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): May 3, 2018

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 May 3, 2018, National Fuel Gas Company (the “Company”) issued a press release regarding its earnings for the quarter and six months ended March 31, 2018. 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; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; 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; the impact of potential information technology, cybersecurity or data security breaches; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits

Exhibit 99      Press release furnished regarding earnings for the quarter and six months ended March 31, 2018

SIGNATURES

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

	
		
NATIONAL FUEL GAS COMPANY	

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

Dated: May 4, 2018

Exhibit 99

	

 	 	6363 Main Street/Williamsville, NY 14221	
 	 	 	 	
Release Date:	Immediate May 3, 2018	Brian M. Welsch
Investor Relations
716-857-7875	David P. Bauer
Treasurer
716-857-7318	

NATIONAL FUEL REPORTS SECOND QUARTER EARNINGS
AND PROVIDES OPERATIONAL UPDATE

WILLIAMSVILLE, N.Y.: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the second quarter of its 2018 fiscal year and for the six months ended March 31, 2018, and provided an update on the Company's upstream and midstream operations.

FISCAL 2018 SECOND QUARTER SUMMARY

•	GAAP earnings of $91.8 million, or $1.06 per share, compared to $89.3 million, or $1.04 per share, in the prior year	
		
•	Excluding a $4.0 million, or $0.05 per share, adjustment to the initial remeasurement of deferred taxes from federal tax reform, Adjusted Operating Results were $95.8 million, or $1.11 per share (see non-GAAP reconciliation below)	
		
•	Consolidated Adjusted EBITDA of $217.9 million (non-GAAP reconciliation on page 24)	
		
•	Net natural gas and oil production of 46.1 Bcfe, up 1% from the prior year and up 15% from the first quarter	
		
•	Average natural gas prices, after the impact of hedging, of $2.52 per Mcf, down $0.44 per Mcf from the prior year	
		
•	Average oil prices, after the impact of hedging, of $58.31 per Bbl, up $5.39 per Bbl from the prior year	
		
•	Utility segment earnings increased 30% on colder weather in Pennsylvania and new rates in New York	
		
•	Due to the reduction in the fiscal 2018 federal statutory rate as a result of the 2017 Tax Reform Act, the Company realized net earnings benefit for the quarter of $10.3 million, or $0.11 per share	

	

 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
(in thousands except per share amounts)	 	2018	 	2017	 	2018	 	2017	
Reported GAAP Earnings	 	$	91,847		 	$	89,284		 	$	290,501		 	$	178,191		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	4,000		 	—		 	(107,000	)	 	—		
Adjusted Operating Results	 	$	95,847		 	$	89,284		 	$	183,501		 	$	178,191		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	1.06		 	$	1.04		 	$	3.37		 	$	2.07		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	$	0.05		 	—		 	$	(1.24	)	 	—		
Adjusted Operating Results per share	 	$	1.11		 	$	1.04		 	$	2.13		 	$	2.07		

Page 2.

UPSTREAM AND MIDSTREAM BUSINESS OPERATIONS UPDATE

Earlier this week, the Company’s exploration and production subsidiary, Seneca Resources Corporation (“Seneca”) entered into a precedent agreement with Transcontinental Gas Pipeline Company, LLC (“Transco”) for 300,000 Dekatherms (Dth) per day of new firm transportation capacity.  The incremental capacity will allow Seneca to move natural gas supplies from its Clermont-Rich Valley producing area in the Western Development Area (“WDA”) and its Lycoming County acreage in the Eastern Development Area (“EDA”) to premium markets connected to Zone 6 of Transco’s interstate pipeline system.  Seneca will be an anchor shipper on the to-be-announced Transco project.  While the size, scope, and facilities associated with Transco’s expansion have yet to be finalized, Seneca’s transportation rate is expected to be competitive with other expansion project rates in its current transportation portfolio. The in-service date is anticipated in the first half of fiscal 2022.

In order to provide Seneca with a complete transportation path extending from its WDA to these Zone 6 markets, Transco is expected to lease approximately 300,000 Dth per day of new capacity from National Fuel Gas Supply Corporation (“Supply Corporation”), a pipeline and storage subsidiary of the Company.  The lease is expected to provide Transco with a path from the Company’s Clermont Gathering System in McKean County, Pa., to Supply Corporation’s existing interconnection with Transco in Leidy, Pa.  This new capacity on the Supply Corporation pipeline system is expected to be created via an expansion component that will be added to Supply Corporation’s FM100 Modernization Project. The preliminary cost estimate for the entirety of the FM100 Modernization Project, including the proposed expansion, is approximately $250 million to $300 million. Supply Corporation is currently in the pre-filing process with FERC on the FM100 Modernization Project, which is also expected to upgrade 1950’s era facilities.

National Fuel also remains committed to building its federally authorized Northern Access pipeline project. Northern Access, a planned expansion of the Supply Corporation and Empire Pipeline, Inc. (“Empire”) interstate pipeline systems, will provide Seneca with 490,000 Dth per day of incremental capacity from the WDA in Pennsylvania to diverse markets in New York state, Canada and the Midwest U.S. Legal challenges relating to the New York State Department of Environmental Conservation’s review of a state environmental permit remain pending.

Seneca has continued to advance its Utica appraisal and optimization program in the WDA. In the second quarter, Seneca brought on three additional Utica wells off a Marcellus development pad in Clermont-Rich Valley and one Utica appraisal well on its Boone Mountain prospect in Elk County, Pa., approximately 30 miles to the south of the Clermont-Rich Valley area. Initial production results on the Boone Mountain well were consistent with the best WDA Utica well that Seneca has completed to date and, based on other geologic information, suggests that as much as 160,000 acres in the WDA is economically viable for future Utica shale development. Much of this Utica position overlaps with Seneca’s core Marcellus acreage, where Seneca has identified as many as 125 well locations on existing Marcellus well pads that allow for the utilization of the Company's Clermont Gathering System. The redevelopment of these locations requires minimal additional investment in gathering infrastructure, which will provide significant uplift to the program's consolidated returns.

Seneca meanwhile continues to make progress on the marketing of its near-term natural gas production, augmenting its existing firm transportation portfolio with firm sales at in-basin receipt points that lock in a significant portion of its projected production volumes at attractive net-back pricing while reducing local spot market exposure. As Seneca looks to grow into this future firm capacity and capitalize on the Company’s integrated strategy to enhance the consolidated upstream and midstream returns of the Appalachian drilling program, Seneca will add a third horizontal drilling rig to its Appalachian operations in the third quarter of fiscal 2018. The additional rig will be primarily dedicated to the redevelopment of Seneca’s Clermont-Rich Valley acreage for the Utica Shale.

While the additional drilling rig will not lead to an immediate production increase this fiscal year, Seneca expects now to grow its production at a 15 to 20 percent compound annual growth rate through fiscal 2022, which will also benefit the Gathering segment's throughput. Due to the minimal gathering capital requirements, as well as Seneca’s existing firm capacity and financial hedge portfolio, peer leading cost structure, and royalty-free economics in the WDA, the Company expects the combined Exploration and Production and Gathering segments to live within cash flows at current natural gas strip pricing over the next three years. The addition of a third rig is also expected to be accretive to the Appalachian program’s overall consolidated earnings and yield a higher return on invested capital relative to the current two rig activity level, while providing economies of scale, operational flexibility, and other benefits to drive further efficiencies.

Additionally, on May 1, 2018, Seneca closed on a sale of its Sespe oil and natural gas assets in California for $43 million. The divestiture of Sespe, the Company’s sole asset in Ventura County, is part of Seneca’s strategy to focus on and grow production from its core California assets in the San Joaquin basin, in particular recently acquired leases in the Midway Sunset field. The

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Sespe field produces approximately 900 net barrels of oil equivalent (“boe”) per day and was expected to contribute approximately $0.05 per share of earnings for the remainder of fiscal 2018. Under full cost accounting rules, the Company will not record any gain or loss with respect to the transaction.

MANAGEMENT COMMENTS

Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “We’re pleased to report another quarter of solid financial results across all of our operating segments. A return this year to a more normal heating season in our New York and Pennsylvania operating regions increased throughput across our utility pipeline system. Notwithstanding the weather that was colder than the two previous heating seasons, our customers continue to benefit from the low cost of natural gas supplies that are being produced from the Appalachian basin and safely delivered to them through our interstate and utility pipeline systems.

“We are also excited about recent updates to our near and longer-term operating plans that will allow us to continue the growth of our upstream and midstream businesses in Appalachia. Our ongoing transition to Utica shale development in the WDA is moving along quite well. Early results indicate that we have a large inventory of additional Utica locations in and around our core Marcellus footprint that will generate stronger consolidated returns, particularly in areas where new Utica production can use existing gathering infrastructure that was built during our Marcellus development. With a newly developed pipeline expansion project planned to be in place, we now expect to have the exit capacity and end-market diversity to tap and bring forward the value of our significant, stacked-pay acreage position in Pennsylvania, while also continuing to grow the earnings and returns of our Gathering and Pipeline and Storage segments and capitalize on the strategic benefits of our integrated business model.”

