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): November 2, 2017

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))	

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 November 2, 2017, National Fuel Gas Company (the “Company”) issued a press release regarding its earnings for the quarter and fiscal year ended September 30, 2017. 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: 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; 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; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; changes in the price of natural gas or oil; 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; 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; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks or pest infestation; 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 fiscal year ended September 30, 2017

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/ Paula M. Ciprich	
 	Paula M. Ciprich	
 	Senior Vice President, General Counsel & Secretary	

Dated: November 3, 2017

Exhibit 99

	

 	 	6363 Main Street/Williamsville, NY 14221	
 	 	 	 	
Release Date:	Immediate November 2, 2017	Brian M. Welsch
Investor Relations
716-857-7875	David P. Bauer
Treasurer
716-857-7318	

NATIONAL FUEL REPORTS FOURTH QUARTER
AND FULL YEAR FISCAL 2017 EARNINGS

WILLIAMSVILLE, N.Y.: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2017.

FISCAL 2017 FOURTH QUARTER SUMMARY

•	Consolidated net income of $45.6 million, or $0.53 per share, compared to consolidated net income of $37.6 million, or $0.44 per share, and operating results of $56.6 million, or $0.66 per share, in the prior year (see reconciliation below)	
		
•	Consolidated adjusted EBITDA of $142.8 million (non-GAAP reconciliation on page 25)	
		
•	Net production of 40.4 Bcfe, a 1% increase from the prior year	
		
•	Price-related natural gas production curtailments of 2.5 Bcf in Appalachia	
		
•	Average natural gas prices, after the impact of hedging, of $2.91 per Mcf, down $0.18 per Mcf from the prior year	
		
•	Average oil prices, after the impact of hedging, of $54.77 per Bbl, down $5.24 per Bbl from the prior year	
		
•	Gathering revenues of $25.0 million, up 6% from the prior year, on 44.9 Bcf of gathering system throughput	

FISCAL 2017 HIGHLIGHTS

•	Consolidated net income of $283.5 million, or $3.30 per share, compared to consolidated net loss of $291.0 million, or $3.43 per share, and operating results of $263.6 million, or $3.09 per share, in the prior year (see reconciliation below)	
		
•	Consolidated adjusted EBITDA of $777.0 million (non-GAAP reconciliation on page 25)	
		
•	Cash provided by operations exceeded net cash used in investing activities by $262 million	
		
•	Gathering net income of $40.4 million, a 32% increase from the prior year	
		
•	Net production of 173.5 Bcfe, an 8% increase from the prior year	
		
•	Proved reserves at September 30, 2017, of 2.2 Tcfe, an increase of 17% from September 30, 2016	
		
•	Seneca finding and development costs, excluding revisions, of $0.60 per Mcfe	
		
•	Increased shareholder dividend for the 47th consecutive year to an annualized distribution of $1.66 per share	

Page 2.

OPERATING RESULTS

	
																	
 	 	Three Months Ended	 	Fiscal Year Ended	
 	 	September 30,	 	September 30,	
(in thousands except per share amounts)	 	2017	 	2016	 	2017	 	2016	
Reported GAAP earnings (loss)	 	$	45,577		 	$	37,553		 	$	283,482		 	$	(290,958	)	
Items impacting comparability:	 	 	 	 	 	 	 	 	
Impairment of oil and gas properties (E&P)	 	 	 	32,756		 	 	 	948,307		
Tax impact of impairment of oil and gas properties	 	 	 	(13,757	)	 	 	 	(398,287	)	
Joint development agreement professional fees (E&P)	 	 	 	 	 	 	 	7,855		
Tax impact of joint development agreement professional fees	 	 	 	 	 	 	 	(3,299	)	
Operating results	 	$	45,577		 	$	56,552		 	$	283,482		 	$	263,618		
 	 	 	 	 	 	 	 	 	
Reported GAAP earnings (loss) per share	 	$	0.53		 	$	0.44		 	$	3.30		 	$	(3.43	)	
Items impacting comparability:	 	 	 	 	 	 	 	 	
Impairment of oil and gas properties (E&P)	 	 	 	0.38		 	 	 	11.18		
Tax impact of impairment of oil and gas properties	 	 	 	(0.16	)	 	 	 	(4.69	)	
Joint development agreement professional fees (E&P)	 	 	 	 	 	 	 	0.09		
Tax impact of joint development agreement professional fees	 	 	 	 	 	 	 	(0.04	)	
         Earnings per share impact of diluted shares	 	 	 	 	 	 	 	(0.02	)	
Operating results per diluted share	 	$	0.53		 	$	0.66		 	$	3.30		 	$	3.09		

MANAGEMENT COMMENTS

Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel ended its 2017 fiscal year on a strong note. Our Exploration and Production segment continues to make progress in the appraisal and optimization of our Utica shale potential. Utica well completions helped drive the 17 percent increase in our proved reserves while lowering our finding and development costs in Appalachia to $0.51 per Mcf. Our Gathering segment meanwhile capped-off an outstanding year that saw its earnings grow by 32 percent. In spite of commodity price volatility and regulatory challenges, the Company generated positive free cash flow for the second consecutive year, which allowed us to continue to grow our dividend, maintain the safety and reliability of our pipeline systems, and position our upstream and midstream businesses for the next leg of growth in Appalachia.

“As we enter 2018, we are optimistic that the ongoing build-out of pipeline infrastructure in the region will help local pricing and provide a tailwind while we continue to work through the regulatory process with our Northern Access project. In any event, just as we have always done, we will continue to manage our business in a way that minimizes the risk to our earnings and cash flows, maintains a strong balance sheet to preserve financial flexibility as opportunities in the market arise, and prioritizes economic returns that add long-term value for our shareholders.”

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DISCUSSION OF RESULTS BY SEGMENT

The following discussion of the earnings of each segment is summarized in a tabular form on pages 9 through 12 of this report. It may be helpful to refer to those tables while reviewing this discussion. Note that management defines operating results as reported GAAP earnings before items impacting comparability and adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, interest and other income, impairments, and items impacting comparability.

Upstream Business

Exploration and Production Segment

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

	
																								
 	Three Months Ended	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2017	 	2016	 	Variance	 	2017	 	2016	 	Variance	
Net Income / (Loss)	$	30,354		 	$	16,744		 	$	13,610		 	$	129,326		 	$	(452,842	)	 	$	582,168		
Net Income / (Loss) Per Share (Diluted)	$	0.35		 	$	0.20		 	$	0.15		 	$	1.50		 	$	(5.34	)	 	$	6.84		
Adjusted EBITDA	$	75,303		 	$	95,157		 	$	(19,854	)	 	$	360,979		 	$	363,830		 	$	(2,851	)	

The $13.6 million increase in the Exploration and Production segment’s fourth quarter earnings was primarily attributable to the non-recurrence of a $32.8 million ($19.0 million after-tax) ceiling test impairment charge recorded to reduce the book value of Seneca’s oil and gas properties in the prior year. Excluding the impairment charge, results for the segment declined $5.4 million, or $0.07 per share, as the impact of higher net production and the benefit of a lower effective income tax rate was more than offset by a decline in realized natural gas and oil prices, an increase in lease operating and transportation (“LOE”) expense, and higher other operating expenses.

Seneca’s fourth quarter net production was 40.4 billion cubic feet equivalent (“Bcfe”), an increase of 0.5 Bcfe, or 1 percent, from the prior year. Net natural gas production increased 0.8 Bcf, or 2 percent, due to significantly reduced price-related curtailments across Seneca’s Appalachian producing areas and higher production in the Western Development Area (“WDA”) from new wells completed and brought online during the year, partially offset by natural declines from Marcellus locations in the Eastern Development Area (“EDA”). As a result of depressed local daily spot prices in Pennsylvania, Seneca voluntarily curtailed an estimated 2.5 Bcf of net natural gas production in the fourth quarter, which was down from an estimated 6.2 Bcf of curtailments in the prior year. Seneca’s oil production decreased 49 thousand barrels ("Mbbl") due mainly to a reduction in well workover activity in prior quarters and modifications to steaming operations at its North Midway Sunset field in California.

Seneca's average realized natural gas price, after the impact of hedging and all marketing and transportation costs, was $2.91 per thousand cubic feet ("Mcf"), a decrease of $0.18 per Mcf from the prior year. Seneca's average realized oil price, after the impact of hedging, was $54.77 per barrel ("Bbl"), a decrease of $5.24 per Bbl. The decline in Seneca’s realized natural gas and oil prices is primarily attributable to the expiration of physical firm sales and financial hedge contracts over the past 12 months that had favorable pricing relative to current market prices and hedge book. Seneca's average realized natural gas and oil prices benefited from an uplift of $0.47 per Mcf and $7.33 per Bbl, respectively, from financial hedges settled during the quarter.

LOE increased $4.6 million, or $0.10 per Mcf equivalent ("Mcfe") on a cost per unit of production basis, due primarily to an increase in well workover and repair activities as well as higher steam volumes at North Midway Sunset in California. The elevated activities are expected to arrest, and in some cases reverse, natural field production declines in fiscal 2018. LOE expense in California is projected to return to normal levels over the next few quarters. Other operating expenses increased $2.9 million versus the prior year due mainly to a one-time payment made to reimburse a third-party pipeline operator for development costs on a project that Seneca has future contracted firm transportation capacity. Seneca will recoup the full amount of the payment when facilities are ultimately constructed.

A decrease in Seneca’s effective tax rate increased the segment’s earnings by $7.2 million in the fourth quarter. This decrease was largely due to an anticipated increase in the sale of future natural gas production at delivery points in the southeastern U.S.

