National Fuel Reports 2007 Earnings



    WILLIAMSVILLE, N.Y., November 8 /CNW/ - National Fuel Gas Company
("National Fuel" or the "Company") (NYSE:  NFG) today announced record
consolidated earnings for its fourth quarter and fiscal year ended September
30, 2007, of $157.7 million or $1.84 per share and $337.5 million or $3.96 per
share, respectively.

    HIGHLIGHTS

    --  National Fuel continues to provide superior total returns for our
shareholders. During the past year, three years and five years, National
Fuel's total returns of 32%, 83% and 185%, far exceeded total returns of the
S&P 500 of 16%, 45% and 105%, respectively.

    --  Quarterly operating results, before items impacting comparability,
increased 20% to $0.40 per share, an increase of $0.07 per share from the
prior year's fourth quarter. Higher average commodity prices realized in the
Exploration and Production segment were the main reason for the increase.

    --  Fiscal year operating results, before items impacting comparability,
increased 10% to $2.26 per share, an increase of $0.21 per share from the
prior fiscal year. Again, higher average realized commodity prices in the
Exploration and Production segment were the main contributor to this earnings
growth. The expiration of old hedges and the addition of new hedges at much
higher prices predict a positive impact on earnings in the future.

    --  Adding to the operating results, the Company successfully sold its
Canadian exploration operations for $232.0 million and realized a pre-tax gain
of $159.9 million ($120.3 million after-tax). Prudent planning on the timing
and structure of this sale enabled us to maximize value received and to
minimize the associated effective tax rate on the sale to less than 25
percent.

    --  Seneca Resources Corporation ("Seneca") drilled or participated in
the drilling of 233 wells in Appalachia during fiscal 2007, representing a 53%
increase from fiscal 2006. This drilling activity allows Seneca to reaffirm
its estimated ultimate recoveries ("EURs"), production profiles, and costs to
drill that are consistent with previous disclosures.

    --  Netherland, Sewell & Associates (Netherland Sewell) completed a
review of Seneca's Appalachian acreage, and the Company disclosed total 3P
(proved, probable and possible) reserves in Appalachia in a press release
issued October 11, 2007(1). The results of Netherland Sewell's study included
10.4 Bcfe of proved undeveloped reserves, helping to increase the total proved
reserves in Appalachia by 33% to 110 Bcfe, including proved developed reserves
associated with our increased drilling activity.

    --  The Company is increasing its GAAP earnings guidance for fiscal 2008
to a range of $2.50 to $2.70 per diluted share. Previous guidance had been in
a range of $2.45 to $2.65.

    --  A conference call is scheduled for Friday, November 9, 2007 at 11:00
am Eastern Time.

    MANAGEMENT COMMENTS

    Philip C. Ackerman, Chairman and Chief Executive Officer of National Fuel
Gas Company stated: "We had both a very good fourth quarter and a very good
year. Underlying operations' earnings were up 20% on the quarter and 10% on
the year and were capped off by a $120 million after-tax gain on the sale of
our Canadian operations.

    As we have shared with the investment community for many years, National
Fuel's corporate objective is to grow shareholder value through timely
investment in the energy industry. I do not believe that long-term shareholder
value can be built by constantly selling assets; nevertheless, the sale of our
Canadian operations is our fourth significant sale since I became chairman in
2002, and the total after tax profits on those sales have been over $212
million. National Fuel and its Board of Directors will continue to do what is
in the best interest of growing shareholder value.

    The financial community has recognized the sound and disciplined
leadership demonstrated by the management and board of National Fuel, as is
apparent based on our superior total shareholder returns. Over the past five
years, three years, and fiscal year, shareholders have enjoyed overall total
returns of 185%, 83%, and 32%, respectively, which far exceed returns of the
S&P 500 of 105%, 45%, and 16% over comparable time periods. These outstanding
returns are due in part to our record of paying a dividend for 105 consecutive
years with 37 consecutive years of increases.

    In short, we had a very successful 2007 fiscal year, and expect to
continue that success in fiscal 2008 with earnings growth expected in the
range of 10% to 19%. We will continue our longstanding dividend record and
strive to continue our record of delivering outstanding returns to our
shareholders in 2008 and beyond."

    David F. Smith, President and Chief Operating Officer of National Fuel
Gas Company added: "The sale of our Canadian assets represents a considerable
step in our plan to streamline and refocus our Exploration and Production
operations. As part of this plan, our initiative to prudently grow our
Appalachian program has been evident, as illustrated by our 53% increase in
drilling activity in Appalachia during the last year. The completion of our
reserve and prospective resource study by Netherland Sewell confirms our
long-held belief that we have the potential to develop this important asset in
a manner that is both strategic and logical. Current well economics based on
today's commodity prices and drilling rig rates have allowed us to ramp up our
drilling program. We anticipate drilling 280 wells and 350 wells in the
Appalachian shallow Devonian formation in fiscal years 2008 and 2009, as well
as continuing to explore the Marcellus Shale through our partnering
arrangement with EOG Resources. Construction is underway on the Empire
Connector and we are looking to have the pipeline in service at this time next
year. We are also pleased that our Conservation Incentive Program has been
authorized for early implementation in our New York utility jurisdiction,
offering our customers the opportunity to save on their heating bills this
winter."

    (1)The Company's October 11, 2007, press release is not incorporated by
reference into this press release or any document filed by the Company with
the Securities and Exchange Commission.

    SUMMARY OF RESULTS

    National Fuel had consolidated earnings for the quarter ended September
30, 2007, of $157.7 million, an increase of $155.7 million, or $1.82 per
share, from the prior year's fourth quarter (note: all references to earnings
per share are to diluted earnings per share, all amounts are stated in U.S.
dollars and all amounts used in the earnings and operating results discussions
are after tax unless otherwise noted).

    Consolidated earnings for the fiscal year ended September 30, 2007, of
$337.5 million, or $3.96 per share, increased $199.4 million, or $2.35 per
share, from the prior year.

    
                                   Three Months           Year Ended
                                Ended September 30,   Ended September 30,
                                   2007      2006       2007       2006
                                ---------- --------  ---------- ----------
    (in thousands except per
     share amounts)
    Reported GAAP earnings      $ 157,690  $  1,968  $ 337,455  $ 138,091
       Items impacting
        comparability(1):
         Gain on disposal of
          Canadian operations    (120,301)            (120,301)
         (Income) loss from
          discontinued
          operations               (3,094)   26,617    (15,479)    46,523
         Reversal of reserve
          for preliminary
          project costs                                 (4,787)
         Resolution of
          purchased gas
          contingency                                   (2,344)
         Discontinuation of
          hedge accounting                              (1,888)
         Out-of-period
          symmetrical sharing
          adjustment                                               (2,551)
         Income tax adjustments                                    (6,122)

                                ---------- --------  ---------- ----------
    Operating results           $  34,295  $ 28,585  $ 192,656  $ 175,941
                                ---------- --------  ---------- ----------

    Reported GAAP earnings per
     share                      $    1.84  $   0.02  $    3.96  $    1.61
       Items impacting
        comparability(1):
         Gain on disposal of
          Canadian operations       (1.41)               (1.41)
         (Income) loss from
          discontinued
          operations                (0.03)     0.31      (0.18)      0.54
         Reversal of reserve
          for preliminary
          project costs                                  (0.06)
         Resolution of
          purchased gas
          contingency                                    (0.03)
         Discontinuation of
          hedge accounting                               (0.02)
         Out-of-period
          symmetrical sharing
          adjustment                                                (0.03)
         Income tax adjustments                                     (0.07)

                                ---------- --------  ---------- ----------
    Earnings excluding these
     items                      $    0.40  $   0.33  $    2.26  $    2.05
                                ---------- --------  ---------- ----------

    (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 operating results when comparing
the 2007 fourth quarter and fiscal year to the comparable periods in fiscal
2006. Excluding these items, operating results for the current fourth quarter
of $34.3 million or $0.40 per share increased $5.7 million or $0.07 per share.
Excluding these items, operating results for the fiscal year ended September
30, 2007, of $192.7 million, or $2.26 per share, increased $16.7 million, or
$0.21 per share. Items impacting comparability will be discussed in more
detail within the discussion of segment earnings below.

    DISCUSSION OF RESULTS BY SEGMENT

    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.
The Utility segment's loss of approximately $3.4 million, or $0.04 per share
for the quarter ended September 30, 2007, increased $2.0 million, or $0.02 per
share, compared to the prior year's fourth quarter. Substantially all of the
Utility segment's loss for the quarter was due to a lower non-cash accrual of
interest income on a pension-related regulatory asset in Distribution's New
York Division. Under Distribution's most recent New York rate agreement, the
interest income Distribution can accrue is reduced as the funded status of the
defined-benefit pension plan improves.

    Ron Tanski, President of Distribution and Principal Financial Officer of
the Company commented: "It's counter intuitive to think that a decrease in
income can be a good thing, but this decrease in interest income is driven by
the strong performance of our pension plan assets over the past year."

    In the New York Division, the loss increased $1.6 million due in part to
the lower interest income accrual on the pension-related regulatory asset
discussed above. Slightly lower usage per customer during the quarter and
certain routine regulatory adjustments also contributed to the increased loss
for the quarter. Partially offsetting these items were lower operating
expenses and a lower effective tax rate.

    In the Pennsylvania division, the loss increased $0.4 million compared to
the prior year's fourth quarter, mainly due to lower usage per customer and a
higher effective tax rate. An increase in base rates in Pennsylvania partially
offset the decrease. On January 1, 2007, Distribution implemented the
Settlement Agreement approved by the Pennsylvania Public Utility Commission,
which, among other things, provided for a $14.3 million (before tax) annual
base rate increase.

    The Utility segment's earnings of $50.9 million, or $0.60 per share, for
the fiscal year ended September 30, 2007, increased $1.1 million, or $0.02 per
share, compared to the fiscal year ended September 30, 2006.

    Earnings in Distribution's New York Division for the fiscal year ended
September 30, 2007, of $33.8 million decreased $6.3 million compared to the
prior year. The comparability of the fiscal year results is impacted by a $2.6
million out-of-period adjustment recorded in the first quarter of fiscal 2006
to correct Distribution's calculation of the symmetrical sharing component of
the New York Division's gas adjustment rate. Excluding this item, operating
results in the New York Division decreased $3.7 million. This decrease is
mainly due to lower interest income accrued on a pension related regulatory
asset as described above. Higher bad debt expense, property taxes, interest
expense and certain routine regulatory adjustments also contributed to the
decline. A 2.2 percent increase in residential customer usage per account and
a lower effective tax rate partially offset the decrease.

    For the fiscal year ended September 30, 2007, earnings in Distribution's
Pennsylvania Division of $17.1 million increased $7.3 million compared to the
prior year. Earnings increased primarily due to an increase in base rates. The
impact of weather that was 5.6 percent colder than the prior year and a lower
effective tax rate also contributed to the increase. Partially offsetting the
increase was higher interest expense.

    Pipeline and Storage Segment

    The Pipeline and Storage segment operations are carried out by National
Fuel Gas Supply Corporation ("Supply Corporation") and Empire State Pipeline
("Empire"). These companies provide 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 $13.3 million, or $0.16
per share, for the quarter ended September 30, 2007, increased $3.1 million,
or $0.04 per share, when compared with the same period in the prior fiscal
year. The increase is primarily due to higher efficiency gas revenue. In the
fourth quarter of fiscal 2006, Supply Corporation recorded a lower of cost or
market adjustment of $4.7 million to the value of efficiency gas held in
inventory at the end of the quarter to reduce the value of the efficiency gas
inventory to reflect current market prices at September 30, 2006. A similar
adjustment was not required in the fourth quarter of fiscal 2007. In addition,
higher transportation and storage revenues and lower depreciation expense
contributed to the growth in earnings. Partially offsetting these items was an
increase in operating expenses and interest expense and a higher effective tax
rate for the quarter.

