Good day, ladies and gentlemen and welcome to the National Fuel Gas Company Q3 2016 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to introduce your host for today’s conference Brian Welsch, Director of Investor Relations. Sir, you may begin.

Thank you, Jamie 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 John McGinnis, President of Seneca Resources Corporation. At the end of the prepared remarks, we will open the discussion to questions. The third quarter fiscal 2016 earnings release and the February Investor 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. I would also like to point out that the Company is planning to participate in the EnerCom Oil & Gas Conference in Denver in two weeks, and the Barclay’s CEO Energy & Power Conference in New York City in September. If you are planning on attending, please contact the respective conference officials or me directly to schedule a meeting with management. We look forward to seeing everybody there. With that, I’ll turn it over to Ron Tanski.

Thank you, Brian. Good morning everyone and thanks for joining us today. National Fuel’s earnings reported last evening reflected a very good quarter of operations across all our subsidiaries. I’ll let Dave Bauer and John McGinnis talk about the drivers of the quarterly earnings for our major segments in a few minutes. Now, another quarter of steady operating results might make it appear that there is not a lot that we have going on. I can assure you that, that’s not the case. In our upstream exploration and production segment, Seneca Resources extended its joint development agreement with IOG resources for a second block of Marcellus wells. That agreement allows us to continue our acreage development program, but it also reduces our capital requirements and allows us to share some of the development risk with the third party. We also have some exciting early results in our Utica Shale appraisal program. Finally, we’ve seen some firming pricing in the basin that allowed us to increase our spot sales of natural gas during the quarter. In our utility segment, we converted to a new customer information and billing system during the quarter. We invested over $50 million and spent a lot of development time to get things right and our conversion went very well. It’s also been an excellent construction season in our service territory, and we’re well along meeting our targets for our mainline and service renewal program. Both system upgrades help us assure the continued safety of our pipeline system and meet the pipeline renewal mandates of the public service commission. All these investments, in fact all the investments that we’ve made in the utility over the past nine years since our last New York rate case in 2007, had put pressure on our earnings, and we filed a…

Thanks, Ron, and good morning everyone. Seneca produced 44 Bcfe during the third quarter, an increase of 4.8 Bcfe or 12% compared to the second quarter. In Pennsylvania, we’ve produced 38.8 Bcf of gas, an increase of 14% from the second quarter. This increase in production was due primarily to additional firm sales and improved spot pricing on both our Transco and PGP receipt points. Although prices have fallen off recently, over the quarter we are able to sell around 6.4 Bcf net into the spot market. And for the remainder of fiscal 2016, we have 34 Bcf of our forecasted gas production, tied to firm sales at an average price of approximately $3.10 per Mcf. In California, we produced, 722,000 barrels of oil during the third quarter essentially flat third quarter over second quarter. Production at our largest field, North Midwest Sunset, however is actually down about 500 barrels a day from a year ago due to a lack of sufficient soft water volumes for our steam flood operations. In order to elevate this shortage, we have recently completed building our own water plant which will initially increase steam levels back to our original volumes and subsequently allow for increased volumes to be added as we move into full development at 17 and nearby track we recently formed into. As a result within the next 12 months, we should be able to both increase our daily production at North Midway and have sufficient steam to begin our 17N development. And moving to our Utica Point Pleasant appraisal program, our first Claremont area, Utica horizontal well has now been online for just over 45 days, and we are quite pleased with the initial results. We landed this well high in this section within the lower Utica based upon rock quality…

Thanks, John, and good morning everyone. Natural Fuel’s third quarter GAAP earnings were $0.10 a share. When you backup the ceiling test charges and some professional fees associated with the IOG joint development agreement, operating results were $0.68 per share, up $0.13 largely because of improved performance at both Seneca and our gathering company NFG Midstream. Last night’s release describes the major drivers of earnings from year-to-year, but I’d like to add some additional commentary in a couple of areas. First, Seneca’s cost structure continues to improve. LOE for the quarter was $0.88 per Mcfe versus $0.96 in the second quarter. We saw reductions in both Appalachia and California, particularly non-transport LOE and Appalachia came in at $0.12 per Mcfe down from $0.15 mostly due to the increase in production. In California, work over activity was reduced due to oil prices. In addition, the steam operations in North Midway were constrained during the quarter in advance of the new water treatment facility that went into service in late June. Seneca also saw improvement in G&A expense. There were a couple of onetime items in the quarter including the 3.2 million of JDA fees and a 1.7 million downward adjustment to a long-term incentive compensation accrual. Excluding the net $1.5 million of expense related to these items, G&A expense for the quarter was 15.1 million while which is about the level of spending we expect going forward. Per unit DD&A expense decreased to $0.71 per Mcfe. Most of this improvement was the result of the ceiling test impairment charge we recorded in the second quarter. Moving forward, we expect DD&A to stand low to mid $0.70 per Mcfe area given the significant improvement in F&B cost. The second major earnings driver is Appalachian pricing. For much of the quarter, basis was…

Thank you. [Operator Instructions] And our first question comes from Holly Stewart with Howard Weil. Your line is now open.