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Page 4.

utilizing firm transportation capacity on the Atlantic Sunrise project, which decreased the effective tax rate used in the calculation of Seneca’s deferred taxes. Seneca holds approximately 190 million cubic feet ("MMcf") per day of capacity on Atlantic Sunrise, which commenced construction during the fourth quarter and is expected to be in-service before the end of the Company’s 2018 fiscal year.

For fiscal 2017, the $582.2 million increase in the Exploration and Production segment’s earnings was primarily attributable to the non-recurrence of two items that reduced earnings in the prior year. In fiscal 2016, Seneca recorded a $948.3 million ($550.0 million after-tax) ceiling test impairment charge to reduce the book value of Seneca’s oil and gas properties. Seneca also incurred $7.9 million ($4.6 million after-tax) in the prior year for professional and legal expenses related to the joint development agreement ("JDA") to develop certain Marcellus wells. Excluding these items, annual results for the segment improved $27.6 million, or $0.31 per share, due primarily to the impact of higher net production, lower general and administrative ("G&A") and depreciation, depletion and amortization (“DD&A”) expenses, and the benefit of a lower effective income tax rate, partially offset by a decline in realized natural gas and oil prices.

Seneca generated net production of 173.5 Bcfe in fiscal 2017, an increase of 12.4 Bcfe, or 8 percent, versus the prior year and the highest annual output in the Company’s history. Seneca's average realized natural gas and oil prices, after the impact of hedging and all marketing and transportation costs, were $2.95 per Mcf and $53.87 Bbl, respectively, a decrease of $0.07 per Mcf and $4.04 per Bbl from fiscal 2016.

G&A expense, excluding the joint development agreement costs, declined $4.0 million, or $0.05 per Mcfe, due to lower personnel costs. DD&A expense decreased $27.4 million as the decline in Seneca’s full cost pool depletion rate more than offset the impact of higher production. Seneca’s per unit DD&A decreased by $0.22 per Mcfe to $0.65 per Mcfe due mainly to a lower depletable fixed asset balance resulting from the ceiling test impairment charges recorded in fiscal 2016. LOE expense increased by $12.1 million in fiscal 2017, in-line with production growth, resulting in per unit LOE expense holding flat versus the prior year at $0.96 per Mcfe.

A decrease in Seneca’s effective tax rate increased the segment’s earnings by $10.6 million in fiscal 2017. The decrease in the effective tax rate was due mostly to the impact on deferred taxes of Seneca's Atlantic Sunrise capacity discussed above, as well as an enhanced oil recovery tax credit related to Seneca’s California properties. This credit was applicable this year as a result of relatively low domestic crude oil prices.

Year End Proved Reserves

Seneca’s total proved natural gas and crude oil reserves at September 30, 2017 increased 17 percent to 2,154 Bcfe from 1,849 Bcfe at September 30, 2016. In fiscal 2017, Seneca recorded 391 Bcfe of proved reserve extensions and discoveries, primarily from Utica and Marcellus locations in Appalachia, and 111 Bcfe of net positive revisions, due mainly to higher natural gas and oil prices during the year. Seneca sold 22 Bcfe of proved reserves associated with 16 Marcellus and Utica wells located in non-core areas of the WDA during the fiscal year. The Company’s total proved reserve base is now 92 percent natural gas and 8 percent crude oil. Seneca’s total proved undeveloped reserves (“PUDs”) at the end of fiscal 2017 were 612 Bcfe, or 28 percent of total proved reserves.

Adjusting for sales and revisions, Seneca replaced 225 percent of its production in fiscal 2017, up from the 117 percent reserve replacement achieved in fiscal 2016. The year over year improvement was due mainly to the success of Seneca’s Utica Shale appraisal program in the WDA, increased development activity in the EDA where Seneca added a rig this past May, and the general shift to developing more 100 percent working interest wells in the WDA as activity on JDA locations is set to conclude in fiscal 2018.

Seneca’s consolidated finding and development (“F&D”) cost, excluding the impact of positive revisions that were largely related to an increase in natural gas and oil prices, was $0.60 per Mcfe in fiscal 2017, driven primarily by Utica and Marcellus shale extensions and discoveries that achieved a drill-bit F&D cost of $0.51 per Mcfe in Appalachia. The Company’s three-year average consolidated F&D cost was $0.98 per Mcfe, down $0.34 per Mcfe from the three-year average of $1.32 per Mcfe at the end of fiscal 2016.

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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	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2017	 	2016	 	Variance	 	2017	 	2016	 	Variance	
Net Income / (Loss)	$	13,791		 	$	16,816		 	$	(3,025	)	 	$	68,446		 	$	76,610		 	$	(8,164	)	
Net Income / (Loss) Per Share (Diluted)	$	0.16		 	$	0.20		 	$	(0.04	)	 	$	0.80		 	$	0.90		 	$	(0.10	)	
Adjusted EBITDA	$	39,049		 	$	46,517		 	$	(7,468	)	 	$	180,328		 	$	199,446		 	$	(19,118	)	

The $3.0 million decrease in the Pipeline and Storage segment's fourth quarter earnings was primarily due to a decline in operating revenues and higher Operation and Maintenance (“O&M”) expense, offset partially by the impact of a lower effective income tax rate. Operating revenues decreased $3.7 million due to the scheduled reduction in Supply Corporation and Empire’s transportation rates that went into effect during the first quarter of fiscal 2017 resulting from their respective rate case settlements, lower reservation revenues resulting from recent contract terminations and restructurings, and a decline in short-term interruptible transportation service in the current quarter. O&M expense increased $3.4 million due mostly to costs associated with the overhaul of two compressor facilities and an increase in the reserve for preliminary engineering costs on projects in development.

The Pipeline and Storage segment’s fiscal 2017 earnings decreased $8.2 million from the prior year as lower operating revenues and higher O&M expenses were only partially offset by a decrease in DD&A expense and the impact of a lower effective income tax rate. Similar to the fourth quarter, operating revenues were negatively impacted by scheduled rate reductions related to Supply and Empire’s rate case settlements, as well as contract terminations and restructurings and lower demand for short-term interruptible transportation service. The increase in O&M expense was primarily due to higher personnel costs and an increase in compressor station maintenance expenses. DD&A expense decreased primarily due to Empire’s rate case settlement, which lowered the subsidiary’s depreciation rate.

Gathering Segment

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Corporation’s subsidiary 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	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2017	 	2016	 	Variance	 	2017	 	2016	 	Variance	
Net Income / (Loss)	$	9,003		 	$	8,537		 	$	466		 	$	40,377		 	$	30,499		 	$	9,878		
Net Income / (Loss) Per Share (Diluted)	$	0.10		 	$	0.10		 	$	—		 	$	0.47		 	$	0.36		 	$	0.11		
Adjusted EBITDA	$	21,206		 	$	20,963		 	$	243		 	$	94,380		 	$	78,685		 	$	15,695		

The Gathering segment’s fourth quarter earnings increased 5 percent versus the prior year due to higher operating revenues and a lower effective tax rate, partially offset by higher operating expenses. Operating revenues increased $1.4 million, or 6 percent, from the prior year due mostly to higher throughput. The Company transported 44.9 Bcf on its gathering systems in the fourth quarter, an increase of 2.3 Bcf, or 5 percent, from the prior year. O&M expense increased $1.3 million due to higher personnel costs and expenses associated with operating new gathering and compression assets placed in service during the past year.

The Gathering segment’s fiscal 2017 earnings increased $9.9 million, or 32 percent, versus the prior year due mainly to higher operating revenues, offset slightly by higher O&M and DD&A expenses. The growth in Seneca’s gross natural gas production in Appalachia, which includes production from Marcellus joint development locations, helped drive a 20 percent increase in throughput across the Company’s gathering systems during the year. O&M expense increased $2.8 million due to

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higher personnel and contract labor costs associated with the continued growth of the segment. DD&A expense increased due to higher gross plant in service during the year.

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	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2017	 	2016	 	Variance	 	2017	 	2016	 	Variance	
Net Income / (Loss)	$	(4,168	)	 	$	(1,784	)	 	$	(2,384	)	 	$	46,935		 	$	50,960		 	$	(4,025	)	
Net Income / (Loss) Per Share (Diluted)	$	(0.05	)	 	$	(0.02	)	 	$	(0.03	)	 	$	0.55		 	$	0.60		 	$	(0.05	)	
Adjusted EBITDA	$	11,846		 	$	10,400		 	$	1,446		 	$	151,078		 	$	148,683		 	$	2,395		

The Utility segment’s fourth quarter net loss increased $2.4 million from the prior year as an improvement in the segment’s operating loss was more than offset by higher interest expense, lower interest and other income, and the impact of a lower income tax benefit. The $1.5 million improvement in Distribution’s operating loss was largely attributable to the impact of new customer rates in Distribution’s New York service territory that went into effect following the rate case order issued in April as well as lower O&M expense. The decrease in interest and other income was primarily due to lower accrued interest income on regulatory reserve accounts, while interest expense was negatively impacted by a non-recurring regulatory adjustment that was recorded in the prior year.

For fiscal 2017, the Utility segment’s earnings decreased $4.0 million as higher utility margin (operating revenues less purchased gas costs) was more than offset by an increase in O&M, DD&A, and interest expenses and a decrease in interest and other income. Utility margin increased $9.2 million due mainly to an increase in normalized customer usage, the benefit of new customer rates in New York, and the impact of regulatory adjustments. O&M expense increased $6.1 million due mainly to higher personnel costs. DD&A expense increased $4.0 million due to higher average plant balances during the year, which was primarily driven by the replacement of Distribution’s customer information system that was placed in service in May of fiscal 2016.

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, offering competitively priced natural gas to its customers.

