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National Fuel Reports 2012 Earnings

WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)-- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated earnings for the fourth quarter and fiscal year ended September 30, 2012, of $48.8 million, or $0.58 per share, and $220.1 million, or $2.63 per share, respectively.

HIGHLIGHTS

  • Operating results before items impacting comparability (“Operating Results”) for the fourth quarter were $36.0 million or $0.43 per share. This compares to Operating Results of $37.4 million, or $0.45 per share, in the prior year’s fourth quarter. Despite a nearly 28% decrease in the average price Seneca realized on natural gas production during the quarter, Operating Results were only down $0.02 per share due to a 46.1% increase in Seneca’s production and higher transportation revenues in the Pipeline and Storage segment.
  • Operating Results for the fiscal year were $211.3 million or $2.53 per share. This compares to Operating Results of $227.0 million, or $2.71 per share, in the prior fiscal year. Current year Operating Results were impacted by 21% lower natural gas prices in the Exploration and Production segment and weather that was over 21% warmer compared to the prior fiscal year in the Utility and Energy Marketing segments. Higher transportation revenues in the Pipeline and Storage segment contributed to a 50% increase in that segment’s Operating Results.
  • In the Pipeline and Storage segment, fourth quarter earnings were $25.1 million or $0.30 per share. During the quarter, FERC approved Supply Corporation’s rate case settlement. As part of that settlement, Supply Corporation eliminated a regulatory liability associated with its postretirement benefit plan. This adjustment increased earnings by $12.8 million. Excluding this item, Operating Results in the Pipeline and Storage segment increased $4.8 million, or $0.06 per share, an increase of 67% compared to the prior year’s fourth quarter. The increase is largely driven by the impact of the Line N Expansion and Tioga County Extension projects that were placed in service during the first quarter.
  • Seneca’s production of crude oil and natural gas in the current quarter was 24.6 billion cubic feet equivalent (“Bcfe”), a 46.1% increase over the 16.8 Bcfe in the fourth quarter of 2011. Appalachian production increased 62.9% to 19.6 Bcfe, including 18.0 Bcfe of Marcellus production, an increase of 78.2% over the prior year’s fourth quarter. California crude oil production increased 4.3%. Total production for fiscal 2012 increased 23.3% to 83.4 Bcfe, an increase of 15.7 Bcfe.
  • Seneca’s total reserves at September 30, 2012, were 1,246 Bcfe, an increase of 311 Bcfe or 33%. Seneca replaced 473% of fiscal 2012 production.
  • A conference call is scheduled for Friday, November 2, 2012, at 11 a.m. Eastern Time.

MANAGEMENT COMMENTS

David F. Smith, Chairman and Chief Executive Officer of National Fuel Gas Company, stated: “The fourth quarter was a successful conclusion to a fiscal year in which each of our major business segments had significant accomplishments. We continued to execute on our long-term plan to grow the company and were very pleased with our results.

“In the Pipeline and Storage segment, operating results for the fiscal year were up an impressive 50 percent on the strength of our recent expansion projects. At Seneca, annual Marcellus production increased 58 percent as a result of ongoing success in our major development areas. Crude oil production grew by 8 percent in California, which, combined with higher realized prices, contributed to a significant growth in our West Division cash flows. At the Utility, our employees did an outstanding job controlling expenses, which helped to offset the impact of the warmest winter on record in our service territory.

“As we progress into fiscal 2013 and beyond, we believe natural gas is positioned to play a critical and expanding role in the United States energy picture. National Fuel, with our diversified business model and strong balance sheet, is well positioned to capitalize on this opportunity and will remain focused on delivering long-term value for our shareholders.”

SUMMARY OF RESULTS

National Fuel had consolidated earnings for the quarter ended September 30, 2012, of $48.8 million, or $0.58 per share, compared to the prior year’s fourth quarter earnings of $37.4 million, or $0.45 per share, an increase of $11.4 million or $0.13 per share. The increase is mainly due to higher earnings in the Pipeline and Storage and Utility segments, offset by lower earnings in the Exploration and Production and Energy Marketing segments, and the All Other category. (Note: All references to earnings per share are to diluted earnings per share, and all amounts used in the discussion of earnings and operating results before items impacting comparability (“Operating Results”) are after tax unless otherwise noted.)

Consolidated earnings for the fiscal year ended September 30, 2012, of $220.1 million, or $2.63 per share, decreased $38.3 million, or $0.46 per share, from the same period in the prior year, where earnings were $258.4 million or $3.09 per share.

Three Months Fiscal Year
Ended September 30, Ended September 30,
2012 2011 2012 2011
(in thousands except per share amounts)
Reported GAAP earnings $ 48,802 $ 37,356 $ 220,077 $ 258,402
Items impacting comparability1:
Eliminate other postretirement regulatory liability (12,786 ) (12,786 )
Pennsylvania impact fee (pre fiscal 2012) 4,034
Gain on sale of landfill gas electric generation investments (31,418 )
Operating Results $ 36,016 $ 37,356 $ 211,325 $ 226,984
Reported GAAP earnings per share $ 0.58 $ 0.45 $ 2.63 $ 3.09
Items impacting comparability1:
Eliminate other postretirement regulatory liability (0.15 ) (0.15 )
Pennsylvania impact fee (pre fiscal 2012) 0.05
Gain on sale of landfill gas electric generation investments (0.38 )
Operating Results $ 0.43 $ 0.45 $ 2.53 $ 2.71

1 See discussion of these individual items below.

As outlined in the table above, certain items included in GAAP earnings impacted the comparability of the Company’s financial results with equivalent periods in fiscal 2011. Excluding these items, Operating Results for the current quarter of $36.0 million, or $0.43 per share, decreased $1.3 million, or $0.02 per share, from the prior year’s fourth quarter where Operating Results were $37.4 million, or $0.45 per share. Excluding these items, Operating Results for the fiscal year ended September 30, 2012, of $211.3 million, or $2.53 per share, decreased $15.7 million, or $0.18 per share, from the prior year, where Operating Results were $227.0 million or $2.71 per share. Items impacting comparability will be discussed in more detail within the discussion of segment earnings below.

DISCUSSION OF RESULTS BY SEGMENT

The following discussion of the earnings of each segment is summarized in a tabular form at pages 9 through 12 of this report. It may be helpful to refer to those tables while reviewing this discussion.

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 in California, Appalachia and Kansas. Seneca completed the sale of its offshore Gulf of Mexico assets in April 2011.

The Exploration and Production segment’s earnings in the fourth quarter of fiscal 2012 of $22.1 million, or $0.26 per share, decreased $8.7 million, or $0.11 per share, when compared with the prior year’s fourth quarter.

Overall production of natural gas and crude oil for the fourth quarter of 24.6 Bcfe increased approximately 7.8 Bcfe compared to the prior year’s fourth quarter. Production from Seneca’s Appalachian properties increased 62.9 percent, due to a 7.9 Bcfe, or 78.2 percent, increase in Marcellus production. Crude oil production in California increased 4.3 percent due to additional wells drilled at the Sespe and Midway Sunset fields.

Changes in commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended September 30, 2012, was $3.98 per thousand cubic feet (“Mcf”), a decrease of $1.51 per Mcf compared to the prior year’s fourth quarter. Higher crude oil prices realized after hedging increased earnings. The weighted average oil price received by Seneca (after hedging) for the quarter ended September 30, 2012, was $88.98 per Barrel (“Bbl”), an increase of $6.74 per Bbl.

