National Fuel Gas Co. (NFG) announced a plan to separate its Integrated Upstream and Gathering (IUG) business from its regulated utility and pipeline operations. The transaction will be structured as a tax-free spin-off, creating two independent, publicly traded companies: National Fuel, a pure-play regulated entity, and Seneca Resources, an Appalachian natural gas E&P company.
Key Details
- Transaction & Timing: The separation is targeted for completion in the second half of calendar year 2027. The new E&P company, Seneca Resources, is expected to trade on the NYSE.
- Structure: NFG shareholders will receive a pro-rata distribution of Seneca Resources shares. National Fuel expects to retain up to a 19.9% ownership interest in Seneca, which it intends to divest in a tax-efficient manner post-separation.
- Leadership: David P. Bauer will remain President and CEO of the regulated National Fuel company, while Justin Loweth will become CEO of Seneca Resources.
- Post-Separation Profile: National Fuel will operate as a 100% rate-regulated utility and pipeline company with a ~$5 billion rate base. Seneca Resources will be an independent E&P with ~1.2 million net acres and 5.2 Tcfe of total proved reserves.