“With the remarkable success we have been achieving, we are able to raise our outlook for the remainder of this year. We’re proud of our accomplishments and remain focused on delivering long-term value to our shareholders.”
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended December 31, 2012, of $67.9 million, or $0.81 per share, compared to the prior year’s first quarter of $60.7 million, or $0.73 per share, an increase of $7.2 million or $0.08 per share. The increase is mainly due to higher earnings in the Utility segment, the Pipeline and Storage segment, and the All Other category, offset by lower earnings in the Exploration and Production segment. (Note: All references to earnings per share are to diluted earnings per share, all amounts are stated in U.S. dollars and all amounts used in the discussion of earnings are after tax unless otherwise noted.)
DISCUSSION OF RESULTS BY SEGMENT
The following discussion of the earnings of each segment is summarized in a tabular form at pages 7 and 8 of this report. It may be helpful to refer to those tables while reviewing this discussion.
Exploration and Production Segment
The Exploration and Production segment operations are carried out by Seneca Resources Corporation (“Seneca”). Seneca explores for, develops and produces natural gas and oil reserves in California, Appalachia and Kansas.
The Exploration and Production segment’s earnings in the first quarter of fiscal 2013 of $26.7 million, or $0.32 per share, decreased $3.6 million, or $0.04 per share, when compared with the prior year’s first quarter. Earnings were reduced by a $3.7 million (pre-tax) charge related to the termination of a contract for a drilling rig that had been idled since June 2012. The contract was terminated as a result of the rig being utilized by another company. The rig was idled as part of Seneca’s previously reported overall plan to reduce Appalachian capital spending in response to lower gas prices. Seneca continues to operate three horizontal drilling rigs in Appalachia. Excluding this charge, earnings decreased $1.2 million or $0.01 per share.