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 First Quarter Earnings

02/08/2006

WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--Feb. 8, 2006--National Fuel Gas Company ("National Fuel" or the "Company") (NYSE:NFG) today announced consolidated earnings for the first quarter of its 2006 fiscal year (the quarter ended December 31, 2005) of $57.4 million or $0.67 per share, an increase of $7.0 million or $0.07 per share when compared to the first quarter of the previous fiscal year (note: all references to earnings per share are to diluted earnings per share and all amounts are stated in U.S. dollars).

As a result of the sale of United Energy, its former operations in the Czech Republic, during the fourth quarter of fiscal 2005, National Fuel has reclassified certain historical information in its financial statements related to its former International segment into the category "Income from Discontinued Operations." Earnings from continuing operations for the quarter ended December 31, 2005, were $57.4 million or $0.67 per share, an increase of $12.6 million from the prior year's first quarter earnings from continuing operations of $44.8 million or $0.53 per share. The Company had no income from discontinued operations in the first quarter of fiscal 2006. This is a decrease of $5.6 million from the prior year first quarter. In all of fiscal 2005, recurring earnings from discontinued operations were $10.2 million.

DISCUSSION OF FIRST QUARTER EARNINGS

Earnings in each of the Company's five continuing reportable segments increased this quarter compared to last year's first quarter results.

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation ("Distribution") which sells or transports natural gas to approximately 731,000 customers located in western New York and northwestern Pennsylvania. The Utility segment's earnings of $21.7 million for the quarter ended December 31, 2005, were $3.7 million higher than the earnings in the same period last fiscal year.

In Distribution's New York Division, earnings of $17.0 million for the quarter increased $1.8 million from $15.2 million in the first quarter of 2005. The increase in earnings for the quarter was mainly the result of an out-of-period adjustment of $2.6 million (after tax) to correct Distribution's calculation of the symmetrical sharing component included in the New York Gas Adjustment rate. The adjustment resulted when it was determined that certain credits that had been included in the calculation should have been removed during the implementation of a previous rate case settlement. The symmetrical sharing component is a mechanism incorporated in Distribution's New York rates that shares with customers 90% of the differences between actual revenues received from large volume customers and the level of revenues that were projected to be received during the rate year. The adjustment related to fiscal years 2002 through 2005. The remaining difference was due to lower average usage per customer, and higher bad debt, pension and interest expenses, which more than offset the positive impact of the rate settlement in New York.

In Distribution's Pennsylvania Division, earnings for the quarter of $4.7 million were up $1.9 million from $2.8 million reported in the prior year's first quarter, as a result of the benefit of the $12.0 million annual base rate increase implemented in April 2005. This increase more than offset higher bad debt expense.

Pipeline and Storage Segment

The Pipeline and Storage segment operations are carried out by National Fuel Gas Supply Corporation ("Supply") and Empire State Pipeline ("Empire"). These companies provide natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and western Pennsylvania.

The Pipeline and Storage segment's earnings of $15.9 million for the quarter ended December 31, 2005, were up $3.6 million when compared with the same period in the prior fiscal year. The impact of higher transportation and efficiency gas revenues and lower project development costs associated with the Empire Connector project were the primary contributors to the increase. Transported volumes increased more than 21.0 billion cubic feet ("Bcf") from the first quarter of the prior year. Supply and Empire were both able to generate additional earnings by utilizing a portion of their system capacity to provide alternate transportation options to customers whose normal natural gas transportation routes were impacted by the hurricanes last fall.

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 earnings for the first quarter of fiscal 2006 of $17.4 million were up $3.5 million from the prior year's quarter. The increase was mainly due to the positive impact of higher crude oil and natural gas commodity prices, which was partially offset by expected lower production volumes (related to last fall's hurricanes in the Gulf of Mexico) and higher lease operating expenses.

Production of 11.2 billion cubic feet equivalent ("Bcfe") met expected first quarter 2006 estimated production of 10 to 12 Bcfe. This was down 2.1 Bcfe from the prior year's first quarter. Gulf of Mexico production was 2.7 Bcfe lower than the prior year's quarter mainly due to production shut-ins resulting from Hurricane Rita. This decline was partially offset by higher production in Canada, California and the Appalachian region. Higher commodity prices (after hedging) more than offset the impact of this decline in production. For the quarter ended December 31, 2005, the weighted average natural gas price (after hedging) was $8.44/thousand cubic feet ("Mcf"), an increase of $2.45/Mcf from the prior year's quarter, and the weighted average oil price (after hedging) was $33.07/barrel ("Bbl"), an increase of $6.72/Bbl from the prior year's quarter.

At the date of this release, approximately 87 percent of Seneca's Gulf of Mexico pre hurricane production is back on line. The remaining 13 percent of production continues to wait on repairs to Seneca's facilities, as well as third-party pipelines. These repairs may be completed within the next six months.*

The increase in production revenues was partially offset by higher lease operating expenses, which, on a per unit basis, increased by $0.44/thousand cubic feet equivalent ("Mcfe") to $1.32/Mcfe. The increase in lease operating expense was mainly the result of higher steaming costs associated with heavy crude oil production in Seneca's California Midway-Sunset field. Seneca resumed operations of its scrubber facility in the Midway-Sunset field on December 7, 2005. Seneca expects to be able to burn waste gas rather than purchased utility gas to generate the steam for its thermal recovery project.* The current waste gas burn rate as a result of this project is about 1,400 Mcfe/day (58.3 Mcfe/hr), and is expected to reach 1,800 Mcfe/day in the next few weeks.* At a utility gas price of $7.00/Mcfe, this would save nearly $3.0 million per year.*

During the first quarter of fiscal 2006, Seneca drilled 81 gross wells with a 96 percent success rate. Seneca also completed the High Island 37 A-5 well that was drilled to a depth of 12,030 feet Total Vertical Depth ("TVD") and encountered 91 feet TVD of net pay sand. The well is currently flowing 15.4 Mmcf/day of gas at 8,500 pounds per square inch ("PSI"). Seneca's working interest in the well is 78 percent; Seneca is the operator of this well.

