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ANALYST DAY PRESENTATION – National Fuel Gas Co.

National Fuel Gas Co. · Nov 19, 2013 · 160 slides

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Slides

  1. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 1
    National Fuel Gas Company Analyst Day Presentation November 19, 2013
  2. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 2
    Corporate National Fuel Gas Company Analyst Day Schedule of Speakers Presenter Topic Ron Tanski Corporate Overview President and Chief Executive Officer Matt Cabell Exploration & Production President of Seneca Resources…
  3. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 3
    Analyst Day - November 2013 Corporate Corporate Overview 4
  4. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 4
    Corporate National Fuel Gas Company Exceptional Assets, Focused on Execution Analyst Day - November 2013 1.549 Tcfe of Proved Reserves 2.8 MMBbl of Crude Oil Production 800,000 Net Acres in Pennsylvania 191 Million of Midstream…
  5. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 5
    Corporate National Fuel Gas Company A History of Success & A Future of Opportunity Recent Success 35% Production CAGR Since 2010 Nearly 600 Million Invested in New Pipeline Infrastructure Analyst Day - November 2013…
  6. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 6
    Corporate Corporate Overview Integrated Businesses Provide Complimentary Benefits Upstream (E&P) Midstream Businesses 600 Tremendous Growth (15% CAGR) 250 Growth & Predictability (10% CAGR) Adjusted EBITDA ( Millions) 492…
  7. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 7
    Corporate Corporate Overview Consistent Growth in Low Natural Gas Price Environment Natural gas prices dropped 1,000 23% from 2009 to 2013 852 Fiscal Natural Gas(1) Year (/MMBtu) 2009 4.68 750 704 Adjusted EBITDA (…
  8. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 8
    Corporate Corporate Overview Still in the Early Stages of Our Marcellus Growth Story 2008-2009 2010-2011 2012-2013 2014-2015 2016+ Initial Delineation Delineation (New Areas/Depths) Development Area Eastern Full Development…
  9. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 9
    Corporate Corporate Overview Formula to Grow Our Marcellus Development Program High-Quality Reservoir Realized Increased Natural Gas Capital Price Deployment Operating Efficiencies Analyst Day - November 2013 National…
  10. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 10
    Corporate Corporate Overview Opportunities to Move Gas Out of the Northeast % of Year that Northeast will be Long Gas Supply 100% 93% 90% 86% 76% 75% 69% 62% 52% 50% 31% 25% Analyst Day - November 2013 0% 2013 2014…
  11. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 11
    Corporate Corporate Overview Marcellus Infrastructure Growth Still Has Room to Run 2010 to 2013 Expansions Capacity Added 1,819 MDth per day Capital Deployed 422 million 2014+ Expansions Capacity Planned 1,724 to 2,224 MDth…
  12. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 12
    Corporate National Fuel Gas Company A History of Success & A Future of Opportunity Future Goals 10-15% Adjusted EBITDA Growth 15-25% Production Growth Analyst Day - November 2013 1.5 Billion of Midstream Investment Over 5…
  13. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 13
    Corporate Corporate Overview Maintaining Our View on Corporate Structure Today Future (2015+) Strong Balance Sheet More Aggressive Growth Ability to modestly increase Requires Capital leverage Goal is to accelerate value 1.89x…
  14. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 14
    Analyst Day - November 2013 Upstream Overview Exploration & Production 15
  15. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 15
    Upstream Seneca Resources Senecas Evolution 2008 2011 2014 Gulf of Mexico Shallow Appalachia California Marcellus Shale Eastern Development Area Marcellus Shale Western Development Area Geneseo Shale (Delineation) Utica…
  16. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 16
    Upstream Seneca Resources Fiscal 2013 Highlights Total production increased 45% to 120.7 Bcfe 45% Replaced 351% of proved reserves 351% Finding & Development Cost: 1.31/Mcfe Marcellus Finding & Development Cost: 0.99/Mcfe…
  17. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 17
    Upstream Seneca Resources Disciplined Capital Spending 1,000 Gulf of Mexico (Divested in 2011) East Division (Appalachia) West Division (California/Kansas) 800 Capital Expenditures ( Millions) 694 650-750 649 550-650 600…
