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INITIATION OF FISCAL 2025 PRELIMINARY GUIDANCE
In the non-regulated Exploration and Production and Gathering segments, the ongoing transition to the highly prolific EDA and lower activity compared to fiscal 2024 is anticipated to drive modest long-term production growth (0-5% annually) and reduce capital expenditures, furthering the trend of enhancing capital efficiency. Combining this with the outlook for higher natural gas prices, these segments are positioned to generate increasing earnings and free cash flow in fiscal 2025. In addition, recent and ongoing ratemaking activity, along with continued investments in system modernization, is expected to drive meaningful growth in rate base and earnings at the Company's rate-regulated segments.
As a result of these factors, the Company is initiating preliminary earnings guidance for fiscal 2025 with a range of $5.75 to $6.25 per share, or $6.00 per share at the midpoint, an increase of 19% from the midpoint of the revised fiscal 2024 guidance range.
Seneca's fiscal 2025 net production is expected to increase to a range of 400 to 420 Bcf, an increase of 4% versus fiscal 2024 at the midpoint of the guidance range. In addition, the Company is assuming NYMEX natural gas prices of $3.25 per MMBtu for the year, which will drive expected natural gas price realizations after hedging to increase by approximately $0.20 per Mcf from estimated fiscal 2024 realizations.
Overall, Seneca has firm sales contracts in place for approximately 88% of its expected fiscal 2025 natural gas production, significantly limiting its exposure to in-basin markets. Approximately 60% of expected production is supported by financial hedges or fixed price contracts, balancing downside protection with upside opportunity. To the extent that NYMEX increases $0.25 per MMBtu for the year, we would expect earnings per share to increase by approximately $0.35 per share, whereas a decrease to prices of $0.25 per MMBtu would reduce projected earnings per share by $0.30.
In the Company's regulated segments, the impact of the recently settled Supply Corporation rate case is expected to drive continued revenue growth in the Pipeline and Storage segment, with revenues projected to be in a range of $415 million to $435 million, which at the midpoint represents a 4% increase from the fiscal 2024 guidance range. In addition, in the Utility segment, the Company is proceeding with the rate case filed in late 2023 in its New York jurisdiction. The impact of the expected base rate increase is expected to further contribute to growing margin and net income in this segment.
The Company's consolidated capital expenditures in fiscal 2025 are expected to be in a range of $885 million to $970 million, which is largely in line with fiscal 2024 guidance.
Capital expenditures in the Company's rate-regulated Pipeline and Storage and Utility segments, collectively, are expected to be in the range of $295 million to $335 million for fiscal 2025, an increase of 8% from fiscal 2024 at the midpoint. Most of this spending will be focused on modernization programs that further enhance the safety, reliability, and resiliency of the Company's critical infrastructure, and contribute to the ongoing reduction in the Company's emissions profile. Investments in these businesses, combined with ongoing ratemaking activity to timely recovery on these investments, provide for the ability to generate stable, predictable, value-accretive returns, and are an efficient means of deploying cash flow generated across the Company to the long-term benefit of shareholders.
The Company projects fiscal 2025 capital expenditures in its Exploration and Production and Gathering segments, collectively, to be in the range of $590 million to $635 million, a decrease of $25 million, or 4%, from fiscal 2024 at the midpoint. This capital program assumes a pace of development driven by operating a single, dedicated frac fleet throughout the year. Further, Seneca plans to operate one to two horizontal rigs and intermittently operate a top hole rig. In addition, the Gathering segment will continue its multi-year build out of key centralized infrastructure in the Tioga County region, which supports Seneca's EDA development activity.
Posted In: NFG