Seneca's capital expenditures during the first quarter of 2006 were $50.9 million. Seneca spent more than $24.0 million on well completion, exploratory drilling, facilities and seismic data in the Gulf of Mexico as high commodity prices, plus royalty relief, have improved the economics of investment in the area. In California, $9.4 million was spent mostly on developmental wells. Capital expenditures in the East were $5.4 million and in Canada were $12.1 million.

Seneca increased its hedge positions for gas produced in 2006 and 2007. For the remaining three quarters of fiscal 2006, Seneca has 11.8 Bcf of gas hedged at an average price of $7.57/Mcf and 1.4 million barrels of oil hedged at an average price of $35.33/Bbl based on NYMEX prices at February 3, 2006. Seneca has emphasized the use of no-cost collars in its hedging program. This will allow Seneca to capture a portion of the upside of gas prices in this volatile gas market.*

Energy Marketing

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

The Energy Marketing segment's net income for the quarter of $1.0 million increased $0.2 from $0.8 million during the first quarter last year mainly due to a 2.0 Bcf increase in volumes.

Timber Segment

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

The Timber segment's first quarter earnings of $1.5 million were $0.7 million higher than the prior year's first quarter. Favorable weather conditions throughout most of the first quarter allowed for an increase in harvested timber volumes and an increase in sales. Sales of cherry veneer logs, which have the highest margins in Highland's timber mix, increased 104,000 board feet or 20% from the prior year's first quarter.

Corporate and All Other

Other direct wholly-owned subsidiaries of the Company include Horizon Energy Development, Inc. ("Horizon"), a corporation formerly engaged in the development of international power projects, Horizon LFG, Inc., a corporation engaged through subsidiaries in the purchase, sale and transportation of landfill gas, Leidy Hub, Inc., a corporation formed to provide various natural gas hub services to customers in the eastern United States, Data-Track Account Services, Inc., a corporation that provides collection services principally for the Company's subsidiaries, and Horizon Power, Inc. ("Horizon Power"), a corporation that develops or operates mid-range independent power production facilities and landfill gas electric generation facilities.

The loss in this category of $70,000 improved from a loss of $0.9 million mainly due to an increase in interest income resulting from the investment of the proceeds from the sale of United Energy.

Philip C. Ackerman, Chairman and Chief Executive Officer of National Fuel Gas Company stated: "This quarter's results again demonstrate the benefit of our diversified structure. Notwithstanding the volatility in energy commodity prices that have affected almost every aspect of our operation, each of our segments increased their contribution to consolidated earnings per share this quarter and more than offset the loss of earnings from the sale of assets in our former International segment. Our Gulf of Mexico production has been restored to nearly 87% of the pre-Hurricane Rita levels. Continued high commodity prices have bolstered earnings in the Exploration and Production segment. In addition, earnings in our Pipeline and Storage segment benefited from providing an alternate transportation route to customers whose normal natural gas supplies and transportation routes were negatively impacted by the hurricanes, and the Utility segment is beginning to realize the full impact of last year's rate settlements. While the Company benefited from the implementation of these rate settlements, our New York customers also received some relief in their monthly bills through the refund of revenue taxes in a credit mechanism negotiated in that same settlement."*

Effective October 1, 2005, the Company adopted Statement of Financial Accounting Standard 123R, commonly known as expensing of stock options. The increase in expense for the quarter ended December 31, 2005 as a result of expensing stock options, was $50,000.

As previously announced, at its December 8, 2005, meeting the Board of Directors authorized the Company to repurchase up to eight million shares of the Company's common stock. To date no shares have been repurchased under this program but it is expected that open market repurchases will begin this month and continue from time to time depending on market conditions.* Any repurchase, will be reported on a quarterly basis in the Company's Forms 10-Q and 10-K.

EARNINGS GUIDANCE

Earnings guidance for the second quarter of fiscal 2006 is in the range of $0.93 to $1.03 per share (diluted). The Company's guidance regarding diluted earnings per share for its entire 2006 fiscal year remains in the range of $2.30 to $2.50.* Earnings per share guidance on a consolidated and segment basis is provided in the table that follows. The Company cautions that this range is based on NYMEX commodity futures prices that settled on September 13, 2005. A table (current as of February 8, 2005) is also included and shows how projected earnings are expected to change in response to changes from commodity pricing on which the guidance is based. NYMEX futures settlement prices on February 7, 2006 had changed as follows: natural gas prices averaged for the remaining nine months of the Company's fiscal year had dropped by approximately $1.54 per MMbtu, and NYMEX futures settlement prices for oil, averaged over the same period had increased by approximately $0.11 per barrel. Utilizing the sensitivities from the table that follows, and the February 7, 2006, NYMEX futures settlement prices, the earnings guidance range for fiscal 2006 could be reduced by approximately $0.15 per share. Because of the volatility in commodity prices, readers should review both the earnings guidance and sensitivity table when performing their analysis.

EARNINGS TELECONFERENCE

The Company will host a conference call on Thursday, February 9, 2006, at 11 a.m. (Eastern Time) to discuss this announcement. There are two ways to access this call. For those with Internet access, you may go to 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, you may access the live call by dialing (toll-free) 1-866-362-4666, and use the passcode "38365930". 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 "46826595." Both the webcast and telephonic replay will be available until the close of business on Thursday, February 16, 2006.

