Press Release Details

WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)-- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the third quarter of its 2017 fiscal year and for the nine months ended June 30, 2017.

FISCAL 2017 THIRD QUARTER SUMMARY

• Consolidated net income of $59.7 million, or $0.69 per share, compared to consolidated net income of $8.3 million, or $0.10 per share, and operating results of $58.1 million, or $0.68 per share, in the prior year (see reconciliation below)
• Adjusted EBITDA of $179.0 million versus $189.8 million in the prior year (non-GAAP reconciliation on page 23)
• Gross natural gas production in Appalachia of 567 MMcf per day, a 6% increase from the prior year
• Net production of 42.7 Bcfe, a 3% decrease from prior year
• Average natural gas prices, after the impact of hedging, of $2.94 per Mcf, up $0.08 per Mcf from the prior year
• Average oil prices, after the impact of hedging, of $53.02 per Bbl, down $5.77 per Bbl from the prior year
• Gathering revenues of $26.9 million on 48.8 Bcf of system throughput, both an increase of 5% from the prior year

OPERATING RESULTS
				Three Months Ended								Nine Months Ended
				June 30,								June 30,
(in thousands except per share amounts)				2017				2016				2017				2016
Reported GAAP earnings (loss)				$	59,714			$	8,286			$	237,906			$	(328,510	)
Items impacting comparability:
Impairment of oil and gas properties (E&P)								82,658								915,552
Tax impact of impairment of oil and gas properties								(34,716		)						(384,531		)
Joint development agreement professional fees (E&P)								3,173								7,855
Tax impact of joint development agreement professional fees								(1,333		)						(3,299		)
Operating Results				$	59,714			$	58,068			$	237,906			$	207,067
Reported GAAP earnings (loss) per share				$	0.69			$	0.10			$	2.77			$	(3.87	)
Items impacting comparability:
Impairment of oil and gas properties (E&P)								0.97								10.80
Tax impact of impairment of oil and gas properties								(0.41		)						(4.54		)
Joint development agreement professional fees (E&P)								0.04								0.09
Tax impact of joint development agreement professional fees								(0.02		)						(0.04		)
Earnings per share impact of diluted shares																(0.01		)
Operating Results per diluted share				$	0.69			$	0.68			$	2.77			$	2.43

MANAGEMENT COMMENTS

Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “Our fiscal third quarter was a strong one with each of our business segments posting solid financial results that were in-line with expectations. Across the system, our talented teams continue to execute on our operational plans. As is typical during the summer period, our utility and transmission pipeline construction crews are busy maintaining the safety and integrity of our thousands of miles of pipelines that will assure safe, reliable, and affordable natural gas services for our region and local communities.

“As we look ahead, we continue to manage around the delay in the Northern Access Project and see plenty of opportunity in the meantime to extract value from our world class natural gas assets in Appalachia. After a year of testing, we believe we have de-risked the Utica potential in our Western Development Area, adding years of economic drilling inventory on the very same acreage we have already developed for the Marcellus. Over the next 18 months, we will continue to optimize our well designs and transition into a Utica development program that will leverage existing upstream and midstream infrastructure to drive capital, operational, and marketing efficiencies. While the commodities futures markets indicate that Seneca Resources, our exploration and production company, will likely achieve lower prices for its production next year, our proven success in driving down finding and development costs and our ability to develop our upstream and midstream assets efficiently allows us to continue to grow our integrated business, maintain a strong financial position, and add shareholder value throughout the commodity price cycle.”

DISCUSSION OF RESULTS BY SEGMENT

The following discussion of the earnings of each segment is summarized in a tabular form on pages 8 through 11 of this report. It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Operating Results as reported GAAP earnings before items impacting comparability and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, depreciation and amortization, interest and other income, impairments, items impacting comparability, and income taxes.

Upstream Business

Exploration and Production Segment

The Exploration and Production segment operations are carried out by Seneca Resources Corporation ("Seneca"). Seneca explores for, develops and produces natural gas and oil reserves, primarily in Pennsylvania and California.

				Three Months Ended												Nine Months Ended
				June 30,												June 30,
(in thousands except per share amounts)				2017				2016				Variance				2017				2016				Variance
Net Income / (Loss)				$	30,123			$	(19,165	)		$	49,288			$	98,972			$	(469,586	)		$	568,558
Net Income / (Loss) Per Share (Diluted)				$	0.35			$	(0.22	)		$	0.57			$	1.15			$	(5.54	)		$	6.69
Adjusted EBITDA				$	89,229			$	97,924			$	(8,695	)		$	285,675			$	268,673			$	17,002

Net income for the Exploration and Production segment in the third quarter was $30.1 million, or $0.35 per share, compared to a net loss of $19.2 million, or $0.22 per share, in the prior year third quarter. The $49.3 million increase in the segment’s earnings was primarily attributable to the non-recurrence of two items that reduced earnings in the prior year. In the prior year third quarter, Seneca recorded an $82.7 million ($47.9 million after-tax) ceiling test impairment charge to reduce the book value of Seneca’s oil and gas properties. Seneca also incurred $3.2 million ($1.8 million after-tax) in the prior year third quarter for professional and legal expenses related to the extension of the joint development agreement that Seneca executed in June 2016.

Excluding these items, operating results for the segment declined $0.5 million, or $0.01 per share, as the impact of higher realized natural gas prices, lower depreciation, depletion and amortization (“DD&A”) expense, and a lower effective income tax rate were more than offset by a decline in net natural gas and oil production, lower realized oil prices and an increase in lease operating and transportation (“LOE”) expense.

Over the past two years, Seneca significantly reduced its capital expenditures in response to low commodity prices by entering into a Joint Development Agreement (“JDA”), where a partner agreed to participate in 75 new Marcellus wells as an 80 percent working interest owner, and reducing the rig count in Appalachia and activity in California. As a result, Seneca's net natural gas and oil production declined 1.3 billion cubic feet equivalent ("Bcfe"), or 3 percent, to 42.7 Bcfe in the third quarter. Net natural gas production was down nearly 1.0 Bcf due mainly to a lower average revenue interest on production from the Western Development Area (“WDA”) resulting from new JDA wells as well as natural declines in Marcellus production from the Eastern Development Area (“EDA”). Seneca’s oil production decreased 58 thousand barrels ("Mbbl") due mainly to temporary changes in steam operations and a reduction in well workover activity at its North Midway Sunset field in California, offset partially by increased activity at South Midway Sunset.

Seneca continues to grow its base of gross natural gas production. Average daily gross natural gas production during the quarter increased 6 percent to 567 million cubic feet (“MMcf’) per day driven primarily by new Marcellus and Utica wells in Appalachia. In the WDA, average daily natural gas production increased approximately 38 MMcf per day, or 16 percent, to 284 MMcf per day during the quarter. Seneca is now producing from 63 of the 75 Marcellus wells that are being developed in the Clermont / Rich Valley area under the JDA entered into with a partner in fiscal 2016. The 12 remaining JDA wells are expected to be completed and brought on-line in the first half of fiscal 2018.

In the EDA, average daily gross natural gas production decreased 4 MMcf per day, or 1 percent, to 283 MMcf per day as natural declines in Marcellus production from Tioga and Lycoming counties were partially offset by new production from the Company’s Utica well on DCNR Tract 007 in Tioga County, Pa., which has produced nearly 2.5 Bcf since it was first turned on-line in November 2016. In May, Seneca added a second rig and resumed Marcellus development activities in Lycoming County, Pa., which is expected to arrest natural production declines and maintain a base of production that will utilize firm transportation capacity on the Atlantic Sunrise pipeline expansion project forecasted to be available in the summer of 2018.

Seneca's average realized natural gas price, after the impact of hedging, for the third quarter was $2.94 per thousand cubic feet ("Mcf"), an increase of $0.08 per Mcf versus the prior year. Seneca's average realized oil price, after the impact of hedging, was $53.02 per barrel ("Bbl"), a decrease of $5.77 per Bbl. Seneca's average realized natural gas and oil prices benefited from an uplift of $0.35 per Mcf and $7.38 per Bbl, respectively, from financial hedges settled during the quarter.

