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August 2015 Investor Presentation – National Fuel Gas Co.

National Fuel Gas Co. · Aug 6, 2015 · 60 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. August 2015 Investor Presentation – National Fuel Gas Co. – slide 1
    National Fuel Gas Company Investor Presentation August 2015
  2. August 2015 Investor Presentation – National Fuel Gas Co. – slide 2
    Quality Assets, Exceptional Location, Unique Integration Corporate 790,000 Net Acres in Marcellus Shale 3 Million BBls of Annual Crude Oil Production 1.9 Tcfe of Proved Reserves(1) 262 Million of Midstream Adjusted EBITDA(2) (1)…
  3. August 2015 Investor Presentation – National Fuel Gas Co. – slide 3
    The National Fuel Value Proposition Corporate Considerable Upstream and Midstream Growth Opportunities in Appalachia 790,000 net acres in Marcellus Shale 2nd largest acreage position in the industry(1) Mineral ownership on 720,000…
  4. August 2015 Investor Presentation – National Fuel Gas Co. – slide 4
    Upstream & Midstream Common Vision for Growth Corporate Expanding Our Interstate Pipeline System to Reach Premium Markets Developing Our High Quality Marcellus Acreage Northern Access Projects to Transport 660,000 MMBtu/d by…
  5. August 2015 Investor Presentation – National Fuel Gas Co. – slide 5
    EBITDA Contribution by Segment Corporate 1,250 Exploration & Production Segment Gathering Segment Pipeline & Storage Segment Utility Segment 1,000 Energy Marketing & Other 953 896 852 Adjusted EBITDA (Millions) 750 704…
  6. August 2015 Investor Presentation – National Fuel Gas Co. – slide 6
    Adjusting Capex to Capitalize on Opportunities Corporate 1,500 Exploration & Production Segment Gathering Segment Pipeline & Storage Segment 1,110 - Utility Segment 1,280 Energy Marketing & Other 990 - 1,045 Capital…
  7. August 2015 Investor Presentation – National Fuel Gas Co. – slide 7
    Maintaining a Strong Balance Sheet Corporate Debt/Adjusted EBITDA Capitalization 2.5 2.09 x 1.98 x 2.0 1.89 x 1.89 x 1.75 x 1.77 x Average Debt /Adjusted EBITDA 1.5 Shareholders Total Debt Equity 48% 1.0 52% 0.5…
  8. August 2015 Investor Presentation – National Fuel Gas Co. – slide 8
    Dividend Track Record Corporate 2.00 Dividend Consistency Consecutive Dividend Payments 113 Years Consecutive Dividend Increases 44 Years 1.50 Current Annualized Dividend Rate 1.58 per Share Annual Dividend Rate 1.00…
  9. August 2015 Investor Presentation – National Fuel Gas Co. – slide 9
    Upstream Overview Exploration & Production 10
  10. August 2015 Investor Presentation – National Fuel Gas Co. – slide 10
    Proven Record of Reserve Growth Upstream 2,500 Natural Gas (Bcf) Crude Oil (MMbbl) 3-Year Fiscal F&D Cost(1) Years (/Mcfe) 2,000 1,914 2007-2009 5.35 2008-2010 2.37 1,549 Total Proved Reserves (Bcfe) 1,500 2009-2011 2.09…
  11. August 2015 Investor Presentation – National Fuel Gas Co. – slide 11
    Marcellus Shale Driving Production Growth Upstream 225 Gulf of Mexico (Divested in 2011) East Division 195 (2) West Division Spot (1) 160.5 155-160 Gas Sales 150 Annual Production (Bcfe) 120.7 83.4 139.3 135- 138…
  12. August 2015 Investor Presentation – National Fuel Gas Co. – slide 12
    Disciplined Capital Spending Upstream 1,000 Gulf of Mexico (Divested in 2011) East Division West Division 800 694 649 Capital Expenditures (Millions) 603 550 - 600 575 533 400 - 475 398 400 631 596 520 510 - 428…