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

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, repeal of the Public Utility Holding Company Act of 1935, and changes in laws and regulations relating to such repeal; 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
                           AND SUBSIDIARIES
                  RECONCILIATION TO REPORTED EARNINGS

                                                  Three       Three
                                                  Months      Months
(Thousands of Dollars)                            Ended       Ended
                                                 December    December
                                                 31, 2005    31, 2004
                                               (unaudited) (unaudited)
                                               ----------- -----------
Utility
-------                                        ----------- -----------
Reported earnings                                 $21,753     $18,072
                                               ----------- -----------

Pipeline and Storage
--------------------                           ----------- -----------
Reported earnings                                  15,850      12,277
                                               ----------- -----------

Exploration and Production
--------------------------                     ----------- -----------
Reported earnings                                  17,435      13,923
                                               ----------- -----------

Energy Marketing
----------------                               ----------- -----------
Reported earnings                                     987         750
                                               ----------- -----------

Timber
------                                         ----------- -----------
Reported earnings                                   1,464         753
                                               ----------- -----------

Corporate and All Other
-----------------------                        ----------- -----------
Reported earnings                                     (70)       (945)
                                               ----------- -----------


Consolidated Earnings from Continuing
 Operations
-------------------------------------
Reported earnings from continuing operations       57,419      44,830
Total non-recurring items from above                    -           -
                                               ----------- -----------
Earnings from continuing operations before
 non-recurring items                              $57,419     $44,830
                                               ----------- -----------
                                               ----------- -----------

Discontinued Operations
-----------------------
Reported earnings from discontinued operations          -       5,608
                                               ----------- -----------

Consolidated
------------
Reported earnings                                 $57,419     $50,438
                                               ----------- -----------
                                               ----------- -----------




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES
                  RECONCILIATION TO REPORTED EARNINGS

                                                 Three       Three
                                                 Months      Months
(Diluted Earnings Per Share)                     Ended       Ended
                                                December    December
                                                31, 2005    31, 2004
                                               (unaudited) (unaudited)
                                               ----------- -----------
Utility
-------                                        ----------- -----------
Reported earnings                                   $0.25       $0.21
                                               ----------- -----------

Pipeline and Storage
--------------------                           ----------- -----------
Reported earnings                                    0.19        0.15
                                               ----------- -----------

Exploration and Production
--------------------------                     ----------- -----------
Reported earnings                                    0.20        0.16
                                               ----------- -----------

Energy Marketing
----------------                               ----------- -----------
Reported earnings                                    0.01        0.01
                                               ----------- -----------

Timber
------                                         ----------- -----------
Reported earnings                                    0.02        0.01
                                               ----------- -----------

Corporate and All Other
-----------------------                        ----------- -----------
Reported earnings                                       -       (0.01)
                                               ----------- -----------


Consolidated Earnings from Continuing
 Operations
-------------------------------------
Reported earnings from continuing operations         0.67        0.53
Total non-recurring items from above                    -           -
                                               ----------- -----------
Earnings from continuing operations before
 non-recurring items                                $0.67       $0.53
                                               =========== ===========

Discontinued Operations
-----------------------
Reported earnings from discontinued operations          -        0.07
                                               ----------- -----------

Consolidated
------------
Reported earnings                                   $0.67       $0.60
                                               ----------- -----------
                                               ----------- -----------




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

(Thousands of Dollars, except per share amounts)
                                                 Three Months Ended
                                                    December 31,
                                                     (Unaudited)
                                               -----------------------
SUMMARY OF OPERATIONS                              2005        2004
---------------------                          ----------- -----------
Operating Revenues                               $710,756    $500,283
                                               ----------- -----------

Operating Expenses:
  Purchased Gas                                   436,778     256,156
  Operation and Maintenance                       103,628      92,623
  Property, Franchise and Other Taxes              17,181      17,056
  Depreciation, Depletion and Amortization         43,046      42,709
                                               ----------- -----------
                                                  600,633     408,544

Operating Income                                  110,123      91,739

Other Income (Expense):
Income from Unconsolidated Subsidiaries             1,264         785
Interest Income                                     1,134         272
Other Income                                          741         552
Interest Expense on Long-Term Debt                (18,218)    (18,376)
Other Interest Expense                             (1,775)     (2,417)
                                               ----------- -----------

Income from Continuing Operations Before
 Income Taxes                                      93,269      72,555

Income Tax Expense                                 35,850      27,725
                                               ----------- -----------

Income from Continuing Operations                  57,419      44,830

Income from Discontinued Operations, Net of
 Tax                                                    -       5,608
                                               ----------- -----------

Net Income Available for Common Stock             $57,419     $50,438
                                               ----------- -----------
                                               ----------- -----------

Earnings Per Common Share:
   Basic:
          Income from Continuing Operations         $0.68       $0.54
          Income from Discontinued Operations           -        0.07
                                               ----------- -----------
          Net Income Available for Common
           Stock                                    $0.68       $0.61
                                               ----------- -----------
                                               ----------- -----------

   Diluted:
          Income from Continuing Operations         $0.67       $0.53
          Income from Discontinued Operations           -        0.07
                                               ----------- -----------
          Net Income Available for Common
           Stock                                    $0.67       $0.60
                                               ----------- -----------
                                               ----------- -----------

Weighted Average Common Shares:
  Used in Basic Calculation                    84,422,717  83,150,086
                                               ----------- -----------
                                               ----------- -----------
  Used in Diluted Calculation                  86,256,862  84,638,106
                                               ----------- -----------
                                               ----------- -----------