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 Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, interest and other income, impairments, and other items reflected in operating income that impact comparability.

Upstream Business

Exploration and Production Segment

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

																								
 	Three Months Ended	 	Six Months Ended	
 	March 31,	 	March 31,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	26,537		 	$	33,769		 	$	(7,232	)	 	$	133,235		 	$	68,849		 	$	64,386		
Net Income Per Share (Diluted)	$	0.31		 	$	0.39		 	$	(0.08	)	 	$	1.54		 	$	0.80		 	$	0.74		
Adjusted EBITDA	$	78,770		 	$	93,970		 	$	(15,200	)	 	$	158,264		 	$	196,447		 	$	(38,183	)	

The Exploration and Production segment’s second quarter earnings declined $7.2 million, as the positive impacts of higher production, better realized crude oil prices, and a lower effective income tax rate were more than offset by a decline in realized natural gas prices and higher operating expenses.

Seneca’s second quarter net production was 46.1 billion cubic feet equivalent (“Bcfe”), an increase of 0.5 Bcfe, or 1 percent, from the prior year due mainly to higher natural gas production in Appalachia. Net natural gas production increased 0.5 billion cubic feet (“Bcf”) versus the prior year and 6.0 Bcf, or 17 percent, versus the fiscal 2018 first quarter. The year over year increase was primarily due to higher net production in the WDA from new Marcellus and Utica wells completed and connected to sales during the past year. The 17 percent sequential increase over the first quarter of the fiscal year was due mostly to production from new wells brought on-line this quarter (including the first development pad brought to sales in the EDA since fiscal 2016), and an increase in Marcellus production from other EDA locations after price-related and operational curtailments experienced

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during the previous quarter (Seneca did not have any significant curtailments in the second quarter of fiscal 2018). Seneca’s oil production decreased 11 thousand barrels ("Mbbl"), or 2 percent, versus the prior year.

Seneca's average realized natural gas price, after the impact of hedging and marketing and transportation costs, was $2.52 per thousand cubic feet ("Mcf"), a decrease of $0.44 per Mcf from the prior year. The decline in Seneca’s realized natural gas price 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 firm sales and hedges settled in the current quarter. Seneca's average realized oil price, after the impact of hedging, was $58.31 per barrel ("Bbl"), an increase of $5.39 per Bbl. The improvement in oil price realizations was due primarily to higher market prices for West Texas Intermediate (WTI) crude oil during the quarter and stronger price differentials relative to WTI at local sales points in California.

Seneca’s operating expenses increased $5.2 million during the second quarter. Lease operating and transportation expense (“LOE”) increased $1.3 million due to higher natural gas production in Appalachia, which resulted in higher gathering and transportation costs, and an increase in well workover activities and steaming costs in California. Depreciation, depletion and amortization (“DD&A”) expense increased $3.1 million due to the increase in production and a higher per unit DD&A rate, which increased by $0.06 per thousand cubic feet equivalent (“Mcfe”) to $0.69 per Mcfe due mainly to a higher depletable fixed asset balance at March 31, 2018.

The decrease in the segment’s effective tax rate was mostly due to the 2017 Tax Reform Act, which reduced the Company’s federal statutory corporate tax rate in fiscal 2018 from 35 percent to 24.5 percent and benefited Seneca’s second quarter earnings by $3.5 million, or $0.04 per share. The current period benefit was offset partially by a $0.8 million revision to the remeasurement of deferred income taxes that was recorded in the first quarter.

See page 21 for additional comparative information on the Exploration & Production segment’s production, realized pricing and per unit operating costs.

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	 	Six Months Ended	
 	March 31,	 	March 31,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	22,724		 	$	19,256		 	$	3,468		 	$	61,186		 	$	38,624		 	$	22,562		
Net Income Per Share (Diluted)	$	0.26		 	$	0.22		 	$	0.04		 	$	0.71		 	$	0.45		 	$	0.26		
Adjusted EBITDA	$	50,142		 	$	49,103		 	$	1,039		 	$	100,915		 	$	97,116		 	$	3,799		

The Pipeline and Storage segment’s second quarter earnings increased $3.5 million due primarily to higher operating revenues and a lower effective income tax rate, offset partially by a decrease in the allowance for funds used during construction reported in other income. Operating revenues increased $1.0 million due to new demand charges for transportation service from Supply Corporation’s Line D Expansion project, which was placed in service on November 1, 2017, and surcharge revenues relating to Supply Corporation’s greenhouse gas and pipeline safety system enhancements that also went into effect in November 2017, which were partially offset by a decline in transportation revenues resulting from contract terminations. The decrease in the effective income tax rate was due primarily to the 2017 Tax Reform Act, which reduced the Company’s federal statutory corporate tax rate and benefited the segment’s earnings by $3.4 million, or $0.04 per share.

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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	 	Six Months Ended	
 	March 31,	 	March 31,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	11,770		 	$	10,285		 	$	1,485		 	$	57,169		 	$	21,266		 	$	35,903		
Net Income Per Share (Diluted)	$	0.14		 	$	0.12		 	$	0.02		 	$	0.66		 	$	0.25		 	$	0.41		
Adjusted EBITDA	$	24,138		 	$	24,172		 	$	(34	)	 	$	44,869		 	$	49,273		 	$	(4,404	)	

The $1.5 million increase in Gathering segment’s second quarter earnings was due mainly to a lower effective income tax rate. Operating revenues were largely flat when compared to the prior year as the increase in gathering throughput from Seneca’s Appalachian natural gas production was offset by the impact of gathering rate adjustments that went into effect in February. The decrease in the effective income tax rate was due primarily to the 2017 Tax Reform Act, which reduced the Company’s federal statutory corporate tax rate and benefited the segment’s earnings by $1.9 million, or $0.02 per share. The current period tax benefit was offset partially by a $0.4 million revision to the remeasurement of deferred income taxes that was recorded in the first quarter.

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	 	Six Months Ended	
 	March 31,	 	March 31,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	33,360		 	$	25,581		 	$	7,779		 	$	54,353		 	$	46,755		 	$	7,598		
Net Income Per Share (Diluted)	$	0.39		 	$	0.30		 	$	0.09		 	$	0.63		 	$	0.54		 	$	0.09		
Adjusted EBITDA	$	66,013		 	$	61,580		 	$	4,433		 	$	112,997		 	$	113,909		 	$	(912	)	

The Utility segment’s second quarter earnings increased $7.8 million due to the positive impacts of colder weather, new customer rates in Distribution’s New York service territory (effective in April 2017), lower O&M expense, and tax reform. Weather in Distribution’s Pennsylvania service territory was 17.1 percent colder on average than last year, resulting in higher residential and transportation customer throughput and revenues. The impact of weather variations on earnings in Distribution’s New York service territory is largely mitigated by that jurisdiction’s weather normalization clause. O&M expense decreased $2.3 million due mainly to lower personnel and information systems costs, partially offset by higher amortization of environmental remediation costs that resulted from the April 2017 rate case order in New York.

The decline in the Utility segment’s effective income tax rate due to the 2017 Tax Reform Act resulted in a $5.4 million decrease in income tax expense, which was mostly offset by a regulatory refund provision recorded against operating revenues. Consistent with utility rate treatment implemented after previous federal tax reforms and taking into consideration guidance provided by state regulators during the quarter, the Company recorded a $5.3 million refund provision ($3.9 million after-tax, or $0.05 per share) that reduced the Utility segment’s operating revenues and deferred the net effect of the reduction in tax rates by increasing the segment’s regulatory liability.

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.

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 	Three Months Ended	 	Six Months Ended	
 	March 31,	 	March 31,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	578		 	$	905		 	$	(327	)	 	$	1,624		 	$	2,687		 	$	(1,063	)	
Net Income Per Share (Diluted)	$	0.01		 	$	0.01		 	$	—		 	$	0.02		 	$	0.03		 	$	(0.01	)	
Adjusted EBITDA	$	924		 	$	1,382		 	$	(458	)	 	$	2,606		 	$	4,230		 	$	(1,624	)	

The Energy Marketing segment’s second quarter earnings declined $0.3 million due largely to lower margins (operating revenues less purchased gas expenses), offset partially by lower O&M expense. NFR’s customer margins were negatively impacted by stronger natural gas prices at local purchase points, which spiked on days with extreme weather in January, relative to NYMEX-based customer sales contracts.

Corporate and All Other

For the second quarter of fiscal 2018, 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 decrease in earnings was primarily attributable to a $2.7 million revision to the remeasurement of deferred income taxes that was recorded in the first quarter of fiscal 2018 due to the 2017 Tax Reform Act.

