NFG/Seneca Resources 1Q16: Big Paper Loss, Still Operating 1 Rig

Seneca ResourcesNational Fuel Gas Company (NFG), the utility giant headquartered in Buffalo, NY and parent of Marcellus driller Seneca Resources, issued what they call their second quarter 2016 update yesterday. NFG’s second quarter is everyone else’s first quarter–it covers January through March. Seneca was negatively impacted by low prices for the natural gas it drills for. NFG’s “upstream” unit (Seneca) lost $213 million in 1Q16, even though its hedging program got the company an average of $2.99 per thousand cubic feet (Mcf) for their gas–about $1.12/Mcf above the going Nymex rate. The loss was all a paper loss–not out of pocket money–due to a writedown of assets. If you take out the writedown, Seneca actually made $17 million in profit for the quarter. NFG’s other units fared better on paper. The midstream unit (pipelines and storage) made $21.2 million in profit for 1Q16; NFG’s utility division made $32 million for the quarter; and their energy marketing unit made $3.5 million. Seneca’s production was up nearly 10% from a year ago. They continue to operate a single rig in the Marcellus/Utica region. Here’s the NFG/Seneca update…

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