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS


                                            December 31, September 30,
(Thousands of Dollars)                          2005          2005
----------------------------------------------------------------------

ASSETS
Property, Plant and Equipment                $4,471,581    $4,423,255
Less - Accumulated Depreciation, Depletion
 and Amortization                             1,602,254     1,583,955
------------------------------------------- --------------------------
          Net Property, Plant and Equipment   2,869,327     2,839,300
------------------------------------------- --------------------------

Current Assets:
Cash and Temporary Cash Investments              64,464        57,607
Hedging Collateral Deposits                      38,691        77,784
Receivables - Net                               289,229       155,064
Unbilled Utility Revenue                         97,932        20,465
Gas Stored Underground                           60,040        64,529
Materials and Supplies - at average cost         32,063        33,267
Unrecovered Purchased Gas Costs                  28,552        14,817
Prepayments and Other Current Assets             53,697        65,469
Deferred Income Taxes                            47,635        83,774
Fair Value of Derivative Financial
 Instruments                                        797             -
------------------------------------------- --------------------------
          Total Current Assets                  713,100       572,776
------------------------------------------- --------------------------

Other Assets:
Recoverable Future Taxes                         85,000        85,000
Unamortized Debt Expense                         17,025        17,567
Other Regulatory Assets                          50,790        47,028
Deferred Charges                                  3,864         4,474
Other Investments                                82,336        80,394
Investments in Unconsolidated Subsidiaries       10,771        12,658
Goodwill                                          5,476         5,476
Intangible Assets                                41,637        42,302
Other                                            10,609        15,677
------------------------------------------- --------------------------
          Total Other Assets                    307,508       310,576
------------------------------------------- --------------------------
Total Assets                                 $3,889,935    $3,722,652
------------------------------------------- --------------------------
------------------------------------------- --------------------------

CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized -
 200,000,000 Shares; Issued and Outstanding
 - 84,498,511 Shares and 84,356,748 Shares,
 Respectively                                   $84,499       $84,357
Paid in Capital                                 538,907       529,834
Earnings Reinvested in the Business             845,951       813,020
------------------------------------------- --------------------------
Total Common Shareholder Equity Before
 Items of Other Comprehensive Income Loss     1,469,357     1,427,211
Accumulated Other Comprehensive Loss           (148,064)     (197,628)
------------------------------------------- --------------------------
Total Comprehensive Shareholders' Equity      1,321,293     1,229,583
Long-Term Debt, Net of Current Portion        1,116,779     1,119,012
------------------------------------------- --------------------------
          Total Capitalization                2,438,072     2,348,595
------------------------------------------- --------------------------

Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper      74,800             -
Current Portion of Long-Term Debt                 9,516         9,393
Accounts Payable                                212,067       155,485
Amounts Payable to Customers                      1,031         1,158
Dividends Payable                                24,488        24,445
Other Accruals and Current Liabilities           58,788        60,404
Fair Value of Derivative Financial
 Instruments                                    127,428       209,072
------------------------------------------- --------------------------
          Total Current and Accrued
           Liabilities                          508,118       459,957
------------------------------------------- --------------------------

Deferred Credits:
Deferred Income Taxes                           500,982       489,720
Taxes Refundable to Customers                    11,066        11,009
Unamortized Investment Tax Credit                 6,621         6,796
Cost of Removal Regulatory Liability             91,724        90,396
Other Regulatory Liabilities                     64,360        66,339
Pension and Other Post-Retirement Benefit
 Liabilities                                    153,242       143,687
Asset Retirement Obligation                      41,647        41,411
Other Deferred Credits                           74,103        64,742
------------------------------------------- --------------------------
          Total Deferred Credits                943,745       914,100
------------------------------------------- --------------------------
Commitments and Contingencies                         -             -
------------------------------------------- --------------------------
Total Capitalization and Liabilities         $3,889,935    $3,722,652
------------------------------------------- --------------------------
------------------------------------------- --------------------------




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                    Three Months Ended
                                                       December 31,
(Thousands of Dollars)                                2005      2004
----------------------------------------------------------------------

Operating Activities:
Net Income Available for Common Stock               $57,419   $50,438
Adjustments to Reconcile Net Income to Net Cash
     Provided by Operating Activities:
          Depreciation, Depletion and Amortization   43,046    46,940
          Deferred Income Taxes                      16,653    (1,864)
          (Income) Loss from Unconsolidated
           Subsidiaries, Net of Cash Distributions    1,887       715
          Minority Interest in Foreign
           Subsidiaries                                   -       937
          Excess Tax Benefits Associated with
           Stock-Based Compensation Awards           (6,439)        -
          Other                                       3,159     2,684
     Change in:
          Hedging Collateral Deposits                39,093       973
          Receivables and Unbilled Utility Revenue (211,491) (132,963)
          Gas Stored Underground and Materials and
           Supplies                                   5,692    12,824
          Unrecovered Purchased Gas Costs           (13,735)      636
          Prepayments and Other Current Assets       17,075     6,946
          Accounts Payable                           56,580    43,950
          Amounts Payable to Customers                 (127)    7,640
          Other Accruals and Current Liabilities       (554)   14,605
          Other Assets                               (3,083)  (13,894)
          Other Liabilities                          15,394    18,560
----------------------------------------------------------------------
               Net Cash Provided by Operating
                Activities                          $20,569   $59,127
----------------------------------------------------------------------
----------------------------------------------------------------------

Investing Activities:
Capital Expenditures                               ($70,368) ($40,022)
Other                                                  (745)   (1,046)
----------------------------------------------------------------------
               Net Cash Used in Investing
                Activities                         ($71,113) ($41,068)
----------------------------------------------------------------------
----------------------------------------------------------------------

