National Fuel Gas Company (“National Fuel” or the “Company”)
(NYSE:NFG) today announced consolidated earnings for its fourth
quarter and fiscal year ended September 30, 2009, of $27.0 million
or $0.33 per share, and $100.7 million or $1.25 per share,
respectively.
HIGHLIGHTS
- Operating results before items
impacting comparability (“Operating Results”) for the fourth
quarter of fiscal 2009 of $29.8 million, or $0.36 per share,
decreased $13.5 million from the prior fiscal year. A 28% decrease
in average commodity prices realized this quarter in the
Exploration and Production segment was the main driver of the
decrease in earnings.
- Operating Results for fiscal
2009 of $210.5 million, or $2.60 per share, decreased $57.7 million
from the prior fiscal year. A 22% decrease in average commodity
prices realized over the entire year in the Exploration and
Production segment was the main driver of the decrease in
earnings.
- Production in the Exploration
and Production segment for the current quarter increased over 20%
compared to the prior year’s fourth quarter. Comparing the fourth
quarter of 2009 to the fourth quarter of 2008, Appalachian
production increased 29%, California production increased 6%, and
Gulf of Mexico production increased 38%. Total production for
fiscal 2009 was 42.5 billion cubic feet equivalent (“Bcfe”).
- Seneca flare tested its second
company-operated Marcellus Shale horizontal well at an average rate
of 4.7 million cubic feet per day (“MMcfd”) over a 7-day period. To
date Seneca has drilled four horizontal Marcellus Shale wells and
fracture stimulated and tested two, at a combined rate for those
two wells of over 10 MMcfd.
- Seneca’s reserve replacement
ratio for the year was 160%. In Appalachia 341% of production was
replaced. Seneca added 21.2 Bcfe of Marcellus Shale Proved Reserves
at a Finding & Development Cost of $1.28 per thousand cubic
feet (“Mcf”), excluding the cost of lease acquisitions.
- Phase 1 of Midstream
Corporation’s Covington Gathering System is expected to be
completed and transporting Marcellus production to market by mid
November (a construction time of less than 6 months).
- Seneca is accelerating its
drilling plans in the Marcellus shale during fiscal 2010. A second
Seneca-operated horizontal drilling rig will arrive later this
month. We are now estimating a total of 50 to 60 horizontal wells
will be drilled in fiscal 2010, approximately half of which will be
operated by EOG in the joint venture. The Company is revising its
GAAP earnings guidance for fiscal 2010 to a range of $2.30 to $2.65
per share. The previous guidance range had been $2.30 to $2.60.
This guidance includes an increase in the upper end of our oil and
gas production range for the Exploration and Production segment.
The production range is now 42 to 50 Bcfe and is based on an
assumed average NYMEX price, exclusive of basis differential, of
$5.00 per Million British Thermal Units (“MMBtu”) for natural gas
and $75.00 per barrel (“Bbl”) for crude oil. The previous
production range was 42 to 48 Bcfe.
- A conference call is scheduled
for Friday, November 6, 2009, at 11:00 a.m. Eastern Time.
MANAGEMENT COMMENTS
David F. Smith, Chief Executive Officer and President of
National Fuel Gas Company stated: “Overall, the fourth quarter was
an excellent one for National Fuel. While commodity prices
certainly impacted the level of earnings in our Exploration and
Production segment, we had an outstanding quarter from an operating
point of view, with production up 20% over the prior year.”
“More importantly, we continue to make great progress on our
strategic initiatives in Appalachia. We have now completed two
Seneca-operated horizontal wells in the Marcellus, and are very
pleased with the results of each of the wells. Just as significant,
we are also completing construction of the Covington Gathering
System, which will get that production to market, and expect to
place it in service by mid November. We have substantial running
room in the Marcellus, and I firmly believe our accomplishments
this quarter demonstrate that National Fuel has the people,
knowledge and skills to capitalize on this exciting
opportunity.”
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended
September 30, 2009, of $27.0 million or $0.33 per share, a decrease
of $16.3 million, or $0.19 per share, from the prior year’s fourth
quarter earnings. (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 discussions of earnings and
operating results before items impacting comparability (“Operating
Results”) are stated on an after tax basis, unless otherwise
noted.)
Consolidated earnings for the fiscal year ended September 30,
2009, of $100.7 million, or $1.25 per share, decreased $168.0
million, or $1.93 per share, from the prior year, where earnings
were $268.7 million, or $3.18 per share. The per share amounts
reflect a lower number of shares outstanding in the current quarter
and fiscal year to date resulting mainly from the impact of the
Company’s repurchase of approximately 5.2 million shares of
National Fuel common stock in the prior fiscal year.
Three Months Fiscal Year Ended
September 30, Ended September 30, 2009
2008 2009 2008 (in
thousands except per share amounts)
Reported GAAP earnings $
26,998 $ 43,266 $ 100,708 $ 268,728
Items impacting
comparability1: Gain on sale of turbine (586 )
Impairment of oil and gas producing properties 108,207 Impairment
of investment in partnership 1,085 Impairment of landfill gas
assets 2,786 2,786 Gain on life insurance policies (2,312 )
Operating Results $ 29,784 $ 43,266 $
210,474 $ 268,142
Reported GAAP earnings
per share $ 0.33 $ 0.52 $ 1.25 $ 3.18
Items impacting
comparability1: Gain on sale of turbine (0.01 )
Impairment of oil and gas producing properties 1.34 Impairment of
investment in partnership 0.01 Impairment of landfill gas assets
0.03 0.03 Gain on life insurance policies (0.03 )
Operating Results $ 0.36 $ 0.52 $ 2.60
$ 3.17
1 See discussion of these individual items below.
As outlined in the table above, certain items included in GAAP
earnings impacted the comparability of the Company’s financial
results when comparing the quarter and fiscal year ended September
30, 2009, to the comparable periods in fiscal 2008. Excluding these
items, Operating Results for the current fourth quarter of $29.8
million, or $0.36 per share, decreased $13.5 million, or $0.16 per
share. Excluding these items, operating results for the fiscal year
ended September 30, 2009, of $210.5 million, or $2.60 per share,
decreased $57.7 million, or $0.57 per share. Items impacting
comparability will be discussed in more detail within the
discussion of segment earnings below.
DISCUSSION OF RESULTS BY SEGMENT
(The following discussion of earnings for each segment is
summarized in a tabular form in this report. It may be helpful to
refer to those tables while reviewing this discussion.)
Exploration and Production
Segment
The Exploration and Production segment operations are carried
out by Seneca Resources Corporation (“Seneca”). Seneca explores
for, develops and purchases natural gas and oil reserves in
California, in the Appalachian region, and in the Gulf of
Mexico.
The Exploration and Production segment’s earnings in the fourth
quarter of fiscal 2009 of $28.1 million, or $0.34 per share,
decreased $10.1 million, or $0.12 per share, when compared with the
prior year’s fourth quarter.
Crude oil and natural gas production for the current quarter of
11.3 Bcfe increased over 20 percent compared to the prior year’s
fourth quarter. Production increased 29 percent in Appalachia, 38
percent in the Gulf of Mexico and six percent in California. The
increase in Appalachia is largely due to the continued development
by Seneca of its Upper Devonian acreage. The increase in Gulf of
Mexico production is mostly due to the return to production of
wells that were shut in due to hurricanes in the fourth quarter of
fiscal 2008. The increase in California production is mainly due to
the acquisition of Ivanhoe Energy’s U.S. oil and gas subsidiary
this quarter.
In spite of higher production, lower crude oil and natural gas
prices realized after hedging caused earnings to decrease. For the
quarter ended September 30, 2009, the weighted average oil price
received by Seneca (after hedging) was $71.39 per Bbl, a decrease
of $15.90 per Bbl from the prior year’s quarter. The weighted
average natural gas price received by Seneca (after hedging) for
the quarter ended September 30, 2009, was $6.00 per Mcf, a decrease
of $3.41 per Mcf.
Aside from the change in production and pricing, several other
items impacted earnings, including higher depletion expense (due
mostly to the increase in production), lower other operating
expenses (which was attributable mostly to a decrease in plugging
and abandonment cost), and the negative impact of period-to-period
mark-to-market adjustments to recognize hedge ineffectiveness on
certain derivative financial instruments used to hedge prices on
Seneca’s oil and gas.