LOE increased $1.8 million, or $0.07 per Mcf equivalent ("Mcfe") on a cost per unit of production basis, due primarily to higher steam fuel and well repair costs in California offset partially by lower gathering and compression costs in Appalachia. DD&A expense decreased $3.8 million due to lower production and a decrease in Seneca’s full cost pool depletion rate. Seneca’s per unit DD&A decreased by $0.07 per Mcfe to $0.64 per Mcfe due mainly to a lower depletable fixed asset balance resulting from the ceiling test impairment charges recorded in the second half of fiscal 2016.

A decrease in Seneca’s effective tax rate increased the segment’s earnings by $2.4 million in the third quarter. The decrease in the effective tax rate was due primarily to an enhanced oil recovery tax credit related to Seneca’s California properties. This credit was applicable this year as a result of relatively low domestic crude oil prices.

Midstream Businesses

Pipeline and Storage Segment

The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides 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 Pennsylvania.

				Three Months Ended												Nine Months Ended
				June 30,												June 30,
(in thousands except per share amounts)				2017				2016				Variance				2017				2016				Variance
Net Income / (Loss)				$	16,031			$	17,323			$	(1,292	)		$	54,656			$	59,794			$	(5,138	)
Net Income / (Loss) Per Share (Diluted)				$	0.19			$	0.20			$	(0.01	)		$	0.64			$	0.71			$	(0.07	)
Adjusted EBITDA				$	44,163			$	48,515			$	(4,352	)		$	141,279			$	152,929			$	(11,650	)

The Pipeline and Storage segment's third quarter earnings decreased $1.3 million, or 7 percent, from the prior year due to a decline in operating revenues offset partially by a lower effective income tax rate. The $4.1 million decrease in operating revenues was expected due to a reduction in Supply Corporation and Empire’s rates related to their respective rate case settlements that went into effect in 2016, lower reservation revenues resulting from recent contract terminations and restructurings, and a decline in short-term interruptible transportation service in the current quarter.

Gathering Segment

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Corporation’s subsidiary limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region which currently delivers Seneca’s gross Appalachian production to the interstate pipeline system.

				Three Months Ended												Nine Months Ended
				June 30,												June 30,
(in thousands except per share amounts)				2017				2016				Variance				2017				2016				Variance
Net Income / (Loss)				$	10,107			$	9,473			$	634			$	31,373			$	21,962			$	9,411
Net Income / (Loss) Per Share (Diluted)				$	0.12			$	0.11			$	0.01			$	0.37			$	0.26			$	0.11
Adjusted EBITDA				$	23,901			$	22,433			$	1,468			$	73,174			$	57,722			$	15,452

The Gathering segment’s third quarter earnings increased $0.6 million, or 7 percent, versus the prior year due primarily to higher operating revenues. Operating revenues increased $1.4 million as the increase in Seneca’s gross natural gas production in Appalachia, which includes production from joint development wells, helped drive higher throughput across the Company’s gathering systems. The Gathering segment transported 48.8 Bcf on its systems in the third quarter, up 2.5 Bcf or 5 percent from the prior year. Higher depreciation expense associated with new gathering and compression assets placed in service during the last twelve months partially offset the impact of higher operating revenues.

Downstream Businesses

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.

				Three Months Ended												Nine Months Ended
				June 30,												June 30,
(in thousands except per share amounts)				2017				2016				Variance				2017				2016				Variance
Net Income / (Loss)				$	4,348			$	2,179			$	2,169			$	51,103			$	52,745			$	(1,642	)
Net Income / (Loss) Per Share (Diluted)				$	0.05			$	0.03			$	0.02			$	0.59			$	0.62			$	(0.03	)
Adjusted EBITDA				$	25,322			$	22,900			$	2,422			$	139,232			$	138,284			$	948

The Utility segment’s third quarter earnings increased $2.2 million due primarily to lower O&M expense offset partially by higher DD&A expenses. O&M expense decreased $2.5 million versus the prior year due mainly to lower pension and personnel costs. DD&A expense increased $0.9 million due to higher average plant balances for the quarter ended June 30, 2017, which was primarily driven by the replacement of Distribution’s customer information system that was placed in service in May 2016.

Energy Marketing Segment

The Energy Marketing segment's operations are carried out by National Fuel Resources, Inc. (“NFR”). NFR markets natural gas to industrial, wholesale, commercial, public authority and residential customers primarily in western and central New York and northwestern Pennsylvania, offering competitively priced natural gas to its customers.

				Three Months Ended												Nine Months Ended
				June 30,												June 30,
(in thousands except per share amounts)				2017				2016				Variance				2017				2016				Variance
Net Income / (Loss)				$	(564	)		$	(590	)		$	26			$	2,122			$	4,117			$	(1,995	)
Net Income / (Loss) Per Share (Diluted)				$	(0.01	)		$	(0.01	)		$	—			$	0.02			$	0.05			$	(0.03	)
Adjusted EBITDA				$	(1,017	)		$	(930	)		$	(87	)		$	3,213			$	6,569			$	(3,356	)

The Energy Marketing segment's third quarter earnings were largely unchanged when compared to the prior year.

Corporate and All Other

The Corporate and All Other category had a net loss of $0.3 million for the third quarter compared to a net loss of $0.9 million in the prior year. The $0.6 million improvement impacted consolidated earnings by less than $0.01 per share.

GUIDANCE

The Company is raising and tightening its earnings guidance for fiscal 2017 to a range of $3.25 to $3.35 per share to reflect the impact of actual results for the nine months ended June 30, 2017, and updates to key forecast assumptions, including revisions to the Exploration and Production segment’s forecasted production, oil pricing and operating expense assumptions, as outlined in the table below.

The Company is also initiating preliminary earnings, production, capital expenditures, and certain business segment operational guidance for fiscal 2018. National Fuel is projecting that its fiscal 2018 earnings will be within a range of $2.70 to $3.05 per share, or $2.875 per share at the midpoint of the range. The $0.425 per share decrease from the fiscal 2017 earnings guidance midpoint is being driven primarily by lower expected price realizations after hedging on Seneca’s natural gas and oil production and higher expected operating costs at the Company’s regulated businesses, offset partially by the impact of normal weather on the Utility segment's earnings and an increase in projected natural gas production in Appalachia, which will benefit earnings for the Company’s Exploration and Production and Gathering segments.

Seneca’s fiscal 2018 net production is expected to be in the range of 185 to 200 Bcfe. Natural gas production in the East Division is expected to be in a range of 165 to 180 Bcf, an 11 percent increase versus fiscal 2017. Seneca added a second rig and resumed Marcellus shale development activities in Lycoming County, Pa. this past May, which is the main driver of the 17.5 Bcf increase. Seneca’s oil operations in California are expected to produce approximately 20 Bcfe, relatively flat versus fiscal 2017. The midpoint of the production range does not assume any price related curtailments.

Due to the expiration of physical firm sales and financial hedge contracts with favorable pricing relative to current market prices and hedge book, Seneca is projecting a significant decrease in natural gas and oil price realizations in fiscal 2018. Seneca’s fiscal 2018 natural gas production is 52 percent hedged at an average hedge price of $2.90 per MMBtu. Assuming NYMEX natural gas pricing of $3.00 per MMBtu, average Appalachian basin spot prices of $2.40 per MMBtu, and adjustments for transportation costs, contracted firm sale differentials, and Btu uplift, Seneca expects its fiscal 2018 net realized gas price after hedging to be approximately $2.55 per Mcf, which is a decrease of $0.41 per Mcf from Seneca’s realized pricing after hedging of $2.96 per Mcf for the nine months ended June 30, 2017. Seneca is approximately 45 percent hedged on an expected 3 million bbls of oil production in fiscal 2018 at an average hedge price of $55.46 per Bbl.

Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2018 are outlined in the table below.

