NFG - Earnings call transcript Q1 2025 | National Fuel Gas Company

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Operator

Hello, and welcome to the National Fuel Gas Company Q1 Fiscal 2025 Earnings Conference Call. My name is Elliott, and I will be your coordinator today. [Operator Instructions]. I'd now like to hand over to Natalie Fischer, Director of Investor Relations. Please go ahead. .

Natalie Fischer

the good call appreciate last and Bauer, for release. Justin us of and on joining evening's President President Elliott, Fuel Loweth, Principal With conference National Fuel Financial Officer. National today's a on Treasurer and you, Chief morning. are Resources Tim you We Midstream. us earnings Gas Executive Thank Company from Silverstein, Dave and call Seneca discussion and of Officer;

open of the end prepared today's we will to the discussion At remarks, questions.

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

expectations, faith and in materially. a beliefs to have made are and basis, believed Fuel's actual may the reasonable projections While results differ are National

as statements specific turn made, refer to you may are speak date a Dave it These of they evening's for only on that, which Bauer. I'll and factors. release With listing last of to over the earnings risk certain

David Bauer

good everyone. Natalie, and morning, you, Thank

the Before the we bidder employees the of that employees stepped of the always to tip get system contractors they to last flawlessly. do, burner and to team through got performed bitterly ensure who our us operations temperatures Arctic moment to the Blast. I our talented take week's wanted a into In cold recognize base quarter, wellhead up as from

Thank for you the extra going mile.

had last adjusted results over operating quarter. year. Now with we up Overall, a strong to quarter first the XX%

our for success with been has our the is our quarter. on that evident and said system I've As calls, execution, focus prior across results the in on

corporation I'll a these continued per of the growth outcomes note, over sight line businesses. share. the supply on past proceedings at And Of positive earnings distribution months our us XX discuss and in gives as in rate long-term moment, particular in

the results. on our the our upstream nonregulated once operating the Upstream company, -- and businesses the and gathering business side company, of solid Gathering side regulated On of posted again

was hedge book more sequentially During compared the last we quarter, drop X% experienced strength production to and quarter. the up year's than the pricing first in mitigated of our

pricing balance development over the providing weeks, improved, year. program. is gas At last of X for time, Seneca's success the materially the momentum has efficiency driving capital in improvement And our of same the operational the continued

As further strength are to up seeing of XXXX, best-in-class, Seneca's discussed area to we're Since transition Appalachia, development and and the the has results focus. expectations, calls, on capital -- recent of improvement see confidence years further to and while exceed in of are Eastern unmatched I'm these say durability is continue area their been The us down gives any assets. trends we our we've which the our expenditures principal peers by XX%, the still ahead. capital in to efficiency expect in production happy fiscal XX%,

Justin more will call. on this in the later have

compared case across $XXX million utility with of our additional excess activity our the to are a caps New Pennsylvania along back the Collectively, in XXXX. rate to the highly and last This company. approved our provide side settle September settlement Corp. cases, York fiscal regulated to that impactful Public period system. joint we December, Service rate Supply in the York of settlement in expected In rate Switching the of the proposal of rate-making off to New filed margin Commission utilities February, case.

our is X.X% National equity outcome, over fiscal layer, is our past, both our The New The York for in case. significant allowed X.X% we've is and of Fuel for including years XXXX improvement XX% on expense volume large settlement, that of revenue good which a the first rate rate items customer uncollectible the the the adds a it equity an decoupling, in tracker had and also protection rate extends return margin settlement. And X which tracker. revenue and customers. through settlement on XX% keeps prior a weather our normalization,

have for agreement, increases additional inflationary XXXX and will increases in a modernization As rate operating expected and as ongoing costs. to our X in as our XXXX multiyear we well spending account

the gives will This important is that delivery state, York our continued great still for our obviously to lowest great And customers. us be our in with visibility earnings amongst it's increases, rates utility. even note New these the growth to in which

policy in for in proposal support clearly case the York the joint of importance our modernization gas of approval the Of distribution standpoint, note, continued record the investment a the the State. of the in From infrastructure. Chairman utilities utility New natural of their commission shows the and our Commission's particular unanimous emphasized

