National Fuel Gas Co. leaders announced a plan Wednesday to spin off its integrated upstream and gathering business into a separate entity, creating two companies.
Company executives, in a conference call with investors, announced National Fuel’s board of directors had approved the split, which will need federal regulatory approval for completion.
“Following the separation, National Fuel will be a 100% rate-regulated enterprise with approximately $5 billion of rate base. Our utility operations will serve approximately 1.1 million customers across Ohio, New York, and Pennsylvania, all of which have constructive regulatory frameworks that support ongoing investments,” said Dave Bauer, National Fuel’s president and chief executive officer.
The split is made possible through a tax-free spinoff to National Fuel shareholders, it was announced. If approved, the split is expected to be finalized in the second half of 2027.
The new company, which has yet to receive a name, will focus on exploring and drilling for natural gas. It will be led by Justin Loweth, who is currently president of Seneca Resources and National Fuel Gas Midstream.
“As we look ahead, IUG is well positioned for long-term success. We have a deep inventory of core acreage, a highly competitive cost structure, and a long-term development plan that we expect will deliver continued improvements in capital efficiency, all of which is supported by an exceptionally talented and dedicated workforce,” Loweth said. “Together, these attributes create a differentiated investment opportunity, a scaled, integrated Appalachian natural gas company with a deep inventory of high-return development opportunities, growing free cash flow generation, and strong positioning to an increasingly constructive long-term natural gas demand outlook.”
National Fuel also announced its acquisition of an Ohio company, which expands its footprint.
Tim Silverstein, National Fuel’s treasurer and chief financial officer, addressed affordability during the conference call, expressing pride in the company’s track record.
“We have always been a believer that maintaining affordable rates is a win-win, one where we can continue to deliver value to shareholders while also cost-effectively providing reliable service to our customers,” he said. “In our New York and Pennsylvania utility service territories, we've had a long history of having the lowest delivery rates in each state, which remains the case today. We expect to extend the same affordability focus to our Ohio business.”