Financing Activities:
Change in Notes Payable to Banks and Commercial
 Paper                                              $74,800   $13,300
Excess Tax Benefits Associated with Stock-Based
 Compensation Awards                                  6,439         -
Reduction of Long-Term Debt                          (2,110)   (3,509)
Dividends Paid on Common Stock                      (24,445)  (23,210)
Proceeds From Issuance of Common Stock                2,570     3,452
----------------------------------------------------------------------
               Net Cash Provided by (Used In)
                Financing Activities                $57,254   ($9,967)
----------------------------------------------------------------------
----------------------------------------------------------------------
Effect of Exchange Rates on Cash                        147     5,339
----------------------------------------------------------------------
Net Increase in Cash and Temporary Cash
 Investments                                          6,857    13,431
Cash and Temporary Cash Investments at Beginning
 of Period                                           57,607    57,541
----------------------------------------------------------------------
----------------------------------------------------------------------
Cash and Temporary Cash Investments at
 December 31                                        $64,464   $70,972
----------------------------------------------------------------------
----------------------------------------------------------------------




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

               SEGMENT OPERATING RESULTS AND STATISTICS
                              (UNAUDITED)


(Thousands of Dollars, except per share         Three Months Ended
 amounts)                                          December 31,
                                           ---------------------------
UTILITY SEGMENT                              2005     2004   Variance
---------------                             --------------------------
Revenues from External Customers           $431,479 $316,829 $114,650
Intersegment Revenues                         4,121    4,305     (184)
                                           ---------------------------
Total Operating Revenues                    435,600  321,134  114,466
                                           ---------------------------

Operating Expenses:
   Purchased Gas                            320,557  217,955  102,602
   Operation and Maintenance                 51,711   45,813    5,898
   Property, Franchise and Other Taxes       11,514   11,511        3
   Depreciation, Depletion and Amortization   9,977    9,980       (3)
                                           ---------------------------
                                            393,759  285,259  108,500
                                           ---------------------------

Operating Income                             41,841   35,875    5,966

Other Income (Expense):
   Interest Income                              201       (6)     207
   Other Income                                 212      124       88
   Other Interest Expense                    (6,723)  (5,610)  (1,113)
                                           ---------------------------

Income Before Income Taxes                   35,531   30,383    5,148
Income Tax Expense                           13,778   12,311    1,467
                                           ---------------------------
Net Income                                 $ 21,753 $ 18,072 $  3,681
                                           ---------------------------
                                           ---------------------------
Net Income Per Share (Diluted)             $   0.25 $   0.21 $   0.04
                                           ---------------------------
                                           ---------------------------



                                                Three Months Ended
                                                   December 31,
                                           ---------------------------
PIPELINE AND STORAGE SEGMENT                 2005     2004   Variance
----------------------------               ---------------------------
Revenues from External Customers           $ 34,738 $ 32,445 $  2,293
Intersegment Revenues                        21,296   20,599      697
                                           ---------------------------
Total Operating Revenues                     56,034   53,044    2,990
                                           ---------------------------

Operating Expenses:
   Purchased Gas                                (16)     680     (696)
   Operation and Maintenance                 15,316   16,985   (1,669)
   Property, Franchise and Other Taxes        3,956    3,725      231
   Depreciation, Depletion and Amortization   9,183    9,094       89
                                           ---------------------------
                                             28,439   30,484   (2,045)
                                           ---------------------------

Operating Income                             27,595   22,560    5,035

Other Income (Expense):
   Interest Income                               52       12       40
   Other Income                                 208      104      104
   Interest Expense on Long-Term Debt          (318)    (483)     165
   Other Interest Expense                    (1,296)  (1,357)      61
                                           ---------------------------

Income Before Income Taxes                   26,241   20,836    5,405
Income Tax Expense                           10,391    8,559    1,832
                                           ---------------------------
Net Income                                 $ 15,850 $ 12,277 $  3,573
                                           ---------------------------
                                           ---------------------------
Net Income Per Share (Diluted)             $   0.19 $   0.15 $   0.04
                                           ---------------------------
                                           ---------------------------




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

               SEGMENT OPERATING RESULTS AND STATISTICS
                              (UNAUDITED)


(Thousands of Dollars, except per share         Three Months Ended
 amounts)                                          December 31,
                                            --------------------------
EXPLORATION AND PRODUCTION SEGMENT            2005     2004   Variance
----------------------------------          --------------------------
Operating Revenues                          $ 82,087 $ 71,838 $10,249
                                            --------------------------

Operating Expenses:
   Purchased Gas                                  94     (228)    322
   Operation and Maintenance:
      General and Administrative Expense       6,300    5,178   1,122
      Lease Operating Expense                 13,539   10,457   3,082
      All Other Operation and Maintenance
       Expense                                 1,972    1,726     246
   Property, Franchise and Other Taxes
    (Lease Operating Expense)                  1,208    1,257     (49)
   Depreciation, Depletion and Amortization   21,540   21,828    (288)
                                            --------------------------
                                              44,653   40,218   4,435
                                            --------------------------

Operating Income                              37,434   31,620   5,814

Other Income (Expense):
   Interest Income                             1,841      858     983
   Other Interest Expense                    (12,429) (12,028)   (401)
                                            --------------------------

Income Before Income Taxes                    26,846   20,450   6,396
Income Tax Expense                             9,411    6,527   2,884
                                            --------------------------
Net Income                                  $ 17,435 $ 13,923 $ 3,512
                                            --------------------------
                                            --------------------------

Net Income Per Share (Diluted)              $   0.20 $   0.16 $  0.04
                                            --------------------------
                                            --------------------------