The Exploration and Production segment’s loss of $10.2 million,
or $0.13 per share, for the fiscal year ended September 30, 2009,
compares to earnings of $146.6 million, or $1.73 per share, for the
fiscal year ended September 30, 2008. The decrease in earnings was
largely due to a non-cash charge of $108.2 million in the first
quarter of fiscal 2009 to write down the value of Seneca’s oil and
natural gas producing properties.
Seneca uses the full cost method of accounting for determining
the book value of its oil and natural gas properties. This
accounting method requires that Seneca perform a quarterly “ceiling
test” to compare the present value of future revenues from its oil
and natural gas reserves based on period end spot prices (the
“ceiling”) with the book value of those reserves at the balance
sheet date. If the book value of the reserves exceeds the ceiling
calculation, a non-cash charge, or impairment, must be recorded in
order to reduce the book value of the reserves to the calculated
ceiling. The impairment was mainly driven by a significant decrease
in commodity prices. At September 30, 2009 pricing, the ceiling
exceeded the book value of the Company’s oil and gas properties by
approximately $212 million.
Excluding the impact of the ceiling test charge in the first
quarter of fiscal year 2009, Operating Results for the fiscal year
ended September 30, 2009, of $98.0 million or $1.21 per share
decreased $48.6 million, or $0.52 per share, from the prior
year.
Overall production for fiscal year ended September 30, 2009, of
42.5 Bcfe increased four percent from 40.8 Bcfe in the prior fiscal
year. Lower production in the Gulf of Mexico as a result of
Hurricane Ike related curtailments during the year, was offset by
increases of 10 percent in Appalachia and seven percent in
California.
For the fiscal year ended September 30, 2009, the weighted
average oil price received by Seneca (after hedging) was $64.94 per
Bbl, a decrease of $16.81 per Bbl from the prior fiscal year. The
weighted average natural gas price received by Seneca (after
hedging) for fiscal year ended September 30, 2009, was $6.94 per
Mcf, a decrease of $2.11 per Mcf.
Other items impacting Operating Results for the fiscal year
ended September 30, 2009, were lower depletion and lease operating
expense (“LOE”) and higher general and administrative expenses
(“G&A”). Lower income taxes also had a positive impact on
earnings for the current fiscal year. The decrease in depletion
expense was mainly due to a lower depletable base resulting from
the ceiling test impairment recorded in the first quarter of fiscal
2009 described above. The decrease in LOE is due to lower steam
fuel costs in California and lower production taxes in the Gulf of
Mexico. The increase in G&A expenses is due to additional
staffing and other costs in the East division, and a bad debt
charge related to a customer bankruptcy in California.
Seneca continues to evaluate and aggressively develop the
Company’s significant Marcellus Shale acreage. Seneca flare tested
its second company-operated Marcellus Shale horizontal well at an
average rate of 4.7 MMcfd over a 7-day period. To date Seneca has
drilled four horizontal Marcellus Shale wells and fracture
stimulated and tested two, at a combined rate of over 10 MMcfd.
Pipeline and Storage
Segment
The Pipeline and Storage segment operations are carried out by
National Fuel Gas Supply Corporation (“Supply Corporation”) and
Empire Pipeline, Inc. (“Empire”). These companies provide natural
gas transportation and storage services to affiliated and
non-affiliated companies through an integrated system of pipelines
and underground natural gas storage fields in western New York and
western Pennsylvania.
The Pipeline and Storage segment’s earnings of $5.8 million, for
the quarter ended September 30, 2009, decreased $7.4 million when
compared with the same period in the prior fiscal year. The
decrease was primarily due to lower efficiency gas revenues, mainly
the result of lower commodity prices and lower transported volumes
during the quarter. Higher transportation revenues from the Empire
Connector, which was placed in service in mid December 2008,
partially offset this decrease. Higher interest expense and a lower
allowance for funds used during construction (“AFUDC”) in the
fourth quarter of the current fiscal year and a higher effective
tax rate also contributed to the decrease in earnings compared to
the prior year’s fourth quarter.
The Pipeline and Storage segment’s earnings of $47.4 million for
the fiscal year ended September 30, 2009, decreased $6.8 million
when compared with the prior fiscal year. Higher transportation
revenues, mainly the result of incremental revenue from the Empire
Connector, which was placed in service in mid December 2008 and the
addition of several new contracts for firm transportation services
were more than offset by lower efficiency gas revenues due to lower
natural gas prices, higher depreciation expense, higher interest
expense and lower AFUDC related to the construction of the Empire
Connector in the prior fiscal year.
Utility Segment
The Utility segment operations are carried out by National Fuel
Gas Distribution Corporation (“Distribution”), which sells or
transports natural gas to customers located in western New York and
northwestern Pennsylvania. The Utility segment’s loss of $1.6
million, or $0.02 per share, for the quarter ended September 30,
2009, compares to a loss of $0.8 million, or $0.01 per share, for
the quarter ended September 30, 2008.
The New York Division’s loss increased $2.4 million due to
higher interest expense. In the Pennsylvania Division, earnings
increased $1.6 million. The increase is mainly due to lower
operating expenses compared to the fourth quarter of fiscal 2008
partially offset by higher interest expense.
The Utility segment’s earnings of $58.7 million for the fiscal
year ended September 30, 2009, decreased $2.8 million compared to
the fiscal year ended September 30, 2008. Earnings in
Distribution’s New York Division for the fiscal year ended
September 30, 2009, of $37.7 million decreased $3.0 million
compared to the prior year. Lower margins in the first quarter of
fiscal 2009 primarily as a result of the rate design change
approved by the New York State Public Service Commission’s December
28, 2007 rate order and higher interest expense more than offset
the impact of lower operating expenses.
For the fiscal year ended September 30, 2009, earnings in
Distribution’s Pennsylvania Division of $21.0 million were nearly
flat compared to the prior year. The positive impact of colder
weather and lower operating expenses was mostly offset by lower
customer usage per account and a higher effective tax rate.
Energy Marketing
National Fuel Resources, Inc. (“NFR”) comprises the Company’s
Energy Marketing segment. NFR markets natural gas to industrial,
wholesale, commercial, public authority and residential customers
primarily in western and central New York and northwestern
Pennsylvania, offering competitively priced natural gas to its
customers.
The Energy Marketing segment’s loss for the quarter ended
September 30, 2009, of $0.3 million decreased from a loss of $1.2
million for the fourth quarter of last year. The improved results
are primarily due to an increase in margin.
The Energy Marketing segment’s earnings for the fiscal year
ended September 30, 2009, of $7.2 million increased $1.3 million
compared to the prior year. An increase in margin and lower
operating expenses due to lower bad debt expense were somewhat
offset by higher state income taxes.
The Energy Marketing segment’s reported sales volume for fiscal
2009 was 4.7 Bcf higher than the reported sales volume for fiscal
2008. The increase in sales volume was due to physical gas sales
transactions that NFR undertook at the Niagara pipeline delivery
point to offset certain basis risks that NFR was exposed to under
fixed basis commodity purchase contracts for Appalachian
production. Such offsetting transactions had the effect of
increasing revenue and volume sold, but the impact on earnings was
minimal.
Corporate and All
Other
The Corporate and All Other category includes the following
active, wholly owned subsidiaries of the Company: Highland Forest
Resources, Inc., a corporation that markets high quality hardwoods
from New York and Pennsylvania land holdings; Horizon LFG, Inc., a
corporation engaged, through subsidiaries, in the purchase,
processing, transportation and sale of landfill gas; and Horizon
Power, Inc., a corporation that develops and owns independent
electric generation facilities that are fueled by natural gas or
landfill gas.
The Corporate and All Other category had a loss of $4.9 million
for the quarter ended September 30, 2009 compared to a loss of $6.2
million in the prior year’s fourth quarter. The comparability of
the results for the quarter ended September 30, 2009, is impacted
by a $2.8 million impairment of one of the landfill gas sites that
transported landfill gas to a now idle manufacturing plant in
Oakridge, Missouri. Excluding this item, Operating Results
increased $4.1 million. Higher margins from timber operations due
to the lower cost basis of the current quarter’s harvest, lower
operating expenses, higher interest income and lower income taxes
were the primary reasons for the decreased loss. The positive
impact of these items was partially offset by lower income from
unconsolidated subsidiaries and higher interest expense.
