National Fuel Reports Second Quarter Earnings

WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)-- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated earnings for the second quarter of its 2015 fiscal year and for the six months ended March 31, 2015, of $16.7 million, or $0.20 per share, and $101.4 million, or $1.19 per share, respectively.

HIGHLIGHTS

• Earnings for the current quarter and six months ended March 31, 2015 were reduced by a $69.5 million non-cash charge to writedown the value of Seneca Resources Corporation’s (“Seneca”) oil and natural gas reserves.
• Excluding Seneca’s writedown and other items impacting comparability, consolidated earnings before items impacting comparability (“Operating Results”) for the second quarter were $86.1 million, or $1.02 per share, compared to $97.0 million, or $1.15 per share, in the prior year’s second quarter. Operating Results for the six months ended March 31, 2015, of $170.9 million, or $2.01 per share, compared to $180.1 million, or $2.13 per share, in the prior year’s six-month period. Operating Results in the Company’s regulated Pipeline & Storage and Utility segments increased for both the quarter and six-month period, however, this was more than offset by a decrease in the Exploration & Production segment mainly due to lower realized average commodity prices.
• In the Company’s Midstream businesses (which consist of the Company's Pipeline and Storage and Gathering segments), Adjusted EBITDA for the quarter and six months ended March 31, 2015, was up $4.7 million or 7% and $14.9 million or 12%, respectively.
• Seneca’s second quarter production of natural gas and crude oil was 35.7 billion cubic feet equivalent (“Bcfe”), compared to 36.9 Bcfe for the prior year’s second quarter. Absent an estimated 13.5 Bcf of pricing related curtailments for the quarter, Seneca’s net production would have increased 34%. Production during the quarter averaged 397 million cubic feet equivalent (“MMcfe”) per day.
• In March 2015, National Fuel Gas Supply Corporation and Empire Pipeline, Inc. jointly filed a certificate application with the Federal Energy Regulatory Commission (“FERC”) for its Northern Access 2016 expansion project, which is designed to transport 497,000 dekatherms per day of natural gas for Seneca from its Western Development Area (“WDA”) to interconnects with major pipelines in western New York and at the Canadian border.
• A conference call is scheduled for Friday, May 1, 2015, at 11 a.m. Eastern Time.

MANAGEMENT COMMENTS

Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “Persistent low crude oil and natural gas prices had a significant negative impact on our financial results, requiring us to write down the value of our oil and gas properties on our balance sheet. The low prices also caused the drop in recurring earnings. While there is little we can do to influence global commodity prices, we remain highly focused on operating our assets as efficiently as possible. In that regard, operations during the quarter went very smoothly, particularly in our Midstream businesses, which continue to capitalize on our strategic position in Appalachia, and at the Utility, where our dedicated employees met the challenge of the coldest February on record.

“While we intend to reduce the pace of our upstream capital spending in Pennsylvania and California over the near-term, we continue to proceed with our pipeline expansion plans in Appalachia. We remain confident that our infrastructure projects will help secure attractive economics for Seneca’s production over the long-term and provide even further opportunities for growth in our Upstream and Midstream businesses for years to come.”

SUMMARY OF RESULTS

National Fuel had consolidated earnings for the quarter ended March 31, 2015, of $16.7 million, or $0.20 per share, compared to the prior year’s second quarter of $95.2 million, or $1.12 per share, a decrease of $78.5 million, or $0.92 per share. The decrease is mainly due to lower earnings in the Exploration and Production segment. (Note: All references to earnings per share are to diluted earnings per share, and all amounts used in the discussion of earnings are after tax unless otherwise noted.)

Consolidated earnings for the six months ended March 31, 2015, of $101.4 million, or $1.19 per share, decreased $76.1 million, or $0.90 per share, from the same period in the prior year where earnings were $177.5 million or $2.09 per share.

OPERATING RESULTS
		Three Months									Six Months
		Ended March 31,									Ended March 31,
		2015					2014				2015				2014
(in thousands except per share amounts)
Reported GAAP earnings		$	16,669				$	95,211			$	101,409			$	177,463
Items impacting comparability1:
Impairment of oil and gas properties		69,474									69,474
Plugging and abandonment accrual							2,445								3,251
Deferred state income tax adjustment							3,000								3,000
Gain on life insurance policies							(3,635		)						(3,635		)
Operating Results		$	86,143				$	97,021			$	170,883			$	180,079
Reported GAAP earnings per share		$	0.20				$	1.12			$	1.19			$	2.09
Items impacting comparability1:
Impairment of oil and gas properties		0.82									0.82
Plugging and abandonment accrual							0.03								0.04
Deferred state income tax adjustment							0.04								0.04
Gain on life insurance policies							(0.04		)						(0.04		)
Operating Results		$	1.02		2		$	1.15			$	2.01			$	2.13
1 See discussion of these individual items below.
2$1.01 per share when Operating Results are divided by weighted average shares.

As outlined in the table above, certain items included in GAAP earnings impacted the comparability of the Company’s financial results when comparing the quarter and six months ended March 31, 2015, to the comparable periods in fiscal 2014. Excluding these items, Operating Results for the current quarter of $86.1 million, or $1.02 per share, decreased $10.9 million, or $0.13 per share, from the prior year’s second quarter when Operating Results were $97.0 million or $1.15 per share. Excluding these items, Operating Results for the six months ended March 31, 2015, of $170.9 million, or $2.01 per share, decreased $9.2 million, or $0.12 per share, from the same period in the prior year when Operating Results were $180.1 million or $2.13 per share. Items impacting comparability will be discussed in more detail with the discussion of segment earnings below.

DISCUSSION OF RESULTS BY SEGMENT

The following discussion of the earnings of each segment is summarized in a tabular form at pages 11 through 14 of this report. It may be helpful to refer to those tables while reviewing this discussion.

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.

The Exploration and Production segment’s loss in the second quarter of fiscal 2015 of $53.6 million, or $0.63 per share, compares to earnings of $24.4 million, or $0.29 per share, in the prior year’s second quarter, a decrease of $78.0 million or $0.92 per share. The decrease was mainly due to a non-cash charge of $69.5 million to write down the value of Seneca’s oil and natural gas producing properties.

Seneca uses the full cost method of accounting for determining the book value of its oil and natural gas properties. This accounting method requires that Seneca perform a quarterly “ceiling test” to compare the present value of future revenues from its oil and natural gas reserves based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period (“the ceiling”) with the book value of those reserves at the balance sheet date. If the book value of the reserves exceeds the ceiling, a non-cash impairment charge must be recorded in order to reduce the book value of the reserves to the calculated ceiling. Unless oil and gas prices improve significantly, Seneca expects that the book value of its oil and gas reserves will also exceed the ceiling at June 30, 2015, September 30, 2015 and December 31, 2015, resulting in significant impairment charges each quarter.

In the second quarter of fiscal 2014, earnings were reduced by a $3.8 million (pre-tax) accrual for well plugging and abandonment costs associated with an offshore Gulf of Mexico mineral lease that Seneca had previously farmed out to an operator who subsequently filed for bankruptcy. As the original lessee, Seneca had become responsible for a portion of the costs to plug and abandon wells on the lease (this accrual was ultimately lowered to $0.9 million in a subsequent quarter). In addition, Seneca increased its state deferred income tax liability by $3.0 million to reflect the impact of its growing presence in Pennsylvania ($5.8 million increase) and a reduction in New York state corporate income tax rates ($2.8 million decrease).

