Good day, ladies and gentlemen, and welcome to the Q4 2015 National Fuel Gas Company Earnings Conference call. My name is Mark, and I’ll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I’d now like to turn the conference over to your host for Brian Welsch, Director of Investor Relations. Please proceed, sir.

Thank you, Mark, and good morning. We appreciate you joining us on today’s conference call for a discussion of last evening’s earnings release. With us on the call from National Fuel Gas Company are Ron Tanski, President and Chief Executive Officer; Dave Bauer, Treasurer and Principal Financial Officer; and Matt Cabell, President of Seneca Resources Corporation. At the end of the prepared remarks, we will open up the discussion to questions. The fiscal 2015 earnings release and November Inventor Presentation have been posted on our Investor Relations website. We may refer to these materials during today’s call. We would also like to remind you that today’s teleconference will contain forward-looking statements. While National Fuel’s expectations, beliefs and projections are made in good faith and are believed to have a reasonable basis, actual results may differ materially. These statements speak only as of the date on which they are made, and you may refer to last evening’s earnings release for a listing of certain specific risk factors. With that, I’ll turn it over to Ron Tanski.

Thanks Brian and good morning everyone and thanks for joining us today for a discussion of our fiscal 2015 results. Last year at this time, I talked about National Fuel having achieved new fiscal year records for recurring earnings and cash flow for our 2014 fiscal year. Over the last 12 months lower commodity prices decreased our GAAP earnings and cash flow for our 2015 fiscal year. However operating results across each of our reporting segments remain strong. While we focused on our growth opportunities in our upstream and midstream segments, our utility and energy marketing operations continue to be an important part of our integrated strategy. In our utility we've increased our investment activity to replace older pipelines that were more prone to developing leaks and were continuing to develop new customer information and billing system to assure continued service quality for our customers, earnings in the utility or just slightly lower compared to last year. Our Energy Marketing segment had another good year, while passing the benefit of lower commodity prices along to their customers this segment still accomplished a million-dollar increase in earnings for the year. In our upstream segment at the Seneca Resources it was lower commodity prices that were the earnings driver for the year. The majority of the decrease in year-over-year earnings in the segment was caused by lower crude oil prices during the year. As we look forward to our fiscal 2016 we have strong hedge book for a large portion of both our crude oil and natural gas production which should protect a large portion of Seneca earnings and cash flow. What’s more important though, is that Seneca continuing to focus on cost control and its development operations that control is evident from the $0.96 per Mcfe of finding and development costs…

Thanks Ron and good morning everyone. For the fiscal fourth-quarter Seneca produced 37.6 Bcfe, which is 8 Bcfe less than last year's fourth quarter. We voluntarily curtailed approximately 12.8 Bcf of potential spot sales due to low prices. Absent those curtailment's production would have over 50 Bcfe for the quarter. In California production for the quarter was nearly flat to last year's fourth quarter, despite a significant reduction in capital spending for the fiscal year. Looking to the future I'm pleased to report we're in the process of closing another farm-in deal with Chevron in the North Midway Sunset field. Under the agreement, we are committed to investing $12 million over the next three years. This acreage is very close to our existing North Midway development and we are confident that we can develop it effectively and economically even at current oil prices. We’ve also called small acquisition adjacent to our South Midway Sunset area and are negotiating a second deal in that area. All three of these deals were structured in a way that minimizes upfront spending and instead allows us to deploy capital to develop the assets over several years. With these deals, we expect our overall California production to be relatively flat or up modestly over the next five years. Moving on to the Marcellus. In the Clermont/Rich Valley development area we have now drilled a total of 111 wells and completed 62. These wells continue to deliver consistent results in line with one type curve. In fact, the P10 to P90 EUR ratio is 1.4, which means the difference between the strongest 10% of our wells and the weakest 10% is only 1.4 times. This consistency in well results gives us a lot of confidence as we pursue our integrated growth strategy. Our fiscal 2015 development…

