Investor Presentation Q1 Fiscal 2020 Update January 30, 2020 - PowerPoint PPT Presentation

Investor Presentation Q1 Fiscal 2020 Update January 30, 2020

National Fuel is committed to the safe and environmentally conscious development, transportation, storage, and distribution of natural gas and oil resources. For additional information, please visit our corporate responsibility website at https://responsibility.natfuel.com 2

NFG: A Diversified, Integrated Natural Gas Company Developing our large, high quality Upstream acreage position in Marcellus & Utica Exploration & shales (1) Production 785,000 ~590 MMcf/day 45% of NFG Net acres in Net Appalachian natural EBITDA (2) Appalachia gas production California: oil production Midstream Expanding and modernizing pipeline generates significant cash flow infrastructure to provide outlets for Gathering Appalachian natural gas production Pipeline & Storage 3.9 MMDth $1.7 Billion 34% of NFG 38% of NFG Daily interstate Investments EBITDA (2) EBITDA (1) pipeline capacity since 2010 under contract Providing safe, reliable and Downstream : affordable service to customers in Utility WNY and NW Pa. % of NFG $324 Million 743,400 21% of NFG 20EBITDA (1) Investments in safety EBITDA (2) Utility customers since 2015 (1) This presentation includes forward-looking statements. Please review the safe harbor for forward looking statements on slide 56 of this presentation. 3 (2) Twelve months ending December 31, 2019. A reconciliation of Adjusted EBITDA to Net Income as presented on the Consolidated Statement of Income and Earnings Reinvested in the Business is included at the end of this presentation.

Why National Fuel? Diversified Assets Provide Stability and Long-Term Growth Opportunities 4

Integrated Model Enhances Shareholder Value . . . 1 Geographic and Operational Benefits of National Fuel’s Integration Drives Synergies: Integrated Structure: Upstream Exploration &  Ability to adjust to changing Upstream Midstream Production commodity price environments  Co-Development of Marcellus and Utica  More efficient capital investment  Just-in-time gathering facilities  Higher returns on investment Midstream  Pipeline expansion opportunities  Operational scale Gathering Pipeline & Storage  Lower cost of capital Midstream Downstream  Lower operating costs  Rate-regulated entities share common Downstream  More competitive pipeline resources, reducing operating expense Utility infrastructure projects  Utility business is a large Pipeline &  Strong balance sheet Storage customer  Growing, stable dividend Financial Efficiencies:  Investment grade credit rating  Shared borrowing capacity  Consolidated income tax return 5

. . . and Drives Organic Growth Opportunities Near Term Strategy Leverages Integration Across the Value Chain Exploration & Pipeline & Gathering Utility Production Storage  Integrated Upstream and Midstream development of 785,000 acre Marcellus and Utica shale position  Drilling program focused on return trips to existing pads and use of existing infrastructure  NFG Gathering transports 100% of natural gas production, driving consolidated returns  NFG pipeline expansions under development create new firm takeaway capacity for E&P business  Further expansion of interstate pipeline systems to satisfy growing natural gas supply and demand  Supply push – Appalachian producers  Demand pull – regional demand-driven projects and utilities  Ongoing investment in safety and modernization of pipeline transportation and distribution systems  $500+ million in new investments expected over the next 5 years 6

Impressive Dividend History 2 49 Years 117 Years $1.74 4.0% yield (1) per share Consecutive Dividend Increases Consecutive Payments $3.1 Billion Dividend payments since 1970 $0.19 per share Annual Rate at Fiscal Year End 7 (1) As of January 28, 2020.

Responsible Capital Allocation and Asset Development 3 E&P Maintaining Focus on Balance Sheet, With . . . While Generating Steady Production, and Reductions in E&P Activity in Response to Optimizing Significant Firm Sales Portfolio Low Natural Gas Price Environment . . . and Firm Transportation Capacity 1,000 Gross Production Trend Gross Firm Contract Volumes (MDth/day) 900 (Reduced Activity Level) E&P Capital Expenditures ($ MM) $500 800 $492 Leidy South 700 $415-$455 $400 (Mid-Atlantic) Full Year $375-$410 at 3 rigs 600 Reduced Activity Further $300 500 to 2 rigs Firm Sales tied to Firm Transportation (FT) Capacity Activity 400 (Mid-Atlantic/Southeast & Canada-Dawn) Reduction $200 300 Company intends to further reduce activity 200 in summer 2020, driving lower capital $100 In-Basin Firm Sales Contracts 100 expenditures in fiscal 2020 and beyond - $0 2019 Actual 2020 Guidance 2020 Guidance (August) (Current) 8

