National Fuel Gas Co. (NFG) saw its 4Q2015 results affected by low commodity prices yet again, as NFG’s exploration and production (E&P) subsidiary Seneca Resources Corp. closed 4Q2015 on Sept. 30 with almost 13 Bcf in voluntary curtailments in its Appalachian production.

The fourth quarter figures mirrored Seneca’s 2Q2015 and 3Q2015 results, as shut-in gas and impairments on its oil and gas properties continued to impact NFG’s bottom line (see Shale Daily, Aug. 12; May 1).

But a strong hedging portfolio and a series of midstream projects either recently completed or expected to come online in 2016 counted among a number of positive signs for NFG as it closed out its fiscal year.

“The continuation of low oil and natural gas commodity prices required us to write down the balance sheet value of our 2.3 Tcfe of oil and natural gas reserves,” CEO Ronald Tanski said. “This large adjustment distracts from an otherwise solid quarter and fiscal year of operations across all our segments.

“Customers of our downstream utility and energy marketing segments continue to benefit from the low prices we are experiencing during this low point in the commodity price cycle. Our integrated business model and balance among operations across the natural gas value chain allow us to maintain our operations with a longer-term view.”

Seneca, which operates acreage primarily in Pennsylvania and California, produced 37.6 Bcfe for the quarter, a decrease of 8.3 Bcfe from the year-ago period due largely to the voluntary curtailments. The company produced 33 Bcf of natural gas and 778,000 Bbl of crude oil in the quarter.

To close the fiscal year, Seneca reported continued efficiencies in its drilling operations, trimming average well costs to $5.7 million in 2015 at an average depth of 14,300 feet and with a 7,300-foot lateral. This compares to $8.7 million/well in 2012 at a depth of 13,700 feet and with an average lateral of 5,100 feet.

As it shut in 2015 production from its E&P, NFG continued to look toward development of its midstream assets to provide additional takeaway for Seneca’s Appalachian production.

During NFG’s quarterly earnings call last week, Tanski reported that three pipeline projects the company had been working on through its midstream subsidiaries, National Fuel Gas Supply Corp. and Empire Pipeline Inc., were put in operation during 4Q2015. These projects included the $86 million, 175,000 Dth/d West Side expansion project; the $60 million Tuscarora Lateral project; and the $67.5 million Northern Access 2015 project, which is paired with a Tennessee Gas Pipeline project on the jointly-owned Niagara Spur Line and is expected to deliver 140,000 Dth/d to Canada.

The company is also moving forward in the certification process for its Northern Access 2016 project, which is expected to go into service in late 2016. And the company is in open season on its recently-announced Empire North project.

“While low commodity prices can be a challenge for our upstream business, we have seen increased average use per customer in our utility business, and continuing demand for more pipeline capacity from producers looking to move their gas to higher-priced markets,” Tanski said. “The next year, we will begin construction of the Northern Access 2016 project, which, in addition to benefiting Supply and Empire, will move Seneca’s production to a higher-priced market in Canada.”

In its consolidated results for 4Q2015, NFG recorded $240.8 million ($2.83/share) in oil and gas impairments. NFG’s consolidated loss for the quarter was $187.7 million (minus $2.22/share), compared to $57.4 million in earnings (68 cents/share) in the year-ago period.

For the fiscal year ending Sept. 30, NFG posted a consolidated loss of $379.4 million (minus $4.50/share). That compares to 2014 earnings of $299.4 million ($3.52/share).