    Earnings of $56.4 million, or $0.66 per share, for the fiscal year ended
September 30, 2007, increased $0.8 million, or $0.01 per share, when compared
with the fiscal year ended September 30, 2006. The comparability of the
results for the fiscal year ended September 30, 2007, is impacted by the $4.8
million reversal of the reserve for preliminary project costs on the Empire
Connector project. Empire recorded a reserve against any project development
costs until such time that it was probable that the project was likely to be
built and placed in service. In June 2007, Empire and KeySpan Gas East
Corporation signed a firm transportation service agreement, which essentially
committed Empire to construct the Empire Connector Pipeline (construction
began in September). The comparability of the results for the fiscal year
ended September 30, 2007 is also impacted by a $1.9 million gain associated
with Empire's prepayment in the first quarter of 2007 of its project financing
debt that was in place when the Company acquired Empire in 2003. Upon the
payment of that debt, the corresponding interest rate collar no longer
qualified for hedge accounting, and gains and losses could no longer be
deferred.

    Excluding these items, operating results decreased $6.0 million, or $0.07
per share, for the fiscal year ended September 30, 2007, mainly due to lower
efficiency gas revenues, higher interest expense and a higher effective tax
rate for the fiscal year. The decline in efficiency gas revenues is due to
lower natural gas prices and lower retained volumes. The lower retained
volumes of efficiency gas was the result of a FERC-approved settlement of a
complaint filed by various parties against Supply Corporation under Sections
5(a) and 13 of the Natural Gas Act (the "FERC settlement") that reduced the
percentages of transported gas which Supply Corporation retains for fuel,
company use, surface operating and lost and unaccounted for, generally
effective as of December 1, 2006. The FERC settlement also required Supply
Corporation to recognize a higher level of expense for post-retirement
benefits, which resulted in higher operating expenses for the fiscal year.
Partially offsetting these items, the FERC settlement lowered Supply
Corporation's depreciation rates, which resulted in lower depreciation expense
for the fiscal year.

    Exploration and Production Segment

    The Exploration and Production segment operations are carried out by
Seneca Resources Corporation ("Seneca"). Seneca explores for, develops and
purchases natural gas and oil reserves in California, the Appalachian region,
and in the Gulf Coast regions of Texas, Louisiana and Alabama.

    The Exploration and Production segment's earnings in the fourth quarter
of fiscal 2007 of $145.7 million or $1.70 per share increased $152.9 million
or $1.78 per share when compared with the prior year's fourth quarter loss. On
August 31, 2007, Seneca completed the sale of its Canadian subsidiary. As a
result of this transaction, the Company is presenting the Canadian operations
as discontinued operations. Earnings in the fourth quarter of fiscal 2007
include earnings from discontinued operations of $123.4 million, which
included $3.1 million of income during the months of July and August plus a
$120.3 million gain on the sale of the Canadian operations. Earnings in the
fourth quarter of fiscal 2006 include a loss from discontinued operations of
$26.6 million. The results of discontinued operations are discussed later in
this document and are excluded from the remaining discussion of the
Exploration and Production segment's quarterly results below.

    Excluding discontinued operations, operating results in the Exploration
and Production segment increased $2.9 million, or $0.03 per share, for the
fourth quarter of fiscal 2007. The increase was mainly due to higher crude oil
and natural gas prices realized after hedging. For the quarter ended September
30, 2007, the weighted average oil price received by Seneca (after hedging)
was $61.35 per barrel ("Bbl"), an increase of $16.51 per Bbl, or 36.8 percent
from the prior year's quarter. The weighted average natural gas price received
by Seneca (after hedging) for the quarter ended September 30, 2007, was $7.13
per thousand cubic feet ("Mcf"), an increase of $0.57 per Mcf, or 8.7 percent,
from the prior year's quarter. Other items impacting operating results for the
quarter were higher operating expenses and a higher effective tax rate. The
increase in depletion expense, which, on a per unit basis, increased $0.35 per
thousand cubic feet equivalent ("Mcfe") to $2.19 per Mcfe was mainly due to a
reduction in proved reserves and an increase in costs to be depleted as a
result of capital spending and higher anticipated future development costs.
The increase in lease operating expenses ("LOE") is due primarily to
escalating service costs and an increase in the number of producing properties
compared to the prior year's quarter.

    The Exploration and Production segment's earnings of $210.7 million, or
$2.47 per share, for the fiscal year ended September 30, 2007, increased
$189.7 million, or $2.23 per share, when compared with the fiscal year ended
September 30, 2006. As discussed above, as a result of Seneca's sale of its
Canadian subsidiary, the Company is presenting the Canadian operations as
discontinued operations. Earnings for the fiscal year ended September 30,
2007, include earnings from discontinued operations of $135.8 million, which
consists of $15.5 million of income from discontinued operations, and a $120.3
million gain on the sale of the Canadian operations. Earnings for the fiscal
year ended September 30, 2006, include a loss from discontinued operations of
$46.5 million. The results of discontinued operations are discussed later in
this document and are excluded from the remaining discussion of the
Exploration and Production segment's fiscal year results below.

    The comparability of the Exploration and Production segment's earnings
for the fiscal years ended September 30, 2007, and 2006, is also impacted by a
$6.1 million benefit to earnings in 2006 related to income taxes. The Company
reversed a valuation allowance associated with the capital loss carryforward
that resulted from the 2003 sale of certain Seneca oil properties and also
recognized a tax benefit related to the favorable resolution of certain open
tax issues.

    Excluding discontinued operations and the tax adjustments discussed
above, operating results for the fiscal year ended September 30, 2007, in the
Exploration and Production segment increased $13.5 million, or $0.17 per
share. The increase was primarily due to higher crude oil and natural gas
prices realized after hedging. For the fiscal year ended September 30, 2007,
the weighted average oil price received by Seneca (after hedging) was $51.68
per Bbl, an increase of $11.42 per Bbl, or 28.4 percent from the prior year.
The weighted average natural gas price received by Seneca (after hedging) for
the fiscal year ended September 30, 2007, was $7.25 per Mcf, an increase of
$0.23 per Mcf, or 3.3 percent, from the prior year. The increase in commodity
prices combined with a 1.7 Bcfe increase in natural gas production more than
offset a 0.6 Bcfe decrease in crude oil production. Other items impacting
operating results for the fiscal year were higher operating expenses and a
higher effective tax rate. The increase in depletion expense is mainly due to
a reduction in proved reserves, an increase in costs to be depleted as a
result of capital spending and higher anticipated future development costs.
The increase in LOE was mostly in the Gulf of Mexico and Appalachia. In the
Gulf of Mexico the increase in LOE was due to the hurricane related shut-ins
experienced in fiscal year 2006 and new producing fields coming on line in
fiscal 2007. In Appalachia, the increase was due to the completion of more
than two hundred wells in fiscal 2007 and an overall increase in servicing
costs.

    Energy Marketing

    The Energy Marketing segment's operations are carried out by National
Fuel Resources, Inc. ("NFR"). NFR markets natural gas to industrial,
commercial, public authority and residential customers in western and central
New York and northwestern Pennsylvania, offering competitively priced energy
and energy management services to its customers.

    The Energy Marketing segment's net loss for the fourth quarter of fiscal
2007 of $0.8 million, or $0.01 per share, increased $0.7 million compared to
the prior year's fourth quarter loss of $0.1 million, and was due to changes
in the effective tax rate and slightly lower margins driven by higher pipeline
reservation charges related to storage capacity. Earnings for the fiscal year
ended September 30, 2007, of $7.7 million, or $0.09 per share, increased $1.9
million, or $0.02 per share, compared to the fiscal year ended September 30,
2006. The comparability of the fiscal year results is impacted by a $2.3
million reversal of an accrual for purchased gas expense for which a
contingency was resolved during the second quarter of fiscal 2007. Excluding
this item, operating results for the Energy Marketing segment for the fiscal
year ended September 30, 2007, were flat compared to the fiscal year ended
September 30, 2006.

    Timber Segment

    The Timber segment operations are carried out by Highland Forest
Resources, Inc. ("Highland") and Seneca's Northeast Division. This segment
markets high-quality hardwoods from its New York and Pennsylvania land
holdings, and owns two sawmill/dry kiln operations in northwestern
Pennsylvania.

    The Timber segment's earnings for the quarter ended September 30, 2007,
of $0.7 million or $0.01 per share, is an increase of $0.2 million from the
prior year's fourth quarter earnings. The increase is due to higher margins as
a result of the strategically timed sale of approximately 3.1 million board
feet of timber rights during the quarter.

    Earnings for the fiscal year ended September 30, 2007, of $3.7 million
decreased $2.0 million from the prior year's earnings. The decrease is due to
lower margins on logs, green lumber and kiln-dried lumber. The decreased
margins are mainly due to lower sales volumes. The unfavorable weather
conditions early in the year made harvesting difficult resulting in lower
harvest volumes for the fiscal year. This, combined with lower unit prices
realized on the non-core species, resulted in lower revenues for veneer logs,
kiln-dried cherry lumber and soft and hard maple green lumber. Although prices
realized on certain species declined, the price realized on our core product,
black cherry veneer logs, increased nearly 3 percent from the prior year. The
price realized on black cherry veneer has increased consistently every year
for the past several years, and that trend is expected to continue. Lower
depletion expense due to lower harvested volumes partially offset the decrease
in revenues.

    Corporate and All Other

    Other direct, wholly-owned subsidiaries of the Company include: Horizon
Energy Development, Inc., a corporation formerly engaged in the development of
international power projects; Horizon LFG, Inc., a corporation engaged through
subsidiaries in the purchase, processing, transportation and sale of landfill
gas; and Horizon Power, Inc., a corporation that develops and owns independent
electric generation facilities which are fueled with natural gas or landfill
gas.

    Earnings in the Corporate and All Other category for the quarter ended
September 30, 2007, were $2.2 million, an increase of $2.2 million when
compared to the prior year's fourth quarter loss. The increase is the result
of higher intercompany interest income, lower interest expense and a lower
effective tax rate.

    Earnings in the Corporate and All Other category for the fiscal year
ended September 30, 2007, were $8.1 million, an increase of $8.0 million when
compared to the prior year's earnings. The increase is mainly due to higher
margins in Horizon LFG, Inc., higher income from unconsolidated subsidiaries
in Horizon Power, Inc., higher intercompany interest income, lower interest
expense and a lower effective tax rate.

    Discontinued Operations

    Earnings from discontinued operations for the quarter ended September 30,
2007, of $123.4 million is an increase of $150.0 million from a loss of $26.6
million for the quarter ended September 30, 2006. The increase is primarily
the result of Seneca's sale of its Canadian subsidiary and the recording of a
gain of approximately $120.3 million. In addition Seneca recorded an
impairment of its Canadian oil and gas producing properties in the quarter
ended September 30, 2006, that did not recur in the quarter ended September
30, 2007.

    Earnings from discontinued operations for the fiscal year ended September
30, 2007, of $135.8 million was an increase of $182.3 million from a loss of
$46.5 million for the fiscal year ended September 30, 2006. The increase is
primarily the result of Seneca's sale of its Canadian subsidiary and the
recording of a gain of approximately $120.3 million. In addition Seneca
recorded an impairment of its Canadian oil and gas producing properties in the
fiscal year ended September 30, 2006, that did not recur in the fiscal year
ended September 30, 2007.

    EARNINGS GUIDANCE

    The Company is increasing its GAAP earnings guidance for fiscal 2008 to a
range of $2.50 to $2.70 per diluted share. Previous guidance had been in a
range of $2.45 to $2.65 per diluted share. The increase is driven by the
layering in of additional hedges in the Exploration and Production segment at
prices higher than those assumed in the Company's base forecast.

    EARNINGS TELECONFERENCE

    The Company will host a conference call on Friday, November 9, 2007 at 11
a.m. (Eastern Time) to discuss this announcement. There are two ways to access
this call. For those with Internet access, visit National Fuel's Web site at
nationalfuelgas.com and click on the "For Investors" link at the top of the
homepage. For those without Internet access, access is also provided by
dialing (toll-free) 1-800-599-9829, and using the passcode "56831965." For
those unable to listen to the live conference call, a replay will be available
approximately one hour after the conclusion of the call at the same Web site
link and by phone at (toll free) 888-286-8010 using passcode "19287282." Both
the webcast and telephonic replay will be available until the close of
business on Friday, November 16, 2007.

    National Fuel is an integrated energy company with $3.9 billion in assets
comprised of the following five operating segments: Utility, Pipeline and
Storage, Exploration and Production, Energy Marketing, and Timber. Additional
information about National Fuel is available on its Internet Web site:
http://www.nationalfuelgas.com or through its investor information service at
1-800-334-2188.

