WILLIAMSVILLE, N.Y., Nov. 06, 2024 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2024.

FISCAL 2024 FOURTH QUARTER SUMMARY

  • GAAP net loss of $167.6 million, or $1.84 per share, which includes $237.8 million in non-cash impairment charges.
  • Adjusted operating results of $70.5 million, or $0.77 per share, compared to $72.2 million, or $0.78 per share, in the prior year (see non-GAAP reconciliation on page 2).
  • Supply Corporation filed a certificate application with FERC for its Tioga Pathway Project, a modernization and expansion project that is expected to provide 190,000 dekatherms per day of firm transportation capacity and $15 million in annual expansion revenues.
  • In the Utility segment, a Joint Proposal was filed with the New York State utility commission for a three-year settlement of its rate proceeding, which, subject to approval, incorporates an $86 million annual revenue requirement increase over three years, with the first-year impact of $57 million in fiscal 2025 and the remainder in fiscal 2026 and 2027.
  • In the E&P segment, hedging-related gains of $61 million drove a $0.07 per Mcfe increase in natural gas price realizations, despite NYMEX decreasing by $0.40 per MMBtu compared to the prior year.

FISCAL 2024 HIGHLIGHTS

  • The Company continued its long history of returning cash to shareholders by announcing its 54th consecutive dividend increase, to an annual rate of $2.06 per share, and through the fiscal year, repurchased $65 million of common stock as part of its $200 million share repurchase program that was authorized in March.
  • E&P segment capital efficiency continued to improve, with non-acquisition capital expenditures decreasing by $58 million, or 10%, compared to the prior year (see page 20), while production increased by approximately 5% to 392.0 Bcf.
  • Gathering segment throughput and revenues increased 6% from the prior year, driven by growth in affiliated and third-party throughput.
  • Pipeline & Storage segment revenues increased $33.2 million, or 9%, from the prior year, primarily due to the settlement of the Supply Corporation rate case, which led to increased rates effective February 2024.
  • Utility segment net income increased $8.7 million, or 18%, compared to the prior year, largely attributable to the continued impact of a rate settlement in its Pennsylvania service territory, effective August 2023.

MANAGEMENT COMMENTS

David P. Bauer, President and CEO, stated: “National Fuel had a good quarter driven largely by the constructive outcomes in our recent ratemaking activity at our Utility and Pipeline and Storage segments. Commodity prices were challenging for our Upstream business, but the significant gains from our hedge portfolio more than offset the impact of the substantial decline in natural gas prices.  

“During the quarter, we achieved key milestones that position the Company to deliver long-term earnings and free cash flow growth. At Distribution Corporation, we reached a multi-year settlement of our New York rate case, which we expect will be approved in the coming months. Further, Supply Corporation filed a certificate application for our 190,000 Dth per day Tioga Pathway Project, which we expect will be in-service in late 2026. Lastly, our Seneca and NFG Midstream teams continue to see success with our transition to the Eastern Development Area, with continued operational enhancements and strong well performance driving further improvements to our capital efficiency.

“Taken together, the progress made during the quarter further improves the long-term outlook for National Fuel and positions us well to create long-term value for our shareholders.”    

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

                 
    Three Months Ended   Fiscal Year Ended
    September 30,   September 30,
(in thousands except per share amounts)     2024       2023       2024       2023  
Reported GAAP Earnings   $ (167,621 )   $ 73,677     $ 77,513     $ 476,866  
Items impacting comparability:                
Impairment of assets (E&P/ Pipeline & Storage)     318,433             519,129        
Tax impact of impairment of assets     (80,585 )           (136,271 )      
Unrealized (gain) loss on derivative asset (E&P)     1,700       (2,803 )     6,548       899  
Tax impact of unrealized (gain) loss on derivative asset     (461 )     775       (1,791 )     (240 )
Unrealized (gain) loss on other investments (Corporate / All Other)     (1,232 )     719       (3,034 )     (913 )
Tax impact of unrealized (gain) loss on other investments     258       (151 )     637       192  
Adjusted Operating Results   $ 70,492     $ 72,217     $ 462,731     $ 476,804  
                 
Reported GAAP Earnings Per Share   $ (1.84 )   $ 0.80     $ 0.84     $ 5.17  
Items impacting comparability:                
Impairment of assets, net of tax (E&P / Pipeline & Storage)     2.61             4.15        
Unrealized (gain) loss on derivative asset, net of tax (E&P)     0.01       (0.02 )     0.05       0.01  
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)     (0.01 )     0.01       (0.03 )     (0.01 )
Rounding           (0.01 )            
Adjusted Operating Results Per Share   $ 0.77     $ 0.78     $ 5.01     $ 5.17  


FISCAL 2025 GUIDANCE UPDATE

National Fuel is updating its guidance for fiscal 2025 adjusted operating results, which are now expected to be within a range of $5.50 to $6.00 per share. This updated range reflects the impact of anticipated lower natural gas prices, partially offset by a projected decrease in Seneca’s per unit operating expenses. Adjusted operating results exclude any future potential items impacting comparability, including a non-cash ceiling test impairment anticipated in the Exploration and Production segment in the first quarter of fiscal 2025.

The Company is now assuming NYMEX natural gas prices will average $2.80 per MMBtu for fiscal 2025, a decrease of $0.45 from preliminary guidance that was initiated last quarter. This updated natural gas price projection approximates the current NYMEX forward curve at this time, however, given the recent volatility in NYMEX natural gas prices, the Company is providing the following sensitivities to its adjusted operating results guidance range:

NYMEX
($/MMBtu)
Sensitivities
$2.50 $5.15 - $5.65
$3.00 $5.70 - $6.20
$3.25 $6.00 - $6.50


Seneca’s production guidance for fiscal 2025 remains unchanged, with a range of 400 to 420 Bcfe, and does not incorporate any potential price-related curtailments. Seneca currently has firm sales contracts in place for 89% of its projected fiscal 2025 natural gas production, significantly limiting its exposure to in-basin markets. Further, 63% of expected production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price.

Additionally, Seneca’s depreciation, depletion and amortization (“DD&A”) guidance range was revised downward to reflect the impact of the fourth quarter fiscal 2024 ceiling test impairment and the associated impact on the full cost pool, while all other unit costs are expected to be in line with previous expectations.

The Company’s other fiscal 2025 guidance assumptions remain largely unchanged and are detailed in the table on page 8.

DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended September 30, 2024 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the fiscal year ended September 30, 2024 are summarized on pages 11 and 12). It may be helpful to refer to those tables while reviewing this discussion.

Note that management defines adjusted operating results as reported GAAP earnings adjusted for items impacting comparability, and adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

Upstream Business

Exploration and Production Segment

The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC (“Seneca”). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania.

