NFG - Earnings call transcript Q1 2022 | National Fuel Gas Company

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Operator

Good day. Thank you for standing by, and welcome to the First Quarter 2022 National Fuel Gas Company Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now Director hand of would to conference I Haspett, Brandon Investor Instructions] like the to over [Operator Relations. Thank you. Please go ahead.

Brandon Haspett

and conference discussion Company are Thank us the call release. Blue, good Fuel appreciate on We you, Gas National you With on us today's last call of a Dave from for evening's earnings morning. joining the will President Chief Executive Resources. Principal the Justin and Officer; of questions. and Officer; Seneca and we Bauer, Loweth, the At prepared discussion to of end Financial open Karen Camiolo, remarks, President Treasurer

contain earnings quarter fiscal website. and first these have today's We'd The forward-looking presentation refer remind will been may on XXXX materials statements. Relations release Investor to February call. today's that like our investor during to posted you We teleconference

expectations, as made differ While the are to basis, beliefs faith and made, With a date are earnings only to may that, are actual results factors. and Dave speak good on of projections believed statements it in a which I'll have risk reasonable These release Bauer. they National may turn materially. and over last of specific for to evening's listing certain refer you Fuel's

Dave Bauer

increase fiscal results. Fuel Appalachia results increase strong Thank good and morning, to everyone. in natural from last adjusted the of XX% of gas drove prices with an you, an excellent commodity start National the and $X.XX per Brandon, an production year operating had share, Higher year.

is of matter earlier pricing several allowed our we a the which leveraged the timing. online initial production side, upstream advantage weeks of winter. of gathering the at to to On integrated than take strong us This start wells the largely and operations a few our bring expectations,

in not overall material the forward on the for have pads our a year. does the Moving production expectations impact schedule

production enhances initial obviously However, return those for peak rates the wells. profile prices at capturing higher

our of release, capital $XX that spending no or X%. midpoint, Seneca's guidance at half noted should night's we're beyond Roughly million persistent This by come cost what guidance driven the As the across chain the incremental increasing about included range. by last as supply inflation press issues initial in increase given in is fiscal XXXX surprise economy. was

half other good production our optimize reduce plan depth a each frequently we the of a top wells program, strength drilling operations, capital which In from rig is and more complete our particular, rig to two in to to designed of think incorporate the incremental our drilling inventory. further we few The hole use prices the gas which allows more of capital is a given and natural time year. us

plan tweaks also to level, enhance but spacing change on previously approach, not digits We with over now to our average, should mid cash at these expect which business. about growth to the also our Obviously, growth this high single it just we isn't step should activity use area, gathering Seneca, growth few to years, low the but development next generation our wells maintenance tighter the forward. Seneca, trajectory flow our in at on a year. the but talked improve a stage rate going of number We've throughout in

Justin will updated later provide production more details on the and capital call. on plans Seneca's

XX% of be and cost we and under $XXX costs our substantially FMXXX December, in estimate Pipeline to In on million, service budget. million. $XXX placed more to expected our business. are initial project Turning Storage our project time Total under than

business thank it. of million model. without past, a wouldn't you And in many to outlet conjunction day for was have who and companion this our the employees Seneca's a XXX to I've who is FMXXX and with South company's As benefit said of dedication the in perfect the Transco's project of our contractors and of on production provides project it example in Leidy history say the a great project the integrated hard reality. largest and everyone been worked the possible I'd made work like

maintenance another to Looking pipeline will modernization. fiscal in about rate an expect to fiscal on will the million level, $XX per efforts, remainder modernization and system million of regulated business $XX on XXXX year the million modestly, including we this and I On area. maintenance reduction initiatives. expect on annual stay be single-digit average our emission basis, low focus and $XX to base XXXX, into our spend on on At our grow

However, of cash year significant on flow spending, per the from million business average. expect level at free we area $XXX this this do in

to energy investing and which U.S. the importance the Union, reliability. to reliability be oil, in pass gas. easily slowly and demand, adding in generation new European smaller the electric up also needed sentiment not XX%, electric will All years economy, fuel real of its pursue doing of the XX% emission there we under Line a term recognizes baseload the coal to making and natural is be make improve gas. buildings would those that projects Investing if the firmly gas clearly in systems. continue intermittent anti-natural about N natural The of converted electrify the D.C. The millions our There But grid. several would use though dozens that to day, natural I will lower decarbonize would Many ahead to will often, in administrations too but emissions policymakers are just by our is efforts expansions Empire infrastructure believe its everything, difference the the elsewhere the of projects And variety and pipeline certainly believe on in actionable be near is Albany, of serious current system renewables challenging. expansion larger-scale plants that hoping the with electric in achieving all goals. homes gas reduction ought today. also bills. of infrastructure reduce but in will We likely Midwest of country of electric can is be while to eroding heat its so and could which save Northeast