Thanks Matt, and good morning everyone. As you read in last night's release National Fuel reported a net loss for the fourth quarter of $2.22 per share. There were three items of note in the quarter that impacted earnings. First, as expected, the decline in commodity prices led Seneca to record another non-cash ceiling test charge of $2.83 a share. Going in the other direction Seneca had a few adjustments to deferred income taxes that improved earnings by $0.15 a share. The most significant of these adjustments related to Seneca’s capacity on the Northern Access 2015 project which will transport its production into Canada. As its Canadian sales increase, less of Seneca’s revenues will be allocated to its Pennsylvania income tax return, which will reduce future tax liability. Lastly, as a result of the net loss we experience this year the restricted stock grants made to our executive team for the three-year cycle that ended September 30 will not vest. Therefore we reversed about $8 million or $0.6 per share of long-term incentive comp expense, which was also a benefit to earnings. Excluding these three items results on operating basis were $0.41 per share. So down from the prior year mostly due to the decline in crude oil prices in the E&P segment. Our consolidated operating results for the quarter were right in line with our expectations. At Seneca both production and per unit cash operating costs were right down the middle of our guidance ranges. Per unit DD&A expense was actually below our guidance range thanks to the continued improvement in Seneca’s finding and development costs the Ron and Matt described earlier. Earnings at our midstream businesses were relatively flat compared with last year. At the gathering business earnings were down his overall volumes and revenues track Seneca’s production.…

[Operator Instruction] Your first question comes from Kevin Smith from Raymond James. Please proceed.

Hi, good morning, gentlemen.

Good morning, Kevin.

Congrats on all of the positive efforts you're making in a tough tape. Matt, as you're working down your Marcellus well economics in the WDA - and clearly, you made a lot of progress there. But however, if we're in a natural gas price - call it a $2.30 price environment, similar to where the prop month is today - do you expect to slow down drilling? Or is it a price you're okay with?

Yes, Kevin, we’re really more focused on timing our drilling and completions to fill the pipeline capacity that we’re going to have from Northern Access 2015 now and then Northern Access 2016 roughly the end of 2016. So that's really what drives our activity level rather than current pricing, now the timing of our completions is at least somewhat dependent on current pricing because we can delay some of the completions closer to the date when the Northern Access 2016 comes on.

Got you. And then one last question on drilling, and I'll jump back in the queue. You've increased your lateral lengths pretty substantially, over the last three years, as well as most people in the industry. But now that you're at 7,000 feet, how much longer do you think you can go, or are you comfortable going?

Yes. So as we look forward in the area around Clermont - so sort of Clermont and Hemlock and Ridgeway - we’re estimating that we’re going to average something closer to 8,800 feet. For fiscal 2016, I think around 8,000 or it's going to be longer than that, over time.

Okay, thank you very much.

Your next question comes from the line of Holly Stewart from Howard Weil. Please proceed.

Good morning, gentlemen. Couple questions this morning. Just going to the slide deck, Matt, I know you talk about building productive capacity, with Northern Access 2016 coming online. Certainly not trying to pin you down on 2017, but just trying to get a sense to how we should think about that productive capacity translating into production in 2017?

I guess what I think you are asking Holly is what we think we will be able to produce when we have Northern Access on in 2017. Is that right?

Yes, I'm not trying to pin you down on numbers, per se. But you've got a - that's a big amount of pipeline capacity. And just trying to think about how we should roll some of that through?

Yes, I think the way to think about it Holly is we probably won’t fully utilize all that capacity the day Northern Access 2016 comes on line, but it won’t take tribally long for us to get to the point that we fill all of it.

Okay. Then maybe looking, also, at the slide deck, slide 9 breaks down that Tier 1 area, and WDA, into the three different buckets. I think slide 10 is a little hard to decipher, but we're just trying to figure out how we should think about those three areas, in terms of your development plan in 2016 and 2017?

Yes, so you're asking about 9 and the…

I think you're trying to get at it in slide 10, with the wells, but it's hard to compare the slide 9 and 10.

Yes, so slide 10 is a zoom in - a great deal zoomed in from slide 9.

Sure.

What you see in slide 9 is it’s virtually our entire Western development area and slide 10 is just focused on Clermont.

Okay. So as we think about those three areas, how should we think about that development plan playing out?

What you say three areas, you mean the Clermont/Rich Valley, Hemlock, Ridgway going down there?

Yes, the three areas in the Tier 1.

Yes, you should think about Clermont/Rich Valley being our focus for the next 12 to 18 months and then we’ll gradually work your way down into Hemlock some time in fiscal 2017.

