NATIONAL FUEL GAS COMPANY
NYSE : NFG

NATIONAL FUEL GAS COMPANY

October 27, 2005 20:30 ET

National Fuel Reports 2005 Earnings

WILLIAMSVILLE, N.Y.--(CCNMatthews - Oct 27, 2005) -

National Fuel Gas Company ("National Fuel" or the "Company") (NYSE:NFG) today announced consolidated earnings for the fiscal year ended September 30, 2005 of $189.5 million or $2.23 per share, an increase of $22.9 million from the prior year's earnings of $166.6 million or $2.01 per share (note: all references to earnings per share are to diluted earnings per share and all amounts are stated in U.S. dollars). The increase in earnings was principally the result of the sale in the fourth quarter of United Energy, a.s. ("United Energy"), a district heating and electric generation business in the Czech Republic. Those Czech Republic operations are presented in the financial statements as discontinued operations.

Consolidated earnings for the quarter ended September 30, 2005 were $49.21 million or $0.57 per share, an increase of $41.46 million from the prior year's fourth quarter of $7.75 million or $0.09 per share. The increase in earnings was principally the result of the $26.0 million (after tax) gain on the sale of United Energy, which was completed in July 2005, and the reversal of $6.0 million of deferred income tax expense related to United Energy. Consolidated earnings for the quarters ended September 30, 2005 and 2004 include income from discontinued operations of $30.9 million or $0.36 per share and a loss of $6.1 million or $0.07 per share, respectively.

Earnings from continuing operations for the quarter ended September 30, 2005 were $18.3 million or $0.21 per share, an increase of $4.5 million from the prior year's fourth quarter earnings from continuing operations of $13.8 million or $0.16 per share. Excluding non-recurring items in the fourth quarter of fiscal 2005, earnings from continuing operations for the quarter ended September 30, 2005 were $14.4 million or $0.16 per share, an increase of $0.6 million from the prior fiscal year. There were no non-recurring items in the quarter ended September 30, 2004. See further discussion of non-recurring items beginning on page 7 of this document and a reconciliation of reported earnings to earnings before non-recurring items on pages 10 and 11 of this document.

Philip C. Ackerman, Chairman, President and Chief Executive Officer of National Fuel Gas Company stated: "Our earnings this year demonstrate once again the value of diversified investing in various segments of the energy business and the strong performance of our employees throughout the National Fuel system. The sale of our Czech Republic assets resulted in a net gain of $26 million. Earlier this year, we also had a non-recurring gain in our Pipeline and Storage segment of $2.6 million from the sale of storage base gas, paving the way for increased storage service revenues on a recurring basis. We again successfully reached our annual forecasted production goals in our Exploration and Production segment, despite the catastrophic weather events in the Gulf Coast region. While we were also successful in achieving base rate settlements in our Utility segment jurisdictions, the current high cost of all energy products will present challenges to us and to our customers during our next fiscal year."(a)

DISCUSSION OF FOURTH QUARTER EARNINGS

CONTINUING OPERATIONS BEFORE NON-RECURRING ITEMS

Please note that the following discussion of earnings from continuing operations excludes certain non-recurring profit and loss items in an effort to provide a clearer picture of actual operating results for the period. A summary of those non-recurring items follows the Discussion of Fourth Quarter Earnings and Discussion of Annual Earnings. A reconciliation of reported earnings to the earnings discussed below is provided on pages 10 and 11 of this document.

Regulated segments

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation ("Distribution"). Distribution sells or transports natural gas to approximately 731,000 customers through a local distribution system located in western New York and northwestern Pennsylvania. The principal metropolitan areas served by this system include Buffalo, Niagara Falls and Jamestown in New York, and Erie and Sharon in Pennsylvania. The Utility segment's loss of $6.1 million for the quarter ended September 30, 2005 was $1.0 million less than the loss in the same period last fiscal year.

In Distribution's New York Division, the net loss of $2.9 million for the quarter improved from a loss of $6.5 million in the fourth quarter of fiscal 2004. The improvement from the prior year was principally attributable to the implementation of the recent rate case settlement agreement in New York, which among other things provides for a $21 million annual base rate increase and allows Distribution to begin accruing interest on a pension-related regulatory asset. In total, the new rate agreement provided a $4.0 million benefit to earnings for the quarter. During the quarter, Distribution also reached agreement with the Staff of the New York Public Service Commission to clarify the calculation of a New York State gross receipts tax related regulatory liability. The revision to the calculation provided a one-time $1.7 million benefit to earnings for the quarter. The benefits to earnings described above were partially offset by higher bad debt expense, which reduced earnings for the quarter by $2.3 million. Distribution increased the allowance for uncollectible accounts to reflect the increase in final billed account balances and the increased age of outstanding active receivables heading into the heating season. A historical look at utility accounts receivable balances and the related reserve for bad debts is provided at page 16 of this document.

Ackerman commented, "Looking toward the heating season, we are deeply concerned about the impact that Hurricanes Katrina and Rita have had on natural gas supplies and the hardship high commodity prices will impose on all of our customers. Presently in our Utility segment, Distribution employees are working hard to provide guidance and assistance to our customers with respect to their heating and business needs during the upcoming winter season. It is no secret that for years our industry has emphasized the need for a diversified supply of natural gas so that utility companies across our nation can reliably meet our nation's energy needs. The unfortunate devastation to the energy industry's infrastructure in the Gulf Coast has brought this issue to the forefront. National Fuel continues its efforts to be part of the solution to this challenging issue, by leveraging our strategic location in the northeast through the development of projects such as the proposed Empire Connector and related storage expansion proposals as necessary and important responses to the deliverability issues now evident in the Gulf Coast."(a)

In Distribution's Pennsylvania Division, the loss for the quarter of $3.2 million increased $2.6 million from the prior year's fourth quarter. The sales margin in Pennsylvania was flat as the impact of lower customer usage offset the benefit of the $12.0 million annual base rate increase implemented on April 15, 2005. The increased loss was mainly due to increased bad debt expense of $3.7 million from a similar increase in account aging that has occurred in Pennsylvania's outstanding receivable balance.

Pipeline and Storage Segment

The Pipeline and Storage segment operations are carried out by National Fuel Gas Supply Corporation ("Supply") and Empire State Pipeline ("Empire"). These companies provide natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields. This system is located within an area bounded by the Canadian border at the Niagara River, southwestern Pennsylvania and central New York.

The Pipeline and Storage segment's earnings of $15.0 million for the quarter ended September 30, 2005 were up $3.5 million when compared with the same period in the prior fiscal year. The impact of higher efficiency gas revenues and lower operating expenses were the primary contributors to the increase.

Exploration and Production segment

The Exploration and Production segment operations are carried out by Seneca Resources Corporation ("Seneca"). Seneca explores for, develops, and purchases natural gas and oil reserves in California, in the Appalachian region, in the Gulf Coast region of Texas, Louisiana and Alabama, and in the western provinces of Canada.

The Exploration and Production segment's earnings for the fourth quarter of fiscal 2005 of $11.7 million were up $1.4 million from the prior year's quarter. The positive impact of higher commodity prices was partially offset by higher depletion and lease operating expenses and a mark-to-market adjustment for losses on certain derivative contracts, as discussed more completely below.

