Commentary on this conference call may contain forward-looking statements within the meaning of the federal securities laws.  National Fuel Gas Company (the “Company”) is providing this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, the Company.

Forward-looking statements include, without limitation, statements regarding future prospects, plans, objectives, goals, projections, estimates of oil and gas quantities, strategies, future events or performance and underlying assumptions, capital structure, anticipated capital expenditures, completion of construction projects, projections for pension and other post-retirement benefit obligations, impacts of the adoption of new accounting rules, and possible outcomes of litigation or regulatory proceedings, as well as statements that are identified by the use of the words "anticipates," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects," "believes," "seeks," "will," "may" and similar expressions.  All forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are expressly qualified by these cautionary statements. 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 are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that management's expectations, beliefs or projections will result or be achieved or accomplished.

In addition to other factors, the following are important factors that, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements:

  1. Changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing;
  2. Delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators;
  3. Governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal;
  4. Changes in the price of natural gas or oil;
  5. Impairments under the SEC’s full cost ceiling test for natural gas and oil reserves;
  6. Financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions;
  7. Factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations;
  8. Increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; 
  9. Changes in price differentials between similar quantities of natural gas or oil at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations;
  10. Other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date;
  11. The cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company;
  12. Uncertainty of oil and gas reserve estimates;
  13. Significant differences between the Company’s projected and actual production levels for natural gas or oil;
  14. Changes in demographic patterns and weather conditions;
  15. Changes in the availability, price or accounting treatment of derivative financial instruments;
  16. Changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities;
  17. Changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services;
  18. The creditworthiness or performance of the Company’s key suppliers, customers and counterparties;
  19. The impact of information technology, cybersecurity or data security breaches;
  20. Economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war;
  21. Significant differences between the Company’s projected and actual capital expenditures and operating expenses; or
  22. Increasing costs of insurance, changes in coverage and the ability to obtain insurance.

Forward-looking statements include estimates of oil and gas quantities. Proved oil and gas reserves are those quantities of oil and gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible under existing economic conditions, operating methods and government regulations. Other estimates of oil and gas quantities, including estimates of probable reserves, possible reserves, and resource potential, are by their nature more speculative than estimates of proved reserves. Accordingly, estimates other than proved reserves are subject to substantially greater risk of being actually realized.

Any forward-looking statements contained in this conference call speak only as of the date of this call. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date of this conference call.  Investors are urged to consider closely the disclosure in our Form 10-K and Forms 10-Q, available at www.investor.nationalfuelgas.com. You can also obtain these forms on the SEC’s website at www.sec.gov.

By clicking “Accept” below, you acknowledge the above.



press-release-details
Press release details

National Fuel Reports 2006 Earnings

11/09/2006

WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--Nov. 9, 2006--National Fuel Gas Company ("National Fuel" or the "Company") (NYSE:NFG) today announced results for its fourth quarter and fiscal year ended September 30, 2006.

HIGHLIGHTS

  • Reported GAAP earnings for the quarter and fiscal year of $0.02 and $1.61 per share, respectively, were down $0.55 per share from the prior year's fourth quarter and $0.62 from the prior year mostly due to the previously announced full cost ceiling test impairments.
  • Quarterly operating results before items impacting comparability were $0.36 per share, a 125 percent increase over the prior year, mostly due to higher average commodity prices realized in the Exploration and Production segment.
  • Fiscal year operating results before items impacting comparability were $2.25 per share, a 30 percent increase, also due to higher average commodity prices.
  • Production of crude oil and natural gas volumes for the quarter and fiscal year were 12.1 billion cubic feet equivalent ("Bcfe") and 47.4 Bcfe, respectively, and were in line with the Company's guidance.
  • The Company's expected fiscal 2007 production remains at the previously announced level of 47 to 52 Bcfe.* Based on recent reductions in crude oil and natural gas pricing strips, the Company is revising its earnings guidance for fiscal 2007 to a range of $2.10 to $2.30 per share. Earnings guidance had previously been $2.60 to $2.80 per share.*
  • A conference call is scheduled for Friday, November 10, 2006 at 11:00 am Eastern Standard Time.
MANAGEMENT COMMENTS

Philip C. Ackerman, Chairman and Chief Executive Officer of National Fuel Gas Company stated: "This year, the continued volatility of commodity prices caused us to experience non-cash write downs of our Canadian exploration and production properties in the third and fourth quarters. Absent these write downs, consolidated earnings improved dramatically. Similarly, cash provided by operating activities improved substantially, reaching $471 million, and was sufficient to fund an increase in capital spending, an increase in our dividend, and the repurchase of more than 2,000,000 shares of stock. Our balance sheet remains solid, with an equity component growing to more than 56 percent of our capital structure, and strong operational results in all of our business segments reflect the continued dedication of the Company's employees."

SUMMARY OF RESULTS

National Fuel had consolidated earnings for the quarter ended September 30, 2006 of $2.0 million, or $0.02 per share, a decrease of $47.2 million, or $0.55 per share, from the prior year's fourth quarter of $49.2 million or $0.57 per share. (note: all references to earnings per share are to diluted earnings per share and all amounts are stated in U.S. dollars).

Consolidated earnings for the fiscal year ended September 30, 2006 were $138.1 million, or $1.61 per share, a decrease of $51.4 million, or $0.62 per share, from the prior year's earnings of $189.5 million or $2.23 per share. Please refer to the table below to view the effect of items impacting comparability for both the quarterly and twelve-month periods.

                                 Three Months         Twelve Months
                              Ended September 30,  Ended September 30,
                                2006      2005         2006      2005
                              ---------- --------  --------- ---------
(in thousands except per
 share amounts)
Reported GAAP earnings           $1,968  $49,211   $138,091  $189,488
   Items impacting
    comparability:
      Income from
       discontinued
       operations1                       (30,900)             (35,973)
      Impairment of Canadian
       oil and gas producing
       properties2               29,144              68,646
      Income tax adjustments2                       (11,202)
      Out-of-period
       symmetrical sharing
       adjustment2                                   (2,551)
      Gain associated with
       insurance proceeds2                (3,885)              (3,885)
      Gain on sale of base
       gas2                                                    (2,636)
                              ---------- --------  --------- ---------
Operating results               $31,112  $14,426   $192,984  $146,994
                              ========== ========  ========= =========

Reported GAAP earnings per
 share                            $0.02    $0.57      $1.61     $2.23
   Items impacting
    comparability:
      Income from
       discontinued
       operations1                         (0.36)               (0.42)
      Impairment of Canadian
       oil and gas producing
       properties2                 0.34                0.80
      Income tax adjustments2                         (0.13)
      Out-of-period
       symmetrical sharing
       adjustment2                                    (0.03)
      Gain associated with
       insurance proceeds2                 (0.05)               (0.05)
      Gain on sale of base
       gas2                                                     (0.03)
                              ---------- --------  --------- ---------
Operating results                 $0.36    $0.16      $2.25     $1.73
                              ========== ========  ========= =========

1 National Fuel presents the earnings of United Energy, a.s. ("United Energy"), its former operations in the Czech Republic, as "Income from Discontinued Operations."

2 See discussion of these 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 fourth quarter of 2006 to the fourth quarter of 2005 and the annual results for fiscal 2006 to those for fiscal 2005. Excluding these items, operating results for the current fourth quarter were $31.1 million, or $0.36 per share, an increase of $16.7 million, or $0.20 per share, over the prior year's quarter. Operating results for fiscal 2006 of $193.0 million, or $2.25 per share, increased $46.0 million, or $0.52 per share, compared to the prior year. Items impacting comparability will be discussed in more detail within the discussion of segment earnings below.

DISCUSSION OF RESULTS BY SEGMENT

(The following discussion of the earnings of each segment is summarized in a tabular form 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 loss of approximately $1.4 million, or $0.02 per share, for the quarter ended September 30, 2006 improved from a loss of $6.1 million, or $0.07 per share, in the prior year's fourth quarter. Annual earnings of $49.8 million, or $0.58 per share, for the Utility segment were up $10.6 million, or $0.12 per share, compared to $39.2 million, or $0.46 per share, in fiscal 2005.

In the fourth quarter, Distribution's New York Division recorded a loss of $0.6 million which represents an improvement from a loss of $2.9 million for the fourth quarter of 2005. In Distribution's Pennsylvania Division, the loss for the quarter of approximately $0.8 million improved from a loss of $3.2 million in the prior year's fourth quarter. The improvement in earnings in both Divisions was due primarily to lower bad debt expense. In the fourth quarter of 2005, Distribution increased the allowance for uncollectible accounts in its New York and Pennsylvania divisions to reflect the increase in final billed account balances and the increased age of outstanding active receivables heading into the heating season. A similar adjustment to the allowance balance was not required in 2006. In addition, in the New York Division, higher usage per account during the quarter and the impact of the last rate case also contributed to the improvement. These positive impacts were partially offset by a higher effective tax rate due to positive tax adjustments recorded in 2005 that did not recur in 2006.

For the year ended September 30, 2006, earnings in Distribution's New York Division of $40.0 million increased $9.2 million compared to the prior year. The comparability of the fiscal year results is impacted by a $2.6 million positive out-of-period adjustment recorded in the first quarter of fiscal 2006 to correct Distribution's calculation of the symmetrical sharing component of New York's gas adjustment rate. The increase in operating results is due to the impact of the last rate settlement and the absence of two negative adjustments recorded in 2005 to true-up regulatory liabilities that did not recur in 2006. Partially offsetting these increases to operating results were lower average usage per account overall for the year, higher bad debt (on an annual basis), pension, and interest expense, and a higher effective tax rate.

For the fiscal year ended September 30, 2006, earnings in Distribution's Pennsylvania Division of $9.8 million, increased $1.4 million, or $0.02 per share, compared to the prior year. Earnings increased mainly due to the positive impact of the last rate settlement combined with lower bad debt expense. Partially offsetting this increase was warmer weather and lower usage per account. In addition, a higher effective tax rate partially offset the increase in earnings.

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 $10.2 million, or $0.12 per share, for the quarter ended September 30, 2006, decreased $8.6 million, or $0.10 per share, when compared with the same period in the prior fiscal year. The comparability of the results for the quarter is impacted by a $3.9 million gain associated with insurance proceeds received in a prior year for which a contingency (related to possible migration of storage gas) was resolved during last year's fourth quarter. Excluding that gain, operating results decreased $4.7 million mainly due to lower efficiency gas revenue resulting from a lower of cost or market adjustment of $4.7 million (after tax) to the value of efficiency gas held in inventory at the end of the quarter. The value of the efficiency gas inventory was adjusted to current market prices at September 30, 2006. In addition, higher pension and other operating expenses, partially offset by lower expenses for preliminary project costs associated with the Empire Connector project, contributed to the decrease in earnings.

