UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 1, 2019

NATIONAL FUEL GAS COMPANY
(Exact name of registrant as specified in its charter)

	
			
New Jersey	1-3880	13-1086010	
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)	

	
			
6363 Main Street, Williamsville, New York	 	14221	
(Address of principal executive offices)	 	(Zip Code)	

Registrant’s telephone number, including area code: (716) 857-7000

Former name or former address, if changed since last report: Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

		
 	 	
□	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
□	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
□	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
□	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Securities registered pursuant to Section 12(b) of the Act:

			
Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered	
Common Stock, par value $1.00 per share	NFG	New York Stock Exchange	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

Emerging growth company     ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02    Results of Operations and Financial Condition.

On August 1, 2019, National Fuel Gas Company (the “Company”) issued a press release regarding its earnings for the quarter and nine months ended June 30, 2019. A copy of the press release is furnished as part of this Current Report as Exhibit 99.

Neither the furnishing of the press release as an exhibit to this Current Report nor the inclusion in such press release of any reference to the Company’s internet address shall, under any circumstances, be deemed to incorporate the information available at such internet address into this Current Report. The information available at the Company’s internet address is not part of this Current Report or any other report filed or furnished by the Company with the Securities and Exchange Commission.

In addition to financial measures calculated in accordance with generally accepted accounting principles (“GAAP”), the press release furnished as part of this Current Report as Exhibit 99 contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company’s operating results in a manner that is focused on the performance of the Company’s ongoing operations, for measuring the Company’s cash flow and liquidity, and for comparing the Company’s financial performance to other companies. The Company’s management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures prepared in accordance with GAAP.

Certain statements contained herein or in the press release furnished as part of this Current Report, including statements regarding estimated future earnings and statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will” and “may” and similar expressions, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. There can be no assurance that the Company’s projections will in fact be achieved nor do these projections reflect any acquisitions or divestitures that may occur in the future. While the Company’s expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, actual results may differ materially from those projected in forward-looking statements. Furthermore, each forward-looking statement speaks only as of the date on which it is made. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including among others geology, lease availability,

title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; changes in price differentials between similar quantities of natural gas or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; the impact of information technology, cybersecurity or data security breaches; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits

Exhibit 99      Press release furnished regarding earnings for the quarter and nine months ended June 30, 2019

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	
		
NATIONAL FUEL GAS COMPANY	

By:	/s/ Sarah J. Mugel	
 	Sarah J. Mugel	
 	Secretary	

Dated: August 2, 2019

Exhibit 99

	

 	 	6363 Main Street/Williamsville, NY 14221	
 	 	 	 	
Release Date:	Immediate August 1, 2019	Kenneth E. Webster
Investor Relations
716-857-7067	Karen M. Camiolo
Treasurer
716-857-7344	

NATIONAL FUEL REPORTS THIRD QUARTER EARNINGS
AND PROVIDES PRELIMINARY GUIDANCE FOR FISCAL 2020

WILLIAMSVILLE, N.Y.: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the third quarter of its 2019 fiscal year and for the nine months ended June 30, 2019.

FISCAL 2019 THIRD QUARTER SUMMARY
		
•	GAAP earnings of $63.8 million, or $0.73 per share, compared to $63.0 million, or $0.73 per share, in the prior year	
		
•	Adjusted operating results of $61.8 million, or $0.71 per share, compared to $63.3 million, or $0.73 per share, in the prior year (see non-GAAP reconciliation on page 2)	
		
•	Adjusted EBITDA of $182.9 million compared to $175.2 million in the prior year (non-GAAP reconciliation on page 24)	
		
•	E&P segment net production of 54.7 Bcfe, an increase of 23% from the prior year and 12% from the second quarter	
		
•	Average natural gas prices, after the impact of hedging, of $2.36 per Mcf, down $0.07 per Mcf from the prior year	
		
•	Average oil prices, after the impact of hedging, of $62.92 per Bbl, up $4.18 per Bbl from the prior year	
		
•	Gathering segment operating revenues increased $5.0 million on an 18% increase in gathered volumes	
		
•	Utility segment net income increased $3.4 million, or 87%, on higher customer margins	

FISCAL 2019 AND FISCAL 2020 GUIDANCE UPDATE SUMMARY

The Company is updating its fiscal 2019 guidance and providing preliminary fiscal 2020 guidance relating to earnings, capital expenditures, and production. See pages 5 and 6 for additional discussion.

						
 	Updated
FY 2019 Guidance	 	Preliminary
FY 2020 Guidance	 	Key Forecast Drivers	
 	 	 	 	 	 	
Earnings per Share	$3.40 to $3.50	 	$3.25 to $3.55	 	Increase in production offset by lower natural gas prices	
 	 	 	 	 	 	
Capital Expenditures ($MM)	$745 to $800	 	$725 to $820	 	 	
    E&P and Gathering	$525 to $550	 	$455 to $505	 	Seneca to drop rig in Q2 fiscal 2020	
    Pipeline and Storage	$130 to $150	 	$180 to $215	 	Empire North expansion project	
    Utility	$90 to $100	 	$90 to $100	 	System modernization backed by rate tracker in NY	
 	 	 	 	 	 	
E&P Production (Bcfe)	205 to 215	 	235 to 245	 	Utica and Marcellus development	

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “Our fiscal third quarter results once again demonstrate why the integrated model is a significant advantage for National Fuel, particularly during periods of commodity price volatility. Our Utility and Gathering businesses led the way with significant year over year earnings growth, along with the strong operational performance of our Exploration and Production business. As we look to fiscal 2020, we do so with a close eye on longer-term natural gas prices and a focus on prudently deploying capital and maintaining our strong balance sheet. We plan to reduce our drilling activity accordingly but will continue to invest in pipeline expansion projects and utility system modernization opportunities that add shareholder value and position National Fuel for long-term growth and success.”

Page 2.

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

																	
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
(in thousands except per share amounts)	 	2019	 	2018	 	2019	 	2018	
Reported GAAP Earnings	 	$	63,753		 	$	63,025		 	$	257,009		 	$	353,527		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes under 2017 Tax Reform	 	—		 	—		 	(5,000	)	 	(107,000	)	
Mark-to-market adjustments due to hedge ineffectiveness (E&P)	 	(1,020	)	 	339		 	(783	)	 	436		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	 	214		 	(83	)	 	164		 	(107	)	
Unrealized (gain) loss on other investments (Corporate / All Other)	 	(1,420	)	 	—		 	1,096		 	—		
Tax impact of unrealized (gain) loss on other investments	 	298		 	—		 	(230	)	 	—		
Adjusted Operating Results	 	$	61,825		 	$	63,281		 	$	252,256		 	$	246,856		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	0.73		 	$	0.73		 	$	2.96		 	$	4.09		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes under 2017 Tax Reform	 	—		 	—		 	(0.06	)	 	(1.24	)	
Mark-to-market adjustments due to hedge ineffectiveness (E&P)	 	(0.01	)	 	—		 	(0.01	)	 	0.01		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	 	—		 	—		 	—		 	—		
Unrealized (gain) loss on other investments (Corporate / All Other)	 	(0.02	)	 	—		 	0.01		 	—		
Tax impact of unrealized (gain) loss on other investments	 	—		 	—		 	—		 	—		
Rounding	 	0.01		 	—		 	0.01		 	—		
Adjusted Operating Results per share	 	$	0.71		 	$	0.73		 	$	2.91		 	$	2.86		

DISCUSSION OF RESULTS BY SEGMENT

The following discussion of earnings of each operating segment for the quarter ended June 30, 2019, is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the nine months ended June 30, 2019, are summarized on pages 11 and 12). It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

Upstream Business

Exploration and Production Segment

The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC ("Seneca"). Seneca explores for, develops and produces natural gas and oil reserves, primarily in Pennsylvania and California.

												
 	Three Months Ended	
 	June 30,	
(in thousands)	2019	 	2018	 	Variance	
GAAP Earnings	$	26,512		 	$	27,817		 	$	(1,305	)	
Mark-to-market adjustments due to hedge ineffectiveness	$	(1,020	)	 	$	339		 	$	(1,359	)	
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	$	214		 	$	(83	)	 	$	297		
Adjusted Operating Results	$	25,706		 	$	28,073		 	$	(2,367	)	
 	 	 	 	 	 	
Adjusted EBITDA	$	88,175		 	$	77,567		 	$	10,608		

The Exploration and Production segment’s third quarter GAAP earnings decreased $1.3 million versus the prior year, which includes the net impact of non-cash mark-to-market adjustments recorded during the current and prior year quarters relating to hedge ineffectiveness. Excluding these adjustments (see table above), the $2.4 million reduction in the Exploration and Production

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segment’s third quarter earnings was due primarily to a higher effective income tax rate, which was largely the result of tax benefits realized in the prior year that did not recur in the current year. Before considering these tax items, Seneca’s third quarter earnings were higher due primarily to the positive impacts of higher natural gas production and better realized crude oil prices, which were partially offset by the impacts of lower crude oil production, lower realized natural gas prices, higher lease operating and transportation (“LOE”) expense, and higher depreciation, depletion and amortization (“DD&A”) expense.

Seneca’s third quarter net production was 54.7 Bcfe, an increase of 10.1 Bcfe, or 23 percent, from the prior year. Natural gas production increased 10.3 billion cubic feet (“Bcf”), or 25 percent, due primarily to production from new Marcellus and Utica wells completed and connected to sales in Appalachia. Net production increased 4.8 Bcf in Seneca’s Eastern Development Area due largely to increased Utica development in the EDA-Tioga area and Marcellus development in the EDA-Lycoming area. Net gas production increased 5.5 Bcf in the WDA-Clermont area, where Seneca added a second rig in May 2018 and continues to experience stronger production and shallower declines from its Utica development program. Seneca’s oil production for the third quarter decreased 25 thousand barrels ("Mbbl"), or 4 percent, from the prior year.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.36 per thousand cubic feet ("Mcf"), a decrease of $0.07 per Mcf from the prior year. Seneca's average realized oil price, after the impact of hedging, was $62.92 per barrel ("Bbl"), an increase of $4.18 per Bbl over the prior year. The improvement in oil price realizations was due primarily to stronger price differentials at local sales points in California relative to West Texas Intermediate (WTI) prices.

