Jeff Bellman

Jeff Bellman asked for more detail on what conditions, beyond front-month gas prices, the company would need to see (e.g., 2027/2028 strip, winter storage levels) before increasing activity. He also inquired about broader thoughts on incremental takeaway capacity, specifically smaller brownfield expansions moving gas west out of Pennsylvania into Ohio, in light of data center growth.

Answer

Alan Shepard, President and CEO, explained that long-term maintenance production is due to Appalachia's infrastructure constraints. For short-term production increases, the company would need strong visibility on sustained prices, likely requiring hedging. He noted that most low-hanging fruit for western-bound takeaway projects was addressed last decade, and while some new projects are proposed, their high cost and the need for clarity on AI demand decisions mean nothing material is currently available to shift the company from maintenance production.

Jeff Bellman asked for more detail on what the company needs to see to increase activity beyond maintenance levels, specifically regarding long-term strip prices and winter storage levels. He also inquired about incremental takeaway capacity, focusing on smaller brownfield expansions and gas movement west out of Pennsylvania into Ohio, particularly with data center growth.

Answer

Alan Shepard, President and Chief Executive Officer, explained that the company has been in maintenance production for six years due to Appalachia constraints and lack of new pipelines. For long-term increases, they need visibility on demand-side growth (e.g., new power, AI demand) and associated infrastructure, which are still a few years out. He emphasized the need to hedge off any increased production. Regarding takeaway, he noted that most low-hanging fruit for western-bound projects was taken last decade, and current proposed projects are challenging. He reiterated that nothing material is currently available to move the company off maintenance production, pending decisions on AI demand.

Jeff Bellman inquired about the variability and assessment of the frac barrier between the Upper and Lower Utica across National Fuel Gas Company's acreage, and the broader outlook for incremental takeaway capacity out of the basin, including brownfield expansions and volumes moving west and south.

Answer

Justin Loweth, President of Seneca Resources and National Fuel Midstream, confirmed that the regionally unique seismite barrier between the Utica zones is consistently impermeable across their acreage, despite variations in thickness. He noted that brownfield takeaway projects are progressing, in-basin demand from power generation and data centers is growing, and there's potential for large interstate pipelines to debottleneck, all contributing to dampening volatility.

Jeff Bellman from Daniel Energy Partners inquired about the variability and characteristics of the frac barrier between the Upper and Lower Utica formations across National Fuel Gas Company's acreage, and the broader outlook for incremental industry-wide natural gas takeaway capacity out of the basin, particularly brownfield expansion to the west and volumes moving south.

Answer

Justin Loweth, President of Seneca Resources and National Fuel Midstream, confirmed the frac barrier is a regionally unique and largely impermeable feature with consistent characteristics across their acreage. He also noted ongoing brownfield pipeline expansions, the potential for large greenfield projects like NESE, and growing in-basin demand from power generation and data centers, expressing cautious optimism for increased takeaway capacity.