The Corporate and All Other category loss for the fiscal year
ended September 30, 2009, was $2.2 million, compared to the prior
year’s earnings of $0.6 million. The comparability of the results
for the fiscal year ended September 30, 2009, is impacted by a $0.6
million gain in the second quarter of fiscal 2008 related to the
sale of a gas-powered turbine that the Company had previously
planned to use in the development of a co-generation plant, and in
fiscal 2009, by the $2.8 million landfill gas site impairment
charge described above, a $2.3 million gain recognized on executive
life insurance policies and a $1.1 million impairment in the value
of Horizon Power’s 50 percent investment in Energy Systems North
East, LLC, a partnership that owns an 80-megawatt combined cycle,
natural gas-fired power plant in the town of North East,
Pennsylvania. Excluding these items, Operating Results were a loss
of $0.7 million for the current fiscal year compared to break even
results in fiscal 2008. Lower margins from the timber operations as
a result of decreased sales volumes and prices, lower margins in
the landfill gas operations, a decrease in income from
unconsolidated subsidiaries, lower interest income and higher
interest expense contributed to the decrease in Operating Results.
The non-recurrence of expenses related to the proxy contest in
fiscal 2008, and lower income taxes partially offset the decrease
in Operating Results.
EARNINGS GUIDANCE
The Company is revising its GAAP earnings guidance for fiscal
2010 to a range of $2.30 to $2.65 per share. The previous guidance
range had been $2.30 to $2.60. This guidance includes an increase
in the upper end of our oil and gas production range for the
Exploration and Production segment. The production range is now 42
to 50 Bcfe and is based on an assumed average NYMEX price,
exclusive of basis differential, of $5.00 per MMBtu for natural gas
and $75.00 per Bbl for crude oil. The previous production range was
42 to 48 Bcfe.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, November 6,
2009, at 11 a.m. (Eastern Time) to discuss this announcement. There
are two ways to access this call. For those with Internet access,
visit the investor relations page at National Fuel’s Web site at
investor.nationalfuelgas.com.
For those without Internet access, access is also provided by
dialing (toll-free) 1-866-578-5801, and using the passcode
“70464736.” For those unable to listen to the live conference call,
a replay will be available at approximately 2 p.m. (Eastern Time)
at the same Web site link and by phone at (toll free) 888-286-8010
using passcode “75925727.” Both the webcast and telephonic replay
will be available until the close of business on Friday, November
13, 2009.
National Fuel is an integrated energy company with $4.8 billion
in assets comprised of the following four operating segments:
Exploration and Production, Pipeline and Storage, Utility, and
Energy Marketing. Additional information about National Fuel is
available on its Internet Web site:
http://www.nationalfuelgas.com or through its investor
information service at 1-800-334-2188.
The Securities and Exchange Commission (the “SEC”) currently
permits oil and gas companies, in their filings with the SEC, to
disclose only proved reserves that a company has demonstrated by
actual production or conclusive formation tests to be economically
and legally producible under existing economic and operating
conditions. The Company uses the terms “probable,” “possible,”
“resource potential” and other descriptions of volumes of reserves
or resources potentially recoverable through additional drilling or
recovery techniques that the SEC’s guidelines would prohibit us
from including in filings with the SEC. These estimates are by
their nature more speculative than estimates of proved reserves
and, accordingly, are subject to substantially greater risk of
being actually realized. Investors are urged to consider closely
the disclosure in our Form 10-K and Forms 10-Q, available at
www.nationalfuelgas.com. You can also obtain these forms on the
SEC’s website at www.sec.gov.
Certain statements contained herein, including those regarding
estimated future earnings, and statements that are identified by
the use of the words “anticipates,” “estimates,” “expects,”
“forecasts,” “intends,” “plans,” “predicts,” “projects,”
“believes,” “seeks,” “will,” “may” and similar expressions, are
“forward-looking statements” as defined by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
risks and uncertainties, which could cause actual results or
outcomes to differ materially from those expressed in the
forward-looking statements. The Company’s expectations, beliefs and
projections contained herein are expressed in good faith and are
believed to have a reasonable basis, but there can be no assurance
that such expectations, beliefs or projections will result or be
achieved or accomplished. In addition to other factors, the
following are important factors that could cause actual results to
differ materially from those discussed in the forward-looking
statements: financial and economic conditions, including the
availability of credit, and their effect on the Company’s ability
to obtain financing on acceptable terms for working capital,
capital expenditures and other investments; occurrences affecting
the Company’s ability to obtain financing under credit lines or
other credit facilities or through the issuance of commercial
paper, other short-term notes or debt or equity securities,
including any downgrades in the Company’s credit ratings and
changes in interest rates and other capital market conditions;
changes in economic conditions, including global, national or
regional recessions, and their effect on the demand for, and
customers’ ability to pay for, the Company’s products and services;
the creditworthiness or performance of the Company’s key suppliers,
customers and counterparties; economic disruptions or uninsured
losses resulting from terrorist activities, acts of war, major
accidents, fires, hurricanes, other severe weather, pest
infestation or other natural disasters; changes in actuarial
assumptions, the interest rate environment and the return on
plan/trust assets related to the Company’s pension and other
post-retirement benefits, which can affect future funding
obligations and costs and plan liabilities; changes in demographic
patterns and weather conditions; changes in the availability and/or
price of natural gas or oil and the effect of such changes on the
accounting treatment of derivative financial instruments or the
valuation of the Company’s natural gas and oil reserves;
impairments under the SEC’s full cost ceiling test for natural gas
and oil reserves; uncertainty of oil and gas reserve estimates;
factors affecting the Company’s ability to successfully identify,
drill for and produce economically viable natural gas and oil
reserves, including among others geology, lease availability,
weather conditions, shortages, delays or unavailability of
equipment and services required in drilling operations, and the
need to obtain governmental approvals and permits and comply with
environmental laws and regulations; significant differences between
the Company’s projected and actual production levels for natural
gas or oil; changes in the availability and/or price of derivative
financial instruments; changes in the price differentials between
oil having different quality and/or different geographic locations,
or changes in the price differentials between natural gas having
different heating values and/or different geographic locations;
inability to obtain new customers or retain existing ones;
significant changes in competitive factors affecting the Company;
changes in laws and regulations to which the Company is subject,
including tax, environmental, safety and employment laws and
regulations; governmental/regulatory actions, initiatives and
proceedings, including those involving acquisitions, financings,
rate cases (which address, among other things, allowed rates of
return, rate design and retained natural gas), affiliate
relationships, industry structure, franchise renewal, and
environmental/safety requirements; unanticipated impacts of
restructuring initiatives in the natural gas and electric
industries; significant differences between the Company’s projected
and actual capital expenditures and operating expenses, and
unanticipated project delays or changes in project costs or plans;
the nature and projected profitability of pending and potential
projects and other investments, and the ability to obtain necessary
governmental approvals and permits; ability to successfully
identify and finance acquisitions or other investments and ability
to operate and integrate existing and any subsequently acquired
business or properties; significant changes in tax rates or
policies or in rates of inflation or interest; significant changes
in the Company’s relationship with its employees or contractors and
the potential adverse effects if labor disputes, grievances or
shortages were to occur; changes in accounting principles or the
application of such principles to the Company; the cost and effects
of legal and administrative claims against the Company or activist
shareholder campaigns to effect changes at the Company; increasing
health care costs and the resulting effect on health insurance
premiums and on the obligation to provide other post-retirement
benefits; or increasing costs of insurance, changes in coverage and
the ability to obtain insurance. The Company disclaims any
obligation to update any forward-looking statements to reflect
events or circumstances after the date hereof.