Depletion and lease operating expenses (“LOE”) for the current year’s fourth quarter increased over last year’s fourth quarter due in part to the higher production activity. On a per unit basis, depletion decreased $0.06 per thousand cubic feet equivalent (“Mcfe”) due to higher reserves at fiscal year end. LOE decreased $0.20 per Mcfe due to higher production and lower steam fuel costs in California. Operating Results were also reduced by higher property, franchise and other taxes due to the Pennsylvania impact fee (see discussion below), higher interest expense, due to a higher outstanding debt balance, and higher state income taxes.

In February 2012, the Commonwealth of Pennsylvania passed legislation that includes a “natural gas impact fee.” The legislation, which covers essentially all of Seneca’s Marcellus Shale wells, imposes an annual fee for a period of 15 years on each well drilled. The per well impact fee is adjusted annually based on three factors: The age of the well, changes in the Consumer Price Index and the average monthly NYMEX price for natural gas. The fee is retroactive and applied to wells drilled in the current fiscal year and in all previous years. The impact fee increased property, franchise and other taxes in the current year’s fourth quarter by $1.4 million (pre-tax).

The Exploration and Production segment’s earnings of $96.5 million, or $1.15 per share, for the fiscal year ended September 30, 2012, decreased $27.7 million, or $0.33 per share, when compared to the prior fiscal year. The impact fee, described above, recorded in the current fiscal year was $13.8 million (pre-tax) of which $6.2 million (pre-tax) related to prior fiscal years and $1.4 million (pre-tax) related to the fourth quarter of fiscal 2012. Excluding the $6.2 million impact fee related to prior fiscal years, the Exploration and Production segment’s Operating Results for the fiscal year ended September 30, 2012, were $100.5 million, or $1.20 per share, a decrease of $23.7 million, or $0.28 per share, when compared with the prior fiscal year.

Overall production for the fiscal year ended September 30, 2012, increased 23.3 percent. Excluding fiscal 2011 Gulf of Mexico production of 5.2 Bcfe due to the April 2011 sale of Seneca’s offshore Gulf of Mexico assets, production increased 33.4 percent or 20.9 Bcfe. Production from Seneca’s Appalachian properties increased 45.4 percent, mainly due to a 20.5 Bcfe or 58.1 percent increase in Marcellus production. Crude oil production in California increased 7.8 percent.

Changes in commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the fiscal year ended September 30, 2012, was $4.27 per Mcf, a decrease of $1.12 per Mcf. Higher crude oil prices realized after hedging increased earnings. The weighted average crude oil price received by Seneca (after hedging) for the fiscal year ended September 30, 2012, was $90.88 per Bbl, an increase of $9.75 per Bbl.

Depletion, LOE and general and administrative expenses (“G&A”) for the fiscal year ended September 30, 2012, increased compared to the prior fiscal year due primarily to the higher production activity discussed above. On a per unit basis, depletion increased $0.08 per Mcfe, LOE decreased $0.08 per Mcfe and G&A decreased $0.08 per Mcfe. Operating results were also reduced by higher interest expense, due to a higher outstanding debt balance and higher state income taxes.

Pipeline and Storage Segment

The Pipeline and Storage segment operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. 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 western Pennsylvania.

The Pipeline and Storage segment’s earnings of $25.1 million, or $0.30 per share, for the quarter ended September 30, 2012, increased $17.6 million, or $0.21 per share, when compared with the same period in the prior fiscal year. During the quarter, FERC approved Supply Corporation’s rate case settlement which provided for, among other things, an increase in base tariff rates, lower depreciation rates and implementation of a fuel tracker for retained gas volumes. As part of that settlement, Supply Corporation eliminated a regulatory liability associated with its postretirement benefit plan. This adjustment increased earnings by $12.8 million.

Excluding this item, Operating Results in the Pipeline and Storage segment, increased $4.8 million or $0.06 per share. The increase in earnings is mainly due to higher transportation revenues from the Tioga County Extension and Line N Expansion projects, which were completed and placed in service in the current fiscal year’s first quarter. The increase in base tariff rates, lower depreciation expense and lower operating expenses also increased Operating Results. Operating Results were reduced by lower efficiency gas revenues as a result of adopting a fuel tracker for retained gas volumes, which eliminates revenue recognition for efficiency gas.

The Pipeline and Storage segment’s earnings of $60.5 million, or $0.72 per share, for the fiscal year ended September 30, 2012, increased $29.0 million, or $0.34 per share, when compared with the same period in the prior fiscal year. Excluding the $12.8 million adjustment of the regulatory liability associated with Supply Corporation’s postretirement benefit plan discussed above, Operating Results increased $16.2 million or $0.19 per share. The increase was mostly due to higher transportation revenues from the Tioga County Extension and Line N Expansion projects, higher base tariff rates, and lower operating expenses noted above. Earnings were reduced by lower efficiency gas revenues due to the decline in natural gas prices and implementation of the fuel tracker noted above.

Utility Segment

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

The Utility segment’s earnings of $5.9 million, or $0.07 per share, for the quarter ended September 30, 2012, increased $5.0 million, or $0.06 per share, when compared with the same period in the prior fiscal year. The increase was due to a regulatory true-up adjustment in the prior year’s fourth quarter that did not recur in the current year’s fourth quarter and lower income taxes.

The Utility segment’s earnings of $58.6 million, or $0.70 per share, for the fiscal year ended September 30, 2012, decreased from earnings of $63.2 million, or $0.76 per share, for the fiscal year ended September 30, 2011. Warmer weather in Pennsylvania was the main reason for the decrease in earnings. Temperatures in Pennsylvania were 21.4 percent warmer in the fiscal year ended September 30, 2012, than the prior fiscal year. Higher depreciation expense also reduced earnings. The decrease in earnings was partially offset by the impact of certain regulatory adjustments in the prior fiscal year that did not recur, lower interest expense on deferred gas costs and lower income tax expense.

Energy Marketing Segment

National Fuel Resources, Inc. (“NFR”) comprises the Company’s Energy Marketing segment. 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.

The Energy Marketing segment's loss for the quarter ended September 30, 2012, of $0.5 million, or $0.01 per share, increased $0.2 million, from the prior year's fourth quarter loss of $0.3 million or less than $0.01 per share. The increased loss in the current year's fourth quarter was primarily due to lower average margins.

Earnings for the fiscal year ended September 30, 2012, of $4.2 million, or $0.05 per share, decreased $4.6 million, or $0.06 per share, from the prior fiscal year, mainly due to a decrease in average margins and lower retail sales volumes. The decrease in average margins for the fiscal year ended September 30, 2012, was largely driven by a lower benefit derived from the Energy Marketing segment's contracts for storage capacity. The decrease in retail sales volumes was primarily a result of warmer weather.

Corporate and All Other

The Corporate and All Other category includes the following active, wholly owned subsidiaries of the Company: National Fuel Gas Midstream Corporation (“Midstream”), formed to build, own and operate natural gas processing and pipeline gathering facilities in the Appalachian region; and Seneca’s Northeast division, which markets high quality hardwoods from Appalachian land holdings.

