Folsom,
NJ - South
Jersey Industries (NYSE: SJI)
today announced that Potato Creek, LLC has entered into a
lease agreement with an experienced exploration and production
company to develop the deep mineral rights on over 21,000
acres of property in the Marcellus Shale in western Pennsylvania.
SJI’s
wholly owned subsidiary, South Jersey Resources Group, LLC,
is a minority partner in Potato Creek.
In addition to receiving an upfront lease payment, Potato
Creek has retained certain royalty and carried working interest
rights that provide an opportunity to boost returns based
on natural gas production on the property. The upfront lease
payment will add an estimated 15 cents to SJI’s earnings
per share over the life of the lease.
“Currently we have a successful commodity marketing
and shallow well program at Potato Creek in western Pennsylvania,” explained
Edward Graham, SJI’s Chairman and CEO. “Leasing
the deep mineral rights that we control to an experienced
E&P company enables us to begin realizing the value of
this asset for our shareholders without incurring the risks
and costs associated with drilling this acreage ourselves,” continued
Graham.
Penn State University geoscientist Terry Engelder said early
in November that, based on several common industry assumptions,
he estimates 363 trillion cubic feet of natural gas could
be recovered over the next few decades from the 31-million-acre
core area of the Marcellus region, which includes southern
New York, Pennsylvania, West Virginia, eastern Ohio and western
Maryland. Engelder’s study of Potato Creek’s
acreage suggests that, due to a very high accessibility factor,
recoverable natural gas could range from 275 billion cubic
feet to 725 bcf, potentially providing a significant royalty
and working interest income stream from future natural gas
production to SJI.
Forward-Looking Statement
This news release
contains forward-looking statements. All statements other
than statements of historical fact included in this press
release should be considered forward-looking statements made
in good faith by the Company and are intended to qualify
for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. When used in this
press release words such as “anticipate”, “believe”, “expect”, “estimate”, “forecast”, “goal”, “intend”, “objective”, “plan”, “project”, “seek”, “strategy” and
similar expressions are intended to identify forward-looking
statements. Such forward-looking statements are subject to
risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in the
statements. These risks and uncertainties include, but are
not limited to, the following: general economic conditions
on an international, national, state and local level; weather
conditions in our marketing areas; changes in commodity costs;
the timing of new projects coming online; changes in the
availability of natural gas; “non-routine” or “extraordinary” disruptions
in our distribution system; regulatory, legislative and court
decisions; competition; the availability and cost of capital;
costs and effects of legal proceedings and environmental
liabilities; the failure of customers, suppliers or business
partners to fulfill their contractual obligations; and changes
in business strategies. SJI assumes no duty to update these
statements should actual events differ from expectations.
About South Jersey Industries
South Jersey
Industries (NYSE: SJI)
is an energy services holding company for utility and non-regulated
businesses. A member of the KLD Global Climate 100 Index,
SJI offers solutions to global warming through renewable
energy, clean technology and efficiency. South Jersey Gas,
one of the fastest growing natural gas utilities in the nation,
strongly advocates the efficient use of energy while safely
and reliably delivering natural gas in southern New Jersey.
South Jersey Energy Solutions, the parent of SJI’s
non-regulated businesses, provides innovative, environmentally
friendly energy solutions that help customers control energy
costs. South Jersey Energy acquires and markets natural gas
and electricity for retail customers and offers energy-related
services. Marina Energy develops and operates energy projects
including thermal facilities serving hot and chilled water
for casinos, cogeneration facilities and landfill gas-to-electricity
facilities. South Jersey Resources Group provides wholesale
commodity marketing and risk management services. South Jersey
Energy Service Plus installs, maintains and services heating,
air conditioning and water heating systems, services appliances,
installs solar systems and performs energy audits. For more
information about SJI and its subsidiaries, visit http://www.sjindustries.com.
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