  13. August 2015 Investor Presentation – National Fuel Gas Co. – slide 13
    Highly Competitive Cost Structure Upstream 4.00 Property, Franchise & Other Taxes Other O&M Expense General & Administrative Expense Lease Operating & Transportation Expense (Gathering Only) (3) Lease Operating & Transportation…
  14. August 2015 Investor Presentation – National Fuel Gas Co. – slide 14
    Marcellus Shale: Prolific Pennsylvania Acreage Upstream Seneca Fee Seneca Lease 720,000 Acres 70,000 Acres Eastern Development Area (EDA) Mostly leased (16-18% royalty) Western Development Area (WDA) No near-term lease…
  15. August 2015 Investor Presentation – National Fuel Gas Co. – slide 15
    Marcellus Shale: Eastern Development Area Upstream Covington Fully Developed DCNR Tract 007 Productive Capacity: 40MMcf per Day Utica exploration well 47 Wells Producing 24-hour peak IP 22.7 MMcf per Day Resource potential 1…
  16. August 2015 Investor Presentation – National Fuel Gas Co. – slide 16
    Marcellus Shale: Western Development Area Upstream Senecas Tier I WDA Acreage 200,000 acres…
  17. August 2015 Investor Presentation – National Fuel Gas Co. – slide 17
    Focusing on Clermont/Rich Valley (CRV) Area Upstream 200-250 total horizontal locations 40 wells currently on-line Current productive capacity: 150 MMcf/d Development strategy focused on: (1) Preserving capital currently running 3…
  18. August 2015 Investor Presentation – National Fuel Gas Co. – slide 18
    Marcellus Operated Well Results Upstream EDA Development Wells: Producing Well Average IP Rate Average Average Treatable Area Count (MMcfd) 30-Day (MMcf/d) Lateral Length (ft) Covington Tioga 47 5.2 4.1 4,023 County Tract 595…
  19. August 2015 Investor Presentation – National Fuel Gas Co. – slide 19
    Marcellus Drilling and Completion Efficiencies Upstream Fiscal 2012 Average Development Well Fiscal 2015(1) Average Development Well 8.7 MM Lateral Length: 5,100 ft Lateral Length: 6,900 ft Well Cost 5.8 MM Measured Depth:…
  20. August 2015 Investor Presentation – National Fuel Gas Co. – slide 20
    Marcellus Shale Program Economics Upstream 1,800 WDA Locations Economic at Realizations Below 3/MMbtu (1) Locations Completed Average 3.50 3.25 15% IRR Prospect Product Remaining Lateral EUR BTU Dawn/NYMEX Dawn/NYMEX Realized…
  21. August 2015 Investor Presentation – National Fuel Gas Co. – slide 21
    WDA Mineral Interests Significantly Enhance Returns Upstream Clermont/Rich Valley Example The Seneca Producer Advantage Paying (/Mcf) 0% Royalty 15% Royalty Realized Price 2.19 2.19 Less: Royalty Payment (0.00) (0.33) Less:…
  22. August 2015 Investor Presentation – National Fuel Gas Co. – slide 22
    Adding Long-Term Firm Transport to the Portfolio Upstream FT Capacity (Dth/day) In- Project Service Contract Delivery Fiscal Fiscal Fiscal Fiscal Matched Firm (Counterparty) Date Term Market 2015 2016 2017 2018 Sales Contracts…
  23. August 2015 Investor Presentation – National Fuel Gas Co. – slide 23
    Significant Base of Long-Term Firm Contracts Upstream 1,200 914,405 Dth per day(1) Total Firm Contracts by FY 2018 900 Atlantic Sunrise Williams Co. (Transco) Dth per Day (Thousands) 189,405 Dth/d 600 Northern Access…
  24. August 2015 Investor Presentation – National Fuel Gas Co. – slide 24
    Reaching High Value Markets Upstream Seneca FT Capacity by Fiscal 2018 To Canadian (Dth per day) Markets Canadian Markets 558,000 Mid-Atlantic, Southeast & Other + 341,405 Total Firm Transport Capacity 899,405 To…