its proposing add one the I'm And natural conclusion. infrastructure. of same new reach to gas much will it U.S. the So "green the day that will and the it's pipelines does, that to be taxonomy optimistic when industry pipeline so needed and much National rest to committing of even energy." Fuel to there build

cold January on a significantly first in to a our Pennsylvania weather utility we will normal. was be in Moving a the reflected to business. normal, little been colder cause warmer story margin despite balance it's – than lower with of than has which than our our Nevertheless, the year while, be expect that's weather will than in was in bout recent been Utility The been quarter But ever quite weather on normal. guidance. different the warmer than than prior warmer full XX%

are On last industries, expect all businesses. X% for operations higher and inflationary contractors, the cost many services, pressures. costs those to some at contributing are and companies materials side year. we Costs utility We O&M higher-than-anticipated seeing now X% compared our to to of general about at and pipeline things, will like including costs be

reliable and that will the we phasing added the can particularly the done New would like exhibits, of up the out plan renewable even such, our scoping document, generated Putting past certainly to The and the peak being see its the the as state generation that XXX that that's a Community including broader the comments the we This state's result. team transportation, affordable, day XX to scoping projects. cannot climate electricity rather build-out renewable XXXX, unprecedented know draft cost than to incredibly which plagued cooking, shortages heating by Climate XXXX. well go a generation legislation about If State We in all reduction green aside York but but has have Action almost there of the any grid increases capital emission battery to don't all the and remains contractors, of electrify Act expect cost startling enacted economy, natural about today. is ignores, consideration It's it's itself full an plan winter. speak Switching aggressive totals gears. demand that was Protection begin succinctly: our as the well with technology. scoping shortfall can draft we of have shift our consumers, pages, a the job Council with is any day amount existing is peak Climate commercial that similar to describes gas, after support still of with in plan XX at goals. is great a immediately, an it. electric concerns be Labor in total the has December, how clear heating, And industrial be schedules. Most the everything and grid gigawatts more published and summed state concerning load, Leadership what's greater before of construction largely planned almost fuels that recommendation significant electric before achieving that the of of met its processes, for that that passed of acknowledges lining readily message important The actually electric importantly, up will generation. electrify you amount cost, storage,

our can are coldest low be future the natural plugged put hydrogen all ensure of but goals, in hybrid will the that most, winter. above lot a need Through shortfall can only that temperatures of leverage a very New deployment heating certain and the a the electrification, where like in York, underlying energy of solution energy low but it XX% downstate a it one proposed also in than achieve Fuel that in resilient selective and particularly green preserves carbon day, day makes filled, winners National holes generation more if efficiency, gas, consumers. In the pathways state's there Perhaps fundamentals occur to be In infrastructure territory service emissions that the significant reduction brutal, strong. in colder are the order be we little renewable especially our need where – not low-cost, the almost and sense our to can reliable emissions meantime, meets it's in in access would state and So makes decarbonization eggs existing utility when that to fuels one basket the closing, of we on energy combination to like days to meets report the be the sense. all for we of strategy and reliability. no one to basket, holes peak carbon

positioning in deliver growth flow and our the At subsidiaries, earnings Midstream. and our over continued all same low-cost to Our generation deep ongoing and prices, inventory FMXXX fiscal the which provide in operations of regulated infrastructure us I'll of for the will and economic time, growth significant turn outlook and of to Energy natural Seneca strong lead wells, that, With to gas Justin. modernization at cash of free rate base will call XXXX completion beyond.

Justin Loweth

first With everyone. last million XXX Dave, our good to of activity for completion Thanks, timing, on provides all of new morning, quarter, off the production. visibility Appalachian project good project per day we Leidy valuable line on projected. us year, with Seneca online our came up fiscal ramping quarter. which turn the earlier wells and long-term XX South The start-up than during in XXXX allowing nearly a began capacity outlet a kicked strong of

to lower curtailments keep team forecasted ways innovative operational than addition, came flowing. In as in our gas our found

production, These avoid XX to our production able With time the were allowed to our compression loops. Bcfe station increase to coordinated base bypass and teams, using value enhance and a effort returns on retaining for growing Leidy we the between marketing we through upside us South during and focused from example, truly quarter, during hedging optimization efforts risk the our day while reducing maximize of our very and gathering of allowed production remain of of and upstream us temporary shut-ins capacity This portfolio. sequentially X% maintenance pricing. drove For maximize one. favorable to

