National Fuel Gas Co. has approved a plan to separate its upstream business and gathering operations in the Appalachia region as a standalone public company. Following this separation, National Fuel will become a fully regulated company in the natural gas and pipeline services sector. This tax-free separation is expected to be executed in the second half of 2027 through the distribution of at least 80.1 percent of the shares of the new company to National Fuel shareholders.
Details of Upstream Business and Gathering
National Fuel's upstream and gathering business holds approximately 1.2 million net acres in Appalachia, with net production reaching about 1.1 billion cubic feet per day (Bcf/d) and approximately 5 trillion cubic feet (Tcf) of proven reserves. The company announced that it has over 25 years of development inventory. The company's wholly-owned gathering system transports most of its production. Additionally, capital efficiency has improved by about 25 percent since the development shift to the Eastern Development area in 2023.
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New Management After Separation
Justin Loweth, President of Seneca Resources and NFG Midstream, will be appointed as the CEO of the new company. After the separation, National Fuel will have nearly $5 billion in rate base. The company's services are provided to 1.1 million customers in Ohio, New York, and Pennsylvania. The pipeline and storage business under FERC oversight will provide nearly 5 billion cubic feet per day of transportation capacity and 77 billion cubic feet of storage. The company pointed to the growing gas needs from data centers and power generation as a driver for new pipeline and storage infrastructure.
David Bauer will remain as President and CEO. He stated, "Following the recent closing of the Ohio gas services acquisition, each business is now a scaled platform, and post-separation, it is expected to have the financial strength necessary to capitalize on long-term growth opportunities as independent companies."
