NATIONAL FUEL GAS CO, 10-Q filed on 5/1/2020
Quarterly Report
v3.20.1
Document And Entity Information - $ / shares
6 Months Ended
Mar. 31, 2020
Apr. 30, 2020
Cover [Abstract]    
Amendment Flag false  
Current Fiscal Year End Date --09-30  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2020  
Document Period End Date Mar. 31, 2020  
Document Quarterly Report true  
Document Transition Report false  
Document Type 10-Q  
Entity Address, Address Line One 6363 Main Street  
Entity Address, City or Town Williamsville,  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 14221  
Entity Central Index Key 0000070145  
Entity Common Stock, Shares Outstanding   86,573,652
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Emerging Growth Company false  
Entity File Number 1-3880  
Entity Filer Category Large Accelerated Filer  
Entity Incorporation, State or Country Code NJ  
Entity Registrant Name NATIONAL FUEL GAS COMPANY  
Entity Shell Company false  
Entity Small Business false  
Entity Tax Identification Number 13-1086010  
City Area Code 716  
Local Phone Number 857-7000  
Title of 12(b) Security Common Stock, par value $1.00 per share  
Trading Symbol NFG  
Security Exchange Name NYSE  
Entity Listing, Par Value Per Share $ 1.00  
v3.20.1
Consolidated Statements Of Income And Earnings Reinvested In The Business (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
INCOME        
Operating Revenues $ 491,095 $ 552,544 $ 935,283 $ 1,042,791
Operating Expenses:        
Purchased Gas 118,270 195,037 210,542 333,697
Property, Franchise and Other Taxes 22,743 22,535 45,887 46,540
Depreciation, Depletion and Amortization 77,912 65,664 152,830 129,918
Impairment of Oil and Gas Producing Properties 177,761 0 177,761 0
Total Operating Expenses 515,675 399,185 811,843 727,748
Operating Income (Loss) (24,580) 153,359 123,440 315,043
Other Income (Expense):        
Other Income (Deductions) (17,480) (5,919) (20,520) (15,521)
Interest Expense on Long-Term Debt (25,270) (25,273) (50,713) (50,713)
Other Interest Expense (1,892) (1,787) (3,443) (2,860)
Income (Loss) Before Income Taxes (69,222) 120,380 48,764 245,949
Income Tax Expense 36,846 29,785 68,241 52,693
Net Income (Loss) Available for Common Stock (106,068) 90,595 (19,477) 193,256
EARNINGS REINVESTED IN THE BUSINESS        
Balance at Beginning of Period 1,320,592 1,172,334 1,272,601 1,098,900
Beginning Retained Earnings Unappropriated And Current Period Net Income 1,214,524 1,262,929 1,253,124 1,292,156
Dividends on Common Stock (37,654) (36,678) (75,304) (73,342)
Balance at March 31 $ 1,176,870 $ 1,236,657 $ 1,176,870 $ 1,236,657
Earnings Per Common Share, Basic:        
Net Income (Loss) Available for Common Stock (in dollars per share) $ (1.23) $ 1.05 $ (0.23) $ 2.24
Earnings Per Common Share, Diluted:        
Net Income (Loss) Available for Common Stock (in dollars per share) $ (1.23) $ 1.04 $ (0.23) $ 2.23
Weighted Average Common Shares Outstanding:        
Used in Basic Calculation (shares) 86,561,066 86,290,047 86,469,258 86,159,932
Used in Diluted Calculation (shares) 86,561,066 86,767,673 86,469,258 86,738,809
Dividends Per Common Share:        
Dividends Declared (in dollars per share) $ 0.435 $ 0.425 $ 0.870 $ 0.850
Utility and Energy Marketing [Member]        
INCOME        
Operating Revenues $ 282,634 $ 357,654 $ 510,660 $ 629,747
Operating Expenses:        
Operation and Maintenance 51,725 48,559 94,981 92,475
Exploration and Production and Other [Member]        
INCOME        
Operating Revenues 156,542 146,467 323,735 310,403
Operating Expenses:        
Operation and Maintenance 39,959 40,141 76,652 72,936
Pipeline and Storage and Gathering [Member]        
INCOME        
Operating Revenues 51,919 48,423 100,888 102,641
Operating Expenses:        
Operation and Maintenance 27,305 27,249 53,190 52,182
Guidance for Hedging [Member]        
EARNINGS REINVESTED IN THE BUSINESS        
Cumulative Effect of Adoption of Authoritative Guidance 0 0 (950) 0
Guidance for Recognition and Measurement of Financial Assets and Liabilities [Member]        
EARNINGS REINVESTED IN THE BUSINESS        
Cumulative Effect of Adoption of Authoritative Guidance 0 0 0 7,437
Guidance for Reclassification of Stranded Tax Effects [Member]        
EARNINGS REINVESTED IN THE BUSINESS        
Cumulative Effect of Adoption of Authoritative Guidance $ 0 $ 10,406 $ 0 $ 10,406
v3.20.1
Consolidated Statements Of Comprehensive Income (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Mar. 31, 2020
Mar. 31, 2019
Statement of Comprehensive Income [Abstract]        
Net Income (Loss) Available for Common Stock $ (106,068) $ 90,595 $ (19,477) $ 193,256
Other Comprehensive Income (Loss), Before Tax:        
Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period 76,304   76,799  
Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period   (26,000)   19,390
Reclassification Adjustment for Realized (Gains) Losses on Derivative Financial Instruments in Net Income (25,034)   (32,386)  
Reclassification Adjustment for Realized (Gains) Losses on Derivative Financial Instruments in Net Income   4,739   24,384
Cumulative Effect of Adoption of Authoritative Guidance for Hedging 0 0 1,313 0
Reclassification Adjustment for the Cumulative Effect of Adoption of Authoritative Guidance for Financial Assets and Liabilities to Earnings Reinvested in the Business 0 0 0 (11,738)
Other Comprehensive Income (Loss), Before Tax 51,270 (21,261) 45,726 32,036
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period 20,854   20,974  
Income Tax Expense (Benefit) Related to Unrealized Gain (Loss) on Derivative Financial Instruments Arising During the Period   (7,399)   5,593
Reclassification Adjustment for Income Tax Benefit (Expense) on Realized Losses (Gains) from Derivative Financial Instruments in Net Income (6,817)   (8,849)  
Reclassification Adjustment for Income Tax Benefit (Expense) on Realized Losses (Gains) from Derivative Financial Instruments in Net Income   1,328   6,874
