National Fuel Gas Company · NYSE:NFG
National Fuel Gas — AGA Financial Forum May 2009
59 slides from National Fuel Gas's conference presentation, May 1, 2009
Slide 1: AGA Financial Forum May 2009
AGA Financial Forum May 2009 Exhibit 99
Slide 2: Safe Harbor For Forward Looking Statements
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 structure, anticipated capital expenditures and co
Slide 3: National Fuel Gas Company Business Segment Reporting
National Fuel Gas Company Business Segment Reporting Publicly Traded Holding Company NYSE symbol - NFG Exploration #038; Production Pipeline & Storage Utility Energy Marketing Seneca Resources Corporation National Fuel Gas Supply Corporation National Fuel Gas Distribution Corporation National Fuel R
Slide 4: Net Plant by Segment
Net Plant by Segment $3,058 Million At March 31, 2009 All Other $103 MM 4% National Fuel Gas Company ($ Millions) $3,200 $2,400 $1,600 $800 $0 $3,015 $2,839 $2,878 $2,878 $3,154 $924 $696 $1,057 $975 $1,002 $983 $1,096 $681 $674 $682 $827 $1,057 $1,065 $1,099 $1,126 P&S $838 mm 27% Utility $1,133 MM
Slide 5: Capital Expenditures by Segment
National Fuel Gas Company Capital Expenditures(1) by Segment Capital Expenditures exclude all expenditures associated with Discontinued Operations. Fiscal Year 2009 and 2010 estimates are as of May 1, 2009. 2008 Amount Includes $16.8 MM of Accrued Capital Expenditures Related to the Empire Connector
Slide 6: Utility Segment
Utility Segment National Fuel Gas Distribution Corporation
Slide 7: Utility Segment
7 Utility Segment (Shaded Region) Operated by National Fuel Gas Distribution Corporation Gas service to approximately 727,000 customers in Western New York & Northwest Pennsylvania NY jurisdiction has revenue decoupling, weather normalization, and sym. sharing Focused on providing safe, reliable ser
Slide 8: Utility Diluted Earnings per Share
8 Utility (1) Excludes SFAS 88 settlement loss of -$0.03 (2) Excludes out-of-period adjustment to symmetrical sharing of $0.03 Diluted Earnings per Share (Before Items Impacting Comparability) Support Consistent Earnings 1. Rate Mechanisms - -Revenue Decoupling - -Symmetrical Sharing - -Weather Norm
Slide 9: Utility Cost Containment
9 Utility Cost Containment O&M Expense Other Outside Services Uncollectibles Employee Benefits Labor $194.0 $50.4 $12.2 $20.2 $44.2 $67.0 $211.0 $47.7 $12.9 $30.4 $53.1 $66.9 $204.3 $49.6 $13.0 $28.2 $47.3 $66.2 $203.0 $52.6 $12.4 $26.9 $47.4 $63.7 $202.7 $50.3 $14.0 $25.0 $47.4 $66.0 $206.6 $53.0 $
Slide 10: Utility Customer Service Performance
10 Utility (1) 12-Months Ended 7/31/08 2008 New York State Performance Measures Customer Service Performance Goal(1) Actual Telephone Response (within 30 seconds) 74.0% 78.6% Customer Satisfaction: Residential Commercial 85.1% 86.0% 88.2% 88.0% PSC/PUC Complaints (per 100,000 Customers) 2.1 0.7 Esti
Slide 11: Pipeline & Storage
11 National Fuel Gas Supply Corporation Empire Pipeline, Inc. Pipeline & Storage
Slide 12: Pipeline & Storage Earnings and Growth Opportunities
12 Pipeline & Storage (1) Excludes SFAS 88 settlement loss of -$0.02 (2) Excludes base gas sale of $0.03 and gain associated with insurance proceeds of $0.05 (3) Excludes reversal of reserve for preliminary project costs of $0.06, and discontinuance of Hedge Accounting for interest rate collar of $0