FISCAL 2018 GUIDANCE UPDATE

National Fuel is revising its fiscal 2018 earnings guidance to $3.20 to $3.35 per share, or $3.275 per share at the midpoint of the range. The revised earnings guidance does not include the impact of the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act, which reduced the Company’s consolidated income tax expense and benefited earnings for the six months ended March 31, 2018, by $107.0 million, or $1.24 per share. While the Company expects to record additional adjustments to its deferred income taxes as a result of the 2017 Tax Reform Act during the remaining six months of fiscal 2018, the amounts of these and other potential adjustments are not reasonably determinable at this time. The final determination of the impact of the income tax effects of certain items will require additional analysis and further interpretation of the 2017 Tax Reform Act from yet to be issued U.S. Treasury regulations, state income tax guidance, federal and state regulatory guidance, technical corrections, and the filing of the Company’s fiscal 2017 federal consolidated tax return. Some or all of these factors may be significant. Because the amounts of final adjustments are not reasonably determinable at this time, the Company is unable to provide earnings guidance other than on a non-GAAP basis that excludes the impact of the remeasurement of deferred income taxes and other potential adjustments.

Excluding the impact of the remeasurement of deferred income taxes, the Company expects that the reduction in the statutory federal tax rate from 35 percent to 24.5 percent will lower the Company’s effective income tax rate for fiscal 2018 to a range of 26 percent to 27 percent. Furthermore, consistent with utility rate treatment implemented after previous tax reforms, the Company expects to record a regulatory refund provision of approximately $16.0 million (pre-tax) in fiscal 2018 to reduce the Utility segment’s operating revenues and defer the net effect of the reduction in tax rates by increasing the segment’s regulatory liability. The Company recorded an $11.3 million ($8.3 million after-tax) regulatory refund provision in the first six months of fiscal 2018. The Company’s earnings guidance, including the impact from the Utility segment’s projected regulatory refund provision, assumes normal weather.

In addition to the impacts of tax reform on current year income, the revised earnings guidance range reflects the impact of actual results for the six months ended March 31, 2018, the sale of Seneca's Sespe assets in California, and other updates to key forecast assumptions, including revisions to the Exploration and Production segment’s forecasted production and natural gas and oil pricing as outlined in the table below.

The Exploration and Production segment’s fiscal 2018 forecasted production was reduced by 5 Bcfe at the midpoint of the range to reflect the impact of the sale of Seneca’s Sespe oil properties in California and adjustments made to Seneca’s operations schedule in Appalachia due primarily to the anticipated delay of the in-service date of the Atlantic Sunrise project to later in the fourth quarter, which impacted the expected timing of new pad turn-ons and pushed a portion of new production from fiscal 2018 to fiscal 2019. Seneca, which holds 189,405 Dth per day of firm transportation capacity on Atlantic Sunrise, had previously expected that the capacity would be available on July 1, 2018.

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Page 7.

The Company’s capital expenditure guidance was revised to a range of $610 million to $680 million, at the midpoint an increase of $40 million from the previous guidance range. The increase is due primarily to the additional horizontal drilling rig that Seneca plans to deploy in Appalachia during the third quarter as discussed in the Upstream and Midstream Operations Update section above. The revision to the Pipeline and Storage segment’s capital budget is due primarily to the expected timing of the spending.

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	 	Previous FY 2018 Guidance	
Consolidated Earnings per Share (1)	$3.20 to $3.35	 	$3.20 to $3.40	
Consolidated Effective Tax Rate (1)	26% to 27%	 	~27%	
 	 	 	 	
Capital Expenditures  (Millions)	 	 	 	
    Exploration and Production (2)	$350 - $370	 	$300 - $330	
    Pipeline and Storage	$110 - $130	 	$110 - $140	
    Gathering	$60 - $80	 	$60 - $80	
    Utility	$90 - $100	 	$90 - $100	
    Consolidated Capital Expenditures	$610 - $680	 	$560 - $650	

				
Exploration & Production Segment Guidance	 	 	 	
 	 	 	 	
    Commodity Price Assumptions	 	 	 	
    NYMEX natural gas price	$2.75 /MMBtu	 	$3.00 /MMBtu	
    Appalachian basin spot price (summer)	$2.00 /MMBtu	 	$2.40/$2.00 /MMBtu	
    NYMEX (WTI) crude oil price	$65.00 /Bbl	 	$60.00 /Bbl	
    California oil price (% of WTI)	98%	 	98%	
 	 	 	 	
    Production (Bcfe)	 	 	 	
    East Division - Appalachia (3)	157 to 172	 	160 to 175	
    West Division - California	~ 18	 	~ 20	
    Total Production	175 to 190	 	180 to 195	
 	 	 	 	
    E&P Operating Costs ($/Mcfe)	 	 	 	
    LOE	$0.90 - $1.00	 	$0.90 - $1.00	
    G&A	$0.30 - $0.35	 	$0.30 - $0.35	
    DD&A	~ $0.70	 	~ $0.70	
 	 	 	 	
Other Business Segment Guidance (Millions)	 	 	 	
    Gathering Segment Revenues	$110 - $115	 	$110 - $120	
    Pipeline and Storage Segment Revenues	~$295	 	~$295	
    Utility Segment Regulatory Refund Provision	~$16	 	~$16	

(1)    Excludes earnings impact of the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act.
(2)    Net of conveyance proceeds received from joint development partner for working interest in joint development wells.
(3)    Seneca East Division - Appalachia production guidance assumes approximately 11 Bcf of spot sales for the remainder of FY18.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, May 4, 2018, 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 “2679378.” 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 “2679378.” Both the webcast and a telephonic replay will be available until the close of business on Friday, May 11, 2018.

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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; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; 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; the impact of potential information technology, cybersecurity or data security breaches; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

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Page 9.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
QUARTER ENDED MARCH 31, 2018	
(Unaudited)	

 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second quarter 2017 GAAP earnings	$	33,769		 	$	19,256		 	$	10,285		 	$	25,581		 	$	905		 	$	(512	)	 	$	89,284		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	2,322		 	 	 	 	 	 	 	 	 	 	 	2,322		
Higher (lower) natural gas prices	(11,965	)	 	 	 	 	 	 	 	 	 	 	 	(11,965	)	
Higher (lower) natural gas production	1,031		 	 	 	 	 	 	 	 	 	 	 	1,031		
Higher (lower) crude oil production	(369	)	 	 	 	 	 	 	 	 	 	 	 	(369	)	
Lower (higher) lease operating and transportation expenses	(822	)	 	 	 	 	 	 	 	 	 	 	 	(822	)	
Lower (higher) depreciation / depletion	(2,038	)	 	 	 	 	 	 	 	 	 	(263	)	 	(2,301	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	606		 	 	 	 	 	 	 	 	 	606		
Lower (higher) other operating expenses	(421	)	 	 	 	 	 	1,171		 	 	 	 	 	750		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	1,767		 	 	 	 	 	1,767		
Colder weather	 	 	 	 	 	 	3,448		 	 	 	 	 	3,448		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	(443	)	 	659		 	216		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) AFUDC**	 	 	(599	)	 	 	 	 	 	 	 	 	 	(599	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
(Higher) lower interest expense	 	 	302		 	 	 	 	 	 	 	 	 	302		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	1,884		 	 	 	 	 	 	 	 	 	 	 	1,884		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change (35% to 24.5%) on current period earnings	3,539		 	3,385		 	1,871		 	5,440		 	109		 	(122	)	 	14,222		
Refund provision on tax rate change	 	 	 	 	 	 	(3,914	)	 	 	 	 	 	(3,914	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	(790	)	 	 	 	(400	)	 	 	 	(159	)	 	(2,651	)	 	(4,000	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	397		 	(226	)	 	14		 	(133	)	 	166		 	(233	)	 	(15	)	
Second quarter 2018 GAAP earnings	$	26,537		 	$	22,724		 	$	11,770		 	$	33,360		 	$	578		 	$	(3,122	)	 	$	91,847		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	 	

Page 10.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
QUARTER ENDED MARCH 31, 2018	
(Unaudited)	

 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Second quarter 2017 GAAP earnings	 	$	0.39		 	$	0.22		 	$	0.12		 	$	0.30		 	$	0.01		 	$	—		 	$	1.04		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	0.03		 	 	 	 	 	 	 	 	 	 	 	0.03		
Higher (lower) natural gas prices	 	(0.14	)	 	 	 	 	 	 	 	 	 	 	 	(0.14	)	
Higher (lower) natural gas production	 	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Higher (lower) crude oil production	 	—		 	 	 	 	 	 	 	 	 	 	 	—		
Lower (higher) lease operating and transportation expenses	 	(0.01	)	 	 	 	 	 	 	 	 	 	 	 	(0.01	)	
Lower (higher) depreciation / depletion	 	(0.02	)	 	 	 	 	 	 	 	 	 	—		 	(0.02	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	 	0.01		 	 	 	 	 	 	 	 	 	0.01		
Lower (higher) other operating expenses	 	—		 	 	 	 	 	0.01		 	 	 	 	 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	 	0.02		 	 	 	 	 	0.02		
Colder weather	 	 	 	 	 	 	 	0.04		 	 	 	 	 	0.04		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	 	—		 	0.01		 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) AFUDC**	 	 	 	(0.01	)	 	 	 	 	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(Higher) lower interest expense	 	 	 	—		 	 	 	 	 	 	 	 	 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	0.02													0.02		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change (35% to 24.5%) on current period earnings	 	0.04		 	0.04		 	0.02		 	0.06		 	—		 	—		 	0.16		
Refund provision on tax rate change	 	 	 	 	 	 	 	(0.05	)	 	 	 	 	 	(0.05	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	 	(0.01	)	 	 	 	(0.01	)	 	 	 	—		 	(0.03	)	 	(0.05	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	 	—		 	—		 	0.01		 	0.01		 	—		 	(0.03	)	 	(0.01	)	
Second quarter 2018 GAAP earnings	 	$	0.31		 	$	0.26		 	$	0.14		 	$	0.39		 	$	0.01		 	$	(0.05	)	 	$	1.06		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	 	

Page 11.

