Item 2. Properties
Item 2 Properties
General Information on Facilities
The net investment of the Company in property, plant and equipment was $7.3 billion at September 30, 2024. The Exploration and Production segment constitutes 32.5% of this investment, and is primarily located in the Appalachian region of the United States. Approximately 54.3% of the Company’s investment in net property, plant and equipment was in the Utility and Pipeline and Storage segments , whose operations are located primarily in western and central New York and western Pennsylvania. The Gathering segment constitutes 13.1% of the Company’s investment in net property, plant and equipment, and is located in northwestern and central Pennsylvania. The remaining 0.1% of the Company ’ s net investment in property, plant and equipment falls within All Other and Corporate operations. During the past five years, the Company has made significant additions to property, plant and equipment in order to expand its exploration and production and gathering operations in the Appalachian region of the United States and to expand and modernize transmission, storage, and distribution facilities for customers in New York and Pennsylvania. Net property, plant and equipment has increased $1.8 billion, or 33.2%, s ince September 30, 2019. The five-year increase is net of impairments of assets recorded in 2020, 2021 and 2024 (pre-tax amounts of $449 million, $76 million and $519 million, respectively).
The Exploration and Production segment had a net investment in property, plant and equipment of $2.4 billion at Se ptember 30, 2024 consisting primarily of capitalized costs relating to exploration and production activities, the components of which are disclosed in Item 8, Note N — Supplementary Information for Exploration and Production Activities.
The Pipeline and Storage segment had a net investment o f $2.1 billion in property, plant and eq uipment at September 30, 2024. Transmission pipeline represents 36% of this segment’s total net investment and includes 2,233 miles of pipeline utilized to move large volumes of gas throughout its service area. Storage facilities represent 14% of this segment’s total net investment and consist of 384 miles of pipeline, as well as 29 storage fields operating at a combined working gas level of 77.2 Bcf, three of which are jointly owned and operated with other interstate gas pipeline companies. Net investment in storage facilities includes $81.2 million of gas stored underground-noncurrent, representing the cost of the gas utilized to maintain pressure levels for normal operating purposes as well as gas maintained for system balancing and other purposes, including that needed for no-notice transportation service. The Pipeline and Storage segment has 31 compressor stations with 260,088 installed horsepower that represent 32% of this segment’s total net investment in property, plant and equipment.
The Pipeline and Storage segment ’ s facilities provided the capacity to meet Supply Corporation’s 2024 peak day sendout f or transportation service of 2,304 MMcf, which occurred on January 14, 2024. Withdrawals from storage of 590 MMcf provided approximately 26% of the requirements on that day.
The Gathering segment had a net investment of $1.0 billion i n property, plant and equipment at September 30, 2024. Gathering lines and related compressor stations represent substantially all of this segment’s total net investment, including 390 miles of pipelines utilized to move Appalachian production
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(including Marcellus and Utica shales) to various transmission pipeline receipt points. The Gathering segment has 23 compressor stations with 122,406 installed horsepower.
The Utility segment had a net investment in property, plant and equipment of $1.8 billion at September 30, 2024. The net investment in its gas distribution networ k (including 15,090 miles of distribution pipeline) and its service connections to customers represent approximately 50% and 31%, res pectively, of the Utility segment’s net investment in property, plant and equipment at September 30, 2024.
Company maps are included in Exhibit 99.2 of this Form 10-K and are incorporated herein by reference.
Exploration and Production Activities
The Company is engaged in the exploration for and the development of natural gas reserves i n the Appalachian region of the United States. The Company’s development activities in the Appalachian region are focused primarily in the Marcellus and Utica shales. Further discussion of exploration and production activities is included in Item 8, Note N — Supplementary Information for Exploration and Production Activities. Note N sets forth proved developed and undeveloped reserve information for Seneca. The September 30, 2024, 2023 and 2022 reserves shown in Note N are valued using an unweighted arithmetic average of first day of the month commodity price for each month within the twelve-month period prior to the end of the reporting period. The reserves were estimated by Seneca’s petroleum engineers and were audited by independent petroleum engineers from Netherland, Sewell & Associates, Inc. Note N discusses the qualifications of the Company’s petroleum engineers, internal controls over the reserve estimation process and audit of the reserve estimates and changes in proved developed and undeveloped gas reserves year over year.