Production of 12.7 billion cubic feet equivalent ("Bcfe") was down 0.9 Bcfe from the prior year's fourth quarter. Gulf of Mexico production was 1.5 Bcfe lower than the prior year's quarter, but this decline was partially offset by higher production in Canada. Higher commodity prices (after hedging) more than offset the impact of the decline in production. For the quarter ended September 30, 2005, the weighted average natural gas price (after hedging) was $6.77/thousand cubic feet ("Mcf"), an increase of $1.63/Mcf from the prior year's quarter, and the weighted average oil price (after hedging) was $30.70/barrel ("Bbl"), an increase of $2.91/Bbl. Seneca's earnings for the quarter also reflect a $3.3 million (after tax) mark-to-market adjustment for losses on certain derivative contacts that no longer qualified as effective hedges due to the anticipated delays in oil and gas production volumes caused by Hurricane Rita. These volumes were originally forecast to be produced in the first quarter of fiscal 2006. Seneca will continue to evaluate monthly production. If production estimates change significantly, either positively or negatively, prior to the Company filing its Annual Report on Form 10-K, accounting rules require that the mark-to-market loss for derivatives that no longer qualify as effective hedges be calculated based on the most current forecast of production volumes.(a)

Seneca now has approximately 45% of its Gulf of Mexico production back on line. An additional 46.5% of Seneca's production is ready to begin as soon as notification is received from the offshore pipeline companies that their repairs are complete and they are ready to receive production.(a) The remaining 8.5% of Seneca's production is waiting on equipment to complete necessary repairs.(a)

The increase in production revenues was partially offset by higher depletion and lease operating expenses, which, on a per unit basis, increased by $0.28/thousand cubic feet equivalent ("Mcfe") and $0.18/Mcfe, respectively. The increase in the per unit depletion rate was largely the result of the high finding and development costs experienced by Seneca during fiscal 2005. The high finding and development costs were caused by a significant rise in the rates charged by field service companies for drilling and completion services. The increase in lease operating expense was principally the result of higher steaming costs associated with Seneca's California heavy crude oil production. Increased production from Seneca's Canadian Sukunka well, which produces sour gas that is more expensive to process, also contributed to the rise in per unit lease operating expense.

Seneca continued its successful drilling program during fiscal 2005. Seneca has drilled 241 wells with a 98% success rate; 79 wells were drilled in the quarter ended September 30, 2005 with a success rate of 99%. Seneca increased its drilling activity in Appalachia, where 39 wells were drilled in the fourth quarter as a result of improved opportunities and favorable weather conditions. Seneca also continued its drilling in California, where another 24 wells were drilled in the Midway-Sunset field.

At fiscal year end, Seneca has reserves of approximately 600 Bcfe, down from the total of approximately 616 Bcfe at September 30, 2004. A reserve summary table is included at page 19 of this document.

Other segments

Energy Marketing

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

The Energy Marketing segment's net income for the quarter of $0.2 million improved from a loss of $0.05 million during the fourth quarter last year. Successful market growth resulted in higher sales volumes for the quarter, which helped to offset lower margins caused by higher commodity prices.

Timber Segment

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

The Timber segment's fourth quarter earnings of $0.8 million were $0.9 million lower than the prior year's fourth quarter primarily due to a greater amount of timber being harvested from more recently acquired properties that have a higher cost basis.

Corporate and All Other

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

The loss in the Corporate and All Other category increased from $2.6 million for the quarter ended September 30, 2004 to a loss of $7.2 million for the quarter ended September 30, 2005. This increase is mainly due to the expense recorded to recognize a $2.7 million (after tax) impairment in the value of the Horizon Power's 50% investment in Energy Systems North East, LLC, a partnership that owns an 80-megawatt, combined cycle, natural gas-fired power plant in the town of North East, Pennsylvania. Horizon Power reduced the book value of that investment to $4.6 million. Horizon Power also recorded a $1.8 million (after tax) impairment of a gas-powered turbine, reducing the book value of that asset to $4.1 million. Horizon Power had previously planned to use the turbine in the development of a co-generation plant.

DISCONTINUED OPERATIONS

The income from discontinued operations for the quarter ended September 30, 2005 of $30.9 million was $37.0 million higher when compared with the loss for the quarter ended September 30, 2004 of $6.1 million. This increase primarily resulted from Horizon recording the gain on the sale of United Energy during the quarter ended September 30, 2005 of approximately $26.0 million. As expected, Horizon also reversed $6.0 million of deferred income tax expense that it recorded during the previous quarter. Horizon was required to record the deferred income taxes in the third quarter when it decided to sell United Energy and repatriate its foreign earnings that were previously considered to be permanently reinvested outside of the United States.

DISCUSSION OF ANNUAL EARNINGS

Consolidated earnings for the fiscal year ended September 30, 2005 were $189.5 million or $2.23 per share, an increase of $22.9 million from the prior year's earnings of $166.6 million or $2.01 per share. Earnings for the fiscal years ended September 30, 2005 and 2004 included income from discontinued operations of $36.0 million or $0.42 per share and $12.3 million or $0.15 per share, respectively. Earnings from continuing operations for the fiscal year ended September 30, 2005 were $153.5 million or $1.81 per share, a decrease of $0.8 million from the prior year's earnings from continuing operations of $154.3 million or $1.86 per share. Excluding non-recurring items in both fiscal years, earnings from continuing operations for the year were $147.0 million or $1.73 per share, a decrease of $9.8 million from the prior year's earnings from continuing operations.

CONTINUING OPERATIONS BEFORE NON-RECURRING ITEMS

Please note that the following discussion of earnings by segment excludes certain non-recurring profit and loss items in an effort to provide a clearer picture of actual operating results for the period. A summary of those non-recurring items follows the Discussion of Annual Earnings. A reconciliation of reported earnings to the earnings discussed below is provided on pages 10 and 11 of this document.

Regulated segments

In the Utility segment, annual earnings of $39.2 million were down $9.7 million from fiscal 2004. The decrease was mainly due to lower weather-normalized usage per customer account in both New York and Pennsylvania. This decrease was only partially offset by the base rate increases in both jurisdictions and by colder weather in Pennsylvania. The impact of colder weather in New York during the heating season is tempered by the New York Division's weather normalization clause. Higher pension expense in Pennsylvania and higher bad debt expense in both jurisdictions also contributed to the decline.

In the Pipeline and Storage segment, annual earnings of $53.9 million were up $4.2 million from fiscal 2004, principally due to higher efficiency gas revenues and lower interest and operating expenses, partially offset by approximately $2.7 million in project development costs related to the proposed Empire Connector. As previously announced, Empire has filed an application this month with the Federal Energy Regulatory Commission ("FERC") for the authority to build and operate the Empire Connector Project. That pipeline is projected to be in service in the fall of 2007.(a)

Exploration and Production segment

Earnings in the Exploration and Production segment were $50.7 million, up $0.1 million from fiscal 2004. Higher prices for crude oil and natural gas, higher interest income and lower interest expense more than offset the impact on earnings of lower production volumes, the $3.3 million (after tax) mark-to-market adjustment on certain derivative positions described under the discussion of quarterly results above, as well as higher operating, maintenance and depletion expenses in fiscal 2005.