	

NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
SIX MONTHS ENDED MARCH 31, 2018	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Six months ended March 31, 2017 GAAP earnings	$	68,849		 	$	38,624		 	$	21,266		 	$	46,755		 	$	2,687		 	$	10		 	$	178,191		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	4,519		 	 	 	 	 	 	 	 	 	 	 	4,519		
Higher (lower) natural gas prices	(17,940	)	 	 	 	 	 	 	 	 	 	 	 	(17,940	)	
Higher (lower) natural gas production	(7,587	)	 	 	 	 	 	 	 	 	 	 	 	(7,587	)	
Higher (lower) crude oil production	(2,074	)	 	 	 	 	 	 	 	 	 	 	 	(2,074	)	
Lower (higher) lease operating and transportation expenses	(783	)	 	 	 	 	 	 	 	 	 	 	 	(783	)	
Lower (higher) depreciation / depletion	(979	)	 	(842	)	 	(285	)	 	 	 	 	 	(197	)	 	(2,303	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) storage revenues	 	 	784		 	 	 	 	 	 	 	 	 	784		
Higher (lower) gathering and processing revenues	 	 	 	 	(2,769	)	 	 	 	 	 	 	 	(2,769	)	
Lower (higher) other operating expenses	(1,009	)	 	2,059		 	 	 	476		 	 	 	 	 	1,526		
Lower (higher) property, franchise and other taxes	 	 	(354	)	 	 	 	 	 	 	 	 	 	(354	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	2,789		 	 	 	 	 	2,789		
Colder weather	 	 	 	 	 	 	4,688		 	 	 	 	 	4,688		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) margins	 	 	 	 	 	 	 	 	(1,204	)	 	1,011		 	(193	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) AFUDC**	 	 	(542	)	 	 	 	 	 	 	 	 	 	(542	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) interest expense	 	 	608		 	 	 	452		 	 	 	 	 	1,060		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) income tax expense / effective tax rate	5,754		 		 	1,172		 	(1,850	)	 		 		 	5,076		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change (35% to 24.5%) on current period earnings	7,634		 	6,913		 	3,415		 	10,241		 	291		 	(11	)	 	28,483		
Refund provision on tax rate change	 	 	 	 	 	 	(8,320	)	 	 	 	 	 	(8,320	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	76,510		 	14,100		 	34,500		 	 	 	(359	)	 	(17,751	)	 	107,000		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	341		 	(164	)	 	(130	)	 	(878	)	 	209		 	(128	)	 	(750	)	
Six months ended March 31, 2018 GAAP earnings	$	133,235			$	61,186			$	57,169			$	54,353			$	1,624			$	(17,066	)	 	$	290,501		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	

Page 12.

	

NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
SIX MONTHS ENDED MARCH 31, 2018	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Six months ended March 31, 2017 GAAP earnings	 	$	0.80		 	$	0.45		 	$	0.25		 	$	0.54		 	$	0.03		 	$	—		 	$	2.07		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	0.05		 	 	 	 	 	 	 	 	 	 	 	0.05		
Higher (lower) natural gas prices	 	(0.21	)	 	 	 	 	 	 	 	 	 	 	 	(0.21	)	
Higher (lower) natural gas production	 	(0.09	)	 	 	 	 	 	 	 	 	 	 	 	(0.09	)	
Higher (lower) crude oil production	 	(0.02	)	 	 	 	 	 	 	 	 	 	 	 	(0.02	)	
Lower (higher) lease operating and transportation expenses	 	(0.01	)	 	 	 	 	 	 	 	 	 	 	 	(0.01	)	
Lower (higher) depreciation / depletion	 	(0.01	)	 	(0.01	)	 	—		 	 	 	 	 	—		 	(0.02	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) storage revenues	 	 	 	0.01		 	 	 	 	 	 	 	 	 	0.01		
Higher (lower) gathering and processing revenues	 	 	 	 	 	(0.03	)	 	 	 	 	 	 	 	(0.03	)	
Lower (higher) other operating expenses	 	(0.01	)	 	0.02		 	 	 	0.01		 	 	 	 	 	0.02		
Lower (higher) property, franchise and other taxes	 	 	 	—		 	 	 	 	 	 	 	 	 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	 	0.03		 	 	 	 	 	0.03		
Colder weather	 	 	 	 	 	 	 	0.05		 	 	 	 	 	0.05		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	 	(0.01	)	 	0.01		 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) AFUDC**	 	 	 	(0.01	)	 	 	 	 	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	 	 	0.01		 	 	 	0.01		 	 	 	 	 	0.02		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	0.07		 	 	 	0.01		 	(0.02	)	 	 	 	 	 	0.06		
 	 		 		 		 		 		 		 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of tax rate change (35% to 24.5%) on current period earnings	 	0.09		 	0.08		 	0.04		 	0.12		 	—		 	—		 	0.33		
Refund provision on tax rate change	 	 	 	 	 	 	 	(0.10	)	 	 	 	 	 	(0.10	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	 	0.89		 	0.16		 	0.40		 	 	 	—		 	(0.21	)	 	1.24		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	 	(0.01	)	 	—		 	(0.01	)	 	(0.01	)	 	—		 	0.01		 	(0.02	)	
Six months ended March 31, 2018 GAAP earnings	 	$	1.54		 	$	0.71		 	$	0.66		 	$	0.63		 	$	0.02		 	$	(0.19	)	 	$	3.37		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	 	

Page 13.

	

 	 	 	 	 				 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 				 	
(Thousands of Dollars, except per share amounts)	 	 	 	 				 	
 	Three Months Ended	 	Six Months Ended	 	
 	March 31,	 	March 31,	 	
 	(Unaudited)	 	(Unaudited)	 	
SUMMARY OF OPERATIONS	2018	 	2017	 	2018		2017	 	
Operating Revenues:		 	 	 	 		 	 	
Utility and Energy Marketing Revenues	$	339,422		 	$	308,889		 	$	565,147		 	$	516,669		 	
Exploration and Production and Other Revenues	147,868		 	159,997		 	288,318		 	321,691		 	
Pipeline and Storage and Gathering Revenues	53,615		 	53,189		 	107,096		 	106,216		 	
 	540,905			522,075		 	960,561			944,576		 	
Operating Expenses:	 	 	 	 						 	
Purchased Gas	176,608		 	147,971		 	270,642			218,214		 	
Operation and Maintenance:			 			 						 	
      Utility and Energy Marketing	61,410		 	63,907		 	112,780		 	114,329		 	
      Exploration and Production and Other	39,586		 	37,593		 	75,127		 	68,055		 	
      Pipeline and Storage and Gathering	22,642		 	23,106		 	42,679		 	45,766		 	
Property, Franchise and Other Taxes	22,802		 	22,542		 	43,650			42,921		 	
Depreciation, Depletion and Amortization	61,155		 	56,999		 	116,985			113,194		 	
 	384,203		 	352,118		 	661,863			602,479		 	
 	 	 	 	 						 	
Operating Income	156,702		 	169,957		 	298,698			342,097		 	
 	 	 	 	 						 	
Other Income (Expense):	 	 	 	 						 	
Interest Income	1,025		 	391		 	3,275			1,991		 	
Other Income	770		 	1,744		 	2,492			3,356		 	
Interest Expense on Long-Term Debt	(27,148	)	 	(28,913	)	 	(55,235	)		(58,016	)	 	
Other Interest Expense	(1,233	)	 	(924	)	 	(1,736	)		(1,834	)	 	
 	 	 	 	 						 	
Income Before Income Taxes	130,116		 	142,255		 	247,494			287,594		 	
 	 	 	 	 						 	
Income Tax Expense (Benefit)	38,269		 	52,971		 	(43,007	)		109,403		 	
 	 	 	 	 						 	
Net Income Available for Common Stock	$	91,847		 	$	89,284		 	$	290,501			$	178,191		 	
 	 	 	 	 				 	
Earnings Per Common Share	 	 	 	 				 	
Basic	$	1.07		 	$	1.05		 	$	3.39			$	2.09		 	
Diluted	$	1.06		 	$	1.04		 	$	3.37			$	2.07		 	
 	 	 	 	 				 	
Weighted Average Common Shares:	 	 	 	 				 	
Used in Basic Calculation	85,809,233		 	85,334,887		 	85,718,779			85,261,575		 	
Used in Diluted Calculation	86,323,636		 	86,006,614		 	86,318,892			85,897,282		 	

Page 14.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED BALANCE SHEETS	
(Unaudited)	
 	 	