Excluding the items above, Operating Results in the Exploration and Production segment were $15.9 million, or $0.19 per share, compared to $29.8 million, or $0.36 per share, in the prior year’s second quarter, a decrease of $13.9 million or $0.17 per share. The decrease in Operating Results is mainly due to lower commodity prices realized after hedging. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended March 31, 2015, was $3.65 per thousand cubic feet (“Mcf”), a decrease of $0.24 per Mcf compared to the prior year’s second quarter. The weighted average crude oil price realized after hedging for the quarter ended March 31, 2015, was $67.14 per barrel ("Bbl"), a decrease of $29.71 per Bbl compared to the prior year’s second quarter.

Overall production of natural gas and crude oil for the current quarter of 35.7 Bcfe decreased approximately 1.1 Bcfe, compared to the prior year’s second quarter. Production from Seneca’s Appalachia properties decreased 0.9 Bcfe largely due to an estimated 13.5 Bcfe of pricing related curtailments in the current year’s second quarter. California production of 5.1 Bcfe decreased 0.2 Bcfe due to natural field declines.

On a per unit basis, quarterly depletion expense of $1.61 per Mcfe decreased $0.27 per Mcfe due to higher natural gas reserve balances at March 31, 2015, compared to the prior year’s second quarter. On a per unit basis, lease operating and transportation expenses (“LOE”) at $1.16 per Mcfe increased $0.08 per Mcfe compared to the prior year’s second quarter mostly due to the decrease in Marcellus production, which carries a lower operating expense burden than Seneca’s California production. Higher intercompany gathering and compression costs associated with production delivered into the Gathering segment’s Trout Run and Clermont gathering systems in Seneca’s Eastern Development Area (“EDA”) and WDA, respectively also contributed to the increase. General and administrative expenses (“G&A”) increased $0.04 per Mcfe compared to the prior year’s second quarter, largely due to increased personnel related costs and lower production associated with price related curtailments.

The Exploration and Production segment’s loss for the six months ended March 31, 2015 of $26.8 million, or $0.32 per share, compares to earnings of $55.5 million, or $0.65 per share, in the prior year’s six-month period, a decrease of $82.3 million or $0.97 per share. Excluding the impact of the ceiling test charge from the current year’s six-month period and the plugging and abandonment costs and tax adjustments from the prior year’s six-month period (described above), Operating Results in the Exploration and Production segment were $42.6 million, or $0.50 per share, compared to $61.7 million, or $0.73 per share, a decrease of $19.1 million or $0.23 per share. The decrease in Operating Results is mainly due to lower commodity prices realized after hedging. The weighted average natural gas price received by Seneca (after hedging) for the six months ended March 31, 2015, was $3.42 per Mcf, a decrease of $0.37 per Mcf compared to the prior year’s six-month period. The weighted average crude oil price realized after hedging for the six months ended March 31, 2015, was $72.78 per Bbl, a decrease of $22.69 per Bbl compared to the prior year’s six-month period.

Overall production of natural gas and crude oil for the current six-month period of 83.9 Bcfe increased approximately 10.0 Bcfe, or 13.4 percent, compared to the prior year’s six-month period. Production from Seneca’s Appalachia properties increased approximately 15.5 percent and accounted for 9.8 Bcfe of the increase, largely because of Seneca’s strong well results in Lycoming County and the Clermont-Rich Valley area in Seneca’s EDA and WDA, respectively. California production of 10.5 Bcfe increased 1.1 percent compared to the prior year’s six-month period due to development activities primarily in the East Coalinga and South Midway Sunset fields. Pricing related curtailments for the current six-month period were an estimated 19.5 Bcfe.

On a per unit basis for the six months ended March 31, 2015, depletion expense of $1.64 per Mcfe decreased $0.26 per Mcfe due to higher natural gas reserve balances at March 31, 2015. On a per unit basis, LOE at $1.05 per Mcfe increased $0.03 per Mcfe due to higher intercompany gathering and compression costs associated with production delivered into the Gathering segment’s Trout Run and Clermont gathering systems in Seneca’s EDA and WDA, respectively. G&A decreased $0.04 per Mcfe.

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.

The Pipeline and Storage segment’s earnings of $23.4 million, or $0.27 per share, for the quarter ended March 31, 2015, increased $2.0 million, or $0.02 per share, when compared with the same period in the prior fiscal year. The increase in earnings is due to higher non-affiliated revenues from the Mercer Expansion project, which was placed in service in the current year’s first quarter. The increase in earnings also reflects higher transportation revenues from additional new short-term firm transportation contracts on both pipeline systems. As a result of the ongoing pricing basis differentials in the Appalachian region, the Pipeline and Storage segment continues to see increased demand for transportation services from producers and marketers to move natural gas supplies to higher priced markets. Lower operating expenses also contributed to the increase in earnings.

The Pipeline and Storage segment’s earnings of $44.2 million, or $0.52 per share, for the six months ended March 31, 2015, increased $3.6 million, or $0.04 per share, when compared with the same period in the prior fiscal year. The increase in earnings is due to higher non-affiliated revenues from the Mercer Expansion project and higher transportation revenues from additional new short-term firm transportation contracts on both pipeline systems for the reasons noted above for the quarter. Earnings also benefited from a higher allowance for funds used during construction (AFUDC) associated with various pipeline expansion projects.

Gathering Segment

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Corporation’s (“Midstream”) subsidiary limited liability companies. The Gathering segment constructs, owns and operates natural gas pipeline gathering and processing facilities in the Appalachian region and currently provides the gathering infrastructure for transporting Seneca’s Marcellus Shale production to the interstate pipeline system.

The Gathering segment’s earnings of $6.4 million, or $0.08 per share, for the quarter ended March 31, 2015, decreased $0.9 million, or $0.01 per share, when compared with the same period in the prior fiscal year. The decrease in earnings is mainly due to higher depreciation and operating expenses due to new facilities associated with the Clermont Gathering System being placed in service, partially offset by higher gathering revenues.

The Gathering segment’s earnings of $18.0 million, or $0.21 per share, for the six months ended March 31, 2015, increased $4.6 million, or $0.05 per share, when compared with the same period in the prior fiscal year. The increase in earnings is mainly due to higher gathering revenues from Midstream’s Trout Run and Clermont gathering systems. That increase in revenue is mostly attributable to the overall increase in Seneca’s production volumes and a change in the mix of Seneca’s production among Midstream's three major gathering systems. Higher depreciation and operating expenses partially offset the higher gathering 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.

The Utility segment’s earnings of $38.2 million, or $0.45 per share, for the quarter ended March 31, 2015, increased $2.7 million, or $0.03 per share, when compared with the same period in the prior fiscal year. The increase in earnings is due to the impact of a regulatory adjustment recorded during fiscal 2015 to recognize an under-collection from customers of a New York State regulatory assessment. Earnings were reduced by higher operating expenses mainly associated with the replacement of Distribution’s customer billing system.

The Utility segment’s earnings of $60.8 million, or $0.71 per share, for the six months ended March 31, 2015, increased $1.1 million, or $0.01 per share, when compared with the same period in the prior fiscal year. The increase in earnings was due to the impact of regulatory true-up adjustments, offset by higher operating expenses for the reasons noted above for the quarter.

Energy Marketing Segment

National Fuel Resources, Inc. (“NFR”) comprises the Company’s Energy Marketing segment. 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.

The Energy Marketing segment’s earnings for the quarter ended March 31, 2015, of $3.4 million, or $0.04 per share, were largely unchanged from the prior year’s second quarter.

The Energy Marketing segment’s earnings for the six months ended March 31, 2015 of $6.2 million, or $0.07 per share, increased $0.8 million, or $0.01 per share, compared to the prior year’s six-month period primarily due to higher per unit margins, which benefited from the weak pricing basis in the Northeast.

