National Fuel Gas Company · NYSE:NFG
National Fuel Gas — Investor Day (September 2011)
101 slides from National Fuel Gas's investor day presentation, Sep 9, 2011
Slide 1: Investor Presentation Analyst Day
Investor Presentation Analyst Day September 9, 2011 Exhibit 99
Slide 2: Schedule of Speakers
September 9, 2011 2 Time Presenter Topic National Fuel Gas Company Schedule of Speakers 8:00 - 8:20 am Dave Smith Chairman & Chief Executive Officer Corporate Overview 8:20 - 8:35 am Matt Cabell President - Seneca Resources Corporation Exploration & Production Overview 8:35 – 9:00 am John McGinnis S
Slide 3: Safe Harbor For Forward Looking Statements
September 9, 2011 3 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 stru
Slide 4: Core Businesses
September 9, 2011 4 Core Businesses Integrated Business Structure
Slide 5: Integrated Business Structure
September 9, 2011 5 Core Businesses Integrated Business Structure E&P – Gulf of Mexico Sawmills Landfill Gas Gas-Fired Generation Seneca Energy II Model City ESNE Non-Core Assets
Slide 6: Unique Asset Mix Creates Operational Value
September 9, 2011 6 Seneca Resources Energy Marketing Midstream Gathering Utility Pipeline & Storage National Fuel Gas Company Unique Asset Mix Creates Operational Value The interconnected nature of the current asset mix creates many operational efficiencies and synergies The Company’s gathering and
Slide 7: Our Business Mix Leads to Long-Term Value Creation
September 9, 2011 7 Seneca Resources Utility Pipeline & Storage Energy Marketing Midstream Gathering National Fuel Gas Company Our Business Mix Leads to Long-Term Value Creation The strategic and financial benefits created by the integrated mix of businesses has continued to generate significant lon
Slide 8: Seneca Resources Joint Venture Discussions
September 9, 2011 8 National Fuel Gas Company Seneca Resources Joint Venture Discussions Initial acreage price targets met by several parties Several other negotiating points, each with an associated value or other significant consequence, were not mutually agreed upon Aggressive growth plans were m
Slide 9: Significant Growth Related to the Marcellus Shale
September 9, 2011 9 National Fuel Gas Company Significant Growth Related to the Marcellus Shale
Slide 10: 2014 – Where We Are Headed
September 9, 2011 10 National Fuel Gas Company 2014 – Where We Are Headed Significant Ramp Up in Capital Expenditures to Fuel Marcellus Expansion 2011 to 2014: Growing Capital Expenditures at an 18% CAGR 2014 Forecasted Capital Spending: $1.3 to $1.6 Billion Rapidly Growing Production Through Marcel
Slide 11: Exploration & Production
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 11 Exploration & Production
Slide 12: Seneca Resources Our Growth Story
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 12 Seneca Resources Our Growth Story Not the same company we were just a few years ago Will continue to grow dramatically Production and reserves expected to triple or quadruple from 2010 to 2014 Held over 700,000 Marcellus acres
Slide 13: Major Transformation Over the Past Five Years
September 9, 2011 13 Seneca Resources Major Transformation Over the Past Five Years Capital Expenditures 2006: 70% Gulf of Mexico and Canada Production 2006-2009: Declining Production 3-Year Average F&D Cost 2006-2008: $7.63 per Mcfe Capital Expenditures Gulf of Mexico and Canada have been sold. 201
Slide 14: Top Tier Acreage and Resource Position