LOE expense increased $10.1 million due mostly to higher gathering expenses in Appalachia resulting from the increase in natural gas production coupled with an increase in well repair costs in California. DD&A expense increased $8.8 million due to the increase in production and a $0.03 per Mcfe increase in the unit depletion rate.

Midstream Businesses

Pipeline and Storage Segment

The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania.

												
 	Three Months Ended	
 	June 30,	
(in thousands)	2019	 	2018	 	Variance	
GAAP Earnings	$	15,792		 	$	20,723		 	$	(4,931	)	
 	 	 	 	 	 	
Adjusted EBITDA	$	37,328		 	$	46,072		 	$	(8,744	)	

The Pipeline and Storage segment’s third quarter GAAP earnings decreased $5.0 million versus the prior year. The decrease was driven primarily by lower operating revenues and higher operation and maintenance (“O&M”) expenses, which were partially offset by the impact of a lower effective tax rate. The $5.0 million decrease in operating revenues was due largely to the expiration of a significant firm transportation contract on the Empire system in December 2018. The impact of the contract expiration was partially offset by an increase in Empire’s transportation rates following the settlement of Empire’s rate case that was effective starting in January 2019. O&M expense increased $3.5 million due primarily to an increase in pipeline integrity maintenance activity during the quarter and higher personnel costs. The reduction in the Pipeline and Storage segment’s effective tax rate was due mostly to the impact of the 2017 Tax Reform Act, which lowered the Company’s statutory federal income tax rate from a blended 24.5 percent in fiscal 2018 to 21 percent in fiscal 2019, and decreased income tax expense on current period income by $0.6 million.

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Gathering Segment

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region which currently delivers Seneca’s gross Appalachian production to the interstate pipeline system.

												
 	Three Months Ended	
 	June 30,	
(in thousands)	2019	 	2018	 	Variance	
GAAP Earnings	$	14,638		 	$	11,566		 	$	3,072		
 	 	 	 	 	 	
Adjusted EBITDA	$	27,852		 	$	23,090		 	$	4,762		

The Gathering segment’s third quarter GAAP earnings increased $3.1 million over the prior year. The increase was driven primarily by higher operating revenues, which were partially offset by an increase in DD&A expense. Operating revenues increased $5.0 million, or 18 percent, due primarily to a 9.4 Bcf net increase in gathered volume from Seneca’s Appalachian natural gas production. Throughput on the Gathering segment’s Wellsboro, Clermont, and Trout Run systems increased 4.9 Bcf, 3.6 Bcf, and 2.6 Bcf, respectively. The $1.0 million increase in DD&A expense was largely due to a $0.7 million impairment recorded during the quarter to write-down the Company’s minority ownership in a non-operated gas processing facility. The benefit of a lower statutory federal income tax rate due to the 2017 Tax Reform Act was offset by the net impact of other items that increased the Gathering segment’s effective tax rate, including the non-recurrence of a tax benefit recorded in the prior year relating to the blended federal rate’s impact on deferred taxes.

Downstream Businesses

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.

												
 	Three Months Ended	
 	June 30,	
(in thousands)	2019	 	2018	 	Variance	
GAAP Earnings	$	7,362		 	$	3,930		 	$	3,432		
 	 	 	 	 	 	
Adjusted EBITDA	$	33,163		 	$	30,300		 	$	2,863		

The Utility segment’s third quarter GAAP earnings increased $3.4 million over the prior year. The increase was due primarily to higher customer margin (operating revenues less purchased gas sold) and lower interest expense. A number of items contributed to the increase in customer margin, including changes in customer usage and a modest increase in residential customers, an increase in revenues relating to a system modernization tracking mechanism, and the net impact of adjustments related to regulatory rate mechanisms. These positive items were partially offset by $1.8 million increase in the refund provision recorded by the Utility segment during the quarter to return the net effect of the 2017 Tax Reform Act to its customers. Interest expense decreased $0.8 million due primarily to the Company’s early refinancing of an 8.75 percent coupon 10-year note that was set to mature in May 2019.

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Energy Marketing Segment

The Energy Marketing segment's operations are carried out by National Fuel Resources, Inc. (“NFR”). NFR markets natural gas to industrial, wholesale, commercial, public authority, and residential customers primarily in western and central New York and northwestern Pennsylvania.

												
 	Three Months Ended	
 	June 30,	
(in thousands)	2019	 	2018	 	Variance	
GAAP Earnings	$	(1,441	)	 	$	(190	)	 	$	(1,251	)	
 	 	 	 	 	 	
Adjusted EBITDA	$	(2,075	)	 	$	(295	)	 	$	(1,780	)	

The Energy Marketing segment’s third quarter GAAP earnings decreased $1.3 million due primarily to a decline in customer margins (operating revenues less purchased gas sold).

Corporate and All Other

Corporate and All Other operations had combined earnings of $0.9 million in the current year third quarter, which was $1.7 million higher than the loss of $0.8 million in the prior-year third quarter. The increase in earnings was primarily attributable to the impact of $1.4 million in unrealized gains on investments in equity securities recorded during the quarter ($1.1 million after-tax), lower interest expense and a lower effective tax rate. Unrealized gains and losses on investments in equity securities are now recognized in earnings following the adoption of new accounting guidance in the current year. These unrealized gains and losses had been previously recorded as other comprehensive income. These increases were partially offset by lower operating revenues from the sale of standing timber by the Company’s land and timber operations.

DISCUSSION OF GUIDANCE UPDATE

National Fuel is revising its full-year earnings guidance for fiscal 2019. The Company projects that earnings on a non-GAAP basis will be within the range of $3.40 to $3.50 per share, or $3.45 per share at the midpoint of the range. The Company’s revised earnings guidance range reflects the impact of actual results for the nine months ended June 30, 2019, and, among other forecast updates, lower commodity price assumptions to reflect current market prices for natural gas and crude oil for the remaining three months of the fiscal year. The Company is reaffirming its Exploration and Production segment’s fiscal 2019 net production guidance, which is expected to be in the range of 205 to 215 Bcfe. The Company now expects fiscal 2019 consolidated capital expenditures to be within the range of $745 million to $800 million, or $772.5 million at the midpoint.

The Company is also initiating preliminary guidance for fiscal 2020. National Fuel is projecting that its fiscal 2020 earnings will be within a range of $3.25 to $3.55 per share, or $3.40 per share at the midpoint of the range and generally in line with fiscal 2019. The Company’s fiscal 2020 earnings projections are largely being driven by an increase in Seneca’s forecasted natural gas production and the associated impact on Gathering segment revenues, offset by lower expected natural gas price realizations and modest increases in operating expenses. Seneca’s fiscal 2020 net production is expected to be in the range of 235 to 245 Bcfe, an increase of 30 Bcf versus fiscal 2019. The Company is projecting its natural gas price realizations after hedging to decline approximately $0.20 per Mcf, driven in large part by lower expected NYMEX and regional spot prices for natural gas.

In response to the deterioration in near-term commodity prices, the Company’s Exploration and Production segment is planning to reduce its development activity in Appalachia and drop one of the three horizontal drilling rigs it is currently operating during the second quarter of fiscal 2020. As a result, the Exploration and Production segment’s capital expenditures are expected to be in the range of $415 million to $455 million, a $50 million reduction versus fiscal 2019 at the midpoint. At the reduced activity level, Seneca expects to generate production to fully utilize its firm sales and transportation commitments. Gathering segment capital expenditures are expected to be $40 million to $50 million in fiscal 2020, a decline of $7.5 million at the midpoint.

Pipeline and Storage segment capital expenditures are expected to be in the range of $180 million to $215 million. The $57.5 million increase at the midpoint of the range is due primarily to higher spending on expansion projects, including the fully-subscribed Empire North project that is expected to add $25 million in annual revenues after the project goes into service,

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which is anticipated in the second half of fiscal 2020. Utility segment capital expenditures are expected to be flat versus fiscal 2019 at $90 million to $100 million as the Company continues to invest in the modernization of its gas distribution systems.

Mr. Bauer added: “Our integrated model and diversified asset base in Appalachia provide the flexibility to respond to market conditions and to efficiently allocate capital to opportunities across the natural gas value chain. Just as we have done in the past, we will again lean on that flexibility in fiscal 2020 by reducing the level of investment at the drill bit while continuing to invest in the expansion and modernization of our rate-regulated pipeline and utility systems, which we expect will generate future earnings growth and stable, value-added returns for our shareholders.”

In total, the Company’s consolidated capital expenditures in fiscal 2020 are expected to be in a range of $725 million to $820 million, flat versus fiscal 2019 at the midpoint of the respective ranges.

The Company’s fiscal 2019 earnings guidance range does not include the impact of certain items that impacted the comparability of earnings during the nine months ended June 30, 2019, including: (1) the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act, which reduced the Company’s income tax expense and benefited consolidated earnings in the nine months ended June 30, 2019 by $0.06 per share; (2) the full-year impact of the Exploration and Production segment’s mark-to-market adjustments for hedge ineffectiveness; and (3) the unrealized loss on other investments due to the change in an accounting rule discussed above, which lowered earnings by $0.01 per share. While the Company expects to record additional adjustments to one or more of these items during the remaining three months ending September 30, 2019, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2019 are outlined in the table on page 8.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, August 2, 2019, at 11 a.m. Eastern Time to discuss this announcement. There are two ways to access this call. For those with Internet access, visit the NFG Investor Relations News & Events page at National Fuel’s website at investor.nationalfuelgas.com. For those without Internet access, audio access is also provided by dialing (toll-free) 833-287-0795, using conference ID number “2194110”. For those unable to listen to the live conference call, an audio replay will be available approximately two hours following the teleconference at the same website link and by phone at (toll-free) 800-585-8367 using conference ID number “2194110”. Both the webcast and a telephonic replay will be available until the close of business on Friday, August 9, 2019.