  Three Months Ended
  September 30,
(in thousands)   2024       2023     Variance
GAAP Earnings $ (166,475 )   $ 36,772     $ (203,247 )
Impairment of assets, net of tax   204,089             204,089  
Unrealized (gain) loss on derivative asset, net of tax   1,239       (2,028 )     3,267  
Adjusted Operating Results $ 38,853     $ 34,744     $ 4,109  
           
Adjusted EBITDA $ 129,258     $ 132,641     $ (3,383 )


Seneca’s fourth quarter GAAP earnings decreased $203.2 million versus the prior year. This was primarily driven by non-cash, pre-tax impairment charges of $272.4 million ($204.1 million after-tax), the vast majority of which is related to a “ceiling test” impairment which required Seneca to write-down the book value of its reserves under the full cost method of accounting. Excluding impairments, as well as the net impact of unrealized losses related to reductions in the fair value of contingent consideration received in connection with the June 2022 divestiture of Seneca’s California assets (see table above), Seneca's adjusted operating results increased $4.1 million primarily due to higher realized natural gas prices and a lower effective income tax rate, partially offset by lower natural gas production and higher operating expenses.

Each quarter, Seneca is required to perform a ceiling test comparing the present value of future net revenues from its reserves, after the effect of income taxes, with the book value of those reserves at the balance sheet date. The future net reserves (“the ceiling”) are based on an unweighted arithmetic average of first day of the month pricing for each month within the 12-month period prior to the end of the reporting period, adjusted for the impact of Seneca’s future natural gas hedges, discounted at the required rate of 10%. If the book value of the reserves exceeds the ceiling, a non-cash impairment charge must be recorded in order to reduce the book value of the reserves to the calculated ceiling. For purposes of the ceiling test, the 12-month average of first day of the month pricing for NYMEX natural gas for the period ended September 30, 2024 was $2.21 per MMBtu. It is expected that Seneca will record an additional non-cash impairment in the first quarter of fiscal 2025 and could record additional impairments beyond that depending on the commodity price environment.

During the fourth quarter, Seneca produced 91.9 Bcf of natural gas, a decrease of 1.8 Bcf, or 2%, from the prior year. During the quarter, Seneca voluntarily curtailed 1.5 Bcf of production due to low in-basin pricing. Absent those curtailments, production would have been largely unchanged compared to the prior year.

Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.40 per Mcf, an increase of $0.07 per Mcf, or 3%, from the prior year. Seneca’s hedging portfolio provided an uplift of $0.67 per Mcf during the quarter, which more than offset a 13% decrease in pre-hedge natural gas price realizations versus the prior year.

On a per unit basis, fourth quarter lease operating and transportation expense (“LOE”) was $0.74 per Mcf, an increase of $0.05 per Mcf from the prior year. On an absolute basis, LOE increased $3.2 million ($0.03 per Mcf) largely as a result of the timing of certain repairs and maintenance costs, as well as some one-time road repair costs related to Tropical Storm Debby, and higher intercompany gathering costs. LOE included $51.3 million ($0.56 per Mcf) for gathering and compression services from the Company’s Gathering segment to connect Seneca’s production to sales points along interstate pipelines.

General and administrative (“G&A”) expense was $0.20 per Mcf, an increase of $0.02 per Mcf from the prior year. On an absolute basis, Seneca’s G&A expense increased $0.8 million primarily due to increases in personnel costs.

DD&A expense was $0.69 per Mcf, a decrease of $0.02 per Mcf from the prior year. Absolute DD&A expense decreased $2.6 million ($0.03 per Mcf) due to the ceiling test impairment incurred during the third quarter of fiscal 2024 that lowered Seneca’s full cost pool depletable base.

The reduction in Seneca’s income tax expense was primarily driven by a decrease in pre-tax income and lower state income tax expense. The lower state income taxes were a result of a decrease in Pennsylvania’s state income tax rate from 9.99% in the prior year to 8.99% in the current year, as well as the change in the mix of revenues between state jurisdictions.

Proved Reserves Year-End Update

Seneca’s total proved reserves at September 30, 2024 were 4,753 Bcfe, an increase of 217 Bcfe, or 5%, from September 30, 2023. This increase was a result of Seneca replacing 155% of its fiscal 2024 production. Proved developed reserves at the end of fiscal 2024 were 3,486 Bcfe, representing 73% of total proved reserves. In fiscal 2024, Seneca added 602 Bcfe of proved reserve extensions and discoveries and 7 Bcfe of net positive revisions due primarily to improvements in well performance and changes in development plans, partially offset by price-related revisions.

Midstream Businesses

Pipeline and Storage Segment

The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania.

  Three Months Ended
  September 30,
(in thousands)   2024       2023   Variance
GAAP Earnings $ (5,812 )   $ 23,354   $ (29,166 )
Impairment of assets, net of tax   33,759           33,759  
Adjusted Operating Results $ 27,947     $ 23,354   $ 4,593  
           
Adjusted EBITDA $ 62,527     $ 56,236   $ 6,291  


The Pipeline and Storage segment’s fourth quarter GAAP earnings decreased $29.2 million versus the prior year. This was primarily driven by a non-cash, pre-tax impairment charge of $46.1 million ($33.8 million after-tax) to write-down the carrying value of certain assets associated with Supply Corporation and Empire's Northern Access project. Excluding this impairment, the Pipeline and Storage segment’s adjusted operating results increased $4.6 million primarily due to higher operating revenues, partly offset by higher operation and maintenance (“O&M”) and interest expenses.

The impairment of the Northern Access project was a result of a detailed review of the project following the favorable resolution of pending litigation in the U.S. Court of Appeals for the D.C. Circuit earlier in the fiscal year. In connection with this review, Supply Corporation and Empire evaluated updated project costs, as well as the status of necessary state and federal authorizations, many of which expired during the extensive, multi-year litigation with the New York State Department of Environmental Conservation and other project opponents. Taking into consideration general inflationary pressures on project costs and the pipeline transportation rate increases necessary to support the project, along with the ongoing challenges facing natural gas pipeline development in the State of New York, Supply Corporation, Empire, and Seneca agreed to terminate the precedent agreements on October 16, 2024. As a result, the Company is unlikely to pursue construction of the project and has taken an impairment charge at September 30, 2024.

The increase in operating revenues of $10.5 million, or 11%, was primarily attributable to an increase in Supply Corporation’s transportation and storage rates effective February 1, 2024, in accordance with its rate case settlement.

O&M expense increased $4.0 million primarily due to higher pipeline integrity and personnel costs. Interest expense increased $0.9 million primarily due to a higher average amount of net borrowings.

Gathering Segment

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which delivers Seneca and other non-affiliated Appalachian production to the interstate pipeline system.

  Three Months Ended
  September 30,
(in thousands)   2024     2023   Variance
GAAP Earnings $ 24,403   $ 26,517   $ (2,114 )
           
Adjusted EBITDA $ 43,988   $ 46,874   $ (2,886 )


The Gathering segment’s fourth quarter GAAP earnings decreased $2.1 million versus the prior year due to higher O&M and DD&A expense. O&M expense increased $2.1 million compared to the prior year primarily due to higher material costs, higher outside services expenses (such as contractor fees for compressor repairs, maintenance and overhauls), as well as higher personnel costs. DD&A expense increased $0.9 million primarily due to higher average depreciable plant in service compared to the prior year.

Downstream Business

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution Corporation”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.