Seneca’s proved developed and undeveloped natural gas reserves increased from 4,535 Bcf at September 30, 2023 to 4,752 Bcf at September 30, 2024. This increase is attributed to extensions and discoveries of 602 Bcf and revisions of previous estimates of 7 Bcf, partially offset by production of 392 Bcf. Upward revisions of 145 Bcf are mainly attributed to positive performance improvements, changes to the booked lateral length and optimized development layout. The additions and upward revisions were partially offset by downward revisions of 138 Bcf from the removal of nine PUD locations related to schedule changes and price-related revisions. The Company has no near term plans to develop the reserves at these PUD locations.
Seneca’s proved developed and undeveloped natural gas reserves increased from 4,171 Bcf at September 30, 2022 to 4,535 Bcf at September 30, 2023. This increase was attributed to extensions and discoveries of 670 Bcf, purchases of minerals in place of 34 Bcf, and revisions of previous estimates of 32 Bcf, partially offset by production of 372 Bcf. Upward revisions of 94 Bcf were mainly attributed to positive performance improvements and adding back one PUD location. The additions and upward revisions were partially offset by downward revisions of 62 Bcf from the removal of seven PUD locations related to pad layout changes and price-related revisions. The Company has no near term plans to develop the reserves at these PUD locations.
At September 30, 2024, the Company’s Exploration and Production segment had delivery commitments for natural gas production of 1,896 Bcf. The Company expects to meet those commitments through the future production of reserves that are currently classified as proved reserves and future extensions and discoveries.
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The following is a summary of certain oil and gas information taken from Seneca’s records.
Production
For The Year Ended September 30
2024 2023 2022
United States
Appalachian Region
Average Sales Price per Mcf of Gas $ 1.88 (1) $ 2.78 (1) $ 5.03 (1)
Average Sales Price per Barrel of Oil N/M N/M N/M
Average Sales Price per Mcf of Gas (after hedging) $ 2.44 $ 2.55 $ 2.69
Average Sales Price per Barrel of Oil (after hedging) N/M N/M N/M
Average Production (Lifting) Cost per Mcf Equivalent of Gas and Oil Produced
$ 0.69 (1) $ 0.68 (1) $ 0.68 (1)
Average Production per Day (in MMcf Equivalent of Gas and Oil Produced)
1,072 (1) 1,020 (1) 936 (1)
West Coast Region (2)
Average Sales Price per Mcf of Gas N/A N/A $ 10.03
Average Sales Price per Barrel of Oil N/A N/A $ 94.06
Average Sales Price per Mcf of Gas (after hedging) N/A N/A $ 10.03
Average Sales Price per Barrel of Oil (after hedging) N/A N/A $ 70.53
Average Production (Lifting) Cost per Mcf Equivalent of Gas and Oil Produced
N/A N/A $ 4.83
Average Production per Day (in MMcf Equivalent of Gas and Oil Produced)
N/A N/A 39
Total Company
Average Sales Price per Mcf of Gas $ 1.88 $ 2.78 $ 5.05
Average Sales Price per Barrel of Oil N/M N/M $ 94.10
Average Sales Price per Mcf of Gas (after hedging) $ 2.44 $ 2.55 $ 2.71
Average Sales Price per Barrel of Oil (after hedging) N/M N/M $ 70.80
Average Production (Lifting) Cost per Mcf Equivalent of Gas and Oil Produced
$ 0.69 $ 0.68 $ 0.81
Average Production per Day (in MMcf Equivalent of Gas and Oil Produced)
1,072 1,020 966
N/M Sales price amounts are considered not meaningful as oil production is insignificant.