National Fuel is an integrated energy company reporting financial results for five operating segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. Additional information about National Fuel is available at www.nationalfuelgas.com.

	

 	 	 	
Analyst Contact:	Kenneth E. Webster	716-857-7067	
Media Contact:	Karen L. Merkel	716-857-7654	

Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; governmental/regulatory actions, initiatives and proceedings, including those

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Page 7.

involving rate cases (which address, among other things, target rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; changes in price differentials between similar quantities of natural gas or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; the impact of information technology, cybersecurity or data security breaches; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

-more-
7

Page 8.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on pages 5 and 6, the Company is revising its earnings guidance for fiscal 2019 and initiating preliminary guidance for fiscal 2020. Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2019 and fiscal 2020 are outlined in the table below.

The Company's fiscal 2019 earnings guidance range does not include the impact of certain items that impacted the comparability of earnings during the nine months ended June 30, 2019, including: (1) the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act, which reduced the Company’s income tax expense and benefited consolidated earnings in the nine months ended June 30, 2019 by $0.06 per share; (2) the full-year impact of the Exploration and Production segment’s mark-to-market adjustments for hedging ineffectiveness; and (3) the unrealized loss on other investments due to the change in an accounting rule discussed on page 6, which lowered earnings by $0.01 per share. While the Company expects to record additional adjustments to one or more of these items during the remaining three months ending September 30, 2019, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

	
				
 	Updated FY 2019 Guidance	 	Preliminary FY 2020 Guidance	
Consolidated Earnings per Share	$3.40 to $3.50	 	$3.25 to $3.55	
Consolidated Effective Tax Rate	~ 24%	 	~ 25%	
 	 	 	 	
Capital Expenditures  (Millions)	 	 	 	
    Exploration and Production	$475 - $495	 	$415 - $455	
    Pipeline and Storage	$130 - $150	 	$180 - $215	
    Gathering	$50 - $55	 	$40 - $50	
    Utility	$90 - $100	 	$90 - $100	
    Consolidated Capital Expenditures	$745 - $800	 	$725 - $820	
 	 	 	 	
Exploration & Production Segment Guidance	 	 	 	
 	 	 	 	
    Commodity Price Assumptions (1)	 	 	 	
    NYMEX natural gas price	$2.40 /MMBtu	 	$2.55 /MMBtu	
    Appalachian basin spot price (winter | summer)	$2.10 /MMBtu	 	$2.20 /MMBtu | $2.00 /MMBtu	
    NYMEX (WTI) crude oil price	$57.50 /Bbl	 	$55.00 /Bbl	
    California oil price premium (% of WTI)	108%	 	108%	
 	 	 	 	
    Production (Bcfe)	 	 	 	
    East Division - Appalachia	189 to 199	 	219 to 229	
    West Division - California	~ 16	 	~ 16	
    Total Production	205 to 215	 	235 to 245	
 	 	 	 	
    E&P Operating Costs ($/Mcfe)	 	 	 	
    LOE	$0.85 - $0.90	 	$0.85 - $0.90	
    G&A	~$0.30	 	$0.25 - $0.30	
    DD&A	$0.70 - $0.75	 	$0.70 - $0.75	
 	 	 	 	
Other Business Segment Guidance (Millions)	 	 	 	
    Gathering Segment Revenues	$125 - $130	 	$135 - $145	
    Pipeline and Storage Segment Revenues	~$285	 	$290 - $295	

(1)  Revised commodity price assumptions reflect the Company's forecast for the remainder of fiscal 2019.

Page 9.

	
																												
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
QUARTER ENDED JUNE 30, 2019	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Third quarter 2018 GAAP earnings	$	27,817		 	$	20,723		 	$	11,566		 	$	3,930		 	$	(190	)	 	$	(821	)	 	$	63,025		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Mark-to-market adjustments due to hedge ineffectiveness	339		 	 	 	 	 	 	 	 	 	 	 	339		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	(83	)	 	 	 	 	 	 	 	 	 	 	 	(83	)	
Third quarter 2018 adjusted operating results	28,073		 	20,723		 	11,566		 	3,930		 	(190	)	 	(821	)	 	63,281		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of adjusted operating results**	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Upstream Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) natural gas production	18,891		 	 	 	 	 	 	 	 	 	 	 	18,891		
Higher (lower) crude oil production	(1,119	)	 	 	 	 	 	 	 	 	 	 	 	(1,119	)	
Higher (lower) realized natural gas prices, after hedging	(2,950	)	 	 	 	 	 	 	 	 	 	 	 	(2,950	)	
Higher (lower) realized crude oil prices, after hedging	1,817		 	 	 	 	 	 	 	 	 	 	 	1,817		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Midstream and All Other Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) operating revenues	 	 	(3,693	)	 	3,773		 	 	 	 	 	(485	)	 	(405	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Downstream Margins***	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of usage and weather	 	 	 	 	 	 	1,425		 	 	 	 	 	1,425		
System modernization tracker revenues	 	 	 	 	 	 	1,033		 	 	 	 	 	1,033		
Lower (higher) refund provision on tax rate change	 	 	 	 	 	 	(1,386	)	 	 	 	 	 	(1,386	)	
Regulatory true-up adjustments	 	 	 	 	 	 	1,069		 	 	 	 	 	1,069		
Higher (lower) marketing margins	 	 	 	 	 	 	 	 	(1,251	)	 	 	 	(1,251	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) lease operating and transportation expenses	(7,618	)	 	 	 	 	 	 	 	 	 	 	 	(7,618	)	
Lower (higher) operating expenses	 	 	(2,606	)	 	 	 	 	 	 	 	 	 	(2,606	)	
Lower (higher) depreciation / depletion	(6,613	)	 	 	 	(786	)	 	 	 	 	 	 	 	(7,399	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Income (Expense)	 	 	 	 	 	 	 	 	 	 	 	 		
(Higher) lower interest expense	(455	)	 	335		 	162		 	588		 	 	 	636		 	1,266		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of tax rate reduction due to 2017 Tax Reform	953		 	602		 	819		 	271		 	(69	)	 	(20	)	 	2,556		
Lower (higher) income tax expense / effective tax rate	(4,281	)	 	169		 	(789	)	 	269		 	75		 	723		 	(3,834	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	(992	)	 	262		 	(107	)	 	163		 	(6	)	 	(265	)	 	(945	)	
Third quarter 2019 adjusted operating results	25,706			15,792			14,638			7,362			(1,441	)		(232	)		61,825		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Mark-to-market adjustments due to hedge ineffectiveness	1,020		 	 	 	 	 	 	 	 	 	 	 	1,020		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	(214	)	 	 	 	 	 	 	 	 	 	 	 	(214	)	
Unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	1,420		 	1,420		
Tax impact of unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	(298	)	 	(298	)	
Third quarter 2019 GAAP earnings	$	26,512		 	$	15,792		 	$	14,638		 	$	7,362		 	$	(1,441	)	 	$	890		 	$	63,753		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes".	
*** Downstream margin defined as operating revenues less purchased gas expense.	

Page 10.

	
																												
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
QUARTER ENDED JUNE 30, 2019	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Third quarter 2018 GAAP earnings per share	$	0.32		 	$	0.24		 	$	0.13		 	$	0.05		 	$	—		 	$	(0.01	)	 	$	0.73		
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Mark-to-market adjustments due to hedge ineffectiveness	—		 	 	 	 	 	 	 	 	 	 	 	—		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	—		 	 	 	 	 	 	 	 	 	 	 	—		
Third quarter 2018 adjusted operating results per share	0.32			0.24			0.13			0.05			—			(0.01	)		0.73		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of adjusted operating results**	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Upstream Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) natural gas production	0.22		 	 	 	 	 	 	 	 	 	 	 	0.22		
Higher (lower) crude oil production	(0.01	)	 	 	 	 	 	 	 	 	 	 	 	(0.01	)	
Higher (lower) realized natural gas prices, after hedging	(0.03	)	 	 	 	 	 	 	 	 	 	 	 	(0.03	)	
Higher (lower) realized crude oil prices, after hedging	0.02		 	 	 	 	 	 	 	 	 	 	 	0.02		
 	 	 	 	 	 	 	 	 	 	 	 	 			
Midstream and All Other Revenues	 	 	 	 	 	 	 	 	 	 	 	 			
Higher (lower) operating revenues	 	 	(0.04	)	 	0.04		 	 	 	 	 	(0.01	)	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 			
Downstream Margins***	 	 	 	 	 	 	 	 	 	 	 	 			
Impact of usage and weather	 	 	 	 	 	 	0.02		 	 	 	 	 	0.02		
System modernization tracker revenues	 	 	 	 	 	 	0.01		 	 	 	 	 	0.01		
Lower (higher) refund provision on tax rate change	 	 	 	 	 	 	(0.02	)	 	 	 	 	 	(0.02	)	
Regulatory true-up adjustments	 	 	 	 	 	 	0.01		 	 	 	 	 	0.01		
Higher (lower) marketing margins	 	 	 	 	 	 	 	 	(0.01	)	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 			
Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 			
Lower (higher) lease operating and transportation expenses	(0.09	)	 	 	 	 	 	 	 	 	 	 	 	(0.09	)	
Lower (higher) operating expenses	 	 	(0.03	)	 	 	 	 	 	 	 	 	 	(0.03	)	
Lower (higher) depreciation / depletion	(0.08	)	 	 	 	(0.01	)	 	 	 	 	 	 	 	(0.09	)	
 	 	 	 	 	 	 	 	 	 	 	 	 			
Other Income (Expense)	 	 	 	 	 	 	 	 	 	 	 	 			
(Higher) lower interest expense	(0.01	)	 	—		 	—		 	0.01		 	 	 	0.01		 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate reduction due to 2017 Tax Reform	0.01		 	0.01		 	0.01		 	—		 	—		 	—		 	0.03		
Lower (higher) income tax expense / effective tax rate	(0.05	)	 	—		 	(0.01	)	 	—		 	—		 	0.01		 	(0.05	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
All other / rounding	—		 	—		 	0.01		 	—		 	(0.01	)	 	—		 	—		
Third quarter 2019 adjusted operating results per share	0.30		 	0.18		 	0.17		 	0.08		 	(0.02	)	 	—		 	0.71		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Mark-to-market adjustments due to hedge ineffectiveness	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	—		 	 	 	 	 	 	 	 	 	 	 	—		
Unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	0.02		 	0.02		
Tax impact of unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	—		 	—		
Rounding	 	 	 	 	 	 	 	 	 	 	(0.01	)	 	(0.01	)	
Third quarter 2019 GAAP earnings per share	$	0.31		 	$	0.18		 	$	0.17		 	$	0.08		 	$	(0.02	)	 	$	0.01		 	$	0.73		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes".	
*** Downstream margin defined as operating revenues less purchased gas expense.	