  Three Months Ended
  September 30,
(in thousands)   2024       2023     Variance
GAAP Earnings $ (16,759 )   $ (7,179 )   $ (9,580 )
           
Adjusted EBITDA $ (228 )   $ 6,693     $ (6,921 )


The Utility segment’s fourth quarter GAAP net loss was $9.6 million higher than the net loss in the prior year's fourth quarter due to lower customer margins (operating revenues less purchased gas sold), an increase in O&M and interest expenses and a higher effective income tax rate.

The $2.5 million decline in customer margin for the quarter was primarily due to adjustments related to annual reconciliations of certain regulatory rate and cost recovery mechanisms, the largest of which was negatively impacted by lower natural gas prices compared to last year. This was partially offset by the benefit from higher revenues from Distribution Corporation’s system modernization tracking mechanisms in its New York service territory and the ongoing impact of the base rate increase in its Pennsylvania service territory that went into effect in August 2023.

O&M expense increased by $3.8 million, primarily driven by higher personnel costs, expenses related to the current New York rate case proceeding, as well as costs related to the timing of leak patrols and higher technology-related costs.

Interest expense increased $1.3 million primarily due to a higher average amount of net borrowings. The increase in the Utility segment’s effective income tax rate was primarily driven by the recognition of tax deductions in the prior-year fourth quarter related to the adoption of updated IRS guidance on repairs and maintenance expenditures published in 2023.

New York Rate Case Update

The Company filed a Joint Proposal with the New York Public Service Commission (“NYPSC”) on September 9, 2024, that, if approved, would establish a three-year rate plan commencing October 1, 2024. The Joint Proposal would allow the Company to raise its base delivery rates to recover its increasing costs of providing safe and reliable utility service, including the required rate of return on utility rate base, higher operating costs, and an increase in depreciation expense. The Joint Proposal allows for an $86 million increase in annual revenue requirement over three years, with the first-year impact of $57 million in fiscal 2025 and the remainder in fiscal 2026 and 2027. The Joint Proposal is not deemed final as it remains subject to Commission approval. The Joint Proposal includes standard make-whole language allowing the recovery of authorized revenues between October 1, 2024, and the start of new rates.

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated a combined net loss of $3.0 million in the current-year fourth quarter, which was $2.8 million lower than the combined net loss of $5.8 million in the prior-year fourth quarter. The reduction in net loss was primarily driven by lower O&M expense as a result of a decrease in professional services expense. In addition, the mark-to-market of investment securities swung from a modest unrealized loss in fiscal 2023 to a modest unrealized gain in the current year.

EARNINGS TELECONFERENCE

A conference call to discuss the results will be held on Thursday, November 7, 2024, at 10 a.m. ET. All participants must pre-register to join this conference using the Participant Registration link. A webcast link to the conference call will be provided under the Events Calendar on the NFG Investor Relations website at investor.nationalfuelgas.com. A replay will be available following the call through the end of the day, Thursday, November 14, 2024. To access the replay, dial 1-866-813-9403 and provide Access Code 646147.

National Fuel is an integrated energy company reporting financial results for four operating segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. Additional information about National Fuel is available at www.nationalfuel.com.

Analyst Contact: Natalie M. Fischer 716-857-7315
Media Contact: Karen L. Merkel 716-857-7654


Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; changes in the price of natural gas; changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, water availability and disposal or recycling opportunities of used water, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; the Company’s ability to complete strategic transactions; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company’s workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings guidance for fiscal 2025. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

While the Company expects to record an additional ceiling test impairment charge, certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2025, the amounts of these and other potential adjustments and charges are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

  Previous FY 2025 Guidance   Updated FY 2025 Guidance
Adjusted Consolidated Earnings per Share, excluding items impacting comparability $5.75 to $6.25   $5.50 to $6.00
Consolidated Effective Tax Rate ~ 24.5 - 25%   ~ 24.5 - 25%
       
Capital Expenditures(Millions)      
Exploration and Production $495 - $525   $495 - $525
Pipeline and Storage $130 - $150   $130 - $150
Gathering $95 - $110   $95 - $110
Utility $165 - $185   $165 - $185
Consolidated Capital Expenditures $885 - $970   $885 - $970
       
Exploration and Production Segment Guidance      
       
Commodity Price Assumptions      
NYMEX natural gas price $3.25 /MMBtu   $2.80 /MMBtu
Appalachian basin spot price $2.30 /MMBtu   $2.00 /MMBtu
       
Realized natural gas prices, after hedging ($/Mcf) $2.62 - $2.66   $2.47 - $2.51
       
Production (Bcf) 400 to 420   400 to 420
       
E&P Operating Costs($/Mcf)      
LOE $0.68 - $0.70   $0.68 - $0.70
G&A $0.18 - $0.19   $0.18 - $0.19
DD&A $0.70 - $0.74   $0.65 - $0.69
       
Other Business Segment Guidance(Millions)      
Gathering Segment Revenues $245 - $255   $245 - $255
Pipeline and Storage Segment Revenues $415 - $435   $415 - $435

 

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED SEPTEMBER 30, 2024
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
(Thousands of Dollars) Production   Storage   Gathering   Utility   All Other   Consolidated*
                       
Fourth quarter 2023 GAAP earnings $ 36,772     $ 23,354     $ 26,517     $ (7,179 )   $ (5,787 )   $ 73,677  
Items impacting comparability:                      
Unrealized (gain) loss on derivative asset   (2,803 )                     (2,803 )
Tax impact of unrealized (gain) loss on derivative asset   775                       775  
Unrealized (gain) loss on other investments                   719       719  
Tax impact of unrealized (gain) loss on other investments                   (151 )     (151 )
Fourth quarter 2023 adjusted operating results   34,744       23,354       26,517       (7,179 )     (5,219 )     72,217  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   (3,331 )                     (3,331 )
Higher (lower) realized natural gas prices, after hedging   4,433                       4,433  
Midstream Revenues                      
Higher (lower) operating revenues       8,298       (389 )             7,909  
Downstream Margins***                      
Impact of usage and weather               (678 )         (678 )
Impact of new rates in Pennsylvania               442           442  
System modernization and improvement tracker revenues               1,714           1,714  
Regulatory revenue adjustments               (3,180 )         (3,180 )
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (2,527 )                     (2,527 )
Lower (higher) operating expenses   (1,005 )     (3,192 )     (1,697 )     (3,023 )     1,991       (6,926 )
Lower (higher) depreciation / depletion   2,086           (716 )     (441 )         929  
Other Income (Expense)                      
(Higher) lower interest expense       (738 )         (1,160 )         (1,898 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   4,439       390       862       (3,089 )     (556 )     2,046  
All other / rounding   14       (165 )     (174 )     (165 )     (168 )     (658 )
Fourth quarter 2024 adjusted operating results   38,853       27,947       24,403       (16,759 )     (3,952 )     70,492  
Items impacting comparability:                      
Impairment of assets   (272,358 )     (46,075 )                 (318,433 )
Tax impact of impairment of assets   68,269       12,316                   80,585  
Unrealized gain (loss) on derivative asset   (1,700 )                     (1,700 )
Tax impact of unrealized gain (loss) on derivative asset   461                       461  
Unrealized gain (loss) on other investments                   1,232       1,232  
Tax impact of unrealized gain (loss) on other investments                   (258 )     (258 )
Fourth quarter 2024 GAAP earnings $ (166,475 )   $ (5,812 )   $ 24,403     $ (16,759 )   $ (2,978 )   $ (167,621 )
                       
