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1Q 2022 Earnings Presentation – National Fuel Gas Co.

National Fuel Gas Co. · Feb 3, 2022 · 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. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 1
    Investor Presentation Q1 Fiscal 2022 Update February 3, 2022
  2. 1Q 2022 Earnings 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 review our Corporate Responsibility…
  3. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 3
    NFG: A Diversified, Integrated Natural Gas Company Upstream Developing our large, high-quality Exploration & acreage position in Marcellus & Production Utica shales(1) 49% of NFG 1.2 Million 885 MMcf/day Net acres in Net…
  4. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 4
    Why National Fuel Diversified Assets Provide Stability and Long-Term Growth Opportunities 1 Integrated Model Enhances Shareholder Value 2 Expect to Generate Significant Free Cash Flow in Fiscal 2022 and Beyond 3 Interstate…
  5. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 5
    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…
  6. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 6
    . . . and Continues to Drive Growth Opportunities Near Term Strategy Leverages Integration Across the Value Chain Exploration & Pipeline & Gathering Utility Production Storage Integrated Upstream and Midstream development of…
  7. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 7
    2 Consolidated Business Expected to Generate Significant Free Cash Flow . . . . . . In Fiscal 2022 at Natural Gas Prices . . . With Sustainable, Growing Free Cash Flow Well Below Current NYMEX Strip . . . Generation Expected Over the…
  8. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 8
    3 Significant Interstate Pipeline Growth Supply Corp. Rate Case Settlement: Northern Access 35 million increase in base rates Delivery: NY & Canada Empire North (effective February 2020) 490,000 Dth/d Delivery: Canada & NY (remains…
  9. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 9
    4 Over Half Century of Dividend Growth 51Years 119 Years 1.82 per share 2.9% yield(1) Consecutive Dividend Increases Consecutive Payments 3.4 Billion Dividend payments since 1970 0.19 per share Annual Rate at…
  10. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 10
    5 Focused on Corporate Responsibility and ESG Second Annual Corporate Responsibility Report Provides Enhanced ESG Disclosures Responsive to Key Stakeholder Priorities Climate Risk Enhanced disclosure under the Task Force on Climate-…
  11. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 11
    Emissions Reduction Targets and Initiatives Significant Methane Intensity and Greenhouse Gas Emissions Ongoing Sustainability Reduction Targets Across the Energy Value Chain(1) Initiatives ONE Future NFG 25% Reduction in GHG…
  12. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 12
    First Quarter Fiscal 2022 Financial Highlights 12
  13. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 13
    First Quarter Fiscal 2022 Results and Drivers Adjusted Operating Results (/share)(1) Q1 FY 2021 Q1 FY 2022 Major Drivers 1.48 Natural Gas Prices Oil and Gas Pricing(2) 64.29 2.52 49.91 2.14 Exploration & Oil Prices 1.06…
  14. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 14
    Earnings Guidance FY2021 Adjusted Operating Results FY2022 Earnings Guidance Key Guidance Drivers 4.29/share(1) 5.20 to 5.50/share Net Production 340-365 Bcfe (up 8% vs. FY21) Realized natural gas prices (after-hedge) 2.50/Mcf(2)…
  15. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 15
    Exploration & Production & Gathering Overview Seneca Resources Company, LLC National Fuel Gas Midstream Company, LLC 15
  16. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 16
    E&P and Gathering Growing Production within Disciplined Capital Program E&P Net Production (Bcfe) Near-Term Strategy 400 Continue two rig development program with focus on further improving capital efficiency 300 EDA share of…
  17. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 17
    E&P and Gathering Significant Appalachian Acreage Position 1,000 Economic Drilling Locations at 2.50 NYMEX Prices(1) Decades of highly-economic inventory WDA 915,000 Acres(2) (40 wells per year at current 2-rig pace) Large,…
  18. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 18
    E&P and Gathering Eastern Development Area Seneca EDA Highlights EDA 270,000 Acres 1 Tioga County, PA 160 undeveloped Utica locations 90 undeveloped Marcellus locations Gathering infrastructure: NFG Tioga gathering systems…
  19. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 19
    E&P and Gathering EDA: Tioga County Development Large Contiguous Acreage Position, with Highly-Economic Utica and Marcellus Inventory Tioga Development Plan Significant Tioga County Acreage Position Significant additional assets…
  20. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 20
    E&P and Gathering Integrated Development EDA Tioga Gathering NFG Tioga Gathering Systems Support Growing Seneca Production Current Systems In-Service Tioga County Gathering Systems Map Tioga Gathering System Empire Capacity: up…
  21. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 21
    E&P and Gathering EDA: Tioga County Development Production Underpinned by Firm Sales and Firm Transportation Contracts Tioga County Gas Marketing Strategy Tioga County Gross Firm Contract Volumes (MDth/d) 500 Production…
  22. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 22