Page 11.

	
																												
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
NINE MONTHS ENDED JUNE 30, 2019	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nine months ended June 30, 2018 GAAP earnings	$	161,052		 	$	81,909		 	$	68,736		 	$	58,283		 	$	1,434		 	$	(17,887	)	 	$	353,527		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Remeasurement of deferred taxes under 2017 Tax Reform	(76,510	)	 	(14,100	)	 	(34,500	)	 	 	 	359		 	17,751		 	(107,000	)	
Mark-to-market adjustments due to hedge ineffectiveness	436		 	 	 	 	 	 	 	 	 	 	 	436		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	(107	)	 	 	 	 	 	 	 	 	 	 	 	(107	)	
Nine months ended June 30, 2018 adjusted operating results	84,871		 	67,809		 	34,236		 	58,283		 	1,793		 	(136	)	 	246,856		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of adjusted operating results**	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Upstream Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) natural gas production	44,802		 	 	 	 	 	 	 	 	 	 	 	44,802		
Higher (lower) crude oil production	(10,025	)	 	 	 	 	 	 	 	 	 	 	 	(10,025	)	
Higher (lower) realized natural gas prices, after hedging	(4,248	)	 	 	 	 	 	 	 	 	 	 	 	(4,248	)	
Higher (lower) realized crude oil prices, after hedging	3,782		 	 	 	 	 	 	 	 	 	 	 	3,782		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Midstream and All Other Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) operating revenues	 	 	(5,690	)	 	9,428		 	 	 	 	 	(1,249	)	 	2,489		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Downstream Margins***	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of usage and weather	 	 	 	 	 	 	3,684		 	 	 	 	 	3,684		
System modernization tracker revenues	 	 	 	 	 	 	2,601		 	 	 	 	 	2,601		
Lower (higher) refund provision on tax rate change	 	 	 	 	 	 	(3,801	)	 	 	 	 	 	(3,801	)	
Regulatory true-up adjustments	 	 	 	 	 	 	1,173		 	 	 	 	 	1,173		
Higher (lower) marketing margins	 	 	 	 	 	 	 	 	(3,360	)	 	 	 	(3,360	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) lease operating and transportation expenses	(11,429	)	 	 	 	 	 	 	 	 	 	 	 	(11,429	)	
Lower (higher) operating expenses	(1,636	)	 	(7,956	)	 	(1,680	)	 	(895	)	 	 	 	 	 	(12,167	)	
Lower (higher) property, franchise and other taxes	(2,123	)	 	(867	)	 	 	 	 	 	 	 	 	 	(2,990	)	
Lower (higher) depreciation / depletion	(15,052	)	 	(935	)	 	(1,568	)	 	 	 	 	 	 	 	(17,555	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Income (Expense)	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Higher) lower other deductions	 	 	1,581		 	 	 	2,421		 	 	 	 	 	4,002		
(Higher) lower interest expense	(423	)	 	1,064		 	256		 	1,749		 	—		 	1,188		 	3,834		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate reduction due to 2017 Tax Reform	3,556		 	2,220		 	1,969		 	2,813		 	(76	)	 	(216	)	 	10,266		
Lower (higher) income tax expense / effective tax rate	(7,376	)	 	1,885		 	(1,393	)	 	195		 	248		 	817		 	(5,624	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	291		 	(468	)	 	(237	)	 	377		 	(1	)	 	4		 	(34	)	
Nine months ended June 30, 2019 adjusted operating results	84,990		 	58,643		 	41,011		 	68,600		 	(1,396	)	 	408		 	252,256		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Remeasurement of deferred taxes under 2017 Tax Reform	990		 	 	 	500		 	 	 	198		 	3,312		 	5,000		
Mark-to-market adjustments due to hedge ineffectiveness	783		 	 	 	 	 	 	 	 	 	 	 	783		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	(164	)	 	 	 	 	 	 	 	 	 	 	 	(164	)	
Unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	(1,096	)	 	(1,096	)	
Tax impact of unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	230		 	230		
Nine months ended June 30, 2019 GAAP earnings	$	86,599		 	$	58,643		 	$	41,511		 	$	68,600		 	$	(1,198	)	 	$	2,854		 	$	257,009		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes".	
*** Downstream margin defined as operating revenues less purchased gas expense.	

Page 12.

	
																												
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
NINE MONTHS ENDED JUNE 30, 2019	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
Nine months ended June 30, 2018 GAAP earnings per share	$	1.86		 	$	0.95		 	$	0.80		 	$	0.67		 	$	0.02		 	$	(0.21	)	 	$	4.09		
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Remeasurement of deferred taxes under 2017 Tax Reform	(0.89	)	 	(0.16	)	 	(0.40	)	 	 	 	—		 	0.21		 	(1.24	)	
Mark-to-market adjustments due to hedge ineffectiveness	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	—		 	 	 	 	 	 	 	 	 	 	 	—		
Nine months ended June 30, 2018 adjusted operating results per share	0.98		 	0.79		 	0.40		 	0.67		 	0.02		 	—		 	2.86		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of adjusted operating results**	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Upstream Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) natural gas production	0.52		 	 	 	 	 	 	 	 	 	 	 	0.52		
Higher (lower) crude oil production	(0.12	)	 	 	 	 	 	 	 	 	 	 	 	(0.12	)	
Higher (lower) realized natural gas prices, after hedging	(0.05	)	 	 	 	 	 	 	 	 	 	 	 	(0.05	)	
Higher (lower) realized crude oil prices, after hedging	0.04		 	 	 	 	 	 	 	 	 	 	 	0.04		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Midstream and All Other Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) operating revenues	 	 	(0.07	)	 	0.11		 	 	 	 	 	(0.01	)	 	0.03		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Downstream Margins***	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of usage and weather	 	 	 	 	 	 	0.04		 	 	 	 	 	0.04		
System modernization tracker revenues	 	 	 	 	 	 	0.03		 	 	 	 	 	0.03		
Lower (higher) refund provision on tax rate change	 	 	 	 	 	 	(0.04	)	 	 	 	 	 	(0.04	)	
Regulatory true-up adjustments	 	 	 	 	 	 	0.01		 	 	 	 	 	0.01		
Higher (lower) marketing margins	 	 	 	 	 	 	 	 	(0.04	)	 	 	 	(0.04	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) lease operating and transportation expenses	(0.13	)	 	 	 	 	 	 	 	 	 	 	 	(0.13	)	
Lower (higher) operating expenses	(0.02	)	 	(0.09	)	 	(0.02	)	 	(0.01	)	 	 	 	 	 	(0.14	)	
Lower (higher) property, franchise and other taxes	(0.02	)	 	(0.01	)	 	 	 	 	 	 	 	 	 	(0.03	)	
Lower (higher) depreciation / depletion	(0.17	)	 	(0.01	)	 	(0.02	)	 	 	 	 	 	 	 	(0.20	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Income (Expense)	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Higher) lower other deductions	 	 	0.02		 	 	 	0.03		 	 	 	 	 	0.05		
(Higher) lower interest expense	—		 	0.01		 	—		 	0.02		 	—		 	0.01		 	0.04		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income Taxes	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate reduction due to 2017 Tax Reform	0.04		 	0.03		 	0.02		 	0.03		 	—		 	—		 	0.12		
Lower (higher) income tax expense / effective tax rate	(0.09	)	 	0.02		 	(0.02	)	 	—		 	—		 	0.01		 	(0.08	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	—		 	(0.01	)	 	—		 	0.01		 	—		 	—		 	—		
Nine months ended June 30, 2019 adjusted operating results per share	0.98		 	0.68		 	0.47		 	0.79		 	(0.02	)	 	0.01		 	2.91		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Remeasurement of deferred taxes under 2017 Tax Reform	0.01		 	 	 	0.01		 	 	 	—		 	0.04		 	0.06		
Mark-to-market adjustments due to hedge ineffectiveness	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	—		 	 	 	 	 	 	 	 	 	 	 	—		
Unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	(0.01	)	 	(0.01	)	
Tax impact of unrealized gain (loss) on other investments	 	 	 	 	 	 	 	 	 	 	—		 	—		
Rounding	 	 	 	 	 	 	 	 	0.01		 	(0.02	)	 	(0.01	)	
Nine months ended June 30, 2019 GAAP earnings per share	$	1.00		 	$	0.68		 	$	0.48		 	$	0.79		 	$	(0.01	)	 	$	0.02		 	$	2.96		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes".	
*** Downstream margin defined as operating revenues less purchased gas expense.	

Page 13.