  18. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 18
    Upstream Seneca Resources Proven Record of Growth 2000 3-Year Natural Gas (Bcf) Fiscal F&D Cost(1) Crude Oil (MMbbl) Years (/Mcfe) 1,549 2006-2008 7.63 1500 2007-2009 5.35 Total Proved Reserves (Bcfe) 1,246 2008-2010 2.37…
  19. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 19
    Upstream Seneca Resources Best-In-Class Marcellus Shale Reserve Growth 2009 to 2012 Proved Reserves CAGR(1) 45% 33% 30% 24% 21% 19% 15% 7% 0% Analyst Day - November 2013 -15% -10% NFG Peer 1 Peer 2 Peer 3 Peer 4 Peer…
  20. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 20
    Upstream Seneca Resources Delivering Tremendous Production Growth 225 Gulf of Mexico (Divested in 2011) East Division (Appalachia) 180-220 West Division (California/Kansas) 145-165 Annual Production (Bcfe) 150 120.7…
  21. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 21
    Upstream Seneca Resources Delivering More than Just Absolute Growth Proved Reserves per Total Production per 20 1.5 Debt-Adjusted Share(1) (Mcfe) Debt-Adjusted Share(2) (Mcfe) Total Proved Reserves per Debt-Adjusted Share…
  22. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 22
    Upstream Marcellus Shale Significant Position & Integral Part of Senecas Future Enterprise Net Marcellus Value(2) Acres per Company Acreage(1) ( Billions) Million of EV NFG 780,000 7.4 105.4 RRC 835,000 15.5 53.9 EQT 560,000…
  23. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 23
    Upstream Marcellus Shale Factors for Success Acreage Position Quantity & Quality Operating Expertise Control costs Maximize production Gathering, Transportation and Marketing Financial Stability Analyst Day - November…
  24. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 24
    Upstream Marcellus Shale Prolific Pennsylvania Acreage Seneca Fee Seneca Lease 720,000 Acres 60,000 Acres Eastern Development Area (EDA) Mostly leased (16-18% royalty) Western Development Area (WDA) No near-term lease…
  25. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 25
    Upstream Seneca Acreage Huge Position Varies in Understanding Seneca Fee Seneca Lease Understanding Senecas 780,000 Net Acres Northeast Core 30,000 acres in NE Core Tier I Acres 200,000 acres Economic less than 4/Mcf Awaiting…
  26. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 26
    Upstream Seneca Acreage Fee Ownership & Contiguity are Beneficial Contiguous No Lease No Royalty Acreage Expiration Blocks Analyst Day - November 2013 Senecas Tier I acreage is approaching Northeast Core economics 27
  27. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 27
    Upstream Seneca Acreage Senecas Marcellus Acreage Provides a Unique Advantage Seneca Advantage 1 Fee Ownership Position Competitor 28% IRR Seneca Advantage Single Pad Fee Ownership + Working Interest: 100% Contiguous Acreage…
  28. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 28
    Upstream Senecas Operations Best-In-Class Operator in Lycoming County (EDA) 9.0 180 8.2 Average MMcf per Day Horizontal Well Count 8.0 160 Average Production per Well (MMcf per Day) 7.0 140 6.0 120 Horizontal Well…
  29. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 29
    Upstream Senecas Operations Top-Notch Lycoming Economics Lycoming County: EURs & Breakeven Prices 15.0 6 EUR (Bcfe) Breakeven Price 12.3 Breakeven Price (/Mcfe) 10.0 4 EUR (Bcfe) 6.6 6.3 4.9 5.0 2 3.7 Analyst Day -…
  30. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 30
    Upstream Senecas Operations Senecas Lycoming Economics are in the Top 3 5.00 Top Marcellus Breakevens by Operator & County (Source: ITG Investment Research) There are an additional 109 breakeven data points greater than 3.69/Mcf…
  31. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 31
    Upstream Senecas Operations Driving Down Well Costs In 2014, total well costs are expected to be 35-40% lower than 2012 DCNR Tract 100 Total Well Costs RCS Well Normalized for 5,500 Lateral & 37 RCS Stages 12.0 10.0 Total Well…
  32. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 32
    Upstream Senecas Gathering & Marketing Senecas Overall Marketing Strategy Historical Strategy Firm sales at Financial hedges to interstate pipeline lock in benchmark interconnects and basis risk Develop gathering infrastructure…
  33. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 33
    Upstream National Fuels Financial Stability Ability to Withstand Pricing Challenges Strong Balance Sheet & Liquidity Position Cash Generation from California Oil No Near-Term Debt Maturities Analyst Day - November 2013…