* Amounts do not reflect intercompany eliminations.             
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
 

 

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED SEPTEMBER 30, 2024
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
  Production   Storage   Gathering   Utility   All Other   Consolidated*
                       
Fourth quarter 2023 GAAP earnings per share $ 0.40     $ 0.25     $ 0.29     $ (0.08 )   $ (0.06 )   $ 0.80  
Items impacting comparability:                      
Unrealized (gain) loss on derivative asset, net of tax   (0.02 )                     (0.02 )
Unrealized (gain) loss on other investments, net of tax                   0.01       0.01  
Rounding                   (0.01 )     (0.01 )
Fourth quarter 2023 adjusted operating results per share   0.38       0.25       0.29       (0.08 )     (0.06 )     0.78  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   (0.04 )                     (0.04 )
Higher (lower) realized natural gas prices, after hedging   0.05                       0.05  
Midstream Revenues                      
Higher (lower) operating revenues       0.09                     0.09  
Downstream Margins***                      
Impact of usage and weather               (0.01 )         (0.01 )
Impact of new rates in Pennsylvania                          
System modernization and improvement tracker revenues               0.02           0.02  
Regulatory revenue adjustments               (0.03 )         (0.03 )
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (0.03 )                     (0.03 )
Lower (higher) operating expenses   (0.01 )     (0.03 )     (0.02 )     (0.03 )     0.02       (0.07 )
Lower (higher) depreciation / depletion   0.02           (0.01 )               0.01  
Other Income (Expense)                      
(Higher) lower interest expense       (0.01 )         (0.01 )         (0.02 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   0.05             0.01       (0.03 )     (0.01 )     0.02  
All other / rounding                     (0.01 )     0.01        
Fourth quarter 2024 adjusted operating results per share   0.42       0.30       0.27       (0.18 )     (0.04 )     0.77  
Items impacting comparability:                      
Impairment of assets, net of tax   (2.24 )     (0.37 )                 (2.61 )
Unrealized gain (loss) on derivative asset, net of tax   (0.01 )                     (0.01 )
Unrealized gain (loss) on other investments, net of tax                   0.01       0.01  
Rounding   0.01                   (0.01 )      
Fourth quarter 2024 GAAP earnings per share $ (1.82 )   $ (0.07 )   $ 0.27     $ (0.18 )   $ (0.04 )   $ (1.84 )
                       
* Amounts do not reflect intercompany eliminations.             
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
 

 

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 2024
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
(Thousands of Dollars) Production   Storage   Gathering   Utility   All Other   Consolidated*
Fiscal 2023 GAAP earnings $ 232,275     $ 100,501     $ 99,724     $ 48,395     $ (4,029 )   $ 476,866  
Items impacting comparability:                      
Unrealized (gain) loss on derivative asset   899                       899  
Tax impact of unrealized (gain) loss on derivative asset   (240 )                     (240 )
Unrealized (gain) loss on other investments                   (913 )     (913 )
Tax impact of unrealized (gain) loss on other investments                   192       192  
Fiscal 2023 adjusted operating results   232,934       100,501       99,724       48,395       (4,750 )     476,804  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   39,805                       39,805  
Higher (lower) realized natural gas prices, after hedging   (34,033 )                     (34,033 )
Higher (lower) other operating revenues   (3,729 )                     (3,729 )
Midstream Revenues                      
Higher (lower) operating revenues       26,230       10,987               37,217  
Downstream Margins***                      
Impact of usage and weather               (1,388 )         (1,388 )
Impact of new rates in Pennsylvania               18,104           18,104  
System modernization and improvement tracker revenues               7,924           7,924  
Regulatory revenue adjustments               (5,299 )         (5,299 )
Higher (lower) other operating revenues               (2,094 )         (2,094 )
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (13,724 )                     (13,724 )
Lower (higher) operating expenses   (8,908 )     (7,648 )     (1,247 )     (10,747 )     412       (28,138 )
Lower (higher) property, franchise and other taxes   3,218       (653 )                 2,565  
Lower (higher) depreciation / depletion   (29,074 )     (2,925 )     (2,443 )     (3,011 )         (37,453 )
Other Income (Expense)                      
Higher (lower) other income       1,565           1,714       (2,027 )     1,252  
(Higher) lower interest expense   (4,331 )     (3,104 )     619       (935 )     1,827       (5,924 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   7,331       (456 )     (141 )     4,446       (491 )     10,689  
All other / rounding   413       (81 )     (586 )     (20 )     427       153  
Fiscal 2024 adjusted operating results   189,902       113,429       106,913       57,089       (4,602 )     462,731  
Items impacting comparability:                      
Impairment of assets   (473,054 )     (46,075 )                 (519,129 )
Tax impact of impairment of assets   123,955       12,316                   136,271  
Unrealized gain (loss) on derivative asset   (6,548 )                     (6,548 )
Tax impact of unrealized gain (loss) on derivative asset   1,791                       1,791  
Unrealized gain (loss) on other investments                   3,034       3,034  
Tax impact of unrealized gain (loss) on other investments                   (637 )     (637 )
Fiscal 2024 GAAP earnings $ (163,954 )   $ 79,670     $ 106,913     $ 57,089     $ (2,205 )   $ 77,513  
                       
* Amounts do not reflect intercompany eliminations.             
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
 

 

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
TWELVE MONTHS ENDED SEPTEMBER 30, 2024
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
  Production   Storage   Gathering   Utility   All Other   Consolidated*
Fiscal 2023 GAAP earnings per share $ 2.52     $ 1.09     $ 1.08     $ 0.52     $ (0.04 )   $ 5.17  
Items impacting comparability:                      
Unrealized (gain) loss on derivative asset, net of tax   0.01                       0.01  
Unrealized (gain) loss on other investments, net of tax                   (0.01 )     (0.01 )
Rounding   (0.01 )                 0.01        
Fiscal 2023 adjusted operating results per share   2.52       1.09       1.08       0.52       (0.04 )     5.17  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   0.43                       0.43  
Higher (lower) realized natural gas prices, after hedging   (0.37 )                     (0.37 )
Higher (lower) other operating revenues   (0.04 )                     (0.04 )
Midstream Revenues                      
Higher (lower) operating revenues       0.28       0.12               0.40  
Downstream Margins***                      
Impact of usage and weather               (0.02 )         (0.02 )
Impact of new rates in Pennsylvania               0.20           0.20  
System modernization and improvement tracker revenues               0.09           0.09  
Regulatory revenue adjustments               (0.06 )         (0.06 )
Higher (lower) other operating revenues               (0.02 )         (0.02 )
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (0.15 )                     (0.15 )
Lower (higher) operating expenses   (0.10 )     (0.08 )     (0.01 )     (0.12 )           (0.31 )
Lower (higher) property, franchise and other taxes   0.03       (0.01 )                 0.02  
Lower (higher) depreciation / depletion   (0.31 )     (0.03 )     (0.03 )     (0.03 )         (0.40 )
Other Income (Expense)                      
Higher (lower) other income       0.02           0.02       (0.02 )     0.02  
(Higher) lower interest expense   (0.05 )     (0.03 )     0.01       (0.01 )     0.02       (0.06 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   0.08                   0.05       (0.01 )     0.12  
All other / rounding   0.02       (0.01 )     (0.01 )           (0.01 )     (0.01 )
Fiscal 2024 adjusted operating results per share   2.06       1.23       1.16       0.62       (0.06 )     5.01  
Items impacting comparability:                      
Impairment of assets, net of tax   (3.78 )     (0.37 )                 (4.15 )
Unrealized gain (loss) on derivative asset, net of tax   (0.05 )                     (0.05 )
Unrealized gain (loss) on other investments, net of tax                   0.03       0.03  
Rounding   (0.01 )                 0.01        
Fiscal 2024 GAAP earnings per share $ (1.78 )   $ 0.86     $ 1.16     $ 0.62     $ (0.02 )   $ 0.84  
                       
