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November 2015 Investor Presentation – National Fuel Gas Co.

National Fuel Gas Co. · Nov 10, 2015 · 57 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. November 2015 Investor Presentation – National Fuel Gas Co. – slide 1
    National Fuel Gas Company Investor Presentation November 2015
  2. November 2015 Investor Presentation – National Fuel Gas Co. – slide 2
    Quality Assets, Exceptional Location, Unique Integration Corporate 790,000 Net Acres in Marcellus Shale 257 Million of Midstream Adjusted EBITDA(2) 2.3 Tcfe of Proved Reserves(1) 1.2 Billion Midstream Investments since 2010 (1)…
  3. November 2015 Investor Presentation – National Fuel Gas Co. – slide 3
    The National Fuel Value Proposition Corporate Considerable Upstream and Midstream Growth Opportunities in Appalachia Mineral ownership on 720,000 acres in WDA = limited royalties or drilling commitments Seneca has 900,000 Dth/day of…
  4. November 2015 Investor Presentation – National Fuel Gas Co. – slide 4
    Appalachia Overview Exploration & Production Gathering Pipeline & Storage 5
  5. November 2015 Investor Presentation – National Fuel Gas Co. – slide 5
    NFG Appalachia Integrated Vision for Growth Appalachia Exploration & Production 1 Developing Our High Quality Marcellus & Utica Acreage 3 Gathering Northern Access Projects to 2 Transport 660 MDth/d of Connecting Our Seneca…
  6. November 2015 Investor Presentation – National Fuel Gas Co. – slide 6
    Appalachia Upstream & Midstream CapEx Appalachia Exercising Capital Flexibility & Efficiency to Respond to Commodity Environment and Capitalize on Midstream Opportunities 1,250 Pipeline & Storage Gathering NFG Appalachia Capital…
  7. November 2015 Investor Presentation – National Fuel Gas Co. – slide 7
    Significant Appalachian Acreage Position Exploration & Production Appalachia Seneca Fee Seneca Lease Eastern Development Area (EDA) Western Development Area (WDA) 720,000 Acres 70,000 Acres 153 wells able to produce 415…
  8. November 2015 Investor Presentation – National Fuel Gas Co. – slide 8
    Marcellus Shale: Western Development Area Exploration & Production Appalachia WDA Tier 1 Acreage 200,000 Acres WDA Highlights Large drilling inventory of quality Marcellus dry gas SRC Fee Acreage o 1,200 locations economic <…
  9. November 2015 Investor Presentation – National Fuel Gas Co. – slide 9
    Integrated WDA Development - Upstream Exploration & Production Appalachia Clermont/Rich Valley Development Map Clermont/Rich CRV Development Summary Valley Area 48 wells currently producing 185 MMcf/d 200 MMcf/d firm sales starting…
  10. November 2015 Investor Presentation – National Fuel Gas Co. – slide 10
    Integrated WDA Development - Gathering Gathering Appalachia Gathering System Build-Out Tailored to Accommodate Senecas WDA Production Growth Clermont Gathering System Map Current System In-Service 44 miles of pipe/13,800 HP of…
  11. November 2015 Investor Presentation – National Fuel Gas Co. – slide 11
    Integrated WDA Development - Interstate Pipelines Pipeline & Storage Appalachia Expanding Our Interstate Pipelines to Deliver Senecas WDA Production to Canada Northern Access 2015 Customer: Seneca Resources (NFG) In-Service:…
  12. November 2015 Investor Presentation – National Fuel Gas Co. – slide 12
    Integrated WDA Development - Interstate Pipelines Pipeline & Storage Appalachia Northern Access 2016 to Increase Transport Capacity out of WDA to Canada by 490,000 Dth/d by FY17 Northern Access 2016 Customer: Seneca Resources (NFG)…
  13. November 2015 Investor Presentation – National Fuel Gas Co. – slide 13
    Marcellus Shale: Eastern Development Area Exploration & Production Appalachia EDA Highlights EDA Acreage 70,000 Acres 1 Covington & DCNR Tract 595 o Tioga County, Pa. o 92 wells(1) with 125 MMcf/d productive capacity 3 o 75MM/d…
  14. November 2015 Investor Presentation – National Fuel Gas Co. – slide 14