				Updated FY 2017 Guidance		Preliminary FY 2018 Guidance
Consolidated Earnings per Share				$3.25 to $3.35		$2.70 to $3.05
Capital Expenditures (Millions)
Exploration & Production (1)				$230 - $250		$275 - $325
Pipeline & Storage				$100 - $110		$110 - $140
Gathering				$35 - $45		$60 - $80
Utility				$90 - $100		$90 - $100
Consolidated Capital Expenditures				$455 - $505		$535 - $645

				Updated FY 2017 Guidance		Preliminary FY 2018 Guidance
Exploration & Production Segment Guidance
Commodity Price Assumptions
NYMEX natural gas price				$3.00 /MMBtu		$3.00 /MMBtu
Appalachian basin spot price				$2.00 /MMBtu		$2.40 /MMBtu
NYMEX (WTI) crude oil price				$50.00 /Bbl		$50.00 /Bbl
California oil price (% of WTI)				92%		92%
Production (Bcfe)
East Division - Appalachia (2)				150 to 160		165 to 180
West Division - California				~ 20		~ 20
Total Production				170 to 180		185 to 200
E&P Operating Costs ($/Mcfe)
LOE (3)				~$0.95		$0.90 - $1.00
G&A				~$0.35		$0.30 - $0.35
DD&A				~$0.65		$0.65 - $0.70
Other Business Segment Guidance
Gathering Segment Revenues (Millions)				~$110		$115 - $125
Pipeline & Storage Segment Revenues (Millions)				~$295		~$295

(1)		Net of conveyance proceeds received from joint development partner for working interest in joint development wells.
(2)		Seneca East Division - Appalachia production guidance assumes approximately 35 Bcf of spot sales in FY18.
(3)		FY17 reflects full year average LOE. Fourth quarter FY17 LOE expected to be $1.00-$1.05 due to an increase in well workover and steam activity in California.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, August 4, 2017, at 11 a.m. Eastern Time to discuss this announcement. There are two ways to access this call. For those with Internet access, visit the NFG Investor Relations News & Events page at National Fuel’s website at investor.nationalfuelgas.com. For those without Internet access, audio access is also provided by dialing (toll-free) 844-862-1432, using conference ID number “51109130.” For those unable to listen to the live conference call, an audio replay will be available approximately two hours following the teleconference at the same website link and by phone at (toll-free) 855-859-2056 using conference ID number “51109130.” Both the webcast and a telephonic replay will be available until the close of business on Friday, August 11, 2017.

National Fuel is an integrated energy company reporting financial results for five operating segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. Additional information about National Fuel is available at www.nationalfuelgas.com.

Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, 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: 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; 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; 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; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; changes in the price of natural gas or oil; 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; 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; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; changes in price differentials between similar quantities of natural gas or oil sold 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; other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; 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; 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; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks or pest infestation; significant differences between the Company’s projected and actual capital expenditures and operating expenses; 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 thereof.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED JUNE 30, 2017
(Unaudited)
				Upstream				Midstream Businesses								Downstream Businesses
				Exploration &				Pipeline &												Energy				Corporate /
(Thousands of Dollars)				Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Third quarter 2016 GAAP earnings				$	(19,165	)		$	17,323			$	9,473			$	2,179			$	(590	)		$	(934	)		$	8,286
Items impacting comparability:
Impairment of oil and gas producing properties				82,658																								82,658
Tax impact of impairment of oil and gas producing properties				(34,716		)																						(34,716		)
Joint development agreement professional fees				3,173																								3,173
Tax impact of joint development agreement professional fees				(1,333		)																						(1,333		)
Third quarter 2016 operating results				30,617				17,323				9,473				2,179				(590		)		(934		)		58,068
Drivers of operating results
Higher (lower) crude oil prices				(2,511		)																						(2,511		)
Higher (lower) natural gas prices				2,228																								2,228
Higher (lower) natural gas production				(1,805		)																						(1,805		)
Higher (lower) crude oil production				(2,229		)																						(2,229		)
Derivative mark to market adjustments				619																								619
Lower (higher) lease operating and transportation expenses				(1,150		)																						(1,150		)
Lower (higher) depreciation / depletion				2,490				331				(340		)		(554		)										1,927
Higher (lower) transportation revenues								(2,380		)																		(2,380		)
Higher (lower) gathering and processing revenues												913																913
Lower (higher) other operating expenses																1,769								(392		)		1,377
Lower (higher) property, franchise and other taxes				(428		)		(328		)																		(756		)
Higher (lower) margins																								(630		)		(630		)
Lower (higher) interest expense												(401		)														(401		)
Lower (higher) income tax expense / effective tax rate				2,383				1,214				291				987								1,580				6,455
All other / rounding				(91		)		(129		)		171				(33		)		26				45				(11		)
Third quarter 2017 GAAP earnings and operating results				$	30,123			$	16,031			$	10,107			$	4,348			$	(564	)		$	(331	)		$	59,714
* Amounts do not reflect intercompany eliminations

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED JUNE 30, 2017
(Unaudited)
				Upstream				Midstream Businesses								Downstream Businesses
				Exploration &				Pipeline &												Energy				Corporate /
				Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Third quarter 2016 GAAP earnings				$	(0.22	)		$	0.20			$	0.11			$	0.03			$	(0.01	)		$	(0.01	)		$	0.10
Items impacting comparability:
Impairment of oil and gas producing properties				0.97																								0.97
Tax impact of impairment of oil and gas producing properties				(0.41		)																						(0.41		)
Joint development agreement professional fees				0.04																								0.04
Tax impact of joint development agreement professional fees				(0.02		)																						(0.02		)
Third quarter 2016 operating results				0.36				0.20				0.11				0.03				(0.01		)		(0.01		)		0.68
Drivers of operating results
Higher (lower) crude oil prices				(0.03		)																						(0.03		)
Higher (lower) natural gas prices				0.03																								0.03
Higher (lower) natural gas production				(0.02		)																						(0.02		)
Higher (lower) crude oil production				(0.03		)																						(0.03		)
Derivative mark to market adjustments				0.01																								0.01
Lower (higher) lease operating and transportation expenses				(0.01		)																						(0.01		)
Lower (higher) depreciation / depletion				0.03				—				—				(0.01		)										0.02
Higher (lower) transportation revenues								(0.03		)																		(0.03		)
Higher (lower) gathering and processing revenues												0.01																0.01
Lower (higher) other operating expenses																0.02								—				0.02
Lower (higher) property, franchise and other taxes				—				—																				—
Higher (lower) margins																								(0.01		)		(0.01		)
Lower (higher) interest expense												—																—
Lower (higher) income tax expense / effective tax rate				0.03				0.01				—				0.01								0.02				0.07
All other / rounding				(0.02		)		0.01				—				—				—				(0.01		)		(0.02		)
Third quarter 2017 GAAP earnings and operating results				$	0.35			$	0.19			$	0.12			$	0.05			$	(0.01	)		$	(0.01	)		$	0.69
* Amounts do not reflect intercompany eliminations

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
NINE MONTHS ENDED JUNE 30, 2017
(Unaudited)
				Upstream				Midstream Businesses								Downstream Businesses
				Exploration &				Pipeline &												Energy				Corporate /
(Thousands of Dollars)				Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Nine months ended June 30, 2016 GAAP earnings				$	(469,586	)		$	59,794			$	21,962			$	52,745			$	4,117			$	2,458			$	(328,510	)
Items impacting comparability:
Impairment of oil and gas producing properties				915,552																								915,552
Tax impact of impairment of oil and gas producing properties				(384,531		)																						(384,531		)
Joint development agreement professional fees				7,855																								7,855
Tax impact of joint development agreement professional fees				(3,299		)																						(3,299		)
Nine months ended June 30, 2016 operating results				65,991				59,794				21,962				52,745				4,117				2,458				207,067
Drivers of operating results
Higher (lower) crude oil prices				(4,889		)																						(4,889		)
Higher (lower) natural gas prices				(2,960		)																						(2,960		)
Higher (lower) natural gas production				24,737																								24,737
Higher (lower) crude oil production				(4,999		)																						(4,999		)
Derivative mark to market adjustments				510																								510
Lower (higher) lease operating and transportation expenses				(4,830		)																						(4,830		)
Lower (higher) depreciation / depletion				17,701				970				(391		)		(2,594		)										15,686
Higher (lower) transportation revenues								(4,519		)																		(4,519		)
Higher (lower) gathering and processing revenues												10,927																10,927
Lower (higher) other operating expenses				4,144				(2,191		)		(930		)		(3,876		)						(1,059		)		(3,912		)
Lower (higher) property, franchise and other taxes				(655		)		(558		)																		(1,213		)
Regulatory true-up adjustments																948												948
Higher (lower) usage																2,209												2,209
Impact of new rates																927												927
Higher (lower) margins																				(1,932		)		(951		)		(2,883		)
Higher (lower) AFUDC**								(469		)						(914		)										(1,383		)
Lower (higher) interest expense				1,048																								1,048
Lower (higher) income tax expense / effective tax rate				3,395				1,731				(563		)		887								(491		)		4,959
All other / rounding				(221		)		(102		)		368				771				(63		)		(277		)		476
Nine months ended June 30, 2017 GAAP earnings and operating results				$	98,972			$	54,656			$	31,373			$	51,103			$	2,122			$	(320	)		$	237,906
* Amounts do not reflect intercompany eliminations
** AFUDC = Allowance for Funds Used During Construction

