National Fuel Gas Company · NYSE:NFG
National Fuel Gas — Corporate Update (March 2011)
50 slides from National Fuel Gas's corporate update, Mar 15, 2011
Slide 1: Financial & Operational Update March 15, 2011
Financial & Operational Update March 15, 2011 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: Business Segment Reporting
National Fuel Gas Company Business Segment Reporting Publicly Traded Holding Company NYSE symbol - NFG Reporting Segments Operating Subsidiaries
Slide 4: Financial & Operational Update - March 15, 2011
4 Financial & Operational Update - March 15, 2011
Slide 5: Financial & Operational Update - March 15, 2011
5 Financial & Operational Update - March 15, 2011
Slide 6: Financial & Operational Update - March 15, 2011
6 Financial & Operational Update - March 15, 2011
Slide 7: Corporate & Financial Highlights
Corporate & Financial Highlights National Fuel Gas Company
Slide 8: 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. (CHART) (CHART) $213.5 Million Twelve Months Ended December 31, 2010 E&P $110.1 MM 51.6%
Slide 9: Capital Expenditures from Continuing Operations
National Fuel Gas Company Capital Expenditures(1) from Continuing Operations (CHART) A reconciliation to Capital Expenditures as presented on the Consolidated Statement of Cash Flows is included at the end of this presentation.
Slide 10: Capital Structure
(CHART) National Fuel Gas Company Capital Structure (CHART) $2.824 Billion(1) at December 31, 2010 Forecasted Capital Structure(2) at September 30, 2011 At December 31, 2010, Comprehensive Shareholders' Equity, Long-Term Debt and the Current Portion of Long-Term Debt totaled $2.824 Billion as presen
Slide 11: Dividend Growth
National Fuel Gas Company Dividend Growth (CHART) $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 12: Exploration & Production - Seneca Resources Corporation
Exploration & Production Seneca Resources Corporation
Slide 13: Fiscal Year End Proved Reserves
(CHART) Exploration & Production Fiscal Year End Proved Reserves(1) (CHART) West - California Reserves: 333 Bcfe (47%) (55.5 MMBoe) Gulf of Mexico Reserves: 34 Bcfe (5%) East - Appalachia Reserves: 333 Bcfe (48%) At September 30, 2010 Total Proved Reserves: 700 Bcfe
Slide 14: Fiscal 2010 Annual Production
(CHART) Exploration & Production Fiscal 2010 Annual Production (CHART) West - California Production: 19.8 Bcfe (40%) (3.3 MMBoe) Gulf of Mexico Production: 13.4 Bcfe (27%) East - Appalachia Production: 16.5 Bcfe (33%) Total Production: 49.7 Bcfe
Slide 15: Fiscal 2010 Oil/Gas Mix
Exploration & Production Fiscal 2010 Oil/Gas Mix (CHART) (CHART) (CHART) 700 Bcfe(1) At September 30, 2010 49.7 Bcfe $425.6 Million
Slide 16: Exploration & Production Marcellus Shale, California, Gulf of Mexico
Exploration & Production Marcellus Shale Accelerate development; Convert resource potential to reserves Appalachian Region - Upper Devonian Drill 25-50 wells per year Proved Reserves at 9/30/10 California Continue to operate as a low-cost producer Gulf of Mexico Divestiture of offshore assets planne
Slide 17: Capital Expenditures by Region
Exploration & Production Capital Expenditures by Region (CHART) 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 18: Annual Production by Region
Exploration & Production Annual Production by Region (CHART) 36% 17%
Slide 19: Exploration & Production - California
Exploration & Production California
Slide 20: Seneca's California Properties
Seneca's California Properties South Lost Hills 1,900 BOEPD Monterey Shale Primary 216 Active Wells Sespe 1,000 BOEPD Sespe Formation Primary 182 Active Wells North Lost Hills 1,200 BOEPD Tulare & Etchegoin Formation Primary & Steamflood 221 Active Wells North Midway Sunset 4,100 BOEPD Potter & Tula