* Amounts do not reflect intercompany eliminations.             
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
               
(Thousands of Dollars, except per share amounts)              
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
  (Unaudited)   (Unaudited)
SUMMARY OF OPERATIONS   2024       2023       2024       2023  
Operating Revenues:              
Utility Revenues $ 79,830     $ 78,865     $ 696,807     $ 941,779  
Exploration and Production and Other Revenues   221,540       220,348       961,078       958,455  
Pipeline and Storage and Gathering Revenues   70,698       69,735       286,925       273,537  
    372,068       368,948       1,944,810       2,173,771  
Operating Expenses:              
Purchased Gas   (17,382 )     (12,865 )     150,062       437,595  
Operation and Maintenance:              
Utility   51,988       48,354       218,393       205,239  
Exploration and Production and Other   38,540       37,955       141,308       124,270  
Pipeline and Storage and Gathering   45,996       39,901       160,317       149,247  
Property, Franchise and Other Taxes   22,216       20,701       88,851       92,700  
Depreciation, Depletion and Amortization   108,847       109,599       457,026       409,573  
Impairment of Assets   318,433             519,129        
    568,638       243,645       1,735,086       1,418,624  
               
Operating Income (Loss)   (196,570 )     125,303       209,724       755,147  
               
Other Income (Expense):              
Other Income (Deductions)   3,237       5,384       16,226       18,138  
Interest Expense on Long-Term Debt   (33,008 )     (28,449 )     (122,799 )     (111,948 )
Other Interest Expense   (1,646 )     (4,453 )     (15,896 )     (19,938 )
               
Income (Loss) Before Income Taxes   (227,987 )     97,785       87,255       641,399  
               
Income Tax Expense (Benefit)   (60,366 )     24,108       9,742       164,533  
               
Net Income (Loss) Available for Common Stock $ (167,621 )   $ 73,677     $ 77,513     $ 476,866  
               
Earnings (Loss) Per Common Share              
Basic $ (1.84 )   $ 0.80     $ 0.84     $ 5.20  
Diluted $ (1.84 )   $ 0.80     $ 0.84     $ 5.17  
               
Weighted Average Common Shares:              
Used in Basic Calculation   91,270,386       91,818,933       91,791,167       91,748,890  
Used in Diluted Calculation   91,270,386       92,378,675       92,344,511       92,285,918  

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
   
  September 30,   September 30,
(Thousands of Dollars)   2024       2023  
ASSETS      
Property, Plant and Equipment $ 14,524,798     $ 13,635,303  
Less - Accumulated Depreciation, Depletion and Amortization   7,185,593       6,335,441  
Net Property, Plant and Equipment   7,339,205       7,299,862  
Current Assets:      
Cash and Temporary Cash Investments   38,222       55,447  
Receivables - Net   127,222       160,601  
Unbilled Revenue   15,521       16,622  
Gas Stored Underground   35,055       32,509  
Materials and Supplies - at average cost   47,670       48,989  
Other Current Assets   92,229       100,260  
Total Current Assets   355,919       414,428  
Other Assets:      
Recoverable Future Taxes   80,084       69,045  
Unamortized Debt Expense   5,604       7,240  
Other Regulatory Assets   108,022       72,138  
Deferred Charges   69,662       82,416  
Other Investments   81,705       73,976  
Goodwill   5,476       5,476  
Prepaid Pension and Post-Retirement Benefit Costs   180,230       200,301  
Fair Value of Derivative Financial Instruments   87,905       50,487  
Other   5,958       4,891  
Total Other Assets   624,646       565,970  
Total Assets $ 8,319,770     $ 8,280,260  
CAPITALIZATION AND LIABILITIES      
Capitalization:      
Comprehensive Shareholders' Equity      
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and      
Outstanding - 91,005,993 Shares and 91,819,405 Shares, Respectively $ 91,006     $ 91,819  
Paid in Capital   1,045,487       1,040,761  
Earnings Reinvested in the Business   1,727,326       1,885,856  
Accumulated Other Comprehensive Loss   (15,476 )     (55,060 )
Total Comprehensive Shareholders' Equity   2,848,343       2,963,376  
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs   2,188,243       2,384,485  
Total Capitalization   5,036,586       5,347,861  
Current and Accrued Liabilities:      
Notes Payable to Banks and Commercial Paper   90,700       287,500  
Current Portion of Long-Term Debt   500,000        
Accounts Payable   165,068       152,193  
Amounts Payable to Customers   42,720       59,019  
Dividends Payable   46,872       45,451  
Interest Payable on Long-Term Debt   27,247       20,399  
Customer Advances   19,373       21,003  
Customer Security Deposits   36,265       28,764  
Other Accruals and Current Liabilities   162,903       160,974  
Fair Value of Derivative Financial Instruments   4,744       31,009  
Total Current and Accrued Liabilities   1,095,892       806,312  
Other Liabilities:      
Deferred Income Taxes   1,111,165       1,124,170  
Taxes Refundable to Customers   305,645       268,562  
Cost of Removal Regulatory Liability   292,477       277,694  
Other Regulatory Liabilities   151,452       165,441  
Other Post-Retirement Liabilities   3,511       2,915  
Asset Retirement Obligations   203,006       165,492  
Other Liabilities   120,036       121,813  
Total Other Liabilities   2,187,292       2,126,087  
Commitments and Contingencies          
Total Capitalization and Liabilities $ 8,319,770     $ 8,280,260  

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
    Twelve Months Ended
    September 30,
(Thousands of Dollars)     2024       2023  
         
Operating Activities:        
Net Income Available for Common Stock   $ 77,513     $ 476,866  
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:        
Impairment of Assets     519,129        
Depreciation, Depletion and Amortization     457,026       409,573  
Deferred Income Taxes     (2,610 )     151,403  
Stock-Based Compensation     22,080       20,630  
Other     24,411       19,647  
Change in:        
Receivables and Unbilled Revenue     34,369       213,579  
Gas Stored Underground and Materials and Supplies     1,738       (8,406 )
Unrecovered Purchased Gas Costs           99,342  
Other Current Assets     8,144       (41,077 )
Accounts Payable     5,616       (37,095 )
Amounts Payable to Customers     (16,299 )     58,600  
Customer Advances     (1,630 )     (5,105 )
Customer Security Deposits     7,501       4,481  
Other Accruals and Current Liabilities     2,637       (67,664 )
Other Assets     (48,183 )     (26,564 )
Other Liabilities     (25,481 )     (31,135 )
Net Cash Provided by Operating Activities   $ 1,065,961     $ 1,237,075  
         