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 14 Seneca Resources Top Tier Acreage and Resource Position
Slide 15: Continued Improvement in Finding & Development Costs
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 15 Seneca Resources Continued Improvement in Finding & Development Costs
Slide 16: Ramping Up Production Growth
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 16 Seneca Resources Ramping Up Production Growth
Slide 17: Capital Spending Shifting to the Marcellus
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 17 Seneca Resources Capital Spending Shifting to the Marcellus
Slide 18: Marcellus Acreage Position Provides Superior Economics
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 18 Seneca Resources Marcellus Acreage Position Provides Superior Economics (1) Pre-Tax IRR determined using the NYMEX forward strip as of August 19, 2011
Slide 19: Marcellus Shale Strategic Development Plan
September 9, 2011 19 Seneca Resources Marcellus Shale Strategic Development Plan Aggressively Develop our excellent Tioga and Lycoming County leasehold Systematically evaluate western acreage Begin development of western acres that are “de-risked” Continue participation with EOG on Joint Venture acr
Slide 20: Seneca's Development Areas
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 20 Marcellus Shale Seneca’s Development Areas SRC Lease Acreage SRC Fee Acreage Eastern Development Area (Mostly Leased) Western Development Area (Mostly Fee and HBP) EOG Acreage
Slide 21: Eastern Development Area – Results & Plan Forward
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 21 Covington – Developed 47 Wells Drilled – 44 Producing Gross Production: ~100+ MMcf/d Estimated Avg. EUR: 5.5 Bcf/Well Marcellus Shale Eastern Development Area (EDA) – Results & Plan Forward DCNR Tract 001 – Delineating 1 Well D
Slide 22: EDA Typecurve – 6.7 Bcfe EUR
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 22 Current: 1 st Segment Current: Compression Segment Original 6.0 Bcf Typecurve Marcellus Shale EDA Typecurve – 6.7 Bcfe EUR (Greater Than 3,500’ Lateral) IP Rate 5,400 MMcf/d Hyp. Coeff. 1.25 Decline 65.5% Limit 6 Mo. IP Rate 3,
Slide 23: Warren
Warren SENECA RESOURCES
Slide 24: Slide 24
Slide 25: Western Development Area – Results & Plan Forward
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 23 Marcellus Shale Western Development Area (WDA) – Results & Plan Forward SRC Lease Acreage SRC Fee Acreage EOG Contributed JV Acreage SRC Contributed JV Acreage Seneca Operated EOG Operated Punxy – Full Development EOG Operated:
Slide 26: Geotechnical Keys to Success
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 24 Marcellus Shale Geotechnical Keys to Success 1. 3D Seismic Data Impacts surface location, lateral length and target zone by imaging faults and structure Attribute and fracture analyses being conducted to determine if natural fr
Slide 27: Expanding 3D Seismic Coverage
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 25 Punxy West Branch Mt. Jewett DCNR 001 DCNR 007 Covington DCNR 595 DCNR 100 Owl’s Nest Marcellus Shale Expanding 3D Seismic Coverage Completed – 190,000 ac In Progress – 128,000 ac
Slide 28: Importance of 3D Seismic in Identifying Fractures
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 26 TGP 300 Marcellus Shale Importance of 3D Seismic in Identifying Fractures DCNR 007 5H Well Drilled prior to 3D Seismic acquisition Well Test: 2 MMcf/d DCNR 007 Tioga County
Slide 29: 3D Seismic Analysis: Fracture Patterns?