Other segments

The Energy Marketing segment's earnings of $5.1 million were down $0.8 million from $5.9 million in fiscal 2004 due to lower annual sales volumes, higher transportation costs and a market related reduction in the benefit of stored gas inventory.

In the Timber segment, earnings decreased $1.45 million from $6.48 million in fiscal 2004 to $5.03 million in fiscal 2005 due to the higher cost basis of the trees that were harvested.

DISCONTINUED OPERATIONS

The income from discontinued operations for the year ended September 30, 2005 of $36.0 million was $23.7 million higher when compared with the income for the year ended September 30, 2004 of $12.3 million. This increase primarily resulted from Horizon's sale of United Energy and the recording of a gain of approximately $26.0 million.

DISCUSSION OF NON-RECURRING ITEMS (all amounts are after tax)

The Discussion of Fourth Quarter Earnings and Discussion of Annual Earnings above exclude certain non-recurring profit and loss items in an effort to provide a clearer picture of actual operating results for the period. The following discussion reconciles the earnings discussed above to consolidated earnings from continuing operations.

For the quarter ended September 30, 2005, earnings from continuing operations before non-recurring items of $14.4 million for the Company and $15.0 million for the Pipeline and Storage segment exclude a $3.9 million gain associated with insurance proceeds received in prior years for which a contingency was resolved during the quarter. That contingency related to possible migration of storage gas (Pipeline and Storage segment). There were no non-recurring items in the quarter ended September 30, 2004. Including this non-recurring item, compared with the same quarter in the prior fiscal year, consolidated earnings from continuing operations for the Company were up $4.5 million to $18.3 million and earnings for the Pipeline and Storage segment's earnings were up $7.4 million to $18.9 million.

For the fiscal year ended September 30, 2005, in addition to the recognition of the gain in connection with the resolution of the contingency discussed above, the earnings from continuing operations before non-recurring items of $147.0 million for the Company and $53.9 million for the Pipeline and Storage segment exclude a $2.6 million gain from the FERC approved sale of base gas from Supply's jointly-owned Ellisburg Storage field.

For the fiscal year ended September 30, 2004, the earnings from continuing operations before non-recurring items were $156.8 million for the Company, $48.9 million for the Utility segment, $49.7 million for the Pipeline and Storage segment, $50.5 million for the Exploration and Production segment, $5.9 million for the Energy Marketing segment, $6.5 million for the Timber segment and a loss of $4.7 million in Corporate and All Other. These earnings exclude an adjustment to the Seneca Northeast Division's fiscal 2003 sale of timber properties, which decreased the gain by $0.8 million (Timber segment), $6.4 million of expense associated with the settlement of a pension obligation (allocated to all segments) and a $4.6 million benefit to earnings related to the Seneca's September 2003 sale of Canadian oil properties (Exploration and Production segment).

Including those non-recurring items, earnings from continuing operations for the fiscal year ended September 30, 2004 were $154.27 for the Company, $46.72 million for the Utility segment, $47.73 million for the Pipeline and Storage segment, $54.34 million for the Exploration and Production segment, $5.54 million for the Energy Marketing segment, $5.64 million for the Timber segment and a loss of $5.70 million in Corporate and All Other. Compared with these earnings, the Company's earnings from continuing operations for fiscal 2005 were down $0.75 million to $153.52 million, for the Utility segment were down $7.52 million to $39.20 million, for the Pipeline and Storage segment were up $12.72 million to $60.45 million, for the Exploration and Production segment were down $3.68 million to $50.66 million, for the Energy Marketing segment were down $0.46 million to $5.08 million, for the Timber segment were down $0.61 million to $5.03 million and for Corporate and All Other were down $1.20 million to a loss of $6.90 million.

EARNINGS GUIDANCE

The Company reaffirms its previously provided fiscal 2006 earnings per share guidance of $2.30 to $2.50 per diluted share.(a) Earnings per share guidance on a consolidated and segment basis is provided in the table at page 21 of this document. A table (current as of October 28, 2005) is also included on page 21 that shows how projected earnings are expected to change in response to changes from commodity pricing on which the guidance is based.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, October 28, 2005 at 11:00 a.m. (Eastern Time) to discuss this announcement. There are two ways to access this call. For those with Internet access, you may go to National Fuel's Web site at http://www.nationalfuelgas.com and click on the "For Investors" link at the top of the homepage. For those without Internet access, you may access the live call by dialing (toll-free) 1-866-700-0133, and use the passcode "65763084". For those unable to listen to the live conference call, a replay will be available approximately one hour after the conclusion of the call at the same Web site link and by phone at (toll-free) 888-286-8010 using passcode "16926875." Both the webcast and telephonic replay will be available until the close of business on Friday, November 4, 2005.

National Fuel is an integrated energy company with $3.7 billion in assets comprised of the following five operating segments: Utility, Pipeline and Storage, Exploration and Production, Energy Marketing, and Timber. Additional information about National Fuel is available on its Internet Web site: http://www.nationalfuelgas.com or through its investor information service at 1-800-334-2188.



(a) Certain statements contained herein, including those which are
designated with a ("a") and those which use words such as
"anticipates," "estimates," "expects," "intends," "plans," "predicts,"
"projects," and similar expressions, are "forward-looking statements"
as defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties, which
could cause actual results or outcomes to differ materially from those
expressed in the forward-looking statements. The Company's
expectations, beliefs and projections contained herein are expressed
in good faith and are believed to have a reasonable basis, but there
can be no assurance that such expectations, beliefs or projections
will result or be achieved or accomplished. In addition to other
factors, the following are important factors that could cause actual
results to differ materially from those discussed in the
forward-looking statements: changes in economic conditions, including
economic disruptions caused by terrorist activities or acts of war;
changes in demographic patterns or weather conditions, including the
occurrence of severe weather; changes from expectations with respect
to the extent of damage caused by recent hurricanes or the amount of
time necessary for repairs to be made to Seneca's facilities or those
of third parties; disputes with insurance providers; increasing costs
of insurance, changes in coverage and the ability to obtain insurance;
changes in the availability and/or price of natural gas or oil and the
effect of such changes on the accounting treatment or valuation of
derivative financial instruments or the Company's natural gas and oil
reserves; impairments under the Securities and Exchange Commission's
full cost ceiling test for natural gas and oil reserves; changes in
the availability and/or price of derivative financial instruments;
changes in the price differentials between various types of oil;
failure of the price differential between heavy sour crude oil and
light sweet crude oil to return to its historical norm; inability to
obtain new customers or retain existing ones; significant changes in
competitive factors affecting the Company; governmental/regulatory
actions, initiatives and proceedings, including those involving
acquisitions, financings, rate cases (which address, among other
things, allowed rates of return, rate design and retained gas),
affiliate relationships, industry structure, franchise renewal, and
environmental/safety requirements; unanticipated impacts of
restructuring initiatives in the natural gas and electric industries;
significant changes from expectations in actual capital expenditures
and operating expenses and unanticipated project delays or changes in
project costs; the nature and projected profitability of pending and
potential projects and other investments; occurrences affecting the
Company's ability to obtain funds from operations, debt or equity to
finance needed capital expenditures and other investments, including
any downgrades in the Company's credit ratings; uncertainty of oil and
gas reserve estimates; ability to successfully identify and finance
acquisitions or other investments and ability to operate and integrate
existing and any subsequently acquired business or properties; ability
to successfully identify, drill for and produce economically viable
natural gas and oil reserves; significant changes from expectations in
the Company's actual production levels for natural gas or oil;
regarding foreign operations, changes in trade and monetary policies,
inflation and exchange rates, taxes, operating conditions, laws and
regulations related to foreign operations, and political and
governmental changes; significant changes in tax rates or policies or
in rates of inflation or interest; significant changes in the
Company's relationship with its employees or contractors and the
potential adverse effects if labor disputes, grievances or shortages
were to occur; changes in accounting principles or the application of
such principles to the Company; changes in laws and regulations to
which the Company is subject, including tax, environmental, safety and
employment laws and regulations; the cost and effects of legal and
administrative claims against the Company; changes in actuarial
assumptions and the return on assets with respect to the Company's
retirement plan and post-retirement benefits; or increasing health
care costs and the resulting effect on health insurance premiums and
on the obligation to provide post-retirement benefits. The Company
disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
RECONCILIATION TO REPORTED EARNINGS