    National Fuel Gas Company (the "Company") and its directors and executive
officers may be deemed to be participants in the solicitation of proxies from
stockholders in connection with the Company's 2008 Annual Meeting of
Stockholders (the "Annual Meeting"). The Company plans to file a proxy
statement with the Securities and Exchange Commission (the "SEC") in
connection with this solicitation of proxies for the Annual Meeting (the "2008
Proxy Statement"). Information regarding the names of the Company's directors
and executive officers and their respective interests in the Company by
security holdings or otherwise is set forth in the Company's proxy statement
relating to the 2007 annual meeting of stockholders, which may be obtained
free of charge at the SEC's website at http://www.sec.gov and the Company's
website at http://www.nationalfuelgas.com. Additional information regarding
the interests of such potential participants will be included in the 2008
Proxy Statement and other relevant documents to be filed with the SEC in
connection with the Annual Meeting.

    Promptly after filing its definitive 2008 Proxy Statement for the Annual
Meeting with the SEC, the Company will mail the definitive 2008 Proxy
Statement and a proxy card to each stockholder entitled to vote at the Annual
Meeting. WE URGE INVESTORS TO READ THE 2008 PROXY STATEMENT (INCLUDING ANY
AMENDMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL
FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge,
copies of the 2008 Proxy Statement and any other documents filed by the
Company with the SEC in connection with the Annual Meeting at the SEC's
website (http://www.sec.gov), at the Company's website
(http://www.nationalfuelgas.com) or by contacting Secretary, National Fuel Gas
Company, 6363 Main Street, Williamsville, New York 14221, (716) 857-7000.

    Certain statements contained herein, including those regarding future
earnings, developments and operational results, and those which use words such
as "anticipates," "estimates," "expects," "intends," "plans," "predicts,"
"projects," 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: changes in laws and regulations to which the Company is subject,
including changes in tax, environmental, safety and employment laws and
regulations; changes in economic conditions, including economic disruptions
caused by terrorist activities, acts of war or major accidents; changes in
demographic patterns and weather conditions, including the occurrence of
severe weather, such as hurricanes; changes in the availability and/or price
of natural gas or oil and the effect of such changes on the accounting
treatment of derivative financial instruments or the valuation of the
Company's natural gas and oil reserves; impairments under the Securities and
Exchange Commission's full cost ceiling test for natural gas and oil reserves;
changes in the availability and/or price of derivative financial instruments;
changes in the price differentials between various types of oil; inability to
obtain new customers or retain existing ones; significant changes in
competitive factors affecting the Company; governmental/regulatory actions,
initiatives and proceedings, including those involving acquisitions,
financings, rate cases (which address, among other things, allowed rates of
return, rate design and retained gas), affiliate relationships, industry
structure, franchise renewal, and environmental/safety requirements;
unanticipated impacts of restructuring initiatives in the natural gas and
electric industries; significant changes from expectations in actual capital
expenditures and operating expenses and unanticipated project delays or
changes in project costs or plans, including changes in the plans of the
sponsors of the proposed Millennium Pipeline with respect to that project; the
nature and projected profitability of pending and potential projects and other
investments, and the ability to obtain necessary governmental approvals and
permits; occurrences affecting the Company's ability to obtain funds from
operations or from issuances of short-term notes or debt or equity securities
to finance needed capital expenditures and other investments, including any
downgrades in the Company's credit ratings; uncertainty of oil and gas reserve
estimates; ability to successfully identify and finance acquisitions or other
investments and ability to operate and integrate existing and any subsequently
acquired business or properties; ability to successfully identify, drill for
and produce economically viable natural gas and oil reserves; significant
changes from expectations in the Company's actual production levels for
natural gas or oil; regarding foreign operations, changes in trade and
monetary policies, inflation and exchange rates, taxes, operating conditions,
laws and regulations related to foreign operations, and political and
governmental changes; significant changes in tax rates or policies or in rates
of inflation or interest; significant changes in the Company's relationship
with its employees or contractors and the potential adverse effects if labor
disputes, grievances or shortages were to occur; changes in accounting
principles or the application of such principles to the Company; the cost and
effects of legal and administrative claims against the Company; changes in
actuarial assumptions and the return on assets with respect to the Company's
retirement plan and post-retirement benefit plans; increasing health care
costs and the resulting effect on health insurance premiums and on the
obligation to provide 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 hereof or to reflect the
occurrence of unanticipated events.

    

                          NATIONAL FUEL GAS COMPANY
            RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
                       QUARTER ENDED SEPTEMBER 30, 2007



    (Thousands of Dollars)                       Pipeline &  Exploration &
                                        Utility     Storage   Production (*)
                                      ------------------------------------

    Fourth quarter 2006 GAAP earnings  $  (1,419)  $ 10,248   $    (7,181)
    Items impacting comparability:
    Loss from discontinued operations                              26,617
                                      ------------------------------------
    Fourth quarter 2006 operating
     results                              (1,419)    10,248        19,436

    Drivers of operating results
    Base rate increase in Pennsylvania       648
    Usage                                 (1,592)
    Routine regulatory adjustments          (627)

    Higher transportation and storage
     revenues                                           510
    Higher efficiency gas revenues                    4,259
    Lower (higher) operating expenses      2,309       (423)
    Lower (higher) depreciation /
     depletion                                          710        (2,278)

    Higher crude oil prices                                         8,843
    Higher natural gas prices                                       1,840
    Higher natural gas production                                     660
    Lower crude oil production                                       (853)
    Higher lease operating expenses                                (1,762)
    Higher general & administrative
     expenses                                                      (1,182)

    Higher (lower) margins

    Higher (lower) interest income (xx)     (4,785)
    (Higher) lower interest expense (xx)                 (803)

    Effective tax rate impact -
     positive (negative)                   1,671     (1,064)       (2,876)

    All other / rounding                     359       (126)          488
                                      ------------------------------------

    Fourth quarter 2007 operating
     results                              (3,436)    13,311        22,316
    Items impacting comparability:
    Gain on disposal of discontinued
     operations (xxx)                                               120,301
    Earnings from discontinued
     operations                                                     3,094
                                      ------------------------------------
    Fourth quarter 2007 GAAP earnings  $  (3,436)  $ 13,311   $   145,711
                                      ------------------------------------




    (Thousands of Dollars)                         Corporate
                                  Energy             / All
                                Marketing  Timber     Other  Consolidated
                                ------------------------------------------

    Fourth quarter 2006 GAAP
     earnings                   $    (110)$   469  $    (39)   $   1,968
    Items impacting
     comparability:
    Loss from discontinued
     operations                                                   26,617
                                ------------------------------------------
    Fourth quarter 2006
     operating results               (110)    469       (39)      28,585

    Drivers of operating results
    Base rate increase in
     Pennsylvania                                                    648
    Usage                                                         (1,592)
    Routine regulatory
     adjustments                                                    (627)

    Higher transportation and
     storage revenues                                                510
    Higher efficiency gas
     revenues                                                      4,259
    Lower (higher) operating
     expenses                                                      1,886
    Lower (higher) depreciation
     / depletion                                                  (1,568)

    Higher crude oil prices                                        8,843
    Higher natural gas prices                                      1,840
    Higher natural gas
     production                                                      660
    Lower crude oil production                                      (853)
    Higher lease operating
     expenses                                                     (1,762)
    Higher general &
     administrative expenses                 (245)                (1,427)

    Higher (lower) margins           (328)    582                    254

    Higher (lower) interest
     income (xx)                                          392       (4,393)
    (Higher) lower interest
     expense (xx)                                         958          155

    Effective tax rate impact -
     positive (negative)             (353)              680       (1,942)

    All other / rounding               23    (131)      206          819
                                ------------------------------------------

    Fourth quarter 2007
     operating results               (768)    675     2,197       34,295
    Items impacting
     comparability:
    Gain on disposal of
     discontinued operations (xxx)                                 120,301
    Earnings from discontinued
     operations                                                    3,094
                                ------------------------------------------
    Fourth quarter 2007 GAAP
     earnings                   $    (768)$   675  $  2,197    $ 157,690
                                ------------------------------------------



    (*) Includes discontinued operations
    (xx) Includes intercompany income and expenses
    (xxx) Includes positive effective tax rate impact of $16,384.
    

    

                          NATIONAL FUEL GAS COMPANY
       RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
                       QUARTER ENDED SEPTEMBER 30, 2007



                                               Pipeline &  Exploration &
                                   Utility      Storage      Production (*)
                                 -----------------------------------------

    Fourth quarter 2006 GAAP
     earnings                     $   (0.02)    $   0.12      $   (0.08)
    Items impacting
     comparability:
    Loss from discontinued
     operations                                                    0.31
                                 -----------------------------------------
    Fourth quarter 2006 operating
     results                          (0.02)        0.12           0.23

    Drivers of operating results
    Base rate increase in
     Pennsylvania                      0.01
    Usage                             (0.02)
    Routine regulatory
     adjustments                      (0.01)

    Higher transportation and
     storage revenues                               0.01
    Higher efficiency gas
     revenues                                       0.05
    Lower (higher) operating
     expenses                          0.03        (0.01)
    Lower (higher) depreciation /
     depletion                                      0.01          (0.03)

    Higher crude oil prices                                        0.10
    Higher natural gas prices                                      0.02
    Higher natural gas production                                  0.01
    Lower crude oil production                                    (0.01)
    Higher lease operating
     expenses                                                     (0.02)
    Higher general &
     administrative expenses                                      (0.01)

    Higher (lower) margins

    Higher (lower) interest
     income (xx)                        (0.06)
    (Higher) lower interest
     expense (xx)                                    (0.01)

    Effective tax rate impact -
     positive (negative)               0.02        (0.01)         (0.03)

    All other / rounding               0.01            -              -
                                 -----------------------------------------

    Fourth quarter 2007 operating
     results                          (0.04)        0.16           0.26
    Items impacting
     comparability:
    Gain on disposal of
     discontinued operations                                       1.41
    Earnings from discontinued
     operations                                                    0.03
                                 -----------------------------------------
    Fourth quarter 2007 GAAP
     earnings                     $   (0.04)    $   0.16      $    1.70
                                 -----------------------------------------



                                                   Corporate
                                Energy               / All
                              Marketing   Timber     Other   Consolidated
                              --------------------------------------------

    Fourth quarter 2006 GAAP
     earnings                 $       -  $   0.01  $  (0.01) $      0.02
    Items impacting
     comparability:
    Loss from discontinued
     operations                                                     0.31
                              --------------------------------------------
    Fourth quarter 2006
     operating results                -      0.01     (0.01)        0.33

    Drivers of operating
     results
    Base rate increase in
     Pennsylvania                                                   0.01
    Usage                                                          (0.02)
    Routine regulatory
     adjustments                                                   (0.01)

    Higher transportation and
     storage revenues                                               0.01
    Higher efficiency gas
     revenues                                                       0.05
    Lower (higher) operating
     expenses                                                       0.02
    Lower (higher)
     depreciation / depletion                                      (0.02)

    Higher crude oil prices                                         0.10
    Higher natural gas prices                                       0.02
    Higher natural gas
     production                                                     0.01
    Lower crude oil production                                     (0.01)
    Higher lease operating
     expenses                                                      (0.02)
    Higher general &
     administrative expenses                    -                  (0.01)

    Higher (lower) margins            -      0.01                   0.01

    Higher (lower) interest
     income (xx)                                            -        (0.06)
    (Higher) lower interest
     expense (xx)                                        0.01            -

    Effective tax rate impact
     - positive (negative)            -                0.01        (0.01)

    All other / rounding          (0.01)    (0.01)     0.01            -
                              --------------------------------------------

    Fourth quarter 2007
     operating results            (0.01)     0.01      0.02         0.40
    Items impacting
     comparability:
    Gain on disposal of
     discontinued operations                                        1.41
    Earnings from discontinued
     operations                                                     0.03
                              --------------------------------------------
    Fourth quarter 2007 GAAP
     earnings                 $   (0.01) $   0.01  $   0.02  $      1.84
                              --------------------------------------------



    (*) Includes discontinued operations
    (xx) Includes intercompany income and expenses
    

    

                          NATIONAL FUEL GAS COMPANY
            RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
                        YEAR ENDED SEPTEMBER 30, 2007



    (Thousands of Dollars)                     Pipeline &   Exploration &
                                  Utility        Storage     Production (*)
                               -------------------------------------------