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 27 Marcellus Shale 3D Seismic Analysis: Fracture Patterns? Remainder of DCNR Tract 007 Evidence for significant natural fractures DCNR 007 Tioga County Fault DCNR 007 5H Well In a localized area with minimal fractures 5H Major Fra
Slide 30: Importance of Closure Stress & Target Zone
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 28 Marcellus Shale Importance of Closure Stress & Target Zone
Slide 31: Owl's Nest – Improved IPs by Optimizing Target Zone
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 29 Marcellus Shale Owl’s Nest – Improved IP’s by Optimizing The Target Zone Moving into Full Development
Slide 32: Breaking Down Our Acreage Position
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 30 Area Net Acres Possible Locations Wells Drilled Wells Completed EUR (Bcfe) Status Developed Marcellus Shale Breaking Down Our Acreage Position Eastern Development Area (EDA) Covington 7,000 5.5 6,000 7.0 Full Development 10,000
Slide 33: Strategic Plan Moving Forward
September 9, 2011 31 Marcellus Shale Strategic Plan Moving Forward Fiscal Year 2012 Eastern Development Area Move forward with full development of DCNR 100 (Lycoming) and DCNR 595 (Tioga) Drill several additional delineation wells in DCNR 007 (Tioga) and DCNR 001 (Potter) with recently acquired 3D s
Slide 34: Geneseo Shale – Area Summary
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 32 New Plays Geneseo Shale – Area Summary DCNR 001 Horizontal (Seneca) Depth: 5,830’; Thickness: 77’ Avg. Reservoir TOC: 3.33 Peak Rate: 2.9 MMcf/d; 7-Day Avg. IP: 2.0 MMcf/d East Resources Drilled & Completed April 2010 East Reso
Slide 35: Utica Shale – Activity Summary
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 33 New Plays Utica Shale – Activity Summary Seneca Resources Mt. Jewett Area Drilled: June 2011 Seneca Resources Henderson Area Spud Date: Sept 2011 Seneca Resources Tionesta Area Spud Date: 2012 Vertical Well Permit Horizontal We
Slide 36: Utica Program Update
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 34 New Plays Utica Program Update Seneca Resources recently drilled a vertical Utica/Pt. Pleasant strat test in McKean County, PA. Preliminary results are encouraging. 400 feet of gross reservoir at a depth of 10,000’ Potential pa
Slide 37: Drilling Cost Distribution
September 9, 2011 35 Marcellus Shale Drilling Cost Distribution Estimated 2011 Development Well Drilling Cost: $2.5 Million (4,500’ Lateral)
Slide 38: Continuously Improving Drilling Efficiency
September 9, 2011 36 Wells per Pad Average Lateral Length Days per Well (Incl. Mob) Drill & Suspend Costs ($MM per Well) Marcellus Shale Continuously Improving Drilling Efficiency Estimated 2011 Drill Cost 6-8 4,500’ $2.5 Target 6-8 4,500’ $1.7
Slide 39: Completion Cost Distribution
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 37 Marcellus Shale Completion Cost Distribution
Slide 40: Completion Cost Trends
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 38 Marcellus Shale Completion Cost Trends Average $945/ft Average $1,221/ft Average $730/ft Completion costs have been recently improving in the Marcellus
Slide 41: Operational Efficiencies Drive Cost Savings
September 9, 2011 39 Well Length Drilling Cost Total Drilling Cost Completion Cost Total Completion Cost Total D&C Cost Long-Term Frac Contract Increased Wells per Pad Proppant & Chemical Sourcing Equipment Ownership (Frac Tanks, etc…) Concentrated Regional Development Pad Cost Reductions (Rig Mats,
Slide 42: Cost Savings from Multi-Well Pad Drilling
40 September 9, 2011 Marcellus Shale Cost Savings from Multi-Well Pad Drilling Location & Road Costs $600,000 per well Rig Mobilization $600,000 per well Ancillary Drilling Costs (Trucking, etc..) $150,000 per well Frac Mobilization $7,000 per well Water Hauling vs. Infrastructure $200,000 per well
Slide 43: Understanding Multi-Well Pad Drilling
