NFG - Earnings call transcript Q4 2018 | National Fuel Gas Company

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Operator

Good morning. My name is James and I will be your conference operator today. At this time, I’d like to welcome everyone to the Q4 2018 National Fuel Gas Company Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And after the speaker’s remarks, there will be a question-and-answer session. like Investor the Relations, now the over I’d of Director Ken Instructions] to call turn to [Operator Webster. Mr. Webster, please go ahead.

Ken Webster

At Seneca and McGinnis, XXXX end conference remarks, presentation Executive Bauer, Financial discussion you forward-looking Company are that will Thank us Officer; the call and would the release. to our the of we will Dave James, good refer Tanski, President materials statements. Fuel teleconference The today’s appreciate investor on and Resources. We may Officer; on these you, Gas National you open prepared With We on us questions. today’s Principal like to last during President Investor to call fourth the We Treasurer call. contain Relations have of a Ron November earnings remind of discussion and from for been John evening’s earnings morning. posted quarter website. joining and Chief fiscal release today’s

While last beliefs which will and reasonable made the on of believed may you and they and refer earnings the Conference, later National may Energy listing Jefferies are are for release be National a certain speak to factors. as made, risk Fuel’s in faith differ of to a results specific actual evening’s Fuel only basis, date expectations, participating These month. in are this statements have good materially. projections

I’ll or it contact management attending, me on planners the Tanski. team. plan you If Ron over with turn conference a that, to please the schedule to With meeting

Ron Tanski

be questions. McGinnis results will three those active. they exploration on thoughts John good overall drilling us Well within our half will financial to quarter; our increasing were before and Dave expenditures also how to release, our instrumental color on for a meet Utica got for fit where projections, capital the our provide some and the and Bauer fiscal more More give than XXXX finished continue the program evening’s upstream it up in year fiscal keep toward initial strong too. XXXX business Good various production and results keep last Seneca’s in of we future. our will continue fiscal looking some detailed XXXX earnings operating plans our be directed a in we Thanks, open segments, We’ve major expect drilling feet results X.X cubic We activities I’ll Ken. morning, and with our everyone. to forward, proved rigs busy, equivalent. a we to will lot and in trillion in reserves year

the at keeping We are to well our within well maximize while designs continuing to our look drilling per of some budgets. fine-tuning reserves

only in undeveloped XX% drilling production Seneca-owned in The wells of that cubic reported, impressive feet that that reserves bearing of of equally three cash flow. terms equivalent those and proved XXX% are the category. year-end focusing both, growing XX% is has what’s program trillion now fruit X.X reserves is the on highest While ever reserves rig Seneca proved level developed is with is

get drill pipeline capacity to the to it we’ve is a market. production expirations approach acreage with fee got have sight owned of our that of well across Pennsylvania. taken conservative our a lease with with, locations position no running to plenty lot large is to when in contend bulk we’ve addition line to the only room In we acreage that Since of in of available

of the have last is pipeline, premiums priced capacity. dekatherm all up array pipeline NYMEX. and we’re an month that Sunrise per Speaking contracts pleased shipping full started to at day to that Atlantic of we Seneca is project XXX,XXX flowing and its new for capacity, gas, Transco’s full on

we and posted price practice, usual detail our deck production estimates that last we in night. slide their Following assumptions our

steady to and with year. Seneca. to XX% program approximately an achieve for protection, to our follow a earnings over additional reserves, be hedging drilling the allowing the production type very we projected of as continue coming XX% year plan comfortable to That fiscal for XXXX basis has we’re program certainty drilling maintain earnings. price active and production that hedge Given rigs, contribution strong grow and our of the our With outlook. We’ll some will a make plan Seneca three to

at the of know, our what Seneca. mirror operations doing segment you Gathering As closely we’re

were through gathering on forward. our Utica However, that Area Western from a very translate Seneca’s the The the set investment wells Development built a we be gathering production increased modest. new our and utilizing for our and XXXX to gathering pads. fiscal production on for Marcellus of in will Storage meaningful system into consolidated positive moving will generation business, returns capital had will that Pipeline its our nicely, of volumes already us Switching number expenditures pipelines be interstate developments up Utica basis. cash ramp-up

North are moving well. this FERC we EA, received winter assessment XXXX. our put positive dekatherm Empire things XXX,XXX projects, expansion along should That per certificate, late this on our us Regarding spring get Earlier project. to our day a or environmental week, or on early track