  25. August 2015 Investor Presentation – National Fuel Gas Co. – slide 25
    Firm Sales Provide Market for Appalachian Production Upstream 600,000 Q4 FY15 Fiscal 2016 Pricing Index Key: Fixed Price Long-Term Firm Gross Sales (Avg Dth per Day) Dawn 500,000 Dominion SP NYMEX 402,871 408,936 391,256…
  26. August 2015 Investor Presentation – National Fuel Gas Co. – slide 26
    Natural Gas Financial Hedge Positions(1) Upstream 100 NYMEX Dominion Dawn & MichCon SoCal 82.2 75 Natural Gas Swaps (Million MMBtu) 19.0 59.0 18.8 50 22.1 12.7 25 21.0 44.4 6.2 12.8 24.1 7.2 14.5 11.0 1.8 0…
  27. August 2015 Investor Presentation – National Fuel Gas Co. – slide 27
    FY 2015 Production Upstream 200.0 Q4 FY15 Firm Sales with Price Certainty 28.7 Bcf Realizing 3.60/Mcf 2.5 Bcf of Additional Basis Protection 5.2 Bcfe 155-160 Bcfe 150.0 8.8 Bcf 0 Bcf (2) 6.0 Bcf Total Production (Bcfe) 14.0…
  28. August 2015 Investor Presentation – National Fuel Gas Co. – slide 28
    FY 2016 Production - Firm Sales & Spot Exposure Upstream 250 Seneca Total Fiscal 2016 Firm Sales with Price Certainty East Division 113.6 Bcf Realizing 3.50/Mcf Productive Productive 18.1 Bcf of Additional Basis Protection Capacity…
  29. August 2015 Investor Presentation – National Fuel Gas Co. – slide 29
    Utica/Point Pleasant: Industry Activity Upstream Seneca - DCNR 007 IP: 22.7 MMcfd Shell PGE 26.5 Mmcf/d Seneca Mt. Jewett IP: 8.9 MMcfd Seneca WDA Range 2 Utica Test Wells 59 Mmcf/d Planned for 2016 Rice 42 Mmcf/d CNX…
  30. August 2015 Investor Presentation – National Fuel Gas Co. – slide 30
    Utica/Point Pleasant: EDA Opportunities Upstream Seneca DCNR Tract 007 Shell: Gee IP: 22.7 MMcfd 11.2 Mmcf/d Lateral Length: 4,640 Potential locations: 70 DCNR Tract 001 Anticipated Development Well Potential Future Location…
  31. August 2015 Investor Presentation – National Fuel Gas Co. – slide 31
    California: Stable Production; Modest Growth Upstream 6,000 FY 2010 Gross Operated Daily Production (Boe/d) East Coalinga 4,500 TTM 6/30/15 4,200 Temblor Formation 4,500 Primary 3,000 1,700 1,650 1,600…
  32. August 2015 Investor Presentation – National Fuel Gas Co. – slide 32
    South Midway Sunset Development Upstream 2,000 1,800 B Pool A Pool 1,600 Seneca Acquired 1,400 in June 2009 1,200 1,000 800 16X Pool 600 400 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12…
  33. August 2015 Investor Presentation – National Fuel Gas Co. – slide 33
    California Average Daily Net Production Upstream 11,000 10,000 9,699 9,600 9,100 - 9,322 9,600 (BOE per Day) 9,056 9,078 9,000 8,773 8,000 7,000 2010 2011 2012 2013 2014 2015 2016 Forecast Forecast Fiscal…
  34. August 2015 Investor Presentation – National Fuel Gas Co. – slide 34
    Strong Margins Support Significant Free Cash Flow Upstream FYTD 2015 West Division EBITDA per BOE(1) Non-Steam Fuel LOE 12.45 Steam Fuel 3.75 Average Revenue for FYTD 2015(1) G&A 4.59 66.96 per BOE Production & Other Taxes…
  35. August 2015 Investor Presentation – National Fuel Gas Co. – slide 35
    Midstream Overview Pipeline & Storage Gathering 36
  36. August 2015 Investor Presentation – National Fuel Gas Co. – slide 36
    Gathering is the First Step to Reaching a Market Midstream TGP 200 Clermont Covington Gathering System Gathering System (In-Service) (In-Service) Clermont TGP 300 Gathering System Trout Run (In-Service) Gathering…