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 41 Marcellus Shale Understanding Multi-Well Pad Drilling Drill Vertical Section 8 Days/Well Kickoff Point to TD 14 Days/Well Prep for Completion 3.5 Days/Well Completion 4.2 Days/Well Post-Completion 2.7 Days/Well First Production
Slide 44: Water Management Program
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 42 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
Slide 45: Zero Liquid Discharge Operation
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 43 Marcellus Shale “Zero Liquid Discharge Operation” Utilizing a state-of-the-art evaporative technology to ensure no liquid is discharged at the surface Building centrally located units in the Western Development Area (WDA) and t
Slide 46: Leading Environmental Commitment
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 44 Seneca Resources Leading Environmental Commitment www.FracFocus.org Seneca discloses its hydraulic fracturing data Testing “Green Fluids” Refueling Standards Evaluate shallow geology and shallow water systems Developed Best Pra
Slide 47: California: Stable Production and Strong Cash Flows
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 45 Rank Company California 2010 BOEPD 7 Seneca Resources 9,655 California Stable Production and Strong Cash Flows Chevron 174,856 Aera (Shell/Exxon) 158,786 Occidental 151,584 Plains Exploration 36,488 Venoco Inc. 19,121 Berry Pet
Slide 48: California Stable Production Fields
September 9, 2011 South Lost Hills ~1,800 BOEPD Monterey Shale Primary 216 Active Wells Sespe ~950 BOEPD Sespe Formation Primary 193 Active Wells North Lost Hills ~1,150 BOEPD Tulare & Etchegoin Formation Primary & Steamflood 181 Active Wells North Midway Sunset ~4,300 BOEPD Potter & Tulare Formatio
Slide 49: Strong Margins Support Significant Free Cash Flow
(1) Footnote #1 goes here (2) Footnote #2 goes here September 9, 2011 47 California Strong Margins Support Significant Free Cash Flow Average Price ($/BOE) = $76.86
Slide 50: Pipeline & Storage / Midstream
September 9, 2011 48 Pipeline & Storage / Midstream
Slide 51: Critical To Boosting Returns in the Marcellus
September 9, 2011 49 TGP 300 Transco Tioga County Lycoming County Midstream Critical To Boosting Returns in the Marcellus Midstream’s gathering systems are critical to unlock remote, but highly productive Marcellus acreage Goal is to first work to assist Seneca and then gather 3 rd party producer vo
Slide 52: Covington Gathering System – Tioga County
50 September 9, 2011 September 9, 2011 TGP 300 Midstream Covington Gathering System – Tioga County Early completion of gathering system allowed Seneca to begin flowing gas as pads were completed As Seneca’s production matures, open pipeline to third party production Non-SRC Well Permits
Slide 53: Trout Run Gathering System – Lycoming County
September 9, 2011 51 Transco Midstream Trout Run Gathering System – Lycoming County Will work to add rd party Marcellus producers to offset natural decline of Seneca’s production Non-SRC Well Permits
Slide 54: Future Opportunities for Expansion
September 9, 2011 52 Midstream Future Opportunities for Expansion The Covington and Trout Run gathering systems allow Seneca to achieve significant production growth over the next three years. Midstream is continually looking to build additional gathering systems. Will continue to evaluate new gathe
Slide 55: Expansive Network Located Centrally in Appalachia
September 9, 2011 53 Pipeline & Storage Expansive Network Located Centrally in Appalachia
Slide 56: Intercompany Capacity Utilization
September 9, 2011 54 Pipeline & Storage Intercompany Capacity Utilization Our integrated business structure allows our affiliated businesses to efficiently utilize our Pipeline & Storage services (1) As of July 1, 2011
Slide 57: Positioned to Move Growing Marcellus Production
September 9, 2011 55 Pipeline & Storage Positioned to Move Growing Marcellus Production
Slide 58: Marcellus Producers Increase Utilization of NFGSC
September 9, 2011 56 Pipeline & Storage Marcellus Producers Increase Utilization of NFGSC Producers moving Marcellus gas on NFGSC has more than tripled since January 2009.
