National Fuel Reports Second Quarter Earnings

National Fuel Gas Company

WILLIAMSVILLE, N.Y., May 03, 2023 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the second quarter of its 2023 fiscal year and for the six months ended March 31, 2023.

FISCAL 2023 SECOND QUARTER SUMMARY

• GAAP net income of $140.9 million, or $1.53 per share, compared to GAAP net income of $167.3 million, or $1.82 per share, in the prior year.

• Adjusted operating results of $141.8 million, or $1.54 per share, compared to $154.4 million, or $1.68 per share, in the prior year (see non-GAAP reconciliation on page 2).

• Net cash provided by operating activities fiscal year to date of $711 million, an increase of $285 million or 67%, compared to $426 million in the prior year.

• E&P segment net Appalachian natural gas production of 93.2 Bcfe, an increase of 9.7 Bcfe, or 12%, higher than prior year and 3% higher than fiscal 2023 first quarter.

• Joint settlement agreement filed in Utility's Pennsylvania rate case for increase in base rates of $23 million (black box settlement) and the addition of a weather normalization mechanism. This joint settlement, pending PaPUC approval, would become effective in August.

• Company is revising its fiscal 2023 earnings guidance to a range of $5.10 to $5.40 per share, while maintaining capital expenditure guidance with a range of $830 million to $940 million.

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “The Company had strong operational results in the second quarter amidst a challenging commodity price backdrop. Over the first six months of fiscal 2023, we experienced a significant year-over-year increase in free cash flow generation, affording us the flexibility to reduce our absolute leverage levels and further strengthen our investment grade balance sheet.

“With respect to the balance of the fiscal year, our consistent approach to hedging, combined with the durability of our rate-regulated cash flows, position us well to navigate current natural gas pricing headwinds. As we look further ahead, our ongoing investment in the modernization of our rate-regulated infrastructure, along with Seneca’s growing natural gas production and an improved long-term outlook for natural gas prices, should continue to drive significant free cash flow.”

ACQUISITION OF BOLT-ON UPSTREAM ASSETS IN EASTERN DEVELOPMENT AREA

Seneca has entered into an agreement to acquire upstream assets in northwest Tioga County, Pennsylvania from Southwestern Energy for total consideration of $127.0 million, subject to certain purchase price adjustments at closing.

As part of the transaction, Seneca has agreed to purchase approximately 30,000 net acres located in Tioga and Potter counties, Pennsylvania. At closing, these assets are expected to have flowing net production of approximately 20 million cubic feet per day. The transaction is anticipated to close on June 1, 2023 and is subject to customary closing conditions.

Additionally, Seneca entered into two separate transactions to acquire approximately 6,000 bolt-on fee and lease acres, with a modest amount of production and one proved developed non-producing well, in its Lycoming and Tioga operating areas for total consideration of between $20 and $25 million, subject to closing and title adjustments.

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

		Three Months Ended								Six Months Ended
		March 31,								March 31,
(in thousands except per share amounts)			2023				2022				2023				2022
Reported GAAP Earnings		$	140,880			$	167,328			$	310,570			$	299,720
Items impacting comparability:
Unrealized (gain) loss on derivative asset (E&P)			2,471				—				2,273				—
Tax impact of unrealized (gain) loss on derivative asset			(677	)			—				(623	)			—
Unrealized (gain) loss on other investments (Corporate / All Other)			(1,068	)			2,170				(1,278	)			6,659
Tax impact of unrealized (gain) loss on other investments			224				(456	)			268				(1,398	)
Reduction of other post-retirement regulatory liability (Utility)			—				(18,533	)			—				(18,533	)
Tax impact of reduction of other post-retirement regulatory liability			—				3,892				—				3,892
Adjusted Operating Results		$	141,830			$	154,401			$	311,210			$	290,340
Reported GAAP Earnings Per Share		$	1.53			$	1.82			$	3.37			$	3.26
Items impacting comparability:
Unrealized (gain) loss on derivative asset, net of tax (E&P)			0.02				—				0.02				—
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)			(0.01	)			0.02				(0.01	)			0.05
Reduction of other post-retirement regulatory liability, net of tax (Utility)			—				(0.16	)			—				(0.16	)
Rounding			—				—				(0.01	)			—
Adjusted Operating Results Per Share		$	1.54			$	1.68			$	3.37			$	3.15

FISCAL 2023 GUIDANCE UPDATE

National Fuel is revising its fiscal 2023 earnings guidance with updated forecast assumptions and projections. The Company is now projecting that earnings, excluding items impacting comparability, will be within the range of $5.10 to $5.40 per share, a decrease of $0.30 per share from the midpoint of the Company’s prior guidance range. The decrease from the Company’s prior earnings guidance primarily reflects the impact of lower natural gas prices, as the rest of the Company's assumptions and projections are unchanged.

The Company is now assuming that NYMEX natural gas prices will average $2.50 per MMBtu for the remainder of fiscal 2023, a decrease of $0.75 per MMBtu from the $3.25 per MMBtu assumed in the previous guidance. For guidance purposes, the Company’s updated natural gas price projections approximate the current NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts.

The Exploration and Production segment’s fiscal 2023 net production guidance range of 370 to 390 Bcfe remains unchanged. Capital expenditures are expected to be within the range of $525 to $575 million, which is consistent with prior guidance. During the first half of the year, the Company operated a two-rig program with a dedicated completion crew, while also periodically utilizing a top-hole rig and an additional completion crew. As previously planned, activity levels are expected to decrease during the remainder of the fiscal year as the Company drops its top-hole rig and only utilizes its dedicated completion crew.