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
NINE MONTHS ENDED JUNE 30, 2017
(Unaudited)
				Upstream				Midstream Businesses								Downstream Businesses
				Exploration &				Pipeline &												Energy				Corporate /
				Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Nine months ended June 30, 2016 GAAP earnings				$	(5.54	)		$	0.71			$	0.26			$	0.62			$	0.05			$	0.03			$	(3.87	)
Items impacting comparability:
Impairment of oil and gas producing properties				10.80																								10.80
Tax impact of impairment of oil and gas producing properties				(4.54		)																						(4.54		)
Joint development agreement professional fees				0.09																								0.09
Tax impact of joint development agreement professional fees				(0.04		)																						(0.04		)
Earnings per share impact of diluted shares								(0.01		)																		(0.01		)
Nine months ended June 30, 2016 operating results				0.77				0.70				0.26				0.62				0.05				0.03				2.43
Drivers of operating results
Higher (lower) crude oil prices				(0.06		)																						(0.06		)
Higher (lower) natural gas prices				(0.03		)																						(0.03		)
Higher (lower) natural gas production				0.29																								0.29
Higher (lower) crude oil production				(0.06		)																						(0.06		)
Derivative mark to market adjustments				0.01																								0.01
Lower (higher) lease operating and transportation expenses				(0.06		)																						(0.06		)
Lower (higher) depreciation / depletion				0.21				0.01				—				(0.03		)										0.19
Higher (lower) transportation revenues								(0.05		)																		(0.05		)
Higher (lower) gathering and processing revenues												0.12																0.12
Lower (higher) other operating expenses				0.05				(0.03		)		(0.01		)		(0.05		)						(0.01		)		(0.05		)
Lower (higher) property, franchise and other taxes				(0.01		)		(0.01		)																		(0.02		)
Regulatory true-up adjustments																0.01												0.01
Higher (lower) usage																0.03												0.03
Impact of new rates																0.01												0.01
Higher (lower) margins																				(0.02		)		(0.01		)		(0.03		)
Higher (lower) AFUDC**								(0.01		)						(0.01		)										(0.02		)
Lower (higher) interest expense				0.01																								0.01
Lower (higher) income tax expense / effective tax rate				0.04				0.02				(0.01		)		0.01								(0.01		)		0.05
All other / rounding				(0.01		)		0.01				0.01				—				(0.01		)		—				—
Nine months ended June 30, 2017 GAAP earnings and operating results				$	1.15			$	0.64			$	0.37			$	0.59			$	0.02			$	—			$	2.77
* Amounts do not reflect intercompany eliminations
** AFUDC = Allowance for Funds Used During Construction

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				2017				2016				2017				2016
Operating Revenues:
Utility and Energy Marketing Revenues				$	146,360			$	123,976			$	663,029			$	540,981
Exploration and Production and Other Revenues				151,925				158,578				473,617				456,032
Pipeline and Storage and Gathering Revenues				50,083				53,063				156,298				162,930
				348,368				335,617				1,292,944				1,159,943
Operating Expenses:
Purchased Gas				46,135				23,477				264,349				147,168
Operation and Maintenance:
Utility and Energy Marketing				44,467				46,616				158,796				151,474
Exploration and Production and Other				34,098				35,427				102,153				123,965
Pipeline and Storage and Gathering				23,250				23,215				69,016				64,324
Property, Franchise and Other Taxes				21,447				20,261				64,368				61,923
Depreciation, Depletion and Amortization				55,617				58,802				168,812				193,300
Impairment of Oil and Gas Producing Properties				—				82,658				—				915,552
				225,014				290,456				827,494				1,657,706
Operating Income (Loss)				123,354				45,161				465,450				(497,763		)
Other Income (Expense):
Interest Income				853				564				2,844				2,640
Other Income				1,370				1,519				4,728				7,173
Interest Expense on Long-Term Debt				(29,225		)		(28,897		)		(87,241		)		(88,263		)
Other Interest Expense				(846		)		(1,321		)		(2,680		)		(3,938		)
Income (Loss) Before Income Taxes				95,506				17,026				383,101				(580,151		)
Income Tax Expense (Benefit)				35,792				8,740				145,195				(251,641		)
Net Income (Loss) Available for Common Stock				$	59,714			$	8,286			$	237,906			$	(328,510	)
Earnings (Loss) Per Common Share:
Basic				$	0.70			$	0.10			$	2.79			$	(3.87	)
Diluted				$	0.69			$	0.10			$	2.77			$	(3.87	)
Weighted Average Common Shares:
Used in Basic Calculation				85,422,313				84,917,664				85,315,154				84,791,447
Used in Diluted Calculation				86,064,464				85,470,216				85,950,742				84,791,447

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
				June 30,			September 30,
(Thousands of Dollars)				2017			2016
ASSETS
Property, Plant and Equipment				$9,816,295			$9,539,581
Less - Accumulated Depreciation, Depletion and Amortization				5,232,771			5,085,099
Net Property, Plant and Equipment				4,583,524			4,454,482
Current Assets:
Cash and Temporary Cash Investments				285,325			129,972
Hedging Collateral Deposits				2,142			1,484
Receivables - Net				127,876			133,201
Unbilled Revenue				19,729			18,382
Gas Stored Underground				17,793			34,332
Materials and Supplies - at average cost				34,706			33,866
Unrecovered Purchased Gas Costs				3,757			2,440
Other Current Assets				50,852			59,354
Total Current Assets				542,180			413,031
Other Assets:
Recoverable Future Taxes				182,469			177,261
Unamortized Debt Expense				1,292			1,688
Other Regulatory Assets				315,126			320,750
Deferred Charges				28,821			20,978
Other Investments				126,485			110,664
Goodwill				5,476			5,476
Prepaid Post-Retirement Benefit Costs				18,619			17,649
Fair Value of Derivative Financial Instruments				63,036			113,804
Other				479			604
Total Other Assets				741,803			768,874
Total Assets				$5,867,507			$5,636,387
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000
Shares; Issued and Outstanding - 85,467,963 Shares
and 85,118,886 Shares, Respectively				$85,468			$85,119
Paid in Capital				790,291			771,164
Earnings Reinvested in the Business				841,593			676,361
Accumulated Other Comprehensive Loss				(33,304	)		(5,640	)
Total Comprehensive Shareholders' Equity				1,684,048			1,527,004
Long-Term Debt, Net of Unamortized Discount and Debt Issuance Costs				1,787,954			2,086,252
Total Capitalization				3,472,002			3,613,256
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper				—			—
Current Portion of Long-Term Debt				300,000			—
Accounts Payable				98,842			108,056
Amounts Payable to Customers				13,070			19,537
Dividends Payable				35,469			34,473
Interest Payable on Long-Term Debt				28,985			34,900
Customer Advances				224			14,762
Customer Security Deposits				17,522			16,019
Other Accruals and Current Liabilities				107,101			74,430
Fair Value of Derivative Financial Instruments				922			1,560
Total Current and Accrued Liabilities				602,135			303,737
Deferred Credits:
Deferred Income Taxes				881,547			823,795
Taxes Refundable to Customers				93,321			93,318
Cost of Removal Regulatory Liability				199,739			193,424
Other Regulatory Liabilities				88,647			99,789
Pension and Other Post-Retirement Liabilities				299,326			277,113
Asset Retirement Obligations				115,354			112,330
Other Deferred Credits				115,436			119,625
Total Deferred Credits				1,793,370			1,719,394
Commitments and Contingencies				—			—
Total Capitalization and Liabilities				$5,867,507			$5,636,387