Three Months Three Months Twelve Months Twelve Months
(Thousands of Ended Ended Ended Ended
Dollars) September 30, September 30, September 30, September 30,
2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- ------------- -------------
Utility
-------
Reported
earnings $(6,073) $(7,054) $39,197 $46,718
Pension
settlement
loss - - - 2,193
------------- ------------- ------------- -------------
Earnings
before non-
recurring
items (6,073) (7,054) 39,197 48,911
------------- ------------- ------------- -------------

Pipeline and
Storage
------------
Reported
earnings 18,877 11,493 60,454 47,726
Pension
settlement
loss - - - 1,967
Gain
associated
with
insurance
proceeds (3,885) - (3,885) -
Base gas sale - - (2,636) -
------------- ------------- ------------- -------------
Earnings
before non-
recurring
items 14,992 11,493 53,933 49,693
------------- ------------- ------------- -------------

Exploration
and
Production
-----------
Reported
earnings 11,676 10,278 50,659 54,344
Gain on sale
of oil and
gas producing
properties - - - (4,645)
Pension
settlement
loss - - - 851
------------- ------------- ------------- -------------
Earnings
before non-
recurring
items 11,676 10,278 50,659 50,550
------------- ------------- ------------- -------------

Energy
Marketing
----------
Reported
earnings 168 (52) 5,077 5,535
Pension
settlement
loss - - - 323
------------- ------------- ------------- -------------
Earnings
before non-
recurring
items 168 (52) 5,077 5,858
------------- ------------- ------------- -------------

Timber
------
Reported
earnings 830 1,765 5,032 5,637
Loss on sale
of timber
properties - - - 764
Pension
settlement
loss - - - 78
------------- ------------- ------------- -------------
Earnings
before non-
recurring
items 830 1,765 5,032 6,479
------------- ------------- ------------- -------------

Corporate and
All Other
-------------
Reported
earnings (7,167) (2,598) (6,904) (5,695)
Pension
settlement
loss - - - 994
------------- ------------- ------------- -------------
Earnings
before non-
recurring
items (7,167) (2,598) (6,904) (4,701)
------------- ------------- ------------- -------------

Consolidated
Earnings from
Continuing
Operations
--------------
Reported
earnings from
continuing
operations 18,311 13,832 153,515 154,265
Total non-
recurring
items from
above (3,885) - (6,521) 2,525
------------- ------------- ------------- -------------
Earnings from
continuing
operations
before non-
recurring
items $14,426 $13,832 $146,994 $156,790
============= ============= ============= =============

Discontinued
Operations
------------
Reported
earnings from
discontinued
operations 30,900 (6,078) 35,973 12,321
------------- ------------- ------------- -------------

Consolidated
------------
Reported
earnings $49,211 $7,754 $189,488 $166,586
============= ============= ============= =============

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
RECONCILIATION TO REPORTED EARNINGS

Three Months Three Months Twelve Months Twelve Months
(Diluted Ended Ended Ended Ended
Earnings Per September 30, September 30, September 30, September 30,
Share) 2005 2004 2005 2004
(unaudited) (unaudited) (unaudited) (unaudited)
------------- ------------- ------------- -------------
Utility
-------
Reported
earnings $(0.07) $(0.08) $0.46 $0.56
Pension
settlement
loss - - - 0.03
------------ ------------- ------------- -------------
Earnings before
non-recurring
items (0.07) (0.08) 0.46 0.59
------------ ------------- ------------- -------------

Pipeline and
Storage
------------
Reported
earnings 0.22 0.14 0.71 0.58
Pension
settlement
loss - - - 0.02
Gain associated
with insurance
proceeds (0.05) - (0.05) -
Base gas sale - - (0.03) -
------------ ------------- ------------- -------------
Earnings before
non-recurring
items 0.17 0.14 0.63 0.60
------------ ------------- ------------- -------------

Exploration and
Production
---------------
Reported
earnings 0.13 0.12 0.60 0.66
Gain on sale of
oil and gas
producing
properties - - - (0.06)
Pension
settlement
loss - - - 0.01
------------ ------------- ------------- -------------
Earnings before
non-recurring
items 0.13 0.12 0.60 0.61
------------ ------------- ------------- -------------

Energy
Marketing
----------
Reported
earnings - - 0.06 0.07
Pension
settlement
loss - - - -
------------ ------------- ------------- -------------
Earnings before
non-recurring
items - - 0.06 0.07
------------ ------------- ------------- -------------

Timber
------
Reported
earnings 0.01 0.02 0.06 0.06
Loss on sale of
timber
properties - - - 0.01
Pension
settlement
loss - - - -
------------ ------------- ------------- -------------
Earnings before
non-recurring
items 0.01 0.02 0.06 0.07
------------ ------------- ------------- -------------

Corporate and
All Other
-------------
Reported
earnings
(including
rounding) (0.08) (0.04) (0.08) (0.07)
Pension
settlement
loss
(including
rounding) - - - 0.02
------------ ------------- ------------- -------------
Earnings before
non-recurring
items (0.08) (0.04) (0.08) (0.05)
------------ ------------- ------------- -------------

Consolidated
Earnings from
Continuing
Operations
--------------
Reported
earnings from
continuing
operations 0.21 0.16 1.81 1.86
Total non-
recurring
items from
above (0.05) - (0.08) 0.03
------------ ------------- ------------- -------------
Earnings from
continuing
operations
before non-
recurring
items $0.16 $0.16 $1.73 $1.89
============ ============= ============= =============

Discontinued
Operations
------------
Reported
earnings from
discontinued
operations 0.36 (0.07) 0.42 0.15
------------ ------------- ------------- -------------

Consolidated
------------
Reported
earnings $0.57 $0.09 $2.23 $2.01
============ ============= ============= =============

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

(Thousands of Dollars, except per share amounts)

Three Months Ended Twelve Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
----------------------- -----------------------
SUMMARY OF OPERATIONS 2005 2004 2005 2004
--------------------- ----------- ----------- ----------- -----------
Operating Revenues $287,064 $267,495 $1,923,549 $1,907,968
----------- ----------- ----------- -----------

