Changes in commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the fiscal year ended September 30, 2012, was $4.27 per Mcf, a decrease of $1.12 per Mcf. Higher crude oil prices realized after hedging increased earnings. The weighted average crude oil price received by Seneca (after hedging) for the fiscal year ended September 30, 2012, was $90.88 per Bbl, an increase of $9.75 per Bbl.
Depletion, LOE and general and administrative expenses (“G&A”) for the fiscal year ended September 30, 2012, increased compared to the prior fiscal year due primarily to the higher production activity discussed above. On a per unit basis, depletion increased $0.08 per Mcfe, LOE decreased $0.08 per Mcfe and G&A decreased $0.08 per Mcfe. Operating results were also reduced by higher interest expense, due to a higher outstanding debt balance and higher state income taxes.
Pipeline and Storage Segment
The Pipeline and Storage segment operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. 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 western Pennsylvania.The Pipeline and Storage segment’s earnings of $25.1 million, or $0.30 per share, for the quarter ended September 30, 2012, increased $17.6 million, or $0.21 per share, when compared with the same period in the prior fiscal year. During the quarter, FERC approved Supply Corporation’s rate case settlement which provided for, among other things, an increase in base tariff rates, lower depreciation rates and implementation of a fuel tracker for retained gas volumes. As part of that settlement, Supply Corporation eliminated a regulatory liability associated with its postretirement benefit plan. This adjustment increased earnings by $12.8 million.
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