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
				Nine Months Ended
				June 30,
(Thousands of Dollars)				2017				2016
Operating Activities:
Net Income (Loss) Available for Common Stock				$	237,906			$	(328,510	)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by Operating Activities:
Impairment of Oil and Gas Producing Properties				—				915,552
Depreciation, Depletion and Amortization				168,812				193,300
Deferred Income Taxes				105,073				(269,248		)
Excess Tax Benefits Associated with Stock-Based Compensation Awards				—				(1,786		)
Stock-Based Compensation				8,857				3,138
Other				11,084				9,685
Change in:
Hedging Collateral Deposits				(658		)		8,116
Receivables and Unbilled Revenue				(15,885		)		(7,756		)
Gas Stored Underground and Materials and Supplies				15,699				15,683
Unrecovered Purchased Gas Costs				(1,317		)		(933		)
Other Current Assets				8,502				15,334
Accounts Payable				5,046				(53,687		)
Amounts Payable to Customers				(6,467		)		(21,337		)
Customer Advances				(14,538		)		(16,198		)
Customer Security Deposits				1,503				(396		)
Other Accruals and Current Liabilities				25,423				3,375
Other Assets				(3,548		)		3,775
Other Liabilities				5,638				(8,152		)
Net Cash Provided by Operating Activities				$	551,130			$	459,955
Investing Activities:
Capital Expenditures				$	(314,774	)		$	(481,781	)
Net Proceeds from Sale of Oil and Gas Producing Properties				26,554				115,235
Other				(10,186		)		(11,163		)
Net Cash Used in Investing Activities				$	(298,406	)		$	(377,709	)
Financing Activities:
Excess Tax Benefits Associated with Stock-Based Compensation Awards				$	—			$	1,786
Dividends Paid on Common Stock				(103,594		)		(100,419		)
Net Proceeds From Issuance of Common Stock				6,223				8,358
Net Cash Used in Financing Activities				$	(97,371	)		$	(90,275	)
Net Increase (Decrease) in Cash and Temporary Cash Investments				155,353				(8,029		)
Cash and Temporary Cash Investments at Beginning of Period				129,972				113,596
Cash and Temporary Cash Investments at June 30				$	285,325			$	105,567

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
UPSTREAM BUSINESS
				Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)				June 30,												June 30,
EXPLORATION AND PRODUCTION SEGMENT				2017				2016				Variance				2017			2016			Variance
Total Operating Revenues				$	151,161			$	156,835			$	(5,674	)		$	471,646		$	452,583		$	19,063
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense				14,170				16,573				(2,403		)		43,674			55,671			(11,997		)
Lease Operating and Transportation Expense				40,630				38,861				1,769				122,881			115,451			7,430
All Other Operation and Maintenance Expense				2,835				3,011				(176		)		8,168			10,402			(2,234		)
Property, Franchise and Other Taxes				4,297				3,639				658				11,248			10,241			1,007
Depreciation, Depletion and Amortization				27,448				31,279				(3,831		)		85,353			112,586			(27,233		)
Impairment of Oil and Gas Producing Properties				—				82,658				(82,658		)		—			915,552			(915,552		)
				89,380				176,021				(86,641		)		271,324			1,219,903			(948,579		)
Operating Income (Loss)				61,781				(19,186)				80,967				200,322			(767,320)			967,642
Other Income (Expense):
Interest Income				217				88				129				451			781			(330		)
Interest Expense				(13,444		)		(13,753		)		309				(40,270		)	(41,882		)	1,612
Income (Loss) Before Income Taxes				48,554				(32,851		)		81,405				160,503			(808,421		)	968,924
Income Tax Expense (Benefit)				18,431				(13,686		)		32,117				61,531			(338,835		)	400,366
Net Income (Loss)				$	30,123			$	(19,165	)		$	49,288			$	98,972		$	(469,586	)	$	568,558
Net Income (Loss) Per Share (Diluted)				$	0.35			$	(0.22	)		$	0.57			$	1.15		$	(5.54	)	$	6.69

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
MIDSTREAM BUSINESSES
				Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)				June 30,												June 30,
PIPELINE AND STORAGE SEGMENT				2017				2016				Variance				2017			2016			Variance
Revenues from External Customers				$	50,049			$	52,998			$	(2,949	)		$	156,212		$	162,627		$	(6,415	)
Intersegment Revenues				21,643				22,795				(1,152		)		66,389			68,272			(1,883		)
Total Operating Revenues				71,692				75,793				(4,101		)		222,601			230,899			(8,298		)
Operating Expenses:
Purchased Gas				(13		)		356				(369		)		181			1,059			(878		)
Operation and Maintenance				20,607				20,492				115				60,517			57,145			3,372
Property, Franchise and Other Taxes				6,935				6,430				505				20,624			19,766			858
Depreciation, Depletion and Amortization				10,513				11,023				(510		)		30,651			32,144			(1,493		)
				38,042				38,301				(259		)		111,973			110,114			1,859
Operating Income				33,650				37,492				(3,842		)		110,628			120,785			(10,157		)
Other Income (Expense):
Interest Income				393				237				156				984			527			457
Other Income				449				657				(208		)		1,944			2,651			(707		)
Interest Expense				(8,489		)		(8,528		)		39				(25,177		)	(25,017		)	(160		)
Income Before Income Taxes				26,003				29,858				(3,855		)		88,379			98,946			(10,567		)
Income Tax Expense				9,972				12,535				(2,563		)		33,723			39,152			(5,429		)
Net Income				$	16,031			$	17,323			$	(1,292	)		$	54,656		$	59,794		$	(5,138	)
Net Income Per Share (Diluted)				$	0.19			$	0.20			$	(0.01	)		$	0.64		$	0.71		$	(0.07	)
				Three Months Ended												Nine Months Ended
				June 30,												June 30,
GATHERING SEGMENT				2017				2016				Variance				2017			2016			Variance
Revenues from External Customers				$	34			$	65			$	(31	)		$	86		$	303		$	(217	)
Intersegment Revenues				26,853				25,417				1,436				82,629			65,601			17,028
Total Operating Revenues				26,887				25,482				1,405				82,715			65,904			16,811
Operating Expenses:
Operation and Maintenance				2,973				3,018				(45		)		9,496			8,066			1,430
Property, Franchise and Other Taxes				13				31				(18		)		45			116			(71		)
Depreciation, Depletion and Amortization				4,131				3,608				523				12,008			11,407			601
				7,117				6,657				460				21,549			19,589			1,960
Operating Income				19,770				18,825				945				61,166			46,315			14,851
Other Income (Expense):
Interest Income				288				88				200				641			188			453
Other Income				—				1				(1		)		1			3			(2		)
Interest Expense				(2,411		)		(1,794		)		(617		)		(6,739		)	(6,781		)	42
Income Before Income Taxes				17,647				17,120				527				55,069			39,725			15,344
Income Tax Expense				7,540				7,647				(107		)		23,696			17,763			5,933
Net Income				$	10,107			$	9,473			$	634			$	31,373		$	21,962		$	9,411
Net Income Per Share (Diluted)				$	0.12			$	0.11			$	0.01			$	0.37		$	0.26		$	0.11