																								
 	Three Months Ended	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2017	 	2016	 	Variance	 	2017	 	2016	 	Variance	
Net Income / (Loss)	$	(614	)	 	$	231		 	$	(845	)	 	$	1,509		 	$	4,348		 	$	(2,839	)	
Net Income / (Loss) Per Share (Diluted)	$	(0.01	)	 	$	—		 	$	(0.01	)	 	$	0.02		 	$	0.05		 	$	(0.03	)	
Adjusted EBITDA	$	(1,134	)	 	$	87		 	$	(1,221	)	 	$	2,080		 	$	6,655		 	$	(4,575	)	

The Energy Marketing segment's fourth quarter earnings decreased slightly versus the prior year, resulting in a net loss of $0.6 million, or $0.01 per share. For fiscal 2017, the $2.8 million decline in the Energy Marketing segment’s earnings was due largely to lower customer margins. NFR’s customer margins were negatively impacted by stronger natural gas prices at local purchase points relative to NYMEX-based customer sales contracts during the winter heating season.

Corporate and All Other

The Corporate and All Other category’s net loss of $2.8 million for the fourth quarter was relatively unchanged from the $3.0 million net loss in the prior year. For fiscal 2017, the Corporate and All Other category had a net loss of $3.1 million compared to a net loss of $0.5 million in the prior year. The $2.6 million increase in the net loss was primarily attributable to the non-recurrence of life insurance proceeds and the related tax benefits that were recognized in the prior year.

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Page 7.

GUIDANCE

National Fuel is revising its fiscal 2018 earnings guidance to be within a range of $2.75 to $3.05 per share, or $2.90 per share at the midpoint of the range. The $0.40 per share decrease from the fiscal 2017 earnings of $3.30 per share is being driven primarily by lower expected price realizations after hedging on Seneca’s natural gas and oil production and higher expected operating costs at the Company’s regulated businesses, offset partially by the impact of normal weather on the Utility segment's earnings and an increase in projected natural gas production in Appalachia, which will benefit earnings for the Company’s Exploration and Production and Gathering segments.

Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2018 are outlined in the table below.

				
 	Updated FY 2018 Guidance	 	 	
Consolidated Earnings per Share	$2.75 to $3.05	 	 	
 	 	 	 	
Capital Expenditures  (Millions)	 	 	 	
    Exploration and Production (1)	$275 - $325	 	 	
    Pipeline and Storage	$110 - $140	 	 	
    Gathering	$60 - $80	 	 	
    Utility	$90 - $100	 	 	
    Consolidated Capital Expenditures	$535 - $645	 	 	

	
				
Exploration & Production Segment Guidance	 	 	 	
 	 	 	 	
    Commodity Price Assumptions	 	 	 	
    NYMEX natural gas price	$3.00 /MMBtu	 	 	
    Appalachian basin spot price	$2.40 /MMBtu	 	 	
    NYMEX (WTI) crude oil price	$50.00 /Bbl	 	 	
    California oil price (% of WTI)	95%	 	 	
 	 	 	 	
    Production (Bcfe)	 	 	 	
    East Division - Appalachia (2)	165 to 180	 	 	
    West Division - California	~ 20	 	 	
    Total Production	185 to 200	 	 	
 	 	 	 	
    E&P Operating Costs ($/Mcfe)	 	 	 	
    LOE	$0.90 - $1.00	 	 	
    G&A	$0.30 - $0.35	 	 	
    DD&A	$0.65 - $0.70	 	 	
 	 	 	 	
Other Business Segment Guidance	 	 	 	
    Gathering Segment Revenues (Millions)	$115 - $125	 	 	
    Pipeline and Storage Segment Revenues (Millions)	~$295	 	 	

(1)    Net of conveyance proceeds received from joint development partner for working interest in joint development wells.
(2)    Seneca East Division - Appalachia production guidance assumes approximately 32 Bcf of spot sales at the midpoint of guidance.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, November 3, 2017, 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 “96083185.” 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 “96083185.” Both the webcast and a telephonic replay will be available until the close of business on Friday, November 10, 2017.

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Page 8.

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:	Brian M. Welsch	716-857-7875	
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: 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; 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; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; changes in the price of natural gas or oil; 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; 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; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks or pest infestation; 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.

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Page 9.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
QUARTER ENDED SEPTEMBER 30, 2017	
(Unaudited)	

 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fourth quarter 2016 GAAP earnings	$	16,744		 	$	16,816		 	$	8,537		 	$	(1,784	)	 	$	231		 	$	(2,991	)	 	$	37,553		
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impairment of oil and gas producing properties	32,756		 	 	 	 	 	 	 	 	 	 	 	32,756		
Tax impact of impairment of oil and gas producing properties	(13,757	)	 	 	 	 	 	 	 	 	 	 	 	(13,757	)	
Fourth Quarter 2016 operating results	35,743		 	16,816		 	8,537		 	(1,784	)	 	231		 	(2,991	)	 	56,552		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of operating results	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	(2,303	)	 	 	 	 	 	 	 	 	 	 	 	(2,303	)	
Higher (lower) natural gas prices	(4,202	)	 	 	 	 	 	 	 	 	 	 	 	(4,202	)	
Higher (lower) natural gas production	1,677		 	 	 	 	 	 	 	 	 	 	 	1,677		
Higher (lower) crude oil production	(1,891	)	 	 	 	 	 	 	 	 	 	 	 	(1,891	)	
Derivative mark to market adjustments	(765	)	 	 	 	 	 	 	 	 	 	 	 	(765	)	
Lower (higher) lease operating and transportation expenses	(3,021	)	 	 	 	 	 	 	 	 	 	 	 	(3,021	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation revenues	 	 	(2,364	)	 	 	 	 	 	 	 	 	 	(2,364	)	
Higher (lower) gathering and processing revenues	 	 	 	 	926		 	 	 	 	 	 	 	926		
Lower (higher) other operating expenses	(1,952	)	 	(2,185	)	 	(869	)	 	541		 	 	 	 	 	(4,465	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	554		 	 	 	 	 	554		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	(703	)	 	 	 	(703	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) interest income	 	 	 	 	 	 	(560	)	 	 	 	 	 	(560	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	 	 	 	 	 	(738	)	 	 	 	 	 	(738	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	7,215		 	1,453		 	536		 	(1,837	)	 	 	 	 	 	7,367		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	(147	)	 	71		 	(127	)	 	(344	)	 	(142	)	 	202		 	(487	)	
Fourth quarter 2017 GAAP earnings and operating results	$	30,354		 	$	13,791		 	$	9,003		 	$	(4,168	)	 	$	(614	)	 	$	(2,789	)	 	$	45,577		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	

Page 10.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
QUARTER ENDED SEPTEMBER 30, 2017	
(Unaudited)	

 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fourth quarter 2016 GAAP earnings	 	$	0.20		 	$	0.20		 	$	0.10		 	$	(0.02	)	 	$	—		 	$	(0.04	)	 	$	0.44		
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impairment of oil and gas producing properties	 	0.38		 	 	 	 	 	 	 	 	 	 	 	0.38		
Tax impact of impairment of oil and gas producing properties	 	(0.16	)	 	 	 	 	 	 	 	 	 	 	 	(0.16	)	
Fourth quarter 2016 operating results	 	0.42			0.20			0.10			(0.02	)		—			(0.04	)		0.66		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of operating results	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	(0.03	)	 	 	 	 	 	 	 	 	 	 	 	(0.03	)	
Higher (lower) natural gas prices	 	(0.05	)	 	 	 	 	 	 	 	 	 	 	 	(0.05	)	
Higher (lower) natural gas production	 	0.02		 	 	 	 	 	 	 	 	 	 	 	0.02		
Higher (lower) crude oil production	 	(0.02	)	 	 	 	 	 	 	 	 	 	 	 	(0.02	)	
Derivative mark to market adjustments	 	(0.01	)	 	 	 	 	 	 	 	 	 	 	 	(0.01	)	
Lower (higher) lease operating and transportation expenses	 	(0.04	)	 	 	 	 	 	 	 	 	 	 	 	(0.04	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation revenues	 	 	 	(0.03	)	 	 	 	 	 	 	 	 	 	(0.03	)	
Higher (lower) gathering and processing revenues	 	 	 	 	 	0.01		 	 	 	 	 	 	 	0.01		
Lower (higher) other operating expenses	 	(0.02	)	 	(0.03	)	 	(0.01	)	 	0.01		 	 	 	 	 	(0.05	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of new rates	 	 	 	 	 	 	 	0.01		 	 	 	 	 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) margins	 	 	 	 	 	 	 	 	 	(0.01	)	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
High (lower) interest income	 	 	 	 	 	 	 	(0.01	)	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	 	 	 	 	 	 	(0.01	)	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	0.08			0.02			0.01			(0.02	)						0.09		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
All other / rounding	 	—		 	—		 	(0.01	)	 	(0.01	)	 	—		 	0.02		 	—		
Fourth quarter 2017 GAAP earnings and operating results	 	$	0.35		 	$	0.16		 	$	0.10		 	$	(0.05	)	 	$	(0.01	)	 	$	(0.02	)	 	$	0.53		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Page 11.

