National Fuel Gas Company Q1 FY2026 earnings call

Dave Bauer's Remarks - Acknowledged operations team's work during challenging winter weather. - Adjusted earnings per share was $2.06, in line with expectations. - Integrated upstream and gathering business had 29% higher adjusted EBITDA. - Pipeline projects like Tioga Pathway and Shippingport Lateral Project are progressing. - Utility business had Pennsylvania division file a rate case and Ohio utility acquisition on track. ### Tim Silverstein's Remarks - Explained comparability impacts from Ohio utility acquisition. - Reaffirmed adjusted EPS guidance range of $7.60 to $8.10. - Discussed hedge book and future hedging for production. - Ohio regulatory environment has positive trends with ratemaking modernization. ### Justin Loweth's Remarks - Upstream and gathering business had strong start, reaffirmed FY2026 guidance. - Focus on capital efficiency through well design testing and co-development pilots. - Natural gas market outlook with price volatility and structural demand. - Executed first-of-its-kind methane reduction certificate agreement.

The Integrated Upstream and Gathering segment saw a 29% increase in adjusted EBITDA compared to the prior year, driven by higher production and natural gas prices. Net production in the first quarter was 109 Bcf, a 12% increase over Q1 FY2025. The Regulated businesses delivered strong results, with the New York utility having a 3-year rate settlement and the Pennsylvania utility having a pipeline modernization tracker.

- Reaffirmed adjusted EPS guidance range of $7.60 to $8.10. ### - Reaffirmed FY2026 production guidance of 440 to 455 Bcf and capital guidance of $560 million to $610 million. ### - Hedge book provides downside protection in 70% of remaining production for FY2026, with exposure to higher prices on over 50% of remaining production. ### - Added swap layers and collars for fiscal '27 and '28, locking in strong cash flows.

- Natural gas pricing volatility which can impact earnings. ### - Regulatory changes that could affect rate cases and project approvals. ### - Permitting challenges that could delay project timelines.

Q: On taking advantage of local price spikes, can you flow incremental volumes?

A: Yes, we have a marketing portfolio and keep a portion of gas open to take advantage of high prices.

Q: Thoughts on federal permitting reform and pipeline projects?

A: Permitting reform would likely allow projects to be built sooner.

Q: D&C costs of Seneca Gen 4 design?

A: Gen 4 design has wider inter-well spacing and upsized proppant loading, adding $150 to $175 a foot roughly.

Q: Optimal production growth rate?

A: Mid-single-digit growth is a starting point, with interstate pipeline capacity being a governor.

Q: Frac barrier between upper and lower Utica?

A: The barrier is regionally unique, consistent across acreage with varying thickness but consistent characteristics.

Q: Takeaway industry-wide out of the basin?

A: Combination of brownfield, intra-basin, and some greenfield projects, with need for more takeaway to dampen volatility.