National Fuel Joint Venture to Develop Marcellus Shale Is A No Go.
Dow Jones Newswire -
National Fuel Gas Co. (NFG) said it likely won't pursue a joint venture with two companies that its subsidiary had been eyeing to develop assets in the Marcellus shale region.
The company's stock had rallied last September after its Seneca Resources Corp. subsidiary said it was seeking a partner for its assets in the prolific natural-gas production area in Pennsylvania.
Friday, shares were off 9.9% to $57.01 after setting off a single-stock circuit breaker. The stock had also declined after-hours Thursday, despite the company's better-than-expected fiscal third-quarter results.
As late as last month, Seneca said it was still considering offers from "several" different parties. Friday, it parent company said discussions came "relatively close" with two potential partners but didn't meet the bar of enhancing shareholder value.
"Our future growth prospects--and the fact that we're not capital constrained or up against a schedule of lease expirations--sets a pretty high bar," Chief Executive David F. Smith said in a statement. He added that, while the two offers the company considered were good and serious, "they just weren't good enough."
Seneca's exploration-and-production business already operates a joint venture for some of its Marcellus shale wells with EOG Resources Inc. (EOG)
Late Thursday, National Fuel reported its profit for the period ended June 30 rose 10% to $46.9 million, or 56 cents a share, from $42.6 million, or 51 cents a share, a year earlier. Operating revenue climbed 8.2% to $381 million. Analysts polled by Thomson Reuters had expected earnings of 53 cents a share and revenue of $375 million.
National Fuel also increased its earnings guidance for the year to a range of $3 to $3.10 a share from $2.83 to $2.98.
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