Seneca currently has firm sales contracts in place for approximately 92% of its projected remaining fiscal 2023 production, limiting its exposure to in-basin markets. Approximately 77% of Seneca’s expected remaining fiscal 2023 production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price.

The Company’s other guidance assumptions remain unchanged from the previous guidance. The details are outlined in the table on page 7.

DISCUSSION OF SECOND QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended March 31, 2023 is summarized in a tabular form on pages 8 and 9 of this report (earnings drivers for the six months ended March 31, 2023 are summarized on pages 10 and 11). It may be helpful to refer to those tables while reviewing this discussion.

Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

Upstream Business

Exploration and Production Segment

The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC (“Seneca”). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania.

	Three Months Ended
	March 31,
(in thousands)		2023			2022		Variance
GAAP Earnings	$	60,982		$	71,121		$	(10,139	)
Unrealized (gain) loss on derivative asset, net of tax		1,794			—			1,794
Adjusted Operating Results	$	62,776		$	71,121		$	(8,345	)
Adjusted EBITDA	$	154,574		$	158,450		$	(3,876	)

Seneca’s second quarter GAAP earnings decreased $10.1 million versus the prior year. Higher production and Appalachian realized natural gas prices were more than offset by the loss of earnings related to Seneca's crude oil production in California which was divested in June 2022. This decrease includes an unrealized loss of $2.5 million ($1.8 million after-tax) recognized from a reduction in the implied fair value of an asset related to the contingent consideration in connection with this divestiture. Excluding this loss, Seneca's earnings decreased $8.3 million.

Seneca produced 93.3 Bcfe during the second quarter, an increase of 6.2 Bcfe, or 7%, from the prior year. This increase was a result of a 9.7 Bcf increase, or 12%, in Appalachian natural gas production, partially offset by a 3.5 Bcfe decrease in production related to the aforementioned California sale.

Seneca’s average Appalachian realized natural gas price, after the impact of hedging and transportation costs, was $2.58 per Mcf, an increase of $0.02 per Mcf from the prior year. The lower Appalachian natural gas prices, before the impact of hedging, were more than offset by an increase in the weighted average hedge price compared to the prior year second quarter.

On an absolute basis, lease operating and transportation expense (“LOE”) decreased $6.8 million primarily due to the California sale. Partly offsetting that decrease were increases in LOE from higher transportation and gathering costs as a result of increased production, as well as higher water management and well maintenance costs in Appalachia. LOE expense includes $55.3 million in intercompany expense for gathering and compression services used to connect Seneca’s production to sales points along interstate pipelines. On a per unit basis, LOE was $0.71 per Mcfe, a decrease of $0.12 per Mcfe from the prior year.

General and administrative (“G&A”) expense decreased by $1.4 million largely due to the California sale. On a per unit basis, G&A expense was $0.19 per Mcfe, a decrease of $0.03 per Mcfe from the prior year. The decrease in Seneca’s other operating expenses of $2.7 million was also primarily due to the sale of Seneca’s California assets. Other taxes decreased $2.4 million largely attributable to both the impact of the sale of Seneca's California assets as well as lower Impact Fees in Pennsylvania.

Depreciation, depletion and amortization (“DD&A”) expense increased $8.1 million due to higher natural gas production and a higher per unit DD&A rate, which was driven by an increase in capitalized costs in Seneca’s full cost pool. DD&A expense was $0.63 per Mcfe, an increase of $0.05 per Mcfe from the prior year.

Midstream Businesses

Pipeline and Storage Segment

The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania.

	Three Months Ended
	March 31,
(in thousands)		2023			2022		Variance
GAAP Earnings	$	23,858		$	25,470		$	(1,612	)
Adjusted EBITDA	$	58,926		$	61,371		$	(2,445	)

The Pipeline and Storage segment’s second quarter GAAP earnings decreased $1.6 million versus the prior year primarily due to higher operation and maintenance (“O&M”) expense, partially offset by an increase in other income. O&M expense increased $2.8 million primarily due to higher personnel, pipeline integrity, and compressor maintenance costs. The increase in other income of $1.3 million was primarily attributable to a higher weighted average interest rate on intercompany short-term notes receivables.

Gathering Segment

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

	Three Months Ended
	March 31,
(in thousands)		2023			2022		Variance
GAAP Earnings	$	24,334		$	22,092		$	2,242
Adjusted EBITDA	$	46,263		$	43,056		$	3,207

The Gathering segment’s second quarter GAAP earnings increased $2.2 million versus the prior year primarily due to higher operating revenues, partially offset by higher O&M expense and higher DD&A expense. Operating revenues increased $4.4 million, or 8%, which was the result of a 5.6 Bcf increase in gathered volumes due to an increase in Seneca’s natural gas production. The increase in O&M expense of $1.2 million was due to higher compression leasing expenses, as well as increases in personnel expenses and costs for materials. DD&A expense increased $0.6 million due primarily to higher average depreciable plant in service compared to the prior year.

Downstream Business

Utility Segment

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

	Three Months Ended
	March 31,
(in thousands)		2023			2022			Variance
GAAP Earnings	$	31,720		$	53,048			$	(21,328	)
Reduction of other post-retirement regulatory liability, net of tax		—			(14,641	)			14,641
Adjusted Operating Results	$	31,720		$	38,407			$	(6,687	)
Adjusted EBITDA	$	65,820		$	77,529			$	(11,709	)

The Utility segment’s second quarter GAAP earnings decreased $21.3 million versus the prior year. Distribution's prior-year second quarter earnings included a $14.6 million (after-tax) reduction in an other post-employment benefit (“OPEB”) regulatory liability as a result of the February 2022 conclusion of a rate proceeding in Distribution's Pennsylvania service territory.