Investing Activities:        
Capital Expenditures   $ (931,236 )   $ (1,009,868 )
Acquisition of Upstream Assets           (124,758 )
Sale of Fixed Income Mutual Fund Shares in Grantor Trust           10,000  
Other     (2,669 )     12,279  
Net Cash Used in Investing Activities   $ (933,905 )   $ (1,112,347 )
         
Financing Activities:        
Proceeds from Issuance of Short-Term Note Payable to Bank   $     $ 250,000  
Repayment of Short-Term Note Payable to Bank           (250,000 )
Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper     (196,800 )     227,500  
Shares Repurchased Under Repurchase Plan     (64,086 )      
Reduction of Long-Term Debt           (549,000 )
Net Proceeds From Issuance of Long-Term Debt     299,359       297,306  
Dividends Paid on Common Stock     (183,798 )     (176,096 )
Net Repurchases of Common Stock Under Stock and Benefit Plans     (3,956 )     (6,709 )
Net Cash Used in Financing Activities   $ (149,281 )   $ (206,999 )
         
Net Decrease in Cash, Cash Equivalents, and Restricted Cash     (17,225 )     (82,271 )
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period     55,447       137,718  
Cash, Cash Equivalents, and Restricted Cash at September 30   $ 38,222     $ 55,447  

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
UPSTREAM BUSINESS
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
EXPLORATION AND PRODUCTION SEGMENT   2024       2023     Variance     2024     2023   Variance
Total Operating Revenues $ 221,540     $ 220,348     $ 1,192     $ 961,078   $ 958,455   $ 2,623  
Operating Expenses:                  
Operation and Maintenance:                  
General and Administrative Expense   17,977       17,163       814       71,148     66,074     5,074  
Lease Operating and Transportation Expense   67,611       64,412       3,199       270,927     253,555     17,372  
All Other Operation and Maintenance Expense   2,815       2,357       458       15,529     9,327     6,202  
Property, Franchise and Other Taxes   3,879       3,775       104       13,643     17,717     (4,074 )
Depreciation, Depletion and Amortization   63,754       66,394       (2,640 )     277,945     241,142     36,803  
Impairment of Assets   272,358             272,358       473,054         473,054  
    428,394       154,101       274,293       1,122,246     587,815     534,431  
                   
Operating Income (Loss)   (206,854 )     66,247       (273,101 )     (161,168 )   370,640     (531,808 )
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Credit   100       347       (247 )     402     1,389     (987 )
Interest and Other Income (Deductions)   (988 )     3,457       (4,445 )     (1,819 )   2,359     (4,178 )
Interest Expense   (14,753 )     (15,268 )     515       (59,799 )   (54,317 )   (5,482 )
Income (Loss) Before Income Taxes   (222,495 )     54,783       (277,278 )     (222,384 )   320,071     (542,455 )
Income Tax Expense (Benefit)   (56,020 )     18,011       (74,031 )     (58,430 )   87,796     (146,226 )
Net Income (Loss) $ (166,475 )   $ 36,772     $ (203,247 )   $ (163,954 ) $ 232,275   $ (396,229 )
Net Income (Loss) Per Share (Diluted) $ (1.82 )   $ 0.40     $ (2.22 )   $ (1.78 ) $ 2.52   $ (4.30 )
                   

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
MIDSTREAM BUSINESSES
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
PIPELINE AND STORAGE SEGMENT   2024       2023     Variance     2024     2023   Variance
Revenues from External Customers $ 67,318     $ 64,846     $ 2,472     $ 271,388   $ 259,646   $ 11,742  
Intersegment Revenues   37,224       29,192       8,032       141,005     119,545     21,460  
Total Operating Revenues   104,542       94,038       10,504       412,393     379,191     33,202  
Operating Expenses:                  
Purchased Gas   (3 )     326       (329 )     1,537     1,436     101  
Operation and Maintenance   33,194       29,154       4,040       116,335     106,654     9,681  
Property, Franchise and Other Taxes   8,824       8,322       502       34,601     33,774     827  
Depreciation, Depletion and Amortization   18,373       17,953       420       74,530     70,827     3,703  
Impairment of Assets   46,075             46,075       46,075         46,075  
    106,463       55,755       50,708       273,078     212,691     60,387  
                   
Operating Income (Loss)   (1,921 )     38,283       (40,204 )     139,315     166,500     (27,185 )
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Credit   1,257       1,330       (73 )     5,030     5,319     (289 )
Interest and Other Income   2,458       2,017       441       8,798     6,670     2,128  
Interest Expense   (11,730 )     (10,796 )     (934 )     (47,428 )   (43,499 )   (3,929 )
Income (Loss) Before Income Taxes   (9,936 )     30,834       (40,770 )     105,715     134,990     (29,275 )
Income Tax Expense (Benefit)   (4,124 )     7,480       (11,604 )     26,045     34,489     (8,444 )
Net Income (Loss) $ (5,812 )   $ 23,354     $ (29,166 )   $ 79,670   $ 100,501   $ (20,831 )
Net Income (Loss) Per Share (Diluted) $ (0.07 )   $ 0.25     $ (0.32 )   $ 0.86   $ 1.09   $ (0.23 )
                   
                   
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
GATHERING SEGMENT   2024       2023     Variance     2024     2023   Variance
Revenues from External Customers $ 3,380     $ 4,889     $ (1,509 )   $ 15,537   $ 13,891   $ 1,646  
Intersegment Revenues   54,145       53,129       1,016       228,688     216,426     12,262  
Total Operating Revenues   57,525       58,018       (493 )     244,225     230,317     13,908  
Operating Expenses:                  
Operation and Maintenance   13,271       11,123       2,148       45,954     44,375     1,579  
Property, Franchise and Other Taxes   266       21       245       489     60     429  
Depreciation, Depletion and Amortization   10,017       9,111       906       38,817     35,725     3,092  
    23,554       20,255       3,299       85,260     80,160     5,100  
                   
Operating Income   33,971       37,763       (3,792 )     158,965     150,157     8,808  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Credit   9       37       (28 )     38     150     (112 )
Interest and Other Income   76       75       1       333     534     (201 )
Interest Expense   (3,381 )     (3,433 )     52       (14,206 )   (14,989 )   783  
Income Before Income Taxes   30,675       34,442       (3,767 )     145,130     135,852     9,278  
Income Tax Expense   6,272       7,925       (1,653 )     38,217     36,128     2,089  
Net Income $ 24,403     $ 26,517     $ (2,114 )   $ 106,913   $ 99,724   $ 7,189  
Net Income Per Share (Diluted) $ 0.27     $ 0.29     $ (0.02 )   $ 1.16   $ 1.08   $ 0.08  
                   