in near-term over layering the hedges while past fixed Our price, months on longer adding financial the firm mostly focus for has term. over sales, few the been

floors towards natural added of our hedging recent price production. favorable adding fiscal firm existing for mostly We've as portfolio long-term modest Given strategy our bolstering roughly XX strong XX fiscal and volatility move and Bcf sales of targeting price well XXXX and included also gas our XXXX contracts of collars with in beyond, firm locking economics transportation and $X.XX, fixed growth. XXXX we SKU, costless Bcf

our work, have overall top-hole rig enhancing Tioga us allowing rig development acreage activity expected our Regarding levels, mentioned, our returns. to we're accelerate as Dave and maintaining consolidated within program, two increased our but further

to us drill on basis. Our per X days top-hole drill wells rig program while well, our year complete will lowering per more a foot drilling by and also costs to allowing X per reduce times

activities expected to of at payback of completion modestly additional also to stage half to largely of area XXX guidance completion enhanced expected are these the we increase, tightening XXX single higher We majority investment sustainable generates inflation. with production Overall, planning feet and our and in from top-hole the incremental about designs our compared program, attractive our We through returns growth capital to This spacing see which feet. year's mitigate our for is our in some The generate a the XX% matter months. further benefit extremely of efficiencies. operational roughly ability mid are development driving long-term flow. enhancements context free XXXX to cash fiscal activity increasing we inflation Also drive to talked rig optimize to XXXX of digits, previously in production. overall fiscal the expect forecasted this in high pads, capital

fully expect high digits. be our operational year, from to costs beyond risen have we prior our prior headwind. drilling and to to are services now efficiencies and single our realizing materials XX% reduce and overall those for continuing completion impact We to the this our While though certain estimates the mid expenses up XX% efficiencies,

procurement material million Despite million. has guidance in done to operations on labor, together, certain increases While challenges, capital $XXX $XXX tubulars have our items keep for range service we Putting schedule. million tremendous we've longer-term rising. increased possible by our the still contracts, a ensuring availability completion like in and of to for our locked to spreads cost job team these a these of tempering we've our $XX.X midpoint and costs are trucking, where materials rigs

spring. for XXXX, are scheduled online production remainder bulk for of to cadence the of our fiscal the Moving coming wells the new

second a to third guidance, is level output day. and first there, to As flat result, out per our of Bcfe just the to increased slightly relatively shy we fiscal our XXX for remaining We've have of to midpoint to the to From quarter the be XXX up compared account this and quarter expect incorporating production our of range At the results into and X modestly gas quarter. firm then XXXX production. expected ramp sales of a XX% hedges strong natural quarter. our cadence Bcfe for fiscal of revised updated guidance to expected first place nearly we fixed-price our in

protection creating XX% months have portfolio basis opportunistic exposed and when at our with over not locking is production in-basin XX% to past rally, of than We've few hedged, We favorable expected marketing less with great differentials been another basis that in price which pricing. end prices. prices leaves the

Tract within four pad our which in XXX, we've quarter, online last into Utica increase discussed footprint. brought laterals activity that recently extended We the to a acreage. I development As Tioga acquired adjusted well our plans County included

us position well million our has combined This results almost lateral the day to contiguous since XX pad and lengths themselves. Our November. optimize speak acreage spacing late a and for producing been allowed newly at

after on acreage. testament of than infrastructure, to running to additional our acquisition Developing closed the have well to including existing modifications a teams Northwest in XX are come Utica doing. six this Southeast. spring: development these a development the and We in pads pad have expected less over we two Marcellus this a the pad months job online the well in pads, we five and gathering prolific outstanding And room Tioga a upstream well is gathering decade

great we've sustainability also our with taken Starting operations offset While will in the strides new operations, plant along moving are soon California our initiatives. service Sunset solar really XX% needs. very power in field's Midway go our South of is to well, and our expected

