National Fuel Gas Company · NYSE:NFG
National Fuel Gas — Howard Weil Energy Conference 2009
57 slides from National Fuel Gas's conference presentation, Mar 23, 2009
Slide 1: Howard Weil Energy Conference March 2009
Howard Weil Energy ConferenceMarch 2009
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 CompanyNYSE symbol - NFG Reporting Segments Corporate Subsidiaries
Slide 4: Net Plant by Segment
Net Plant by Segment (CHART) $3,044 MillionAt December 31, 2008 All Other$104 MM4% (CHART) National Fuel Gas Company
Slide 5: Net Income from Continuing Operations
Net Income from Continuing Operations (CHART) $261.84 Million12 Months EndedAt December 31, 2008 All Other$2.71 MM1.0% (CHART) National Fuel Gas Company Excludes gains on sale and income/(loss) related to divestiture of international power generation assets and Canadian E&P assets(2) Excludes non-ca
Slide 6: Capital Expenditures by Segment
National Fuel Gas Company Capital Expenditures(1) by Segment (CHART) (CHART) Utility Pipeline & Storage Exploration & Production Capital Expenditures exclude all expenditures associated with Discontinued Operations (CHART)
Slide 7: Capitalization
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.Includes $100 MM current po
Slide 8: Utility Segment
9 Utility Segment (Shaded Region)Operated by National Fuel Gas Distribution CorporationGas service to approximately 727,000 customers in Western New York & Northwest PennsylvaniaNY jurisdiction has revenue decoupling, weather normalization, and sym. sharingFocused on providing safe, reliable service
Slide 9: Pipeline & Storage Segment
10 Empire ConnectorIn-service as of December 2008 Storage ExpansionIncrease Storage Capacity by 8.5 Bcf West to East / Appalachian LateralProposed pipeline project Millennium Pipeline Pipeline & Storage Segment Operated by National Fuel Gas Supply Corporation & Empire Pipeline, Inc., regulated at th
Slide 10: Exploration & Production: Seneca Resources Corporation
Exploration & Production Seneca Resources Corporation
Slide 11: Exploration & Production: Seneca Resources
Exploration & Production Seneca Resources
Slide 12: Exploration & Production Proved Reserves
Exploration & Production Proved Reserves (CHART) Proved Reserves @9/30 491 Bcfe 503 Bcfe West - CaliforniaReserves: 339 Bcfe (57 Mmboe)67% Gulf of MexicoReserves: 33 Bcfe 7% East - AppalachiaReserves: 131 Bcfe 26%
Slide 13: Exploration & Production Capital Expenditures
Exploration & Production Capital Expenditures(1) Major shift in capital allocation from higher-risk exploration to lower-risk development expected to lead to improved Finding & Development costs (CHART) Excluding Acquisitions
Slide 14: Annual Production by Region
Exploration & Production Annual Production by Region (CHART) Growing 2006 2007 2008 2009E 38.1 39.3 40.8 38-44 Total Fiscal Year Production (Bcfe) Stable 2009 down due to Ike
Slide 15: Exploration & Production: Appalachian Basin
Exploration & Production Appalachian Basin
Slide 16: Appalachian Basin Continued Upper Devonian Success
Appalachian Basin Continued Upper Devonian Success 2008 Shallow Drilling Program
Slide 17: Appalachian Basin Upper Devonian and Medina
Appalachian Basin Upper Devonian and Medina (CHART) Proved Reserves (CHART) (CHART) 2P Reserves 3P Reserves Reserve BaseReplaced 361% of productionProved Reserves up 19%670 Bcfe - Additional Resource Base
Slide 18: Upper Devonian Development Drilling
Appalachian Basin Upper Devonian - Development Drilling (CHART) 2009 drilling plan reduced due to natural gas price
Slide 19: Upper Devonian Drilling Program
Appalachian Basin 20 Upper Devonian Drilling Program (CHART) Detailed Geologic work has improved per well reserves and success ratesAccelerating reserve additions each year (excludes PUDs):2005 - 5.8 Bcfe2006 - 11.8 Bcfe2007 - 20.8 Bcfe2008 - 24.2 Bcfe
Slide 20: Marcellus Shale Industry Activity
Marcellus Shale Industry Activity Marcellus Outcrop Seneca Fee AcreageSeneca Lease Acreage Range ResourcesMultiple Wells1-10 Mmcf/d Atlas EnergyMultiple Verticals1-3 Mmcf/d CNX GasHorizontal Well6.5 Mmcf/d Chesapeake Energy2 Wells4.5 Mmcf/d EXCO Resources2 Horizontal Wells1-3.4 Mmcf/d Fortuna Energy