For the quarter ended September 30, 2012, the Corporate and All Other category had a loss of $3.7 million, or $0.04 per share, compared to a loss of $1.4 million, or $0.02 per share, in the prior year’s fourth quarter. The increased loss is mainly due to higher income taxes, lower income from unconsolidated subsidiaries and higher Corporate operating expenses. Higher earnings from Midstream’s pipeline gathering and natural gas processing operations partially offset the higher loss.

Earnings in the Corporate and All Other category for the fiscal year ended September 30, 2012, were $0.3 million, or $0.01 per share, a decrease of $30.4 million, or $0.35 per share, when compared to the earnings for the fiscal year ended September 30, 2011. The comparability of the results for the fiscal years ended September 30, 2012, and September 30, 2011, was impacted by a $31.4 million gain realized on the February 2011 Horizon Power, Inc. sale of its interest in certain entities that owned electric generation assets powered by landfill gas.

Excluding this item, Operating Results of $0.3 million, or $0.01 per share, for the fiscal year ended September 30, 2012, increased from a loss of $0.7 million or $0.02 per share in the prior fiscal year. The increase in Operating Results is mainly due to higher earnings from Midstream’s pipeline gathering and natural gas processing operations.

EARNINGS GUIDANCE

The Company is increasing its GAAP earnings guidance for fiscal 2013 to a range of $2.65 to $2.95 per share (the previous range had been $2.45 to $2.75). This updated guidance reflects Seneca’s updated production forecast for fiscal 2013, which is now a range of 95 to 107 Bcfe (the previous range had been 92 to 105 Bcfe), and an assumed flat NYMEX price of $3.50 per MMBTU for natural gas and $85 per Bbl for crude oil. It also assumes Seneca’s per unit DD&A expense is in a range of $2.10 to $2.25 per Mcfe (the previous range had been $2.30 to $2.40).

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, November 2, 2012, 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 investor relations page at National Fuel’s website at investor.nationalfuelgas.com. For those without Internet access, access is also provided by dialing (toll-free) 1-800-299-6183, and using the passcode “95413478.” For those unable to listen to the live conference call, a replay will be available at approximately 2 p.m. (Eastern Time) at the same website link and by phone at (toll-free) 1-888-286-8010 using passcode “80430237.” Both the webcast and telephonic replay will be available until the close of business on Friday, November 9, 2012.

National Fuel is an integrated energy company with $5.9 billion in assets comprised of the following four operating segments: Exploration and Production, Pipeline and Storage, Utility, and Energy Marketing. Additional information about National Fuel is available at:www.nationalfuelgas.com or through its investor information service at 1-800-334-2188.

Certain statements contained herein, including those 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,” “may” and similar expressions, 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: 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; 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; 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; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, allowed rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; 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; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks or pest infestation; changes in price differential between similar quantities of natural gas at different geographic locations, and the effect of such changes on the demand for pipeline transportation capacity to or from such locations; other changes in price differentials between similar quantities of oil or natural gas having different quality, heating value, geographic location or delivery date; significant differences between the Company’s projected and actual capital expenditures and operating expenses; 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; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; 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.

Page 9
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED SEPTEMBER 30, 2012
Exploration & Pipeline & Energy Corporate /
(Thousands of Dollars) Production Storage Utility Marketing All Other Consolidated*
Fourth quarter 2011 GAAP earnings $ 30,734 $ 7,479 $ 829 $ (321 ) $ (1,365 ) $ 37,356
Drivers of operating results
Higher (lower) crude oil prices 3,091 3,091
Higher (lower) natural gas prices (20,028 ) (20,028 )
Higher (lower) natural gas production 27,112 27,112
Higher (lower) crude oil production 1,345 1,345
Lower (higher) lease operating expenses (2,617 ) (2,617 )
Lower (higher) depreciation / depletion (9,862 ) 542 (601 ) (9,921 )
Higher (lower) processing plant revenues (852 ) (852 )
Higher (lower) transportation and storage revenues 6,635 6,635
Higher (lower) efficiency gas revenues (1,624 ) (1,624 )
Higher (lower) gathering and processing revenues 1,843 1,843
Lower (higher) operating expenses 951 688 241 (753 ) 1,127
Lower (higher) property, franchise and other taxes (1,351 ) (1,351 )
Regulatory true-up adjustments 1,666 1,666
Higher (lower) income from unconsolidated subsidiaries (749 ) (749 )
Higher (lower) margins (128 ) (128 )
Higher (lower) interest income 327 327
Lower (higher) interest expense (2,991 ) (2,991 )
Lower (higher) income tax expense/effective tax rate (3,520 ) (1,138 ) 2,547 (2,623 ) (4,734 )
All other / rounding 64 (269 ) 256 (44 ) 502 509
Fourth quarter 2012 operating results 22,076 12,313 5,866 (493 ) (3,746 ) 36,016
Items impacting comparability:
Elimination of other post-retirement regulatory liability 12,786 12,786
Fourth quarter 2012 GAAP earnings $ 22,076 $ 25,099 $ 5,866 $ (493 ) $ (3,746 ) $ 48,802

* Amounts do not reflect intercompany eliminations

Page 10
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED SEPTEMBER 30, 2012
Exploration & Pipeline & Energy Corporate /
Production Storage Utility Marketing All Other Consolidated*
Fourth quarter 2011 GAAP earnings $ 0.37 $ 0.09 $ 0.01 $ - $ (0.02 ) $ 0.45
Drivers of operating results
Higher (lower) crude oil prices 0.04 0.04
Higher (lower) natural gas prices (0.24 ) (0.24 )
Higher (lower) natural gas production 0.32 0.32
Higher (lower) crude oil production 0.02 0.02
Lower (higher) lease operating expenses (0.03 ) (0.03 )
Lower (higher) depreciation / depletion (0.12 ) 0.01 (0.01 ) (0.12 )
Higher (lower) processing plant revenues (0.01 ) (0.01 )
Higher (lower) transportation and storage revenues 0.08 0.08
Higher (lower) efficiency gas revenues (0.02 ) (0.02 )
Higher (lower) gathering and processing revenues 0.02 0.02
Lower (higher) operating expenses 0.01 0.01 - (0.01 ) 0.01
Lower (higher) property, franchise and other taxes (0.02 ) (0.02 )
Regulatory true-up adjustments 0.02 0.02
Higher (lower) income from unconsolidated subsidiaries (0.01 ) (0.01 )
Higher (lower) margins - -
Higher (lower) interest income - -
Lower (higher) interest expense (0.04 ) (0.04 )
Lower (higher) income tax expense/effective tax rate (0.04 ) (0.01 ) 0.03 (0.03 ) (0.05 )
All other / rounding - (0.01 ) 0.01 (0.01 ) 0.02 0.01
Fourth quarter 2012 operating results 0.26 0.15 0.07 (0.01 ) (0.04 ) 0.43
Items impacting comparability:
Elimination of other post-retirement regulatory liability 0.15 0.15
Fourth quarter 2012 GAAP earnings $ 0.26 $ 0.30 $ 0.07 $ (0.01 ) $ (0.04 ) $ 0.58