Slide 59: Shifting Sources of Throughput
September 9, 2011 57 Pipeline & Storage Shifting Sources of Throughput 2% Marcellus 98% Upper Devonian 47% Marcellus 53% Upper Devonian
Slide 60: Stable Revenue Amid Changing Market Dynamics
September 9, 2011 58 Pipeline & Storage Stable Revenue Amid Changing Market Dynamics
Slide 61: Marcellus Driving Changing Gas Flow Patterns
September 9, 2011 59 Pipeline & Storage Marcellus Driving Changing Gas Flow Patterns
Slide 62: Positioned to Move Growing Marcellus Production
September 9, 2011 60 Pipeline & Storage Positioned to Move Growing Marcellus Production
Slide 63: Marcellus Driven Expansion Projects
61 September 9, 2011 Pipeline & Storage Marcellus Driven Expansion Projects Lamont Phase II Project (July 2011) Line “N” Expansion (October 2011) Tioga County Extension (November 2011) Line “N” 2012 Expansion (November 2012) Northern Access Expansion (November 2012) West to East (2014) Central Tioga
Slide 64: Tioga County Extension Project
September 9, 2011 62 Pipeline & Storage Tioga County Extension Project FERC Certificate Issued: May 19, 2011 Anticipated In-Service: 11/2011 Firm Transportation: 350,000 Dth/d 15 Miles of 26” High Pressure Pipe Replacement of 1.36 miles of Original Empire New Interconnect with TGP 200 Tioga County E
Slide 65: Line N Expansion Project
September 9, 2011 63 Pipeline & Storage Line N Expansion Project Line N Expansion 2011 In-Service Date: 9/2011 Fully Subscribed: 160,000 Dth/D 20+ Miles of 20” Pipe New 4,740 HP Compression Station Delivery to TETCO at Holbrook Station Line N Expansion 2012 In-Service Date: 11/2012 Fully Subscribed:
Slide 66: Marcellus Volumes from System Expansions
September 9, 2011 64 Pipeline & Storage Marcellus Volumes from System Expansions Estimated Marcellus Volumes from System Expansions (80% Load Factor) Actual Transported Marcellus Production Volumes Line N 2012 Expansion & Northern Access West to East Tioga County Expansion Line N 2011 Central Tioga
Slide 67: Significant Throughput Growth
September 9, 2011 65 Pipeline, Storage & Midstream Significant Throughput Growth
Slide 68: Deploying Significant Growth Capital
66 66 September 9, 2011 Pipeline & Storage Growth Deploying Significant Growth Capital Capital spending is ramping up significantly to fund system expansion and assuming recently allowed industry average ROE and capital structure targets, this segment can achieve significant growth with a rapid incr
Slide 69: Utility: National Fuel Gas Distribution Corporation
September 9, 2011 67 Utility National Fuel Gas Distribution Corporation
Slide 70: Strong Commitment to Safety
September 9, 2011 68 Utility Strong Commitment to Safety Capital spending from 2011 to 2014 is expected to be between $55 and $60 million per year
Slide 71: Operational Reliability
September 9, 2011 69 Utility Operational Reliability The development of unconventional resources has shifted the need for traditional sources of natural gas supply to reliably serve our utility customers Changing Natural Gas Supply Dynamics
Slide 72: Continued Cost Control
September 9, 2011 70 Utility Continued Cost Control
Slide 73: Stable Earnings/Financial Stability
September 9, 2011 71 Utility Stable Earnings/Financial Stability Photo courtesy of Carl Heldmann , Build Your Own House - www.byoh.com
Slide 74: Diluted Earnings per Share
September 9, 2011 72 Utility Diluted Earnings per Share (Before Items Impacting Comparability) (1) Excludes out-of-period adjustment to symmetrical sharing of $0.03; Including this adjustment, GAAP earnings would be $0.58.
Slide 75: Financial Stability: Rate Mechanisms
September 9, 2011 73 Utility Financial Stability Rate Mechanisms New York & Pennsylvania Low Income Rates Choice Program/POR Merchant Function Charge New York only Revenue Decoupling 90/10 Sharing Weather Normalization Fiscal Year
Slide 76: Continuing Goals and Outlook
September 9, 2011 74 Strong Commitment to Safety Continue to control expenses Financial Stability Operational Reliability Maintain a solid regulatory strategy to achieve strong regulatory outcomes Utility Continuing Goals and Outlook
Slide 77: Utility: National Fuel Gas Distribution Corporation
September 9, 2011 75 Utility National Fuel Gas Distribution Corporation
Slide 78: Corporate & Financial Overview
September 9, 2011 76 National Fuel Gas Company Corporate & Financial Overview
Slide 79: Consolidated Capital Expenditures
77 September 9, 2011 National Fuel Gas Company Consolidated Capital Expenditures Note: A reconciliation to Capital Expenditures as presented on the Consolidated Statement of Cash Flows is included at the end of this presentation.