Excluding the impact of the reduction in the OPEB-related regulatory liability recorded in the prior year's second quarter, the Utility segment's second quarter earnings decreased $6.7 million, due to lower customer margins (operating revenues less purchased gas sold), along with higher O&M and interest expense, partially offset by a decrease in non-service pension and OPEB costs and higher other income.

The decline in customer margin of $8.5 million was due primarily to a $8.0 million reduction in base rates in New York as a result of a rate proceeding that became effective October 1, 2022 which temporarily reduced the Utility’s recovery of pension and OPEB expenses to zero. In addition to lowering rates, the proceeding mandated a corresponding decrease in pension and OPEB expense, most of which had been previously recorded in “below the line” non-service pension and OPEB costs. Additionally, customer margin was lower due to a decrease in customer usage related to weather that was 11% warmer than last year in Pennsylvania (where the Company's current rates are not subject to a weather normalization adjustment mechanism). These decreases were partially offset by higher revenues from the Company’s system modernization tracking mechanism in its New York service territory.

O&M expense increased by $3.0 million due primarily to higher personnel costs and an increase in legal and consulting expenses related to the current Pennsylvania rate case proceeding filed in October 2022. An increase in the accrual for uncollectible accounts, which was generally in line with the increase in the Utility segment’s revenue, also contributed to higher O&M expense for the quarter. Interest expense increased $4.2 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. The increase in other income of $1.5 million was primarily attributable to interest earned on deferred gas costs.

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated a combined net loss of less than $0.1 million in the current quarter, which was $4.4 million lower than the combined net loss of $4.4 million in the prior-year second quarter. The reduction in the net loss was primarily driven by unrealized gains on investment securities recognized in the current quarter compared to unrealized losses on investment securities recognized in the prior-year second quarter.

EARNINGS TELECONFERENCE

The Company will host a conference call on Thursday, May 4, 2023, at 11 a.m. Eastern Time to discuss this announcement. To pre-register for this call (recommended), please visit https://www.netroadshow.com/events/login?show=96471e60&confld=49148. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-833–470–1428 and provide Access Code 565178. The teleconference will be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. An audio replay of the teleconference call will be available until Thursday, May 11, 2023. To access the telephone replay, dial U.S. toll free 1-866-813-9403 and provide Access Code 313864.

National Fuel is an integrated energy company reporting financial results for four operating segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. 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: 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, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; 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; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company’s ability to complete planned strategic transactions; changes in price differentials between similar quantities of natural gas 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; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas 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; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings guidance for fiscal 2023. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

The revised earnings guidance range does not include the impact of certain items that impacted the comparability of earnings during the six months ended March 31, 2023, including: (1) after-tax unrealized losses on a derivative asset, which reduced earnings by $0.02 per share; and (2) after-tax unrealized gains on other investments, which increased earnings by $0.01 per share. While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the six months ending September 30, 2023, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

	Previous FY 2023 Guidance		Updated FY 2023 Guidance
Consolidated Earnings per Share, excluding items impacting comparability	$5.35 to $5.75		$5.10 to $5.40
Consolidated Effective Tax Rate	~ 25 - 25.5%		~ 25 - 25.5%
Capital Expenditures (Millions)*
Exploration and Production	$525 - $575		$525 - $575
Pipeline and Storage	$110 - $130		$110 - $130
Gathering	$85 - $105		$85 - $105
Utility	$110 - $130		$110 - $130
Consolidated Capital Expenditures	$830 - $940		$830 - $940
Exploration & Production Segment Guidance**
Commodity Price Assumptions
NYMEX natural gas price	$3.25 /MMBtu		$2.50 /MMBtu
Appalachian basin spot price	$2.25 /MMBtu		$1.80 /MMBtu
Production (Bcfe)	370 to 390		370 to 390
E&P Operating Costs ($/Mcfe)
LOE	$0.67 - $0.69		$0.67 - $0.69
G&A	$0.17 - $0.19		$0.17 - $0.19
DD&A	$0.60 - $0.64		$0.60 - $0.64
Other Business Segment Guidance (Millions)
Gathering Segment Revenues	$230 - $245		$230 - $245
Pipeline and Storage Segment Revenues	$360 - $380		$360 - $380