Income Tax Benefit (Expense) on Cumulative Effect of Adoption of Authoritative Guidance for Hedging 0 0 363 0
Reclassification Adjustment for Income Tax Benefit (Expense) on the Cumulative Effect of Adoption of Authoritative Guidance for Financial Assets and Liabilities to Earnings Reinvested in the Business 0 0 0 (4,301)
Reclassification Adjustment for Stranded Tax Effects Related to the 2017 Tax Reform Act to Earnings Reinvested in the Business 0 10,406 0 10,406
Income Taxes – Net 14,037 4,335 12,488 18,572
Other Comprehensive Income (Loss) 37,233 (25,596) 33,238 13,464
Comprehensive Income (Loss) $ (68,835) $ 64,999 $ 13,761 $ 206,720
v3.20.1
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Mar. 31, 2020
Sep. 30, 2019
ASSETS    
Property, Plant and Equipment $ 11,559,528 $ 11,204,838
Less - Accumulated Depreciation, Depletion and Amortization 6,003,658 5,695,328
Property, Plant and Equipment, Net, Total 5,555,870 5,509,510
Current Assets    
Cash and Temporary Cash Investments 111,655 20,428
Hedging Collateral Deposits [1] 10,728 6,832
Receivables - Net of Allowance for Uncollectible Accounts of $29,627 and $25,788, Respectively 172,011 139,956
Unbilled Revenue 44,715 18,758
Gas Stored Underground 8,860 36,632
Materials and Supplies - at average cost 48,113 40,717
Unrecovered Purchased Gas Costs 0 2,246
Other Current Assets 100,188 97,054
Total Current Assets 496,270 362,623
Other Assets    
Recoverable Future Taxes 115,934 115,197
Unamortized Debt Expense 13,151 14,005
Other Regulatory Assets 161,800 167,320
Deferred Charges 56,855 33,843
Other Investments 137,044 144,917
Goodwill 5,476 5,476
Prepaid Post-Retirement Benefit Costs 71,381 60,517
Fair Value of Derivative Financial Instruments 94,797 48,669
Other 81 80
Total Other Assets 656,519 590,024
Total Assets 6,708,659 6,462,157
Capitalization:    
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 86,561,532 Shares and 86,315,287 Shares, Respectively 86,562 86,315
Paid in Capital 835,444 832,264
Earnings Reinvested in the Business 1,176,870 1,272,601
Accumulated Other Comprehensive Loss (18,917) (52,155)
Total Comprehensive Shareholders’ Equity 2,079,959 2,139,025
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,134,964 2,133,718
Total Capitalization 4,214,923 4,272,743
Current and Accrued Liabilities    
Notes Payable to Banks and Commercial Paper 230,000 55,200
Current Portion of Long-Term Debt 0 0
Accounts Payable 106,938 132,208
Amounts Payable to Customers 17,213 4,017
Dividends Payable 37,654 37,547
Interest Payable on Long-Term Debt 18,508 18,508
Customer Advances 615 13,044
Customer Security Deposits 14,999 16,210
Other Accruals and Current Liabilities 150,239 139,600
Fair Value of Derivative Financial Instruments 7,652 5,574
Total Current and Accrued Liabilities 583,818 421,908
Deferred Credits    
Deferred Income Taxes 777,299 653,382
Taxes Refundable to Customers 360,331 366,503
Cost of Removal Regulatory Liability 224,546 221,699
Other Regulatory Liabilities 157,371 142,367
Pension and Other Post-Retirement Liabilities 126,959 133,729
Asset Retirement Obligations 128,779 127,458
Other Deferred Credits 134,633 122,368
Total Deferred Credits 1,909,918 1,767,506
Commitments and Contingencies (Note 8) 0 0
Total Capitalization and Liabilities $ 6,708,659 $ 6,462,157
[1]
Netting Adjustments represent the impact of legally-enforceable master netting arrangements that allow the Company to net gain and loss positions held with the same counterparties. The net asset or net liability for each counterparty is recorded as an asset or liability on the Company’s balance sheet.
v3.20.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2020
Sep. 30, 2019
Statement of Financial Position [Abstract]    
Receivables, Allowance for Uncollectible Accounts $ 29,627 $ 25,788
Common Stock, Par Value $ 1 $ 1
Common Stock, Shares Authorized 200,000,000 200,000,000
Common Stock, Shares Issued 86,561,532 86,315,287
Common Stock, Shares Outstanding 86,561,532 86,315,287
v3.20.1
Consolidated Statements Of Cash Flows (Unaudited) - USD ($)
$ in Thousands
6 Months Ended
Mar. 31, 2020
Mar. 31, 2019
OPERATING ACTIVITIES    
Net Income (Loss) Available for Common Stock $ (19,477) $ 193,256
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:    
Impairment of Oil and Gas Producing Properties 177,761 0
Depreciation, Depletion and Amortization 152,830 129,918
Deferred Income Taxes 104,883 90,468
Stock-Based Compensation 7,580 10,731
Other 9,800 7,997
Change in:    
Receivables and Unbilled Revenue (58,248) (130,377)
Gas Stored Underground and Materials and Supplies 20,086 29,093
Unrecovered Purchased Gas Costs 2,246 (1,556)
Other Current Assets (3,134) 10,438
Accounts Payable (5,465) 10,226
Amounts Payable to Customers 13,196 12,069
Customer Advances (12,429) (13,176)
Customer Security Deposits (1,211) (7,184)
Other Accruals and Current Liabilities 9,076 48,028
Other Assets (10,359) (38,686)
Other Liabilities 3,857 (10,410)
Net Cash Provided by Operating Activities 390,992 340,835
INVESTING ACTIVITIES    
Capital Expenditures (395,486) (386,579)
Other 4,167 (2,616)
Net Cash Used in Investing Activities (391,319) (389,195)
Financing Activities    
Changes in Notes Payable to Banks and Commercial Paper 174,800 0
Dividends Paid on Common Stock (75,197) (73,197)
Net Repurchases of Common Stock (4,153) (8,864)
Net Cash Provided by (Used in) Financing Activities 95,450 (82,061)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 95,123 (130,421)
Cash, Cash Equivalents and Restricted Cash at October 1 27,260 233,047
Cash, Cash Equivalents and Restricted Cash at March 31 122,383 102,626
Supplemental Disclosure of Cash Flow Information, Non-Cash Investing Activities:    
Non-Cash Capital Expenditures $ 59,490 $ 74,929
v3.20.1
Summary Of Significant Accounting Policies
6 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies Summary of Significant Accounting Policies
 
