National Fuel Gas Company · NYSE:NFG
National Fuel Gas — Investor Presentation (February 2013)
52 slides from National Fuel Gas's investor presentation, Feb 11, 2013
Slide 1: National Fuel Gas Company Investor Presentation February 2013
National Fuel Gas Company Investor Presentation February 2013 Exhibit 99
Slide 2: Safe Harbor For Forward Looking Statements
February 2013 2 National Fuel Gas Company 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, performance and capital structur
Slide 3: Our Business Mix Leads to Long-Term Value Creation
February 2013 3 Upstream Crude Oil Midstream Downstream Upstream Natural Gas National Fuel Gas Company Our Business Mix Leads to Long-Term Value Creation National Fuel Gas Supply Corporation Empire Pipeline, Inc. National Fuel Gas Midstream Corporation National Fuel Gas Distribution Corporation Nati
Slide 4: Integrated Businesses with Significant Marcellus Exposure
February 2013 4 Appalachian Shale Growth Integrated Businesses with Significant Marcellus Exposure…
Slide 5: Exposure to Growth from the Utica Shale
February 2013 5 Appalachian Shale Growth …And Exposure to Growth from the Utica Shale
Slide 6: Integrated Business Mix Provides Financial Balance
February 2013 6 National Fuel Gas Company Integrated Business Mix Provides Financial Balance Note: A reconciliation of Adjusted EBITDA to Net Income as presented on the Consolidated Statement of Income and Earnings is included at the end of this presentation.
Slide 7: Capital Spending Flexibility to Maintain Financial Strength
February 2013 7 National Fuel Gas Company Capital Spending Flexibility to Maintain Financial Strength Note: A reconciliation to Capital Expenditures as presented on the Consolidated Statement of Cash Flows is included at the end of this presentation. (1) Does not include the $34.9 MM Seneca Resource
Slide 8: Capital Deployment Has Led to Significant Accomplishments
February 2013 8 National Fuel Gas Company Capital Deployment Has Led to Significant Accomplishments Note: A reconciliation of Adjusted EBITDA to Net Income as presented on the Consolidated Statement of Income and Earnings is included at the end of this presentation.
Slide 9: Strong Balance Sheet and Liquidity Position
February 2013 9 Capital Resources Total Short-Term Capacity: $1,085 Million Committed Credit Facility: $750 Million Syndicated facility extends until January 6, 2017 Uncommitted Lines of Credit: $335 Million $18.0 million of outstanding short-term notes payable to banks as of December 31, 2012 $300.
Slide 10: Dividend Track Record
February 2013 10 National Fuel Gas Company Dividend Track Record (1) As of February 7, 2013
Slide 11: Midstream Businesses
February 2013 11 Midstream Businesses Pipeline & Storage/NFG Midstream
Slide 12: Pipeline Expansions to Transport Appalachian Production
February 2013 12 Midstream Businesses Pipeline Expansions to Transport Appalachian Production
Slide 13: A Closer Look at the Expansion Progress
February 2013 13 Midstream Businesses A Closer Look at the Expansion Progress
Slide 14: Pursuing Additional Opportunities Near the Line N Corridor
February 2013 14 Midstream Businesses Pursuing Additional Opportunities Near the Line N Corridor Activity along the Pennsylvania/Ohio border continues to remain robust and is shifting north as the Utica begins to be delineated National Fuel’s Line N system is well- positioned to expand in conjunctio
Slide 15: Using a History of Excellence to Serve Appalachian Producers
February 2013 15 NFG Midstream Using a History of Excellence to Serve Appalachian Producers Midstream’s gathering systems are critical to unlock remote, but highly productive Marcellus acreage History of operational success and efficiency within Pennsylvania Current focus is on developing and expand
Slide 16: Utility
February 2013 16 Utility
Slide 17: Rate Mechanisms Providing Financial Stability
February 2013 17 Rate Mechanisms Utility Providing Financial Stability Low Income Rates Choice Program/POR Merchant Function Charge Revenue Decoupling 90/10 Sharing Weather Normalization New York & Pennsylvania New York only