Operating Expenses:
Purchased Gas 82,316 77,859 959,827 949,452
Operation and
Maintenance 106,968 92,149 404,517 385,519
Property, Franchise
and Other Taxes 15,525 15,184 69,076 68,978
Depreciation,
Depletion and
Amortization 47,329 43,939 179,767 174,289
----------- ----------- ----------- -----------
252,138 229,131 1,613,187 1,578,238

Loss on Sale of Timber
Properties - - - (1,252)
Gain on Sale of Oil and
Gas Producing
Properties - - - 4,645
----------- ----------- ----------- -----------

Operating Income 34,926 38,364 310,362 333,123

Other Income (Expense):
Income from
Unconsolidated
Subsidiaries 1,447 402 3,362 805
Impairment of
Investment in
Partnership (4,158) - (4,158) -
Other Income 6,764 733 12,744 2,908
Interest Income 4,714 524 6,496 1,771
Interest Expense on
Long-Term Debt (18,255) (18,999) (73,244) (82,989)
Other Interest
Expense (158) (1,933) (9,069) (6,763)
----------- ----------- ----------- -----------

Income from Continuing
Operations Before
Income Taxes 25,280 19,091 246,493 248,855

Income Tax Expense 6,969 5,259 92,978 94,590
----------- ----------- ----------- -----------

Income from Continuing
Operations 18,311 13,832 153,515 154,265

Discontinued
Operations:
Income (Loss) from
Operations, Net of
Tax 5,126 (6,078) 10,199 12,321
Gain on Disposal,
Net of Tax 25,774 - 25,774 -
----------- ----------- ----------- -----------

Income (Loss) from
Discontinued
Operations, Net of Tax 30,900 (6,078) 35,973 12,321
----------- ----------- ----------- -----------

Net Income Available
for Common Stock $49,211 $7,754 $189,488 $166,586
=========== =========== =========== ===========

Earnings Per Common
Share:
Basic:
Income from
Continuing
Operations $0.22 $0.17 $1.84 $1.88
Income (Loss) from
Discontinued
Operations 0.36 (0.08) 0.43 0.15
----------- ----------- ----------- -----------
Net Income
Available for
Common Stock $0.58 $0.09 $2.27 $2.03
=========== =========== =========== ===========

Diluted:
Income from
Continuing
Operations $0.21 $0.16 $1.81 $1.86
Income (Loss) from
Discontinued
Operations 0.36 (0.07) 0.42 0.15
----------- ----------- ----------- -----------
Net Income
Available for
Common Stock $0.57 $0.09 $2.23 $2.01
=========== =========== =========== ===========

Weighted Average Common
Shares:
Used in Basic
Calculation 84,128,929 82,633,724 83,541,627 82,045,535
=========== =========== =========== ===========
Used in Diluted
Calculation 85,784,654 83,851,467 85,029,131 82,900,438
=========== =========== =========== ===========

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

September 30, September 30,
(Thousands of Dollars) 2005 2004
----------------------------------------------------------------------

ASSETS
Property, Plant and Equipment $4,423,255 $4,602,779
Less - Accumulated Depreciation, Depletion
and Amortization 1,583,955 1,596,015
------------------------------------------ ---------------------------
Net Property, Plant and
Equipment 2,839,300 3,006,764
------------------------------------------ ---------------------------

Current Assets:
Cash and Temporary Cash Investments 135,391 66,153
Receivables - Net 155,064 129,825
Unbilled Utility Revenue 20,465 18,574
Gas Stored Underground 64,529 68,511
Materials and Supplies - at average cost 44,777 43,922
Unrecovered Purchased Gas Costs 14,817 7,532
Prepayments 54,817 38,760
Fair Value of Derivative Financial
Instruments - 23
------------------------------------------ ---------------------------
Total Current Assets 489,860 373,300
------------------------------------------ ---------------------------

Other Assets:
Recoverable Future Taxes 85,000 83,847
Unamortized Debt Expense 17,567 19,573
Other Regulatory Assets 82,842 66,862
Deferred Charges 4,474 3,411
Other Investments 80,394 72,556
Investments in Unconsolidated Subsidiaries 12,658 16,444
Goodwill 5,476 5,476
Intangible Assets 42,302 45,994
Other 4,167 17,571
------------------------------------------ ---------------------------
Total Other Assets 334,880 331,734
------------------------------------------ ---------------------------
Total Assets $3,664,040 $3,711,798
------------------------------------------ ---------------------------

CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized -
200,000,000 Shares; Issued and
Outstanding - 84,356,748 Shares and
82,990,340 Shares, Respectively $84,357 $82,990
Paid in Capital 529,834 506,560
Earnings Reinvested in the Business 813,020 718,926
------------------------------------------ ---------------------------
Total Common Shareholders' Equity Before
Items of Other Comprehensive Loss 1,427,211 1,308,476
Accumulated Other Comprehensive Loss (197,628) (54,775)
------------------------------------------ ---------------------------
Total Comprehensive Shareholders' Equity 1,229,583 1,253,701
Long-Term Debt, Net of Current Portion 1,119,012 1,133,317
------------------------------------------ ---------------------------
Total Capitalization 2,348,595 2,387,018
------------------------------------------ ---------------------------

------------------------------------------ ---------------------------
Minority Interest in Foreign Subsidiaries - 37,048
------------------------------------------ ---------------------------

Current and Accrued Liabilities:
Notes Payable to Banks and Commercial
Paper - 156,800
Current Portion of Long-Term Debt 9,393 14,260
Accounts Payable 155,485 115,979
Amounts Payable to Customers 1,158 3,154
Other Accruals and Current Liabilities 65,753 63,594
Fair Value of Derivative Financial
Instruments 209,072 95,099
------------------------------------------ ---------------------------
Total Current and Accrued
Liabilities 440,861 448,886
------------------------------------------ ---------------------------

Deferred Credits:
Accumulated Deferred Income Taxes 397,896 458,095
Taxes Refundable to Customers 11,009 11,065
Unamortized Investment Tax Credit 6,796 7,498
Cost of Removal Regulatory Liability 90,396 82,020
Other Regulatory Liabilities 71,495 67,669
Pension and Post-Employment Benefit
Liabilities 200,585 119,157
Asset Retirement Obligation 41,411 32,292
Other Deferred Credits 54,996 61,050
------------------------------------------ ---------------------------
Total Deferred Credits 874,584 838,846
------------------------------------------ ---------------------------
Commitments and Contingencies - -
------------------------------------------ ---------------------------
Total Capitalization and Liabilities $3,664,040 $3,711,798
------------------------------------------ ---------------------------

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

Twelve Months Ended
September 30,
(Thousands of Dollars) 2005 2004
----------------------------------------------------------------------

