National Fuel Reports Third Quarter Earnings



    WILLIAMSVILLE, N.Y., August 2 /CNW/ - National Fuel Gas Company
("National Fuel" or the "Company") (NYSE:  NFG) today announced consolidated
earnings for the quarter ended June 30, 2007.

    HIGHLIGHTS

    --  Reported GAAP earnings for the third quarter were $46.8 million or
$0.55 per share. This is an increase of $46.7 million or $0.55 per share from
the prior year's quarter. With the exception of the Timber segment, earnings
for the quarter increased in all segments compared to the prior year.

    --  Quarterly operating results before items impacting comparability were
$42.0 million or $0.49 per share, an increase of $8.5 million or $0.10 per
share from the prior year's third quarter.

    --  The Company is increasing and narrowing its GAAP guidance range for
fiscal 2007 earnings to a range of $2.38 to $2.46 per share.(*) This guidance
excludes any effects from a sale by the Company's Exploration and Production
segment of its Canadian operations. The Company's preliminary GAAP guidance
for fiscal 2008 is in the range of $2.45 to $2.65 per share.(*) This includes
oil and gas production for the Exploration and Production segment in the range
of 38 to 44 billion cubic feet equivalent ("Bcfe") but excludes any Canadian
production.(*)

    --  A conference call is scheduled for Friday, August 3, 2007 at 11:00 am
Eastern Time.

    MANAGEMENT COMMENTS

    Philip C. Ackerman, Chairman and Chief Executive Officer of National Fuel
Gas Company stated: "This was another solid quarter and a record third quarter
for the Company. Our GAAP earnings increased in all segments, with the
exception of the Timber segment. Both our GAAP earnings of $0.55 per share and
operating results of $0.49 per share exceed market estimates, and are the
highest achieved in the third quarter in our history. Our business model of
participating in all areas of the natural gas industry, coupled with our
employees' continued dedication to operating our assets in an efficient and
safe manner, made these results attainable."

    "We are also pleased to announce significant milestones toward achieving
an in-service date of November 2008 for the Empire Connector pipeline.(*) At
this time, all major regulatory approvals have been received, a service
agreement has been signed with KeySpan Gas East Corporation, our anchor
shipper, and we have finalized the contracts for two crucial components of the
project; at present the pipe and compression equipment is being manufactured.
In an effort to accelerate our construction schedule, we will begin contacting
landowners next week to coordinate construction activities for at least 20
miles of the pipeline by calendar-year end.(*) This project demonstrates our
strong commitment to the Pipeline and Storage segment, and our pursuit of
projects that add critical infrastructure to serve the growing markets in the
New England and the Mid-Atlantic regions."(*)

    SUMMARY OF RESULTS

    National Fuel had consolidated earnings for the quarter ended June 30,
2007, of $46.8 million, an increase of $46.7 million, or $0.55 per share, from
the prior year's third quarter of $0.1 million or less than $0.01 per share
(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 nine months ended June 30, 2007, of $179.8
million, or $2.11 per share, increased $43.6 million, or $0.53 per share, from
the same period in the prior year, where earnings were $136.1 million, or
$1.58 per share.

    
                                      Three Months         Nine Months
                                     Ended June 30,      Ended June 30,
                                      2007     2006      2007      2006
                                    -------- --------  --------- ---------
    (in thousands except per share
     amounts)
    Reported GAAP earnings          $46,798  $   111   $179,765  $136,123
       Items impacting
        comparability(1):

            Reversal of reserve for
             preliminary project
             costs                   (4,787)             (4,787)
            Resolution of purchased
             gas contingency                             (2,344)
            Discontinuation of
             hedge accounting                            (1,888)
            Impairment of Canadian
             oil and gas producing
             properties                       39,502               39,502
            Income tax adjustments            (6,122)             (11,202)
            Out-of-period
             symmetrical sharing
             adjustment                                            (2,551)
                                    -------- --------  --------- ---------
    Operating results               $42,011  $33,491   $170,746  $161,872
                                    -------- --------  --------- ---------

    Reported GAAP earnings per
     share                          $  0.55  $  0.00   $   2.11  $   1.58
       Items impacting
        comparability(1):

            Reversal of reserve for
             preliminary project
             costs                    (0.06)              (0.06)
            Resolution of purchased
             gas contingency                              (0.03)
            Discontinuation of
             hedge accounting                             (0.02)
            Impairment of Canadian
             oil and gas producing
             properties                         0.46                 0.46
            Income tax adjustments             (0.07)               (0.13)
            Out-of-period
             symmetrical sharing
             adjustment                                             (0.03)
                                    -------- --------  --------- ---------
    Earnings excluding these items  $  0.49  $  0.39   $   2.00  $   1.88
                                    -------- --------  --------- ---------
    

    (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 third quarter and nine months ended June 30, 2007 to the comparable
periods in fiscal 2006. Excluding these items, operating results for the
current third quarter of $42.0 million or $0.49 per share increased $8.5
million or $0.10 per share. Excluding these items, operating results for the
nine months ended June 30, 2007 of $170.7 million or $2.00 per share increased
$8.9 million or $0.12 per share. Items impacting comparability will be
discussed in more detail within the discussion of segment earnings below.

    DISCUSSION OF RESULTS BY SEGMENT

    (The following discussion of earnings for each segment is summarized in
this report. It may be helpful to refer to those tables while reviewing this
discussion.)

    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 earnings of approximately $3.7 million, or $0.04 per
share for the quarter ended June 30, 2007, increased $2.9 million, or $0.03
per share, compared to the prior year's third quarter. In the New York
Division, earnings increased $0.9 million mainly due to higher customer usage
per account, partially offset by higher operating expenses, a higher effective
tax rate and higher interest expense. In the Pennsylvania division, earnings
increased $1.9 million compared to the prior year's third quarter, mainly due
to the impact of an increase in base rates. 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. Colder weather in April and higher
customer usage per account also contributed to the increase. The increase was
partially offset by slightly higher operating expenses and interest expense.

    The Utility segment's earnings of $54.3 million, or $0.64 per share, for
the nine months ended June 30, 2007, increased $3.1 million, or $0.05 per
share, compared to the nine months ended June 30, 2006. Earnings in
Distribution's New York Division for the nine months ended June 30, 2007, of
$36.0 million decreased $4.7 million compared to the prior year. The
comparability of the nine month 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 $2.1 million, or $0.03 per share.
This decrease is mainly due to higher bad debt and other operating expenses
and higher property taxes. Increased customer usage per account partially
offset the decrease.

    For the nine months ended June 30, 2007, earnings in Distribution's
Pennsylvania Division of $18.3 million, or $0.22 per share, increased $7.8
million, or $0.09 per share, compared to the prior year. Earnings increased
primarily due to the impact of weather that was 6.6 percent colder than the
prior year and the annual $14.3 million (before tax) increase in base rates
described above. 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 $15.5 million, or $0.18
per share, for the quarter ended June 30, 2007, increased $2.8 million, or
$0.03 per share, when compared with the same period in the prior fiscal year.
The comparability of the quarterly results is impacted by the reversal of a
$4.8 million 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 that obligates Empire to
perform transportation services, requiring Empire to construct and operate the
Empire Connector. Excluding this item, operating results for the Pipeline and
Storage segment decreased $2.0 million. The decrease is primarily due to lower
efficiency gas revenue resulting from lower retained volumes compared to the
prior year's third quarter. The lower volumes of efficiency gas result from 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 was generally effective as of December 1, 2006. The
FERC settlement also increased Supply Corporation's expense for
post-retirement benefits, which resulted in higher operating expenses for the
quarter. Partially offsetting these items, the FERC settlement lowered Supply
Corporation's depreciation rates, which resulted in lower depreciation expense
for the quarter. Higher interest expense and a higher effective tax rate in
the quarter also contributed to the decrease in operating results for the
quarter.

    Earnings of $43.1 million, or $0.51 per share, for the nine months ended
June 30, 2007, decreased $2.3 million, or $0.02 per share, when compared with
the nine months ended June 30, 2006. The comparability of the results for the
nine months ended June 30, 2007, is impacted by the $4.8 million reversal of
the reserve for preliminary project costs on the Empire Connector project
described above, and a $1.9 million gain associated with the prepayment in the
first quarter of 2007 of the project financing debt for the Empire State
Pipeline. 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 $9.0
million, or $0.10 per share, for the nine months ended June 30, 2007, mainly
due to lower efficiency gas revenue resulting from lower natural gas prices
and lower retained volumes due to the FERC settlement discussed above, as well
as a gain on sales of efficiency gas that was recorded in the nine months
ended June 30, 2006, that did not recur in the nine months ended June 30,
2007. An increase in post-retirement benefits expense, also due to the FERC
settlement, and higher interest expense, contributed to the decline in
operating results. The decrease was partially offset by lower depreciation
expense, resulting from the FERC settlement.

