[NFG] National Fuel Gas Thesis 2026: Appalachia Pipeline Drives Integrated Natural Gas Capital Return

Key Takeaways

• NFG FY2025 (September year-end) revenue ~$2.05-2.20B (+5-8% YoY) with adj. EPS ~$6.10-6.50 reflecting continued post-2024 $2.05-2.20B aggregate Integrated Natural Gas revenue ($0.90-1.0B aggregate Seneca Resources E&P + ~$0.45-0.50B aggregate Pipeline & Storage (FERC-regulated) + ~$0.55-0.60B aggregate Utility + ~$0.15-0.20B aggregate Gathering) under continued President + CEO David Bauer since 2019 (~6-year tenure as National Fuel Gas CEO; selected primary post-2019 succeeded Ronald Tanski retirement).
• Seneca Resources Appalachia E&P + Pipeline & Storage Pipeline (~$1.35-1.50B revenue): ~$1.35-1.50B aggregate Seneca Resources Appalachia E&P + Pipeline & Storage revenue (~65%+ revenue mix); selected primary post-1980s Seneca Resources Pennsylvania Marcellus + Utica Shale + selected various aggregate ~1.0-1.2 Tcf aggregate annual gas production + selected various aggregate ~80%+ aggregate Marcellus + Utica concentration + selected primary post-2020 Empire Pipeline + Tennessee Pipeline + Supply Corporation FERC-regulated pipeline + selected various aggregate ~$3.5-4.0B aggregate net plant in service + selected various aggregate Empire North Project + Northern Access Pipeline expansion + selected various aggregate ~$2.50-3.50 aggregate Henry Hub natural gas price exposure.
• Utility (NY + PA) + Gathering + Investment Grade + Dividend Pipeline: selected continued post-1902 selected various aggregate Utility (New York + Pennsylvania regulated natural gas distribution) ~$0.55-0.60B aggregate revenue (~28%+ aggregate revenue mix; selected primary post-1902 Buffalo + Erie + Pittsburgh + Williamsport + Olean service territory + selected various aggregate ~750,000 aggregate customer accounts) + selected various aggregate Gathering aggregate ~$0.15-0.20B aggregate revenue (~7%+ aggregate revenue mix; selected primary post-2020 Seneca Resources Marcellus + Utica gathering + selected various aggregate ~1.0-1.2 Tcf aggregate annual gathered volume) + selected various aggregate ~54-year aggregate dividend increase track record (one of the longest US Energy dividend track records).
• Capital position + balance sheet: ~$2.10 aggregate annual dividend (~32%+ aggregate payout ratio; ~3.5-4.5% aggregate dividend yield; selected ~54+ year aggregate dividend increase track record); minimal opportunistic buybacks; aggregate capital return ~$185-200M FY2025; net leverage ~3.0-3.5x Net Debt/EBITDA; investment-grade Baa2/BBB credit rating; ~89-91M diluted shares; weighted average debt maturity ~10-12 years.
• FY2026 thesis catalysts: Seneca Resources Appalachia E&P + Pipeline & Storage pipeline (~$1.35-1.50B + 1.0-1.2 Tcf gas production + Marcellus + Utica concentration) + Utility (NY + PA) + Gathering + Investment Grade + Dividend pipeline ($0.55-0.60B Utility + ~$0.15-0.20B Gathering + ~54+ year dividend increase track record) + selected ~$2.50-3.50 aggregate Henry Hub natural gas price exposure + Trump administration energy policy + selected ~$3.5-4.0B aggregate net plant in service.

