National Fuel announces consolidated first-quarter earnings

WILLIAMSVILLE – National Fuel Gas Company recently announced consolidated earnings for the first quarter of its 2013 fiscal year (the quarter ended Dec. 31).

HIGHLIGHTS

Earnings for the first quarter of fiscal 2013 of $67.9 million, or $0.81 per share, increased $7.2 million, or $0.08 per share, compared to $60.7 million, or $0.73 per share, for the prior year’s first quarter. The increase is mainly due to higher earnings in the Utility segment, the Pipeline and Storage segment, and the All Other category.

Seneca Resources Corporation’s first quarter production of crude oil and natural gas increased 6.3 billion cubic feet equivalent (Bcfe), or approximately 34 percent, to 24.5 Bcfe. Appalachian production increased approximately 48 percent to 19.5 Bcfe, including production from the Marcellus Shale of 17.8 Bcfe.

In the current year’s first quarter, Seneca recorded a $3.7 million (pre-tax) charge related to the termination of a drilling rig contract. Seneca continues to operate three horizontal drilling rigs in Appalachia. Excluding this charge, Seneca’s first quarter earnings were down only $1.2 million, or $0.01 per share, despite realized natural gas prices that were 14 percent lower than the prior year’s first quarter.

In the Pipeline and Storage segment, first quarter earnings of $16.9 million, or $0.20 per share, increased 70 percent compared to the prior year’s first quarter. The increase is largely driven by increased gas flows through the Northern Access and Line N 2012 Expansion pipeline projects that were placed in service in the first quarter.

The Company is revising its GAAP earnings guidance range for fiscal 2013 to a range of $2.75 to $3.00 per share. The previous earnings guidance had been a range of $2.65 to $2.95 per share. This revised guidance assumes flat NYMEX equivalent pricing of $3.50 per Million British Thermal Units (MMBtu) for natural gas (Henry Hub) and $85 per barrel (Bbl) for crude oil (West Texas Intermediate) for unhedged production for the remainder of the fiscal year. Production for the entire 2013 fiscal year is projected to be between 102 to 112 Bcfe. The previous guidance for projected production was between 95 and 107 Bcfe.

MANAGEMENT COMMENTS

David F. Smith, Chairman and Chief Executive Officer of National Fuel Gas Company, stated: “Fiscal 2013 is off to a very impressive start, with the first quarter delivering strong financial and operational results across the system. Our efforts to grow our E&P and midstream businesses continue to gain momentum, and the growth that we forecasted is being delivered. The success of our recent midstream expansion initiatives, with five projects completed since the fall of 2011, is evidence of both the strategic location of our system and of our ability to efficiently conceive and construct projects that are critical to our customers’ success. In addition, the recent impressive results from our Marcellus Shale acreage in Lycoming County will help drive our increased production outlook for the years to come.

“With the remarkable success we have been achieving, we are able to raise our outlook for the remainder of this year. We’re proud of our accomplishments and remain focused on delivering long-term value to our shareholders.”

SUMMARY OF RESULTS

National Fuel had consolidated earnings for the quarter ended December 31, of $67.9 million, or $0.81 per share, compared to the prior year’s first quarter of $60.7 million, or $0.73 per share, an increase of $7.2 million or $0.08 per share. The increase is mainly due to higher earnings in the Utility segment, the Pipeline and Storage segment, and the All Other category, offset by lower earnings in the Exploration and Production segment. (Note: All references to earnings per share are to diluted earnings per share, all amounts are stated in U.S. dollars and all amounts used in the discussion of earnings are after tax unless otherwise noted.)