Investor Presentation Barclays CEO Energy-Power Conference September 5, 2018
NFG: A Diversified, Integrated Natural Gas Company Developing our large, high quality acreage position in Marcellus & Utica Upstream shales E&P 785,000 445 MMcf/day Net acres in Net Appalachian natural Appalachia gas production…
Why National Fuel Strategy For Creating Long-term, Sustainable Shareholder Value 1 Geographic and operational integration lowers costs and drives financial efficiencies Unique Integration Significant base of stable, regulated earnings…
Benefits of Integration Unique Geographic and Operational Integration Drives Synergies that Maximize Shareholder Value Utility and Pipeline & Storage Upstream and Midstream Benefits of Operational Efficiencies Strategic Development NFG…
Diversified, Balanced Earnings and Cash Flows Adjusted Operating Results ( per share)(1) Adjusted EBITDA ( millions)(2) 4.00 1,000 Decrease in EBITDA 3.30 to 3.60 primarily due to roll off 3.30 3.30 to 3.40 of favorable hedges 777…
Near-Term Growth Strategy Exploration & Production Gathering Pipeline and Storage Utility 3-rig program designed to grow Pursue and execute opportunities for Continue to invest in pipeline Marcellus and Utica production and…
Disciplined, Flexible Capital Allocation Capital Expenditures by Segment ( millions)(1) (2) Exploration & Production 1,250 Gathering 1,001 Pipeline & Storage 1,000 970 Utility 745-845 750 557 603 585-645 460-500 500 455…
Maintaining Strong Balance Sheet & Liquidity Net Debt / Adjusted EBITDA(1) Capitalization 2.51 x 2.45 x 2.48 x 2.18 x 1.72 x Total Equity Total Debt 48% 52% 2014 2015 2016 2017 TTM 4.0 Billion Total Capitalization Fiscal…
Dividend Track Record 48 Years 116 Years 1.70 per share 3.2% yield(1) Consecutive Dividend Increases Consecutive Payments 2.9 Billion Dividend payments since 1970 0.19 per share Annual Rate at Fiscal Year End (1) As…
Q3 Fiscal 2018 Financial Highlights 11
Third Quarter Fiscal 2018 Results and Drivers Operating Results (/share)(1) Q3 FY 2017 Q3 FY 2018 Drivers 0.73 0.69 Oil and Gas Pricing(2) Utility 0.05 Oil Prices Utility 0.05 53.02 58.74 2.94 2.43 Natural Gas Prices…
Impact of Federal Tax Reform Exploration & Production and Gathering Non-Rate Positive ongoing earnings impact expected from reduction in federal income tax rate from 35% to 21% Regulated (blended 24.5% in FY 2018) Segments…
Earnings Guidance FY2018 Earnings Guidance(1) FY2019 Earnings Guidance Key Guidance Drivers 3.30 to 3.40 /share 3.30 to 3.60 /share Non-regulated Seneca Net Production: 210 to 230 Bcfe Production & Gathering Throughput Businesses…
Exploration & Production and Gathering Overview Seneca Resources Company, LLC National Fuel Gas Midstream Company, LLC 15
E&P and Gathering Proved Reserves Total Proved Reserves (Bcfe) 3-Year Average F&D Cost (/Mcfe) 3,000 2.00 Natural Gas (Bcf) 1.67 Crude Oil (MMbbl) 1.50 1.38 1.32 2,500 2,343 2,154 1.12 0.98 1.00 2,000 1,914 1,849 1,549…
E&P and Gathering Growing Production within Disciplined Capital Program E&P Net Capital Expenditures(1) ( millions) Senecas Near-term Operational Plan 600 Appalachia West Coast (California) Appalachia Natural Gas 460-500 3-rig…
E&P and Gathering Significant Appalachian Acreage Position Western Development Area (WDA) Fee Acreage Lease Acreage Current gross production: 322 MMcf/d EDA - 70,000 Acres Large inventory of high quality Marcellus WDA -…
E&P and Gathering Western Development Area Marcellus Core Acreage vs. Utica Appraisal Trend(1) Significant multi-zone drilling inventory economic at 2.00 /Mcf Marcellus Shale: 600+ well locations remaining / 200,000 acres Area of…
E&P and Gathering WDA Utica Appraisal Results and Initial Type Curve WDA Utica Appraisal Update WDA-CRV Type Curves Wells(1) Normalized to 8,000' Tested / producing from 10 Utica wells in WDA-CRV WDA Type Utica Utica Curve Type…
E&P and Gathering Transitioning to Utica Development in CRV WDA Utica Development Will Utilize Existing Pad, Water, and Gathering Infrastructure to Drive Economics WDA Utica Transition Plan WDA-CRV Marcellus WDA-CRV Utica (Depth…