	

NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
TWELVE MONTHS ENDED SEPTEMBER 30, 2017	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fiscal 2016 GAAP earnings	$	(452,842	)	 	$	76,610		 	$	30,499		 	$	50,960		 	$	4,348		 	$	(533	)	 	$	(290,958	)	
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impairment of oil and gas producing properties	948,307		 	 	 	 	 	 	 	 	 	 	 	948,307		
Tax impact of impairment of oil and gas producing properties	(398,287	)	 	 	 	 	 	 	 	 	 	 	 	(398,287	)	
Joint development agreement professional fees	7,855		 	 	 	 	 	 	 	 	 	 	 	7,855		
Tax impact of joint development agreement professional fees	(3,299	)	 	 	 	 	 	 	 	 	 	 	 	(3,299	)	
Fiscal 2016 operating results	101,734			76,610			30,499			50,960			4,348			(533	)		263,618		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of operating results	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	(7,198	)	 	 	 	 	 	 	 	 	 	 	 	(7,198	)	
Higher (lower) natural gas prices	(7,318	)	 	 	 	 	 	 	 	 	 	 	 	(7,318	)	
Higher (lower) natural gas production	26,571		 	 	 	 	 	 	 	 	 	 	 	26,571		
Higher (lower) crude oil production	(6,884	)	 	 	 	 	 	 	 	 	 	 	 	(6,884	)	
Lower (higher) lease operating and transportation expenses	(7,851	)	 	 	 	 	 	 	 	 	 	 	 	(7,851	)	
Lower (higher) depreciation / depletion	17,808		 	1,350		 	(571	)	 	(2,577	)	 	 	 	 	 	16,010		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation revenues	 	 	(6,885	)	 	 	 	 	 	 	 	 	 	(6,885	)	
Higher (lower) gathering and processing revenues	 	 	 	 	11,852		 	 	 	 	 	 	 	11,852		
Lower (higher) other operating expenses	2,193		 	(4,377	)	 	(1,799	)	 	(3,335	)	 	 	 	(1,181	)	 	(8,499	)	
Lower (higher) property, franchise and other taxes	(1,060	)	 	(753	)	 	 	 	 	 	 	 	 	 	(1,813	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Regulatory true-up adjustments	 	 	 	 	 	 	464		 	 	 	 	 	464		
Higher (lower) usage	 	 	 	 	 	 	2,543		 	 	 	 	 	2,543		
Impact of new rates	 	 	 	 	 	 	1,481		 	 	 	 	 	1,481		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) margins	 	 	 	 	 	 	 	 	(2,634	)	 	(1,027	)	 	(3,661	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) AFUDC**	 	 	(484	)	 	 	 	(913	)	 	 	 	 	 	(1,397	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) interest income	 	 	 	 	 	 	(581	)	 	 	 	 	 	(581	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	1,126		 	 	 	 	 	(592	)	 	 	 	 	 	534		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) income tax expense / effective tax rate	10,609		 	3,185		 		 	(948	)	 		 	(460	)	 	12,386		
 	 	 	 	 	 	 	 	 	 	 	 	 		
All other / rounding	(404	)	 	(200	)	 	396		 	433		 	(205	)	 	90		 	110		
Fiscal 2017 GAAP earnings and operating results	$	129,326		 	$	68,446		 	$	40,377		 	$	46,935		 	$	1,509		 	$	(3,111	)	 	$	283,482		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	

Page 12.

	

NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
TWELVE MONTHS ENDED SEPTEMBER 30, 2017	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fiscal 2016 GAAP earnings	 	$	(5.34	)	 	$	0.90		 	$	0.36		 	$	0.60		 	$	0.05		 	$	—		 	$	(3.43	)	
Items impacting comparability:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impairment of oil and gas producing properties	 	11.18		 	 	 	 	 	 	 	 	 	 	 	11.18		
Tax impact of impairment of oil and gas producing properties	 	(4.69	)	 	 	 	 	 	 	 	 	 	 	 	(4.69	)	
Joint development agreement professional fees	 	0.09		 	 	 	 	 	 	 	 	 	 	 	0.09		
Tax impact of joint development agreement professional fees	 	(0.04	)	 	 	 	 	 	 	 	 	 	 	 	(0.04	)	
Earnings per share impact of diluted shares	 	(0.01	)	 	 	 	 	 	 	 	 	 	(0.01	)	 	(0.02	)	
Fiscal 2016 operating results	 	1.19			0.90			0.36			0.60			0.05			(0.01	)		3.09		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Drivers of operating results	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	(0.08	)	 	 	 	 	 	 	 	 	 	 	 	(0.08	)	
Higher (lower) natural gas prices	 	(0.09	)	 	 	 	 	 	 	 	 	 	 	 	(0.09	)	
Higher (lower) natural gas production	 	0.31		 	 	 	 	 	 	 	 	 	 	 	0.31		
Higher (lower) crude oil production	 	(0.08	)	 	 	 	 	 	 	 	 	 	 	 	(0.08	)	
Lower (higher) lease operating and transportation expenses	 	(0.09	)	 	 	 	 	 	 	 	 	 	 	 	(0.09	)	
Lower (higher) depreciation / depletion	 	0.21		 	0.02		 	(0.01	)	 	(0.03	)	 	 	 	 	 	0.19		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation revenues	 	 	 	(0.08	)	 	 	 	 	 	 	 	 	 	(0.08	)	
Higher (lower) gathering and processing revenues	 	 	 	 	 	0.14		 	 	 	 	 	 	 	0.14		
Lower (higher) other operating expenses	 	0.03		 	(0.05	)	 	(0.02	)	 	(0.04	)	 	 	 	(0.01	)	 	(0.09	)	
Lower (higher) property, franchise and other taxes	 	(0.01	)	 	(0.01	)	 	 	 	 	 	 	 	 	 	(0.02	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Regulatory true-up adjustments	 	 	 	 	 	 	 	0.01		 	 	 	 	 	0.01		
Higher (lower) usage	 	 	 	 	 	 	 	0.03		 	 	 	 	 	0.03		
Impact of new rates	 	 	 	 	 	 	 	0.02		 	 	 	 	 	0.02		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) margins	 	 	 	 	 	 	 	 	 	(0.03	)	 	(0.01	)	 	(0.04	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) AFUDC**	 	 	 	(0.01	)	 	 	 	(0.01	)	 	 	 	 	 	(0.02	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) interest income	 	 	 	 	 	 	 	(0.01	)	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	0.01		 	 	 	 	 	(0.01	)	 	 	 	 	 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	0.12		 	0.04		 	 	 	(0.01	)	 	 	 	(0.01	)	 	0.14		
 	 		 		 		 		 		 		 		
All other / rounding	 	(0.02	)	 	(0.01	)	 	—		 	—		 	—		 	—		 	(0.03	)	
Fiscal 2017 GAAP earnings and operating results	 	$	1.50		 	$	0.80		 	$	0.47		 	$	0.55		 	$	0.02		 	$	(0.04	)	 	$	3.30		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	

Page 13.

	

 	 	 	 	 				 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 				 	
(Thousands of Dollars, except per share amounts)	 	 	 	 				 	
 	Three Months Ended	 	Twelve Months Ended	 	
 	September 30,	 	September 30,	 	
 	(Unaudited)	 	(Unaudited)	 	
SUMMARY OF OPERATIONS	2017	 	2016	 	2017		2016	 	
Operating Revenues:		 	 	 	 		 	 	
Utility and Energy Marketing Revenues	$	92,456		 	$	83,620		 	$	755,485		 	$	624,602		 	
Exploration and Production and Other Revenues	144,049		 	155,734		 	617,666		 	611,766		 	
Pipeline and Storage and Gathering Revenues	50,432		 	53,118		 	206,730		 	216,048		 	
 	286,937			292,472		 	1,579,881			1,452,416		 	
Operating Expenses:	 	 	 	 						 	
Purchased Gas	10,905		 	814		 	275,254			147,982		 	
Operation and Maintenance:			 			 						 	
      Utility and Energy Marketing	40,497		 	41,038		 	199,293		 	192,512		 	
      Exploration and Production and Other	42,946		 	36,235		 	145,099		 	160,201		 	
      Pipeline and Storage and Gathering	29,184		 	24,477		 	98,200		 	88,801		 	
Property, Franchise and Other Taxes	20,627		 	19,791		 	84,995			81,714		 	
Depreciation, Depletion and Amortization	55,383		 	56,117		 	224,195			249,417		 	
Impairment of Oil and Gas Producing Properties	—		 	32,756		 	—		 	948,307		 	
 	199,542		 	211,228		 	1,027,036			1,868,934		 	
 	 	 	 	 						 	
Operating Income (Loss)	87,395		 	81,244		 	552,845			(416,518	)	 	
 	 	 	 	 						 	
Other Income (Expense):	 	 	 	 						 	
Interest Income	1,269		 	1,595		 	4,113			4,235		 	
Other Income	2,316		 	2,647		 	7,043			9,820		 	
Interest Expense on Long-Term Debt	(29,230	)	 	(29,083	)	 	(116,471	)		(117,347	)	 	
Other Interest Expense	(686	)	 	241		 	(3,366	)		(3,697	)	 	
 	 	 	 	 						 	
Income (Loss) Before Income Taxes	61,064		 	56,644		 	444,164			(523,507	)	 	
 	 	 	 	 						 	
Income Tax Expense (Benefit)	15,487		 	19,091		 	160,682			(232,549	)	 	
 	 	 	 	 						 	
Net Income (Loss) Available for Common Stock	$	45,577		 	$	37,553		 	$	283,482			$	(290,958	)	 	
 	 	 	 	 				 	
Earnings (Loss) Per Common Share	 	 	 	 				 	
Basic	$	0.53		 	$	0.44		 	$	3.32			$	(3.43	)	 	
Diluted	$	0.53		 	$	0.44		 	$	3.30			$	(3.43	)	 	
 	 	 	 	 				 	
Weighted Average Common Shares:	 	 	 	 				 	
Used in Basic Calculation	85,512,637		 	85,016,408		 	85,364,929			84,847,993		 	
Used in Diluted Calculation	86,238,287		 	85,629,858		 	86,021,386			84,847,993		 	