Okay. And then maybe one, just if I could, on the financing, Dave. You mentioned some - a lot of private capital. I know you've put the - I think it was an additional $500 million revolver, or maybe it was $750 million revolver in place. Is there just some color you can give? I mean could you do this all kind of bridge the CapEx to cash flow deficit, all through debt, without much of a ratings movement? Or how should we think about that?

Yes, I think, well the idea behind putting the additional committed credit in place was to give us flexibility to access the markets when the time was right. I guess our feeling is when you look at the size of the Northern Access 2016 project it’s unlikely we could finance that and keep our current ratings. So that’s the emphasis for pursuing other avenues of capital.

Okay, great. Thanks, guys.

Your next question comes from Chris Sighinolfi from Jefferies. Please proceed.

Hey, good morning.

Good morning, Chris.

Thanks for the color already provided. I do have a couple questions. I guess following up on where Holly left off, given just the current market conditions, both for gas prices, but also, if you're watching what's going on the Midstream MLP space, it has been pretty volatile. So I'm just wondering, Ron, if you have revised thoughts to share, with regard to the Northern Access 2016 project? The capital need, and the thought process or decision tree around how to finance it? You had previously talked about Midstream MLP, you mentioned that today, you mentioned private sources. If you could just give us a little bit more color, in terms of like how you and the executive team and the Board think about each of those? Realizing you have, to Dave's earlier point, maybe six to nine months before you really have to make a full decision on it?

Yes, Chris it’s just a matter of lining up all the various options and looking at the various costs or the attractiveness of each at the time that we are going to need to enter the market as you mentioned the MLP space is a little bit volatile right now, but what we are doing and then as Dave mentioned, first of all we’ve got that in our pocket the short-term credit facilities that really allow us to be flexible in the actual timing of any financing that we have coming up. So as Dave mentioned the private capital market, the infrastructure funds have always exhibited a strong interest in our asset. So we’ve had ongoing dialogues with a number of different sources and we will just line those up and see which one fits the bill at the time and as you mentioned the big capital need comes in the summer. So that’s we are just working at as we go along.

Okay. And in terms of, when you talk about private, are you envisioning if - in a completely hypothetical sense, obviously, at this point in time. If we were to think about that route being selected, are - should we be interpreting that, Ron, to think about some level of sort of project financing on that basis? Where private maybe has an interest in that project individually? Or are you talking about private investment in National Fuel?

It’s more on a project type basis, and I guess the other thing to throw in there is always the possibility of partners on various projects. So there's a whole host of options.

Right, okay. All right. I won't beat that any further. I appreciate the color on it. I guess my next two questions are for Dave. Dave, I really always appreciate your comments. They're very detailed, relative to the disclosure we get from so many other companies, it's incredibly helpful.

Thank you, so much.

So thank you for that. You had mentioned NFG supply would trim its rates, in several phases, over the next couple of years. I'm wondering - obviously, the impact there relatively small. I think you said $3 million in revenue? But I'm wondering, as you look at the rest of the system, are there any know contract roll-offs, or likely settlement reductions of a similar nature, on any other aspects of the system that we should be aware of?

Yes, we have a few re-contracting issues that we expect this year. They are not huge dollars maybe in the $5 million range total.

Okay. And when would those - did the discussions around those re-negotiations already commence? Or is that something coming up?

They’ve actually already happened.

They have, okay. And to your thinking, the net impact of those finished discussions, it's $5 million?

Right.

Okay.

I mean rough quarter magnitude.

Yes, okay. And then also, you had mentioned this gradual shift in Seneca production or sales moving from Pennsylvania to Canada. Obviously, we'll see more of that gradually, over time. I don't know if you could quantify for us what the magnitude of the tax differentials would be, as you've thought about that shift?

Yes, I am looking at our Vice President of Tax here, as how do best answer to that question.

The Canadian sales would really be not cash that all because Seneca doesn’t have a presence in Canada. In the Pennsylvania tax rate is 9.9%. So that’s the math is involved.

Okay, and can we just look at the firm sale that you have net to, let's say, the done price, or whatever, as effectively de facto Canadian sales? When we think about firm segments? Or how should we gauge what magnitude of sales actually sell in Canada?

I think you can look at the capacity still we hold in the Canada is the proxy for that.

Okay.

And then whatever percentage of that is used which ultimately 100%.