Slide 18: Continued Cost Control Helps Provide Earnings Stability
February 2013 18 Utility Continued Cost Control Helps Provide Earnings Stability
Slide 19: Strong Commitment to Safety
February 2013 19 Utility Strong Commitment to Safety The anticipated increase in 2013 capital expenditures is largely due to the implementation of a new Customer Information System
Slide 20: Exploration & Production
February 2013 20 Exploration & Production
Slide 21: Another Strong Year of Reserve Growth
February 2013 21 Fiscal Years 3-Year F&D Cost (1) ($/Mcfe) Seneca Resources Another Strong Year of Reserve Growth 2006-2008 $7.63 2007-2009 $5.35 2008-2010 $2.37 2009-2011 $2.09 2010-2012 $1.87 Seneca has more than doubled its proved reserves since 2009, while maintaining a relatively high percentag
Slide 22: Increased Oil Spending and Tempered Marcellus Spending
February 2013 22 Seneca Resources Increased Oil Spending and Tempered Marcellus Spending (1) Does not include the $34.9 MM acquisition of Ivanhoe’s U.S.-based assets in California, as this was accounted for as an investment in subsidiaries on the Statement of Cash Flows, and was not included in Capi
Slide 23: Production Still Growing
February 2013 23 Seneca Resources Production Still Growing
Slide 24: Continuing to Focus on Improving Its Cost Structure
February 2013 24 Seneca Resources Continuing to Focus on Improving Its Cost Structure (1) Represents the midpoint of current General & Administrative Expense guidance of $58 to $62 million, divided by the midpoint of current production guidance of 95 to 107 Bcfe (2) Represents the midpoint of curren
Slide 25: California: Stable Production and Increasing Cash Flows
February 2013 25 Rank Company California 2011 BOEPD 7 Seneca Resources 9,209 California Stable Production and Increasing Cash Flows Net Acreage: 18,418 Acres Net Wells: 1,478 Oil Gravity: 12 – 37° Api NRI: 87.64 Occidental 164,796 Chevron 163,153 Aera (Shell/Exxon) 149,974 Plains Exploration 36,775
Slide 26: California Stable Production Fields
February 2013 26 California Stable Production Fields
Slide 27: California Strong Margins Support Significant Free Cash Flow
27 February 2013 California Strong Margins Support Significant Free Cash Flow Average Revenue (12 Months Ended 12/31/12) $85.69 per BOE $9.40 $3.35 $3.06 $2.32 $1.11 $66.45 Non Steam Fuel LOE Steam Fuel G&A Production & Other Taxes Other Operating Costs Adjusted EBITDA (1) Total production from the
Slide 28: California Recent Initiatives Driving Near-Term Growth
February 2013 28 Seneca Resources California – Recent Initiatives Driving Near-Term Growth
Slide 29: Midway Sunset South Activity Update
February 2013 29 Midway Sunset South Activity Update Seneca Resources
Slide 30: Sespe Field Drilling Programs and Results
February 2013 30 “X” SANDS ISOCHORE (Thickness) Seneca Resources Sespe Field – Drilling Programs and Results
Slide 31: Monterey Shale Play
February 2013 31 Seneca Resources Monterey Shale Play
Slide 32: Expansive Pennsylvania Acreage Position
February 2013 32 Seneca Resources Expansive Pennsylvania Acreage Position
Slide 33: Eastern Development Area (EDA)
February 2013 33 Seneca Resources Eastern Development Area (EDA)
Slide 34: Lycoming and Tioga Counties Are Highly Productive Areas
February 2013 34 Development Area Producing Well Count Average IP Rate (MMcf/d) Average 7-Day (MMcf/d) Average 30-Day (MMcf/d) Average EUR per Well (Bcf) Average Lateral Length EUR per 1,000’ of Lateral (Bcfe) Seneca Resources Lycoming and Tioga Counties Are Highly Productive Areas Covington Tioga C
Slide 35: Ramping Marcellus Shale Production
February 2013 35 Seneca Resources Ramping Marcellus Shale Production
Slide 36: Fiscal 2013 Western Development Area Delineation Program
February 2013 36 Seneca Resources Fiscal 2013 Western Development Area Delineation Program
Slide 37: Utica Shale Activity Summary
February 2013 37 Seneca Resources Utica Shale – Activity Summary
Slide 38: Initial Entry into the Mississippian Lime Play in Kansas