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
DOWNSTREAM BUSINESSES
				Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)				June 30,												June 30,
UTILITY SEGMENT				2017				2016				Variance				2017			2016			Variance
Revenues from External Customers				$	121,900			$	106,568			$	15,332			$	550,819		$	463,154		$	87,665
Intersegment Revenues				3,391				1,729				1,662				11,314			10,757			557
Total Operating Revenues				125,291				108,297				16,994				562,133			473,911			88,222
Operating Expenses:
Purchased Gas				46,536				29,514				17,022				235,481			155,764			79,717
Operation and Maintenance				43,506				45,990				(2,484		)		155,783			148,883			6,900
Property, Franchise and Other Taxes				9,927				9,893				34				31,637			30,980			657
Depreciation, Depletion and Amortization				13,086				12,234				852				39,502			35,511			3,991
				113,055				97,631				15,424				462,403			371,138			91,265
Operating Income				12,236				10,666				1,570				99,730			102,773			(3,043		)
Other Income (Expense):
Interest Income				141				115				26				418			321			97
Other Income				438				345				93				576			1,749			(1,173		)
Interest Expense				(7,062		)		(7,192		)		130				(21,454		)	(21,684		)	230
Income Before Income Taxes				5,753				3,934				1,819				79,270			83,159			(3,889		)
Income Tax Expense				1,405				1,755				(350		)		28,167			30,414			(2,247		)
Net Income				$	4,348			$	2,179			$	2,169			$	51,103		$	52,745		$	(1,642	)
Net Income Per Share (Diluted)				$	0.05			$	0.03			$	0.02			$	0.59		$	0.62		$	(0.03	)
				Three Months Ended												Nine Months Ended
				June 30,												June 30,
ENERGY MARKETING SEGMENT				2017				2016				Variance				2017			2016			Variance
Revenues from External Customers				$	24,460			$	17,408			$	7,052			$	112,210		$	77,827		$	34,383
Intersegment Revenues				565				231				334				600			855			(255		)
Total Operating Revenues				25,025				17,639				7,386				112,810			78,682			34,128
Operating Expenses:
Purchased Gas				24,336				17,191				7,145				104,335			67,235			37,100
Operation and Maintenance				1,706				1,376				330				5,262			4,872			390
Property, Franchise and Other Taxes				—				2				(2		)		—			6			(6		)
Depreciation, Depletion and Amortization				69				70				(1		)		210			208			2
				26,111				18,639				7,472				109,807			72,321			37,486
Operating Income (Loss)				(1,086		)		(1,000		)		(86		)		3,003			6,361			(3,358		)
Other Income (Expense):
Interest Income				146				145				1				418			286			132
Other Income				22				20				2				57			44			13
Interest Expense				(13		)		(11		)		(2		)		(38		)	(37		)	(1		)
Income (Loss) Before Income Taxes				(931		)		(846		)		(85		)		3,440			6,654			(3,214		)
Income Tax Expense (Benefit)				(367		)		(256		)		(111		)		1,318			2,537			(1,219		)
Net Income (Loss)				$	(564	)		$	(590	)		$	26			$	2,122		$	4,117		$	(1,995	)
Net Income (Loss) Per Share (Diluted)				$	(0.01	)		$	(0.01	)		$	—			$	0.02		$	0.05		$	(0.03	)

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
				Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)				June 30,												June 30,
ALL OTHER				2017				2016				Variance				2017			2016			Variance
Total Operating Revenues				$	538			$	1,508			$	(970	)		$	1,311		$	2,775		$	(1,464	)
Operating Expenses:
Operation and Maintenance				435				256				179				1,344			495			849
Property, Franchise and Other Taxes				151				144				7				445			449			(4		)
Depreciation, Depletion and Amortization				182				399				(217		)		525			888			(363		)
				768				799				(31		)		2,314			1,832			482
Operating Income (Loss)				(230		)		709				(939		)		(1,003		)	943			(1,946		)
Other Income (Expense):
Interest Income				59				32				27				147			83			64
Income (Loss) Before Income Taxes				(171		)		741				(912		)		(856		)	1,026			(1,882		)
Income Tax Expense (Benefit)				(73		)		311				(384		)		(358		)	431			(789		)
Net Income (Loss)				$	(98	)		$	430			$	(528	)		$	(498	)	$	595		$	(1,093	)
Net Income (Loss) Per Share (Diluted)				$	—			$	0.01			$	(0.01	)		$	—		$	0.01		$	(0.01	)
				Three Months Ended												Nine Months Ended
				June 30,												June 30,
CORPORATE				2017				2016				Variance				2017			2016			Variance
Revenues from External Customers				$	226			$	235			$	(9	)		$	660		$	674		$	(14	)
Intersegment Revenues				977				967				10				2,930			2,900			30
Total Operating Revenues				1,203				1,202				1				3,590			3,574			16
Operating Expenses:
Operation and Maintenance				3,658				3,236				422				11,054			10,273			781
Property, Franchise and Other Taxes				124				122				2				369			365			4
Depreciation, Depletion and Amortization				188				189				(1		)		563			556			7
				3,970				3,547				423				11,986			11,194			792
Operating Loss				(2,767		)		(2,345		)		(422		)		(8,396		)	(7,620		)	(776		)
Other Income (Expense):
Interest Income				31,185				30,684				501				93,684			92,767			917
Other Income				461				496				(35		)		2,150			2,726			(576		)
Interest Expense on Long-Term Debt				(29,225		)		(28,897		)		(328		)		(87,241		)	(88,263		)	1,022
Other Interest Expense				(1,003		)		(868		)		(135		)		(2,901		)	(850		)	(2,051		)
Loss Before Income Taxes				(1,349		)		(930		)		(419		)		(2,704		)	(1,240		)	(1,464		)
Income Tax Expense (Benefit)				(1,116		)		434				(1,550		)		(2,882		)	(3,103		)	221
Net Income (Loss)				$	(233	)		$	(1,364	)		$	1,131			$	178		$	1,863		$	(1,685	)
Net Income (Loss) Per Share (Diluted)				$	(0.01	)		$	(0.02	)		$	0.01			$	—		$	0.02		$	(0.02	)
				Three Months Ended												Nine Months Ended
				June 30,												June 30,
INTERSEGMENT ELIMINATIONS				2017				2016				Variance				2017			2016			Variance
Intersegment Revenues				$	(53,429	)		$	(51,139	)		$	(2,290	)		$	(163,862	)	$	(148,385	)	$	(15,477	)
Operating Expenses:
Purchased Gas				(24,724		)		(23,584		)		(1,140		)		(75,648		)	(76,890		)	1,242
Operation and Maintenance				(28,705		)		(27,555		)		(1,150		)		(88,214		)	(71,495		)	(16,719		)
				(53,429		)		(51,139		)		(2,290		)		(163,862		)	(148,385		)	(15,477		)
Operating Income				—				—				—				—			—			—
Other Income (Expense):
Interest Income				(31,576		)		(30,825		)		(751		)		(93,899		)	(92,313		)	(1,586		)
Interest Expense				31,576				30,825				751				93,899			92,313			1,586
Net Income				$	—			$	—			$	—			$	—		$	—		$	—
Net Income Per Share (Diluted)				$	—			$	—			$	—			$	—		$	—		$	—

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
				Three Months Ended														Nine Months Ended
				June 30,														June 30,
				(Unaudited)														(Unaudited)
														Increase														Increase
				2017					2016					(Decrease)				2017					2016					(Decrease)
Capital Expenditures:
Exploration and Production				$	70,719		(1)(2)		$	47,269		(3)		$	23,450			$	168,545		(1)(2)		$	214,923		(3)(4)		$	(46,378	)
Pipeline and Storage				16,750			(1)(2)		18,325			(3)		(1,575		)		53,528			(1)(2)		76,020			(3)(4)		(22,492		)
Gathering				9,214			(1)(2)		9,192			(3)		22				23,705			(1)(2)		43,715			(3)(4)		(20,010		)
Utility				20,116			(1)(2)		26,280			(3)		(6,164		)		56,411			(1)(2)		72,288			(3)(4)		(15,877		)
Energy Marketing				3					19					(16		)		14					28					(14		)
Total Reportable Segments				116,802					101,085					15,717				302,203					406,974					(104,771		)
All Other				—					—					—				40					37					3
Corporate				22					36					(14		)		86					191					(105		)
Eliminations				295					—					295				(482		)			—					(482		)
Total Capital Expenditures				$	117,119				$	101,121				$	15,998			$	301,847				$	407,202				$	(105,355	)