    Fiscal 2006 GAAP earnings   $    49,815    $   55,633    $    20,971
    Items impacting
     comparability:
    Loss from discontinued
     operations                                                   46,523
    Out-of-period adjustment to
     symmetrical sharing             (2,551)
    Income tax adjustments                                        (6,122)
                               -------------------------------------------
    Fiscal 2006 operating
     results                         47,264        55,633         61,372

    Drivers of operating
     results
    Base rate increase in
     Pennsylvania                     5,507
    Usage                             1,576
    Colder weather                    2,536
    Routine regulatory
     adjustments                     (1,484)

    Lower efficiency gas
     revenues                                      (2,739)
    Higher operating expenses          (765)       (1,466)
    Higher property taxes              (767)
    Lower (higher) depreciation
     / depletion                                    2,529         (7,184)

    Higher crude oil prices                                       24,065
    Higher natural gas prices                                      2,984
    Higher natural gas
     production                                                    7,946
    Lower crude oil production                                    (2,406)
    Higher lease operating
     expenses                                                     (4,586)
    Higher general &
     administrative expenses                                        (575)

    Higher (lower) margins
    Income from unconsolidated
     subsidiaries

    Higher (lower) interest
     income (xx)                       (4,692)
    (Higher) lower interest
     expense (xx)                      (1,310)       (3,179)

    Effective tax rate impact -
     positive (negative)              3,010          (930)        (6,285)

    All other / rounding                 11          (137)          (442)
                               -------------------------------------------

    Fiscal 2007 operating
     results                         50,886        49,711         74,889
    Items impacting
     comparability:
    Gain on disposal of
     discontinued operations
     (xxx)                                                         120,301
    Earnings from discontinued
     operations                                                   15,479
    Reversal of reserve for
     preliminary project costs                      4,787
    Resolution of a purchased
     gas contingency
    Discontinuance of hedge
     accounting                                     1,888
                               -------------------------------------------
    Fiscal 2007 GAAP earnings   $    50,886    $   56,386    $   210,669
                               -------------------------------------------



    (Thousands of Dollars)                         Corporate
                                Energy               / All
                                Marketing  Timber     Other  Consolidated
                               -------------------------------------------

    Fiscal 2006 GAAP earnings     $5,798  $  5,704    $  170    $ 138,091
    Items impacting
     comparability:
    Loss from discontinued
     operations                                                    46,523
    Out-of-period adjustment to
     symmetrical sharing                                           (2,551)
    Income tax adjustments                                         (6,122)
                               -------------------------------------------
    Fiscal 2006 operating
     results                       5,798     5,704       170      175,941

    Drivers of operating
     results
    Base rate increase in
     Pennsylvania                                                   5,507
    Usage                                                           1,576
    Colder weather                                                  2,536
    Routine regulatory
     adjustments                                                   (1,484)

    Lower efficiency gas
     revenues                                                      (2,739)
    Higher operating expenses                                      (2,231)
    Higher property taxes                                            (767)
    Lower (higher) depreciation
     / depletion                             1,160                 (3,495)

    Higher crude oil prices                                        24,065
    Higher natural gas prices                                       2,984
    Higher natural gas
     production                                                     7,946
    Lower crude oil production                                     (2,406)
    Higher lease operating
     expenses                                                      (4,586)
    Higher general &
     administrative expenses                  (334)                  (909)

    Higher (lower) margins           (64)   (2,499)    1,028       (1,535)
    Income from unconsolidated
     subsidiaries                                        907          907

    Higher (lower) interest
     income (xx)                                         4,060         (632)
    (Higher) lower interest
     expense (xx)                                          660       (3,829)

    Effective tax rate impact -
     positive (negative)            (498)              1,962       (2,741)

    All other / rounding              83      (303)     (664)      (1,452)
                               -------------------------------------------

    Fiscal 2007 operating
     results                       5,319     3,728     8,123      192,656
    Items impacting
     comparability:
    Gain on disposal of
     discontinued operations
     (xxx)                                                          120,301
    Earnings from discontinued
     operations                                                    15,479
    Reversal of reserve for
     preliminary project costs                                      4,787
    Resolution of a purchased
     gas contingency               2,344                            2,344
    Discontinuance of hedge
     accounting                                                     1,888
                               -------------------------------------------
    Fiscal 2007 GAAP earnings     $7,663  $  3,728    $8,123    $ 337,455
                               -------------------------------------------



    (*) Includes discontinued operations
    (xx) Includes intercompany income and expenses
    (xxx) Includes positive effective tax rate impact of $16,384.
    

    

                             NATIONAL FUEL GAS COMPANY
          RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
                           YEAR ENDED SEPTEMBER 30, 2007



                                              Pipeline &   Exploration &
                                   Utility       Storage    Production (*)
                                ------------------------------------------

    Fiscal 2006 GAAP earnings     $     0.58   $    0.65     $     0.24
    Items impacting
     comparability:
    Loss from discontinued
     operations                                                    0.54
    Out-of-period adjustment to
     symmetrical sharing               (0.03)
    Income tax adjustments                                        (0.07)
                                ------------------------------------------
    Fiscal 2006 operating
     results                            0.55        0.65           0.71

    Drivers of operating results
    Base rate increase in
     Pennsylvania                       0.06
    Usage                               0.02
    Colder weather                      0.03
    Routine regulatory
     adjustments                       (0.02)

    Lower efficiency gas
     revenues                                      (0.03)
    Higher operating expenses          (0.01)      (0.02)
    Higher property taxes              (0.01)
    Lower (higher) depreciation
     / depletion                                    0.03          (0.08)

    Higher crude oil prices                                        0.28
    Higher natural gas prices                                      0.03
    Higher natural gas
     production                                                    0.09
    Lower crude oil production                                    (0.03)
    Higher lease operating
     expenses                                                     (0.05)
    Higher general &
     administrative expenses                                          -

    Higher (lower) margins
    Income from unconsolidated
     subsidiaries

    Higher (lower) interest
     income (xx)                         (0.06)
    (Higher) lower interest
     expense (xx)                        (0.02)      (0.04)

    Effective tax rate impact -
     positive (negative)                0.04       (0.01)         (0.07)

    All other / rounding                0.02           -              -
                                ------------------------------------------

    Fiscal 2007 operating
     results                            0.60        0.58           0.88
    Items impacting
     comparability:
    Gain on disposal of
     discontinued operations                                       1.41
    Earnings from discontinued
     operations                                                    0.18
    Reversal of reserve for
     preliminary project costs                      0.06
    Resolution of a purchased
     gas contingency
    Discontinuance of hedge
     accounting                                     0.02
                                ------------------------------------------
    Fiscal 2007 GAAP earnings     $     0.60   $    0.66     $     2.47
                                ------------------------------------------



                                                    Corporate
                                  Energy              / All
                                Marketing   Timber    Other  Consolidated
                                ------------------------------------------

    Fiscal 2006 GAAP earnings    $   0.07  $  0.07   $   0.00 $     1.61
    Items impacting
     comparability:
    Loss from discontinued
     operations                                                     0.54
    Out-of-period adjustment to
     symmetrical sharing                                           (0.03)
    Income tax adjustments                                         (0.07)
                                ------------------------------------------
    Fiscal 2006 operating
     results                         0.07     0.07       0.00       2.05

    Drivers of operating results
    Base rate increase in
     Pennsylvania                                                   0.06
    Usage                                                           0.02
    Colder weather                                                  0.03
    Routine regulatory
     adjustments                                                   (0.02)

    Lower efficiency gas
     revenues                                                      (0.03)
    Higher operating expenses                                      (0.03)
    Higher property taxes                                          (0.01)
    Lower (higher) depreciation
     / depletion                              0.01                 (0.04)

    Higher crude oil prices                                         0.28
    Higher natural gas prices                                       0.03
    Higher natural gas
     production                                                     0.09
    Lower crude oil production                                     (0.03)
    Higher lease operating
     expenses                                                      (0.05)
    Higher general &
     administrative expenses                                           -

    Higher (lower) margins              -    (0.03)      0.01      (0.02)
    Income from unconsolidated
     subsidiaries                                        0.01       0.01

    Higher (lower) interest
     income (xx)                                           0.05      (0.01)
    (Higher) lower interest
     expense (xx)                                          0.01      (0.05)

    Effective tax rate impact -
     positive (negative)            (0.01)               0.02      (0.03)

    All other / rounding                -    (0.01)         -       0.01
                                ------------------------------------------

    Fiscal 2007 operating
     results                         0.06     0.04       0.10       2.26
    Items impacting
     comparability:
    Gain on disposal of
     discontinued operations                                        1.41
    Earnings from discontinued
     operations                                                     0.18
    Reversal of reserve for
     preliminary project costs                                      0.06
    Resolution of a purchased
     gas contingency                 0.03                           0.03
    Discontinuance of hedge
     accounting                                                     0.02
                                ------------------------------------------
    Fiscal 2007 GAAP earnings    $   0.09  $  0.04   $   0.10 $     3.96
                                ------------------------------------------



    (*) Includes discontinued operations
    (xx) Includes intercompany income and expenses
    

    

                          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            2007         2006         2007         2006
    ------------------ ------------ ------------ ------------ ------------
    Operating Revenues $   302,030  $   280,506  $ 2,039,566  $ 2,239,675
                       ------------ ------------ ------------ ------------

    Operating
     Expenses:
      Purchased Gas         79,164       79,609    1,018,081    1,267,562
      Operation and
       Maintenance          90,905       88,803      396,408      395,289
      Property,
       Franchise and
       Other Taxes          16,098       15,625       70,660       69,202
      Depreciation,
       Depletion and
       Amortization         42,359       39,604      157,919      151,999
                       ------------ ------------ ------------ ------------
                           228,526      223,641    1,643,068    1,884,052

    Operating Income        73,504       56,865      396,498      355,623

    Other Income
     (Expense):
      Income from
       Unconsolidated
       Subsidiaries          1,880        1,384        4,979        3,583
      Other Income             908        1,291        4,936        2,825
      Interest Income       (1,548)       5,695        1,550        9,409
      Interest Expense
       on Long-Term
       Debt                (16,289)     (18,127)     (68,446)     (72,629)
      Other Interest
       Expense              (1,151)      (1,686)      (6,029)      (5,952)
                       ------------ ------------ ------------ ------------

    Income from
     Continuing
     Operations Before
     Income Taxes           57,304       45,422      333,488      292,859

    Income Tax Expense      23,009       16,837      131,813      108,245
                       ------------ ------------ ------------ ------------

    Income from
     Continuing
     Operations             34,295       28,585      201,675      184,614

    Discontinued
     Operations:
      Income (Loss)
       from
       Operations, Net
       of Tax                3,094      (26,617)      15,479      (46,523)
      Gain on
       Disposal, Net
       of Tax              120,301            -      120,301            -
                       ------------ ------------ ------------ ------------

    Income (Loss) from
     Discontinued
     Operations, Net
     of Tax                123,395      (26,617)     135,780      (46,523)
                       ------------ ------------ ------------ ------------

    Net Income
     Available for
     Common Stock      $   157,690  $     1,968  $   337,455  $   138,091
                       ------------ ------------ ------------ ------------

    Earnings Per
     Common Share:
      Basic:
        Income from
         Continuing
         Operations    $      0.41  $      0.34  $      2.43  $      2.20
        Income (Loss)
         from
         Discontinued
         Operations           1.48        (0.32)        1.63        (0.56)
                       ------------ ------------ ------------ ------------
        Net Income
         Available for
         Common Stock  $      1.89  $      0.02  $      4.06  $      1.64
                       ------------ ------------ ------------ ------------

      Diluted:
        Income from
         Continuing
         Operations    $      0.40  $      0.33  $      2.37  $      2.15
        Income (Loss)
         from
         Discontinued
         Operations           1.44        (0.31)        1.59        (0.54)
                       ------------ ------------ ------------ ------------
        Net Income
         Available for
         Common Stock  $      1.84  $      0.02  $      3.96  $      1.61
                       ------------ ------------ ------------ ------------

    Weighted Average
     Common Shares:
      Used in Basic
       Calculation      83,506,748   83,432,553   83,141,640   84,030,118
                       ------------ ------------ ------------ ------------
      Used in Diluted
       Calculation      85,577,898   85,523,042   85,301,361   86,028,466
                       ------------ ------------ ------------ ------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)