  34. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 34
    Upstream Marcellus Shale Factors for Success Acreage Position Quantity & Quality Operating Expertise Control costs Maximize production Gathering, Transportation and Marketing Financial Stability Analyst Day - November…
  35. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 35
    Upstream California Outstanding Cash Flow(1) 250 Capital Expenditures 226.9 Adjusted EBITDA 215.0 200 187.8 187.6 171.6 150 Millions 104.6 100 62.9 47.4 Analyst Day - November 2013 50 31.4 27.6 0 2009 2010…
  36. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 36
    Upstream California Looking Back at the Successful Ivanhoe Acquisition Seneca South Midway Sunset Production 1,600 Net Production at Acquisition Acquisition Date 1,400 Gross Prodcution (BOPD) 1,200 550 Bbl per Day (March…
  37. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 37
    Upstream California Looking Forward 1. Manage decline of base production 2. Pursue and develop opportunities for growth from current assets Sespe East Coalinga South Midway Sunset Analyst Day - November 2013 3. Continue to…
  38. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 38
    Upstream Seneca Resources Key Metrics Operational Strategic Metric Fiscal 2009 Fiscal 2013 Strategy Improvements East Division 9 Bcfe 12x Production 101 Bcfe Production (21% of Total Production) Growth (83% of Total…
  39. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 39
    Upstream Seneca Resources What Will Seneca Look Like Moving Forward Consistent Production Growth: 15-25% CAGR Driven by a very large, high-quality Appalachian acreage position Disciplined Spending Driven by Rates of Return Pace…
  40. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 40
    Analyst Day - November 2013 Upstream Overview Appraisal & Development 41
  41. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 41
    Upstream Marcellus Shale WDA Is the Key to Senecas Long-Term Growth Outlook Seneca Fee Seneca Lease 720,000 Acres 60,000 Acres Full Development Since 2010 Full Development Started in 2013 225 locations remaining Analyst Day…
  42. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 42
    Upstream Marcellus Shale Significantly Improved Understanding of the WDA SRC Fee Acreage SRC Lease Acreage 3D Seismic Outlines EOG Earned Acreage Mt. Jewett W. Branch Rich Valley James City Clermont Owls Nest St. Marys…
  43. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 43
    Upstream Marcellus Shale Northwest PA Generalized Cross-Section Transitional Platform Basin Outer Shelf Owls Nest Ridgway Rich Valley Beechwood Punxy James City Clermont Leasgang CaCO3 Sed. Rate Analyst Day - November…
  44. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 44
    Upstream Marcellus Shale WDA Log Summary Cross-Section Platform Transitional Outer Shelf Basin TOC/PHI/BWV TOC/PHI/BWV TOC/PHI/BWV TOC/PHI/BWV 0 Wt% 50 Gas Resource Gas Resource 0 Wt% 50 Gas Resource 0 Wt% 50 Gas Resource Mineralogy…
  45. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 45
    Upstream Marcellus Shale 2013 & 2014 WDA Delineation Program Clermont Full Development SRC Fee Acreage 2 Wells Completed Rich Valley Full Development SRC Lease Acreage 9H: 7-Day IP of 10 MMcf/d & EUR of 8.6 Bcf 2 Wells Completed…
  46. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 46
    Upstream Marcellus Shale Rich Valley/Clermont is in Full Development Mode Marcellus Faults Marcellus & Basement Faults Pad N: Spacing Test Clermont RCS: 9H 7-day IP: 10.0 MMcf/d (EUR: 8.6 Bcf) Rich Valley Non-RCS: 10H 7-day…
  47. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 47
    Upstream Marcellus Shale Clermont Wells Improved from Early Non-Op JV Wells SRC Clermont vs. Non-Op JV Clermont 10,000 9H 10H COP 2316 5H COP 2316 6H 9,000 Clermont 5H & 6H (Non-op wells) Avg. lateral length: 3,344 9H: RCS…
  48. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 48
    Upstream Marcellus Shale Moving All Completions to Reduced Cluster Spacing (RCS) RCS Design Conventional Design 1000 1000 300 300 Fracture Formation Fracture Formation Wellbore Wellbore Twice the number of…
  49. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 49
    Upstream Marcellus Shale Consistently Improved Results in the Owls Nest Area Owls Nest Area 8,000 2013 Appraisal Program 7,000 Lateral length 4,400 to 6,200 6,000 Ridgway RCS completions 150 spacing Owls Nest Flowback Gas…
  50. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 50
    Upstream Marcellus Shale Strong Wells Across WDA Acreage Peak Peak Treatable 24-Hour 7-Day Completion Lateral Rate Rate EUR Well Name Design Length Stages (MMcfd) (MMcfd) (Bcf) Status Rich Valley 27H RCS1 6,372 42 8.1 7.8 7.4…
