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Investor Presentation – National Fuel Gas Co.

National Fuel Gas Co. · May 5, 2013 · 59 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. Investor Presentation – National Fuel Gas Co. – slide 1
    National Fuel Gas Company Investor Presentation May 2013
  2. Investor Presentation – National Fuel Gas Co. – slide 2
    National Fuel Gas Company May 2013 Our Business Mix Leads to Long-Term Value Creation Upstream Upstream Midstream Downstream Crude Oil Natural Gas Seneca Resources Seneca Resources National Fuel Gas National Fuel Gas…
  3. Investor Presentation – National Fuel Gas Co. – slide 3
    National Fuel Gas Company May 2013 Integrated Businesses with Significant Marcellus Exposure (1) Footnote 1 goes here (2) Footnote 2 goes here 4
  4. Investor Presentation – National Fuel Gas Co. – slide 4
    National Fuel Gas Company May 2013 And Exposure to Growth from the Utica Shale (1) Footnote 1 goes here (2) Footnote 2 goes here 5
  5. Investor Presentation – National Fuel Gas Co. – slide 5
    National Fuel Gas Company May 2013 EBITDA Growth Driven by Stability and Continued Success 1,000 Exploration & Production Segment Midstream, Energy Marketing & Other Pipeline & Storage Segment Utility Segment 768 750 Adjusted…
  6. Investor Presentation – National Fuel Gas Co. – slide 6
    National Fuel Gas Company May 2013 Capital Spending Flexibility to Maintain Financial Strength 1,250 Exploration & Production Segment Midstream, Energy Marketing & Other Pipeline & Storage Segment 1,000 977 Utility Segment…
  7. Investor Presentation – National Fuel Gas Co. – slide 7
    National Fuel Gas Company May 2013 Strong Balance Sheet and Liquidity Position Debt / Adjusted EBITDA Capitalization 2.5 Average Debt / Adjusted EBITDA 2.02 1.98 2.00 2.0 1.89 1.75 1.5 Total Debt(1) Shareholders 45%…
  8. Investor Presentation – National Fuel Gas Co. – slide 8
    National Fuel Gas Company May 2013 Forecasted Cash Flow Position for Fiscal Year 2013 1,500 421 1,000 495 123 Millions Debt Repayment Uses Dividend CapEx 500 Fiscal 2013 Cash from Cash on Hand 775 765…
  9. Investor Presentation – National Fuel Gas Co. – slide 9
    National Fuel Gas Company May 2013 Dividend Track Record 2.00 Dividend Consistency Consecutive Dividend Payments 110 Years Consecutive Dividend Increases 42 Years 1.50 Current Annualized Dividend Rate 1.46 per Share Annual…
  10. Investor Presentation – National Fuel Gas Co. – slide 10
    Exploration & Production May 2013 11
  11. Investor Presentation – National Fuel Gas Co. – slide 11
    Seneca Resources May 2013 Efficiently Deploying Capital Towards the Best Opportunities 1,000 Gulf of Mexico (Divested in 2011) East Division (Appalachia) West Division (California/Kansas) Capital Expenditures ( Millions) 750…
  12. Investor Presentation – National Fuel Gas Co. – slide 12
    Seneca Resources May 2013 Production Continues to Grow 150 Gulf of Mexico (Divested in 2011) 132-142 East Division (Appalachia) 125 West Division (California/Kansas) 110-118 Annual Production (Bcfe) 100 83.4 111119 75…
  13. Investor Presentation – National Fuel Gas Co. – slide 13
    Seneca Resources May 2013 Continuing to Focus on Improving Its Cost Structure 4.50 Property, Franchise & Other Taxes Other O&M Expense General & Administrative Expense Even after the new Pennsylvania Impact Lease Operating…
  14. Investor Presentation – National Fuel Gas Co. – slide 14
    Seneca Resources May 2013 California: Stable Production and Increasing Cash Flows California 2012 Rank Company BOEPD(1) 1 Occidental 187,376 2 Chevron 160,611 3 Aera (Shell/Exxon) 143,983 4 Plains Exploration 36,365 5 Berry…
  15. Investor Presentation – National Fuel Gas Co. – slide 15
    Seneca Resources May 2013 California: Stable Production Fields East Coalinga 100 BOEPD Temblor Formation North Lost Hills Primary South Lost Hills 1,100 BOEPD 1,500 BOEPD Tulare & Etchegoin Formation Monterey Shale Primary &…