Slide 21: California Average Daily Production
California Average Daily Production Modest capital spending to maintain production Pursue additional bolt-on acquisitions 2011 Plans: CapEx - $40 MM 50 Development wells Two 5-acre in-fill wells at Sespe (CHART)
Slide 22: Fiscal Year 2011 Sespe Field Development Plans
California Fiscal Year 2011 Sespe Field Development Plans First drilling for Seneca at Sespe since 1991 Will drill six wells during this fiscal year Wells to be drilled at 10-acre spacing: 4 wells Test wells to be drilled at 5-acre spacing: 2 wells If successful, 5-acre down-spacing could add substa
Slide 23: Gulf of Mexico - Exploration & Production
Gulf of Mexico Exploration & Production
Slide 24: Planned Divestiture of Offshore Assets
Gulf of Mexico Planned Divestiture of Offshore Assets On March 9, 2011, Seneca entered into an agreement to sell its offshore Gulf of Mexico oil and natural gas producing properties Sale price: $70 million Effective Date: January 1, 2011 Seneca will account for the production through the month prece
Slide 25: East Division - Exploration & Production
East Division Exploration & Production
Slide 26: East Division Average Daily Net Production
East Division Average Daily Net Production (CHART) Rapid growth in the East Division as Marcellus is ramping up
Slide 27: Seneca's Pennsylvania Acreage
Marcellus Shale Seneca's Pennsylvania Acreage Seneca Resource Acreage Position 745,000 Net Acres in the heart of the PA Marcellus fairway Risked Resource Potential: 8-15 TCFE 80% Fee - Seneca owns the minerals No lease expiration 94% Average NRI SRC Fee Acreage
Slide 28: Seneca's Development Areas
Marcellus Shale Seneca's Development Areas SRC Fee Acreage Eastern Development Area (Mostly Leased) Western Development Area (Mostly Fee and HBP)
Slide 29: Marcellus Shale Eastern Development Area
Marcellus Shale Eastern Development Area Covington Area - Full Development 37 Wells Drilled; 31 Producing Production (As of 3/8/11): 110 MMcf/d 2011: 16 Wells Planned DCNR Block 100 1st Well IP: 15.8 MMCFD 2011: 6 Wells Planned First Production: Fall 2011 Initial Test Wells Drilling / Fracing SRC Fe
Slide 30: Acquisition of EOG's Tioga County Interests
Exploration & Production Acquisition of EOG's Tioga County Interests Seneca has acquired EOG's interest in Tioga County, Pa. Seneca has always been the operator on all joint-interest wells in Tioga County, Pa. Acquisition Price: $24.1 million Proved Reserves at 10/1/10: 42 Bcfe PDP: 14 Bcfe PUD: 28
Slide 31: Marcellus Shale Western Development Area - Activity
Marcellus Shale Western Development Area - Activity EOG Contributed JV Acreage SRC Contributed JV Acreage Seneca Operated EOG Operated Punxy Area - Full Development EOG Operated 34 Wells Drilled; 21 Producing Gross Production (As of 3/8/11): 45 MMCFD 2011: 30+ Wells Planned Owl's Nest Area Seneca Op
Slide 32: Marcellus Net Production
(CHART) Marcellus Shale Marcellus Net Production Seneca Operated EOG JV In early March 2011, Marcellus net production reached: 120 MMcfe per day
Slide 33: Centralized Water System
Marcellus Shale Centralized Water System Recovering water discharged from an abandoned coal mine which was adversely impacting a local trout stream Authorized by SRBC to withdraw approximately 500,000 gallons per day of mine discharge Water pipeline system supplies frac water for Seneca in Tioga Cou
Slide 34: Marcellus Shale Wells Drilled per Year
(CHART) Marcellus Shale Wells Drilled per Year
Slide 35: Evaluation of JV Opportunities
Seneca Resources Evaluation of JV Opportunities Seneca has engaged Jefferies & Company to explore joint-venture opportunities across a broad portion of its acreage, with the following goals: Ramp up development faster than current aggressive growth plans Bring forward the earnings stream, where a mi