Slide 21: Seneca is 3rd Largest Marcellus Acreage Holder
Marcellus Shale Seneca is 3rd Largest Marcellus Acreage Holder All acreage positions taken from most recent Company disclosures, as of January 6, 2009 Marcellus Outcrop Seneca Fee AcreageSeneca Lease Acreage Company Net Acres Chesapeake Energy 1,200,000 Range Resources 900,000 Seneca Resources 725,0
Slide 22: Marcellus Shale EOG Joint Venture
Marcellus Shale EOG Joint Venture Marcellus Outcrop Seneca Fee AcreageSeneca Lease Acreage Year # of Wells 2009 10 2010 20 2011 30 2012 40 2013 50 2014 60 Approx. Outline of JV Acreage200,000 Gross AcresSeneca 50% W.I. (Avg. 58% NRI) EOG Acreage Contributed~120,000 Gross AcresSeneca 50% W.I. (40% NR
Slide 23: Marcellus Shale EOG JV Drilling Update
Well Type # of Wells Vertical 5 Horizontal 7 Marcellus Shale EOG JV Drilling Update 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 3,800' - 4,200' Laterals; 3rd Q Frac 6 5,700' Lateral; 3rd Q Frac 7 5,600' La
Slide 24: Seneca Marcellus Operations
Appalachian Basin Seneca Marcellus Operations New DCNR Leases 3/1/09 EOG Acreage Selection Seneca is a major Marcellus Operator Marcellus acreage prioritized by:GeologyLease TermsPermitting IssuesPipeline infrastructure May partner in some areas, remain 100% in others 500,000 net acres to evaluate a
Slide 25: Seneca Vertical Drilling Program
Marcellus Shale Seneca Vertical Drilling Program Marcellus Outcrop Seneca Fee AcreageSeneca Lease Acreage 10 Vertical Wells in 6 Counties 6 to 7 Cores Spread across 6 counties
Slide 26: Seneca Horizontal Development Drilling Program
Marcellus Shale Seneca Horizontal Development Drilling Program Marcellus Outcrop Seneca Fee AcreageSeneca Lease Acreage Initial Area of FocusHWD Rig arrives July 2009NFG Midstream working on Gathering System
Slide 27: Marcellus Shale Evaluation
Appalachian Basin Marcellus Shale Evaluation Depth TVD: 5,000' - 8,000' Thickness 50' - 200' Total Organic Content (TOC) 2% - (>) 10% Thermal Maturity 1% - 3% Effective Porosity 3% - 12% Pressure (psi/foot) 0.43 - 0.65 Water Saturation 12% - 35% Gas-in-Place (Bcfe/Section) 30 - 150 Anticipated EUR/H
Slide 28: Marcellus Summary
Marcellus Summary Seneca Resources 725,000 net AcresRecent test rate has validated our positionEOG JV activity is acceleratingSeneca operated activity has begunVertical test well program underwayHorizontal development begins in JulyMajor growth focus for SenecaApproximately 50% of CapEx budget for n
Slide 29: Exploration & Production: Gulf of Mexico
Exploration & Production Gulf of Mexico
Slide 30: Gulf of Mexico Discoveries since April 1st, 2007
Gulf of Mexico 5 Discoveries since April 1st, 2007 Recent Discovery Gulf of Mexico StatisticsExploration: 5 of 6 (83% success) in last 24 monthsProducing 40 Mmcfe/d netOne discovery still being developedNo exploration drilling in FY '09Fiscal 2009 CapEx $19 Million
Slide 31: Exploration & Production: California
Exploration & Production California
Slide 32: California Lifting Cost - Peer Comparison
California Lifting Cost - Peer Comparison (CHART) Seneca is a low-cost operator in California, with Lifting Costs consistently outperforming its peers Source: IHS Herold, Inc. and Seneca Financial Reports
Slide 33: California 2008 Highlights
California 2008 Highlights Monterey Shale Drilling at Lost Hills Drilled 4 wells Added 300 Boepd Marvic Sand Development at MWSS Drilled 11 wells in 2008 3.3 Bcfe @ $1.58 F&D Cost Additional wells planned in 2009 Increased Production 500 Boepd Fiscal year-end Exit Rate (9,100 Boepd)
Slide 34: Exploration & Production Fiscal 2008 Highlights
Exploration & Production Fiscal 2008 Highlights
Slide 35: Future Direction: Seneca Resources
Future Direction Seneca Resources 2009 PlansEvaluate overall Marcellus position and establish productionMaintain California production at FY '08 level Minimize spending in the GulfLong Term ExpectationsContinue strategic shift to AppalachiaGrow Marcellus production to 20-40 MMCFD in next 24 monthsMa
Slide 36: Appendix
NS )) nicnarucr Appendix
Slide 37: Corporate Overview Key Information & Statistics
