National Fuel Gas Company (NFG, Financial) (0.2%) (NFG – $63.30 – NYSE) (Williamsville, New York) is a gas and pipeline utility with a growing exploration and production business. The gas utility serves 753,000 customers in Buffalo, New York, and Erie and Sharon, Pennsylvania. The pipeline & storage (P&S) business operates 3,000 miles of pipe and 34 storage facilities primarily in the state of New York. The E&P business, Seneca Resources, operates in Appalachia (owns 1.2 million net acres), primarily the Marcellus and Utica shales. Seneca’s proved gas reserves at year-end FY 2022 were 4,172 Bcfe (compared to 3,853 Bcfe in FY 2021). NFG expects to generate $325 million in FY 2023 free cash flow (before the $175 million dividend), which will likely be used to paydown debt. NFG raised the annual dividend for the 52nd consecutive year to $1.90 per share, from $1.82 per share. S&P rates NFG’s unsecured credit ‘BBB-‘ stable. Higher gas prices increase the potential for the significant value of the 1.2 million net Marcellus/Utica acreage to be realized.
From Mario Gabelli (Trades, Portfolio)'s Gabelli Asset Fund fourth-quarter 2022 commentary.