Eastern the Transco XXXX. and National targeting we XXX,XXX generating production capacity to together Fuel’s project incremental pipeline the project, respective Corporation date new second and committed our Transco’s and Transco, the its expansion FMXXX significant Seneca’s of from our part Gas we flow Transco an large working structure. South revenues. is On of on sometime markets Area Zone acreage Seneca our path WDA, their free day both, position move So, of premium Fuel put our of their project is Western system. Transco another gas the dekatherm the Leidy invest another are during both The to has example Seneca benefits half in-service combined production in X pipeline integrated and Development provide in facilities are will compression FMXXX, while fiscal Fuel per Development as to the to is through our will National South. Supply National developer Area annual to that and and project develop on assets, Leidy of the segments of lease gathering project,

target We date for continue to XXXX these projects. late a in-service calendar

project determination the Northern by Our received favorable quality New Federal Regulatory a exceeded Access by time but either approve Energy deny the Commission, water a a to allowed of boost way certification. DEC their York or

it’s and this the project. While few couple anticipate step we’re from will years challenges a legal in a still of project, right giant XXXX this direction. constructing that a We be away likely a likely

for base to rate year business and great to we Marcellus to having will utility into for significant pipeline foreseeable pipelines in million provide in that of a tracking allows provide $XXX projects our utility that are infrastructure that earnings rate safe. outlet new central the million for be have that the In state case. for future rate a in expect important invest both get needed our keep we us of wait to these a mechanism full-blown to investing safety pipeline without and network. All projects maintain regulators growth I that $XX it’s In production rate recognize to customers our them our New York, base base Pennsylvania. and our business,

to We at and financing an investments. within turning term, pretty to Many margin and retaining maintain growth on such to overall see peers flexibility spend just projects business while living attributable our pay look are a pipeline the So, and focus the we our attractive flows business. over but is living in balance been cash modest medium of you When to a straightforward. strategy, we’ve operating sheet, along. all right the those growth on Fuel’s National it exploration operations, can conservative dividend, approach our

dividend exceeded and net $XXX from capital million our million today, expenditures it’s our opportunity by returned cumulative Where been practice. sit set to the we roughly of Over shareholders sales that fiscal a the our best in long past asset three with our is years, through that amount $XXX time. cash operations nearly long-standing

businesses, the invest to in the significant transmission, and four one $X.X rights the returns a our the majority proven years. ability have and as of to we modernizing with deploy the billion in opportunity our opportunities position our five is have acreage And regulated basin. storage, next vast low potential cost in gas distribution on warrant. expanding fee, of a and pricing in largest as capitalize Seneca’s the natural owned to assets producer We to with

we to And our integrated businesses, in codevelopment Utica in have gathering balance strong Our the remain achieve believe and growth the associated have great we market a sheet. along conditions. standalone as operating the of Marcellus adapt with you’ve and plan but a the to changing to owning infrastructure, We excess producers. of us committed to efficiently past, for seen flexibility returns allows we

to John to over it Seneca’s turn I’ll Now, discuss operations.

John McGinnis

XX.X Ron. quarter quarter compared Bcfe XXX.X Bcfe during Good high In XX.X% were XXX,XXX and midpoint new on XX% earlier during Seneca by increase. fourth the about morning, Bcfe, for everyone. of East, was was year-over-year. quarter. largely annual the to our Capital In production the guidance. were several at in per XX.X the all decrease guidance. increase the XX.X sale for and year year, year’s And XX.X a last fourth California, the just down we last driven Total Bcfe Seneca quarter. fourth Thanks, $XXX this we around to a Expenses X.X% within produced a our a last at of annual basis unit this net produced Sespe BOEs, produced under year million, fields. from decline natural fourth expenditures year’s compared of

Bcfe reserves now by primarily cubic the more of equivalent. for Utica and X.X doubled total For proved XXX within year, trillion XX% just our reserves. than increased nearly XX% our to WDA, the or year-over-year reserves, feet account over driven

years, finally, F&D forward down now Mcfe. will per in at grow. our continue three-year continue with next costs, move to percent we increased average As over we this few $X.XX And around our production, the to WDA conjunction drive

guidance. moving to fiscal So, XXXX

between now XXX XXX between and production to a to of forecasted expenditures bit come Net ranging are is to in the forecasting million a $XX now increase range around XXX be $XXX at capital expected lower, midpoint. $XXX to Bcfe, to expected million. XX% million. around Pennsylvania to XXX is year-over-year California We between

the Tioga and week WDA, last Utica on active went in assets, takeaway service existing the the in first pads, two during a Sunrise, in county from which drilling wells and into As quarter, Atlantic single rig Utica with stated we wells wells will in of important drilling our three-rig continue provides Marcellus the mostly Lycoming. program, October. and EDA, Lycoming CRV rigs

to on Our NYMEX five this been plus over and next XXX per at a transportation the entities firm pipeline has years day, which sold million all third-party of around downstream premium is to marketers.

