Seneca Resources Corp. credited the Marcellus Shale for “tremendous growth” during the fiscal fourth quarter, with production and reserves posting big gains — reserves to a record high — and a successful drilling program in Pennsylvania allowing it to raise production guidance for 2014.

Seneca, the exploration and production subsidiary of National Fuel Gas Co., said Monday that during fiscal 4Q2013, which ended Sept. 30, total production was 33.2 Bcfe (361 MMcfe/d), a 35% increase from fiscal 4Q2012. The company said the increase “was driven by the continued success of Seneca’s Marcellus Shale development program in Lycoming County, PA.” (see Shale Daily, Feb. 12).

Gas production increased 42% to 28.9 Bcf, despite nearly 3 Bcf of price-related curtailments. Total production for fiscal 2013 was 120.7 Bcfe, a 45% increase from fiscal 2012.

Meanwhile, Seneca said it replaced 351% of its production to reach a record 1.55 Tcfe of proved reserves as of Sept. 30. The company attributed its “success through the drillbit in the Marcellus Shale” with a 311 Bcf (31%) increase in gas reserves, which totaled 1.3 Tcf at the end of the fiscal year. Of the total reserves, 71% were classified as proved developed, up from 67% at the end of the previous year.

“The fourth quarter capped off an outstanding year for Seneca,” said National Fuel CEO Ronald Tanski. “We achieved tremendous growth in both production and proved reserves, and our delineation program in the western development area [WDA] of the Marcellus Shale demonstrates the vast potential of our acreage position.”

During the quarter, Seneca tested two horizontal wells, 54H and 59H, in the Owl’s Nest prospect area in Elk County, PA, the latter using linear gel to place a large amount of proppant near the wellbore. Both wells were drilled with reduced cluster spacing (RCS) and achieved 24-hour peak production rates of 6.1 MMcfe and 3.4 MMcfe, respectively.

“Seneca believes longer laterals and standard RCS completion design are more representative of expectations for this area,” the company said, adding that both of the Owl’s Nest wells were shut in awaiting the completion of production infrastructure. Six additional Pennsylvania wells — four in Elk County, and one each in Cameron and Forest counties — were also completed in the WDA during fiscal 2013.

In Lycoming County’s Lewis Township, Seneca brought a new five-well pad on its DCNR 100 tract online during the fourth quarter (see Shale Daily, Jan. 23). At the five wells, 24-hour peak production rates ranged from 14.8 MMcf/d to 22.1 MMcf/d. Overall, the pad produced 2.3 Bcf during the first 30 days of operation. Lycoming and neighboring Tioga County, PA, are in Seneca’s eastern development area (EDA).

Seneca’s news wasn’t exclusively about the Marcellus. In the Utica Shale it tested a dry gas well at its Mt. Jewett prospect area in McKean County, PA (see Shale Daily, Nov. 29, 2012). The well hit a 24-hour peak production rate of 8.5 MMcf/d and averaged 6.8 MMcf/d over a seven-day period.

The company said that as a result of its unexpected success in the Marcellus, Seneca has increased its production guidance for FY 2014 from 134-146 Bcfe to 145-165 Bcfe. The new goal is 20-37% above this year.

“This increase is primarily a result of decreased spud to sales timing in Lycoming and Tioga counties within [the] EDA, increased estimated ultimate recovery assumptions, and a base of producing properties projected to decline at a slower rate in part due to the start-up of compression within [the] DCNR Tract 100 acreage in Lycoming County,” Seneca said.

Tanski added that Seneca and its midstream businesses “will be executing a coordinated plan to develop our resources and install the infrastructure needed to bring our production to market.”

Over the past several years, Seneca has transitioned from an exploration company focused on conventional plays to a development company focused on resource plays.