E&P and Gathering Integrated Development WDA Gathering System Gathering System Build-Out Tailored to Accommodate Senecas WDA Development Clermont Gathering System Map Current System In-Service 70 miles of pipe / 36,220 HP of…
E&P and Gathering WDA Development Consolidated Economics Leveraging Existing Gathering Infrastructure Enhances Consolidated Returns WDA Well Costs(1) WDA EURs WDA Consolidated Economics Total cost per well expected 60-70% EUR…
E&P and Gathering WDA Firm Transportation and Sales Capacity WDA Exit Capacity Supports Long-term Production Growth and Protects Consolidated Returns WDA Gas Marketing Strategy WDA Contracted Firm Transport and Sales Volumes…
E&P and Gathering Eastern Development Area EDA Highlights EDA Acreage 70,000 Acres 1 DCNR Tract 007 (Tioga Co., Pa) 1 Utica and 1 Marcellus producing well Utica 30-day IP = 15.8 MMcf/d Utica development resumed in third…
E&P and Gathering EDA Marcellus: Lycoming County Development Marcellus Development in Lycoming County has Resumed in Anticipation of Atlantic Sunrise Prolific Marcellus acreage with peer leading well results Existing Line…
E&P and Gathering EDA Utica: Tioga County Development Utica Development in Tioga County Tract 007 Development Resumed in Q3 FY18 Inventory: 47 locations economic at 1.75 /Mcf Tract 007 Utica Appraisal Well Results vs. Industry…
E&P and Gathering Integrated Development EDA Gathering Systems Gathering Segment Supporting Senecas EDA Production & Future Development Wellsboro Gathering System Total Investment (to date): 7 million FY 2018 Capital…
E&P and Gathering Long-term Contracts Supporting Appalachian Growth Seneca continues to layer-in firm sales contracts with attractive realizations at regional pricing points to lock-in drilling economics and minimize spot exposure…
E&P and Gathering Near-term Firm Sales Provide Market & Price Certainty Net Contracted Firm Sales Volumes (Dth per day) Contracted Index Price Differentials ( per Dth)(1) Fixed Price Dawn 512,500 512,500 485,500 NYMEX…
E&P and Gathering California Oil Stable Oil Production Minimal Capital Investment Steady Free Cash Flow 1 FY17 Daily Production Location Formation Production Method (net Boe/d) 1 East Coalinga Temblor Primary 570 2 North…
E&P and Gathering California Capital Expenditures vs. Production West Division Annual Capital Expenditures (MM)(1) West Division Average Net Daily Production (BOE/D) Sespe Sale 9,674 9,341 900 boe/d(2) 57 8,863 8,200 7,800…
E&P and Gathering Future Development Focused on Midway Sunset North Midway Sunset Economics North MWSS MWSS Project IRRs at 65 /Bbl(1) Sec. 17N Acreage 84% 56% 47% Pioneer NMWSS & Sec. 17N Pioneer SMWSS South MWSS…
E&P and Gathering Fiscal 2018 Production 39 Bcf Protected by Firm Sales for Remainder of Year 34 Bcf locked-in realizing net 2.40/Mcf (1) 5 Bcf of additional basis protection 200 4.2 Bcfe 175-180 Bcfe 5 Bcf (2) 3.5 +/- Bcf…
E&P and Gathering Fiscal 2019 Production 176 Bcf of Appalachian Production Protected by Firm Sales 140 Bcf locked-in realizing net 2.44/Mcf (1) 36 Bcf of additional basis protection 240 210 230 Bcfe 17 Bcfe 200 27+/- Bcf 72%…
E&P and Gathering Strong Hedge Book Natural Gas Swap & Fixed Physical Sales Contracts (Millions MMBtu) Crude Oil Swap Contracts (Thousands Bbls) 2,500 250 NYMEX Swaps Dawn Swaps Fixed Price (1) NYMEX (WTI) Brent Physical Sales…
Pipeline and Storage Overview National Fuel Gas Supply Corporation Empire Pipeline, Inc. 38
Pipeline & Storage Pipeline & Storage Segment Overview National Fuel Gas Supply Corporation Contracted Capacity(1): Empire Pipeline Firm Transportation: 3,157 MDth per day Firm Storage: 68,042 Mdth (fully subscribed) Rate…
Pipeline & Storage FM100 Project Provides Consolidated Benefit Project expected to provide long term earnings 300,000 Dth/d of new transportation capacity from uplift to Seneca, Supply Corp. and Gathering WDA and EDA acreage…
Pipeline & Storage FM100 Project Expansion component of pending FM100 Project will provide significant incremental revenues for Supply Target In-Service: late calendar year 2021 Facilities (all in Pennsylvania): Approximately 30…
