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Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co.

National Fuel Gas Co. · Nov 30, 2011 · 51 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 1
    Investor Presentation Jefferies 2011 Global Energy Conference November 30, 2011
  2. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 2
    Core Businesses November 30, 2011 Integrated Business Structure Seneca Resources Corporation Empire Pipeline & NFG Supply Corp. Significant Appalachian Growth Appalachian Pipeline Growth Leading Marcellus Shale Position Delivery…
  3. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 3
    National Fuel Gas Company November 30, 2011 Integrated Business Structure (1) Footnote 1 goes here (2) Footnote 2 goes here 4
  4. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 4
    National Fuel Gas Company November 30, 2011 Consolidated Capital Expenditures 2,000 Utility Pipeline & Storage Exploration & Production Midstream & Other Capital Expenditures ( Millions) 1,295- 1,500 1,570 1,015- 1,015-…
  5. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 5
    Exploration & Production November 30, 2011 (1) Footnote 1 goes here (2) Footnote 2 goes here 6
  6. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 6
    Seneca Resources November 30, 2011 Continued Improvement in Finding & Development Costs Three Year Average U.S Finding & Development Cost 8.00 7.63 7.38 3-Year F&D Cost (/Mcfe) 6.00 5.35 4.00 2.37 2.09 2.00 0.00…
  7. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 7
    Seneca Resources November 30, 2011 Uniquely Positioned in Pennsylvania Held over 700,000 Marcellus acres before the play received any attention Have since added another 45,000 acres in the core of the play 80% of acreage is held…
  8. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 8
    Marcellus Shale November 30, 2011 Senecas Development Areas Eastern Development Area (Mostly Leased) Western Development Area (Mostly Fee and HBP) SRC Fee Acreage SRC Lease Acreage EOG Acreage (1) Footnote 1 goes…
  9. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 9
    Seneca Resources November 30, 2011 Marcellus Shale Strategic Development Plan Gross Rig Count 16 Seneca EOG Gross Rig Count 12 9.5 10 8 8.5 3 3 Aggressively Develop our excellent 6 4 1.5 3 Tioga and Lycoming…
  10. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 10
    Marcellus Shale November 30, 2011 3 Step Development Strategy 1. Area evaluation Vertical wells and cores 3-well horizontal test pads 2D and 3D seismic 2. Optimization Landing depth Frac design Lateral length Locations 3.…
  11. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 11
    Marcellus Shale November 30, 2011 Eastern Development Area (EDA) Results & Plan Forward Covington Developed 47 Wells Drilled 47 Producing Gross Production: 110 MMcf/d DCNR Tract 595 Full Development 10 Wells Drilled 3…
  12. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 12
    Marcellus Shale November 30, 2011 EDA Typecurve 6.7 Bcfe EUR (Greater Than 3,500 Lateral) 12.0 Original 6.0 Bcf Typecurve EDA Average Daily Production Rate IP Rate 7,250 MMcf/d 6.7 Bcf Typecurve (40 Year Life) Hyp. Coeff. 1.4…
  13. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 13
    Marcellus Shale November 30, 2011 Western Development Area (WDA) Results & Plan Forward Approx. Outline of JV Acreage SRC Fee Acreage 200,000 Gross Acres Seneca 50% W.I. (Avg. 58% NRI) SRC Lease Acreage Mt. Jewett Delineating…
  14. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 14
    Marcellus Shale November 30, 2011 Breaking Down Our Acreage Position Possible Wells Area Net Acres Locations Wells Drilled Completed EUR (Bcfe) Status Eastern Development Area (EDA) Covington 7,000 47 47 47 5.5 Developed 595…
  15. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 15
    Seneca Resources November 30, 2011 Marcellus Acreage Position Provides Superior Economics Marcellus Economics for a 6.2 Million Well 125% No Royalty 18% Royalty 100% 90% Minimal Acreage acquisition cost Pre-Tax IRR 75%…
  16. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 16
    Marcellus Shale November 30, 2011 Operational Efficiencies Drive Cost Savings Equipment Ownership (Frac Tanks, etc) Pad Cost Reductions Long-Term (Rig Mats, Concrete Frac Contract Pads, etc) Improved Efficiency Increased…
  17. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 17
    Upper Devonian Geneseo Shale November 30, 2011 Activity Summary East Resources East Resources 3 Wells Permitted Drilled & Completed November 2010 April 2010 Mt. Jewett Vertical (Seneca) Depth: 5,095; Thickness: 110 DCNR 001…