 	March 31,	 	September 30,	
(Thousands of Dollars)	2018	 	2017	
 	 	 	 	
ASSETS	 	 	 	
Property, Plant and Equipment		$10,126,931		 		$9,945,560		
Less - Accumulated Depreciation, Depletion and Amortization	5,344,134		 	5,271,486		
Net Property, Plant and Equipment	4,782,797		 	4,674,074		
 	 	 	 	
Current Assets:	 	 	 	
Cash and Temporary Cash Investments	227,994		 	555,530		
Hedging Collateral Deposits	3,657		 	1,741		
Receivables - Net	198,922		 	112,383		
Unbilled Revenue	60,059		 	22,883		
Gas Stored Underground	6,842		 	35,689		
Materials and Supplies - at average cost	34,769		 	33,926		
Unrecovered Purchased Gas Costs	426		 	4,623		
Other Current Assets	60,324		 	51,505		
Total Current Assets	592,993		 	818,280		
 	 	 	 	
Other Assets:	 	 	 	
Recoverable Future Taxes	115,514		 	181,363		
Unamortized Debt Expense	7,861		 	1,159		
Other Regulatory Assets	171,902		 	174,433		
Deferred Charges	36,835		 	30,047		
Other Investments	123,039		 	125,265		
Goodwill	5,476		 	5,476		
Prepaid Post-Retirement Benefit Costs	59,586		 	56,370		
Fair Value of Derivative Financial Instruments	18,144		 	36,111		
Other	426		 	742		
Total Other Assets	538,783		 	610,966		
Total Assets		$5,914,573		 		$6,103,320		
 	 	 	 	
CAPITALIZATION AND LIABILITIES	 	 	 	
Capitalization:	 	 	 	
Comprehensive Shareholders' Equity	 	 	 	
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and	 	 	 	
Outstanding - 85,881,897 Shares and 85,543,125 Shares, Respectively		$85,882		 		$85,543		
Paid in Capital	810,126		 	796,646		
Earnings Reinvested in the Business	1,070,939		 	851,669		
Accumulated Other Comprehensive Loss	(47,760	)	 	(30,123	)	
Total Comprehensive Shareholders' Equity	1,919,187		 	1,703,735		
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs	2,085,012		 	2,083,681		
Total Capitalization	4,004,199		 	3,787,416		
 	 	 	 	
Current and Accrued Liabilities:	 	 	 	
Notes Payable to Banks and Commercial Paper	—		 	—		
Current Portion of Long-Term Debt	—		 	300,000		
Accounts Payable	127,585		 	126,443		
Amounts Payable to Customers	12,083		 	—		
Dividends Payable	35,641		 	35,500		
Interest Payable on Long-Term Debt	26,435		 	35,031		
Customer Advances	154		 	15,701		
Customer Security Deposits	18,973		 	20,372		
Other Accruals and Current Liabilities	147,549		 	111,889		
Fair Value of Derivative Financial Instruments	11,475		 	1,103		
Total Current and Accrued Liabilities	379,895		 	646,039		
 	 	 	 	
Deferred Credits:	 	 	 	
Deferred Income Taxes	482,682		 	891,287		
Taxes Refundable to Customers	365,091		 	95,739		
Cost of Removal Regulatory Liability	207,711		 	204,630		
Other Regulatory Liabilities	124,868		 	113,716		
Pension and Other Post-Retirement Liabilities	133,852		 	149,079		
Asset Retirement Obligations	106,481		 	106,395		
Other Deferred Credits	109,794		 	109,019		
Total Deferred Credits	1,530,479		 	1,669,865		
Commitments and Contingencies	—		 	—		
Total Capitalization and Liabilities		$5,914,573		 		$6,103,320		

Page 15.

	

 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED STATEMENTS OF CASH FLOWS	
(Unaudited)	
 	 	Six Months Ended	
 	 	March 31,	
(Thousands of Dollars)	 	2018	 	2017	
 	 	 	 	 	
Operating Activities:	 	 	 	 	
Net Income Available for Common Stock	 	$	290,501		 	$	178,191		
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:	 	 	 	 	
Depreciation, Depletion and Amortization	 	116,985		 	113,194		
Deferred Income Taxes	 	(62,459	)	 	63,781		
Stock-Based Compensation	 	7,862		 	5,632		
Other	 	8,052		 	7,713		
Change in:	 	 	 	 	
Hedging Collateral Deposits	 	(1,916	)	 	(287	)	
Receivables and Unbilled Revenue	 	(123,954	)	 	(92,155	)	
Gas Stored Underground and Materials and Supplies	 	28,004		 	24,476		
Unrecovered Purchased Gas Costs	 	4,197		 	(2,241	)	
Other Current Assets	 	(8,819	)	 	7,769		
Accounts Payable	 	10,838		 	13,997		
Amounts Payable to Customers	 	12,083		 	(71	)	
Customer Advances	 	(15,547	)	 	(14,462	)	
Customer Security Deposits	 	(1,399	)	 	1,493		
Other Accruals and Current Liabilities	 	37,646		 	44,690		
Other Assets	 	(9,541	)	 	(32	)	
Other Liabilities	 	(5,767	)	 	202		
Net Cash Provided by Operating Activities	 	$	286,766		 	$	351,890		
 	 	 	 	 	
Investing Activities:	 	 	 	 	
Capital Expenditures	 	$	(261,720	)	 	$	(208,231	)	
Net Proceeds from Sale of Oil and Gas Producing Properties	 	17,310		 	26,554		
Other	 	5,355		 	(3,225	)	
Net Cash Used in Investing Activities	 	$	(239,055	)	 	$	(184,902	)	
 	 	 	 	 	
Financing Activities:	 	 	 	 	
Reduction of Long-Term Debt	 	$	(307,047	)	 	$	—		
Dividends Paid on Common Stock	 	(71,091	)	 	(69,017	)	
Net Proceeds From Issuance of Common Stock	 	2,891		 	3,230		
Net Cash Used in Financing Activities	 	$	(375,247	)	 	$	(65,787	)	
 	 	 	 	 	
Net Increase (Decrease) in Cash and Temporary Cash Investments	 	(327,536	)	 	101,201		
Cash and Temporary Cash Investments at Beginning of Period	 	555,530		 	129,972		
Cash and Temporary Cash Investments at March 31	 	$	227,994		 	$	231,173		

Page 16.

	

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

 	Three Months Ended	 	Six Months Ended	
(Thousands of Dollars, except per share amounts)	March 31,	 	March 31,	
EXPLORATION AND PRODUCTION SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Total Operating Revenues	$	146,411		 	$	159,553		 	$	(13,142	)	 	$	285,552		$	320,485		$	(34,933	)	
 	 	 	 	 	 	 							
Operating Expenses:	 	 	 	 	 	 							
Operation and Maintenance:	 	 	 	 	 	 							
General and Administrative Expense	17,041		 	16,530		 	511		 	30,936		29,504		1,432		
Lease Operating and Transportation Expense	43,808		 	42,543		 	1,265		 	83,455		82,251		1,204		
All Other Operation and Maintenance Expense	2,919		 	2,781		 	138		 	5,454		5,332		122		
Property, Franchise and Other Taxes	3,873		 	3,729		 	144		 	7,443		6,951		492		
Depreciation, Depletion and Amortization	31,986		 	28,851		 	3,135		 	59,411		57,905		1,506		
 	99,627		 	94,434		 	5,193		 	186,699		181,943		4,756		
 	 	 	 	 	 	 							
Operating Income	46,784		 	65,119		 	(18,335	)	 	98,853		138,542		(39,689	)	
 	 	 	 	 	 	 							
Other Income (Expense):	 	 	 	 	 	 							
Interest Income	305		 	147		 	158		 	601		233		368		
Interest Expense	(13,380	)	 	(13,303	)	 	(77	)	 	(26,753	)	(26,826	)	73		
 	 	 	 	 	 	 							
Income Before Income Taxes	33,709		 	51,963		 	(18,254	)	 	72,701		111,949		(39,248	)	
Income Tax Expense (Benefit)	7,172		 	18,194		 	(11,022	)	 	(60,534	)	43,100		(103,634	)	
Net Income	$	26,537		 	$	33,769		 	$	(7,232	)	 	$	133,235		$	68,849		$	64,386		
 	 	 	 	 	 	 							
Net Income Per Share (Diluted)	$	0.31		 	$	0.39		 	$	(0.08	)	 	$	1.54		$	0.80		$	0.74		

Page 17.