Slide 13: Pipeline & Storage Capital Spending
13 Pipeline & Storage Capital Spending All Other Pipeline & Storage Empire Connector(1) $200 $150 $100 $50 $0 Capital Spending($ Millions) (1) $145.0M, $13.7M and $2.0M were incurred during the years ended September 30, 2008, 2007 and 2006, respectively. (2) Amount includes $16.8 million of accrued
Slide 14: Intermediate Expansion Opportunities
14 Intermediate Expansion Opportunities 1. West to East/Appalachian Lateral 2. Bristoria Project - add pipeline facilities and compression to interconnect with Spectra Energy and move Appalachian production 3. Lamont Compression - add compression to move Appalachian production into TGP 300-line
Slide 15: Midstream Covington Gathering System
15 Midstream Covington Gathering System - Lycoming & Tioga Counties
Slide 16: NFG Midstream Covington, LLC
16 NFG Midstream Covington, LLC Approximately: 26 miles of 12" steel 4 miles of 8" steel Delivery into TGP and UGI Estimated Cost: $25 MM - $30 MM Preliminary Survey Complete Acquiring Rights In-Service Date: Phase 1: Aug 31, 2009 Phase 2: Aug 31, 2010 Pipeline System accesses areas of Tioga County
Slide 17: Exploration & Production
17 Exploration & Production Seneca Resources Corporation
Slide 18: Exploration & Production Overview
18 Exploration & Production Appalachia Accelerating Growth Grew production by from fiscal to fiscal 361% Reserve Replacement Rate Marcellus Shale Huge Potential 720,000 Prospective Acres Active and accelerating drilling program California Outstanding Cash Flow Low cost producer Increasing production
Slide 19: Exploration & Production Proved Reserves
19 Exploration & Production Proved Reserves Proved Reserves @9/30 491 Bcfe 503 Bcfe West - California Reserves: 339 Bcfe (57 Mmboe) 67% Gulf of Mexico Reserves: 33 Bcfe 7% East - Appalachia Reserves: 131 Bcfe 26%
Slide 20: Exploration & Production Capital Expenditures
20 Exploration & Production Capital Expenditures(1) $208 $42 $103 $36 $27 $175 $29 $66 $41 $39 $172 $65 $45 $62 $196 $19 $35 $142 $250 $200 $150 $100 $50 $0 2006 2007 2008 2009 Forecast(2) Major shift in capital allocation from higher-risk exploration to lower-risk development expected to lead to im
Slide 21: Annual Production by Region
21 Exploration & Production Annual Production by Region Growing Total Fiscal Year Production (Bcfe) 2006 2007 2008 2009E 38.1 39.3 40.8 38-44 Annual Production (Bcfe) 0 5 10 15 20 25 5.5 6.3 7.9 8.5-9.5 19.4 18.3 18.8 18.5-19.5 13.2 14.7 14.1 11.0-15.0 Appalachia California Gulf of Mexico Stable 200
Slide 22: Appalachian Basin
22 Exploration & Production Appalachian Basin
Slide 23: Appalachian Basin Continued Upper Devonian Success
23 Appalachian Basin Continued Upper Devonian Success Production Growth: 25% F&DC Cost: 2.19/Mcfe 361% Reserve Replacement 31.7 BCFE Extensions & Discoveries 2008 Shallow Drilling Program
Slide 24: Appalachian Basin Fiscal Year-end Reserves
24 Appalachian Basin Upper Devonian and Medina Fiscal Year-end Reserves Replaced 361% of production Proved Reserves up 19% 0 50 100 150 200 250 83 110 131 83 147 163 83 221 234 Proved Reserves 2P Reserves 3P Reserves 670 Bcfe - Additional Resource Potential PUD 2006 2007 2008
Slide 25: Upper Devonian Development Drilling