Corporate and All Other

The Corporate and All Other category primarily includes corporate operations. The category also includes the remaining operations of Seneca’s Northeast division that markets high quality hardwoods from Appalachian land holdings.

The Corporate and All Other category loss of $1.2 million in the quarter ended March 31, 2015, compares to earnings of $2.8 million, in the prior year’s second quarter. The Corporate and All Other category loss of $1.0 million in the six months ended March 31, 2015, compares to earnings of $2.9 million in the prior year’s six-month period. The comparability of the quarterly and six-month results is impacted by a $3.6 million gain recognized on corporate-owned executive life insurance policies recorded in the prior year’s second quarter.

Excluding this item, Operating Results for the quarter, a loss of $1.2 million, and for the six-month ended March 31, 2015, a loss of $1.0 million, were largely unchanged from the prior year’s quarter and six-month period.

EARNINGS GUIDANCE

The Company is updating its earnings guidance range for fiscal 2015 to a range of $2.75 to $2.90 per share exclusive of any ceiling test impairment charges. The previous earnings guidance had been a range of $2.65 to $2.90 per share. The change in earnings guidance reflects the following changes in assumptions:

• Seneca's expected production for fiscal 2015 is now a range of 155 to 175 Bcfe. The previous range was 155 to 190 Bcfe. The decrease in the high end of the range is attributable to 13.5 Bcfe of price related curtailments experienced during the quarter.
• The Company is now assuming Marcellus spot pricing averages between $1.75 and $2.00 per Mcf for the remainder of the fiscal year, down $0.25 per Mcf from the previous range of $2.00 and $2.25 per Mcf.
• NYMEX natural gas prices are now assumed to average $2.75 per MMBtu for the remainder of the fiscal year, down $0.25 from the previous forecast. NYMEX crude oil prices average $60.00 per Bbl for the remainder of the fiscal year, an increase of $10.00 from the previous forecast.
• As indicated earlier in this release, non-cash ceiling test impairment charges over each of the next three quarters are expected to impact the Company's earnings.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, May 1, 2015, 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 investor relations page at National Fuel’s website at investor.nationalfuelgas.com. For those without Internet access, access is also provided by dialing (toll-free) 1-877-703-6110, using passcode “12281744.” For those unable to listen to the live conference call, a replay will be available at approximately 3 p.m. Eastern Time at the same website link and by phone at (toll-free) 1-888-286-8010, using passcode “60939904.” Both the webcast and telephonic replay will be available until the close of business on Friday, May 8, 2015.

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: 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; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; changes in the price of natural gas or oil; 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; 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 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; 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; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; 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; 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; 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; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other 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 thereof.

<td class="bwpadl0 bwvertalignb bwalignl">Drivers of operating results

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED MARCH 31, 2015
(Unaudited)
						Midstream								Downstream
		Upstream				Businesses								Businesses
		Exploration &				Pipeline &												Energy				Corporate /
(Thousands of Dollars)		Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Second quarter 2014 GAAP earnings		$	24,390			$	21,372			$	7,324 </td>			$	35,545			$	3,765			$	2,815			$	95,211
Items impacting comparability:
Plugging and abandonment accrual		2,445																								2,445
Deferred state income tax adjustment		3,000																								3,000
Gain on life insurance policies																						(3,635		)		(3,635		)
Second quarter 2014 operating results		29,835				21,372				7,324				35,545				3,765				(820		)		97,021
Higher (lower) crude oil prices		(14,023		)																						(14,023		)
Higher (lower) natural gas prices		(4,845		)																						(4,845		)
Higher (lower) natural gas production		(2,383		)																						(2,383		)
Higher (lower) crude oil production		(1,791		)																						(1,791		)
Derivative mark to market adjustments		2,150																								2,150
Lower (higher) lease operating and transportation expenses		(949		)																						(949		)
Lower (higher) depreciation / depletion		7,667				(462		)		(2,070		)														5,135
Higher (lower) transportation revenues						1,794																				1,794
Higher (lower) gathering and processing revenues										1,175																1,175
Lower (higher) operating expenses		(1,194		)		807				(456		)		(821		)										(1,664		)
Regulatory true-up adjustments														4,011												4,011
Higher (lower) margins																		(385		)						(385		)
Lower (higher) income tax expense / effective tax rate		1,683																								1,683
All other / rounding		(238		)		(134		)		432				(497		)		(7		)		(342		)		(786		)
Second quarter 2015 operating results		15,912				23,377				6,405				38,238				3,373				(1,162		)		86,143
Items impacting comparability:
Impairment of oil and gas producing properties		(69,474		)																						(69,474		)
Second quarter 2015 GAAP earnings		$	(53,562	)		$	23,377			$	6,405			$	38,238			$	3,373			$	(1,162	)		$	16,669
* Amounts do not reflect intercompany eliminations

<td class="bwpadl0 bwnowrap bwpadr0 bwvertalignb bwalignr" colspan="2"> (0.01

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED MARCH 31, 2015
(Unaudited)
						Midstream								Downstream
		Upstream				Businesses								Businesses
		Exploration &				Pipeline &												Energy				Corporate /
		Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Second quarter 2014 GAAP earnings		$	0.29			$	0.25			$	0.09			$	0.42			$	0.04			$	0.03			$	1.12
Items impacting comparability:
Plugging and abandonment accrual		0.03																								0.03
Deferred state income tax adjustment		0.04																								0.04
Gain on life insurance policies																						(0.04		)		(0.04		)
Second quarter 2014 operating results		0.36				0.25				0.09				0.42				0.04				(0.01		)		1.15
Drivers of operating results
Higher (lower) crude oil prices		(0.16		)																						(0.16		)
Higher (lower) natural gas prices		(0.06		)																						(0.06		)
Higher (lower) natural gas production		(0.03		)																						(0.03		)
Higher (lower) crude oil production		(0.02		)																						(0.02		)
Derivative mark to market adjustments		0.02																								0.02
Lower (higher) lease operating and transportation expenses		(0.01		)																						(0.01		)
Lower (higher) depreciation / depletion		0.09				(0.01		)		(0.02		)														0.06
Higher (lower) transportation revenues						0.02																				0.02
Higher (lower) gathering and processing revenues										0.01																0.01
Lower (higher) operating expenses		(0.01		)		0.01				)		(0.01		)										(0.02		)
Regulatory true-up adjustments														0.05												0.05
Higher (lower) margins																		—								—
Lower (higher) income tax expense / effective tax rate		0.02																								0.02
All other / rounding		(0.01		)		—				0.01				(0.01		)		—				—				(0.01		)
Second quarter 2015 operating results		0.19				0.27				0.08				0.45				0.04				(0.01		)		1.02
Items impacting comparability:
Impairment of oil and gas producing properties		(0.82		)																						(0.82		)
Second quarter 2015 GAAP earnings		$	(0.63	)		$	0.27			$	0.08			$	0.45			$	0.04			$	(0.01	)		$	0.20
* Amounts do not reflect intercompany eliminations