And emissions reduced adjusted operations, later full win-win. We target with steam at to XX% has less LOE benefits plant in-service with and in lower moving and impact team refocused COX steaming with of South this resulting a a production, are and also speed year. Hills approximately our ahead true fuel minimal consumption Lost new dual our

efforts. our Equitable we under certification Development. Pennsylvania Appalachian of to Responsible this our sustainability Origin's Energy Earlier month, production achieved EOXXX Standard Moving of for XXX%

gas a this a rigorous targets. community is of reminder, certification to framework Achieving allows social responsibly a environmental, validation and has As in marketplace. our of and performance longstanding our culture series stewardship governance of and sourced engagement differentiate environmental the us

certify to three on Project deployed production monitoring expect our sustainability also These a be sourced Equitable next complete will of near-term, the Canary term, modest XXX will the Origin advantage value our produced they benefit initiatives. and own with otherwise, believe not certification only the selling In from are efforts. sustainability it we working we a us approximately producing Project are competitive create Longer in by weeks. but at from we certification and continuous this November, us with we XXX In gas a many or allow and which will we producers TrustWell Project devices to give to this Canary million to wells, premium. efforts that day to meet Canary per pads, our long-term process certification. few Additionally, under perspective, us buyers, utilities designation some we require marketing think think their responsibly important

with emission has and comprehensive with our on equipment. various emissions of takeaways. completed key U.S. types conjunction two study in Well This we've NexTier Services associated completion study Finally, done

tested. of in emissions fuel engines that significantly the GHG winner the XXX% equipment reciprocating gas confirmed increasing it First, natural lowers utilization being gas natural intensity, diesel with of of place clear

the of are substantially and expected more lower. be natural diesel costs more fuel our gas, displace completions to we as Second, with consumption

would our for from XX% fuel than along and assessment emission fuel to annual costs moving with XXX% This by natural completions study, each equipment XXX% cost diesel example, more frac of going gas our forward. reliability guide decision-making spread. reduce will For

we of and this our heels study, redoubling use our more is operations. efficiently increase of this our are to natural and uniquely National Fuel focus given consolidated the our gathering the many do upstream On completion drilling efforts development. on gas to to fuel of peers, positioned than

accelerate ensure worked nearly have infrastructure our utilize of can lockstep field in gas we in all of gathering to key teams to operations. Our development the

moving With several be coupled cash That and our with free takeaway single Karen. advantage digits I'll backdrop high-quality with to natural forward inventory intensity come. our Fuel We National closing, collaborating flow the In the will and and to next of initiatives. Leidy in increased reduction in price added stay now overall over in Seneca of success. emissions years to a And positions for of growth, is gathering. our that, is it by on years, a South modestly many substitution team The to seeing acreage are mid and additional generation. growth the completion for the capacity, diesel next edge as leg continue emissions on look take just high the contracts strong efficiency enhances examples the benefit long-term our one of few supports to continued Seneca of over of in leading over turn gas the up execution we This long-term toggling firm sales out we the years, next of capital of additional to of laser the expected great deep sustainability, Seneca position. focus activity. This

Karen Camiolo

Justin, good everyone. and morning Thanks,

primarily realizations prior increase our driven Dave and National from higher in mentioned, increased share, segments, the increase the of E&P The by Gathering price Appalachian XX% and per for operating were commodity Fuel's As was an both $X.XX results adjusted year. production. quarter

to strengthened relates former, have supply-demand fundamentals the commodity prices. As tightening it

to price were natural In were our between flat realizations result, Combining year. from up earnings were up a year, $X.XX last while throughput, a oil were in our compared crude to last per production, these XX% gas up gathering benefit share. which segment, over total increase corresponding two earnings this has segments with XX%. As realizations Regulated X% a our

the under during service the As show $X FMXXX started up million in benefit results, revenue project commenced see our of recognizing of quarter. to just we the in December,

As to of is a project reminder, annualized $XX this of the revenues expansion portion million. expected generate

in In to addition, to the per the New see growing modernization about related component we year $X quarter. the revenues the At adding to tracker of million our York, we during million have benefits project. utility, of commencing in system a the continue margin April $XX modernization of

do weather warmer the Going a XX% the than benefit Pennsylvania direction warmer impact clause. not normal last our warmer we in weather $X Temperatures Pennsylvania. was approximately the other million year on than in utilities of X% jurisdiction and were average normalization have where of

to of There look an share we are of are to year, per share, $X.XX the earnings at of guidance of key noting. As the remainder range $X.XX drivers $X.XX a couple we the our worth to midpoint. a increasing increase per

First, with we commodity to truing current better assumptions up price the are align strip. our forward

has price $X.XX to and March as six gas of had $X.XX natural late. been per NYMEX year. guiding a for to revised has fiscal of Pricing dose Our MMBtu. volatility to January were the from healthy months $X.XX previously the of We last

reference, move up by per $X moved for our previous earnings year. oil $X.XX for will change in price earnings in For by our from a remainder impacts of guidance, pricing $X $X.XX $XX WTI assumption also our barrel, the change to We've $X.XX. every the up

on The are changes things. other cost of the notable two side

fuel our we by that in LOE steam $X.XX. Seneca, of a guidance projecting earlier. function $X.XX now California largely First, a costs at per to Justin of lower $X.XX range referenced are Mcfe, is reducing This

versus On facing. the are to discussed X% expect up X% to We the some inflationary approximately now of Dave regulated businesses, O&M last be costs headwinds year. we

approximately Storage in expected the Outside costs XXXX year. up FMXXX, will be and Just favorable as are about operate this costs million that not to to to O&M O&M fiscal recur as of this everyone, had remind we dynamic one-time underlying benefit of $X to a Pipeline X.X%. well