Transco system. into announced discussed premium Clermont-Rich recently Williams, X pipeline outlook markets commitment day Transco’s has addition, Seneca provide for system. transportation into Leidy and a production connected by WDA the expansion The In for firm to we previously million our critical as new entered Zone interstate a South on XXX will of project a Valley

attributes of how and One path key benefits unique we capacity. is to on the the fully utilize flexibility that Seneca allows transportation

CRV to our areas. this long-term development to access firm We both our have two market Seneca’s and from the Lycoming out-of-basin flow largest acreage ensuring optionality production capacity, fill from new

Bcf system, we calendar will Transco EUR Utica to CRV be remain quarter to-date, producing. to line In the results XXXX. Seneca early NFG as X.X affiliated capacity Additionally, on the an type given could This Utica curve consolidated assume wells utilize our WDA, XX of X,XXX-foot. continues And fourth our as strong gathering returns. to reach per at infrastructure leading of

wells XX XXXX. on come half have the Utica fiscal to first of CRV during line We additional scheduled

pricing we further we Bcf design. We completion or production have target should as division in and physically XX% optimize drill our XXXX XXX sufficient a enter to the inventory for realized per of East Mcf. $X.XX third fiscal with financially and at quarter, enter So, price gas locked our of producing

protection. firm of basis Bcf XX another have We providing sales

That local being risk these over of that curtailment, sold. on current forecasted potentially our for portfolio, could forecasted sales volumes our as is which We our are gas of a currently market. in-basin production said, XX firm result we’ll at Bcf production Dave. locked already is XX% into as we pricing, sell around spot estimate So, growth in of reduce the are production at excellent range. that, depending already turn our it oil have winter. prices exit to California, And we price fall in $XX.XX of this almost XX% And With of shape net production and I’ll finally, X%. well-insulated, hedged an barrel. we therefore, gas around per average in over should But,

Dave Bauer

guidance were operating these Thanks, with Last we results John. a National morning, provided Fuel right Good per fourth consensus, Street $X.XX share. everyone. night, little last reported below results line quarter the in Though of quarter.

quarters. the million and businesses gathering by income last businesses increased a these basis, of E&P On had year. over $X Our good combined operating

with compared prior production year up expectations. expenses mentioned all earlier, operating were and to XX% Seneca’s its As was John our line in the

drove benefiting from favorable to during $X.XX hedge in in Seneca, increase higher expiration of drop first addition the In the this quarter. revenues realized offset gathering Unfortunately, a production. contracts prices in the production benefit three natural a gas caused the growth as XX% which quarters,

Going year. be much natural prices marketing, gas should $X.X more business, and spending the pipeline forward, given quarter-over-quarter comparisons million hedge realized position. strong of increased our At over last muted, portfolio O&M by

on in than compressor near our pipeline cyclically required maintenance and of increases in the expect spending term, higher normal discussed quarter’s to call, I see to As last levels due integrity activity. we significant

spending. up XXXX, to maintenance quarter or a quarter good a of fourth O&M Some the went result service offset storage otherwise that spending that million and both pipeline X%, nearly was what that May. Line of revenues business as in the acquisition started our for this D This activity where fiscal increase in past $X.X leading last were the our November Expansion in of closed

year. Utility income demand some discounts evenly of in reflected based switched a year, new for our under low new bills, low the a as the more on year’s program, fourth the across a York. prior old down to saw in Xst, nice Effective versus Under program income discounts also on was quarter, which service rate the of April granted customer’s program were a margin we We new result are short-term to New transition usage. our start systems.