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
DOWNSTREAM BUSINESS
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
UTILITY SEGMENT   2024       2023     Variance     2024     2023   Variance
Revenues from External Customers $ 79,830     $ 78,865     $ 965     $ 696,807   $ 941,779   $ (244,972 )
Intersegment Revenues   77       81       (4 )     555     581     (26 )
Total Operating Revenues   79,907       78,946       961       697,362     942,360     (244,998 )
Operating Expenses:                  
Purchased Gas   18,232       14,743       3,489       283,215     548,195     (264,980 )
Operation and Maintenance   52,882       49,056       3,826       222,142     208,539     13,603  
Property, Franchise and Other Taxes   9,021       8,454       567       39,492     40,624     (1,132 )
Depreciation, Depletion and Amortization   16,583       16,026       557       65,261     61,450     3,811  
    96,718       88,279       8,439       610,110     858,808     (248,698 )
                   
Operating Income (Loss)   (16,811 )     (9,333 )     (7,478 )     87,252     83,552     3,700  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Credit   251       9       242       2,040     4     2,036  
Interest and Other Income   1,740       1,437       303       6,475     6,339     136  
Interest Expense   (9,325 )     (8,041 )     (1,284 )     (34,727 )   (34,233 )   (494 )
Income (Loss) Before Income Taxes   (24,145 )     (15,928 )     (8,217 )     61,040     55,662     5,378  
Income Tax Expense (Benefit)   (7,386 )     (8,749 )     1,363       3,951     7,267     (3,316 )
Net Income (Loss) $ (16,759 )   $ (7,179 )   $ (9,580 )   $ 57,089   $ 48,395   $ 8,694  
Net Income (Loss) Per Share (Diluted) $ (0.18 )   $ (0.08 )   $ (0.10 )   $ 0.62   $ 0.52   $ 0.10  
                   

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
ALL OTHER   2024       2023     Variance     2024     2023   Variance
Total Operating Revenues $     $     $     $   $   $  
Operating Expenses:                  
Operation and Maintenance   17             17       17     21     (4 )
    17             17       17     21     (4 )
                   
Operating Loss   (17 )           (17 )     (17 )   (21 )   4  
Other Income (Expense):                  
Interest and Other Income (Deductions)   (227 )     (66 )     (161 )     (412 )   (517 )   105  
Interest Expense   (112 )     (68 )     (44 )     (374 )   (157 )   (217 )
Loss before Income Taxes   (356 )     (134 )     (222 )     (803 )   (695 )   (108 )
Income Tax Benefit   (81 )     (33 )     (48 )     (186 )   (164 )   (22 )
Net Loss $ (275 )   $ (101 )   $ (174 )   $ (617 ) $ (531 ) $ (86 )
Net Loss Per Share (Diluted) $ (0.01 )   $     $ (0.01 )   $   $   $  
           
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
CORPORATE   2024       2023     Variance     2024     2023   Variance
Revenues from External Customers $     $     $     $   $   $  
Intersegment Revenues   1,216       932       284       5,073     4,388     685  
Total Operating Revenues   1,216       932       284       5,073     4,388     685  
Operating Expenses:                  
Operation and Maintenance   5,808       8,345       (2,537 )     18,597     19,115     (518 )
Property, Franchise and Other Taxes   226       129       97       626     525     101  
Depreciation, Depletion and Amortization   120       115       5       473     429     44  
    6,154       8,589       (2,435 )     19,696     20,069     (373 )
                   
Operating Loss   (4,938 )     (7,657 )     2,719       (14,623 )   (15,681 )   1,058  
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs   (386 )     (354 )     (32 )     (1,548 )   (1,417 )   (131 )
Interest and Other Income   40,938       36,337       4,601       161,225     147,935     13,290  
Interest Expense on Long-Term Debt   (33,008 )     (28,449 )     (4,559 )     (122,799 )   (111,948 )   (10,851 )
Other Interest Expense   (4,336 )     (6,089 )     1,753       (23,698 )   (23,370 )   (328 )
Loss before Income Taxes   (1,730 )     (6,212 )     4,482       (1,443 )   (4,481 )   3,038  
Income Tax Expense (Benefit)   973       (526 )     1,499       145     (983 )   1,128  
Net Loss $ (2,703 )   $ (5,686 )   $ 2,983     $ (1,588 ) $ (3,498 ) $ 1,910  
Net Loss Per Share (Diluted) $ (0.03 )   $ (0.06 )   $ 0.03     $ (0.02 ) $ (0.04 ) $ 0.02  
                   
                   
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
INTERSEGMENT ELIMINATIONS   2024       2023     Variance     2024     2023   Variance
Intersegment Revenues $ (92,662 )   $ (83,334 )   $ (9,328 )   $ (375,321 ) $ (340,940 ) $ (34,381 )
Operating Expenses:                  
Purchased Gas   (35,611 )     (27,934 )     (7,677 )     (134,690 )   (112,036 )   (22,654 )
Operation and Maintenance   (57,051 )     (55,400 )     (1,651 )     (240,631 )   (228,904 )   (11,727 )
    (92,662 )     (83,334 )     (9,328 )     (375,321 )   (340,940 )   (34,381 )
Operating Income                              
Other Income (Expense):                  
Interest and Other Deductions   (41,991 )     (39,242 )     (2,749 )     (164,336 )   (150,627 )   (13,709 )
Interest Expense   41,991       39,242       2,749       164,336     150,627     13,709  
Net Income $     $     $     $   $   $  
Net Income Per Share (Diluted) $     $     $     $   $   $  

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                       
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
                       
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
  (Unaudited)   (Unaudited)
          Increase           Increase
    2024     2023   (Decrease)     2024     2023   (Decrease)
                       
Capital Expenditures:                      
Exploration and Production(1) $ 136,529 (2) $ 144,938 (3) $ (8,409 )   $ 536,349 (2)(3) $ 737,725 (3)(4) $ (201,376 )
Pipeline and Storage   42,039 (2)   75,109 (3)   (33,070 )     110,830 (2)(3)   141,877 (3)(4)   (31,047 )
Gathering   40,163 (2)   47,917 (3)   (7,754 )     109,251 (2)(3)   103,295 (3)(4)   5,956  
Utility   67,108 (2)   51,246 (3)   15,862       184,615 (2)(3)   139,922 (3)(4)   44,693  
Total Reportable Segments   285,839     319,210     (33,371 )     941,045     1,122,819     (181,774 )
All Other                          
Corporate   717     305     412       970     754     216  
Total Capital Expenditures $ 286,556   $ 319,515   $ (32,959 )   $ 942,015   $ 1,123,573   $ (181,558 )

(1) The year ended September 30, 2024 includes $6.2 million related to the acquisition of assets from UGI. The year ended September 30, 2023 includes $124.8 million related to the acquisition of upstream assets acquired from SWN, as well as $25.0 million related to the acquisition of assets from EXCO and UGI. The acquisition cost for the assets acquired from SWN is reported as a component of Acquisition of Upstream Assets on the Consolidated Statement of Cash Flows. Non-acquisition capital expenditures were $530.1 million in fiscal 2024 and $587.9 million in fiscal 2023, a decrease of $57.8 million.
(2) Capital expenditures for the quarter and year ended September 30, 2024, include accounts payable and accrued liabilities related to capital expenditures of $63.3 million, $14.4 million, $21.7 million, and $20.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at September 30, 2024, since they represent non-cash investing activities at that date.
(3) Capital expenditures for the year ended September 30, 2024, exclude capital expenditures of $43.2 million, $31.8 million, $20.6 million and $13.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2023 and paid during the year ended September 30, 2024. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2023, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2024.
(4) Capital expenditures for the year ended September 30, 2023, exclude capital expenditures of $83.0 million, $15.2 million, $10.7 million and $11.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2022 and paid during the year ended September 30, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2023.