  16. Investor Presentation – National Fuel Gas Co. – slide 16
    Seneca Resources May 2013 California: Strong Margins Support Significant Free Cash Flow Adjusted EBITDA per BOE(1) (12 Months Ended March 31, 2013) Non-Steam Fuel LOE 9.78 Steam Fuel 3.35 Average Revenue (12 Months Ended…
  17. Investor Presentation – National Fuel Gas Co. – slide 17
    Seneca Resources May 2013 California: Midway Sunset South Activity Update 2012 Drill Program: 21 Wells / 3 Injectors Seneca 251U 2013 Drill Program: 23 Wells / 5 Injectors Extended 251 Pool to the West 2014 Drill Program: 23…
  18. Investor Presentation – National Fuel Gas Co. – slide 18
    Seneca Resources May 2013 California: Sespe Field Drilling Programs and Results 2011 Sespe Wells (5) TG 53-29 IP: 90 BOEPD 2012 Sespe Wells (6) 1 Mile 1st Oil 3/13 2013 Sespe Wells (6) TG 562-29 IP: 190 BOEPD 2014 Sespe Wells…
  19. Investor Presentation – National Fuel Gas Co. – slide 19
    Seneca Resources May 2013 California: East Coalinga Overview Seneca became operator on January 30, 2013 Previous Operator: Chevron 7,764 net acres 170 wells (60 active) 350 BOPD (Up from 230 BOPD on 1/30/13) 30 million capital…
  20. Investor Presentation – National Fuel Gas Co. – slide 20
    Seneca Resources May 2013 California: Recent Initiatives Driving Near-Term Growth Key Areas of Focus in 2013 1. South Midway Sunset Field Extensions Average Daily Net Production (BOE per Day) 10,000 2. Sespe Infill Drill…
  21. Investor Presentation – National Fuel Gas Co. – slide 21
    Seneca Resources May 2013 Expansive Pennsylvania Acreage Position SRC Fee Acreage SRC Lease Acreage NFG Storage Acreage Western Development Area Eastern Development Area Net acreage: 720,000 acres Net Acreage: 55,000 acres…
  22. Investor Presentation – National Fuel Gas Co. – slide 22
    Seneca Resources May 2013 Eastern Development Area (EDA) Covington Fully Developed Gross Production: 60 MMcf per Day 47 Wells Drilled and Producing DCNR Tract 595 Gross Production: 80 MMcf per Day 34 Wells Drilled 26 Wells…
  23. Investor Presentation – National Fuel Gas Co. – slide 23
    Seneca Resources May 2013 Lycoming and Tioga Counties Are Highly Productive Areas Average EUR per Producing Average Average Average EUR Average 1,000 of Well IP Rate 7-Day 30-Day per Well Lateral Lateral Development Area Count…
  24. Investor Presentation – National Fuel Gas Co. – slide 24
    Seneca Resources May 2013 Western Development Area Marcellus Delineation Program Owls Nest Rich Valley (1 Well) Peak 7-Day IP: 7.8 MMcf per Day 2 Wells Drilled 30-Day Rate: 6.7 MMcf per Day 3D Seismic Coverage Complete…
  25. Investor Presentation – National Fuel Gas Co. – slide 25
    Seneca Resources May 2013 Rich Valley/Clermont Marcellus Development Area WDA Pilot Development Program Upon completion of initial delineation drilling, a pilot development program will begin this summer. Full development…
  26. Investor Presentation – National Fuel Gas Co. – slide 26
    Marcellus Shale May 2013 Rich Valley/Clermont Pilot Development Project Marcellus Faults Marcellus & Basement Faults Pad N: 3 Wells Rich Valley 27H Production: Q3/Q4 FY14 7-day IP: 7.8 MMcf/d 30-day IP: 6.7 MMcf/d Rich…
  27. Investor Presentation – National Fuel Gas Co. – slide 27
    Seneca Resources May 2013 Rich Valley 27H Type Curve 10.0 Rich Valley 27H 7 Bcf Typecurve 8.0 Production (MMcf per Day) 6.0 4.0 2.0 Lateral Length: 6,300 Completion Stages: 42 (Reduced Cluster Spacing) 0.0…
  28. Investor Presentation – National Fuel Gas Co. – slide 28
    Seneca Resources May 2013 Ongoing Production Growth in the East Division Forecast 300 Tract 100 (Lycoming) Tract 595 (Tioga) Covington (Tioga) Total Natural Gas Production (Mmcf per Day) 250 WDA/Other EOG JV Shallow…
  29. Investor Presentation – National Fuel Gas Co. – slide 29
    Seneca Resources May 2013 Utica Shale Activity Summary Mt. Jewett Tested 3 Frac Stages at 1.6 MMcfd Permitted (Typical Well: 17 Frac Stages) Range Resources 2nd Horizontal: Moving in Rig Drilled/Drilling 1.4 MMcfd Completed Not…