bad Also prior we result, quarter adjustment, saw in half more the in which will This expense. reduce $X respect a for expense, XXXX from a benefit debt utility, O&M fiscal really reflects The quarters This which fiscal is With fiscal adjustments taxes. in that quarter, first the in year. this In $X.X fourth higher to increase just a the in an XXXX, As about is fourth not the a income related timing debts. the at approximately low-usage change. usage to was quarter, see than ‘XX. issue. reserve million utilities million fiscal discounts of to did lowered the recorded O&M recur ‘XX bad in

line with Our right our effective consolidated full-year tax expectations. XX%, rate was in

to XXXX number for a of IRS’ many During regulated our the related tax for in the that quarter, further reform, tax year. would segments, of bonus impacts adjustments a were August the announcement particularly across there of the operating depreciation which tax relate XXX% available be companies

our among In moving state impacts tax should forward. and favorable during quarter E&P and Gathering time to addition, restructuring savings the cash significant one tax our subsidiaries lead created

rate Looking effective area. to next year, the we will remain consolidated expect in XX% our

items. share share, driven fiscal in expect $X.XX Turning be $X.XX to principal a earnings our now will midpoint, of guidance. two We This per $X.XX the to per XXXX range was guidance. by increase the at previous from

a business. E&P pricing refined assumptions we few First, the in

NYMEX assumes gas be Our MMBtu Also, basin, assumption pricing winter $X $X.XX per and in $X.XX are will be $XX and strength by summer. the in prices recent the of now WTI spot in our we barrel MMBtu. natural increasing will the per winter $X.XX the to on price per forecast

We’re at assumption spot our $X. price keeping

in toward a refined pipeline end X.X% of the will some the XX% Storage estimates work. and now the system. increase teleconference, Second, earnings range, again, fiscal our we as across over the X% said I area. lower required O&M increase X% by compressor that finalized to levels, O&M XXXX result fiscal our of and our integrity say to the expected Pipeline On last and maintenance budgets XXXX expect be was to We’ve

million $XXX On of side, the we’re our range a approximately lowering midpoint to range $XX by the to million. capital of million $XXX

acquisition to E&P mentioned, in by of spending Pipeline $XX was On due reduced be our for John the the materials of and side, timing the delays to California. Storage change will as expansion lower slightly projects. about capital million in permitting reflect

delay compressor Empire be Northern two project. the that for Access, North units used were With in project will that in the instead purchased

will reach us if with potentially an a shippers. project little capital, near-term In this allow a to addition the of in agreement ahead put North portion of to schedule service project can Empire preserving we

to then our on greater sheet on that will construction. had the we cash have dividend We compression of $XXX of of from a million met we timing be balance cover Access CapEx for the updated should to the Adding the with XXXX. expect operations financing once fiscal earnings end Based we clarity in capital Northern need expenditures guidance, at equation, September. we of area the our and for the procure midpoints working the capital million on all can and funds $XXX our expect have the substantially to

August, the pipeline this it a In Looking in the grow, early quarter’s have to to program Empire Since active treasuries to moved of the to million we issued the $XXX then, the will which financing pretty balance fund point, since We’ve outspend been redemption our up million fund the proceeds be last cause expect used $XXX within and ongoing early XX-year markets teleconference. XXXX, notes, of North were project construction XXXX May meaningfully. at of from maturity. to sheet. able modernization but we

our like were So, The good this highest debt the transaction. XXXX a portfolio. looks in really bonds coupon

the XXXX’s. program Next strength advantage In facility year, to that would carries amended issuance at expense The structure rate bank our basis changes There have of years of drive good XXXX; in $X are looking North Fuel, undrawn XX% rating, through borrowings In the the short-term a pricing is into will committed our business to liquidity facility made National in Also, for and facility. extend facility lower tenure growth to savings area; project that, today. week, Northern even market million Seneca’s in at drive the took fiscal $XXX XXX year see should projects of last going cash and ask flat for plus XX% in credit and to business. the three-rig revenue we And closing, points growth utility be current fiscal a for interest should amount basis we credit be Together coming the XXXX points. XXX the questions. and significant continued was in Empire the the XXXX production with gathering beyond in no and the in an years. modernization LIBOR for on operator hand, our the and line that’s been the another a relatively billion is nearly we game Access years five recent will new pipeline changers loan interest the a modest under XXXX. the were I’ll FMXXX lastly, better. open XXXX. as than of the program With

Operator

Raymond comes first the ahead, And Instructions] [Operator your please. Go Graham from of line question James. Price from