L Leveraging Existing Infrastructure to Enhance Returns 4 Utilization of Existing Infrastructure for Ongoing Utica Development Amplifies Consolidated Returns Utica development on Requires modest investment in Resulting in significant Marcellus pads allows new Gathering facilities to consolidated return uplift use of existing: support production growth for E&P and Gathering  Gathering Pipelines Gathering Costs in Western Development Area (CRV) ~10% IRR Uplift  Compression Expected (3) Gathering  Water Handling Facilities CapEx/Well  Roadways and Pads ($ thousands) Marcellus $1,489 (1) (pre-2019) Utica Return ~$430 (2) Trips (current) (1) Approximate WDA Marcellus gathering facility costs for 192 wells drilled and completed as of September 30, 2018. (2) Estimated WDA Utica gathering facility costs for remaining return trip locations in the Clermont Rich Valley area of redevelopment. (3) Internal Rate of Return for Seneca WDA includes estimated well costs under current cost structure, and anticipated LOE and Gathering costs. Internal Rate of Return for Seneca WDA and Gathering includes expected gathering capital expenditures for 9 remaining return trip locations, well costs under current cost structure, and non-gathering LOE.

$1 Billion+ Backlog in Pipeline & Storage Projects 5  ~$150 Million in Potential Annual Expansion Revenues: Northern Access Empire North Delivery: Canada & NY  Line N to Monaca: $5 MM Delivery: Canada & NY 490,000 Dth/d (placed into service 11/1/19 ) 205,000 Dth/d  Empire North: $25 MM  FM100: $35 MM FM100 Delivery: Transco (Leidy)  Northern Access: $84 MM 330,000 Dth/d  $1.0 – $1.1 Billion in Pipeline Line N to Monaca Delivery: Shell ethane cracker Projects under Development: facility (Beaver Co., Pa) 133,000 Dth/d  Expansion Projects: ~$850 million  Supply Corp. Modernization: $150 - $250 million 10

First Quarter Fiscal 2020 Financial Highlights 11

First Quarter Fiscal 2020 Results and Drivers Adjusted Operating Results ($/share) (1) Drivers Q1 FY 2019 Q1 FY 2020 $1.12 Oil and Gas Oil Prices Pricing (2) $1.01 $62.92 $61.70 Utility $2.61 $0.30 $2.32 Natural Gas Prices Utility $0.31 Crude Oil ($/Bbl) Natural Gas ($/Mcfe) Pipeline & Storage Net Oil and Gas Pipeline & $0.29 Production Natural Gas Production Storage $0.21 54.8 Gathering 601 45.8 572 $0.16 Gathering Oil Production $0.18 Crude Oil (Mbbl) Natural Gas (Bcf) Exploration & Exploration & Production Production $0.37 $0.28 Gathering Revenue $34.8 All Other : $0.00 All Other : $0.03 $29.7 MM Seneca Gross Production MM Q1 FY19 Q1 FY20 (1) Adjusted Operating results of $1.12 for Q1 FY19 and $1.01 for Q1 FY20 include operating results of Corporate & All Other Segments segment. See slide 65 for a Reconciliation of Adjusted Operating Results to Earnings Per Share. 12 (2) Realized price after hedging.

Earnings Guidance FY2019 Adjusted Operating Results FY2020 Earnings Guidance $3.45/share (1) $2.95 to $3.15/share Key Guidance Drivers  Seneca Net Production: 235 to 245 Bcfe Production & Gathering Throughput  Gathering Revenues: $135-$145 million Non-regulated Businesses Realized natural gas prices (after-hedge)  Natural Gas: ~$2.10/Mcf (2) (vs. $2.44/Mcf in FY 2019) Exploration & Production ~$62.00/Bbl (3) (vs. $61.65/Bbl in FY 2019)  Realized oil prices (after-hedge) Crude Oil: Gathering  Guidance of $0.73 - $0.77/Mcf ( vs. $0.73 in FY 2019) due to DD&A Expense higher recorded asset retirement obligations in California  ~$290-295 million in revenues (expansion revenues Regulated Pipeline & Storage Revenues partial offset by full year of Empire contract expiration) Businesses Pipeline & Storage Pension Costs  Expected to increase by ~$4 million from FY19 Pipeline & Storage  Guidance assumes normal weather; higher gross margin Utility Operating Income Utility expected to be offset by cost inflation  Effective tax rate ~25% (enhanced oil recovery credit Tax Rate Higher effective tax rate unavailable in FY2020) (1) Excludes items impacting comparability. See non-GAAP disclosure on slide 65 of this presentation. 13 (2) Assumes NYMEX natural gas pricing of $2.05/MMBtu and in-basin spot pricing of $1.70/MMBtu for the remainder of fiscal 2020, and reflects the impact of existing financial hedges, firm sales and firm transportation contracts. (3) Assumes NYMEX (WTI) oil pricing of $55.00/Bbl and California-MWSS pricing differentials of 104% to WTI, and reflects impact of existing financial hedge contracts.