  30. Investor Presentation – National Fuel Gas Co. – slide 30
    Seneca Resources May 2013 Initial Entry into the Mississippian Lime Play in Kansas Unit Total Net Acres: 9,300 30-day IP: 352 BOED 100% working interest in 4,600 gross (92% Oil/NGLs) acres 25% net working interest in 18,500…
  31. Investor Presentation – National Fuel Gas Co. – slide 31
    Midstream Businesses May 2013 Pipeline & Storage/NFG Midstream (1) Footnote 1 goes here (2) Footnote 2 goes here 32
  32. Investor Presentation – National Fuel Gas Co. – slide 32
    Midstream Businesses May 2013 Pipeline Expansions to Transport Appalachian Production Shipping Gas to Canada & Northeast Gathering Marcellus Production Line N Corridor Expansions (1) Footnote 1 goes here (2)…
  33. Investor Presentation – National Fuel Gas Co. – slide 33
    Midstream Businesses May 2013 A Closer Look at the Expansion Progress NORTHERN ACCESS EXPANSION (In-Service) TIOGA TIONESTA COUNTY GATHERING EXTENSION SYSTEM (In-Service) (In-Service) CENTRAL TIOGA COUNTY EXTENSION…
  34. Investor Presentation – National Fuel Gas Co. – slide 34
    Midstream Businesses May 2013 Pursuing Additional Opportunities Near the Line N Corridor Line N Activity in the Marcellus and Utica shales Focus Area along the Pennsylvania/Ohio border continues to remain robust NFG Supply…
  35. Investor Presentation – National Fuel Gas Co. – slide 35
    Midstream Businesses May 2013 NFG Midstream is Focused on Serving Appalachian Producers Midstreams gathering systems are critical to unlock remote, but highly productive Marcellus acreage History of operational success and…
  36. Investor Presentation – National Fuel Gas Co. – slide 36
    Utility May 2013 (1) Footnote 1 goes here (2) Footnote 2 goes here 37
  37. Investor Presentation – National Fuel Gas Co. – slide 37
    Utility May 2013 New York Service Territory Total Customers: 520,000 Rate Mechanisms: Revenue Decoupling Weather Normalization Low Income Rates Choice Program/Purchase of Receivables (POR) Merchant Function Charge…
  38. Investor Presentation – National Fuel Gas Co. – slide 38
    Utility May 2013 New York - Earnings Sharing Proposal and Show Cause Order April 19, 2013 NY PSC issued an Order Further proceedings to Show Cause (OTSC) June 1, 2013 would follow to establish commencing a OTSC suggests…
  39. Investor Presentation – National Fuel Gas Co. – slide 39
    Utility May 2013 Pennsylvania Service Territory Total Customers: 213,000 Rate Mechanisms: Low Income Rates Choice Program/Purchase of Receivables (POR) Merchant Function Charge Return on Equity 30% Allowed ROE (N/A)…
  40. Investor Presentation – National Fuel Gas Co. – slide 40
    Utility May 2013 Consistently Delivering Excellent Customer Service Study Year Customer Satisfaction (March) Study Rank 2013 2 2012 2 2011 2 National Fuel has ranked 2nd among Gas Utilities in the East Region for…
  41. Investor Presentation – National Fuel Gas Co. – slide 41
    Utility May 2013 Lower Natural Gas Prices Led to Increased Normalized Usage Industrial load increasing slightly for Fiscal Year 2013 Residential Industrial 110 30,000 105 27,886 102.3 101.5 28,000 Usage Per Account(1)…
  42. Investor Presentation – National Fuel Gas Co. – slide 42
    Utility May 2013 Continued Cost Control Helps Provide Earnings Stability Low natural gas prices, 250 combined with a focus on cost control, continue to 203 help reduce expenses 200 191 25 181 O&M Expense ( Millions) 179…
  43. Investor Presentation – National Fuel Gas Co. – slide 43
    Utility May 2013 Strong Commitment to Safety The anticipated increase in 2013 capital expenditures is largely due to the implementation of a new Customer Information System 80 Capital Expenditures for Safety Total Capital…
  44. Investor Presentation – National Fuel Gas Co. – slide 44
    National Fuel Gas Company May 2013 Capital Deployment Has Led to Significant Accomplishments 136% Increase in Proved Reserves Since 2009 Total oil and gas proved reserves reached 1,246 Bcfe at September 30, 2012, with a 3-year…