    E&P and Gathering EDA: Lycoming County Development Marcellus Development in Lycoming County Fully Utilizes Valuable Firm Transportation Prolific Marcellus acreage with average EUR of 2.5-3.0 Bcf / 1,000 ft 25 remaining Marcellus…
  23. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 23
    E&P and Gathering Integrated Development EDA Lycoming Gathering NFG Trout Run Gathering System Supports Seneca and Third-Party Development Current System In-Service Trout Run Gathering System Map Total Investment (to date): 272…
  24. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 24
    E&P and Gathering Western Development Area Marcellus Core Acreage vs. Utica Trend(1) WDA Highlights Large well inventory: Marcellus Shale: 600+ well locations remaining / 200,000 acres Utica Shale: 500+ potential locations…
  25. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 25
    E&P and Gathering WDA Development Plan Beechwood Development Area Provides 90 Potential Utica Locations with Strong Economics WDA Development Update WDA Potential RV-Beechwood Utica Development Area WDA-CRV Area: producing from…
  26. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 26
    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 Capacity: 750 MMcf per day…
  27. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 27
    E&P and Gathering WDA Firm Transportation and Sales Capacity WDA Exit Capacity Supports Production and Enhances Consolidated Returns WDA Gas Marketing Strategy WDA Contracted Firm Transport and Gross Sales Volumes (MDth/d) 500…
  28. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 28
    E&P and Gathering Long-term Contracts Supporting Appalachian Production Seneca Appalachia Natural Gas Marketing Firm Contract / Transport Volumes (MDth/day) 1,200 Leidy South (Transco & NFG - Supply) 1,000 Transco Zone 6 Non-NY…
  29. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 29
    E&P and Gathering Near-term Firm Sales Provide Market & Price Certainty Net Contracted Firm Sales / Transport Volumes (Dth per day) Contracted Index Price Differentials ( per Dth)(1) NYMEX Dawn Other Capped Fixed Price 17,300…
  30. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 30
    E&P and Gathering Sustainability Initiatives RSG and Completion Equipment Study Responsible Gas Certification Completion Equipment Emissions Testing & Field Trial Comprehensive Emissions Testing Equitable Origin (100% of…
  31. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 31
    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) East Coalinga/ 11 Temblor Primary 613 Other…
  32. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 32
    E&P and Gathering California Continued Focus on Integrating Renewable Energy Ongoing Investments in Solar Facilities Offset Operational Power Needs North Midway Bakersfield South Midway South Lost Hills Sunset Field (2016) Office…
  33. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 33
    E&P and Gathering Fiscal 2022 Production Profile 235 Bcf of Appalachian Production Protected by Firm Sales 192 Bcf locked-in realizing net 2.23/Mcf (1) 43 Bcf of additional firm sales(2) 11 Bcfe 340-365 Bcfe 350 22 Bcf 59% of…
  34. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 34
    E&P and Gathering Hedge Positions and Prices Production Supported by Strong Hedge Positions Pro Forma Natural Gas - MMDth, /MMBtu Crude Oil - MBbl, /Bbl 207.3 160.7 2.76 972 855 58.28 Fiscal 2022 Fiscal 2022 MMDth…
  35. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 35
    E&P and Gathering Continued Decrease in E&P Operating Costs Increased Scale and Highly-Contiguous Operations Expected to Drive Lower Cash Unit Costs Seneca Cash OpEx (/Mcfe) Appalachia LOE (/Mcfe)(3) Approximately 0.25/Mcfe…
  36. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 36
    Pipeline & Storage Overview National Fuel Gas Supply Corporation Empire Pipeline, Inc. 36
  37. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 37
    Pipeline & Storage Pipeline & Storage Segment Overview National Fuel Gas Supply Corporation Contracted Capacity(1): Firm Transportation: 3,284 MDth per day Firm Storage: 70,693 Mdth (fully subscribed) Rate Base(2): 959 million…
  38. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 38
    Pipeline & Storage FM100 Project Significant Investment by Supply Corp. In-service date: December 1, 2021(1) Estimated capital cost: 230 million Annual revenue: 50 million In-service: 35 million (lease revenues) April 2022:…
  39. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 39
    Pipeline & Storage Empire North Project Fully Subscribed Project Provides 205,000 Dth/day of Incremental Firm Transportation In-service date: September 15, 2020 Capital cost: 129 million Annual revenues: 27 million Underpinned…
  40. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 40
    Pipeline & Storage Continued Expansion of the Supply Corp. Line N System Line N to Monaca Project Shell Chemical Appalachia, LLC - On-system Delivery Point In-Service Date: November 2019 TGP 219 Contracted Firm Transport: 133,000…
  41. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 41
    Pipeline & Storage Northern Access Project Delivery points: 350,000 Dth/d to Chippawa (TCPL interconnect) 140,000 Dth/d to East Aurora (TGP 200 line) Regulatory/legal status: To Dawn Feb. 2017 FERC 7(c) certificate issued…
  42. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 42
    Pipeline & Storage Pipeline & Storage Customer Mix Customer Transportation by Shipper Type(1) Affiliated Customer Mix (Contracted Capacity) Outside Affiliated Non-Affiliated Pipeline 9% End User 8% 26% 52% Marketer…
  43. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 43
    Utility Overview National Fuel Gas Distribution Corporation 43