National Fuel Gas Company Corporate Overview Key Information & Statistics Key Information & Statistics New York Stock Exchange NFG Fiscal Year End September Shares Outstanding (Approx.) (As of 12/31/08) 79.5 Million Average Daily Trading Volume (12 Months Ended 12/31/08) 712,355 Market Capitalizatio
Slide 38: Dividend Growth
National Fuel Gas Company Dividend Growth Compound Annual Growth Rate5.2% $1.30 $0.19
Slide 39: 2009 EPS Guidance & Sensitivity
National Fuel Gas Company 2009 EPS Guidance & Sensitivity Fiscal 2009Earnings per Share (Diluted) Guidance(1)Consolidated Earnings $1.10 - $1.30(2)Earnings per Share Sensitivity to Changes from $5.50/ MMBtu for natural gas and $45/Bbl for crude oil(1)$1 change per $5 change per MMBtu Gas Bbl Oil Inc
Slide 40: Net Plant by Segment
National Fuel Gas Company Net Plant by Segment (CHART) $3.0 B
Slide 41: Debt Ratings
National Fuel Gas Company Debt Ratings - As of March 2, 2009 Standard & Poor's Moody's Fitch, Inc. Long-Term Debt BBB Baa1 A- Outlook Stable Stable Stable Commercial Paper A-2 P-2 F2
Slide 42: Pipeline & Storage
Pipeline & Storage National Fuel Gas Supply CorporationEmpire State Pipeline
Slide 43: Pipeline & Storage Diluted Earnings per Share
Pipeline & Storage Excludes SFAS 88 settlement loss of -$0.02Excludes base gas sale of $0.03 and gain associated with insurance proceeds of $0.05Excludes reversal of reserve for preliminary project costs of $0.06, and discontinuance of Hedge Accounting of $0.02 (CHART) Diluted Earnings per Share(Bef
Slide 44: Empire Connector Key Highlights & Statistics
Pipeline & Storage Empire Connector Key Highlights & Statistics Key Highlights & Statistics Design Capacity 250,000 Dth/day KeySpan Capacity 150,750 Dth/day In-Service Date December 2008 Length of 24" Pipe (1,440 psig) 77 Miles Total Compression 20,620 HP Capital Expenditures (As of 12/31/08) $181.7
Slide 45: Pipeline & Storage Upcoming Projects
Pipeline & Storage Upcoming Projects West to East & Appalachian Lateral ProjectPipeline Length: 324 Miles Starting Location: Rockies Express (REX) - Clarington, OHEnding Location: Millennium Pipeline - Corning, NYReceipts From: REX (~555,000 to 750,000 Dth/d) Local Production Cove Point Gas at Leidy
Slide 46: Pipeline Overview
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 47: Storage Overview
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 companies
Slide 48: Utility Segment
Utility Segment National Fuel Gas Distribution Corporation
Slide 49: Utility Diluted Earnings per Share
Utility Excludes SFAS 88 settlement loss of -$0.03Excludes out-of-period adjustment to symmetrical sharing of $0.03 Diluted Earnings per Share(Before Items Impacting Comparability) (CHART)
Slide 50: Utility Average Use per Residential Customer
Utility Average Use per Residential Customer (CHART)
Slide 51: Utility Accounts Receivable and Average Annual Residential Bill
Utility Accounts Receivable - Customer (CHART) Average Annual Residential Bill
Slide 52: Utility Keys to Continued Success
Utility Keys to Continued Success Conservation Incentive Program
Slide 53: Utility Segment Overview Key Statistics
Utility Segment Overview Key Statistics Key Statistics Average Number of Customers 726,863 Total Utility Volumes 135,271 MMcf Utility Revenue (2008) $1,121 MM Utility Pipeline Mileage (2008) 14,819 Miles Diluted EPS (2008) $0.73 Average Annual Residential Bill (2008) $1,479
Slide 54: Utility Rate Case Activity
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 partic
Slide 55: Utility Rate Cases
Utility Rate Cases Pennsylvania New York Rate Case Result Rate Case Result Settled Adjudicated Approximate Rate Base Approximate Rate Base $280 - 290 MM(1) $699 MM Approximate Base Rate Revenue Increase Approximate Base Rate Revenue Increase $14.3 MM $1.8 MM Conservation Incentive Program Conservati
Slide 56: Marketing Diluted Earnings per Share
Marketing (CHART) (1) Excludes resolution of a purchased gas contingency of +$0.03 Diluted Earnings per Share(Before Items Impacting Comparability)
Slide 57: 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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