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
SIX MONTHS ENDED MARCH 31, 2015
(Unaudited)
						Midstream								Downstream
		Upstream				Businesses								Businesses
		Exploration &				Pipeline &												Energy				Corporate /
(Thousands of Dollars)		Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Six months ended March 31, 2014 GAAP earnings		$	55,487			$	40,510			$	13,471			$	59,760			$	5,369			$	2,866			$	177,463
Items impacting comparability:
Plugging and abandonment accrual		3,251																								3,251
Deferred state income tax adjustment		3,000																								3,000
Gain on life insurance policies																						(3,635		)		(3,635		)
Six months ended March 31, 2014 operating results		61,738				40,510				13,471				59,760				5,369				(769		)		180,079
Drivers of operating results
Higher (lower) crude oil prices		(22,073		)																						(22,073		)
Higher (lower) natural gas prices		(18,342		)																						(18,342		)
Higher (lower) natural gas production		24,140																								24,140
Higher (lower) crude oil production		1,652																								1,652
Derivative mark to market adjustments		1,894																								1,894
Insurance settlement proceeds adjustment		(1,261		)																						(1,261		)
Lower (higher) lease operating and transportation expenses		(8,513		)																						(8,513		)
Lower (higher) depreciation / depletion		1,845				(405		)		(2,168		)														(728		)
Higher (lower) transportation revenues						3,229																				3,229
Higher (lower) gathering and processing revenues										7,668																7,668
Lower (higher) operating expenses		(1,592		)						(851		)		(2,036		)										(4,479		)
Regulatory true-up adjustments														3,058												3,058
Higher (lower) margins																		871								871
Higher (lower) AFUDC**						894																				894
Lower (higher) interest expense										398																398
Lower (higher) income tax expense / effective tax rate		3,056								(483		)														2,573
All other / rounding		88				(73		)		(7		)		49				(41		)		(193		)		(177		)
Six months ended March 31, 2015 operating results		42,632				44,155				18,028				60,831				6,199				(962		)		170,883
Items impacting comparability:
Impairment of oil and gas producing properties		(69,474		)																						(69,474		)
Six months ended March 31, 2015 GAAP earnings		$	(26,842	)		$	44,155			$	18,028			$	60,831			$	6,199			$	(962	)		$	101,409
* Amounts do not reflect intercompany eliminations
** AFUDC = Allowance for Funds Used During Construction

<td class="bwpadl0 bwpadb1 bwvertalignb bwalignl"> All other / rounding

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
SIX MONTHS ENDED MARCH 31, 2015
(Unaudited)
						Midstream								Downstream
		Upstream				Businesses								Businesses
		Exploration &				Pipeline &												Energy				Corporate /
		Production				Storage				Gathering				Utility				Marketing				All Other				Consolidated*
Six months ended March 31, 2014 GAAP earnings		$	0.65			$ 0.48			$	0.16			$	0.70			$	0.06			$	0.04			$	2.09
Items impacting comparability:
Plugging and abandonment accrual		0.04																								0.04
Deferred state income tax adjustment		0.04																								0.04
Gain on life insurance policies																						(0.04		)		(0.04		)
Six months ended March 31, 2014 operating results		0.73				0.48				0.16				0.70				0.06				—				2.13
Drivers of operating results
Higher (lower) crude oil prices		(0.26		)																						(0.26		)
Higher (lower) natural gas prices		(0.22		)																						(0.22		)
Higher (lower) natural gas production		0.28																								0.28
Higher (lower) crude oil production		0.02																								0.02
Derivative mark to market adjustments		0.02																								0.02
Insurance settlement proceeds adjustment		(0.01		)																						(0.01		)
Lower (higher) lease operating and transportation expenses		(0.10		)																						(0.10		)
Lower (higher) depreciation / depletion		0.02				(0.01		)		(0.03		)														(0.02		)
Higher (lower) transportation revenues						0.04																				0.04
Higher (lower) gathering and processing revenues										0.09																0.09
Lower (higher) operating expenses		(0.02		)						(0.01		)		(0.02		)										(0.05		)
Regulatory true-up adjustments													</td>	0.03												0.03
Higher (lower) margins																		0.01								0.01
Higher (lower) AFUDC**						0.01																				0.01
Lower (higher) interest expense										—																—
Lower (higher) income tax expense / effective tax rate		0.04								—																0.04
	—				—				—				—				—				—				—
Six months ended March 31, 2015 operating results		0.50				0.52				0.21				0.71				0.07				—				2.01
Items impacting comparability:
Impairment of oil and gas producing properties		(0.82		)																						(0.82		)
Six months ended March 31, 2015 GAAP earnings		$	(0.32	)		$	0.52			$	0.21			0.71			$	0.07			$	—			$	1.19
* Amounts do not reflect intercompany eliminations
** AFUDC = Allowance for Funds Used During Construction

</tr>

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts)
		Three Months Ended								Six Months Ended
		March 31,								March 31,
		(Unaudited)								(Unaudited)
SUMMARY OF OPERATIONS		2015				2014				2015				2014
Operating Revenues		$	596,127			$	756,242			$	1,120,036			$	1,306,314
Operating Expenses:
Purchased Gas		190,600				322,772				317,690				490,378
Operation and Maintenance		133,245				137,716				245,827				245,562
Property, Franchise and Other Taxes		24,916				25,704				45,845				46,630
Depreciation, Depletion and Amortization		82,687				89,975				185,433				183,089
Impairment of Oil and Gas Producing Properties		120,348				—				120,348				—
		551,796				576,167				915,143				965,659
Operating Income		44,331				180,075				204,893				340,655
Other Income (Expense):
Interest Income		46				249				1,303				951
Other Income		1,388				5,123				2,571				5,352
Interest Expense on Long-Term Debt		(22,376		)		(22,766		)		(44,687		)		(45,651		)
Other Interest Expense		(1,584		)		(1,375		)		(2,375		)		(2,324		)
Income Before Income Taxes		21,805				161,306				161,705				298,983
Income Tax Expense		5,136				66,095				60,296				121,520
Net Income Available for Common Stock		$	16,669			$	95,211			$	101,409			$	177,463
Earnings Per Common Share:
Basic		$	0.20			$	1.14			$	1.20			$	2.12
Diluted		$	0.20			$	1.12			$	1.19			$	2.09
Weighted Average Common Shares:
Used in Basic Calculation		84,317,508				83,856,120				84,262,471				83,781,085
Used in Diluted Calculation		85,133,142				84,837,123				85,175,961				84,787,610

<td>

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
		March 31,				September 30,
(Thousands of Dollars)		2015				2014
ASSETS
Property, Plant and Equipment		$	8,691,487			$	8,245,791
Less - Accumulated Depreciation, Depletion and Amortization			2,794,981				2,502,700
Net Property, Plant and Equipment			5,896,506				5,743,091
Current Assets:
Cash and Temporary Cash Investments			69,441				36,886
Hedging Collateral Deposits			15,726				2,734
Receivables - Net			207,673				149,735
Unbilled Revenue			56,148				25,663
Gas Stored Underground			7,361				39,422
Materials and Supplies - at average cost			31,658				27,817
Other Current Assets			59,592				54,752
Deferred Income Taxes			39,260				40,323
Total Current Assets			486,859				377,332
Other Assets:
Recoverable Future Taxes			163,976				163,485
Unamortized Debt Expense			13,129				14,304
Other Regulatory Assets			217,369				224,436
Deferred Charges			10,923				14,212
Other Investments			88,246			86,788
Goodwill			5,476				5,476
Prepaid Post-Retirement Benefit Costs			43,400				36,512
Fair Value of Derivative Financial Instruments			301,884				72,606
Other			178				1,355
Total Other Assets			844,581				619,174
Total Assets		$	7,227,946			$	6,739,597
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000
Shares; Issued and Outstanding - 84,385,366 Shares
and 84,157,220 Shares, Respectively		$	84,385			$	84,157
Paid in Capital			737,335				716,144
Earnings Reinvested in the Business			1,650,840				1,614,361
Accumulated Other Comprehensive Income (Loss)			126,689				(3,979	)
Total Comprehensive Shareholders' Equity			2,599,249				2,410,683
Long-Term Debt, Net of Current Portion			1,649,000				1,649,000
Total Capitalization			4,248,249				4,059,683
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper			157,500				85,600
Current Portion of Long-Term Debt			—				—
Accounts Payable			168,290				136,674
Amounts Payable to Customers			44,796				33,745
Dividends Payable			32,488				32,400
Interest Payable on Long-Term Debt			29,960				29,960
Customer Advances			270				19,005
Customer Security Deposits			18,463				15,761
Other Accruals and Current Liabilities			179,233				136,672
Fair Value of Derivative Financial Instruments			13,175				759
Total Current and Accrued Liabilities			644,175				490,576
Deferred Credits:
Deferred Income Taxes			1,563,368				1,456,283
Taxes Refundable to Customers			90,214				91,736
Unamortized Investment Tax Credit			937				1,145
Cost of Removal Regulatory Liability			178,096				173,199
Other Regulatory Liabilities			119,631				81,152
Pension and Other Post-Retirement Liabilities			137,204				134,202
Asset Retirement Obligations			119,164				117,713
Other Deferred Credits			126,908				133,908
Total Deferred Credits			2,335,522				2,189,338
Commitments and Contingencies			—				—
Total Capitalization and Liabilities		$	7,227,946			$	6,739,597

