National Fuel Gas Company · NYSE:NFG
National Fuel Gas — IPAA OGIS San Francisco 2010
44 slides from National Fuel Gas's conference presentation, Oct 12, 2010
Slide 1: IPAA OGIS San Francisco October 12-14, 2010
IPAA OGIS San Francisco October 12-14, 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 Operating 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 Revenue
Slide 5: 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 6: Exploration & Production
Exploration & Production Marcellus Shale Accelerate development; Convert resource potential to reserves Appalachian Region - Upper Devonian Drill 25-50 wells per year Preliminary Proved Reserves at 9/30/10(1) California Continue to operate as a low-cost producer Gulf of Mexico No exploration; Develo
Slide 7: 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 8: Exploration & Production Annual Production by Region
Exploration & Production Annual Production by Region 30%
Slide 9: Seneca Operating Cash Margins
Exploration & Production Seneca Operating Cash Margins Source: Raymond James estimates and Company Reports
Slide 10: Exploration & Production California
Exploration & Production California
Slide 11: 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 12: 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
Slide 13: Gulf of Mexico Exploration & Production
Gulf of Mexico Exploration & Production
Slide 14: Gulf of Mexico Average Daily Production
Gulf of Mexico Average Daily Production Minimal capital spending Expect production decline in 2011
Slide 15: East Division Exploration & Production
East Division Exploration & Production
Slide 16: East Division Average Daily Production
East Division Average Daily Production Rapid growth in the East Division as Marcellus is ramping up Expect significant production increase in Q1
Slide 17: Marcellus Shale Recent Well Results Validate Seneca's Position
Marcellus Shale Recent Well Results Validate Seneca's Position McKean County SM Energy IP: 7+ MMCFD SRC Fee Acreage Clearfield County Seneca/EOG IP: 8.9 MMCFD Lycoming County Seneca Resources IP: 15.8 MMCFD Armstrong County EQT IP: 15 MMCFD Elk County Seneca Resources IP: 3.9 MMCFD
Slide 18: 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 30 Horizontals Drilled; 8 frac'd Small Fracs: 2-4 MMCFD Big
Slide 19: Marcellus Shale Seneca Operated Drilling Program Results
Marcellus Shale Seneca Operated Drilling Program Results 25 Horizontals Drilled 15 frac'd 10 Producing IP: 5-13 MMCFD Net Production: ~45 MMCFD IP: 3.9 MMCFD 2 Horizontals Drilled IP: 1.4 - 2.0 MMCFD IP: 2.2 MMCFD EOG IP: 15.8 MMCFD
Slide 20: Tioga County Decline Curves
Actual Declines flatter than "type" curves 6 BCF "Typecurve" 4 BCF "Typecurve" 3 BCF "Typecurve" 5 BCF "Typecurve" Initial 30-day average for 7 Tioga County wells = 7.0 MMCFD Tioga County Decline Curves
Slide 21: Marcellus Shale Pennsylvania Average Gas Production per Well by Operator
Marcellus Shale Pennsylvania Average Gas Production per Well by Operator (Companies with at least 5 wells producing) Source: All data represents Marcellus Shale gas production from July 1, 2009 through June 30, 2010 for companies with at least five producing wells within the State of Pennsylvania an
Slide 22: Marcellus Shale Net Production
Marcellus Shale Marcellus Net Production Seneca Operated EOG JV Marcellus net production as of September 30, 2010 was: 57 MMcfe per day
Slide 23: Marcellus Shale Wells Drilled per Year
Marcellus Shale Wells Drilled per Year
Slide 24: 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 - $/MMBtu) Pre-Tax IRR (NYMEX - $/MMBtu) Pre-Tax IRR (NYMEX - $/MMBtu) Description EUR Well Cost ($ MM) Net Working Interest Net Revenue Interest $4.00 $5.00 $6.00 Tio
Slide 25: Seneca Resources 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 26: Seneca Resources Marcellus Shale Summary