  18. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 18
    Utica Shale November 30, 2011 Activity Summary Seneca Resources Mt. Jewett Area Vertical Drilled June 11 Vertical Well Permit Prep to Frac Horizontal Well Permit Horizontal 2Q 12 Drilled Well Chesapeake 3.1 MMcf/d 1,015…
  19. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 19
    Utica Shale November 30, 2011 Mt. Jewett Vertical Well Seneca Resources recently drilled a vertical Utica/Pt. Pleasant well in McKean County, PA. Preliminary results are encouraging. 400 feet of gross reservoir at a depth of…
  20. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 20
    California November 30, 2011 Stable Production Fields North Lost Hills 1,150 BOEPD Tulare & Etchegoin Formation South Lost Hills Primary & Steamflood 1,700 BOEPD 181 Active Wells Monterey Shale Primary 216 Active Wells North…
  21. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 21
    California November 30, 2011 Strong Margins Support Significant Free Cash Flow Fiscal Year 2011 Net Income and Expenses per BOE Income tax 21% DDA 13% Cash Non-Steam Fuel LOE 12% Net Income Expenses 31.88 35.50 Other 6%…
  22. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 22
    Seneca Resources November 30, 2011 Capital Spending Shifting to the Marcellus 1,250 California Upper Devonian Marcellus Gulf of Mexico Canada 935- 840- 1,145 Capital Expenditures ( Millions) 1,000 785- 1,050 875 750…
  23. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 23
    Seneca Resources November 30, 2011 Ramping Up Production Growth 225 California Upper Devonian Marcellus Gulf of Mexico Canada Annual production 160-200 growth of 30% to Annual Production (Bcfe) 150 50% is expected 125-155…
  24. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 24
    Pipeline & Storage / Midstream November 30, 2011 (1) Footnote 1 goes here (2) Footnote 2 goes here 25
  25. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 25
    Pipeline & Storage November 30, 2011 Positioned to Move Growing Marcellus Production NORTHERN TIOGA ACCESS COUNTY EXPANSION EXTENSION (In-Service) CENTRAL TIOGA LAMONT COUNTY COMPRESSOR EXTENSION STATION PHASE I & II…
  26. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 26
    Midstream November 30, 2011 Critical To Boosting Returns in the Marcellus Midstreams gathering systems are TGP 300 critical to unlock remote, but highly productive Marcellus acreage Tioga County Goal is to first work to assist…
  27. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 27
    National Fuel Gas Company November 30, 2011 Targeted Capital Structure Debt Equity Utility 50% 50% Equity P&S 50% 50% 55% - 65% Debt 35% - 45% E&P 30% 70% All Other 40% 60% Capital Structure Long-Term Consolidated…
  28. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 28
    National Fuel Gas Company November 30, 2011 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 29
  29. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 29
    National Fuel Gas Company November 30, 2011 Fiscal Year 2012 Earnings Guidance Drivers 2012 Forecast GAAP Earnings per Share 2.85 - 3.15 Operating Earnings per Share 2.85 - 3.15 11% EPS Growth Exploration & Production Drivers…
  30. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 30
    National Fuel Gas Company November 30, 2011 Manageable Debt Maturity Schedule 350 2012 Debt Maturity Paid on November 21, 2011 300 300 250 250 Debt Maturity ( Millions) 250 200 150 150 100 49 50 50 6.700%…
  31. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 31
    National Fuel Gas Company November 30, 2011 Strong Dividend Track Record 1.60 National Fuel has had 109 uninterrupted 1.40 years of dividend payments and has increased its dividend for 41 consecutive years 1.20 Annual Dividend…
  32. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 32
    National Fuel Gas Company November 30, 2011 Hedge Positions and Strategy Hedged Forecasted Production As of November 23, 2011 Volume Average 100% Oil Swaps (MMBbl) Hedge Price % of Forecasted Production Hedged Fiscal 2012…
  33. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 33
    National Fuel Gas Company November 30, 2011 Capitalization & Liquidity Short-Term Debt 1.3% Capital Resources Long-Term Debt Total Short-Term Capacity: 685 Million Shareholders 35.2% Commercial Paper Program: 300 Million…
  34. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 34
    Pipeline & Storage / Midstream November 30, 2011 (1) Footnote 1 goes here (2) Footnote 2 goes here 35
  35. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 35
