National Fuel Gas Company · NYSE:NFG
National Fuel Gas — Enercom Oil & Gas Conference 2010
51 slides from National Fuel Gas's conference presentation, Aug 20, 2010
Slide 1: Enercom Oil & Gas Conference August 25, 2010
Enercom Oil & Gas Conference August 25, 2010 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 Reporting Segments Corporate Subsidiaries
Slide 4: Net Income from Continuing Operations Excluding Items Impacting Comparability
Net Income from Continuing Operations Excluding Items Impacting Comparability (1) National Fuel Gas Company A reconciliation to GAAP Net Income is included at the end of this presentation. $217.3 Million 12 Months Ended June 30, 2010 E&P $113.2 MM 52.1%
Slide 5: Net Income from Continuing Operations Excluding Items Impacting Comparability
Net Income from Continuing Operations Excluding Items Impacting Comparability (1) National Fuel Gas Company A reconciliation to GAAP Net Income is included at the end of this presentation. $217.3 Million 12 Months Ended June 30, 2010 Revenue
Slide 6: Capital Expenditures from Continuing Operations
National Fuel Gas Company Capital Expenditures(1) from Continuing Operations A reconciliation to Capital Expenditures as presented on the Consolidated Statement of Cash Flows is included at the end of this presentation.
Slide 7: Capital Expenditures - An Appalachian Focus
National Fuel Gas Company Capital Expenditures(1) - An Appalachian Focus (2) (3) A reconciliation to Capital Expenditures as presented on the Consolidated Statement of Cash Flows is included at the end of this presentation. Defined as spending related to efforts to drill for, gather, or transport Ap
Slide 8: Pipeline & Storage / Midstream Completed & Near-Term Expansion Initiatives
LAMONT COMPRESSOR STATION COVINGTON GATHERING SYSTEM TIOGA COUNTY EXTENSION LINE "N" EXPANSION 8 PIPELINE & STORAGE / MIDSTREAM COMPLETED & NEAR-TERM EXPANSION INITIATIVES NORTHERN ACCESS Enercom Oil & Gas Conference- August 25, 2010
Slide 9: Pipeline & Storage/Midstream Key Completed & Near-Term Expansion Initiatives
Pipeline & Storage/Midstream Key Completed & Near-Term Expansion Initiatives Project Name Capacity (Dth/D) Est. CapEx In-Service Date Status Covington Gathering System - Phase I 200,000 $16 MM 11/17/09 Completed - Flowing into TGP 300 Line Lamont Compressor Station 40,000 $6 MM 6/15/10 Completed - F
Slide 10: Exploration & Production: Seneca Resources Corporation
Exploration & Production Seneca Resources Corporation
Slide 11: Exploration & Production Overview by Region
Exploration & Production Marcellus Shale Accelerate development; convert resource potential to reserves Appalachian Region - Upper Devonian Drill 25-100 wells per year Proved Reserves California Continue to operate as a low-cost producer Gulf of Mexico No exploration; Develop and produce existing re
Slide 12: Exploration & Production Balance Between Oil and Gas
Exploration & Production Balance Between Oil and Gas (1) (2) (2) At September 30, 2009 12 months ended June 30, 2010
Slide 13: Exploration & Production Capital Expenditures by Region
Exploration & Production Capital Expenditures by Region Does not include the $34.9MM acquisition of Ivanhoe's US-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 Capital Expenditures.
