Low oil and natural gas prices keep cutting into National Fuel’s profits, but the Amherst-based energy company still managed to earn more this spring than analysts expected.
National Fuel’s earnings from its operations rose by 24 percent as energy prices stabilized and the company’s expanded pipeline system allowed it to increase production from its wells in the Marcellus Shale region in Pennsylvania.
The earnings were better than analysts were expecting, and National Fuel raised its profit forecast for the full fiscal year by about 2 percent. The company is one of the biggest private employers in the Buffalo Niagara region, with nearly 1,300 full-time workers.
Because of the steep drop in oil and natural gas prices, National Fuel has scaled back its drilling program in Pennsylvania to a single drilling rig, but the company was able to increase its natural gas production from its Pennsylvania wells by 25 percent because increased capacity on its network of pipelines allowed it to ship more gas to markets in places such as New York and Canada.
National Fuel’s earnings from its operations improved to $58.1 million, or 68 cents per share, from $46.7 million, or 55 cents per share, a year ago. The earnings were three cents per share better than analysts were expecting.
Because of low energy prices, the company wrote down the value of its oil and gas reserves by $82.7 million, continuing a trend of curtailment charges that began last year. That write-down reduced National Fuel’s third-quarter profits to $8.3 million, or 10 cents per share, compared with a loss of $293 million, or $3.44 per share, a year ago, when the company had a much bigger impairment charge.
For the fiscal year that ends in September, National Fuel said it expects to earn between $2.90 and $3 per share from its operations, up about 2 percent from its previous guidance and better than the $2.89 per share analysts were forecasting.
For the fiscal year that begins in October, National Fuel said it expects to earn between $2.85 and $3.15 per share from its operations, which is in line with the $3.04 per share that analyst are expecting.