Commission's to or rhetoric charge, in a that to recently from over York. in is the elected the -- it's will version future it small the see the natural to state's gas next few Pennsylvania New Despite the implement make system to distribution experts the a years a tracking DISC approval for officials, ongoing clear long of distribution system. mechanism. permitted improvement our be the Pennsylvania We energy and received year, this which utility. Switching our first surcharge We're though impact investments grow in month as modernization expect we begin I

project milestone its the our we storage a and key for according continues In project. in Tioga which is Pathway assessment schedule, months, pipeline environmental coming ahead move the to to to business, the FERC expect and issue

XXX this an important project reminder, a provide As outlet will EDA growing a day Seneca's for million production.

hopeful our submit currently our Empire case by had a In Based so. rate month the file constructive amending we're to or settlement, requires to the April. with addition, negotiated FERC of end that approval next these on on discussions, shippers for which Empire our settlement existing rate be able extension in we've at pipeline, we'll discussions a

years. deliver like pipeline Pathway settlement additional the together, rate-making York Supply disk and expected the coming with expansions Taken Tioga to future New multiyear Corp Pennsylvania in growth at activity are and along continued

for industry. Turning gas outlook to natural The excellent. the is broader

overhang expected demand in daily the generation. expectations absent Enzo, industry the given Storm contributing stemming level pricing is pull Winter a levels with and Colder month being for inventory current for feels from recent remove During record some in from helps high sustainable fiscal on warm power levels. of LNG, also demand Tcf, $X.XX hovered Prices of which, onshoring on storage had weather production gas-fired of and continued growth industrial growth the X 'XX of reached to the days. for to the remainder area, record of the the consecutive X which approximately abnormally withdrawal national for storage generation to addition and in weather, an along increased demand

IR bodes current National billion over we set and years. assuming free NYMEX improved the the cash our Fuel. next nonregulated This outlook for X well position in in At our hedge of forth expect significant deck, flow businesses. the potentially $X strip upwards

cause hopeful term, Over industry regulatory early optimism. Congress administration longer in Washington work they'll to -- of clear there's while supportive it's the needs. address for innings, new still unquestionably the so reform, is the gas and with urgently I'm The and natural permitting

natural artificial demand source a expected generation. in critical the impressive. we've for new without fuel from baseload role gas play in all question, is is centers in power this growth intelligence highly the a growing read will as meeting data and And reliable press, need Additionally,

centers. is footprint National Pennsylvania of location for is can gas land, amounts atop natural large available It of relatively an data an attractive situated temper power abundant and cooler has in consumption. Fuel's its climate operating source help

center positioned data support and developers an integrated facilities. is the generation needs Fuel of uniquely As natural to National gas company, power

decades and a by Our a routine solution track natural expansion highly allows long-term high-quality range underpinned record to inventory to supply interconnected infrastructure pipeline executing contracts. projects gas us of services developers long from fully on development of service to integrated of transportation offer

of center optimistic key in many active National -- growth excited are future we that this Like it years. for Fuel. additional together, in drive are discussions opportunities peers, Putting value in will of coming data chain our the I'm the the players all with and

collection excellence great strong over and all sheet. value great assets term. focused positions a of balance the a a that's in investment-grade basin the of longer located on significant have deliver to in team to operational North We us America, which lowest-cost -- shareholders

Tim. to previously best year career XX-plus take recognize Officer, Chief moment call Operating as company, a Ron our work an call to turning With the turn in announced, Tim, to is over the we that, retiring wish over I incredible I had nothing want Before with tomorrow, to who, Kramer, the I'll and the has Ron him retirement.

Timothy Silverstein

the for last a are good of segment results and Fuel $X.XX everyone. great compared quarter seeing morning, driving Dave, per improved XX% our success is had with each operationally year. share, operating also year. and the had -- The financially, both National up Thanks, outlook of we in to a remainder

earnings. quickly Before GAAP I did moving touch want to outlook, that to on

the which was in we the of of noncash the due segment. the majority saw to quarter, ceiling During test. impact impairments the E&P

Given results in are outlook outlook for guidance XXXX pricing, results. from for the $X.XX and of XXXX. for led -- XX% expect future. earnings any pricing be $X our the further to we now fiscal higher a This increase adjusted guidance to impairments increase our over previous for earnings at XX% anticipating a is foreseeable to operating not range midpoint per us fiscal the increase we also a which And share,

book of X is our by provided quarters recent different new demand averaged prices generally of our is and but guidance impacted assumptions. on our based fiscal of NYMEX continues in today with hedge to Keeping forward the NYMEX lot assumes a which $X.XX gas to the practice, be volatility. the for timing natural curve. likely the gen year, volatile the LNG range of be and we've as to This with weather, Pricing sensitivities MMBtu power projects, last mitigates line per