* Capital expenditures guidance excludes capital related to recently announced acquisitions.
** Commodity price assumptions are for the remaining 6 months of the fiscal year.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED MARCH 31, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
(Thousands of Dollars)	Production				Storage				Gathering				Utility				All Other				Consolidated*
Second quarter 2022 GAAP earnings	$	71,121			$	25,470			$	22,092			$	53,048			$	(4,403	)		$	167,328
Items impacting comparability:
Reduction of other post-retirement regulatory liability														(18,533	)							(18,533	)
Tax impact of reduction of other post-retirement regulatory liability														3,892								3,892
Unrealized (gain) loss on other investments																		2,170				2,170
Tax impact of unrealized (gain) loss on other investments																		(456	)			(456	)
Second quarter 2022 adjusted operating results		71,121				25,470				22,092				38,407				(2,689	)			154,401
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		19,077																				19,077
Higher (lower) crude oil production		(28,690	)																			(28,690	)
Higher (lower) realized natural gas prices, after hedging		(1,289	)																			(1,289	)
Higher (lower) other operating revenues		(2,580	)																			(2,580	)
Midstream Revenues
Higher (lower) operating revenues										3,458												3,458
Downstream Margins***
Impact of usage and weather														(2,919	)							(2,919	)
Impact of new rates****														(6,333	)							(6,333	)
System modernization tracker revenues														1,729								1,729
Operating Expenses
Lower (higher) lease operating and transportation expenses		5,344																				5,344
Lower (higher) operating expenses		3,184				(2,241	)			(920	)			(1,718	)							(1,695	)
Lower (higher) property, franchise and other taxes		1,872																				1,872
Lower (higher) depreciation / depletion		(6,366	)							(439	)											(6,805	)
Other Income (Expense)
(Higher) lower other deductions		1,032				927								5,517				562				8,038
(Higher) lower interest expense														(3,395	)			1,917				(1,478	)
Income Taxes
Lower (higher) income tax expense / effective tax rate		35				(60	)			(224	)			806				(205	)			352
All other / rounding		36				(238	)			367				(374	)			(443	)			(652	)
Second quarter 2023 adjusted operating results		62,776				23,858				24,334				31,720				(858	)			141,830
Items impacting comparability:
Unrealized gain (loss) on derivative asset		(2,471	)																			(2,471	)
Tax impact of unrealized gain (loss) on derivative asset		677																				677
Unrealized gain (loss) on other investments																		1,068				1,068
Tax impact of unrealized gain (loss) on other investments																		(224	)			(224	)
Second quarter 2023 GAAP earnings	$	60,982			$	23,858			$	24,334			$	31,720			$	(14	)		$	140,880
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED MARCH 31, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
	Production				Storage				Gathering				Utility				All Other				Consolidated*
Second quarter 2022 GAAP earnings per share	$	0.77			$	0.28			$	0.24			$	0.58			$	(0.05	)		$	1.82
Items impacting comparability:
Reduction of other post-retirement liability, net of tax														(0.16	)							(0.16	)
Unrealized (gain) loss on other investments, net of tax																		0.02				0.02
Second quarter 2022 adjusted operating results per share		0.77				0.28				0.24				0.42				(0.03	)			1.68
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		0.21																				0.21
Higher (lower) crude oil production		(0.31	)																			(0.31	)
Higher (lower) realized natural gas prices, after hedging		(0.01	)																			(0.01	)
Higher (lower) other operating revenues		(0.03	)																			(0.03	)
Midstream Revenues
Higher (lower) operating revenues										0.04												0.04
Downstream Margins***
Impact of usage and weather														(0.03	)							(0.03	)
Impact of new rates****														(0.07	)							(0.07	)
System modernization tracker revenues														0.02								0.02
Operating Expenses
Lower (higher) lease operating and transportation expenses		0.06																				0.06
Lower (higher) operating expenses		0.03				(0.02	)			(0.01	)			(0.02	)							(0.02	)
Lower (higher) property, franchise and other taxes		0.02																				0.02
Lower (higher) depreciation / depletion		(0.07	)							—												(0.07	)
Other Income (Expense)
(Higher) lower other deductions		0.01				0.01								0.06				0.01				0.09
(Higher) lower interest expense														(0.04	)			0.02				(0.02	)
Income Taxes
Lower (higher) income tax expense / effective tax rate		—				—				—				0.01				—				0.01
All other / rounding		—				(0.01	)			(0.01	)			—				(0.01	)			(0.03	)
Second quarter 2023 adjusted operating results per share		0.68				0.26				0.26				0.35				(0.01	)			1.54
Items impacting comparability:
Unrealized gain (loss) on derivative asset, net of tax		(0.02	)																			(0.02	)
Unrealized gain (loss) on other investments, net of tax																		0.01				0.01
Second quarter 2023 GAAP earnings per share	$	0.66			$	0.26			$	0.26			$	0.35			$	—			$	1.53
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
SIX MONTHS ENDED MARCH 31, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
(Thousands of Dollars)	Production				Storage				Gathering				Utility				All Other				Consolidated*
Six months ended March 31, 2022 GAAP earnings	$	133,490			$	50,637			$	45,229			$	75,178			$	(4,814	)		$	299,720
Items impacting comparability:
Reduction of other post-retirement regulatory liability														(18,533	)							(18,533	)
Tax impact of reduction of other post-retirement regulatory liability														3,892								3,892
Unrealized (gain) loss on other investments																		6,659				6,659
Tax impact of unrealized (gain) loss on other investments																		(1,398	)			(1,398	)
Six months ended March 31, 2022 adjusted operating results		133,490				50,637				45,229				60,537				447				290,340
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		36,513																				36,513
Higher (lower) crude oil production		(56,128	)																			(56,128	)
Higher (lower) realized natural gas prices, after hedging		34,518																				34,518
Higher (lower) other operating revenues		(2,601	)																			(2,601	)
Midstream Revenues
Higher (lower) operating revenues						7,119				6,766												13,885
Downstream Margins***
Impact of usage and weather														348								348
Impact of new rates****														(10,059	)							(10,059	)
System modernization tracker revenues														2,597								2,597
Higher (lower) other operating revenues														1,741								1,741
Operating Expenses
Lower (higher) lease operating and transportation expenses		11,341																				11,341
Lower (higher) operating expenses		6,507				(3,700	)			(2,105	)			(4,108	)			(489	)			(3,895	)
Lower (higher) property, franchise and other taxes		891																				891
Lower (higher) depreciation / depletion		(11,147	)			(1,617	)			(690	)											(13,454	)
Other Income (Expense)
(Higher) lower other deductions		2,304				1,519				438				9,652				(3,881	)			10,032
(Higher) lower interest expense		(855	)			(852	)							(5,423	)			3,639				(3,491	)
Income Taxes
Lower (higher) income tax expense / effective tax rate		(1,137	)			(251	)			(776	)			739				(158	)			(1,583	)
All other / rounding		128				480				210				(487	)			(116	)			215
Six months ended March 31, 2023 adjusted operating results		153,824				53,335				49,072				55,537				(558	)			311,210
Items impacting comparability:
Unrealized gain (loss) on derivative asset		(2,273	)																			(2,273	)
Tax impact of unrealized gain (loss) on derivative asset		623																				623
Unrealized gain (loss) on other investments																		1,278				1,278
Tax impact of unrealized gain (loss) on other investments																		(268	)			(268	)
Six months ended March 31, 2023 GAAP earnings	$	152,174			$	53,335			$	49,072			$	55,537			$	452			$	310,570
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
SIX MONTHS ENDED MARCH 31, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
	Production				Storage				Gathering				Utility				All Other				Consolidated*
Six months ended March 31, 2022 GAAP earnings per share	$	1.45			$	0.55			$	0.49			$	0.82			$	(0.05	)		$	3.26
Items impacting comparability:
Reduction of other post-retirement regulatory liability, net of tax														(0.16	)							(0.16	)
Unrealized (gain) loss on other investments, net of tax																		0.05				0.05
Six months ended March 31, 2022 adjusted operating results per share		1.45				0.55				0.49				0.66				—				3.15
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		0.40																				0.40
Higher (lower) crude oil production		(0.61	)																			(0.61	)
Higher (lower) realized natural gas prices, after hedging		0.37																				0.37
Higher (lower) other operating revenues		(0.03	)																			(0.03	)
Midstream Revenues
Higher (lower) operating revenues						0.08				0.07												0.15
Downstream Margins***
Impact of usage and weather														—								—
Impact of new rates****														(0.11	)							(0.11	)
System modernization tracker revenues														0.03								0.03
Higher (lower) other operating revenues														0.02								0.02
Operating Expenses
Lower (higher) lease operating and transportation expenses		0.12																				0.12
Lower (higher) operating expenses		0.07				(0.04	)			(0.02	)			(0.04	)			(0.01	)			(0.04	)
Lower (higher) property, franchise and other taxes		0.01																				0.01
Lower (higher) depreciation / depletion		(0.12	)			(0.02	)			(0.01	)											(0.15	)
Other Income (Expense)
(Higher) lower other deductions		0.02				0.02				—				0.10				(0.04	)			0.10
(Higher) lower interest expense		(0.01	)			(0.01	)							(0.06	)			0.04				(0.04	)
Income Taxes
Lower (higher) income tax expense / effective tax rate		(0.01	)			—				(0.01	)			0.01				—				(0.01	)
All other / rounding		0.01				—				0.01				(0.01	)			—				0.01
Six months ended March 31, 2023 adjusted operating results per share		1.67				0.58				0.53				0.60				(0.01	)			3.37
Items impacting comparability:
Unrealized gain (loss) on derivative asset, net of tax		(0.02	)																			(0.02	)
Unrealized gain (loss) on other investments, net of tax																		0.01				0.01
Rounding																		0.01				0.01
Six months ended March 31, 2023 GAAP earnings per share	$	1.65			$	0.58			$	0.53			$	0.60			$	0.01			$	3.37
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

