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 Third Quarter Earnings

08/03/2006

WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--Aug. 3, 2006--National Fuel Gas Company ("National Fuel" or the "Company") (NYSE:NFG) today announced consolidated earnings for the quarter ended June 30, 2006 of $0.1 million, or less than $0.01 per share, a decrease of $19.0 million or $0.23 per share from the third 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). Please refer to the table below to view the impact of significant items for the quarterly and nine month comparative periods.


                                 Three Months          Nine Months
                                Ended June 30,       Ended June 30,
                                2006      2005       2006      2005
                              --------- ---------  --------- ---------
(in thousands except per
 share amounts)
Reported GAAP earnings            $111   $19,156   $136,123  $140,276
Less:  Income (Loss) from
        discontinued
        operations of United
        Energy(1)                         (7,237)               5,073
                              --------- ---------  --------- ---------
Income from continuing
 operations                        111    26,393    136,123   135,203
Exclude:   Impairment of
            Canadian oil and
            gas producing
            properties(2)       39,502               39,502
           Gain on sale of
            base gas(2)                                        (2,636)
                              --------- ---------  --------- ---------
Earnings excluding these
 items                         $39,613   $26,393   $175,625  $132,567
                              ========= =========  ========= =========

Reported GAAP earnings per
 share                           $0.00     $0.23      $1.58     $1.65
Less:  Income (Loss) from
        discontinued
        operations of United
        Energy(1)                          (0.08)                0.06
                              --------- ---------  --------- ---------
Income from continuing
 operations                       0.00      0.31       1.58      1.59
Exclude:   Impairment of
            Canadian oil and
            gas producing
            properties(2)         0.46                 0.46
           Gain on sale of
            base gas(2)                                         (0.03)
                              --------- ---------  --------- ---------
Earnings excluding these
 items                           $0.46     $0.31      $2.04     $1.56
                              ========= =========  ========= =========

(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.

Excluding the significant items discussed below, earnings from continuing operations increased $13.2 million or $0.15 per share from the prior year's third quarter earnings from continuing operations of $26.4 million or $0.31 per share.

Earnings from continuing operations for the quarter ended June 30, 2006 were negatively affected by a $39.5 million or $0.46 per share non-cash impairment of Canadian oil and gas producing properties which caused earnings to decrease $26.3 million or $0.31 per share from the prior year's third quarter earnings from continuing operations of $26.4 million or $0.31 per share. See further discussion of the impairment later in this document.

Philip C. Ackerman, Chairman and Chief Executive Officer of National Fuel Gas Company stated: "This quarter the consolidated performance of the Company is affected by certain accounting rules that may confuse, rather than enlighten our investors. Under the 'full-cost' rules for oil and gas accounting, projected future revenue streams from our properties in Canada and the United States are each valued separately. When those projected revenue streams are compared to the book value of those properties at the end of each quarter, only shortfalls, not gains, are recorded. Thus our reported earnings reflect the $39.5 million decline in the value of our Canadian properties, but not a simultaneous $37.2 million gain in the value of our properties in the United States.

"While performance in our Exploration and Production segment is not all that it might have been, particularly in Canada, exploration and production will easily be our largest contributor to cash flow this year, and the increasing value of our oil reserves, although not reflected under the accounting rules, is certainly building value for the shareholder."*

Ackerman continued, "Absent the accounting adjustment, I am pleased that this quarter's earnings are up 50 percent from last year's third quarter and that our earnings guidance of $2.60 to $2.80 per share for 2007 is up significantly from our guidance for 2006."*

DISCUSSION OF THIRD QUARTER EARNINGS

CONTINUING OPERATIONS

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 approximately $0.8 million for the quarter ended June 30, 2006, were $2.5 million higher than the earnings in the prior year's third quarter.

In Distribution's New York Division, a loss of $0.08 million improved from a loss of $4.0 million for the third quarter of 2005. In the third quarter of fiscal 2005, Distribution recorded two regulatory adjustments totaling $4.1 million (after tax). These adjustments did not recur in the third quarter of fiscal 2006.

In Distribution's Pennsylvania Division, earnings for the quarter of approximately $0.9 million were down $1.4 million from the $2.3 million reported in the prior year's third quarter. This decrease is mainly the result of lower customer usage and weather that was 14.7 percent warmer than the prior year.

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 $12.6 million for the quarter ended June 30, 2006, were up $1.8 million when compared with the same period in the prior fiscal year. Lower pension expense for the quarter and lower expense for preliminary project costs associated with the Empire Connector project were the primary contributors to the increase.

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 third quarter of fiscal 2006 of $15.13 million is a decrease of $28.96 million from earnings of $13.83 million in the prior year's quarter. The decrease was mainly due to the non-cash charge of $39.5 million (after tax) to write down the value of Seneca's Canadian oil and natural gas producing properties. Excluding this impairment, Seneca's earnings were $24.4 million, an increase of $10.5 million from the prior year's quarter.

Seneca uses the full cost method of accounting for determining the book value of its oil and natural gas properties. This method requires that Seneca perform a quarterly "ceiling test" to compare, on a country-by-country basis, the present value of future revenues from its oil and natural gas reserves based on current market prices ("the ceiling") with the book value of those reserves at the balance sheet date. If the book value of the reserves in any country exceeds the ceiling, a non-cash charge must be recorded to reduce the book value of the reserves to the calculated ceiling. For purposes of calculating the ceiling, accounting rules require that Seneca's Canadian reserves (of which more than 80% are natural gas) are valued at commodity prices on the last day of the quarter. At June 30, 2006 the prompt month New York Mercantile Exchange ("NYMEX") price for natural gas was $6.10 per MMBtu of natural gas as compared to $7.21/MMBtu at the end of March (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 July 31, 2006, however, the prompt month closing NYMEX price for natural gas had rebounded at $8.21/MMBtu and has varied by as much as $0.61/MMBtu during this past week. If prices were to remain at these levels at September 30, 2006, the accounting rules would not allow Seneca to recognize the benefit of this increase in pricing in the fourth quarter of 2006. The accounting rules also do not allow Seneca to offset the reduction in the value of our Canadian reserves with the increase in U.S. reserve values during the quarter of approximately $37.2 million. 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 $464.0 million at June 30, 2006.

Natural gas prices received by Seneca were 6.3 percent higher and crude oil prices received by Seneca were 57.7 percent higher than the prior year's quarter. Production for the quarter of 12.0 billion cubic feet equivalent ("Bcfe") was in line with Seneca's expected production. For the quarter ended June 30, 2006, the weighted average natural gas price (after hedging) was $6.57/Mcf, an increase of $0.39/Mcf from the prior year's quarter, and the weighted average oil price (after hedging) was $45.13/barrel ("Bbl"), an increase of $16.51/Bbl from the prior year's quarter. Earnings increased by approximately $6.0 million as a result of higher commodity prices (after hedging) that more than offset the impact of a 1.4 Bcfe decline in production.

During the quarter Seneca also 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. During the quarter the Company made the determination that it expects to be in a position to fully utilize the loss carryforward. As a result, a valuation allowance of $2.9 million that the Company had on its balance sheet is no longer necessary. Seneca also recognized a tax benefit of $3.2 million related to the favorable resolution of certain open tax issues.

Seneca's higher production revenues were partially offset by higher depletion expense of approximately $2.6 million, which, on a per unit basis, increased $0.43/thousand cubic feet equivalent ("Mcfe") to $2.17/Mcfe. The increase in depletion expense resulted mainly from higher finding and development costs.

Seneca drilled 80 wells during the third quarter. In Seneca's East division, 44 wells were drilled during this year's third quarter, bringing the total to 97 for the nine months ended June 30, 2006. In Seneca's West division, 31 wells were drilled this quarter for a total of 91 wells drilled year to date. In the Gulf of Mexico, construction of the Eugene Island 320 platform was completed in late June, and production commenced in mid July. The well is currently producing 8 million cubic feet ("Mmcf") per day. Seneca's working interest in this well is 100 percent. The Brazos 502 #2 well was drilled and encountered 97 feet of gas pay. Seneca has a 65 percent working interest in this well and production is expected to commence in mid fiscal 2007.*

In June 2006, the National Fuel Board of Directors approved an increase in capital spending in the Exploration and Production segment for fiscal 2006, from $155 million to $207 million. Estimated capital spending will increase approximately $32 million, $16 million and $4 million in the Gulf of Mexico, West Coast region and Appalachian region, respectively.* The increase in the capital budget for the Gulf of Mexico is due to an increase in drilling and completion activity, higher working interests on new wells and construction of facilities for new wells. The increase in the West is due to the acquisition of reserves and the addition of new wells and construction of facilities for those wells.