                                            September 30,   September 30,
    (Thousands of Dollars)                      2007             2006
    ----------------------------------------------------------------------

    ASSETS
    Property, Plant and Equipment          $    4,461,586    $   4,703,040
    Less - Accumulated Depreciation,
     Depletion and Amortization                 1,583,181        1,825,314
    -------------------------------------  -------------------------------
          Net Property, Plant and
           Equipment                            2,878,405        2,877,726
    -------------------------------------  -------------------------------

    Current Assets:
    Cash and Temporary Cash Investments           124,806           69,611
    Cash Held in Escrow                            61,964                -
    Hedging Collateral Deposits                     4,066           19,676
    Receivables - Net                             172,380          173,671
    Unbilled Utility Revenue                       20,682           25,538
    Gas Stored Underground                         66,195           59,461
    Materials and Supplies - at average
     cost                                          35,669           36,693
    Unrecovered Purchased Gas Costs                14,769           12,970
    Other Current Assets                           45,057           63,723
    Deferred Income Taxes                          13,093           23,402
    -------------------------------------  -------------------------------
          Total Current Assets                    558,681          484,745
    -------------------------------------  -------------------------------

    Other Assets:
    Recoverable Future Taxes                       83,954           79,511
    Unamortized Debt Expense                       12,070           15,492
    Other Regulatory Assets                       137,577           76,917
    Deferred Charges                                5,545            3,558
    Other Investments                              85,902           88,414
    Investments in Unconsolidated
     Subsidiaries                                  18,256           11,590
    Goodwill                                        5,476            5,476
    Intangible Assets                              28,836           31,498
    Prepaid Pension and Post-Retirement
     Benefit Costs                                 61,006           64,125
    Fair Value of Derivative Financial
     Instruments                                    9,188           11,305
    Deferred Income Taxes                               -            9,003
    Other                                           8,059            4,388
    -------------------------------------  -------------------------------
          Total Other Assets                      455,869          401,277
    -------------------------------------  -------------------------------
    Total Assets                           $    3,892,955    $   3,763,748
    -------------------------------------  -------------------------------

    CAPITALIZATION AND LIABILITIES
    Capitalization:
    Comprehensive Shareholders' Equity
    Common Stock, $1 Par Value Authorized
     - 200,000,000 Shares; Issued and
     Outstanding - 83,461,308 Shares and
     83,402,670 Shares, Respectively       $       83,461    $      83,403
    Paid in Capital                               569,085          543,730
    Earnings Reinvested in the Business           983,776          786,013
    -------------------------------------  -------------------------------
    Total Common Shareholders' Equity
     Before Items of Other Comprehensive
     Income (Loss)                              1,636,322        1,413,146
    Accumulated Other Comprehensive
     Income (Loss)                                 (6,203)          30,416
    -------------------------------------  -------------------------------
    Total Comprehensive Shareholders'
     Equity                                     1,630,119        1,443,562
    Long-Term Debt, Net of Current
     Portion                                      799,000        1,095,675
    -------------------------------------  -------------------------------
          Total Capitalization                  2,429,119        2,539,237
    -------------------------------------  -------------------------------

    Current and Accrued Liabilities:
    Notes Payable to Banks and Commercial
     Paper                                              -                -
    Current Portion of Long-Term Debt             200,024           22,925
    Accounts Payable                              109,757          133,034
    Amounts Payable to Customers                   10,409           23,935
    Dividends Payable                              25,873           25,008
    Interest Payable on Long-Term Debt             18,158           18,420
    Customer Advances                              22,863           29,417
    Other Accruals and Current
     Liabilities                                   36,062           27,040
    Fair Value of Derivative Financial
     Instruments                                   16,200           39,983
    -------------------------------------  -------------------------------
          Total Current and Accrued
           Liabilities                            439,346          319,762
    -------------------------------------  -------------------------------

    Deferred Credits:
    Deferred Income Taxes                         579,899          544,502
    Taxes Refundable to Customers                  14,026           10,426
    Unamortized Investment Tax Credit               5,392            6,094
    Cost of Removal Regulatory Liability           91,226           85,076
    Other Regulatory Liabilities                   76,659           75,456
    Post-Retirement Liabilities                    70,555           32,918
    Asset Retirement Obligations                   75,939           77,392
    Other Deferred Credits                        110,794           72,885
    -------------------------------------  -------------------------------
          Total Deferred Credits                1,024,490          904,749
    -------------------------------------  -------------------------------
    Commitments and Contingencies                       -                -
    -------------------------------------  -------------------------------
    Total Capitalization and Liabilities   $    3,892,955    $   3,763,748
    -------------------------------------  -------------------------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)
                                                     Twelve Months Ended
                                                        September 30,
    (Thousands of Dollars)                             2007        2006
    ----------------------------------------------------------------------

    Operating Activities:
    Net Income Available for Common Stock            $337,455    $138,091
    Adjustments to Reconcile Net Income to Net Cash
      Provided by Operating Activities:
        Gain on Sale of Discontinued Operations      (159,873)          -
        Impairment of Oil and Gas Producing
         Properties                                         -     104,739
        Depreciation, Depletion and Amortization      170,803     179,615
        Deferred Income Taxes                          52,847      (5,230)
        Income from Unconsolidated Subsidiaries,
         Net of Cash Distributions                     (3,366)      1,067
        Excess Tax Benefits Associated with Stock-
         Based Compensation Awards                    (13,689)     (6,515)
        Other                                          16,399       4,829
      Change in:
        Hedging Collateral Deposits                    15,610      58,108
        Receivables and Unbilled Utility Revenue        5,669     (12,343)
        Gas Stored Underground and Materials and
         Supplies                                      (5,714)      1,679
        Unrecovered Purchased Gas Costs                (1,799)      1,847
        Prepayments and Other Current Assets           18,800     (39,572)
        Accounts Payable                              (26,002)    (23,144)
        Amounts Payable to Customers                  (13,526)     22,777
        Customer Advances                              (6,554)      4,946
        Other Accruals and Current Liabilities          8,950     (17,754)
        Other Assets                                    4,109     (22,700)
        Other Liabilities                              (5,922)     80,960
    ----------------------------------------------------------------------
          Net Cash Provided by Operating Activities  $394,197    $471,400
    ----------------------------------------------------------------------

    Investing Activities:
    Capital Expenditures                            ($276,728)  ($294,159)
    Investment in Partnership                          (3,300)          -
    Net Proceeds from Sale of Foreign Subsidiary      232,092           -
    Cash Held in Escrow                               (58,248)          -
    Net Proceeds from Sale of Oil and Gas Producing
     Properties                                         5,137          13
    Other                                                (725)     (3,230)
    ----------------------------------------------------------------------
          Net Cash Used in Investing Activities     ($101,772)  ($297,376)
    ----------------------------------------------------------------------

    Financing Activities:
    Excess Tax Benefits Associated with Stock-Based
     Compensation Awards                              $13,689      $6,515
    Shares Repurchased under Repurchase Plan          (48,070)    (85,168)
    Reduction of Long-Term Debt                      (119,576)     (9,805)
    Dividends Paid on Common Stock                   (100,632)    (98,266)
    Proceeds From Issuance of Common Stock             17,498      23,339
    ----------------------------------------------------------------------
          Net Cash Used In Financing Activities     ($237,091)  ($163,385)
    ----------------------------------------------------------------------
    Effect of Exchange Rates on Cash                     (139)      1,365
    ----------------------------------------------------------------------
    Net Increase in Cash and Temporary Cash
     Investments                                       55,195      12,004
    Cash and Temporary Cash Investments at
     Beginning of Period                               69,611      57,607
    ----------------------------------------------------------------------
    Cash and Temporary Cash Investments at
     September 30                                    $124,806     $69,611
    ----------------------------------------------------------------------
    

    
                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)



    (Thousands of Dollars, except per           Three Months Ended
     share amounts)                                September 30,
                                         ---------------------------------
    UTILITY SEGMENT                         2007      2006      Variance
    ----------------------------------------------------------------------
    Revenues from External Customers     $ 105,594 $  111,320   $ (5,726)
    Intersegment Revenues                    1,715      2,751     (1,036)
                                         ---------------------------------
    Total Operating Revenues               107,309    114,071     (6,762)
                                         ---------------------------------

    Operating Expenses:
      Purchased Gas                         47,682     52,440     (4,758)
      Operation and Maintenance             37,519     41,233     (3,714)
      Property, Franchise and Other Taxes   10,037     10,151       (114)
      Depreciation, Depletion and
       Amortization                         10,389     10,113        276
                                         ---------------------------------
                                           105,627    113,937     (8,310)
                                         ---------------------------------

    Operating Income                         1,682        134      1,548

    Other Income (Expense):
     Interest Income                        (2,907)     4,347     (7,254)
     Other Income                              318        221         97
     Other Interest Expense                 (6,847)    (6,782)       (65)
                                         ---------------------------------

    Income (Loss) Before Income Taxes       (7,754)    (2,080)    (5,674)
    Income Tax Expense (Benefit)            (4,318)      (661)    (3,657)
                                         ---------------------------------
    Net Income (Loss)                    $  (3,436)$   (1,419)  $ (2,017)
                                         ---------------------------------

    Net Income (Loss) Per Share (Diluted)$   (0.04)$    (0.02)  $  (0.02)
                                         ---------------------------------


                                                Three Months Ended
                                                   September 30,
                                         ---------------------------------
    PIPELINE AND STORAGE SEGMENT              2007       2006   Variance
    ----------------------------------------------------------------------
    Revenues from External Customers     $  35,521 $   28,086   $  7,435
    Intersegment Revenues                   19,972     20,126       (154)
                                         ---------------------------------
    Total Operating Revenues                55,493     48,212      7,281
                                         ---------------------------------

    Operating Expenses:
       Purchased Gas                             7        (48)        55
       Operation and Maintenance            19,111     18,462        649
       Property, Franchise and Other
        Taxes                                4,317      4,109        208
       Depreciation, Depletion and
        Amortization                         8,135      9,227     (1,092)
                                         ---------------------------------
                                            31,570     31,750       (180)
                                         ---------------------------------

    Operating Income                        23,923     16,462      7,461

    Other Income (Expense):
       Interest Income                         134        137         (3)
       Other Income                            330        197        133
       Interest Expense on Long-Term Debt      (16)      (241)       225
       Other Interest Expense               (3,274)    (1,813)    (1,461)
                                         ---------------------------------

    Income Before Income Taxes              21,097     14,742      6,355
    Income Tax Expense                       7,786      4,494      3,292
                                         ---------------------------------
    Net Income                           $  13,311 $   10,248   $  3,063
                                         ---------------------------------

    Net Income Per Share (Diluted)       $    0.16 $     0.12   $   0.04
                                         ---------------------------------



    (Thousands of Dollars, except per           Twelve Months Ended
     share amounts)                                September 30,
                                          --------------------------------
    UTILITY SEGMENT                          2007       2006     Variance
    ------------------------------------- --------------------------------
    Revenues from External Customers      $1,106,453 $1,265,695 $(159,242)
    Intersegment Revenues                     14,271     15,068      (797)
                                          --------------------------------
    Total Operating Revenues               1,120,724  1,280,763  (160,039)
                                          --------------------------------

    Operating Expenses:
      Purchased Gas                          718,376    883,263  (164,887)
      Operation and Maintenance              202,965    204,330    (1,365)
      Property, Franchise and Other Taxes     47,023     47,029        (6)
      Depreciation, Depletion and
       Amortization                           40,541     40,172       369
                                          --------------------------------
                                           1,008,905  1,174,794  (165,889)
                                          --------------------------------

    Operating Income                         111,819    105,969     5,850

    Other Income (Expense):
     Interest Income                          (2,345)     4,889    (7,234)
     Other Income                              1,244        830       414
     Other Interest Expense                  (28,190)   (26,174)   (2,016)
                                          --------------------------------

    Income (Loss) Before Income Taxes         82,528     85,514    (2,986)
    Income Tax Expense (Benefit)              31,642     35,699    (4,057)
                                          --------------------------------
    Net Income (Loss)                     $   50,886 $   49,815 $   1,071
                                          --------------------------------

    Net Income (Loss) Per Share (Diluted) $     0.60 $     0.58 $    0.02
                                          --------------------------------