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		2023				2022				2023				2022
Operating Revenues:
Utility Revenues	$	406,758			$	369,092			$	718,376			$	605,776
Exploration and Production and Other Revenues		244,552				261,676				521,525				505,957
Pipeline and Storage and Gathering Revenues		65,951				70,952				136,218				136,544
		717,261				701,720				1,376,119				1,248,277
Operating Expenses:
Purchased Gas		243,839				199,592				415,035				301,219
Operation and Maintenance:
Utility		56,453				53,476				106,805				100,120
Exploration and Production and Other		31,782				49,806				58,655				95,425
Pipeline and Storage and Gathering		37,479				33,518				70,740				63,446
Property, Franchise and Other Taxes		25,367				27,717				51,572				52,219
Depreciation, Depletion and Amortization		100,964				91,245				197,564				179,823
		495,884				455,354				900,371				792,252
Operating Income		221,377				246,366				475,748				456,025
Other Income (Expense):
Other Income		2,884				10,018				9,203				8,940
Interest Expense on Long-Term Debt		(27,583	)			(30,079	)			(57,188	)			(60,209	)
Other Interest Expense		(5,861	)			(1,519	)			(9,704	)			(2,680	)
Income Before Income Taxes		190,817				224,786				418,059				402,076
Income Tax Expense		49,937				57,458				107,489				102,356
Net Income Available for Common Stock	$	140,880			$	167,328			$	310,570			$	299,720
Earnings Per Common Share
Basic	$	1.53			$	1.83			$	3.39			$	3.28
Diluted	$	1.53			$	1.82			$	3.37			$	3.26
Weighted Average Common Shares:
Used in Basic Calculation		91,794,765				91,444,638				91,686,110				91,354,488
Used in Diluted Calculation		92,256,348				92,064,711				92,264,717				92,047,467