Okay, perfect. And then I don't know if she's there with you guys, or listening. But just wanted to congratulate Anna Marie on her pending retirement. Always been really helpful, appreciated her thoughts on all things Utility-related. So congrats to her, and best wishes to Carl.

I am here Chris, thank you. And I am leaving you in good hands with Carl.

Thanks a lot guys, appreciate the time this morning.

You bet.

You next question is come from the line of Tim Winter from Gabelli. Please proceed.

Good morning, and thanks for taking my questions.

Good morning, Tim.

I wanted to clarify, on Slide 18 that the top end of the earnings range is assuming that all 70 of that Bcf is sold at $1.75. Is that what I heard?

Yes, that’s right Tim.

Okay, and then on Slide 19, the - how should we think about the pricing of that 900,000 dekatherms a day in 2018? Is that - the bulk of that just future Dawn pricing? Or…

Yes, that’s there is a big chuck of that that’s going to be future Dawn pricing. So both the Niagara Expansion piece and the Northern Access 2016 piece, now that’s not to say we might not put some firm sales agreements and have them indexed to NYMEX instead of Dawn. But as you’re looking at things in the future that we don’t already have contracted Dawn’s probably your best proxy. The orange piece on there that's Atlantic Sunrise, we've got most of that sold under firm contracts that are premium to NYMEX.

Okay, great. And then just one more follow-up question, on the financing, and the various alternatives that you're thinking about. Might one of them be a non-core asset sale? Are there any pieces of your business that, over time, have become less, “core”?

Tim as we look at pretty much all of our assets, and you look at the map where they all overlay each other, we're in pretty good shape with all our assets now. The one issue or not issue, the one opportunity could be the remainder of the timber assets that we have in Pennsylvania hardwood timber assets. If you recall, we sold probably at least half of those assets when we or maybe a little bit more, when we sold those to do the financing for the Empire Pipeline. When we initially acquired that, we did a like-kind exchange. So there's - probably the most likely one asset that would be sizable enough or meaningful enough in terms of an asset sale. The rest of the business I mean all of the pipelines and storages and utility work pretty well and when we continue to focus on the expansion of all the pipeline assets that we have.

Okay, great. Thank you.

[Operator Instructions] Your next question comes from Becca Followill from U.S. Capital Advisors. Please proceed.

Good morning.

Good morning, Becca.

On the credit rating, would you be willing to sacrifice the credit rating?

Likely no, Becca. We have regulatory commissions that would expect us to be at investment-grade credit rating, so that would be our intent.

Okay, thank you, that's what I thought. I just always have to ask. And then Matt, you talked about that you could generate decent returns at the strip. What is decent?

Yes, so if you - we have a slide that shows, probably the best way to answer the question is to reference slide, what slide is that Ron, with the little table of economics?

9. If you go to slide 9, you can kind of get a sense for our returns at varying realized prices.

Okay. And then just, I know there's been several questions on this. But again, on the firm transportation capacity. So you don't see any scenario, assuming that the strip holds, that you would be left with a material amount of FT that you would be holding the bag for, for more than a year or so?

Yes, not for more than a year or so and even in that one-year we are talking about it, probably wouldn't be a terribly large volume that we would have to release.

Thank you. And then last question. Any progress on removing those indentures that prohibit you guys from raising debt?

Yes, we’ve had a process that’s been ongoing over the past few months to try and find a solution that works for everyone, unfortunately we haven't had a great deal of luck with that which is why also partially why we increased our credit lines by the $500 million that we did. It’s something that we will still continue to explore and if we got to the point where we were looking to do a long-term debt issuance, we could always seek a temporary waiver, but I guess that’s where we stand on it.

Okay, thank you. That's all my questions.

I’d now like to turn the call back over to Brian Welsch for closing remarks. Please proceed.

Thank you, Mark. We’d like to thank everyone for taking the time to be with us today. A replay of this call will be available at approximately 3 PM Eastern Time on both our website and by telephone and will run through the close of business on Friday, November 13, 2015. To access the replay online, please visit our Investor Relations website at investor.nationalfuelgas.com. And to access by telephone, call 1-888-286-8010, and enter passcode 17759908. This concludes our conference call for today. Thank you and goodbye.

Ladies and gentlemen, thank you very much. Your conference call is concluded. You may now disconnect and have a great day.