Slide 36: Seneca Oil and Gas Hedge Positions
National Fuel Gas Company Seneca Oil and Gas Hedge Positions For fiscal year 2011, Seneca has hedged 56% of its remaining forecasted production NYMEX Strip Prices(at 03/08/11) Natural Gas Oil Fiscal 2011(1) $3.98 $95.53 Fiscal 2012 $4.59 $105.74 Fiscal 2013 $5.04 $102.93 The NYMEX strip prices for f
Slide 37: Pipeline & Storage / Midstream
National Fuel Gas Supply Corporation Empire Pipeline, Inc. National Fuel Gas Midstream Corporation Pipeline & Storage / Midstream
Slide 38: Pipeline & Storage / Midstream Expansion Initiatives
LAMONT COMPRESSOR STATION PHASE I & II LINE "N" EXPANSION PHASE I & II NORTHERN ACCESS COVINGTON GATHERING SYSTEM TROUT RUN GATHERING SYSTEM WEST TO EAST OVERBECK TO LEIDY LAMONT COMPRESSOR STATION PHASE I & II TIOGA COUNTY EXTENSION PHASE I & II LINE "N" EXPANSION PHASE I & II PIPELINE & STORAGE /
Slide 39: Pipeline & Storage/Midstream Expansion Initiatives
Pipeline & Storage/Midstream Expansion Initiatives Project Name Capacity (Dth/D) Est. CapEx In-Service Date Status Covington Gathering System 145,000 $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 Lamont Phas
Slide 40: Pipeline & Storage Challenges & Opportunities
Pipeline & Storage Challenges & Opportunities NFGSC Contract Turnbacks Supply has received capacity turnbacks on expiring contracts, decreasing future revenue by: FY11: ~$7.5 Million FY12: ~$6.0 Million Empire Unsold Capacity ~100,000 Dth/d of capacity remains unsold after the construction of the Em
Slide 41: Trout Run Gathering System - Lycoming County
Midstream Corporation Trout Run Gathering System - Lycoming County Capacity: 250,000 Dth/d Will Interconnect with Transco Pipeline in Lycoming County Seneca Resources will be the primary shipper Estimated In-Service: Fall 2011 Interstate Pipeline Gathering System Transco
Slide 42: Utility Segment - National Fuel Gas Distribution Corporation
Utility Segment National Fuel Gas Distribution Corporation
Slide 43: Utility Rate Mechanisms
New York Revenue Decoupling Customer Choice / POR Merchant Function Charge 90/10 Sharing (large volume users) Weather Normalization Low Income Rates Pennsylvania Low Income Rates Customer Choice / POR Merchant Function Charge Under Consideration: Revenue Decoupling Rate Mechanisms Utility
Slide 44: Utility Return on Equity
(1) Calculated using Average Total Comprehensive Shareholder Equity. (CHART) Utility Return on Equity (1)
Slide 45: Key Takeaways
National Fuel Gas Company Key Takeaways High-Quality Marcellus Acreage Position 745,000 net acres with a resource potential of 8-15 Tcfe Recent well results validate the quality of our acreage Fee ownership results in superior economics Balanced Business Model Regulated segments support dividend and
Slide 46: Appendix
ee ee Appendix
Slide 47: Fiscal Year 2011 Earnings Guidance - Key Drivers
National Fuel Gas Company Fiscal Year 2011 Earnings Guidance - Key Drivers(1) FY 2011 EPS $2.70 to $2.95 Utility Operating Expense: ? 3% to 5% PA Normal Weather Pipeline & Storage Operating Expense: ? 3% to 5% Transportation Revenue: ? $7.5 Million Project Development Costs (O&M): $7 Million Explora
Slide 48: Peer Group Comparisons
National Fuel Gas Company Peer Group Comparisons National Fuel's Diversified business model continues to generate long-term outperformance versus its peer groups by limiting downside risk through economically challenging times and capturing upside growth in an expanding market 1-Year Total Return Pe
Slide 49: Marcellus Shale Pennsylvania Acreage Holdings
Marcellus Shale Pennsylvania Acreage Holdings EOG Contributed JV Acreage SRC Contributed JV Acreage
Slide 50: 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