* Amounts do not reflect intercompany eliminations

Page 11
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
YEAR ENDED SEPTEMBER 30, 2012
Exploration & Pipeline & Energy Corporate /
(Thousands of Dollars) Production Storage Utility Marketing All Other Consolidated**
Fiscal 2011 GAAP earnings $ 124,189 $ 31,515 $ 63,228 $ 8,801 $ 30,669 $ 258,402
Items impacting comparability:
Gain on sale of unconsolidated subsidiaries (31,418 ) (31,418 )
Fiscal 2011 operating results 124,189 31,515 63,228 8,801 (749 ) 226,984
Drivers of operating results
Higher (lower) Appalachian and West Coast crude oil prices 19,156 19,156
Higher (lower) Appalachian and West Coast natural gas prices (47,684 ) (47,684 )
Higher (lower) Appalachian and West Coast natural gas production 68,921 68,921
Higher (lower) Appalachian and West Coast crude oil production 10,325 10,325
Lower Gulf Coast natural gas and crude oil revenues (25,218 ) (25,218 )
Lower (higher) lease operating expenses (6,572 ) (6,572 )
Lower (higher) depreciation / depletion (26,532 ) (595 ) (1,267 ) (830 ) (29,224 )
Higher (lower) transportation and storage revenues 20,342 20,342
Higher (lower) efficiency gas revenues (6,055 ) (6,055 )
Higher (lower) gathering and processing revenues 4,046 4,046
Lower (higher) operating costs (2,685 ) 2,703 272 290
Lower (higher) property, franchise and other taxes (3,403 ) (358 ) 913 606 (2,242 )
Warmer weather (10,081 ) (10,081 )
Regulatory true-up adjustments 2,509 2,509
Higher (lower) income from unconsolidated subsidiaries (444 ) (444 )
Higher (lower) margins (4,468 ) 354 (4,114 )
Higher AFUDC * 625 625
Higher (lower) interest income 636 560 1,196
Lower (higher) interest expense (7,344 ) 820 (6,524 )
Lower (higher) income tax expense/effective tax rate (3,202 ) (115 ) 1,117 (2,618 ) (4,818 )
All other / rounding (55 ) (321 ) 519 (164 ) (72 ) (93 )
Fiscal 2012 operating results 100,532 47,741 58,590 4,169 293 211,325
Items impacting comparability:
Elimination of other post-retirement regulatory liability 12,786 12,786
Pennsylvania impact fee (4,034 ) (4,034 )
Fiscal 2012 GAAP earnings $ 96,498 $ 60,527 $ 58,590 $ 4,169 $ 293 $ 220,077

* AFUDC = Allowance for Funds Used During Construction

** Amounts do not reflect intercompany eliminations

Page 12
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
YEAR ENDED SEPTEMBER 30, 2012
Exploration & Pipeline & Energy Corporate /
Production Storage Utility Marketing All Other Consolidated**
Fiscal 2011 GAAP earnings $ 1.48 $ 0.38 $ 0.76 $ 0.11 $ 0.36 $ 3.09
Items impacting comparability:
Gain on sale of unconsolidated subsidiaries (0.38 ) (0.38 )
Fiscal 2011 operating results 1.48 0.38 0.76 0.11 (0.02 ) 2.71
Drivers of operating results
Higher (lower) Appalachian and West Coast crude oil prices 0.23 0.23
Higher (lower) Appalachian and West Coast natural gas prices (0.57 ) (0.57 )
Higher (lower) Appalachian and West Coast natural gas production 0.82 0.82
Higher (lower) Appalachian and West Coast crude oil production 0.12 0.12
Lower Gulf Coast natural gas and crude oil revenues (0.30 ) (0.30 )
Lower (higher) lease operating expenses (0.08 ) (0.08 )
Lower (higher) depreciation / depletion (0.32 ) (0.01 ) (0.02 ) (0.01 ) (0.36 )
Higher (lower) transportation and storage revenues 0.24 0.24
Higher (lower) efficiency gas revenues (0.07 ) (0.07 )
Higher (lower) gathering and processing revenues 0.05 0.05
Lower (higher) operating costs (0.03 ) 0.03 - -
Lower (higher) property, franchise and other taxes (0.04 ) - 0.01 0.01 (0.02 )
Warmer weather (0.12 ) (0.12 )
Regulatory true-up adjustments 0.03 0.03
Higher (lower) income from unconsolidated subsidiaries (0.01 ) (0.01 )
Higher (lower) margins (0.05 ) - (0.05 )
Higher AFUDC * 0.01 0.01
Higher (lower) interest income 0.01 0.01 0.02
Lower (higher) interest expense (0.09 ) 0.01 (0.08 )
Lower (higher) income tax expense/effective tax rate (0.04 ) - 0.01 (0.03 ) (0.06 )
All other / rounding 0.01 (0.01 ) 0.01 (0.01 ) 0.02 0.02
Fiscal 2012 operating results 1.20 0.57 0.70 0.05 0.01 2.53
Items impacting comparability:
Elimination of other post-retirement regulatory liability 0.15 0.15
Pennsylvania impact fee (0.05 ) (0.05 )
Fiscal 2012 GAAP earnings $ 1.15 $ 0.72 $ 0.70 $ 0.05 $ 0.01 $ 2.63

* AFUDC = Allowance for Funds Used During Construction

** Amounts do not reflect intercompany eliminations

Page 13
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts)
Three Months Ended Twelve Months Ended
September 30, September 30,
(Unaudited) (Unaudited)

SUMMARY OF OPERATIONS

2012 2011 2012 2011
Operating Revenues $ 313,261 $ 286,034 $ 1,626,853 $ 1,778,842
Operating Expenses:
Purchased Gas 24,700 46,374 415,589 628,732
Operation and Maintenance 89,541 90,371 401,397 400,519
Property, Franchise and Other Taxes 20,150 18,188 90,288 81,902
Depreciation, Depletion and Amortization 71,606 55,910 271,530 226,527
205,997 210,843 1,178,804 1,337,680
Operating Income 107,264 75,191 448,049 441,162
Other Income (Expense):
Gain on Sale of Unconsolidated Subsidiaries - - - 50,879
Other Income 1,058 1,817 5,133 5,947
Interest Income 2,002 1,639 3,689 2,916
Interest Expense on Long-Term Debt (21,408 ) (17,573 ) (82,002 ) (73,567 )
Other Interest Expense (1,386 ) (541 ) (4,238 ) (4,554 )
Income Before Income Taxes 87,530 60,533 370,631 422,783
Income Tax Expense 38,728 23,177 150,554 164,381
Net Income Available for Common Stock $ 48,802

