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Investor Presentation – National Fuel Gas Co.

National Fuel Gas Co. · Jan 30, 2015 · 62 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 January 2015
  2. Investor Presentation – National Fuel Gas Co. – slide 2
    Corporate National Fuel Gas Company 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 Corporation…
  3. Investor Presentation – National Fuel Gas Co. – slide 3
    Corporate NFGs Unique Integration Common Geographic Footprint NFGs concentrated geographical footprint January 2015 differentiates our integrated structure and drives distinct shareholder value creation opportunities 4
  4. Investor Presentation – National Fuel Gas Co. – slide 4
    Corporate National Fuel Gas Company Regulated Operations Provide Significant Synergies OPERATIONAL SYNERGIES Utility segment and Pipeline and Storage segment share common: Management Dispatch center Engineering services Materials…
  5. Investor Presentation – National Fuel Gas Co. – slide 5
    Corporate National Fuel Gas Company Upstream and Midstream Common Vision For Growth Western Development Area Tier I Acreage: 200,000 Acres Clermont Gathering System NFG Supply & Other Interconnects High quality Marcellus…
  6. Investor Presentation – National Fuel Gas Co. – slide 6
    Corporate NFG Focused on Long-Term Value Creating sustainable value for shareholders remains our 1 priority We regularly evaluate structural alternatives as part of our ongoing assessment of our strategic direction We firmly believe…
  7. Investor Presentation – National Fuel Gas Co. – slide 7
    Corporate National Fuel Gas Company What Makes NFG Unique, Also Maximizes Value Financial High Quality Assets Efficiencies + Lower Cost of Capital Strategic + Lower Operating Costs Commercial + Efficient Capital Spend…
  8. Investor Presentation – National Fuel Gas Co. – slide 8
    Corporate National Fuel Gas Company Targeting Sustained EBITDA Growth over the next Five Years 1,250 Exploration & Production Segment Gathering Segment Pipeline & Storage Segment Utility Segment 1,000 Energy Marketing & Other 953…
  9. Investor Presentation – National Fuel Gas Co. – slide 9
    Corporate National Fuel Gas Company Capital Spending Adjusts to Capitalize on Opportunities 1,500 Exploration & Production Segment Gathering Segment Pipeline & Storage Segment 1,250 990 - Utility Segment Energy Marketing & Other…
  10. Investor Presentation – National Fuel Gas Co. – slide 10
    Corporate National Fuel Gas Company Maintaining a Strong Balance Sheet Debt/Adjusted EBITDA Capitalization 2.5 Average Debt /Adjusted EBITDA 1.98 x 2.0 1.89 x 1.89 x 1.75 x 1.77 x 1.80 x 1.5 Total Debt(1) Shareholders…
  11. Investor Presentation – National Fuel Gas Co. – slide 11
    Corporate National Fuel Gas Company Dividend Track Record 2.00 Dividend Consistency Consecutive Dividend Payments 112 Years Consecutive Dividend Increases 44 Years Annual Dividend Rate 1.50 Current Annualized Dividend Rate 1.54…
  12. Investor Presentation – National Fuel Gas Co. – slide 12
    Upstream Exploration & Production Overview January 2015 13
  13. Investor Presentation – National Fuel Gas Co. – slide 13
    Upstream Seneca Resources Proven Record of Growth 2,000 1,914 3-Year Natural Gas (Bcf) Fiscal F&D Cost(1) Crude Oil (MMbbl) Years (/Mcfe) 1,549 2007-2009 5.35 1,500 2008-2010 2.37 Total Proved Reserves (Bcfe) 1,246 2009-2011…
  14. Investor Presentation – National Fuel Gas Co. – slide 14
    Upstream Seneca Resources Delivering Tremendous Production Growth 225 Gulf of Mexico (Divested in 2011) East Division West Division 155-190 160.5 Annual Production (Bcfe) 150 120.7 83.4 134-167 139.3 75 67.6 100.7…
  15. Investor Presentation – National Fuel Gas Co. – slide 15
    Upstream Seneca Resources Disciplined Capital Spending 1,000 Gulf of Mexico (Divested in 2011) East Division West Division 800 Capital Expenditures (Millions) 694 649 603 525- 600 533 575 398 400 631 596 428 520 485-…
  16. Investor Presentation – National Fuel Gas Co. – slide 16
    Upstream Seneca Resources LOE: Operating Costs down; Transportation Costs up 4.00 Property, Franchise & Other Taxes Other O&M Expense General & Administrative Expense Lease Operating & Transportation Expense (Gathering Only) 3.00…