Slide 80: Cash Flow Forecast – Utility
78 September 9, 2011 $135- 145 $120- 130 $115- 125 $115- 120 $55- 60 $55- 60 $55- 60 $55- 60 National Fuel Gas Company Cash Flow Forecast – Utility $0 $40 $80 $120 $160 2011 Forecast 2012 Forecast 2013 Forecast 2014 Forecast Cash From Operations Capital Expenditures
Slide 81: Cash Flow Forecast – Pipeline & Storage
79 September 9, 2011 $85- 95 $100- 150 $95- 105 $100- 135 $105- 115 $100- 150 $110- 125 $300- 350 National Fuel Gas Company Cash Flow Forecast – Pipeline & Storage $350 $300 $200 $100 $150 $250 $50 $0 2011 Forecast 2012 Forecast 2013 Forecast 2014 Forecast Cash From Operations Capital Expenditures
Slide 82: Cash Flow Forecast – Exploration & Production
80 September 9, 2011 $360- 380 $600- 655 $450- 500 $785- 875 $650- 800 $840- 1,050 $900- 1,100 $935- 1,145 National Fuel Gas Company Cash Flow Forecast – Exploration & Production Note: This assumes NYMEX natural gas pricing of $4.00, $4.50, $5.00 and $5.50 for fiscal years 2011, 2012, 2013 and 2014,
Slide 83: Hedge Positions and Strategy
81 Natural Gas Swaps Volume (Bcf) Average Hedge Price Oil Swaps Volume (MMBbl) Average Hedge Price September 9, 2011 National Fuel Gas Company Hedge Positions and Strategy Fiscal 2012 35.0 $5.89 / Mcf Fiscal 2013 23.9 $5.67 / Mcf Fiscal 2014 4.6 $5.89 / Mcf Fiscal 2012 1.6 $77.03 / Bbl Fiscal 2013 0
Slide 84: Cash Flow Forecast – Midstream, Marketing & Other
82 September 9, 2011 $23-27 $15-20 $20-30 $40-60 $40-50 $20-30 $55-70 $5-15 National Fuel Gas Company Cash Flow Forecast – Midstream, Marketing & Other $100 $75 $50 $0 2011 Forecast 2012 Forecast 2013 Forecast 2014 Forecast Cash From Operations Capital Expenditures $25
Slide 85: Financing Needs – A Consolidated View of Cash Flows
83 September 9, 2011 $828 $1,055 $1,153 $1,433 National Fuel Gas Company Financing Needs – A Consolidated View of Cash Flows 2013E 2014E 2012E 2011E Note: This assumes NYMEX natural gas pricing of $4.00, $4.50, $5.00 and $5.50 for fiscal years 2011, 2012, 2013 and 2014, respectively. It also assumes
Slide 86: Strong Dividend Track Record
84 September 9, 2011 National Fuel Gas Company Strong Dividend Track Record Compound Annual Growth Rate 5.0% National Fuel has had 109 uninterrupted years of dividend payments and has increased its dividend for 41 consecutive years $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 Annual Rate at
Slide 87: Manageable Debt Maturity Schedule
85 September 9, 2011 National Fuel Gas Company Manageable Debt Maturity Schedule $150 $250 $300 $250 $49 $50 $0 $50 $100 $150 $200 $250 $300 $350 Fiscal Year
Slide 88: Financing Needs – A Consolidated View of Cash Flows
86 September 9, 2011 $828 $1,055 $1,153 $1,433 $115 $119 $123 $128 $200 $150 $250 National Fuel Gas Company Financing Needs – A Consolidated View of Cash Flows 2013E 2014E 2012E 2011E $625 $725 $1,000 $1,300 $124 $385 $550 $500 $225 $0 $500 $1,000 $1,500 $2,000 Cash from Ops Asset Sales & Other CapE
Slide 89: Targeted Capital Structure
87 September 9, 2011 Debt 35% - 45% Equity 55% - 65% 40% 30% 50% 50% 60% 70% 50% 50% National Fuel Gas Company Targeted Capital Structure Long-Term Consolidated Capital Structure Target Capital Structure Targets by Segment All Other E&P P&S Utility Debt Equity
Slide 90: Investment Grade Credit Rating
88 Rating Agency Rating September 9, 2011 Capital Resources Total Short-Term Capacity: $685 Million Commercial Paper Program: $300 Million Uncommitted Lines of Credit: $385 Million $300.0 MM Committed Credit Facility through September 2013 – backs Commercial Paper Program National Fuel Gas Company I
Slide 91: Appendix
89 September 9, 2011 National Fuel Gas Company Appendix
Slide 92: Fiscal Year 2012 Earnings Guidance Drivers
90 2012 Forecast September 9, 2011 National Fuel Gas Company Fiscal Year 2012 Earnings Guidance Drivers GAAP Earnings per Share $2.85 - $3.15 Operating Earnings per Share $2.85 - $3.15 12% EPS Growth Exploration & Production Drivers Total Production (Bcfe) 87 - 35% Production Growth DD&A Expense $2.