$ 37,356 $ 220,077

$ 258,402
Earnings Per Common Share:
Basic $ 0.59 $ 0.45 $ 2.65 $ 3.13
Diluted $ 0.58 $ 0.45 $ 2.63 $ 3.09
Weighted Average Common Shares:
Used in Basic Calculation 83,305,793 82,743,764 83,127,844 82,514,015
Used in Diluted Calculation 83,855,991 83,715,222 83,739,771 83,670,802
Page 14
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, September 30,
(Thousands of Dollars) 2012 2011
ASSETS
Property, Plant and Equipment $ 6,615,813 $ 5,646,918
Less - Accumulated Depreciation, Depletion and Amortization 1,876,010 1,646,394
Net Property, Plant and Equipment 4,739,803 4,000,524
Current Assets:
Cash and Temporary Cash Investments 74,494 80,428
Hedging Collateral Deposits 364 19,701
Receivables - Net 115,818 131,885
Unbilled Utility Revenue 19,652 17,284
Gas Stored Underground 49,795 54,325
Materials and Supplies - at average cost 28,577 27,932
Other Current Assets 56,121 64,923
Deferred Income Taxes 10,755 15,423
Total Current Assets 355,576 411,901
Other Assets:
Recoverable Future Taxes 150,941 144,377
Unamortized Debt Expense 13,409 10,571
Other Regulatory Assets 549,702 484,397
Deferred Charges 7,591 5,552
Other Investments 86,774 79,365
Goodwill 5,476 5,476
Fair Value of Derivative Financial Instruments 27,616 76,085
Other 1,105 2,836
Total Other Assets 842,614 808,659
Total Assets $ 5,937,993 $ 5,221,084
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity

Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 83,330,140 Shares and 82,812,677 Shares, Respectively

$ 83,330 $ 82,813
Paid in Capital 669,501 650,749
Earnings Reinvested in the Business 1,306,284 1,206,022

Total Common Shareholders' Equity Before Items of Other Comprehensive Loss

2,059,115 1,939,584
Accumulated Other Comprehensive Loss (99,020 ) (47,699 )
Total Comprehensive Shareholders' Equity 1,960,095 1,891,885
Long-Term Debt, Net of Current Portion 1,149,000 899,000
Total Capitalization 3,109,095 2,790,885
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper 171,000 40,000
Current Portion of Long-Term Debt 250,000 150,000
Accounts Payable 87,985 126,709
Amounts Payable to Customers 19,964 15,519
Dividends Payable 30,416 29,399
Interest Payable on Long-Term Debt 29,491 25,512
Customer Advances 24,055 19,643
Customer Security Deposits 17,942 17,321
Other Accruals and Current Liabilities 79,099 108,636
Fair Value of Derivative Financial Instruments 24,527 9,728
Total Current and Accrued Liabilities 734,479 542,467
Deferred Credits:
Deferred Income Taxes 1,065,757 955,384
Taxes Refundable to Customers 66,392 65,543
Unamortized Investment Tax Credit 2,005 2,586
Cost of Removal Regulatory Liability 139,611 135,940
Other Regulatory Liabilities 23,864 17,177
Pension and Other Post-Retirement Liabilities 516,197 481,520
Asset Retirement Obligations 119,246 75,731
Other Deferred Credits 161,347 153,851
Total Deferred Credits 2,094,419 1,887,732
Commitments and Contingencies - -
Total Capitalization and Liabilities $ 5,937,993 $ 5,221,084

Page 15

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twelve Months Ended
September 30,
(Thousands of Dollars) 2012 2011
Operating Activities:
Net Income Available for Common Stock $ 220,077 $ 258,402
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Gain on Sale of Unconsolidated Subsidiaries - (50,879 )
Depreciation, Depletion and Amortization 271,530 226,527
Deferred Income Taxes 144,150 164,251
Excess Tax Costs (Benefits) Associated with Stock-Based Compensation Awards (985 ) 1,224
Elimination of Other Post-Retirement Regulatory Liability (21,672 ) -
Other 12,952 15,651
Change in:
Hedging Collateral Deposits 19,337 (8,567 )
Receivables and Unbilled Utility Revenue 13,859 3,887
Gas Stored Underground and Materials and Supplies 5,405 (9,934 )
Other Current Assets 9,789 83,245
Accounts Payable (6,570 ) 896
Amounts Payable to Customers 4,445 (22,590 )
Customer Advances 4,412 (7,995 )
Customer Security Deposits 621 (999 )
Other Accruals and Current Liabilities 10,633 242
Other Assets (13,584 ) 15,259
Other Liabilities (5,187 ) (27,470 )
Net Cash Provided by Operating Activities $ 669,212 $ 641,150
Investing Activities:
Capital Expenditures ($1,045,209 ) ($801,476 )
Net Proceeds from Sale of Unconsolidated Subsidiaries - 59,365
Net Proceeds from Sale of Oil and Gas Producing Properties - 63,501
Other 446 (2,908 )
Net Cash Used in Investing Activities ($1,044,763 ) ($681,518 )
Financing Activities:
Changes in Notes Payable to Banks and Commercial Paper $ 131,000 $ 40,000
Excess Tax Benefits (Costs) Associated with Stock-Based Compensation Awards 985 (1,224 )
Reduction of Long-Term Debt (150,000 ) (200,000 )
Net Proceeds From Issuance of Long-Term Debt 496,085 -
Dividends Paid on Common Stock (118,798 ) (114,559 )
Net Proceeds From Issuance (Repurchase) of Common Stock 10,345 (592 )
Net Cash Provided by (Used in) Financing Activities $ 369,617 ($276,375 )
Net Decrease in Cash and Temporary
Cash Investments (5,934 ) (316,743 )
Cash and Temporary Cash Investments
at Beginning of Period 80,428 397,171
Cash and Temporary Cash Investments
at September 30 $ 74,494 $ 80,428
Page 16
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30, September 30,

EXPLORATION AND PRODUCTION SEGMENT

2012 2011 Variance 2012 2011 Variance
Operating Revenues $ 146,732 $ 130,463 $ 16,269 $ 558,180 $ 519,035 $ 39,145
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense 12,540 14,174 (1,634 ) 53,792 49,504 4,288
Lease Operating Expense 23,540 19,514 4,026 83,361 73,250 10,111
All Other Operation and Maintenance Expense 1,620 1,450 170 6,485 6,645 (160 )
Property, Franchise and Other Taxes 4,622 2,544 2,078 23,620 12,179 11,441
Depreciation, Depletion and Amortization 51,363 36,191 15,172 187,624 146,806 40,818
93,685 73,873 19,812 354,882 288,384 66,498
Operating Income 53,047 56,590 (3,543 ) 203,298 230,651 (27,353 )
Other Income (Expense):
Interest Income 423 (16 ) 439 1,493 (27 ) 1,520
Other Income - - - - 1 (1 )
Other Interest Expense (8,379 ) (3,577 ) (4,802 ) (29,243 ) (17,402 ) (11,841 )
Income Before Income Taxes 45,091 52,997 (7,906 ) 175,548 213,223 (37,675 )
Income Tax Expense 23,015 22,263 752 79,050 89,034 (9,984 )
Net Income $ 22,076 $ 30,734 $ (8,658 ) $ 96,498 $ 124,189 $ (27,691 )
Net Income Per Share (Diluted) $ 0.26 $ 0.37 $ (0.11 ) $ 1.15 $ 1.48 $ (0.33 )
Three Months Ended Twelve Months Ended
September 30, September 30,