Moving to capital.

by sheet an of $XXX revised capital million, earlier, this the $XXX guidance Given to all million our remain dynamics balance cash million funds consolidated our at flow midpoint. increase million. that in of dividend. exceeding discussed $XXX generating projections Bringing $XX.X well This spite the strong. to X% of free cash will range, a in have we great previously spending from to Dave or range still discussed the capital Justin million being in improve cash we guidance, is our our metrics. together, increase and flow free of and level operations of in our shape $XXX to flow the anticipate expenditure We continue In excess capital leverage

For we the months debt-to-EBITDA perspective. were XXXX, December XX ended approximately X.Xx levered from a

As cash the our grows we months. continue we trend to EBITDA X.XXx and flow, XX to this generate expect to free closer next over

well over no inflationary prices are course commodity balance our the one. rules there the and sheet headwinds, the While to positions play for out. our flow, a closing, the hard way cash and investment-grade National depending quarter future. ask which are weather the the I’ll fast projecting us positioned operator we metrics was agencies, how further strong so, and next to With first or year well of on the will In toward Fuel to with meaningful mid-BBB line free work questions. strengthen rating that, despite is for generate the open

Operator

comes with JPMorgan. Parham [Operator line you. Instructions] of question from the Your Zach Thank first

Your line is open. now

Zach Parham

Hey, for my taking thanks question.

couple locked you’re basin like local industry Just looks general of near-term what just in ago? curious numbers had seem a producers to NYMEX It of but wide guidance assuming pipe $X.XX similar part and on just any we’ve your Appalachia on that volumes, a Appalachia climb volumes the really. getting a a out being view situation year basis. the shut delay is end, out we First but off, seen all worries on your potentially even Seneca thoughts for in mostly further production to for in years some where basis to on that. on for in know spot, saw I of of you new into

Justin Loweth

Zach. Sure,

much locked have in-basin of We with. as comfortable feel much our least in exposure we as at

with to new that’s and along we’re summer, than the It’s on where part other protect will And hard our with blowout depend, in any So course, producers efforts part some sort in of winter to Leidy and doing. it happen in storage due our will to that. say capacity, what basin. exposed to what so what less South massive of marketing and end, it it’s some basis depends are exactly levels like, of frankly, XX% look this of we

– our they activity beyond through handle of similar people levels, kind is going maintenance decide of production to their to they we’ve how if this overall the insulated done Longer same. we’re Appalachia, least peers the anticipating how I before stick our grow. really where story on at production pretty to It’s were we that In is year. term, depend terms in if the we’ve or levels how is what overall they well more to But XXXX. risk think

home grow not take. we grow as We willing want not to good to that a have And think risk we’re in-basin that it consistently, just gives amount knowing minimal to is because and I to So for we going gas, grow. long as that of with not to really our sales we’re term us existing in-basin. firm firm our exposure portfolio, we’ve a said a transport and view

Zach Parham

I just Got it. that maybe color. Thanks guess for follow-up. X

the certification and could bit what market in RSG little RSU of mentioned gas? a of you looks that you premium for that about prepared kind get some your potentially You gas. getting what premium like? And the remarks talk on for Can a potentially

Justin Loweth

Sure.

for think some is. I that, And of our be number just on likely is you going think more we’ll selling least not premium. at that commercial successful So magnitude, expecting. settling of at think should rather we’re guide I’d kind help modest The we’re but it’s to the dimes we premium pennies. It’s say to the what is And at right quarters. of in speak purposes, not on – we – and gas a absolutely what specifically what order I’d And developing. nickels, market be

gas. We’re in very definitely particular, of in gas, seeing they, to get our a And lot of can Canada, Canada. we interested certified the interest. it Interestingly, in a Equi-Origin are lot

and a Utility reduce utility at opportunity intensity a buying move – that will as discussion the that our producer there’s ultimately their as particularly other will level, emissions continue utilities we’ll RSG we is to on and cost for we’ll think great their And will markets. keep with as the and asking think of Seneca. them towards sustainability Public we get to years to hope in it allow developing, just months us So not get come. but recover the well And like there board there from into Commission

Zach Parham

for me. for That's Thanks color. all the

Operator

of the comes Holly next line from Howard Stewart Weil. from Your question Scotia

now Your line open. is

Holly Stewart

Good Karen. morning, gentlemen,

Karen Camiolo

Hi.