Page 14.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED BALANCE SHEETS	
(Unaudited)	
 	 	
 	September 30,	 	September 30,	
(Thousands of Dollars)	2017	 	2016	
 	 	 	 	
ASSETS	 	 	 	
Property, Plant and Equipment		$9,945,560		 		$9,539,581		
Less - Accumulated Depreciation, Depletion and Amortization	5,271,486		 	5,085,099		
Net Property, Plant and Equipment	4,674,074		 	4,454,482		
 	 	 	 	
Current Assets:	 	 	 	
Cash and Temporary Cash Investments	555,530		 	129,972		
Hedging Collateral Deposits	1,741		 	1,484		
Receivables - Net	112,383		 	133,201		
Unbilled Revenue	22,883		 	18,382		
Gas Stored Underground	35,689		 	34,332		
Materials and Supplies - at average cost	33,926		 	33,866		
Unrecovered Purchased Gas Costs	4,623		 	2,440		
Other Current Assets	51,505		 	59,354		
Total Current Assets	818,280		 	413,031		
 	 	 	 	
Other Assets:	 	 	 	
Recoverable Future Taxes	181,363		 	177,261		
Unamortized Debt Expense	1,159		 	1,688		
Other Regulatory Assets	174,433		 	320,750		
Deferred Charges	30,047		 	20,978		
Other Investments	125,265		 	110,664		
Goodwill	5,476		 	5,476		
Prepaid Post-Retirement Benefit Costs	56,370		 	17,649		
Fair Value of Derivative Financial Instruments	36,111		 	113,804		
Other	742		 	604		
Total Other Assets	610,966		 	768,874		
Total Assets		$6,103,320		 		$5,636,387		
 	 	 	 	
CAPITALIZATION AND LIABILITIES	 	 	 	
Capitalization:	 	 	 	
Comprehensive Shareholders' Equity	 	 	 	
Common Stock, $1 Par Value Authorized - 200,000,000	 	 	 	
Shares; Issued and Outstanding - 85,543,125 Shares	 	 	 	
and 85,118,886 Shares, Respectively		$85,543		 		$85,119		
Paid in Capital	796,646		 	771,164		
Earnings Reinvested in the Business	851,669		 	676,361		
Accumulated Other Comprehensive Loss	(30,123	)	 	(5,640	)	
Total Comprehensive Shareholders' Equity	1,703,735		 	1,527,004		
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs	2,083,681		 	2,086,252		
Total Capitalization	3,787,416		 	3,613,256		
 	 	 	 	
Current and Accrued Liabilities:	 	 	 	
Notes Payable to Banks and Commercial Paper	—		 	—		
Current Portion of Long-Term Debt	300,000		 	—		
Accounts Payable	126,443		 	108,056		
Amounts Payable to Customers	—		 	19,537		
Dividends Payable	35,500		 	34,473		
Interest Payable on Long-Term Debt	35,031		 	34,900		
Customer Advances	15,701		 	14,762		
Customer Security Deposits	20,372		 	16,019		
Other Accruals and Current Liabilities	111,889		 	74,430		
Fair Value of Derivative Financial Instruments	1,103		 	1,560		
Total Current and Accrued Liabilities	646,039		 	303,737		
 	 	 	 	
Deferred Credits:	 	 	 	
Deferred Income Taxes	891,287		 	823,795		
Taxes Refundable to Customers	95,739		 	93,318		
Cost of Removal Regulatory Liability	204,630		 	193,424		
Other Regulatory Liabilities	113,716		 	99,789		
Pension and Other Post-Retirement Liabilities	149,079		 	277,113		
Asset Retirement Obligations	106,395		 	112,330		
Other Deferred Credits	109,019		 	119,625		
Total Deferred Credits	1,669,865		 	1,719,394		
Commitments and Contingencies	—		 	—		
Total Capitalization and Liabilities		$6,103,320		 		$5,636,387		

Page 15.

	

 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED STATEMENTS OF CASH FLOWS	
(Unaudited)	
 	 	Twelve Months Ended	
 	 	September 30,	
(Thousands of Dollars)	 	2017	 	2016	
 	 	 	 	 	
Operating Activities:	 	 	 	 	
Net Income (Loss) Available for Common Stock	 	$	283,482		 	$	(290,958	)	
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:	 	 	 	 	
Impairment of Oil and Gas Producing Properties	 	—		 	948,307		
Depreciation, Depletion and Amortization	 	224,195		 	249,417		
Deferred Income Taxes	 	117,975		 	(246,794	)	
Excess Tax Benefits Associated with Stock-Based Compensation Awards	 	—		 	(1,868	)	
Stock-Based Compensation	 	12,262		 	5,755		
Other	 	16,476		 	12,620		
Change in:	 	 	 	 	
Hedging Collateral Deposits	 	(257	)	 	9,640		
Receivables and Unbilled Revenue	 	(3,380	)	 	(6,408	)	
Gas Stored Underground and Materials and Supplies	 	(1,417	)	 	(3,532	)	
Unrecovered Purchased Gas Costs	 	(2,183	)	 	(2,440	)	
Other Current Assets	 	7,849		 	3,179		
Accounts Payable	 	17,192		 	(40,664	)	
Amounts Payable to Customers	 	(19,537	)	 	(37,241	)	
Customer Advances	 	939		 	(1,474	)	
Customer Security Deposits	 	4,353		 	(471	)	
Other Accruals and Current Liabilities	 	27,004		 	3,453		
Other Assets	 	(2,885	)	 	1,941		
Other Liabilities	 	2,183		 	(13,483	)	
Net Cash Provided by Operating Activities	 	$	684,251		 	$	588,979		
 	 	 	 	 	
Investing Activities:	 	 	 	 	
Capital Expenditures	 	$	(450,335	)	 	$	(581,576	)	
Net Proceeds from Sale of Oil and Gas Producing Properties	 	26,554		 	137,316		
Other	 	1,216		 	(9,236	)	
Net Cash Used in Investing Activities	 	$	(422,565	)	 	$	(453,496	)	
 	 	 	 	 	
Financing Activities:	 	 	 	 	
Excess Tax Benefits Associated with Stock-Based Compensation Awards	 	$	—		 	$	1,868		
Dividends Paid on Common Stock	 	(139,063	)	 	(134,824	)	
Net Proceeds From Issuance of Long-Term Debt	 	295,151		 	—		
Net Proceeds From Issuance of Common Stock	 	7,784		 	13,849		
Net Cash Provided by (Used in) Financing Activities	 	$	163,872		 	$	(119,107	)	
 	 	 	 	 	
Net Increase in Cash and Temporary Cash Investments	 	425,558		 	16,376		
Cash and Temporary Cash Investments at Beginning of Period	 	129,972		 	113,596		
Cash and Temporary Cash Investments at September 30	 	$	555,530		 	$	129,972		

Page 16.

	

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

 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
EXPLORATION AND PRODUCTION SEGMENT	2017	 	2016	 	Variance	 	2017	2016	Variance	
Total Operating Revenues	$	142,952		 	$	154,530		 	$	(11,578	)	 	$	614,599		$	607,113		$	7,486		
 	 	 	 	 	 	 							
Operating Expenses:	 	 	 	 	 	 							
Operation and Maintenance:	 	 	 	 	 	 							
General and Administrative Expense	15,060		 	14,928		 	132		 	58,734		70,598		(11,864	)	
Lease Operating and Transportation Expense	43,110		 	38,463		 	4,647		 	165,991		153,914		12,077		
All Other Operation and Maintenance Expense	5,301		 	2,429		 	2,872		 	13,469		12,832		637		
Property, Franchise and Other Taxes	4,178		 	3,553		 	625		 	15,426		13,794		1,632		
Depreciation, Depletion and Amortization	27,212		 	27,377		 	(165	)	 	112,565		139,963		(27,398	)	
Impairment of Oil and Gas Producing Properties	—		 	32,756		 	(32,756	)	 	—		948,307		(948,307	)	
 	94,861		 	119,506		 	(24,645	)	 	366,185		1,339,408		(973,223	)	
 	 	 	 	 	 	 							
Operating Income (Loss)	48,091		 	35,024		 	13,067		 	248,414		(732,295)		980,709		
 	 	 	 	 	 	 							
Other Income (Expense):	 	 	 	 	 	 							
Interest Income	257		 	78		 	179		 	707		858		(151	)	
Interest Expense	(13,432	)	 	(13,552	)	 	120		 	(53,702	)	(55,434	)	1,732		
 	 	 	 	 	 	 							
Income (Loss) Before Income Taxes	34,916		 	21,550		 	13,366		 	195,419		(786,871	)	982,290		
Income Tax Expense (Benefit)	4,562		 	4,806		 	(244	)	 	66,093		(334,029	)	400,122		
Net Income (Loss)	$	30,354		 	$	16,744		 	$	13,610		 	$	129,326		$	(452,842	)	$	582,168		
 	 	 	 	 	 	 							
Net Income (Loss) Per Share (Diluted)	$	0.35		 	$	0.20		 	$	0.15		 	$	1.50		$	(5.34	)	$	6.84		

Page 17.

