National Fuel Plans 2027 Spin-Off of Upstream and Gathering Business

National Fuel plans to separate IUG by distributing IUG shares pro rata to its shareholders. The distribution is intended to be tax-free for National Fuel and its shareholders under U.S. federal income tax rules. After the spin-off, National Fuel expects to retain up to 19.9% of IUG and plans to dispose of that stake in a tax-efficient manner to further strengthen its investment-grade balance sheet.

The company expects to complete the separation during the second half of calendar year 2027, subject to customary conditions. These include filing and securing effectiveness of applicable filings, including a Form 10 registration statement with the Securities and Exchange Commission, completing financing arrangements and receiving final approval from National Fuel’s Board of Directors. National Fuel plans to provide formal guidance for fiscal 2027 with its fourth-quarter earnings release in November 2026. IUG will remain part of National Fuel’s consolidated financial results until the separation is completed.

The source section ends mid-sentence after stating that each publicly traded company will be an independent, focused entity. The stand-alone businesses are expected to have the scale and financial strength to support long-term growth and sustainable value for investors, customers and employees. Greater flexibility in allocating capital could allow each company to pursue its own growth opportunities and shareholder-return priorities, backed by experienced leadership teams, strong balance sheets and more tailored capital structures.

The separation is expected to retain key integration benefits, including capital efficiencies from IUG’s combined upstream and gathering operations. Operating synergies are also expected to help support customer affordability and commercial benefits across National Fuel’s regulated businesses. More clearly differentiated equity stories could raise the companies’ visibility among investors and research analysts, while aligning each public company with its natural investor base.

After the separation, National Fuel is expected to be a 100% regulated natural gas platform, with growing, strategically important integrated utility, interstate pipeline and storage assets in constructive regulatory jurisdictions. The business has a rate base of nearly $5 billion. National Fuel’s natural gas utilities serve 1.1 million customers in Ohio, New York and Pennsylvania. Its FERC-regulated pipeline and storage operations are expected to provide nearly 5 Bcf per day of contracted natural gas transportation capacity and 77 Bcf of fully contracted storage services.

National Fuel operates in constructive regulatory jurisdictions and sees significant long-term investment opportunities, supported by infrastructure modernization programs in each jurisdiction. Rising natural gas demand, including from data centers and power generation within its operating footprint, is accelerating the need for additional pipeline and storage infrastructure. Ongoing investment in safety and reliability, together with growing regional demand for natural gas, supports a strong growth outlook across these businesses. National Fuel expects to retain key operating synergies between its utility and FERC-regulated operations.

Financially, the business is expected to maintain a strong balance sheet, targeting National Fuel expects its investment-grade credit metrics to rank among the strongest in the utility sector. Under current capital plans, it does not expect to need additional equity capital over the next five years, which the company says will give it financial flexibility to pursue long-term growth opportunities. It also plans to maintain a capital-return policy in line with utility peers. The existing management teams at the Utility and Pipeline and Storage businesses are expected to stay in place.

They include David P. Bauer, President and Chief Executive Officer, and Timothy J. Silverstein, Treasurer and Chief Financial Officer. The company cited the leadership team’s experience and record of safe operations, strong regulatory relationships and execution of financial plans, while keeping customer rates among the lowest in its operating jurisdictions.

National Fuel said these attributes are expected to support an attractive risk-adjusted return proposition for investors, with predictable growth. The business has stable cash flows that underpin a strong financial foundation. Its integrated upstream and gathering operations form a leading Appalachian natural gas business, with high-quality assets, deep inventory and top-tier capital efficiency trends. After the separation, IUG will be a leading, low-cost integrated natural gas producer, with approximately 1.2 million net acres in Appalachia and approximately 1.1 Bcf per day of net natural gas production.

Its wholly owned gathering assets carry the vast majority of its output, supporting lower costs, greater operating control and improved capital efficiency. IUG has approximately 5 Tcf of proved natural gas reserves and more than 25 years of development inventory at very low breakeven prices. This positions the company to build on its capital efficiency trends and pursue long-term value through disciplined capital allocation. Since shifting its development program to the Eastern Development Area in 2023, IUG has improved capital efficiency by approximately 25%, enabling it to generate more production and free cash flow for each dollar invested.

Combined with its IUG’s integrated gathering platform and portfolio of firm transportation capacity provide access to premium markets. The company is expected to retain a highly competitive cash operating cost structure, with market access advantages supporting high cash margins and long-term value creation. As an independent company, IUG is expected to have a strong balance sheet, giving it flexibility in capital allocation, development of its premier drilling inventory and pursuit of targeted growth opportunities. IUG will retain its current leadership team.

Seneca Resources and NFG Midstream President Justin I. Loweth is set to become chief executive officer of the new company. Keeping the experienced team in place is expected to support IUG’s record of operational excellence. The company’s focused business model, experienced management and high-quality resource base are expected to position IUG to pursue its strategy from the outset as an independent company.