NATIONAL FUEL GAS CO Q4 FY2024 earnings call

Dave Bauer's Remarks - Operating results: Fourth-quarter adjusted operating results were $0.77 per share, with a strong hedge book mitigating gas price headwinds. Focus on Eastern Development Area (EDA) in Tioga and Lycoming counties for high-return acreage. Pipeline and storage business benefited from supply corporation rate settlement and Tioga Pathway project progress. Utility reached three-year rate case settlement. Energy policy advocacy for all-of-the-above approach.

Justin Loweth's Remarks - Seneca and Midstream: Fiscal 2024 production and reserves growth, 2025 production guidance 400-420 BCFE, marketing focus on minimizing in-basin pricing exposure, capital efficiency with projects like Tioga Utica Pad and produced water pipeline, sustainability achievements including methane intensity reduction and certifications.

Tim Silverstein's Remarks - Operating results: GAAP earnings impacted by impairments, $34 million impairment from Northern Access project, DD&A expense changes, O&M cost variations, effective tax rate around 24%, 2025 EPS guidance $5.50-$6.00 assuming NYMEX $2.80, 63% hedged at $3.44, buyback progress, balance sheet stability.

The E&P segment (Seneca) delivered record production of 392 BCFE in fiscal 2024, a 5% increase over fiscal 2023 despite voluntary price curtailments, with reserves growing to 4.8 TCFE. NFG Midstream's throughput increased 6% to a record 480 BCF in fiscal 2024. The regulated utility reached a three-year rate case settlement with an annual revenue requirement increase of $86 million phasing in over three years.

2025 Adjusted EPS: Revised to $5.50-$6.00 per share assuming NYMEX average $2.80 per MMBtu. Seneca's 2025 production guidance is 400-420 BCFE. Almost 90% of Seneca's 2025 production forecast protected by firm transportation and sales. Midpoint of 2025 capital guidance $20 million below 2024, with continued capital efficiency tailwinds.

Impairments: $34 million impairment from Northern Access project, expected additional ceiling test impairment in Q1 2025. ### Price Volatility: Natural gas price pressure in first half of 2025, though longer-term outlook constructive. ### Regulatory: Uncertainties in energy policy and rate case approvals.

Q: Morning all. I guess just the first question here is if I could get your latest thoughts on the regulatory environment and maybe how that has changed over the past 72 hours or so with the election results. And does that at all make you more comfortable to invest in expansion projects?

A: Sure. Good morning. I guess I will say, you know, first and foremost, that we design our business and run it in such a way that it thrives regardless of who is in power. But having said that, some administrations are better to work with than others. Looking at the change at the federal level, it is obviously still early days, but I think there is a good chance that the Trump administration will be good for the energy industry. Generally, a better regulatory environment to operate in.

Q: At the state level, there really has not been much for change. New York and PA, we expect to stay exactly, you know, the balance of power to stay exactly where it was beforehand. Really appreciate that color. And then for my second question, as you guys mentioned in the opening remarks, I see the 2025 adjusted EPS guidance was revised lower due to the natural gas pricing assumption, but we assume the $3.25 that was given last quarter, then, actually, the adjusted EPS should be $0.25 higher. Could you just talk about what was driving that and what would drive that improvement assuming a flat natural gas price?

A: Sure. The biggest driver is the change in the DD&A rate that we laid out in our guidance. You know, that is a function of our impairment that we took in the fourth quarter. But we also had a couple of other tailwinds on some operating costs across the system. They are small in aggregate, so they do not really stick out amongst our individual guidance ranges. But the collective between the lower DD&A rate and some other small improvements across the system provide a nice tailwind to allow us to, I guess, quote-unquote, increase guidance if you were to hold pricing constant.

Q: Hi. Thank you. Good morning, team. Quick question on the activity cadence. You gave us some cadence for next year. Can you talk about the sensitivity of that timing in your plans? Does that become a tool for managing production based on where gas prices are, or is that pathway relatively decided upon?

A: Sure. Hi. Good morning. So the short answer is we absolutely always retain some flexibility within our plan both ways to accelerate if there is a good price signal. So, for example, I mentioned in the remarks that we are very constructive on the longer-term macro environment on natural gas prices, but look, if we end up with a colder-than-normal winter, it has not started that way. But things can change quickly. We will have some flexibility and capability to move faster into that. Conversely, if we see sustained lower prices, there are a number of levers within our plan that we can look to evolve through the course of the year to address that. And then the other thing I would just note is our team has done a fantastic job also of really insulating us from a lot of those changes. We have about almost 90% of our fiscal 2025 gas locked in from a physical perspective, so very little exposure. And on top of that, have a really attractive hedge book over the balance of the year that positions us with a great floor and quite a bit of upside. So I think holistically, we have definitely got levers on capital to bring it down as needed, but also see a lot of kind of positive leverage to the upside in how we have structured the combination of the operations as well as the marketing and hedging book.