National Fuel Gas pany(NFG) - 2023 Q2 - Quarterly Report

Financial Performance - Utility revenues for Q2 2023 reached $406.758 million, up from $369.092 million in Q2 2022, representing a 10.5% increase[11] - Exploration and production revenues decreased to $244.552 million in Q2 2023 from $261.676 million in Q2 2022, a decline of 6.5%[11] - Net income available for common stock for the six months ended March 31, 2023, was $310.570 million, compared to $299.720 million for the same period in 2022, reflecting a 3.0% increase[12] - The company reported operating income of $221.377 million for Q2 2023, down from $246.366 million in Q2 2022, a decrease of 10.1%[11] - Total operating revenues for the six months ended March 31, 2023, were $1.376 billion, compared to $1.248 billion for the same period in 2022, indicating a 10.2% growth[11] - The company’s basic earnings per share for Q2 2023 was $1.53, compared to $1.83 in Q2 2022, a decrease of 16.4%[11] - Comprehensive income for the six months ended March 31, 2023, was $881.439 million, significantly higher than $159.063 million for the same period in 2022[12] Assets and Liabilities - Total assets increased to $7,967,242 thousand as of March 31, 2023, compared to $7,896,262 thousand as of September 30, 2022, reflecting a growth of approximately 0.9%[19] - Long-term debt, net of current portion, was $2,085,235 thousand as of March 31, 2023, slightly up from $2,083,409 thousand as of September 30, 2022[19] - The company reported a reduction in accounts payable to $119,497 thousand as of March 31, 2023, down from $178,945 thousand as of September 30, 2022, reflecting improved cash management[19] - The fair value of derivative financial instruments increased to $42,424 thousand as of March 31, 2023, compared to $9,175 thousand as of September 30, 2022, indicating a significant rise in financial instrument valuations[19] Cash Flow and Investments - Net cash provided by operating activities for the six months ended March 31, 2023, was $711,209 thousand, compared to $425,619 thousand for the same period in 2022, indicating a significant increase of approximately 67.2%[21] - Cash and temporary cash investments increased to $71,533 thousand as of March 31, 2023, from $46,048 thousand as of September 30, 2022, representing a growth of about 55.5%[21] - The Company’s other investments totaled $74.6 million as of March 31, 2023, down from $95.0 million as of September 30, 2022[62] Capital Expenditures - Capital expenditures for the six months ended March 31, 2023, totaled $496,362 thousand, compared to $415,415 thousand for the same period in 2022, reflecting an increase of about 19.5%[21] - Capitalized costs related to oil and gas producing activities rose to $2.2 billion at March 31, 2023, up from $1.9 billion at September 30, 2022, indicating a 15.8% increase[30] Shareholder Returns - The company declared dividends of $0.475 per common share for Q2 2023, up from $0.455 in Q2 2022, a rise of 4.4%[11] - Total comprehensive shareholders' equity rose to $2,878,726 thousand as of March 31, 2023, from $2,079,896 thousand as of September 30, 2022, marking an increase of approximately 38.4%[19] Environmental and Regulatory Matters - The Company aims to reduce methane emissions and total greenhouse gas emissions as part of its ESG performance goals, with specific targets set by the Compensation Committee[40] - The Company has estimated remaining environmental clean-up costs of approximately $3.8 million, which are expected to be recovered through rate recovery within one year[84] - A settlement approved by the PaPUC allows for an increase in annual base rate operating revenues of $23 million effective August 1, 2023[97] Derivative Financial Instruments - The Company reported derivative financial instruments with a total fair value of $127.8 million as of March 31, 2023, with Level 2 inputs primarily from natural gas price swaps and foreign currency contracts[54] - The fair value of derivative financial instruments classified as Level 2 included $91.5 million in over-the-counter swaps and $21.6 million in no-cost collars as of March 31, 2023[54] Taxation - The effective tax rate for the quarter ended March 31, 2023, was 26.2%, compared to 25.6% for the same quarter in 2022[76] Miscellaneous - The Company entered into a purchase agreement to acquire upstream assets in Pennsylvania for a total consideration of $127.0 million, expected to close by June 2023[43] - The sale of California assets was completed for $253.5 million, with potential contingent payments up to $10 million per year from 2023 to 2025 based on commodity prices[44]