MANAGEMENT COMMENTS
MANAGEMENT COMMENTS
David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: "The Company had strong operational results in the second quarter amidst a challenging commodity price backdrop. Over the first six months of fiscal 2023, we experienced a significant year-over-year increase in free cash flow generation, affording us the flexibility to reduce our absolute leverage levels and further strengthen our investment grade balance sheet.
"With respect to the balance of the fiscal year, our consistent approach to hedging, combined with the durability of our rate-regulated cash flows, position us well to navigate current natural gas pricing headwinds. As we look further ahead, our ongoing investment in the modernization of our rate-regulated infrastructure, along with Seneca's growing natural gas production and an improved long-term outlook for natural gas prices, should continue to drive significant free cash flow."
ACQUISITION OF BOLT-ON UPSTREAM ASSETS IN EASTERN DEVELOPMENT AREA
Seneca has entered into an agreement to acquire upstream assets in northwest Tioga County, Pennsylvania from Southwestern Energy for total consideration of $127.0 million, subject to certain purchase price adjustments at closing.
As part of the transaction, Seneca has agreed to purchase approximately 30,000 net acres located in Tioga and Potter counties, Pennsylvania. At closing, these assets are expected to have flowing net production of approximately 20 million cubic feet per day. The transaction is anticipated to close on June 1, 2023 and is subject to customary closing conditions.
Additionally, Seneca entered into two separate transactions to acquire approximately 6,000 bolt-on fee and lease acres, with a modest amount of production and one proved developed non-producing well, in its Lycoming and Tioga operating areas for total consideration of between $20 and $25 million, subject to closing and title adjustments.