  51. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 51
    Upstream Marcellus Shale Key Areas of Improvement in Recent Delineation Program Areas of Improvement 2012-2013 Delineation Program Target Selection (Landing Depth) Identification of specific target interval is key Percent of…
  52. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 52
    Upstream Marcellus Shale Selection of Target Interval is Critical Percentage of Wellbore in Current Target Interval 100% Wells 260% Improvement Percent In Current Target (% of CLL) Averages 83% 75% 50% 33% 25% 23%…
  53. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 53
    Upstream Marcellus Shale Optimized Landing Depth EDA Lycoming Type Log Improved Target Zone Drivers Best rock quality in terms of organic content, brittleness, and porosity Highest rate of penetration (ROP) ROP vs Height…
  54. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 54
    Upstream Marcellus Shale Continued Improvement Staying within Targeted Interval Percent of Wellbore In Target Zone (15-20 Interval) 100% 17% Wells Percent In Target (% of CLL) 83% Averages Improvement 75% 69% 71% 50%…
  55. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 55
    Upstream Marcellus Shale RCS & Increased Sand Volume Generating Better Results Increases near wellbore fracturing Improved near wellbore & stimulated reservoir volume fracture conductivity Stage Spacing & Count Pounds of Sand per…
  56. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 56
    Upstream Marcellus Shale Longer Laterals Drive Improved Economics Completed Lateral Length (ft) 7,000 Wells Completed Lateral Length (ft) Averages 6,000 5,586 50% 5,000 Increase 4,838 4,000 3,709 3,000 2,000 2009…
  57. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 57
    Upstream Marcellus Shale 2013 Appraisal Program was a Success 50-hr Flowback Rate (Mcf/d/1000') P10 P50 P90 Mean StDev FY13 Program 1,427 1,128 893 1,147 211 Previous Programs 1,002 519 270 589 329 P1 2.100 95% improvement…
  58. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 58
    Upstream Marcellus Shale 200,000 Acres With 6-8 Bcfe EUR Wells SRC Fee Acreage SRC Lease Acreage EOG Earned JV Acreage 2-4 BCF/well 2014 Hz Appraisal Program 2015+ Locations 6 - 8 BCF/well 4 - 6 BCF/well 2-4 BCF/well…
  59. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 59
    Upstream Marcellus Shale 1,700 To 2,000 Economic WDA Locations Below 4/Mcfe Approx. 15% IRR(1) Remaining EUR IRR(1) Breakeven Price Prospect County Product Locations (Bcfe) BTU 4/MMBtu (/Mcf) Tract 100 Lycoming Dry Gas 40 11.5 1,030…
  60. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 60
    Upstream Marcellus Shale Marketing Intercompany Gathering Ensures Timely Gas Sales Historical Strategy Firm sales at Financial hedges to interstate pipeline lock in benchmark interconnects and basis risk Develop gathering…
  61. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 61
    Upstream Marcellus Shale Marketing Securing Firm Transportation to Major Markets Firm transport to Canada, Northeast and Southeast U.S. markets Analyst Day - November 2013 Current Seneca Development Areas 62
  62. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 62
    Upstream Marcellus Shale Marketing TGP 300 Production & Firm Sales Aligned Thru 2014 200 Dawn NYMEX Dominion Production (Forecast) 180 160 140 Gross MMBtu per Day 120 100 NYMEX Index 80 Less 0.24 Dawn Index 60 Less…
  63. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 63
    Upstream Marcellus Shale Marketing Targeting Future Firm Sales on Transco 400 Transco Z6 NY/NNY NYMEX Dominion Production (Forecast) 350 300 Gross MMBtu per Day 250 200 150 Transco Zone 6 Index Less 0.57 100 NYMEX…
  64. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 64
    Upstream Point Pleasant & Utica Shale Continuing to Delineate Range Resources Point Pleasant Permitted 1.4 MMcf/d Northern Boundary Not Effectively Stimulated Drilled/Drilling Completed Producing Mt. Jewett Horizontal: completed…
  65. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 65
    Upstream Mississippian Lime Commencing Evaluation Program in Fiscal 2014 Total Net Acres: 13,615 Unit 100% working interest in 4,400 30-day IP: gross acres 352 BOED (92% Oil/NGLs) 55% net working interest in 17,365 gross acres…
  66. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 66
    Analyst Day - November 2013 Upstream Update California 67
  67. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 67