                                                Twelve Months Ended
                                                   September 30,
                                          --------------------------------
    PIPELINE AND STORAGE SEGMENT                2007       2006  Variance
    ------------------------------------- --------------------------------
    Revenues from External Customers      $  130,410 $  132,921 $  (2,511)
    Intersegment Revenues                     81,556     81,431       125
                                          --------------------------------
    Total Operating Revenues                 211,966    214,352    (2,386)
                                          --------------------------------

    Operating Expenses:
       Purchased Gas                              (5)       (65)       60
       Operation and Maintenance              61,230     66,340    (5,110)
       Property, Franchise and Other
        Taxes                                 17,112     16,088     1,024
       Depreciation, Depletion and
        Amortization                          32,985     36,876    (3,891)
                                          --------------------------------
                                             111,322    119,239    (7,917)
                                          --------------------------------

    Operating Income                         100,644     95,113     5,531

    Other Income (Expense):
       Interest Income                           357        454       (97)
       Other Income                              748        582       166
       Interest Expense on Long-Term Debt      1,792     (1,078)    2,870
       Other Interest Expense                (11,415)    (5,542)   (5,873)
                                          --------------------------------

    Income Before Income Taxes                92,126     89,529     2,597
    Income Tax Expense                        35,740     33,896     1,844
                                          --------------------------------
    Net Income                            $   56,386 $   55,633 $     753
                                          --------------------------------

    Net Income Per Share (Diluted)        $     0.66 $     0.65 $    0.01
                                          --------------------------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)



    (Thousands of Dollars, except per share      Three Months Ended
     amounts)                                       September 30,
                                           -------------------------------
    EXPLORATION AND PRODUCTION SEGMENT        2007      2006     Variance
    ----------------------------------------------------------------------
    Operating Revenues                     $  90,329 $   75,511 $  14,818
                                           -------------------------------

    Operating Expenses:
      Purchased Gas                                -          -         -
      Operation and Maintenance:
        General and Administrative Expense     6,243      4,425     1,818
        Lease Operating Expense               11,585      9,199     2,386
        All Other Operation and Maintenance
         Expense                               1,468      1,992      (524)
      Property, Franchise and Other Taxes
       (Lease Operating Expense)               1,220        895       325
      Depreciation, Depletion and
       Amortization                           21,844     18,339     3,505
                                           -------------------------------
                                              42,360     34,850     7,510
                                           -------------------------------

    Operating Income                          47,969     40,661     7,308

    Other Income (Expense):
      Interest Income                          3,134      2,290       844
      Other Income                                18          -        18
      Interest Expense on Long-Term Debt           -          -         -
      Other Interest Expense                 (12,149)   (12,835)      686
                                           -------------------------------

    Income from Continuing Operations
     Before Income Taxes                      38,972     30,116     8,856
    Income Tax Expense                        16,656     10,680     5,976
                                           -------------------------------
    Income from Continuing Operations         22,316     19,436     2,880

    Discontinued Operations:
      Income (Loss) from Operations, Net of
       Tax                                     3,094    (26,617)   29,711
      Gain on Disposal, Net of Tax           120,301          -   120,301
                                           -------------------------------
    Income (Loss) from Discontinued
     Operations, Net of Tax                  123,395    (26,617)  150,012
                                           -------------------------------

    Net Income (Loss)                      $ 145,711 $   (7,181)$ 152,892
                                           -------------------------------

    Income from Continuing Operations Per
     Share (Diluted)                       $    0.26 $     0.23 $    0.03

    Income (Loss) from Discontinued
     Operations, Net of Tax, Per Share
     (Diluted)                                  1.44      (0.31)     1.75
                                           -------------------------------
    Net Income (Loss) Per Share (Diluted)  $    1.70 $    (0.08)$    1.78
                                           -------------------------------



                                                 Three Months Ended
                                                    September 30,
                                           -------------------------------
    ENERGY MARKETING SEGMENT                    2007       2006  Variance
    ----------------------------------------------------------------------
    Operating Revenues                     $  53,576 $   50,702 $   2,874
                                           -------------------------------

    Operating Expenses:
      Purchased Gas                           53,275     49,939     3,336
      Operation and Maintenance                1,287      1,185       102
      Property, Franchise and Other Taxes         27         10        17
      Depreciation, Depletion and
       Amortization                               10          7         3
                                           -------------------------------
                                              54,599     51,141     3,458
                                           -------------------------------

    Operating Income (Loss)                   (1,023)      (439)     (584)

    Other Income (Expense):
      Interest Income                            183        144        39
      Other Income                               122         57        65
      Other Interest Expense                      (9)       (20)       11
                                           -------------------------------

    Income (Loss) Before Income Taxes           (727)      (258)     (469)
    Income Tax Expense (Benefit)                  41       (148)      189
                                           -------------------------------
    Net Income (Loss)                      $    (768)$     (110)$    (658)
                                           -------------------------------

    Net Income Per Share (Diluted)         $   (0.01)$        - $   (0.01)
                                           -------------------------------


    (Thousands of Dollars, except per share        Twelve Months Ended
     amounts)                                         September 30,
                                               ---------------------------
    EXPLORATION AND PRODUCTION SEGMENT           2007     2006   Variance
    ------------------------------------------ ---------------------------
    Operating Revenues                         $324,037 $274,896 $ 49,141
                                               ---------------------------

    Operating Expenses:
      Purchased Gas                                   -       98      (98)
      Operation and Maintenance:
        General and Administrative Expense       19,946   19,061      885
        Lease Operating Expense                  43,916   37,056    6,860
        All Other Operation and Maintenance
         Expense                                  8,378    7,775      603
      Property, Franchise and Other Taxes
       (Lease Operating Expense)                  4,493    4,298      195
      Depreciation, Depletion and Amortization   78,174   67,122   11,052
                                               ---------------------------
                                                154,907  135,410   19,497
                                               ---------------------------

    Operating Income                            169,130  139,486   29,644

    Other Income (Expense):
      Interest Income                             9,905    7,816    2,089
      Other Income                                   18        -       18
      Interest Expense on Long-Term Debt         (1,188)       -   (1,188)
      Other Interest Expense                    (50,555) (50,457)     (98)
                                               ---------------------------

    Income from Continuing Operations Before
     Income Taxes                               127,310   96,845   30,465
    Income Tax Expense                           52,421   29,351   23,070
                                               ---------------------------
    Income from Continuing Operations            74,889   67,494    7,395

    Discontinued Operations:
      Income (Loss) from Operations, Net of
       Tax                                       15,479  (46,523)  62,002
      Gain on Disposal, Net of Tax              120,301        -  120,301
                                               ---------------------------
    Income (Loss) from Discontinued
     Operations, Net of Tax                     135,780  (46,523) 182,303
                                               ---------------------------

    Net Income (Loss)                          $210,669 $ 20,971 $189,698
                                               ---------------------------

    Income from Continuing Operations Per
     Share (Diluted)                           $   0.88 $   0.78 $   0.10

    Income (Loss) from Discontinued
     Operations, Net of Tax, Per Share
     (Diluted)                                     1.59    (0.54)    2.13
                                               ---------------------------
    Net Income (Loss) Per Share (Diluted)      $   2.47 $   0.24 $   2.23
                                               ---------------------------



                                                   Twelve Months Ended
                                                      September 30,
                                               ---------------------------
    ENERGY MARKETING SEGMENT                       2007     2006 Variance
    ------------------------------------------ ---------------------------
    Operating Revenues                         $413,612 $497,069 $(83,457)
                                               ---------------------------

    Operating Expenses:
      Purchased Gas                             396,322  483,250  (86,928)
      Operation and Maintenance                   4,998    5,079      (81)
      Property, Franchise and Other Taxes            73     (222)     295
      Depreciation, Depletion and Amortization       33       53      (20)
                                               ---------------------------
                                                401,426  488,160  (86,734)
                                               ---------------------------

    Operating Income (Loss)                      12,186    8,909    3,277

    Other Income (Expense):
      Interest Income                               682      445      237
      Other Income                                  712      419      293
      Other Interest Expense                       (263)    (227)     (36)
                                               ---------------------------

    Income (Loss) Before Income Taxes            13,317    9,546    3,771
    Income Tax Expense (Benefit)                  5,654    3,748    1,906
                                               ---------------------------
    Net Income (Loss)                          $  7,663 $  5,798 $  1,865
                                               ---------------------------

    Net Income Per Share (Diluted)             $   0.09 $   0.07 $   0.02
                                               ---------------------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)



    (Thousands of Dollars, except per            Three Months Ended
     share amounts)                                September 30,
                                          --------------------------------
    TIMBER SEGMENT                           2007      2006     Variance
    ----------------------------------------------------------------------
    Revenues from External Customers      $  15,819 $   13,647  $   2,172
    Intersegment Revenues                         -          1         (1)
                                          --------------------------------
    Total Operating Revenues                 15,819     13,648      2,171
                                          --------------------------------

    Operating Expenses:
      Operation and Maintenance              12,029     10,383      1,646
      Property, Franchise and Other Taxes       406        370         36
      Depreciation, Depletion and
       Amortization                           1,616      1,582         34
                                          --------------------------------
                                             14,051     12,335      1,716
                                          --------------------------------

    Operating Income                          1,768      1,313        455

    Other Income (Expense):
      Interest Income                           327        229         98
      Other Income                                -         66        (66)
      Other Interest Expense                   (863)      (796)       (67)
                                          --------------------------------

    Income Before Income Taxes                1,232        812        420
    Income Tax Expense (Benefit)                557        343        214
                                          --------------------------------
    Net Income                            $     675 $      469  $     206
                                          --------------------------------

    Net Income Per Share (Diluted)        $    0.01 $     0.01  $       -
                                          --------------------------------



                                                 Three Months Ended
                                                   September 30,
                                          --------------------------------
    ALL OTHER                                  2007       2006  Variance
    ----------------------------------------------------------------------
    Revenues from External Customers      $     997 $    1,053  $     (56)
    Intersegment Revenues                     2,186      1,506        680
                                          --------------------------------
    Total Operating Revenues                  3,183      2,559        624
                                          --------------------------------

    Operating Expenses:
      Purchased Gas                           1,969      1,541        428
      Operation and Maintenance               1,091      1,132        (41)
      Property, Franchise and Other Taxes        22         21          1
      Depreciation, Depletion and
       Amortization                             196        196          -
                                          --------------------------------
                                              3,278      2,890        388
                                          --------------------------------

    Operating Income (Loss)                     (95)      (331)       236

    Other Income (Expense):
      Income from Unconsolidated
       Subsidiaries                           1,880      1,384        496
      Interest Income                             4          3          1
      Other Income                               15         11          4
      Other Interest Expense                   (688)      (681)        (7)
                                          --------------------------------

    Income (Loss) Before Income Taxes         1,116        386        730
    Income Tax Expense (Benefit)                463        430         33
                                          --------------------------------
    Net Income (Loss)                     $     653 $      (44) $     697
                                          --------------------------------

    Net Income (Loss) Per Share (Diluted) $    0.01 $    (0.01) $    0.02
                                          --------------------------------


    (Thousands of Dollars, except per share       Twelve Months Ended
     amounts)                                        September 30,
                                             -----------------------------
    TIMBER SEGMENT                             2007      2006    Variance
    ---------------------------------------- -----------------------------
    Revenues from External Customers         $ 58,897  $ 65,024  $ (6,127)
    Intersegment Revenues                           -         5        (5)
                                             -----------------------------
    Total Operating Revenues                   58,897    65,029    (6,132)
                                             -----------------------------

    Operating Expenses:
      Operation and Maintenance                44,059    45,712    (1,653)
      Property, Franchise and Other Taxes       1,589     1,611       (22)
      Depreciation, Depletion and
       Amortization                             4,709     6,495    (1,786)
                                             -----------------------------
                                               50,357    53,818    (3,461)
                                             -----------------------------

    Operating Income                            8,540    11,211    (2,671)

    Other Income (Expense):
      Interest Income                           1,249       747       502
      Other Income                                 22       118       (96)
      Other Interest Expense                   (3,265)   (3,095)     (170)
                                             -----------------------------

    Income Before Income Taxes                  6,546     8,981    (2,435)
    Income Tax Expense (Benefit)                2,818     3,277      (459)
                                             -----------------------------
    Net Income                               $  3,728  $  5,704  $ (1,976)
                                             -----------------------------

    Net Income Per Share (Diluted)           $   0.04  $   0.07  $  (0.03)
                                             -----------------------------