February 2013 38 Seneca Resources Initial Entry into the Mississippian Lime Play in Kansas Total Net Acres: 9,300 The initial entry into the Mississippian Lime play furthers the Company’s goal of maintaining a significant contribution from oil-producing properties 100% working interest in 4,600 gros
Slide 39: Appendix
February 2013 39 National Fuel Gas Company Appendix
Slide 40: 2013 Forecast
February 2013 40 2013 Forecast National Fuel Gas Company Fiscal Year 2013 Earnings Guidance Drivers GAAP Earnings per Share $2.75 - $3.00 Exploration & Production Drivers Total Production (Bcfe) 102 - DD&A Expense $2.10 - $2.25 LOE Expense $0.90 - $1.10 G&A Expense $58 - $62 MM Pipeline & Storage Dr
Slide 41: Manageable Debt Maturity Schedule
February 2013 41 National Fuel Gas Company Manageable Debt Maturity Schedule
Slide 42: Pipeline & Storage / Midstream Appendix
February 2013 42 Pipeline & Storage / Midstream Appendix
Slide 43: Pipeline & Storage Expansion Initiatives
February 2013 43 Project Name Capacity (Dth/D) Est. CapEx In-Service Market Status Pipeline & Storage Expansion Initiatives Lamont Compressor Station 90,000 $14 MM 2010/2011 Fully Subscribed Completed – Two Phases Line “N” Expansion 160,000 $22 MM 10/2011 Fully Subscribed Completed Tioga County Exte
Slide 44: Midstream Corporation Expansion Initiatives
February 2013 44 Project Name Capacity (Mcf/D) Est. CapEx In-Service Date Market Comments Midstream Corporation Expansion Initiatives Covington Gathering System 220,000 $40 MM Multiple Phases - Most In-Service Capacity Available [Marketing to Third Parties] Completed – Flowing into TGP 300 Line. Thi
Slide 45: Exploration & Production Appendix
February 2013 45 Exploration & Production Appendix
Slide 46: Hedge Positions and Strategy
February 2013 46 Natural Gas Swaps Volume (Bcf) Average Hedge Price Oil Swaps Volume (MMBbl) Average Hedge Price National Fuel Gas Company Hedge Positions and Strategy Fiscal 2013 43.2 $4.68 / Mcf Fiscal 2014 49.9 $4.24 / Mcf Fiscal 2015 22.7 $4.10 / Mcf Fiscal 2016 17.9 $4.07 / Mcf Fiscal 2017 17.9
Slide 47: Targeting Continued Cost Reductions
February 2013 47 Marcellus Shale Targeting Continued Cost Reductions (1) Completion Cost per Stage is for horizontal wells completed utilizing a standard completion design, not a Reduced Cluster Spacing (RCS) completion design.
Slide 48: Water Management Program
February 2013 48 Marcellus Shale Water Management Program Water Sourcing: Coal mine runoff Permitted freshwater sources Recycled water Water Management: Instituted a “Zero Surface Discharge” policy Recycle Marcellus flowback and produced water Centralized water handling in development areas Installi
Slide 49: Comparable GAAP Financial Measure Slides and Reconciliations
February 2013 49 National Fuel Gas Company Comparable GAAP Financial Measure Slides and Reconciliations This presentation contains certain non-GAAP financial measures. For pages that contain non-GAAP financial measures, pages containing the most directly comparable GAAP financial measures and reconc
Slide 50: Reconciliation of E&P West Division Adjusted EBITDA to Segment Net Income
February 2013 50 Reconciliation of Exploration & Production West Division Adjusted EBITDA to Exploration & Production Segment Net Income ($ Thousands) 12 Months Ended December 31, 2012 Exploration & Production - West Division Adjusted EBITDA 224,201 $ Exploration & Production - All Other Divisions A
Slide 51: Reconciliation of Adjusted EBITDA to Consolidated Net Income
February 2013 51 Reconciliation of Adjusted EBITDA to Consolidated Net Income ($ Thousands) FY 2009 FY 2010 FY 2011 FY 2012 Exploration & Production - West Division Adjusted EBITDA 171,572 $ 187,838 $ 187,603 $ 226,897 $ 224,201 $ Exploration & Production - All Other Divisions Adjusted EBITDA 108,13
Slide 52: Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures
February 2013 52 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 Capital Expenditures 188,290 $ 398,174 $ 648,815 $ 693,810 $ $4
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