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Howard Weil 40th Annual Energy Conference – National Fuel Gas Co.

National Fuel Gas Co. · Mar 26, 2012 · 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. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 1
    Investor Presentation Howard Weil 40th Annual Energy Conference March 26-28, 2012
  2. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 2
    Core Businesses March 26-28, 2012 Integrated Business Structure Seneca Resources Corporation Empire Pipeline & NFG Supply Corp. Significant Appalachian Growth Appalachian Pipeline Growth Leading Marcellus Shale Position Delivery…
  3. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 3
    National Fuel Gas Company March 26-28, 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…
  4. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 4
    National Fuel Gas Company March 26-28, 2012 Consolidated Capital Expenditures 1,500 Utility Pipeline & Storage Exploration & Production Midstream & Other The relative increase in Midstream & Capital Expenditures ( Millions)…
  5. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 5
    Pipeline & Storage March 26-28, 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…
  6. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 6
    Midstream March 26-28, 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…
  7. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 7
    Exploration & Production March 26-28, 2012 (1) Footnote 1 goes here (2) Footnote 2 goes here 10
  8. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 8
    Seneca Resources March 26-28, 2012 Response to Low Gas Prices Reduced Seneca-operated rig count from 6 rigs to 4 rigs Curtailing production in excess of firm sales into TGP 300 Production currently curtailed: 15 MMcf per day TGP…
  9. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 9
    Seneca Resources March 26-28, 2012 Net Rig Count (Working Interest) 10 Seneca Resources EOG Resources Fiscal 2013 rig count range depends on 8 7.5 participation in Net Horizontal Rig Count EOG JV wells 1.5 6 5.5 4.0 -…
  10. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 10
    Seneca Resources March 26-28, 2012 Ramping Marcellus Shale Production Covington DCNR 595 DCNR 100 EOG JV WDA/Other 225 Forecast Average Daily Net Production (MMcf per Day) 150 75 0 (1) Footnote 1 goes here (2)…
  11. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 11
    Seneca Resources March 26-28, 2012 Pennsylvania Acreage Position Eastern Development Area (Mostly Leased) Western Development Area (Mostly Fee and HBP) SRC Fee Acreage SRC Lease Acreage EOG Acreage (1) Footnote 1…
  12. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 12
    Seneca Resources March 26-28, 2012 Eastern Development Area (EDA) Results & Plan Forward DCNR Tract 007 1 Well Drilled Expiration Date: January 2020 Minimum Wells to Hold Acreage: 33 Covington Fully Developed 47 Wells Drilled…
  13. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 13
    Marcellus Shale March 26-28, 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…
  14. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 14
    Seneca Resources March 26-28, 2012 Evaluating Marcellus Wet Gas Potential More than 100,000 acres with BTU 1100-1200 Need cryogenic plant only for ethane rejection mode processing 0.50 - 0.70 per Mcf uplift from sale of NGLs…
  15. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 15
    Marcellus Shale March 26-28, 2012 Targeting Continued Cost Reductions Drilling Cost per Lateral Foot Completion Cost per Stage (000) WDA/DCNR 595 DCNR 100 WDA/DCNR 595 DCNR 100 800 400 700 350 600 300 500 250 650…
  16. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 16
    Seneca Resources March 26-28, 2012 Utica Shale Activity Summary Mt. Jewett Vertical: Tested Dry Gas Vertical Well Permit Horizontal: Prep to Complete Horizontal Well Permit Horizontal Well Drilled Rex 9.2 MMCFD Chesapeake…
  17. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 17
    California March 26-28, 2012 Stable Production and Strong Cash Flows California 2010 Rank Company BOEPD 1 Chevron 174,856 2 Aera (Shell/Exxon) 158,786 3 Occidental 151,584 4 Plains Exploration 36,488 5 Venoco Inc. 19,121…
  18. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 18
    California March 26-28, 2012 Strong Margins Support Significant Free Cash Flow Fiscal Year 2012 (1st Quarter) EBITDA per BOE Non-Steam Fuel LOE 7.81 Steam Fuel 3.11 Average Revenue in 2012 1st Quarter Production & Other…
  19. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 19
    Seneca Resources March 26-28, 2012 West Division Modest Production Growth 10,000 Actual Forecast Average Daily Net Production (BOE per Day) Production Increase Drivers 1. North MWSS Steaming 9,500 2. South MWSS Field…
  20. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 20
    Seneca Resources March 26-28, 2012 MWSS South Update 2011 Drill Program: 12 Wells / 4 Injectors 2012 Drill Program: 23 Wells / 3 Injectors Seneca Western Minerals 251T Extended 251 Pool to the West Seneca Western Minerals…
  21. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 21
    Seneca Resources March 26-28, 2012 Sespe Field 2011 Drill Plan & Results 5 Wells White Star 533-33 350 Thick 150 - 200 MBoe/Well (Medium Blue) 1 Mile Qr T White Star 5 Acre Tests Powell 10 Acre Tests WS 533-33 Powell 4…
  22. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 22
    Seneca Resources March 26-28, 2012 Sespe Field 2012 Drill Plan 6 Wells Thornbury-Strand 42-29 Type Log 350 Thick 140 - 170 MBoe/Well (Medium Blue) 1 Mile X Thornbury (10/5) Coldwater Tests Base X CW White Star 533-33…