    Integrated EDA Development - Gathering Gathering Appalachia Gathering Segment Supporting Senecas EDA Production & Future Development Covington Gathering System In-Service Date: November 2009 Capital Expenditures (to date): 33…
  15. November 2015 Investor Presentation – National Fuel Gas Co. – slide 15
    Utica/Point Pleasant: Industry Activity Exploration & Production Appalachia Seneca - DCNR 007 IP: 22.7 MMcf/d Shell PGE 26.5 MMcf/d Seneca Mt. Jewett IP: 8.9 MMcf/d Seneca WDA Range 2 Utica Test Wells 59 MMcf/d Planned for…
  16. November 2015 Investor Presentation – National Fuel Gas Co. – slide 16
    Marcellus Drilling and Completion Efficiencies Exploration & Production Appalachia Fiscal 2012 Average Development Well Fiscal 2015 Average Development Well 8.7 MM Lateral Length: 5,100 ft Lateral Length: 7,300 ft Well Cost 5.7…
  17. November 2015 Investor Presentation – National Fuel Gas Co. – slide 17
    FY 2016 Production - Firm Sales & Spot Exposure Exploration & Production Appalachia Fiscal 2016 Firm Sales with Price Certainty Appalachia Seneca Total 119.9 Bcf Realizing 3.45/Mcf (1) Productive Productive 250 15.0 Bcf of…
  18. November 2015 Investor Presentation – National Fuel Gas Co. – slide 18
    Significant Base of Long-Term Firm Contracts Exploration & Production Appalachia 1,250 914,405 Dth per day 1,000 Total Firm Contracts by FY2018 Atlantic Sunrise (Transco) Delivery Markets: Mid-Atlantic & Southeast U.S. Dth per…
  19. November 2015 Investor Presentation – National Fuel Gas Co. – slide 19
    Natural Gas Hedge Position Exploration & Production Appalachia Natural Gas Swap & Fixed Physical Sales Contracts (Million MMBtu) 150 124.9 FY 2016 = 67% hedged(1) at 3.66 per MMbtu 100 42.7 95.4 31.0 19.0 50 18.8 22.1…
  20. November 2015 Investor Presentation – National Fuel Gas Co. – slide 20
    Appalachian Price Realizations & Margins Exploration & Production Appalachia Strong hedge book, firm sales portfolio, and cost discipline generating impressive natural gas price realizations and margins in challenging commodity…
  21. November 2015 Investor Presentation – National Fuel Gas Co. – slide 21
    Pipeline & Storage: Premier Appalachian Position Pipeline & Storage Appalachia In addition to serving our own upstream and downstream subsidiaries, NFG is uniquely positioned to expand our regional pipeline systems and provide…
  22. November 2015 Investor Presentation – National Fuel Gas Co. – slide 22
    Recent 3rd Party Expansions Highly Successful Pipeline & Storage Appalachia Expansions for 3rd Parties since 2010 3rd Party Expansion Capital Cost (MM) 1,442 MDth/d 387 million since FY2010 72 since FY 2010 Northern Access 2012…
  23. November 2015 Investor Presentation – National Fuel Gas Co. – slide 23
    Planned Empire System Expansion Pipeline & Storage Appalachia Empire North Expansion Project Target In-Service: Late 2018 System: Empire Pipeline Target Market: o Marcellus & Utica producers in Tioga & Potter County, Pa. Open…
  24. November 2015 Investor Presentation – National Fuel Gas Co. – slide 24
    Midstream EBITDA Growth Appalachia 300 Gathering Pipeline & Storage 257 250 64 69 Adjusted EBITDA (Millions) 200 191 30 152 15 121 100 188 186 161 137 111 0 2011 2012 2013 2014 2015 Fiscal Year Note: A…
  25. November 2015 Investor Presentation – National Fuel Gas Co. – slide 25
    Downstream Overview Utility Energy Marketing 26
  26. November 2015 Investor Presentation – National Fuel Gas Co. – slide 26
    New York & Pennsylvania Service Territories Downstream New York Total Customers: 526,323 ROE: 9.1% (NY PSC Rate Case Settlement, May 2014) Rate Mechanisms: o Earnings Sharing o Revenue Decoupling o Weather Normalization o Low…
  27. November 2015 Investor Presentation – National Fuel Gas Co. – slide 27
    Utility: Shifting Trends in Customer Usage Downstream Residential Usage Industrial Usage 120 40 Usage Per Account(1) (MMcf) 110 35 Usage Per Account(1) (Mcf) 100 30 90 25 80 20 12-Months Ended September 30…