PIPELINE AND STORAGE SEGMENT

2012 2011 Variance 2012 2011 Variance
Revenues from External Customers $ 58,336 $ 30,956 $ 27,380 $ 172,312 $ 134,071 $ 38,241
Intersegment Revenues 22,529 20,200 2,329 86,963 81,037 5,926
Total Operating Revenues 80,865 51,156 29,709 259,275 215,108 44,167
Operating Expenses:
Purchased Gas 480 26 454 674 12 662
Operation and Maintenance 19,868 20,927 (1,059 ) 78,397 82,555 (4,158 )
Property, Franchise and Other Taxes 5,386 5,287 99 21,618 21,067 551
Depreciation, Depletion and Amortization 8,636 9,470 (834 ) 38,182 37,266 916
34,370 35,710 (1,340 ) 138,871 140,900 (2,029 )
Operating Income 46,495 15,446 31,049 120,404 74,208 46,196
Other Income (Expense):
Interest Income 61 73 (12 ) 199 324 (125 )
Other Income 1,151 1,238 (87 ) 3,182 2,574 608
Other Interest Expense (6,324 ) (6,233 ) (91 ) (25,603 ) (25,737 ) 134
Income Before Income Taxes 41,383 10,524 30,859 98,182 51,369 46,813
Income Tax Expense 16,284 3,045 13,239 37,655 19,854 17,801
Net Income $ 25,099 $ 7,479 $ 17,620 $ 60,527 $ 31,515 $ 29,012
Net Income Per Share (Diluted) $ 0.30 $ 0.09 $ 0.21 $ 0.72 $ 0.38 $ 0.34
Page 17
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts)

September 30,

September 30,

UTILITY SEGMENT

2012 2011 Variance 2012 2011 Variance
Revenues from External Customers $ 81,682 $ 85,051 $ (3,369 ) $ 704,518 $ 835,853 $ (131,335 )
Intersegment Revenues 1,961 1,962 (1 ) 14,604 16,642 (2,038 )
Total Operating Revenues 83,643 87,013 (3,370 ) 719,122 852,495 (133,373 )
Operating Expenses:
Purchased Gas 23,448 30,399 (6,951 ) 340,325 460,115 (119,790 )
Operation and Maintenance 32,237 32,708 (471 ) 176,938 179,258 (2,320 )
Property, Franchise and Other Taxes 9,246 9,650 (404 ) 41,873 44,582 (2,709 )
Depreciation, Depletion and Amortization 10,254 9,822 432 42,757 40,808 1,949
75,185 82,579 (7,394 ) 601,893 724,763 (122,870 )
Operating Income 8,458 4,434 4,024 117,229 127,732 (10,503 )
Other Income (Expense):
Interest Income 1,945 1,564 381 2,765 2,049 716
Other Income 216 315 (99 ) 887 1,212 (325 )
Other Interest Expense (8,671 ) (8,193 ) (478 ) (33,181 ) (34,440 ) 1,259
Income (Loss) Before Income Taxes 1,948 (1,880 ) 3,828 87,700 96,553 (8,853 )
Income Tax Expense (Benefit) (3,918 ) (2,709 ) (1,209 ) 29,110 33,325 (4,215 )
Net Income $ 5,866 $ 829 $ 5,037 $ 58,590 $ 63,228 $ (4,638 )
Net Income Per Share (Diluted) $ 0.07 $ 0.01 $ 0.06 $ 0.70 $ 0.76 $ (0.06 )
Three Months Ended Twelve Months Ended
September 30, September 30,

ENERGY MARKETING SEGMENT

2012 2011 Variance 2012 2011 Variance
Revenues from External Customers $ 24,757 $ 37,827 $ (13,070 ) $ 186,579 $ 284,546 $ (97,967 )
Intersegment Revenues 290 263 27 1,425 420 1,005
Total Operating Revenues 25,047 38,090 (13,043 ) 188,004 284,966 (96,962 )
Operating Expenses:
Purchased Gas 25,130 37,976 (12,846 ) 175,605 265,692 (90,087 )
Operation and Maintenance 1,454 1,497 (43 ) 6,373 6,050 323
Property, Franchise and Other Taxes 22 12 10 81 46 35
Depreciation, Depletion and Amortization 21 19 2 90 47 43
26,627 39,504 (12,877 ) 182,149 271,835 (89,686 )
Operating Income (Loss) (1,580 ) (1,414 ) (166 ) 5,855 13,131 (7,276 )
Other Income (Expense):
Interest Income 62 32 30 188 104 84
Other Income 12 15 (3 ) 100 75 25
Other Interest Expense (22 ) (5 ) (17 ) (41 ) (20 ) (21 )
Income (Loss) Before Income Taxes (1,528 ) (1,372 ) (156 ) 6,102 13,290 (7,188 )
Income Tax Expense (Benefit) (1,035 ) (1,051 ) 16 1,933 4,489 (2,556 )
Net Income (Loss) $ (493 ) $ (321 ) $ (172 ) $ 4,169 $ 8,801 $ (4,632 )
Net Income (Loss) Per Share (Diluted) $ (0.01 ) $ - $ (0.01 ) $ 0.05 $ 0.11 $ (0.06 )
Page 18
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30, September 30,

ALL OTHER

2012 2011 Variance 2012 2011 Variance
Revenues from External Customers $ 1,523 $ 1,507 $ 16 $ 4,307 $ 4,401 $ (94 )
Intersegment Revenues 5,943 2,990 2,953 16,771 10,017 6,754
Total Operating Revenues 7,466 4,497 2,969 21,078 14,418 6,660
Operating Expenses:
Purchased Gas - - - - 48 (48 )
Operation and Maintenance 1,226 784 442 4,020 3,914 106
Property, Franchise and Other Taxes 327 146 181 896 637 259
Depreciation, Depletion and Amortization 1,132 210 922 2,091 840 1,251
2,685 1,140 1,545 7,007 5,439 1,568
Operating Income 4,781 3,357 1,424 14,071 8,979 5,092
Other Income (Expense):
Gain on Sale of Unconsolidated Subsidiaries - - - - 50,879 (50,879 )
Interest Income 39 49 (10 ) 175 247 (72 )
Other Income (1,085 ) (60 ) (1,025 ) (1,305 ) (469 ) (836 )
Other Interest Expense (449 ) (536 ) 87 (1,738 ) (2,173 ) 435
Income Before Income Taxes 3,286 2,810 476 11,203 57,463 (46,260 )
Income Tax Expense (Benefit) 1,976 (1,372 ) 3,348 4,335 18,961 (14,626 )
Net Income $ 1,310 $ 4,182 $ (2,872 ) $ 6,868 $ 38,502 $ (31,634 )
Net Income Per Share (Diluted) $ 0.02 $ 0.05 $ (0.03 ) $ 0.08 $ 0.46 $ (0.38 )
Page 19
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30, September 30,

CORPORATE

2012 2011 Variance 2012 2011 Variance
Revenues from External Customers $ 231 $ 230 $ 1 $ 957 $ 936 $ 21
Intersegment Revenues 1,028 1,028 - 3,865 3,983 (118 )
Total Operating Revenues 1,259 1,258 1 4,822 4,919 (97 )
Operating Expenses:
Operation and Maintenance 4,449 3,733 716 14,644 14,307 337
Property, Franchise and Other Taxes 547 549 (2 ) 2,200 3,391 (1,191 )
Depreciation, Depletion and Amortization 200 198 2 786 760 26
5,196 4,480 716 17,630 18,458 (828 )
Operating Loss (3,937 ) (3,222 ) (715 ) (12,808 ) (13,539 ) 731
Other Income (Expense):
Interest Income 22,768 18,737 4,031 88,337 77,454 10,883
Other Income 764 309 455 2,269 2,554 (285 )
Interest Expense on Long-Term Debt (21,408 ) (17,573 ) (3,835 ) (82,002 ) (73,567 ) (8,435 )
Other Interest Expense (837 ) (797 ) (40 ) (3,900 ) (2,017 ) (1,883 )
Loss Before Income Taxes (2,650 ) (2,546 ) (104 ) (8,104 ) (9,115 ) 1,011
Income Tax Expense (Benefit) 2,406 3,001 (595 ) (1,529 ) (1,282 ) (247 )
Net Loss $ (5,056 ) $ (5,547 ) $ 491 $ (6,575 ) $ (7,833 ) $ 1,258
Net Loss Per Share (Diluted) $ (0.06 ) $ (0.07 ) $ 0.01 $ (0.07 ) $ (0.10 ) $ 0.03
Three Months Ended Twelve Months Ended
September 30, September 30,

