National Fuel Gas Company Earnings Call Insights: Quarterly Impact of Projects and Trout Run

National Fuel Gas Company (NYSE:NFG) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Quarterly Impact of Projects

Andrea Sharkey – Gabelli & Company, Inc.: So, I’m going to focus on the pipeline a little bit because that was better than what I was expecting. The $0.20 for the quarter, that includes Northern Access and Line N went in November, so I would assume it’s not even really accounting for the whole quarterly impact of those projects. So, I’m just kind of trying to get a sense of is $0.20 sort of a good run rate going forward, could it be a little bit better or are there things coming up that we should be mindful of that would make it come down a little bit?

David F. Smith – Chairman and CEO: Andrea, I think it should be a decent run rate. We’ll also have a ramp up in the Empire Tioga Extension project that went in service, that ramps up to its full volumes in May, but generally all of the projects that we have for this year are in service and this should be a good quarter to benchmark off of.

Andrea Sharkey – Gabelli & Company, Inc.: And then the comment, I think, that Ron made about there was another Line N expansion that you had the open season four that you received, I guess, four bids what would be the timing and size of that project and are the CapEx related to it?

Ronald J. Tanski – President and COO: While we are still working on the details of the CapEx, Andrea, but as I mentioned we are looking at 95 million cubic feet a day for that and again that’s through the Line N corridor with more and more producers there looking to get some more of the both Marcellus and Utica production in there. That’s looking at some time in 2015 to be completed and in service.

Trout Run

Kevin Smith – Raymond James: Just had two questions how is Trout Run doing on excess gathering capacity. Is there any potential for bottlenecks?

Ronald J. Tanski – President and COO: Let’s put it this way. We’ve built the line in anticipation of more and more pads coming on for Seneca, so it is not ramped up to its full capacity yet. We don’t expect that there will be any problem in adding each new pad that comes as soon as it is pretty much completed for Seneca, so…

Ronald J. Tanski – President and COO: Is that what you’re looking for?

Kevin Smith – Raymond James: Absolutely.

David F. Smith – Chairman and CEO: We don’t expect the bottleneck, I guess.

Ronald J. Tanski – President and COO: Yeah, no bottleneck.

Kevin Smith – Raymond James: Then, Matt, can you walk me through the process or the thought process there of moving rig from Utica development to Rich Valley. Are you more optimistic on rates of return or how should I think about that?

Matthew D. Cabell – SVP, President of Seneca Resources Corporation: Well, I guess, I would just say that Rich Valley, Clairemont area is an area we have a lot more certainty on. We drilled the Rich Valley well. We’ve drilled other wells in the area. We have a geologic interpretation that gives us a pretty clear path forward there for development. Utica, we really only have I’d almost define it as 1.5 well tests with the Tionesta well, which was a little disappointing, and there is Mt. Jewett well that was not so disappointing, but was only tested two stages. So, while we are still excited about the Utica, there is still a lot of uncertainty there. We need some more delineation work before we’re ready to go forward development there.

Kevin Smith – Raymond James: Do you plan on testing the Utica again this calendar year? I think you mentioned that in your prepared remarks.

David F. Smith – Chairman and CEO: We’ll definitely drill additionally Utica wells this year and likely at the Mt. Jewett area again, but by the time we’ve drilled them, fracked them, soaked them I don’t think we’ll see another rate on Utica well in the fiscal year it will be more likely be in the fall.