  28. November 2015 Investor Presentation – National Fuel Gas Co. – slide 28
    A Proven History of Controlling Costs Downstream 250 All Other O&M Expenses O&M Pension Expense O&M Uncollectible Expense 200 200 193 179 9 177 178 10 11 6 28 O&M Expense (Millions) 9 33 (1) (1) 16 16 20 150 100…
  29. November 2015 Investor Presentation – National Fuel Gas Co. – slide 29
    Utility: Strong Commitment to Safety Downstream 150 Capital Expenditures for Safety Near-term increase due to 60MM upgrade of Total Capital Expenditures the Utilitys Customer Information System 120 Capital Expenditures…
  30. November 2015 Investor Presentation – National Fuel Gas Co. – slide 30
    California Exploration & Production 31
  31. November 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 FY 2015 4,350 Temblor Formation 4,500 Primary 3,000 1,700 1,650 1,500…
  32. November 2015 Investor Presentation – National Fuel Gas Co. – slide 32
    California Average Daily Net Production Upstream 40-50 Million Annual CapEx to Keep California Oil Production Flat 9,699 9,850 10,000 9,322 9,250 8,773 9,078 (BOE per Day) 7,500 5,000 2,500 0 2011 2012 2013 2014…
  33. November 2015 Investor Presentation – National Fuel Gas Co. – slide 33
    Strong Margins Support Significant Free Cash Flow Upstream FY 2015 West Division EBITDA per BOE(1) Non-Steam Fuel LOE 12.50 Steam Fuel 3.66 Average Revenue for FYTD 2015(1) G&A 5.78 65.72 per BOE Production & Other Taxes…
  34. November 2015 Investor Presentation – National Fuel Gas Co. – slide 34
    Consolidated Financial Overview Upstream Midstream Downstream 35
  35. November 2015 Investor Presentation – National Fuel Gas Co. – slide 35
    Appalachia Driving Proved Reserve Growth Corporate 3,000 Natural Gas (Bcf) Crude Oil (MMbbl) 3-Year Fiscal F&D Cost(1) 2,500 2,344 Years (/Mcfe) 2008-2010 2.37 2,000 1,914 2009-2011 2.09 Total Proved Reserves (Bcfe)…
  36. November 2015 Investor Presentation – National Fuel Gas Co. – slide 36
    Seneca Production Corporate 225 Gulf of Mexico (Divested in 2011) (1) Appalachia Division 161 232 Bcfe West Coast Division Appalachia 160.5 Spot Sales 157.8 150 Annual Production (Bcfe) 120.7 83.4 139.3 136.6 141…
  37. November 2015 Investor Presentation – National Fuel Gas Co. – slide 37
    EBITDA Contribution by Segment Corporate 1,250 Exploration & Production Segment Gathering Segment Pipeline & Storage Segment 1,000 Utility Segment 953 Energy Marketing & Other 852 843 Adjusted EBITDA (Millions) 750 704…
  38. November 2015 Investor Presentation – National Fuel Gas Co. – slide 38
    Capital Expenditures by Segment Corporate 1,500 Exploration & Production Segment Gathering Segment Pipeline & Storage Segment 1,115- Utility Segment 1,260 Energy Marketing & Other 1,001 Capital Expenditures (Millions)…
  39. November 2015 Investor Presentation – National Fuel Gas Co. – slide 39
    Maintaining a Strong Balance Sheet Corporate Debt/Adjusted EBITDA Capitalization 2.27 x 1.89 x 1.89 x 1.75 x 1.77 x Total Equity Total Debt 49% 51% 4.1 Billion Total Capitalization 2011 2012 2013 2014 2015 as of September…
  40. November 2015 Investor Presentation – National Fuel Gas Co. – slide 40
    Dividend Track Record Corporate 2.00 Dividend Consistency Consecutive Dividend Payments 113 Years Consecutive Dividend Increases 45 Years 1.50 Current Annualized Dividend Rate 1.58 per Share Annual Dividend Rate 1.00…
  41. November 2015 Investor Presentation – National Fuel Gas Co. – slide 41
    Appendix 42
  42. November 2015 Investor Presentation – National Fuel Gas Co. – slide 42
    2015 Pipeline Expansion Projects In-Service Appendix Westside Expansion & Modernization 2015 Completed Pipeline Expansion Projects In-Service (October 2015) Total Cost: 86 MM o Expansion: 45 MM o Modernization: 41 MM Incremental…
  43. November 2015 Investor Presentation – National Fuel Gas Co. – slide 43
    Total Seneca Capital Spending by Division Appendix 1,000 Gulf of Mexico (Divested in 2011) Appalachia (1) West Coast (California) 800 694 649 Capital Expenditures (Millions) 603 600 533 557 400 - 450 400 631 596…