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Six Months Ended
		March 31,
(Thousands of Dollars)		2015				2014
Operating Activities:
Net Income Available for Common Stock		$	101,409			$	177,463
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Impairment of Oil and Gas Producing Properties		120,348				—
Depreciation, Depletion and Amortization		185,433				183,089
Deferred Income Taxes		10,351				71,939
Excess Tax Benefits Associated with Stock-Based Compensation Awards		(9,024		)		(3,149		)
Stock-Based Compensation		5,985				8,045
Other		4,709				(118		)
Change in:
Hedging Collateral Deposits		(12,992		)		1,094
Receivables and Unbilled Revenue		(88,339		)		(198,277		)
Gas Stored Underground and Materials and Supplies		29,085				52,661
Unrecovered Purchased Gas Costs		—				10,583
Other Current Assets		4,184				(443		)
Accounts Payable		62,832				69,379
Amounts Payable to Customers		11,051				11,837
Customer Advances		(18,735		)		(21,878		)
Customer Security Deposits		2,702				(602		)
Other Accruals and Current Liabilities		53,491				102,222
Other Assets		1,826				23,445
Other Liabilities		43,186				15,946
Net Cash Provided by Operating Activities		$	507,502			$	503,236
Investing Activities:
Capital Expenditures		$	(493,341	)		$	(367,393	)
Other		(1,262		)		4,927
Net Cash Used in Investing Activities		$	(494,603	)		$	(362,466	)
Financing Activities:
Changes in Notes Payable to Banks and Commercial Paper		$	71,900			$	—
Excess Tax Benefits Associated with Stock-Based Compensation Awards		9,024				3,149
Dividends Paid on Common Stock		(64,842		)		(62,776		)
Net Proceeds From Issuance of Common Stock		3,574				4,863
Net Cash Provided by (Used) in Financing Activities		$	19,656			$	(54,764	)
Net Increase in Cash and Temporary Cash Investments		32,555				86,006
Cash and Temporary Cash Investments at Beginning of Period		36,886				64,858
Cash and Temporary Cash Investments at March 31		$	69,441			$	150,864

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
UPSTREAM BUSINESS
		Three Months Ended												Six Months Ended
(Thousands of Dollars, except per share amounts)		March 31,												March 31,
EXPLORATION AND PRODUCTION SEGMENT		2015				2014				Variance				2015				2014				Variance
Total Operating Revenues		$	165,521			$	199,561			$	(34,040	)		$	370,186			$	392,607			$	(22,421	)
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense		18,042				17,079				963				33,727				32,213				1,514
Lease Operating and Transportation Expense		41,417				39,957				1,460				88,224				75,127				13,097
All Other Operation and Maintenance Expense		4,905				9,033				(4,128		)		7,748				11,816				(4,068		)
Property, Franchise and Other Taxes		5,542				5,854				(312		)		9,443				10,118				(675		)
Depreciation, Depletion and Amortization		57,436				69,232				(11,796		)		137,503				140,342				(2,839		)
Impairment of Oil and Gas Producing Properties		120,348				—				120,348				120,348				—				120,348
		247,690				141,155				106,535				396,993				269,616				127,377
Operating Income (Loss)		(82,169)				58,406				(140,575		)		(26,807		)		122,991				(149,798		)
Other Income (Expense):
Interest Income		663				405				258				1,173				956				217
Other Interest Expense		(11,053		)		(10,775		)		(278)				(21,360		)		(21,500		)		140
Income (Loss) Before Income Taxes		(92,559		)		48,036				(140,595		)		(46,994		)		102,447				(149,441		)
Income Tax Expense (Benefit)		(38,997		)		23,646				(62,643		)		(20,152		)		46,960				(67,112		)
Net Income (Loss)		$	(53,562	)		$	24,390			$	(77,952	)		$	(26,842	)		$	55,487			$	(82,329	)
Net Income (Loss) Per Share (Diluted)		$	(0.63	)		$	0.29			$	(0.92	)		$	(0.32	)		$	0.65			$	(0.97	)

<td>

<td class="bwsinglebottom">  

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
MIDSTREAM BUSINESSES
		Three Months Ended												Six Months Ended
(Thousands of Dollars, except per share amounts)		March 31,												March 31,
PIPELINE AND STORAGE SEGMENT		2015				2014				Variance				2015				2014				Variance
Revenues from External Customers		$	55,758			$	53,571			$	2,187			$	107,504			$	104,784			$	2,720
Intersegment Revenues		23,054				22,235				819				44,515				42,974				1,541
Total Operating Revenues		78,812				75,806				3,006				152,019				147,758				4,261
Operating Expenses:
Purchased Gas		289				38				251				555			1,301				(746		)
Operation and Maintenance		17,642				18,885				(1,243		)		35,526				35,770				(244		)
Property, Franchise and Other Taxes		6,466				6,107				359				12,629				11,795				834
Depreciation, Depletion and Amortization		9,778				9,069				709				18,813				18,190				623
		34,175				34,099				76				67,523				67,056				467
Operating Income		44,637			41,707			2,930				84,496				80,702				3,794
Other Income (Expense):
Interest Income		122				57				65				207				131				76
Other Income		332				192				140				889				(1		)		890
Other Interest Expense		(6,793		)		(6,646		)		(147		)		(13,333		)		(13,445		)		112
Income Before Income Taxes		38,298			</td>	35,310				2,988				72,259				67,387				4,872
Income Tax Expense		14,921				13,938				983				28,104				26,877				1,227
Net Income		$	23,377			$	21,372			$	2,005			$	44,155			$	40,510			$	3,645
Net Income Per Share (Diluted)		$	0.27			$	0.25			$	0.02			$	0.52			$	0.48			$	0.04
		Three Months Ended												Six Months Ended
		March 31,												March 31,
GATHERING SEGMENT		2015				2014				Variance				2015				2014				Variance
Revenues from External Customers		$	89			$	195			$	(106	)		$	235			$	429			$	(194	)
Intersegment Revenues		17,365				15,452				1,913				41,793				29,802				11,991
Total Operating Revenues		17,454				15,647				1,807			42,028				30,231				11,797
Operating Expenses:
Operation and Maintenance		2,232				1,530				702				4,008				2,697				1,311
Property, Franchise and Other Taxes		57				60				(3		)		92				92				—
Depreciation, Depletion and Amortization		3,798				614				3,184				5,858				2,523				3,335
		6,087				2,204				3,883				9,958		</td>		5,312				4,646
Operating Income		11,367				13,443				(2,076		)		32,070				24,919				7,151
Other Income (Expense):
Interest Income		32				26				6				58				65				(7		)
Other Income		1				4				(3		)		2				5				(3		)
Other Interest Expense		(132		)		(460		)		328				(430 )			(1,043		)		613
Income Before Income Taxes		11,268				13,013				(1,745		)		31,700				23,946				7,754
Income Tax Expense		4,863				5,689				(826		)		13,672				10,475				3,197
Net Income		$	6,405			$	7,324			$	(919	)		$	18,028			$	13,471			$	4,557
Net Income Per Share (Diluted)		$	0.08			$	0.09			$	(0.01	)		$	0.21			$	0.16			$	0.05