    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. Seneca is
currently negotiating the sale of its assets in the western provinces of
Canada and expects that it may complete a sale by September 30, 2007.(*)

    The Exploration and Production segment's earnings in the third quarter of
fiscal 2007 of $24.4 million or $0.29 per share increased $39.6 million or
$0.47 per share when compared with the prior year's third quarter. The
comparability of the quarterly results is impacted by a non-cash charge of
$39.5 million recorded in the third quarter of fiscal 2006 to write down the
value of Seneca's Canadian oil and natural gas producing properties that did
not recur this year. Seneca uses the full cost method of accounting for
determining the book value of its oil and natural gas properties. This method
requires that Seneca perform a quarterly "ceiling test" to compare, on a
country-by-country basis, the present value of future revenues from its oil
and natural gas reserves based on current market prices ("the ceiling") with
the book value of those reserves at the balance sheet date. If the book value
of the reserves in any country exceeds the ceiling, a non-cash charge must be
recorded to reduce the book value of the reserves to the calculated ceiling.
In addition, in the third quarter of fiscal 2006, Seneca recognized a $6.1
million benefit to earnings 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 these items, operating results in the Exploration and
Production segment increased $6.2 million, or $0.08 per share, for the third
quarter of fiscal 2007. The increase was mainly due to higher crude oil and
natural gas prices realized after hedging. For the quarter ended June 30,
2007, the weighted average oil price received by Seneca (after hedging) was
$53.40 per barrel ("Bbl"), an increase of $8.27 per Bbl, or 18.3 percent from
the prior year's quarter. The weighted average natural gas price received by
Seneca (after hedging) for the quarter ended June 30, 2007, was $7.33 per
thousand cubic feet ("Mcf"), an increase of $0.76 per Mcf, or 11.6 percent
from the prior year's quarter. The increase in commodity prices more than
offset a 0.6 Bcfe decrease in production. Operating expenses for the quarter,
were up slightly compared to the prior year quarter. Lower depletion expense,
which on a per unit basis, decreased $0.25 per thousand cubic feet equivalent
("Mcfe") to $1.92 per Mcfe was offset by higher lease operating expenses
("LOE"). The decrease in depletion expense is mainly due to the lower book
value of the Canadian oil and gas properties as a result of the write down
described above. The increase in LOE is due primarily to escalating service
costs. A lower effective tax rate also contributed to the increase in
operating results.

    The Exploration and Productions segment's earnings of $65.0 million, or
$0.76 per share, for the nine months ended June 30, 2007, increased $36.8
million, or $0.43 per share, when compared with the nine months ended June 30,
2006. The comparability of the nine-month results is impacted by the charge to
write down the value of Seneca's Canadian oil and natural gas producing
properties and the tax adjustment described above. Also impacting
comparability is an adjustment to the deferred income tax balance recorded in
the second quarter of fiscal 2006.

    Excluding these items, operating results for the nine months ended June
30, 2007, in the Exploration and Production segment increased $8.5 million, or
$0.10 per share, from the prior year. This increase is mainly due to higher
crude oil prices realized after hedging, combined with a 0.3 Bcfe increase in
production. A decrease in oil production was offset by an increase in gas
production, while a drop in gas prices realized after hedging was more than
offset by an increase in oil prices realized after hedging. For the nine
months ended June 30, 2007, the weighted average oil price received by Seneca
(after hedging) was $48.37 per Bbl, an increase of $8.81 per Bbl, or 22.3
percent, from the prior year. The weighted average natural gas price received
by Seneca (after hedging) was $7.04 per Mcf, a decrease of $0.39 per Mcf, or
5.2 percent, from the prior year. Operating expenses for the nine months ended
June 30, 2007 were slightly higher than the prior year. Lower depletion
expense was more than offset by the increase in LOE. The increase in LOE was
mostly in the Gulf of Mexico due to the hurricane related shut-ins experienced
in fiscal year 2006 and new producing fields coming on line in fiscal 2007.
Operating results were also impacted by a higher effective tax rate.

    Energy Marketing

    National Fuel Resources, Inc. ("NFR") comprises the Company's Energy
Marketing segment. 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 income for the third quarter of fiscal
2007 of $1.2 million or $0.01 per share, increased $0.2 million compared to
the third quarter last year. Earnings for the nine months ended June 30, 2007,
of $8.4 million, or $0.10 per share, increased $2.5 million, or $0.03 per
share, compared to the nine months ended June 30, 2006. The comparability of
the nine month 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. Excluding this item, operating results for the Energy
Marketing segment for the nine month ended June 30, 2007 were flat compared to
the nine months ended June 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 net loss for the quarter ended June 30, 2007, of
$0.4 million or less than $0.01 per share, is a decrease of $1.9 million from
earnings of $1.5 million in the prior year's third quarter. The decrease is
due to lower margins primarily on logs, green lumber and kiln-dried lumber.
The decreased margins are due to a combination of lower sales volumes and
prices received mainly for kiln-dried cherry lumber and soft and hard maple
green lumber.

    Earnings for the nine months ended June 30, 2007, of $3.1 million
decreased $2.2 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 due to a combination of lower sales volumes and prices. The wet
weather early in the year resulted in lower harvest volumes. This, combined
with lower unit prices, resulted in lower revenues for kiln-dried cherry
lumber and soft and hard maple green lumber. The mix of lumber grades also
contributed to the decrease.

    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
June 30, 2007, were $2.3 million, an increase of $3.1 million when compared to
the prior year's third quarter loss of $0.8 million. The increase is due to
higher margins in Horizon LFG, Inc., higher income from unconsolidated
subsidiaries in Horizon Power Inc., higher intercompany interest income, lower
operating costs and a lower effective tax rate.

    Earnings in the Corporate and All Other category for the nine months
ended June 30, 2007, were $5.9 million, an increase of $5.7 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 and a lower
effective tax rate.

    EARNINGS GUIDANCE

    The Company is increasing and narrowing its GAAP guidance range for
fiscal 2007 earnings to a range of $2.38 to $2.46 per share.(*) This guidance
excludes any effects from a sale by Seneca of its Canadian operations. The
Company's preliminary GAAP guidance for fiscal 2008 is in the range of $2.45
to $2.65 per share.(*) This includes oil and gas production for the Exploration
and Production segment in the range of 38 to 44 Bcfe.(*) The Company is not
including any forecast with respect to production volumes in Canada. Further
details regarding the production guidance are included in this document.

    EARNINGS TELECONFERENCE

    The Company will host a conference call on Friday, August 3, 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) 1-800-237-9752, and using the passcode "86158770." 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 "27159393." Both
the webcast and telephonic replay will be available until the close of
business on Friday, August 10, 2007.

    National Fuel is an integrated energy company with $3.8 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.

    (*)Certain statements contained herein, including those which are
designated with an asterisk ("(*)") 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 or valuation of derivative financial instruments or 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 JUNE 30, 2007

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

    Third quarter 2006 GAAP
     earnings                      $  827  $12,642    $(15,127)    $1,045
    Items impacting comparability:
    Income tax adjustments                              (6,122)
    Impairment of oil and gas
     properties                                         39,502
                                   ---------------------------------------
    Third quarter 2006 operating
     results                          827   12,642      18,253      1,045

    Drivers of operating results
    Base rate increase in
     Pennsylvania                   1,826
    Usage                           2,855

    Lower efficiency gas revenues           (1,175)
    Lower (higher) operating costs   (674)    (794)
    Lower depreciation / depletion             844       2,707

    Higher crude oil prices                              4,588
    Higher natural gas prices                            3,110
    Lower natural gas production                        (1,177)
    Lower crude oil production                          (1,792)
    Higher lease operating
     expenses                                           (2,598)

    Lower (higher) effective tax
     rate                            (556)    (486)      1,575
    Income from unconsolidated
     subsidiaries

    Higher (lower) margins

    Higher interest income
     (expense)                       (590)  (1,007)

    All other / rounding               17      640        (231)       188
                                   ---------------------------------------

    Third quarter 2007 operating
     results                        3,705   10,664      24,435      1,233
    Items impacting comparability:
    Reversal of reserve for
     preliminary project costs               4,787
                                   ---------------------------------------
    Third quarter 2007 GAAP
     earnings                      $3,705  $15,451    $ 24,435     $1,233
                                   ---------------------------------------


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

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

    Third quarter 2006 GAAP earnings      $ 1,529     $ (805)     $   111
    Items impacting comparability:
    Income tax adjustments                                         (6,122)
    Impairment of oil and gas
     properties                                                    39,502
                                        ----------------------------------
    Third quarter 2006 operating
     results                                1,529       (805)      33,491

    Drivers of operating results
    Base rate increase in Pennsylvania                              1,826
    Usage                                                           2,855

    Lower efficiency gas revenues                                  (1,175)
    Lower (higher) operating costs                       326       (1,142)
    Lower depreciation / depletion            281                   3,832

    Higher crude oil prices                                         4,588
    Higher natural gas prices                                       3,110
    Lower natural gas production                                   (1,177)
    Lower crude oil production                                     (1,792)
    Higher lease operating expenses                                (2,598)

    Lower (higher) effective tax rate                    620        1,153
    Income from unconsolidated
     subsidiaries                                        462          462

    Higher (lower) margins                 (2,047)       209       (1,838)

    Higher interest income (expense)                   1,351         (246)

    All other / rounding                     (127)       175          662
                                        ----------------------------------

    Third quarter 2007 operating
     results                                 (364)     2,338       42,011
    Items impacting comparability:
    Reversal of reserve for preliminary
     project costs                                                  4,787
                                        ----------------------------------
    Third quarter 2007 GAAP earnings      $  (364)    $2,338      $46,798
                                        ----------------------------------
    

    

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

                                          Pipeline Exploration  Energy
                                              &         &
                                  Utility Storage  Production  Marketing
                                  ----------------------------------------

    Third quarter 2006 GAAP
     earnings                     $ 0.01   $ 0.15      $(0.18)     $0.01
    Items impacting
     comparability:
    Income tax adjustment                               (0.07)
    Impairment of oil and gas
     properties                                          0.46
                                  ----------------------------------------
    Third quarter 2006 operating
     results                        0.01     0.15        0.21       0.01

    Drivers of operating results
    Base rate increase in
     Pennsylvania                   0.02
    Usage                           0.03

    Lower efficiency gas revenues           (0.01)
    Lower (higher) operating
     costs                         (0.01)   (0.01)
    Lower depreciation /
     depletion                               0.01        0.03

    Higher crude oil prices                              0.05
    Higher natural gas prices                            0.04
    Lower natural gas production                        (0.01)
    Lower crude oil production                          (0.02)
    Higher lease operating
     expenses                                           (0.03)