  44. November 2015 Investor Presentation – National Fuel Gas Co. – slide 44
    Marcellus Operated Well Results Appendix WDA Development Wells: Producing Well Average IP Rate Average Average Treatable Area Count (MMcfd) 30-Day (MMcf/d) Lateral Length (ft) Clermont/Rich Valley (CRV) &amp; Hemlock 46(1) 8.0 6.1 (1)…
  45. November 2015 Investor Presentation – National Fuel Gas Co. – slide 45
    Highly Competitive Cost Structure Appendix 3.00 Property, Franchise & Other Taxes Other O&M Expense General & Administrative Expense Lease Operating & Transportation Expense (Gathering Only) (3) Lease Operating & Transportation…
  46. November 2015 Investor Presentation – National Fuel Gas Co. – slide 46
    Marcellus Shale Program Economics Appendix 1,200 WDA Locations Economic Below 2.50/MMBtu Locations Completed NYMEX / DAWN Pricing Average 15% IRR (1) Prospect Product Remaining Lateral BTU 3.50 3.25 3.00 EUR (Bcf) Realized…
  47. November 2015 Investor Presentation – National Fuel Gas Co. – slide 47
    WDA Mineral Interests Significantly Enhance Returns Appendix Clermont/Rich Valley Example The Seneca Producer Advantage Paying (/Mcf) 0% Royalty 15% Royalty Realized Price 2.03 2.03 Less: Royalty Payment (0.00) (0.30) Less:…
  48. November 2015 Investor Presentation – National Fuel Gas Co. – slide 48
    Adding Long-Term Firm Transport to the Portfolio Appendix FT Capacity (Dth/day) In- Demand Project Service Contract Delivery Charge Fiscal Fiscal Fiscal Matched Firm (Counterparty) Date Term Market (/Dth) 2016 2017 2018 Sales…
  49. November 2015 Investor Presentation – National Fuel Gas Co. – slide 49
    Firm Sales Provide Market for Appalachian Production Appendix Fiscal 2016 Firm Sales by Fiscal Quarter Gross Contracted Volumes (Dth per day) Pricing Index Key: Fixed Price Contracted Index Price Differentials ( per Dth) Dawn…
  50. November 2015 Investor Presentation – National Fuel Gas Co. – slide 50
    Natural Gas Hedge Positions Appendix (Volumes in thousands MMBtu; Prices in /MMBtu) Fiscal 2016 Fiscal 2017 Fiscal 2018 Fiscal 2019 Fiscal 2020 Avg. Avg. Avg. Avg. Avg. Volume Price Volume Price Volume Price Volume Price Volume…
  51. November 2015 Investor Presentation – National Fuel Gas Co. – slide 51
    Crude Oil Hedge Positions Appendix (Volumes & Prices in Bbl) Fiscal 2016 Fiscal 2017 Fiscal 2018 Avg. Avg. Avg. Volume Price Volume Price Volume Price Midway Sunset (MWSS) 36,000 92.10 - - - - Swaps Brent Swaps 933,000 95.18…
  52. November 2015 Investor Presentation – National Fuel Gas Co. – slide 52
    Utica/Point Pleasant: EDA Opportunities Appendix Seneca DCNR Tract 007 Shell: Gee IP: 22.7 MMcf/d 11.2 MMcf/d Lateral Length: 4,640 Potential locations: 70 DCNR Tract 001 Anticipated Development Well Potential Future Location…
  53. November 2015 Investor Presentation – National Fuel Gas Co. – slide 53
    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…
  54. November 2015 Investor Presentation – National Fuel Gas Co. – slide 54
    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…
  55. November 2015 Investor Presentation – National Fuel Gas Co. – slide 55
    National Fuel Gas Company Appendix Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Total Adjusted EBITDA Exploration & Production Adjusted EBITDA 377,457 397,129…
  56. November 2015 Investor Presentation – National Fuel Gas Co. – slide 56
    National Fuel Gas Company Appendix Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2016 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Forecast Capital Expenditures from Continuing…
  57. November 2015 Investor Presentation – National Fuel Gas Co. – slide 57
    National Fuel Gas Company Appendix Reconciliation of Exploration & Production Adjusted EBITDA for Appalachia and West Coast divisions to Exploration & Production Segment Net Income ( Thousands) Three Months Ended Three Months Ended…

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