  17. Investor Presentation – National Fuel Gas Co. – slide 17
    Upstream Marcellus Shale Prolific Pennsylvania Acreage Seneca Fee Seneca Lease 720,000 Acres 60,000 Acres Eastern Development Area (EDA) Mostly leased (16-18% royalty) Western Development Area (WDA) No near-term lease…
  18. Investor Presentation – National Fuel Gas Co. – slide 18
    Upstream Marcellus Shale EDA Delivering Significant Growth DCNR Tract 007 Covington Fully Developed Utica & Marcellus delineation wells Productive Capacity: 45MMcf per Day Results expected 1H FY2015 47 Wells Drilled and…
  19. Investor Presentation – National Fuel Gas Co. – slide 19
    Upstream Marcellus Shale EDA Historical Well Results are Exceptional Average EUR per Average Average Average EUR Average 1,000 of Producing IP Rate 7-Day 30-Day per Well Lateral Lateral Development Area Well Count (MMcf/d) (MMcf/d)…
  20. Investor Presentation – National Fuel Gas Co. – slide 20
    Upstream Marcellus Shale Focusing on WDA Development Senecas Tier I Acreage: 200,000 Acres 6-8 Bcfe EUR Wells 2-4 BCF/well Economic at 2.60 to 4.00/MMbtu 6 - 8 BCF/well 4 - 6 BCF/well 2-4 BCF/well 4 - 6 BCF/well SRC…
  21. Investor Presentation – National Fuel Gas Co. – slide 21
    Upstream Marcellus Shale Strong Wells Currently Producing Across WDA Acreage WDA Development Areas: Producing Well Peak 24-Hour Average Average Treatable Area Count Rate (MMcfd) 7-Day (MMcf/d) Lateral Length (ft) Clermont/Rich…
  22. Investor Presentation – National Fuel Gas Co. – slide 22
    Upstream Marcellus Shale Clermont/Rich Valley (CRV) Area Clermont/Rich Valley 200-250 Planned Horizontal Locations Productive Capacity: 19 Wells; 60 MMcfd Planned Wells Drilled Wells Producing Wells Pad C8-F Completing Pad…
  23. Investor Presentation – National Fuel Gas Co. – slide 23
    Upstream Marcellus Shale 2,000 Economic WDA Locations Below 4/MMBtu Locations Completed EUR 4.50 4.00 15% IRR(1) Prospect Product Remaining to Lateral Assumption BTU Dawn/Nymex Dawn/Nymex Realized Price Be Drilled Length (ft)…
  24. Investor Presentation – National Fuel Gas Co. – slide 24
    Upstream Marcellus Shale WDA Mineral Interests Significantly Enhance Returns Clermont/Rich Valley Example Typical The Seneca Producer Advantage (/Mcf) 15% Royalty 0% Royalty Average Net Realized Price 3.06 2.60 Less: Cash…
  25. Investor Presentation – National Fuel Gas Co. – slide 25
    Corporate Natural Gas Marketing How Does Seneca Sell its Production Contracted Basis Differential 3rd Party Marketer (or spot market) Gathering System Interconnection Well Head with Interstate Spot Market Pipeline Network…
  26. Investor Presentation – National Fuel Gas Co. – slide 26
    Corporate Natural Gas Marketing Adding Long-Term Firm Transport to the Portfolio FT Capacity (Dth/day) In- Project Service Contract Delivery Fiscal Fiscal Fiscal Fiscal Matched Firm (Counterparty) Date Term Market 2015 2016 2017…
  27. Investor Presentation – National Fuel Gas Co. – slide 27
    Corporate Natural Gas Marketing Significant Base of Long-Term Firm Contracts 1,000 Atlantic Sunrise 189,405 Dth/d Northern Access 2016 750 350,000 Dth/d Dth per Day (Thousands) Niagara Expansion TETCO 500 170,000…
  28. Investor Presentation – National Fuel Gas Co. – slide 28
    Corporate Natural Gas Marketing Firm Sales Provide a Market for Appalachian Production 500,000 Fixed Price Values shown represent the price or differential to a reference Long-Term Firm Gross Sales (Avg Dth per Day) NYMEX price…
  29. Investor Presentation – National Fuel Gas Co. – slide 29
    Corporate Natural Gas Marketing Current Natural Gas Hedge Positions 100 NYMEX Dominion Dawn & MichCon SoCal Natural Gas Swaps (Million MMBtu) 75 68.7 65.7 18.6 14.5 50 46.8 18.8 11.0 12.7 25 49.1 32.4 23.1 5.6 5.6 0…
  30. Investor Presentation – National Fuel Gas Co. – slide 30
    Corporate Natural Gas Marketing FY 2015 Production Firm Sales & Hedge Composition Firm Sales with Price Certainty Spot Price Exposure 200.0 76.5 Bcf at 3.70/Mcf 27 Bcf at 2.00-2.25/Mcf (1) 134-167 Bcf 150.0 Total Production…
  31. Investor Presentation – National Fuel Gas Co. – slide 31