Your open. line is

Graham Price

guys, guess, base annual of you and a wanted And I taking where questions. that over for rate the year-end, thanks sense Hey. decline changing given see my stands where then, today. it’s time? Good maybe just get to existing that morning, production on

Ron Tanski

year have two. But, annual shallower year-over-year or activity across at of I basin then, Utica I wells it decline both stage similar is. similarly, on a The basis. Marcellus the over most change, couldn’t tend percent And than our the WDA decline what decline the at actually -- where tell wells, in focus and you the do Utica think, two, first a that on let’s our there to will wells Marcellus how of terms Utica the the is. rate

wells, we more related see the So, we But, conforms and decline see the of as to what it we that will related more then drill bit shallower as develop sort a program. -- Utica Utica Marcellus to as more to well. we

Graham Price

my Thanks. further of near when kind get just That’s we sort of Mountain curious see well? then, of in to follow-up, area sense delineation kind the definitely southern for WDA might was helpful. a And Boone of I

Ron Tanski

Sure.

this of X, that XX our quarter will think, I our be year of is quarter approximately well. Mountain XXXX, and the scheduled northeast for or well located miles fourth fiscal first next Boone appraisal of north,

will So, less. a maybe be it little year bit out, a

Operator

the Your Go Jefferies. Instructions] of next Sighinolfi from line please. Chris question from [Operator comes ahead,

Your line is open.

Chris Sighinolfi

point for If always don’t It comments on we to pipeline know operating flagged when what appreciate a spending quantify in based But, into quantify I just -- for modestly if last could Dave, And quarter. seems misscalibrated if shifted had might And curious outlook. of magnitude. drives this I back remarks I’m moment? guess, could, could comments. happen, and spend the happened, from you your I circle happen? you have if that know has timing then, could I if detailed did like on if your that we that I the utility cost at your XXXX XQ. also, you to the that

Dave Bauer

all Chris, of moved a hours. Yes. X compressor timing the be terms dollars. run little for it’s there’s number but that a so not forward, or units, And may in bit of million on mean, spending what’s of driving ton. I based our the

So, every to increment. the same those do these of to happen a you just overhauls units, all number have year. within we milestones our And reach have

the integrity a other cycle. do got integrity We’ve is The seven-year assessments element side. on on pipeline to

just the components. that and -- system fiscal take doing the we different work fiscal excuse into happens seven or year in that It it ‘XX in split we’re our highest XXXX so cycle. is whole So, that me, seven-year

on of same that So, -- us then moderate are we’ve that on get all XXXX. got couple a we but going as against should year, into things the

Chris Sighinolfi

both guess might Yes. what increase of back you or year, profile guide, those revised you is year-on-year help then, we’d how that I And to interested O&M up? pipes the I the in if would a X% much which range I come next us of ‘XX, activities. to that think incorporates I’m X.X% guess, estimate had

Dave Bauer

of specific don’t be overly similar level increase. on I a wouldn’t to guess, I and want I expect certainly

will expense we’d a what think, we XXXX. good I there’s O&M than in have actually lower XXXX that in chance

Chris Sighinolfi

regard, about York. transition side the on New program Okay. talked in And that utilities of low-income guess the in I you then,

something expect I sort think you million that’s flagged that well. fiscal Should as had a it’s when $X.X on for temporal the But recognized. year earlier we in you of XQ the your similar and as shift so of order mentioned in ‘XX, benefit XQ have that earnings would would XQ higher that benefit fiscal perhaps very to X.X? then the be quarter, or activity utility the --

Dave Bauer

The level kind are same, exactly Yes. flow it’s of granted discounts that to just it’s a of stay as them that through going system, be on instead recognizing the of the volumes basis. straight line

to punishing about going the effect helping have volume that’s quarters. volume quarters are So, the you high of the the right and low But, it thinking way.

Chris Sighinolfi

of Okay. tailwind But utility, rates think credit and cetera. card And more little something standards we’ve question bit articles companies had have rising strong more low about of interest the et seen that’s debt we one becoming on about rate. a been their bad The seen some careful has lending been we’ve climate the bit I economic as very and a Dave. a

bad better of tied what expense is the or that? assessment much guess how drives So rates stated, I debt to on

Dave Bauer

Yes.

fiscal in So and didn’t we about of that the were XXXX quarter was it talking the fourth in recur made XXXX. adjustment

to So pretty winter. when we had you go XXXX warm a back fiscal

lower so customer bills we had than expected. And were

needed. of than was the an fiscal the And three amount higher that bad so actually we first debt course we quarters over expense accrued of of XXXX

what I late than So isn’t different quarter really we of should say took the level that at final you fourth expense the of down or it’s bills look been bills of XXXX. and debt When level XXXX, that in past. the in bad our

really of in haven’t seen credit our or of payment we deterioration So the customers. much habits

Chris Sighinolfi

it. Okay, I misunderstood

it a the -- on base. was not comments change think just I change really were your the customer addressing year-on-year

Dave Bauer

Right.