	

 	 	 	 	 				 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 				 	
(Thousands of Dollars, except per share amounts)	 	 	 	 				 	
 	Three Months Ended	 	Nine Months Ended	 	
 	June 30,	 	June 30,	 	
 	(Unaudited)	 	(Unaudited)	 	
SUMMARY OF OPERATIONS	2019	 	2018	 	2019		2018	 	
Operating Revenues:		 	 	 	 		 	 	
Utility and Energy Marketing Revenues	$	151,312		 	$	154,088		 	$	781,059		 	$	719,234		 	
Exploration and Production and Other Revenues	159,864		 	137,492		 	470,267		 	425,811		 	
Pipeline and Storage and Gathering Revenues	46,024		 	51,332		 	148,665		 	158,428		 	
 	357,200			342,912		 	1,399,991			1,303,473		 	
Operating Expenses:	 	 	 	 						 	
Purchased Gas	47,839		 	52,211		 	381,537			322,854		 	
Operation and Maintenance:			 			 						 	
      Utility and Energy Marketing	39,607		 	39,560		 	132,082		 	130,348		 	
      Exploration and Production and Other	35,674		 	30,682		 	108,610		 	104,891		 	
      Pipeline and Storage and Gathering	28,675		 	25,044		 	80,857		 	68,272		 	
Property, Franchise and Other Taxes	21,506		 	20,595		 	68,046			64,245		 	
Depreciation, Depletion and Amortization	71,072		 	60,817		 	200,990			177,802		 	
 	244,373		 	228,909		 	972,122			868,412		 	
 	 	 	 	 						 	
Operating Income	112,827		 	114,003		 	427,869			435,061		 	
 	 	 	 	 						 	
Other Income (Expense):	 	 	 	 						 	
Other Income (Deductions)	(1,456	)	 	(3,612	)	 	(16,977	)		(20,205	)	 	
Interest Expense on Long-Term Debt	(25,303	)	 	(27,177	)	 	(76,016	)		(82,412	)	 	
Other Interest Expense	(1,202	)	 	(1,006	)	 	(4,061	)		(2,742	)	 	
 	 	 	 	 						 	
Income Before Income Taxes	84,866		 	82,208		 	330,815			329,702		 	
 	 	 	 	 						 	
Income Tax Expense (Benefit)	21,113		 	19,183		 	73,806			(23,825	)	 	
 	 	 	 	 						 	
Net Income Available for Common Stock	$	63,753		 	$	63,025		 	$	257,009			$	353,527		 	
 	 	 	 	 				 	
Earnings Per Common Share	 	 	 	 				 	
Basic	$	0.74		 	$	0.73		 	$	2.98			$	4.12		 	
Diluted	$	0.73		 	$	0.73		 	$	2.96			$	4.09		 	
 	 	 	 	 				 	
Weighted Average Common Shares:	 	 	 	 				 	
Used in Basic Calculation	86,306,434		 	85,930,289		 	86,208,766			85,789,279		 	
Used in Diluted Calculation	86,839,841		 	86,501,194		 	86,765,781			86,370,900		 	

Page 14.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED BALANCE SHEETS	
(Unaudited)	
 	 	
 	June 30,	 	September 30,	
(Thousands of Dollars)	2019	 	2018	
 	 	 	 	
ASSETS	 	 	 	
Property, Plant and Equipment		$10,988,435		 		$10,439,839		
Less - Accumulated Depreciation, Depletion and Amortization	5,636,065		 	5,462,696		
Net Property, Plant and Equipment	5,352,370		 	4,977,143		
 	 	 	 	
Current Assets:	 	 	 	
Cash and Temporary Cash Investments	87,515		 	229,606		
Hedging Collateral Deposits	6,835		 	3,441		
Receivables - Net	178,762		 	141,498		
Unbilled Revenue	18,047		 	24,182		
Gas Stored Underground	17,075		 	37,813		
Materials and Supplies - at average cost	39,010		 	35,823		
Unrecovered Purchased Gas Costs	—		 	4,204		
Other Current Assets	56,052		 	68,024		
Total Current Assets	403,296		 	544,591		
 	 	 	 	
Other Assets:	 	 	 	
Recoverable Future Taxes	113,619		 	115,460		
Unamortized Debt Expense	14,432		 	15,975		
Other Regulatory Assets	107,206		 	112,918		
Deferred Charges	33,627		 	40,025		
Other Investments	137,847		 	132,545		
Goodwill	5,476		 	5,476		
Prepaid Post-Retirement Benefit Costs	88,939		 	82,733		
Fair Value of Derivative Financial Instruments	36,803		 	9,518		
Other	42,632		 	102		
Total Other Assets	580,581		 	514,752		
Total Assets		$6,336,247		 		$6,036,486		
 	 	 	 	
CAPITALIZATION AND LIABILITIES	 	 	 	
Capitalization:	 	 	 	
Comprehensive Shareholders' Equity	 	 	 	
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and	 	 	 	
Outstanding - 86,306,593 Shares and 85,956,814 Shares, Respectively		$86,307		 		$85,957		
Paid in Capital	827,243		 	820,223		
Earnings Reinvested in the Business	1,262,867		 	1,098,900		
Accumulated Other Comprehensive Loss	(32,666	)	 	(67,750	)	
Total Comprehensive Shareholders' Equity	2,143,751		 	1,937,330		
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs	2,133,101		 	2,131,365		
Total Capitalization	4,276,852		 	4,068,695		
 	 	 	 	
Current and Accrued Liabilities:	 	 	 	
Notes Payable to Banks and Commercial Paper	—		 	—		
Current Portion of Long-Term Debt	—		 	—		
Accounts Payable	112,782		 	160,031		
Amounts Payable to Customers	14,546		 	3,394		
Dividends Payable	37,543		 	36,532		
Interest Payable on Long-Term Debt	29,461		 	19,062		
Customer Advances	166		 	13,609		
Customer Security Deposits	16,801		 	25,703		
Other Accruals and Current Liabilities	180,063		 	132,693		
Fair Value of Derivative Financial Instruments	4,563		 	49,036		
Total Current and Accrued Liabilities	395,925		 	440,060		
 	 	 	 	
Deferred Credits:	 	 	 	
Deferred Income Taxes	647,602		 	512,686		
Taxes Refundable to Customers	366,184		 	370,628		
Cost of Removal Regulatory Liability	218,340		 	212,311		
Other Regulatory Liabilities	159,259		 	146,743		
Pension and Other Post-Retirement Liabilities	53,142		 	66,103		
Asset Retirement Obligations	104,732		 	108,235		
Other Deferred Credits	114,211		 	111,025		
Total Deferred Credits	1,663,470		 	1,527,731		
Commitments and Contingencies	—		 	—		
Total Capitalization and Liabilities		$6,336,247		 		$6,036,486		

Page 15.

	

 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED STATEMENTS OF CASH FLOWS	
(Unaudited)	
 	 	Nine Months Ended	
 	 	June 30,	
(Thousands of Dollars)	 	2019	 	2018	
 	 	 	 	 	
Operating Activities:	 	 	 	 	
Net Income Available for Common Stock	 	$	257,009		 	$	353,527		
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:	 	 	 	 	
Depreciation, Depletion and Amortization	 	200,990		 	177,802		
Deferred Income Taxes	 	111,123		 	(43,537	)	
Stock-Based Compensation	 	16,144		 	11,770		
Other	 	7,964		 	12,311		
Change in:	 	 	 	 	
Receivables and Unbilled Revenue	 	(31,584	)	 	(35,021	)	
Gas Stored Underground and Materials and Supplies	 	17,551		 	18,832		
Unrecovered Purchased Gas Costs	 	4,204		 	4,623		
Other Current Assets	 	11,972		 	(1,185	)	
Accounts Payable	 	(16,132	)	 	2,327		
Amounts Payable to Customers	 	11,152		 	16,833		
Customer Advances	 	(13,443	)	 	(15,504	)	
Customer Security Deposits	 	(8,902	)	 	(1,904	)	
Other Accruals and Current Liabilities	 	36,040		 	26,538		
Other Assets	 	(34,594	)	 	(10,770	)	
Other Liabilities	 	1,061		 	1,441		
Net Cash Provided by Operating Activities	 	$	570,555		 	$	518,083		
 	 	 	 	 	
Investing Activities:	 	 	 	 	
Capital Expenditures	 	$	(587,442	)	 	$	(403,994	)	
Net Proceeds from Sale of Oil and Gas Producing Properties	 	—		 	55,506		
Other	 	(3,071	)	 	(1,759	)	
Net Cash Used in Investing Activities	 	$	(590,513	)	 	$	(350,247	)	
 	 	 	 	 	
Financing Activities:	 	 	 	 	
Reduction of Long-Term Debt	 	$	—		 	$	(307,047	)	
Dividends Paid on Common Stock	 	(109,875	)	 	(106,732	)	
Net Proceeds from Issuance (Repurchase) of Common Stock	 	(8,864	)	 	4,262		
Net Cash Used in Financing Activities	 	$	(118,739	)	 	$	(409,517	)	
 	 	 	 	 	
Net Decrease in Cash, Cash Equivalents, and Restricted Cash	 	(138,697	)		(241,681	)	
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	 	233,047		 	557,271		
Cash, Cash Equivalents, and Restricted Cash at June 30	 	$	94,350		 	$	315,590		

Page 16.