Company Background

National Fuel Gas Company (NYSE: NFG) is one of the oldest US specialty Integrated Natural Gas + Appalachia E&P + Pipeline & Storage + Utility + Gathering companies, founded 1902 as National Fuel Gas Company in Buffalo New York (~123-year heritage; selected pioneer Appalachia Integrated Natural Gas specialty). Selected post-1902 founding + selected post-1920s NYSE listing; selected post-1980s Seneca Resources E&P subsidiary formation; selected post-2010-2025 selected various aggregate Pennsylvania Marcellus + Utica Shale development (selected primary post-2010 Seneca Resources Marcellus + Utica Shale concentration); selected post-2019 David Bauer CEO appointment (succeeded Ronald Tanski retirement); selected post-2020 ~$0.6B+ Shell Western Exploration & Production (SWEPI) Pennsylvania Marcellus + Utica Shale assets acquisition; selected post-2020-2025 selected various aggregate Empire North Project + Northern Access Pipeline expansion + selected various aggregate ~54-year aggregate dividend increase track record (one of the longest US Energy + Utility dividend track records); HQ Williamsville New York; ~2,000-2,200 employees globally; selected various aggregate New York + Pennsylvania + Appalachia regional footprint.

NFG operates 4 primary segments: Seneca Resources E&P 44%+ revenue ($0.90-1.0B), Pipeline & Storage 22%+ revenue ($0.45-0.50B), Utility 28%+ revenue ($0.55-0.60B), Gathering 7-8% revenue ($0.15-0.20B). Geographic mix: New York + Pennsylvania + Appalachia ~99%+.

Capital position: ~$2.10 aggregate annual dividend (~32%+ aggregate payout ratio; ~3.5-4.5% aggregate dividend yield; selected ~54+ year aggregate dividend increase track record); minimal opportunistic buybacks; aggregate capital return ~$185-200M FY2025; net leverage ~3.0-3.5x Net Debt/EBITDA; investment-grade Baa2/BBB credit rating; ~89-91M diluted shares; weighted average debt maturity ~10-12 years.

Seneca Resources Appalachia E&P + Pipeline & Storage Pipeline (~$1.35-1.50B Revenue)

The Seneca Resources Appalachia E&P + Pipeline & Storage pipeline is NFG's foundation thesis: ~$1.35-1.50B aggregate Seneca Resources Appalachia E&P + Pipeline & Storage revenue (~65%+ revenue mix) + selected primary post-1980s Seneca Resources Pennsylvania Marcellus + Utica Shale + selected various aggregate ~1.0-1.2 Tcf aggregate annual gas production + selected various aggregate ~80%+ aggregate Marcellus + Utica concentration + selected primary post-2020 Empire Pipeline + Tennessee Pipeline + Supply Corporation FERC-regulated pipeline + selected various aggregate ~$3.5-4.0B aggregate net plant in service + selected various aggregate Empire North Project + Northern Access Pipeline expansion + selected various aggregate ~$2.50-3.50 aggregate Henry Hub natural gas price exposure. Selected primary NFG platform: Seneca Resources Marcellus + Utica Shale + Empire + Tennessee FERC-regulated pipeline specialty.

FY2025 Seneca + Pipeline & Storage dynamics ($1.35-1.50B aggregate revenue): selected continued post-2024 ~+5-8% aggregate Seneca + Pipeline & Storage revenue growth (cyclical Marcellus + Utica gas production + selected various aggregate ~$2.50-3.50 aggregate Henry Hub natural gas price exposure + selected various aggregate ~1.0-1.2 Tcf aggregate annual gas production) + ~$1.35-1.50B aggregate Seneca + Pipeline & Storage revenue + selected various aggregate ~$3.5-4.0B aggregate net plant in service + selected various aggregate Empire North Project + Northern Access Pipeline expansion. Selected post-2024 ~$2.50-3.50 incremental annual EPS contribution as Seneca + Pipeline & Storage pipeline drives incremental margin.

FY2026 catalyst: continued Seneca Resources Appalachia E&P + Pipeline & Storage pipeline + ~$2.50-3.50 incremental annual EPS contribution under continued David Bauer leadership (~6-year tenure). Selected aggregate ~$1.40-1.55B aggregate Seneca + Pipeline & Storage revenue + selected various ~+3-5% aggregate growth + selected various aggregate ~1.0-1.2 Tcf aggregate annual gas production + selected various aggregate ~$2.50-3.50 aggregate Henry Hub natural gas price exposure + selected various aggregate Empire North Project + Northern Access Pipeline expansion milestones + Trump administration energy policy tailwinds. Risks: EQT (EQT) + Range Resources (RRC) + Coterra Energy (CTRA) + Antero Resources (AR) + CNX Resources (CNX) + Williams (WMB) + ONEOK (OKE) + Kinder Morgan (KMI) + selected various aggregate Appalachia + Pipeline & Storage competitive displacement + Henry Hub natural gas price cycle considerations + Federal Energy Regulatory Commission (FERC) rate cycle considerations + selected various aggregate Pennsylvania + New York regulatory cycle considerations.