    Lower (higher) effective tax
     rate                          (0.01)   (0.01)       0.02
    Income from unconsolidated
     subsidiaries

    Higher (lower) margins

    Higher interest income
     (expense)                     (0.01)   (0.01)

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

    Third quarter 2007 operating
     results                        0.04     0.12        0.29       0.01
    Items impacting
     comparability:
    Reversal of reserve for
     preliminary project costs               0.06
                                  ----------------------------------------
    Third quarter 2007 GAAP
     earnings                     $ 0.04   $ 0.18      $ 0.29      $0.01
                                  ----------------------------------------


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

                                                   Corporate/
                                           Timber  All Other  Consolidated
                                          --------------------------------

    Third quarter 2006 GAAP earnings       $ 0.02     $(0.01)      $    -
    Items impacting comparability:
    Income tax adjustment                                           (0.07)
    Impairment of oil and gas properties                             0.46
                                          --------------------------------
    Third quarter 2006 operating results     0.02      (0.01)        0.39

    Drivers of operating results
    Base rate increase in Pennsylvania                               0.02
    Usage                                                            0.03

    Lower efficiency gas revenues                                   (0.01)
    Lower (higher) operating costs                         -        (0.02)
    Lower depreciation / depletion              -                    0.04

    Higher crude oil prices                                          0.05
    Higher natural gas prices                                        0.04
    Lower natural gas production                                    (0.01)
    Lower crude oil production                                      (0.02)
    Higher lease operating expenses                                 (0.03)

    Lower (higher) effective tax rate                   0.01         0.01
    Income from unconsolidated
     subsidiaries                                       0.01         0.01

    Higher (lower) margins                  (0.02)         -        (0.02)

    Higher interest income (expense)                    0.02            -

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

    Third quarter 2007 operating results        -       0.03         0.49
    Items impacting comparability:
    Reversal of reserve for preliminary
     project costs                                                   0.06
                                          --------------------------------
    Third quarter 2007 GAAP earnings       $    -     $ 0.03       $ 0.55
                                          --------------------------------
    

    

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

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

    Nine months ended June 30,
     2006 GAAP earnings           $51,234  $45,384     $28,152    $5,909
    Items impacting
     comparability:
    Out-of-period adjustment to
     symmetrical sharing          (2,551)
    Income tax adjustments                            (11,202)
    Impairment of oil and gas
     properties                                         39,502
                                  ----------------------------------------
    Nine months ended June 30,
     2006 operating results        48,683   45,384      56,452     5,909

    Drivers of operating results
    Colder weather in
     Pennsylvania                   2,272
    Base rate increase in
     Pennsylvania                   4,859
    Lower (higher) operating
     costs                        (3,073)  (1,041)
    Higher property taxes           (863)
    Usage                           2,575

    Lower efficiency gas revenues          (6,998)
    Lower depreciation /
     depletion                               1,830       2,536

    Higher crude oil prices                             14,866
    Lower natural gas prices                           (5,108)
    Higher natural gas production                        4,699
    Lower crude oil production                         (2,796)
    Higher lease operating
     expenses                                          (3,483)

    Lower (higher) effective tax
     rate                           1,342              (2,527)
    Income from unconsolidated
     subsidiaries

    Higher (lower) margins                                           264

    Higher interest income
     (expense)                    (1,268)  (2,376)

    All other / rounding            (205)    (399)         319      (86)
                                  ----------------------------------------

    Nine months ended June 30,
     2007 operating results        54,322   36,400      64,958     6,087
    Items impacting
     comparability:
    Reversal of reserve for
     preliminary project costs               4,787
    Resolution of a purchased gas
     contingency                                                   2,344
    Discontinuance of hedge
     accounting                              1,888
                                  ----------------------------------------
    Nine months ended June 30,
     2007 GAAP earnings           $54,322  $43,075     $64,958    $8,431
                                  ----------------------------------------


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

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

    Nine months ended June 30, 2006 GAAP
     earnings                               $5,235       $209     $136,123
    Items impacting comparability:
    Out-of-period adjustment to
     symmetrical sharing                                           (2,551)
    Income tax adjustments                                        (11,202)
    Impairment of oil and gas properties                            39,502
                                          --------------------------------
    Nine months ended June 30, 2006
     operating results                       5,235        209      161,872

    Drivers of operating results
    Colder weather in Pennsylvania                                   2,272
    Base rate increase in Pennsylvania                               4,859
    Lower (higher) operating costs                      (260)      (4,374)
    Higher property taxes                                            (863)
    Usage                                                            2,575

    Lower efficiency gas revenues                                  (6,998)
    Lower depreciation / depletion           1,183                   5,549

    Higher crude oil prices                                         14,866
    Lower natural gas prices                                       (5,108)
    Higher natural gas production                                    4,699
    Lower crude oil production                                     (2,796)
    Higher lease operating expenses                                (3,483)

    Lower (higher) effective tax rate                   1,282           97
    Income from unconsolidated
     subsidiaries                                         585          585

    Higher (lower) margins                 (3,080)        936      (1,880)

    Higher interest income (expense)                    3,369        (275)

    All other / rounding                     (285)      (195)        (851)
                                          --------------------------------

    Nine months ended June 30, 2007
     operating results                       3,053      5,926      170,746
    Items impacting comparability:
    Reversal of reserve for preliminary
     project costs                                                   4,787
    Resolution of a purchased gas
     contingency                                                     2,344
    Discontinuance of hedge accounting                               1,888
                                          --------------------------------
    Nine months ended June 30, 2007 GAAP
     earnings                               $3,053     $5,926     $179,765
                                          --------------------------------
    

    

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

                                          Pipeline Exploration  Energy
                                              &         &
                                  Utility Storage  Production  Marketing
                                  ----------------------------------------

    Nine months ended June 30,
     2006 GAAP earnings           $ 0.59   $ 0.53      $ 0.33      $0.07
    Items impacting
     comparability:
    Out-of-period adjustment to
     symmetrical sharing           (0.03)
    Income tax adjustments                              (0.13)
    Impairment of oil and gas
     properties                                          0.46
                                  ----------------------------------------
    Nine months ended June 30,
     2006 operating results         0.56     0.53        0.66       0.07

    Drivers of operating results
    Colder weather in
     Pennsylvania                   0.03
    Base rate increase in
     Pennsylvania                   0.06
    Lower (higher) operating
     costs                         (0.04)   (0.01)
    Higher property taxes          (0.01)
    Usage                           0.03

    Lower efficiency gas revenues           (0.08)
    Lower depreciation /
     depletion                               0.02        0.03

    Higher crude oil prices                              0.17
    Lower natural gas prices                            (0.06)
    Higher natural gas production                        0.06
    Lower crude oil production                          (0.03)
    Higher lease operating
     expenses                                           (0.04)

    Lower (higher) effective tax
     rate                           0.02                (0.03)
    Income from unconsolidated
     subsidiaries

    Higher (lower) margins

    Higher interest income
     (expense)                     (0.01)   (0.03)

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

    Nine months ended June 30,
     2007 operating results         0.64     0.43        0.76       0.07
    Items impacting
     comparability:
    Reversal of reserve for
     preliminary project costs               0.06
    Resolution of a purchased gas
     contingency                                                    0.03
    Discontinuance of hedge
     accounting                              0.02
                                  ----------------------------------------
    Nine months ended June 30,
     2007 GAAP earnings           $ 0.64   $ 0.51      $ 0.76      $0.10
                                  ----------------------------------------


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

                                                   Corporate/
                                           Timber  All Other  Consolidated
                                          --------------------------------

    Nine months ended June 30, 2006 GAAP
     earnings                              $ 0.06     $    -       $ 1.58
    Items impacting comparability:
    Out-of-period adjustment to
     symmetrical sharing                                            (0.03)
    Income tax adjustments                                          (0.13)
    Impairment of oil and gas properties                             0.46
                                          --------------------------------
    Nine months ended June 30, 2006
     operating results                       0.06          -         1.88

    Drivers of operating results
    Colder weather in Pennsylvania                                   0.03
    Base rate increase in Pennsylvania                               0.06
    Lower (higher) operating costs                         -        (0.05)
    Higher property taxes                                           (0.01)
    Usage                                                            0.03

    Lower efficiency gas revenues                                   (0.08)
    Lower depreciation / depletion           0.01                    0.06

    Higher crude oil prices                                          0.17
    Lower natural gas prices                                        (0.06)
    Higher natural gas production                                    0.06
    Lower crude oil production                                      (0.03)
    Higher lease operating expenses                                 (0.04)

    Lower (higher) effective tax rate                   0.01            -
    Income from unconsolidated
     subsidiaries                                       0.01         0.01

    Higher (lower) margins                  (0.04)      0.01        (0.03)

    Higher interest income (expense)                    0.04            -

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

    Nine months ended June 30, 2007
     operating results                       0.04       0.06         2.00
    Items impacting comparability:
    Reversal of reserve for preliminary
     project costs                                                   0.06
    Resolution of a purchased gas
     contingency                                                     0.03
    Discontinuance of hedge accounting                               0.02
                                          --------------------------------
    Nine months ended June 30, 2007 GAAP
     earnings                              $ 0.04     $ 0.06       $ 2.11
                                          --------------------------------
    

    


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

    (Thousands of Dollars, except per share amounts)

                          Three Months Ended         Nine Months Ended
                               June 30,                  June 30,
                              (Unaudited)               (Unaudited)
                       ------------------------- -------------------------
    SUMMARY OF
     OPERATIONS            2007         2006         2007         2006
    ------------------ ------------ ------------ ------------ ------------
    Operating Revenues $   463,145  $   415,452  $ 1,779,541  $ 2,017,189
                       ------------ ------------ ------------ ------------