NATIONAL FUEL GAS COMPANY RECONCILIATION OF
CURRENT AND PRIOR YEAR GAAP EARNINGS QUARTER ENDED SEPTEMBER
30, 2009 Exploration &
Pipeline & Energy
Corporate / (Thousands of Dollars) Production
Storage Utility Marketing
All Other Consolidated
Fourth
quarter 2008 GAAP earnings $ 38,227 $ 13,218 $ (756 ) $ (1,191
) $ (6,232 ) $ 43,266
Drivers of operating results
Higher (lower) crude oil prices (9,077 ) (9,077 ) Higher (lower)
natural gas prices (13,377 ) (13,377 ) Higher (lower) natural gas
production 6,797 6,797 Higher (lower) crude oil production 7,381
7,381 Higher (lower) processing plant revenues (888 ) (888 )
Derivative mark to market adjustment (1,555 ) (1,555 ) Lower
(higher) lease operating expenses (499 ) (499 ) Lower (higher)
depreciation / depletion (998 ) (297 ) (1,295 ) Higher
(lower) transportation revenues 2,124 2,124 Higher (lower)
efficiency gas revenues (3,102 ) (3,102 ) Lower (higher) operating
expenses 1,351 (333 ) 1,849 1,280 4,147 Higher (lower)
income from unconsolidated subsidiaries (514 ) (514 ) Higher
(lower) margins 903 2,836 3,739 Higher (lower) AFUDC* (2,656
) (2,656 ) Higher (lower) interest income (909 ) 1,263 354 (Higher)
lower interest expense 686 (1,954 ) (2,395 ) (1,771 ) (5,434 )
Lower (higher) income tax expense / effective tax rate 1,050
(1,491 ) 829 388 All other / rounding (61 )
267 (337 )
(55 ) 171
(15 )
Fourth quarter 2009 operating results 28,128
5,776 (1,639 ) (343 ) (2,138 ) 29,784
Items impacting
comparability: Impairment of landfill gas assets
(2,786 ) (2,786 )
Fourth
quarter 2009 GAAP earnings $ 28,128 $
5,776 $ (1,639 ) $ (343 )
$ (4,924 ) $ 26,998 *
AFUDC = Allowance for Funds Used During Construction
NATIONAL FUEL GAS COMPANY RECONCILIATION OF CURRENT AND
PRIOR YEAR GAAP EARNINGS PER SHARE QUARTER ENDED SEPTEMBER
30, 2009
Exploration & Pipeline &
Energy Corporate / Production Storage
Utility Marketing All Other
Consolidated
Fourth quarter 2008 GAAP earnings
$ 0.46 $ 0.16 $ (0.01 ) $ (0.01 ) $ (0.08 ) $ 0.52
Drivers of operating results Higher (lower) crude oil prices
(0.11 ) (0.11 ) Higher (lower) natural gas prices (0.16 ) (0.16 )
Higher (lower) natural gas production 0.08 0.08 Higher (lower)
crude oil production 0.09 0.09 Higher (lower) processing plant
revenues (0.01 ) (0.01 ) Derivative mark to market adjustment (0.02
) (0.02 ) Lower (higher) lease operating expenses (0.01 ) 0.02 0.01
Lower (higher) depreciation / depletion (0.01 ) - (0.01 )
Higher (lower) transportation revenues 0.03 0.03 Higher (lower)
efficiency gas revenues (0.04 ) (0.04 ) Lower (higher) operating
expenses 0.02 - 0.02 - 0.04 Higher (lower) income from
unconsolidated subsidiaries (0.01 ) (0.01 ) Higher (lower)
margins 0.01 0.03 0.04 Higher (lower) AFUDC* (0.03 ) (0.03 )
Higher (lower) interest income (0.01 ) 0.02 0.01 (Higher) lower
interest expense 0.01 (0.02 ) (0.03 ) (0.02 ) (0.06 ) Lower
(higher) income tax expense / effective tax rate 0.01 (0.02 ) 0.01
- All other / rounding (including impact of lower weighted
average shares) - (0.01 )
- -
- (0.01 )
Fourth
quarter 2009 operating results 0.34 0.07 (0.02 ) - (0.03 ) 0.36
Items impacting comparability: Impairment of landfill gas
assets
(0.03 )
(0.03 )
Fourth quarter 2009 GAAP earnings $ 0.34
$ 0.07 $ (0.02 ) $
- $ (0.06 ) $ 0.33
* AFUDC = Allowance for Funds Used During Construction
NATIONAL FUEL GAS COMPANY RECONCILIATION OF
CURRENT AND PRIOR YEAR GAAP EARNINGS YEAR ENDED SEPTEMBER
30, 2009 Exploration &
Pipeline & Energy
Corporate / (Thousands of Dollars) Production
Storage Utility Marketing
All Other Consolidated
Fiscal
2008 GAAP earnings $ 146,612 $ 54,148 $ 61,472 $ 5,889 $ 607 $
268,728
Items impacting comparability: Gain on sale of
turbine
(586 ) (586
)
Fiscal 2008 operating results 146,612 54,148 61,472 5,889
21 268,142
Drivers of operating results Higher
(lower) crude oil prices (36,858 ) (36,858 ) Higher (lower) natural
gas prices (30,579 ) (30,579 ) Higher (lower) natural gas
production (342 ) (342 ) Higher (lower) crude oil production 16,110
16,110 Higher (lower) processing plant revenues (3,827 ) (3,827 )
Lower (higher) lease operating expenses 2,646 2,646 Lower (higher)
depreciation / depletion 913 (1,459 ) (546 ) Higher (lower)
transportation revenues 9,719 9,719 Higher (lower) efficiency gas
revenues (7,487 ) (7,487 ) Lower (higher) operating expenses (1,680
) 3,544 359 4,945 7,168 Higher (lower) usage (2,307 ) (2,307
) Colder weather in Pennsylvania 2,146 2,146 Regulatory true-up
adjustments (222 ) (222 ) Higher (lower) income from
unconsolidated subsidiaries (1,997 ) (1,997 ) Higher (lower)
margins (1,419 ) 1,514 (4,051 ) (3,956 ) Higher (lower)
AFUDC* (1,994 ) (1,994 ) Higher (lower) interest income (5,519 )
(632 ) (6,151 ) (Higher) lower interest expense 5,381 (5,069 )
(3,076 ) (3,111 ) (5,875 ) Lower (higher) income tax expense
/ effective tax rate 4,229 (1,501 ) (391 ) 4,304 6,641 All
other / rounding 883 (500 )
27 (205 )
(162 ) 43
Fiscal 2009 operating results 97,969 47,358 58,664 7,166
(683 ) 210,474
Items impacting comparability: Gain on life
insurance policies 2,312 2,312 Impairment of investment in
partnership (1,085 ) (1,085 ) Impairment of landfill gas assets
(2,786 ) (2,786 ) Impairment of oil and gas properties
(108,207 )
(108,207 )
Fiscal 2009 GAAP earnings $ (10,238 ) $ 47,358
$ 58,664 $ 7,166
$ (2,242 ) $ 100,708
* AFUDC = Allowance for Funds Used During Construction
NATIONAL FUEL GAS COMPANY RECONCILIATION OF
CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE YEAR ENDED
SEPTEMBER 30, 2009 Exploration
& Pipeline &
Energy Corporate / Production
Storage Utility Marketing
All Other Consolidated
Fiscal 2008
GAAP earnings $ 1.73 $ 0.64 $ 0.73 $ 0.07 $ 0.01 $ 3.18
Items impacting comparability: Gain on sale of turbine
(0.01 ) (0.01 )
Fiscal 2008 operating results 1.73 0.64 0.73 0.07 - 3.17
Drivers of operating results Higher (lower) crude oil
prices (0.46 ) (0.46 ) Higher (lower) natural gas prices (0.38 )
(0.38 ) Higher (lower) natural gas production - - Higher (lower)
crude oil production 0.20 0.20 Higher (lower) processing plant
revenues (0.05 ) (0.05 ) Lower (higher) lease operating expenses
0.03 0.03 Lower (higher) depreciation / depletion 0.01 (0.02 )
(0.01 ) Higher (lower) transportation revenues 0.12 0.12
Higher (lower) efficiency gas revenues (0.09 ) (0.09 ) Lower
(higher) operating expenses (0.02 ) 0.04 - 0.06 0.08 Higher
(lower) usage (0.03 ) (0.03 ) Colder weather in Pennsylvania 0.03
0.03 Regulatory true-up adjustments - - Higher (lower)
income from unconsolidated subsidiaries (0.02 ) (0.02 )
Higher (lower) margins (0.02 ) 0.02 (0.05 ) (0.05 ) Higher
(lower) AFUDC* (0.02 ) (0.02 ) Higher (lower) interest income (0.07
) (0.01 ) (0.08 ) (Higher) lower interest expense 0.07 (0.06 )
(0.04 ) (0.04 ) (0.07 ) Lower (higher) income tax expense /
