While the Marcellus Shale continues to drive growth for National Fuel Gas (NFG) Co., the Williamsville, NY-based company is now offering details on its short-term plans for the Upper Devonian/Geneseo and the Utica shales, the company told analysts recently.

Through its operating arm Seneca Resources, NFG recently drilled two wells into the Geneseo, a shale within the Upper Devonian formation located directly above the Marcellus. Impressed by the thickness of the shale and organic content of the rocks seen in its well logs, Seneca believes the play could eventually be developed in conjunction with the Marcellus but doesn’t yet believe the play is economic on its own, at least at current natural gas prices, according to John McGinnis, senior vice president of Seneca.

The company holds 300,000 acres in the Geneseo Shale.

Mt. Jewett, a 5,095-foot vertical well near the border of Elk and McKean counties in northwestern Pennsylvania, only collected information about rock quality. DCNR 001, a 5,830-foot horizontal well in Potter County, flowed at a seven-day initial production (IP) rate of 2 MMcf/d, peaking at 2.9 MMcf/d. By comparison, a Marcellus well Seneca drilled nearby tested at an IP rate of 4 MMcf/d.

East Resources Inc., now a subsidiary of Shell Oil, drilled a Geneseo test well just north of DCNR 001 in April 2010, and Pennsylvania General Energy drilled two Geneseo tests wells in Lycoming County to the southeast in February 2010, but neither company released well results.

In the Utica, directly below the Marcellus, Seneca drilled a vertical well in McKean County in June. While the company didn’t test the well, it said the reservoir quality compared favorably to the Marcellus while the mineral make-up differed considerably. The company is currently drilling a vertical Utica well in Venango County and plans to drill another well in the county next year, McGinnis said.

While the Utica is touted as a liquids-rich play, Seneca’s acreage is entirely in the dry gas window (see Shale Daily, Aug. 24).

The stacked shales in the Appalachian Basin have companies discussing the possibility of bundling three plays, a strategy that could greatly improve the economics of the region, according to frontrunners such as Range Resources Corp. (see Shale Daily, March 7). While the Upper Devonian and Utica are just starting to see test wells, though, development of the Marcellus continues to rapidly expand.

NFG plans to increase capital spending by 18% per year for the next three years, reaching $1.6 billion by 2014. With more than 90% of that going to Appalachia, the company expects its Marcellus production to increase more than 40% per year, to 200 Bcfe in 2014.

Unlike operators that rushed to lease acreage in the Marcellus, NFG already held some 700,000 acres in the region before the play took off in 2008. The company now holds 745,000 acres, including 168,000 operated by partner EOG Resources Inc. In recent years, NFG even sold its production in the Gulf of Mexico and Canada to focus more resources on the Marcellus (see Shale Daily, March 29).

Seneca is now developing its Marcellus acreage in north-central Pennsylvania and evaluating additional acreage farther to the west.

Of the 17 prospects it identified across its leasehold, NFG completed development at one and is currently developing four more and delineating another eight. (The remaining four are still untested). NFG has drilled 126 wells in the Marcellus, including 56 operated by partner EOG Resources Inc., and completed 94 wells, including 34 operated by EOG. NFG has identified 5,387 drilling locations.

NFG recently completed the 47 wells planned for its Covington prospect in Tioga County and the site is now producing more than 100 MMcf/d and with an average estimated ultimate recovery of 5.5 Bcf/well. NFG is currently delineating and developing four other tracts in Tioga, Lycoming and Potter counties leased from the Pennsylvania Department of Conservation and Natural Resources.