National Fuel Gas Company

you may begin your conference.

Thank you, Brianna, and good morning. We appreciate you joining us on today's conference call for a discussion of last evening's earnings release. With us on the call from National Fuel Gas Company are Dave Bauer, our President and Chief Executive Officer, Tim Silverstein, Treasurer and Principal Financial Officer, and Justin Lois, President of Seneca Resources and National Fuel Midstream. At the end of today's prepared remarks, we will open the discussion to questions. The third quarter fiscal 2024 earnings release and July investor presentation has been posted on our investor relations website. We may refer to these materials during today's call. We would like to remind you that today's teleconference will contain forward-looking statements. While National Fuel's expectations, beliefs, and projections are made in good faith and are believed to have a reasonable basis, actual results may differ materially. These statements speak only as of the date on which they are made, and you may refer to last evening's earnings release for a listing of certain specific risk factors. With that, I'll turn it over to Dave Bauer.

Thank you, Natalie. Good morning, everyone. Overall, the third quarter was a good one for National Fuel, one in which we saw continued operational success across the system. Apart from natural gas prices, our financial results for the quarter were right in line with expectations. Tim and Justin will get into some more of the details of the quarter, so I'll focus my time highlighting our future growth opportunities and the value proposition National Fuel offers to investors. In short, our strong return on capital, our visibility to significant growth earnings and free cash flow, and our longstanding commitment to returning an increasing amount of capital to shareholders positions us very well to deliver significant value in the coming years. Last night, we initiated our preliminary guidance for fiscal 2025 for $5.75 to $6.25 per share. at the midpoint a nearly 20% increase over fiscal 24. And we expect that this will be a system-wide increase in earnings, with each of our major operating segments seeing improved results. In addition to our outlook for 2025, we've added multi-year outlooks for several key financial metrics to our updater and investor presentation. In particular, as you can see on page nine of our updated IR deck, we're now guiding to compound annual consolidated earnings growth of better than 10% for at least the next three years. Importantly, as we expect will be the case in 2025, each of our businesses across the system should contribute to our improved outlook. At our regulated utility and pipeline and storage businesses, we expect a 7 to 10% average annual growth in earnings per share over the next three years. Much of next year's growth will come from the Supply Corp rate case we settled earlier this year. along with the impact of our ongoing New York utility rate case. With respect to that case, we are still in settlement discussions, but I am optimistic we'll reach a settlement this quarter. Looking beyond next year, the modernization programs at the regulated companies and expansion projects like Tioga Pathway are expected to drive rate-based growth in the 5% to 7% area. As many of you know, we look to the regulated businesses to fund the majority of our dividend, and the expected growth in those segments gives me confidence in our ability to continue growing it for many years to come one quick note on the status of the tioga project we're making good progress with it and expect to file our first application later this month for a late calendar 2026 in service day the outlook for growth in our non-regulated upstream and gathering businesses is even better seneca's one to two rig program should grow production and gathering throughput in the low to mid single digit percentage area on average. But more importantly, natural gas prices are expected to meaningfully improve in the next several months, which should drive Seneca's earnings higher. Like most in the industry, we expect to see significant demand growth in the year ahead as the next wave of LNG projects come online and additional natural gas powered power generation is needed to support the increase in electricity demand for data centers and the onshoring of manufacturing. It goes without saying that natural gas prices are volatile, but we expect that our longstanding approach to hedging, which layers in trades over generally a three-year period, will allow us to continue to lock in increasing price realizations, providing greater certainty to our longer-term consolidated earnings growth trend. Nevertheless, as you can see from page 27 of our investor deck, we have significant unhedged volumes in the future that provide considerable upside potential should prices run up. Free cash flow should grow alongside earnings, particularly at our non-regulated businesses. As I've said on prior calls, as we complete our transition to the eastern development area, we should be in the enviable position where we can grow production at the same time as we're decreasing the amount of capital we invest in Seneca's drilling program and once centralized infrastructure and trunk lines are built out, NFG midstreams as well. The improved capital efficiency, combined with the natural gas, contango natural gas curve, should lead to considerable growth in non-regulated free cash flow over the next three years, as you can see on page nine of our IR deck. This should give us significant financial flexibility to allocate capital towards additional growth opportunities, further improve our investment-grade balance sheet, or absent either of these, return additional capital to shareholders. To that end, in June, our board approved an 8 cent or 4% increase in our dividend, which continues our impressive streak of paying a dividend for 122 consecutive years and increasing it in each of the last 54. The dividend is a core element of our value proposition. We are one of approximately 50 companies in the country that have increased their dividend for more than half a century, which is a testament to our long history of judiciously allocating capital to projects that generate strong returns in excess of our cost of capital. As you know, in March, we initiated a $200 million share buyback program that we expect to complete by the end of next fiscal year. We're right on track with this program. As of yesterday, we repurchased approximately $45 million of our stock, which has reduced our total shares outstanding by just under 1%. Looking to the quarters ahead, I see this program continuing at a similar cadence. As I said on last call, given the positive outlook for our integrated businesses, we see significant long-term value in national fuel and view this as a great opportunity to buy back shares at a low point in the commodity price cycle. In closing, I'm excited for the future for the natural gas industry and especially for national fuel. While there's a vocal minority trying to sway policymakers toward the future without natural gas, the vast majority of people across the globe recognize that natural gas is a reliable, affordable source of energy. that is critical to economic prosperity. The future is bright, and National Fuels' outstanding group of assets and our long history of strong operational execution makes us well positioned to provide these critical energy supplies for decades to come, and in doing so, generate attractive returns for our shareholders. With that, I'll turn the call over to Tim to discuss the results of the quarter and provide more details on our preliminary guidance for fiscal 2025.