                                                Three Months Ended
                                                   December 31,
                                            --------------------------
ENERGY MARKETING SEGMENT                      2005     2004   Variance
------------------------                    --------------------------
Operating Revenues                          $145,560 $ 63,494 $82,066
                                            --------------------------

Operating Expenses:
   Purchased Gas                             142,829   61,589  81,240
   Operation and Maintenance                   1,231      768     463
   Property, Franchise and Other Taxes            10       46     (36)
   Depreciation, Depletion and Amortization       21       21       -
                                            --------------------------
                                             144,091   62,424  81,667
                                            --------------------------

Operating Income                               1,469    1,070     399

Other Income (Expense):
   Interest Income                               126      134      (8)
   Other Income                                   99       53      46
   Other Interest Expense                        (62)      (2)    (60)
                                            --------------------------

Income Before Income Taxes                     1,632    1,255     377
Income Tax Expense                               645      505     140
                                            --------------------------
Net Income                                  $    987 $    750 $   237
                                            --------------------------
                                            --------------------------

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          Three Months Ended
 amounts)                                           December 31,
                                             -------------------------
TIMBER SEGMENT                                  2005    2004  Variance
--------------                               -------------------------
Revenues from External Customers             $16,908  $12,995 $ 3,913
Intersegment Revenues                             23        -      23
                                             -------------------------
Total Operating Revenues                      16,931   12,995   3,936
                                             -------------------------

Operating Expenses:
   Operation and Maintenance                  11,684    9,558   2,126
   Property, Franchise and Other Taxes           380      329      51
   Depreciation, Depletion and Amortization    2,011    1,477     534
                                             -------------------------
                                              14,075   11,364   2,711
                                             -------------------------

Operating Income                               2,856    1,631   1,225

Other Income (Expense):
   Interest Income                               137       92      45
   Other Income                                   17       17       -
   Other Interest Expense                       (763)    (585)   (178)
                                             -------------------------

Income Before Income Taxes                     2,247    1,155   1,092
Income Tax Expense                               783      402     381
                                             -------------------------
Net Income                                   $ 1,464  $   753 $   711
                                             -------------------------
                                             -------------------------

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


                                                Three Months Ended
                                                   December 31,
                                             -------------------------
ALL OTHER                                      2005    2004  Variance
---------                                    -------------------------
Revenues from External Customers             $   (16) $ 2,682 $(2,698)
Intersegment Revenues                          4,527    1,080   3,447
                                             -------------------------
Total Operating Revenues                       4,511    3,762     749
                                             -------------------------

Operating Expenses:
   Purchased Gas                               3,107    2,070   1,037
   Operation and Maintenance                     874      890     (16)
   Property, Franchise and Other Taxes            19       20      (1)
   Depreciation, Depletion and Amortization      199      193       6
                                             -------------------------
                                               4,199    3,173   1,026
                                             -------------------------

Operating Income                                 312      589    (277)

Other Income (Expense):
   Income from Unconsolidated Subsidiaries     1,264      785     479
   Interest Income                                 6        4       2
   Other Income                                    3        -       3
   Other Interest Expense                       (590)    (352)   (238)
                                             -------------------------

Income Before Income Taxes                       995    1,026     (31)
Income Tax Expense                               425      426      (1)
                                             -------------------------
Net Income                                   $   570  $   600 $   (30)
                                             -------------------------
                                             -------------------------

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       Three Months Ended
 amounts)                                        December 31,
                                          ----------------------------
CORPORATE                                   2005      2004    Variance
---------                                 ----------------------------
Intersegment Revenues                     $    692  $    628  $    64
                                          ----------------------------

Operating Expenses:
   Operation and Maintenance                 1,867     1,950      (83)
   Property, Franchise and Other Taxes          94       168      (74)
   Depreciation, Depletion and
    Amortization                               115       116       (1)
                                          ----------------------------
                                             2,076     2,234     (158)
                                          ----------------------------

Operating Loss                              (1,384)   (1,606)     222

Other Income (Expense):
   Interest Income                          22,654    19,553    3,101
   Other Income                                202       254      (52)
   Interest Expense on Long-Term Debt      (17,900)  (17,893)      (7)
   Other Interest Expense                   (3,795)   (2,858)    (937)
                                          ----------------------------

Loss Before Income Taxes                      (223)   (2,550)   2,327
Income Tax Expense                             417    (1,005)   1,422
                                          ----------------------------
Net Loss                                  $   (640) $ (1,545) $   905
                                          ----------------------------
                                          ----------------------------

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


                                               Three Months Ended
                                                  December 31,
                                          ----------------------------
INTERSEGMENT ELIMINATIONS                    2005     2004    Variance
-------------------------                 ----------------------------
Intersegment Revenues                     $(30,659) $(26,612) $(4,047)
                                          ----------------------------

Operating Expenses:
   Purchased Gas                           (29,793)  (25,910)  (3,883)
   Operation and Maintenance                  (866)     (702)    (164)
                                          ----------------------------
                                           (30,659)  (26,612)  (4,047)
                                          ----------------------------

Operating Income                                 -        -       -

Other Income (Expense):
   Interest Income                         (23,883)  (20,375)  (3,508)
   Other Interest Expense                   23,883    20,375    3,508
                                          ----------------------------

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

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





                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

                    SEGMENT INFORMATION (Continued)
                        (Thousands of Dollars)


                                          Three Months Ended
                                              December 31,
                                              (Unaudited)
                                 -------------------------------------

                                                          Increase
                                       2005      2004    (Decrease)
                                    --------- ---------  -----------