<td>

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
DOWNSTREAM BUSINESSES
		Three Months Ended												Six Months Ended
(Thousands of Dollars, except per share amounts)		March 31,												March 31,
UTILITY SEGMENT		2015				2014				Variance				2015				2014				Variance
Revenues from External Customers		$	309,974			$	377,647			$	(67,673	)		$	520,047			$	608,100			$	(88,053	)
Intersegment Revenues		6,521				8,204				(1,683		)		11,055				12,911				(1,856		)
Total Operating Revenues		316,495				385,851				(69,356		)		531,102				621,011				(89,909		)
Operating Expenses:
Purchased Gas		161,966				235,784				(73,818		)		263,677				357,711				(94,034		)
Operation and Maintenance		61,732				61,653				79				110,638				108,925				1,713
Property, Franchise and Other Taxes		12,564				13,370				(806		)		23,122				24,037				(915		)
Depreciation, Depletion and Amortization		11,333				10,798				535				22,484				21,509				975
		247,595				321,605				(74,010		)		419,921				512,182				(92,261		)
Operating Income		68,900				64,246				4,654				111,181				108,829				2,352
Other Income (Expense):
Interest Income		7				73				(66		)		25				151				(126		)
Other Income		497				318				179				995				688				307
Other Interest Expense		(7,204		)		(7,079		)		(125		)		(14,148		)		(13,893		)		(255		)
Income Before Income Taxes		62,200				57,558				4,642				98,053				95,775				2,278
Income Tax Expense		23,962				22,013				1,949				37,222				36,015				1,207
Net Income		$	38,238			$	35,545			$	2,693			$	60,831			$	59,760			$	1,071
Net Income Per Share (Diluted)		$	0.45			$	0.42			$	0.03			$	0.71			$	0.70			$	0.01
		Three Months Ended												Six Months Ended
		March 31,												March 31,
ENERGY MARKETING SEGMENT		2015				2014				Variance				2015				2014				Variance
Revenues from External Customers		$	64,167			$	124,439			$	(60,272	)		$	120,333			$	197,598			$	(77,265	)
Intersegment Revenues		211				5				206				417				260				157
Total Operating Revenues		64,378				124,444				(60,066		)		120,750				197,858				(77,108		)
Operating Expenses:
Purchased Gas		57,142				116,615				(59,473		)		107,371				185,818				(78,447		)
Operation and Maintenance		1,790				1,701				89				3,289				3,293				(4		)
Property, Franchise and Other Taxes		2				13				(11		)		5				13				(8		)
Depreciation, Depletion and Amortization		51				48				3				101				96				5
		58,985				118,377				(59,392		)		110,766				189,220				(78,454		)
Operating Income		5,393				6,067				(674		)		9,984				8,638				1,346
Other Income (Expense):
Interest Income		44				33				11				82				77				5
Other Income		43				34				9				67				49				18
Other Interest Expense		(12		)		(8		)		(4		)		(15		)		(17		)		2
Income Before Income Taxes		5,468				6,126				(658		)		10,118				8,747				1,371
Income Tax Expense		2,095				2,361				(266		)		3,919				3,378				541
Net Income		$	3,373			$	3,765			$	(392	)		$	6,199			$	5,369			$	830
Net Income Per Share (Diluted)		$	0.04			$	0.04			$	—			$	0.07			$	0.06			$	0.01

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
		Three Months Ended												Six Months Ended
(Thousands of Dollars, except per share amounts)		March 31,												March 31,
ALL OTHER		2015				2014				Variance				2015				2014				Variance
Total Operating Revenues		$	388			$	597			$	(209	)		$	1,271			$	2,298			$	(1,027	)
Operating Expenses:
Operation and Maintenance		(47		)		305				(352		)		482				658				(176		)
Property, Franchise and Other Taxes		158				177				(19		)		307				335				(28		)
Depreciation, Depletion and Amortization		124				57				67				340				114				226
		235				539				(304		)		1,129				1,107				22
Operating Income		153				58				95				142				1,191				(1,049		)
Other Income (Expense):
Interest Income		17				25				(8		)		30				59				(29		)
Other Income		1				378				(377		)		2				399				(397		)
Other Interest Expense		—				—				—				—				(1		)		1
Income Before Income Taxes		171				461				(290		)		174				1,648				(1,474		)
Income Tax Expense		73				183				(110		)		81				694				(613		)
Net Income		$	98			$	278			$	(180	)		$	93			$	954			$	(861	)
Net Income Per Share (Diluted)		$	—			$	—			$	—			$	—			$	0.01			$	(0.01	)
		Three Months Ended												Six Months Ended
		March 31,												March 31,
CORPORATE		2015				2014				Variance				2015				2014				Variance
Revenues from External Customers		$	230			$	232			$	(2	)		$	460			$	498			$	(38	)
Intersegment Revenues		953				946				7				1,839				1,908				(69		)
Total Operating Revenues		1,183				1,178				5				2,299				2,406				(107		)
Operating Expenses:
Operation and Maintenance		4,839				4,750				89				7,891				8,466				(575		)
Property, Franchise and Other Taxes		127				123				4				247				240				7
Depreciation, Depletion and Amortization		167				157				10				334				315				19
		5,133				5,030				103				8,472				9,021				(549		)
Operating Loss		(3,950		)		(3,852		)		(98		)		(6,173		)		(6,615		)		442
Other Income (Expense):
Interest Income		24,188				24,028				160				49,488				48,635				853
Other Income		514				4,197			(3,683		)		616				4,212				(3,596		)
Interest Expense on Long-Term Debt		(22,376		)		(22,766		)		390				(44,687		)		(45,651		)		964
Other Interest Expense		(1,417		)		(805		)		(612		)		(2,849		)		(1,548		)		(1,301		)
Income (Loss) Before Income Taxes		(3,041		)		802				(3,843		)		(3,605		)		(967		)		(2,638		)
Income Tax Expense (Benefit)		(1,781		)		(1,735		)		(46		)		(2,550		)		(2,879		)		329
Net Income (Loss)		$	(1,260	)		$	2,537			$	(3,797	)		$	(1,055	)		$	1,912			$	(2,967	)
Net Income (Loss) Per Share (Diluted)		$	(0.01	)		$	0.03			$	(0.04	)		$	—			$	0.03			$	(0.03	)
		Three Months Ended												Six Months Ended
		March 31,												March 31,
INTERSEGMENT ELIMINATIONS		2015				2014				Variance				2015				2014				Variance
Intersegment Revenues		$	(48,104	)		$	(46,842	)		$	(1,262	)		$	(99,619	)		$	(87,855	)		$	(11,764	)
Operating Expenses:
Purchased Gas		(28,797		)		(29,665		)		868				(53,913		)		(54,452		)		539
Operation and Maintenance		(19,307		)		(17,177		)		(2,130		)		(45,706		)		(33,403		)		(12,303		)
		(48,104		)		(46,842		)		(1,262		)		(99,619		)		(87,855		)		(11,764		)
Operating Income		—				—				—				—				—				—
Other Income (Expense):
Interest Income		(25,027		)		(24,398		)		(629		)		(49,760		)		(49,123		)		(637		)
Other Interest Expense		25,027				24,398				629				49,760				49,123				637
Net Income		$	—			$	—			$	—			$	—			$	—			$	—
Net Income Per Share (Diluted)		$	—			$	—			$	—			$	—			$	—			$	—