	

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

 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
PIPELINE AND STORAGE SEGMENT	2017	 	2016	 	Variance	 	2017	2016	Variance	
Revenues from External Customers	$	50,403		 	$	53,047		 	$	(2,644	)	 	$	206,615		$	215,674		$	(9,059	)	
Intersegment Revenues	21,421		 	22,483		 	(1,062	)	 	87,810		90,755		(2,945	)	
Total Operating Revenues	71,824		 	75,530		 	(3,706	)	 	294,425		306,429		(12,004	)	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	90		 	(10	)	 	100		 	271		1,048		(777	)	
Operation and Maintenance	25,618		 	22,256		 	3,362		 	86,135		79,402		6,733		
Property, Franchise and Other Taxes	7,067		 	6,767		 	300		 	27,691		26,533		1,158		
Depreciation, Depletion and Amortization	10,545		 	11,128		 	(583	)	 	41,196		43,273		(2,077	)	
 	43,320		 	40,141		 	3,179		 	155,293		150,256		5,037		
 	 	 	 	 	 	 	 	 	 	
Operating Income	28,504		 	35,389		 	(6,885	)	 	139,132		156,173		(17,041	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	483		 	242		 	241		 	1,467		770		697		
Other Income	568		 	583		 	(15	)	 	2,511		3,235		(724	)	
Interest Expense	(8,540	)	 	(8,309	)	 	(231	)	 	(33,717	)	(33,327	)	(390	)	
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	21,015		 	27,905		 	(6,890	)	 	109,393		126,851		(17,458	)	
Income Tax Expense	7,224		 	11,089		 	(3,865	)	 	40,947		50,241		(9,294	)	
Net Income	$	13,791		 	$	16,816		 	$	(3,025	)	 	$	68,446		$	76,610		$	(8,164	)	
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.16		 	$	0.20		 	$	(0.04	)	 	$	0.80		$	0.90		$	(0.10	)	

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
GATHERING SEGMENT	2017	 	2016	 	Variance	 	2017	2016	Variance	
Revenues from External Customers	$	29		 	$	71		 	$	(42	)	 	$	115		$	374		$	(259	)	
Intersegment Revenues	24,937		 	23,471		 	1,466		 	107,566		89,073		18,493		
Total Operating Revenues	24,966		 	23,542		 	1,424		 	107,681		89,447		18,234		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	3,884		 	2,547		 	1,337		 	13,380		10,613		2,767		
Property, Franchise and Other Taxes	(124	)	 	32		 	(156	)	 	(79	)	149		(228	)	
Depreciation, Depletion and Amortization	4,154		 	3,876		 	278		 	16,162		15,282		880		
 	7,914		 	6,455		 	1,459		 	29,463		26,044		3,419		
 	 	 	 	 	 	 	 	 	 	
Operating Income	17,052		 	17,087		 	(35	)	 	78,218		63,403		14,815		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 		 	 	 		
Interest Income	353		 	109		 	244		 	994		297		697		
Other Income	—		 	1		 	(1	)	 	1		5		(4	)	
Interest Expense	(2,403	)	 	(2,091	)	 	(312	)	 	(9,142	)	(8,872	)	(270	)	
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	15,002		 	15,106		 	(104	)	 	70,071		54,833		15,238		
Income Tax Expense	5,999		 	6,569		 	(570	)	 	29,694		24,334		5,360		
Net Income	$	9,003		 	$	8,537		 	$	466		 	$	40,377		$	30,499		$	9,878		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.10		 	$	0.10		 	$	—		 	$	0.47		$	0.36		$	0.11		

Page 18.

	

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

 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
UTILITY SEGMENT	2017	 	2016	 	Variance	 	2017	2016	Variance	
Revenues from External Customers	$	76,080		 	$	67,870		 	$	8,210		 	$	626,899		$	531,024		$	95,875		
Intersegment Revenues	1,758		 	2,367		 	(609	)	 	13,072		13,123		(51	)	
Total Operating Revenues	77,838		 	70,237		 	7,601		 	639,971		544,147		95,824		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	17,321		 	10,392		 	6,929		 	252,802		166,155		86,647		
Operation and Maintenance	39,448		 	40,294		 	(846	)	 	195,231		189,178		6,053		
Property, Franchise and Other Taxes	9,223		 	9,151		 	72		 	40,860		40,131		729		
Depreciation, Depletion and Amortization	13,080		 	13,107		 	(27	)	 	52,582		48,618		3,964		
 	79,072		 	72,944		 	6,128		 	541,475		444,082		97,393		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(1,234	)	 	(2,707	)	 	1,473		 	98,496		100,065		(1,569	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	633		 	1,415		 	(782	)	 	1,051		1,737		(686	)	
Other Income	197		 	593		 	(396	)	 	774		2,342		(1,568	)	
Interest Expense	(7,037	)	 	(5,898	)	 	(1,139	)	 	(28,492	)	(27,582	)	(910	)	
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	(7,441	)	 	(6,597	)	 	(844	)	 	71,829		76,562		(4,733	)	
Income Tax Expense (Benefit)	(3,273	)	 	(4,813	)	 	1,540		 	24,894		25,602		(708	)	
Net Income (Loss)	$	(4,168	)	 	$	(1,784	)	 	$	(2,384	)	 	$	46,935		$	50,960		$	(4,025	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	(0.05	)	 	$	(0.02	)	 	$	(0.03	)	 	$	0.55		$	0.60		$	(0.05	)	

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
ENERGY MARKETING SEGMENT	2017	 	2016	 	Variance	 	2017	2016	Variance	
Revenues from External Customers	$	16,376		 	$	15,750		 	$	626		 	$	128,586		$	93,578		$	35,008		
Intersegment Revenues	194		 	30		 	164		 	794		884		(90	)	
Total Operating Revenues	16,570		 	15,780		 	790		 	129,380		94,462		34,918		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	15,982		 	14,111		 	1,871		 	120,317		81,347		38,970		
Operation and Maintenance	1,717		 	1,575		 	142		 	6,978		6,447		531		
Property, Franchise and Other Taxes	5		 	7		 	(2	)	 	5		13		(8	)	
Depreciation, Depletion and Amortization	69		 	70		 	(1	)	 	279		278		1		
 	17,773		 	15,763		 	2,010		 	127,579		88,085		39,494		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(1,203	)	 	17		 	(1,220	)	 	1,801		6,377		(4,576	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	153		 	136		 	17		 	571		422		149		
Other Income	19		 	15		 	4		 	75		58		17		
Interest Expense	(10	)	 	(13	)	 	3		 	(47	)	(49	)	2		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	(1,041	)	 	155		 	(1,196	)	 	2,400		6,808		(4,408	)	
Income Tax Expense (Benefit)	(427	)	 	(76	)	 	(351	)	 	891		2,460		(1,569	)	
Net Income (Loss)	$	(614	)	 	$	231		 	$	(845	)	 	$	1,509		$	4,348		$	(2,839	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	(0.01	)	 	$	—		 	$	(0.01	)	 	$	0.02		$	0.05		$	(0.03	)	

Page 19.

	
																						
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
ALL OTHER	2017	 	2016	 	Variance	 	2017	2016	Variance	
Total Operating Revenues	$	862		 	$	978		 	$	(116	)	 	$	2,173		$	3,753		$	(1,580	)	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	374		 	281		 	93		 	1,718		776		942		
Property, Franchise and Other Taxes	151		 	145		 	6		 	596		593		3		
Depreciation, Depletion and Amortization	136		 	373		 	(237	)	 	661		1,260		(599	)	
 	661		 	799		 	(138	)	 	2,975		2,629		346		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	201		 	179		 	22		 	(802	)	1,124		(1,926	)	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	66		 	35		 	31		 	213		117		96		
Other Income	—		 	98		 	(98	)	 	—		98		(98	)	
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	267		 	312		 	(45	)	 	(589	)	1,339		(1,928	)	
Income Tax Expense (Benefit)	111		 	130		 	(19	)	 	(247	)	561		(808	)	
Net Income (Loss)	$	156		 	$	182		 	$	(26	)	 	$	(342	)	$	778		$	(1,120	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	0.01		 	$	—		 	$	0.01		 	$	(0.01	)	$	0.01		$	(0.02	)	

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
CORPORATE	2017	 	2016	 	Variance	 	2017	2016	Variance	
Revenues from External Customers	$	235		 	$	226		 	$	9		 	$	894		$	900		$	(6	)	
Intersegment Revenues	895		 	1,091		 	(196	)	 	3,825		3,991		(166	)	
Total Operating Revenues	1,130		 	1,317		 	(187	)	 	4,719		4,891		(172	)	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	4,832		 	4,740		 	92		 	15,887		15,012		875		
Property, Franchise and Other Taxes	127		 	136		 	(9	)	 	496		501		(5	)	
Depreciation, Depletion and Amortization	187		 	186		 	1		 	750		743		7		
 	5,146		 	5,062		 	84		 	17,133		16,256		877		
 	 	 	 	 	 	 	 	 	 	
Operating Loss	(4,016	)	 	(3,745	)	 	(271	)	 	(12,414	)	(11,365	)	(1,049	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	31,318		 	30,389		 	929		 	125,003		123,156		1,847		
Other Income	1,532		 	1,357		 	175		 	3,682		4,082		(400	)	
Interest Expense on Long-Term Debt	(29,230	)	 	(29,083	)	 	(147	)	 	(116,471	)	(117,347	)	876		
Other Interest Expense	(1,258	)	 	(705	)	 	(553	)	 	(4,159	)	(1,555	)	(2,604	)	
 	 	 	 	 	 	 	 	 	 	
Loss Before Income Taxes	(1,654	)	 	(1,787	)	 	133		 	(4,359	)	(3,029	)	(1,330	)	
Income Tax Expense (Benefit)	1,291		 	1,386		 	(95	)	 	(1,590	)	(1,718	)	128		
Net Loss	$	(2,945	)	 	$	(3,173	)	 	$	228		 	$	(2,769	)	$	(1,311	)	$	(1,458	)	
 	 	 	 	 	 	 	 	 	 	
Net Loss Per Share (Diluted)	$	(0.03	)	 	$	(0.04	)	 	$	0.01		 	$	(0.03	)	$	(0.01	)	$	(0.02	)	

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
INTERSEGMENT ELIMINATIONS	2017	 	2016	 	Variance	 	2017	2016	Variance	
Intersegment Revenues	$	(49,205	)	 	$	(49,442	)	 	$	237		 	$	(213,067	)	$	(197,826	)	$	(15,241	)	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	(22,488	)	 	(23,679	)	 	1,191		 	(98,136	)	(100,568	)	2,432		
Operation and Maintenance	(26,717	)	 	(25,763	)	 	(954	)	 	(114,931	)	(97,258	)	(17,673	)	
 	(49,205	)	 	(49,442	)	 	237		 	(213,067	)	(197,826	)	(15,241	)	
 	 	 	 	 	 	 	 	 	 	
Operating Income	—		 	—		 	—		 	—		—		—		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	(31,994	)	 	(30,809	)	 	(1,185	)	 	(125,893	)	(123,122	)	(2,771	)	
Interest Expense	31,994		 	30,809		 	1,185		 	125,893		123,122		2,771		
Net Income	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

Page 20.