Seneca Resources Marcellus Shale Summary Bringing on 12 new wells in Tioga County in September and October Continuing to achieve high IP rates and showing slow decline Fourth horizontal rig is on location Will have 3 rigs in East and 1 in West for 1st half of FY2011 EOG Program is picking up and sho
Slide 27: Appendix
ee Y rionacur Appendix
Slide 28: 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 29: 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 30: 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 31: 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 $705.0 MM $300.0 MM Committed Credit Facility through September 2013 - Backs Commercial Paper Program RATING AGENCY RATING FITCH BBB+ MOO
Slide 32: Utility Segment National Fuel Gas Distribution Corporation
Utility Segment National Fuel Gas Distribution Corporation
Slide 33: Utility Return on Equity
(1) Calculated using Average Total Comprehensive Shareholder Equity. Utility Return on Equity (1)
Slide 34: 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 35: Pipeline & Storage
National Fuel Gas Supply Corporation Empire Pipeline, Inc. Pipeline & Storage
Slide 36: 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 36 PIPELINE & STORAGE / MIDSTREAM EXPANSION INITIATIVES NORTHERN ACCESS IPAA OGIS San Francisco - October 12-14, 2010 TROUT RUN
Slide 37: 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 $6 MM 6/15/10 Completed - Flowing into TGP 300 Line Lamont Phas
Slide 38: Exploration & Production Seneca Resources Corporation
Exploration & Production Seneca Resources Corporation
Slide 39: Fiscal Year 2010 Preliminary Proved Reserves
Exploration & Production Fiscal Year 2010 Preliminary Proved Reserves(1) Proved Reserves @ 9/30 503 Bcfe 528 Bcfe 699 Bcfe West - California Reserves: 333 Bcfe (49%) (55.5 MMBoe) FY '10E Production(2): +- 19.7 Bcfe (40%) Gulf of Mexico Reserves: 34 Bcfe (5%) FY '10E Production(2): +-13.5 Bcfe (27%)
Slide 40: Marcellus Shale Water Use
Marcellus Shale Water Use Recovering water discharged from an abandoned coal mine which was polluting a local trout stream Authorized by SRBC to withdraw approximately 500,000 gallon per day of mine discharge Water pipeline system supplies frac water for Seneca in Tioga County (90 wells) Can supply
Slide 41: Marcellus Western Development Area Type Decline Curve
Marcellus Shale Western Development Area "Type" Decline Curve - 3.0 BCF Estimated Ultimate Recovery (EUR) Category Type Curve Parameters Initial Rate 3,550 MCF/D Average first year decline 68% Final decline 6% Hyperbolic Coefficient 1.6 Abandonment rate 10 MCF/D Average first month rate 3,090 MCF/D
Slide 42: Comparable GAAP Financial Measure Slides and Reconciliations
National Fuel Gas Company Comparable GAAP Financial Measure Slides and Reconciliations This presentation contains certain non-GAAP financial measures. For pages that contain non-GAAP financial measures, pages containing the most directly comparable GAAP financial measures and reconciliations are pro
Slide 43: Reconciliation of Income from Continuing Operations by Segment to GAAP Net Income
Reconciliation of Income from Continuing Operations by Segment to Consolidated GAAP Net Income ($ Thousands) 12 Mos. Ended FY 2007 FY 2008 FY 2009 6/30/2010 GAAP Net Income E&P Segment GAAP Net Income 210,669 $ 146,612 $ (10,238) $ 113,173 $ P&S Segment GAAP Net Income 56,386 54,148 47,358 35,812 Ut
Slide 44: Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures
Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures ($ Thousands) FY 2010 FY 2011 FY 2006 FY 2007 FY 2008 FY 2009 Forecast Forecast Capital Expenditures from Continuing Operations Exploration & Production Capital Expenditures 166,535 $ 146,687 $ 192,187 $ 188,290 $ $3