NATIONAL FUEL GAS COMPANY</org>
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
		Three Months Ended														Six Months Ended
		March 31,														March 31,
		(Unaudited)														(Unaudited)
												Increase														Increase
		2015					2014					(Decrease)				2015					2014					(Decrease)
Capital Expenditures:
Exploration and Production		$	143,364		(1)		$	164,987		(3)		$	(21,623	)		$	301,076		(1)(2)		$	276,328		(3)(4)		$	24,748
Pipeline and Storage		41,643			(1)		19,155			(3)		22,488				57,671			(1)(2)		29,093			(3)(4)		28,578
Gathering		35,601			(1)		24,823			(3)		10,778				50,549			(1)(2)		48,285			(3)(4)		2,264
Utility		20,566			(1)		19,921			(3)		645				41,740			(1)(2)		41,581			(3)(4)		159
Energy Marketing		17					70					(53		)		92					113					(21		)
Total Reportable Segments		241,191					228,956					12,235				451,128					395,400					55,728
All Other		—					80					(80		)		—					140					(140		)
Corporate		43					54					(11		)		68					70					(2		)
Total Capital Expenditures		$	241,234				$	229,090				$	12,144			$	451,196				$	395,610				$	55,586

(1)		Capital expenditures for the quarter and six months ended March 31, 2015, include accounts payable and accrued liabilities related to capital expenditures of $63.5 million, $8.2 million, $14.1 million, and $8.7 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 March 31, 2015, since they represent non-cash investing activities at that date.
(2)		Capital expenditures for the six months ended March 31, 2015, exclude capital expenditures of $80.1 million, $28.1 million, $20.1 million and $8.3 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, 2014 and paid during the six months ended March 31, 2015. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2014, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2015.
(3)		Capital expenditures for the quarter and six months ended March 31, 2014, include accounts payable and accrued liabilities related to capital expenditures of $90.3 million, $5.1 million, $8.7 million, and $5.3 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 March 31, 2014, since they represent non-cash investing activities at that date.
(4)		Capital expenditures for the six months ended March 31, 2014, exclude capital expenditures of $58.5 million, $5.6 million, $6.7 million and $10.3 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, 2013 and paid during the six months ended March 31, 2014. These amounts were excluded from the Consolidated Statements of Cash Flows at September 30, 2013, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2014.

DEGREE DAYS
											Percent Colder
											(Warmer) Than:
Three Months Ended March 31		Normal			2015			2014			Normal (1)			Last Year (1)
Buffalo, NY		3,290			3,984			3,826			21.1			4.1
Erie, PA		3,108			3,815			3,718			22.7			2.6
Six Months Ended March 31
Buffalo, NY		5,543			6,120			6,116			10.4			0.1
Erie, PA		5,152			5,806			5,828			12.7			(0.4	)

(1)		Percents compare actual 2015 degree days to normal degree days and actual 2015 degree days to actual 2014 degree days.

<td colspan="3">

NATIONAL FUEL GAS COMPANY</b>
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
		Three Months Ended												Six Months Ended
		March 31,												March 31,
										Increase												Increase
		2015				2014				(Decrease)				2015				2014				(Decrease)
Gas Production/Prices:
Production (MMcf)
Appalachia		30,592				31,490				(898		)		73,391				63,543				9,848
West Coast		795				841				(46		)		1,567				1,626				(59		)
Total Production		31,387				32,331				(944		)		74,958				65,169				9,789
Average Prices (Per Mcf)
Appalachia		$	2.46			$	4.44			$	(1.98	)		$	2.75			$	3.86			$	(1.11	)
West Coast		3.81				7.57				(3.76		)		4.70				6.77				(2.07		)
Weighted Average		2.50				4.52				(2.02 </td>		)		2.79				3.93				(1.14		)
Weighted Average after Hedging		3.65				3.89				(0.24		)		3.42				3.79				(0.37		)
Oil Production/Prices:
Production (Thousands of Barrels)
Appalachia		5				7				(2)				15				17				(2)
West Coast		721				748				(27)				1,482				1,453				29
Total Production		726				755				(29)				1,497				1,470				27
Average Prices (Per Barrel)
Appalachia		$	46.18			$	94.15			$	(47.97	)		$	65.09			$	95.21			$	(30.12	)
West Coast		43.93				99.98				(56.05		)		55.71				98.75				(43.04		)
Weighted Average		43.95				99.93				(55.98		)		55.80				98.71				(42.91		)
Weighted Average after Hedging		67.14				96.85				(29.71		)		72.78				95.47				(22.69		)
									</td>
Total Production (Mmcfe)		35,743				36,861				(1,118)				83,940				73,989				9,951
Selected Operating Performance Statistics:
General & Administrative Expense per Mcfe (1)		$	0.50			$	0.46			$	0.04			$	0.40			$	0.44			$	(0.04	)
Lease Operating and Transportation Expense per Mcfe (1)(2)		$	1.16			$	1.08			$	0.08			$	1.05			$	1.02			$	0.03
Depreciation, Depletion & Amortization per Mcfe (1)		$	1.61			$	1.88			$	(0.27	)		$	1.64			$	1.90			$	(0.26	)

(1)		Refer to page 18 for the General and Administrative Expense, Lease Operating Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
(2)		Amounts include transportation expense of $0.52 and $0.45 per Mcfe for the three months ended March 31, 2015 and March 31, 2014, respectively. Amounts include transportation expense of $0.52 and $0.43 per Mcfe for the six months ended March 31, 2015 and March 31, 2014, respectively.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for the Remaining Six Months of Fiscal 2015
		Volume					Average Hedge Price
Oil Swaps
Midway Sunset (MWSS)		182,000		BBL		$	68.62 / BBL
Brent		510,000		BBL		$	98.32 / BBL
NYMEX		198,000		BBL		$	90.14 / BBL
Total		890,000		BBL		$	90.43 / BBL
Gas Swaps
NYMEX		28,920,000		MMBTU		$	4.18 / MMBTU
Dominion Transmission Appalachian (DOM)		12,420,000		MMBTU		$	3.74 / MMBTU
Southern California City Gate (SoCal)		600,000		MMBTU		$	4.35 / MMBTU
Fixed Price Physical Sales		16,800,000		MMBTU		$	3.42 / MMBTU
Total		58,740,000		MMBTU		$	3.87 / MMBTU
Hedging Summary for Fiscal 2016
		Volume					Average Hedge Price
Oil Swaps
MWSS		36,000		BBL		$	92.10 / BBL
Brent		933,000		BBL		$	95.18 / BBL
NYMEX		300,000		BBL		$	86.09 / BBL
Total		1,269,000		BBL		$	92.95 / BBL
Gas Swaps
NYMEX		32,350,000		MMBTU		$	4.24 / MMBTU
DOM		18,840,000		MMBTU		$	3.78 / MMBTU
Michigan Consolidated City Gate (Mich Con)		9,000,000		MMBTU		$	4.10 / MMBTU
Dawn Ontario (Dawn)		5,490,000		MMBTU		$	4.36 / MMBTU
Fixed Price Physical Sales		36,600,000		MMBTU		$	3.39 / MMBTU
Total		102,280,000		MMBTU		$	3.84 / MMBTU
Hedging Summary for Fiscal 2017
		Volume					Average Hedge Price
Oil Swaps
Brent		384,000		BBL		$	92.30 / BBL
Gas Swaps
NYMEX		23,130,000		MMBTU		$	4.50 / MMBTU
DOM		12,720,000		MMBTU		$	3.87 / MMBTU
Mich Con		3,000,000		MMBTU		$	4.10 / MMBTU
Dawn		7,950,000		MMBTU		$	4.14 / MMBTU
Fixed Price Physical Sales		27,350,000		MMBTU		$	3.51 / MMBTU
Total		74,150,000		MMBTU		$	3.97 / MMBTU
Hedging Summary for Fiscal 2018
		Volume					Average Hedge Price
Oil Swaps
Brent	75,000		BBL		$	91.00 / BBL
Gas Swaps
NYMEX		5,550,000		MMBTU		$	4.59 / MMBTU
Fixed Price Physical Sales		1,550,000		MMBTU		$	3.77 / MMBTU
Total		7,100,000		MMBTU		$	4.41 / MMBTU