Appalachian have of differentials, and in the a basis at increased demand continued the modest outlook to combination pricing. led discipline for producer improvement Looking

this we tightened cold result, the a of below we've year, Overall, is now $X.XX snap the we to led the expect recent few to weeks. significant for expect And forecast average the nice continue. NYMEX. remainder past do The which As tailwind. our in seasonality a tightening basis

to expect exit do prior levels wider we as our reaching differentials winter, we closer to guidance. However, trend

Alongside tailwind, revenue across year. start on also production the improvements of range results our to gathering at and segment we E&P higher the associated revised of are seeing We've pricing guidance the operations. great Seneca heels our

been of has impact guidance our to QX account the DD&A for our impairment. lower revised ceiling addition, test In

are higher we for rate year. tax consolidated expecting the Lastly, effective

our marginally taxed above our the of statutory is the As rate, at incremental midpoint prior guidance. prices which is rise, income

we On capital continued midpoint Seneca's efficiencies. side, spending the modestly for account guidance capital of range to the reduced

front with unchanged projections capital guidance. are for we the regulated in On of on the side construction One pipeline of leaving now. the bulk season point our remainder of us, of business, still the last

York rate X. was New the The was where became December the settlement, in saw we effective settlement. which the October This first quarter of impact approved

While revenues, start for customers with we make-whole until order with rates included any from date. didn't building starting the the foregone effective provision the new commission a X, January

we this calendar a flow and we higher entire the As over recorded course first the collect of to quarter, result, impact the the rates of associated for cash expect year.

utility these to with are new through noise slide be deck please Natalie typical York, further the in is of investor lays if the will over our We've statements course there particularly As in all in But walk there that a rate the the some to details. year. out financial reach out questions, items. cases, New included

last up aside, approximately note in XXXX, utility. utility the in in are And is XX% to increase meaningfully the just to expected that point important that to this isn't compared growth the fiscal earnings year. Setting

we seeing businesses. also in significant our of each other are growth Dave As discussed,

sheet to and expect to cash buyback improve to shareholders us allowing cash that continuing earnings program. into already We free long-standing through return translate our balance dividend these further strong our will higher flow, higher ongoing

relates to through approximately X.X million move the million repurchase date, As we've shares to $XXX it to or invested buyback, time.

each sheet, the that to spoke to in said, an point business do -- in several reaching as rather closing, outlook being previously the set the back upcoming that we're shape about will have Looking we was maturities than debt great balance In mid-XXXX improve. for inflection significantly company need we to we later.

by natural will the returns capital in The to will from in be to roots. gas of well our both growth major underpinned of continues identified This capital. already growth true term as seen over for be our expected projects longer Staying excess this as the term increase. targeting allocation, cost demand -- X disciplined near as

great our have our of continue strength ability outlook, the buying our dividend With our we opportunistically to long-term back strong and sheet. confidence shares further in balance growing improving

With call I'll to that, the turn Justin over

Justin Loweth

and Tim, morning, you, Thank good everyone.

to EDA moment or exceeded I recent quarter, want to extreme the led Bcf we the evening. as well per take our our operations recognize teams to the for production -- our to and the X.X strategies posted In below. incidents maintaining WDA, optimized Dave production Utica cold our get in EUR no in to our safety and I Both major disruptions management before investor EDA, well echo we've presentation X,XXX Utica highlighted with and designs Seneca First, a XX Tyfo degrees and through midstream and vendors expectations weather -- feet brought increased last stronger performance.