Earnings of $55.6 million, or $0.65 per share, for the fiscal year ended September 30, 2006, decreased $4.8 million, or $0.06 per share, when compared with the fiscal year ended September 30, 2005. The comparability of the fiscal year results is impacted by the $3.9 million gain in 2005 associated with insurance proceeds described above and a $2.6 million gain in 2005 on the sale of base gas from Supply Corporation's jointly-owned Ellisburg Storage Field. The increase in operating results of $1.7 million, or $0.02 per share, is due to higher transportation and storage revenues and a lower effective tax rate that more than offset lower efficiency gas revenues (including the impact of the lower of cost or market adjustment).

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, in the Appalachian region, in the Gulf Coast region of Texas, Louisiana and Alabama, and in the western provinces of Canada.

The Exploration and Production segment's loss in the fourth quarter of fiscal 2006 of $7.2 million, or $0.08 per share, is a decrease of $18.9 million, or $0.21 per share, when compared with the prior year's fourth quarter. The decrease was mainly due to the previously announced non-cash charge of $29.1 million (after tax) to write down the value of Seneca's Canadian oil and natural gas producing properties.

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 period-end spot 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. For purposes of calculating the ceiling, Seneca values its Canadian reserves (of which more than 80 percent are natural gas) at commodity prices on the last day of the quarter. Seneca determines this quarter-end price by reference to a Canadian current cash index price, a price quoted by Alberta Energy Company or "AECO." That price had declined from approximately CDN $7.30/MMBtu at the end of March 2006 to CDN $5.50/MMBtu at the end of June 2006 and to CDN $3.70/MMBtu at September 30, 2006 (MMBtu is the designation for one million British Thermal Units, a measure of heating value. One MMBtu is approximately equivalent to one thousand cubic feet, or one Mcf, of natural gas). At November 8, 2006, the AECO cash index price had rebounded to approximately CDN $7.50/MMBtu. If Seneca's Canadian reserves had been valued at that price, no impairment would have been recorded. In the United States, Seneca had a ceiling test cushion (i.e. the present value of future net revenue exceeded the book value) of approximately $200.0 million at September 30, 2006.

Excluding the impact of the ceiling test this quarter, Seneca's earnings were $22.0 million, or $0.26 per share, an increase of $10.3 million, or $0.13 per share, compared to the fourth quarter of the prior year. The increase was primarily due to higher weighted average crude oil prices after hedging, as well as the impact of a mark-to-market adjustment recorded in the fourth quarter of 2005 that did not recur in 2006. That adjustment related to losses on certain derivatives contracts that no longer qualified as effective hedges due to anticipated delays in oil and gas production volumes caused by Hurricane Rita. This increase was partially offset by slightly lower natural gas prices and a 0.6 Bcfe decline in production. For the quarter ended September 30, 2006, the weighted average oil price (after hedging) was $45.73/barrel ("Bbl"), an increase of $15.03/Bbl from the prior year's quarter and the weighted average natural gas price (after hedging) was $6.36/Mcf, a decrease of $0.41/Mcf from the prior year's quarter.

Earnings of $21.0 million, or $0.24 per share, for the fiscal year ended September 30, 2006 decreased $29.7 million, or $0.36 per share, when compared with the year ended September 30, 2005. The comparability of the fiscal year results is impacted by the two non-cash charges totaling $68.6 million (after tax) to write down the value of Seneca's Canadian oil and natural gas producing properties described above and in the Company's third quarter earnings release, and certain positive tax adjustments recorded in the second and third quarters of fiscal 2006. In the second quarter, Seneca recognized a $5.1 million benefit to earnings that resulted from an adjustment to a deferred income tax balance. Under generally accepted accounting principles, a company may recognize the benefit of certain expected future income tax deductions as a deferred tax asset only if it anticipates sufficient future taxable income to utilize those deductions. As a result of changing circumstances, Seneca increased its forecast of future taxable income in the Canadian division and, consequently, recorded a deferred tax asset for certain costs related to capital expenditures that it now expects to deduct on future income tax returns. In the third quarter, 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 the items that impacted comparability, annual operating results in the Exploration and Production segment increased $27.8 million, or $0.31 per share, from the prior year. This increase is mainly due to higher weighted average natural gas and oil prices after hedging that were partially offset by lower production volumes. For the year ended September 30, 2006, the weighted average oil price (after hedging) was $41.10/Bbl, an increase of $13.24/Bbl, or 47.5 percent, from the prior year and the weighted average natural gas price (after hedging) was $7.15/Mcf, an increase of $0.92/Mcf, or 14.8 percent, from the prior year. These price increases more than offset a 5.0 Bcfe decline in production. More than 4.0 Bcfe of the decline was due to production shut-ins resulting from Hurricane Rita.

The increase in annual operating results also reflects the positive impact of a mark-to-market adjustment recorded in the fourth quarter of 2005 for losses on certain derivatives contracts that no longer qualified as effective hedges that did not recur in 2006 as described above.

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 loss for the quarter of $0.1 million compares to earnings of $0.2 million in the fourth quarter last year. This decrease is mainly due to a slight decrease in margin.

Earnings for the year ended September 30, 2006 in the Energy Marketing segment of $5.8 million, or $0.07 per share, increased $0.7 million, or $0.01 per share, from the prior year due to higher margins offset partially by higher operating expenses.

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 fourth quarter earnings of $0.5 million compared to $0.8 million in the prior year's fourth quarter. The decrease is due to lower margins during the quarter.

Earnings for the year ended September 30, 2006 of $5.7 million, or $0.07 per share, increased $0.7 million, or $0.01 per share, from the prior year's earnings. The increase is due to higher margins overall for the fiscal year.

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. ("Horizon Power"), a corporation that develops and owns independent electric generation facilities which are fueled by natural gas or landfill gas.

Break-even earnings in the quarter for this category decreased $23.8 million or $0.29 per share when compared to the prior year's fourth quarter. Excluding earnings from discontinued operations of $30.9 million, operating results improved from a loss of $7.2 million in the fourth quarter of 2005 to breakeven results for the fourth quarter of 2006. Annual earnings of $0.2 million decreased $28.9 million, or $0.34 per share, when compared to the prior year. Excluding earnings from discontinued operations of $36.0 million, operating results improved from a loss of $6.9 million in fiscal year 2005 to income of $0.2 million in fiscal year 2006. The loss during last year's fourth quarter and fiscal year included an impairment in the value of the Horizon Power's 50 percent investment in Energy Systems North East, LLC, a partnership that owns an 80-megawatt natural gas-fired combined cycle power plant, and an impairment of a gas-fired turbine Horizon Power had previously planned to use in the development of an independent power plant.

SHARE REPURCHASES

During the quarter, the Company repurchased in the open market 242,200 shares of its common stock pursuant to the authorization of the Company's Board of Directors to repurchase up to 8,000,000 shares of its common stock. Through September 30, 2006, the Company has repurchased 2,526,550 shares pursuant to this authorization. Depending upon other investment opportunities, and subject to market conditions, such purchases may continue from time to time.* The Company estimates that the share repurchases had no meaningful impact upon the calculated diluted earnings per share for the quarter. For the year ended September 30, 2006, the Company estimates that the calculated diluted earnings per share were increased by $0.017 per share as a result of the share repurchases.

With respect to the earnings guidance discussed below, the Company has not incorporated any additional share repurchases into its earnings per share guidance. The Company continues to view share repurchases as a good use of its cash, and will continue to consider repurchasing shares up to the full 8,000,000 repurchase authorization of its Board of Directors.* The Company cannot predict with any certainty the timing of those repurchases or the impact of those repurchases on the calculation of earnings per share.

EARNINGS GUIDANCE

The Company's consolidated earnings guidance for fiscal 2007 is in the range of $2.10 to $2.30 per share.* This guidance includes a revision in New York Mercantile Exchange ("NYMEX") futures pricing for the unhedged portion of Seneca's projected production. The NYMEX futures closing prices on September 21, 2006 are incorporated into this current guidance on a consolidated basis, and are shown in this release. An earnings sensitivity is also shown in this release. Changes in actual prices from the NYMEX prices shown in the table, will affect earnings accordingly.

Following a growing trend by other public companies, National Fuel will provide earnings guidance only on its consolidated earnings and will no longer provide earnings guidance by segment or by future quarterly periods. Based on certain corporate events, National Fuel will update its annual guidance as necessary.

For its 2007 fiscal year, the $2.10 to $2.30 earnings guidance range includes:

Exploration and Production segment

  • Production between 47 and 52 Bcfe.*
  • Pricing based on September 21, 2006 NYMEX futures pricing strip.
  • No new 2007 production from the venture with EOG Resources, Inc. announced in the Company's press release dated November 1, 2006.

Pipeline and Storage segment

  • Settlement of complaint proceeding brought by Joint State Agencies with new tariff rates in effect during fiscal 2007.*

Utility segment

  • Pennsylvania rate settlement in effect as of January 1, 2007.*
EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, November 10, 2006, at 11 a.m. (Eastern Standard 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 http://www.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) 1-866-578-5771, and using the passcode "93603463." 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 "91885312." Both the webcast and telephonic replay will be available until the close of business on Friday, November 17, 2006.