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Gross Wells in Process of Drilling
Six Months Ended March 31, 2015
							Total
		East			West		Company
Wells in Process - Beginning of Period
Exploratory		3.000	(1)		0.000		3.000
Developmental		77.000	(1)		2.000		79.000
Wells Commenced
Exploratory		0.000			0.000		0.000
Developmental		29.000			37.000		66.000
Wells Completed
Exploratory		3.000			0.000		3.000
Developmental		20.000			37.000		57.000
Wells Plugged & Abandoned
Exploratory		0.000			0.000		0.000
Developmental		2.000			1.000		3.000
Wells in Process - End of Period
Exploratory		0.000			0.000		0.000
Developmental		84.000			1.000		85.000
(1) Gross exploratory wells were increased by 2 and developmental wells were decreased by 2.
Net Wells in Process of Drilling
Six Months Ended March 31, 2015
							Total
		East			West		Company
Wells in Process - Beginning of Period
Exploratory		3.000	(1)		0.000		3.000
Developmental		62.500	(1)		2.000		64.500
Wells Commenced
Exploratory		0.000			0.000		0.000
Developmental		29.000			37.000		66.000
Wells Completed
Exploratory		3.000			0.000		3.000
Developmental		20.000			37.000		57.000
Wells Plugged & Abandoned
Exploratory		0.000			0.000		0.000
Developmental		2.000			1.000		3.000
Wells in Process - End of Period
Exploratory		0.000			0.000		0.000
Developmental		69.500			1.000		70.500
(1) Net exploratory wells were increased by 2 and developmental wells were decreased by 2.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
		Three Months Ended									Six Months Ended
		March 31,									March 31,
								Increase									Increase
		2015			2014			(Decrease)			2015			2014			(Decrease)
Firm Transportation - Affiliated		50,777			48,163	</td>		2,614			79,863			77,849			2,014
Firm Transportation - Non-Affiliated		179,534			176,815			2,719			336,770			338,785			(2,015	)
Interruptible Transportation		3,627			1,458			2,169			5,729			2,780			2,949
		233,938			226,436			7,502			422,362			419,414			2,948
Gathering Volume - (MMcf)
		Three Months Ended									Six Months Ended
		March 31,									March 31,
								Increase									Increase
		2015			2014			(Decrease)			2015			2014			(Decrease)
Gathered Volume - Affiliated		31,175			30,955			220			76,047			61,969			14,078
Utility Throughput - (MMcf)
		Three Months Ended									Six Months Ended
		March 31,									March 31,
								Increase									Increase
		2015			2014			(Decrease)			2015			2014			(Decrease)
Retail Sales:
Residential Sales		31,561			30,640			921			48,029			47,647			382
Commercial Sales		4,813			4,759			54			7,097			7,119			(22	)
Industrial Sales		194			297			(103	)		282			389			(107	)
		36,568			35,696			872			55,408			55,155			253
Off-System Sales		2,118			1,832			286			3,787			3,810			(23	)
Transportation		33,567			34,157			(590	)		54,516			55,347			(831	)
		72,253			71,685			568			113,711			114,312			(601	)
Energy Marketing Volume
		Three Months Ended									Six Months Ended
		March 31,									March 31,
								Increase									Increase
		2015			2014			(Decrease)			2015			2014			(Decrease)
Natural Gas (MMcf)		19,337			20,910			(1,573	)		31,926			36,918			(4,992	)

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, for measuring the Company’s cash flow and liquidity, 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 4 of this report reconciles National Fuel's reported GAAP earnings to Operating Results for the three and six months ended March 31, 2015 and 2014.

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 six months ended March 31, 2015 and 2014:

		Three Months Ended								Six Months Ended
		March 31,								March 31,
		2015				2014				2015				2014
(in thousands)
Reported GAAP Earnings		$	16,669			$	95,211			$	101,409			$	177,463
Depreciation, Depletion and Amortization		82,687				89,975				185,433				183,089
Interest and Other Income		(1,434		)		(5,372		)		(3,874		)		(6,303		)
Interest Expense		23,960				24,141				47,062				47,975
Income Taxes		5,136				66,095				60,296				121,520
Impairment of Oil and Gas Producing Properties		120,348				—				120,348				—
Plugging and Abandonment Accrual		—				3,761				—				5,002
Adjusted EBITDA		$	247,366			$	273,811			$	510,674			$	528,746
Adjusted EBITDA by Segment
Pipeline and Storage Adjusted EBITDA		$	54,415			$	50,776			$	103,309			$	98,892
Gathering Adjusted EBITDA		15,165				14,057				37,928				27,442
Total Midstream Businesses Adjusted EBITDA		69,580				64,833				141,237				126,334
Exploration and Production Adjusted EBITDA		95,615				131,399				231,044				268,335
Utility Adjusted EBITDA		80,233				75,044				133,665				130,338
Energy Marketing Adjusted EBITDA		5,444				6,115				10,085				8,734
Corporate and All Other Adjusted EBITDA		(3,506		)		(3,580		)		(5,357		)		(4,995		)
Total Adjusted EBITDA		$	247,366			$	273,811			$	510,674			$	528,746

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Quarter Ended March 31 (unaudited)		2015				2014
Operating Revenues		$	596,127,000			$	756,242,000
Net Income Available for Common Stock		$	16,669,000			$	95,211,000
Earnings Per Common Share:
Basic		$	0.20			$	1.14
Diluted		$	0.20			$	1.12
Weighted Average Common Shares:
Used in Basic Calculation		84,317,508				83,856,120
Used in Diluted Calculation		85,133,142				84,837,123
Six Months Ended March 31 (unaudited)
Operating Revenues		$	1,120,036,000			$	1,306,314,000
Net Income Available for Common Stock		$	101,409,000			$	177,463,000
Earnings Per Common Share:
Basic		$	1.20			$	2.12
Diluted		$	1.19			$	2.09
Weighted Average Common Shares:
Used in Basic Calculation		84,262,471				83,781,085
Used in Diluted Calculation		85,175,961				84,787,610
Twelve Months Ended March 31 (unaudited)
Operating Revenues		$	1,926,803,000			$	2,085,185,000
Net Income Available for Common Stock		$	223,360,000			$	283,800,000
Earnings Per Common Share:
Basic		$	2.65			$	3.39
Diluted		$	2.62			$	3.35
Weighted Average Common Shares:
Used in Basic Calculation		84,170,033				83,687,056
Used in Diluted Calculation		85,102,075				84,601,418

National Fuel Gas Company

Analysts:

Brian M. Welsch, 716-857-7875

or

Media:

Karen L. Merkel, 716-857-7654

Source: National Fuel Gas Company