                                                  Twelve Months Ended
                                                     September 30,
                                             -----------------------------
    ALL OTHER                                    2007      2006  Variance
    ---------------------------------------- -----------------------------
    Revenues from External Customers         $  5,385  $  3,304  $  2,081
    Intersegment Revenues                       8,726     9,444      (718)
                                             -----------------------------
    Total Operating Revenues                   14,111    12,748     1,363
                                             -----------------------------

    Operating Expenses:
      Purchased Gas                             7,529     7,908      (379)
      Operation and Maintenance                 3,854     3,731       123
      Property, Franchise and Other Taxes          92        95        (3)
      Depreciation, Depletion and
       Amortization                               785       789        (4)
                                             -----------------------------
                                               12,260    12,523      (263)
                                             -----------------------------

    Operating Income (Loss)                     1,851       225     1,626

    Other Income (Expense):
      Income from Unconsolidated
       Subsidiaries                             4,979     3,583     1,396
      Interest Income                              16        22        (6)
      Other Income                                 52        53        (1)
      Other Interest Expense                   (2,687)   (2,555)     (132)
                                             -----------------------------

    Income (Loss) Before Income Taxes           4,211     1,328     2,883
    Income Tax Expense (Benefit)                1,647       969       678
                                             -----------------------------
    Net Income (Loss)                        $  2,564  $    359  $  2,205
                                             -----------------------------

    Net Income (Loss) Per Share (Diluted)    $   0.03  $      -  $   0.03
                                             -----------------------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)



    (Thousands of Dollars, except per           Three Months Ended
     share amounts)                                September 30,
                                         ---------------------------------
    CORPORATE                               2007       2006     Variance
    ----------------------------------------------------------------------
    Revenues from External Customers     $     194  $     187   $      7
    Intersegment Revenues                    1,202        737        465
                                         ---------------------------------
    Total Operating Revenues                 1,396        924        472
                                         ---------------------------------

    Operating Expenses:
      Operation and Maintenance              1,878      1,650        228
      Property, Franchise and Other Taxes       69         69          -
      Depreciation, Depletion and
       Amortization                            169        140         29
                                         ---------------------------------
                                             2,116      1,859        257
                                         ---------------------------------

    Operating Loss                            (720)      (935)       215

    Other Income (Expense):
      Interest Income                       21,518     20,916        602
      Other Income                             105        739       (634)
      Interest Expense on Long-Term Debt   (16,273)   (17,886)     1,613
      Other Interest Expense                (1,262)    (1,130)      (132)
                                         ---------------------------------

    Income (Loss) Before Income Taxes        3,368      1,704      1,664
    Income Tax Expense (Benefit)             1,824      1,699        125
                                         ---------------------------------
    Net Income (Loss)                    $   1,544  $       5   $  1,539
                                         ---------------------------------

    Net Income (Loss) Per Share (Diluted)$    0.01  $       -   $   0.01
                                         ---------------------------------



                                                Three Months Ended
                                                   September 30,
                                         ---------------------------------
    INTERSEGMENT ELIMINATIONS                 2007       2006   Variance
    ----------------------------------------------------------------------
    Intersegment Revenues                $ (25,075) $ (25,121)  $     46
                                         ---------------------------------

    Operating Expenses:
      Purchased Gas                        (23,769)   (24,263)       494
      Operation and Maintenance             (1,306)      (858)      (448)
                                         ---------------------------------
                                           (25,075)   (25,121)        46
                                         ---------------------------------

    Operating Income                             -          -          -

    Other Income (Expense):
      Interest Income                      (23,941)   (22,371)    (1,570)
      Other Interest Expense                23,941     22,371      1,570
                                         ---------------------------------

    Net Income                           $       -  $       -   $      -
                                         ---------------------------------

    Net Income Per Share (Diluted)       $       -  $       -   $      -
                                         ---------------------------------



    (Thousands of Dollars, except per share       Twelve Months Ended
     amounts)                                        September 30,
                                              ----------------------------
    CORPORATE                                    2007      2006   Variance
    ----------------------------------------- ----------------------------
    Revenues from External Customers          $     772 $     766 $     6
    Intersegment Revenues                         3,819     2,949     870
                                              ----------------------------
    Total Operating Revenues                      4,591     3,715     876
                                              ----------------------------

    Operating Expenses:
      Operation and Maintenance                  11,293     8,210   3,083
      Property, Franchise and Other Taxes           278       303     (25)
      Depreciation, Depletion and
       Amortization                                 692       492     200
                                              ----------------------------
                                                 12,263     9,005   3,258
                                              ----------------------------

    Operating Loss                               (7,672)   (5,290) (2,382)

    Other Income (Expense):
      Interest Income                            87,296    81,044   6,252
      Other Income                                2,140       823   1,317
      Interest Expense on Long-Term Debt        (69,050)  (71,551)  2,501
      Other Interest Expense                     (5,264)   (3,910) (1,354)
                                              ----------------------------

    Income (Loss) Before Income Taxes             7,450     1,116   6,334
    Income Tax Expense (Benefit)                  1,891     1,305     586
                                              ----------------------------
    Net Income (Loss)                         $   5,559 $    (189)$ 5,748
                                              ----------------------------

    Net Income (Loss) Per Share (Diluted)     $    0.07 $       - $  0.07
                                              ----------------------------



                                                  Twelve Months Ended
                                                     September 30,
                                              ----------------------------
    INTERSEGMENT ELIMINATIONS                      2007      2006 Variance
    ----------------------------------------- ----------------------------
    Intersegment Revenues                     $(108,372)$(108,897)$   525
                                              ----------------------------

    Operating Expenses:
      Purchased Gas                            (104,141) (106,892)  2,751
      Operation and Maintenance                  (4,231)   (2,005) (2,226)
                                              ----------------------------
                                               (108,372) (108,897)    525
                                              ----------------------------

    Operating Income                                  -         -       -

    Other Income (Expense):
      Interest Income                           (95,610)  (86,008) (9,602)
      Other Interest Expense                     95,610    86,008   9,602
                                              ----------------------------

    Net Income                                $       - $       - $     -
                                              ----------------------------

    Net Income Per Share (Diluted)            $       - $       - $     -
                                              ----------------------------
    

    

                          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
                    2007    2006   (Decrease)   2007     2006   (Decrease)
                   ------- ------- ---------- -------- -------- ----------

    Capital
     Expenditures:
    ---------------
    Utility        $14,240 $15,042     $(802)  $54,185  $54,414     $(229)
    Pipeline and
     Storage        16,818  10,662      6,156   43,226   26,023     17,203
    Exploration and
     Production     33,899  40,868    (6,969)  146,687  166,535   (19,848)
    Energy
     Marketing          18      10          8       76       16         60
    Timber           1,394   1,193        201    3,657    2,323      1,334
                   ------- ------- ---------- -------- -------- ----------
       Total
        Reportable
        Segments    66,369  67,775    (1,406)  247,831  249,311    (1,480)
    All Other            -       7        (7)       87       85          2
    Corporate          219     607      (388)    (319)    2,995    (3,314)
                   ------- ------- ---------- -------- -------- ----------
      Total
       Expenditures
       from
       Continuing
       Operations   66,588  68,389    (1,801)  247,599  252,391    (4,792)
    Discontinued
     Operations      3,631   7,112    (3,481)   29,129   41,768   (12,639)
                   ------- ------- ---------- -------- -------- ----------
      Total Capital
       Expenditures$70,219 $75,501   $(5,282) $276,728 $294,159  $(17,431)
                   ------- ------- ---------- -------- -------- ----------
    

    

    DEGREE DAYS
    ------------------------

                                                         Percent Colder
                                                         (Warmer) Than:
    Three Months Ended
     September 30              Normal   2007    2006    Normal   Last Year
    ------------------------  -------- ------- ------- --------- ---------

      Buffalo, NY                  178      76     152    (57.3)    (50.0)
      Erie, PA                     135      77     123    (43.0)    (37.4)

    Twelve Months Ended
     September 30
    ------------------------

      Buffalo, NY                6,692   6,271   5,968     (6.3)      5.1
      Erie, PA                   6,243   6,007   5,688     (3.8)      5.6
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                    EXPLORATION AND PRODUCTION INFORMATION
    ----------------------------------------------------------------------


                         Three Months Ended        Twelve Months Ended
                           September 30,              September 30,
                     -------------------------- --------------------------
                                      Increase                   Increase
                      2007    2006   (Decrease)  2007    2006   (Decrease)
                     ------- ------- ---------- ------- ------- ----------

    Gas Production /
     Prices:
    ----------------
    Production
     (MMcf)
      Gulf Coast       2,422   2,582      (160)  10,356   9,110     1,246
      West Coast       1,046     947        99    3,929   3,880        49
      Appalachia       1,557   1,342       215    5,555   5,108       447
                     ------- ------- ---------- ------- ------- ----------
    Total Production
     from Continuing
     Operations        5,025   4,871       154   19,840  18,098     1,742
      Canada -
       Discontinued
       Operations      1,210   1,842      (632)   6,426   7,673    (1,247)
                     ------- ------- ---------- ------- ------- ----------
    Total Production   6,235   6,713      (478)  26,266  25,771       495
                     ------- ------- ---------- ------- ------- ----------

    Average Prices
     (Per Mcf)
      Gulf Coast     $  6.05 $  6.62  $  (0.57) $  6.58 $  8.01  $  (1.43)
      West Coast        5.93    6.40     (0.47)    6.54    7.93     (1.39)
      Appalachia        6.89    7.38     (0.49)    7.48    9.53     (2.05)
        Weighted
         Average for
         Continuing
         Operations     6.28    6.79     (0.51)    6.82    8.42     (1.60)

        Weighted
         Average
         after
         Hedging for
         Continuing
         Operations     7.13    6.56      0.57     7.25    7.02      0.23
      Canada -
       Discontinued
       Operations       4.98    5.22     (0.24)    6.09    7.14     (1.05)

    Oil Production /
     Prices:
    ----------------
    Production
     (Thousands of
     Barrels)
      Gulf Coast         177     206       (29)     717     685        32
      West Coast         614     620        (6)   2,403   2,582      (179)
      Appalachia          33      27         6      124      69        55
                     ------- ------- ---------- ------- ------- ----------
    Total Production
     from Continuing
     Operations          824     853       (29)   3,244   3,336       (92)
      Canada -
       Discontinued
       Operations         31      51       (20)     206     272       (66)
                     ------- ------- ---------- ------- ------- ----------
    Total Production     855     904       (49)   3,450   3,608      (158)
                     ------- ------- ---------- ------- ------- ----------

    Average Prices
     (Per Barrel)
      Gulf Coast     $ 74.26 $ 68.92  $   5.34  $ 63.04 $ 64.10  $  (1.06)
      West Coast       68.22   61.23      6.99    56.86   56.80      0.06
      Appalachia       70.18   70.37     (0.19)   62.26   65.28     (3.02)
        Weighted
         Average for
         Continuing
         Operations    69.59   63.38      6.21    58.43   58.47     (0.04)
        Weighted
         Average
         after
         Hedging for
         Continuing
         Operations    61.35   44.84     16.51    51.68   40.26     11.42
      Canada -
       Discontinued
       Operations      60.72   60.69      0.03    50.06   51.40     (1.34)

    Total Production
     (Mmcfe)          11,365  12,137      (772)  46,966  47,419      (453)
    ---------------- ------- ------- ---------- ------- ------- ----------

    Selected
     Operating
     Performance
     Statistics:
    ----------------
    General &
     Administrative
     Expense per
     Mcfe (1)        $  0.63 $  0.44  $   0.19  $  0.51 $  0.50  $   0.01
    Lease Operating
     Expense per
     Mcfe (1)        $  1.28 $  1.01  $   0.27  $  1.23 $  1.09  $   0.14
    Depreciation,
     Depletion &
     Amortization
     per Mcfe (1)    $  2.19 $  1.84  $   0.35  $  1.99 $  1.76  $   0.23


    (1) Refer to page 21 for the General and Administrative Expense, Lease
     Operating Expense and Depreciation, Depletion, and Amortization
     Expense for the Exploration and Production segment. Amounts exclude
     discontinued operations of Canada.
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                    EXPLORATION AND PRODUCTION INFORMATION
    ----------------------------------------------------------------------