Capital Expenditures:
---------------------
Utility                             $ 12,354  $ 11,335     $  1,019
Pipeline and Storage                   6,163     4,887        1,276
Exploration and Production            50,923    21,008       29,915
Energy Marketing                           5        11           (6)
Timber                                   495       852         (357)
                                    --------- ---------  -----------
   Total Reportable Segments          69,940    38,093       31,847
All Other                                  -         7           (7)
Corporate                                428        19          409
                                    --------- ---------  -----------
   Total Expenditures from
    Continuing Operations           $ 70,368  $ 38,119     $ 32,249
                                    --------- ---------  -----------
                                    --------- ---------  -----------


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

                                                     Percent Colder
Three Months Ended                                   (Warmer) Than:
 December 31          Normal     2005      2004    Normal   Last Year
-------------------  --------   -------  -------- --------  ---------

  Buffalo, NY          2,260     2,210     2,172    (2.2)      1.7
  Erie, PA             2,081     2,048     1,997    (1.6)      2.6





                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

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

                                               Three Months Ended
                                                  December 31,
                                          ----------------------------
                                                             Increase
                                            2005     2004   (Decrease)
                                           -------  ------- ----------

Gas Production/Prices:
----------------------
Production (MMcf)
  Gulf Coast                                1,667    3,225     (1,558)
  West Coast                                1,018    1,039        (21)
  Appalachia                                1,253    1,206         47
  Canada                                    1,911    1,665        246
                                           -------  -------  ---------
                                            5,849    7,135     (1,286)
                                           -------  -------  ---------
                                           -------  -------  ---------
Average Prices (Per  Mcf)
  Gulf Coast                              $ 10.74  $  6.50  $    4.24
  West Coast                                11.08     6.55       4.53
  Appalachia                                13.62     7.73       5.89
  Canada                                    10.76     5.45       5.31
    Weighted Average                        11.42     6.47       4.95
    Weighted Average after Hedging           8.44     5.99       2.45

Oil Production/Prices:
----------------------
Production (Thousands of Barrels)
  Gulf Coast                                  107      289       (182)
  West Coast                                  685      653         32
  Appalachia                                   10        3          7
  Canada                                       87       76         11
                                           -------  -------  ---------
                                              889    1,021       (132)
                                           -------  -------  ---------
                                           -------  -------  ---------

Average Prices (Per Barrel)
  Gulf Coast                              $ 57.90  $ 47.08  $   10.82
  West Coast                                51.34    37.14      14.20
  Appalachia                                61.53    44.33      17.20
  Canada                                    43.18    38.43       4.75
    Weighted Average                        51.45    40.08      11.37
    Weighted Average after Hedging          33.07    26.35       6.72

Total Production (Mmcfe)                   11,183   13,261     (2,078)
------------------------                   -------  -------  ---------
                                           -------  -------  ---------
Selected Operating Performance Statistics:
------------------------------------------
General & Administrative Expense per
 Mcfe (1)                                 $  0.56  $  0.39  $    0.17
Lease Operating Expense per Mcfe (1)      $  1.32  $  0.88  $    0.44
Depreciation, Depletion & Amortization
 per Mcfe (1)                             $  1.93  $  1.65  $    0.28


(1) Refer to page 13 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 2006

SWAPS                  Volume       Average Hedge Price
-----                  ------       -------------------
Oil                     1.4 .MMBBL  $35.33 / BBL
Gas                     6.7 BCF     $6.21 / MCF

No-cost Collars        Volume       Floor Price       Ceiling Price
---------------        ------       -----------       -------------
Gas                     5.1 BCF     $7.28 / MCF       $11.34 / MCF

Hedging Summary for Fiscal 2007

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

No-cost Collars        Volume       Floor Price       Ceiling Price
---------------        ------       -----------       -------------
Gas                     3.5 BCF     $8.12 / MCF       $11.35 / MCF




Drilling Program Quarter Ended December 31, 2005:
-------------------------------------------------
Gross Wells Drilled
-------------------
                             Gulf     West    East    Canada   Total
                           -------- -------- ------- -------- --------
Exploratory
    Successful                   0        0       1        6        7
    Unsuccessful                 0        0       0        2        2
Developmental
    Successful                   0       32      38        1       71
    Unsuccessful                 0        1       0        0        1
Total
    Successful                   0       32      39        7       78
    Unsuccessful                 0        1       0        2        3

Success Ratio                  N/A       97%    100%      78%      96%




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES


Utility Throughput - (millions of cubic feet - MMcf)

                                               Three Months Ended
                                                  December 31,
                                           ---------------------------
                                                             Increase
                                            2005     2004   (Decrease)
                                           -------- ------- ----------
    Retail Sales:
       Residential Sales                    19,524  19,869       (345)
       Commercial Sales                      3,443   3,454        (11)
       Industrial Sales                        327     176        151
                                           -------- ------- ----------
                                            23,294  23,499       (205)
    Transportation                          14,342  14,103        239
                                           -------- ------- ----------
                                            37,636  37,602         34
                                           -------- ------- ----------
                                           -------- ------- ----------

Pipeline & Storage Throughput- (MMcf)
                                               Three Months Ended
                                                  December 31,
                                           ---------------------------
                                                             Increase
                                            2005     2004   (Decrease)
                                           -------- ------- ----------
    Firm Transportation - Affiliated        33,225  32,202      1,023
    Firm Transportation - Non-Affiliated    69,597  51,540     18,057
    Interruptible Transportation             3,723   1,662      2,061
                                           -------- ------- ----------
                                           106,545  85,404     21,141
                                           -------- ------- ----------
                                           -------- ------- ----------

