NATIONAL FUEL GAS CO Q2 FY2025 earnings call

Dave Bauer:

• National Fuel had earnings up over 30% y-o-y, with Seneca's Utica program showing strong well results, 12 wells online, and confidence in Appalachian development program. Regulated utility had EPS increase due to rate settlement, Pennsylvania modernization tracker starting to impact. Pipeline/storage: Supply Corp rate settlement benefit, Empire Pipeline rate agreement, Tioga Pathway Project progress. Natural gas price outlook strong, with demand growth and LNG export potential.

Tim Silverstein:

• Adjusted operating results up 32% q-o-q, hedges added for fiscal '26 and '27, earnings guidance range $6.75-$7.05 per share, capital guidance unchanged, buyback activity reduced but plan to resume, minimal effect from tariffs so far.

Justin Loweth:

• Seneca had record production and throughput, EDA development driving capital efficiency, Gen 3 well design performing well, midstream growth with third party activity and infrastructure expansion.

Seneca Resources: Production increased 8% sequentially, with 12 wells brought online since the start of the fiscal year, including the best WDA Utica pad to date. Regulated businesses: Utility had earnings per share increase of $0.22 due to rate settlement approved by NY PSC, with Pennsylvania modernization tracker impact starting to grow. Pipeline and storage: Supply Corporation's 2024 rate settlement benefits earnings, Empire Pipeline reached rate agreement with shippers, and Tioga Pathway Project progresses with FERC environmental assessment cleared.

Tim Silverstein:

• Adjusted operating results guidance range $6.75 to $7.05 per share at NYMEX $3.50 per MMBtu base case. Added 76 Bcf of swaps and collars for fiscal '26 and '27. Capital guidance unchanged. Reduced buyback activity temporarily but plan to resume $200 million authorization by end of 2025.

Risks:

• Regulatory and litigation risks for infrastructure projects, potential Canadian retaliatory tariffs affecting ~5% of Seneca production, economic volatility impacting refinancing.

Q: Could you talk a little bit more about how you’re thinking about the buyback? The stock’s been very strong year to date...

A: I don’t see any change in our thinking right now to our buyback program. Price is a factor, but first preference is to grow the company, then return capital to shareholders. Still committed to the buyback program.

Q: Could you maybe give us some additional color on what leading edge EUR per 1,000 foot is for the recent EDA tills...

A: We’ve got now a number of tightly Utica pads online, last one to two pads with M3 design. EUR moving up to expectation of 2.5 Bcf per 1,000 feet, pressure declines exceeding expectations.

Q: I was wondering if you could speak to your views on current outlook for growing in basin demand...

A: Opportunity for more in basin demand through other producers investing less capital, freeing up capacity, and continued industrial development in the basin.

Q: You all had an active and consistent hedging program for years...

A: We’re constructive, but skew more towards collars as long as there is skew available, protecting downside at good price and retaining upside.