to flow into larger regional pipelines.
The company expects to have 15 producing wells on the same 10,000-acre tract by the end of this month and plans to drill 16 more wells by the end of September. National Fuel then plans to drill another 25 wells there between October 2013 and the end of September 2014.
“Without the infrastructure constraints facing many other operators in the Marcellus, we anticipate this acreage will be a key driver of Seneca’s production growth over the next two the three years,” Smith said.