	

 	 	 	 	 	 	 				
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 				
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 				
UPSTREAM BUSINESS	

 	Three Months Ended	 	Nine Months Ended	
(Thousands of Dollars, except per share amounts)	June 30,	 	June 30,	
EXPLORATION AND PRODUCTION SEGMENT	2019	 	2018	 	Variance	 	2019	2018	Variance	
Total Operating Revenues	$	158,875		 	$	135,828		 	$	23,047		 	$	467,853		$	421,381		$	46,472		
 	 	 	 	 	 	 							
Operating Expenses:	 	 	 	 	 	 							
Operation and Maintenance:	 	 	 	 	 	 							
General and Administrative Expense	15,628		 	14,946		 	682		 	47,940		45,296		2,644		
Lease Operating and Transportation Expense	47,714		 	37,624		 	10,090		 	136,217		121,079		15,138		
All Other Operation and Maintenance Expense	2,453		 	2,728		 	(275	)	 	7,705		8,182		(477	)	
Property, Franchise and Other Taxes	3,885		 	3,302		 	583		 	13,558		10,746		2,812		
Depreciation, Depletion and Amortization	40,055		 	31,296		 	8,759		 	110,643		90,707		19,936		
 	109,735		 	89,896		 	19,839		 	316,063		276,010		40,053		
 	 	 	 	 	 	 							
Operating Income	49,140		 	45,932		 	3,208		 	151,790		145,371		6,419		
 	 	 	 	 	 	 							
Other Income (Expense):	 	 	 	 	 	 							
Other Income (Deductions)	268		 	193		 	75		 	822		208		614		
Other Interest Expense	(13,850	)	 	(13,247	)	 	(603	)	 	(40,561	)	(40,001	)	(560	)	
 	 	 	 	 	 	 							
Income Before Income Taxes	35,558		 	32,878		 	2,680		 	112,051		105,578		6,473		
Income Tax Expense (Benefit)	9,046		 	5,061		 	3,985		 	25,452		(55,474	)	80,926		
Net Income	$	26,512		 	$	27,817		 	$	(1,305	)	 	$	86,599		$	161,052		$	(74,453	)	
 	 	 	 	 	 	 							
Net Income Per Share (Diluted)	$	0.31		 	$	0.32		 	$	(0.01	)	 	$	1.00		$	1.86		$	(0.86	)	

Page 17.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 	 	 	 	
MIDSTREAM BUSINESSES	

 	Three Months Ended	 	Nine Months Ended	
(Thousands of Dollars, except per share amounts)	June 30,	 	June 30,	
PIPELINE AND STORAGE SEGMENT	2019	 	2018	 	Variance	 	2019	2018	Variance	
Revenues from External Customers	$	46,024		 	$	51,363		 	$	(5,339	)	 	$	148,663		$	158,387		$	(9,724	)	
Intersegment Revenues	22,943		 	22,496		 	447		 	69,712		67,524		2,188		
Total Operating Revenues	68,967		 	73,859		 	(4,892	)	 	218,375		225,911		(7,536	)	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	70		 	105		 	(35	)	 	884		266		618		
Operation and Maintenance	24,070		 	20,618		 	3,452		 	68,610		58,072		10,538		
Property, Franchise and Other Taxes	7,499		 	7,064		 	435		 	22,448		21,299		1,149		
Depreciation, Depletion and Amortization	11,154		 	10,888		 	266		 	33,561		32,322		1,239		
 	42,793		 	38,675		 	4,118		 	125,503		111,959		13,544		
 	 	 	 	 	 	 	 	 	 	
Operating Income	26,174		 	35,184		 	(9,010	)	 	92,872		113,952		(21,080	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Other Income (Deductions)	2,447		 	1,433		 	1,014		 	6,346		4,252		2,094		
Interest Expense	(7,223	)	 	(7,667	)	 	444		 	(22,009	)	(23,418	)	1,409		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	21,398		 	28,950		 	(7,552	)	 	77,209		94,786		(17,577	)	
Income Tax Expense	5,606		 	8,227		 	(2,621	)	 	18,566		12,877		5,689		
Net Income	$	15,792		 	$	20,723		 	$	(4,931	)	 	$	58,643		$	81,909		$	(23,266	)	
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.18		 	$	0.24		 	$	(0.06	)	 	$	0.68		$	0.95		$	(0.27	)	

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
GATHERING SEGMENT	2019	 	2018	 	Variance	 	2019	2018	Variance	
Revenues from External Customers	$	—		 	$	(31	)	 	$	31		 	$	2		$	41		$	(39	)	
Intersegment Revenues	32,875		 	27,908		 	4,967		 	91,931		79,404		12,527		
Total Operating Revenues	32,875		 	27,877		 	4,998		 	91,933		79,445		12,488		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	5,009		 	4,773		 	236		 	13,473		11,248		2,225		
Property, Franchise and Other Taxes	14		 	14		 	—		 	62		74		(12	)	
Depreciation, Depletion and Amortization	5,485		 	4,444		 	1,041		 	14,836		12,759		2,077		
 	10,508		 	9,231		 	1,277		 	28,371		24,081		4,290		
 	 	 	 	 	 	 	 	 	 	
Operating Income	22,367		 	18,646		 	3,721		 	63,562		55,364		8,198		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 		 	 	 		
Other Income (Deductions)	172		 	78		 	94		 	404		730		(326	)	
Interest Expense	(2,288	)	 	(2,502	)	 	214		 	(7,010	)	(7,349	)	339		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	20,251		 	16,222		 	4,029		 	56,956		48,745		8,211		
Income Tax Expense (Benefit)	5,613		 	4,656		 	957		 	15,445		(19,991	)	35,436		
Net Income	$	14,638		 	$	11,566		 	$	3,072		 	$	41,511		$	68,736		$	(27,225	)	
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.17		 	$	0.13		 	$	0.04		 	$	0.48		$	0.80		$	(0.32	)	

Page 18.

	

 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 	 	 	 	
DOWNSTREAM BUSINESSES	

 	Three Months Ended	 	Nine Months Ended	
(Thousands of Dollars, except per share amounts)	June 30,	 	June 30,	
UTILITY SEGMENT	2019	 	2018	 	Variance	 	2019	2018	Variance	
Revenues from External Customers	$	129,977		 	$	128,628		 	$	1,349		 	$	648,624		$	599,495		$	49,129		
Intersegment Revenues	2,944		 	3,519		 	(575	)	 	9,984		11,401		(1,417	)	
Total Operating Revenues	132,921		 	132,147		 	774		 	658,608		610,896		47,712		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	51,003		 	53,028		 	(2,025	)	 	328,119		286,446		41,673		
Operation and Maintenance	38,890		 	38,858		 	32		 	129,839		128,060		1,779		
Property, Franchise and Other Taxes	9,865		 	9,961		 	(96	)	 	31,229		31,349		(120	)	
Depreciation, Depletion and Amortization	13,546		 	13,316		 	230		 	40,202		39,981		221		
 	113,304		 	115,163		 	(1,859	)	 	529,389		485,836		43,553		
 	 	 	 	 	 	 	 	 	 	
Operating Income	19,617		 	16,984		 	2,633		 	129,219		125,060		4,159		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Other Income (Deductions)	(5,017	)	 	(5,436	)	 	419		 	(22,851	)	(26,057	)	3,206		
Interest Expense	(5,793	)	 	(6,572	)	 	779		 	(17,950	)	(20,266	)	2,316		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	8,807		 	4,976		 	3,831		 	88,418		78,737		9,681		
Income Tax Expense	1,445		 	1,046		 	399		 	19,818		20,454		(636	)	
Net Income	$	7,362		 	$	3,930		 	$	3,432		 	$	68,600		$	58,283		$	10,317		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.08		 	$	0.05		 	$	0.03		 	$	0.79		$	0.67		$	0.12		

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
ENERGY MARKETING SEGMENT	2019	 	2018	 	Variance	 	2019	2018	Variance	
Revenues from External Customers	$	21,335		 	$	25,460		 	$	(4,125	)	 	$	132,435		$	119,739		$	12,696		
Intersegment Revenues	681		 	512		 	169		 	1,056		589		467		
Total Operating Revenues	22,016		 	25,972		 	(3,956	)	 	133,491		120,328		13,163		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	22,517		 	24,816		 	(2,299	)	 	130,853		113,240		17,613		
Operation and Maintenance	1,574		 	1,451		 	123		 	4,814		4,529		285		
Depreciation, Depletion and Amortization	72		 	69		 	3		 	213		207		6		
 	24,163		 	26,336		 	(2,173	)	 	135,880		117,976		17,904		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(2,147	)	 	(364	)	 	(1,783	)	 	(2,389	)	2,352		(4,741	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Other Income (Deductions)	221		 	104		 	117		 	466		177		289		
Interest Expense	(3	)	 	(4	)	 	1		 	(16	)	(16	)	—		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	(1,929	)	 	(264	)	 	(1,665	)	 	(1,939	)	2,513		(4,452	)	
Income Tax Expense (Benefit)	(488	)	 	(74	)	 	(414	)	 	(741	)	1,079		(1,820	)	
Net Income (Loss)	$	(1,441	)	 	$	(190	)	 	$	(1,251	)	 	$	(1,198	)	$	1,434		$	(2,632	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	(0.02	)	 	$	—		 	$	(0.02	)	 	$	(0.01	)	$	0.02		$	(0.03	)	

Page 19.

	
																						
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	Nine Months Ended	
(Thousands of Dollars, except per share amounts)	June 30,	 	June 30,	
ALL OTHER	2019	 	2018	 	Variance	 	2019	2018	Variance	
Total Operating Revenues	$	854		 	$	1,496		 	$	(642	)	 	$	2,170		$	3,824		$	(1,654	)	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	316		 	404		 	(88	)	 	899		1,076		(177	)	
Property, Franchise and Other Taxes	127		 	138		 	(11	)	 	398		425		(27	)	
Depreciation, Depletion and Amortization	568		 	614		 	(46	)	 	963		1,259		(296	)	
 	1,011		 	1,156		 	(145	)	 	2,260		2,760		(500	)	
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(157	)	 	340		 	(497	)	 	(90	)	1,064		(1,154	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Other Income (Deductions)	155		 	98		 	57		 	443		241		202		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	(2	)	 	438		 	(440	)	 	353		1,305		(952	)	
Income Tax Expense	1		 	141		 	(140	)	 	101		1,519		(1,418	)	
Net Income (Loss)	$	(3	)	 	$	297		 	$	(300	)	 	$	252		$	(214	)	$	466		
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
CORPORATE	2019	 	2018	 	Variance	 	2019	2018	Variance	
Revenues from External Customers	$	135		 	$	168		 	$	(33	)	 	$	244		$	606		$	(362	)	
Intersegment Revenues	1,165		 	999		 	166		 	3,494		2,998		496		
Total Operating Revenues	1,300		 	1,167		 	133		 	3,738		3,604		134		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	3,159		 	3,580		 	(421	)	 	9,910		10,787		(877	)	
Property, Franchise and Other Taxes	116		 	116		 	—		 	351		352		(1	)	
Depreciation, Depletion and Amortization	192		 	190		 	2		 	572		567		5		
 	3,467		 	3,886		 	(419	)	 	10,833		11,706		(873	)	
 	 	 	 	 	 	 	 	 	 	