INTERSEGMENT ELIMINATIONS

2012 2011 Variance 2012 2011 Variance
Intersegment Revenues $ (31,751 ) $ (26,443 ) $ (5,308 ) $ (123,628 ) $ (112,099 ) $ (11,529 )
Operating Expenses:
Purchased Gas (24,358 ) (22,027 ) (2,331 ) (101,015 ) (97,135 ) (3,880 )
Operation and Maintenance (7,393 ) (4,416 ) (2,977 ) (22,613 ) (14,964 ) (7,649 )
(31,751 ) (26,443 ) (5,308 ) (123,628 ) (112,099 ) (11,529 )
Operating Income - - - - - -
Other Income (Expense):
Interest Income (23,296 ) (18,800 ) (4,496 ) (89,468 ) (77,235 ) (12,233 )
Other Interest Expense 23,296 18,800 4,496 89,468 77,235 12,233
Net Income $ - $ - $ - $ - $ - $ -
Net Income Per Share (Diluted) $ - $ - $ - $ - $ - $ -
Page 20
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
Three Months Ended Twelve Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
Increase Increase
2012 2011 (Decrease) 2012 2011 (Decrease)

Capital Expenditures:

Exploration and Production $ 95,251

(1)

$ 175,300

(2)

$ (80,049 ) $ 693,810

(1)

(2)

$ 648,815

(2)

(3)

$ 44,995
Pipeline and Storage 46,914

(1)

54,237

(2)

(7,323 ) 144,167

(1)

(2)

129,206

(2)

14,961
Utility 18,426 18,969 (543 ) 58,284 58,398 (114 )
Energy Marketing 350 131 219 770 460 310
Total Reportable Segments 160,941 248,637 (87,696 ) 897,031 836,879 60,152
All Other 13,229 10,735

(2)

2,494 80,017

(2)

17,022

(2)

62,995
Corporate 55 77 (22 ) 346 285 61
Total Capital Expenditures $ 174,225 $ 259,449 $ (85,224 ) $ 977,394 $ 854,186 $ 123,208
(1) Capital expenditures for the quarter and year ended September 30, 2012 include $37.8 million of accrued capital expenditures in the Exploration and Production segment, the majority of which was in the Appalachian region, and $2.7 million of accrued capital expenditures in the Pipeline and Storage segment. These amounts have been excluded from the Consolidated Statement of Cash Flows at September 30, 2012 since they represent non-cash investing activities at that date.
(2) Capital expenditures for the year ended September 30, 2012 exclude $99.6 million of capital expenditures in the Exploration and Production segment, the majority of which was in the Appalachian region, $7.3 million of capital expenditures in the Pipeline and Storage segment, and $1.4 million of capital expenditures in the All Other category. These amounts were accrued at September 30, 2011 and paid during the year ended September 30, 2012. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2011 since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2012.
(3) Capital expenditures for the Exploration and Production segment for the year ended September 30, 2011 exclude $55.5 million of capital expenditures, the majority of which was in the Appalachian region. This amount was accrued at September 30, 2010 and paid during the year ended September 30, 2011. This amount was excluded from the Consolidated Statement of Cash Flows at September 30, 2010 since it represented a non-cash investing activity at that date. This amount has been included in the Consolidated Statement of Cash Flows at September 30, 2011.

DEGREE DAYS

Percent Colder
(Warmer) Than:
Three Months Ended September 30 Normal 2012 2011 Normal (1) Last Year (1)
Buffalo, NY 178 125 77 (29.8) 62.3
Erie, PA 135 124 73 (8.1) 69.9
Twelve Months Ended September 30
Buffalo, NY 6,729 5,296 6,751 (21.3) (21.6)
Erie, PA 6,277 4,999 6,359 (20.4) (21.4)
(1) Percents compare actual 2012 degree days to normal degree days and actual 2012 degree days to actual 2011 degree days.
Page 21
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

EXPLORATION AND PRODUCTION INFORMATION

Three Months Ended Twelve Months Ended
September 30, September 30,
Increase Increase
2012 2011 (Decrease) 2012 2011 (Decrease)

Gas Production/Prices:

Production (MMcf)
Appalachia 19,538 11,959 7,579 62,663 42,979 19,684
West Coast 798 831 (33 ) 3,468 3,447 21
Gulf Coast - (51 )

(1)

51 - 4,041 (4,041 )
Total Production 20,336 12,739 7,597 66,131 50,467 15,664
Average Prices (Per Mcf)
Appalachia $ 2.72 $ 4.37 $ (1.65 ) $ 2.71 $ 4.37 $ (1.66 )
West Coast 2.42 5.08 (2.66 ) 3.43 4.56 (1.13 )
Gulf Coast N/M N/M N/M N/M 5.02 N/M
Weighted Average 2.71 4.41 (1.70 ) 2.75 4.43 (1.68 )
Weighted Average after Hedging 3.98 5.49 (1.51 ) 4.27 5.39 (1.12 )

Oil Production/Prices:

Production (Thousands of Barrels)
Appalachia 8 11 (3 ) 36 45 (9 )
West Coast 698 669 29 2,834 2,628 206
Gulf Coast - - - - 187 (187 )
Total Production 706 680 26 2,870 2,860 10
Average Prices (Per Barrel)
Appalachia $ 92.81 $ 84.20 $ 8.61 $ 93.94 $ 86.58 $ 7.36
West Coast 102.76 101.45 1.31 107.13 96.45 10.68
Gulf Coast N/M N/M N/M N/M 88.57 N/M
Weighted Average 102.65 101.17 1.48 106.97 95.78 11.19
Weighted Average after Hedging 88.98 82.24 6.74 90.88 81.13 9.75
Total Production (Mmcfe) 24,572 16,819 7,753 83,351 67,627 15,724

Selected Operating Performance Statistics:

General & Administrative Expense per Mcfe (2) $ 0.51 $ 0.84 $ (0.33 ) $ 0.65 $ 0.73 $ (0.08 )
Lease Operating Expense per Mcfe (2) $ 0.96 $ 1.16 $ (0.20 ) $ 1.00 $ 1.08 $ (0.08 )
Depreciation, Depletion & Amortization per Mcfe (2) $ 2.09 $ 2.15 $ (0.06 ) $ 2.25 $ 2.17 $ 0.08
(1) The sale of Gulf Coast properties in April 2011 and various adjustments to prior months' production resulted in negative
oil production.

(2) 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.