	

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

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
 	(Unaudited)	 	(Unaudited)	
 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	2017	 	2016	 	(Decrease)	 	2017	 	2016	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	
Capital Expenditures:	 	 	 	 	 	 	 	 	 	 	 	
Exploration and Production	$	84,512		(1)  	$	41,181		(2)  	$	43,331		 	$	253,057		(1)(2)  	$	256,104		(2)(3)  	$	(3,047	)	
Pipeline and Storage	41,808		(1)  	38,230		(2)  	3,578		 	95,336		(1)(2)  	114,250		(2)(3)  	(18,914	)	
Gathering	8,940		(1)  	10,578		(2)  	(1,638	)	 	32,645		(1)(2)  	54,293		(2)(3)  	(21,648	)	
Utility	24,456		(1)  	25,719		(2)  	(1,263	)	 	80,867		(1)(2)  	98,007		(2)(3)  	(17,140	)	
Energy Marketing	22		 	6		 	16		 	36		 	34		 	2		
Total Reportable Segments	159,738			115,714			44,024			461,941			522,688			(60,747	)	
All Other	—		 	—		 	—		 	39		 	37		 	2		
Corporate	49		 	136		 	(87	)	 	137		 	326		 	(189	)	
Eliminations	482		 	—		 	482		 	—		 	—		 	—		
Total Capital Expenditures	$	160,269		 	$	115,850		 	$	44,419		 	$	462,117		 	$	523,051		 	$	(60,934	)	

		
(1)  	Capital expenditures for the quarter and year ended September 30, 2017, include accounts payable and accrued liabilities related to 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 have been excluded from the Consolidated Statement of Cash Flows at September 30, 2017, since they represent non-cash investing activities at that date.	

(2)  	Capital expenditures for the year ended September 30, 2017, exclude capital expenditures of $25.2 million, $18.7 million, $5.3 million and $11.2 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, 2016 and paid during the year ended September 30, 2017. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2016, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2017.	

(3)  	Capital expenditures for the year ended September 30, 2016, exclude capital expenditures of $46.2 million, $33.9 million, $22.4 million and $16.5 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, 2015 and paid during the year ended September 30, 2016. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2015, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2016.	

	

DEGREE DAYS	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Percent Colder	
 	 	 	 	 	 	 	(Warmer) Than:	
Three Months Ended September 30	Normal	 	2017	 	2016	 	  Normal (1)	 	Last Year (1)	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	162	 	109	 	44	 	(32.7)	 	147.7		
Erie, PA	124	 	97	 	23	 	(21.8)	 	321.7		
 	 	 	 	 	 	 	 	 	 	
Twelve Months Ended September 30	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	6,617	 	5,708	 	5,611	 	(13.7)	 	1.7		
Erie, PA	6,147	 	5,179	 	5,182	 	(15.7)	 	(0.1	)	

(1)  	Percents compare actual 2017 degree days to normal degree days and actual 2017 degree days to actual 2016 degree days.	

Page 21.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	

 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2017	 	2016	 	(Decrease)	 	2017	 	2016	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gas Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	35,576		 	34,711		 	865		 	154,093		 	140,457		 	13,636		
West Coast	 	749		 	779		 	(30	)	 	2,995		 	3,090		 	(95	)	
Total Production	 	36,325		 	35,490		 	835		 	157,088		 	143,547		 	13,541		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Mcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	2.42		 	$	2.24		 	$	0.18		 	$	2.52		 	$	1.94		 	$	0.58		
West Coast	 	3.77		 	3.62		 	0.15		 	4.00		 	3.25		 	0.75		
Weighted Average	 	2.44		 	2.27		 	0.17		 	2.55		 	1.97		 	0.58		
Weighted Average after Hedging	 	2.91		 	3.09		 	(0.18	)	 	2.95		 	3.02		 	(0.07	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (Thousands of Barrels)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	1		 	12		 	(11	)	 	4		 	28		 	(24	)	
West Coast	 	674		 	712		 	(38	)	 	2,736		 	2,895		 	(159	)	
Total Production	 	675		 	724		 	(49	)	 	2,740		 	2,923		 	(183	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Barrel)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	45.71		 	$	63.46		 	$	(17.75	)	 	$	48.27		 	$	52.15		 	$	(3.88	)	
West Coast	 	47.44		 	39.06		 	8.38		 	46.14		 	35.26		 	10.88		
Weighted Average	 	47.44		 	39.46		 	7.98		 	46.18		 	35.42		 	10.76		
Weighted Average after Hedging	 	54.77		 	60.01		 	(5.24	)	 	53.87		 	57.91		 	(4.04	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Production (Mmcfe)	 	40,375		 	39,834		 	541		 	173,528		 	161,085		 	12,443		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Selected Operating Performance Statistics:	 	 	 	 	 	 	 	 	 	 	 	 	
General & Administrative Expense per Mcfe (1)	 	$	0.37		 	$	0.37		 	$	—		 	$	0.34		 	$	0.44		 	$	(0.10	)	
Lease Operating and Transportation Expense per Mcfe (1)(2)	 	$	1.07		 	$	0.97		 	$	0.10		 	$	0.96		 	$	0.96		 	$	—		
Depreciation, Depletion & Amortization per Mcfe (1)	 	$	0.67		 	$	0.69		 	$	(0.02	)	 	$	0.65		 	$	0.87		 	$	(0.22	)	

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

(2)  	Amounts include transportation expense of $0.54 and $0.52 per Mcfe for the three months ended September 30, 2017 and September 30, 2016, respectively. Amounts include transportation expense of $0.54 and $0.52 per Mcfe for the twelve months ended September 30, 2017 and September 30, 2016, respectively.	

Page 22.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2018	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	24,000		BBL	 	$	91.00 / BBL	
NYMEX	 	1,731,000		BBL	 	$	53.79 / BBL	
Total	 	1,755,000		BBL	 	$	54.30 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	42,570,000		MMBTU	 	$	3.34 / MMBTU	
DOM	 	180,000		MMBTU	 	$	3.82 / MMBTU	
DAWN	 	8,400,000		MMBTU	 	$	3.08 / MMBTU	
Fixed Price Physical Sales	 	47,992,454		MMBTU	 	$	2.43 / MMBTU	
Total	 	99,142,454		MMBTU	 	$	2.88 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2019	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
NYMEX	 	1,068,000		BBL	 	$	53.42 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	27,060,000		MMBTU	 	$	3.17 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	34,438,090		MMBTU	 	$	2.49 / MMBTU	
Total	 	68,698,090		MMBTU	 	$	2.81 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2020	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
NYMEX	 	324,000		BBL	 	$	50.52 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	16,880,000		MMBTU	 	$	3.07 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	38,428,255		MMBTU	 	$	2.28 / MMBTU	
Total	 	62,508,255		MMBTU	 	$	2.58 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2021	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	4,840,000		MMBTU	 	$	3.01 / MMBTU	
   DAWN	 	600,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	41,260,451		MMBTU	 	$	2.21 / MMBTU	
Total	 	46,700,451		MMBTU	 	$	2.31 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2022	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	39,844,042		MMBTU	 	$	2.23 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2023	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	35,769,734		MMBTU	 	$	2.25 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2024	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	20,111,036		MMBTU	 	$	2.24 / 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	
 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	
 	 	 	 	 	
Reserve Quantity Information	
(Unaudited)	

 	 	Gas MMcf	
 	 	U.S.	
 	 	Appalachian	West Coast	Total	
 	 	Region	Region	Company	
Proved Developed and Undeveloped Reserves:	 	 	 	 	
September 30, 2016	 	1,631,451		43,124		1,674,575		
Extensions and Discoveries	 	386,649		8		386,657		
Revisions of Previous Estimates	 	84,480		6,369		90,849		
Production	 	(154,093	)	(2,995	)	(157,088	)	
Sales of Minerals in Place	 	(21,873	)	—		(21,873	)	
September 30, 2017	 	1,926,614		46,506		1,973,120		
 	 	 	 	 	
Proved Developed Reserves:	 	 	 	 	
 	 	 	 	 	
September 30, 2016	 	1,089,492		43,124		1,132,616		
September 30, 2017	 	1,316,596		46,506		1,363,102		

 	 	Oil Mbbl	
 	 	U.S.	
 	 	Appalachian	West Coast	Total	
 	 	Region	Region	Company	
Proved Developed and Undeveloped Reserves:	 	 	 	 	
September 30, 2016	 	73		28,936		29,009		
Extensions and Discoveries	 	—		674		674		
Revisions of Previous Estimates	 	(12	)	3,305		3,293		
Production	 	(4	)	(2,736	)	(2,740	)	
Sales of Minerals in Place	 	(29	)	—		(29	)	
September 30, 2017	 	28		30,179		30,207		
 	 	 	 	 	