Dave Bauer

Good morning.

Holly Stewart

Dave, relocate on a NFG and question you like Senator invited electrification to It’s a maybe to fuel reliability anti-fossil has a just Pennsylvania few grid. versus made state looks lot claims York. off very move New picture ago, that of Pennsylvania a say, its interesting I’ll a because And of over New actually the the given headquarters bigger few start last a of the it about York years. the overall weeks talked lot let’s

how curious around sort offer? of and the you are and as this maybe So thinking company your this just thoughts about to

Dave Bauer

York amount. just to Sure. up the I’m ready New been give not yet. question on getting We’ve Yes. a fair

you and political I is to when all electric pace of think phase move the in to things costs if and to being implementation. its come think and not more senses be play currently legislation may into is going reliability decide smart And phase the that contemplated. that state we’re bringing that at solidly I play, climate the practical the the next start like into

York just here. ready and not give up to plan we’re yet our on to keep So headquarters New

Holly Stewart

Great.

and maturity on looks bit this like on, updated lot maybe that in allocation. of cash thought a was on little there’s But be of balance It thought maybe rate could a beyond. highlighted higher small take interesting moving senator. I of your lot – of to at Just doesn’t it move the that’s get a could you flow just generation than a side we thoughts do things. that that, out. sheet an to not other appear a you year capital that out free Maybe

any you give maybe just So updated can us. thoughts

Dave Bauer

Yes.

on delever EBITDA, that’s to the delevering where bit, just a going driven higher capital past, horizon. in Our rate into cases our our lowering our so is – lower number sense lot – on as be rate debt-to-EBITDA and reducing also process, first know, we but Because absolute priority sheet. by setting and are makes talked as of in the plays absolute not debt you to a the leverage balance if structure a

got that’s in we’ve is, the So February our maturity it next range. of $XXX I XXXX, million think in

in XXXX free acquisitions. do that we So maturity all the use certainly, down revenues we’ll some smaller pay no of have flow flow FMXXX issuance. thinking. term, through of if will and change from have and in or shareholders our excess company either opportunities way. lower longer as those to find like Then some and in cash arise, we free our Really grow to capital continue But capital. We’d organically to a the cash likely growing return really don’t

Holly Stewart

pads more talking Can comment. I those Okay. spacing for Maybe in Justin. us flipping that, new about And a XXXX, today number TILs just for few know just missed – which and if in the That’s Justin, some what for XXXX? to completion me of of updated and TILs great. you’re design plan enhancing terms now and you of guess, your kind I pardon give and capital then whatnot. had the [ph] maybe that with you I

Justin Loweth

Holly. Sure,

in the on first XX wells brought we quarter. So

hand. see And spoke incremental the lot the most there, we balance on today history the that we’re investing more that enhanced your part, side, lot where IRRs completion kind change. don’t are of the – on incremental over prices for stage development of and payouts for on balance TILs plus incremental the a months of in more design capital just about the where of and And count over what the I really and so out optimization. year, capital talking, XXX% returns year mean spacing. can of Our our completion and are we’re doing – the about, of are fiscal these got a time the data that payout, on top-hole that through tighter you kind on The it’s we’ve I

incrementally rig very see we of of that benefit call with more the XXXX bit our see larger of we’ll just the our fiscal year. top-hole pads. in that seven It that Similarly, and mostly our most optimization will towards top-hole impact sense six, you end XXXX. – that up of how – from the our of two might There’s top-hole, the spill incremental on really that going one three, particular, to just spill but to year drill fiscal will what in frequently and wells lowering that quickly speeds we’re And four, our a that’s tail employ has maybe we So into really kind per wells of an a pad a, Again, plan. benefit I’ll more five, little that production likely into those can accelerating the does four of enhancement the is of perspective. the it, costs. it’s all bring – on of has benefits And rigs.

Holly Stewart

Okay.

terms at And just my year. sorry, of expected fingertips I don’t have for the in number TILs that total the

Justin Loweth

number but I can of off right that top – my don’t up. the have follow head, we

Holly Stewart

follow Okay. on I up can that.