the in almost we the as reminder, a best held Beachwood acreage. our WDA, our WDA by fee. to value in confidence which In offered gives achieved performance pad also area, which, long-term is us in date further our entirely

efficiencies team's to improvements the in prolific asset capital to the productivity both WDA achieved development base. highly greater integrated we our of our Taken testament quarter and EDA from capture together, this a are ability the

of program X.X% quarter, to This a in relative range fiscal the Bcf are a guidance increase XXX In we our range first Bcfe. quarter's over increase previous across and the is light 'XX an production. revising performance upward development the to of midpoint well of guidance production the X.X at to represents strong annual XXX

remainder additional quarter continue to and slightly of year, County fiscal the production through third we before to mostly in our Tioga net bring in XX plan the the For online declining quarter. fourth expect rising wells,

as also to to to development year we the for range end Seneca's lowering million capture program. and updating $XXX of by We continue new value guidance integrated are operational capital million by our the $XX $XXX of efficiencies guidance million a from high

period We anticipate higher weighted towards time. to to second of the capital somewhat expenditures of that year levels the be due half during activity

long-term in and in wells growth. areas concentrated our operate XX to returning the around of our low Looking year, EDA remains in to line unchanged. development, forward pace We to a ahead, turning strategy plan XX per production delivering highest mid-single-digit similar

demand optimistic for of have recent protect gas opportunistically the that upside to year, LNG Turning electricity fiscal discipline, flows natural to remain declining levels. producer given storage exposure. incremental and pricing, ramping combination has layer swaps contributed which factors to pricing the cash allowed unique room us we while the and These maintaining in increasing remainder a of exports, collars,

to and higher firm our to As sales firm you throughout into team With fiscal can significant prices 'XX portfolio. sales Investor materials, we upside physical agreements. our marketing Relations the XX% continues and in optimizing focus have Currently, safeguarded see 'XX to transportation we beyond. have year by respect of on and forecasted sales, our nearly Seneca's remaining production,

evident to In QX, in-basin lower for the and exposure minimal. addition to That sales providing was November, price premium firm voluntary markets, minimize pricing were potential in in-basin access and in despite prices curtailments. these curtailments October where to

out Looking longer term.

we During will a capacity incremental quarter, securing in million that the were transportation firm $XX reach successful Gulf day Coast. the of

renewals, firm contract access opens and sales. both firm value and development accelerating opportunities transportation additional secure economic firm find locations. our long-term inventory to believe Given transportation to highly evolving bring so Doing activity and forward Pennsylvania, to related in we the of development markets will potential deep Northeast more of conditions consider operator premium the to we

development Inese development activity quarter, of arbitrage several and projects in Seneca and system advantage supporting optimization to At focused Eastern adding Incremental of deliveries interconnection that this discussed Midstream, support the Last and allowed County. I outlet Seneca volumes. take value-enhancing growing third-party opportunities. with price our marketing throughput increase on capacity commissioning into the remains has by Tioga

that Seneca throughput on where online than compressor brought facilities per acquired our and gone went day of and XXX midstream upgrading Further X pads. X service multiyear benefits over leveraging unit in Seneca X as has in swap less in we facility Kenyville completed months economics, prolific focus the integrated from of Our model, we recently and consolidated XXXX. in million a plan equipment XXXX, October reduction to

record Bcf to PDP and XX% midstream years allowed the pressure many these wells, support drove the This of investments decline prolific Tioga to of for gathering QX, Seneca's production. development for to Seneca's system highly in of initiative projects throughput a expect will Altogether, these for come. XX I rate sequentially lower doubling growth Seneca's acreage suction

Looking long-term positioned we success. well ahead, Seneca are and P Midstream for and sustained and believe growth

Our economic and workforce, inventory talented highly of future model deep in integrated business locations differentiate us development market. today's

success and We sustainability considerable believe 'XX our in operational fiscal execution up focus for and of excellence culture leadership strong asset us on base and to and our come. and alongside the years safety sets

for to I'll that, open With questions. the the line operator ask

Operator

Instructions] [Operator

Hungness . Our first America.. Bank from of question comes Noah with

Noah Hungness

was any did how had could types timing around conversations provide guess far an of centers first you're on think maybe timing and color I we data question any rough I when are we -- the if announcement. could conversations those along on, the and you incremental having really hear

David Bauer

Yes. innings I'd and said But remarks, we active a of chain have my because meeting, to we of early across team are I relatively very we services do to still in the in lot say I'd say as types on discussions. a developers. that's we're those interest get value

So we're announce nothing to now, it. on working but

Noah Hungness

CapEx that you seen that additional have and production million here understand second wanted Got And flat of incremental I if take guys was then the maybe savings? the hold for taking you. question, thought to and captured grow and egress gains of a day by you $XX choosing production that guys enabled And this better versus the of your process to kind . the