Proved Developed Reserves:	 	 	 	 	
 	 	 	 	 	
September 30, 2016	 	73		28,698		28,771		
September 30, 2017	 	28		29,771		29,799		

Page 24.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	

 	 	 	 	 	 	 	 	 	 	 	 	 	
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2017	 	2016	 	(Decrease)	 	2017	 	2016	 	(Decrease)	
Firm Transportation - Affiliated	 	15,404		 	13,468		 	1,936		 	107,987		 	100,637		 	7,350		
Firm Transportation - Non-Affiliated	 	176,380		 	169,247		 	7,133		 	671,395		 	640,238		 	31,157		
Interruptible Transportation	 	727		 	5,079		 	(4,352	)	 	5,805		 	23,548		 	(17,743	)	
 	 	192,511		 	187,794		 	4,717		 	785,187		 	764,423		 	20,764		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gathering Volume - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2017	 	2016	 	(Decrease)	 	2017	 	2016	 	(Decrease)	
Gathered Volume - Affiliated	 	44,915		 	42,600		 	2,315		 	194,921		 	161,955		 	32,966		

Utility Throughput - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2017	 	2016	 	(Decrease)	 	2017	 	2016	 	(Decrease)	
Retail Sales:	 	 	 	 	 	 	 	 	 	 	 	 	
Residential Sales	 	3,576		 	3,143		 	433		 	52,394		 	49,971		 	2,423		
Commercial Sales	 	555		 	477		 	78		 	7,927		 	7,247		 	680		
Industrial Sales	 	50		 	11		 	39		 	333		 	244		 	89		
 	 	4,181		 	3,631		 	550		 	60,654		 	57,462		 	3,192		
Off-System Sales	 	7		 	—		 	7		 	1,301		 	1,243		 	58		
Transportation	 	10,587		 	11,078		 	(491	)	 	71,040		 	70,847		 	193		
 	 	14,775		 	14,709		 	66		 	132,995		 	129,552		 	3,443		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Energy Marketing Volume	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2017	 	2016	 	(Decrease)	 	2017	 	2016	 	(Decrease)	
Natural Gas (MMcf)	 	5,932		 	6,048		 	(116	)	 	38,901		 	39,849		 	(948	)	

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Page 25.

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 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 operating results as reported GAAP earnings before items impacting comparability. The table at page 2 of this report reconciles National Fuel's reported GAAP earnings to operating results for the three and twelve months ended September 30, 2017 and 2016.

Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, interest and other income, impairments, and items impacting comparability.

The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and twelve months ended September 30, 2017 and 2016:

																	
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	2017	 	2016	 	2017	 	2016	
(in thousands)	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	45,577		 	$	37,553		 	$	283,482		 	$	(290,958	)	
Depreciation, Depletion and Amortization	 	55,383		 	56,117		 	224,195		 	249,417		
Interest and Other Income	 	(3,585	)	 	(4,242	)	 	(11,156	)	 	(14,055	)	
Interest Expense	 	29,916		 	28,842		 	119,837		 	121,044		
Income Taxes	 	15,487		 	19,091		 	160,682		 	(232,549	)	
Impairment of Oil and Gas Producing
  Properties	 	—		 	32,756		 	—		 	948,307		
Joint Development Agreement Professional
  Fees	 	—		 	—		 	—		 	7,855		
Adjusted EBITDA	 	$	142,778		 	$	170,117		 	$	777,040		 	$	789,061		
 	 	 	 	 	 	 	 	 	
Adjusted EBITDA by Segment	 	 	 	 	 	 	 	 	
Pipeline and Storage Adjusted EBITDA	 	$	39,049		 	$	46,517		 	$	180,328		 	$	199,446		
Gathering Adjusted EBITDA	 	21,206		 	20,963		 	94,380		 	78,685		
Total Midstream Businesses Adjusted EBITDA	 	60,255		 	67,480			274,708			278,131		
Exploration and Production Adjusted EBITDA	 	75,303		 	95,157		 	360,979		 	363,830		
Utility Adjusted EBITDA	 	11,846		 	10,400		 	151,078		 	148,683		
Energy Marketing Adjusted EBITDA	 	(1,134	)	 	87		 	2,080		 	6,655		
Corporate and All Other Adjusted EBITDA	 	(3,492	)	 	(3,007	)	 	(11,805	)	 	(8,238	)	
Total Adjusted EBITDA	 	$	142,778		 	$	170,117			$	777,040			$	789,061		

Page 26.

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

																	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
(in thousands)	 	2017	 	2016	 	2017	 	2016	
Exploration and Production Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	30,354		 	$	16,744		 	$	129,326		 	$	(452,842	)	
Depreciation, Depletion and Amortization	 	27,212		 	27,377		 	112,565		 	139,963		
Interest and Other Income	 	(257	)	 	(78	)	 	(707	)	 	(858	)	
Interest Expense	 	13,432		 	13,552		 	53,702		 	55,434		
Income Taxes	 	4,562		 	4,806		 	66,093		 	(334,029	)	
Impairment of Oil and Gas Producing Properties	 	—		 	32,756		 	—		 	948,307		
Joint Development Agreement Professional Fees	 	—		 	—		 	—		 	7,855		
Adjusted EBITDA	 	$	75,303		 	$	95,157		 	$	360,979		 	$	363,830		
 	 	 	 	 	 	 	 	 	
Pipeline and Storage Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	13,791		 	$	16,816		 	$	68,446		 	$	76,610		
Depreciation, Depletion and Amortization	 	10,545		 	11,128		 	41,196		 	43,273		
Interest and Other Income	 	(1,051	)	 	(825	)	 	(3,978	)	 	(4,005	)	
Interest Expense	 	8,540		 	8,309		 	33,717		 	33,327		
Income Taxes	 	7,224		 	11,089		 	40,947		 	50,241		
Adjusted EBITDA	 	$	39,049		 	$	46,517		 	$	180,328		 	$	199,446		
 	 	 	 	 	 	 	 	 	
Gathering Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	9,003		 	$	8,537		 	$	40,377		 	$	30,499		
Depreciation, Depletion and Amortization	 	4,154		 	3,876		 	16,162		 	15,282		
Interest and Other Income	 	(353	)	 	(110	)	 	(995	)	 	(302	)	
Interest Expense	 	2,403		 	2,091		 	9,142		 	8,872		
Income Taxes	 	5,999		 	6,569		 	29,694		 	24,334		
Adjusted EBITDA	 	$	21,206		 	$	20,963		 	$	94,380		 	$	78,685		
 	 	 	 	 	 	 	 	 	
Utility Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(4,168	)	 	$	(1,784	)	 	$	46,935		 	$	50,960		
Depreciation, Depletion and Amortization	 	13,080		 	13,107		 	52,582		 	48,618		
Interest and Other Income	 	(830	)	 	(2,008	)	 	(1,825	)	 	(4,079	)	
Interest Expense	 	7,037		 	5,898		 	28,492		 	27,582		
Income Taxes	 	(3,273	)	 	(4,813	)	 	24,894		 	25,602		
Adjusted EBITDA	 	$	11,846		 	$	10,400		 	$	151,078		 	$	148,683		
 	 	 	 	 	 	 	 	 	
Energy Marketing Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(614	)	 	$	231		 	$	1,509		 	$	4,348		
Depreciation, Depletion and Amortization	 	69		 	70		 	279		 	278		
Interest and Other Income	 	(172	)	 	(151	)	 	(646	)	 	(480	)	
Interest Expense	 	10		 	13		 	47		 	49		
Income Taxes	 	(427	)	 	(76	)	 	891		 	2,460		
Adjusted EBITDA	 	$	(1,134	)	 	$	87		 	$	2,080		 	$	6,655		
 	 	 	 	 	 	 	 	 	
Corporate and All Other	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(2,789	)	 	$	(2,991	)	 	$	(3,111	)	 	$	(533	)	
Depreciation, Depletion and Amortization	 	323		 	559		 	1,411		 	2,003		
Interest and Other Income	 	(922	)	 	(1,070	)	 	(3,005	)	 	(4,331	)	
Interest Expense	 	(1,506	)	 	(1,021	)	 	(5,263	)	 	(4,220	)	
Income Taxes	 	1,402		 	1,516		 	(1,837	)	 	(1,157	)	
Adjusted EBITDA	 	$	(3,492	)	 	$	(3,007	)	 	$	(11,805	)	 	$	(8,238	)	

Page 27.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	

Quarter Ended September 30 (unaudited)	 	2017	 	2016	
 	 	 	 	 	
Operating Revenues	 	$	286,937,000		 	$	292,472,000		
 	 	 	 	 	
Net Income Available for Common Stock	 	$	45,577,000		 	$	37,553,000		
 	 	 	 	 	
Earnings Per Common Share	 	 	 	 	
Basic	 	$	0.53		 	$	0.44		
Diluted	 	$	0.53		 	$	0.44		
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,512,637		 	85,016,408		
Used in Diluted Calculation	 	86,238,287		 	85,629,858		
 	 	 	 	 	
Twelve Months Ended September 30 (unaudited)	 	 	 	 	
 	 	 	 	 	
Operating Revenues	 	$	1,579,881,000		 	$	1,452,416,000		
 	 	 	 	 	
Net Income (Loss) Available for Common Stock	 	$	283,482,000		 	$	(290,958,000	)	
 	 	 	 	 	
Earnings (Loss) Per Common Share	 	 	 	 	
Basic	 	$	3.32		 	$	(3.43	)	
Diluted	 	$	3.30		 	$	(3.43	)	
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,364,929		 	84,847,993		
Used in Diluted Calculation	 	86,021,386		 	84,847,993