National Fuel is an integrated energy company with $3.7 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; failure of the price differential between heavy sour crude oil and light sweet crude oil to return to its historical norm; 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; occurrences affecting the Company's ability to obtain funds from operations, debt or equity to finance needed capital expenditures and other investments, including any downgrades in the Company's credit ratings; uncertainty of oil and gas reserve estimates; ability to successfully identify and finance acquisitions or other investments and ability to operate and integrate existing and any subsequently acquired business or properties; ability to successfully identify, drill for and produce economically viable natural gas and oil reserves; significant changes from expectations in the Company's actual production levels for natural gas or oil; regarding foreign operations, changes in trade and monetary policies, inflation and exchange rates, taxes, operating conditions, laws and regulations related to foreign operations, and political and governmental changes; significant changes in tax rates or policies or in rates of inflation or interest; significant changes in the Company's relationship with its employees or contractors and the potential adverse effects if labor disputes, grievances or shortages were to occur; changes in accounting principles or the application of such principles to the Company; the cost and effects of legal and administrative claims against the Company; changes in actuarial assumptions and the return on assets with respect to the Company's retirement plan and post retirement benefit plans; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide post retirement benefits; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

                      NATIONAL FUEL GAS COMPANY
        RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
                   QUARTER ENDED SEPTEMBER 30, 2006





                    Pipeline                         Corporate
                       &            Energy             / All  Consol-
            Utility  Storage  E&P    Marketing Timber  Other*  idated
            ---------------------------------- -----------------------

Fourth
 quarter
 2005 GAAP
 earnings   $(6,073)$18,877 $11,676      $168   $830  $23,733 $49,211
Items
 impacting
 compar-
ability:
Earnings
 from dis-
continued
 operations                                           (30,900)(30,900)
Gain
 associated
 with
 insurance
 proceeds            (3,885)                                   (3,885)
            ---------------------------------- -----------------------
Fourth
 quarter
 2005
 operating
 results     (6,073) 14,992  11,676       168    830   (7,167) 14,426

Drivers of
 operating
 results
Impact of NY
 rate
 settlement     967                                               967
Higher
 normalized
 usage per
 account      1,755                                             1,755
True-up of
 regulatory
 liabilities (1,724)                                           (1,724)
Routine
 regulatory
 adjustments  1,541                                             1,541

Higher
transportation
 and storage
 revenues               638                                       638
Lower
 efficiency
 gas
 revenues            (4,598)                                   (4,598)

Lower
 (higher)
 operating
 expenses     6,137  (1,101)                            1,054   6,090

Higher crude
 oil and
 natural gas
 prices                       7,045                             7,045
Lower crude
 oil and
 natural gas
 production                  (2,431)                           (2,431)
Derivatives
 mark-to-
 market
 adjustment                   3,343                             3,343

Lower per
 unit
 margins                                 (110)                   (110)

Lower
 margins                                        (203)            (203)

Asset
 impairment
 write-downs
 in 2005                                                4,499   4,499

Higher
 interest
 expense     (1,081)                                     (391) (1,472)
Higher
 interest
 income                         706                     1,350   2,056

Higher
 effective
 tax rate    (3,754)                                           (3,754)

All other /
 rounding       813     317   1,624      (168)  (158)     616   3,044
            ---------------------------------- -----------------------

Fourth
 quarter
 2006
 operating
 results     (1,419) 10,248  21,963      (110)   469      (39) 31,112
Items
 impacting
comparability:
Impairment
 of oil and
 gas
 properties                 (29,144)                          (29,144)
            ---------------------------------- -----------------------
Fourth
 quarter
 2006 GAAP
 earnings   $(1,419)$10,248 $(7,181)    $(110)  $469     $(39) $1,968
            ================================== =======================


* Includes discontinued operations

                      NATIONAL FUEL GAS COMPANY
   RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
                   QUARTER ENDED SEPTEMBER 30, 2006


                      Pipeline                        Corporate
                         &            Energy            / All  Consol
               Utility Storage  E&P   Marketing Timber  Other* -idated
               -------------------------------- ----------------------

Fourth quarter
 2005 GAAP
 earnings      $(0.07)  $0.22  $0.13        $-  $0.01    $0.28  $0.57
Items impacting
 comparability:
Earnings from
 discontinued
 operations                                              (0.36) (0.36)
Gain associated
 with insurance
 proceeds               (0.05)                               -  (0.05)
               -------------------------------- ----------------------
Fourth quarter
 2005 operating
 results        (0.07)   0.17   0.13         -   0.01    (0.08)  0.16

Drivers of
 operating
 results
Impact of NY
 rate
 settlement      0.01                                            0.01
Higher
 normalized
 usage per
 account         0.02                                            0.02
True-up of
 regulatory
 liabilities    (0.02)                                          (0.02)
Routine
 regulatory
 adjustments     0.02                                            0.02

Higher
 transportation
 and storage
 revenues                0.01                                    0.01
Lower
 efficiency gas
 revenues               (0.05)                                  (0.05)

Lower (higher)
 operating
 expenses        0.07   (0.01)                            0.01   0.07

Higher crude
 oil and
 natural gas
 prices                         0.08                             0.08
Lower crude oil
 and natural
 gas production                (0.03)                           (0.03)
Derivatives
 mark-to-market
 adjustment                     0.04                             0.04

Lower per unit
 margins                                     -                      -

Lower margins                                       -               -

Asset
 impairment
 write-downs in
 2005                                                     0.05   0.05
                                                                    -
Higher interest
 expense        (0.01)                                          (0.01)
Higher interest
 income                         0.01                      0.02   0.03
                                                                    -
Higher
 effective tax
 rate           (0.04)                                          (0.04)
                                                                    -
All other /
 rounding           -       -   0.03         -      -    (0.01)  0.02
               -------------------------------- ----------------------

Fourth quarter
 2006 operating
 results        (0.02)   0.12   0.26         -   0.01    (0.01)  0.36
Items impacting
 comparability:
Impairment of
 oil and gas
 properties                    (0.34)                           (0.34)
               -------------------------------- ----------------------
Fourth quarter
 2006 GAAP
 earnings      $(0.02)  $0.12 $(0.08)       $-  $0.01   $(0.01) $0.02
               ================================ ======================


* Includes discontinued operations

                      NATIONAL FUEL GAS COMPANY
        RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
                    YEAR ENDED SEPTEMBER 30, 2006


                                                    Corporate
                    Pipeline                            /
                       &             Energy           All    Consoli-
            Utility Storage   E&P   Marketing Timber  Other*   dated
            ----------------------------------------------------------

Fiscal 2005
 GAAP
 earnings   $39,197 $60,454 $50,659   $5,077 $5,032  $29,069 $189,488
Items
 impacting
comparability:
Earnings
 from
discontinued
operations                                           (35,973) (35,973)
Gain
 associated
 with
 insurance
 proceeds            (3,885)                                   (3,885)
Gain on sale
 of base gas         (2,636)                                   (2,636)
            ----------------------------------------------------------
Fiscal 2005
 operating
 results     39,197  53,933  50,659    5,077  5,032   (6,904) 146,994

Drivers of
 operating
 results
Impact of NY
 & PA rate
 settle-
ments        18,640                                            18,640
Warmer
 weather in
 PA          (3,033)                                           (3,033)
Lower
 normalized
 usage per
 account     (2,930)                                           (2,930)
True-up of
 regulatory
 liabilities  2,603                                             2,603
Routine
 regulatory
 adjustments  1,433                                             1,433

Higher
transportation
 and storage
 revenues             1,963                                     1,963
Lower
 efficiency
 gas
 revenues            (1,661)                                   (1,661)

Higher
 operating
 expenses      (712)   (613) (1,969)    (815)         (1,290)  (5,399)

Higher crude
 oil and
 natural gas
 prices                      46,459                            46,459
Lower crude
 oil and
 natural gas
 production                 (18,529)                          (18,529)
Derivatives
 mark-to-
 market
 adjustment                   3,343                             3,343
Higher
 lifting
 costs                       (3,157)                           (3,157)
Higher DD&A                  (2,487)                           (2,487)


Higher per
 unit
 margins                               1,679                    1,679

Higher
 margins                                        989               989

Lower
 margins on
 landfill
 gas
 pipeline
 sales                                                  (530)    (530)

Asset
 impairment
 write-downs
 in 2005                943                            4,499    5,442

Higher
 interest
 expense     (3,490)                                           (3,490)
Higher
 interest
 income                       2,614                    4,755    7,369

(Higher)
 lower
 effective
 tax rate    (4,467)  1,674                                    (2,793)

All other /
 rounding        23    (606)  1,482     (143)  (317)    (360)      79
            ----------------------------------------------------------

Fiscal 2006
 operating
 results     47,264  55,633  78,415    5,798  5,704      170  192,984
Items
 impacting
comparability:
Out-of-
 period
 adjustment
 to
 symmetrical
 sharing      2,551                                             2,551
Income tax
 adjustments                 11,202                            11,202
Impairment
 of oil and
 gas
 properties                 (68,646)                          (68,646)
            ----------------------------------------------------------
Fiscal 2006
 GAAP
 earnings   $49,815 $55,633 $20,971   $5,798 $5,704     $170 $138,091
            ==========================================================


* Includes discontinued operations

                      NATIONAL FUEL GAS COMPANY
   RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
                    YEAR ENDED SEPTEMBER 30, 2006


                                                     Corporate
                      Pipeline                           /
                          &           Energy           All    Consoli-
               Utility Storage  E&P  Marketing Timber  Other*  dated
               -------------------------------------------------------

Fiscal 2005
 GAAP earnings  $0.46    $0.71 $0.60    $0.06  $0.06    $0.34   $2.23
Items
 impacting
 comparability:
Earnings from
 discontinued
 operations                                             (0.42)  (0.42)
Gain associated
 with insurance
 proceeds                (0.05)                                 (0.05)
Gain on sale of
 base gas                (0.03)                                 (0.03)
               -------------------------------------------------------
Fiscal 2005
 operating
 results         0.46     0.63  0.60     0.06   0.06    (0.08)   1.73

Drivers of
 operating
 results
Impact of NY &
 PA rate
 settlements     0.21                                            0.21
Warmer weather
 in PA          (0.04)                                          (0.04)
Lower
 normalized
 usage per
 account        (0.03)                                          (0.03)
True-up of
 regulatory
 liabilities     0.03                                            0.03
Routine
 regulatory
 adjustments     0.02                                            0.02

Higher
 transportation
 and storage
 revenues                 0.02                                   0.02
Lower
 efficiency gas
 revenues                (0.02)                                 (0.02)

Higher
 operating
 expenses       (0.01)   (0.01)(0.02)   (0.01)          (0.02)  (0.07)

Higher crude
 oil and
 natural gas
 prices                         0.54                             0.54
Lower crude oil
 and natural
 gas production                (0.22)                           (0.22)
Derivatives
 mark-to-market
 adjustments                    0.04                             0.04
Higher lifting
 costs                         (0.03)                           (0.03)
Higher DD&A                    (0.04)                           (0.04)


Higher per unit
 margins                                 0.02                    0.02

Higher margins                                  0.01             0.01

Lower margins
 on landfill
 gas pipeline
 sales                                                  (0.01)  (0.01)

Asset
 impairment
 write-downs in
 2005                     0.01                           0.05    0.06

Higher interest
 expense        (0.04)                                      -   (0.04)
Higher interest
 income                         0.03                     0.06    0.09

(Higher) lower
 effective tax
 rate           (0.05)    0.02                                  (0.03)