Pipeline & Storage Empire North Project Fully Subscribed Project will Provide 205,000 Dth/day of Incremental Firm Transportation Target In-Service: Second half of fiscal 2020 Est. Capital Cost: 145 million Est. Annual Revenues:…
Pipeline & Storage National Fuel Remains Committed to Northern Access Project Capacity: 490,000 Dth/day (350,000 Dth/day to Chippawa and remainder to interconnection with TGP 200 Line) Total Cost: 500MM (76MM spent to date) FERC…
Pipeline & Storage Continued Expansion of the NFG Supply System Line N Expansion Opportunities Line N to Monaca Project Project: Firm transportation service to a new ethylene cracker facility being built by Shell Chemical…
Pipeline & Storage Pipeline & Storage Customer Mix Customer Transportation by Shipper Type(1) Affiliated Customer Mix (Contracted Capacity) 4.1 MMDth/d Affiliated Non-Affiliated Outside End User Pipeline 2% 6% 40% Marketer…
Utility Overview National Fuel Gas Distribution Corporation 46
Utility New York & Pennsylvania Service Territories New York Total Customers(1): 530,400 ROE: 8.7% (NY PSC Rate Case Order, April 2017) Rate Mechanisms: o Revenue Decoupling o Weather Normalization o Low Income Rates o…
Utility New York Rate Case Outcome On April 20, 2017, the New York Public Service Commission issued a Rate Order relating to NFG Distributions rate case (No. 16-G-0257) filed in April 2016. Rate Order Summary: Revenue Requirement:…
Utility Utility: Strong Commitment to Safety Capital Expenditures ( millions)(1) Capital Expenditures for Safety 125.0 Total Capital Expenditures 98.0 100.0 94.4 90-100M 80-90M 80.9 75.0 61.8 63.6 54.4 50.0 The…
Utility Accelerating Pipeline Replacement & Modernization Utility Mains by Material Miles of Utility Main Pipeline Replaced(1) Wrought 161 Iron Bare Coated 128 135 Cast Iron NY 112 115 9,723 miles Plastic Bare…
Utility A Proven History of Controlling Costs O&M Expense ( millions) 250 All Other O&M Expenses O&M Pension Expense O&M Uncollectible Expense 200 195 195 200 193 189 9 6 7 10 7 28 22 19 33 23 150 100 163 160 167 169…
Appendix 52
Appendix Hedge Positions and Prices Natural Gas Volumes in thousand MMBtu; Prices in /MMBtu Fiscal 2018 (last 3 mos.) Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Avg. Avg. Avg. Avg. Avg. Volume Price Volume Price Volume…
Appendix Appalachia Drilling Program Economics Large Inventory of Marcellus and Utica Location Economic Below 2.00/MMBtu(1) (2) Internal Rate of Return % Realized (1) Locations Completed Price Anticipated Remaining Lateral EUR…
Appendix Firm Transportation Commitments Volume Delivery Demand Charges Production Source Gas Marketing Strategy (Dth/d) Market (/Dth) Firm Sales Contracts Currently In-Service Northeast Supply EDA -Tioga County Canada…
Appendix Comparable GAAP Financial Measure Slides & Reconciliations This presentation contains certain non-GAAP financial measures. For pages that contain non-GAAP financial measures, pages containing the most directly comparable…
Appendix Non-GAAP Reconciliations Adjusted EBITDA Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) 12-Months FY 2014 FY 2015 FY 2016 FY 2017 Ended 6/30/18 Total Adjusted EBITDA Exploration & Production…
Appendix Non-GAAP Reconciliations Adjusted EBITDA, by Segment Reconciliation of Adjusted EBITDA to Net Income, by Segment ( Thousands) FY18 FY17 12-Months ( Thousands) FY18 FY17 12-Months FY 2017 FYTD FYTD Ended 6/30/18 FY 2017…
Appendix Non-GAAP Reconciliations Adjusted Operating Results Three Months Ended Nine Months Ended June 30, June 30, (in thousands except per share amounts) 2018 2017 2018 2017 Reported GAAP Earnings 63,025 59,714 353,527 237,906…
Appendix Non-GAAP Reconciliations Capital Expenditures Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2018 FY 2019 FY 2014 FY 2015 FY 2016 FY 2017 Forecast Forecast Capital…
Appendix Non-GAAP Reconciliations E&P Operating Expenses Reconciliation of Exploration & Production Segment Operating Expenses by Division (000s unless noted otherwise) Twelve Months Ended Twelve Months Ended September 30, 2017…
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