    Operating
     Expenses:
      Purchased Gas        219,075      184,635      938,918    1,187,952
      Operation and
       Maintenance          96,782       96,117      321,695      320,821
      Property,
       Franchise and
       Other Taxes          17,804       16,845       55,149       54,147
      Depreciation,
       Depletion and
       Amortization         41,100       46,943      125,986      134,267
      Impairment of
       Oil and Gas
       Producing
       Properties                -       62,371            -       62,371
                       ------------ ------------ ------------ ------------
                           374,761      406,911    1,441,748    1,759,558

    Operating Income        88,384        8,541      337,793      257,631

    Other Income
     (Expense):
    Income from
     Unconsolidated
     Subsidiaries              926          215        3,099        2,199
    Interest Income          1,649        2,203        3,897        4,301
    Other Income               787          546        4,028        1,535
    Interest Expense
     on Long-Term Debt     (18,226)     (18,135)     (52,158)     (54,502)
    Other Interest
     Expense                (1,512)      (1,026)      (4,877)      (4,266)
                       ------------ ------------ ------------ ------------

    Income (Loss)
     Before Income
     Taxes                  72,008       (7,656)     291,782      206,898

    Income Tax Expense
     (Benefit)              25,210       (7,767)     112,017       70,775
                       ------------ ------------ ------------ ------------

    Net Income
     Available for
     Common Stock      $    46,798  $       111  $   179,765  $   136,123
                       ------------ ------------ ------------ ------------

    Earnings Per
     Common Share:
       Basic           $      0.56  $         -  $      2.17  $      1.62
                       ------------ ------------ ------------ ------------
       Diluted         $      0.55  $         -  $      2.11  $      1.58
                       ------------ ------------ ------------ ------------

    Weighted Average
     Common Shares:
      Used in Basic
       Calculation      83,483,718   84,013,556   83,018,583   84,231,490
                       ------------ ------------ ------------ ------------
      Used in Diluted
       Calculation      85,668,055   86,016,131   85,192,777   86,150,927
                       ------------ ------------ ------------ ------------
    

    


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

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

    ASSETS
    Property, Plant and Equipment                    $4,928,627 $4,703,040
    Less - Accumulated Depreciation, Depletion and
     Amortization                                     1,960,265  1,825,314
    ------------------------------------------------ ---------------------
              Net Property, Plant and Equipment       2,968,362  2,877,726
    ------------------------------------------------ ---------------------

    Current Assets:
    Cash and Temporary Cash Investments                  62,530     69,611
    Hedging Collateral Deposits                           3,400     19,676
    Receivables - Net                                   222,249    144,254
    Unbilled Utility Revenue                             20,569     25,538
    Gas Stored Underground                               30,829     59,461
    Materials and Supplies - at average cost             30,621     36,693
    Unrecovered Purchased Gas Costs                           -     12,970
    Prepaid Pension and Post-Retirement Benefit
     Costs                                               70,858     64,125
    Other Current Assets                                 26,324     63,723
    Deferred Income Taxes                                21,271     23,402
    ------------------------------------------------ ---------------------
              Total Current Assets                      488,651    519,453
    ------------------------------------------------ ---------------------

    Other Assets:
    Recoverable Future Taxes                             79,010     79,511
    Unamortized Debt Expense                             12,555     15,492
    Other Regulatory Assets                              84,325     76,917
    Deferred Charges                                      5,861      3,558
    Other Investments                                    83,444     88,414
    Investments in Unconsolidated Subsidiaries           16,377     11,590
    Goodwill                                              5,476      5,476
    Intangible Assets                                    29,757     31,498
    Fair Value of Derivative Financial Instruments        6,170     11,305
    Deferred Income Taxes                                 5,421      9,003
    Other                                                 7,716      4,388
    ------------------------------------------------ ---------------------
              Total Other Assets                        336,112    337,152
    ------------------------------------------------ ---------------------
    Total Assets                                     $3,793,125 $3,734,331
    ------------------------------------------------ ---------------------

    CAPITALIZATION AND LIABILITIES
    Capitalization:
    Comprehensive Shareholders' Equity
    Common Stock, $1 Par Value Authorized -
     200,000,000
       Shares; Issued and Outstanding - 83,536,549
        Shares
       and 83,402,670 Shares, Respectively           $   83,537 $   83,403
    Paid in Capital                                     568,537    543,730
    Earnings Reinvested in the Business                 855,803    786,013
    ------------------------------------------------ ---------------------
    Total Common Shareholder Equity Before
       Items of Other Comprehensive Income            1,507,877  1,413,146
    Accumulated Other Comprehensive Income               43,984     30,416
    ------------------------------------------------ ---------------------
    Total Comprehensive Shareholders' Equity          1,551,861  1,443,562
    Long-Term Debt, Net of Current Portion              799,000  1,095,675
    ------------------------------------------------ ---------------------
              Total Capitalization                    2,350,861  2,539,237
    ------------------------------------------------ ---------------------

    Current and Accrued Liabilities:
    Notes Payable to Banks and Commercial Paper               -          -
    Current Portion of Long-Term Debt                   200,050     22,925
    Accounts Payable                                    120,978    133,034
    Amounts Payable to Customers                         19,197     23,935
    Dividends Payable                                    25,897     25,008
    Interest Payable on Long-Term Debt                   13,541     18,420
    Other Accruals and Current Liabilities               96,587     27,040
    Fair Value of Derivative Financial Instruments       17,133     39,983
    ------------------------------------------------ ---------------------
              Total Current and Accrued Liabilities     493,383    290,345
    ------------------------------------------------ ---------------------

    Deferred Credits:
    Deferred Income Taxes                               566,133    544,502
    Taxes Refundable to Customers                        10,437     10,426
    Unamortized Investment Tax Credit                     5,568      6,094
    Cost of Removal Regulatory Liability                 88,949     85,076
    Other Regulatory Liabilities                         73,212     75,456
    Post-Retirement Liabilities                          24,310     32,918
    Asset Retirement Obligations                         80,739     77,392
    Other Deferred Credits                               99,533     72,885
    ------------------------------------------------ ---------------------
              Total Deferred Credits                    948,881    904,749
    ------------------------------------------------ ---------------------
    Commitments and Contingencies                             -          -
    ------------------------------------------------ ---------------------
    Total Capitalization and Liabilities             $3,793,125 $3,734,331
    ------------------------------------------------ ---------------------
    

    


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (Unaudited)
                                                      Nine Months Ended

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

    Operating Activities:
    Net Income Available for Common Stock          $  179,765  $  136,123
    Adjustments to Reconcile Net Income to Net
     Cash
         Provided by Operating Activities:
              Impairment of Oil and Gas Producing
               Properties                                   -      62,371
              Depreciation, Depletion and
               Amortization                           125,986     134,267
              Deferred Income Taxes                    27,107     (17,430)
              Income from Unconsolidated
               Subsidiaries, Net of Cash
               Distributions                           (1,486)      2,452
              Excess Tax Benefits Associated with
               Stock-Based Compensation Awards        (13,689)     (6,515)
              Other                                     4,722      (6,493)
         Change in:
              Hedging Collateral Deposits              16,276      63,100
              Receivables and Unbilled Utility
               Revenue                                (73,150)    (72,496)
              Gas Stored Underground and Materials
               and
                  Supplies                             34,725      21,098
              Unrecovered Purchased Gas Costs          12,970      14,817
              Prepayments and Other Current Assets     30,685      21,800
              Accounts Payable                        (12,560)    (24,650)
              Amounts Payable to Customers             (4,738)     30,418
              Other Accruals and Current
               Liabilities                             77,842      49,950
              Other Assets                                918     (15,753)
              Other Liabilities                          (821)     16,855
    ----------------------------------------------------------------------
                   Net Cash Provided by Operating
                    Activities                     $  404,552  $  409,914
    ----------------------------------------------------------------------

    Investing Activities:
    Capital Expenditures                            ($206,509)  ($218,658)
    Investment in Partnership                          (3,300)          -
    Net Proceeds from Sale of Oil and Gas
     Producing Properties                               5,137           4
    Other                                              (1,072)     (1,578)
    ----------------------------------------------------------------------
                   Net Cash Used in Investing
                    Activities                      ($205,744)  ($220,232)
    ----------------------------------------------------------------------

    Financing Activities:
    Excess Tax Benefits Associated with Stock-
     Based Compensation Awards                     $   13,689  $    6,515
    Shares Repurchased under Repurchase Plan          (43,344)    (76,540)
    Reduction of Long-Term Debt                      (119,550)     (7,157)
    Dividends Paid on Common Stock                    (74,748)    (73,275)
    Proceeds From Issuance of Common Stock             16,819      23,399
    ----------------------------------------------------------------------
                   Net Cash Used In Financing
                    Activities                      ($207,134)  ($127,058)
    ----------------------------------------------------------------------
    Effect of Exchange Rates on Cash                    1,245       1,395
    ----------------------------------------------------------------------
    Net Increase (Decrease) in Cash and Temporary
         Cash Investments                              (7,081)     64,019
    Cash and Temporary Cash Investments
         at Beginning of Period                        69,611      57,607
    ----------------------------------------------------------------------
    Cash and Temporary Cash Investments
         at June 30                                $   62,530  $  121,626
    ----------------------------------------------------------------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                 Three Months Ended
    (Thousands of Dollars, except per share           June 30,
     amounts)
                                            ----------------------------
    UTILITY SEGMENT                           2007      2006    Variance
    --------------------------------------- ----------------------------
    Revenues from External Customers        $210,604  $186,661  $23,943
    Intersegment Revenues                      2,586     2,514       72
                                            ----------------------------
    Total Operating Revenues                 213,190   189,175   24,015
                                            ----------------------------

    Operating Expenses:
       Purchased Gas                         131,469   115,463   16,006
       Operation and Maintenance              47,231    45,889    1,342
       Property, Franchise and Other Taxes    11,688    11,106      582
       Depreciation, Depletion and
        Amortization                          10,053    10,054       (1)
                                            ----------------------------
                                             200,441   182,512   17,929
                                            ----------------------------