  23. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 23
    Seneca Resources March 26-28, 2012 Monterey Shale Play Monterey Shale Play Belridge Field 5 AMIs across the field Seneca WI: 12.5% AMI Outlines Seneca NRI: 11.1% Producing (Gross): 50 BOPD 3-4 Delineation Wells…
  24. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 24
    Seneca Resources March 26-28, 2012 Reduced Capital Spending 1,000 California Upper Devonian Marcellus/Utica Gulf of Mexico Capital Expenditures ( Millions) 750 649 610-690 525-625 500 398(1) 585 565-635 480-570 250 188…
  25. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 25
    Seneca Resources March 26-28, 2012 Production Still Growing 175 California Upper Devonian Marcellus/Utica Gulf of Mexico 150 112-126 Annual Production (Bcfe) 125 100 81-90 75 67.6 88-98 5.2 49.6 56-61 50 42.5…
  26. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 26
    National Fuel Gas Company March 26-28, 2012 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 29
  27. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 27
    National Fuel Gas Company March 26-28, 2012 Hedge Positions and Strategy Seneca has hedged approximately 50% of its remaining forecasted production for Fiscal 2012 Natural Gas Volume Average Hedge Volume Average Swaps (Bcf)…
  28. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 28
    National Fuel Gas Company March 26-28, 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…
  29. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 29
    National Fuel Gas Company March 26-28, 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%…
  30. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 30
    National Fuel Gas Company March 26-28, 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…
  31. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 31
    National Fuel Gas Company March 26-28, 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…
  32. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 32
    Exploration & Production March 26-28, 2012 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 35
  33. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 33
    Seneca Resources March 26-28, 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…
  34. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 34
    Marcellus Shale March 26-28, 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…
  35. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 35
    Marcellus Shale March 26-28, 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.…
  36. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 36
    Marcellus Shale March 26-28, 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…
  37. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 37
    California March 26-28, 2012 Stable Production Fields North Lost Hills 1,200 BOEPD Tulare & Etchegoin Formation South Lost Hills Primary & Steamflood 1,700 BOEPD 181 Active Wells Monterey Shale Primary 215 Active Wells North…
  38. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 38
    Marcellus Shale March 26-28, 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…
  39. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 39
    Marcellus Shale March 26-28, 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…
  40. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 40
    Pipeline & Storage / Midstream March 26-28, 2012 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 43
  41. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 41
    Pipeline & Storage March 26-28, 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…
  42. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 42
    Pipeline & Storage March 26-28, 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…
  43. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 43
    Midstream March 26-28, 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…
  44. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 44
    Midstream Corporation March 26-28, 2012 Expansion Initiatives Capacity Est. In-Service Project Name Market Comments (Mcf/D) CapEx Date Completed Flowing into TGP Multiple 300 Line. This includes 32 Phases - Covington…
  45. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 45
    Pipeline & Storage Growth March 26-28, 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…
  46. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 46
    Utility March 26-28, 2012 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 49
  47. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 47
    Utility March 26-28, 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…
  48. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 48
    Utility March 26-28, 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…
  49. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 49
    National Fuel Gas Company March 26-28, 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…
  50. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 50
    March 26-28, 2012 Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2012 FY 2013 FY 2009 FY 2010 FY 2011 Forecast Forecast Capital Expenditures from Continuing Operations…
  51. Howard Weil 40th Annual Energy Conference – National Fuel Gas Co. – slide 51
    March 26-28, 2012 Reconciliation of Exploration & Production West Division EBITDA to Exploration & Production Segment Net Income ( Thousands) 3 Months Ended December 31, 2011 Exploration & Production - West Division EBITDA…

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