25 Appalachian Basin Upper Devonian - Development Drilling 0 100 200 300 5 2 7 41 40 52 42 82 152 233 254 200(1) 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009E Fiscal Year (1) 2009 drilling plan revised from original plan of 300 wells at start of fiscal year due to reduced natural gas
Slide 26: Upper Devonian Drilling Program
26 Appalachian Basin Upper Devonian Drilling Program Detailed Geologic work has improved per well reserves and success rates Accelerating reserve additions each year (excludes PUDs): 2005 - 5.8 Bcfe 2006 - 11.8 Bcfe 2007 - 20.8 Bcfe 2008 - 24.2 Bcfe 0 20 40 60 80 100 120 57 71 97 113 2005 2006 2007
Slide 27: Marcellus Shale Industry Activity
27 Marcellus Shale Industry Activity Range Resources Multiple Wells 1-10 Mmcf/d Atlas Energy Multiple Verticals 1-3 Mmcf/d Chesapeake Energy 2 Wells 4.5 Mmcf/d EXCO Resources 2 Horizontal Wells 1-3.4 Mmcf/d Cabot Oil & Gas 6.4 Mmcf/d EOG & Seneca Horizontal Well 1.4 Mmcf/d (25 days) EOG & Seneca Hor
Slide 28: Marcellus Shale Seneca Acreage
28 Marcellus Shale Seneca Fee Acreage Seneca Lease Acreage Seneca is 3rd Largest Marcellus Acreage Holder Company Net Acres Chesapeake Energy 1,200,000 Range Resources 900,000 Seneca Resources 720,000 Statoil 600 000 600,000 Atlas Energy 580,000 EQT Corp. 400,000 Q p , Chief Oil & Gas 350,000 XTO En
Slide 29: Marcellus Shale EOG Joint Venture
29 SRC Fee/Lease EOG Marcellus Shale EOG Joint Venture Approx. Outline of JV Acreage 200,000 Gross Acres Seneca 50% W.I. (Avg. 58% NRI) EOG 50% W.I. (40% NRI) Year # of Wells 2009 10 2010 20 2011 30 2012 40 2013 50 2014 60 EOG Acreage Contributed ~120,000 Gross Acres Seneca 50% W.I. (40% NRI)
Slide 30: Marcellus Shale EOG JV Drilling Update
30 Well Type # of Wells Vertical 6 Horizontal 7 Well# IP Rate Details 1 350 Mcf/d Short Lateral; Ineffective Frac Job 2 400 Mcf/d Short Lateral 1,500 3 1,400 Mcf/d 3,500 Lateral 4,5,6 3,800 5,700 Laterals; Frac 3Q/4Q 7 5,600 Lateral; completing/testing 8 Drilling Marcellus Shale EOG JV Drilling Upda
Slide 31: Marcellus Shale Seneca Vertical Drilling Program
31 Marcellus Shale Seneca Vertical Drilling Program 10 Vertical Wells in 7 Counties 6 to 7 Cores SRC Fee/Lease EOG
Slide 32: Marcellus Shale Horizontal Development Drilling Program
32 SRC Fee/Lease EOG Marcellus Shale Horizontal Development Drilling Program 1st HWD Rig arrives July 2009 2nd Seneca horizontal rig 1st half FY2010 EOG JV
Slide 33: Seneca Resources Marcellus Summary
33 Seneca Resources Marcellus Summary 720,000 net Acres Recent test rate has validated our position EOG JV activity is accelerating Seneca operated activity has begun Major growth focus for Seneca Approximately 50% of CapEx budget for next two years Expect production of 30-40 MMCFD in 24 months
Slide 34: Exploration & Production Gulf of Mexico
34 Exploration & Production Gulf of Mexico
Slide 35: Gulf of Mexico Discoveries and Statistics
35 Gulf of Mexico 5 Discoveries since April 1st, 2007 Recent Discovery Gulf of Mexico Statistics Exploration: 5 of 6 (83% success) in last 24 months Producing 50+ Mmcfe/d net One discovery still being developed No exploration drilling in FY '09 Fiscal 2009 CapEx $19 Million
Slide 36: Exploration & Production California
36 Exploration & Production California
Slide 37: California Lifting Cost - Peer Comparison