  37. August 2015 Investor Presentation – National Fuel Gas Co. – slide 37
    Gathering Supporting Senecas EDA Production Midstream Covington Gathering System In-Service Date: November 2009 Capital Expenditures (to date): 33 Million Capacity: 220,000 Dth per day Production Source: Seneca Resources Tioga…
  38. August 2015 Investor Presentation – National Fuel Gas Co. – slide 38
    Clermont Gathering System: Coordinated Build-out Midstream Current System In-Service (July 14) 26 miles of pipe / 13,800 HP of compression C Compressor Station Current Capacity of 400 mmcfd Interconnect Interconnect with TGP 300…
  39. August 2015 Investor Presentation – National Fuel Gas Co. – slide 39
    Gathering Delivering Growth Midstream Total Gathering Revenues since 2011 (MM) 125 95 100 77 70.6 75 50 34.8 25 11.3 17.5 0 2011 2012 2013 2014 2015E (1) 2016E (1) Fiscal Year Throughput by Gathering System since 2011…
  40. August 2015 Investor Presentation – National Fuel Gas Co. – slide 40
    Pipeline & Storage: Premier Appalachian Position Midstream NEW NFG is uniquely MAP-need positioned to add our regional pipeline systems and to expand in the provide valuable transmission outlets for producers and shippers in…
  41. August 2015 Investor Presentation – National Fuel Gas Co. – slide 41
    Major Expansion Designed for Canadian Deliveries Midstream Northern Access 2015 Northern Customer: Seneca Resources Access 2015 (November 2015) In-Service: November 2015 System: NFG Supply Corp. Capacity: 140,000 Dth per day…
  42. August 2015 Investor Presentation – National Fuel Gas Co. – slide 42
    Northern Access 2016 Provides Access to Canada Midstream Northern Access 2016 Customer: Seneca Resources In-Service: Targeting Late 2016 Northern Capacity: 490,000 Dth/d Access 2016 (Late 2016) Interconnects: o TransCanada…
  43. August 2015 Investor Presentation – National Fuel Gas Co. – slide 43
    Recent 3rd Party Expansions Highly Successful Midstream Completed Expansions Capacity (Dth/day) Northern Access 2012 320,000 Tioga County Ext. & Lamont 440,000 Northern Access 2012 Line N & Mercer Expansion 458,000 Tioga Total…
  44. August 2015 Investor Presentation – National Fuel Gas Co. – slide 44
    Pairing Line N Expansions with System Modernization Midstream Westside Expansion & Modernization In-Service: October 2015 System: NFG Supply Corp. Capacity: 175,000 Dth per day o Range Resources (145,000 Dth/d) o Seneca…
  45. August 2015 Investor Presentation – National Fuel Gas Co. – slide 45
    Developing Unique Solutions for Shippers Midstream Tuscarora Lateral In-Service: November 2015 System: NFG Supply & Empire Pipeline New No-Notice Services o Precedent agreements executed with RG&E, NYSEG & NFG Utility…
  46. August 2015 Investor Presentation – National Fuel Gas Co. – slide 46
    Significant Expansions Are Driving Growth Midstream Other Projects Lamont Compressor Completed Projects (Since 2009) Delivering Gas North Tuscarora Lateral Tioga County Extension Recent Capacity Northern Access 2012 Total…
  47. August 2015 Investor Presentation – National Fuel Gas Co. – slide 47
    Capitalizing on Appalachian Opportunities Corporate 750 Gathering 625 - Pipeline & Storage 700 125 - 150 Capital Expenditures (Millions) 500 350 - 450 278 110 - 120 500 - 250 224 550 138 146 80 111 235 - 55 245 45…
  48. August 2015 Investor Presentation – National Fuel Gas Co. – slide 48