    Upstream California Stable Production Fields; Modest Growth Potential 6,000 2010 4,500 East Coalinga 2013 4,000 Temblor Formation Gross Operated Daily 4,500 Production (Boe/d) Primary 3,000 1,700 1,500…
  68. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 68
    Upstream California South Midway Sunset Has Delivered Significant Growth Monthly Production at South Midway Sunset 2,000 Daily Production (Boe per day) Seneca Acquired in 1,500 June 2009 B Pool A Pool 1,000 500 0 16X…
  69. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 69
    Upstream California South MWSS Growth Opportunities Continue into 2014 Analyst Day - November 2013 70
  70. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 70
    Upstream California Early Success in Farm-In with Chevron at East Coalinga Returned to Production Monthly Production East Coalinga 2013 Evaluation Wells 750 1-Acre Test Daily Production (Boe per Day) Seneca Lease 48 BOPD…
  71. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 71
    Upstream California Ramping Up the Coalinga Drill Program in Fiscal 2014 2014 Development Program (Tentative) 2014 Locations (30) 2013 Locations (12) Location Selection Criteria 2013 new well production Reservoir pressure…
  72. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 72
    Upstream California Ongoing Evaluation of Long-Term Sespe Potential 2011 Wells (5) TC 524-28 IP: 100 BOEPD 2012 Wells (6) 1 1st Oil 10/13 2013 Wells (6) Mile TC 525-28 2014 Wells (4) IP: 160 BOEPD 1st Oil 10/13 WS 535-33…
  73. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 73
    Upstream California Evaluating the Monterey Shale at South Lost Hills GR Brittleness Oil SP ResD Gas Truman 2H Lower Reef Ridge Planned FY14 Seneca Lease 1000 Upper Antelope A Truman 1H 2013 Upper Antelope B 190 BOEPD…
  74. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 74
    Upstream California Limited Growth Opportunities, But Strong Economics Average Estimated Average EUR IRR Fiscal 2014 Field Well Cost (MBO) 100/Bbl Locations South Midway Sunset 250,000 30 75% 23 East Coalinga 400,000 40 50% 30…
  75. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 75
    Upstream California Modest Growth Anticipated in 2014 and 2015 Forecast 10,000 Average Daily Net Production (BOE per Day) 9,322 9,056 9,078 9,000 8,773 8,000 7,000 Analyst Day - November 2013 6,000 2010 2011…
  76. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 76
    Upstream Marcellus Operational & Environmental Overview Analyst Day - November 2013 77
  77. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 77
    Upstream Marcellus Shale Our Development Approach Drives Major Efficiencies Focused Technical & Multi-Well Development Operational Pads Areas Expertise Analyst Day - November 2013 Faster Spud-to-Sales Timing Economies of…
  78. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 78
    Upstream Marcellus Shale EDA Delivering Significant Growth Covington Fully Developed Gross Production: 60 MMcf per Day 47 Wells Drilled and Producing DCNR Tract 595 Gross Production: 100 MMcf per Day 34 Wells Drilled (52 Total…
  79. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 79
    Upstream Marcellus Shale EDA Historical Well Results Are Exceptional Average EUR per Average Average Average EUR Average 1,000 of Producing IP Rate 7-Day 30-Day per Well Lateral Lateral Development Area Well Count (MMcf/d) (MMcf/d)…
  80. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 80
    Upstream Marcellus Shale Faster Spud-to-Sales: Drilling Efficiencies DCNR Tract 100 (Lycoming) Average Daily Drilling Footage 1,500 How has this been accomplished 1,320 1,200 Directional Plan Optimization Minimize drilling path…
  81. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 81
    Upstream Marcellus Shale Faster Spud-to-Sales: Multi-Well Pads Are Key Average Number of Yearly Rig Moves Average Rig Move Cost per Well Cumulative Annual Cost Savings ( Millions) 24 24 500 6.0 Average per Well Move Cost (…
  82. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 82
    Upstream Marcellus Shale Drilling Efficiencies Allow for More Wells per Year Drilling Efficiency vs. Lateral Length 30 5,500 6,000 All Marcellus Wells 5,021 4,614 4,650 Average Lateral Length (Feet) 3,929 Wells per Rig per…
  83. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 83
    Upstream Marcellus Shale Faster Spud-to-Sales: Completing More Stages per Day DCNR Tract 100 (Lycoming) RCS Stages per Day 15 How has this been accomplished 12 Completion Efficiency Technologies 10 10 RCS Stages per Day…
  84. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 84