37 California Lifting Cost - Peer Comparison Seneca is a low-cost operator in California, with Lifting Costs consistently outperforming its peers Source: IHS Herold, Inc. and Seneca Financial Reports $0 $5 $10 $15 $20 $25 $9.22 $16.13 $17.58 $17.92 $23.30
Slide 38: California Average Daily Production
38 BOE/Day 9,600 9,400 9,200 9,000 8,800 8,600 8,400 8,200 8,000 7,800 7,600 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 Jan 09 Feb 09 Mar 09 Apr 09 California Average Daily Production 2009 Average Daily Production Up ~ 550 BOEPD vs. 2008 Production Increases: Monterey shale drill
Slide 39: Seneca Resources Future Direction
39 Seneca Resources Future Direction 2009 Plans Evaluate overall Marcellus position and establish production Maintain California production at FY '08 level Minimize spending in the Gulf Long Term Expectations Continue strategic shift to Appalachia Grow Marcellus production to 30-40 MMCFD in next 24
Slide 40: Net Income from Continuing Operations
40 National Fuel Gas Company Net Income from Continuing Operations $268.7(1) $201.7 Net Income before Items Impacting Comparability (2) P&S $58.11 MM 24.1% Utility $62.00 MM 25 7% $146.6 $184.6(1) $201.7(1) $200 25.7% E&P $35.6 $67.5 $74.9 $138.4(1) $120.78 MM 50.1% $ $50.9 $61 5 $60.5 $55.6 $56.4 $
Slide 41: Dividend Growth
41 National Fuel Gas Company Dividend Growth $1.30 $0.19 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2006 2008 Annual Rate at Fiscal Year End At the end of February 2009, of the more than 7,000(1) total domestic publicly traded equities on major markets, only
Slide 42: Capitalization
42 National Fuel Gas Company Capitalization The Company may issue debt or equity securities in a public offering or a private placement from time to time, depending on market conditions, indenture requirements, regulatory authorizations and the Company's capital requirements. At March 31, 2009, GAAP
Slide 43: Public Utilities Fortnightly Ranking
43 National Fuel Gas Company Public Utilities Fortnightly Ranked the 3rd best energy company in 2008 Based on the 3-year averages of: Profit Margin Dividend Yield FCF, ROE, ROA Sustainable Growth Consistently in the Top 10 best energy companies (2006-2008) "National Fuel Gas ... strongly positioned
Slide 44: Appendix
Appendix
Slide 45: Key Information & Statistics
45 Key Information & Statistics New York Stock Exchange NFG Fiscal Year End September p Shares Outstanding (Approx.) (As of 3/31/09) 79.5 Million Average Daily Trading Volume (12 Months Ended 3/31/09) 661,684 M k t C it li ti (A ) Market Capitalization Approx.) (As of 3/31/09) $2.44 Billion Annual D
Slide 46: 2009 EPS Guidance & Sensitivity
46 National Fuel Gas Company 2009 EPS Guidance & Sensitivity Fiscal 2009 Earnings per Share (Diluted) Guidance(1) Consolidated Earnings $0.95 - $1.10(2) Earnings per Share Sensitivity to Changes from $3.50/ MMBtu for natural gas and $45/Bbl for crude oil(1) $1 change per $5 change per MMBtu Gas Bbl
Slide 47: Net Plant by Segment
47 National Fuel Gas Company Net Plant by Segment $3.1 B National Fuel Gas Company Net Plant by Segment $3.0 $3.5 $2.5 $1.5 $2.0 $1.0 $0.0 $0.5 $47 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2QFY09 International Corporate & All Other E & P Pipeline and Stora
Slide 48: Debt Ratings