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
	March 31,				September 30,
(Thousands of Dollars)		2023				2022
ASSETS
Property, Plant and Equipment	$	12,978,137			$	12,551,909
Less - Accumulated Depreciation, Depletion and Amortization		6,162,406				5,985,432
Net Property, Plant and Equipment		6,815,731				6,566,477
Current Assets:
Cash and Temporary Cash Investments		71,533				46,048
Hedging Collateral Deposits		—				91,670
Receivables - Net		257,965				361,626
Unbilled Revenue		60,018				30,075
Gas Stored Underground		6,554				32,364
Materials and Supplies - at average cost		45,204				40,637
Unrecovered Purchased Gas Costs		26,851				99,342
Other Current Assets		75,233				59,369
Total Current Assets		543,358				761,131
Other Assets:
Recoverable Future Taxes		104,426				106,247
Unamortized Debt Expense		8,062				8,884
Other Regulatory Assets		61,497				67,101
Deferred Charges		85,053				77,472
Other Investments		74,618				95,025
Goodwill		5,476				5,476
Prepaid Pension and Post-Retirement Benefit Costs		224,701				196,597
Fair Value of Derivative Financial Instruments		42,424				9,175
Other		1,896				2,677
Total Other Assets		608,153				568,654
Total Assets	$	7,967,242			$	7,896,262
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and
Outstanding - 91,795,080 Shares and 91,478,064 Shares, Respectively	$	91,795			$	91,478
Paid in Capital		1,031,341				1,027,066
Earnings Reinvested in the Business		1,810,454				1,587,085
Accumulated Other Comprehensive Loss		(54,864	)			(625,733	)
Total Comprehensive Shareholders' Equity		2,878,726				2,079,896
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs		2,085,235				2,083,409
Total Capitalization		4,963,961				4,163,305
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper		410,000				60,000
Current Portion of Long-Term Debt		—				549,000
Accounts Payable		119,497				178,945
Amounts Payable to Customers		2,830				419
Dividends Payable		43,602				43,452
Interest Payable on Long-Term Debt		14,303				17,376
Customer Advances		—				26,108
Customer Security Deposits		34,382				24,283
Other Accruals and Current Liabilities		257,923				257,327
Fair Value of Derivative Financial Instruments		34,763				785,659
Total Current and Accrued Liabilities		917,300				1,942,569
Other Liabilities:
Deferred Income Taxes		1,000,526				698,229
Taxes Refundable to Customers		354,274				362,098
Cost of Removal Regulatory Liability		265,626				259,947
Other Regulatory Liabilities		189,378				188,803
Other Post-Retirement Liabilities		2,977				3,065
Asset Retirement Obligations		160,910				161,545
Other Liabilities		112,290				116,701
Total Other Liabilities		2,085,981				1,790,388
Commitments and Contingencies		—				—
Total Capitalization and Liabilities	$	7,967,242			$	7,896,262

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Six Months Ended
		March 31,
(Thousands of Dollars)			2023				2022
Operating Activities:
Net Income Available for Common Stock		$	310,570			$	299,720
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation, Depletion and Amortization			197,564				179,823
Deferred Income Taxes			80,745				94,212
Stock-Based Compensation			11,286				10,631
Reduction of Other Post-Retirement Regulatory Liability			—				(18,533	)
Other			10,758				14,494
Change in:
Receivables and Unbilled Revenue			71,760				(166,584	)
Gas Stored Underground and Materials, Supplies and Emission Allowances			21,243				32,040
Unrecovered Purchased Gas Costs			72,491				29,377
Other Current Assets			(15,864	)			(8,605	)
Accounts Payable			(29,169	)			2,006
Amounts Payable to Customers			2,411				3,401
Customer Advances			(26,108	)			(17,223	)
Customer Security Deposits			10,099				1,474
Other Accruals and Current Liabilities			28,741				11,164
Other Assets			(26,901	)			(32,659	)
Other Liabilities			(8,417	)			(9,119	)
Net Cash Provided by Operating Activities		$	711,209			$	425,619
Investing Activities:
Capital Expenditures		$	(496,362	)		$	(415,415	)
Net Proceeds from Sale of Oil and Gas Producing Properties			—				13,525
Deposit Paid for Upstream Assets			(12,700	)			—
Sale of Fixed Income Mutual Fund Shares in Grantor Trust			10,000				30,000
Other			14,413				13,689
Net Cash Used in Investing Activities		$	(484,649	)		$	(358,201	)
Financing Activities:
Proceeds from Issuance of Short-Term Note Payable to Bank		$	250,000			$	—
Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper			100,000				59,500
Reduction of Long-Term Debt			(549,000	)			—
Dividends Paid on Common Stock			(87,051	)			(83,091	)
Net Repurchases of Common Stock			(6,694	)			(9,026	)
Net Cash Used in Financing Activities		$	(292,745	)		$	(32,617	)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			(66,185	)			34,801
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			137,718				120,138
Cash, Cash Equivalents, and Restricted Cash at March 31		$	71,533			$	154,939

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		2023				2022			Variance					2023			2022		Variance
Total Operating Revenues	$	244,552			$	261,593			$	(17,041	)		$	521,525		$	505,791		$	15,734
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense		17,435				18,798				(1,363	)			33,033			36,553			(3,520	)
Lease Operating and Transportation Expense		65,783				72,548				(6,765	)			127,328			141,684			(14,356	)
All Other Operation and Maintenance Expense		2,089				4,756				(2,667	)			4,612			9,328			(4,716	)
Property, Franchise and Other Taxes		4,671				7,041				(2,370	)			11,647			12,775			(1,128	)
Depreciation, Depletion and Amortization		58,605				50,547				8,058				114,164			100,054			14,110
		148,583				153,690				(5,107	)			290,784			300,394			(9,610	)
Operating Income		95,969				107,903				(11,934	)			230,741			205,397			25,344
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit		347				(186	)			533				694			(372	)		1,066
Interest and Other Income		(1,623	)			75				(1,698	)			(292	)		131			(423	)
Interest Expense		(12,186	)			(12,206	)			20				(25,420	)		(24,338	)		(1,082	)
Income Before Income Taxes		82,507				95,586				(13,079	)			205,723			180,818			24,905
Income Tax Expense		21,525				24,465				(2,940	)			53,549			47,328			6,221
Net Income	$	60,982			$	71,121			$	(10,139	)		$	152,174		$	133,490		$	18,684
Net Income Per Share (Diluted)	$	0.66			$	0.77			$	(0.11	)		$	1.65		$	1.45		$	0.20