Principles of Consolidation.  The Company consolidates all entities in which it has a controlling financial interest.  All significant intercompany balances and transactions are eliminated. The Company uses proportionate consolidation when accounting for drilling arrangements related to oil and gas producing properties accounted for under the full cost method of accounting.
 
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Earnings for Interim Periods.  The Company, in its opinion, has included all adjustments (which consist of only normally recurring adjustments, unless otherwise disclosed in this Form 10-Q) that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 2019, 2018 and 2017 that are included in the Company's 2019 Form 10-K.  The consolidated financial statements for the year ended September 30, 2020 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.
 
The earnings for the six months ended March 31, 2020 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2020.  Most of the business of both the Utility segment and the Company's NFR operations (included in the All Other category) is seasonal in nature and is influenced by weather conditions.  Due to the seasonal nature of the heating business in the Utility segment and in the Company's NFR operations, earnings during the winter months normally represent a substantial part of the earnings that those businesses are expected to achieve for the entire fiscal year.  The Company’s business segments are discussed more fully in Note 9 — Business Segment Information.
 
Consolidated Statements of Cash Flows.  The components, as reported on the Company’s Consolidated Balance Sheets, of the total cash, cash equivalents, and restricted cash presented on the Statement of Cash Flows are as follows (in thousands):
 
Six Months Ended
March 31, 2020
 
Six Months Ended
March 31, 2019
 
Balance at October 1, 2019
 
Balance at March 31, 2020
 
Balance at October 1, 2018
 
Balance at March 31, 2019
 
 
 
 
 
 
 
 
Cash and Temporary Cash Investments
$
20,428

 
$
111,655

 
$
229,606

 
$
100,643

Hedging Collateral Deposits
6,832

 
10,728

 
3,441

 
1,983

Cash, Cash Equivalents, and Restricted Cash
$
27,260

 
$
122,383

 
$
233,047

 
$
102,626



The Company considers all highly liquid debt instruments purchased with a maturity date of generally three months or less to be cash equivalents. The Company’s restricted cash is composed entirely of amounts reported as Hedging Collateral Deposits on the Consolidated Balance Sheets. Hedging Collateral Deposits is an account title for cash held in margin accounts funded by the Company to serve as collateral for hedging positions. In accordance with its accounting policy, the Company does not offset hedging collateral deposits paid or received against related derivative financial instruments liability or asset balances.

Allowance for Uncollectible Accounts. The allowance for uncollectible accounts is the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable. The allowance is determined based on historical experience, the age and other specific information about customer accounts. Account balances are charged off against the allowance twelve months after the account is final billed or when it is anticipated that the receivable will not be recovered. In light of the current COVID-19 crisis, government mandates have resulted in the shut-down of a significant number of businesses in the Company’s service territories and many individuals are currently out of work. The financial strains on businesses and individuals could have a significant impact on their ability to pay their bills, which could lead to a significant increase in uncollectible expense for customer receivables, primarily within the Utility segment. While the combination of the current low cost of natural gas service and the steps taken by the federal government to alleviate the financial burden on companies and individuals should act as an offset to the overall economic situation, the Company is anticipating that there will be some level of increase in uncollectible expense depending
on the extent and duration of the pandemic crisis. To date, the Company has not experienced any discernible change in the rate at which its customers pay their bills.

Gas Stored Underground.  In the Utility segment, gas stored underground is carried at lower of cost or net realizable value, on a LIFO method.  Gas stored underground normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.  In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.”  Such reserve, which amounted to $24.0 million at March 31, 2020, is reduced to zero by September 30 of each year as the inventory is replenished.
 
Property, Plant and Equipment.  In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting. Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities. The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities. The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center. The Company's capitalized costs relating to oil and gas producing activities, net of accumulated depreciation, depletion and amortization, were $1.6 billion and $1.7 billion at March 31, 2020 and September 30, 2019, respectively.
 
Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.  Such costs amounted to $74.8 million and $53.5 million at March 31, 2020 and September 30, 2019, respectively.  All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred. The amount of any impairment is transferred to the pool of capitalized costs being amortized.
 
Capitalized costs are subject to the SEC full cost ceiling test. The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized. The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10%, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unevaluated properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties. The gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period. If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent impairment is required to be charged to earnings in that quarter.  The book value of the oil and gas properties exceeded the ceiling at March 31, 2020. As such, the Company recognized a pre-tax impairment charge of $177.8 million for the quarter ended March 31, 2020. Deferred income tax benefits of $48.5 million related to the impairment charge were also recognized for the quarter ended March 31, 2020. In adjusting estimated future cash flows for hedging under the ceiling test at March 31, 2020, estimated future net cash flows were increased by $32.7 million.
    