                   
DEGREE DAYS                  
              Percent Colder
              (Warmer) Than:
Three Months Ended September 30, Normal   2024   2023   Normal(1)   Last Year(1)
Buffalo, NY 162   34   61   (79.0 )   (44.3 )
Erie, PA(2) 78   23   59   (70.5 )   (61.0 )
                   
Twelve Months Ended September 30,                  
Buffalo, NY 6,653   5,162   5,717   (22.4 )   (9.7 )
Erie, PA(2) 5,805   4,782   5,493   (17.6 )   (12.9 )
                   

(1) Percents compare actual 2024 degree days to normal degree days and actual 2024 degree days to actual 2023 degree days.
(2) Normal degree days changed from NOAA 30-year degree days to NOAA 15-year degree days with the implementation of new base rates in Pennsylvania in August 2023.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                         
EXPLORATION AND PRODUCTION INFORMATION
                         
    Three Months Ended   Twelve Months Ended
    September 30,   September 30,
            Increase           Increase
      2024     2023   (Decrease)     2024     2023   (Decrease)
                         
Gas Production/Prices:                        
Production (MMcf)                        
Appalachia     91,902     93,709     (1,807 )     392,047     372,271     19,776  
                         
Average Prices (Per Mcf)                        
Weighted Average   $ 1.73   $ 1.99   $ (0.26 )   $ 1.88   $ 2.78   $ (0.90 )
Weighted Average after Hedging     2.40     2.33     0.07       2.44     2.55     (0.11 )
                         
Selected Operating Performance Statistics:                        
General and Administrative Expense per Mcf(1)   $ 0.20   $ 0.18   $ 0.02     $ 0.18   $ 0.18   $  
Lease Operating and Transportation Expense per Mcf(1)(2)   $ 0.74   $ 0.69   $ 0.05     $ 0.69   $ 0.68   $ 0.01  
Depreciation, Depletion and Amortization per Mcf(1)   $ 0.69   $ 0.71   $ (0.02 )   $ 0.71   $ 0.65   $ 0.06  
                         

(1) Refer to page 16 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
(2) Amounts include transportation expense of $0.57 and $0.55 per Mcf for the three months ended September 30, 2024 and September 30, 2023, respectively. Amounts include transportation expense of $0.57 per Mcf for the twelve months ended September 30, 2024 and September 30, 2023.

  

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
             
EXPLORATION AND PRODUCTION INFORMATION
 
Hedging Summary for Fiscal 2025   Volume     Average Hedge Price
Gas Swaps            
NYMEX   127,030,000 MMBTU   $ 3.46 / MMBTU
No Cost Collars   57,085,000 MMBTU   $ 3.44 / MMBTU (Floor) / $4.54 / MMBTU (Ceiling)
Fixed Price Physical Sales   80,398,595 MMBTU   $ 2.48 / MMBTU
Total   264,513,595 MMBTU      
             
Hedging Summary for Fiscal 2026   Volume     Average Hedge Price
Gas Swaps            
NYMEX   52,065,000 MMBTU   $ 3.84 / MMBTU
No Cost Collars   59,275,000 MMBTU   $ 3.45 / MMBTU (Floor) / $4.58 / MMBTU (Ceiling)
Fixed Price Physical Sales   76,656,505 MMBTU   $ 2.44 / MMBTU
Total   187,996,505 MMBTU      
             
Hedging Summary for Fiscal 2027   Volume     Average Hedge Price
Gas Swaps            
NYMEX   36,810,000 MMBTU   $ 3.92 / MMBTU
No Cost Collars   14,120,000 MMBTU   $ 3.31 / MMBTU (Floor) / $4.19 / MMBTU (Ceiling)
Fixed Price Physical Sales   59,128,595 MMBTU   $ 2.50 / MMBTU
Total   110,058,595 MMBTU      
             
Hedging Summary for Fiscal 2028   Volume     Average Hedge Price
Gas Swaps            
NYMEX   9,630,000 MMBTU   $ 3.67 / MMBTU
No Cost Collars   1,880,000 MMBTU   $ 3.26 / MMBTU (Floor) / $4.00 / MMBTU (Ceiling)
Fixed Price Physical Sales   22,011,060 MMBTU   $ 2.68 / MMBTU
Total   33,521,060 MMBTU      
             
Hedging Summary for Fiscal 2029   Volume     Average Hedge Price
Gas Swaps            
NYMEX   1,500,000 MMBTU   $ 3.53 / MMBTU
Fixed Price Physical Sales   7,050,570 MMBTU   $ 2.88 / MMBTU
Total   8,550,570 MMBTU      
             
Hedging Summary for Fiscal 2030   Volume     Average Hedge Price
Fixed Price Physical Sales   266,194 MMBTU   $ 2.92 / MMBTU

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
           
EXPLORATION AND PRODUCTION INFORMATION
           
Reserve Quantity Information
(Unaudited)
           
  U.S.
  Appalachian Region
  Gas   Oil   Total
  (MMcf)   (Mbbl)   (MMcfe)
Proved Developed and Undeveloped Reserves:          
September 30, 2023 4,535,084     216     4,536,380  
Extensions and Discoveries 601,679         601,679  
Revisions of Previous Estimates 7,046     8     7,092  
Production (392,047 )   (31 )   (392,230 )
September 30, 2024 4,751,762     193     4,752,921  
           
Proved Developed Reserves:          
September 30, 2023 3,550,034     216     3,551,330  
September 30, 2024 3,484,852     193     3,486,010  

 

                         
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                         
Pipeline and Storage Throughput - (millions of cubic feet - MMcf)        
                         
    Three Months Ended   Twelve Months Ended
    September 30,   September 30,
            Increase           Increase
    2024   2023   (Decrease)   2024   2023   (Decrease)
Firm Transportation - Affiliated   16,412   17,589   (1,177 )   108,845   126,500   (17,655 )
Firm Transportation - Non-Affiliated   150,126   161,750   (11,624 )   648,562   689,984   (41,422 )
Interruptible Transportation   283   168   115     1,791   2,192   (401 )
    166,821   179,507   (12,686 )   759,198   818,676   (59,478 )
                         
Gathering Volume - (MMcf)                        
    Three Months Ended   Twelve Months Ended
    September 30,   September 30,
            Increase           Increase
    2024   2023   (Decrease)   2024   2023   (Decrease)
Gathered Volume   112,856   117,260   (4,404 )   480,688   453,338   27,350  
                         
                         
Utility Throughput - (MMcf)