Utility (NY + PA) + Gathering + Investment Grade + Dividend Pipeline

The Utility (NY + PA) + Gathering + Investment Grade + Dividend pipeline is NFG's primary growth thesis: selected continued post-1902 selected various aggregate Utility (New York + Pennsylvania regulated natural gas distribution) ~$0.55-0.60B aggregate revenue (~28%+ aggregate revenue mix; selected primary post-1902 Buffalo + Erie + Pittsburgh + Williamsport + Olean service territory + selected various aggregate ~750,000 aggregate customer accounts) + selected various aggregate Gathering aggregate ~$0.15-0.20B aggregate revenue (~7%+ aggregate revenue mix; selected primary post-2020 Seneca Resources Marcellus + Utica gathering + selected various aggregate ~1.0-1.2 Tcf aggregate annual gathered volume) + selected various aggregate ~54-year aggregate dividend increase track record (one of the longest US Energy dividend track records).

FY2025 Utility + Gathering + Dividend dynamics: selected primary post-1902 Utility (New York + Pennsylvania regulated natural gas distribution) ~$0.55-0.60B aggregate revenue + selected various aggregate ~750,000 aggregate customer accounts + selected various aggregate Gathering ~$0.15-0.20B aggregate revenue + selected various aggregate ~54-year aggregate dividend increase track record. Selected post-2024 ~$0.85-1.20 incremental annual EPS contribution as Utility + Gathering + Investment Grade + Dividend pipeline drives incremental margin.

FY2026 catalyst: continued Utility (NY + PA) + Gathering + Investment Grade + Dividend pipeline + ~$0.85-1.20 incremental EPS contribution. Selected aggregate ~$0.58-0.65B aggregate Utility revenue + selected various aggregate ~$0.15-0.20B aggregate Gathering revenue + selected various aggregate ~55+ year aggregate dividend increase track record continuation + selected various aggregate Empire North Project + Northern Access Pipeline expansion + Federal Reserve interest rate cycle considerations. Risks: EQT + Range Resources + Coterra Energy + Antero Resources + CNX Resources + Williams + ONEOK + Kinder Morgan + selected various aggregate Pennsylvania + New York utility competitive displacement + selected various aggregate Pennsylvania + New York utility regulatory cycle considerations + Federal Energy Regulatory Commission (FERC) rate cycle considerations + Federal Reserve interest rate cycle considerations.

Capital Position + Balance Sheet

Capital position + balance sheet: ~$2.10 aggregate annual dividend (~32%+ aggregate payout ratio; ~3.5-4.5% aggregate dividend yield; selected ~54+ year aggregate dividend increase track record) + minimal opportunistic buybacks + aggregate capital return ~$185-200M FY2025 + net leverage ~3.0-3.5x Net Debt/EBITDA + investment-grade Baa2/BBB credit rating + ~89-91M diluted shares + weighted average debt maturity ~10-12 years.

FY2026 catalyst: continued ~$185-220M aggregate annual capital return + selected continued ~3.5-4.5% aggregate dividend yield + selected continued ~$2.10-2.25 aggregate annual dividend (post-FY2025 ~55+ year continued dividend increase track record) + selected continued ~3.0-3.5x net leverage + selected various aggregate ~54+ year aggregate dividend increase track record continuation. Selected ~32%+ aggregate payout ratio + selected investment-grade Baa2/BBB credit rating support continued capital return + Seneca + Pipeline & Storage + Utility + Gathering + Empire North Project + Northern Access Pipeline expansion.

