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3Q 2019 Investor Presentation – National Fuel Gas Co.

National Fuel Gas Co. · Aug 1, 2019 · 65 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. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 1
    Investor Presentation Q3 Fiscal 2019 Update August 1, 2019
  2. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 2
    National Fuel is committed to the safe and environmentally conscious development, transportation, storage, and distribution of natural gas and oil resources. For additional information, please visit our corporate responsibility…
  3. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 3
    Why National Fuel Large Appalachian Footprint Providing Long-Term Growth Opportunities 4
  4. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 4
    1 Integrated Model Enhances Shareholder Value . . . Benefits of National Fuels Geographic and Operational Integrated Structure: Upstream Integration Drives Synergies: Exploration & Ability to adjust to changing Production Upstream…
  5. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 5
    . . . and Drives Organic Growth Opportunities Near Term Strategy Leverages Integration Across the Value Chain Exploration & Pipeline & Gathering Utility Production Storage Integrated Upstream and Midstream development of 785,000…
  6. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 6
    2 Impressive Dividend History 49 Years 117 Years 1.74 per share 3.7% yield(1) Consecutive Dividend Increases Consecutive Payments 2.9 Billion Dividend payments since 1970 0.19 per share Annual Rate at Fiscal Year…
  7. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 7
    1 3 E&P Growth Supported by Existing Firm Sales Portfolio . . . E&P . . . And New Firm Transportation Capacity Production Growth Drives Consistent Providing Access to Premium Markets Increase in Gathering Revenues 1,000 180 Gross…
  8. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 8
    L4 Leveraging Existing Infrastructure to Enhance Returns Utilization of Existing Infrastructure for Ongoing Utica Development Amplifies Consolidated Returns Utica development on Requires modest investment in Resulting in significant…
  9. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 9
    5 1 Billion+ Backlog in Pipeline & Storage Projects 150 Million in Potential Annual Expansion Revenues: Northern Access Empire North Delivery: Canada & NY 490,000 Dth/d Delivery: Canada & NY Line N to Monaca: 5 MM 205,000 Dth/d…
  10. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 10
    Third Quarter Fiscal 2019 Financial Highlights 11
  11. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 11
    Third Quarter Fiscal 2019 Results and Drivers Adjusted Operating Results (/share)(1) Q3 FY 2018 Q3 FY 2019 Drivers 0.73 0.71 Oil and Gas Oil Prices Pricing(2) Utility 0.05 Utility 62.92 0.08 58.74 2.43 2.36 Natural Gas…
  12. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 12
    Earnings Guidance FY2019 Earnings Guidance FY2020 Earnings Guidance Key Guidance Drivers 3.40 to 3.50 /share(1) 3.25 to 3.55/share Non-regulated Seneca Net Production: 235 to 245 Bcfe Production & Gathering Throughput Businesses…
  13. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 13
    Exploration & Production and Gathering Overview Seneca Resources Company, LLC National Fuel Gas Midstream Company, LLC 14
  14. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 14
    E&P and Gathering Proved Reserves Total Proved Reserves (Bcfe) 3-Year Average F&D Cost (/Mcfe) 3,000 1.50 1.38 Natural Gas (Bcf) 1.32 Crude Oil (MMbbl) 2,523 1.12 2,500 2,344 0.98 2,154 1.00 1,914 0.74 2,000 1,849 0.50…
  15. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 15
    E&P and Gathering Growing Production within Disciplined Capital Program E&P Net Capital Expenditures ( millions)(1) Near-Term Growth Strategy 600 Appalachia 475-495 2-rig development program, with flexibility 500 West Coast…
  16. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 16
    E&P and Gathering Significant Appalachian Acreage Position Western Development Area (WDA) Average gross production(1): 347 MMcf/d WDA - 715,000 Acres EDA - 70,000 Acres Large inventory of Marcellus & Utica locations economic at…
  17. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 17
    E&P and Gathering Western Development Area Marcellus Core Acreage WDA Highlights vs. Utica Appraisal Trend(1) Area of Re-Development Large well inventory economic at 2.00 /Mcf 120 Utica locations on existing Marcellus pads…
  18. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 18
    E&P and Gathering WDA Utica Appraisal Results and Initial Type Curve WDA Utica Appraisal Update WDA-CRVUtica WDA-CRV UticaWells Wells - Normalized Normalizedtoto9,000' 9,000 Tested / producing from 21 Utica wells in WDA-CRV…
  19. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 19
    E&P and Gathering CRV Return Trips Drive Utica Economics CRV Utica Development Utilizes Existing Pad, Water, and Gathering Infrastructure CRV Utica Development Plan WDA-CRV Marcellus WDA-CRV Utica (Depth 7,000 feet) (Depth…
  20. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 20
    E&P and Gathering Limited New Infrastructure Needed to Support Production Growth Leveraging Existing Gathering, Water and Pad Infrastructure Enhances Returns WDA Well Costs(1) WDA EURs WDA Consolidated Economics Total cost per…
  21. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 21
    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 98 miles of pipe / 36,220 HP of…