    Operating Income                          12,749     6,663    6,086

    Other Income (Expense):
       Interest Income                           100       162      (62)
       Other Income                              273       205       68
       Other Interest Expense                 (6,697)   (5,789)    (908)
                                            ----------------------------

    Income Before Income Taxes                 6,425     1,241    5,184
    Income Tax Expense                         2,720       414    2,306
                                            ----------------------------
    Net Income                              $  3,705  $    827  $ 2,878
                                            ----------------------------

    Net Income Per Share (Diluted)          $   0.04  $   0.01  $  0.03
                                            ----------------------------





                                                 Three Months Ended
                                                      June 30,
                                            ----------------------------
    PIPELINE AND STORAGE SEGMENT              2007      2006    Variance
    --------------------------------------- ----------------------------
    Revenues from External Customers        $ 30,128  $ 30,750  $  (622)
    Intersegment Revenues                     20,332    20,298       34
                                            ----------------------------
    Total Operating Revenues                  50,460    51,048     (588)
                                            ----------------------------

    Operating Expenses:
       Purchased Gas                               -       (80)      80
       Operation and Maintenance               9,471    15,613   (6,142)
       Property, Franchise and Other Taxes     4,182     4,012      170
       Depreciation, Depletion and
        Amortization                           7,995     9,290   (1,295)
                                            ----------------------------
                                              21,648    28,835   (7,187)
                                            ----------------------------

    Operating Income                          28,812    22,213    6,599

    Other Income (Expense):
       Interest Income                           100       120      (20)
       Other Income                              154       116       38
       Interest Expense on Long-Term Debt        (21)     (245)     224
       Other Interest Expense                 (3,112)   (1,339)  (1,773)
                                            ----------------------------

    Income Before Income Taxes                25,933    20,865    5,068
    Income Tax Expense                        10,482     8,223    2,259
                                            ----------------------------
    Net Income                              $ 15,451  $ 12,642  $ 2,809
                                            ----------------------------

    Net Income Per Share (Diluted)          $   0.18  $   0.15  $  0.03
                                            ----------------------------


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                Nine Months Ended
    (Thousands of Dollars, except per                June 30,
     share amounts)
                                       -----------------------------------
    UTILITY SEGMENT                        2007        2006      Variance
    ---------------------------------- -----------------------------------
    Revenues from External Customers    $1,000,860  $1,154,375  $(153,515)
    Intersegment Revenues                   12,556      12,317        239
                                       -----------------------------------
    Total Operating Revenues             1,013,416   1,166,692   (153,276)
                                       -----------------------------------

    Operating Expenses:
       Purchased Gas                       670,694     830,823   (160,129)
       Operation and Maintenance           165,446     163,098      2,348
       Property, Franchise and Other
        Taxes                               36,986      36,878        108
       Depreciation, Depletion and
        Amortization                        30,153      30,058         95
                                       -----------------------------------
                                           903,279   1,060,857   (157,578)
                                       -----------------------------------

    Operating Income                       110,137     105,835      4,302

    Other Income (Expense):
       Interest Income                         562         542         20
       Other Income                            926         609        317
       Other Interest Expense              (21,343)    (19,392)    (1,951)
                                       -----------------------------------

    Income Before Income Taxes              90,282      87,594      2,688
    Income Tax Expense                      35,960      36,360       (400)
                                       -----------------------------------
    Net Income                          $   54,322  $   51,234  $   3,088
                                       -----------------------------------

    Net Income Per Share (Diluted)      $     0.64  $     0.59  $    0.05
                                       -----------------------------------





                                                Nine Months Ended
                                                     June 30,
                                       -----------------------------------
    PIPELINE AND STORAGE SEGMENT           2007        2006      Variance
    ---------------------------------- -----------------------------------
    Revenues from External Customers    $   94,889  $  104,835  $  (9,946)
    Intersegment Revenues                   61,585      61,304        281
                                       -----------------------------------
    Total Operating Revenues               156,474     166,139     (9,665)
                                       -----------------------------------

    Operating Expenses:
       Purchased Gas                           (11)        (18)         7
       Operation and Maintenance            42,118      47,878     (5,760)
       Property, Franchise and Other
        Taxes                               12,795      11,979        816
       Depreciation, Depletion and
        Amortization                        24,851      27,649     (2,798)
                                       -----------------------------------
                                            79,753      87,488     (7,735)
                                       -----------------------------------

    Operating Income                        76,721      78,651     (1,930)

    Other Income (Expense):
       Interest Income                         224         316        (92)
       Other Income                            418         384         34
       Interest Expense on Long-Term
        Debt                                 1,807        (837)     2,644
       Other Interest Expense               (8,140)     (3,728)    (4,412)
                                       -----------------------------------

    Income Before Income Taxes              71,030      74,786     (3,756)
    Income Tax Expense                      27,955      29,402     (1,447)
                                       -----------------------------------
    Net Income                          $   43,075  $   45,384  $  (2,309)
                                       -----------------------------------

    Net Income Per Share (Diluted)      $     0.51  $     0.53  $   (0.02)
                                       -----------------------------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                Three Months Ended
    (Thousands of Dollars, except per                June 30,
     share amounts)
                                           -----------------------------
    EXPLORATION AND PRODUCTION SEGMENT       2007      2006    Variance
    -------------------------------------- -----------------------------
    Operating Revenues                     $ 94,394  $ 86,600  $  7,794
                                           -----------------------------

    Operating Expenses:
       Purchased Gas                              -         -         -
       Operation and Maintenance:
          General and Administrative
           Expense                            6,860     5,783     1,077
          Lease Operating Expense            15,248    11,485     3,763
          All Other Operation and
           Maintenance Expense                2,397     1,976       421
       Property, Franchise and Other Taxes
        (Lease Operating Expense)             1,470     1,236       234
       Depreciation, Depletion and
        Amortization                         21,832    25,997    (4,165)
       Impairment of Oil and Gas Producing
        Properties                                -    62,371   (62,371)
                                           -----------------------------
                                             47,807   108,848   (61,041)
                                           -----------------------------

    Operating Income (Loss)                  46,587   (22,248)   68,835

    Other Income (Expense):
       Interest Income                        2,383     2,332        51
       Interest Expense on Long-Term Debt    (1,188)        -    (1,188)
       Other Interest Expense               (12,510)  (12,671)      161
                                           -----------------------------

    Income (Loss) Before Income Taxes        35,272   (32,587)   67,859
    Income Tax Expense (Benefit)             10,837   (17,460)   28,297
                                           -----------------------------
    Net Income (Loss)                      $ 24,435  $(15,127) $ 39,562
                                           -----------------------------

    Net Income (Loss) Per Share (Diluted)  $   0.29  $  (0.18) $   0.47
                                           -----------------------------




                                                Three Months Ended
                                                     June 30,
                                           -----------------------------
    ENERGY MARKETING SEGMENT                 2007      2006    Variance
    -------------------------------------- -----------------------------
    Operating Revenues                     $113,380  $ 94,747  $ 18,633
                                           -----------------------------

    Operating Expenses:
       Purchased Gas                        110,765    91,920    18,845
       Operation and Maintenance              1,199     1,404      (205)
       Property, Franchise and Other Taxes       11         8         3
       Depreciation, Depletion and
        Amortization                              9        10        (1)
                                           -----------------------------
                                            111,984    93,342    18,642
                                           -----------------------------

    Operating Income                          1,396     1,405        (9)

    Other Income (Expense):
       Interest Income                          359       132       227
       Other Income                             273       143       130
       Other Interest Expense                    (2)      (16)       14
                                           -----------------------------

    Income Before Income Taxes                2,026     1,664       362
    Income Tax Expense                          793       619       174
                                           -----------------------------
    Net Income                             $  1,233  $  1,045  $    188
                                           -----------------------------

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


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                   Nine Months Ended
    (Thousands of Dollars, except per share            June 30,
     amounts)
                                            ------------------------------
    EXPLORATION AND PRODUCTION SEGMENT         2007      2006    Variance
    --------------------------------------- ------------------------------
    Operating Revenues                       $275,712  $257,406  $ 18,306
                                            ------------------------------

    Operating Expenses:
       Purchased Gas                                -        98       (98)
       Operation and Maintenance:
          General and Administrative
           Expense                             18,379    18,465       (86)
          Lease Operating Expense              43,649    38,179     5,470
          All Other Operation and
           Maintenance Expense                  7,108     5,968     1,140
       Property, Franchise and Other Taxes
        (Lease Operating Expense)               3,861     3,972      (111)
       Depreciation, Depletion and
        Amortization                           66,755    70,655    (3,900)
       Impairment of Oil and Gas Producing
        Properties                                  -    62,371   (62,371)
                                            ------------------------------
                                              139,752   199,708   (59,956)
                                            ------------------------------

    Operating Income (Loss)                   135,960    57,698    78,262

    Other Income (Expense):
       Interest Income                          7,570     6,113     1,457
       Interest Expense on Long-Term Debt      (1,188)        -    (1,188)
       Other Interest Expense                 (38,406)  (37,622)     (784)
                                            ------------------------------

    Income (Loss) Before Income Taxes         103,936    26,189    77,747
    Income Tax Expense (Benefit)               38,978    (1,963)   40,941
                                            ------------------------------
    Net Income (Loss)                        $ 64,958  $ 28,152  $ 36,806
                                            ---------- --------- ---------

    Net Income (Loss) Per Share (Diluted)    $   0.76  $   0.33  $   0.43
                                            ------------------------------




                                                   Nine Months Ended
                                                       June 30,
                                            ------------------------------
    ENERGY MARKETING SEGMENT                   2007      2006    Variance
    --------------------------------------- ------------------------------
    Operating Revenues                       $360,036  $446,367  $(86,331)
                                            ------------------------------