Slide 14: Exploration & Production Annual Production by Region
Exploration & Production Annual Production by Region
Slide 15: Exploration & Production: California
Exploration & Production California
Slide 16: Seneca's California Properties
Seneca's California Properties South Lost Hills 2,100 BOEPD Monterey Shale Primary 221 Active Wells Sespe 900 BOEPD Sespe Formation Primary 192 Active Wells North Lost Hills 1,200 BOEPD Tulare & Etchegoin Formation Primary & Steamflood 202 Active Wells North Midway Sunset 4,300 BOEPD Potter & Tulare
Slide 17: California Average Daily Production
California Average Daily Production Modest Capital spending to maintain production Pursue additional bolt- on acquisitions
Slide 18: West Division Ivanhoe Acquisition
West Division Ivanhoe Acquisition Acquisition (July 2009) Jan. 2010 Oil Price $58 $72 PV10 (Proved) $42.1MM $70.3MM LOE $17.56/BOE $10.97/BOE Completed 14 well development program First well went into production on February 10, 2010 South Midway Sunset Production: 600 BOE/d 900 BOE/d by Fiscal Year-
Slide 19: Gulf of Mexico Exploration & Production
Gulf of Mexico Exploration & Production
Slide 20: Gulf of Mexico Average Daily Production
Gulf of Mexico Average Daily Production Minimal Capital spending in 2010 Production Holding steady
Slide 21: East Division Exploration & Production
East Division Exploration & Production
Slide 22: East Division Average Daily Production
East Division Average Daily Production Rapid Growth in the East Division as Marcellus is ramping up
Slide 23: Marcellus Shale Seneca Acreage Position
Marcellus Shale Seneca Acreage Position Range Resources Seneca Chesapeake Cabot Seneca/EOG SRC Fee/Lease Seneca
Slide 24: Seneca Resources Unique Marcellus Position
Seneca Resources Unique Marcellus Position 738,000 net acres in Marcellus Fairway Majority of Acreage is Fee (Seneca owns the minerals) No Royalty No lease expirations Drilling best acreage Drilling where infrastructure is in place Large Contiguous blocks of acreage Multi-well pad drilling Maximum e
Slide 25: Marcellus Shale EOG Joint Venture Overview & Results
Marcellus Shale EOG Joint Venture Overview & Results Approx. Outline of JV Acreage 200,000 Gross Acres Seneca 50% W.I. (Avg. 58% NRI) EOG 50% W.I. (40% NRI) EOG Acreage Contributed ~120,000 Gross Acres Seneca 50% W.I. (40% NRI) EOG Operated 20 Horizontals Drilled; 6 frac'd IP: 1-4 MMCFD Net Producti
Slide 26: Marcellus Shale Seneca Drilling Program Results
Marcellus Shale Seneca Drilling Program Results Seneca Operated 20 Horizontals Drilled 7 frac'd IP: 5-13 MMCFD EURs: 4-6 BCF Net Production: ~25 MMCFD Seneca Operated IP: 3.9 MMCFD Seneca Operated 2 Horizontals Drilled IP: 1.4 - 2.0 MMCFD Seneca Operated IP: 2.2 MMCFD Seneca Operated IP: 1.0 MMCFD E
Slide 27: Marcellus Shale Covington Area Structure Map
IP: 5.7, 4.8 MMCFPD Peak 24 hr IP: 13.2 MMCFPD (First 30 Days: 10.8 MMCFD) IP: 9.3, 7.5, 7.2 MMCFPD IP: 7.8 MMCFD off map to south Marcellus Shale Covington Area Structure Map Currently Fracing 7 wells on pad Five well pad to be frac'd in Sept/Oct.
Slide 28: Tioga County Decline Curves
Actual Declines flatter than "type" curves 6 BCF "Typecurve" 4 BCF "Typecurve" 3 BCF "Typecurve" 5 BCF "Typecurve" 30-day average for 7 Tioga County wells = 7.0 MMCFD Tioga County Decline Curves
Slide 29: Marcellus Shale 5-Well Pad in Covington Area
Marcellus Shale 5-Well Pad in Covington Area Utilizing multi-well Pad drilling in Tioga County "Crawler rig" air rig drills a series of top holes to kick-off-point Switch over to mud and drill a reverse sequence of laterals Greatly reduced time for rig moves Only switch from air to mud once for enti
Slide 30: Marcellus Shale Water Use
Marcellus Shale Water Use Recovering water discharged from an abandoned coal mine which was polluting a local trout stream Authorized by SRBC to withdraw approximately 500,000 gallon per day of mine discharge Water pipeline system supplies all frac water for Seneca in Tioga County (90 wells) Can sup
Slide 31: Marcellus Net Production
Marcellus Shale Marcellus Net Production Seneca Operated EOG JV
Slide 32: Marcellus Shale Wells Drilled per Year
Marcellus Shale Wells Drilled per Year
Slide 33: Marcellus Shale Western Development Area Pre-Tax IRR
Marcellus Shale Western Development Area Pre-Tax IRR: 3.0 BCF EUR; $4.0 MM Well Cost JV Wells on Seneca Mineral Fee 100% Wells on Seneca Mineral Fee Typical 15% Royalty Rate