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		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	64,223			$	67,795			$	(3,572	)		$	131,844		$	129,342		$	2,502
Intersegment Revenues		30,880				27,602				3,278				60,915			54,405			6,510
Total Operating Revenues		95,103				95,397				(294	)			192,759			183,747			9,012
Operating Expenses:
Purchased Gas		462				989				(527	)			887			1,437			(550	)
Operation and Maintenance		27,275				24,438				2,837				51,294			46,611			4,683
Property, Franchise and Other Taxes		8,440				8,599				(159	)			17,123			17,180			(57	)
Depreciation, Depletion and Amortization		17,728				17,294				434				35,142			33,095			2,047
		53,905				51,320				2,585				104,446			98,323			6,123
Operating Income		41,198				44,077				(2,879	)			88,313			85,424			2,889
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Credit		1,330				767				563				2,660			1,534			1,126
Interest and Other Income		958				192				766				2,822			1,595			1,227
Interest Expense		(10,877	)			(10,618	)			(259	)			(21,829	)		(20,750	)		(1,079	)
Income Before Income Taxes		32,609				34,418				(1,809	)			71,966			67,803			4,163
Income Tax Expense		8,751				8,948				(197	)			18,631			17,166			1,465
Net Income	$	23,858			$	25,470			$	(1,612	)		$	53,335		$	50,637		$	2,698
Net Income Per Share (Diluted)	$	0.26			$	0.28			$	(0.02	)		$	0.58		$	0.55		$	0.03
	Three Months Ended												Six Months Ended
	March 31,												March 31,
GATHERING SEGMENT		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	1,728			$	3,157			$	(1,429	)		$	4,374		$	7,202		$	(2,828	)
Intersegment Revenues		55,253				49,447				5,806				109,020			97,627			11,393
Total Operating Revenues		56,981				52,604				4,377				113,394			104,829			8,565
Operating Expenses:
Operation and Maintenance		10,715				9,551				1,164				20,403			17,739			2,664
Property, Franchise and Other Taxes		3				(3	)			6				14			2			12
Depreciation, Depletion and Amortization		8,918				8,362				556				17,626			16,753			873
		19,636				17,910				1,726				38,043			34,494			3,549
Operating Income		37,345				34,694				2,651				75,351			70,335			5,016
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit		37				(56	)			93				75			(112	)		187
Interest and Other Income		225				18				207				395			27			368
Interest Expense		(3,900	)			(4,071	)			171				(7,943	)		(8,219	)		276
Income Before Income Taxes		33,707				30,585				3,122				67,878			62,031			5,847
Income Tax Expense		9,373				8,493				880				18,806			16,802			2,004
Net Income	$	24,334			$	22,092			$	2,242			$	49,072		$	45,229		$	3,843
Net Income Per Share (Diluted)	$	0.26			$	0.24			$	0.02			$	0.53		$	0.49		$	0.04

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
DOWNSTREAM BUSINESS
	Three Months Ended												Six Months Ended
(Thousands of Dollars, except per share amounts)	March 31,												March 31,
UTILITY SEGMENT		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	406,758			$	369,092			$	37,666			$	718,376		$	605,776		$	112,600
Intersegment Revenues		358				110				248				420			184			236
Total Operating Revenues		407,116				369,202				37,914				718,796			605,960			112,836
Operating Expenses:
Purchased Gas		271,881				225,469				46,412				470,301			352,680			117,621
Operation and Maintenance		57,292				54,249				3,043				108,568			101,710			6,858
Property, Franchise and Other Taxes		12,123				11,955				168				22,531			22,013			518
Depreciation, Depletion and Amortization		15,553				14,997				556				30,428			29,827			601
		356,849				306,670				50,179				631,828			506,230			125,598
Operating Income		50,267				62,532				(12,265	)			86,968			99,730			(12,762	)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit		(5	)			13,023				(13,028	)			(13	)		8,697			(8,710	)
Interest and Other Income		1,769				289				1,480				3,211			813			2,398
Interest Expense		(9,709	)			(5,504	)			(4,205	)			(17,752	)		(11,028	)		(6,724	)
Income Before Income Taxes		42,322				70,340				(28,018	)			72,414			98,212			(25,798	)
Income Tax Expense		10,602				17,292				(6,690	)			16,877			23,034			(6,157	)
Net Income	$	31,720			$	53,048			$	(21,328	)		$	55,537		$	75,178		$	(19,641	)
Net Income Per Share (Diluted)	$	0.35			$	0.58			$	(0.23	)		$	0.60		$	0.82		$	(0.22	)