effective tax rate 0.05 (0.02 ) - 0.05 0.08 All other /
rounding (including impact of lower weighted average shares)
0.10 0.02
0.04 - (0.01 )
0.15
Fiscal 2009 operating
results 1.21 0.59 0.73 0.09 (0.02 ) 2.60
Items impacting
comparability: Gain on life insurance policies 0.03 0.03
Impairment of investment in partnership (0.01 ) (0.01 ) Impairment
of landfill gas assets (0.03 ) (0.03 ) Impairment of oil and gas
properties (1.34 )
(1.34 )
Fiscal 2009 GAAP earnings $ (0.13 ) $
0.59 $ 0.73 $ 0.09
$ (0.03 ) $ 1.25 * AFUDC
= Allowance for Funds Used During Construction
NATIONAL
FUEL GAS COMPANY AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts) Three
Months Ended Twelve Months Ended September 30, September 30,
(Unaudited) (Unaudited)
SUMMARY OF OPERATIONS
2009 2008 2009
2008 Operating Revenues $ 278,933 $ 397,858 $
2,057,852 $ 2,400,361 Operating Expenses:
Purchased Gas 60,611 152,816 1,001,782 1,235,157 Operation and
Maintenance 92,251 107,228 402,856 432,871 Property, Franchise and
Other Taxes 15,454 17,379 72,163 75,585 Depreciation, Depletion and
Amortization 45,695 41,286 173,410 170,623 Impairment of Oil and
Gas Producing Properties - -
182,811 - 214,011 318,709 1,833,022 1,914,236
Operating Income 64,922 79,149 224,830 486,125 Other
Income (Expense): Income from Unconsolidated Subsidiaries 646 1,437
3,366 6,303 Impairment of Investment in Partnership - - (1,804 ) -
Interest Income 1,418 2,459 5,776 10,815 Other Income 118 2,394
6,576 7,376 Interest Expense on Long-Term Debt (22,062 ) (18,055 )
(79,419 ) (70,099 ) Other Interest Expense (2,484 )
339 (7,497 ) (3,870 ) Income Before
Income Taxes 42,558 67,723 151,828 436,650 Income Tax
Expense 15,560 24,457 51,120
167,922
Net Income Available for
Common Stock $ 26,998 $ 43,266 $ 100,708 $
268,728
Earnings Per Common Share: Basic $
0.34 $ 0.54 $ 1.26 $ 3.27 Diluted $
0.33 $ 0.52 $ 1.25 $ 3.18
Weighted Average Common Shares: Used in Basic Calculation
80,240,861 80,858,668 79,649,965
82,304,335 Used in Diluted Calculation
81,607,864 82,896,107 80,628,685
84,474,839
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) September 30,
September 30, (Thousands of Dollars) 2009
2008
ASSETS Property,
Plant and Equipment $ 5,183,527 $ 4,873,969 Less - Accumulated
Depreciation, Depletion and Amortization 2,051,482
1,719,869 Net Property, Plant and Equipment
3,132,045 3,154,100
Current Assets: Cash and Temporary Cash Investments 408,053 68,239
Cash Held in Escrow 2,000 - Hedging Collateral Deposits 848 1
Receivables - Net 144,466 185,397 Unbilled Utility Revenue 18,884
24,364 Gas Stored Underground 55,862 87,294 Materials and Supplies
- at average cost 24,520 31,317 Unrecovered Purchased Gas Costs -
37,708 Other Current Assets 68,474 65,158 Deferred Income Taxes
53,863 - Total Current Assets
776,970 499,478 Other
Assets: Recoverable Future Taxes 138,435 82,506 Unamortized Debt
Expense 14,815 13,978 Other Regulatory Assets 530,913 189,587
Deferred Charges 2,737 4,417 Other Investments 78,503 80,640
Investments in Unconsolidated Subsidiaries 16,257 16,279 Goodwill
5,476 5,476 Intangible Assets 21,536 26,174 Prepaid Post-Retirement
Benefit Costs - 21,034 Fair Value of Derivative Financial
Instruments 44,817 28,786 Other 6,625
7,732 Total Other Assets 860,114
476,609 Total Assets $ 4,769,129 $
4,130,187
CAPITALIZATION AND LIABILITIES
Capitalization: Comprehensive Shareholders' Equity Common Stock, $1
Par Value Authorized - 200,000,000 Shares; Issued and Outstanding -
80,499,915 Shares and 79,120,544 Shares, Respectively $ 80,500 $
79,121 Paid in Capital 602,839 567,716 Earnings Reinvested in the
Business 948,293 953,799 Total
Common Shareholders' Equity Before Items of Other Comprehensive
Income (Loss) 1,631,632 1,600,636 Accumulated Other Comprehensive
Income (Loss) (42,396 ) 2,963 Total
Comprehensive Shareholders' Equity 1,589,236 1,603,599 Long-Term
Debt, Net of Current Portion 1,249,000
999,000 Total Capitalization 2,838,236
2,602,599 Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper - - Current Portion of
Long-Term Debt - 100,000 Accounts Payable 90,723 142,520 Amounts
Payable to Customers 105,778 2,753 Dividends Payable 26,967 25,714
Interest Payable on Long-Term Debt 32,031 22,114 Customer Advances
24,555 33,017 Other Accruals and Current Liabilities 36,305 45,220
Deferred Income Taxes - 1,871 Fair Value of Derivative Financial
Instruments 2,148 1,362 Total
Current and Accrued Liabilities 318,507
374,571 Deferred Credits: Deferred Income Taxes
663,876 634,372 Taxes Refundable to Customers 67,046 18,449
Unamortized Investment Tax Credit 3,989 4,691 Cost of Removal
Regulatory Liability 105,546 103,100 Other Regulatory Liabilities
120,229 91,933 Pension and Other Post-Retirement Liabilities
415,888 78,909 Asset Retirement Obligations 91,373 93,247 Other
Deferred Credits 144,439 128,316
Total Deferred Credits 1,612,386
1,153,017 Commitments and Contingencies -
- Total Capitalization and Liabilities $ 4,769,129
$ 4,130,187
NATIONAL FUEL GAS
COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited) Twelve
Months Ended September 30, (Thousands of Dollars)
2009 2008
Operating Activities: Net Income Available for
Common Stock $ 100,708 $ 268,728 Adjustments to Reconcile Net
Income to Net Cash Provided by Operating Activities: Impairment of
Oil and Gas Producing Properties 182,811 - Depreciation, Depletion
and Amortization 173,410 170,623 Deferred Income Taxes (2,521 )
72,496 Income from Unconsolidated Subsidiaries, Net of Cash
Distributions (466 ) 1,977 Impairment of Investment in Partnership
1,804 - Excess Tax Benefits Associated with Stock-Based
Compensation Awards (5,927 ) (16,275 ) Other 17,443 4,858 Change
in: Hedging Collateral Deposits (847 ) 4,065 Receivables and
Unbilled Utility Revenue 47,658 (16,815 ) Gas Stored Underground
and Materials and Supplies 43,598 (22,116 ) Unrecovered Purchased
Gas Costs 37,708 (22,939 ) Prepayments and Other Current Assets
2,921 (36,376 ) Accounts Payable (61,149 ) 32,763 Amounts Payable
to Customers 103,025 (7,656 ) Customer Advances (8,462 ) 10,154
Other Accruals and Current Liabilities 17,059 (3,641 ) Other Assets
(35,140 ) (11,887 ) Other Liabilities
(4,201 ) 54,817 Net Cash
Provided by Operating Activities $ 609,432
$ 482,776 Investing
Activities: Capital Expenditures ($309,930 ) ($397,734 ) Investment
in Subsidiary, Net of Cash Acquired (34,933 ) - Investment in
Partnership (1,317 ) - Cash Held in Escrow (2,000 ) 58,397 Net
Proceeds from Sale of Oil and Gas Producing Properties 3,643 5,969
Other (2,806 )
4,376 Net Cash Used in Investing Activities
($347,343 )
($328,992 ) Financing Activities: Excess Tax Benefits
Associated with Stock-Based Compensation Awards $ 5,927 $ 16,275
Shares Repurchased under Repurchase Plan - (237,006 ) Net Proceeds