Operating Activities:
Net Income Available for Common Stock $189,488 $166,586
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Gain on Sale of Discontinued Operations (27,274) -
Loss on Sale of Timber Properties - 1,252
Gain on Sale of Oil and Gas Producing
Properties - (4,645)
Depreciation, Depletion and Amortization 193,144 189,538
Deferred Income Taxes 32,338 40,329
Income from Unconsolidated Subsidiaries,
Net of Cash Distributions (1,372) (19)
Impairment of Investment in Partnership 4,158 -
Minority Interest in Foreign
Subsidiaries 2,645 1,933
Other 7,390 9,839
Change in:
Receivables and Unbilled Utility Revenue (31,246) 4,840
Gas Stored Underground and Materials and
Supplies (1,171) 9,860
Unrecovered Purchased Gas Costs (7,285) 21,160
Prepayments (16,455) 8,146
Accounts Payable 48,089 (5,134)
Amounts Payable to Customers (1,996) 2,462
Other Accruals and Current Liabilities 3,637 25,857
Other Assets (12,918) (10,693)
Other Liabilities 4,694 (17,011)
----------------------------------------------------------------------
Net Cash Provided by Operating
Activities $385,866 $444,300
----------------------------------------------------------------------

Investing Activities:
Capital Expenditures ($218,271) ($172,341)
Net Proceeds from Sale of Foreign Subsidiary 111,619 -
Net Proceeds from Sale of Oil and Gas Producing
Properties 90 7,162
Other 3,890 1,974
----------------------------------------------------------------------
Net Cash Used in Investing
Activities ($102,672) ($163,205)
----------------------------------------------------------------------

Financing Activities:
Change in Notes Payable to Banks and Commercial
Paper ($115,359) $38,600
Reduction of Long-Term Debt (13,317) (243,085)
Dividends Paid on Common Stock (94,159) (89,092)
Dividends Paid to Minority Interest (12,676) -
Proceeds From Issuance of Common Stock 20,279 23,763
----------------------------------------------------------------------
Net Cash Used In Financing
Activities ($215,232) ($269,814)
----------------------------------------------------------------------
Effect of Exchange Rates on Cash 1,276 3,451
----------------------------------------------------------------------
Net Increase in Cash and Temporary Cash
Investments 69,238 14,732
Cash and Temporary Cash Investments at Beginning
of Period 66,153 51,421
----------------------------------------------------------------------
Cash and Temporary Cash Investments at September
30 $135,391 $66,153
----------------------------------------------------------------------

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

SEGMENT INFORMATION
(Thousands of Dollars)

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

Increase
2005 2004 (Decrease)
----------- --------- ----------
Operating Revenues
------------------
Utility $112,684 $109,516 $3,168
Pipeline and Storage 54,671 51,662 3,009
Exploration and Production 73,898 68,105 5,793
Energy Marketing 53,608 43,617 9,991
Timber 14,291 14,346 (55)
----------- --------- ----------
Total Reportable Segments 309,152 287,246 21,906
All Other 3,140 3,227 (87)
Corporate 811 628 183
Intersegment Eliminations (26,039) (23,606) (2,433)
----------- --------- ----------
Total Consolidated $287,064 $267,495 $19,569
=========== ========= ==========

Operating Income (Loss)
-----------------------
Utility $(14,920) $(9,554) $(5,366)
Pipeline and Storage 24,830 19,492 5,338
Exploration and Production 30,118 27,759 2,359
Energy Marketing (170) (29) (141)
Timber 1,358 3,217 (1,859)
----------- --------- ----------
Total Reportable Segments 41,216 40,885 331
All Other (3,604) (187) (3,417)
Corporate (2,686) (2,334) (352)
----------- --------- ----------
Total Consolidated $34,926 $38,364 $(3,438)
=========== ========= ==========

Income (Loss) from Continuing
Operations
-----------------------------
Utility $(6,073) $(7,054) $981
Pipeline and Storage 18,877 11,493 7,384
Exploration and Production 11,676 10,278 1,398
Energy Marketing 168 (52) 220
Timber 830 1,765 (935)
----------- --------- ----------
Total Reportable Segments 25,478 16,430 9,048
All Other (4,137) 181 (4,318)
Corporate (3,030) (2,779) (251)
----------- --------- ----------
Total Consolidated $18,311 $13,832 $4,479
=========== ========= ==========

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

Increase
2005 2004 (Decrease)
----------- ----------- ----------
Operating Revenues
------------------
Utility $1,117,067 $1,152,641 $(35,574)
Pipeline and Storage 215,859 209,707 6,152
Exploration and Production 293,425 293,698 (273)
Energy Marketing 329,714 284,349 45,365
Timber 61,286 55,970 5,316
----------- ----------- ----------
Total Reportable Segments 2,017,351 1,996,365 20,986
All Other 13,354 13,695 (341)
Corporate 2,824 2,513 311
Intersegment Eliminations (109,980) (104,605) (5,375)
----------- ----------- ----------
Total Consolidated $1,923,549 $1,907,968 $15,581
=========== =========== ==========

Operating Income (Loss)
-----------------------
Utility $80,389 $98,642 $(18,253)
Pipeline and Storage 96,178 88,748 7,430
Exploration and Production 123,208 132,053 (8,845)
Energy Marketing 7,288 8,749 (1,461)
Timber 9,556 10,802 (1,246)
----------- ----------- ----------
Total Reportable Segments 316,619 338,994 (22,375)
All Other (1,996) 2,367 (4,363)
Corporate (4,261) (8,238) 3,977
----------- ----------- ----------
Total Consolidated $310,362 $333,123 $(22,761)
=========== =========== ==========

Income (Loss) from Continuing
Operations
-----------------------------
Utility $39,197 $46,718 $(7,521)
Pipeline and Storage 60,454 47,726 12,728
Exploration and Production 50,659 54,344 (3,685)
Energy Marketing 5,077 5,535 (458)
Timber 5,032 5,637 (605)
----------- ----------- ----------
Total Reportable Segments 160,419 159,960 459
All Other (2,616) 1,530 (4,146)
Corporate (4,288) (7,225) 2,937
----------- ----------- ----------
Total Consolidated $153,515 $154,265 $(750)
=========== =========== ==========

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

SEGMENT INFORMATION (Continued)
(Thousands of Dollars)

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

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

Depreciation, Depletion and
Amortization:
---------------------------
Utility $10,079 $10,131 $(52)
Pipeline and Storage 9,134 10,462 (1,328)
Exploration and Production 23,368 21,202 2,166
Energy Marketing (24) 23 (47)
Timber 1,697 1,502 195
----------- -------- ----------
Total Reportable Segments 44,254 43,320 934
All Other 2,957 513 2,444
Corporate 118 106 12
----------- -------- ----------
Total Consolidated $47,329 $43,939 $3,390
=========== ======== ==========

Expenditures for Long-Lived Assets
----------------------------------
Utility $15,078 $16,746 $(1,668)
Pipeline and Storage 7,977 9,514 (1,537)
Exploration and Production 35,143 19,577 15,566
Energy Marketing 12 - 12
Timber 193 649 (456)
----------- -------- ----------
Total Reportable Segments 58,403 46,486 11,917
All Other 293 107 186
Corporate 512 98 414
----------- -------- ----------
Total Expenditures from Continuing
Operations $59,208 $46,691 $12,517
=========== ======== ==========

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

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

Depreciation, Depletion and
Amortization:
---------------------------
Utility $40,159 $39,101 $1,058
Pipeline and Storage 38,050 37,345 705
Exploration and Production 90,912 89,943 969
Energy Marketing 41 102 (61)
Timber 6,601 6,277 324
----------- --------- ----------
Total Reportable Segments 175,763 172,768 2,995
All Other 3,537 1,071 2,466
Corporate 467 450 17
----------- --------- ----------
Total Consolidated $179,767 $174,289 $5,478
=========== ========= ==========