  45. Investor Presentation – National Fuel Gas Co. – slide 45
    National Fuel Gas Company May 2013 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 46
  46. Investor Presentation – National Fuel Gas Co. – slide 46
    National Fuel Gas Company May 2013 Fiscal Year 2013 Earnings Guidance Drivers 2013 Forecast GAAP Earnings per Share 2.95 - 3.10 Exploration & Production Drivers Total Production (Bcfe) 110 - 118 DD&A Expense (per Mcfe) 2.05 -…
  47. Investor Presentation – National Fuel Gas Co. – slide 47
    National Fuel Gas Company May 2013 No Debt Maturities Until Fiscal 2018 600 In February, the Company Issued 500 million in 549 10-year notes at 3.75% 500 500 Debt Maturity ( Millions) 400 Embedded Cost of 300 500 300…
  48. Investor Presentation – National Fuel Gas Co. – slide 48
    Midstream Businesses May 2013 Appendix (1) Footnote 1 goes here (2) Footnote 2 goes here 49
  49. Investor Presentation – National Fuel Gas Co. – slide 49
    Midstream Businesses May 2013 Regulated Interstate Expansion Initiatives (Pipeline & Storage) Capacity Est. Project Name In-Service Market Status (Dth/D) CapEx Lamont Compressor Station 90,000 14 MM 2010/2011 Fully Subscribed…
  50. Investor Presentation – National Fuel Gas Co. – slide 50
    Midstream Businesses May 2013 Gathering Expansion Initiatives (NFG Midstream) Capacity Est. In-Service Project Name Market Comments (Mcf/D) CapEx Date Capacity Completed Flowing into TGP Multiple Available 300 Line. This…
  51. Investor Presentation – National Fuel Gas Co. – slide 51
    Exploration & Production May 2013 Appendix 52
  52. Investor Presentation – National Fuel Gas Co. – slide 52
    Seneca Resources May 2013 Another Strong Year of Reserve Growth 1500 3-Year Natural Gas (Bcf) Fiscal F&D Cost(1) Crude Oil (MMbbl) Years (/Mcfe) 1,246 2006-2008 7.63 1200 2007-2009 5.35 Total Proved Reserves (Bcfe) 935…
  53. Investor Presentation – National Fuel Gas Co. – slide 53
    Seneca Resources May 2013 Hedge Positions and Strategy Seneca has hedged approximately 73% of its forecasted production for Fiscal 2013 Natural Gas Volume Average Hedge Volume Average Swaps (Bcf) Price Oil Swaps (MMBbl) Hedge…
  54. Investor Presentation – National Fuel Gas Co. – slide 54
    Seneca Resources May 2013 Operational Efficiencies Continue to Drive Production Growth Seneca-Operated Appalachian Rig Count Drilling & Completion Operations 6.0 15 Non-RCS - Frac Stages per Day (1) 1,200 RCS - Frac Stages per…
  55. Investor Presentation – National Fuel Gas Co. – slide 55
    Marcellus Shale May 2013 Targeting Continued Cost Reductions Drilling Cost per Lateral Foot Completion Cost per Stage (000)(1) WDA/DCNR 595 DCNR 100 WDA/DCNR 595 DCNR 100 800 400 700 350 600 300 500 250 674 650…
  56. Investor Presentation – National Fuel Gas Co. – slide 56
    National Fuel Gas Company May 2013 Comparable GAAP Financial Measure Slides and Reconciliations This presentation contains certain non-GAAP financial measures. For pages that contain non-GAAP financial measures, pages containing…
  57. Investor Presentation – National Fuel Gas Co. – slide 57
    May 2013 Reconciliation of Exploration & Production West Division Adjusted EBITDA to Exploration & Production Segment Net Income ( Thousands) 12 Months Ended March 31, 2013 Exploration & Production - West Division Adjusted…
  58. Investor Presentation – National Fuel Gas Co. – slide 58
    May 2013 Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) 12-Months Ended FY 2009 FY 2010 FY 2011 FY 2012 3/31/13 Exploration & Production - West Division Adjusted EBITDA 171,572 187,838 187,603 226,897…
  59. Investor Presentation – National Fuel Gas Co. – slide 59
    May 2013 Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2013 FY 2009 FY 2010 FY 2011 FY 2012 Forecast Capital Expenditures from Continuing Operations Exploration & Production…

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