National Fuel Gas Company

Hello and welcome to the National Fuel Gas Company Q3 Fiscal 2025 Earnings Conference call. My name is Alex. I'll be coordinating today's call. If you'd like to ask a question once the presentation has finished, please press star one on your telephone keypad. I'm going to hand it over to Natalie Fisher to begin. Please go ahead.

Thank you, Alex, and good morning. We appreciate you joining us on today's conference call for discussion of last evening's earnings release. With us on the call from National Fuel Gas Company are Dave Bauer, President and Chief Executive Officer, Tim Silverstein, Treasurer and Chief 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 2025 Earnings Release and July Investor Presentation have 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. National Fuel had an excellent third quarter. We're seeing great execution across the company and our momentum continues to build. At Seneca, our Eastern Development Area continues to exceed expectations. Production for the quarter was up 16% from last year, and based on our updated guidance, we expect full year production to be up approximately 8% versus Fiscal 2024. We're also seeing ongoing improvements in cash operating costs, furthering our position as a low-cost operator with top tier of break-even economics. Looking to Fiscal 26, I expect Seneca will deliver further improvements in capital efficiency. We've initiated production guidance of 440 to 455 BCF, which is a projected increase of 6% at the midpoint. Equally as important, we expect to spend 4% less capital to achieve that growth. We have a great operational team that continues to improve well productivity, most recently with our Gen 3 well design, while at the same time driving our DNC cost per foot lower and reducing overall capital expenditures. It's clear that our E&P assets, which include more than two decades of high quality inventory, will drive significant value creation in the years ahead. Justin will have more to say on our non-regulated operations later in the call. Our outlook on the regulated side of the business is equally exciting. We've recently seen significant growth through rate making activity, and looking forward, we expect to deliver mid single digit rate based growth over the next several years as we continue to invest in system modernization. On top of that, we've also seen meaningful pipeline expansion opportunities develop in recent months. On prior calls, I've talked about the need for infrastructure to support the growing demand for energy and about Pennsylvania's suitability for data center development. With over $90 billion of new investment in Pennsylvania announced two weeks ago, it's clear that this is becoming a reality, and national fuel is as well positioned as anyone to participate in that growth. To that point, earlier this month, we announced our Shipping Port Lateral Project, which is an approximately seven mile pipeline expansion off of our line end system in western Pennsylvania that's designed to deliver a significant portion of the natural gas supply for the Shipping Port Power Station and a new co-located data center. Speed to market is critical on these types of projects, and thanks to FERC's recent increase in blanket certificate project cost limits, we should be able to build the project on an expedited basis and include more robust facilities that provide incremental capacity. We currently have a proceeding agreement in place to provide 205,000 deca-thermos per day of capacity, starting in the fourth quarter of calendar 2026. And again, this is the largest amount of capacity that we can build in the shortest amount of time. Over time, Shipping Port plans to bring online over three gigawatts of generation, so there's the very real potential for us to provide significant additional pipeline capacity to the facility in future years. In May, our Tioga Pathway project received FERC approval and remains on track for an early fiscal 2027 in service day. As a reminder, this 190,000 deca-therm per day project provides an outlet for Seneca's EDA production volumes to more premium pricing markets. Construction for both the Tioga Pathway and Shipping Port Lateral projects is expected to begin in the first half of calendar 2026. While both expansions are individually modest in size, together we expect to generate north of $30 million of new revenue annually, which represents about 7% of our current pipeline and storage segment revenues. So in short, between modernization and expansion projects, the outlook for our pipeline business is very strong. Turning to our capital return programs, based on our strong results for the year and high degree of confidence in our long-term outlook, in June we raised our dividend for the 55th consecutive year to an annual rate of $2.14 per share. With respect to the buyback program, we've made good progress with repurchases, but recently hit pause as we evaluate opportunities to grow the company, which as I've said on earlier calls is our top priority. Should those opportunities not come to fruition, I fully expect we'll complete the buyback program in 2026. Switching to state energy policy, Pennsylvania is clearly embracing economic development. The Energy and Innovation Summit held earlier this month in Pittsburgh was attended by leaders from top energy, technology, and financial companies, as well as President Trump and several cabinet members. The summit highlighted the tens of billions of dollars of investment in the state committed to by data center developers. With our unique set of assets, including a deep inventory of high quality drilling locations and an integrated midstream and downstream business, we're very well positioned to support the infrastructure build out that is anticipated across the Commonwealth. Hopefully our shipping port project is the first of many such projects. While New York hasn't quite taken the same steps as its neighbor, the pendulum there is starting to swing back towards a more pragmatic approach to energy policy. Last week, the state energy planning board released their draft energy plan, something they're required to do every five years but have not done since 2015. This draft plan acknowledges that the state will not meet some of its interim targets set in the 2019 climate act. And it takes positive steps towards acknowledging the importance of an all of the above approach to energy. Instead of being driven solely by aggressive short-term decarbonization targets, the draft plan moves in a direction that will better balance the critical objectives of energy reliability, affordability, and emission reductions. While it stopped short of embracing new natural gas generation as a way to achieve the state's decarbonization goals, it clearly acknowledges the importance of continuing to invest in the natural gas system while leaving open the potential for new investment in natural gas generation. In closing, it's a great time to be in the natural gas industry. Demand for natural gas is at all-time highs, both domestically and abroad, and production is increasing in lockstep. The notion that wind and solar can power everything in just a few short years is largely in the rearview mirror. Without question, natural gas is the foundational fuel that will be key to powering our nation's growth for decades to come. National fuel has some of the best acreage in the lowest cost basin, lowest cost natural gas basin in the country. We have a pipeline network that's incredibly well located to support rising regional demand, and a highly talented workforce that's eager to grow the company. All of this should translate to meaningful opportunities for the company and, in turn, value creation for our shareholders. With that, I'll turn the call over to Tim.