Expenditures for Long-Lived Assets
----------------------------------
Utility $50,071 $55,449 $(5,378)
Pipeline and Storage 21,099 23,196 (2,097)
Exploration and Production 121,191 77,654 43,537
Energy Marketing 58 10 48
Timber 18,894 2,823 16,071
----------- --------- ----------
Total Reportable Segments 211,313 159,132 52,181
All Other 463 200 263
Corporate 618 5,511 (4,893)
----------- --------- ----------
Total Expenditures from Continuing
Operations $212,394 $164,843 $47,551
=========== ========= ==========

UTILITY
CUSTOMER ACCOUNTS RECEIVABLE SUMMARY
------------------------------------

2005 2004 2003 2002 2001
-------- -------- -------- -------- --------

Current to 29 days $10,830 $11,136 $17,294 $4,135 $12,041
30-59 days 8,967 8,270 7,866 5,398 7,909
60-89 days 6,466 5,949 5,594 3,659 5,673
90-119 days 6,304 5,376 5,843 3,404 5,617
Over 120 days 54,449 48,411 43,809 28,969 48,226
-------- -------- -------- -------- --------
Total $87,016 $79,142 $80,406 $45,565 $79,466
-------- -------- -------- -------- --------

Reserve for Bad Debt $25,124 $12,903 $12,666 $13,297 $15,246
-------- -------- -------- -------- --------

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

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

Buffalo, NY 178 36 98 (79.8) (63.3)
Erie, PA 135 32 95 (76.3) (66.3)

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

Buffalo, NY 6,692 6,587 6,572 (1.6) 0.2
Erie, PA 6,243 6,247 6,086 0.1 2.6

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

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

Three Months Ended
September 30,
--------------------------------
Increase
2005 2004 (Decrease)
---------- ---------- ----------

Gas Production/Prices:
----------------------
Production (MMcf)
Gulf Coast 3,035 3,545 (510)
West Coast 1,052 1,040 12
Appalachia 1,150 1,238 (88)
Canada 2,050 1,354 696
---------- ---------- ----------
7,287 7,177 110
========== ========== ==========
Average Prices (Per Mcf)
Gulf Coast $8.07 $5.96 $2.11
West Coast 7.73 5.85 1.88
Appalachia 8.93 6.01 2.92
Canada 7.47 4.94 2.53
Weighted Average 7.99 5.76 2.23
Weighted Average after Hedging 6.77 5.14 1.63

Oil Production/Prices:
----------------------
Production (Thousands of Barrels)
Gulf Coast 188 351 (163)
West Coast 628 637 (9)
Appalachia 13 5 8
Canada 71 70 1
---------- ---------- ----------
900 1,063 (163)
========== ========== ==========

Average Prices (Per Barrel)
Gulf Coast $58.53 $41.64 $16.89
West Coast 54.52 37.04 17.48
Appalachia 51.06 36.75 14.31
Canada 51.29 36.13 15.16
Weighted Average 55.06 38.49 16.57
Weighted Average after Hedging 30.70 27.79 2.91

Total Production (Mmcfe) 12,687 13,555 (868)
------------------------ ========== ========== ==========

Selected Operating Performance
Statistics:
------------------------------
General & Administrative Expense
per Mcfe $0.36 $0.43 $(0.07)
Lease Operating Expense per Mcfe $1.09 $0.91 $0.18
Depreciation, Depletion &
Amortization per Mcfe $1.84 $1.56 $0.28

Twelve Months Ended
September 30,
--------------------------------
Increase
2005 2004 (Decrease)
---------- ---------- ----------

Gas Production/Prices:
----------------------
Production (MMcf)
Gulf Coast 12,468 17,596 (5,128)
West Coast 4,052 4,057 (5)
Appalachia 4,650 5,132 (482)
Canada 8,009 6,228 1,781
---------- ---------- ----------
29,179 33,013 (3,834)
========== ========== ==========
Average Prices (Per Mcf)
Gulf Coast $7.05 $5.61 $1.44
West Coast 6.85 5.54 1.31
Appalachia 7.60 5.91 1.69
Canada 6.15 4.87 1.28
Weighted Average 6.86 5.51 1.35
Weighted Average after Hedging 6.23 5.06 1.17

Oil Production/Prices:
----------------------
Production (Thousands of Barrels)
Gulf Coast 989 1,534 (545)
West Coast 2,544 2,650 (106)
Appalachia 36 20 16
Canada 300 324 (24)
---------- ---------- ----------
3,869 4,528 (659)
========== ========== ==========

Average Prices (Per Barrel)
Gulf Coast $49.78 $35.31 $14.47
West Coast 42.91 31.89 11.02
Appalachia 48.28 31.30 16.98
Canada 42.97 30.94 12.03
Weighted Average 44.72 32.98 11.74
Weighted Average after Hedging 27.86 26.40 1.46

Total Production (Mmcfe) 52,393 60,181 (7,788)
------------------------ ========== ========== ==========

Selected Operating Performance
Statistics:
------------------------------
General & Administrative Expense
per Mcfe $0.41 $0.38 $0.03
Lease Operating Expense per Mcfe $0.98 $0.80 $0.18
Depreciation, Depletion &
Amortization per Mcfe $1.74 $1.49 $0.25

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

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

Hedging Summary for Fiscal 2006

SWAPS Volume Average Hedge Price
----- ------ -------------------
Oil 1.9 MMBBL $34.14 / BBL
Gas 9.2 BCF $6.17 / MCF

No-cost Collars Volume Floor Price Ceiling Price
--------------- ------ ----------- -------------
Gas 6.7 BCF $7.45 / MCF $11.59 / MCF

Hedging Summary for Fiscal 2007

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

No-cost Collars Volume Floor Price Ceiling Price
--------------- ------ ----------- -------------
Gas 2.4 BCF $7.45 / MCF $10.74 / MCF

Drilling Program
----------------
Twelve Months Ended September 30, 2005:
----------------------------------------
Gross Wells Drilled
-------------------
Gulf West East Canada Total
-------- -------- -------- -------- --------
Exploratory
Successful 7 0 2 24 33
Unsuccessful 1 0 1 3 5
Developmental
Successful 3 115 78 7 203
Unsuccessful 0 0 0 0 0
Total
Successful 10 115 80 31 236
Unsuccessful 1 0 1 3 5

Success Ratio 91% 100% 99% 91% 98%

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

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

Reserve Quantity Information

Gas MMcf
------------------------------------------------------
U.S.
-------------------------------------
Gulf West Total
Coast Coast Appalachian Total
Region Region Region U.S. Canada Company
------------------------------------------------------
Proved
Developed and
Undeveloped
Reserves:
September 30,
2004 27,734 67,444 78,760 173,938 50,846 224,784
Extensions and
Discoveries 17,165 - 5,461 22,626 4,849 27,475
Revisions of
Previous
Estimates 6,039 7,067 3,733 16,839 (1,600) 15,239
Production (12,468) (4,052) (4,650)(21,170) (8,009) (29,179)
Sales of
Minerals in
Place - - (179) (179) - (179)
------------------------------------------------------
September 30,
2005 38,470 70,459 83,125 192,054 46,086 238,140