(1)		Capital expenditures for the quarter and nine months ended June 30, 2017, include accounts payable and accrued liabilities related to capital expenditures of $25.0 million, $10.3 million, $5.2 million, and $7.0 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2017, since they represent non-cash investing activities at that date.
(2)		Capital expenditures for the nine months ended June 30, 2017, exclude capital expenditures of $25.2 million, $18.7 million, $5.3 million and $11.2 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2016 and paid during the nine months ended June 30, 2017. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2016, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2017.
(3)		Capital expenditures for the quarter and nine months ended June 30, 2016, include accounts payable and accrued liabilities related to capital expenditures of $26.7 million, $7.6 million, $2.8 million, and $7.3 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2016, since they represent non-cash investing activities at that date.
(4)		Capital expenditures for the nine months ended June 30, 2016, exclude capital expenditures of $46.2 million, $33.9 million, $22.4 million and $16.5 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2015 and paid during the nine months ended June 30, 2016. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2015, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2016.

DEGREE DAYS
										Percent Colder
										(Warmer) Than:
Three Months Ended June 30				Normal		2017		2016		Normal (1)		Last Year (1)
Buffalo, NY				912		767		927		(15.9)		(17.3)
Erie, PA				871		705		936		(19.1)		(24.7)
Nine Months Ended June 30
Buffalo, NY				6,455		5,599		5,567		(13.3)		0.6
Erie, PA				6,023		5,082		5,159		(15.6)		(1.5)

(1)		Percents compare actual 2017 degree days to normal degree days and actual 2017 degree days to actual 2016 degree days.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
					Three Months Ended												Nine Months Ended
					June 30,												June 30,
													Increase												Increase
					2017				2016				(Decrease)				2017				2016				(Decrease)
Gas Production/Prices:
Production (MMcf)
Appalachia					37,904				38,846				(942		)		118,517				105,747				12,770
West Coast					733				763				(30		)		2,246				2,310				(64		)
Total Production					38,637				39,609				(972		)		120,763				108,057				12,706
Average Prices (Per Mcf)
Appalachia					$	2.58			$	1.73			$	0.85			$	2.55			$	1.84			$	0.71
West Coast					3.39				2.84				0.55				4.07				3.13				0.94
Weighted Average					2.59				1.75				0.84				2.58				1.87				0.71
Weighted Average after Hedging					2.94				2.86				0.08				2.96				3.00				(0.04		)
Oil Production/Prices:
Production (Thousands of Barrels)
Appalachia					1				6				(5		)		3				16				(13		)
West Coast					669				722				(53		)		2,062				2,183				(121		)
Total Production					670				728				(58		)		2,065				2,199				(134		)
Average Prices (Per Barrel)
Appalachia					$	48.34			$	58.28			$	(9.94	)		$	48.85			$	44.05			$	4.80
West Coast					45.63				38.89				6.74				45.71				34.02				11.69
Weighted Average					45.64				39.04				6.60				45.76				34.10				11.66
Weighted Average after Hedging					53.02				58.79				(5.77		)		53.58				57.22				(3.64		)
Total Production (Mmcfe)					42,657				43,977				(1,320		)		133,153				121,251				11,902
Selected Operating Performance Statistics:
General & Administrative Expense per Mcfe (1)					$	0.33			$	0.38			$	(0.05	)		$	0.33			$	0.46			$	(0.13	)
Lease Operating and Transportation Expense per Mcfe (1)(2)					$	0.95			$	0.88			$	0.07			$	0.92			$	0.95			$	(0.03	)
Depreciation, Depletion & Amortization per Mcfe (1)					$	0.64			$	0.71			$	(0.07	)		$	0.64			$	0.93			$	(0.29	)

(1)		Refer to page 15 for the General and Administrative Expense, Lease Operating Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
(2)		Amounts include transportation expense of $0.54 and $0.53 per Mcfe for the three months ended June 30, 2017 and June 30, 2016, respectively. Amounts include transportation expense of $0.54 and $0.52 per Mcfe for the nine months ended June 30, 2017 and June 30, 2016, respectively.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for the Remaining Three Months of Fiscal 2017				Volume						Average Hedge Price
Oil Swaps
Brent				24,000		BBL			$	91.00 / BBL
NYMEX				396,000		BBL			$	58.34 / BBL
Total				420,000		BBL			$	60.21 / BBL
Gas Swaps
NYMEX				9,990,000		MMBTU			$	4.35 / MMBTU
Dominion Transmission Appalachian (DOM)				450,000		MMBTU			$	3.82 / MMBTU
Dawn Ontario (DAWN)				3,330,000		MMBTU			$	3.71 / MMBTU
Fixed Price Physical Sales				17,381,568		MMBTU			$	2.45 / MMBTU
Total				31,151,568		MMBTU			$	3.21 / MMBTU
Hedging Summary for Fiscal 2018				Volume						Average Hedge Price
Oil Swaps
Brent				24,000		BBL			$	91.00 / BBL
NYMEX				1,275,000		BBL			$	54.79 / BBL
Total				1,299,000		BBL			$	55.46 / BBL
Gas Swaps
NYMEX				42,570,000		MMBTU			$	3.34 / MMBTU
DOM				180,000		MMBTU			$	3.82 / MMBTU
DAWN				8,400,000		MMBTU			$	3.08 / MMBTU
Fixed Price Physical Sales				42,902,876		MMBTU			$	2.42 / MMBTU
Total				94,052,876		MMBTU			$	2.90 / MMBTU
Hedging Summary for Fiscal 2019				Volume						Average Hedge Price
Oil Swaps
NYMEX				912,000		BBL			$	53.84 / BBL
Gas Swaps
NYMEX				27,060,000		MMBTU			$	3.17 / MMBTU
DAWN				7,200,000		MMBTU			$	3.00 / MMBTU
Fixed Price Physical Sales				32,328,272		MMBTU			$	2.51 / MMBTU
Total				66,588,272		MMBTU			$	2.83 / MMBTU
Hedging Summary for Fiscal 2020				Volume						Average Hedge Price
Oil Swaps
NYMEX				168,000		BBL			$	50.08 / BBL
Gas Swaps
NYMEX				16,880,000		MMBTU			$	3.07 / MMBTU
DAWN				7,200,000		MMBTU			$	3.00 / MMBTU
Fixed Price Physical Sales				38,232,955		MMBTU			$	2.30 / MMBTU
Total				62,312,955		MMBTU			$	2.59 / MMBTU
Hedging Summary for Fiscal 2021				Volume						Average Hedge Price
Gas Swaps
NYMEX				4,840,000		MMBTU			$	3.01 / MMBTU
DAWN				600,000		MMBTU			$	3.00 / MMBTU
Fixed Price Physical Sales				38,650,830		MMBTU			$	2.22 / MMBTU
Total				44,090,830		MMBTU			$	2.31 / MMBTU
Hedging Summary for Fiscal 2022				Volume						Average Hedge Price
Fixed Price Physical Sales				35,245,042		MMBTU			$	2.24 / MMBTU
Hedging Summary for Fiscal 2023				Volume						Average Hedge Price
Fixed Price Physical Sales				31,170,734		MMBTU			$	2.26 / MMBTU
Hedging Summary for Fiscal 2024				Volume						Average Hedge Price
Fixed Price Physical Sales				15,499,436		MMBTU			$	2.26 / MMBTU