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

Fiscal 2006
 operating
 results         0.55     0.65  0.91     0.07   0.07     0.00    2.25
Items impacting
 comparability:
Out-of-period
 adjustment to
 symmetrical
 sharing         0.03                                            0.03
Income tax
 adjustments                    0.13                             0.13
Impairment of
 oil and gas
 properties                    (0.80)                           (0.80)
               -------------------------------------------------------
Fiscal 2006
 GAAP earnings  $0.58    $0.65 $0.24    $0.07  $0.07    $0.00   $1.61
               =======================================================


* Includes discontinued operations

                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

(Thousands of Dollars, except per share amounts)

                         Three Months Ended      Twelve Months Ended
                            September 30,           September 30,
                             (Unaudited)             (Unaudited)
                       ----------------------- -----------------------
SUMMARY OF OPERATIONS     2006        2005        2006        2005
---------------------- ----------- ----------- ----------- -----------
Operating Revenues       $294,469    $287,064  $2,311,659  $1,923,549
                       ----------- ----------- ----------- -----------
Operating Expenses:
   Purchased Gas           79,609      82,316   1,267,562     959,827
   Operation and
    Maintenance            92,905     106,968     413,726     404,517
   Property, Franchise
    and Other Taxes        15,795      15,525      69,942      69,076
   Depreciation,
    Depletion and
    Amortization           45,348      47,329     179,615     179,767
   Impairment of Oil
    and Gas Producing
    Properties             42,368           -     104,739           -
                       ----------- ----------- ----------- -----------
                          276,025     252,138   2,035,584   1,613,187
Operating Income           18,444      34,926     276,075     310,362
Other Income
 (Expense):
   Income from
    Unconsolidated
    Subsidiaries            1,384       1,447       3,583       3,362
   Impairment of
    Investment in
    Partnership                 -      (4,158)          -      (4,158)
   Other Income             1,291       6,764       2,825      12,744
   Interest Income          5,973       4,714      10,275       6,496
   Interest Expense on
    Long-Term Debt        (18,127)    (18,255)    (72,629)    (73,244)
   Other Interest
    Expense                (1,686)       (158)     (5,952)     (9,069)
                       ----------- ----------- ----------- -----------
Income from Continuing
 Operations Before
 Income Taxes               7,279      25,280     214,177     246,493
Income Tax Expense          5,311       6,969      76,086      92,978
                       ----------- ----------- ----------- -----------
Income from Continuing
 Operations                 1,968      18,311     138,091     153,515
Discontinued
 Operations:
   Income from
    Operations, Net of
    Tax                         -       5,126           -      10,199
   Gain on Disposal,
    Net of Tax                  -      25,774           -      25,774
                       ----------- ----------- ----------- -----------
Income from
 Discontinued
 Operations, Net of
 Tax                            -      30,900           -      35,973
                       ----------- ----------- ----------- -----------
Net Income Available
 for Common Stock          $1,968     $49,211    $138,091    $189,488
                       =========== =========== =========== ===========
Earnings Per Common
 Share:
   Basic:
      Income from
       Continuing
       Operations           $0.02       $0.22       $1.64       $1.84
      Income from Dis-
      continued
       Operations               -        0.36           -        0.43
                       ----------- ----------- ----------- -----------
      Net Income
       Available for
       Common Stock         $0.02       $0.58       $1.64       $2.27
                       =========== =========== =========== ===========
   Diluted:
      Income from
       Continuing
       Operations           $0.02       $0.21       $1.61       $1.81
      Income from
       Discontinued
       Operations               -        0.36           -        0.42
                       ----------- ----------- ----------- -----------
      Net Income
       Available for
       Common Stock         $0.02       $0.57       $1.61       $2.23
                       =========== =========== =========== ===========
Weighted Average
 Common Shares:
  Used in Basic
   Calculation         83,432,553  84,128,929  84,030,118  83,541,627
                       =========== =========== =========== ===========
  Used in Diluted
   Calculation         85,523,042  85,784,654  86,028,466  85,029,131
                       =========== =========== =========== ===========

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


                                               September   September
                                                   30,         30,
(Thousands of Dollars)                            2006        2005
----------------------------------------------------------------------

ASSETS
Property, Plant and Equipment                  $4,703,040  $4,423,255
Less - Accumulated Depreciation, Depletion and
 Amortization                                   1,825,314   1,583,955
----------------------------------------------------------------------
          Net Property, Plant and Equipment     2,877,726   2,839,300
---------------------------------------------- -----------------------

Current Assets:
Cash and Temporary Cash Investments                69,611      57,607
Hedging Collateral Deposits                        19,676      77,784
Receivables - Net                                 144,254     141,408
Unbilled Utility Revenue                           25,538      20,465
Gas Stored Underground                             59,461      64,529
Materials and Supplies - at average cost           36,693      33,267
Unrecovered Purchased Gas Costs                    12,970      14,817
Prepaid Pension and Post-Retirement Benefit
 Costs                                             64,125      14,404
Other Current Assets                               56,320      64,721
Deferred Income Taxes                              23,402      83,774
---------------------------------------------- -----------------------
          Total Current Assets                    512,050     572,776
---------------------------------------------- -----------------------

Other Assets:
Recoverable Future Taxes                           79,511      85,000
Unamortized Debt Expense                           15,492      17,567
Other Regulatory Assets                            76,917      47,028
Deferred Charges                                    3,558       4,474
Other Investments                                  88,414      80,394
Investments in Unconsolidated Subsidiaries         11,590      12,658
Goodwill                                            5,476       5,476
Intangible Assets                                  31,498      42,302
Fair Value of Derivative Financial Instruments     11,305           -
Deferred Income Taxes                               9,003           -
Other                                               4,388      15,677
---------------------------------------------- -----------------------
          Total Other Assets                      337,152     310,576
---------------------------------------------- -----------------------
Total Assets                                   $3,726,928  $3,722,652
---------------------------------------------- -----------------------

CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized -
 200,000,000
   Shares; Issued and Outstanding - 83,402,670
    Shares
   and 84,356,748 Shares, Respectively            $83,403     $84,357
Paid in Capital                                   563,746     529,834
Earnings Reinvested in the Business               765,997     813,020
---------------------------------------------- -----------------------
Total Common Shareholders' Equity Before
    Items of Other Comprehensive Income (Loss)  1,413,146   1,427,211
Accumulated Other Comprehensive Income (Loss)      30,416    (197,628)
---------------------------------------------- -----------------------
Total Comprehensive Shareholders' Equity        1,443,562   1,229,583
Long-Term Debt, Net of Current Portion          1,109,109   1,119,012
---------------------------------------------- -----------------------
          Total Capitalization                  2,552,671   2,348,595
---------------------------------------------- -----------------------

Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper             -           -
Current Portion of Long-Term Debt                   9,491       9,393
Accounts Payable                                  133,034     155,485
Amounts Payable to Customers                       23,935       1,158
Dividends Payable                                  25,008      24,445
Other Accruals and Current Liabilities             38,057      60,404
Fair Value of Derivative Financial Instruments     39,983     209,072
---------------------------------------------- -----------------------
          Total Current and Accrued
           Liabilities                            269,508     459,957
---------------------------------------------- -----------------------

Deferred Credits:
Deferred Income Taxes                             544,502     489,720
Taxes Refundable to Customers                      10,426      11,009
Unamortized Investment Tax Credit                   6,094       6,796
Cost of Removal Regulatory Liability               85,076      90,396
Other Regulatory Liabilities                       75,456      66,339
Pension and Post-Retirement Liabilities            32,918     143,687
Asset Retirement Obligation                        77,392      41,411
Other Deferred Credits                             72,885      64,742
---------------------------------------------- -----------------------
          Total Deferred Credits                  904,749     914,100
---------------------------------------------- -----------------------
Commitments and Contingencies                           -           -
---------------------------------------------- -----------------------
Total Capitalization and Liabilities           $3,726,928  $3,722,652
---------------------------------------------- -----------------------

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

                                                  Twelve Months Ended
                                                     September 30,
(Thousands of Dollars)                             2006       2005
----------------------------------------------------------------------

Operating Activities:
Net Income Available for Common Stock             $138,091   $189,488
Adjustments to Reconcile Net Income to Net Cash
     Provided by Operating Activities:
          Gain on Sale of Discontinued
           Operations                                    -    (27,386)
          Impairment of Oil and Gas Producing
           Properties                              104,739          -
          Depreciation, Depletion and
           Amortization                            179,615    193,144
          Deferred Income Taxes                     (5,231)    40,388
          (Income) Loss from Unconsolidated
           Subsidiaries, Net of Cash
           Distributions                             1,068     (1,372)
          Impairment of Investment in
           Partnership                                   -      4,158
          Minority Interest in Foreign
           Subsidiaries                                  -      2,645
          Excess Tax Benefits Associated with
           Stock-Based Compensation Awards          (6,515)         -
          Other                                      4,829      7,390
     Change in:
          Hedging Collateral Deposits               58,108    (69,172)
          Receivables and Unbilled Utility
           Revenue                                  (7,397)   (21,857)
          Gas Stored Underground and Materials
           and
              Supplies                               1,679      1,934
          Unrecovered Purchased Gas Costs            1,847     (7,285)
          Prepayments and Other Current Assets     (34,799)   (39,779)
          Accounts Payable                         (23,144)    48,089
          Amounts Payable to Customers              22,777     (1,996)
          Other Accruals and Current Liabilities   (22,527)    16,085
          Other Assets                             (22,700)   (13,461)
          Other Liabilities                         80,960     (3,667)
----------------------------------------------------------------------
               Net Cash Provided by Operating
                Activities                        $471,400   $317,346
----------------------------------------------------------------------

Investing Activities:
Capital Expenditures                             ($294,159) ($219,530)
Net Proceeds from Sale of Foreign Subsidiary             -    111,619
Net Proceeds from Sale of Oil and Gas Producing
 Properties                                             13      1,349
Other                                               (3,230)     3,238
----------------------------------------------------------------------
               Net Cash Used in Investing
                Activities                       ($297,376) ($103,324)
----------------------------------------------------------------------