Just a couple of quick ones, John, your comments on the Utica are pretty exciting. You mentioned as your confidence builds, you’d maybe move more towards a Utica development versus the Marcellus so I am assuming this would be sort of a 2018 kind of timing after this sort a six-well plan that you mentioned?

That’s exactly right. We have, at least we have 3 wells this year that will test in fiscal ’17, and then we’ll go into fiscal ’18 that will be another 4 wells. And at that stage, we’ll be ready to make a decision whether to move forward with that Utica development program, but that’s exactly right the fiscal ’18, fiscal ’19 program.

Okay, so maybe a late ’18 decision.

Yes.

Okay, and then just sort of comparing the CapEx for E&P year-over-year kind of a delta between the tier and obviously that jump up is just due to the Utica testing?

Utica testing and plus we will be drilling additional wells in Lycoming. We'll be moving to gamble this fall and drill, I think it's eight wells for fiscal '17 in preparation for Atlantic Sunrise.

And then maybe one, just talk a little bit about sort of the changing dynamics that we can see at dawn. I know you tied some of your capacity on both Northern Access and Atlantic Sunrise to firm sales agreement. So just sort of on a big picture how you guys are thinking about this, how maybe you could mitigate some of your more mitigation to your exposure, etc.?

We've been paying a lot of attention to it. It's hard to speculate until we understand what volumes we could potentially see heading to dawn from West Canada. But most of the analysis that we've seen is essentially a raised sum of the premium to dawn to NYMEX. But worst case we've seen is that Dawn [ph] approaches NYMEX and those two essentially trade roughly together. We continue to convert Dawn index into NYMEX's going forward. We still see a bit of a premium related to that but I could see that flattening out over time as well.

And then maybe big picture question, if I could, for Ron, just any new thoughts to share on the MLP market, and maybe if that sort of moving up on the options for funding in the future?

Well it remains an option but there's for the IPO market we just haven't seen that come alive again yet. As Dave mentioned given our construction program and the need for financing really not occurring until next summer, at the earliest, we've got plenty of time that's remains to be under table, but as we move forward again with the JDA our capital costs have decreased and our balance sheet is getting stronger. So, it remains an option but the whole market has to get a little bit better. Let's put it this way. I don't expect the national fuel would be the first to test the IPO market again.

Thank you. And our next question comes from Kevin Smith with Raymond James. Your line is now open.

John seems to be some different viewpoints out in the industry about shut in productions in Central and Northeast Marcellus. Maybe from where you sit, is Seneca constrained at all in Marcellus, and are you seeing a regional production decline which allows you to increase front sales?

Well, we had a good quarter selling into the spot market, as I said in the release here it's about 6.4 Bcf. We've seen prices fall off recently. We did curtail about 4.5 Bcf for the quarter. If prices stay where they are in the spot market I see that that would probably increase going into the next quarter. It's hard for me to comment on Northeast and Southwest PA. It's very different dynamics and that's just -- it's difficult for me to comment on that.

And then Dave, would you mind reminding me, I guess about the next project milestones, what we should be looking for on Northern Access?

Well, we received our EA from FERC. The next thing we'll get out of them will be a certificate in late October or early November. And then the next major milestone will be the water quality certificate out of the New York DEC that we’d expect in the first week of March 2017.

Thank you. And our next question comes from Tim Winter with Gabelli. Your line is now open.

I wanted to ask about the $300 million shortfall and looking at the balance sheet, it looks like the impairments are sort of putting a dent in the equity ratio, how do you think about the equity ratio as it relates to the financing and maybe what is the utilities that equity ratio in the rate filing and does that impact your thinking as well?

Yeah, well from a when we evaluate our credit, we’ve taken approach, it's more of the way the agencies look at us which is principally a dent to EBITDA or FFO to debt type metric and we are certainly mindful of the capital structure but our principal focus is on the leverage metrics. From a rate case perspective, the New York division -- I am sorry, the New York PUC is pretty much consistently used 48% as an equity component in recent cases and that’s what we’ve included in our filing. It also I what we had agreed to in our settlement in 2013, so if you look at that 48%, it’s above our consolidated levels but it would be below the equity component of our utility on a standalone basis which will be in a low mid-50% area.

And I am showing no further questions at this time, I’d like to turn the call back over to Brian Welsch for closing remarks.

Thank you Jamie, I’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 we’ll run through the close of business on Friday, August 12, 2016. To access the replay online, please visit our investor relations website at investor.nationalfuelgas.com and to access by telephone call 1855-859-2056 and enter the conference Id no 46345887. This concludes our conference call for today, thank you and good bye.

Ladies and gentlemen thank you for participating in today’s conference. This does conclude the program, you may all disconnect. Everyone have a great day.