    Midstream EBITDA Growth Corporate 300 Gathering Pipeline & Storage 262 250 72 64 Adjusted EBITDA (Millions) 200 191 30 152 15 123 121 9 100 190 186 161 137 121 111 0 2010 2011 2012 2013 2014 TTM Fiscal…
  49. August 2015 Investor Presentation – National Fuel Gas Co. – slide 49
    Downstream Overview Utility Energy Marketing 50
  50. August 2015 Investor Presentation – National Fuel Gas Co. – slide 50
    New York & Pennsylvania Service Territories Downstream New York Total Customers: 524,300 ROE: 9.1% (NY PSC Rate Case Settlement, May 2014) Rate Mechanisms: o Earnings Sharing o Revenue Decoupling o Weather Normalization o Low…
  51. August 2015 Investor Presentation – National Fuel Gas Co. – slide 51
    Utility: Shifting Trends in Customer Usage Downstream 120 Residential Usage 40 Industrial Usage Usage Per Account(1) (MMcf) 110 35 Usage Per Account(1) (Mcf) 100 30 90 25 80 20 12-Months Ended June 30…
  52. August 2015 Investor Presentation – National Fuel Gas Co. – slide 52
    A Proven History of Controlling Costs Downstream 250 All Other O&M Expenses O&M Pension Expense O&M Uncollectible Expense 200 193 195 181 179 177 178 10 8 14 11 6 O&M Expense (Millions) 9 33 (1) 30 (1) 13 16 16 20…
  53. August 2015 Investor Presentation – National Fuel Gas Co. – slide 53
    Utility: Strong Commitment to Safety Downstream 150 Capital Expenditures for Safety Total Capital Expenditures 120 Capital Expenditures (Millions) 95 - 105 88.8 85-105 90 72.0 Near-term increase due to 60MM upgrade of…
  54. August 2015 Investor Presentation – National Fuel Gas Co. – slide 54
    Appendix 55
  55. August 2015 Investor Presentation – National Fuel Gas Co. – slide 55
    Natural Gas Hedge Positions Appendix (Volumes in thousands Mmbtu; Prices in /Mmbtu) Fiscal 2015(1) Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Avg. Avg. Avg. Avg. Avg. Avg. Volume Price Volume Price Volume Price…
  56. August 2015 Investor Presentation – National Fuel Gas Co. – slide 56
    Crude Oil Hedge Positions Appendix (Volumes & Prices in Bbl) Fiscal 2015(1) Fiscal 2016 Fiscal 2017 Fiscal 2018 Avg. Avg. Avg. Avg. Volume Price Volume Price Volume Price Volume Price Midway Sunset 96,000 67.91 36,000 92.10 -…
  57. August 2015 Investor Presentation – National Fuel Gas Co. – slide 57
    Updated Marcellus Type Curves: EDA Appendix Estimated Cumulative Lycoming - Type Curve Volumes 16,000 YEAR CUM (MMCF) 1 3,226 2 5,451 14,000 3 6,815 4 7,762 5 8,470 12,000 6 9,029 7 9,483 8 9,862 9 10,185 Daily Production…
  58. August 2015 Investor Presentation – National Fuel Gas Co. – slide 58
    Updated Marcellus Type Curves: WDA Appendix Estimated Cumulative Elk - Cameron Type Curve Volumes 8,000 YEAR CUM (MMCF) 1 1,466 2 2,334 7,000 3 2,989 4 3,510 5 3,933 6,000 6 4,289 7 4,596 8 4,866 9 5,108 Daily Production…
  59. August 2015 Investor Presentation – National Fuel Gas Co. – slide 59
    National Fuel Gas Company Appendix Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) 12-Months FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Ended 6/30/15 Exploration & Production - West Division Adjusted EBITDA…
  60. August 2015 Investor Presentation – National Fuel Gas Co. – slide 60
    National Fuel Gas Company Appendix Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2015 FY 2016 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Forecast Forecast Capital Expenditures from…

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