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BMO Conference – National Fuel Gas Co.

National Fuel Gas Co. · Jan 10, 2012 · 50 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. BMO Conference – National Fuel Gas Co. – slide 1
    Investor Presentation BMO Capital Markets Unconventional Resource Conference January 10, 2012
  2. BMO Conference – National Fuel Gas Co. – slide 2
    Core Businesses January 10, 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. BMO Conference – National Fuel Gas Co. – slide 3
    National Fuel Gas Company January 10, 2012 Integrated Business Structure (1) Footnote 1 goes here (2) Footnote 2 goes here 4
  4. BMO Conference – National Fuel Gas Co. – slide 4
    National Fuel Gas Company January 10, 2012 Consolidated Capital Expenditures 1,500 Utility Pipeline & Storage Exploration & Production Midstream & Other Capital Expenditures ( Millions) 1,250 1,015 - 1,185 40-85 1,000 854…
  5. BMO Conference – National Fuel Gas Co. – slide 5
    Exploration & Production January 10, 2012 (1) Footnote 1 goes here (2) Footnote 2 goes here 6
  6. BMO Conference – National Fuel Gas Co. – slide 6
    Seneca Resources January 10, 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…
  7. BMO Conference – National Fuel Gas Co. – slide 7
    Seneca Resources January 10, 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…
  8. BMO Conference – National Fuel Gas Co. – slide 8
    Marcellus Shale January 10, 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…
  9. BMO Conference – National Fuel Gas Co. – slide 9
    Seneca Resources January 10, 2012 Marcellus Shale Strategic Development Plan Gross Rig Count Aggressively Develop our excellent 16 Tioga and Lycoming County leasehold Seneca EOG 12 Systematically evaluate western Gross Rig…
  10. BMO Conference – National Fuel Gas Co. – slide 10
    Marcellus Shale January 10, 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.…
  11. BMO Conference – National Fuel Gas Co. – slide 11
    Marcellus Shale January 10, 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 19 Wells Drilled 4…
  12. BMO Conference – National Fuel Gas Co. – slide 12
    Marcellus Shale January 10, 2012 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. BMO Conference – National Fuel Gas Co. – slide 13
    Marcellus Shale January 10, 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…
  14. BMO Conference – National Fuel Gas Co. – slide 14
    Marcellus Shale January 10, 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…
  15. BMO Conference – National Fuel Gas Co. – slide 15
    Seneca Resources January 10, 2012 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. BMO Conference – National Fuel Gas Co. – slide 16
    Marcellus Shale January 10, 2012 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. BMO Conference – National Fuel Gas Co. – slide 17
    Upper Devonian Geneseo Shale January 10, 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…
  18. BMO Conference – National Fuel Gas Co. – slide 18
    Utica Shale January 10, 2012 Activity Summary Seneca Resources Seneca Resources Dry Gas Vertical Well Permit Vertical Completed Vertical Completed: December 2011 Prep to Test Moving in rig for horizontal well Horizontal Well…
  19. BMO Conference – National Fuel Gas Co. – slide 19
    Utica Shale January 10, 2012 Mt. Jewett Vertical Well Seneca Resources recently drilled a vertical Utica/Pt. Pleasant well in McKean County, PA. Preliminary results are encouraging. Potential pay spans the Utica, Pt. Pleasant and…
  20. BMO Conference – National Fuel Gas Co. – slide 20
    California January 10, 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 216 Active Wells North…
  21. BMO Conference – National Fuel Gas Co. – slide 21
    California January 10, 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%…
  22. BMO Conference – National Fuel Gas Co. – slide 22
    Seneca Resources January 10, 2012 Capital Spending Shifting to the Marcellus 1,250 California Upper Devonian Marcellus Gulf of Mexico Capital Expenditures ( Millions) 1,000 785-875 750 649 500 398 740-820 585 250 192…
  23. BMO Conference – National Fuel Gas Co. – slide 23
    Seneca Resources January 10, 2012 Ramping Up Production Growth 125 California Upper Devonian Marcellus Gulf of Mexico 100 Annual production 87-101 growth of 30% to Annual Production (Bcfe) 50% is expected 75 from 2011 to…
