National Fuel Reports Second Quarter Fiscal 2026 Earnings
WILLIAMSVILLE, N.Y., April 29, 2026 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the second quarter of its 2026 fiscal year.
SECOND QUARTER FISCAL 2026 SUMMARY
MANAGEMENT COMMENTS
David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel had a solid second quarter, with adjusted EPS increasing 13% over the prior year. Operationally, our resilient natural gas system and dedicated workforce performed extremely well during the severe weather of Winter Storm Fern, delivering the safe and reliable production, transmission, storage, and distribution services that customers across our businesses expect.
“Looking forward, we’ve taken meaningful steps to position National Fuel for the next phase of our long-term growth strategy. In our regulated Pipeline and Storage business, our two major expansion projects are expected to be in-service late this calendar year, and we’ve signed an agreement for another expansion on our Line N system. At the Utility, our Ohio acquisition is on track to close in the calendar fourth quarter. Lastly, in our Integrated Upstream and Gathering business, we have decades of high-quality Appalachian inventory and a great track record of improving capital efficiency. With our ongoing testing to optimize well designs across our development footprint and our focus on continuously improving our integrated development plans, we expect to see further benefits in the future.
“With these positive catalysts across our operations, including line of sight to earnings growth at our regulated businesses and increasing free cash flow generation at our non-regulated businesses, National Fuel is well positioned to deliver long-term value to shareholders.”
RECONCILIATION OF GAAP EARNINGS TO ADJUSTED EARNINGS
FISCAL 2026 GUIDANCE UPDATE
National Fuel is revising its adjusted EPS guidance for fiscal 2026, which is now expected to be within a range of $7.45 to $7.75, or $7.60 at the midpoint. This updated range incorporates second quarter results as well as modest changes to certain assumptions for the remainder of the fiscal year, primarily related to natural gas prices. The Company is now assuming the NYMEX natural gas price will average $3.00 per MMBtu for the remaining six months of fiscal 2026 (a decrease of $0.75 from previous guidance), which approximates the current NYMEX forward curve at this time.
Integrated Upstream and Gathering fiscal 2026 production is now expected to be 425 to 440 Bcf, a moderate decrease from our prior guidance. This decrease reflects the weather impacts during the period around Winter Storm Ferm, which primarily delayed flowback and completion timing. In addition, there were modest production impacts from a six-well pad in Tioga County where tests of a new Gen 4 Lower Utica well design and a new Upper Utica performed as expected, however, older generation Lower Utica wells underperformed projections. While these factors are expected to impact the fiscal year, they do not change the long-term production growth outlook, which we still expect will be in the mid-single digits over the next few years. This guidance range also does not incorporate any price-related curtailments over the remainder of the fiscal year. Capital expenditure guidance remains unchanged; however, higher oil and diesel prices related to the Iranian conflict and increased land activity represent potential headwinds that could result in capital trending toward the higher end of the range.
The acquisition of CenterPoint Energy's Ohio natural gas utility business is expected to close in the fourth quarter of calendar 2026, as previously planned. As a result, this is not expected to impact fiscal 2026 guidance, which also excludes any financing or acquisition-related costs.
The Company’s other fiscal 2026 guidance assumptions remain largely unchanged and are detailed in the table on page 6.
DISCUSSION OF SECOND QUARTER RESULTS BY SEGMENT
The following earnings discussion of each operating segment for the quarter ended March 31, 2026 is summarized in a tabular form on pages 7 and 8 of this report (earnings drivers for the six months ended March 31, 2026 are summarized on pages 9 and 10).
Note that management defines adjusted earnings as reported GAAP earnings adjusted for items impacting comparability, and adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.
Integrated Upstream and Gathering Segment
The Integrated Upstream and Gathering segment's exploration and production operations are carried out by Seneca Resources Company, LLC (“Seneca”) and its gathering operations are carried out by the operating subsidiaries of National Fuel Gas Midstream Company, LLC ("Gathering"). Seneca explores for, develops, and produces primarily natural gas reserves in Pennsylvania. Gathering constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which primarily delivers Seneca's production and, to a lesser extent, third-party Appalachian production to various interstate pipelines.
The Integrated Upstream and Gathering segment's second quarter GAAP earnings increased $27.9 million versus the prior year. Excluding items impacting comparability, adjusted earnings increased $25.9 million from the prior year, primarily due to higher realized natural gas prices, partially offset by modestly lower production volumes and additional third-party gathering expenses.
Seneca’s weighted average realized natural gas price, after the impact of hedging and transportation costs, was $3.45 per Mcf, an increase of $0.51 per Mcf, or 17%, from the prior year due to higher NYMEX prices.
During the second quarter, Seneca produced 102.0 Bcf of natural gas, a decrease of 3.5 Bcf, or 3%, from the prior year. During the quarter, production was lower than the prior year due to weather-driven completion delays and typical natural gas production declines on producing wells.
