National Fuel Gas Company · NYSE:NFG
National Fuel Gas — Investor Presentation (March 2013)
53 slides from National Fuel Gas's investor presentation, Mar 18, 2013
Slide 1: National Fuel Gas Company Investor Presentation March 2013
National Fuel Gas Company Investor Presentation March 2013 Exhibit 99
Slide 2: Safe Harbor For Forward Looking Statements
National Fuel Gas Company Safe Harbor For Forward Looking Statements This resentation may contain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, including statements regarding future prespecss, plans, performance and capital structure, anticipated ca
Slide 3: Our Business Mix Leads to Long-Term Value Creation
March 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 Nationa
Slide 4: Integrated Businesses with Significant Marcellus Exposure
March 2013 4 National Fuel Gas Company Integrated Businesses with Significant Marcellus Exposure…
Slide 5: Exposure to Growth from the Utica Shale
March 2013 5 National Fuel Gas Company …And Exposure to Growth from the Utica Shale
Slide 6: EBITDA Growth Driven by Stability and Continued Success
March 2013 6 National Fuel Gas Company EBITDA Growth Driven by Stability and Continued Success 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
March 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) (1)Does not include the $34.9 MM Seneca Resource
Slide 8: Strong Balance Sheet and Liquidity Position
March 2013 8 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 $300.0
Slide 9: Midstream Businesses
March 2013 9 Midstream Businesses Pipeline & Storage/NFG Midstream
Slide 10: Pipeline Expansions to Transport Appalachian Production
March 2013 10 Midstream Businesses Pipeline Expansions to Transport Appalachian Production
Slide 11: Exploration & Production
March 2013 11 Exploration & Production
Slide 12: Another Strong Year of Reserve Growth
March 2013 12 Seneca Resources Another Strong Year of Reserve Growth Seneca has more than doubled its proved reserves since 2009, while maintaining a relatively high percentage of proved developed reserves (67%), given its large resource base (1) Represents a three-year average U.S. finding and deve
Slide 13: Operational Efficiencies Continue to Drive Production Growth
March 2013 13 Seneca Resources Operational Efficiencies Continue to Drive Production Growth Ongoing efficiency allows for more activity with a flat rig count (1) RCS – Reduced Cluster Spacing (2) Drilling pace represents the average feet drilled per day from the time the well is spud until it reache
Slide 14: Increased Oil Spending and Tempered Marcellus Spending
March 2013 14 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 Capital
Slide 15: Seneca Resources
March 2013 15 Seneca Resources
Slide 16: California: Stable Production Fields
March 2013 16 Seneca Resources California: Stable Production Fields
Slide 17: California: Strong Margins Support Significant Free Cash Flow
March 2013 17 Seneca Resources California: Strong Margins Support Significant Free Cash Flow (1) Total production from the Exploration & Production segment’s properties in California was 3,374 Mboe for the 12 months ended December 31, 2012. Note: A reconciliation of Exploration & Production West Div
Slide 18: California: Midway Sunset South Activity Update
March 2013 18 California: Midway Sunset South Activity Update Seneca Resources
Slide 19: California: Sespe Field – Drilling Programs and Results
March 2013 19 “X” SANDS ISOCHORE (Thickness) Seneca Resources California: Sespe Field – Drilling Programs and Results
Slide 20: California: East Coalinga Overview
March 2013 20 Seneca Resources California: East Coalinga Overview Seneca became operator on January 30, 2013 Previous Operator: Chevron 7,764 net acres ~170 wells (60 active) ~250 BOPD $30 million capital commitment over first three years $100 million of potential opportunities over the next five to
Slide 21: Expansive Pennsylvania Acreage Position
March 2013 21 Seneca Resources Expansive Pennsylvania Acreage Position
Slide 22: Eastern Development Area (EDA)
March 2013 22 Seneca Resources Eastern Development Area (EDA)
Slide 23: Lycoming and Tioga Counties Are Highly Productive Areas
March 2013 23 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 Coun
Slide 24: Fiscal 2013 Western Development Area Delineation Program
March 2013 24 Seneca Resources Fiscal 2013 Western Development Area Delineation Program
Slide 25: Rich Valley/Clermont Development Area
March 2013 25 Seneca Resources Rich Valley/Clermont Development Area
Slide 26: Utica Shale – Activity Summary
March 2013 26 Seneca Resources Utica Shale – Activity Summary Permitted Drilled/Drilling Completed Producing Mt. Jewett Tested 3 Frac Stages at 1.6 MMcfd (Typical Well: 17 Frac Stages) nd Horizontal: FY 2013 Henderson Vertical Well: Tested Tionesta Horizontal: Completed Fall 2012 Peak 24-Hour Rate:
Slide 27: Initial Entry into the Mississippian Lime Play in Kansas
March 2013 27 Seneca Resources Initial Entry into the Mississippian Lime Play in Kansas Total Net Acres: 9,300 st Well Spud: FY2013 – Q3 The initial entry into the Mississippian Lime play furthers the Company’s goal of maintaining a significant contribution from oil-producing properties Unit 30-day