from Issuance of Long-Term Debt 247,780 296,655 Reduction of
Long-Term Debt (100,000 ) (200,024 ) Dividends Paid on Common Stock
(104,158 ) (103,683 ) Proceeds From Issuance of Common Stock
28,176
17,432 Net Cash Provided by (Used In) Financing Activities
$ 77,725
($210,351 ) Net Increase / (Decrease) in Cash and Temporary Cash
Investments 339,814 (56,567 ) Cash and Temporary Cash Investments
at Beginning of Period 68,239
124,806 Cash and Temporary Cash
Investments at September 30 $ 408,053
$ 68,239
NATIONAL FUEL GAS
COMPANY AND SUBSIDIARIES SEGMENT OPERATING
RESULTS AND STATISTICS (UNAUDITED)
Three Months Ended Twelve Months
Ended (Thousands of Dollars, except per share amounts) September
30, September 30,
EXPLORATION AND PRODUCTION
SEGMENT
2009 2008 Variance
2009 2008 Variance Operating
Revenues $ 101,349 $ 117,931 $ (16,582
) $ 382,758 $ 466,760 $ (84,002 )
Operating Expenses: Operation and Maintenance: General and
Administrative Expense 6,910 5,925 985 29,374 24,600 4,774 Lease
Operating Expense 17,013 14,223 2,790 53,957 55,335 (1,378 ) All
Other Operation and Maintenance Expense 2,460 5,523 (3,063 ) 11,059
13,250 (2,191 ) Property, Franchise and Other Taxes (Lease
Operating Expense) 935 2,956 (2,021 ) 8,657 11,350 (2,693 )
Depreciation, Depletion and Amortization 23,658 22,122 1,536 90,816
92,221 (1,405 ) Impairment of Oil and Gas Producing Properties
- - -
182,811 - 182,811
50,976 50,749
227 376,674 196,756
179,918 Operating Income 50,373
67,182 (16,809 ) 6,084 270,004 (263,920 ) Other Income
(Expense): Interest Income 244 1,642 (1,398 ) 2,430 10,921 (8,491 )
Other Income - - - - 18 (18 ) Other Interest Expense (7,915
) (8,970 ) 1,055 (33,368
) (41,645 ) 8,277 Income
(Loss) Before Income Taxes 42,702 59,854 (17,152 ) (24,854 )
239,298 (264,152 ) Income Tax Expense (Benefit) 14,574
21,627 (7,053 )
(14,616 ) 92,686 (107,302 ) Net
Income (Loss) $ 28,128 $ 38,227 $
(10,099 ) $ (10,238 ) $ 146,612 $ (156,850 )
Net Income (Loss) Per Share (Diluted) $ 0.34 $
0.46 $ (0.12 ) $ (0.13 ) $ 1.73
$ (1.86 ) Three Months Ended
Twelve Months Ended September 30, September 30,
PIPELINE AND STORAGE SEGMENT
2009 2008 Variance
2009 2008 Variance Revenues from
External Customers $ 31,573 $ 33,181 $ (1,608 ) $ 137,478 $ 135,052
$ 2,426 Intersegment Revenues 19,770
20,164 (394 ) 81,795
81,504 291 Total Operating
Revenues 51,343 53,345
(2,002 ) 219,273 216,556
2,717 Operating Expenses: Purchased Gas
(5 ) 2 (7 ) 132 (10 ) 142 Operation and Maintenance 20,268 19,755
513 70,814 70,632 182 Property, Franchise and Other Taxes 4,681
4,224 457 17,470 16,763 707 Depreciation, Depletion and
Amortization 8,699 8,242
457 35,115 32,871
2,244 33,643
32,223 1,420 123,531
120,256 3,275
Operating Income 17,700 21,122 (3,422 ) 95,742 96,300 (558 )
Other Income (Expense): Interest Income 52 116 (64 ) 995 843 152
Other Income (411 ) 2,251 (2,662 ) 2,780 4,796 (2,016 ) Interest
Expense on Long-Term Debt - - - - (31 ) 31 Other Interest Expense
(6,821 ) (3,813 ) (3,008 )
(21,580 ) (13,752 ) (7,828 )
Income Before Income Taxes 10,520 19,676 (9,156 ) 77,937
88,156 (10,219 ) Income Tax Expense 4,744
6,458 (1,714 ) 30,579
34,008 (3,429 ) Net Income $
5,776 $ 13,218 $ (7,442 ) $ 47,358
$ 54,148 $ (6,790 ) Net Income
Per Share (Diluted) $ 0.07 $ 0.16 $
(0.09 ) $ 0.59 $ 0.64 $ (0.05 )
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED)
Three Months Ended Twelve Months Ended (Thousands of Dollars,
except per share amounts) September 30, September 30,
UTILITY SEGMENT
2009 2008 Variance
2009 2008 Variance Revenues from
External Customers $ 87,587 $ 127,464 $ (39,877 ) $ 1,097,550 $
1,194,657 $ (97,107 ) Intersegment Revenues 2,135
2,044 91 15,474
15,612 (138 ) Total
Operating Revenues 89,722 129,508
(39,786 ) 1,113,024
1,210,269 (97,245 ) Operating
Expenses: Purchased Gas 31,185 65,215 (34,030 ) 713,174 800,474
(87,300 ) Operation and Maintenance 36,104 44,765 (8,661 ) 191,192
202,745 (11,553 ) Property, Franchise and Other Taxes 9,392 9,726
(334 ) 44,215 45,476 (1,261 ) Depreciation, Depletion and
Amortization 10,005 9,661
344 39,675 39,113
562 86,686 129,367
(42,681 ) 988,256
1,087,808 (99,552 ) Operating Income
3,036 141 2,895 124,768 122,461 2,307 Other Income
(Expense): Interest Income 1,138 1,148 (10 ) 2,486 1,836 650 Other
Income 161 278 (117 ) 924 1,161 (237 ) Other Interest Expense
(9,597 ) (5,913 ) (3,684 )
(32,417 ) (27,683 ) (4,734 )
Income (Loss) Before Income Taxes (5,262 ) (4,346 ) (916 )
95,761 97,775 (2,014 ) Income Tax Expense (Benefit) (3,623 )
(3,590 ) (33 ) 37,097
36,303 794 Net Income
(Loss) $ (1,639 ) $ (756 ) $ (883 ) $ 58,664
$ 61,472 $ (2,808 ) Net Income (Loss)
Per Share (Diluted) $ (0.02 ) $ (0.01 ) $ (0.01 ) $
0.73 $ 0.73 $ -
Three Months Ended Twelve Months Ended September 30,
September 30,
ENERGY MARKETING SEGMENT
2009 2008 Variance
2009 2008 Variance Revenues from
External Customers $ 47,318 $ 109,821 $ (62,503 ) $ 397,763 $
549,932 $ (152,169 ) Intersegment Revenues 558
1,300 (742 ) 558
1,300 (742 ) Total Operating Revenues
47,876 111,121
(63,245 ) 398,321 551,232
(152,911 ) Operating Expenses: Purchased Gas 47,292
111,926 (64,634 ) 380,677 535,917 (155,240 ) Operation and
Maintenance 1,446 1,396 50 6,014 6,566 (552 ) Property, Franchise
and Other Taxes 19 18 1 41 50 (9 ) Depreciation, Depletion and
Amortization 11 11
- 42 42 -
48,768 113,351
(64,583 ) 386,774 542,575
(155,801 ) Operating Income (Loss) (892 )
(2,230 ) 1,338 11,547 8,657 2,890 Other Income (Expense):
Interest Income 12 30 (18 ) 79 323 (244 ) Other Income 24 58 (34 )
225 264 (39 ) Other Interest Expense (6 ) (42
) 36 (215 ) (175 )
(40 ) Income (Loss) Before Income Taxes (862 ) (2,184
) 1,322 11,636 9,069 2,567 Income Tax Expense (Benefit) (519
) (993 ) 474 4,470
3,180 1,290 Net Income
(Loss) $ (343 ) $ (1,191 ) $ 848 $ 7,166
$ 5,889 $ 1,277 Net
Income (Loss) Per Share (Diluted) $ - $ (0.01 )
$ 0.01 $ 0.09 $ 0.07 $
0.02
NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES SEGMENT OPERATING RESULTS AND
STATISTICS (UNAUDITED)
Three Months Ended Twelve Months
Ended September 30, September 30,
ALL OTHER
2009 2008 Variance
2009 2008 Variance Revenues from
External Customers $ 10,887 $ 9,262 $ 1,625 $ 41,409 $ 53,265 $
(11,856 ) Intersegment Revenues - 3,864
(3,864 ) 3,890
14,115 (10,225 ) Total Operating Revenues
10,887 13,126
(2,239 ) 45,299 67,380
(22,081 ) Operating Expenses: Purchased Gas 3,918
2,942 976 8,456 10,883 (2,427 ) Operation and Maintenance 7,395
12,609 (5,214 ) 35,547 45,998 (10,451 ) Property, Franchise and
Other Taxes 358 384 (26 ) 1,498 1,662 (164 ) Depreciation,
Depletion and Amortization 3,148 1,078
2,070 7,066
5,687 1,379 14,819
17,013 (2,194 ) 52,567
64,230 (11,663 )
Operating Income (Loss) (3,932 ) (3,887 ) (45 ) (7,268 ) 3,150
(10,418 ) Other Income (Expense): Income from Unconsolidated