Chris Sighinolfi

understood. Okay,

that. about Sorry

to curves one realized the Or for you or Sewell we’ll same detail Netherland in XXX be out BOEs discussed the XX% just and by and had said more about John. we I two your a just reserve type did assessing what I represented remarks the can Okay, is Curious you’ve reserve the -- if make that as that full little out I questions is for detail think intended not or the maybe of prepared ask Sewell that. bit Marcellus adjustments yet, the But Netherland should is posted curious, today? now they Obviously, used report the more wait that Utica. any by base Utica the of? aware program, in program K

John McGinnis

early it’s Chris, process. in the

know we’ll been producing goes it Yes, is have drilling in tightens up. have really are on what a do XXX, of Netherland the detail We is information. Utica have time we’re lot some But programs, these -- increases. posted, Utica in on, As we very only driver there for since on -- But once reserve as and WDA. there’s is as well. a mostly we release be years bringing new less. some wells early the Sewell the there bit or where little but deviation, the as we similar -- the you’ll of these two you we that wells WDA, It’s to and see has

Chris Sighinolfi

Okay. be they Deviation you? would where to auditor as more tend reserve conservative the than

John McGinnis

It varies.

bit sometimes more to conservative, they tend a we Sometimes be do.

Chris Sighinolfi

toward I I last more might shift in -- -- over Utica have comment in on explaining in influence ultimately guess Any maybe obviously guess Okay. And the report? had time your year had the help this program the development. reserve what focus we’ll that any would you’ve a see

John McGinnis

not that I’m understand question. I sure

Chris Sighinolfi

would that how development Well, to for imagine the each pivoted the of the regions. activity obviously they’re I window of at a program terms would look you five-year influence of and focus in going of

John McGinnis

still understand where Chris, WDA the I is focus guess, be to not is Utica. your going in I sure Certainly, what question here. -- our I’m

Chris Sighinolfi

term the program comment Well will look one to same I was guess just as in -- that. I how mean I financial guess official and we share in trying forecasts. what with your maybe obviously than to and more pivot to given about little you’re to you I going gauge, in Netherland John, the do your they’re terms tethered much type longer the a bit curve of them year-on-year detail anticipate. see

on was WDA ago? curve would have terms not deviated but much had you in of only what year a thought view, of the versus activity they I in do you how curious terms level So just type might the maybe

John McGinnis

Engineering Yes. and on At to to some really between about something Reservoir each would and through. sit well-by-well that’s walk is difference I’m comment on Chris. not one stage I that going through this our goes -- well-by-well a every how have Sewell down Netherland and Seneca Group between

So suffice Seneca the in lot to that’s well Sewell how at Netherland we that get just don’t are that’s just our -- of typically and But we within that of detail into. boundaries look terms say a it Utica.

Chris Sighinolfi

Thanks Understood. for the time.

Operator

Citi. of ahead from from Your is George open. you line next question comes please, line Go Wang the

George Wang

want to seems in biggest was one hone just Utica. the of It I on stock. drivers that

of So just are D&C tweaking than design best whether the drill to give well to terms also returns? and just and more design cost the still on the improving zone? Utica, spacing guys the landing you for can find competing the Just you potential color namely savings impact in well

Ron Tanski

will Obviously, terms I’ll information. get we’ve on in continue we detail to And basis. months stage But get testing in we’ll of let’s been into be to now, see XXX- -- between I to Sure we at testing on much determine right and cost that. production. more spacing. to We’ve as saving on touch to XXX-foot today, in any said per-well six move my a been statement we as begin more spacing XXX-foot, our if that if impact stage cost that