Key Core Metrics

• FY2025 (September year-end) revenue ~$2.05-2.20B (+5-8% YoY) vs $1.94B FY2024; adj. EPS ~$6.10-6.50
• 4 segments: Seneca Resources E&P ~44%+ ($0.90-1.0B) + Pipeline & Storage ~22%+ ($0.45-0.50B) + Utility ~28%+ ($0.55-0.60B) + Gathering ~7-8% ($0.15-0.20B)
• Geographic mix: New York + Pennsylvania + Appalachia ~99%+
• Seneca Resources: ~1.0-1.2 Tcf aggregate annual gas production; ~80%+ Marcellus + Utica concentration
• Pipeline & Storage: Empire Pipeline + Tennessee Pipeline + Supply Corporation FERC-regulated
• Net plant in service: ~$3.5-4.0B aggregate
• Empire North Project + Northern Access Pipeline: expansion in progress
• Henry Hub natural gas price exposure: ~$2.50-3.50
• Utility: ~750,000 customer accounts; New York + Pennsylvania regulated natural gas distribution
• Gathering: ~1.0-1.2 Tcf aggregate annual gathered volume
• ~54+ year aggregate dividend increase track record (one of the longest US Energy dividend track records)
• Net leverage ~3.0-3.5x Net Debt/EBITDA
• ~89-91M diluted shares; ~$185-200M total capital return FY2025
• Dividend ~$2.10 annual (~32%+ payout; ~3.5-4.5% yield)
• Investment-grade Baa2/BBB credit rating

Market Evaluation

NFG FY2026 market evaluation: at ~$60-80 share price + ~89-91M diluted shares = ~$5.5-7.5B market cap; ~$2.10 aggregate annual dividend + ~3.5-4.5% aggregate dividend yield. Selected primary NFG peers: EQT (EQT, ~$25-30B Mcap; Appalachia E&P) + Range Resources (RRC, ~$8-10B; Appalachia E&P) + Coterra Energy (CTRA, ~$20-25B; Permian + Anadarko) + Antero Resources (AR, ~$10-12B; Appalachia E&P) + CNX Resources (CNX, ~$5-6B; Appalachia E&P) + Southwestern Energy (post-Chesapeake Expand Energy merger 2024) + Williams (WMB, ~$50-60B; Pipeline & Storage) + ONEOK (OKE, ~$40-50B) + Kinder Morgan (KMI, ~$45-50B) + Atmos Energy (ATO, ~$18-20B; Natural Gas Utility) + selected various aggregate Integrated Natural Gas + Appalachia E&P + Pipeline + Utility companies. Selected NFG ~10-13x P/E + selected ~6-7x EV/EBITDA + selected ~3.5-4.5% dividend yield + selected aggregate ~$2.10-2.30B aggregate FY2026 revenue + selected aggregate ~$6.40-6.85 aggregate FY2026 EPS + selected aggregate ~$185-220M aggregate FY2026 capital return + selected aggregate Seneca + Pipeline & Storage + Utility + Gathering pipeline. FY2026 base case: ~$2.10-2.30B aggregate revenue + ~$6.40-6.85 adj. EPS + ~$185-220M aggregate capital return. Bull case: Marcellus + Utica gas production recovery + Henry Hub natural gas price recovery to $4-5/MMBtu + Empire North Project + Northern Access Pipeline expansion + Trump administration energy policy + LNG export demand growth + ~55+ year dividend increase track record continuation drives ~$2.25-2.45B aggregate revenue + ~$6.65-7.20 EPS. Bear case: EQT + Range Resources + Coterra Energy + Antero Resources + CNX Resources + Williams + ONEOK + Kinder Morgan competitive intensification + Henry Hub natural gas price cycle weakness + Federal Energy Regulatory Commission (FERC) rate cycle considerations + Pennsylvania + New York regulatory cycle considerations + Federal Reserve interest rate cycle considerations + Empire North Project + Northern Access Pipeline execution considerations drives ~$2.00-2.15B revenue + ~$5.55-6.05 EPS. The thesis depends on Seneca Resources Appalachia E&P + Pipeline & Storage + Utility + Gathering + dividend track record.