(1) Average sales prices per Mcf of gas reflect sales of gas in the Marcellus and Utica Shale fields. The Marcellus Shale fields (which exceed 15% of total reserves at September 30, 2024, 2023 and 2022) contributed 645 MMcfe, 521 MMcfe and 574 MMcfe of daily production in 2024, 2023 and 2022, respectively. The average lifting costs (per Mcfe) were $0.72 in 2024, $0.73 in 2023 and $0.71 in 2022. The Utica Shale fields (which exceed 15% of total reserves at September 30, 2024, 2023 and 2022) contributed 423 MMcfe, 495 MMcfe and 357 MMcfe of daily production in 2024, 2023 and 2022, respectively. The average lifting costs (per Mcfe) were $0.64 in 2024, $0.62 in 2023 and $0.63 in 2022.
(2) West Coast region properties were sold at June 30, 2022. Information for the years ended September 30, 2023 and 2024 is not applicable (N/A) as a result of the sale.
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Productive Wells
Appalachian
Region
At September 30, 2024 Gas
Productive Wells — Gross 1,043
Productive Wells — Net 928
Developed and Undeveloped Acreage
At September 30, 2024 Appalachian
Region
Developed Acreage
— Gross 673,978
— Net 661,856
Undeveloped Acreage
— Gross 701,123
— Net 659,234
Total Developed and Undeveloped Acreage
— Gross 1,375,101
— Net 1,321,090 (1)
(1) Of the 1,321,090 Total Developed and Undeveloped Net Acreage in the Appalachian region as of September 30, 2024, there are a total of 1,249,213 net acres in Pennsylvania. Of the 1,249,213 total net acres in Pennsylvania, shale development in the Marcellus, Utica or Geneseo shales has occurred on approximately 144,551 net acres, or 12% of Seneca’s total net acres in Pennsylvania. Developed Acreage in the table reflects previous development activities in the Upper Devonian formation, but does not include the potential for development beneath this formation in areas of previous development, which includes the Marcellus, Utica and Geneseo shales.
As of September 30, 2024, the aggregate amounts of gross undeveloped acreage expiring under lease in the next three years and thereafter are as follows: 1,547 acres in 2025 (1,388 net acres), 13,650 acres in 2026 (13,503 net acres), 9,267 acres in 2027 (8,398 net acres) and 204,655 acres thereafter (197,901 net acres). The remaining 472,004 gross acres (438,044 net acres) represent non-expiring oil and gas rights owned by the Company. Of the acreage that is currently scheduled to expire in 2025, 2026 and 2027, Seneca has 633.7 Bcf of associated proved undeveloped gas reserves. As a part of its management approved development plan, Seneca generally commences development of these reserves prior to the expiration of the leases and/or proactively extends/renews these leases.
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Drilling Activity
Productive Dry
For the Year Ended September 30 2024 2023 2022 2024 2023 2022
United States
Appalachian Region
Net Wells Completed
— Exploratory — — — — — —
— Development(1) 34.00 34.25 43.00 — 0.50 2.50
West Coast Region
Net Wells Completed
— Exploratory — — — — — —
— Development — — 23.00 — — —
Total Company
Net Wells Completed
— Exploratory — — — — — —
— Development 34.00 34.25 66.00 — 0.50 2.50
(1) Fiscal 2023 and 2022 Appalachian region dry wells include 0.5 and 2.5 net wells, respectively, drilled prior to 2013 that were never completed under a joint venture in which the Company was the nonoperator. The Company became the operator of the properties in 2017 and plugged and abandoned the wells in 2023 and 2022 after the Company determined it would not continue development activities.
Present Activities
At September 30, 2024 Appalachian
Region
Wells in Process of Drilling(1)
— Gross 48.00
— Net 42.00
(1) Includes wells awaiting completion.