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National Fuel Gas Analyst Day - Transcript

Pipeline and Storage segment which is Empire and Supply, they’re both FERC regulated. And they’ve been very busy building infrastructure and planning infrastructure to move Marcellus gas to market. And in the meantime transforming their system, I mean, there are a number of projects on the horizon. But really, probably more importantly we’ve been transforming our system from a north to a south system, where gas came in from the north and went south to a bi-directional system where it can go both ways. And we started doing that, we started looking at doing that a few years back, in part to take advantage of the strong market in Canada and that has very long term implications for National Fuel Gas and Ron Tanski is going to spend time talking about that today.

The Midstream is much as the same although it’s on a non-regulator ground. They’re putting in gather systems, primarily now for Seneca, they’re focused on Seneca but working with other producers as well, and we see that as a great business moving forward.

On the utility side, we have 728 or so customers, perhaps just the most underappreciated in our system from the financial perspective. But they’re really focused on customer service and safety and we won’t spend much time today at this seminar on because, this is a financial seminar essentially. But there in terms of their contribution or stable predictable cash flow, in order to do that, they are focused on cost controls they are focused on protection of revenue.

Now, we’d like these businesses and we like the standalone businesses. But we really like the way they fit together and we have for a long time, we very much like the model, we now have. And it’s taken us some time to achieve that. Some of you will remember way back when we were professionally a utility company. And then we had a work to grow the pipeline and storage and grow the E&P, and we moved through that. Then, you know, we sold our assets, our international assets, some of you may remember we had international assets and we sold those and we sold our Canadian properties, because they just didn’t fit. And more recently in the past 12 months, really past 15 to 12 months, most of them in the last year, we sold these companies. In fact that they wanted good companies, they were good companies but they were relatively small with relatively limited upside, the Gulf was relatively high risk for National Fuel Gas particularly compared to the Marcellus into California. And most importantly we’re able to focus our attention, our management attention and our financial resources, this has freed up some $200 million of capital to put into the other businesses. So, we like this model. And these are the companies we intend on continuing into the future with, obviously as the company changes its nature and it will, because we’re putting so much money into E&P, we’ll re-visit this down the road. But right now, this is the model that works for us.

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