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 decreased $0.5 million from $1.5 million in the third quarter last year. This decrease is primarily due to a slight decrease in margin and higher operating expense due to credits recorded in the prior year third quarter that did not recur in the current quarter.

Timber Segment

The Timber segment operations are carried out by Highland Forest Resources, Inc. ("Highland") and Seneca's Northeast Division. This segment primarily 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 third quarter earnings of $1.5 million were $1.0 million higher than the prior year's third quarter mainly due to higher kiln dry lumber sales and lower operating expenses. During the quarter Highland changed their cost accounting procedures so that certain costs associated with timber processing follow along with the produced lumber until it is removed from inventory.

Corporate and All Other

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

Earnings in this category declined to a loss of $0.8 million from earnings of $1.3 million in the prior year's quarter. Earnings during last year's third quarter benefited from $1.3 million of reimbursed project development costs that did not recur in 2006.

DISCUSSION OF NINE MONTH EARNINGS

Consolidated earnings for the nine months ended June 30, 2006 were $136.1 million or $1.58 per share, a decrease of $4.2 million from the prior year's earnings of $140.3 million. Consolidated earnings for the nine months ended June 30, 2005 include earnings from discontinued operations from United Energy, the Company's former operations in the Czech Republic, of $5.1 million or $0.06 per share. There was no income from discontinued operations for the nine months ended June 30, 2006. Excluding the $2.6 million gain from the sale of base gas from Supply Corporation's jointly-owned Ellisburg Storage Field in the second quarter of 2005 and the $39.5 million impairment of Canadian oil and gas producing properties this quarter, earnings from continuing operations increased $43.1 million or $0.48 per share from the prior year's nine month earnings from continuing operations of $132.6 million or $1.56 per share. (See further discussion of the base gas sale below and the oil and gas impairment in this document).

CONTINUING OPERATIONS

In the Utility segment, earnings increased $6.0 million. The comparative consolidated earnings for the nine months ended June 30, 2005 include $4.1 million (after tax) in regulatory adjustments that reduced earnings in 2005 and did not recur in the current nine month period. In addition, a $2.6 million (after tax) adjustment (which increased earnings) was recorded in the first quarter of fiscal 2006 to correct Distribution's calculation of the symmetrical sharing component included in the New York gas adjustment rate. The positive impact of the most recent rate settlements in New York and Pennsylvania were more than offset by the impact of warmer weather in Pennsylvania, lower average usage per customer and higher bad debt and interest expense in both New York and Pennsylvania.

In the Pipeline and Storage segment, earnings were up $3.8 million. The comparative consolidated earnings for the nine months ended June 30, 2005 include a $2.6 million (after tax) gain from the sale of base gas from Supply Corporation's jointly-owned Ellisburg Storage Field. Excluding this item earnings were up $6.4 million mainly due to higher transportation, storage and efficiency gas revenues. Lower project development costs associated with the Empire Connector project and lower interest and depreciation expense also contributed to the increase in earnings.

Earnings in the Exploration and Production segment decreased $10.8 million mainly due to the non-cash charge of $39.5 million (after tax) to write down the value of Seneca's Canadian oil and natural gas producing properties described above. Excluding this item, earnings in this segment increased $28.7 million. This increase is mainly due to higher weighted average natural gas and oil prices after hedging and the tax adjustments described above and in the Company's second quarter earnings release. Partially offsetting the impact of these items were lower production volumes and higher depletion and operating expenses.

The Energy Marketing segment's earnings were up $1.0 million primarily due to an increase in sales volumes.

In the Timber segment, earnings increased $1.0 million mainly due to higher cherry kiln dry lumber and cherry export logs sales and lower operating expenses as a result of the change in cost accounting procedures noted above.

SHARE REPURCHASES

During the quarter, the Company repurchased in the open market 1,459,100 shares of its common stock pursuant to the authorization of the Company's Board of Directors that authorized the Company to repurchase up to 8,000,000 shares of its common stock. Through June 30, 2006, the Company has repurchased 2,284,350 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 nine months ended June 30, 2006, the Company estimates that the calculated diluted earnings per share were increased by $0.008 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 and the impact of those repurchases on the calculation of earnings per share.

EARNINGS GUIDANCE

Earnings guidance for the Company's fourth quarter of fiscal 2006 and the entire fiscal year are presented in the table below. The guidance is being revised to fully incorporate third quarter actual earnings and to show the impact of the impairment charge related to the Canadian properties in the Exploration and Production segment.* Guidance for the fourth quarter of fiscal 2006 includes production from the Exploration and Production segment in the range of 11 to 13 Bcfe.*


FISCAL 2006 EARNINGS GUIDANCE
-----------------------------

                      Reported                    Guidance*
              ------------------------- -----------------------------
              Six Months  Three Months   Three Months   Fiscal Year
                 Ended        Ended         Ended          Ended
               March 31,    June 30,    September 30,  September 30,
                 2006         2006           2006           2006
              ----------- ------------- -------------- --------------

GAAP earnings      $1.58         $0.00  $0.27 - $0.33  $1.85 - $1.91

Add: oil &
 gas                             $0.46                         $0.46
 impairment

              ----------- ------------- -------------- --------------
Earnings
 excluding         $1.58         $0.46  $0.27 - $0.33  $2.31 - $2.37
 impairment

FISCAL 2007 EARNINGS GUIDANCE

The Company's preliminary consolidated earnings guidance for fiscal 2007 is in the range of $2.60 to $2.80 per share.* This includes oil and gas production for the Exploration and Production segment in the range of 47 to 52 Bcfe.* Further details regarding the production guidance are included on page 22 of this document.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, August 4, 2006 at 11 a.m. (Eastern Time) to discuss this announcement. There are two ways to access this call. For those with Internet access, visit National Fuel's Web site at 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) 1-866-825-3354, and using the passcode "12960669." 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 "44573014." Both the webcast and telephonic replay will be available until the close of business on Friday, August 11, 2006.

National Fuel is an integrated energy company with $3.8 billion in assets comprised of the following five operating segments: Utility, Pipeline and Storage, Exploration and Production, Energy Marketing, and Timber. Additional information about National Fuel is available on its Internet Web site: http://www.nationalfuelgas.com or through its investor information service at 1-800-334-2188.

*Certain statements contained herein, including those which are designated with an asterisk ("*") and those which use words such as "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects," and similar expressions, are "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company's expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: changes in laws and regulations to which the Company is subject, including changes in tax, environmental, safety and employment laws and regulations, and changes in laws and regulations relating to repeal of the Public Utility Holding Company Act of 1935; 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 Months Three Months Nine Months  Nine Months
(Thousands of         Ended        Ended        Ended        Ended
 Dollars)            June 30,     June 30,     June 30,     June 30,
                       2006         2005         2006         2005
                   (unaudited)  (unaudited)  (unaudited)  (unaudited)
                   ------------ ------------ ------------ ------------
Utility
-------            ------------ ------------ ------------ ------------
Reported earnings         $827      $(1,684)     $51,234      $45,269
                   ------------ ------------ ------------ ------------

Pipeline and Storage
--------------------
Reported earnings       12,642       10,843       45,384       41,577
Base gas sale                -            -            -       (2,636)
                   ------------ ------------ ------------ ------------
Earnings excluding
 this item              12,642       10,843       45,384       38,941
                   ------------ ------------ ------------ ------------

Exploration and
 Production
---------------
Reported earnings      (15,127)      13,830       28,152       38,984
Impairment of oil
 and gas producing
 properties             39,502            -       39,502            -
                   ------------ ------------ ------------ ------------
Earnings excluding
 this item              24,375       13,830       67,654       38,984
                   ------------ ------------ ------------ ------------

Energy Marketing
----------------   ------------ ------------ ------------ ------------
Reported earnings        1,045        1,548        5,909        4,909
                   ------------ ------------ ------------ ------------

Timber
------             ------------ ------------ ------------ ------------
Reported earnings        1,529          555        5,235        4,201
                   ------------ ------------ ------------ ------------

Corporate and All
 Other
-----------------  ------------ ------------ ------------ ------------
Reported earnings         (805)       1,301          209          263
                   ------------ ------------ ------------ ------------

Consolidated
 Earnings from
 Continuing
 Operations
--------------
Reported earnings
 from continuing
 operations                111       26,393      136,123      135,203
Total excluded
 items                  39,502            -       39,502       (2,636)
                   ------------ ------------ ------------ ------------
Earnings from
 continuing
 operations
 excluding these
 items                 $39,613      $26,393     $175,625     $132,567
                   ============ ============ ============ ============

Discontinued
 Operations
------------
Reported earnings
 from discontinued
 operations                  -       (7,237)           -        5,073
                   ------------ ------------ ------------ ------------