48 National Fuel Gas Company Debt Ratings - At May 1, 2009 Standard & Poors Moodys Fitch, Inc. Long-Term Debt BBB Baa1 A- Outlook Stable Stable Stable Commercial Paper A-2 P-2 F2
Slide 49: Debt Maturity Schedule
49 National Fuel Gas Company Debt Maturity Schedule ($ Millions) 300 350 200 250 150 50 100 0 $200 $150 $300 $250 $49 $50 0 50 100 150 200 250 300 350 Fiscal Year Total Long-Term Debt Outstanding at May 1, 2009: $1.249 B
Slide 50: Utility Rate Case Activity
50 Utility Rate Case Activity 11/30/06: The Pennsylvania PUC approved the Settlement Agreement reached in the Delivery Service Charge Rate Case Effective Date: 1/1/07 Revenue Increase: $14.3 MM Revenue Decoupling: Initially proposed by the Utility in this case. Will instead be pursued via active par
Slide 51: Utility Recent Rate Case Results
51 Utility Recent Rate Case Results Increased Pension Funding Effects of Stimulus Package Article 18A Assessment Increased Pension Funding Effects of Stimulus Package Pending Issues New York Pennsylvania Effective Date December 28, 2007 January 1, 2007 Approximate Rate Base $699 MM $280-290 MM Reven
Slide 52: Utility Average Use per Residential Customer
52 Utility Average Use per Residential Customer 200 120 140 160 80 100 40 60 20 0 1973 1978 1983 1988 1993 1998 2003 2008 Fiscal Year TME 2Q FY09 Annual Rate 104.268 Mcf
Slide 53: Utility Accounts Receivable - Customer
53 Utility Accounts Receivable - Customer(1) 30-59 Days 60-89 Days 90-119 Days 120 Days & Over Reserve for Bad Debt $1,556 $1,362 $1,457 $1,524 $1,327 $48.1 $54.8 $56.0 66.5 43 0 49.0 50 60 ns $25.6 $28.7 $27.1 $27.6 $30.0 $39.9 21 1 41.6 43.0 37.5 30 40 $14.6 $19.2 $12.6 $16.4 $19.2 $7.2 $11.2 $7.0
Slide 54: Utility Keys to Continued Success
54 Utility Keys to Continued Success Conservation Incentive Program
Slide 55: Pipeline & Storage Upcoming Projects
55 Pipeline & Storage Upcoming Projects West to East & Appalachian Lateral Project Pipeline Length: 333Miles Starting Location: Rockies Express (REX) - Clarington, OH Ending Location: Millennium Pipeline - Corning, NY Receipts From: REX (~555,000 to 750,000 Dth/d) Local Production Cove Point Gas at
Slide 56: Pipeline Overview
56 Pipeline Overview KEY STATISTICS KEY STATISTICS System Pipeline Mileage 2,877 Miles(1) Total Compressor Stations 17(1) Total Horsepower 60,604 HP(1) Transportation Volume (2008) 358.4 Bcf Transportation Revenue (2008) $126.7 MM Includes facilities related to Empire Connector Pipeline & Storage
Slide 57: Storage Overview
57 Storage Overview Pipeline & Storage KEY STATISTICS KEY STATISTICS Underground Natural Gas Storage Fields 31 (1) Working Storage Capacity 78.3 Bcf Total Compressor Stations 14 Total Horsepower 35,325 HP Storage Revenue (2008) $67.0 MM Includes 4 storage fields co-owned with non-affiliated companie
Slide 58: Energy Marketing Diluted Earnings per Share
58 $0.08 $0.07 $0.06 $0.05 $0.04 $0.03 $0.02 $0.01 $0.07 $0.06 $0.07 $0.06(1) $0.07 $0.08 2004 2005 2006 2007 2008 6 Months Ended 3/31/09 Energy Marketing (1) Excludes resolution of a purchased gas contingency of +$0.03 Diluted Earnings per Share (Before Items Impacting Comparability)
Slide 59: Comparable GAAP Financial Measure Slides and Reconciliations
59 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 reconciliations are