The principal assets of the Utility, Pipeline and Storage and Gathering segments, consisting primarily of gas plant in service, are recorded at the historical cost when originally devoted to service. In light of COVID-19, government mandates have resulted in the shut-down of a significant number of businesses in the Company’s service territories and many individuals are currently out of work. It is possible that the extent and duration of this crisis could reduce projected cash flows associated with the use of these assets, which could in turn lead to a decrease in fair value and result in a potential impairment of the recorded value of such assets. While there were no indications of any conditions that could result in impairments at March 31, 2020, management will continue to monitor the situation on a quarterly basis.
Accumulated Other Comprehensive Loss.  The components of Accumulated Other Comprehensive Loss and changes for the six months ended March 31, 2020 and 2019, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands): 
 
Gains and Losses on Derivative Financial Instruments
 
Gains and Losses on Securities Available for Sale
 
Funded Status of the Pension and Other Post-Retirement Benefit Plans
 
Total
Three Months Ended March 31, 2020
 
 
 
 
 
 
 
Balance at January 1, 2020
$
30,680

 
$

 
$
(86,830
)
 
$
(56,150
)
Other Comprehensive Gains and Losses Before Reclassifications
55,450

 

 

 
55,450

Amounts Reclassified From Other Comprehensive Income (Loss)
(18,217
)
 

 

 
(18,217
)
Balance at March 31, 2020
$
67,913

 
$

 
$
(86,830
)
 
$
(18,917
)
Six Months Ended March 31, 2020
 
 
 
 
 
 
 
Balance at October 1, 2019
$
34,675

 
$

 
$
(86,830
)
 
$
(52,155
)
Other Comprehensive Gains and Losses Before Reclassifications
55,825

 

 

 
55,825

Amounts Reclassified From Other Comprehensive Income (Loss)
(23,537
)
 

 

 
(23,537
)
Cumulative Effect of Adoption of Authoritative Guidance for Hedging
950

 

 

 
950

Balance at March 31, 2020
$
67,913

 
$

 
$
(86,830
)
 
$
(18,917
)
Three Months Ended March 31, 2019
 
 
 
 
 
 
 
Balance at January 1, 2019
$
17,886

 
$

 
$
(46,576
)
 
$
(28,690
)
Other Comprehensive Gains and Losses Before Reclassifications
(18,601
)
 

 

 
(18,601
)
Amounts Reclassified From Other Comprehensive Income (Loss)
3,411

 

 

 
3,411

Reclassification of Stranded Tax Effects Related to the 2017 Tax Reform Act
1,866

 

 
(12,272
)
 
(10,406
)
Balance at March 31, 2019
$
4,562

 
$

 
$
(58,848
)
 
$
(54,286
)
Six Months Ended March 31, 2019
 
 
 
 
 
 
 
Balance at October 1, 2018
$
(28,611
)
 
$
7,437

 
$
(46,576
)
 
$
(67,750
)
Other Comprehensive Gains and Losses Before Reclassifications
13,797

 

 

 
13,797

Amounts Reclassified From Other Comprehensive Income (Loss)
17,510

 

 

 
17,510

Reclassification Adjustment for the Cumulative Effect of Adoption of Authoritative Guidance for Financial Assets and Liabilities

 
(7,437
)
 

 
(7,437
)
Reclassification of Stranded Tax Effects Related to the 2017 Tax Reform Act
1,866

 

 
(12,272
)
 
(10,406
)
Balance at March 31, 2019
$
4,562

 
$

 
$
(58,848
)
 
$
(54,286
)


In August 2017, the FASB issued authoritative guidance which changes the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities and to simplify the application of hedge accounting. The Company adopted this authoritative guidance effective October 1, 2019, recognizing a cumulative effect adjustment that decreased retained earnings by $1.0 million and increased accumulated other comprehensive income by the same amount.

In January 2016, the FASB issued authoritative guidance regarding the recognition and measurement of financial assets and liabilities. The authoritative guidance primarily affects the accounting for equity investments and the presentation and disclosure
requirements for financial instruments. All equity investments in unconsolidated entities will be measured at fair value through earnings rather than through accumulated other comprehensive income. The Company adopted this authoritative guidance effective October 1, 2018 and, as called for by the modified retrospective method of adoption, recorded a cumulative effect adjustment during the quarter ended December 31, 2018 to increase retained earnings by $7.4 million and decrease accumulated other comprehensive income by the same amount.

In February 2018, the FASB issued authoritative guidance that allows an entity to elect a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the 2017 Tax Reform Act and requires certain disclosures about stranded tax effects. The Company adopted this authoritative guidance effective January 1, 2019 and recorded a cumulative effect adjustment related to deferred income taxes associated with hedging activities and pension and post-retirement benefit obligations for the quarter ended March 31, 2019 to increase retained earnings by $10.4 million and decrease accumulated other comprehensive income by the same amount.
    
Reclassifications Out of Accumulated Other Comprehensive Loss.  The details about the reclassification adjustments out of accumulated other comprehensive loss for the six months ended March 31, 2020 and 2019 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):
Details About Accumulated Other Comprehensive Loss Components
 
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Loss
 
Affected Line Item in the Statement Where Net Income is Presented
 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
 
2020
 
2019
 
2020
 
2019
 
Gains (Losses) on Derivative Financial Instrument Cash Flow Hedges:
 
 
 
 
 
 
 
 
 
 
     Commodity Contracts
 

$23,396

 

($4,260
)
 

$30,937

 

($22,782
)
 
Operating Revenues
     Commodity Contracts
 
1,909

 
(280
)
 
1,911

 
(1,182
)
 
Purchased Gas
     Foreign Currency Contracts
 
(271
)
 
(199
)
 
(462
)
 
(420
)
 
Operating Revenues
 
 
25,034

 
(4,739
)
 
32,386

 
(24,384
)
 
Total Before Income Tax
 
 
(6,817
)
 
1,328

 
(8,849
)
 
6,874

 
Income Tax Expense
 
 

$18,217

 

($3,411
)
 

$23,537

 

($17,510
)
 