Financing Activities:
Change in Notes Payable to Banks and
     Commercial Paper                                   $-  ($115,359)
Excess Tax Benefits Associated with Stock-Based
 Compensation Awards                                 6,515          -
Shares Repurchased under Repurchase Plan           (85,168)         -
Reduction of Long-Term Debt                         (9,805)   (13,317)
Dividends Paid on Common Stock                     (98,266)   (94,159)
Dividends Paid to Minority Interest                      -    (12,676)
Proceeds From Issuance of Common Stock              23,339     20,279
----------------------------------------------------------------------
               Net Cash Used In Financing
                Activities                       ($163,385) ($215,232)
----------------------------------------------------------------------
Effect of Exchange Rates on Cash                     1,365      1,276
----------------------------------------------------------------------
Net Increase in Cash and Temporary
     Cash Investments                               12,004         66
Cash and Temporary Cash Investments
     at Beginning of Period                         57,607     57,541
----------------------------------------------------------------------
Cash and Temporary Cash Investments
     at September 30                               $69,611    $57,607
----------------------------------------------------------------------
                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES
               SEGMENT OPERATING RESULTS AND STATISTICS
                             (UNAUDITED)



(Thousands of Dollars, except per share      Three Months Ended
 amounts)                                      September 30,
                                        ----------------------------
UTILITY SEGMENT                               2006     2005 Variance
--------------------------------------------------------------------
Revenues from External Customers          $111,320 $109,921  $1,399
Intersegment Revenues                        2,751    2,763     (12)
                                        ----------------------------
Total Operating Revenues                   114,071  112,684   1,387
                                        ----------------------------

Operating Expenses:
   Purchased Gas                            52,440   52,060     380
   Operation and Maintenance                41,233   55,674 (14,441)
   Property, Franchise and Other Taxes      10,151    9,791     360
   Depreciation, Depletion and
    Amortization                            10,113   10,079      34
                                        ----------------------------
                                           113,937  127,604 (13,667)
                                        ----------------------------

Operating Income (Loss)                        134  (14,920) 15,054

Other Income (Expense):
   Interest Income                           4,347    3,836     511
   Other Income                                221      213       8
   Other Interest Expense                   (6,782)  (4,145) (2,637)
                                        ----------------------------

Income (Loss) Before Income Taxes           (2,080) (15,016) 12,936
Income Tax Expense (Benefit)                  (661)  (8,943)  8,282
                                        ----------------------------
Net Income (Loss)                          $(1,419) $(6,073) $4,654
                                        ============================

Net Income (Loss) Per Share (Diluted)       $(0.02)  $(0.07)  $0.05
                                        ============================

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



(Thousands of Dollars, except per            Twelve Months Ended
 share amounts)                                 September 30,
                                    ----------------------------------
UTILITY SEGMENT                              2006       2005 Variance
----------------------------------------------------------------------
Revenues from External Customers       $1,265,695 $1,101,572 $164,123
Intersegment Revenues                      15,068     15,495     (427)
                                    ----------------------------------
Total Operating Revenues                1,280,763  1,117,067  163,696
                                    ----------------------------------

Operating Expenses:
   Purchased Gas                          883,263    739,286  143,977
   Operation and Maintenance              204,330    211,019   (6,689)
   Property, Franchise and Other
    Taxes                                  47,029     46,214      815
   Depreciation, Depletion and
    Amortization                           40,172     40,159       13
                                    ----------------------------------
                                        1,174,794  1,036,678  138,116
                                    ----------------------------------

Operating Income (Loss)                   105,969     80,389   25,580

Other Income (Expense):
   Interest Income                          4,889      4,111      778
   Other Income                               830        699      131
   Other Interest Expense                 (26,174)   (22,900)  (3,274)
                                    ----------------------------------

Income (Loss) Before Income Taxes          85,514     62,299   23,215
Income Tax Expense (Benefit)               35,699     23,102   12,597
                                    ----------------------------------
Net Income (Loss)                         $49,815    $39,197  $10,618
                                    ==================================

Net Income (Loss) Per Share
 (Diluted)                                  $0.58      $0.46    $0.12
                                    ==================================


                                             Three Months Ended
                                                September 30,
                                        -----------------------------
PIPELINE AND STORAGE SEGMENT                  2006     2005  Variance
--------------------------------------------------- -------- --------
Revenues from External Customers           $28,086  $34,689  $(6,603)
Intersegment Revenues                       20,126   19,982      144
                                        ----------- -------- --------
Total Operating Revenues                    48,212   54,671   (6,459)
                                        ----------- -------- --------

Operating Expenses:
   Purchased Gas                               (48)       5      (53)
   Operation and Maintenance                18,462   16,766    1,696
   Property, Franchise and Other Taxes       4,109    3,936      173
   Depreciation, Depletion and
    Amortization                             9,227    9,134       93
                                        ----------- -------- --------
                                            31,750   29,841    1,909
                                        ----------- -------- --------

Operating Income                            16,462   24,830   (8,368)

Other Income (Expense):
   Interest Income                             137       29      108
   Other Income                                197    6,128   (5,931)
   Interest Expense on Long-Term Debt         (241)    (363)     122
   Other Interest Expense                   (1,813)  (1,383)    (430)
                                        ----------- -------- --------

Income Before Income Taxes                  14,742   29,241  (14,499)
Income Tax Expense                           4,494   10,364   (5,870)
                                        ----------- -------- --------
Net Income                                 $10,248  $18,877  $(8,629)
                                        =========== ======== ========

Net Income Per Share (Diluted)               $0.12    $0.22   $(0.10)
                                        =========== ======== ========


                                             Twelve Months Ended
                                                September 30,
                                        ------------------------------
PIPELINE AND STORAGE SEGMENT                  2006      2005  Variance
--------------------------------------------------- --------- --------
Revenues from External Customers          $132,921  $132,805     $116
Intersegment Revenues                       81,431    83,054   (1,623)
                                        ----------- --------- --------
Total Operating Revenues                   214,352   215,859   (1,507)
                                        ----------- --------- --------

Operating Expenses:
   Purchased Gas                               (65)      636     (701)
   Operation and Maintenance                66,340    65,397      943
   Property, Franchise and Other Taxes      16,088    15,598      490
   Depreciation, Depletion and
    Amortization                            36,876    38,050   (1,174)
                                        ----------- --------- --------
                                           119,239   119,681     (442)
                                        ----------- --------- --------

Operating Income                            95,113    96,178   (1,065)

Other Income (Expense):
   Interest Income                             454        76      378
   Other Income                                582    10,396   (9,814)
   Interest Expense on Long-Term Debt       (1,078)   (1,675)     597
   Other Interest Expense                   (5,542)   (5,453)     (89)
                                        ----------- --------- --------

Income Before Income Taxes                  89,529    99,522   (9,993)
Income Tax Expense                          33,896    39,068   (5,172)
                                        ----------- --------- --------
Net Income                                 $55,633   $60,454  $(4,821)
                                        =========== ========= ========

Net Income Per Share (Diluted)               $0.65     $0.71   $(0.06)
                                        =========== ========= ========

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



(Thousands of Dollars, except per share      Three Months Ended
 amounts)                                       September 30,
                                         ---------------------------
EXPLORATION AND PRODUCTION SEGMENT          2006     2005  Variance
------------------------------------------------- -------- ---------
Operating Revenues                       $89,474  $73,898   $15,576
                                         -------- -------- ---------

Operating Expenses:
   Purchased Gas                               -      106      (106)
   Operation and Maintenance:
      General and Administrative Expense   4,888    4,623       265
      Lease Operating Expense             12,765   12,677        88
      All Other Operation and Maintenance
       Expense                             2,065    1,813       252
   Property, Franchise and Other Taxes
    (Lease Operating Expense)              1,065    1,193      (128)
   Depreciation, Depletion and
    Amortization                          24,083   23,368       715
   Impairment of Oil and Gas Producing
    Properties                            42,368        -    42,368
                                         -------- -------- ---------
                                          87,234   43,780    43,454
                                         -------- -------- ---------

Operating Income                           2,240   30,118   (27,878)

Other Income (Expense):
   Interest Income                         2,568    1,482     1,086
   Other Interest Expense                (12,835) (12,472)     (363)
                                         -------- -------- ---------

Income (Loss) Before Income Taxes         (8,027)  19,128   (27,155)
Income Tax Expense (Benefit)                (846)   7,452    (8,298)
                                         -------- -------- ---------
Net Income (Loss)                        $(7,181) $11,676  $(18,857)
                                         ======== ======== =========

Net Income (Loss) Per Share (Diluted)     $(0.08)   $0.13    $(0.21)
                                         ======== ======== =========

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



(Thousands of Dollars, except per share       Twelve Months Ended
 amounts)                                        September 30,
                                        ------------------------------
EXPLORATION AND PRODUCTION SEGMENT           2006      2005  Variance
-------------------------------------------------- --------- ---------
Operating Revenues                       $346,880  $293,425   $53,455
                                        ---------- --------- ---------

Operating Expenses:
   Purchased Gas                               98      (176)      274
   Operation and Maintenance:
      General and Administrative Expense   23,352    21,512     1,840
      Lease Operating Expense              50,944    46,030     4,914
      All Other Operation and
       Maintenance Expense                  8,033     6,844     1,189
   Property, Franchise and Other Taxes
    (Lease Operating Expense)               5,038     5,095       (57)
   Depreciation, Depletion and
    Amortization                           94,738    90,912     3,826
   Impairment of Oil and Gas Producing
    Properties                            104,739         -   104,739
                                        ---------- --------- ---------
                                          286,942   170,217   116,725
                                        ---------- --------- ---------

Operating Income                           59,938   123,208   (63,270)

Other Income (Expense):
   Interest Income                          8,682     4,661     4,021
   Other Interest Expense                 (50,457)  (48,856)   (1,601)
                                        ---------- --------- ---------

Income (Loss) Before Income Taxes          18,163    79,013   (60,850)
Income Tax Expense (Benefit)               (2,808)   28,354   (31,162)
                                        ---------- --------- ---------
Net Income (Loss)                         $20,971   $50,659  $(29,688)
                                        ========== ========= =========

Net Income (Loss) Per Share (Diluted)       $0.24     $0.60    $(0.36)
                                        ========== ========= =========


                                               Three Months Ended
                                                 September 30,
                                           --------------------------
ENERGY MARKETING SEGMENT                      2006     2005  Variance
--------------------------------------------------- -------- --------
Operating Revenues                         $50,702  $53,608  $(2,906)
                                           -------- -------- --------

Operating Expenses:
   Purchased Gas                            49,939   52,628   (2,689)
   Operation and Maintenance                 1,185    1,170       15
   Property, Franchise and Other Taxes          10        4        6
   Depreciation, Depletion and Amortization      7      (24)      31
                                           -------- -------- --------
                                            51,141   53,778   (2,637)
                                           -------- -------- --------