	

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

 	Three Months Ended	 	Six Months Ended	
(Thousands of Dollars, except per share amounts)	March 31,	 	March 31,	
PIPELINE AND STORAGE SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	53,714		 	$	53,163		 	$	551		 	$	107,025		$	106,164		$	861		
Intersegment Revenues	23,044		 	22,592		 	452		 	45,028		44,746		282		
Total Operating Revenues	76,758		 	75,755		 	1,003		 	152,053		150,910		1,143		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	55		 	(28	)	 	83		 	161		194		(33	)	
Operation and Maintenance	19,426		 	19,668		 	(242	)	 	36,742		39,911		(3,169	)	
Property, Franchise and Other Taxes	7,135		 	7,012		 	123		 	14,235		13,689		546		
Depreciation, Depletion and Amortization	10,838		 	10,476		 	362		 	21,434		20,138		1,296		
 	37,454		 	37,128		 	326		 	72,572		73,932		(1,360	)	
 	 	 	 	 	 	 	 	 	 	
Operating Income	39,304		 	38,627		 	677		 	79,481		76,978		2,503		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	608		 	319		 	289		 	1,153		591		562		
Other Income	209		 	807		 	(598	)	 	954		1,494		(540	)	
Interest Expense	(7,875	)	 	(8,342	)	 	467		 	(15,752	)	(16,688	)	936		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	32,246		 	31,411		 	835		 	65,836		62,375		3,461		
Income Tax Expense	9,522		 	12,155		 	(2,633	)	 	4,650		23,751		(19,101	)	
Net Income	$	22,724		 	$	19,256		 	$	3,468		 	$	61,186		$	38,624		$	22,562		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.26		 	$	0.22		 	$	0.04		 	$	0.71		$	0.45		$	0.26		

 	Three Months Ended	 	Six Months Ended	
 	March 31,	 	March 31,	
GATHERING SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	(99	)	 	$	26		 	$	(125	)	 	$	71		$	52		$	19		
Intersegment Revenues	27,832		 	27,936		 	(104	)	 	51,497		55,776		(4,279	)	
Total Operating Revenues	27,733		 	27,962		 	(229	)	 	51,568		55,828		(4,260	)	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	3,572		 	3,769		 	(197	)	 	6,638		6,523		115		
Property, Franchise and Other Taxes	23		 	21		 	2		 	61		32		29		
Depreciation, Depletion and Amortization	4,227		 	3,997		 	230		 	8,315		7,877		438		
 	7,822		 	7,787		 	35		 	15,014		14,432		582		
 	 	 	 	 	 	 	 	 	 	
Operating Income	19,911		 	20,175		 	(264	)	 	36,554		41,396		(4,842	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 		 	 	 		
Interest Income	419		 	207		 	212		 	815		353		462		
Other Income	—		 	—		 	—		 	—		1		(1	)	
Interest Expense	(2,508	)	 	(2,235	)	 	(273	)	 	(4,847	)	(4,328	)	(519	)	
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	17,822		 	18,147		 	(325	)	 	32,522		37,422		(4,900	)	
Income Tax Expense (Benefit)	6,052		 	7,862		 	(1,810	)	 	(24,647	)	16,156		(40,803	)	
Net Income	$	11,770		 	$	10,285		 	$	1,485		 	$	57,169		$	21,266		$	35,903		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.14		 	$	0.12		 	$	0.02		 	$	0.66		$	0.25		$	0.41		

Page 18.

	

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

 	Three Months Ended	 	Six Months Ended	
(Thousands of Dollars, except per share amounts)	March 31,	 	March 31,	
UTILITY SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	283,778		 	$	257,949		 	$	25,829		 	$	470,867		$	428,919		$	41,948		
Intersegment Revenues	5,700		 	6,096		 	(396	)	 	7,882		7,922		(40	)	
Total Operating Revenues	289,478		 	264,045		 	25,433		 	478,749		436,841		41,908		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	151,493		 	128,212		 	23,281		 	233,418		188,945		44,473		
Operation and Maintenance	60,463		 	62,748		 	(2,285	)	 	110,946		112,277		(1,331	)	
Property, Franchise and Other Taxes	11,509		 	11,505		 	4		 	21,388		21,710		(322	)	
Depreciation, Depletion and Amortization	13,340		 	13,314		 	26		 	26,665		26,415		250		
 	236,805		 	215,779		 	21,026		 	392,417		349,347		43,070		
 	 	 	 	 	 	 	 	 	 	
Operating Income	52,673		 	48,266		 	4,407		 	86,332		87,494		(1,162	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	510		 	144		 	366		 	816		278		538		
Other Income	138		 	45		 	93		 	307		137		170		
Interest Expense	(6,857	)	 	(7,194	)	 	337		 	(13,695	)	(14,392	)	697		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	46,464		 	41,261		 	5,203		 	73,760		73,517		243		
Income Tax Expense	13,104		 	15,680		 	(2,576	)	 	19,407		26,762		(7,355	)	
Net Income	$	33,360		 	$	25,581		 	$	7,779		 	$	54,353		$	46,755		$	7,598		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.39		 	$	0.30		 	$	0.09		 	$	0.63		$	0.54		$	0.09		

 	Three Months Ended	 	Six Months Ended	
 	March 31,	 	March 31,	
ENERGY MARKETING SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	55,644		 	$	50,940		 	$	4,704		 	$	94,280		$	87,750		$	6,530		
Intersegment Revenues	(51	)	 	16		 	(67	)	 	76		35		41		
Total Operating Revenues	55,593		 	50,956		 	4,637		 	94,356		87,785		6,571		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	52,980		 	47,661		 	5,319		 	88,423		79,999		8,424		
Operation and Maintenance	1,689		 	1,913		 	(224	)	 	3,327		3,556		(229	)	
Depreciation, Depletion and Amortization	68		 	70		 	(2	)	 	138		140		(2	)	
 	54,737		 	49,644		 	5,093		 	91,888		83,695		8,193		
 	 	 	 	 	 	 	 	 	 	
Operating Income	856		 	1,312		 	(456	)	 	2,468		4,090		(1,622	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	161		 	138		 	23		 	295		271		24		
Other Income	22		 	33		 	(11	)	 	25		35		(10	)	
Interest Expense	—		 	(11	)	 	11		 	(12	)	(24	)	12		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	1,039		 	1,472		 	(433	)	 	2,776		4,372		(1,596	)	
Income Tax Expense	461		 	567		 	(106	)	 	1,152		1,685		(533	)	
Net Income	$	578		 	$	905		 	$	(327	)	 	$	1,624		$	2,687		$	(1,063	)	
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.01		 	$	0.01		 	$	—		 	$	0.02		$	0.03		$	(0.01	)	

Page 19.

	
																						
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	Six Months Ended	
(Thousands of Dollars, except per share amounts)	March 31,	 	March 31,	
ALL OTHER	2018	 	2017	 	Variance	 	2018	2017	Variance	
Total Operating Revenues	$	1,232		 	$	218		 	$	1,014		 	$	2,328		$	772		$	1,556		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	367		 	394		 	(27	)	 	691		909		(218	)	
Property, Franchise and Other Taxes	145		 	150		 	(5	)	 	288		294		(6	)	
Depreciation, Depletion and Amortization	506		 	102		 	404		 	645		343		302		
 	1,018		 	646		 	372		 	1,624		1,546		78		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	214		 	(428	)	 	642		 	704		(774	)	1,478		
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	91		 	49		 	42		 	163		89		74		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	305		 	(379	)	 	684		 	867		(685	)	1,552		
Income Tax Expense (Benefit)	98		 	(158	)	 	256		 	1,378		(285	)	1,663		
Net Income (Loss)	$	207		 	$	(221	)	 	$	428		 	$	(511	)	$	(400	)	$	(111	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

 	Three Months Ended	 	Six Months Ended	
 	March 31,	 	March 31,	
CORPORATE	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	225		 	$	226		 	$	(1	)	 	$	438		$	434		$	4		
Intersegment Revenues	999		 	977		 	22		 	1,999		1,953		46		
Total Operating Revenues	1,224		 	1,203		 	21		 	2,437		2,387		50		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	3,957		 	4,003		 	(46	)	 	7,519		7,395		124		
Property, Franchise and Other Taxes	117		 	125		 	(8	)	 	235		245		(10	)	
Depreciation, Depletion and Amortization	190		 	189		 	1		 	377		376		1		
 	4,264		 	4,317		 	(53	)	 	8,131		8,016		115		
 	 	 	 	 	 	 	 	 	 	
Operating Loss	(3,040	)	 	(3,114	)	 	74		 	(5,694	)	(5,629	)	(65	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	29,877		 	30,693		 	(816	)	 	61,697		62,498		(801	)	
Other Income	401		 	859		 	(458	)	 	1,206		1,689		(483	)	
Interest Expense on Long-Term Debt	(27,148	)	 	(28,913	)	 	1,765		 	(55,235	)	(58,016	)	2,781		
Other Interest Expense	(1,559	)	 	(1,145	)	 	(414	)	 	(2,942	)	(1,898	)	(1,044	)	
 	 	 	 	 	 	 	 	 	 	
Loss Before Income Taxes	(1,469	)	 	(1,620	)	 	151		 	(968	)	(1,356	)	388		
Income Tax Expense (Benefit)	1,860		 	(1,329	)	 	3,189		 	15,587		(1,766	)	17,353		
Net Income (Loss)	$	(3,329	)	 	$	(291	)	 	$	(3,038	)	 	$	(16,555	)	$	410		$	(16,965	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	(0.05	)	 	$	—		 	$	(0.05	)	 	$	(0.19	)	$	—		$	(0.19	)	

 	Three Months Ended	 	Six Months Ended	
 	March 31,	 	March 31,	
INTERSEGMENT ELIMINATIONS	2018	 	2017	 	Variance	 	2018	2017	Variance	
Intersegment Revenues	$	(57,524	)	 	$	(57,617	)	 	$	93		 	$	(106,482	)	$	(110,432	)	$	3,950		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	(27,920	)	 	(27,874	)	 	(46	)	 	(51,360	)	(50,924	)	(436	)	
Operation and Maintenance	(29,604	)	 	(29,743	)	 	139		 	(55,122	)	(59,508	)	4,386		
 	(57,524	)	 	(57,617	)	 	93		 	(106,482	)	(110,432	)	3,950		
 	 	 	 	 	 	 	 	 	 	
Operating Income	—		 	—		 	—		 	—		—		—		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	(30,946	)	 	(31,306	)	 	360		 	(62,265	)	(62,322	)	57		
Interest Expense	30,946		 	31,306		 	(360	)	 	62,265		62,322		(57	)	
Net Income	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

Page 20.