  22. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 22
    E&P and Gathering WDA Firm Transportation and Sales Capacity WDA Exit Capacity Supports Long-term Production Growth and Enhances Consolidated Returns WDA Gas Marketing Strategy WDA Contracted Firm Transport and Gross Sales…
  23. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 23
    E&P and Gathering Eastern Development Area EDA Highlights EDA Acreage 70,000 Acres 1 DCNR Tract 007 (Tioga Co., Pa) Utica development resumed in third quarter fiscal 2018 43 remaining Utica locations economic at 1.82 /Mcf 1…
  24. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 24
    E&P and Gathering EDA Marcellus: Lycoming County Development Marcellus Development in Lycoming County has Resumed in Connection with Atlantic Sunrise Existing Line Producing Prolific Marcellus acreage with peer leading well…
  25. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 25
    E&P and Gathering EDA Utica: Tioga County Development Development Focused on Tract 007 Production Area, with Production Underpinned by Firm Sales EDA TGP 300 Firm Contracts UPDATE DCNR Tract 007 150 Gross Firm Volumes…
  26. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 26
    E&P and Gathering EDA Utica: Tioga County Development Tract 007 Utica Wells Brought Online in Q2 Fiscal 2019 Tracking Best Industry Results to Date Tract 007 Utica Development Update Tract 007 Utica Well Results vs. Industry…
  27. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 27
    E&P and Gathering Integrated Development EDA Gathering Systems Gathering Segment Supporting Senecas EDA Production & Future Development Wellsboro Gathering System Total Investment (to date): 20 million FY 2019 Estimated Capital…
  28. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 28
    E&P and Gathering Long-term Contracts Supporting Appalachian Growth Seneca continues to layer-in firm sales contracts with attractive realizations to lock-in drilling economics and minimize spot exposure ahead of firm…
  29. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 29
    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) NYMEX Dawn Other Fixed Price 8,300 (0.74) 584,100…
  30. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 30
    E&P and Gathering California Oil Stable Oil Production Minimal Capital Investment Steady Free Cash Flow 1 Avg. Daily Production Location Formation Production Method (net Boe/d)(1) East Coalinga/ 1 Temblor Primary 482…
  31. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 31
    E&P and Gathering California Capital Expenditures vs. Production West Division Annual Capital Expenditures ( MM)(1) West Division Average Net Daily Production (Boe) Sespe Sale Closed on 5/1/18 (reduced production by 900 Boe/d)…
  32. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 32
    E&P and Gathering California Development Activities North Seneca West Economics North MWSS Project IRRs at 57.50/Bbl(1) Sec. 17N Acreage 52% 53% 36% Pioneer NMWSS & 17N SMWSS & Pioneer East Coalinga East Coalinga…
  33. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 33
    E&P and Gathering Fiscal 2019 Production and Price Certainty 46 Bcf of Appalachian Production Protected by Firm Sales for Remainder of Year 40 Bcf locked-in realizing net 2.42/Mcf (1) 6 Bcf of additional basis protection 240 7…
  34. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 34
    E&P and Gathering Fiscal 2020 Production and Price Certainty 195 Bcf of Appalachian Production Protected by Firm Sales 92 Bcf locked-in realizing net 2.40/Mcf (1) 103 Bcf of additional basis protection 280 235-245 Bcfe 240 16…
  35. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 35
    E&P and Gathering Strong Hedge Book Natural Gas Swap & Fixed Physical Sales Contracts (Millions MMBtu) Crude Oil Swap Contracts (Thousands Bbls) 2,500 275 Brent NYMEX NYMEX Swaps Dawn Swaps Fixed Price (1) Physical Sales 250…
  36. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 36
    E&P and Gathering Seneca Operating Costs Appalachia LOE & Gathering California LOE Total Seneca Cash OpEx /Mcfe /Boe /Mcfe 21.30 21.00 1.40 1.30 1.27 17.91 0.14 0.69 0.68 0.68 0.13 0.12 0.09 0.07 0.07 0.34 (1) (1) 0.30…
  37. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 37
    Pipeline and Storage Overview National Fuel Gas Supply Corporation Empire Pipeline, Inc. 38
  38. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 38
    Pipeline & Storage Pipeline & Storage Segment Overview National Fuel Gas Supply Corporation Contracted Capacity(1): Empire Pipeline Firm Transportation: 3,187 MDth per day Firm Storage: 71,938 Mdth (fully subscribed) Rate…
  39. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 39
    Pipeline & Storage FM100 Project - Consolidated Benefit for NFG Project expected to provide long-term earnings 330,000 Dth/d of new transportation capacity from uplift to Seneca, Supply Corp. and Gathering WDA and EDA acreage…
  40. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 40
    Pipeline & Storage FM100 Project Significant Investment by Supply Corp. Estimated capital cost: 279 million Expansion facilities: 159 million Modernization facilities: 120 million Facilities (all in Pennsylvania) include:…
  41. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 41
    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:…
  42. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 42
    Pipeline & Storage Northern Access Project In-service: as early as fiscal 2022 Total cost: 500 MM(1) (57 MM spent to date) Estimated annual revenues: 84 million Delivery points: 350,000 Dth/d to Chippawa (TCPL interconnect) To…