Operating Income (Loss)                       (439)    (170)    (269)

Other Income (Expense):
   Interest Income                             144      200      (56)
   Other Income                                 57       47       10
   Other Interest Expense                      (20)      (4)     (16)
                                           -------- -------- --------

Income (Loss) Before Income Taxes             (258)      73     (331)
Income Tax Expense (Benefit)                  (148)     (95)     (53)
                                           -------- -------- --------
Net Income (Loss)                            $(110)    $168    $(278)
                                           ======== ======== ========

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


                                              Twelve Months Ended
                                                 September 30,
                                         -----------------------------
ENERGY MARKETING SEGMENT                     2006      2005  Variance
-------------------------------------------------- --------- ---------
Operating Revenues                       $497,069  $329,714  $167,355
                                         --------- --------- ---------

Operating Expenses:
   Purchased Gas                          483,250   318,571   164,679
   Operation and Maintenance                5,079     3,731     1,348
   Property, Franchise and Other Taxes       (222)       83      (305)
   Depreciation, Depletion and
    Amortization                               53        41        12
                                         --------- --------- ---------
                                          488,160   322,426   165,734
                                         --------- --------- ---------

Operating Income (Loss)                     8,909     7,288     1,621

Other Income (Expense):
   Interest Income                            445       783      (338)
   Other Income                               419       227       192
   Other Interest Expense                    (227)      (11)     (216)
                                         --------- --------- ---------

Income (Loss) Before Income Taxes           9,546     8,287     1,259
Income Tax Expense (Benefit)                3,748     3,210       538
                                         --------- --------- ---------
Net Income (Loss)                          $5,798    $5,077      $721
                                         ========= ========= =========

Net Income Per Share (Diluted)              $0.07     $0.06     $0.01
                                         ========= ========= =========

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


(Thousands of Dollars, except per share      Three Months Ended
 amounts)                                      September 30,
                                        ----------------------------
TIMBER SEGMENT                            2006      2005   Variance
--------------------------------------------------------------------
Revenues from External Customers          $13,647  $14,291    $(644)
Intersegment Revenues                           1        -        1
                                        ----------------------------
Total Operating Revenues                   13,648   14,291     (643)
                                        ----------------------------

Operating Expenses:
   Operation and Maintenance               10,383   10,818     (435)
   Property, Franchise and Other Taxes        370      418      (48)
   Depreciation, Depletion and
    Amortization                            1,582    1,697     (115)
                                        ----------------------------
                                           12,335   12,933     (598)
                                        ----------------------------

Operating Income                            1,313    1,358      (45)

Other Income (Expense):
   Interest Income                            229      131       98
   Other Income                                66        3       63
   Other Interest Expense                    (796)    (757)     (39)
                                        ----------------------------

Income Before Income Taxes                    812      735       77
Income Tax Expense (Benefit)                  343      (95)     438
                                        ----------------------------
Net Income                                   $469     $830    $(361)
                                        ============================

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

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


(Thousands of Dollars, except per share        Twelve Months Ended
 amounts)                                         September 30,
                                        ------------------------------
TIMBER SEGMENT                               2006     2005   Variance
----------------------------------------------------------------------
Revenues from External Customers            $65,024  $61,285   $3,739
Intersegment Revenues                             5        1        4
                                        ------------------------------
Total Operating Revenues                     65,029   61,286    3,743
                                        ------------------------------

Operating Expenses:
   Operation and Maintenance                 45,712   43,641    2,071
   Property, Franchise and Other Taxes        1,611    1,488      123
   Depreciation, Depletion and
    Amortization                              6,495    6,601     (106)
                                        ------------------------------
                                             53,818   51,730    2,088
                                        ------------------------------

Operating Income                             11,211    9,556    1,655

Other Income (Expense):
   Interest Income                              747      438      309
   Other Income                                 118       73       45
   Other Interest Expense                    (3,095)  (2,764)    (331)
                                        ------------------------------

Income Before Income Taxes                    8,981    7,303    1,678
Income Tax Expense (Benefit)                  3,277    2,271    1,006
                                        ------------------------------
Net Income                                   $5,704   $5,032     $672
                                        ==============================

Net Income Per Share (Diluted)                $0.07    $0.06    $0.01
                                        ==============================


                                             Three Months Ended
                                                September 30,
                                        -----------------------------
ALL OTHER                                  2006      2005    Variance
--------------------------------------------------- -------- --------
Revenues from External Customers            $1,053     $658     $395
Intersegment Revenues                        1,506    2,482     (976)
                                        ----------- -------- --------
Total Operating Revenues                     2,559    3,140     (581)
                                        ----------- -------- --------

Operating Expenses:
   Purchased Gas                             1,541    2,580   (1,039)
   Operation and Maintenance                 1,132    1,187      (55)
   Property, Franchise and Other Taxes          21       20        1
   Depreciation, Depletion and
    Amortization                               196    2,957   (2,761)
                                        ----------- -------- --------
                                             2,890    6,744   (3,854)
                                        ----------- -------- --------

Operating Income (Loss)                       (331)  (3,604)   3,273

Other Income (Expense):
   Income from Unconsolidated
    Subsidiaries                             1,384    1,447      (63)
   Impairment of Investment in
    Partnership                                  -   (4,158)   4,158
   Interest Income                               3        6       (3)
   Other Income                                 11      172     (161)
   Other Interest Expense                     (681)    (523)    (158)
                                        ----------- -------- --------

Income (Loss) Before Income Taxes              386   (6,660)   7,046
Income Tax Expense (Benefit)                   430   (2,523)   2,953
                                        ----------- -------- --------
Net Income (Loss)                             $(44) $(4,137)  $4,093
                                        =========== ======== ========

Net Income (Loss) Per Share (Diluted)       $(0.01)  $(0.05)   $0.04
                                        =========== ======== ========


                                             Twelve Months Ended
                                                September 30,
                                        ------------------------------
ALL OTHER                                  2006       2005    Variance
---------------------------------------------------- -------- --------
Revenues from External Customers             $3,304   $4,748  $(1,444)
Intersegment Revenues                         9,444    8,606      838
                                        ------------ -------- --------
Total Operating Revenues                     12,748   13,354     (606)
                                        ------------ -------- --------

Operating Expenses:
   Purchased Gas                              7,908    7,876       32
   Operation and Maintenance                  3,731    3,850     (119)
   Property, Franchise and Other Taxes           95       87        8
   Depreciation, Depletion and
    Amortization                                789    3,537   (2,748)
                                        ------------ -------- --------
                                             12,523   15,350   (2,827)
                                        ------------ -------- --------

Operating Income (Loss)                         225   (1,996)   2,221

Other Income (Expense):
   Income from Unconsolidated
    Subsidiaries                              3,583    3,362      221
   Impairment of Investment in
    Partnership                                   -   (4,158)   4,158
   Interest Income                               22       19        3
   Other Income                                  53      458     (405)
   Other Interest Expense                    (2,555)  (1,726)    (829)
                                        ------------ -------- --------

Income (Loss) Before Income Taxes             1,328   (4,041)   5,369
Income Tax Expense (Benefit)                    969   (1,425)   2,394
                                        ------------ -------- --------
Net Income (Loss)                              $359  $(2,616)  $2,975
                                        ============ ======== ========

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


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


(Thousands of Dollars, except per share      Three Months Ended
 amounts)                                      September 30,
                                        ----------------------------
CORPORATE                                 2006      2005    Variance
-------------------------------------------------- -------- --------
Revenues from External Customers             $187       $-     $187
Intersegment Revenues                         737      811      (74)
                                        ---------- -------- --------
Total Operating Revenues                      924      811      113
                                        ---------- -------- --------

Operating Expenses:
   Operation and Maintenance                1,650    3,216   (1,566)
   Property, Franchise and Other Taxes         69      163      (94)
   Depreciation, Depletion and
    Amortization                              140      118       22
                                        ---------- -------- --------
                                            1,859    3,497   (1,638)
                                        ---------- -------- --------

Operating Loss                               (935)  (2,686)   1,751

Other Income (Expense):
   Interest Income                         22,360   20,280    2,080
   Other Income                               739      201      538
   Interest Expense on Long-Term Debt     (17,886) (17,892)       6
   Other Interest Expense                  (2,574)  (2,124)    (450)
                                        ---------- -------- --------

Income (Loss) Before Income Taxes           1,704   (2,221)   3,925
Income Tax Expense (Benefit)                1,699      809      890
                                        ---------- -------- --------
Net Income (Loss)                              $5  $(3,030)  $3,035
                                        ========== ======== ========

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

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


(Thousands of Dollars, except per share        Twelve Months Ended
 amounts)                                         September 30,
                                        ------------------------------
CORPORATE                                    2006     2005    Variance
---------------------------------------------------- -------- --------
Revenues from External Customers               $766       $-     $766
Intersegment Revenues                         2,949    2,824      125
                                        ------------ -------- --------
Total Operating Revenues                      3,715    2,824      891
                                        ------------ -------- --------

Operating Expenses:
   Operation and Maintenance                  8,210    6,107    2,103
   Property, Franchise and Other Taxes          303      511     (208)
   Depreciation, Depletion and
    Amortization                                492      467       25
                                        ------------ -------- --------
                                              9,005    7,085    1,920
                                        ------------ -------- --------

Operating Loss                               (5,290)  (4,261)  (1,029)

Other Income (Expense):
   Interest Income                           86,820   79,508    7,312
   Other Income                                 823      891      (68)
   Interest Expense on Long-Term Debt       (71,551) (71,569)      18
   Other Interest Expense                    (9,686) (10,459)     773
                                        ------------ -------- --------

Income (Loss) Before Income Taxes             1,116   (5,890)   7,006
Income Tax Expense (Benefit)                  1,305   (1,602)   2,907
                                        ------------ -------- --------
Net Income (Loss)                             $(189) $(4,288)  $4,099
                                        ============ ======== ========

Net Income (Loss) Per Share (Diluted)            $-   $(0.05)   $0.05
                                        ============ ======== ========
                                             Three Months Ended
                                                September 30,
                                        -----------------------------
INTERSEGMENT ELIMINATIONS                 2006       2005    Variance
-------------------------------------------------- --------- --------
Intersegment Revenues                    $(25,121) $(26,039)    $918
                                        ---------- --------- --------

Operating Expenses:
   Purchased Gas                          (24,263)  (25,063)     800
   Operation and Maintenance                 (858)     (976)     118
                                        ---------- --------- --------
                                          (25,121)  (26,039)     918
                                        ---------- --------- --------