    Upstream Utica Shale Seneca Activity in Tioga County Seneca - Mt Jewett Horizontal: Completed September 2013 Peak 24-Hour Rate: 8.5 MMcf/d Shell Shell 11 MMcf/d 26 MMcf/d Seneca - DCNR 007 Completing Seneca - Tionesta…
  32. Investor Presentation – National Fuel Gas Co. – slide 32
    Upstream California Stable Production Fields; Modest Growth Potential 6,000 East Coalinga 2010 LTM (1) 4,500 Temblor Formation 4,000 Gross Operated Daily Production 4,500 Primary 3,000 (Boe/d) 1,750…
  33. Investor Presentation – National Fuel Gas Co. – slide 33
    Upstream California South Midway Sunset Has Delivered Significant Growth 2,000 1,800 B Pool A Pool 1,600 Seneca Acquired 1,400 in June 2009 1,200 1,000 16X Pool 800 600 400 97X Pool Jan-06 Jan-07 Jan-08…
  34. Investor Presentation – National Fuel Gas Co. – slide 34
    Upstream California East Coalinga Summary Production has increased from 214 BOPD to 750 BOPD Drilled 31 new producers and 1 water disposal well in 2014 Plan to drill 5 wells in 2015 Evaluating potential of undeveloped Upper…
  35. Investor Presentation – National Fuel Gas Co. – slide 35
    Upstream California Evaluating the Monterey Shale at South Lost Hills GR Brittleness Oil SP ResD Gas Truman 2H Lower Reef Ridge Currently Installing Artificial Lift Seneca Lease 1000 Upper Antelope A Truman 1H 2013 Upper…
  36. Investor Presentation – National Fuel Gas Co. – slide 36
    Upstream California Modest Growth Opportunities, But Strong Economics Average Estimated Average EUR IRR Fiscal 2015 Field Well Cost (MBO) 55/Bbl Locations South Midway Sunset 250,000 39 57% 36 North Midway Sunset 300,000 30 25%…
  37. Investor Presentation – National Fuel Gas Co. – slide 37
    Upstream California Modest Growth Anticipated in 2015 11,000 Average Daily Net Production (BOE per Day) 9,800- 10,000 10,200 9,699 9,322 9,056 9,078 9,000 8,773 8,000 7,000 January 2015 2010 2011 2012 2013…
  38. Investor Presentation – National Fuel Gas Co. – slide 38
    Upstream California Strong Margins Support Significant Free Cash Flow 12-months ended 12/31/14 EBITDA per BOE Non-Steam Fuel LOE 12.98 Steam Fuel 4.77 Average Revenue for TTM 12/31/14 G&A 3.99 84.26 per BOE Production & Other…
  39. Investor Presentation – National Fuel Gas Co. – slide 39
    Midstream Midstream Businesses Overview January 2015 40
  40. Investor Presentation – National Fuel Gas Co. – slide 40
    Midstream Midstream Businesses Positioned to Serve Rapidly Growing Production in Appalachia January 2015 41
  41. Investor Presentation – National Fuel Gas Co. – slide 41
    Midstream Gathering Gathering is the First Step to Reaching a Market Gathering Segment Revenue 120 TGP 200 Revenue (Millions) 75 - 90 95 70.6 60 34.8 30 0 2010 2011 2012 2013 2014 2015E (1) Fiscal Year Clermont…
  42. Investor Presentation – National Fuel Gas Co. – slide 42
    Midstream Gathering Gathering Systems Supporting Senecas EDA Production Covington Gathering System In-Service Date: November 2009 Capacity: 220,000 Dth per day Interconnect: TGP 300 Capital Expenditures (to date): 32 Million…
  43. Investor Presentation – National Fuel Gas Co. – slide 43
    Midstream Gathering Clermont Gathering System has Large Expandability C Compressor Station Clermont Gathering C Interconnect System In-Service: July 2014 Ultimate Trunkline Capacity: 1+ Bcf per day Interconnects C TGP 300…
  44. Investor Presentation – National Fuel Gas Co. – slide 44
    Midstream Pipeline & Storage Project Opportunities to Support Appalachian Growth Develop multiple outlets to high-value markets January 2015 45
  45. Investor Presentation – National Fuel Gas Co. – slide 45
    Midstream Pipeline & Storage Expansions to Move Gas from the WDA Are Significant Projects to Support WDA Growth Northern Access 2015 Capacity (November 2015) Project (Dth/day) Northern Access 2015 140,000 Northern Access 2016…
  46. Investor Presentation – National Fuel Gas Co. – slide 46
    Midstream Pipeline & Storage Major Expansion Designed for Canadian Deliveries Northern Access 2015 Northern Access 2015 Customer: Seneca Resources (November 2015) In-Service: November 2015 System: NFG Supply Corp. Capacity:…
  47. Investor Presentation – National Fuel Gas Co. – slide 47