Consolidated
------------
Reported earnings         $111      $19,156     $136,123     $140,276
                   ============ ============ ============ ============

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES
                  RECONCILIATION TO REPORTED EARNINGS

                   Three Months Three Months Nine Months  Nine Months
(Diluted Earnings     Ended        Ended        Ended        Ended
 Per Share)          June 30,     June 30,     June 30,     June 30,
                       2006         2005         2006         2005
                   (unaudited)  (unaudited)  (unaudited)  (unaudited)
                   ------------ ------------ ------------ ------------
Utility
-------            ------------ ------------ ------------ ------------
Reported earnings        $0.01       $(0.02)       $0.59        $0.53
                   ------------ ------------ ------------ ------------

Pipeline and Storage
--------------------
Reported earnings         0.15         0.13         0.53         0.49
Base gas sale                -            -            -        (0.03)
                   ------------ ------------ ------------ ------------
Earnings excluding
 this item                0.15         0.13         0.53         0.46
                   ------------ ------------ ------------ ------------

Exploration and
 Production
---------------
Reported earnings        (0.18)        0.16         0.33         0.46
Impairment of oil
 and gas producing
 properties               0.46            -         0.46            -
                   ------------ ------------ ------------ ------------
Earnings excluding
 this item                0.28         0.16         0.79         0.46
                   ------------ ------------ ------------ ------------

Energy Marketing
----------------   ------------ ------------ ------------ ------------
Reported earnings         0.01         0.02         0.07         0.06
                   ------------ ------------ ------------ ------------

Timber
------             ------------ ------------ ------------ ------------
Reported earnings         0.02         0.01         0.06         0.05
                   ------------ ------------ ------------ ------------

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

Consolidated
 Earnings from
 Continuing
 Operations
--------------
Reported earnings            -         0.31         1.58         1.59
Impairment of oil
 and gas producing
 properties               0.46            -         0.46        (0.03)
                   ------------ ------------ ------------ ------------
Earnings from
 continuing
 operations
 excluding these
 items                   $0.46        $0.31        $2.04        $1.56
                   ============ ============ ============ ============

Discontinued
 Operations
------------
Reported earnings
 from discontinued
 operations                  -        (0.08)           -         0.06
                   ------------ ------------ ------------ ------------

Consolidated
------------
Reported earnings           $-        $0.23        $1.58        $1.65
                   ============ ============ ============ ============

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

(Thousands of Dollars,
 except per share
 amounts)
                         Three Months Ended       Nine Months Ended
                              June 30,                June 30,
                             (Unaudited)             (Unaudited)
                       ----------------------- -----------------------
SUMMARY OF OPERATIONS     2006        2005        2006        2005
---------------------  ----------- ----------- ----------- -----------
Operating Revenues       $415,452    $400,359  $2,017,189  $1,636,484
                       ----------- ----------- ----------- -----------

Operating Expenses:
  Purchased Gas           184,635     181,100   1,187,952     877,510
  Operation and
   Maintenance             96,117      94,534     320,821     297,549
  Property, Franchise
   and Other Taxes         16,845      16,598      54,147      53,551
  Depreciation,
   Depletion and
   Amortization            46,943      45,099     134,267     132,438
  Impairment of Oil
   and Gas Producing
   Properties              62,371           -      62,371           -
                       ----------- ----------- ----------- -----------
                          406,911     337,331   1,759,558   1,361,048

Operating Income            8,541      63,028     257,631     275,436

Other Income
 (Expense):
Income from
 Unconsolidated
 Subsidiaries                 215         675       2,199       1,914
Interest Income             2,203         492       4,301       1,783
Other Income                  546         602       1,535       5,979
Interest Expense on
 Long-Term Debt           (18,135)    (18,294)    (54,502)    (54,989)
Other Interest Expense     (1,026)     (4,557)     (4,266)     (8,911)
                       ----------- ----------- ----------- -----------

Income (Loss) from
 Continuing Operations
 Before Income Taxes       (7,656)     41,946     206,898     221,212

Income Tax Expense
 (Benefit)                 (7,767)     15,553      70,775      86,009
                       ----------- ----------- ----------- -----------

Income from Continuing
 Operations                  $111     $26,393    $136,123    $135,203

Income (Loss) from
 Discontinued
 Operations, Net of
 Tax                            -      (7,237)          -       5,073
                       ----------- ----------- ----------- -----------

Net Income Available
 for Common Stock            $111     $19,156    $136,123    $140,276
                       =========== =========== =========== ===========

Earnings Per Common
 Share:
   Basic:
    Income from
     Continuing
     Operations                $-       $0.32       $1.62       $1.62
    Income (Loss) from
     Discontinued
     Operations                 -       (0.09)          -        0.06
                       ----------- ----------- ----------- -----------
    Net Income
     Available for
     Common Stock              $-       $0.23       $1.62       $1.68

   Diluted:
    Income from
     Continuing
     Operations                $-       $0.31       $1.58       $1.59
    Income (Loss) from
     Discontinued
     Operations                 -       (0.08)          -        0.06
                       ----------- ----------- ----------- -----------
    Net Income
     Available for
     Common Stock              $-       $0.23       $1.58       $1.65
                       =========== =========== =========== ===========

Weighted Average
 Common Shares:
  Used in Basic
   Calculation         84,013,556  83,568,251  84,231,490  83,343,711
                       =========== =========== =========== ===========
  Used in Diluted
   Calculation         86,016,131  84,897,466  86,150,927  84,771,403
                       =========== =========== =========== ===========

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

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

ASSETS
Property, Plant and Equipment                $4,638,247    $4,423,255
Less - Accumulated Depreciation, Depletion
 and Amortization                             1,753,147     1,583,955
----------------------------------------------------------------------
          Net Property, Plant and
           Equipment                         $2,885,100     2,839,300
------------------------------------------ ---------------------------

Current Assets:
Cash and Temporary Cash Investments             121,626        57,607
Hedging Collateral Accounts                      14,684        77,784
Receivables - Net                               233,150       155,064
Unbilled Utility Revenue                         15,529        20,465
Gas Stored Underground                           40,803        64,529
Materials and Supplies - at average cost         35,925        33,267
Unrecovered Purchased Gas Costs                       -        14,817
Prepayments and Other Current Assets             43,681        65,469
Deferred Income Taxes                            51,239        83,774
------------------------------------------ ---------------------------
          Total Current Assets                  556,637       572,776
------------------------------------------ ---------------------------

Other Assets:
Recoverable Future Taxes                         84,667        85,000
Unamortized Debt Expense                         16,000        17,567
Other Regulatory Assets                          60,134        47,028
Deferred Charges                                  5,715         4,474
Other Investments                                87,291        80,394
Investments in Unconsolidated Subsidiaries       10,206        12,658
Goodwill                                          5,476         5,476
Intangible Assets                                40,305        42,302
Fair Value of Derivative Financial
 Instruments                                      8,266             -
Other                                             5,728        15,677
------------------------------------------ ---------------------------
          Total Other Assets                    323,788       310,576
------------------------------------------ ---------------------------
Total Assets                                 $3,765,525    $3,722,652
------------------------------------------ ---------------------------

CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized -
 200,000,000 Shares; Issued and
 Outstanding - 83,309,093 Shares and
 84,356,748 Shares, Respectively                $83,309       $84,357
Paid in Capital                                 553,081       529,834
Earnings Reinvested in the Business             807,951       813,020
------------------------------------------ ---------------------------
Total Common Shareholder Equity Before
 Items of Other Comprehensive Loss            1,444,341     1,427,211
Accumulated Other Comprehensive Loss           (102,611)     (197,628)
------------------------------------------ ---------------------------
Total Comprehensive Shareholders' Equity      1,341,730     1,229,583
Long-Term Debt, Net of Current Portion        1,111,746     1,119,012
------------------------------------------ ---------------------------
          Total Capitalization                2,453,476     2,348,595
------------------------------------------ ---------------------------

Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper           -             -
Current Portion of Long-Term Debt                 9,502         9,393
Accounts Payable                                131,540       155,485
Amounts Payable to Customers                     31,576         1,158
Dividends Payable                                24,978        24,445
Other Accruals and Current Liabilities          104,350        60,404
Fair Value of Derivative Financial
 Instruments                                     75,239       209,072
----------------------------------------------------------------------
          Total Current and Accrued
           Liabilities                          377,185       459,957
----------------------------------------------------------------------