Operating Income                                -         -        -

Other Income (Expense):
   Interest Income                        (23,815)  (21,250)  (2,565)
   Other Interest Expense                  23,815    21,250    2,565
                                        ---------- --------- --------

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

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


                                             Twelve Months Ended
                                                September 30,
                                        ------------------------------
INTERSEGMENT ELIMINATIONS                 2006       2005     Variance
-------------------------------------------------- ---------- --------
Intersegment Revenues                   $(108,897) $(109,980)  $1,083
                                        ---------- ---------- --------

Operating Expenses:
   Purchased Gas                         (106,892)  (106,366)    (526)
   Operation and Maintenance               (2,005)    (3,614)   1,609
                                        ---------- ---------- --------
                                         (108,897)  (109,980)   1,083
                                        ---------- ---------- --------

Operating Income                                -          -        -

Other Income (Expense):
   Interest Income                        (91,784)   (83,100)  (8,684)
   Other Interest Expense                  91,784     83,100    8,684
                                        ---------- ---------- --------

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

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

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



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

                                                        Increase
                            2006            2005       (Decrease)
                      ------------------ ----------- ---------------

Capital Expenditures:
----------------------
Utility                         $15,042     $15,078            $(36)
Pipeline and Storage             10,662       7,977           2,685
Exploration and
 Production                      47,980      36,402          11,578
Energy Marketing                     10          12              (2)
Timber                            1,193         193           1,000
                      ------------------ ----------- ---------------
   Total Reportable
    Segments                     74,887      59,662          15,225
All Other                             7         293            (286)
Corporate                           607         512              95
                      ------------------ ----------- ---------------
   Total Expenditures
    from
       Continuing
        Operations              $75,501     $60,467         $15,034
                      ================== =========== ===============

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



                                          Twelve Months Ended
                                             September 30,
                                              (Unaudited)
                      ------------------------------------------------

                                                            Increase
                                     2006        2005      (Decrease)
                      ----------------------- ----------- ------------

Capital Expenditures:
----------------------
Utility                              $54,414     $50,071       $4,343
Pipeline and Storage                  26,023      21,099        4,924
Exploration and
 Production                          208,303     122,450       85,853
Energy Marketing                          16          58          (42)
Timber                                 2,323      18,894      (16,571)
                      ----------------------- ----------- ------------
   Total Reportable
    Segments                         291,079     212,572       78,507
All Other                                 85         463         (378)
Corporate                              2,995         618        2,377
                      ----------------------- ----------- ------------
   Total Expenditures
    from
       Continuing
        Operations                  $294,159    $213,653      $80,506
                      ======================= =========== ============

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

                                                        Percent Colder
                                                        (Warmer) Than:
                                                                Last
Three Months Ended September 30   Normal   2006   2005  Normal   Year
--------------------------------  ------- ------ ------ ------- ------

  Buffalo, NY                        178    152     36   (14.6) 322.2
  Erie, PA                           135    123     32    (8.9) 284.4

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

  Buffalo, NY                      6,692  5,968  6,587   (10.8)  (9.4)
  Erie, PA                         6,243  5,688  6,247    (8.9)  (8.9)


                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

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


                                              Three Months Ended
                                                September 30,

                                                           Increase
                                           2006    2005   (Decrease)
                                          ------- ------- ----------

Gas Production/Prices:
-----------------------------------------
Production (MMcf)
  Gulf Coast                               2,582   3,035       (453)
  West Coast                                 947   1,052       (105)
  Appalachia                               1,342   1,150        192
  Canada                                   1,842   2,050       (208)
                                          ------- ------- ----------
                                           6,713   7,287       (574)
                                          ======= ======= ==========
Average Prices (Per Mcf)
  Gulf Coast                               $6.62   $8.07     $(1.45)
  West Coast                                6.40    7.73      (1.33)
  Appalachia                                7.38    8.93      (1.55)
  Canada                                    5.22    7.47      (2.25)
    Weighted Average                        6.36    7.99      (1.63)
    Weighted Average after Hedging          6.36    6.77      (0.41)

Oil Production/Prices:
-----------------------------------------
Production (Thousands of Barrels)
  Gulf Coast                                 206     188         18
  West Coast                                 620     628         (8)
  Appalachia                                  27      13         14
  Canada                                      51      71        (20)
                                          ------- ------- ----------
                                             904     900          4
                                          ======= ======= ==========

Average Prices (Per Barrel)
  Gulf Coast                              $68.92  $58.53     $10.39
  West Coast                               61.23   54.52       6.71
  Appalachia                               70.37   51.06      19.31
  Canada                                   60.69   51.29       9.40
    Weighted Average                       63.23   55.06       8.17
    Weighted Average after Hedging         45.73   30.70      15.03

Total Production (Mmcfe)                  12,137  12,687       (550)
----------------------------------------- ======= ======= ==========

Selected Operating Performance
 Statistics:
-----------------------------------------
General & Administrative Expense per Mcfe
 (1)                                       $0.40   $0.36      $0.04
Lease Operating Expense per Mcfe (1)       $1.14   $1.09      $0.05
Depreciation, Depletion & Amortization
 per Mcfe (1)                              $1.98   $1.84      $0.14


                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

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


                                               Twelve Months Ended
                                                  September 30,

                                                             Increase
                                             2006    2005   (Decrease)
                                         ---------- ------- ----------

Gas Production/Prices:
-----------------------------------------
Production (MMcf)
  Gulf Coast                                 9,110  12,468     (3,358)
  West Coast                                 3,880   4,052       (172)
  Appalachia                                 5,108   4,650        458
  Canada                                     7,673   8,009       (336)
                                         ---------- ------- ----------
                                            25,771  29,179     (3,408)
                                         ========== ======= ==========
Average Prices (Per Mcf)
  Gulf Coast                                 $8.01   $7.05      $0.96
  West Coast                                  7.93    6.85       1.08
  Appalachia                                  9.53    7.60       1.93
  Canada                                      7.14    6.15       0.99
    Weighted Average                          8.04    6.86       1.18
    Weighted Average after Hedging            7.15    6.23       0.92

Oil Production/Prices:
-----------------------------------------
Production (Thousands of Barrels)
  Gulf Coast                                   685     989       (304)
  West Coast                                 2,582   2,544         38
  Appalachia                                    69      36         33
  Canada                                       272     300        (28)
                                         ---------- ------- ----------
                                             3,608   3,869       (261)
                                         ========== ======= ==========

Average Prices (Per Barrel)
  Gulf Coast                                $64.10  $49.78     $14.32
  West Coast                                 56.80   42.91      13.89
  Appalachia                                 65.28   48.28      17.00
  Canada                                     51.40   42.97       8.43
    Weighted Average                         57.94   44.72      13.22
    Weighted Average after Hedging           41.10   27.86      13.24

Total Production (Mmcfe)                    47,419  52,393     (4,974)
-----------------------------------------========== ======= ==========

Selected Operating Performance
 Statistics:
-----------------------------------------
General & Administrative Expense per Mcfe
 (1)                                         $0.49   $0.41      $0.08
Lease Operating Expense per Mcfe (1)         $1.18   $0.98      $0.20
Depreciation, Depletion & Amortization
 per Mcfe (1)                                $2.00   $1.74      $0.26
(1) Refer to page 18 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 Fiscal 2007

SWAPS                                  Volume      Average Hedge Price
-------------------------------------- ----------- -------------------
Oil                                     0.9 MMBBL  $37.03 /
                                                    BBL
Gas                                     0.7 BCF    $5.84 /
                                                    MCF


                                                    Average   Average
                                                     Floor     Ceiling
No-cost Collars                          Volume       Price     Price
-------------------------------------- ----------- ---------- --------
Oil                                     0.2 MMBBL  $70.00 /   $77.00 /
                                                    BBL        BBL
Gas                                     5.7 BCF    $8.12 /    $17.45 /
                                                    MCF        MCF

Hedging Summary for Fiscal 2008


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

Drilling Program
----------------------------------
Twelve Months Ended September 30,
 2006:
----------------------------------
Gross Wells Drilled
----------------------------------
                                    Gulf    West   East  Canada  Total
                                   ------- ------- ----- ------- -----
Exploratory
    Successful                          3       1     7      19    30
    Unsuccessful                        2       0     2       2     6
Developmental
    Successful                          0      93   143       3   239
    Unsuccessful                        0       1     0       1     2
Total
    Successful                          3      94   150      22   269
    Unsuccessful                        2       1     2       3     8

Success Ratio                          60%     99%   99%     88%   97%

                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

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

                     Reserve Quantity Information


                                         Gas MMcf
                     -------------------------------------------------
                                   U.S.
                     ---------------------------------

                      Gulf   West
                      Coast  Coast Appalachian Total           Total
                     Region Region   Region     U.S.   Canada Company
                     -------------------------------------------------
Proved Developed and
   Undeveloped
    Reserves:
September 30, 2005   38,470 70,459     83,125 192,054  46,086 238,140
Extensions and
 Discoveries         11,763  1,815     11,132  24,710   6,229  30,939
Revisions of
 Previous Estimates     679  5,757     (7,776) (1,340)(11,096)(12,436)
Production           (9,110)(3,880)    (5,108)(18,098) (7,673)(25,771)
Purchases of
 Minerals in Place        -  1,715          -   1,715       -   1,715
Sales of Minerals in
 Place                    -      -          -       -     (12)    (12)
                     -------------------------------------------------
September 30, 2006   41,802 75,866     81,373 199,041  33,534 232,575

Proved Developed
 Reserves:

September 30, 2005   23,108 58,692     83,125 164,925  43,980 208,905
September 30, 2006   32,345 64,196     81,373 177,914  33,534 211,448


                                         Oil Mbbl
                     -------------------------------------------------
                                   U.S.
                     ---------------------------------

                      Gulf   West
                      Coast  Coast Appalachian Total           Total
                     Region Region   Region     U.S.   Canada Company
                     -------------------------------------------------
Proved Developed and
   Undeveloped
    Reserves:
September 30, 2005    1,295 57,085        177  58,557   1,700  60,257
Extensions and
 Discoveries             39    172        108     319     128     447
Revisions of
 Previous Estimates     595    (80)        57     572     101     673
Production             (685)(2,582)       (69) (3,336)   (272) (3,608)
Purchases of
 Minerals in Place        -    274          -     274       -     274
Sales of Minerals in
 Place                    -      -          -       -     (25)    (25)
                     -------------------------------------------------
September 30, 2006    1,244 54,869        273  56,386   1,632  58,018