Subsidiaries 646 1,437 (791 ) 3,366 6,303 (2,937 ) Impairment of
Investment in Partnership - - - (1,804 ) - (1,804 ) Interest Income
40 311 (271 ) 583 1,232 (649 ) Other Income 264 10 254 302 1,062
(760 ) Other Interest Expense (551 ) (855 )
304 (2,471 ) (3,782 )
1,311 Income (Loss) Before Income Taxes
(3,533 ) (2,984 ) (549 ) (7,292 ) 7,965 (15,257 ) Income Tax
Expense (Benefit) (1,508 ) (1,413 )
(95 ) (5,221 ) 2,186
(7,407 ) Net Income (Loss) $ (2,025 ) $ (1,571 )
$ (454 ) $ (2,071 ) $ 5,779 $ (7,850 )
Net Income (Loss) Per Share (Diluted) $ (0.02 ) $
(0.02 ) $ - $ (0.03 ) $ 0.07 $
(0.10 )
NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES SEGMENT OPERATING RESULTS AND
STATISTICS (UNAUDITED)
Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,
September 30,
CORPORATE
2009 2008 Variance
2009 2008 Variance Revenues from
External Customers $ 219 $ 199 $ 20 $ 894 $ 695 $ 199 Intersegment
Revenues 1,003 962
41 4,065 3,844
221 Total Operating Revenues 1,222
1,161 61 4,959
4,539 420
Operating Expenses: Operation and Maintenance 2,342 4,097 (1,755 )
10,024 18,013 (7,989 ) Property, Franchise and Other Taxes 69 71 (2
) 282 284 (2 ) Depreciation, Depletion and Amortization 174
172 2 696
689 7 2,585
4,340 (1,755 )
11,002 18,986 (7,984 )
Operating Loss (1,363 ) (3,179 ) 1,816 (6,043 ) (14,447 )
8,404 Other Income (Expense): Interest Income 22,518 20,304
2,214 84,761 85,084 (323 ) Other Income 80 (203 ) 283 2,345 75
2,270 Interest Expense on Long-Term Debt (22,062 ) (18,055 ) (4,007
) (79,419 ) (70,068 ) (9,351 ) Other Interest Expense (180 )
(1,160 ) 980 (3,004 )
(6,257 ) 3,253 Loss
Before Income Taxes (1,007 ) (2,293 ) 1,286 (1,360 ) (5,613 ) 4,253
Income Tax Expense (Benefit) 1,892
2,368 (476 ) (1,189 )
(441 ) (748 ) Net Loss $ (2,899 ) $ (4,661 )
$ 1,762 $ (171 ) $ (5,172 ) $ 5,001
Net Loss Per Share (Diluted) $ (0.04 ) $ (0.06
) $ 0.02 $ - $ (0.06 ) $ 0.06
Three Months Ended Twelve Months Ended
September 30, September 30,
INTERSEGMENT ELIMINATIONS
2009 2008 Variance
2009 2008 Variance Intersegment
Revenues $ (23,466 ) $ (28,334 ) $ 4,868 $
(105,782 ) $ (116,375 ) $ 10,593
Operating Expenses: Purchased Gas (21,779 ) (27,269 ) 5,490
(100,657 ) (112,107 ) 11,450 Operation and Maintenance
(1,687 ) (1,065 ) (622 ) (5,125
) (4,268 ) (857 ) (23,466 )
(28,334 ) 4,868 (105,782
) (116,375 ) 10,593
Operating Income - - - - - - Other Income (Expense):
Interest Income (22,586 ) (21,092 ) (1,494 ) (85,558 ) (89,424 )
3,866 Other Interest Expense 22,586
21,092 1,494 85,558
89,424 (3,866 ) Net
Income $ - $ - $ - $ -
$ - $ - Net Income Per Share
(Diluted) $ - $ - $ - $ -
$ - $ -
NATIONAL FUEL GAS
COMPANY AND SUBSIDIARIES SEGMENT INFORMATION
(Continued) (Thousands of Dollars)
Three Months Ended Twelve Months Ended
September 30, September 30, (Unaudited) (Unaudited) Increase
Increase 2009 2008 (Decrease) 2009
2008 (Decrease)
Capital
Expenditures: Exploration and Production (1) $ 36,612 $
51,644 $ (15,032 ) $ 188,290 $ 192,187 $ (3,897 ) Pipeline and
Storage (3) 15,264 59,316 (44,052 ) 50,118 165,520 (115,402 )
Utility 15,798 18,621 (2,823 ) 56,178 57,457 (1,279 ) Energy
Marketing -
18 (18 ) 25 39 (14
) Total Reportable Segments 67,674 129,599 (61,925 ) 294,611
415,203 (120,592 ) All Other (2) 5,401 182 5,219 8,406 1,485 6,921
Corporate 148 138 10 297 221 76 Eliminations - -
- (344 ) (2,407 ) 2,063
Total Capital Expenditures $ 73,223 $ 129,919 $ (56,696 ) $ 302,970
$ 414,502 $ (111,532 ) (1) Amount for
the quarter and year ended September 30, 2009 includes $9.1 million
of accrued capital expenditures, the majority of which was in the
Appalachian region. This amount has been excluded from the
Consolidated Statement of Cash Flows at
September 30, 2009 since it
represents a non-cash investing activity at that date.
(2) Amount for the quarter and year ended September 30, 2009
includes $0.7 million of accrued capital expenditures related to
the construction of the Midstream Covington Gathering System. This
amount has been excluded from the Consolidated Statement of Cash
Flows at September 30, 2009 since it represents a non-cash
investing activity at that date. (3) Amount for the year
ended September 30, 2009 excludes $16.8 million of capital
expenditures related to the Empire Connector project accrued at
September 30, 2008 and paid during the year ended September 30,
2009. This amount was excluded from the Consolidated Statement of
Cash Flows at September 30, 2008 since it represented a non-cash
investing activity at that date. The amount has been included in
the Consolidated Statement of Cash Flows at September 30, 2009.
DEGREE DAYS
Percent Colder (Warmer) Than:
Three Months Ended September 30
Normal 2009 2008 Normal Last Year
Buffalo, NY 178 143 102 (19.7 ) 40.2 Erie, PA 135 112 42
(17.0 ) 166.7
Twelve Months Ended September 30
Buffalo, NY 6,692 6,701 6,277 0.1 6.8 Erie, PA 6,243 6,176
5,779 (1.1 ) 6.9
NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES
EXPLORATION AND PRODUCTION
INFORMATION
Three Months Ended Twelve Months Ended
September 30, September 30, Increase Increase 2009
2008 (Decrease) 2009 2008 (Decrease)
Gas Production/Prices:
Production (MMcf) Gulf Coast 2,767 2,165 602 9,886 11,033 (1,147 )
West Coast 999 1,029 (30 ) 4,063 4,039 24 Appalachia 2,271
1,732 539 8,335 7,269
1,066 Total Production 6,037 4,926
1,111 22,284 22,341 (57 )
Average Prices (Per Mcf) Gulf Coast $ 3.61 $ 11.57 $ (7.96 ) $ 4.54
$ 10.03 $ (5.49 ) West Coast 3.36 9.54 (6.18 ) 3.91 8.71 (4.80 )
Appalachia 4.09 11.27 (7.18 ) 5.52 9.73 (4.21 ) Weighted Average
3.75 11.04 (7.29 ) 4.79 9.70 (4.91 ) Weighted Average after Hedging
6.00 9.41 (3.41 ) 6.94 9.05 (2.11 )
Oil Production/Prices:
Production (Thousands of Barrels) Gulf Coast 170 96 74 640 505 135
West Coast 691 635 56 2,674 2,460 214 Appalachia 17
17 - 59 105 (46 ) Total
Production 878 748 130 3,373
3,070 303 Average Prices (Per
Barrel) Gulf Coast $ 65.50 $ 123.54 $ (58.04 ) $ 54.58 $ 107.27 $
(52.69 ) West Coast 62.56 108.32 (45.76 ) 50.90 98.17 (47.27 )
Appalachia 59.08 114.20 (55.12 ) 56.15 97.40 (41.25 ) Weighted
Average 63.06 110.40 (47.34 ) 51.69 99.64 (47.95 ) Weighted Average
after Hedging 71.39 87.29 (15.90 ) 64.94 81.75 (16.81 )
Total Production (MMcfe) 11,305 9,414 1,891
42,522 40,761 1,761
Selected Operating Performance
Statistics:
General & Administrative Expense per Mcfe (1) $ 0.61 $ 0.63 $
(0.02 ) $ 0.69 $ 0.60 $ 0.09 Lease Operating Expense per Mcfe (1) $
1.59 $ 1.82 $ (0.23 ) $ 1.47 $ 1.64 $ (0.17 ) Depreciation,
Depletion & Amortization per Mcfe (1) $ 2.09 $ 2.35 $ (0.26 ) $
2.14 $ 2.26 $ (0.12 )
(1)
Refer to the table titled, "Segment Operating Results and
Statistics (Unaudited)," for the General and Administrative
Expense, Lease Operating Expense and Depreciation, Depletion, and
Amortization Expense for the Exploration and Production segment.
