National Fuel Files Petition with the New York State Public Service Commission

    Company Believes New Mountain Vantage Has Not Complied with Utility Laws

    WILLIAMSVILLE, N.Y., December 19 /CNW/ - Today, National Fuel Gas
Distribution Corporation, the Utility segment of National Fuel Gas Company
(NYSE:   NFG) (the "Company" or "National Fuel"), is filing a petition with the
New York State Public Service Commission ("PSC") seeking the issuance of an
Order compelling New Mountain Vantage GP, L.L.C. and its foreign and domestic
affiliates (collectively, "New Mountain"), to disclose the full extent of
their holdings of shares of the Company's stock to determine whether New
Mountain's actions violate the Public Service Law. In the event New Mountain
is found to be in violation of the Public Service Law, the petition asks the
PSC to take such action as the Public Service Law requires, including but not
limited to, requiring New Mountain to file for the Commission's permission to
acquire such shares and for the Commission to hold hearings as to whether such
acquisition of shares is in the public interest.

    National Fuel is an integrated energy company with five business
segments, including a Utility segment with operations in western New York. The
Company serves more than 500,000 customers in western New York and has
provided safe and reliable natural gas service to its customers for more than
100 years. New Mountain, a hedge fund activist shareholder, is advancing a
business plan for all of National Fuel's operating segments that, the Company
believes, is not in the best interest of the Company's Utility customers. The
Company further believes that New Mountain is required to have taken certain
action with the PSC before it secured a significant ownership position in the
Company, advanced its business strategy and presented a list of candidates it
wishes to be elected to the Company's Board of Directors.

    The Company, in its petition explains that the Public Service Law
requires that if an entity is pursuing a controlling interest, either directly
or indirectly, in a regulated public utility, then it must first secure the
approval of the PSC. Such a requirement, the Company believes, is designed to
give the public and regulatory agencies an opportunity to determine if that
entity will be qualified to manage the assets that deliver essential energy
services to the citizens of New York.

    "We are proud of our long history of providing safe and reliable service
to our customers and we believe that any entity that is putting itself in a
position to have substantial influence and control over the way that important
service is provided, should have first sought the necessary Commission review
and approval," said Philip C. Ackerman, National Fuel's Chairman and Chief
Executive Officer. "Utility law has developed over time to protect the best
interests of the hundreds of thousands of customers who rely on a local
utility to provide them with the services they need, in a safe and reliable
fashion. We believe that New Mountain's interests are focused on short-term
gains derived principally from the Company's Exploration and Production
segment and that it has conveniently ignored the fundamental rules for this
vital operation," Ackerman continued.

    Since earlier this year, New Mountain has advanced a business strategy
for the Company that would, among other things, break up National Fuel's
integrated structure. The Company believes that such an action would have a
detrimental effect on its businesses, particularly if the end result were to
have the Utility segment as the remaining, sole substantial asset of the
Company. The Company's current structure provides certain efficiencies for the
Utility segment that, if lost, would be harmful and costly to its Utility

    Last month, the Company filed a similar petition with the Pennsylvania
Public Utility Commission. National Fuel has also served the citizens of
northwestern Pennsylvania for more than 100 years and currently provides
natural gas service to more than 200,000 customers in that region.

    The opinions of New Mountain and the Company differ with regard to the
value and wisdom of its integrated structure and the very nature of some of
the Company's operations. In a letter sent to New Mountain last week, the
Company said that New Mountain's analysis of its business structure and its
recommendation for changing that structure are "flawed by inadequate
analysis." The Company also noted that New Mountain is lacking in real
experience in managing assets in the energy industry. "We have deep experience
in all aspects of the energy industry and in the utility sector, particularly.
Our Management Team, Board of Directors and employee group as a whole are
fully committed and unquestionably qualified to offer our customers the kind
of service that they need for their safety and comfort every day. In contrast,
New Mountain criticizes management for approaching its E(xploration) and
P(roduction) business from a utility mindset. We believe that position speaks
volumes about how we differ in valuing the importance of the Utility segment
of the National Fuel Gas Company system and the essential role it plays in our
community," Ackerman said.

    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: or through its investor information service at


    In connection with its 2008 Annual Meeting, National Fuel Gas Company has
filed a preliminary proxy statement and will be filing a definitive proxy
statement, WHITE proxy card and other materials with the U.S. Securities and
TO BE CONSIDERED AT ITS ANNUAL MEETING. Investors may contact Morrow & Co.,
LLC, National Fuel Gas Company's proxy advisor for the 2008 Annual Meeting, at
(800) 252-1959 or by email at Investors may also obtain
a free copy of the proxy statement and other relevant documents when they
become available as well as other materials filed with the SEC concerning
National Fuel Gas Company at the SEC's website at Free
copies of National Fuel Gas Company's SEC filings are also available on
National Fuel Gas Company's website at These
materials and other documents may also be obtained for free from: Secretary,
National Fuel Gas Company, 6363 Main Street, Williamsville, New York 14221,
(716) 857-7000.


    National Fuel Gas Company and its directors are, and certain of its
officers and employees may be deemed to be, participants in the solicitation
of proxies from National Fuel Gas Company's stockholders with respect to the
matters considered at National Fuel Gas Company's 2008 Annual Meeting.
Information regarding these directors, and these certain officers and
employees, is included in the preliminary proxy statement on Schedule 14A
filed with the SEC on December 17, 2007, and on National Fuel Gas Company's
website at Security holders can also obtain
information with respect to the identity of the participants and potential
participants in the solicitation and a description of their direct or indirect
interests, by security holdings or otherwise, for free, by contacting:
Secretary, National Fuel Gas Company, 6363 Main Street, Williamsville, New
York 14221, (716) 857-7000. More detailed information with respect to the
identity of the participants, and their direct or indirect interests, by
security holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with the SEC in connection with National Fuel Gas
Company's 2008 Annual Meeting.

For further information:

For further information: National Fuel Gas Distribution Corporation
Analyst: James C. Welch, 716-857-6987 or Media: Julie C. Cox, 716-857-7079

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