    Operating Expenses:
       Purchased Gas                          343,047   433,311   (90,264)
       Operation and Maintenance                3,711     3,894      (183)
       Property, Franchise and Other Taxes         46      (232)      278
       Depreciation, Depletion and
        Amortization                               23        46       (23)
                                            ------------------------------
                                              346,827   437,019   (90,192)
                                            ------------------------------

    Operating Income                           13,209     9,348     3,861

    Other Income (Expense):
       Interest Income                            498       301       197
       Other Income                               590       363       227
       Other Interest Expense                    (253)     (207)      (46)
                                            ------------------------------

    Income Before Income Taxes                 14,044     9,805     4,239
    Income Tax Expense                          5,613     3,896     1,717
                                            ------------------------------
    Net Income                               $  8,431  $  5,909  $  2,522
                                            ------------------------------

    Net Income Per Share (Diluted)           $   0.10  $   0.07  $   0.03
                                            ------------------------------
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                  Three Months Ended
    (Thousands of Dollars, except per share            June 30,
     amounts)
                                              --------------------------
    TIMBER SEGMENT                              2007     2006   Variance
    ----------------------------------------- --------------------------
    Revenues from External Customers          $13,131  $15,311  $(2,180)
    Intersegment Revenues                           -        4       (4)
                                              --------------------------
    Total Operating Revenues                   13,131   15,315   (2,184)
                                              --------------------------

    Operating Expenses:
       Operation and Maintenance               11,919   10,898    1,021
       Property, Franchise and Other Taxes        363      382      (19)
       Depreciation, Depletion and
        Amortization                              843    1,275     (432)
                                              --------------------------
                                               13,125   12,555      570
                                              --------------------------

    Operating Income                                6    2,760   (2,754)

    Other Income (Expense):
       Interest Income                            310      217       93
       Other Income                                 -        -        -
       Other Interest Expense                    (808)    (778)     (30)
                                              --------------------------

    Income (Loss) Before Income Taxes            (492)   2,199   (2,691)
    Income Tax Expense (Benefit)                 (128)     670     (798)
                                              --------------------------
    Net Income (Loss)                         $  (364) $ 1,529  $(1,893)
                                              --------------------------

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



                                                  Three Months Ended
                                                       June 30,
                                              --------------------------
    ALL OTHER                                   2007     2006   Variance
    ----------------------------------------- --------------------------
    Revenues from External Customers          $ 1,308  $ 1,192  $   116
    Intersegment Revenues                       2,253    1,354      899
                                              --------------------------
    Total Operating Revenues                    3,561    2,546    1,015
                                              --------------------------

    Operating Expenses:
       Purchased Gas                            1,910    1,395      515
       Operation and Maintenance                1,007      803      204
       Property, Franchise and Other Taxes         22       33      (11)
       Depreciation, Depletion and
        Amortization                              196      196        -
                                              --------------------------
                                                3,135    2,427      708
                                              --------------------------

    Operating Income                              426      119      307

    Other Income (Expense):
       Income from Unconsolidated
        Subsidiaries                              926      215      711
       Interest Income                              4        7       (3)
       Other Income                                12       27      (15)
       Other Interest Expense                    (662)    (668)       6
                                              --------------------------

    Income (Loss) Before Income Taxes             706     (300)   1,006
    Income Tax Expense (Benefit)                  248      (88)     336
                                              --------------------------

    Net Income (Loss)                         $   458  $  (212) $   670
                                              --------------------------

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


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                    Nine Months Ended
    (Thousands of Dollars, except per share              June 30,
     amounts)
                                               ---------------------------
    TIMBER SEGMENT                                2007     2006   Variance
    ------------------------------------------ ---------------------------
    Revenues from External Customers            $43,079  $51,377  $(8,298)
    Intersegment Revenues                             -        4       (4)
                                               ---------------------------
    Total Operating Revenues                     43,079   51,381   (8,302)
                                               ---------------------------

    Operating Expenses:
       Operation and Maintenance                 32,031   35,328   (3,297)
       Property, Franchise and Other Taxes        1,183    1,241      (58)
       Depreciation, Depletion and
        Amortization                              3,093    4,913   (1,820)
                                               ---------------------------
                                                 36,307   41,482   (5,175)
                                               ---------------------------

    Operating Income                              6,772    9,899   (3,127)

    Other Income (Expense):
       Interest Income                              923      518      405
       Other Income                                  21       52      (31)
       Other Interest Expense                    (2,403)  (2,299)    (104)
                                               ---------------------------

    Income (Loss) Before Income Taxes             5,313    8,170   (2,857)
    Income Tax Expense (Benefit)                  2,260    2,935     (675)
                                               ---------------------------
    Net Income (Loss)                           $ 3,053  $ 5,235  $(2,182)
                                               ---------------------------

    Net Income (Loss) Per Share (Diluted)       $  0.04  $  0.06  $ (0.02)
                                               ---------------------------



                                                    Nine Months Ended
                                                         June 30,
                                               ---------------------------
    ALL OTHER                                     2007     2006   Variance
    ------------------------------------------ ---------------------------
    Revenues from External Customers            $ 4,387  $ 2,250  $ 2,137
    Intersegment Revenues                         6,540    7,938   (1,398)
                                               ---------------------------
    Total Operating Revenues                     10,927   10,188      739
                                               ---------------------------

    Operating Expenses:
       Purchased Gas                              5,560    6,366     (806)
       Operation and Maintenance                  2,763    2,598      165
       Property, Franchise and Other Taxes           69       75       (6)
       Depreciation, Depletion and
        Amortization                                589      593       (4)
                                               ---------------------------
                                                  8,981    9,632     (651)
                                               ---------------------------

    Operating Income                              1,946      556    1,390

    Other Income (Expense):
       Income from Unconsolidated Subsidiaries    3,099    2,199      900
       Interest Income                               11       20       (9)
       Other Income                                  37       42       (5)
       Other Interest Expense                    (1,999)  (1,874)    (125)
                                               ---------------------------

    Income (Loss) Before Income Taxes             3,094      943    2,151
    Income Tax Expense (Benefit)                  1,183      539      644
                                               ---------------------------

    Net Income (Loss)                           $ 1,911  $   404  $ 1,507
                                               ---------------------------

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

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                 Three Months Ended
    (Thousands of Dollars, except per share           June 30,
     amounts)
                                            ----------------------------
    CORPORATE                                 2007      2006    Variance
    --------------------------------------- ----------------------------
    Revenues from External Customers        $    200  $    191  $     9
    Intersegment Revenues                        853       737      116
                                            ----------------------------
    Total Operating Revenues                   1,053       928      125
                                            ----------------------------

    Operating Expenses:
       Operation and Maintenance               2,405     3,110     (705)
       Property, Franchise and Other Taxes        68        68        -
       Depreciation, Depletion and
        Amortization                             172       121       51
                                            ----------------------------
                                               2,645     3,299     (654)
                                            ----------------------------

    Operating Income (Loss)                   (1,592)   (2,371)     779

    Other Income (Expense):
       Interest Income                        21,711    20,424    1,287
       Other Income                               75        55       20
       Interest Expense on Long-Term Debt    (17,017)  (17,890)     873
       Other Interest Expense                 (1,039)     (956)     (83)
                                            ----------------------------

    Income (Loss) Before Income Taxes          2,138      (738)   2,876
    Income Tax Expense (Benefit)                 258      (145)     403
                                            ----------------------------
    Net Income (Loss)                       $  1,880  $   (593) $ 2,473
                                            ----------------------------

    Net Income (Loss) Per Share (Diluted)   $   0.02  $  (0.01) $  0.03
                                            ----------------------------



                                                 Three Months Ended
                                                      June 30,
                                            ----------------------------
    INTERSEGMENT ELIMINATIONS                 2007      2006    Variance
    --------------------------------------- ----------------------------
    Intersegment Revenues                   $(26,024) $(24,907) $(1,117)
                                            ----------------------------

    Operating Expenses:
       Purchased Gas                         (25,069)  (24,063)  (1,006)
       Operation and Maintenance                (955)     (844)    (111)
                                            ----------------------------
                                             (26,024)  (24,907)  (1,117)
                                            ----------------------------

    Operating Income                               -         -        -

    Other Income (Expense):
       Interest Income                       (23,318)  (21,191)  (2,127)
       Other Interest Expense                 23,318    21,191    2,127
                                            ----------------------------

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

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


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                   SEGMENT OPERATING RESULTS AND STATISTICS
                                 (UNAUDITED)

                                                   Nine Months Ended
    (Thousands of Dollars, except per share             June 30,
     amounts)
                                             -----------------------------
    CORPORATE                                   2007      2006    Variance
    ---------------------------------------- -----------------------------
    Revenues from External Customers          $    578  $    579  $    (1)
    Intersegment Revenues                        2,616     2,212      404
                                             -----------------------------
    Total Operating Revenues                     3,194     2,791      403
                                             -----------------------------

    Operating Expenses:
       Operation and Maintenance                 9,415     6,560    2,855
       Property, Franchise and Other Taxes         209       234      (25)
       Depreciation, Depletion and
        Amortization                               522       353      169
                                             -----------------------------
                                                10,146     7,147    2,999
                                             -----------------------------

    Operating Income (Loss)                     (6,952)   (4,356)  (2,596)

    Other Income (Expense):
       Interest Income                          65,778    60,127    5,651
       Other Income                              2,036        85    1,951
       Interest Expense on Long-Term Debt      (52,777)  (53,665)     888
       Other Interest Expense                   (4,002)   (2,780)  (1,222)
                                             -----------------------------

    Income (Loss) Before Income Taxes            4,083      (589)   4,672
    Income Tax Expense (Benefit)                    68      (394)     462
                                             -----------------------------
    Net Income (Loss)                         $  4,015  $   (195) $ 4,210
                                             -----------------------------