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
EXPLORATION AND PRODUCTION
INFORMATION
Hedging Summary for
Fiscal 2010
SWAPS
Volume
Average Hedge Price
Oil 1.7 MMBBL $74.59 / BBL Gas 15.6 BCF $6.90 / MCF
Hedging Summary for Fiscal 2011
SWAPS
Volume
Average Hedge Price
Oil 0.6 MMBBL $66.54 / BBL Gas 12.6 BCF $7.22 / MCF
Hedging Summary for Fiscal 2012
SWAPS
Volume
Average Hedge Price
Oil 0.3 MMBBL $62.95 / BBL Gas 8.8 BCF $7.49 / MCF
Gross Wells in Process of
Drilling
Twelve Months Ended September 30,
2009
Total
Gulf
West
East
Company
Wells in Process - Beginning of Period Exploratory
1.00 0.00 24.00 25.00 Developmental 1.00 1.00 123.00 125.00
Wells Commenced Exploratory 0.00 0.00 28.00 28.00
Developmental 0.00 26.00 198.00 224.00
Wells Completed
Exploratory 1.00 0.00 2.00 3.00 Developmental 0.00 27.00 250.00
277.00
Wells Plugged & Abandoned Exploratory 0.00 0.00
3.00 3.00 Developmental 1.00 0.00 0.00 1.00
Wells in Process -
End of Period Exploratory 0.00 0.00 47.00 47.00 Developmental
0.00 0.00 71.00 71.00
Net Wells in Process of
Drilling
Twelve Months Ended September 30,
2009
Total
Gulf
West
East
Company
Wells in Process - Beginning of Period Exploratory
0.29 0.00 23.00 23.29 Developmental 0.30 1.00 122.00 123.30
Wells Commenced Exploratory 0.00 0.00 21.50 21.50
Developmental 0.00 26.00 197.00 223.00
Wells Completed
Exploratory 0.29 0.00 2.00 2.29 Developmental 0.00 27.00 250.00
277.00
Wells Plugged & Abandoned Exploratory 0.00 0.00
3.00 3.00 Developmental 0.30 0.00 0.00 0.30
Wells in Process -
End of Period Exploratory 0.00 0.00 39.50 39.50 Developmental
0.00 0.00 69.00 69.00
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION
INFORMATION
Reserve Quantity Information
Gas MMcf U.S. Gulf Coast West Coast
Appalachian Total Region Region Region Company
Proved Developed and Undeveloped Reserves: September 30, 2008
24,641 72,860 128,398 225,899 Extensions and Discoveries 6,698
3,282 49,249 59,229 Revisions of Previous Estimates 9,407 488
(19,484 ) (9,589 ) Production (9,886 ) (4,063 ) (8,335 ) (22,284 )
Purchases of Minerals in Place - 392 - 392 Sales of Minerals in
Place (4,693 ) - - (4,693 )
September 30, 2009 26,167 72,959 149,828 248,954 Proved
Developed Reserves: September 30, 2008 18,242 68,453 115,824
202,519 September 30, 2009 18,051 67,603 120,579 206,233
Oil Mbbl U.S. Gulf Coast West Coast Appalachian Total Region
Region Region Company Proved Developed and
Undeveloped Reserves: September 30, 2008 1,358 44,444 396 46,198
Extensions and Discoveries 302 896 15 1,213 Revisions of Previous
Estimates 447 43 (41 ) 449 Production (640 ) (2,674 ) (59 ) (3,373
) Purchases of Minerals in Place - 2,115 - 2,115 Sales of Minerals
in Place (15 ) - - (15 )
September 30, 2009 1,452 44,824 311 46,587 Proved Developed
Reserves: September 30, 2008 1,313 37,224 357 38,894
September 30, 2009 1,194 37,711 285 39,190
NATIONAL FUEL
GAS COMPANY AND SUBSIDIARIES Pipeline
& Storage Throughput- (millions of cubic feet - MMcf)
Three Months Ended Twelve Months Ended
September 30, September 30, Increase 2009 2008 Decrease 2009 2008
(Decrease) Firm Transportation - Affiliated 10,473 10,997 (524 )
109,884 107,846 2,038 Firm Transportation - Non-Affiliated 41,298
59,071 (17,773 ) 246,887 245,327 1,560 Interruptible Transportation
512 1,354 (842 ) 4,070 5,197 (1,127 ) 52,283 71,422 (19,139 )
360,841 358,370 2,471
Utility Throughput -
(MMcf) Three Months Ended Twelve Months Ended September 30,
September 30, Increase Increase 2009 2008 (Decrease) 2009
2008 (Decrease) Retail Sales: Residential Sales 3,835 3,583 252
58,835 57,463 1,372 Commercial Sales 567 571 (4 ) 9,551 9,769 (218
) Industrial Sales 16 29 (13 ) 515 552 (37 ) 4,418 4,183 235 68,901
67,784 1,117 Off-System Sales - 895 (895 ) 513 5,686 (5,173 )
Transportation 7,275 8,301 (1,026 ) 59,751 64,267 (4,516 ) 11,693
13,379 (1,686 ) 129,165 137,737 (8,572 )
Energy Marketing
Volumes Three Months Ended Twelve Months Ended September 30,
September 30, Increase Increase 2009 2008 (Decrease)
2009 2008 (Decrease) Natural Gas (MMcf) 10,400 8,931 1,469
60,858 56,120 4,738
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES FISCAL 2010 EARNINGS GUIDANCE AND
SENSITIVITY
Earnings per share sensitivity to changes Fiscal 2010
(Diluted earnings per share guidance*) from prices used in
guidance* ^ $1 change per MMBtu gas $5 change per Bbl
oil Earnings Range Increase Decrease Increase Decrease
Consolidated Earnings $2.30 - $2.65 + $0.06 - $0.06 + $0.07 - $0.07
* Please refer to forward looking
statement footnote featured earlier in this document.
^ This sensitivity table is current as of November 6, 2009
and only considers revenue from the Exploration and Production
segment's crude oil and natural gas sales. This revenue is based
upon pricing used in the Company's earnings forecast. For its
fiscal 2010 earnings forecast, the Company is utilizing flat NYMEX
equivalent commodity pricing, exclusive of basis differential, of
$5 per MMBtu for natural gas and $75 per Bbl for crude oil. The
sensitivities will become obsolete with the passage of time,
changes in Seneca's production forecast, changes in basis
differential, as additional hedging contracts are entered into, and
with the settling of hedge contracts at their maturity.
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
Quarter Ended September 30
(unaudited)
2009 2008 Operating Revenues $ 278,933,000 $
397,858,000 Net Income Available for Common Stock $
26,998,000 $ 43,266,000 Earnings Per Common Share: Basic $
0.34 $ 0.54 Diluted $ 0.33 $ 0.52 Weighted Average Common
Shares: Used in Basic Calculation 80,240,861
80,858,668 Used in Diluted Calculation 81,607,864
82,896,107
Twelve Months Ended September 30
(unaudited)
Operating Revenues $ 2,057,852,000 $ 2,400,361,000
Net Income Available for Common Stock $ 100,708,000 $ 268,728,000
Earnings Per Common Share: Basic $ 1.26 $ 3.27 Diluted $
1.25 $ 3.18 Weighted Average Common Shares: Used in Basic
Calculation 79,649,965 82,304,335 Used in Diluted
Calculation 80,628,685 84,474,839
National Fuel Gas (NYSE:NFG)
Historical Stock Chart
From May 2024 to Jun 2024
National Fuel Gas (NYSE:NFG)
Historical Stock Chart
From Jun 2023 to Jun 2024