    Hedging Summary for Fiscal
     2008

    SWAPS                       Volume         Average Hedge Price
    --------------------------  -------------- ---------------------------
    Oil                          1.4 MMBBL     $58.78 / BBL
    Gas                          10.8 BCF      $8.47 / MCF


                                                 Average        Average
    No-cost Collars             Volume          Floor Price  Ceiling Price
    --------------------------  -------------- ------------  -------------
    Gas                          1.4 BCF       $8.83 / MCF   $16.45 / MCF

    Hedging Summary for Fiscal
     2009

    SWAPS                       Volume         Average Hedge Price
    --------------------------  -------------- ---------------------------
    Oil                          0.4 MMBBL     $62.00 / BBL
    Gas                          4.0 BCF       $8.83 / MCF





    Gross Wells in Process of Drilling
    ---------------------------------------
    Twelve Months Ended September 30, 2007
    ---------------------------------------
                                                                    Total
                                            Gulf    West    East   Company
                                           ------- ------- ------- -------

    Wells in Process - Beginning of Period
      Exploratory                             4.00    1.00   10.00   15.00
      Developmental                           1.00    2.00   44.00   47.00
    Wells Commenced
      Exploratory                             5.00    0.00   20.00   25.00
      Developmental                           2.00   63.00  213.00  278.00
    Wells Completed
      Exploratory                             4.00    1.00    9.00   14.00
      Developmental                           2.00   59.00  186.00  247.00
    Wells Plugged & Abandoned
      Exploratory                             3.00    0.00    0.00    3.00
      Developmental                           1.00    2.00    2.00    5.00
    Wells in Process - End of Period
      Exploratory                             2.00    0.00   21.00   23.00
      Developmental                           0.00    4.00   69.00   73.00


    Net Wells in Process of Drilling
    ---------------------------------------
    Twelve Months Ended September 30, 2007
    ---------------------------------------
                                                                    Total
                                            Gulf    West    East   Company
                                           ------- ------- ------- -------

    Wells in Process - Beginning of Period
      Exploratory                             2.02    0.50   10.00   12.52
      Developmental                           0.67    2.00   44.00   46.67
    Wells Commenced
      Exploratory                             2.01    0.00   18.10   20.11
      Developmental                           1.00   62.99  210.00  273.99
    Wells Completed
      Exploratory                             1.31    0.50    8.10    9.91
      Developmental                           1.00   58.99  184.00  243.99
    Wells Plugged & Abandoned
      Exploratory                             1.42    0.00    0.00    1.42
      Developmental                           0.67    2.00    2.00    4.67
    Wells in Process - End of Period
      Exploratory                             1.30    0.00   20.00   21.30
      Developmental                           0.00    4.00   68.00   72.00
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                    EXPLORATION AND PRODUCTION INFORMATION
    ----------------------------------------------------------------------

                         Reserve Quantity Information


                                             Gas MMcf
                        --------------------------------------------------
                                       U.S.
                        ----------------------------------
                         Gulf    West
                          Coast  Coast Appalachian Total           Total
                         Region Region   Region     U.S.   Canada Company
                        --------------------------------------------------

    Proved Developed
     and Undeveloped
     Reserves:
    September 30, 2006   41,802 75,866     81,373 199,041  33,534 232,575
    Extensions and
     Discoveries          3,577      -     29,676  33,253   1,333  34,586
    Revisions of
     Previous Estimates  (9,851) 1,238      1,618  (6,995) 11,634   4,639
    Production          (10,356)(3,929)    (5,555)(19,840) (6,426)(26,266)
    Sales of Minerals
     in Place               (36)     -        (34)    (70)(40,075)(40,145)
                        --------------------------------------------------
    September 30, 2007   25,136 73,175    107,078 205,389       - 205,389

    Proved Developed
     Reserves:

    September 30, 2006   32,345 64,196     81,373 177,914  33,534 211,448
    September 30, 2007   25,136 66,017     96,674 187,827       - 187,827


                                             Oil Mbbl
                        --------------------------------------------------
                                       U.S.
                        ----------------------------------
                         Gulf    West
                          Coast  Coast Appalachian Total           Total
                         Region Region   Region     U.S.   Canada Company
                        --------------------------------------------------
    Proved Developed
     and Undeveloped
     Reserves:
    September 30, 2006    1,244 54,869        273  56,386   1,632  58,018
    Extensions and
     Discoveries             63      -        281     344     108     452
    Revisions of
     Previous Estimates     851 (6,822)        84  (5,887)    (76) (5,963)
    Production             (717)(2,403)      (124) (3,244)   (206) (3,450)
    Sales of Minerals
     in Place                (6)     -         (7)    (13) (1,458) (1,471)
                        --------------------------------------------------
    September 30, 2007    1,435 45,644        507  47,586       -  47,586

    Proved Developed
     Reserves:

    September 30, 2006    1,217 42,522        273  44,012   1,632  45,644
    September 30, 2007    1,435 36,509        483  38,427       -  38,427
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES


    Utility Throughput
     - (millions of
     cubic feet -
     MMcf)
                          Three Months Ended       Twelve Months Ended
                            September 30,             September 30,
                       ------------------------ --------------------------
                                      Increase                   Increase
                        2007   2006  (Decrease)  2007    2006   (Decrease)
                       ------ ------ ---------- ------- ------- ----------
     Retail Sales:
        Residential
         Sales          3,507  4,372      (865)  60,236  59,443       793
        Commercial
         Sales            580    741      (161)  10,713  10,681        32
        Industrial
         Sales            100     85        15      727     985      (258)
                       ------ ------ ---------- ------- ------- ----------
                        4,187  5,198    (1,011)  71,676  71,109       567
     Off-System Sales     888      -       888    1,355       -     1,355
     Transportation     8,684  9,701    (1,017)  62,240  57,950     4,290
                       ------ ------ ---------- ------- ------- ----------
                       13,759 14,899    (1,140) 135,271 129,059     6,212
                       ------ ------ ---------- ------- ------- ----------

    Pipeline & Storage
     Throughput-
     (MMcf)
                          Three Months Ended       Twelve Months Ended
                            September 30,             September 30,
                       ------------------------ --------------------------
                                      Increase                   Increase
                        2007   2006  (Decrease)  2007    2006   (Decrease)
                       ------ ------ ---------- ------- ------- ----------
     Firm
      Transportation -
      Affiliated       10,680 10,608        72  111,243 103,223     8,020
     Firm
      Transportation -
      Non-Affiliated   66,920 64,501     2,419  239,870 260,156   (20,286)
     Interruptible
      Transportation    1,378  3,835    (2,457)   4,975  11,609    (6,634)
                       ------ ------ ---------- ------- ------- ----------
                       78,978 78,944        34  356,088 374,988   (18,900)
                       ------ ------ ---------- ------- ------- ----------

    Energy Marketing
     Volumes
                          Three Months Ended       Twelve Months Ended
                            September 30,             September 30,
                       ------------------------ --------------------------
                                      Increase                   Increase
                        2007   2006  (Decrease)  2007    2006   (Decrease)
                       ------ ------ ---------- ------- ------- ----------
     Natural Gas
      (MMcf)            6,712  6,774       (62)  50,775  45,270     5,505
                       ------ ------ ---------- ------- ------- ----------

    Timber Board Feet
     (Thousands)
                          Three Months Ended       Twelve Months Ended
                            September 30,             September 30,
                       ------------------------ --------------------------
                                      Increase                   Increase
                        2007   2006  (Decrease)  2007    2006   (Decrease)
                       ------ ------ ---------- ------- ------- ----------
     Log Sales          2,202  1,986       216    8,660   9,527      (867)
     Green Lumber
      Sales             2,738  2,372       366    9,358  10,454    (1,096)
     Kiln-dried Lumber
      Sales             3,826  3,624       202   14,778  16,862    (2,084)
                       ------ ------ ---------- ------- ------- ----------
                        8,766  7,982       784   32,796  36,843    (4,047)
                       ------ ------ ---------- ------- ------- ----------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES
               FISCAL 2008 EARNINGS GUIDANCE AND SENSITIVITIES



                                       Earnings per share sensitivity to
    Fiscal 2008 (Diluted earnings per   changes from NYMEX prices used in
     share guidance(*))                             guidance(*) (1)
    ---------------------------------- -----------------------------------

                                        $1 change per    $5 change per Bbl
                                           MMBtu gas            oil
                                       ----------------- -----------------
                            Range      Increase Decrease Increase Decrease
                        -------------- ----------------- -----------------

    Consolidated
     Earnings           $2.50 - $2.70   + $0.07  - $0.07  + $0.05  - $0.05




     NYMEX Settlement Prices at July
                 24, 2007
    ----------------------------------

                        Natural
                          Gas    Oil
                        ($ per  ($ per
                         MMBtu)  Bbl)
                        ------- ------

    Oct-07               $6.128 $73.39
    Nov-07               $7.078 $73.25
    Dec-07               $8.028 $73.10
    Jan-08               $8.468 $72.95
    Feb-08               $8.488 $72.82
    Mar-08               $8.338 $72.70
    Apr-08               $7.713 $72.59
    May-08               $7.678 $72.48
    Jun-08               $7.768 $72.39
    Jul-08               $7.866 $72.29
    Aug-08               $7.939 $72.19
    Sep-08               $7.994 $72.09

    Average              $7.791 $72.69




    (*) Please refer to forward looking statement footnote at pages 11-12 of
     this document.

    (1) This sensitivity table is current as of November 2, 2007 and only
     considers revenue from the Exploration and Production segment's crude
     oil and natural gas sales. 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 NYMEX hedge contracts at their
     maturity.
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES



    Quarter Ended September 30 (unaudited)       2007           2006
    --------------------------------------- -------------- ---------------

     Operating Revenues                     $  302,030,000 $  280,506,000
                                            -------------- ---------------

     Income from Continuing Operations      $   34,295,000 $   28,585,000
     Income (Loss) from Discontinued
      Operations, Net of Tax                   123,395,000    (26,617,000)
                                            -------------- ---------------
     Net Income Available for Common Stock  $  157,690,000 $    1,968,000
                                            -------------- ---------------

     Earnings Per Common Share:
      Basic:
          Income from Continuing Operations $         0.41 $         0.34
          Income (Loss) from Discontinued
           Operations                                 1.48          (0.32)
                                            -------------- ---------------
          Net Income Available for Common
           Stock                            $         1.89 $         0.02
                                            -------------- ---------------

      Diluted:
          Income from Continuing Operations $         0.40 $         0.33
          Income (Loss) from Discontinued
           Operations                                 1.44          (0.31)
                                            -------------- ---------------
          Net Income Available for Common
           Stock                            $         1.84 $         0.02
                                            -------------- ---------------

      Weighted Average Common Shares:
        Used in Basic Calculation               83,506,748     83,432,553
                                            -------------- ---------------
        Used in Diluted Calculation             85,577,898     85,523,042
                                            -------------- ---------------


    Twelve Months Ended September 30
     (unaudited)
    ---------------------------------------

     Operating Revenues                     $2,039,566,000 $2,239,675,000
                                            -------------- ---------------

     Income from Continuing Operations      $  201,675,000 $  184,614,000
     Income (Loss) from Discontinued
      Operations, Net of Tax                   135,780,000    (46,523,000)
                                            -------------- ---------------
     Net Income Available for Common Stock  $  337,455,000 $  138,091,000
                                            -------------- ---------------

     Earnings Per Common Share:
      Basic:
          Income from Continuing Operations $         2.43 $         2.20
          Income (Loss) from Discontinued
           Operations                                 1.63          (0.56)
                                            -------------- ---------------
          Net Income Available for Common
           Stock                            $         4.06 $         1.64
                                            -------------- ---------------

      Diluted:
          Income from Continuing Operations $         2.37 $         2.15
          Income (Loss) from Discontinued
           Operations                                 1.59          (0.54)
                                            -------------- ---------------
          Net Income Available for Common
           Stock                            $         3.96 $         1.61
                                            -------------- ---------------

      Weighted Average Common Shares:
        Used in Basic Calculation               83,141,640     84,030,118
                                            -------------- ---------------
        Used in Diluted Calculation             85,301,361     86,028,466
                                            -------------- ---------------
    




For further information:

For further information: National Fuel Gas Company Analysts: James C.
Welch, 716-857-6987 or Media: Julie Coppola Cox, 716-857-7079

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NATIONAL FUEL GAS COMPANY

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