Net of Tax

Other Current Assets.  The components of the Company’s Other Current Assets are as follows (in thousands):
                            
At March 31, 2020
 
At September 30, 2019
 
 
 
 
Prepayments
$
6,289

 
$
12,728

Prepaid Property and Other Taxes
23,702

 
14,361

Federal Income Taxes Receivable
42,385

 
42,388

State Income Taxes Receivable
3,455

 
8,579

Fair Values of Firm Commitments
8,775

 
7,538

Regulatory Assets
15,582

 
11,460

 
$
100,188

 
$
97,054



 
 
 
 

 
Other Accruals and Current Liabilities.  The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):
                            
At March 31, 2020
 
At September 30, 2019
 
 
 
 
Accrued Capital Expenditures
$
31,886

 
$
33,713

Regulatory Liabilities
45,338

 
50,332

Reserve for Gas Replacement
23,978

 

Liability for Royalty and Working Interests
13,987

 
18,057

Non-Qualified Benefit Plan Liability
13,194

 
13,194

Other
21,856

 
24,304

 
$
150,239

 
$
139,600


 
Earnings Per Common Share.  Basic earnings per common share is computed by dividing income or loss by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.  For purposes of determining earnings per common share, the potentially dilutive securities the Company had outstanding were SARs, restricted stock units and performance shares.  As the Company recognized a net loss for both the quarter and six months ended March 31, 2020, the aforementioned securities, amounting to 310,015 and 406,748 securities, were not recognized in the diluted earnings per share calculation for the quarter and six months ended March 31, 2020, respectively. For 2019, the diluted weighted average shares outstanding shown on the Consolidated Statements of Income reflects the potential dilution as a result of these securities as determined using the Treasury Stock Method.  SARs, restricted stock units and performance shares that are antidilutive are excluded from the calculation of diluted earnings per common share. There were 159,023 securities and 175,443 securities excluded as being antidilutive for the quarter and six months ended March 31, 2019, respectively.
 
Stock-Based Compensation.  The Company granted 254,608 performance shares during the six months ended March 31, 2020. The weighted average fair value of such performance shares was $43.32 per share for the six months ended March 31, 2020. Performance shares are an award constituting units denominated in common stock of the Company, the number of which may be adjusted over a performance cycle based upon the extent to which performance goals have been satisfied.  Earned performance shares may be distributed in the form of shares of common stock of the Company, an equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company. The performance shares do not entitle the participant to receive dividends during the vesting period.
 
Half of the performance shares granted during the six months ended March 31, 2020 must meet a performance goal related to relative return on capital over a three-year performance cycle.  The performance goal over the performance cycle is the Company’s total return on capital relative to the total return on capital of other companies in a group selected by the Compensation Committee (“Report Group”).  Total return on capital for a given company means the average of the Report Group companies’ returns on capital for each twelve month period corresponding to each of the Company’s fiscal years during the performance cycle, based on data reported for the Report Group companies in the Bloomberg database.  The number of these performance shares that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value of these performance shares is calculated by multiplying the expected number of shares that will be issued by the average market price of Company common stock on the date of grant reduced by the present value of forgone dividends over the vesting term of the award.  The fair value is recorded as compensation expense over the vesting term of the award.  The other half of the performance shares granted during the six months ended March 31, 2020 must meet a performance goal related to relative total shareholder return over a three-year performance cycle.  The performance goal over the performance cycle is the Company’s three-year total shareholder return relative to the three-year total shareholder return of the other companies in the Report Group.  Three-year total shareholder return for a given company will be based on the data reported for that company (with the starting and ending stock prices over the performance cycle calculated as the average closing stock price for the prior calendar month and with dividends reinvested in that company’s securities at each ex-dividend date) in the Bloomberg database.  The number of these total shareholder return performance shares ("TSR performance shares") that will vest and be paid will depend upon the Company’s performance relative to the Report Group and not upon the absolute level of return achieved by the Company.  The fair value price at the date of grant for the TSR performance shares is determined using a Monte Carlo simulation technique, which includes a reduction in value for the present value of forgone dividends over the vesting term of the award.  This price is multiplied by the number of TSR performance shares awarded, the result of which is recorded as compensation expense over the vesting term of the award.
 
The Company granted 150,839 nonperformance-based restricted stock units during the six months ended March 31, 2020.  The weighted average fair value of such nonperformance-based restricted stock units was $40.38 per share for the six months ended March 31, 2020.  Restricted stock units represent the right to receive shares of common stock of the Company (or the equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company) at the end of a specified time period. These nonperformance-based restricted stock units do not entitle the participant to receive dividends during the vesting period. The accounting for nonperformance-based restricted stock units is the same as the accounting for restricted share awards, except that the fair value at the date of grant of the restricted stock units must be reduced by the present value of forgone dividends over the vesting term of the award.
v3.20.1
Revenue from Contracts with Customers
6 Months Ended
Mar. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contracts with Customers Revenue from Contracts with Customers
 
The Company adopted authoritative guidance regarding revenue recognition on October 1, 2018 using the modified retrospective method of adoption for open contracts as of October 1, 2018. A cumulative effect adjustment to retained earnings was not necessary since no revenue recognition differences were identified when comparing the revenue recognition criteria under the new authoritative guidance to the previous guidance. The Company records revenue related to its derivative financial instruments in the Exploration and Production segment as well as in its NFR operations (included in the All Other category). The Company also records revenue related to alternative revenue programs in its Utility segment. Revenue related to derivative financial instruments and alternative revenue programs are excluded from the scope of the new authoritative guidance since they are accounted for under other existing accounting guidance.