Slide 34: Marcellus Shale Pre-Tax IRR Comparison
Marcellus Shale Pre-Tax IRR Comparison Description EUR Well Cost ($ MM) Net Working Interest Net Revenue Interest Pre-Tax IRR (NYMEX - $/Mcf) Pre-Tax IRR (NYMEX - $/Mcf) Pre-Tax IRR (NYMEX - $/Mcf) Description EUR Well Cost ($ MM) Net Working Interest Net Revenue Interest $4.00 $5.00 $6.00 Tioga Cou
Slide 35: Seneca Resources Summary
Seneca Resources Summary Maintain California Oil Production Continue as Low-cost producer Use excess cash flow for Marcellus growth Produce-out Gulf of Mexico Minimal Capex Strong production from recent development projects Focus on the Marcellus Fourth Seneca-operated horizontal rig arrives in Sept
Slide 36: Appendix
——— Mational Fuel CA) National Fuel Appendix
Slide 37: National Fuel Gas Company Dividend Growth
National Fuel Gas Company Dividend Growth $1.38 $0.19 Compound Annual Growth Rate 5.1% National Fuel has had 108 uninterrupted years of dividend payments and has increased its dividend for 40 consecutive years
Slide 38: 2011 Preliminary EPS Guidance & Sensitivity
National Fuel Gas Company 2011 Preliminary EPS Guidance & Sensitivity NFG & Subsidiaries The preliminary earnings guidance and sensitivity table are current as of August 5, 2010. The sensitivity table only considers revenue from the Exploration and Production segment's crude oil and natural gas sale
Slide 39: Debt Maturity Schedule
National Fuel Gas Company Debt Maturity Schedule Fiscal Year Total Long-Term Debt Outstanding At June 30, 2010: $1.249 B
Slide 40: Capital Resources & Credit Ratings
National Fuel Gas Company Capital Resources & Credit Ratings Capital Resources $300.0 MM Commercial Paper Program and Uncommitted Credit Facilities - Aggregate of $720.0 MM $300.0 MM Committed Credit Facility - Backs Commercial Paper Program RATING AGENCY RATING FITCH BBB+ MOODY'S Baa1 STANDARD & PO
Slide 41: Exploration & Production: Seneca Resources Corporation
Exploration & Production Seneca Resources Corporation
Slide 42: Exploration & Production Proved Reserves
Exploration & Production Proved Reserves Proved Reserves @ 9/30 491 Bcfe 503 Bcfe 528 Bcfe West - California Reserves: 342 Bcfe (64%) (57 Mmboe) FY '09 Production: 20.1 Bcfe (47%) Gulf of Mexico Reserves: 35 Bcfe (7%) FY '09 Production: 13.7 Bcfe (32%) East - Appalachia Reserves: 151 Bcfe (29%) FY '
Slide 43: Marcellus Shale Western Development Area Type Decline Curve
Marcellus Shale Western Development Area "Type" Decline Curve - 3.0 BCF Estimated Ultimate Recovery (EUR) Category Type Curve Parameters Initial Rate 3,550 MCF/D Average first year decline 68% Final decline 6% Hyperbolic Coefficient 1.6 Abandonment rate 10 MCF/D Average first month rate 3,090 MCF/D
Slide 44: Pipeline & Storage
National Fuel Gas Supply Corporation Empire Pipeline, Inc. Pipeline & Storage
Slide 45: Pipeline & Storage/Midstream Expansion Initiatives
Pipeline & Storage/Midstream Expansion Initiatives Project Name Capacity (Dth/D) Est. CapEx In-Service Date Status Covington Gathering System: Phase I 200,000 $16 MM 11/17/09 Completed - Flowing into TGP 300 Line Lamont Compressor Station 40,000 $6 MM 6/15/10 Completed - Flowing into TGP 300 Line La
Slide 46: Pipeline & Storage / Midstream Expansion Initiatives
WEST TO EAST OVERBECK TO LEIDY APPALACHIAN LATERAL LAMONT COMPRESSOR STATION PHASE I & II COVINGTON GATHERING SYSTEM TIOGA COUNTY EXTENSION LINE "N" EXPANSION PHASE I & II GALBRAITH STORAGE EAST BRANCH STORAGE 46 PIPELINE & STORAGE / MIDSTREAM EXPANSION INITIATIVES NORTHERN ACCESS Enercom Oil & Gas
Slide 47: Utility Segment
Utility Segment National Fuel Gas Distribution Corporation
Slide 48: Utility Return on Equity
(1) Calculated using Average Total Comprehensive Shareholder Equity. Utility Return on Equity (1)
Slide 49: Utility NFGDC Rate Base
Utility NFGDC Rate Base New York Ratemaking uses an average net plant and rate base for setting rates and calculating earnings Pennsylvania Ratemaking uses a date certain net plant and rate base for setting rates and calculating earnings (1) (2)
Slide 50: Accounts Receivable - Customer
Accounts Receivable - Customer (1) (1) All values include Purchase of Receivables ("POR") Program Utility
Slide 51: Comparable GAAP Financial Measure Slides and Reconciliations
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 pro
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