Utica drilling our and, in upper of where effective we’ll we’ve the both little the next have and Pleasant. fracking. -- more call those wells been I also within we determine six in -- zones And sufficient over to, is there better area both within see production which again, what guess, then target a deeper Point we bit testing lower We have been months,

look for far want -- what to not state we spacing, we can with X,XXX-foot. starting as But going we’re be to to target the focus at up. or lockdown As the at whether we’re around wide And spacing to spacing begin time, now, right well to X,XXX-foot. we’re the we’ll the future, once -- on, target going well begin near at we tighten least then

George Wang

down to management? Utica, EUR in restricted a have with of a for WDA you draw you. Got potential the terms just And better drawdown, quantified improvement

Dave Bauer

hard we did down worst wells -- to and speak specifically by wells. those we on two far EUR draw are know in our is management to in It’s be. without the what wells of program Yes. bring early will the All the both that two how to-date, the difference

significant what I say per difference, say foot -- time? I Ms sorry. basis I does It a X,XXX-foot. am to so per on would make going to XXX And XXX was

a difference. significant makes it So,

George Wang

Utica Good to guys the in Can question, most in point wells data comparison other you. producing your especially latest test peers, and of comment belt. sort results Got more on with the northeast of under Utica you my And in kind to just PA? the hear. of last of

Ron Tanski

have XX or a XXX how track, we actually exactly compare the Slide on shows surrounding what deck -- see slide our is, the wells. page lot that let’s Well, you peers I can to go when terms do certainly and -- in don’t But around of Utica in Tioga. that in to whole it a of we Tioga WDA have We with our activity.

Operator

Weil. of ahead Your next Howard you Holly Stewart from line the Scotia line question from comes is open. please, Go

Holly Stewart

down comment on missed I management. draw that those the John, on last wells

to? were that? then wells yourself what could you And if just on of you referring repeat Specifically sort

John McGinnis

We And same of little rest the perform on ago had two our more a wells that wells as the rest did our call about maybe brought talked inventory this EXX-S year a we on those too the there. basically -- a about they of early. we pad We’ve not strongly.

Holly Stewart

them specific those And now rate holding that Okay. wells at? you’re and is a there getting to right up

John McGinnis

the watching much basis. pressure No, it’s more declines a daily just how on

Holly Stewart

Okay.

John McGinnis

nothing decline. with do press it’s has It Yes, rate. to just the

We’re that. just minimizing

Holly Stewart

Yes.

Okay, initial missed XXXX. it’s And guess little in to heard color a think that this at pad comments a owning on about CRV you pad to in as apologize -- if I I that. well, about I your online. I give production just cadence in then can how I -- maybe XX-well but just clarify XXX. know is there coming an wanted larger

throughout in just I’m we model production should kind So about of XXXX? trying to how coming think the

John McGinnis

Sure.

XX Lycoming. that and be Marcellus be to on, Utica and in be wells. Utica, And out will XXX. we’ll be right then And XX WDA of the split be bringing in scheduled of bringing to those those now -- on four will we’ll others terms bringing about the we’re We’re of between XX be online going will wells, wells; bring

Holly Stewart

Okay. back through? should any versus weighted of half think And front kind half that we

John McGinnis

weighted Yes. front heavier than The the has half. certainly Utica WDA

sort I Utica. fiscal mean the or in one I the are -- of calendar in across back Lycoming comes the then half. our are evenly and think the year. in the have in six and that spread XXX back will half And we EDA across pad that WDA on of most other wells the be year WDA And then Marcellus the wells

Holly Stewart

one that’s kind great. thus What on, also expectation seeing guess what would you’re one then, your And in XXXX? you seeing, if you’re it’s John just Okay, just or service and cost of far be for is escalation. deflation maybe what last I maybe

John McGinnis

It’s -- a completion at little I’m side. stay I should least we that bit we flat. think on on the drill actually hoping the relatively been Potentially creep flat. side fairly should of But

Operator

time. over further turn no this questions Ken are there Webster. I’ll to And back at the call

Ken Webster

the and goodbye. access please Friday, Xth. the to and Thank on of ID call today. X:XX by Eastern telephone and taking call be thank through approximately November for access our concludes and investor.nationalfuelgas.com; time business to replay of close website call website replay with this you, us telephone like run Relations you enter Time online, everyone will visit will conference at our the Thank and our for to Investor This be James. on XXXXXXX. To A by conference XXXX-XXX-XXXX number both today. available p.m. We’d at

Operator

concludes today’s This call. conference

may disconnect. You now

National Fuel Gas (NFG) 2 Nov 182018 Q4 Earnings call transcript