    Pipeline & Storage November 30, 2011 Expansion Initiatives Capacity Est. In-Service Project Name Market Status (Dth/D) CapEx Date Lamont Compressor Station 40,000 6 MM 6/2010 Fully Subscribed Completed Lamont Phase II Project…
  36. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 36
    Midstream Corporation November 30, 2011 Expansion Initiatives Capacity Est. In-Service Project Name Market Status (Dth/D) CapEx Date Completed Flowing into TGP Covington Gathering System 100,000 16 MM 11/17/09 Fully Subscribed…
  37. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 37
    Utility November 30, 2011 National Fuel Gas Distribution Corporation (1) Footnote 1 goes here (2) Footnote 2 goes here 38
  38. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 38
    Utility November 30, 2011 Continued Cost Control 350 All Other O&M Expenses O&M Expense - Uncollectibles 300 O&M Expense ( Millions) 250 203 203 200 191 179 27 25 181 27 14 11 150 100 178 176 164 167 168 50 0…
  39. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 39
    Utility November 30, 2011 Financial Stability Return on Equity 30.0% NY PA Allowed ROE - NY Approx. Settled ROE - PA 18.8% Return on Equity 20.0% 14.0% 14.7% 13.2% 10.9% 10.6% 10.5% 9.8% 10.0% 0.0% 2008 2009…
  40. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 40
    Exploration & Production November 30, 2011 (1) Footnote 1 goes here (2) Footnote 2 goes here 41
  41. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 41
    Marcellus Shale November 30, 2011 Geotechnical Keys to Success 1. 3D Seismic Data Impacts surface location, lateral length and target zone by imaging faults and structure Attribute and fracture analyses being conducted to…
  42. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 42
    Marcellus Shale November 30, 2011 Expanding 3D Seismic Coverage DCNR 007 DCNR 001 Mt. Jewett West Branch Covington DCNR 595 Owls Nest DCNR 100 Punxy Completed 190,000 ac In Progress 128,000 ac (1) Footnote 1 goes…
  43. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 43
    Marcellus Shale November 30, 2011 Importance of 3D Seismic in Identifying Fractures DCNR 007 5H Well Drilled prior to 3D Seismic acquisition Well Test: 2 MMcf/d TGP 300 DCNR 007 Tioga County (1) Footnote 1 goes here (2)…
  44. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 44
    Marcellus Shale November 30, 2011 3D Seismic Analysis: Fracture Patterns DCNR 007 5H Well In a localized area with minimal fractures Fault 5H Major Fractures DCNR 007 Remainder of DCNR Tract 007 Tioga County…
  45. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 45
    Marcellus Shale November 30, 2011 Importance of Closure Stress & Target Zone Closure Stress & Target Zone High Closure Stress Impacts frac initiation & limits frac width. Avoid high closure stress pinch points. Currently…
  46. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 46
    Marcellus Shale November 30, 2011 Owls Nest Improved IPs by Optimizing The Target Zone Moving into Full Development 3H Production Results Treated Lateral: 4,396 Peak Rate: 4.47 MMcf/d 3-Day Avg.: 4.25 MMcf/d Narrowed Union…
  47. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 47
    Marcellus Shale November 30, 2011 Cost Savings from Multi-Well Pad Drilling 1 Well per Pad 6 Wells per Pad Location & Road Costs Location & Road Costs 600,000 per well 100,000 per well Rig Mobilization Rig Mobilization 600,000…
  48. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 48
    Marcellus Shale November 30, 2011 Water Management Program Water Sourcing: Coal mine runoff Permitted freshwater sources Recycled water Water Management: Instituted a Zero Surface Discharge policy Recycle Marcellus flowback…
  49. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 49
    Marcellus Shale November 30, 2011 Zero Liquid Discharge Operation Utilizing a state-of-the-art evaporative technology to ensure no liquid is discharged at the surface Building centrally located units in the Western Development…
  50. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 50
    National Fuel Gas Company November 30, 2011 Comparable GAAP Financial Measure Slides and Reconciliations This presentation contains certain non-GAAP financial measures. For pages that contain non-GAAP financial measures, pages…
  51. Jefferies 2nd Annual Global Energy Conference – National Fuel Gas Co. – slide 51
    November 30, 2011 Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2012 FY 2013 FY 2014 FY 2010 FY 2011 Forecast Forecast Forecast Capital Expenditures from Continuing Operations…

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