Deferred Credits:
Deferred Income Taxes                           494,957       489,720
Taxes Refundable to Customers                    11,073        11,009
Unamortized Investment Tax Credit                 6,270         6,796
Cost of Removal Regulatory Liability             94,166        90,396
Other Regulatory Liabilities                     58,376        66,339
Pension and Other Post-Retirement
 Liabilities                                    155,579       143,687
Asset Retirement Obligation                      42,940        41,411
Other Deferred Credits                           71,503        64,742
------------------------------------------ ---------------------------
          Total Deferred Credits                934,864       914,100
------------------------------------------ ---------------------------
Commitments and Contingencies                         -             -
------------------------------------------ ---------------------------
Total Capitalization and Liabilities         $3,765,525     3,722,652
------------------------------------------ ---------------------------

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

                                                   Nine Months Ended
                                                       June 30,
(Thousands of Dollars)                             2006       2005
----------------------------------------------------------------------

Operating Activities:
Net Income Available for Common Stock             $136,123   $140,276
Adjustments to Reconcile Net Income to Net Cash
     Provided by Operating Activities:
          Impairment of Oil and Gas Producing
           Properties                               62,371          -
          Depreciation, Depletion and
           Amortization                            134,267    145,814
          Deferred Income Taxes                    (17,430)     1,994
          Income from Unconsolidated
           Subsidiaries, Net of Cash
           Distributions                             2,452       (374)
          Minority Interest in Foreign
           Subsidiaries                                  -      2,899
          Excess Tax Benefits Associated with
           Stock-Based Compensation Awards          (6,515)         -
          Other                                     (6,493)    (9,342)
     Change in:
          Hedging Collateral Deposits               63,100     (8,513)
          Receivables and Unbilled Utility
           Revenue                                 (72,496)   (91,223)
          Gas Stored Underground and Materials
           and Supplies                             21,098     32,878
          Unrecovered Purchased Gas Costs           14,817      7,532
          Prepayments and Other Current Assets      21,800      1,524
          Accounts Payable                         (24,650)    23,886
          Amounts Payable to Customers              30,418     37,492
          Other Accruals and Current Liabilities    49,950     63,749
          Other Assets                             (15,753)    (8,621)
          Other Liabilities                         16,855     (5,573)
----------------------------------------------------------------------
               Net Cash Provided by Operating
                Activities                        $409,914   $334,398
----------------------------------------------------------------------

Investing Activities:
Capital Expenditures                             ($218,658) ($157,401)
Net Proceeds from Sale of Oil and Gas Producing
 Properties                                              4         90
Other                                               (1,578)     4,001
----------------------------------------------------------------------
               Net Cash Used in Investing
                Activities                       ($220,232) ($153,310)
----------------------------------------------------------------------

Financing Activities:
Change in Notes Payable to Banks and Commercial
 Paper                                                   -  ($107,243)
Excess Tax Benefits Associated with Stock-Based
 Compensation Awards                                $6,515          -
Shares Repurchased under Repurchase Plan          ($76,540)         -
Reduction of Long-Term Debt                         (7,157)   (10,740)
Dividends Paid on Common Stock                     (73,275)   (69,847)
Dividends Paid to Minority Interest                      -    (12,676)
Proceeds From Issuance of Common Stock              23,399     12,499
----------------------------------------------------------------------
               Net Cash Used In Financing
                Activities                       ($127,058) ($188,007)
----------------------------------------------------------------------
Effect of Exchange Rates on Cash                     1,395        (40)
----------------------------------------------------------------------
Net Increase (Decrease) in Cash and Temporary
 Cash Investments                                   64,019     (6,959)
Cash and Temporary Cash Investments at Beginning
 of Period                                          57,607     57,541
----------------------------------------------------------------------
Cash and Temporary Cash Investments at June 30    $121,626    $50,582
----------------------------------------------------------------------

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

               SEGMENT OPERATING RESULTS AND STATISTICS
                              (UNAUDITED)

(Thousands of
 Dollars,
 except per
 share           Three Months Ended           Nine Months Ended
 amounts)             June 30,                     June 30,
             -------------------------- ------------------------------
UTILITY
 SEGMENT       2006     2005  Variance      2006      2005   Variance
--------     -------------------------- ------------------------------
Revenues from
 External
 Customers   $186,661 $189,175 $(2,514) $1,154,375  $991,651 $162,724
Intersegment
 Revenues       2,514    2,734    (220)     12,317    12,732     (415)
             -------------------------- ------------------------------
Total
 Operating
 Revenues     189,175  191,909  (2,734)  1,166,692 1,004,383  162,309
             -------------------------- ------------------------------

Operating
 Expenses:
 Purchased
 Gas          115,463  119,615  (4,152)    830,823   687,225  143,598
 Operation
  and
  Maintenance  45,889   46,174    (285)    163,098   155,344    7,754
 Property,
  Franchise
  and Other
  Taxes        11,106   10,868     238      36,878    36,423      455
 Depreciation,
  Depletion
  and
  Amortization 10,054   10,084     (30)     30,058    30,081      (23)
             -------------------------- ------------------------------
              182,512  186,741  (4,229)  1,060,857   909,073  151,784
             -------------------------- ------------------------------

Operating
 Income
 (Loss)         6,663    5,168   1,495     105,835    95,310   10,525

Other Income
 (Expense):
 Interest
  Income          162       63      99         542       275      267
 Other Income     205      202       3         609       485      124
 Other
  Interest
  Expense      (5,789)  (7,911)  2,122     (19,392)  (18,755)    (637)
             -------------------------- ------------------------------

Income (Loss)
 Before
 Income Taxes   1,241   (2,478)  3,719      87,594    77,315   10,279
Income Tax
 Expense
 (Benefit)        414     (794)  1,208      36,360    32,046    4,314
             -------------------------- ------------------------------
Net Income
 (Loss)          $827  $(1,684) $2,511     $51,234   $45,269   $5,965
             ========================== ==============================

Net Income
 (Loss) Per
 Share
 (Diluted)      $0.01   $(0.02)  $0.03       $0.59     $0.53    $0.06
             ========================== ==============================

                                          Three Months  Twelve Months
                                              Ended         Ended
(Thousands of Dollars, except per share   September 30, September 30,
 amounts)                                 ----------------------------
UTILITY SEGMENT                               2005          2005
---------------                           ----------------------------
Revenues from External Customers               $109,921    $1,101,572
Intersegment Revenues                             2,763        15,495
                                          ----------------------------
Total Operating Revenues                        112,684     1,117,067
                                          ----------------------------

Operating Expenses:
 Purchased Gas                                   52,060       739,286
 Operation and Maintenance                       55,674       211,019
 Property, Franchise and Other Taxes              9,791        46,214
 Depreciation, Depletion and Amortization        10,079        40,159
                                          ----------------------------
                                                127,604     1,036,678
                                          ----------------------------

Operating Income (Loss)                         (14,920)       80,389

Other Income (Expense):
 Interest Income                                  3,836         4,111
 Other Income                                       213           699
 Other Interest Expense                          (4,145)      (22,900)
                                          ----------------------------

Income (Loss) Before Income Taxes               (15,016)       62,299
Income Tax Expense (Benefit)                     (8,943)       23,102
                                          ----------------------------
Net Income (Loss)                               $(6,073)      $39,197
                                          ============================

Net Income (Loss) Per Share (Diluted)            $(0.07)        $0.46
                                          ============================

                       Three Months Ended        Nine Months Ended
                            June 30,                 June 30,
                    ------------------------ -------------------------
PIPELINE AND STORAGE
 SEGMENT             2006    2005   Variance   2006    2005   Variance
-------------------------------------------- -------------------------
Revenues from
 External Customers $30,750 $29,642  $1,108  $104,835 $98,117  $6,718
Intersegment
 Revenues            20,298  20,956    (658)   61,304  63,071  (1,767)
                    ------------------------ -------------------------
Total Operating
 Revenues            51,048  50,598     450   166,139 161,188   4,951
                    ------------------------ -------------------------

Operating Expenses:
 Purchased Gas          (80)    (24)    (56)      (18)    631    (649)
 Operation and
  Maintenance        15,613  17,031  (1,418)   47,878  48,632    (754)
 Property, Franchise
  and Other Taxes     4,012   4,014      (2)   11,979  11,663     316
 Depreciation,
  Depletion and
  Amortization        9,290   9,560    (270)   27,649  28,915  (1,266)
                    ------------------------ -------------------------
                     28,835  30,581  (1,746)   87,488  89,841  (2,353)
                    ------------------------ -------------------------

Operating Income     22,213  20,017   2,196    78,651  71,347   7,304

Other Income
 (Expense):
 Interest Income        120      23      97       316      48     268
 Other Income           116      70      46       384   4,269  (3,885)
 Interest Expense on
  Long-Term Debt       (245)   (402)    157      (837) (1,312)    475
 Other Interest
  Expense            (1,339) (1,405)     66    (3,728) (4,071)    343
                    ------------------------ -------------------------