Energy Marketing Volumes
                                               Three Months Ended
                                                  December 31,
                                           ---------------------------
                                                             Increase
                                            2005     2004   (Decrease)
                                           -------- ------- ----------
    Natural Gas (MMcf)                       9,975   8,007      1,968
                                           -------- ------- ----------
                                           -------- ------- ----------
Timber Board Feet (Thousands)

                                                  December 31,
                                           ---------------------------
                                                             Increase
                                            2005     2004   (Decrease)
                                           -------- ------- ----------
    Log Sales                                2,491   1,745        746
    Green Lumber Sales                       1,974   2,164       (190)
    Kiln Dry Lumber Sales                    4,486   3,366      1,120
                                           -------- ------- ----------
                                             8,951   7,275      1,676
                                           -------- ------- ----------
                                           -------- ------- ----------




                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES
        FISCAL 2006 SEGMENT EARNINGS GUIDANCE AND SENSITIVITIES


                                   Earnings per share sensitivity to
                                    changes from September 13, 2005
                                           NYMEX prices(a)(b)
  Fiscal 2006 earnings per         -----------------------------------
 share guidance by segment(a)        $1 change per    $1 change per
                                        MMBtu gas         Bbl oil
                                   ---------------- ------------------
                      Range        Increase Decrease Increase Decrease
                 ----------------  -------- -------- -------- --------
Utility            $0.52   $0.59    - $0.01  + $0.01     -       -
Pipeline &
 Storage           $0.60   $0.63   + $0.015 - $0.015     -       -
Exploration &
 Production        $1.10   $1.20    + $0.09  - $0.09  + $0.01  - $0.01
Energy Marketing   $0.02   $0.02        -        -       -       -
Timber             $0.05   $0.05        -        -       -       -
Corporate & Other  $0.01   $0.01        -        -       -       -

Consolidated       $2.30   $2.50   + $0.095 - $0.095  + $0.01  - $0.01




 NYMEX Settlement Prices at September 13, 2005
 ---------------------------------------------

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

 Oct-05        $10.763       $63.11
 Nov-05        $11.371       $63.78
 Dec-05        $11.866       $64.38
 Jan-06        $12.156       $64.83
 Feb-06        $12.046       $65.19
 Mar-06        $11.751       $65.41
 Apr-06         $9.551       $65.48
 May-06         $9.191       $65.44
 Jun-06         $9.216       $65.35
 Jul-06         $9.257       $65.23
 Aug-06         $9.300       $65.10
 Sep-06         $9.276       $64.96

Fiscal Year
 Average       $10.479       $64.86
Jan-06/Sept-06
 Average       $10.194       $65.22




(a) Please refer to forward looking statement footnote at page 6
    of this document.

(b) This sensitivity table is current as of February 8, 2006, but
    will become obsolete with the passage of time, changes in Seneca's
    production forecast, 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 December 31 (unaudited)        2005            2004
--------------------------------------  --------------  --------------

  Operating Revenues                   $  710,756,000  $  500,283,000
                                        --------------- --------------
                                        --------------- --------------

  Income from Continuing Operations    $   57,419,000  $   44,830,000
  Income from Discontinued Operations,
   Net of Tax                                       -       5,608,000
                                        --------------- --------------
  Net Income Available for Common
   Stock                               $   57,419,000  $   50,438,000
                                        --------------- --------------
                                        --------------- --------------

  Earnings Per Common Share:
   Basic:
          Income from Continuing
           Operations                  $         0.68  $         0.54
          Income from Discontinued
           Operations                               -            0.07
                                        --------------  --------------
          Net Income Available for
           Common Stock                $         0.68  $         0.61
                                        --------------- --------------
                                        --------------- --------------

   Diluted:
          Income from Continuing
           Operations                  $         0.67  $         0.53
          Income from Discontinued
           Operations                               -            0.07
                                        --------------  --------------
          Net Income Available for
           Common Stock                $         0.67  $         0.60
                                        --------------- --------------
                                        --------------- --------------

   Weighted Average Common Shares:
      Used in Basic Calculation            84,422,717      83,150,086
                                        --------------- --------------
                                        --------------- --------------
      Used in Diluted Calculation          86,256,862      84,638,106
                                        --------------- --------------
                                        --------------- --------------

Twelve Months Ended December 31 (unaudited)
-------------------------------------------

  Operating Revenues                   $2,134,021,000  $1,917,888,000
                                        --------------  --------------
                                        --------------  --------------

  Income from Continuing Operations    $  166,104,000  $  159,561,000
  Income from Discontinued Operations,
   Net of Tax                              30,365,000       8,249,000
                                        --------------  --------------
  Net Income Available for Common
   Stock                               $  196,469,000  $  167,810,000
                                        --------------  --------------
                                        --------------  --------------

  Earnings Per Common Share:
   Basic:
          Income from Continuing
           Operations                  $         1.98  $         1.94
          Income from Discontinued
           Operations                            0.36            0.10
                                        --------------  --------------
          Net Income Available for
           Common Stock                $         2.34  $         2.04
                                        --------------  --------------
                                        --------------  --------------

   Diluted:
          Income from Continuing
           Operations                  $         1.94  $         1.91
          Income from Discontinued
           Operations                            0.36            0.10
                                        --------------  --------------
          Net Income Available for
           Common Stock                $         2.30  $         2.01
                                        --------------  --------------
                                        --------------  --------------


   Weighted Average Common Shares:
      Used in Basic Calculation            83,862,052      82,442,202
                                        --------------  --------------
                                        --------------  --------------
      Used in Diluted Calculation          85,438,189      83,520,574
                                        --------------  --------------
                                        --------------  --------------

CONTACT:
National Fuel Gas
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.