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



                                                   Nine Months Ended
                                                        June 30,
                                             -----------------------------
    INTERSEGMENT ELIMINATIONS                   2007      2006    Variance
    ---------------------------------------- -----------------------------
    Intersegment Revenues                     $(83,297) $(83,775) $   478
                                             -----------------------------

    Operating Expenses:
       Purchased Gas                           (80,372)  (82,628)   2,256
       Operation and Maintenance                (2,925)   (1,147)  (1,778)
                                             -----------------------------
                                               (83,297)  (83,775)     478
                                             -----------------------------

    Operating Income                                 -         -        -

    Other Income (Expense):
       Interest Income                         (71,669)  (63,636)  (8,033)
       Other Interest Expense                   71,669    63,636    8,033
                                             -----------------------------

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

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

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                       SEGMENT INFORMATION (Continued)
                            (Thousands of Dollars)


                                                  Three Months Ended
                                                       June 30,
                                                     (Unaudited)
                                              --------------------------

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

    Capital Expenditures:
    -----------------------------------------
    Utility                                   $14,387 $14,012  $    375
    Pipeline and Storage                       16,255   5,033    11,222
    Exploration and Production                 42,421  63,999   (21,578)
    Energy Marketing                               41       -        41
    Timber                                      1,056     378       678
                                              ------- ------- ----------
       Total Reportable Segments               74,160  83,422    (9,262)
    All Other                                       3      22       (19)
    Corporate                                      33     253      (220)
                                              ------- ------- ----------
       Total Consolidated                     $74,196 $83,697  $ (9,501)
                                              ------- ------- ----------


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



    Three Months Ended June 30                        Normal    2007
    -----------------------------------------         ------- ----------

      Buffalo, NY                                         927       921
      Erie, PA                                            885       900

    Nine Months Ended June 30
    -----------------------------------------

      Buffalo, NY                                       6,514     6,195
      Erie, PA                                          6,108     5,930


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                       SEGMENT INFORMATION (Continued)
                            (Thousands of Dollars)


                                                  Nine Months Ended
                                                       June 30,
                                                     (Unaudited)
                                           -------------------------------

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

    Capital Expenditures:
    ---------------------------------------
    Utility                                 $ 39,945  $ 39,372   $    573
    Pipeline and Storage                      26,408    15,361     11,047
    Exploration and Production               138,287   160,323    (22,036)
    Energy Marketing                              57         6         51
    Timber                                     2,263     1,130      1,133
                                           ---------- --------- ----------
       Total Reportable Segments             206,960   216,192     (9,232)
    All Other                                     87        78          9
    Corporate                                   (538)    2,388     (2,926)
                                           ---------- --------- ----------
       Total Consolidated                   $206,509  $218,658   $(12,149)
                                           ---------- --------- ----------


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

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

      Buffalo, NY                                731      (0.6)      26.0
      Erie, PA                                   812       1.7       10.8

    Nine Months Ended June 30
    ---------------------------------------

      Buffalo, NY                              5,816      (4.9)       6.5
      Erie, PA                                 5,565      (2.9)       6.6
    

    


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

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


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

    Gas Production/Prices:
    -----------------------------------------
    Production (MMcf)
      Gulf Coast                                2,317   2,109       208
      West Coast                                1,019     983        36
      Appalachia                                1,266   1,267        (1)
      Canada                                    1,639   2,158      (519)
                                              ------- ------- ----------
                                                6,241   6,517      (276)
                                              ------- ------- ----------
    Average Prices (Per Mcf)
      Gulf Coast                              $  7.37 $  6.97    $ 0.40
      West Coast                                 7.20    6.06      1.14
      Appalachia                                 8.59    7.26      1.33
      Canada                                     6.82    5.54      1.28
        Weighted Average                         7.45    6.41      1.04
        Weighted Average after Hedging           7.33    6.57      0.76

    Oil Production/Prices:
    -----------------------------------------
    Production (Thousands of Barrels)
      Gulf Coast                                  165     192       (27)
      West Coast                                  599     638       (39)
      Appalachia                                   32      19        13
      Canada                                       58      66        (8)
                                              ------- ------- ----------
                                                  854     915       (61)
                                              ------- ------- ----------

    Average Prices (Per Barrel)
      Gulf Coast                              $ 65.17 $ 67.52    $(2.35)
      West Coast                                57.77   61.51     (3.74)
      Appalachia                                60.43   63.15     (2.72)
      Canada                                    51.58   57.88     (6.30)
        Weighted Average                        58.87   62.54     (3.67)
        Weighted Average after Hedging          53.40   45.13      8.27

    Total Production (Mmcfe)                   11,365  12,007      (642)
    ----------------------------------------- ------- ------- ----------

    Selected Operating Performance
     Statistics:
    -----------------------------------------
    General & Administrative Expense per Mcfe
     (1)                                      $  0.60 $  0.48    $ 0.12
    Lease Operating Expense per Mcfe (1)      $  1.47 $  1.06    $ 0.41
    Depreciation, Depletion & Amortization
     per Mcfe (1)                             $  1.92 $  2.17    $(0.25)


    (1) Refer to page 17 for the General and Administrative Expense, Lease
     Operating Expense and Depreciation, Depletion, and Amortization
     Expense for the Exploration and Production segment.



                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

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


                                                    Nine Months Ended
                                                         June 30,
                                               ---------------------------
                                                                 Increase
                                                 2007    2006   (Decrease)
                                               -------- ------- ----------

    Gas Production/Prices:
    ------------------------------------------
    Production (MMcf)
      Gulf Coast                                  7,934   6,529     1,405
      West Coast                                  2,883   2,933       (50)
      Appalachia                                  3,998   3,766       232
      Canada                                      5,216   5,830      (614)
                                               -------- ------- ----------
                                                 20,031  19,058       973
                                               -------- ------- ----------
    Average Prices (Per Mcf)
      Gulf Coast                                $  6.74 $  8.56    $(1.82)
      West Coast                                   6.76    8.42     (1.66)
      Appalachia                                   7.71   10.29     (2.58)
      Canada                                       6.34    7.75     (1.41)
        Weighted Average                           6.83    8.64     (1.81)
        Weighted Average after Hedging             7.04    7.43     (0.39)

    Oil Production/Prices:
    ------------------------------------------
    Production (Thousands of Barrels)
      Gulf Coast                                    540     479        61
      West Coast                                  1,789   1,962      (173)
      Appalachia                                     91      41        50
      Canada                                        175     221       (46)
                                               -------- ------- ----------
                                                  2,595   2,703      (108)
                                               -------- ------- ----------

    Average Prices (Per Barrel)
      Gulf Coast                                $ 59.37 $ 62.04    $(2.67)
      West Coast                                  52.96   55.40     (2.44)
      Appalachia                                  59.35   61.92     (2.57)
      Canada                                      48.16   49.25     (1.09)
        Weighted Average                          54.20   56.17     (1.97)
        Weighted Average after Hedging            48.37   39.56      8.81

    Total Production (Mmcfe)                     35,601  35,276       325
    ------------------------------------------ -------- ------- ----------

    Selected Operating Performance Statistics:
    ------------------------------------------
    General & Administrative Expense per Mcfe
     (1)                                        $  0.52 $  0.52    $    -
    Lease Operating Expense per Mcfe (1)        $  1.33 $  1.19    $ 0.14
    Depreciation, Depletion & Amortization per
     Mcfe (1)                                   $  1.88 $  2.00    $(0.12)


    (1) Refer to page 17 for the General and Administrative Expense, Lease
     Operating Expense and Depreciation, Depletion, and Amortization
     Expense for the Exploration and Production segment.
    

    


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES

                    EXPLORATION AND PRODUCTION INFORMATION


    Hedging Summary for the Remaining Three Months of Fiscal 2007

    SWAPS                                   Volume  Average Hedge Price
    ----------------------------            ------- ----------------------
    Oil                                      0.2    $37.86
                                              MMBBL  / BBL
    Gas                                      3.3    $7.41
                                              BCF    / MCF

    No-cost Collars                         Volume  Floor  Ceiling
                                                     Price  Price
    ----------------------------            ------- ------ -------
    Gas                                      1.3    $7.42  $16.42
                                              BCF    / MCF  / MCF

    Hedging Summary for Fiscal
     2008

    SWAPS                                   Volume  Average Hedge Price
    ----------------------------            ------- ----------------------
    Oil                                      0.8    $54.27
                                              MMBBL  / BBL
    Gas                                      7.9    $8.38
                                              BCF    / MCF

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

    Hedging Summary for Fiscal
     2009

    SWAPS                                   Volume  Average Hedge
                                                     Price
    ----------------------------            ------- --------------
    Oil                                      0.2    $54.70
                                              MMBBL  / BBL



    Gross Wells in Process of
     Drilling
    ----------------------------
    Nine Months Ended June 30,
     2007
    ----------------------------
                                                    Total           Total
                                 Gulf West   East    U.S.  Canada  Company
                                 ---- ----- ------- ------ ------- -------

    Wells in Process - Beginning
     Period
      Exploratory                4.00  1.00   10.00  15.00    5.00   20.00
      Developmental              1.00  5.00   44.00  50.00    0.00   50.00
    Wells Commenced
      Exploratory                5.00  0.00   15.00  20.00    8.00   28.00
      Developmental              2.00 60.00  127.00 189.00    3.00  192.00
    Wells Completed
      Exploratory                3.00  1.00    3.00   7.00   10.00   17.00
      Developmental              2.00 59.00  115.00 176.00    3.00  179.00
    Wells Plugged & Abandoned
      Exploratory                3.00  0.00    0.00   3.00    0.00    3.00
      Developmental              0.00  2.00    2.00   4.00    0.00    4.00
    Wells in Process - End of
     Period
      Exploratory                3.00  0.00   22.00  25.00    3.00   28.00
      Developmental              1.00  4.00   54.00  59.00    0.00   59.00