Income Before Income
 Taxes               20,865  18,303   2,562    74,786  70,281   4,505
Income Tax Expense    8,223   7,460     763    29,402  28,704     698
                    ------------------------ -------------------------
Net Income          $12,642 $10,843  $1,799   $45,384 $41,577  $3,807
                    ======================== =========================

Net Income Per Share
 (Diluted)            $0.15   $0.13   $0.02     $0.53   $0.49   $0.04
                    ======================== =========================

                                          Three Months  Twelve Months
                                              Ended         Ended
                                          September 30, September 30,
                                          ----------------------------
PIPELINE AND STORAGE SEGMENT                  2005          2005
----------------------------              ----------------------------
Revenues from External Customers                $34,689      $132,805
Intersegment Revenues                            19,982        83,054
                                          ----------------------------
Total Operating Revenues                         54,671       215,859
                                          ----------------------------

Operating Expenses:
 Purchased Gas                                        5           636
 Operation and Maintenance                       16,766        65,397
 Property, Franchise and Other Taxes              3,936        15,598
 Depreciation, Depletion and Amortization         9,134        38,050
                                          ----------------------------
                                                 29,841       119,681
                                          ----------------------------

Operating Income                                 24,830        96,178

Other Income (Expense):
 Interest Income                                     29            76
 Other Income                                     6,128        10,396
 Interest Expense on Long-Term Debt                (363)       (1,675)
 Other Interest Expense                          (1,383)       (5,453)
                                          ----------------------------

Income Before Income Taxes                       29,241        99,522
Income Tax Expense                               10,364        39,068
                                          ----------------------------
Net Income                                      $18,877       $60,454
                                          ============================

Net Income Per Share (Diluted)                    $0.22         $0.71
                                          ============================

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

               SEGMENT OPERATING RESULTS AND STATISTICS
                              (UNAUDITED)

(Thousands of
 Dollars, except
 per share          Three Months Ended          Nine Months Ended
 amounts)                June 30,                   June 30,
                -------------------------- ---------------------------
EXPLORATION AND
 PRODUCTION
 SEGMENT          2006    2005   Variance    2006     2005   Variance
--------------- -------------------------- ---------------------------
Operating
 Revenues        $86,600 $77,370   $9,230  $257,406 $219,527  $37,879
                -------------------------- ---------------------------

Operating
 Expenses:
 Purchased Gas         -      62      (62)       98     (282)     380
 Operation and
  Maintenance:
  General and
   Administrative
   Expense         5,783   6,285     (502)   18,465   16,888    1,577
  Lease
   Operating
   Expense        11,485  11,826     (341)   38,179   33,353    4,826
  All Other
   Operation and
   Maintenance
   Expense         1,976   1,758      218     5,968    5,032      936
 Property,
  Franchise and
  Other Taxes
  (Lease
  Operating
  Expense)         1,236   1,170       66     3,972    3,902       70
 Depreciation,
  Depletion and
  Amortization    25,997  23,416    2,581    70,655   67,544    3,111
 Impairment of
  Oil and Gas
  Producing
  Properties      62,371       -   62,371    62,371        -   62,371
                -------------------------- ---------------------------
                 108,848  44,517   64,331   199,708  126,437   73,271
                -------------------------- ---------------------------

Operating Income
 (Loss)          (22,248) 32,853  (55,101)   57,698   93,090  (35,392)

Other Income
 (Expense):
 Interest Income   2,332   1,285    1,047     6,113    3,179    2,934
 Other Interest
  Expense        (12,671)(12,253)    (418)  (37,622) (36,384)  (1,238)
                -------------------------- ---------------------------

Income (Loss)
 Before Income
 Taxes           (32,587) 21,885  (54,472)   26,189   59,885  (33,696)
Income Tax
 Expense
 (Benefit)       (17,460)  8,055  (25,515)   (1,963)  20,901  (22,864)
                -------------------------- ---------------------------
Net Income
 (Loss)         $(15,127)$13,830 $(28,957)  $28,152  $38,984 $(10,832)
                ========================== ===========================

Net Income
 (Loss) Per
 Share (Diluted)  $(0.18)  $0.16   $(0.34)    $0.33    $0.46   $(0.13)
                ========================== ===========================

                                          Three Months  Twelve Months
                                              Ended         Ended
(Thousands of Dollars, except per share   September 30, September 30,
 amounts)
EXPLORATION AND PRODUCTION SEGMENT            2005          2005
----------------------------------        ----------------------------
Operating Revenues                              $73,898      $293,425
                                          ----------------------------

Operating Expenses:
 Purchased Gas                                      106          (176)
 Operation and Maintenance:
  General and Administrative Expense              4,623        21,512
  Lease Operating Expense                        12,677        46,030
  All Other Operation and Maintenance
   Expense                                        1,813         6,844
 Property, Franchise and Other Taxes
  (Lease Operating Expense)                       1,193         5,095
 Depreciation, Depletion and Amortization        23,368        90,912
                                          ----------------------------
 Impairment of Oil and Gas Producing
  Properties
                                          ----------------------------
                                                 43,780       170,217
                                          ----------------------------

Operating Income (Loss)                          30,118       123,208

Other Income (Expense):
 Interest Income                                  1,482         4,661
 Other Interest Expense                         (12,472)      (48,856)
                                          ----------------------------

Income (Loss) Before Income Taxes                19,128        79,013
Income Tax Expense (Benefit)                      7,452        28,354
                                          ----------------------------
Net Income (Loss)                               $11,676       $50,659
                                          ============================

Net Income (Loss) Per Share (Diluted)             $0.13         $0.60
                                          ============================

                     Three Months Ended         Nine Months Ended
                          June 30,                  June 30,
                  ------------------------ ---------------------------
ENERGY MARKETING
 SEGMENT           2006    2005   Variance   2006     2005   Variance
----------------  ------------------------ ---------------------------
Operating
 Revenues         $94,747 $88,048  $6,699  $446,367 $276,106 $170,261
                  ------------------------ ---------------------------

Operating
 Expenses:
 Purchased Gas     91,920  85,113   6,807   433,311  265,943  167,368
 Operation and
  Maintenance       1,404     674     730     3,894    2,561    1,333
 Property,
  Franchise and
  Other Taxes           8       8       -      (232)      78     (310)
 Depreciation,
  Depletion and
  Amortization         10      22     (12)       46       66      (20)
                  ------------------------ ---------------------------
                   93,342  85,817   7,525   437,019  268,648  168,371
                  ------------------------ ---------------------------

Operating Income
 (Loss)             1,405   2,231    (826)    9,348    7,458    1,890

Other Income
 (Expense):
 Interest Income      132     300    (168)      301      584     (283)
 Other Income         143      60      83       363      180      183
 Other Interest
  Expense             (16)     (2)    (14)     (207)      (8)    (199)
                  ------------------------ ---------------------------

Income Before
 Income Taxes       1,664   2,589    (925)    9,805    8,214    1,591
Income Tax Expense
 (Benefit)            619   1,041    (422)    3,896    3,305      591
                  ------------------------ ---------------------------
Net Income         $1,045  $1,548   $(503)   $5,909   $4,909   $1,000
                  ======================== ===========================

Net Income Per
 Share (Diluted)    $0.01   $0.02  $(0.01)    $0.07    $0.06    $0.01
                  ======================== ===========================

                                          Three Months  Twelve Months
                                              Ended         Ended
                                          September 30, September 30,
                                          ----------------------------
ENERGY MARKETING SEGMENT                      2005          2005
------------------------                  ----------------------------
Operating Revenues                              $53,608      $329,714
                                          ----------------------------

Operating Expenses:
 Purchased Gas                                   52,628       318,571
 Operation and Maintenance                        1,170         3,731
  Property, Franchise and Other Taxes                 4            83
  Depreciation, Depletion and
   Amortization                                     (24)           41
                                          ----------------------------
                                                 53,778       322,426
                                          ----------------------------

Operating Income (Loss)                            (170)        7,288

Other Income (Expense):
 Interest Income                                    200           783
 Other Income                                        47           227
 Other Interest Expense                              (4)          (11)
                                          ----------------------------

Income Before Income Taxes                           73         8,287
Income Tax Expense (Benefit)                        (95)        3,210
                                          ----------------------------
Net Income                                         $168        $5,077
                                          ============================

Net Income Per Share (Diluted)                       $-         $0.06
                                          ============================

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

               SEGMENT OPERATING RESULTS AND STATISTICS
                              (UNAUDITED)