The following tables provide a disaggregation of the Company's revenues for the quarter and six months ended March 31, 2020 and 2019, presented by type of service from each reportable segment. As reported in the Company's 2019 Form 10-K, the Company's NFR operations were previously reported as the Energy Marketing segment, however the Company is no longer reporting the energy marketing operations as a separate reportable segment. Prior year disaggregation of revenue information shown below has been restated to reflect this change in presentation.
Quarter Ended March 31, 2020 (Thousands)
 
 
 
 
 
 

 
 

 
 

Revenues By Type of Service
Exploration and Production
 
Pipeline and Storage
 
Gathering
 
Utility
 
All Other
 
Corporate and Intersegment Eliminations
 
Total Consolidated
Production of Natural Gas
$
100,777

 
$

 
$

 
$

 
$

 
$

 
$
100,777

Production of Crude Oil
30,268

 

 

 

 

 

 
30,268

Natural Gas Processing
714

 

 

 

 

 

 
714

Natural Gas Gathering Services

 

 
35,267

 

 

 
(35,267
)
 

Natural Gas Transportation Service

 
58,454

 

 
39,832

 

 
(21,976
)
 
76,310

Natural Gas Storage Service

 
20,524

 

 

 

 
(9,087
)
 
11,437

Natural Gas Residential Sales

 

 

 
185,323

 

 

 
185,323

Natural Gas Commercial Sales

 

 

 
27,296

 

 

 
27,296

Natural Gas Industrial Sales

 

 

 
1,144

 

 

 
1,144

Natural Gas Marketing

 

 

 

 
36,404

 
(79
)
 
36,325

Other
405

 
267

 

 
(3,524
)
 
851

 
(65
)
 
(2,066
)
Total Revenues from Contracts with Customers
132,164

 
79,245

 
35,267

 
250,071

 
37,255

 
(66,474
)
 
467,528

Alternative Revenue Programs

 

 

 
4,422

 

 

 
4,422

Derivative Financial Instruments
23,396

 

 

 

 
(4,251
)
 

 
19,145

Total Revenues
$
155,560

 
$
79,245

 
$
35,267

 
$
254,493

 
$
33,004

 
$
(66,474
)
 
$
491,095

Six Months Ended March 31, 2020 (Thousands)
 
 
 
 

 
 

 
 

Revenues By Type of Service
Exploration and Production
 
Pipeline and Storage
 
Gathering
 
Utility
 
All Other
 
Corporate and Intersegment Eliminations
 
Total Consolidated
Production of Natural Gas
$
220,651

 
$

 
$

 
$

 
$

 
$

 
$
220,651

Production of Crude Oil
67,931

 

 

 

 

 

 
67,931

Natural Gas Processing
1,402

 

 

 

 

 

 
1,402

Natural Gas Gathering Services

 

 
70,055

 

 

 
(70,055
)
 

Natural Gas Transportation Service

 
111,906

 

 
72,640

 

 
(38,963
)
 
145,583

Natural Gas Storage Service

 
38,950

 

 

 

 
(17,079
)
 
21,871

Natural Gas Residential Sales

 

 

 
329,693

 

 

 
329,693

Natural Gas Commercial Sales

 

 

 
46,137

 

 

 
46,137

Natural Gas Industrial Sales

 

 

 
2,413

 

 

 
2,413

Natural Gas Marketing

 

 

 

 
70,513

 
(256
)
 
70,257

Other
578

 
609

 

 
(6,848
)
 
1,971

 
(118
)
 
(3,808
)
Total Revenues from Contracts with Customers
290,562

 
151,465

 
70,055

 
444,035

 
72,484

 
(126,471
)
 
902,130

Alternative Revenue Programs

 

 

 
7,283

 

 

 
7,283

Derivative Financial Instruments
30,937

 

 

 

 
(5,067
)
 

 
25,870

Total Revenues
$
321,499

 
$
151,465

 
$
70,055

 
$
451,318

 
$
67,417

 
$
(126,471
)
 
$
935,283

 
 
 
 
 
 
 
 
 
 
 
 
 
 

Quarter Ended March 31, 2019 (Thousands)
 
 
 
 
 
 

 
 

 
 

Revenues By Type of Service
Exploration and Production
 
Pipeline and Storage
 
Gathering
 
Utility
 
All Other
 
Corporate and Intersegment Eliminations
 
Total Consolidated
Production of Natural Gas
$
121,824

 
$

 
$

 
$

 
$

 
$

 
$
121,824

Production of Crude Oil
34,878

 

 

 

 

 

 
34,878

Natural Gas Processing
971

 

 

 

 

 

 
971

Natural Gas Gathering Services

 

 
29,368

 

 

 
(29,366
)
 
2

Natural Gas Transportation Service

 
52,239

 

 
45,083

 

 
(19,819
)
 
77,503

Natural Gas Storage Service

 
19,360

 

 

 

 
(8,333
)
 
11,027

Natural Gas Residential Sales

 

 

 
229,254

 

 

 
229,254

Natural Gas Commercial Sales

 

 

 
34,255

 

 

 
34,255

Natural Gas Industrial Sales

 

 

 
1,867

 

 

 
1,867

Natural Gas Marketing

 

 

 

 
58,516

 
(43
)
 
58,473

Other
493

 
740

 

 
(5,963
)
 
318

 
(105
)
 
(4,517
)
Total Revenues from Contracts with Customers
158,166

 
72,339

 
29,368

 
304,496

 
58,834

 
(57,666
)
 
565,537

Alternative Revenue Programs

 

 

 
(1,466
)
 

 

 
(1,466
)
Derivative Financial Instruments
(12,064
)
 

 

 

 
537

 

 
(11,527
)
Total Revenues
$
146,102

 
$
72,339

 
$
29,368

 
$
303,030

 
$
59,371

 
$
(57,666
)
 
$
552,544

Six Months Ended March 31, 2019 (Thousands)
 
 
 
 

 
 

 
 

Revenues By Type of Service
Exploration and Production
 
Pipeline and Storage
 
Gathering
 
Utility
 
All Other
 
Corporate and Intersegment Eliminations
 
Total Consolidated
Production of Natural Gas
$
257,735

 
$

 
$

 
$

 
$

 
$

 
$
257,735

Production of Crude Oil
72,433

 

 

 

 

 

 
72,433

Natural Gas Processing
1,945

 