  24. BMO Conference – National Fuel Gas Co. – slide 24
    Pipeline & Storage / Midstream January 10, 2012 (1) Footnote 1 goes here (2) Footnote 2 goes here 25
  25. BMO Conference – National Fuel Gas Co. – slide 25
    Pipeline & Storage January 10, 2012 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. BMO Conference – National Fuel Gas Co. – slide 26
    Midstream January 10, 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…
  27. BMO Conference – National Fuel Gas Co. – slide 27
    National Fuel Gas Company January 10, 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…
  28. BMO Conference – National Fuel Gas Co. – slide 28
    National Fuel Gas Company January 10, 2012 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 29
  29. BMO Conference – National Fuel Gas Co. – slide 29
    National Fuel Gas Company January 10, 2012 Manageable Debt Maturity Schedule 600 2012 Debt Maturity Paid on November 21, 2011 500 500 Debt Maturity ( Millions) 400 300 300 250 250 200 150 100 7.395% 49 50…
  30. BMO Conference – National Fuel Gas Co. – slide 30
    National Fuel Gas Company January 10, 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…
  31. BMO Conference – National Fuel Gas Co. – slide 31
    National Fuel Gas Company January 10, 2012 Hedge Positions and Strategy Hedged Forecasted Production As of January 10, 2012 Volume Average 100% Oil Swaps (MMBbl) Hedge Price % of Forecasted Production Hedged Fiscal 2012 1.6…
  32. BMO Conference – National Fuel Gas Co. – slide 32
    National Fuel Gas Company January 10, 2012 Capitalization & Liquidity Short-Term Debt 1.3% Capital Resources Long-Term Debt Total Short-Term Capacity: 1,135 Million Committed Credit Facility: 750 Million Shareholders 35.2%…
  33. BMO Conference – National Fuel Gas Co. – slide 33
    Pipeline & Storage / Midstream January 10, 2012 (1) Footnote 1 goes here (2) Footnote 2 goes here 34
  34. BMO Conference – National Fuel Gas Co. – slide 34
    Pipeline & Storage January 10, 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…
  35. BMO Conference – National Fuel Gas Co. – slide 35
    Midstream Corporation January 10, 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…
  36. BMO Conference – National Fuel Gas Co. – slide 36
    Utility January 10, 2012 National Fuel Gas Distribution Corporation (1) Footnote 1 goes here (2) Footnote 2 goes here 37
  37. BMO Conference – National Fuel Gas Co. – slide 37
    Utility January 10, 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…
  38. BMO Conference – National Fuel Gas Co. – slide 38
    Utility January 10, 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…
  39. BMO Conference – National Fuel Gas Co. – slide 39
    Exploration & Production January 10, 2012 (1) Footnote 1 goes here (2) Footnote 2 goes here 40
  40. BMO Conference – National Fuel Gas Co. – slide 40
    Marcellus Shale January 10, 2012 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…
  41. BMO Conference – National Fuel Gas Co. – slide 41
    Marcellus Shale January 10, 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…
  42. BMO Conference – National Fuel Gas Co. – slide 42
    Marcellus Shale January 10, 2012 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)…
  43. BMO Conference – National Fuel Gas Co. – slide 43
    Marcellus Shale January 10, 2012 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…
  44. BMO Conference – National Fuel Gas Co. – slide 44
    Marcellus Shale January 10, 2012 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…
  45. BMO Conference – National Fuel Gas Co. – slide 45
    Marcellus Shale January 10, 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…
  46. BMO Conference – National Fuel Gas Co. – slide 46
    Marcellus Shale January 10, 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…
  47. BMO Conference – National Fuel Gas Co. – slide 47
    Marcellus Shale January 10, 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…
  48. BMO Conference – National Fuel Gas Co. – slide 48
    Marcellus Shale January 10, 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…
  49. BMO Conference – National Fuel Gas Co. – slide 49
    National Fuel Gas Company January 10, 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. BMO Conference – National Fuel Gas Co. – slide 50
    January 10, 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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