(Thousands of
 Dollars, except per    Three Months Ended       Nine Months Ended
 share amounts)              June 30,                 June 30,
                     ------------------------ ------------------------
TIMBER SEGMENT        2006    2005   Variance  2006    2005   Variance
--------------       ------------------------ ------------------------
Revenues from
 External Customers  $15,311 $15,028    $283  $51,377 $46,994  $4,383
Intersegment Revenues      4       -       4        4       1       3
                     ------------------------ ------------------------
Total Operating
 Revenues             15,315  15,028     287   51,381  46,995   4,386
                     ------------------------ ------------------------

Operating Expenses:
 Operation and
  Maintenance         10,898  11,556    (658)  35,328  32,823   2,505
 Property, Franchise
  and Other Taxes        382     375       7    1,241   1,069     172
 Depreciation,
  Depletion and
  Amortization         1,275   1,707    (432)   4,913   4,904       9
                     ------------------------ ------------------------
                      12,555  13,638  (1,083)  41,482  38,796   2,686
                     ------------------------ ------------------------

Operating Income       2,760   1,390   1,370    9,899   8,199   1,700

Other Income
 (Expense):
 Interest Income         217     116     101      518     308     210
 Other Income              -      50     (50)      52      68     (16)
 Other Interest
  Expense               (778)   (740)    (38)  (2,299) (2,008)   (291)
                     ------------------------ ------------------------

Income Before Income
 Taxes                 2,199     816   1,383    8,170   6,567   1,603
Income Tax Expense
 (Benefit)               670     261     409    2,935   2,366     569
                     ------------------------ ------------------------
Net Income            $1,529    $555    $974   $5,235  $4,201  $1,034
                     ======================== ========================

Net Income Per Share
 (Diluted)             $0.02   $0.01   $0.01    $0.06   $0.05   $0.01
                     ======================== ========================

                                          Three Months  Twelve Months
                                              Ended         Ended
(Thousands of Dollars, except per share   September 30, September 30,
 amounts)                                 ----------------------------
TIMBER SEGMENT                                2005          2005
--------------                            ----------------------------
Revenues from External Customers                $14,291       $61,285
Intersegment Revenues                                 -             1
                                          ----------------------------
Total Operating Revenues                         14,291        61,286
                                          ----------------------------

Operating Expenses:
 Operation and Maintenance                       10,818        43,641
 Property, Franchise and Other Taxes                418         1,488
 Depreciation, Depletion and Amortization         1,697         6,601
                                          ----------------------------
                                                 12,933        51,730
                                          ----------------------------

Operating Income                                  1,358         9,556

Other Income (Expense):
 Interest Income                                    131           438
 Other Income                                         3            73
 Other Interest Expense                            (757)       (2,764)
                                          ----------------------------

Income Before Income Taxes                          735         7,303
Income Tax Expense (Benefit)                        (95)        2,271
                                          ----------------------------
Net Income                                         $830        $5,032
                                          ============================

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

                           Three Months Ended     Nine Months Ended
                                June 30,               June 30,
                         ---------------------- ----------------------
ALL OTHER                 2006   2005  Variance  2006   2005  Variance
---------                ---------------------- ----------------------
Revenues from External
 Customers               $1,192 $1,096     $96  $2,250 $4,089 $(1,839)
Intersegment Revenues     1,354  1,782    (428)  7,938  6,125   1,813
                         ---------------------- ----------------------
Total Operating Revenues  2,546  2,878    (332) 10,188 10,214     (26)
                         ---------------------- ----------------------

Operating Expenses:
 Purchased Gas            1,395  1,528    (133)  6,366  5,296   1,070
 Operation and
  Maintenance               803    872     (69)  2,598  2,664     (66)
 Property, Franchise and
  Other Taxes                33     19      14      75     66       9
 Depreciation, Depletion
  and Amortization          196    194       2     593    580      13
                         ---------------------- ----------------------
                          2,427  2,613    (186)  9,632  8,606   1,026
                         ---------------------- ----------------------

Operating Income (Loss)     119    265    (146)    556  1,608  (1,052)

Other Income (Expense):
 Income from
  Unconsolidated
  Subsidiaries              215    675    (460)  2,199  1,914     285
 Impairment of Investment
  in Partnership              -      -       -       -      -       -
 Interest Income              7      5       2      20     13       7
 Other Income                27      5      22      42    285    (243)
 Other Interest Expense    (668)  (459)   (209) (1,874)(1,201)   (673)
                         ---------------------- ----------------------

Income (Loss) Before
 Income Taxes              (300)   491    (791)    943  2,619  (1,676)
Income Tax Expense
 (Benefit)                  (88)   221    (309)    539  1,097    (558)
                         ---------------------- ----------------------

Net Income (Loss)         $(212)  $270   $(482)   $404 $1,522 $(1,118)
                         ====================== ======================

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

                                          Three Months  Twelve Months
                                              Ended         Ended
                                          September 30, September 30,
                                          ----------------------------
ALL OTHER                                     2005          2005
---------                                 ----------------------------
Revenues from External Customers                   $658        $4,748
Intersegment Revenues                             2,482         8,606
                                          ----------------------------
Total Operating Revenues                          3,140        13,354
                                          ----------------------------

Operating Expenses:
 Purchased Gas                                    2,580         7,876
 Operation and Maintenance                        1,187         3,850
 Property, Franchise and Other Taxes                 20            87
 Depreciation, Depletion and Amortization         2,957         3,537
                                          ----------------------------
                                                  6,744        15,350
                                          ----------------------------

Operating Income (Loss)                          (3,604)       (1,996)

Other Income (Expense):
 Income from Unconsolidated Subsidiaries          1,447         3,362
 Impairment of Investment in Partnership         (4,158)       (4,158)
 Interest Income                                      6            19
 Other Income                                       172           458
 Other Interest Expense                            (523)       (1,726)
                                          ----------------------------

Income (Loss) Before Income Taxes                (6,660)       (4,041)
Income Tax Expense (Benefit)                     (2,523)       (1,425)
                                          ----------------------------

Net Income (Loss)                               $(4,137)      $(2,616)
                                          ============================

Net Income (Loss) Per Share (Diluted)            $(0.05)       $(0.03)
                                          ============================

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

               SEGMENT OPERATING RESULTS AND STATISTICS
                              (UNAUDITED)

(Thousands of
 Dollars, except per    Three Months Ended       Nine Months Ended
 share amounts)              June 30,                 June 30,
                     ------------------------ ------------------------
CORPORATE             2006    2005   Variance  2006    2005   Variance
---------            ------------------------ ------------------------
Revenues from
 External Customers     $191      $-    $191     $579      $-    $579
Intersegment Revenues    737     692      45    2,212   2,013     199
                     ------------------------ ------------------------
Total Operating
 Revenues                928     692     236    2,791   2,013     778
                     ------------------------ ------------------------

Operating Expenses:
 Operation and
  Maintenance          3,110    (672)  3,782    6,560   2,891   3,669
 Property, Franchise
  and Other Taxes         68     144     (76)     234     350    (116)
 Depreciation,
  Depletion and
  Amortization           121     116       5      353     348       5
                     ------------------------ ------------------------
                       3,299    (412)  3,711    7,147   3,589   3,558
                     ------------------------ ------------------------

Operating Income
 (Loss)               (2,371)  1,104  (3,475)  (4,356) (1,576) (2,780)

Other Income
 (Expense):
 Interest Income      23,280  19,477   3,803   68,942  59,249   9,693
 Other Income             55     215    (160)      85     692    (607)
 Interest Expense on
  Long-Term Debt     (17,890)(17,892)      2  (53,665)(53,677)     12
 Other Interest
  Expense             (3,812) (2,564) (1,248) (11,595) (8,357) (3,238)
                     ------------------------ ------------------------

Income (Loss) Before
 Income Taxes           (738)    340  (1,078)    (589) (3,669)  3,080
Income Tax Expense
 (Benefit)              (145)   (691)    546     (394) (2,410)  2,016
                     ------------------------ ------------------------
Net Income (Loss)      $(593) $1,031 $(1,624)   $(195)$(1,259) $1,064
                     ======================== ========================

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

                                         Three Months   Twelve Months
                                             Ended          Ended
(Thousands of Dollars, except per share  September 30,  September 30,
 amounts)                                -------------- --------------
CORPORATE                                    2005           2005
---------                                -------------- --------------
Revenues from External Customers                    $-             $-
Intersegment Revenues                              811          2,824
                                         -------------- --------------
Total Operating Revenues                           811          2,824
                                         -------------- --------------

Operating Expenses:
 Operation and Maintenance                       3,216          6,107
 Property, Franchise and Other Taxes               163            511
 Depreciation, Depletion and
  Amortization                                     118            467
                                         -------------- --------------
                                                 3,497          7,085
                                         -------------- --------------

Operating Income (Loss)                         (2,686)        (4,261)