 

 

 

 

 
1,945

Natural Gas Gathering Services

 

 
59,058

 

 

 
(59,056
)
 
2

Natural Gas Transportation Service

 
108,375

 

 
80,714

 

 
(36,884
)
 
152,205

Natural Gas Storage Service

 
38,289

 

 

 

 
(16,306
)
 
21,983

Natural Gas Residential Sales

 

 

 
396,121

 

 

 
396,121

Natural Gas Commercial Sales

 

 

 
56,301

 

 

 
56,301

Natural Gas Industrial Sales

 

 

 
3,368

 

 

 
3,368

Natural Gas Marketing

 

 

 

 
107,803

 
(375
)
 
107,428

Other
876

 
2,744

 

 
(8,824
)
 
1,325

 
(510
)
 
(4,389
)
Total Revenues from Contracts with Customers
332,989

 
149,408

 
59,058

 
527,680

 
109,128

 
(113,131
)
 
1,065,132

Alternative Revenue Programs

 

 

 
(1,993
)
 

 

 
(1,993
)
Derivative Financial Instruments
(24,011
)
 

 

 

 
3,663

 

 
(20,348
)
Total Revenues
$
308,978

 
$
149,408

 
$
59,058

 
$
525,687

 
$
112,791

 
$
(113,131
)
 
$
1,042,791

 
 
 
 
 
 
 
 
 
 
 
 
 
 

The Company’s Pipeline and Storage segment expects to recognize the following revenue amounts in future periods related to “fixed” charges associated with remaining performance obligations for transportation and storage contracts: $92.0 million for the remainder of fiscal 2020; $171.8 million for fiscal 2021; $142.5 million for fiscal 2022; $97.9 million for fiscal 2023; $86.4 million for fiscal 2024; and $361.5 million thereafter.
v3.20.1
Leases
6 Months Ended
Mar. 31, 2020
Leases [Abstract]  
Leases Leases
 
On October 1, 2019, the Company adopted authoritative guidance regarding lease accounting, which requires entities that lease the use of property, plant and equipment to recognize on the balance sheet the assets and liabilities for the rights and obligations created by all leases, including leases classified as operating leases. The Company implemented the new standard using the optional transition method and elected to apply the following practical expedients provided in the authoritative guidance:

1.
For contracts that commenced prior to and existed as of October 1, 2019, a package of practical expedients to not reassess whether a contract is or contains a lease, lease classification, and initial direct costs under the new authoritative guidance;
2.
An election not to apply the recognition requirements in the new authoritative guidance to short-term leases (a lease that at commencement date has a lease term of one year or less);
3.
A practical expedient to not reassess certain land easements that existed prior to October 1, 2019 and were not previously accounted for as leases under the prior authoritative guidance; and
4.
A practical expedient that permits combining lease and non-lease components in a contract and accounting for the combination as a lease (elected by asset-class).

Upon adoption, the Company increased assets and liabilities on its Consolidated Balance Sheet by $19.7 million. The adoption did not result in a cumulative effect adjustment to earnings reinvested in the business or have a material impact on the Company’s Consolidated Statement of Income or Consolidated Statement of Cash Flows. Comparative periods, including disclosures relating to those periods, were not restated.

Nature of Leases

The Company primarily leases building space and drilling rigs, and on a limited basis compressor equipment and other miscellaneous assets. The Company determines if an arrangement is a lease at the inception of the arrangement. To the extent that an arrangement represents a lease, the Company classifies that lease as an operating or a finance lease in accordance with the
authoritative guidance. As of March 31, 2020 the Company did not have any finance leases. Aside from a sublease of office space at the Company’s corporate headquarters, the Company does not have any material arrangements where the Company is the lessor.

Buildings and Property

The Company enters into building and property rental agreements with third parties for office space, certain field locations and other properties used in the Company’s operations. Building and property leases include the Company’s corporate headquarters in Williamsville, New York, and Exploration and Production segment offices in Houston, Texas, and Pittsburgh, Pennsylvania. The primary non-cancelable terms of the Company’s building and property leases range from three months to ten years. Most building leases include one or more options to renew, generally at the Company’s sole discretion, with renewal terms that can extend the lease terms from one year to fourteen years. Renewal options are included in the lease term if they are reasonably certain to be exercised. The agreements do not contain any material restrictive covenants.

In March 2020, the Company entered into a lease agreement that has not yet commenced. This lease agreement is a building and property lease for a term of ten years expected to commence in June 2021. Total estimated base rent payments over the lease term are approximately $8.4 million. There is also an option to extend the term of the lease for one additional period of eighteen months.

Drilling Rigs

The Company enters into contracts for drilling rig services with third party contractors to support Seneca’s development activities in Pennsylvania and California. Seneca’s drilling rig arrangements are structured with a non-cancelable primary term of one year or less. Upon mutual agreement with the contractor, Seneca has the option to extend the contract with amended terms and conditions, including a renegotiated day rate fee.

The Company has strategically entered into shorter-term drilling rig arrangements to allow for operational and financial flexibility to respond to changes in its operating and economic environment. The Company uses discretion in choosing to extend or not extend drilling rig contracts on a rig by rig basis depending on market and operating conditions present at the time the contract expires, including prices for natural gas and oil.

Due to these considerations, the Company concluded that it is not reasonably certain that it will elect to extend any of its drilling rig arrangements beyond their primary non-cancelable terms of one year or less. Consequently, the Company’s drilling rig leases are deemed to be short-term leases subject to the exemption for balance sheet recognition. These costs are capitalized as part of oil and natural gas properties on the Consolidated Balance Sheet when incurred.

Significant Judgments

Lease Identification

The Company uses judgment when determining whether or not an arrangement is or contains a lease. A contract is or contains a lease if the contract conveys the right to use an explicitly or implicitly identified asset that is physically distinct and the Company has the right to control the use of the identified asset for a period of time. When determining right of control, the Company evaluates whether it directs the use of the asset and obtains substantially all of the economic benefits from the use of the asset.