Slide 28: Capital Deployment Has Led to Significant Accomplishments
March 2013 28 31% Increase in Pipeline & Storage Adjusted EBITDA since Fiscal 2011 44.3 Bcfe in 2012 NFG Midstream Gathering Volumes National Fuel Gas Company Capital Deployment Has Led to Significant Accomplishments Note: A reconciliation of Adjusted EBITDA to Net Income as presented on the Consoli
Slide 29: Appendix
March 2013 29 National Fuel Gas Company Appendix
Slide 30: Fiscal Year 2013 Earnings Guidance Drivers
March 2013 30 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 Drive
Slide 31: Dividend Track Record
March 2013 31 National Fuel Gas Company Dividend Track Record Current Dividend Yield (1) 2.5% (1) As of March 12, 2013
Slide 32: No Debt Maturities Until Fiscal 2018
March 2013 32 National Fuel Gas Company No Debt Maturities Until Fiscal 2018
Slide 33: Midstream Businesses Appendix
March 2013 33 Midstream Businesses Appendix
Slide 34: A Closer Look at the Expansion Progress
March 2013 34 COVINGTON GATHERING SYSTEM (In-Service) TROUT RUN GATHERING SYSTEM (In-Service ) TIOGA COUNTY EXTENSION (In-Service) LINE “N” EXPANSION (In-Service) NORTHERN ACCESS EXPANSION (In-Service) CENTRAL TIOGA COUNTY EXTENSION (2015/2016) LINE “N” 2012 EXPANSION (In-Service) MERCER EXPANSION P
Slide 35: Pursuing Additional Opportunities Near the Line N Corridor
March 2013 35 Midstream Businesses Pursuing Additional Opportunities Near the Line N Corridor Activity in the Marcellus and Utica shales along the Pennsylvania/Ohio border continues to remain robust NFG Supply Corporation’s Line N system is well-positioned for continued expansion NFG Midstream Corpo
Slide 36: Regulated Interstate Expansion Initiatives (Pipeline & Storage)
March 2013 36 Project Name Capacity (Dth/D) Est. CapEx In-Service Market Status Midstream Businesses Regulated Interstate Expansion Initiatives (Pipeline & Storage) Lamont Compressor Station 90,000 $14 MM 2010/2011 Fully Subscribed Completed – Two Phases Line “N” Expansion 160,000 $22 MM 10/2011 Ful
Slide 37: NFG Midstream is Focused on Serving Appalachian Producers
March 2013 37 Midstream Businesses NFG Midstream is Focused on Serving 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 expan
Slide 38: Gathering Expansion Initiatives (NFG Midstream)
March 2013 38 Project Name Capacity (Mcf/D) Est. CapEx In-Service Date Market Comments Midstream Businesses Gathering Expansion Initiatives (NFG Midstream) Covington Gathering System 220,000 $40 MM Multiple Phases - Most In-Service Capacity Available [Marketing to Third Parties] Completed – Flowing
Slide 39: Exploration & Production Appendix
March 2013 39 Exploration & Production Appendix
Slide 40: Hedge Positions and Strategy
March 2013 40 Natural Gas Swaps Volume (Bcf) Average Hedge Price Oil Swaps Volume (MMBbl) Average Hedge Price Seneca Resources Hedge Positions and Strategy Fiscal 2013 48.9 $4.57 / Mcf Fiscal 2014 51.0 $4.24 / Mcf Fiscal 2015 23.8 $4.12 / Mcf Fiscal 2016 17.9 $4.07 / Mcf Fiscal 2017 17.9 $4.07 / Mcf
Slide 41: Continuing to Focus on Improving Its Cost Structure
March 2013 41 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 current L
Slide 42: California: Stable Production and Increasing Cash Flows
March 2013 42 Rank Company California 2011 BOEPD 7 Seneca Resources 9,209 Seneca Resources 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 Expl
Slide 43: California: Recent Initiatives Driving Near-Term Growth
March 2013 43 Seneca Resources California: Recent Initiatives Driving Near-Term Growth
Slide 44: Ramping Marcellus Shale Production
March 2013 44 Seneca Resources Ramping Marcellus Shale Production
Slide 45: Targeting Continued Cost Reductions
March 2013 45 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 46: ‘spresbungh
‘spresbungh Hentenurg National Fuef
Slide 47: Rate Mechanisms
March 2013 47 Rate Mechanisms New York & Pennsylvania Low Income Rates Choice Program/POR Merchant Function Charge New York only Revenue Decoupling 90/10 Sharing Weather Normalization Utility Providing Financial Stability
Slide 48: Continued Cost Control Helps Provide Earnings Stability
March 2013 48 Utility Continued Cost Control Helps Provide Earnings Stability
Slide 49: Strong Commitment to Safety
March 2013 49 Utility Strong Commitment to Safety The anticipated increase in 2013 capital expenditures is largely due to the implementation of a new Customer Information System The Utility remains focused on consistent spending to maintain the ongoing safety and reliability of its system
Slide 50: Comparable GAAP Financial Measure Slides and Reconciliations
March 2013 50 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 reconcili
Slide 51: Reconciliation of E&P West Division Adjusted EBITDA to Segment Net Income
March 2013 51 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 Adju
Slide 52: Reconciliation of Adjusted EBITDA to Consolidated Net Income
March 2013 52 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 108,139 1
Slide 53: Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures
March 2013 53 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 $ $480,
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