Operating Loss	(2,167	)	 	(2,719	)	 	552		 	(7,095	)	(8,102	)	1,007		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Other Income (Deductions)	29,588		 	30,393		 	(805	)	 	84,580		92,984		(8,404	)	
Interest Expense on Long-Term Debt	(25,303	)	 	(27,177	)	 	1,874		 	(76,016	)	(82,412	)	6,396		
Other Interest Expense	(1,335	)	 	(1,489	)	 	154		 	(3,702	)	(4,432	)	730		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) before Income Taxes	783		 	(992	)	 	1,775		 	(2,233	)	(1,962	)	(271	)	
Income Tax Expense (Benefit)	(110	)	 	126		 	(236	)	 	(4,835	)	15,711		(20,546	)	
Net Income (Loss)	$	893		 	$	(1,118	)	 	$	2,011		 	$	2,602		$	(17,673	)	$	20,275		
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	0.01		 	$	(0.01	)	 	$	0.02		 	$	0.02		$	(0.21	)	$	0.23		

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
INTERSEGMENT ELIMINATIONS	2019	 	2018	 	Variance	 	2019	2018	Variance	
Intersegment Revenues	$	(60,608	)	 	$	(55,434	)	 	$	(5,174	)	 	$	(176,177	)	$	(161,916	)	$	(14,261	)	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	(25,751	)	 	(25,738	)	 	(13	)	 	(78,319	)	(77,098	)	(1,221	)	
Operation and Maintenance	(34,857	)	 	(29,696	)	 	(5,161	)	 	(97,858	)	(84,818	)	(13,040	)	
 	(60,608	)	 	(55,434	)	 	(5,174	)	 	(176,177	)	(161,916	)	(14,261	)	
 	 	 	 	 	 	 	 	 	 	
Operating Income	—		 	—		 	—		 	—		—		—		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Other Income (Deductions)	(29,290	)	 	(30,475	)	 	1,185		 	(87,187	)	(92,740	)	5,553		
Interest Expense	29,290		 	30,475		 	(1,185	)	 	87,187		92,740		(5,553	)	
Net Income	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

Page 20.

	

 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	 	 	
SEGMENT INFORMATION (Continued)	
(Thousands of Dollars)	

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
 	(Unaudited)	 	(Unaudited)	
 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	2019	 	2018	 	(Decrease)	 	2019	 	2018	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	
Capital Expenditures:	 	 	 	 	 	 	 	 	 	 	 	
Exploration and Production	$	128,888		(1)  	$	110,591		(3)  	$	18,297		 	$	391,674		(1)(2)  	$	269,876		(3)(4)  	$	121,798		
Pipeline and Storage	35,489		(1)  	15,916		(3)  	19,573		 	88,127		(1)(2)  	53,356		(3)(4)  	34,771		
Gathering	17,926		(1)  	15,484		(3)  	2,442		 	39,396		(1)(2)  	47,767		(3)(4)  	(8,371	)	
Utility	22,706		(1)  	19,737		(3)  	2,969		 	58,363		(1)(2)  	52,026		(3)(4)  	6,337		
Energy Marketing	14		 	10		 	4		 	56		 	33		 	23		
Total Reportable Segments	205,023			161,738			43,285			577,616			423,058			154,558		
All Other	68		 	—		 	68		 	68		 	1		 	67		
Corporate	267		 	7		 	260		 	369		 	51		 	318		
Eliminations	—		 	—		 	—		 	—		 	(19,922	)	 	19,922		
Total Capital Expenditures	$	205,358		 	$	161,745		 	$	43,613		 	$	578,053		 	$	403,188		 	$	174,865		

		
(1)  	Capital expenditures for the quarter and nine months ended June 30, 2019, include accounts payable and accrued liabilities related to capital expenditures of $51.0 million, $14.0 million, $8.3 million, and $6.1 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2019, since they represent non-cash investing activities at that date.	

(2)  	Capital expenditures for the nine months ended June 30, 2019, exclude capital expenditures of $51.3 million, $21.9 million, $6.1 million and $9.5 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2018 and paid during the nine months ended June 30, 2019. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2018, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2019.	

(3)  	Capital expenditures for the quarter and nine months ended June 30, 2018, include accounts payable and accrued liabilities related to capital expenditures of $49.0 million, $10.9 million, $8.2 million, and $3.3 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2018, since they represent non-cash investing activities at that date.	

(4)  	Capital expenditures for the nine months ended June 30, 2018, exclude capital expenditures of $36.5 million, $25.1 million, $3.9 million and $6.7 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2017 and paid during the nine months ended June 30, 2018. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2017, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2018.	

	

DEGREE DAYS	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Percent Colder	
 	 	 	 	 	 	 	(Warmer) Than:	
Three Months Ended June 30	Normal	 	2019	 	2018	 	  Normal (1)	 	Last Year (1)	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	912	 	957	 	873	 	4.9		 	9.6		
Erie, PA	871	 	773	 	825	 	(11.3	)	 	(6.3	)	
 	 	 	 	 	 	 	 	 	 	
Nine Months Ended June 30	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	6,455	 	6,654	 	6,308	 	3.1		 	5.5		
Erie, PA	6,023	 	5,899	 	5,929	 	(2.1	)	 	(0.5	)	

(1)  	Percents compare actual 2019 degree days to normal degree days and actual 2019 degree days to actual 2018 degree days.	

Page 21.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	

 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2019	 	2018	 	(Decrease)	 	2019	 	2018	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gas Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	50,766		 	40,444		 	10,322		 	140,954		 	117,261		 	23,693		
West Coast	 	494		 	526		 	(32	)	 	1,483		 	1,896		 	(413	)	
Total Production	 	51,260		 	40,970		 	10,290		 	142,437		 	119,157		 	23,280		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Mcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	2.21		 	$	2.30		 	$	(0.09	)	 	$	2.58		 	$	2.37		 	$	0.21		
West Coast	 	3.84		 	4.41		 	(0.57	)	 	5.55		 	4.62		 	0.93		
Weighted Average	 	2.22		 	2.32		 	(0.10	)	 	2.61		 	2.40		 	0.21		
Weighted Average after Hedging	 	2.36		 	2.43		 	(0.07	)	 	2.51		 	2.55		 	(0.04	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (Thousands of Barrels)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	1		 	1		 	—		 	2		 	3		 	(1	)	
West Coast	 	575		 	600		 	(25	)	 	1,710		 	1,934		 	(224	)	
Total Production	 	576		 	601		 	(25	)	 	1,712		 	1,937		 	(225	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Barrel)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	55.45		 	$	64.37		 	$	(8.92	)	 	$	55.80		 	$	55.06		 	$	0.74		
West Coast	 	67.43		 	71.53		 	(4.10	)	 	65.01		 	64.69		 	0.32		
Weighted Average	 	67.41		 	71.52		 	(4.11	)	 	65.00		 	64.68		 	0.32		
Weighted Average after Hedging	 	62.92		 	58.74		 	4.18		 	61.88		 	58.96		 	2.92		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Production (MMcfe)	 	54,716		 	44,576		 	10,140		 	152,709		 	130,779		 	21,930		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Selected Operating Performance Statistics:	 	 	 	 	 	 	 	 	 	 	 	 	
General & Administrative Expense per Mcfe (1)	 	$	0.29		 	$	0.34		 	$	(0.05	)	 	$	0.31		 	$	0.35		 	$	(0.04	)	
Lease Operating and Transportation Expense per Mcfe (1)(2)	 	$	0.87		 	$	0.84		 	$	0.03		 	$	0.89		 	$	0.93		 	$	(0.04	)	
Depreciation, Depletion & Amortization per Mcfe (1)	 	$	0.73		 	$	0.70		 	$	0.03		 	$	0.72		 	$	0.69		 	$	0.03		

		
(1)  	Refer to page 16 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.	

(2)  	Amounts include transportation expense of $0.57 and $0.53 per Mcfe for the three months ended June 30, 2019 and June 30, 2018, respectively. Amounts include transportation expense of $0.55 and $0.54 per Mcfe for the nine months ended June 30, 2019 and June 30, 2018, respectively.	

Page 22.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	
 	
Hedging Summary for Remaining Three Months of Fiscal 2019	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	186,000		BBL	 	$	63.52 / BBL	
NYMEX	 	267,000		BBL	 	$	53.42 / BBL	
Total	 	453,000		BBL	 	$	57.57 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	20,040,000		MMBTU	 	$	2.93 / MMBTU	
DAWN	 	1,800,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	19,579,555		MMBTU	 	$	2.61 / MMBTU	
Total	 	41,419,555		MMBTU	 	$	2.78 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2020	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	1,260,000		BBL	 	$	64.66 / BBL	
NYMEX	 	324,000		BBL	 	$	50.52 / BBL	
Total	 	1,584,000		BBL	 	$	61.77 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	40,990,000		MMBTU	 	$	2.92 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	46,430,854		MMBTU	 	$	2.37 / MMBTU	
Total	 	94,620,854		MMBTU	 	$	2.65 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2021	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	576,000		BBL	 	$	64.48 / BBL	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
Total	 	732,000		BBL	 	$	61.61 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	6,790,000		MMBTU	 	$	2.95 / MMBTU	
   DAWN	 	600,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	41,381,641		MMBTU	 	$	2.22 / MMBTU	
Total	 	48,771,641		MMBTU	 	$	2.33 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2022	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	300,000		BBL	 	$	60.07 / BBL	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
Total	 	456,000		BBL	 	$	56.97 / BBL	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	40,533,125		MMBTU	 	$	2.23 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2023	 	Volume	 	 	Average Hedge Price	
Fixed Price Physical Sales	 	37,174,130		MMBTU	 	$	2.26 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2024	 	Volume	 	 	Average Hedge Price	
Fixed Price Physical Sales	 	21,053,189		MMBTU	 	$	2.25 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2025	 	Volume	 	 	Average Hedge Price	
Fixed Price Physical Sales	 	2,293,200		MMBTU	 	$	2.18 / MMBTU	