  44. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 44
    Utility New York & Pennsylvania Service Territories New York Total Customers(1): 539,000 ROE: 8.7% (NY PSC Rate Case Order, April 2017)(2) Rate Mechanisms: o Revenue Decoupling o Weather Normalization o Low Income Rates o…
  45. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 45
    Utility Utility Continues its Significant Investments in Safety Long-Standing Focus on Distribution System Safety and Reliability 125.0 (1) Capital Expenditures for Safety Total Capital Expenditures Utility Capital Expenditures (…
  46. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 46
    Utility Long-Standing Pipeline Replacement & Modernization Utility Mains by Material(1) Miles of Utility Main Pipeline Replaced Wrought Iron 159 158 154 156 Coated Bare 144 NY Cast Iron 9,782 miles Plastic Wrought…
  47. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 47
    Utility A Proven History of Controlling Costs Utility O&M Expense and Non-Service Pension Costs ( millions)(1) Expect 10 MM reduction to O&M Expense (GAAP) Non-Service Pension Costs Non-Service Pension Costs in FY22, with…
  48. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 48
    Utility Utility Targeting Substantial Emissions Reductions Significant Reductions in Utility GHG Emissions to GHG Reduction Targets, Continuing Focus on Date, Driven by System Modernization Efforts Lowering Carbon Footprint…
  49. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 49
    Utility Promoting Renewable Natural Gas Through Fiscal 2020 October 2020 July 2021 Ongoing Accepted first RNG Petitioned NY PSC to deliveries into NY system Continue to advance Awarded three RNG include RNG in the from anaerobic…
  50. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 50
    Consolidated Financial Overview Upstream I Midstream I Downstream 50
  51. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 51
    Diversified, Balanced Earnings and Cash Flows Adjusted Operating Results ( per share)(1) Adjusted EBITDA ( millions)(2) 1,200 6.00 5.20 to 5.50 1,047 1,000 5.00 1,000 4.29 4.00 E&P 800 465 511 1.83 3.00 600 159 163…
  52. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 52
    Disciplined, Flexible Capital Allocation Capital Expenditures by Segment ( millions)(1) 1,000 (2) (3) Exploration & Production Gathering Pipeline & Storage Utility 781 770 719 665-810 750 583 381 492 384 500 455 425-500…
  53. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 53
    Maintaining Strong Balance Sheet & Liquidity Net Debt / Adjusted EBITDA(1) Capitalization 3.08 x Expect 2.72 x further Total 2.45 x 2.47 x 2.61 x 2.53 x reduction Equity in FY22 Total 43%(2) Debt 57% 2017 2018 2019 2020…
  54. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 54
    Appendix 54
  55. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 55
    Appendix Safe Harbor For Forward Looking Statements This presentation may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, including statements regarding future prospects, plans,…
  56. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 56
    Appendix Hedge Positions and Prices Natural Gas Volumes in thousand MMBtu; Prices in /MMBtu Fiscal 2022 Fiscal 2023 Fiscal 2024 Avg. Avg. Avg. Volume Price Volume Price Volume Price NYMEX Swaps 160,740 2.76 116,200 2.79 61,080…
  57. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 57
    Appendix NYMEX Capped Firm Sales Additional Detail Capped Firm Sales - Net Contracted Volumes (Dth/d) NYMEX Cap Q2 FY22 Q3 FY22 Q4 FY22 FY23 Avg 2.92 25,800 25,500 25,100 25,800 3.00 45,100 44,200 44,000 3,700 3.00 capped firm…
  58. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 58
    Appendix Firm Transportation Commitments Volume Delivery Demand Charges Production Source Gas Marketing Strategy (Dth/d) Market (/Dth) Northeast Supply Firm Sales Contracts Canada Diversification EDA Tioga 50,000 0.50 (3rd…
  59. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 59
    Appendix Primary Development Area Type Curves Lycoming Marcellus Tioga Utica WDA Utica 20 18 16 Cumulative Production, BCF 14 12 10 8 Estimated Cumulative Volumes (Bcf) Lycoming Tioga Utica WDA Utica 6 Year…
  60. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 60
    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 GAAP…
  61. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 61
    Appendix Non-GAAP Reconciliations Adjusted EBITDA (1) Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) 12-Months FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Ended 12/31/21 Total Adjusted EBITDA Exploration…
  62. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 62
    Appendix Non-GAAP Reconciliations Adjusted EBITDA, by Segment Reconciliation of Adjusted EBITDA to Net Income, by Segment ( Thousands) FY22 FY21 12-Months FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FYTD FYTD Ended 12/31/21 Exploration…
  63. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 63
    Appendix Non-GAAP Reconciliations Adjusted Operating Results Three Months Ended Fiscal Year Ended December 31, September 30, (in thousands except per share amounts) (in thousands except per share amounts) 2021 2020 2021 2020…
  64. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 64
    Appendix Non-GAAP Reconciliations Capital Expenditures Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2022 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Guidance Capital Expenditures…
  65. 1Q 2022 Earnings Presentation – National Fuel Gas Co. – slide 65
    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, 2021…

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