Discount Rate

The Company uses a discount rate to calculate the present value of lease payments in order to determine lease classification and measurement of the lease asset and liability. In the absence of a rate of interest that is readily determinable in the contract, the Company estimates the incremental borrowing rate (IBR) for each lease. The IBR reflects the rate of interest that the Company would pay on the lease commencement date to borrow an amount equal to the lease payments on a collateralized basis over a similar term in similar economic environments.

Firm Transportation and Storage Contracts

The Company’s subsidiaries enter into long-term arrangements to both reserve firm transportation capacity on third party pipelines and provide firm transportation and storage services to third party shippers. The Company’s firm capacity contracts with non-affiliated entities do not provide rights to use substantially all of the underlying pipeline or storage asset. As such, the Company has concluded that these arrangements are not leases under the authoritative guidance.

Oil and Gas Leases

The new authoritative guidance does not apply to leases to explore for or use minerals, oil or natural gas resources, including the right to explore for those natural resources and rights to use the land in which those natural resources are contained. As such, the Company has concluded that its oil and gas exploration and production leases and gas storage leases are not leases under the authoritative guidance.

Amounts Recognized in the Financial Statements

Operating lease costs, excluding those relating to short-term drilling rig leases that are capitalized as part of oil and natural gas properties under full cost pool accounting, are presented in Operations and Maintenance expense on the Consolidated Statement of Income. The following table summarizes the components of the Company’s total operating lease costs (in thousands):
 
Three Months Ended
March 31, 2020
 
Six Months Ended
March 31, 2020
 
 
 
 
Operating Lease Expense
$
943

 
1,916

Variable Lease Expense (1)
137

 
272

Short-Term Lease Expense (2)
76

 
140

Sublease Income
(80
)
 
(161
)
Total Lease Expense
$
1,076

 
$
2,167

 
 
 
 
Short-Term Lease Costs Recorded to Property, Plant and Equipment (3)
$
6,776

 
$
14,289


(1) 
Variable lease payments that are not dependent on an index or rate are not included in the lease liability.
(2) 
Short-term lease costs exclude expenses related to leases with a lease term of one month or less.
(3) 
Short-term lease costs relating to drilling rig leases that are capitalized as part of oil and natural gas properties under full cost pool accounting.

Right-of-use assets and lease liabilities are recognized at the commencement date of a leasing arrangement based on the present value of lease payments over the lease term. As of March 31, 2020, the weighted average remaining lease term was 8.6 years and the weighted average discount rate was 3.50%.

The Company’s right-of-use operating lease assets are reflected as Deferred Charges on the Consolidated Balance Sheet. The corresponding operating lease liabilities are reflected in Other Accruals and Current Liabilities (current) and Other Deferred Credits (noncurrent). Short-term leases that have a lease term of one year or less are not recorded on the Consolidated Balance Sheet.

The following amounts related to operating leases were recorded on the Company’s Consolidated Balance Sheet (in thousands):
 
At March 31, 2020
Assets:
 
Deferred Charges
$
18,260

 
 
Liabilities:
 
Other Accruals and Current Liabilities
$
3,390

Other Deferred Credits
$
14,870



For the six months ended March 31, 2020, cash paid for operating liabilities, and reported in cash flows provided by operating activities on the Company’s Consolidated Statement of Cash Flows, was $2.2 million. During the six months ended March 31, 2020, the Company did not record any right-of-use assets in exchange for new lease liabilities.

The following schedule of operating lease liability maturities summarizes the undiscounted lease payments owed by the Company to lessors pursuant to contractual agreements in effect as of March 31, 2020 (in thousands):
 
At March 31, 2020
 
 
2020 (remaining 6 months)
$
1,877

2021
2,868

2022
2,278

2023
2,270

2024
2,237

Thereafter
9,717

Total Lease Payments
21,247

Less: Interest
(2,987
)
Total Lease Liability
$
18,260


The future minimum operating lease payments as of September 30, 2019, as reported in the Company's 2019 Form 10-K, under the prior authoritative guidance are as follows (in thousands):
 
At September 30, 2019
 
 
2020 (1)
$
12,356

2021
2,813

2022
2,264

2023
2,270

2024
2,237

Thereafter
9,717

Total Operating Lease Obligations
$
31,657


(1) 
The future minimum operating lease payment amount for 2020 includes short-term leases, including drilling rigs, that are not included in the schedule of operating lease liability maturities above under the new authoritative guidance.
v3.20.1
Fair Value Measurements
6 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
 
The FASB authoritative guidance regarding fair value measurements establishes a fair-value hierarchy and prioritizes the inputs used in valuation techniques that measure fair value. Those inputs are prioritized into three levels. Level 1 inputs are unadjusted quoted prices in active markets for assets or liabilities that the Company can access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly at the measurement date. Level 3 inputs are unobservable inputs for the asset or liability at the measurement date. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.
 
The following table sets forth, by level within the fair value hierarchy, the Company's financial assets and liabilities (as applicable) that were accounted for at fair value on a recurring basis as of March 31, 2020 and September 30, 2019.  Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value presentation for over the counter swaps combines gas and oil swaps because a significant number of the counterparties enter into both gas and oil swap agreements with the Company.  
Recurring Fair Value Measures
At fair value as of March 31, 2020
(Thousands of Dollars)   
Level 1
 
Level 2
 
Level 3
 
Netting Adjustments(1)
 
Total(1)
Assets:
 

 
 

 
 

 
 

 
 

Cash Equivalents – Money Market Mutual Funds
$
95,966

 
$

 
$

 
$

 
$
95,966

Derivative Financial Instruments:
 

 
 

 
 

 
 

 
 

Commodity Futures Contracts – Gas
935

 

 

 
(935
)
 

Over the Counter Swaps – Gas and Oil

 
103,068

 

 
(2,732
)
 
100,336

Over the Counter No Cost Collars - Gas

 

 

 
(751
)
 
(751
)