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Planned Spending, Acquisitions Aid National Fuel Gas (NFG)
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National Fuel Gas Company (NFG - Free Report) is an integrated energy company, with natural gas assets in the prolific Appalachian basin and oil-producing assets in California. Consistent capital investment, acquiring Shell’s assets, and expanding upstream and midstream operations are tailwinds.
National Fuel Gas’ systematic capital spending to strengthen its natural gas and oil operation is aiding the total production of the company. It has been consistently increasing its total production since fiscal 2015. NFG plans to invest $725-$870 million in fiscal 2022. Net E&P production was 327.4 billion cubic feet equivalent (Bcfe) for fiscal 2021, while that for fiscal 2022 is expected to be 350-355 Bcfe and the fiscal 2023 production is expected to be 370-390 Bcfe.
The acquisition of Shell’s assets added 684 billion cubic feet of natural gas reserves at a F&D cost of less than 40 cents per thousand cubic feet equivalent, lower than what the company currently incurs. National Fuel Gas’s increased scale and contiguous operations are expected to further reduce the per-cash-unit costs, boosting the company's margins.
Expanding operations of National Fuel Gas enables it to generate a stable cash flow. The company’s total liquidity as of Jun 30, 2022, was $1,283 million, sufficient to address near-term debt obligations.
Headwinds
There is strong competition in the natural gas industry among providers of natural gas, and other energy sources such as fuel oil and electricity. Therefore, a drop in the prices of alternate fuel and electricity could affect natural gas demand and hurt the company’s prospects. Fluctuation in the weather can adversely impact the demand of natural gas.
Price Performance
In the past 12 months, shares of the company have risen 39% compared with the industry's 21.3% rally.
Image Source: Zacks Investment Research
Other Picks
Some better-ranked stocks in the same sector are NextEra Energy (NEE - Free Report) , The Southern Company (SO - Free Report) and Alliant Energy (LNT - Free Report) , each currently carrying a Zacks Rank #2 (Buy).
NextEra Energy, Southern Company and Alliant Energy delivered earnings surprises of 5.5%, 9.4% and 5.8%, respectively, in the trailing four quarters on average.
The Zacks Consensus Estimate for 2022 earnings of NextEra Energy, Southern Company and Alliant Energy moved up 1.8%, 2% and 1.8%, respectively, in the last 60 days.
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Planned Spending, Acquisitions Aid National Fuel Gas (NFG)
National Fuel Gas Company (NFG - Free Report) is an integrated energy company, with natural gas assets in the prolific Appalachian basin and oil-producing assets in California. Consistent capital investment, acquiring Shell’s assets, and expanding upstream and midstream operations are tailwinds.
We recently updated the report on the Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tailwinds
National Fuel Gas’ systematic capital spending to strengthen its natural gas and oil operation is aiding the total production of the company. It has been consistently increasing its total production since fiscal 2015. NFG plans to invest $725-$870 million in fiscal 2022. Net E&P production was 327.4 billion cubic feet equivalent (Bcfe) for fiscal 2021, while that for fiscal 2022 is expected to be 350-355 Bcfe and the fiscal 2023 production is expected to be 370-390 Bcfe.
The acquisition of Shell’s assets added 684 billion cubic feet of natural gas reserves at a F&D cost of less than 40 cents per thousand cubic feet equivalent, lower than what the company currently incurs. National Fuel Gas’s increased scale and contiguous operations are expected to further reduce the per-cash-unit costs, boosting the company's margins.
Expanding operations of National Fuel Gas enables it to generate a stable cash flow. The company’s total liquidity as of Jun 30, 2022, was $1,283 million, sufficient to address near-term debt obligations.
Headwinds
There is strong competition in the natural gas industry among providers of natural gas, and other energy sources such as fuel oil and electricity. Therefore, a drop in the prices of alternate fuel and electricity could affect natural gas demand and hurt the company’s prospects. Fluctuation in the weather can adversely impact the demand of natural gas.
Price Performance
In the past 12 months, shares of the company have risen 39% compared with the industry's 21.3% rally.
Image Source: Zacks Investment Research
Other Picks
Some better-ranked stocks in the same sector are NextEra Energy (NEE - Free Report) , The Southern Company (SO - Free Report) and Alliant Energy (LNT - Free Report) , each currently carrying a Zacks Rank #2 (Buy).
NextEra Energy, Southern Company and Alliant Energy delivered earnings surprises of 5.5%, 9.4% and 5.8%, respectively, in the trailing four quarters on average.
The Zacks Consensus Estimate for 2022 earnings of NextEra Energy, Southern Company and Alliant Energy moved up 1.8%, 2% and 1.8%, respectively, in the last 60 days.