Slide 93: Pipeline & Storage Expansion Initiatives
91 Project Name Capacity (Dth/D) Est. CapEx In-Service Date Market Status September 9, 2011 Pipeline & Storage Expansion Initiatives Lamont Compressor Station 40,000 $6 MM 6/15/10 Fully Subscribed Completed – Flowing into TGP 300 Line Lamont Phase II Project 50,000 $7.6 MM 07/1/11 Fully Subscribed F
Slide 94: Midstream Corporation Expansion Initiatives
92 Project Name Capacity (Dth/D) Est. CapEx In-Service Date Market Status September 9, 2011 Midstream Corporation Expansion Initiatives Covington Gathering System 140,000 $16 MM 11/17/09 Fully Subscribed Completed – Flowing into TGP 300 Line Covington Gathering System Expansion 80,000 $3.5 MM ~12/20
Slide 95: Industry Leading Production Growth
93 September 9, 2011 Seneca Resources Industry Leading Production Growth U.S. Independent E&P Companies nd Quarter Year-Over-Year Production Growth (1) Source: Raymond James & Associates, Inc. – August 22, 2011
Slide 96: Eastern Development Area – Current Results
94 Developed September 9, 2011 Covington Marcellus Shale Eastern Development Area (EDA) – Current Results Location Possible Locations Wells Drilled Gross Production (MMcf/d) 3D Seismic 2012 Wells Planned Comments Covington 100+ Acquired N/A Estimated Gross EUR: 5.5 Bcfe Full Development DCNR 595 1 W
Slide 97: Western Development Area – Results & Plan Forward
95 September 9, 2011 Marcellus Shale Western Development Area (EDA) – Results & Plan Forward Boone Mtn. Mt. Jewett Owl’s Nest Punxy Approx. Outline of JV Acreage 200,000 Gross Acres Seneca 50% W.I. (Avg. 58% NRI) Rich Valley Location Possible Locations Wells Drilled Gross Production (MMcf/d) 3D Seis
Slide 98: Ensuring Gas Reaches the Market
96 September 9, 2011 Marcellus Shale Ensuring Gas Reaches the Market - Tioga County Production and Future Firm Sales Firm Sales Tioga County Production Firm sales agreements continue to be layered on as the future production profile becomes more predictable
Slide 99: Water Sourcing Program
97 September 9, 2011 Marcellus Shale Water Sourcing Program Utilizing least quality freshwater sources, including abandoned coal mine drainage Centralized storage impoundments create a flexible and efficient water system Seven mile pipeline supplies multiple locations: Covington Area: 47 Wells DCNR
Slide 100: Committed to Health, Safety and the Environment
98 “…creating a systematically integrated model of EHS stewardship beyond mere compliance.” Dedicated 24-Hour EHS Hotline and E-mail Address Culture Above and Beyond Best Practices and Required Compliance Simultaneous Operations (SIMOPS) Program Extensive Operations Audit Program Dedicated Safety Of
Slide 101: Comparable GAAP Financial Measure Slides and Reconciliations
99 September 9, 2011 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 re