National Fuel Gas Company

What they do

The Integrated Upstream and Gathering segment, run by Seneca Resources and National Fuel Gas Midstream, produces gas from the Marcellus and Utica shales and operates gathering and processing facilities that primarily serve Seneca. The Pipeline and Storage segment, through National Fuel Gas Supply Corporation and Empire Pipeline, provides FERC-regulated interstate transportation and underground storage in Pennsylvania and New York. The Utility segment, National Fuel Gas Distribution Corporation, serves roughly 756,000 customers in western New York and northwestern Pennsylvania, including Buffalo, Niagara Falls, Jamestown, Erie and Sharon.

Revenue drivers

• Integrated Upstream and Gathering — Earns revenue from natural gas production and gathering services, with Seneca holding 4,980,410 MMcf of proved natural gas reserves and 180 Mbbl of oil at September 30, 2025; one customer of this segment represented about $258 million, or 11.3%, of consolidated revenue in fiscal 2025.
• Pipeline and Storage — Earns FERC-approved transportation and storage rates on integrated pipeline systems in Pennsylvania and New York; the same large customer also bought Pipeline and Storage services worth $16 million, or 0.7% of fiscal 2025 consolidated revenue.
• Utility — Earns regulated distribution revenue from about 756,000 natural gas customers in western New York and northwestern Pennsylvania, with rates set in New York by the NYPSC and in Pennsylvania by the PaPUC.

Recent performance

For the third quarter of fiscal 2026, National Fuel reported GAAP earnings of $138.6 million, or $1.45 per share, versus $149.8 million, or $1.64 per share, a year earlier, and adjusted EPS of $1.54 compared with $1.64. The Integrated Upstream and Gathering segment benefited from a $0.56 per Mcf gain on its hedge and marketing portfolio that more than offset lower NYMEX natural gas prices. Net cash provided by operating activities was $1.035 billion for the nine months ended June 30, 2026, with free cash flow of $280 million. Revenue by quarter swung from $909.0 million in the March 2026 quarter to $474.0 million in the June 2026 quarter. At June 30, 2026, total assets were $10.45 billion, shareholder equity $3.92 billion, cash $1.24 billion and long-term debt $3.57 billion.

Strategy

The company is investing in pipeline expansion, including the Tioga Pathway Project, a 190,000 Dth per day expansion with a target in-service date in late calendar 2026 and a preliminary cost estimate of about $101 million, and the Line N System Upgrade Project, expanded to 294,000 Dth per day of additional capacity with a projected in-service date of late calendar 2028. It also plans a roughly 7.5 mile lateral to serve 205,000 Dth per day to the Shippingport Power Station site in Beaver County, Pennsylvania, supporting a co-located data center under development. A pending Ohio gas utility acquisition received final regulatory approval and is on track to close on October 1, 2026. Management raised the annual dividend 4% to $2.22 per share, its 56th consecutive annual increase.

Risks

• Credit market dependence — The company relies on short-term bank borrowings, commercial paper and long-term capital markets to fund capital requirements not covered by operating cash flow, and a credit rating downgrade could increase costs or restrict access to those markets.
• Floating-rate and rate-reset debt exposure — Short-term bank loans, commercial paper and Term Loan Agreement borrowings carry floating or short-fixed rates, and $2.4 billion of outstanding long-term debt would see interest rates increase if certain fundamental changes occur involving a material subsidiary and a downgrade results.
• Regulated rate outcomes — Pipeline and Utility earnings depend on approvals from FERC, the NYPSC and the PaPUC, including pending cases such as Supply Corporation's April 30, 2026 FERC filing requesting an annual cost of service of about $404 million, roughly $95 million above its 2023 settlement.
• Customer concentration in Upstream and Gathering — One customer represented about $258 million, or 11.3%, of consolidated fiscal 2025 revenue in the Integrated Upstream and Gathering segment.

Outlook

Management revised fiscal 2026 adjusted EPS guidance to a range of $7.40 to $7.60 per share, or $7.50 at the midpoint, a projected 9% increase from fiscal 2025. The company expects approximately 7% to 10% average annual EPS growth through 2029, citing growing natural gas demand from data centers and power generation and its firm transportation portfolio. It also expects its pending Ohio gas utility acquisition, once closed, to significantly increase rate base for its regulated businesses.