	

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

 	Three Months Ended	 	Six Months Ended	
 	March 31,	 	March 31,	
 	(Unaudited)	 	(Unaudited)	
 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	
Capital Expenditures:	 	 	 	 	 	 	 	 	 	 	 	
Exploration and Production	$	84,559		(1)  	$	57,137		(3)  	$	27,422		 	$	159,285		(1)(2)  	$	97,826		(3)(4)  	$	61,459		
Pipeline and Storage	15,167		(1)  	11,386		(3)  	3,781		 	37,440		(1)(2)  	36,778		(3)(4)  	662		
Gathering	19,352		(1)  	3,147		(3)  	16,205		 	32,283		(1)(2)  	14,491		(3)(4)  	17,792		
Utility	15,755		(1)  	19,244		(3)  	(3,489	)	 	32,290		(1)(2)  	36,296		(3)(4)  	(4,006	)	
Energy Marketing	4		 	5		 	(1	)	 	22		 	11		 	11		
Total Reportable Segments	134,837			90,919			43,918			261,320			185,402			75,918		
All Other	—		 	—		 	—		 	1		 	39		 	(38	)	
Corporate	15		 	3		 	12		 	44		 	64		 	(20	)	
Eliminations	(19,922	)	 	(777	)	 	(19,145	)	 	(19,922	)	 	(777	)	 	(19,145	)	
Total Capital Expenditures	$	114,930		 	$	90,145		 	$	24,785		 	$	241,443		 	$	184,728		 	$	56,715		

		
(1)  	Capital expenditures for the quarter and six months ended March 31, 2018, include accounts payable and accrued liabilities related to capital expenditures of $38.8 million, $9.0 million, $1.6 million, and $2.5 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 March 31, 2018, since they represent non-cash investing activities at that date.	

(2)  	Capital expenditures for the six months ended March 31, 2018, exclude capital expenditures of $36.5 million, $25.1 million, $3.9 million and $6.7 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2017 and paid during the six months ended March 31, 2018. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2017, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2018.	

(3)  	Capital expenditures for the quarter and six months ended March 31, 2017, include accounts payable and accrued liabilities related to capital expenditures of $23.2 million, $5.8 million, $2.2 million, and $5.7 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 March 31, 2017, since they represent non-cash investing activities at that date.	

(4)  	Capital expenditures for the six months ended March 31, 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 six months ended March 31, 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 March 31, 2017.	

	

DEGREE DAYS	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Percent Colder	
 	 	 	 	 	 	 	(Warmer) Than:	
Three Months Ended March 31	Normal	 	2018	 	2017	 	  Normal (1)	 	Last Year (1)	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	3,290	 	3,208	 	2,866	 	(2.5)	 	11.9		
Erie, PA	3,108	 	3,075	 	2,627	 	(1.1)	 	17.1		
 	 	 	 	 	 	 	 	 	 	
Six Months Ended March 31	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	5,543	 	5,435	 	4,832	 	(1.9)	 	12.5		
Erie, PA	5,152	 	5,104	 	4,377	 	(0.9)	 	16.6		

(1)  	Percents compare actual 2018 degree days to normal degree days and actual 2018 degree days to actual 2017 degree days.	

Page 21.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	

 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gas Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	41,403		 	40,805		 	598		 	76,817		 	80,612		 	(3,795	)	
West Coast	 	675		 	737		 	(62	)	 	1,370		 	1,513		 	(143	)	
Total Production	 	42,078		 	41,542		 	536		 	78,187		 	82,125		 	(3,938	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Mcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	2.46		 	$	2.71		 	$	(0.25	)	 	$	2.41		 	$	2.54		 	$	(0.13	)	
West Coast	 	4.40		 	4.57		 	(0.17	)	 	4.70		 	4.40		 	0.30		
Weighted Average	 	2.49		 	2.75		 	(0.26	)	 	2.45		 	2.57		 	(0.12	)	
Weighted Average after Hedging	 	2.52		 	2.96		 	(0.44	)	 	2.61		 	2.96		 	(0.35	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (Thousands of Barrels)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	1		 	2		 	(1	)	 	2		 	2		 	—		
West Coast	 	662		 	672		 	(10	)	 	1,334		 	1,393		 	(59	)	
Total Production	 	663		 	674		 	(11	)	 	1,336		 	1,395		 	(59	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Barrel)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	58.54		 	$	49.87		 	$	8.67		 	$	49.82		 	$	49.04		 	$	0.78		
West Coast	 	65.39		 	$	47.96		 	17.43		 	61.61		 	45.75		 	15.86		
Weighted Average	 	65.39		 	47.96		 	17.43		 	61.60		 	45.82		 	15.78		
Weighted Average after Hedging	 	58.31		 	52.92		 	5.39		 	59.05		 	53.85		 	5.20		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Production (Mmcfe)	 	46,056		 	45,586		 	470		 	86,203		 	90,495		 	(4,292	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Selected Operating Performance Statistics:	 	 	 	 	 	 	 	 	 	 	 	 	
General & Administrative Expense per Mcfe (1)	 	$	0.37		 	$	0.36		 	$	0.01		 	$	0.36		 	$	0.33		 	$	0.03		
Lease Operating and Transportation Expense per Mcfe (1)(2)	 	$	0.95		 	$	0.93		 	$	0.02		 	$	0.97		 	$	0.91		 	$	0.06		
Depreciation, Depletion & Amortization per Mcfe (1)	 	$	0.69		 	$	0.63		 	$	0.06		 	$	0.69		 	$	0.64		 	$	0.05		

		
(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 per Mcfe for both the three months ended March 31, 2018 and March 31, 2017. Amounts include transportation expense of $0.54 per Mcfe for both the six months ended March 31, 2018 and March 31, 2017.	

Page 22.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	
 	
Hedging Summary for the Remaining Six Months of Fiscal 2018	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	228,000		BBL	 	$	63.55 / BBL	
NYMEX	 	840,000		BBL	 	$	52.67 / BBL	
Total	 	1,068,000		BBL	 	$	54.99 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	20,520,000		MMBTU	 	$	3.17 / MMBTU	
DAWN	 	3,600,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	38,109,910		MMBTU	 	$	2.33 / MMBTU	
Total	 	62,229,910		MMBTU	 	$	2.65 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2019	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	612,000		BBL	 	$	61.26 / BBL	
NYMEX	 	1,068,000		BBL	 	$	53.42 / BBL	
Total	 	1,680,000		BBL	 	$	56.28 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	46,420,000		MMBTU	 	$	3.03 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	43,507,349		MMBTU	 	$	2.44 / MMBTU	
Total	 	97,127,349		MMBTU	 	$	2.76 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2020	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	600,000		BBL	 	$	59.60 / BBL	
NYMEX	 	324,000		BBL	 	$	50.52 / BBL	
Total	 	924,000		BBL	 	$	56.42 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	18,640,000		MMBTU	 	$	3.04 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	41,716,849		MMBTU	 	$	2.28 / MMBTU	
Total	 	67,556,849		MMBTU	 	$	2.57 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2021	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	300,000		BBL	 	$	60.00 / BBL	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
Total	 	456,000		BBL	 	$	56.92 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	4,840,000		MMBTU	 	$	3.01 / MMBTU	
   DAWN	 	600,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	41,937,357		MMBTU	 	$	2.22 / MMBTU	
Total	 	47,377,357		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	 	40,839,635		MMBTU	 	$	2.23 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2023	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	37,376,584		MMBTU	 	$	2.26 / 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	

 	 	 	 	 	 	 	 	 	 	 	 	 	
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Firm Transportation - Affiliated	 	47,551		 	43,243		 	4,308		 	82,392		 	74,850		 	7,542		
Firm Transportation - Non-Affiliated	 	152,128		 	170,124		 	(17,996	)	 	323,989		 	329,298		 	(5,309	)	
Interruptible Transportation	 	1,165		 	971		 	194		 	2,046		 	4,017		 	(1,971	)	
 	 	200,844		 	214,338		 	(13,494	)	 	408,427		 	408,165		 	262		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gathering Volume - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Gathered Volume - Affiliated	 	51,374		 	50,598		 	776		 	94,536		 	101,167		 	(6,631	)	