  43. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 43
    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 ethane cracker facility being built by Shell Chemical…
  44. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 44
    Pipeline & Storage Pipeline & Storage Customer Mix Customer Transportation by Shipper Type(1) Affiliated Customer Mix (Contracted Capacity) 4.2 MMDth/d Affiliated Non-Affiliated End User Outside 6% Pipeline 9% 34% 59%…
  45. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 45
    Utility Overview National Fuel Gas Distribution Corporation 46
  46. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 46
    Utility New York & Pennsylvania Service Territories New York Total Customers(1): 535,800 ROE: 8.7% (NY PSC Rate Case Order, April 2017) Rate Mechanisms: o Revenue Decoupling o Weather Normalization o Low Income Rates o…
  47. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 47
    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:…
  48. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 48
    Utility Utility Continues its Significant Investments in Safety System modernization tracker in NY allows recovery of pipeline replacement costs, which is expected to drive modest gross margin and rate base growth 125.0 Capital…
  49. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 49
    Utility Accelerating Pipeline Replacement & Modernization Utility Mains by Material(1) Miles of Utility Main Pipeline Replaced Wrought 159 Iron 146 144 Coated Bare Cast Iron 130 NY 120 9,726 miles Plastic Wrought Bare…
  50. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 50
    Utility A Proven History of Controlling Costs (1) Utility O&M Expense ( millions) 250 O&M Expense (GAAP) Non-Service Pension Costs 200 195 197 197 200 189 31 29 150 166 168 100 50 0 2015 2016 2017 2018 TTM…
  51. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 51
    Consolidated Financial Overview Upstream I Midstream I Downstream 52
  52. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 52
    Diversified, Balanced Earnings and Cash Flows Adjusted Operating Results ( per share)(1) Adjusted EBITDA ( millions)(2) 4.00 800 761 776 3.40 to 3.50 3.25 to 3.55 3.34 Exploration 3.00 Exploration & & 318 343 1.25 600…
  53. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 53
    Disciplined, Flexible Capital Allocation Capital Expenditures by Segment ( millions)(1) (2) 1,250 Exploration & Production Gathering Pipeline & Storage Utility 970 1,001 1,000 745-800 725-820 750 557 603 583 475-495…
  54. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 54
    Maintaining Strong Balance Sheet & Liquidity Net Debt / Adjusted EBITDA(1) Capitalization 2.51 x 2.45 x 2.47 x 2.48 x 2.19 x Total Equity Total Debt 50% 50% 2015 2016 2017 2018 TTM 6/30/19 4.3 Billion Total Capitalization…
  55. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 55
    Appendix 56
  56. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 56
    Appendix Hedge Positions and Prices Natural Gas Volumes in thousand MMBtu; Prices in /MMBtu Fiscal 2019 (last 3 mos.) Fiscal 2020 Fiscal 2021 Fiscal 2022 Avg. Avg. Avg. Avg. Volume Price Volume Price Volume Price Volume Price…
  57. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 57
    Appendix Appalachia Drilling Program Economics Large Marcellus and Utica Inventory Economic at 2.00/MMBtu(1) Internal Rate of Return % (2) Realized Locations Completed Price(1) Anticipated Remaining Lateral EUR / 1000' Well Cost…
  58. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 58
    Appendix Firm Transportation Commitments Volume Delivery Demand Charges Production Source Gas Marketing Strategy (Dth/d) Market (/Dth) Firm Sales Contracts Northeast Supply EDA -Tioga County Canada 0.50 50,000 Dth/d…
  59. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 59
    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…
  60. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 60
    Appendix Non-GAAP Reconciliations Adjusted EBITDA Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) 12-Months (1) (1) FY 2015 FY 2016 FY 2017 FY 2018 Ended 6/30/19 Total Adjusted EBITDA Exploration &…
  61. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 61
    Appendix Non-GAAP Reconciliations Adjusted EBITDA, by Segment 63
  62. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 62
    Appendix Non-GAAP Reconciliations Adjusted Operating Results Fiscal Year Ended Three Months Ended Nine Months Ended September 30, June 30, June 30, (in thousands except per share amounts) 2019 2018 2019 2018 (in thousands except…
  63. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 63
    Appendix Non-GAAP Reconciliations Capital Expenditures Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2019 FY 2020 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 Forecast Forecast…
  64. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 64
    Appendix Non-GAAP Reconciliations E&P Operating Expenses Reconciliation of Exploration & Production Segment Operating Expenses by Division (000s unless noted otherwise) Twelve Months Ended September 30, 2018 West Coast(2) (2)…
  65. 3Q 2019 Investor Presentation – National Fuel Gas Co. – slide 65
    Appendix Non-GAAP Reconciliations Adjusted Operation & Maintenance Expense Reconciliation of Adjusted Operation and Maintenance Expense to Operation and Maintenance Expense, By Segment ( Thousands) FY19 FY18 12-Months FY 2018 FYTD…

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