On a per unit basis, second quarter adjusted total operating costs were $0.14 higher compared to the prior year, primarily due to higher per unit LOE and DD&A expense. The increase in per unit LOE compared to the prior year was largely driven by additional third-party gathering expenses due to new production brought online during the quarter, as well as modestly higher costs related to winter weather conditions. The increase in DD&A expense was largely driven by the impact of ceiling test impairments Seneca recorded in fiscal 2025 that artificially lowered the per unit DD&A rate in the prior year.
Pipeline and Storage Segment
The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides 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 Pennsylvania.
The Pipeline and Storage segment’s second quarter GAAP earnings were in line with the prior year as an increase in operating revenues was offset by higher expenses, the majority of which was higher DD&A as a result of a higher average depreciable plant in service compared to the prior year.
Utility Segment
The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution Corporation”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.
The Utility segment’s second quarter GAAP earnings increased $1.8 million, or 3%, primarily as a result of higher customer margin (operating revenue less purchased gas sold) of $9.1 million. The biggest contributors to increased customer margin were the implementation of year two of the Utility’s three-year rate agreement in New York and revenue from the Utility’s Distribution System Improvement Charge in Pennsylvania. Partially offsetting this was an increase in O&M expense driven by higher employee-related costs (which were largely the result of new collective bargaining agreements) and an increase in uncollectible expense, as well as higher DD&A expense due to a larger average depreciable plant in service compared to the prior year.
Corporate and All Other
The Company’s operations that are included in Corporate and All Other generated a combined net loss of $1.3 million in the second quarter, largely due to transaction and financing costs related to the pending Ohio gas utility acquisition.
EARNINGS TELECONFERENCE
A conference call to discuss the results will be held on Thursday, April 30, 2026, at 9 a.m. ET. All participants must pre-register to join this conference using the Participant Registration link. A webcast link to the conference call is provided under the Events Calendar on the NFG Investor Relations website at investor.nationalfuelgas.com, and a replay of the webcast will be available on the website following the call.
National Fuel is an integrated energy company reporting financial results for three operating segments: Integrated Upstream and Gathering, Pipeline and Storage, and Utility. Additional information about National Fuel is available at www.nationalfuel.com.
Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, 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: changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; changes in economic conditions, including the imposition of additional tariffs on U.S. imports and related retaliatory tariffs, inflationary pressures, supply chain issues, liquidity challenges, and 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 Company’s ability to complete strategic transactions, such as the pending transaction with CenterPoint Energy Resources Corp., including receipt of required regulatory clearances and satisfaction of other conditions to closing, and to recognize the anticipated benefits of such transactions; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; changes in the price of natural gas; impairments under the SEC’s full cost ceiling test for natural gas reserves; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures, other investments, and acquisitions, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; negotiations with the collective bargaining units representing the Company’s workforce, including potential work stoppages during negotiations; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches, including the impact of issues that may arise from the use of artificial intelligence technologies; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, water availability and disposal or recycling opportunities of used water, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, 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; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; 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 thereof.
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
GUIDANCE SUMMARY
As discussed on page 2, the Company is revising its adjusted earnings per share guidance for fiscal 2026. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below. The acquisition of CenterPoint Energy's Ohio natural gas utility business still is expected to close in the fourth quarter of calendar 2026, as previously planned. As a result, this is not expected to impact fiscal 2026 guidance, which also excludes any financing or acquisition-related costs. Fiscal 2026 adjusted earnings per share guidance also excludes after-tax financing and acquisition related costs during the six months ended March 31, 2026, which reduced earnings by $0.18 per share, and expected financing and acquisition related costs during the six months ending September 30, 2026.
The revised adjusted earnings per share guidance range also excludes certain items that impacted the comparability of adjusted operating results during the six months ended March 31, 2026, including after-tax unrealized losses on other investments, which reduced earnings by $0.01 per share. While the Company expects to record certain adjustments to unrealized gain or loss on investments during the remaining six months ending September 30, 2026, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.
(1) Customer Margin is defined as Operating Revenues less Purchased Gas Expense.
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding adjusted earnings, adjusted EBITDA, and free cash flow, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results or liquidity and for comparing the Company’s financial performance to other companies. The Company's management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.
Management defines adjusted earnings as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to adjusted earnings for the three and six months ended March 31, 2026 and 2025:
Management defines adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to adjusted EBITDA for the three and six months ended March 31, 2026 and 2025:
Management defines free cash flow as net cash provided by operating activities, less net cash used in investing activities, adjusted for acquisitions and divestitures. For the six months ended March 31, 2026, net cash provided by operating activities was $661 million; net cash used in investing activities was $501 million; there were no adjustments for acquisitions or divestitures; and free cash flow was $160 million. For the six months ended March 31, 2025, net cash provided by operating activities was $474 million; net cash used in investing activities was $425 million; there were no adjustments for acquisitions or divestitures; and free cash flow was $49 million. The Company is unable to provide a reconciliation of any projected free cash flow measure to its comparable GAAP financial measure without unreasonable efforts. This is due to an inability to calculate the comparable GAAP projected metrics, including operating income and total production costs, given the unknown effect, timing, and potential significance of certain income statement items.