Utility Throughput - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Retail Sales:	 	 	 	 	 	 	 	 	 	 	 	 	
Residential Sales	 	28,568		 	24,949		 	3,619		 	46,415		 	40,713		 	5,702		
Commercial Sales	 	4,500		 	3,903		 	597		 	7,096		 	6,202		 	894		
Industrial Sales	 	287		 	157		 	130		 	431		 	234		 	197		
 	 	33,355		 	29,009		 	4,346		 	53,942		 	47,149		 	6,793		
Off-System Sales	 	119		 	1,122		 	(1,003	)	 	141		 	1,295		 	(1,154	)	
Transportation	 	29,624		 	27,089		 	2,535		 	51,051		 	46,654		 	4,397		
 	 	63,098		 	57,220		 	5,878		 	105,134		 	95,098		 	10,036		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Energy Marketing Volume	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Natural Gas (MMcf)	 	16,112		 	14,120		 	1,992		 	28,091		 	25,248		 	2,843		

	

	

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Page 24.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

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

Management defines Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the three and six months ended March 31, 2018 and 2017:

																	
 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
(in thousands except per share amounts)	 	2018	 	2017	 	2018	 	2017	
Reported GAAP Earnings	 	$	91,847		 	$	89,284		 	$	290,501		 	$	178,191		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	4,000		 	—		 	(107,000	)	 	—		
Adjusted Operating Results	 	$	95,847		 	$	89,284		 	$	183,501		 	$	178,191		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	1.06		 	$	1.04		 	$	3.37		 	$	2.07		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	0.05		 	—		 	(1.24	)	 	—		
Adjusted Operating Results per share	 	$	1.11		 	$	1.04		 	$	2.13		 	$	2.07		

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 other items reflected in operating income that impact comparability.

The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and six months ended March 31, 2018 and 2017:

																	
 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
 	 	2018	 	2017	 	2018	 	2017	
(in thousands)	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	91,847		 	$	89,284		 	$	290,501		 	$	178,191		
Depreciation, Depletion and Amortization	 	61,155		 	56,999		 	116,985		 	113,194		
Interest and Other Income	 	(1,795	)	 	(2,135	)	 	(5,767	)	 	(5,347	)	
Interest Expense	 	28,381		 	29,837		 	56,971		 	59,850		
Income Taxes	 	38,269		 	52,971		 	(43,007	)	 	109,403		
Adjusted EBITDA	 	$	217,857		 	$	226,956		 	$	415,683		 	$	455,291		
 	 	 	 	 	 	 	 	 	
Adjusted EBITDA by Segment	 	 	 	 	 	 	 	 	
Pipeline and Storage Adjusted EBITDA	 	$	50,142		 	$	49,103		 	$	100,915		 	$	97,116		
Gathering Adjusted EBITDA	 	24,138		 	24,172		 	44,869		 	49,273		
Total Midstream Businesses Adjusted EBITDA	 	74,280		 	73,275			145,784			146,389		
Exploration and Production Adjusted EBITDA	 	78,770		 	93,970		 	158,264		 	196,447		
Utility Adjusted EBITDA	 	66,013		 	61,580		 	112,997		 	113,909		
Energy Marketing Adjusted EBITDA	 	924		 	1,382		 	2,606		 	4,230		
Corporate and All Other Adjusted EBITDA	 	(2,130	)	 	(3,251	)	 	(3,968	)	 	(5,684	)	
Total Adjusted EBITDA	 	$	217,857		 	$	226,956			$	415,683			$	455,291		

Page 25.

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

																	
 	 	Three Months Ended	 	Six Months Ended	
 	 	March 31,	 	March 31,	
(in thousands)	 	2018	 	2017	 	2018	 	2017	
Exploration and Production Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	26,537		 	$	33,769		 	$	133,235		 	$	68,849		
Depreciation, Depletion and Amortization	 	31,986		 	28,851		 	59,411		 	57,905		
Interest and Other Income	 	(305	)	 	(147	)	 	(601	)	 	(233	)	
Interest Expense	 	13,380		 	13,303		 	26,753		 	26,826		
Income Taxes	 	7,172		 	18,194		 	(60,534	)	 	43,100		
Adjusted EBITDA	 	$	78,770		 	$	93,970		 	$	158,264		 	$	196,447		
 	 	 	 	 	 	 	 	 	
Pipeline and Storage Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	22,724		 	$	19,256		 	$	61,186		 	$	38,624		
Depreciation, Depletion and Amortization	 	10,838		 	10,476		 	21,434		 	20,138		
Interest and Other Income	 	(817	)	 	(1,126	)	 	(2,107	)	 	(2,085	)	
Interest Expense	 	7,875		 	8,342		 	15,752		 	16,688		
Income Taxes	 	9,522		 	12,155		 	4,650		 	23,751		
Adjusted EBITDA	 	$	50,142		 	$	49,103		 	$	100,915		 	$	97,116		
 	 	 	 	 	 	 	 	 	
Gathering Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	11,770		 	$	10,285		 	$	57,169		 	$	21,266		
Depreciation, Depletion and Amortization	 	4,227		 	3,997		 	8,315		 	7,877		
Interest and Other Income	 	(419	)	 	(207	)	 	(815	)	 	(354	)	
Interest Expense	 	2,508		 	2,235		 	4,847		 	4,328		
Income Taxes	 	6,052		 	7,862		 	(24,647	)	 	16,156		
Adjusted EBITDA	 	$	24,138		 	$	24,172		 	$	44,869		 	$	49,273		
 	 	 	 	 	 	 	 	 	
Utility Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	33,360		 	$	25,581		 	$	54,353		 	$	46,755		
Depreciation, Depletion and Amortization	 	13,340		 	13,314		 	26,665		 	26,415		
Interest and Other Income	 	(648	)	 	(189	)	 	(1,123	)	 	(415	)	
Interest Expense	 	6,857		 	7,194		 	13,695		 	14,392		
Income Taxes	 	13,104		 	15,680		 	19,407		 	26,762		
Adjusted EBITDA	 	$	66,013		 	$	61,580		 	$	112,997		 	$	113,909		
 	 	 	 	 	 	 	 	 	
Energy Marketing Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	578		 	$	905		 	$	1,624		 	$	2,687		
Depreciation, Depletion and Amortization	 	68		 	70		 	138		 	140		
Interest and Other Income	 	(183	)	 	(171	)	 	(320	)	 	(306	)	
Interest Expense	 	—		 	11		 	12		 	24		
Income Taxes	 	461		 	567		 	1,152		 	1,685		
Adjusted EBITDA	 	$	924		 	$	1,382		 	$	2,606		 	$	4,230		
 	 	 	 	 	 	 	 	 	
Corporate and All Other	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(3,122	)	 	$	(512	)	 	$	(17,066	)	 	$	10		
Depreciation, Depletion and Amortization	 	696		 	291		 	1,022		 	719		
Interest and Other Income	 	577		 	(295	)	 	(801	)	 	(1,954	)	
Interest Expense	 	(2,239	)	 	(1,248	)	 	(4,088	)	 	(2,408	)	
Income Taxes	 	1,958		 	(1,487	)	 	16,965		 	(2,051	)	
Adjusted EBITDA	 	$	(2,130	)	 	$	(3,251	)	 	$	(3,968	)	 	$	(5,684	)	

Page 26.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	

Quarter Ended March 31 (unaudited)	 	2018	 	2017	
 	 	 	 	 	
Operating Revenues	 	$	540,905,000		 	$	522,075,000		
 	 	 	 	 	
Net Income Available for Common Stock	 	$	91,847,000		 	$	89,284,000		
 	 	 	 	 	
Earnings Per Common Share	 	 	 	 	
Basic	 	$	1.07		 	$	1.05		
Diluted	 	$	1.06		 	$	1.04		
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,809,233		 	85,334,887		
Used in Diluted Calculation	 	86,323,636		 	86,006,614		
 	 	 	 	 	
Six Months Ended March 31 (unaudited)	 	 	 	 	
 	 	 	 	 	
Operating Revenues	 	$	960,561,000		 	$	944,576,000		
 	 	 	 	 	
Net Income Available for Common Stock	 	$	290,501,000		 	$	178,191,000		
 	 	 	 	 	
Earnings Per Common Share:	 	 	 	 	
Basic	 	$	3.39		 	$	2.09		
Diluted	 	$	3.37		 	$	2.07		
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,718,779		 	85,261,575		
Used in Diluted Calculation	 	86,318,892		 	85,897,282		
 	 	 	 	 	
Twelve Months Ended March 31 (unaudited)	 	 	 	 	
 	 	 	 	 	
Operating Revenues	 	$	1,595,866,000		 	$	1,572,665,000		
 	 	 	 	 	
Net Income Available for Common Stock	 	$	395,792,000		 	$	224,030,000		
 	 	 	 	 	
Earnings Per Common Share	 	 	 	 	
Basic	 	$	4.62		 	$	2.63		
Diluted	 	$	4.59		 	$	2.61		
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,592,904		 	85,114,029		
Used in Diluted Calculation	 	86,232,666		 	85,738,474