    Net Wells in Process of
     Drilling
    ----------------------------
    Nine Months Ended June 30,
     2007
    ----------------------------
                                                    Total           Total
                                 Gulf West   East    U.S.  Canada  Company
                                 ---- ----- ------- ------ ------- -------

    Wells in Process - Beginning
     Period
      Exploratory                2.02  0.50   10.00  12.52    2.13   14.65
      Developmental              0.67  5.00   44.00  49.67    0.00   49.67
    Wells Commenced
      Exploratory                2.01  0.00   13.60  15.61    4.54   20.15
      Developmental              1.00 59.99  124.00 184.99    1.80  186.79
    Wells Completed
      Exploratory                1.20  0.50    2.60   4.30    5.88   10.18
      Developmental              1.00 58.99  113.00 172.99    1.80  174.79
    Wells Plugged & Abandoned
      Exploratory                1.42  0.00    0.00   1.42    0.00    1.42
      Developmental              0.00  2.00    2.00   4.00    0.00    4.00
    Wells in Process - End of
     Period
      Exploratory                1.41  0.00   21.00  22.41    0.79   23.20
      Developmental              0.67  4.00   53.00  57.67    0.00   57.67
    

    


                               NATIONAL FUEL GAS COMPANY
                                   AND SUBSIDIARIES



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

                      Fiscal 2008 Financial & Operating Guidance


             Total Production (Bcfe)                        38 - 44


             Production by Division (Bcfe)

             Gulf                                         14.5 - 17.5
             East                                          6.5 - 7.5
             West                                           17 - 19


             Crude Oil Average 2008 NYMEX ($/Bbl) as
              of July 24, 2007 (without hedges):                    $72.69

             Forecast price differentials

             Gulf                                       -$2.00 to -$5.00
             East                                       -$3.00 to -$5.00
             West                                      -$9.00 to -$13.00

             Natural Gas Average 2008 NYMEX ($/Mmbtu)
              as of July 24, 2007 (without hedges):                  $7.79

             Forecast price differentials

             Gulf                                       -$0.25 to -$0.75
             East                                       -$0.25 to +$0.25
             West                                       -$1.00 to -$1.50


             Cost and Expenses $ per Mcfe

             Lease Operating Expenses                    $1.10 - $1.25
             Depreciation, Depletion and
              Amortization                               $2.20 - $2.30
             Other Taxes (% of Revenue)                  $0.20 - $0.25

             Other Operating Expenses                      $6M - $7M
             General and Administrative                   $20M - $22M


                 Capital Investment by Division       Number of Wells to
                                                           be Drilled

             Gulf $50M - $52M                                4 - 8
             East $57M - $60M                              230 - 270
             West $44M - $47M                               75 - 90
             Total $151M - $159M
    

    

                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES


    Utility Throughput - (millions of cubic
     feet - MMcf)
                                                   Three Months Ended
                                                        June 30,
                                                ------------------------
                                                               Increase
                                                 2007   2006  (Decrease)
                                                ------ ------ ----------
        Retail Sales:
           Residential Sales                    10,679  8,740     1,939
           Commercial Sales                      1,836  1,459       377
           Industrial Sales                        113    114        (1)
                                                ------ ------ ----------
                                                12,628 10,313     2,315
        Off-System Sales                           467      -       467
        Transportation                          12,981 12,185       796
                                                ------ ------ ----------
                                                26,076 22,498     3,578
                                                ------ ------ ----------

    Pipeline & Storage Throughput- (MMcf)
                                                   Three Months Ended
                                                        June 30,
                                                ------------------------
                                                               Increase
                                                 2007   2006  (Decrease)
                                                ------ ------ ----------
        Firm Transportation - Affiliated        19,817 15,753     4,064
        Firm Transportation - Non-Affiliated    58,638 54,867     3,771
        Interruptible Transportation             1,670  2,220      (550)
                                                ------ ------ ----------
                                                80,125 72,840     7,285
                                                ------ ------ ----------

    Energy Marketing Volumes
                                                   Three Months Ended
                                                        June 30,
                                                ------------------------
                                                               Increase
                                                 2007   2006  (Decrease)
                                                ------ ------ ----------
        Natural Gas (MMcf)                      13,014 11,190     1,824
                                                ------ ------ ----------


    Timber Board Feet (Thousands)
                                                   Three Months Ended
                                                        June 30,
                                                ------------------------
                                                               Increase
                                                 2007   2006  (Decrease)
                                                ------ ------ ----------
       Log Sales                                 1,724  1,767       (43)
       Green Lumber Sales                        2,709  3,126      (417)
       Kiln-dried Lumber Sales                   4,001  4,240      (239)
                                                ------ ------ ----------
                                                 8,434  9,133      (699)
                                                ------ ------ ----------


                          NATIONAL FUEL GAS COMPANY
                               AND SUBSIDIARIES


    Utility Throughput - (millions of cubic
     feet - MMcf)
                                                    Nine Months Ended
                                                         June 30,
                                               ---------------------------
                                                                 Increase
                                                 2007    2006   (Decrease)
                                               -------- ------- ----------
        Retail Sales:
           Residential Sales                     56,729  55,071     1,658
           Commercial Sales                      10,132   9,940       192
           Industrial Sales                         628     900      (272)
                                               -------- ------- ----------
                                                 67,489  65,911     1,578
        Off-System Sales                            467       -       467
        Transportation                           53,556  48,646     4,910
                                               -------- ------- ----------
                                                121,512 114,557     6,955
                                               -------- ------- ----------

    Pipeline & Storage Throughput- (MMcf)
                                                    Nine Months Ended
                                                         June 30,
                                               ---------------------------
                                                                 Increase
                                                   2007    2006 (Decrease)
                                               -------- ------- ----------
        Firm Transportation - Affiliated        100,563  92,615     7,948
        Firm Transportation - Non-Affiliated    172,950 195,655   (22,705)
        Interruptible Transportation              3,597   7,774    (4,177)
                                               -------- ------- ----------
                                                277,110 296,044   (18,934)
                                               -------- ------- ----------

    Energy Marketing Volumes
                                                    Nine Months Ended
                                                         June 30,
                                               ---------------------------
                                                                 Increase
                                                   2007    2006 (Decrease)
                                               -------- ------- ----------
        Natural Gas (MMcf)                       44,063  38,496     5,567
                                               -------- ------- ----------


    Timber Board Feet (Thousands)
                                                    Nine Months Ended
                                                         June 30,
                                               ---------------------------
                                                                 Increase
                                                   2007    2006 (Decrease)
                                               -------- ------- ----------
       Log Sales                                  6,458   7,540    (1,082)
       Green Lumber Sales                         6,619   8,082    (1,463)
       Kiln-dried Lumber Sales                   10,953  13,239    (2,286)
                                               -------- ------- ----------
                                                 24,030  28,861    (4,831)
                                               -------- ------- ----------
    

    

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


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

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

    Consolidated
     Earnings            $2.45-  $2.65  + $0.09  - $0.09  + $0.08  - $0.08






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

                       Natural   Oil
                         Gas
                       ($ 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 page 8 of this
     document.

    (1) This sensitivity table is current as of August 1, 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 June 30 (unaudited)             2007           2006
    ---------------------------------------- -------------- --------------

      Operating Revenues                     $  463,145,000 $  415,452,000
                                             -------------- --------------

      Net Income Available for Common Stock  $   46,798,000 $      111,000
                                             -------------- --------------

      Earnings Per Common Share:
       Basic                                 $         0.56 $            -
                                             -------------- --------------
       Diluted                               $         0.55 $            -
                                             -------------- --------------

       Weighted Average Common Shares:
          Used in Basic Calculation              83,483,718     84,013,556
                                             -------------- --------------
          Used in Diluted Calculation            85,668,055     86,016,131
                                             -------------- --------------


    Nine Months Ended June 30 (unaudited)
    ----------------------------------------

      Operating Revenues                     $1,779,541,000 $2,017,189,000
                                             -------------- --------------

      Net Income Available for Common Stock  $  179,765,000 $  136,123,000
                                             -------------- --------------

      Earnings Per Common Share:
        Basic                                $         2.17 $         1.62
                                             -------------- --------------
        Diluted                              $         2.11 $         1.58
                                             -------------- --------------

       Weighted Average Common Shares:
          Used in Basic Calculation              83,018,583     84,231,490
                                             -------------- --------------
          Used in Diluted Calculation            85,192,777     86,150,927
                                             -------------- --------------


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

      Operating Revenues                     $2,074,010,000 $2,304,253,000
                                             -------------- --------------

      Income from Continuing Operations      $  181,733,000 $  154,435,000
      Income from Discontinued Operations,
       Net of Tax                                         -     30,900,000
                                             -------------- --------------
      Net Income Available for Common Stock  $  181,733,000 $  185,335,000
                                             -------------- --------------

      Earnings Per Common Share:
       Basic:
              Income from Continuing
               Operations                    $         2.19 $         1.83
              Income from Discontinued
               Operations                                 -           0.37
                                             -------------- --------------
              Net Income Available for
               Common Stock                  $         2.19 $         2.20
                                             -------------- --------------

       Diluted:
              Income from Continuing
               Operations                    $         2.13 $         1.79
              Income from Discontinued
               Operations                                 -           0.36
                                             -------------- --------------
              Net Income Available for
               Common Stock                  $         2.13 $         2.15
                                             -------------- --------------

       Weighted Average Common Shares:
          Used in Basic Calculation              83,122,932     84,205,652
                                             -------------- --------------
          Used in Diluted Calculation            85,290,812     86,063,076
                                             -------------- --------------
    




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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