National Fuel Completes Acquisition of Shell’s Integrated Upstream and Midstream Assets in Pennsylvania
July 31 2020 - 3:15PM
National Fuel Gas Company (NYSE: NFG) (the “Company”) announced
today that it has completed the purchase of integrated upstream and
midstream gathering assets in Pennsylvania from SWEPI LP, a
subsidiary of Royal Dutch Shell plc (NYSE: RDS.A) (“Shell”), in an
all cash transaction of approximately $504 million, after customary
purchase price adjustments.
“The closing of the largest acquisition in our 118-year history
marks an exciting time for the Company, and leaves us
well-positioned for the long-term, said David P. Bauer, the
Company’s President and Chief Executive Officer. Mr. Bauer added,
“With the integration of these high-quality, contiguous assets in
one of the most prolific areas of Appalachia into our existing
operations, we expect to generate meaningful free cash flow in our
upstream and midstream businesses. Additionally, we have executed a
financing strategy which further strengthens our balance sheet and
maintains our investment grade ratings, reinforcing the strong
foundation of our business as we move into the future.”
National Fuel plans to provide preliminary fiscal 2021 guidance
in connection with its third quarter earnings release on August 6,
2020. However, the Company expects this acquisition to be highly
accretive to its earnings per share in fiscal 2021, driven by
significant acquired flowing production and related gathering
throughput, further unit cost reductions, and its strong hedge
position.
National Fuel is an integrated energy company reporting
financial results for four operating segments: Exploration and
Production, Pipeline and Storage, Gathering, and Utility.
Additional information about National Fuel is available at
www.nationalfuel.com.
Certain statements contained herein, including statements
identified by the use of the words “anticipates,” “estimates,”
“expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,”
“believes,” “seeks,” “will,” “may” and similar expressions, and
statements which are other than statements of historical facts, are
“forward-looking statements” as defined by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
risks and uncertainties, which could cause actual results or
outcomes to differ materially from those expressed in the
forward-looking statements. The Company’s expectations, beliefs and
projections contained herein are expressed in good faith and are
believed to have a reasonable basis, but there can be no assurance
that such expectations, beliefs or projections will result or be
achieved or accomplished. In addition to other factors, the
following are important factors that could cause actual results to
differ materially from those discussed in the forward-looking
statements: the Company’s ability to successfully integrate
acquired assets, including Shell’s upstream and midstream gathering
assets in Pennsylvania, and achieve expected cost synergies;
impairments under the SEC’s full cost ceiling test for natural gas
and oil reserves; changes in the price of natural gas or oil; the
length and severity of the COVID-19 pandemic, including its impacts
across our businesses on demand, operations, global supply chains
and liquidity; changes in economic conditions, including global,
national or regional recessions, and their effect on the demand
for, and customers’ ability to pay for, the Company’s products and
services; the creditworthiness or performance of the Company’s key
suppliers, customers and counterparties; financial and economic
conditions, including the availability of credit, and occurrences
affecting the Company’s ability to obtain financing on acceptable
terms for working capital, capital expenditures and other
investments, including any downgrades in the Company’s credit
ratings and changes in interest rates and other capital market
conditions; changes in laws, regulations or judicial
interpretations to which the Company is subject, including those
involving derivatives, taxes, safety, employment, climate change,
other environmental matters, real property, and exploration and
production activities such as hydraulic fracturing; delays or
changes in costs or plans with respect to Company projects or
related projects of other companies, including disruptions due to
COVID-19, as well as difficulties or delays in obtaining necessary
governmental approvals, permits or orders or in obtaining the
cooperation of interconnecting facility operators; the Company’s
ability to complete planned strategic transactions;
governmental/regulatory actions, initiatives and proceedings,
including those involving rate cases (which address, among other
things, target rates of return, rate design and retained natural
gas), environmental/safety requirements, affiliate relationships,
industry structure, and franchise renewal; changes in price
differentials between similar quantities of natural gas or oil sold
at different geographic locations, and the effect of such changes
on commodity production, revenues and demand for pipeline
transportation capacity to or from such locations; the impact
of information technology disruptions, cybersecurity or data
security breaches; factors affecting the Company’s ability to
successfully identify, drill for and produce economically viable
natural gas and oil reserves, including among others geology, lease
availability, title disputes, weather conditions, shortages, delays
or unavailability of equipment and services required in drilling
operations, insufficient gathering, processing and transportation
capacity, the need to obtain governmental approvals and permits,
and compliance with environmental laws and regulations; increasing
health care costs and the resulting effect on health insurance
premiums and on the obligation to provide other post-retirement
benefits; other changes in price differentials between similar
quantities of natural gas or oil having different quality, heating
value, hydrocarbon mix or delivery date; the cost and effects of
legal and administrative claims against the Company or activist
shareholder campaigns to effect changes at the Company; uncertainty
of oil and gas reserve estimates; significant differences between
the Company’s projected and actual production levels for natural
gas or oil; changes in demographic patterns and weather conditions;
changes in the availability, price or accounting treatment of
derivative financial instruments; changes in laws, actuarial
assumptions, the interest rate environment and the return on
plan/trust assets related to the Company’s pension and other
post-retirement benefits, which can affect future funding
obligations and costs and plan liabilities; economic disruptions or
uninsured losses resulting from major accidents, fires, severe
weather, natural disasters, terrorist activities or acts of war;
significant differences between the Company’s projected and actual
capital expenditures and operating expenses; increasing costs of
insurance, changes in coverage and the ability to obtain insurance.
The Company disclaims any obligation to update any forward-looking
statements to reflect events or circumstances after the date
thereof.
Analyst Contact:
Kenneth E. Webster
716-857-7067
Media Contact:
Karen L. Merkel
716-857-7654
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