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
				Three Months Ended									Nine Months Ended
				June 30,									June 30,
										Increase									Increase
				2017			2016			(Decrease)			2017			2016			(Decrease)
Firm Transportation - Affiliated				17,734			19,836			(2,102	)		92,583			87,169			5,414
Firm Transportation - Non-Affiliated				165,717			153,543			12,174			495,015			470,991			24,024
Interruptible Transportation				1,060			6,354			(5,294	)		5,078			18,469			(13,391	)
				184,511			179,733			4,778			592,676			576,629			16,047
Gathering Volume - (MMcf)
				Three Months Ended									Nine Months Ended
				June 30,									June 30,
										Increase									Increase
				2017			2016			(Decrease)			2017			2016			(Decrease)
Gathered Volume - Affiliated				48,838			46,360			2,478			150,005			119,355			30,650
Utility Throughput - (MMcf)
				Three Months Ended									Nine Months Ended
				June 30,									June 30,
										Increase									Increase
				2017			2016			(Decrease)			2017			2016			(Decrease)
Retail Sales:
Residential Sales				8,105			9,209			(1,104	)		48,817			46,828			1,989
Commercial Sales				1,170			1,254			(84	)		7,373			6,770			603
Industrial Sales				48			—			48			282			233			49
				9,323			10,463			(1,140	)		56,472			53,831			2,641
Off-System Sales				—			—			—			1,295			1,243			52
Transportation				13,799			14,857			(1,058	)		60,453			59,770			683
				23,122			25,320			(2,198	)		118,220			114,844			3,376
Energy Marketing Volume
				Three Months Ended									Nine Months Ended
				June 30,									June 30,
										Increase									Increase
				2017			2016			(Decrease)			2017			2016			(Decrease)
Natural Gas (MMcf)				7,722			8,537			(815	)		32,969			33,800			(831	)

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding Operating Results and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results and for comparing the Company’s financial performance to other companies. The Company's management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.

Management defines Operating Results as reported GAAP earnings before items impacting comparability. The table at page 1 of this report reconciles National Fuel's reported GAAP earnings to Operating Results for the three and nine months ended June 30, 2017 and 2016.

Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, depreciation, depletion and amortization, interest and other income, impairments, items impacting comparability and income taxes.

The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and nine months ended June 30, 2017 and 2016:

				Three Months Ended								Nine Months Ended
				June 30,								June 30,
				2017				2016				2017				2016
(in thousands)
Reported GAAP Earnings				$	59,714			$	8,286			$	237,906			$	(328,510	)
Depreciation, Depletion and Amortization				55,617				58,802				168,812				193,300
Interest and Other Income				(2,223		)		(2,083		)		(7,572		)		(9,813		)
Interest Expense				30,071				30,218				89,921				92,201
Income Taxes				35,792				8,740				145,195				(251,641		)
Impairment of Oil and Gas Producing Properties				—				82,658				—				915,552
Joint Development Agreement Professional Fees				—				3,173				—				7,855
Adjusted EBITDA				$	178,971			$	189,794			$	634,262			$	618,944
Adjusted EBITDA by Segment
Pipeline and Storage Adjusted EBITDA				$	44,163			$	48,515			$	141,279			$	152,929
Gathering Adjusted EBITDA				23,901				22,433				73,174				57,722
Total Midstream Businesses Adjusted EBITDA				68,064				70,948				214,453				210,651
Exploration and Production Adjusted EBITDA				89,229				97,924				285,675				268,673
Utility Adjusted EBITDA				25,322				22,900				139,232				138,284
Energy Marketing Adjusted EBITDA				(1,017		)		(930		)		3,213				6,569
Corporate and All Other Adjusted EBITDA				(2,627		)		(1,048		)		(8,311		)		(5,233		)
Total Adjusted EBITDA				$	178,971			$	189,794			$	634,262			$	618,944

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES SEGMENT ADJUSTED EBITDA
				Three Months Ended								Nine Months Ended
				June 30,								June 30,
(in thousands)				2017				2016				2017				2016
Exploration and Production Segment
Reported GAAP Earnings				$	30,123			$	(19,165	)		$	98,972			$	(469,586	)
Depreciation, Depletion and Amortization				27,448				31,279				85,353				112,586
Interest and Other Income				(217		)		(88		)		(451		)		(781		)
Interest Expense				13,444				13,753				40,270				41,882
Income Taxes				18,431				(13,686		)		61,531				(338,835		)
Impairment of Oil and Gas Producing Properties				—				82,658				—				915,552
Joint Development Agreement Professional Fees				—				3,173				—				7,855
Adjusted EBITDA				$	89,229			$	97,924			$	285,675			$	268,673
Pipeline and Storage Segment
Reported GAAP Earnings				$	16,031			$	17,323			$	54,656			$	59,794
Depreciation, Depletion and Amortization				10,513				11,023				30,651				32,144
Interest and Other Income				(842		)		(894		)		(2,928		)		(3,178		)
Interest Expense				8,489				8,528				25,177				25,017
Income Taxes				9,972				12,535				33,723				39,152
Adjusted EBITDA				$	44,163			$	48,515			$	141,279			$	152,929
Gathering Segment
Reported GAAP Earnings				$	10,107			$	9,473			$	31,373			$	21,962
Depreciation, Depletion and Amortization				4,131				3,608				12,008				11,407
Interest and Other Income				(288		)		(89		)		(642		)		(191		)
Interest Expense				2,411				1,794				6,739				6,781
Income Taxes				7,540				7,647				23,696				17,763
Adjusted EBITDA				$	23,901			$	22,433			$	73,174			$	57,722
Utility Segment
Reported GAAP Earnings				$	4,348			$	2,179			$	51,103			$	52,745
Depreciation, Depletion and Amortization				13,086				12,234				39,502				35,511
Interest and Other Income				(579		)		(460		)		(994		)		(2,070		)
Interest Expense				7,062				7,192				21,454				21,684
Income Taxes				1,405				1,755				28,167				30,414
Adjusted EBITDA				$	25,322			$	22,900			$	139,232			$	138,284
Energy Marketing Segment
Reported GAAP Earnings				$	(564	)		$	(590	)		$	2,122			$	4,117
Depreciation, Depletion and Amortization				69				70				210				208
Interest and Other Income				(168		)		(165		)		(475		)		(330		)
Interest Expense				13				11				38				37
Income Taxes				(367		)		(256		)		1,318				2,537
Adjusted EBITDA				$	(1,017	)		$	(930	)		$	3,213			$	6,569
Corporate and All Other
Reported GAAP Earnings				$	(331	)		$	(934	)		$	(320	)		$	2,458
Depreciation, Depletion and Amortization				370				588				1,088				1,444
Interest and Other Income				(129		)		(387		)		(2,082		)		(3,263		)
Interest Expense				(1,348		)		(1,060		)		(3,757		)		(3,200		)
Income Taxes				(1,189		)		745				(3,240		)		(2,672		)
Adjusted EBITDA				$	(2,627	)		$	(1,048	)		$	(8,311	)		$	(5,233	)

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Quarter Ended June 30 (unaudited)				2017				2016
Operating Revenues				$	348,368,000			$	335,617,000
Net Income Available for Common Stock				$	59,714,000			$	8,286,000
Earnings Per Common Share:
Basic				$	0.70			$	0.10
Diluted				$	0.69			$	0.10
Weighted Average Common Shares:
Used in Basic Calculation				85,422,313				84,917,664
Used in Diluted Calculation				86,064,464				85,470,216
Nine Months Ended June 30 (unaudited)
Operating Revenues				$	1,292,944,000			$	1,159,943,000
Net Income (Loss) Available for Common Stock				$	237,906,000			$	(328,510,000	)
Earnings (Loss) Per Common Share:
Basic				$	2.79			$	(3.87	)
Diluted				$	2.77			$	(3.87	)
Weighted Average Common Shares:
Used in Basic Calculation				85,315,154				84,791,447
Used in Diluted Calculation				85,950,742				84,791,447
Twelve Months Ended June 30 (unaudited)
Operating Revenues				$	1,585,416,000			$	1,461,005,000
Net Income (Loss) Available for Common Stock				$	275,459,000			$	(516,213,000	)
Earnings (Loss) Per Common Share:
Basic				$	3.23			$	(6.09	)
Diluted				$	3.21			$	(6.09	)
Weighted Average Common Shares:
Used in Basic Calculation				85,239,850				84,735,887
Used in Diluted Calculation				85,881,424				84,735,887

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Source: National Fuel Gas Company