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Q1 2012 Update – National Fuel Gas Co.

National Fuel Gas Co. · Feb 8, 2012 · 46 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. Q1 2012 Update – National Fuel Gas Co. – slide 1
    Investor Presentation Fiscal 2012 First Quarter Financial & Operational Update February 8, 2012
  2. Q1 2012 Update – National Fuel Gas Co. – slide 2
    Core Businesses February 8, 2012 Integrated Business Structure Seneca Resources Corporation Empire Pipeline & NFG Supply Corp. Significant Appalachian Growth Appalachian Pipeline Growth Leading Marcellus Shale Position Delivery to…
  3. Q1 2012 Update – National Fuel Gas Co. – slide 3
    National Fuel Gas Company February 8, 2012 Integrated Business Structure (1) Footnote 1 goes here (2) Footnote 2 goes here 4
  4. Q1 2012 Update – National Fuel Gas Co. – slide 4
    National Fuel Gas Company February 8, 2012 Our Business Mix Leads to Long-Term Value Creation Seneca Utility Resources Pipeline & Storage Midstream Energy Gathering Marketing The strategic and financial benefits created by…
  5. Q1 2012 Update – National Fuel Gas Co. – slide 5
    Exploration & Production February 8, 2012 (1) Footnote 1 goes here (2) Footnote 2 goes here 6
  6. Q1 2012 Update – National Fuel Gas Co. – slide 6
    Seneca Resources February 8, 2012 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 in…
  7. Q1 2012 Update – National Fuel Gas Co. – slide 7
    Seneca Resources February 8, 2012 Capital Spending Shifting to the Marcellus 1,250 California Upper Devonian Marcellus Gulf of Mexico Capital Expenditures ( Millions) 1,000 720-800 750 649 500 398 675-745 585 250…
  8. Q1 2012 Update – National Fuel Gas Co. – slide 8
    Seneca Resources February 8, 2012 Ramping Up Production Growth 125 California Upper Devonian Marcellus Gulf of Mexico 100 Annual production growth of 25% to 85-95 Annual Production (Bcfe) 40% is expected 75 from 2011 to…
  9. Q1 2012 Update – National Fuel Gas Co. – slide 9
    Seneca Resources February 8, 2012 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…
  10. Q1 2012 Update – National Fuel Gas Co. – slide 10
    Marcellus Shale February 8, 2012 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…
  11. Q1 2012 Update – National Fuel Gas Co. – slide 11
    Seneca Resources February 8, 2012 Strategic Development Plan Develop our excellent Tioga and Lycoming County leasehold Gross Rig Count 16 Systematically evaluate both the Seneca EOG Marcellus and Utica in the western 12…
  12. Q1 2012 Update – National Fuel Gas Co. – slide 12
    Marcellus Shale February 8, 2012 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.…
  13. Q1 2012 Update – National Fuel Gas Co. – slide 13
    Marcellus Shale February 8, 2012 Eastern Development Area (EDA) Results & Plan Forward Covington Developed 47 Wells Drilled 47 Producing Gross Production: 100 MMcf/d DCNR Tract 595 Full Development 24 Wells Drilled 4…
  14. Q1 2012 Update – National Fuel Gas Co. – slide 14
    Marcellus Shale February 8, 2012 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 SRC Contributed JV Acreage…
  15. Q1 2012 Update – National Fuel Gas Co. – slide 15
    Marcellus Shale February 8, 2012 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…
  16. Q1 2012 Update – National Fuel Gas Co. – slide 16
    Seneca Resources February 8, 2012 Economics of an Average DCNR 595 Well in Tioga County, Pa. Marcellus Economics for a Typical DCNR 595 Well 50% 40% Estimated Pre-Tax Economic Assumptions IRR at Current NYMEX Strip(1) Well…
  17. Q1 2012 Update – National Fuel Gas Co. – slide 17
    Utica Shale February 8, 2012 Activity Summary Seneca Resources Seneca Resources Dry Gas Vertical Well Permit Vertical Completed Vertical Completed: December 2011 Currently Testing Currently Drilling 1st Horizontal Horizontal Well…
  18. Q1 2012 Update – National Fuel Gas Co. – slide 18
    Upper Devonian Geneseo Shale February 8, 2012 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…
  19. Q1 2012 Update – National Fuel Gas Co. – slide 19
    California February 8, 2012 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 215 Active Wells North…
  20. Q1 2012 Update – National Fuel Gas Co. – slide 20
    California February 8, 2012 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%…
  21. Q1 2012 Update – National Fuel Gas Co. – slide 21
    National Fuel Gas Company February 8, 2012 Hedge Positions(1) and Strategy As of February 2nd, 2012, Seneca has hedged approximately 47% of its remaining forecasted production for Fiscal 2012 Natural Gas Volume Average Hedge…
  22. Q1 2012 Update – National Fuel Gas Co. – slide 22
    Pipeline & Storage / Midstream February 8, 2012 (1) Footnote 1 goes here (2) Footnote 2 goes here 23
  23. Q1 2012 Update – National Fuel Gas Co. – slide 23