Proved Developed
Reserves:

September 30,
2004 25,827 53,035 78,760 157,622 46,223 203,845
September 30,
2005 23,108 58,692 83,125 164,925 43,980 208,905

Oil Mbbl
------------------------------------------------------
U.S.
-------------------------------------
Gulf West Total
Coast Coast Appalachian Total
Region Region Region U.S. Canada Company
------------------------------------------------------
Proved
Developed and
Undeveloped
Reserves:
September 30,
2004 2,080 60,882 147 63,109 2,104 65,213
Extensions and
Discoveries 99 - 63 162 204 366
Revisions of
Previous
Estimates 105 (1,253) 3 (1,145) (186) (1,331)
Production (989) (2,544) (36) (3,569) (300) (3,869)
Sales of
Minerals in
Place - - - - (122) (122)
------------------------------------------------------
September 30,
2005 1,295 57,085 177 58,557 1,700 60,257

Proved Developed
Reserves:

September 30,
2004 2,061 38,631 148 40,840 2,104 42,944
September 30,
2005 1,229 41,701 177 43,107 1,700 44,807

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

Utility Throughput - (millions of cubic feet - MMcf)

Three Months Ended Twelve Months Ended
September 30, September 30,
-------------------------- ----------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------- ------- ---------- -------- -------- ----------
Retail Sales:
Residential
Sales 3,778 4,317 (539) 66,903 70,109 (3,206)
Commercial
Sales 643 733 (90) 11,984 12,752 (768)
Industrial
Sales 666 211 455 1,387 2,261 (874)
------- ------- ---------- -------- -------- ----------
5,087 5,261 (174) 80,274 85,122 (4,848)
------- ------- ---------- -------- -------- ----------
Off-System
Sales - 2,585 (2,585) - 16,839 (16,839)
Transportation 9,426 8,968 458 59,770 60,565 (795)
------- ------- ---------- -------- -------- ----------
14,513 16,814 (2,301) 140,044 162,526 (22,482)
======= ======= ========== ======== ======== ==========

Pipeline & Storage Throughput- (MMcf)

Three Months Ended Twelve Months Ended
September 30, September 30,
------------------------- ----------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------ ------- ---------- -------- -------- ----------
Firm
Transportation
- Affiliated 10,442 8,746 1,696 113,242 116,768 (3,526)
Firm
Transportation
- Non-
Affiliated 62,606 45,894 16,712 244,343 222,223 22,120
Interruptible
Transportation 4,790 1,801 2,989 14,794 12,692 2,102
------- ------- ---------- -------- -------- ---------
77,838 56,441 21,397 372,379 351,683 20,696
======= ======= ========== ======== ======== =========

Energy Marketing Volumes

Three Months Ended Twelve Months Ended
September 30, September 30,
-------------------------- ----------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------- ------ ---------- -------- -------- ----------
Natural Gas
(MMcf) 6,567 5,743 824 40,683 41,651 (968)
======= ======= ========= ======== ======== =========

Timber Board Feet (Thousands)

Three Months Ended Twelve Months Ended
September 30, September 30,
-------------------------- ----------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------ ------ ---------- -------- -------- ----------
Log Sales 1,668 1,640 28 7,601 6,848 753
Green Lumber
Sales 2,310 2,398 (88) 10,489 9,552 937
Kiln Dry Lumber
Sales 4,118 4,111 7 15,491 15,020 471
------- ------- ---------- -------- -------- ----------
8,096 8,149 (53) 33,581 31,420 2,161
======= ======= ========== ======== ======== ==========

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


Fiscal 2006 earnings per share guidance by segment(a)

Range
----------------------
Utility $0.52 $0.59
Pipeline & Storage $0.60 $0.63
Exploration & Production $1.10 $1.20
Energy Marketing $0.02 $0.02
Timber $0.05 $0.05
Corporate & Other $0.01 $0.01

Consolidated $2.30 $2.50

Earnings per share sensitivity to changes
from September 13, 2005 NYMEX prices(a)(b)
---------------------------------------------
$1 change per MMBtu gas $1 change per Bbl oil
----------------------- ---------------------
Increase Decrease Increase Decrease
----------- ----------- ----------- ---------
Utility - $0.01 + $0.01 - -
Pipeline & Storage + $0.02 - $0.02 - -
Exploration &
Production + $0.11 - $0.11 + $0.01 - $0.01
Energy Marketing - - - -
Timber - - - -
Corporate & Other - - - -

Consolidated + $0.12 - $0.12 + $0.01 - $0.01

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

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

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

Average $10.479 $64.86

(a) Please refer to forward looking statement footnote as appears
earlier in this document.

(b) This sensitivity table is current as of October 28, 2005, but will
become obsolete with the passage of time, changes in Seneca's
production forecast, changes in customer use per account, as
additional hedging contracts are entered into, and the settling of
NYMEX hedge contracts at their maturity.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

Quarter Ended September 30 (unaudited) 2005 2004
-------------------------------------- --------------- ---------------

Operating Revenues $ 287,064,000 $ 267,495,000
=============== ===============

Income from Continuing Operations $ 18,311,000 $ 13,832,000
Income (Loss) from Discontinued
Operations, Net of Tax 30,900,000 (6,078,000)
--------------- ---------------
Net Income Available for Common Stock $ 49,211,000 $ 7,754,000
--------------- ---------------

Earnings Per Common Share:
Basic:
Income from Continuing Operations $ 0.22 $ 0.17
Income (Loss) from Discontinued
Operations 0.36 (0.08)
--------------- ---------------
Net Income Available for Common
Stock $ 0.58 $ 0.09
=============== ===============

Diluted:
Income from Continuing Operations $ 0.21 $ 0.16
Income (Loss) from Discontinued
Operations 0.36 (0.07)
--------------- ---------------
Net Income Available for Common
Stock $ 0.57 $ 0.09
=============== ===============

Weighted Average Common Shares:
Used in Basic Calculation 84,128,929 82,633,724
=============== ===============
Used in Diluted Calculation 85,784,654 83,851,467
=============== ===============

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

Operating Revenues $1,923,549,000 $1,907,968,000
=============== ===============

Income from Continuing Operations $ 153,515,000 $ 154,265,000
Income from Discontinued Operations,
Net of Tax 35,973,000 12,321,000
--------------- ---------------
Net Income Available for Common Stock $ 189,488,000 $ 166,586,000
=============== ===============

Earnings Per Common Share:
Basic:
Income from Continuing Operations $ 1.84 $ 1.88
Income from Discontinued Operations 0.43 0.15
--------------- ---------------
Net Income Available for Common
Stock $ 2.27 $ 2.03
=============== ===============

Diluted:
Income from Continuing Operations $ 1.81 $ 1.86
Income from Discontinued Operations 0.42 0.15
--------------- ---------------
Net Income Available for Common
Stock $ 2.23 $ 2.01
=============== ===============

Weighted Average Common Shares:
Used in Basic Calculation 83,541,627 82,045,535
=============== ===============
Used in Diluted Calculation 85,029,131 82,900,438
=============== ===============



Contact Information

  • Analysts:
    Margaret M. Suto, 716-857-6987
    or
    Media:
    Julie Coppola Cox, 716-857-7079