Other Income (Expense):
 Interest Income                                20,915         80,166
 Other Income                                      201            891
 Interest Expense on Long-Term Debt            (17,892)       (71,569)
 Other Interest Expense                         (2,759)       (11,117)
                                         -------------- --------------

Income (Loss) Before Income Taxes               (2,221)        (5,890)
Income Tax Expense (Benefit)                       809         (1,602)
                                         -------------- --------------
Net Income (Loss)                              $(3,030)       $(4,288)
                                         ============== ==============

Net Income (Loss) Per Share (Diluted)           $(0.03)        $(0.05)
                                         ============== ==============

                     Three Months Ended         Nine Months Ended
                          June 30,                   June 30,
                 -------------------------- --------------------------
INTERSEGMENT
 ELIMINATIONS      2006     2005   Variance   2006     2005   Variance
-------------    -------------------------- --------------------------
Intersegment
 Revenues        $(24,907)$(26,164) $1,257  $(83,775)$(83,942)   $167
                 -------------------------- --------------------------

Operating
 Expenses:
 Purchased Gas    (24,063) (25,194)  1,131   (82,628) (81,303) (1,325)
 Operation and
  Maintenance        (844)    (970)    126    (1,147)  (2,639)  1,492
                 -------------------------- --------------------------
                  (24,907) (26,164)  1,257   (83,775) (83,942)    167
                 -------------------------- --------------------------

Operating Income        -        -       -         -        -       -

Other Income
 (Expense):
 Interest Income  (24,047) (20,777) (3,270)  (72,451) (61,873)(10,578)
 Other Interest
  Expense          24,047   20,777   3,270    72,451   61,873  10,578
                 -------------------------- --------------------------

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

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

                                          Three Months  Twelve Months
                                             Ended          Ended
                                         September 30,  September 30,
                                         -------------- --------------
INTERSEGMENT ELIMINATIONS                    2005           2005
-------------------------                -------------- --------------
Intersegment Revenues                         $(26,039)     $(109,980)
                                         -------------- --------------

Operating Expenses:
 Purchased Gas                                 (25,063)      (106,366)
 Operation and Maintenance                        (976)        (3,614)
                                         -------------- --------------
                                               (26,039)      (109,980)
                                         -------------- --------------

Operating Income                                     -              -

Other Income (Expense):
 Interest Income                               (21,885)       (83,758)
 Other Interest Expense                         21,885         83,758
                                         -------------- --------------

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

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

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

                    SEGMENT INFORMATION (Continued)
                        (Thousands of Dollars)

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

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

Capital Expenditures:
---------------------
Utility                                   $14,012  $12,719     $1,293
Pipeline and Storage                        5,033    4,917        116
Exploration and Production                 63,999   24,174     39,825
Energy Marketing                                -       12        (12)
Timber                                        378        5        373
                                       ----------- -------- ----------
   Total Reportable Segments               83,422   41,827     41,595
All Other                                      22       67        (45)
Corporate                                     253       20        233
                                       ----------- -------- ----------
   Total Expenditures from Continuing
    Operations                            $83,697  $41,914    $41,783
                                       =========== ======== ==========

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

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

Capital Expenditures:
---------------------
Utility                                  $39,372   $34,993     $4,379
Pipeline and Storage                      15,361    13,122      2,239
Exploration and Production               160,323    86,048     74,275
Energy Marketing                               6        46        (40)
Timber                                     1,130    18,701    (17,571)
                                      ----------- --------- ----------
   Total Reportable Segments             216,192   152,910     63,282
All Other                                     78       170        (92)
Corporate                                  2,388       106      2,282
                                      ----------- --------- ----------

   Total Expenditures from Continuing
    Operations                          $218,658  $153,186    $65,472
                                      =========== ========= ==========

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

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

  Buffalo, NY                       927    731    911  (21.1)   (19.8)
  Erie, PA                          885    812    952   (8.2)   (14.7)

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

  Buffalo, NY                     6,514  5,816  6,551  (10.7)   (11.2)
  Erie, PA                        6,108  5,565  6,215   (8.9)   (10.5)

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

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

                     Three Months Ended         Nine Months Ended
                          June 30,                   June 30,
                 -------------------------- --------------------------
                                  Increase                   Increase
                  2006    2005   (Decrease)  2006    2005   (Decrease)
                 ------- ------- ---------- ------- ------- ----------

Gas Production/
 Prices:
---------------
Production
 (MMcf)
  Gulf Coast      2,109   3,365     (1,256)  6,529   9,433     (2,904)
  West Coast        983     975          8   2,933   3,000        (67)
  Appalachia      1,267   1,156        111   3,766   3,499        267
  Canada          2,158   2,134         24   5,830   5,959       (129)
                 ------- ------- ---------- ------- ------- ----------
                  6,517   7,630     (1,113) 19,058  21,891     (2,833)
                 ======= ======= ========== ======= ======= ==========
Average Prices
 (Per  Mcf)
  Gulf Coast      $6.97   $6.92      $0.05   $8.56   $6.72      $1.84
  West Coast       6.06    6.87      (0.81)   8.42    6.54       1.88
  Appalachia       7.26    6.97       0.29   10.29    7.16       3.13
  Canada           5.54    6.08      (0.54)   7.75    5.70       2.05
    Weighted
     Average       6.41    6.69      (0.28)   8.64    6.49       2.15
    Weighted
     Average
     after
     Hedging       6.57    6.18       0.39    7.43    6.05       1.38

Oil Production/
 Prices:
---------------
Production
 (Thousands of
 Barrels)
  Gulf Coast        192     251        (59)    479     801       (322)
  West Coast        638     630          8   1,962   1,916         46
  Appalachia         19      11          8      41      23         18
  Canada             66      75         (9)    221     229         (8)
                 ------- ------- ---------- ------- ------- ----------
                    915     967        (52)  2,703   2,969       (266)
                 ======= ======= ========== ======= ======= ==========

Average Prices
 (Per Barrel)
  Gulf Coast     $67.52  $49.83     $17.69  $62.04  $47.73     $14.31
  West Coast      61.51   42.57      18.94   55.40   39.10      16.30
  Appalachia      63.15   50.95      12.20   61.92   46.71      15.21
  Canada          57.88   41.66      16.22   49.25   40.39       8.86
    Weighted
     Average      62.54   44.48      18.06   56.17   41.59      14.58
    Weighted
     Average
     after
     Hedging      45.13   28.62      16.51   39.56   27.00      12.56

Total Production
 (Mmcfe)         12,007  13,432     (1,425) 35,276  39,705     (4,429)
---------------- ======= ======= ========== ======= ======= ==========

Selected
 Operating
 Performance
 Statistics:
------------
General &
 Administrative
 Expense per
 Mcfe (1)         $0.48   $0.47      $0.01   $0.52   $0.43      $0.09
Lease Operating
 Expense per
 Mcfe (1)         $1.06   $0.97      $0.09   $1.19   $0.94      $0.25
Depreciation,
 Depletion &
 Amortization
 per Mcfe (1)     $2.17   $1.74      $0.43   $2.00   $1.70      $0.30

(1) Refer to page 16 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

                                        Average
SWAPS                   Volume        Hedge Price
-----                   ------        ------------
Oil                     0.5 MMBBL     $35.33 / BBL
Gas                     2.3 BCF       $6.20  / MCF

No-cost Collars         Volume        Floor Price    Ceiling Price
---------------         ------        -----------    -------------
Gas                     1.1 BCF       $8.28 / MCF     $15.47 / MCF

Hedging Summary for Fiscal 2007

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

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

Hedging Summary for Fiscal  2008


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

Drilling Program
----------------
Nine Months Ended June 30, 2006:
--------------------------------
Gross Wells Drilled
-------------------
                                    Gulf    West   East   Canada Total
                                   ------- ------ ------- ------ -----
Exploratory
    Successful                          1      0       4     15    20
    Unsuccessful                        1      0       0      2     3
Developmental
    Successful                          0     90      93      2   185
    Unsuccessful                        0      1       0      0     1
Total
    Successful                          1     90      97     17   205
    Unsuccessful                        1      1       0      2     4

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

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

              Fiscal 2007 Financial & Operating Guidance

     Total Production (Bcfe)                           47 - 52

     Production by Division (Bcfe)

     Gulf                                            14 - 15.5
     East                                            5.5 - 6.5
     West                                              19 - 20
     Canada                                           8.5 - 10

     Crude Oil Average 2007 NYMEX ($/Bbl) as of July 12, 2006
     (without hedges):                                         $77.68

     Forecast price differentials

     Gulf                                    -$2.00 to  -$5.00
     East                                    -$4.00 to  -$6.00
     West                                    -$9.00 to -$13.00
     Canada                                 -$10.00 to -$13.00