    Pipeline & Storage February 8, 2012 Positioned to Move Growing Marcellus Production NORTHERN ACCESS EXPANSION TIOGA LAMONT COUNTY COMPRESSOR EXTENSION STATION PHASE I & II (In-Service) CENTRAL (In-Service) TIOGA COUNTY…
  24. Q1 2012 Update – National Fuel Gas Co. – slide 24
    Pipeline & Storage February 8, 2012 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…
  25. Q1 2012 Update – National Fuel Gas Co. – slide 25
    Midstream February 8, 2012 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…
  26. Q1 2012 Update – National Fuel Gas Co. – slide 26
    Midstream Corporation February 8, 2012 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…
  27. Q1 2012 Update – National Fuel Gas Co. – slide 27
    Pipeline & Storage Growth February 8, 2012 Deploying Significant Growth Capital Capital spending is increasing to fund system expansion and assuming recently allowed industry average ROE and capital structure targets, this segment…
  28. Q1 2012 Update – National Fuel Gas Co. – slide 28
    Utility February 8, 2012 National Fuel Gas Distribution Corporation (1) Footnote 1 goes here (2) Footnote 2 goes here 29
  29. Q1 2012 Update – National Fuel Gas Co. – slide 29
    Utility February 8, 2012 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…
  30. Q1 2012 Update – National Fuel Gas Co. – slide 30
    Utility February 8, 2012 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…
  31. Q1 2012 Update – National Fuel Gas Co. – slide 31
    National Fuel Gas Company February 8, 2012 Financial Summary (1) Footnote 1 goes here (2) Footnote 2 goes here 32
  32. Q1 2012 Update – National Fuel Gas Co. – slide 32
    National Fuel Gas Company February 8, 2012 Consolidated Capital Expenditures 1,500 Utility Pipeline & Storage Exploration & Production Midstream & Other Capital Expenditures ( Millions) 1,250 950 - 1,085 1,000 40-60 854…
  33. Q1 2012 Update – National Fuel Gas Co. – slide 33
    National Fuel Gas Company February 8, 2012 Manageable Debt Maturity Schedule 600 Paid at Maturity on November 21, 2011 500 500 Debt Maturity ( Millions) 400 300 300 250 250 200 150 100 7.395% 49 50 6.700%…
  34. Q1 2012 Update – National Fuel Gas Co. – slide 34
    National Fuel Gas Company February 8, 2012 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…
  35. Q1 2012 Update – National Fuel Gas Co. – slide 35
    National Fuel Gas Company February 8, 2012 Capitalization & Liquidity Short-Term Debt 0.6% Capital Resources Total Short-Term Capacity: 1,085 Million Committed Credit Facility: 750 Million Long-Term Five-year syndicated…
  36. Q1 2012 Update – National Fuel Gas Co. – slide 36
    National Fuel Gas Company February 8, 2012 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…
  37. Q1 2012 Update – National Fuel Gas Co. – slide 37
    National Fuel Gas Company February 8, 2012 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 38
  38. Q1 2012 Update – National Fuel Gas Co. – slide 38
    National Fuel Gas Company February 8, 2012 Fiscal Year 2012 Major Earnings Guidance Drivers 2012 Forecast GAAP Earnings per Share 2.40 - 2.65 Flat NYMEX Natural Gas Pricing (/MMBtu) 3.00(1) Flat NYMEX Crude Oil Pricing (/Bbl)…
  39. Q1 2012 Update – National Fuel Gas Co. – slide 39
    Marcellus Shale February 8, 2012 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…
  40. Q1 2012 Update – National Fuel Gas Co. – slide 40
    Marcellus Shale February 8, 2012 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…
  41. Q1 2012 Update – National Fuel Gas Co. – slide 41
    Marcellus Shale February 8, 2012 Covington 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.…
  42. Q1 2012 Update – National Fuel Gas Co. – slide 42
    Marcellus Shale February 8, 2012 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…
  43. Q1 2012 Update – National Fuel Gas Co. – slide 43
    Marcellus Shale February 8, 2012 Water Management Program Water Sourcing: Coal mine runoff Permitted freshwater sources Recycled water Water Management: Instituted a Zero Surface Discharge policy Recycle Marcellus flowback and…
  44. Q1 2012 Update – National Fuel Gas Co. – slide 44
    Marcellus Shale February 8, 2012 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 Area…
  45. Q1 2012 Update – National Fuel Gas Co. – slide 45
    National Fuel Gas Company February 8, 2012 Comparable GAAP Financial Measure Slides and Reconciliations This presentation contains certain non-GAAP financial measures. For pages that contain non-GAAP financial measures, pages…
  46. Q1 2012 Update – National Fuel Gas Co. – slide 46
    February 8, 2012 Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2012 FY 2008 FY 2009 FY 2010 FY 2011 Forecast Capital Expenditures from Continuing Operations Exploration &…

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