And stop then, of has and bit the to from one maybe I’ll in quarters great. perspective, of last a been Justin, sorry, the and of volume here. like bit. ratio gathered weeds. looks a It the a maybe Seneca sort particularly last rising the But volume little seceding fee Okay, more two and Midstream

how think versus I’m not mix sure So gross or net on based to I’m that’s it. just sure about or

trend then forward So that I is And going here in my what’s guess the driving we forecast? question think that? should about that’s

Justin Loweth

Sure.

dialing So it, it’s in you’re them. on a kind of couple of and things driving

Seneca added we difference throughput and other is between that sense gathering the systems. – simply net gross have our and the the of revenues third-party exciting third-party now just through – one the volume meaningful for volumes is in one So the

Some of future. of continuing some and where that the the those we’ve the of anticipate into to been balance working the this should on absolutely quarter for up. show started you And through was benefits year quarter time. a long first And

Holly Stewart

all. you Thank Great. Okay.

Operator

the Your from line America. question comes next of of John Abbott Bank from

Your is open. line now

John Abbott

you taking questions. Good morning. Thank for our

Dave Bauer

John. Hey,

John Abbott

Hey.

question you And several period when think addressed you your it years, maintenance of David, your inflation. the this next granted sounds are So latest CapEx across CapEx. cost on seeing is maintenance you are on our what over I to some segments? you are going multiyear time, remarks, opening like. in thoughts of over mean, grow But a first but your various

Dave Bauer

Yes.

was seen On it least $XX to the pipeline we’ve that would that said, I and range, side, in inflation into account date. like take at the cost the million

million hit say side, more system. the side, Gathering range true to million say, very, older and Justin, would very let’s you on I into the, preventative maintenance, of like, right, then And so O&M. the $XX small, pipe. it’s It’s in then Utility to which of the and for $XX modernization maintenance On excluding replacement age given falls Seneca? the the want And

Justin Loweth

Sure.

our look I’ll So in at aren’t maintenance, they so plans quite what baseline you Seneca, like. on

So truly you’d year, we about going continue more come to $XX down, if we closer it’s of year, still come went will then to into per about that production. mid-high flat you be maintenance probably single million in another XXX. just we’d at if that, if to capital think just down. as subtract to it But next off will the million $XX we to just digits, It think And term, expect XXX. say, long XXX

John Abbott

But saw, you you’ve very marketing post gas the but our about are it been When mean out adding being second of thinking in on your sold And touched is basin, was long-term how this about earlier differential you XXXX, about you think are at the that how you thinking helpful. majority That of question, Appalachia then when about basis I is long-term differential differentials. time? contracts. Appalachia?

Justin Loweth

lot than getting it which pretty – overall say on NYMEX setbacks is in-basin production of the $X.XX that’s supply. gas growing But it’s and There’s I So that how depending to on not recently, there a is of much drive infrastructure will gas some I wide, is, – no out but growing basin. be large be to other in terms within pricing, will had And variable projects the are $X. which range exposed levels would certainly of with where activity of highly would kind or in gas it know depends basin. MVP, a

firm portfolio transportation augment So and you sales have some firm top unless on with of a that. great it

are $X.XX people and range keep of in have result of talking think going production $X I to off kind in their kind stay I’m to about check, term, of that that will generally to NYMEX. long

John Abbott

term? you your layer marketing you do potentially your in-basin for that’s when contracts, you out see differential play – And shaking on in sort the marketing long of correct? where for When you

Justin Loweth

give It’s good slide of you we we deck, I a – basis average, show our show XXXX, would our So we look to point And I like. long-term have guess Slide in if an is our that looks pretty deck. what assessment. just take XX where at would you a you what fiscal

some describing cases, it look some better than in what you in ranges, are we markets, our the you York – good [ph] into better. that would flavor more over and are through, Transco time. I’m what in of meaningfully we those evolve us that and general Northern be expect If contracts at all will some just New really But Don overall were go our our that there contracts, a to NYMEX other Empire specifics. and contracts, gives would basin in if realizations see I

John Abbott

one So I how inflation? That is businesses, this the businesses? very the in work? squeeze if helpful. How inflationary timing that case potentially in And sort pressures, does does here? more regulated that could a those for factor maybe rate of of with how influence for the And does just

Dave Bauer

driver cases. Yes. certainly of a mean is it rate I

another both side Pipeline year. of have at stay the in for least a things, On pipes out we

business, On Utility jurisdictions can file can now. we I in of think we both the the file side –

case approaching year you’ll see two. earning returns, where We’re but next point the good rate file we’re in the likely And I obviously, into think eats a inflation that. or us

John Abbott

Very helpful. Thank you for questions. taking our

Dave Bauer

bet. You

Operator

line comes James. Lamar [Operator next question Raymond of from the with Instructions] Your Trafford

now is line open. Your

Trafford Lamar

Great. Thank question. you taking guys for my

spend growth. And fair a The first this in that of assumption additional with kind given year, XXXX? one do make? proportionate XXXX the to capital to we should has increase for midstream CapEx expect in Is production growth a

