National Fuel Gas Co (NFG) Q4 2024 Earnings Call Highlights: Record Production and Strategic ...

In This Article:

  • Adjusted Operating Results: $0.77 per share for Q4 fiscal 2024.

  • Hedge Book Gain: $61 million gain during the quarter.

  • Seneca Production: Record production of 392 Bcfe, a 5% increase over fiscal 2023.

  • Reserves: Grew to 4.8 Tcfe with net additions and revisions of over 600 Bcfe.

  • NFG Midstream Throughput: Increased 6% to a record 480 Bcf in fiscal 2024.

  • Pipeline and Storage Rate Increase: $56 million annual rate increase effective February 2024.

  • New York Utility Revenue Requirement Increase: $86 million phased over three years.

  • GAAP Earnings: Reported a loss of $1.84 per share due to noncash impairments.

  • Impairment Charge: $34 million related to the Northern Access project.

  • Fiscal 2025 Production Guidance: 400 to 420 Bcfe.

  • Fiscal 2025 Capital Guidance: Midpoint $20 million below fiscal 2024.

  • Fiscal 2025 Adjusted Operating Results Guidance: $5.50 to $6 per share.

  • Hedge Portfolio: 63% hedged for fiscal 2025 with an average floor price of $3.44.

  • Share Buyback: 1.4 million shares repurchased at an average price of $57 per share.

  • Debt-to-EBITDA Ratio: Approximately 2.25 times.

  • FFO to Debt: 37%.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • National Fuel Gas Co (NYSE:NFG) reported strong hedge book performance, delivering a $61 million gain during the quarter, which helped mitigate the impact of low natural gas prices.

  • The company achieved a 5% increase in production year over year while reducing Seneca Capital by 10%, indicating improved operational efficiency.

  • NFG's pipeline and storage business benefited from a $56 million annual rate increase from the Supply Corporation rate settlement.

  • The company reached a favorable three-year settlement in its New York rate case, resulting in an $86 million annual revenue requirement increase phased over three years.

  • NFG's sustainability efforts are noteworthy, with Seneca surpassing its 2030 methane intensity reduction goal seven years ahead of schedule and achieving high certification levels for environmental standards.

Negative Points

  • NFG reported a GAAP loss of $1.84 per share due to noncash impairments, including a $34 million impairment related to the Northern Access project.

  • The company faced higher operating and maintenance costs in its regulated segments, partly due to pipeline integrity program expenses and prevailing wage requirements in New York.

  • Natural gas prices remain a challenge, with continued pressure expected in the first half of fiscal 2025, potentially impacting earnings.

  • NFG decided to cease further development of the Northern Access project due to increased expected project costs, resulting in a significant write-down.

  • The company's 2025 adjusted EPS guidance was revised lower due to a decrease in natural gas pricing assumptions, reflecting ongoing market volatility.

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