    Upstream Marcellus Shale Faster Spud-to-Sales: The Overall Picture Average Spud-to-Sales for a 6-Well Pad (Normalized for 5,500 Laterals per Well) (1) 2010 164 89 253 Days 2011 161 72 233 Days 2012 158 101 259 Days 2013…
  85. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 85
    Upstream Marcellus Shale Faster Spud-to-Sales: More Lateral Feet Completed Yearly Total Lateral Feet & Stages Completed 2,000 1,888 400 Stages per Year (RCS) Stages per Year (Non-RCS) Lateral Feet Completed Lateral Feet…
  86. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 86
    Upstream Marcellus Shale Drilling Cost Reductions: Several Contributing Factors DCNR Tract 100 (Lycoming) DCNR Tract 100 (Lycoming) Average Drilling Days to TD Average Drilling Cost (Normalized for a 5,500 Treatable Lateral)…
  87. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 87
    Upstream Marcellus Shale Completion Cost Reductions: Ongoing Optimization DCNR Tract 100 (Lycoming) Average RCS Completion Cost per Stage 200 How is this being accomplished Completion Costs per Stage ( Thousands) New Frac…
  88. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 88
    Upstream Marcellus Shale Completion Cost Reductions: New Efficient Technologies Time Savings 4 days per well Toe Sub 60,000 savings per well Prep 24 days per 6-well pad Time Savings Sleeve 6 days per well 200,000 savings per…
  89. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 89
    Upstream Marcellus Shale Completion Cost Reductions: Water Infrastructure System Cost: 8.5 million 8 miles of pipeline 43 million gallons of storage Will serve at least 70 wells Provides 75% of water needs, with the remainder…
  90. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 90
    Upstream Marcellus Shale Minimizing Backlogs: Coordinated Development Sales Lag (Months) 0 6 12 18 IRR(1) 4/Mcf Realized Pricing 90% 58% 46% 38% Coordination with NFG Midstream to construct gathering systems Development well…
  91. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 91
    Upstream Seneca Resources Committed to Health, Safety, and the Environment Seneca Resources Corporation Value Statement We ask that each employee share in our philosophy and unwavering commitment to each others health and safety and…
  92. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 92
    Analyst Day - November 2013 Midstream Overview Midstream Businesses 93
  93. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 93
    Midstream Midstream Businesses National Fuels Midstream Businesses NFG Midstream Businesses Pipeline & Storage Gathering Reporting Segment Segment Segments National Fuel Gas National Fuel Gas Midstream Supply Corporation…
  94. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 94
    Midstream Midstream Businesses Positioned Well to Serve Appalachian Producers National Fuel Gas Supply Corporation System Length 2,550 Miles Storage Capacity 73.4 Bcf Contracted Transport 2.58 MMDth/d 2013 Revenue 191.2…
  95. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 95
    Midstream Midstream Businesses Positioned Well to Serve Appalachian Producers Empire Pipeline System Length 250 Miles Contracted Transport 1.07 MMDth/d 2013 Revenue 76.4 Million 2010 2013 62.8 Million Lysander Capital…
  96. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 96
    Midstream Midstream Businesses Positioned Well to Serve Appalachian Producers NFG Midstream Corp. System Length 59 Miles 2013 Revenue 34.8 Million Capital Expenditures 168 Million (Since Inception) TGP 300 Transco…
  97. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 97
    Midstream Midstream Businesses Long-Term Strategy Driven by Both Seneca & 3rd Parties Develop strong partnerships with customers to help them reach diverse, high-value markets Seneca Midstream 3rd Party Resources Businesses…
  98. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 98
    Midstream Midstream Businesses Positioned to Serve Senecas Rapidly Growing Production Analyst Day - November 2013 99
  99. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 99
    Midstream Gathering Gathering is the Crucial First Step to Reaching a Market TGP 200 Clermont Gathering System Covington (Under Construction) Gathering System (In-Service) TGP 300 Analyst Day - November 2013 Trout Run…
  100. ANALYST DAY PRESENTATION – National Fuel Gas Co. – slide 100
    Midstream Gathering Existing Systems Supporting Senecas Near-Term Growth Covington Gathering System In-service date: November 2009 Capacity: 220,000 Dth per day Interconnect: TGP 300 Capital expenditures (to date): 28.3 million…

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