Dave Bauer

able line not pipe that cetera, modest likely an piece likely will will a et ground, XXXX, have we but in to to few of a we’re material we – step-up. have fiscal or move incremental more might during will There necessarily. which we – more Not a need result in very wells able wells few a we’re in put turn the

this stating just mid- of Seneca down thing, was I ballpark Seneca growth side would even capital other that year XXXX Appalachian million shifting capital falling next our in $XXX in The kind would by I high to this make and with kind to into single-digit this talking earlier about. revised we’re with that the I clear the capital – to see sure to Gathering see from is of plans capital that growth, of year. And

Trafford Lamar

midstream and you Okay. any recent the Perfect. around then in have if current Thank or winter to It you. And XQ and any last as want revolves if I effect know production well? shut-ins all of the any, experienced any effect if kind storms. production on just it’s on question. at

Justin Loweth

Yes.

associated we’ve with – very, freeze-offs of other or the minimal Seneca had and really So flowing. very keeping We’ve a fortunately, team weather. the at Gathering, done job fantastic production our has issues

Dave Bauer

Regulated of business, side the the and Pipeline on no And issues.

Trafford Lamar

great Thank guys. you news. That’s Okay.

Dave Bauer

Yes.

Operator

of Your Goldman next comes line Umang from Choudhary Sachs. from the question

Umang Choudhary

of you you seeing Thank back reliable. Are than And fuel you like independent more more is and certification. at my you the to taking mentioned, certified on questions. had auditors? just wanted policymakers get I engagement future carbon much one. is coal development for RSG I as intensity support to by much natural from circle the gas oil lower

coming on outlook as quarters? Appalachia also you demand do engagement well. the Thank you. and that to of you growth potential across basin see the the can on touch pipeline maybe in So increase And pipeline kind

Justin Loweth

utility very front, from public that pass responsibly anything to I’ll that How like consumers, say think their speak to be to to into else relates I ability it we’re sourced it speaking level. D.C. gas ultimately as sustainability And we’re for as at policymakers I to a just certainly, in holistically, for it’s that slightly cost of on what from on in that. a producer engaged it as certainly well we’re making and an going whether key and finds its other we’ve actually engaged with seems overall informing of So a the how doing we’ve to peer quickly speaking catch-up we’re education process good gas is in that sure taking, And we’re how phase to ongoing. and initiatives the this why come buying us and matters. the doing think education that kind time, and just responsible where of to far the receptivity sustainability industry come just place is and takes or source the companies commissions the incremental of way just their state-level think kind – companies, perspective in I very we’re we’re what stakeholders state

Dave Bauer

part I I think expansion you Did asked opportunities, right? right? that hear about pipeline

Umang Choudhary

the Appalachia it? Any and expansion in in That’s absolutely around right. systems your existing opportunities timing

Dave Bauer

Yes.

system. I will to think large our project. think expand there done. I that But to projects say be our the as as, think FMXXX opportunity continue it’s I quite going don’t have can are get we to

line, that example, for a that Empire XXXX our throughput. So built compression-only was project our North boosted we on Empire in project

or can add station that compressor the there volumes. on by boost I expansion opportunity lot add there development be – pipeline. served that’s Line another think on system, we of and do to the petrochemical Similarly, another we’ve got to N there’s going a our

those system things. we our N. Rover pursuing expansions. I as be with in can if would our for And will it into built and that wouldn’t get very XXXX system the think come see will be I – lead far to of to terms interesting think to we’re that types is fruition. further from these projects timing, But things I us connect isn’t to Line anything expect we XXXX, XXXX. in We hope these some of of further our

Umang Choudhary

great. Thank That’s Okay. you.

Dave Bauer

Yes.

Operator

to There are back Brandon turn time. I no will this further Haspett. the call at questions now over

Brandon Haspett

afternoon the business investor.nationalfuelgas.com, telephone, call through We’d Blue. at replay us will enter XXX-XXXX our our this by be concludes ID the everyone (XXX) available This To replay will and XXX-XXXX. telephone for taking you, X call time by please website to website to for online, you, access conference like on and be run with and our and Thank conference on Relations Friday, XX. this call both thank and Investor access visit of today. today. February A the Thank close to number of goodbye.

Operator

concludes for Ladies today’s call. Thank and gentlemen, you participating. this conference

You may disconnect. now

National Fuel Gas (NFG) 4 Feb 222022 Q1 Earnings call transcript