National Fuel Gas Co.’s natural gas wells in Pennsylvania are doing better than the company expected.
The Amherst-based energy company said Monday that it expects its oil and natural gas production this year to be 6 percent higher than it initially forecast, largely because the wells it has drilled in the Marcellus Shale region in Pennsylvania are yielding more gas than the company expected.
National Fuel also hiked its production forecast for its 2014 fiscal year, which begins in October, by 2 percent.
“Well results continue to improve,” said Ronald J. Tanski, National Fuel’s president and CEO. “Third-quarter production was outstanding and exceeded our projections.”
The use of horizontal drilling and hydraulic fracturing, or “fracking,” has released a bounty of gas from the shale in Pennsylvania. Critics argue that the process damages the environment, but proponents say the drilling techniques have become more safe.
While National Fuel has slowed the pace of its drilling program from the accelerated schedule it envisioned two years ago as natural gas prices have dropped below $4 per 1,000 cubic feet, the company’s overall production still has been increasing rapidly.
National Fuel produced the equivalent of 34.1 billion cubic feet of natural gas during the quarter that ended in June, up by 54 percent from a year ago and 18 percent higher than in the first three months of this year.
Most of the increase came from new wells the company drilled in Lycoming County, Pa., which helped offset a nearly 2 percent drop in crude oil production that was caused mainly by pipeline constraints near some of its oil wells in California. National Fuel said the pipeline constraints are expected to ease by the end of this year.
The company said that it now expects its oil and gas production to range between 118 billion and 124 billion cubic feet during the fiscal year that ends in September, up from its earlier forecast of between 110 billion and 118 billion cubic feet. That will be about 45 percent more than the 83.4 billion cubic feet of gas that it produced in 2012.
National Fuel also increased its production forecast for 2014 to between 134 billion and 146 billion cubic feet, about 23 percent more than its expected production this year and slightly higher than its initial prediction of 132 billion to 142 billion cubic feet. The company said it expects its production to be relatively flat through next winter and then increase as several new wells begin operating.