Proved Developed
 Reserves:

September 30, 2005    1,229 41,701        177  43,107   1,700  44,807
September 30, 2006    1,217 42,522        273  44,012   1,632  45,644


           NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES


Utility Throughput - (millions of cubic feet - MMcf)


                                            Three Months Ended
                                              September 30,
                                      ------------------------------

                                                           Increase
                                        2006      2005    (Decrease)
                                      ---------- -------- ----------
    Retail Sales:
       Residential Sales                  4,372    3,778        594
       Commercial Sales                     741      643         98
       Industrial Sales                      85      666       (581)
                                      ---------- -------- ----------
                                          5,198    5,087        111
    Transportation                        9,701    9,426        275
                                      ---------- -------- ----------
                                         14,899   14,513        386
                                      ========== ======== ==========

Pipeline & Storage Throughput- (MMcf)


                                            Three Months Ended
                                              September 30,
                                      ------------------------------

                                                           Increase
                                        2006      2005    (Decrease)
                                      ---------- -------- ----------
    Firm Transportation - Affiliated     10,608   10,442        166
    Firm Transportation - Non-
     Affiliated                          64,501   62,606      1,895
    Interruptible Transportation          3,835    4,790       (955)
                                      ---------- -------- ----------
                                         78,944   77,838      1,106
                                      ========== ======== ==========

Energy Marketing Volumes
                                            Three Months Ended
                                              September 30,


                                                           Increase
                                        2006      2005    (Decrease)
                                      ---------- -------- ----------
    Natural Gas (MMcf)                    6,774    6,567        207
                                      ========== ======== ==========

Timber Board Feet (Thousands)
                                            Three Months Ended
                                              September 30,


                                                           Increase
                                        2006      2005    (Decrease)
                                      ---------- -------- ----------
   Log
    Sales                                 1,986    1,668        318
   Green Lumber Sales                     2,372    2,310         62
   Kiln Dry Lumber Sales                  3,624    4,118       (494)
                                      ---------- -------- ----------
                                          7,982    8,096       (114)
                                      ========== ======== ==========

                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES


Utility Throughput - (millions
 of cubic feet - MMcf)


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

                                                            Increase
                                        2006      2005     (Decrease)
                                --------------- ---------- -----------
    Retail Sales:
       Residential Sales                59,443     66,903      (7,460)
       Commercial Sales                 10,681     11,984      (1,303)
       Industrial Sales                    985      1,387        (402)
                                --------------- ---------- -----------
                                        71,109     80,274      (9,165)
    Transportation                      57,950     59,770      (1,820)
                                --------------- ---------- -----------
                                       129,059    140,044     (10,985)
                                =============== ========== ===========

Pipeline & Storage Throughput-
 (MMcf)


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

                                                            Increase
                                          2006       2005  (Decrease)
                                --------------- ---------- -----------
    Firm Transportation -
     Affiliated                        103,223    113,242     (10,019)
    Firm Transportation - Non-
     Affiliated                        260,156    244,343      15,813
    Interruptible Transportation        11,609     14,794      (3,185)
                                --------------- ---------- -----------
                                       374,988    372,379       2,609
                                =============== ========== ===========

Energy Marketing Volumes
                                            Twelve Months Ended
                                               September 30,


                                                            Increase
                                          2006       2005  (Decrease)
                                --------------- ---------- -----------
    Natural Gas (MMcf)                  45,270     40,683       4,587
                                =============== ========== ===========

Timber Board Feet (Thousands)
                                            Twelve Months Ended
                                               September 30,


                                                            Increase
                                          2006       2005  (Decrease)
                                --------------- ---------- -----------
   Log
    Sales                                9,527      7,601       1,926
   Green Lumber Sales                   10,454     10,489         (35)
   Kiln Dry Lumber Sales                16,862     15,491       1,371
                                --------------- ---------- -----------
                                        36,843     33,581       3,262
                                =============== ========== ===========

                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES
           FISCAL 2007 EARNINGS GUIDANCE AND SENSITIVITIES


                                   Earnings per share sensitivity to
Fiscal 2007 (Diluted earnings per   changes from NYMEX prices used in
 share guidance*)                           guidance* (caret)
---------------------------------- -----------------------------------

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

Consolidated
 Earnings           $2.10 - $2.30  + $0.19  - $0.19  + $0.09  - $0.09
 NYMEX Settlement Prices at September 21, 2006
-----------------------------------------------


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

Oct-06                   $4.781         $61.59
Nov-06                   $6.011         $61.59
Dec-06                   $7.391         $62.53
Jan-07                   $7.881         $63.32
Feb-07                   $7.921         $64.03
Mar-07                   $7.746         $64.65
Apr-07                   $7.166         $65.18
May-07                   $7.126         $65.61
Jun-07                   $7.221         $65.96
Jul-07                   $7.311         $66.25
Aug-07                   $7.391         $66.49
Sep-07                   $7.476         $66.67

Average                  $7.119         $64.49
* Please refer to forward looking statement footnote at page 9 of this
 document.

(caret) This sensitivity table is current as of November 6, 2006, but
 will become obsolete with the passage of time, changes in Seneca's
 production forecast, change in basis differentials, changes in
 customer use per account, as additional hedging contracts are entered
 into, and the settling of NYMEX hedge contracts at their maturity.


                      NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES


Quarter Ended September 30 (unaudited)      2006            2005
-------------------------------------- --------------- ---------------

  Operating Revenues                     $294,469,000    $287,064,000
                                       =============== ===============

  Income from Continuing Operations        $1,968,000     $18,311,000
  Income (Loss) from Discontinued
   Operations, Net of Tax                           -      30,900,000
                                       --------------- ---------------
  Net Income Available for Common
   Stock                                   $1,968,000     $49,211,000
                                       --------------- ---------------

  Earnings Per Common Share:
   Basic:
          Income from Continuing
           Operations                           $0.02           $0.22
          Income (Loss) from
           Discontinued Operations                  -            0.36
                                       --------------- ---------------
          Net Income Available for
           Common Stock                         $0.02           $0.58
                                       =============== ===============

   Diluted:
          Income from Continuing
           Operations                           $0.02           $0.21
          Income (Loss) from
           Discontinued Operations                  -            0.36
                                       --------------- ---------------
          Net Income Available for
           Common Stock                         $0.02           $0.57
                                       =============== ===============

   Weighted Average Common Shares:
      Used in Basic Calculation            83,432,553      84,128,929
                                       =============== ===============
      Used in Diluted Calculation          85,523,042      85,784,654
                                       =============== ===============


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

  Operating Revenues                   $2,311,659,000  $1,923,549,000
                                       =============== ===============

  Income from Continuing Operations      $138,091,000    $153,515,000
  Income from Discontinued Operations,
   Net of Tax                                       -      35,973,000
                                       --------------- ---------------
  Net Income Available for Common
   Stock                                 $138,091,000    $189,488,000
                                       =============== ===============

  Earnings Per Common Share:
   Basic:
          Income from Continuing
           Operations                           $1.64           $1.84
          Income from Discontinued
           Operations                               -            0.43
                                       --------------- ---------------
          Net Income Available for
           Common Stock                         $1.64           $2.27
                                       =============== ===============

   Diluted:
          Income from Continuing
           Operations                           $1.61           $1.81
          Income from Discontinued
           Operations                               -            0.42
                                       --------------- ---------------
          Net Income Available for
           Common Stock                         $1.61           $2.23
                                       =============== ===============

   Weighted Average Common Shares:
      Used in Basic Calculation            84,030,118      83,541,627
                                       =============== ===============
      Used in Diluted Calculation          86,028,466      85,029,131
                                       =============== ===============

CONTACT:
National Fuel Gas Company
Analyst:
Margaret M. Suto, 716-857-6987

Media:
Julie Coppola Cox, 716-857-7079

Transfer Agent and Plan Administrator

EQ Shareowner Services (1)

  • U.S. Mail
    EQ Shareowner Services
    P.O. Box 64874
    St. Paul, MN 55164-0874
  • Overnight Delivery
    EQ Shareowner Services
    1110 Centre Pointe Curve, Suite 101
    Mendota Heights, MN 55120-4100


Toll-Free Telephone:  1-800-648-8166
Calling from outside the U.S. and Canada:  1-651-450-4064
Automated: 24 hours, 7 days a week
Attended:  8:00 am to 8:00 pm ET, Monday-Friday
Website:  www.shareowneronline.com
For additional Investor information, please click here.

(1) Effective February 1, 2018, the Wells Fargo Shareowner Service division of Wells Fargo Bank, N.A., has been sold to Equinity Group, plc.

Disclosure: Caution Concerning Forward-Looking Statements

National Fuel Gas Company is including the following cautionary statement in this corporate website to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, the Company.

Forward-looking statements include, without limitation, statements regarding future prospects, plans, objectives, goals, projections, estimates of oil and gas quantities, strategies, future events or performance and underlying assumptions, capital structure, anticipated capital expenditures, completion of construction projects, projections for pension and other post-retirement benefit obligations, impacts of the adoption of new accounting rules, and possible outcomes of litigation or regulatory proceedings, as well as statements that are identified by the use of the words "anticipates," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects," "believes," "seeks," "will," "may" and similar expressions. All forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are expressly qualified by these cautionary statements. 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 are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that management's expectations, beliefs or projections will result or be achieved or accomplished.

In addition to other factors and matters discussed elsewhere in this website, the following are important factors that, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements:

  1. Changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing;
  2. Delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators;
  3. Governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal;
  4. Changes in the price of natural gas or oil;
  5. Impairments under the SEC’s full cost ceiling test for natural gas and oil reserves;
  6. Financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions;
  7. Factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations;
  8. Increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; 
  9. Changes in price differentials between similar quantities of natural gas or oil at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations;
  10. Other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date;
  11. The cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company;
  12. Uncertainty of oil and gas reserve estimates;
  13. Significant differences between the Company’s projected and actual production levels for natural gas or oil;
  14. Changes in demographic patterns and weather conditions;
  15. Changes in the availability, price or accounting treatment of derivative financial instruments;
  16. Changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities;
  17. Changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services;
  18. The creditworthiness or performance of the Company’s key suppliers, customers and counterparties;
  19. The impact of information technology, cybersecurity or data security breaches;
  20. Economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war;
  21. Significant differences between the Company’s projected and actual capital expenditures and operating expenses; or
  22. Increasing costs of insurance, changes in coverage and the ability to obtain insurance.

The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.