Justin Loweth

Sure, Noah. that. speak Yes, to I'm happy to

we remarks, near-term Those we get productivity. have in continual increase outstanding result have to resulted quarter. just we in of design more the and first well Utica development. changes both enhanced the in of in more a So been I is our as really results my changes experienced as the that noted production kind making

seeing we're higher flat ability these So wells rates higher over for flow time. long well as EUR sustained as the to periods at estimates

production driven increase results by just overall the great of level any of really so sort is And activity. to opposed this recent change in in as our

only our very to level comfortable I've of many we're in forward, like transportation production we firm As past, a we to a very will we sales. grow times markets. spot of but that the is look have we portfolio access noted as There takeaway firm good the with to extent and have

enter year growth to more our inflecting next or were recent we transport starts at part which previously firm we're any transaction this But of The point, not relayed. able we that into, than that. is

So continued low with mid-single and expect kind down capital of even that digits that efficiency to to looking in improvements capital the further into drive future.

Operator

Drefke Margaret Instructions] Please with Goldman Sachs. go ahead. [Operator

Margaret Drefke

larger the for think to your how on the As returns potential through about reduction share from Alternatively, dividends. focus in incremental here, we return capital capital you increasing the outlook become do incremental the a expect X? year or authorization for characterize debt would repurchase next you to relative view of

uses we thinking XXXX free and should flow the about be How cash XXXX. in of generation

David Bauer

Yes. Sure, Drefke.

like we like As in mentioned my through. I we buyback about the remarks, think we're halfway -- program, about

remaining So million our $XXX authorization. we on about existing still have

thing the and cash the incremental I flow outlook free good strength supports prices is think for of certainly gas the business the generation.

of wrapping as a and we have go balance program, great sheet. we the through so best existing dividend, and up that buyback use we closer for Obviously, capital. have of get this look the And our our long-standing to year course

communicate continue to it that this the extent to time. makes beyond buyback -- that the over evaluate Street that to So We'll sense and year.

Margaret Drefke

your very the industry universe, a potentially I still energy directed has regulated you guess, of of frame mind investment remained broadly? scaling specifically. NFG as the Is Makes of M&A as -- for sense. would for towards for well the business? role the preference . outlook lot more in the And how for the segment M&A as then M&A top

David Bauer

regulated we'd roll the looking change call that would where Really, on the think us previous side from no the our from discussion the Yes. But be make at, like bigger of doesn't our on out bolt-on to a of business. sense. . adding we E&P this, on acquisitions it, smaller company, side,

Operator

ahead. Gabelli & turn to is Winter Company. line Timothy with your open. now Please -- go We

Timothy Winter

a construct you on of the you the you products helping you a about? more if can more site of up or color? services little like follow data Dave, little . say some you marketing? Are a gas-fired a talking bit suite When you or provide could full Or suite offer to of plant or are maybe center. what talking services, are

David Bauer

Yes.

moving the also contract. potentially to that a most a it. with and could to wellhead, long-term with basic That's back in level, a So incremental energy, a the of pipeline supply a capacity ways could . partner developers developer. to you transportation long-term most be it the at the then pipeline the do principal supply if Those we're offer most would we basic talking providing or source the single contract We're level. contract do also plants. to But to power thinking are about we will,

Timothy Winter

project Okay. any Great. of gas a lining Appalachia? to Northern there for Great. And Is get then and on the coming development. green improved potential help out the back being get and some Access production thought maybe to sentiment of

David Bauer

the Yes, term. not near in

As way the certificate rights conceived file whatnot. year. of did for earlier, and extension being project you do is and not have recall, later we guess, may is we I said, last That a

there interest, and bit it, that but do of it is So extent a time. we could restart would the to take that

over that So we'll see . out plays how time.

Operator

no questions. Fischer have any We final I'll now back to remarks. Natalie for hand further

Natalie Fischer

with speaking again February Thursday, have to you, feel us and X. Elliott. this on the and out today. . telephone day. and with run replay quarter. be free both any you follow-up A business We'd by afternoon reach everyone nice taking available to on through you, a you Thank the Thank time look like be will to if this website thank forward Please Otherwise, of have questions. call for will we of next our close to

Operator

now to gentlemen, you disconnect lines. now We'd like thank your and has Ladies concluded. call you may -- for today's participation your

National Fuel Gas (NFG) 30 Jan 252025 Q1 Earnings call transcript