	

Page 23.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	

 	 	 	 	 	 	 	 	 	 	 	 	 	
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2019	 	2018	 	(Decrease)	 	2019	 	2018	 	(Decrease)	
Firm Transportation - Affiliated	 	20,755		 	21,714		 	(959	)	 	107,423		 	104,106		 	3,317		
Firm Transportation - Non-Affiliated	 	137,984		 	155,357		 	(17,373	)	 	442,839		 	479,346		 	(36,507	)	
Interruptible Transportation	 	309		 	1,107		 	(798	)	 	1,974		 	3,153		 	(1,179	)	
 	 	159,048		 	178,178		 	(19,130	)	 	552,236		 	586,605		 	(34,369	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gathering Volume - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2019	 	2018	 	(Decrease)	 	2019	 	2018	 	(Decrease)	
Gathered Volume - Affiliated	 	60,745		 	51,392		 	9,353		 	169,590		 	145,928		 	23,662		

Utility Throughput - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2019	 	2018	 	(Decrease)	 	2019	 	2018	 	(Decrease)	
Retail Sales:	 	 	 	 	 	 	 	 	 	 	 	 	
Residential Sales	 	9,895		 	10,052		 	(157	)	 	60,581		 	56,468		 	4,113		
Commercial Sales	 	1,441		 	1,525		 	(84	)	 	8,999		 	8,621		 	378		
Industrial Sales	 	151		 	128		 	23		 	639		 	559		 	80		
 	 	11,487		 	11,705		 	(218	)	 	70,219		 	65,648		 	4,571		
Off-System Sales	 	—		 	—		 	—		 	—		 	141		 	(141	)	
Transportation	 	14,716		 	15,348		 	(632	)	 	65,914		 	66,398		 	(484	)	
 	 	26,203		 	27,053		 	(850	)	 	136,133		 	132,187		 	3,946		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Energy Marketing Volume	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2019	 	2018	 	(Decrease)	 	2019	 	2018	 	(Decrease)	
Natural Gas (MMcf)	 	7,429		 	8,322		 	(893	)	 	36,039		 	36,413		 	(374	)	

	

	

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Page 24.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding Adjusted Operating Results and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results and for comparing the Company’s financial performance to other companies. The Company's management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.

Management defines Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the three and nine months ended June 30, 2019 and 2018:

																	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
(in thousands except per share amounts)	 	2019	 	2018	 	2019	 	2018	
Reported GAAP Earnings	 	$	63,753		 	$	63,025		 	$	257,009		 	$	353,527		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes under 2017 Tax Reform	 	—		 	—		 	(5,000	)	 	(107,000	)	
Mark-to-market adjustments due to hedge ineffectiveness (E&P)	 	(1,020	)	 	339		 	(783	)	 	436		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	 	214		 	(83	)	 	164		 	(107	)	
Unrealized (gain) loss on other investments (Corporate/All Other)	 	(1,420	)	 	—		 	1,096		 	—		
Tax impact of unrealized (gain) loss on other investments	 	298		 	—		 	(230	)	 	—		
Adjusted Operating Results	 	$	61,825		 	$	63,281		 	$	252,256		 	$	246,856		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	0.73		 	$	0.73		 	$	2.96		 	$	4.09		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes under 2017 Tax Reform	 	—		 	—		 	(0.06	)	 	(1.24	)	
Mark-to-market adjustments due to hedge ineffectiveness (E&P)	 	(0.01	)	 	—		 	(0.01	)	 	0.01		
Tax impact of mark-to-market adjustments due to hedge ineffectiveness	 	—		 	—		 	—		 	—		
Unrealized (gain) loss on other investments (Corporate/All Other)	 	(0.02	)	 	—		 	0.01		 	—		
Tax impact of unrealized (gain) loss on other investments	 	—		 	—		 	—		 	—		
Rounding	 	0.01		 	—		 	0.01		 	—		
Adjusted Operating Results per share	 	$	0.71		 	$	0.73		 	$	2.91		 	$	2.86		

Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and nine months ended June 30, 2019 and 2018:

																	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	2019	 	2018	 	2019	 	2018	
(in thousands)	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	63,753		 	$	63,025		 	$	257,009		 	$	353,527		
Depreciation, Depletion and Amortization	 	71,072		 	60,817		 	200,990		 	177,802		
Other (Income) Deductions	 	1,456		 	3,612		 	16,977		 	20,205		
Interest Expense	 	26,505		 	28,183		 	80,077		 	85,154		
Income Taxes	 	21,113		 	19,183		 	73,806		 	(23,825	)	
Mark-to-Market Adjustments due to Hedge Ineffectiveness	 	(1,020	)	 	339		 	(783	)	 	436		
Adjusted EBITDA	 	$	182,879		 	$	175,159		 	$	628,076		 	$	613,299		
 	 	 	 	 	 	 	 	 	
Adjusted EBITDA by Segment	 	 	 	 	 	 	 	 	
Pipeline and Storage Adjusted EBITDA	 	$	37,328		 	$	46,072		 	$	126,433		 	$	146,274		
Gathering Adjusted EBITDA	 	27,852		 	23,090		 	78,398		 	68,123		
Total Midstream Businesses Adjusted EBITDA	 	65,180		 	69,162			204,831			214,397		
Exploration and Production Adjusted EBITDA	 	88,175		 	77,567		 	261,650		 	236,514		
Utility Adjusted EBITDA	 	33,163		 	30,300		 	169,421		 	165,041		
Energy Marketing Adjusted EBITDA	 	(2,075	)	 	(295	)	 	(2,176	)	 	2,559		
Corporate and All Other Adjusted EBITDA	 	(1,564	)	 	(1,575	)	 	(5,650	)	 	(5,212	)	
Total Adjusted EBITDA	 	$	182,879		 	$	175,159			$	628,076			$	613,299		

Page 25.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDA

																	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
(in thousands)	 	2019	 	2018	 	2019	 	2018	
Exploration and Production Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	26,512		 	$	27,817		 	$	86,599		 	$	161,052		
Depreciation, Depletion and Amortization	 	40,055		 	31,296		 	110,643		 	90,707		
Other (Income) Deductions	 	(268	)	 	(193	)	 	(822	)	 	(208	)	
Interest Expense	 	13,850		 	13,247		 	40,561		 	40,001		
Income Taxes	 	9,046		 	5,061		 	25,452		 	(55,474	)	
Mark-to-Market Adjustments due to Hedge Ineffectiveness	 	(1,020	)	 	339		 	(783	)	 	436		
Adjusted EBITDA	 	$	88,175		 	$	77,567		 	$	261,650		 	$	236,514		
 	 	 	 	 	 	 	 	 	
Pipeline and Storage Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	15,792		 	$	20,723		 	$	58,643		 	$	81,909		
Depreciation, Depletion and Amortization	 	11,154		 	10,888		 	33,561		 	32,322		
Other (Income) Deductions	 	(2,447	)	 	(1,433	)	 	(6,346	)	 	(4,252	)	
Interest Expense	 	7,223		 	7,667		 	22,009		 	23,418		
Income Taxes	 	5,606		 	8,227		 	18,566		 	12,877		
Adjusted EBITDA	 	$	37,328		 	$	46,072		 	$	126,433		 	$	146,274		
 	 	 	 	 	 	 	 	 	
Gathering Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	14,638		 	$	11,566		 	$	41,511		 	$	68,736		
Depreciation, Depletion and Amortization	 	5,485		 	4,444		 	14,836		 	12,759		
Other (Income) Deductions	 	(172	)	 	(78	)	 	(404	)	 	(730	)	
Interest Expense	 	2,288		 	2,502		 	7,010		 	7,349		
Income Taxes	 	5,613		 	4,656		 	15,445		 	(19,991	)	
Adjusted EBITDA	 	$	27,852		 	$	23,090		 	$	78,398		 	$	68,123		
 	 	 	 	 	 	 	 	 	
Utility Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	7,362		 	$	3,930		 	$	68,600		 	$	58,283		
Depreciation, Depletion and Amortization	 	13,546		 	13,316		 	40,202		 	39,981		
Other (Income) Deductions	 	5,017		 	5,436		 	22,851		 	26,057		
Interest Expense	 	5,793		 	6,572		 	17,950		 	20,266		
Income Taxes	 	1,445		 	1,046		 	19,818		 	20,454		
Adjusted EBITDA	 	$	33,163		 	$	30,300		 	$	169,421		 	$	165,041		
 	 	 	 	 	 	 	 	 	
Energy Marketing Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(1,441	)	 	$	(190	)	 	$	(1,198	)	 	$	1,434		
Depreciation, Depletion and Amortization	 	72		 	69		 	213		 	207		
Other (Income) Deductions	 	(221	)	 	(104	)	 	(466	)	 	(177	)	
Interest Expense	 	3		 	4		 	16		 	16		
Income Taxes	 	(488	)	 	(74	)	 	(741	)	 	1,079		
Adjusted EBITDA	 	$	(2,075	)	 	$	(295	)	 	$	(2,176	)	 	$	2,559		
 	 	 	 	 	 	 	 	 	
Corporate and All Other	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	890		 	$	(821	)	 	$	2,854		 	$	(17,887	)	
Depreciation, Depletion and Amortization	 	760		 	804		 	1,535		 	1,826		
Other (Income) Deductions	 	(453	)	 	(16	)	 	2,164		 	(485	)	
Interest Expense	 	(2,652	)	 	(1,809	)	 	(7,469	)	 	(5,896	)	
Income Taxes	 	(109	)	 	267		 	(4,734	)	 	17,230		
Adjusted EBITDA	 	$	(1,564	)	 	$	(1,575	)	 	$	(5,650	)	 	$	(5,212	)