     Natural Gas Average 2007 NYMEX ($/Mmbtu) as of
      July 12, 2006 (without hedges):                           $8.60

     Forecast price differentials

     Gulf                                    -$0.50 to  -$1.00
     East                                    -$0.25 to  +$0.25
     West                                    -$1.50 to  -$2.00
     Canada                                  -$1.25 to  -$1.75

     Cost and Expenses $ per Mcfe

     Lease Operating Expenses                 $1.10 - $1.30
     Depreciation, Depletion and Amortization $2.10 - $2.30
     Other Taxes (% of Revenue)               $0.10 - $0.14

     Other Operating Expenses                 $8.5M - $10.5M
     Administrative and General                $24M - $26M

      Capital Investment by Division     Number of Wells to be Drilled

     Gulf               $99M - $100M               8 - 12
     East               $35M - $36M              145 - 165
     West               $42M - $43M               85 - 100
     Canada             $34M - $35M               17 - 21
     Total             $210M - $214M

                       NATIONAL FUEL GAS COMPANY
                           AND SUBSIDIARIES

Utility Throughput - (millions of cubic feet - MMcf)

                   Three Months Ended          Nine Months Ended
                        June 30,                    June 30,
               -------------------------- ----------------------------
                                Increase                     Increase
                2006    2005   (Decrease)   2006     2005   (Decrease)
               ------- ------- ---------- -------- -------- ----------
Retail Sales:
 Residential
  Sales         8,740  10,698     (1,958)  55,071   63,125     (8,054)
 Commercial
  Sales         1,459   1,814       (355)   9,940   11,340     (1,400)
 Industrial
  Sales           114     120         (6)     900      721        179
               ------- ------- ---------- -------- -------- ----------
               10,313  12,632     (2,319)  65,911   75,186     (9,275)
Transportation 12,185  13,776     (1,591)  48,646   50,345     (1,699)
               ------- ------- ---------- -------- -------- ----------
               22,498  26,408     (3,910) 114,557  125,531    (10,974)
               ======= ======= ========== ======== ======== ==========

Pipeline & Storage Throughput- (MMcf)

                                             Three Months Ended
                                                  June 30,
                                      --------------------------------
                                                             Increase
                                         2006       2005    (Decrease)
                                      ---------- ---------- ----------
 Firm Transportation - Affiliated        15,753     17,895     (2,142)
 Firm Transportation - Non-Affiliated    54,867     53,049      1,818
 Interruptible Transportation             2,220      7,162     (4,942)
                                      ---------- ---------- ----------
                                         72,840     78,106     (5,266)
                                      ========== ========== ==========

                                             Nine Months Ended
                                                  June 30,
                                      --------------------------------
                                                             Increase
                                         2006       2005    (Decrease)
                                      ---------- ---------- ----------
 Firm Transportation - Affiliated        92,615    102,801    (10,186)
 Firm Transportation - Non-Affiliated   195,655    181,736     13,919
 Interruptible Transportation             7,774     10,004     (2,230)
                                      ---------- ---------- ----------
                                        296,044    294,541      1,503
                                      ========== ========== ==========

Energy Marketing Volumes

                   Three Months Ended          Nine Months Ended
                        June 30,                    June 30,
               -------------------------- ----------------------------
                                Increase                     Increase
                2006    2005   (Decrease)   2006     2005   (Decrease)
               ------- ------- ---------- --------- ------- ----------
 Natural Gas
  (MMcf)       11,190  10,925        265    38,496  34,115      4,381
               ======= ======= ========== ========= ======= ==========

Timber Board Feet (Thousands)

                   Three Months Ended          Nine Months Ended
                        June 30,                    June 30,
               -------------------------- ----------------------------
                                Increase                     Increase
                2006    2005   (Decrease)   2006     2005   (Decrease)
               ------- ------- ---------- --------- ------- ----------
 Log Sales      1,767   1,619        148     7,540   5,934      1,606
 Green Lumber
  Sales         3,126   3,475       (349)    8,082   8,179        (97)
 Kiln Dry
  Lumber Sales  4,240   4,110        130    13,239  11,373      1,866
               ------- ------- ---------- --------- ------- ----------
                9,133   9,204        (71)   28,861  25,486      3,375
               ======= ======= ========== ========= ======= ==========

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

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

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

Consolidated
 Earnings           $2.60 - $2.80  + $0.22  - $0.22  + $0.10  - $0.10

               NYMEX Settlement Prices at July 12, 2006
----------------------------------------------------------------------

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

Oct-06                                          $6.382         $76.69
Nov-06                                          $7.737         $77.12
Dec-06                                          $9.307         $77.47
Jan-07                                         $10.077         $77.74
Feb-07                                         $10.122         $77.91
Mar-07                                          $9.932         $78.01
Apr-07                                          $8.262         $78.04
May-07                                          $8.097         $78.01
Jun-07                                          $8.182         $77.94
Jul-07                                          $8.292         $77.85
Aug-07                                          $8.382         $77.76
Sep-07                                          $8.487         $77.67

Average                                         $8.600         $77.68

* Please refer to forward looking statement footnote at page 9 of this
  document.

(a) This sensitivity table is current as of July 31, 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 June 30 (unaudited)            2006            2005
---------------------------------       --------------  --------------

Operating Revenues                     $  415,452,000  $  400,359,000
                                        ==============  ==============

Income from Continuing Operations      $      111,000  $   26,393,000
Loss from Discontinued Operations, Net
 of Tax                                             -      (7,237,000)
                                        --------------  --------------
Net Income Available for Common Stock  $      111,000  $   19,156,000
                                        ==============  ==============

Earnings Per Common Share:
 Basic:
  Income from Continuing Operations    $            -  $         0.32
  Loss from Discontinued Operations                 -           (0.09)
                                        --------------  --------------
  Net Income Available for Common
   Stock                               $            -  $         0.23
                                        ==============  ==============

 Diluted:
  Income from Continuing Operations    $            -  $         0.31
  Loss from Discontinued Operations                 -           (0.08)
                                        --------------  --------------
  Net Income Available for Common
   Stock                               $            -  $         0.23
                                        ==============  ==============

 Weighted Average Common Shares:
  Used in Basic Calculation                84,013,556      83,568,251
                                        ==============  ==============
  Used in Diluted Calculation              86,016,131      84,897,466
                                        ==============  ==============

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

 Operating Revenues                    $2,017,189,000  $1,636,484,000
                                        ==============  ==============

 Income from Continuing Operations     $  136,123,000  $  135,203,000
 Income from Discontinued Operations,
  Net of Tax                                        -       5,073,000
                                        --------------  --------------
 Net Income Available for Common Stock $  136,123,000  $  140,276,000
                                        ==============  ==============

 Earnings Per Common Share:
  Basic:
   Income from Continuing Operations   $         1.62  $         1.62
   Income from Discontinued Operations              -            0.06
                                        --------------  --------------
   Net Income Available for Common
    Stock                              $         1.62  $         1.68
                                        ==============  ==============

  Diluted:
   Income from Continuing Operations   $         1.58  $         1.59
   Income from Discontinued Operations              -            0.06
                                        --------------  --------------
   Net Income Available for Common
    Stock                              $         1.58  $         1.65
                                        ==============  ==============

  Weighted Average Common Shares:
   Used in Basic Calculation               84,231,490      83,343,711
                                        ==============  ==============
   Used in Diluted Calculation             86,150,927      84,771,403
                                        ==============  ==============

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

  Operating Revenues                   $2,304,253,000  $1,903,979,000
                                        ==============  ==============

  Income from Continuing Operations    $  154,435,000  $  149,035,000
  Income (Loss) from Discontinued
   Operations, Net of Tax                  30,900,000      (1,005,000)
                                        --------------  --------------
  Net Income Available for Common
   Stock                               $  185,335,000  $  148,030,000
                                        ==============  ==============

  Earnings Per Common Share:
   Basic:
   Income from Continuing Operations   $         1.83  $         1.79
   Income (Loss) from Discontinued
    Operations                                   0.37           (0.01)
                                        --------------  --------------
   Net Income Available for Common
    Stock                              $         2.20  $         1.78
                                        ==============  ==============

  Diluted:
   Income from Continuing Operations   $         1.79  $         1.76
   Income (Loss) from Discontinued
    Operations                                   0.36           (0.01)
                                        --------------  --------------
   Net Income Available for Common
    Stock                              $         2.15  $         1.75
                                        ==============  ==============

  Weighted Average Common Shares:
   Used in Basic Calculation               84,205,652      83,164,757
                                        ==============  ==============
   Used in Diluted Calculation             86,063,076      84,559,840
                                        ==============  ==============

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.