N/M Not Meaningful
Page 22
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

EXPLORATION AND PRODUCTION INFORMATION

Hedging Summary for Fiscal 2013

SWAPS

Volume

Average Hedge Price

Oil

1.7 MMBBL

$94.21 / BBL
Gas 50.2 BCF $4.76 / MCF
Hedging Summary for Fiscal 2014

SWAPS

Volume

Average Hedge Price

Oil

0.8 MMBBL

$97.19 / BBL
Gas 30.4 BCF $4.26 / MCF
Hedging Summary for Fiscal 2015

SWAPS

Volume

Average Hedge Price

Oil

0.1 MMBBL

$90.20 / BBL
Gas 18.1 BCF $4.07 / MCF
Hedging Summary for Fiscal 2016

SWAPS

Volume

Average Hedge Price

Gas 17.9 BCF $4.07 / MCF
Hedging Summary for Fiscal 2017

SWAPS

Volume

Average Hedge Price

Gas 17.9 BCF $4.07 / MCF

Gross Wells in Process of Drilling

Twelve Months Ended September 30, 2012

Total

East

West

Company

Wells in Process - Beginning of Period
Exploratory 5.00 0.00 5.00
Developmental 101.00 (1) 0.00 101.00
Wells Commenced
Exploratory 3.00 1.00 4.00
Developmental 54.00 57.00 111.00
Wells Completed
Exploratory 7.00 0.00 7.00
Developmental 71.00 57.00 128.00
Wells Plugged & Abandoned
Exploratory 0.00 0.00 0.00
Developmental 2.00 0.00 2.00
Wells in Process - End of Period
Exploratory 1.00 1.00 2.00
Developmental 82.00 0.00 82.00
(1) Beginning of year number has been adjusted to remove one developmental well.

Net Wells in Process of Drilling

Twelve Months Ended September 30, 2012

Total

East

West

Company

Wells in Process - Beginning of Period
Exploratory 5.00 0.00 5.00
Developmental 68.00 (2) 0.00 68.00
Wells Commenced
Exploratory 3.00 0.13 3.13
Developmental 44.00 56.99 100.99
Wells Completed
Exploratory 7.00 0.00 7.00
Developmental 50.50 56.99 107.49
Wells Plugged & Abandoned
Exploratory 0.00 0.00 0.00
Developmental 2.00 0.00 2.00
Wells in Process - End of Period
Exploratory 1.00 0.13 1.13
Developmental 59.50 0.00 59.50

(2) Beginning of year number has been adjusted to remove one developmental well.

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NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

EXPLORATION AND PRODUCTION INFORMATION

Reserve Quantity Information
Gas MMcf
U.S.
Appalachian West Coast Total
Region Region Company
Proved Developed and
Undeveloped Reserves:
September 30, 2011 606,606 68,316 674,922
Extensions and Discoveries 435,460 638 436,098
Revisions of Previous Estimates (53,992 ) (2,463 ) (56,455 )
Production (62,663 ) (3,468 ) (66,131 )
September 30, 2012 925,411 63,023 988,434
Proved Developed Reserves:
September 30, 2011 350,458 63,965 414,423
September 30, 2012 544,560 59,923 604,483
Oil Mbbl
U.S.
Appalachian West Coast Total
Region Region Company
Proved Developed and
Undeveloped Reserves:
September 30, 2011 279 43,066 43,345
Extensions and Discoveries 28 1,229 1,257
Revisions of Previous Estimates 35 1,095 1,130
Production (36 ) (2,834 ) (2,870 )
September 30, 2012 306 42,556 42,862
Proved Developed Reserves:
September 30, 2011 274 37,306 37,580
September 30, 2012 306 38,138 38,444
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NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
Three Months Ended Twelve Months Ended
September 30, September 30,
Increase Increase
2012 2011 (Decrease) 2012 2011 (Decrease)
Firm Transportation - Affiliated 12,563 11,200 1,363 93,738 107,084 (13,346 )
Firm Transportation - Non-Affiliated 75,334 40,172 35,162 275,739 210,833 64,906
Interruptible Transportation 151 328 (177 ) 1,662 2,037 (375 )
88,048 51,700 36,348 371,139 319,954 51,185
Utility Throughput - (MMcf)
Three Months Ended Twelve Months Ended
September 30, September 30,
Increase Increase
2012 2011 (Decrease) 2012 2011 (Decrease)
Retail Sales:
Residential Sales 3,560 3,392 168 47,036 57,466 (10,430 )
Commercial Sales 573 473 100 6,682 8,517 (1,835 )
Industrial Sales 381 105 276 837 723 114
4,514 3,970 544 54,555 66,706 (12,151 )
Off-System Sales - 963 (963 ) 9,544 7,151 2,393
Transportation 9,364 8,356 1,008 61,027 66,273 (5,246 )
13,878 13,289 589 125,126 140,130 (15,004 )
Energy Marketing Volumes
Three Months Ended Twelve Months Ended
September 30, September 30,
Increase Increase
2012 2011 (Decrease) 2012 2011 (Decrease)
Natural Gas (MMcf) 6,899 7,030 (131 ) 45,756 52,893 (7,137 )
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NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
FISCAL 2013 EARNINGS GUIDANCE AND SENSITIVITY
Earnings per share sensitivity to changes
Fiscal 2013 (Diluted earnings per share guidance*) from prices used in guidance* ^
$0.50 change per MMBtu gas $5 change per Bbl oil
Earnings Range Increase Decrease Increase Decrease
Consolidated Earnings $2.65 - $2.95 + $0.13 - $0.13 + $0.04 - $0.04
* Please refer to forward looking statement footnote beginning at page 8 of this document.

^ This sensitivity table is current as of November 1, 2012 and only considers revenue from the Exploration and Production segment's crude oil and natural gas sales. This revenue is based upon pricing used in the Company's earnings forecast. For its fiscal 2013 earnings forecast, the Company is utilizing flat NYMEX equivalent commodity pricing, exclusive of basis differential, of $3.50 per MMBtu for natural gas and $85 per Bbl for crude oil. The sensitivities will become obsolete with the passage of time, changes in Seneca's production forecast, changes in basis differential, as additional hedging contracts are entered into, and with the settling of hedge contracts at their maturity.

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NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

Quarter Ended September 30 (unaudited)

2012 2011
Operating Revenues $ 313,261,000 $ 286,034,000
Net Income Available for Common Stock $ 48,802,000 $ 37,356,000
Earnings Per Common Share:
Basic $ 0.59 $ 0.45
Diluted $ 0.58 $ 0.45
Weighted Average Common Shares:
Used in Basic Calculation 83,305,793 82,743,764
Used in Diluted Calculation 83,855,991 83,715,222

Twelve Months Ended September 30 (unaudited)

Operating Revenues $ 1,626,853,000 $ 1,778,842,000
Net Income Available for Common Stock $ 220,077,000 $ 258,402,000
Earnings Per Common Share:
Basic $ 2.65 $ 3.13
Diluted $ 2.63 $ 3.09
Weighted Average Common Shares:
Used in Basic Calculation 83,127,844 82,514,015
Used in Diluted Calculation 83,739,771 83,670,802

National Fuel Gas Company
Analyst Contact:
Timothy J. Silverstein, 716-857-6987
or
Media Contact:
Donna L. DeCarolis, 716-857-7872

Source: National Fuel Gas Company