    Midstream Pipeline & Storage Northern Access 2016 Provides Additional Access to Canada Northern Access 2016 Customer: Seneca Resources In-Service: Late 2016 System: NFG Supply Corp. & Empire Pipeline, Inc. Capacity 350,000 Dth…
  48. Investor Presentation – National Fuel Gas Co. – slide 48
    Midstream Pipeline & Storage Recent 3rd Party Expansions Have Been Highly Successful Completed Expansions for 3rd Parties Capacity (Dth/day) Northern Access 2012 320,000 Tioga County Extension 350,000 Tioga County Northern…
  49. Investor Presentation – National Fuel Gas Co. – slide 49
    Midstream Pipeline & Storage Pairing Line N Expansions with System Modernization Westside Expansion & Modernization In-Service: November 2015 System: NFG Supply Corp. Capacity: 175,000 Dth per day Range Resources (145,000 Dth/d)…
  50. Investor Presentation – National Fuel Gas Co. – slide 50
    Midstream Pipeline & Storage Developing Unique Solutions for Shippers Tuscarora Lateral In-Service: November 2015 System: NFG Supply & Empire Pipeline New No-Notice Services Precedent agreements executed with RG&E, NYSEG & NFG…
  51. Investor Presentation – National Fuel Gas Co. – slide 51
    Midstream Pipeline & Storage Significant Expansions Are Driving Growth Delivering Gas North Completed Projects (Since 2009) Tioga County Extension Northern Access 2012 Recent Capacity Northern Access 2015 1,128,000 Dth/day…
  52. Investor Presentation – National Fuel Gas Co. – slide 52
    January 2015 Downstream Utility Overview 53
  53. Investor Presentation – National Fuel Gas Co. – slide 53
    Downstream Utility New York & Pennsylvania Service Territories New York Total Customers: 524,300 Rate Mechanisms: Revenue Decoupling Weather Normalization Low Income Rates Merchant Function Charge (Uncollectibles Adjustment)…
  54. Investor Presentation – National Fuel Gas Co. – slide 54
    Downstream Utility Shifting Trends in Customer Usage 120 Residential Usage 35 Industrial Usage Usage Per Account(1) (MMcf) Usage Per Account(1) (Mcf) 110 30 100 25 90 20 80 15 12-Months Ended December 31…
  55. Investor Presentation – National Fuel Gas Co. – slide 55
    Downstream Utility A Proven History of Controlling Costs All Other O&M Expenses O&M Pension Expense O&M Uncollectible Expense 250 200 193 195 181 179 177 178 10 10 O&M Expense (Millions) 14 11 9 6 31 13 20 33 16 16…
  56. Investor Presentation – National Fuel Gas Co. – slide 56
    Downstream Utility Strong Commitment to Safety 150 Capital Expenditures for Safety Total Capital Expenditures 115 - 130 Capital Expenditures (Millions) 120 88.8 90 Near-term increase due to 60MM upgrade of 72.0 the…
  57. Investor Presentation – National Fuel Gas Co. – slide 57
    January 2015 Appendix Appendix 58
  58. Investor Presentation – National Fuel Gas Co. – slide 58
    Appendix National Fuel Gas Company Natural Gas Hedge Positions (Volumes in thousands Mmbtu; Prices in /Mmbtu) Fiscal 2015(1) Fiscal 2016 Fiscal 2017 Fiscal 2018 Avg. Avg. Avg. Avg. Volume Price Volume Price Volume Price Volume…
  59. Investor Presentation – National Fuel Gas Co. – slide 59
    Appendix National Fuel Gas Company Crude Oil Hedge Positions (Volumes & Prices in Bbl) Fiscal 2015(1) Fiscal 2016 Fiscal 2017 Fiscal 2018 Avg. Avg. Avg. Avg. Volume Price Volume Price Volume Price Volume Price Midway Sunset…
  60. Investor Presentation – National Fuel Gas Co. – slide 60
    Appendix Geneseo Shale Path to Geneseo Development 2018/2019 Start Tract 100/Gamble (Lycoming County) 1st Well (Tract 100 Pad N) Peak IP: 14.1 MMcf per day 30-Day Average Rate: 8.6 MMcf per day Estimated EUR: 7.0 Bcf Lateral…
  61. Investor Presentation – National Fuel Gas Co. – slide 61
    Appendix Reconciliation of Adjusted EBITDA to Consolidated Net Income ( Thousands) 12-Months FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Ended 12/31/14 Exploration & Production - West Division Adjusted EBITDA 187,838 187,603…
  62. Investor Presentation – National Fuel Gas Co. – slide 62
    Appendix Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ( Thousands) FY 2015 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Forecast Capital Expenditures from Continuing Operations Exploration &…

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