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		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	—			$	—			$	—			$	—		$	—		$	—
Intersegment Revenues		—				—				—				—		$	6		$	(6	)
Total Operating Revenues		—				—				—				—			6			(6	)
Operating Expenses:
Purchased Gas		—				—				—				—			6			(6	)
Operation and Maintenance		—				—				—				21			5			16
		—				—				—				21			11			10
Operating Loss		—				—				—				(21	)		(5	)		(16	)
Other Income (Expense):
Interest and Other Income		(62	)			—				(62	)			(387	)		2			(389	)
Interest Expense		(28	)			—				(28	)			(49	)		—			(49	)
Loss before Income Taxes		(90	)			—				(90	)			(457	)		(3	)		(454	)
Income Tax Expense (Benefit)		(21	)			—				(21	)			(107	)		4			(111	)
Net Loss	$	(69	)			—				(69	)			(350	)		(7	)		(343	)
Net Loss Per Share (Diluted)	$	—				—			$	—			$	—			—		$	0.00
	Three Months Ended												Six Months Ended
	March 31,												March 31,
CORPORATE		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	—			$	83			$	(83	)		$	—		$	166		$	(166	)
Intersegment Revenues		1,153				1,082				71				2,304			2,165			139
Total Operating Revenues		1,153				1,165				(12	)			2,304			2,331			(27	)
Operating Expenses:
Operation and Maintenance		4,265				3,835				430				7,447			6,844			603
Property, Franchise and Other Taxes		130				125				5				257			249			8
Depreciation, Depletion and Amortization		160				45				115				204			94			110
		4,555				4,005				550				7,908			7,187			721
Operating Loss		(3,402	)			(2,840	)			(562	)			(5,604	)		(4,856	)		(748	)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs		(354	)			(1,017	)			663				(709	)		(2,034	)		1,325
Interest and Other Income		37,409				28,740				8,669				75,286			61,918			13,368
Interest Expense on Long-Term Debt		(27,583	)			(30,079	)			2,496				(57,188	)		(60,209	)		3,021
Other Interest Expense		(6,308	)			(947	)			(5,361	)			(11,250	)		(1,604	)		(9,646	)
Income (Loss) before Income Taxes		(238	)			(6,143	)			5,905				535			(6,785	)		7,320
Income Tax Benefit		(293	)			(1,740	)			1,447				(267	)		(1,978	)		1,711
Net Income (Loss)	$	55			$	(4,403	)		$	4,458			$	802		$	(4,807	)	$	5,609
Net Income (Loss) Per Share (Diluted)	$	—			$	(0.05	)		$	0.05			$	0.01		$	(0.05	)	$	0.06
	Three Months Ended												Six Months Ended
	March 31,												March 31,
INTERSEGMENT ELIMINATIONS		2023				2022			Variance					2023			2022		Variance
Intersegment Revenues	$	(87,644	)		$	(78,241	)		$	(9,403	)		$	(172,659	)	$	(154,387	)	$	(18,272	)
Operating Expenses:
Purchased Gas		(28,504	)			(26,866	)			(1,638	)			(56,153	)		(52,904	)		(3,249	)
Operation and Maintenance		(59,140	)			(51,375	)			(7,765	)			(116,506	)		(101,483	)		(15,023	)
		(87,644	)			(78,241	)			(9,403	)			(172,659	)		(154,387	)		(18,272	)
Operating Income		—				—				—				—			—			—
Other Income (Expense):
Interest and Other Deductions		(37,147	)			(31,827	)			(5,320	)			(74,539	)		(63,259	)		(11,280	)
Interest Expense		37,147				31,827				5,320				74,539			63,259			11,280
Net Income	$	—			$	—			$	—			$	—		$	—		$	—
Net Income Per Share (Diluted)	$	—			$	—			$	—			$	—		$	—		$	—

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
	Three Months Ended									Six Months Ended
	March 31,									March 31,
	(Unaudited)									(Unaudited)
							Increase									Increase
		2023			2022		(Decrease)				2023			2022		(Decrease)
Capital Expenditures:
Exploration and Production	$	155,112	(1)	$	134,748	(3)	$	20,364		$	323,617	(1)(2)	$	273,960	(3)(4)	$	49,657
Pipeline and Storage		16,838	(1)		14,404	(3)		2,434			33,265	(1)(2)		38,465	(3)(4)		(5,200	)
Gathering		20,788	(1)		11,055	(3)		9,733			34,081	(1)(2)		19,975	(3)(4)		14,106
Utility		23,942	(1)		23,925	(3)		17			49,230	(1)(2)		43,308	(3)(4)		5,922
Total Reportable Segments		216,680			184,132			32,548			440,193			375,708			64,485
All Other		—			—			—			—			—			—
Corporate		391			271			120			403			496			(93	)
Total Capital Expenditures	$	217,071		$	184,403		$	32,668		$	440,596		$	376,204		$	64,392

(1)	Capital expenditures for the quarter and six months ended March 31, 2023, include accounts payable and accrued liabilities related to capital expenditures of $56.1 million, $2.2 million, $2.0 million, and $4.2 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, 2023, since they represent non-cash investing activities at that date.
(2)	Capital expenditures for the six months ended March 31, 2023, exclude capital expenditures of $83.0 million, $15.2 million, $10.7 million and $11.4 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, 2022 and paid during the six months ended March 31, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, 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, 2023.
(3)	Capital expenditures for the quarter and six months ended March 31, 2022, include accounts payable and accrued liabilities related to capital expenditures of $52.5 million, $3.5 million, $3.4 million, and $4.1 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, 2022, since they represent non-cash investing activities at that date.
(4)	Capital expenditures for the six months ended March 31, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 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, 2021 and paid during the six months ended March 31, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, 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, 2022.

DEGREE DAYS
							Percent Colder
							(Warmer) Than:
Three Months Ended March 31,	Normal		2023		2022		Normal (1)			Last Year (1)
Buffalo, NY	3,290		2,820		3,161		(14.3	)		(10.8	)
Erie, PA	3,108		2,645		2,973		(14.9	)		(11.0	)
Six Months Ended March 31,
Buffalo, NY	5,543		4,868		4,865		(12.2	)		0.1
Erie, PA	5,152		4,632		4,533		(10.1	)		2.2

⁽¹⁾   Percents compare actual 2023 degree days to normal degree days and actual 2023 degree days to actual 2022 degree days.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
		Three Months Ended										Six Months Ended
		March 31,										March 31,
								Increase										Increase
			2023			2022		(Decrease)					2023			2022		(Decrease)
Gas Production/Prices:
Production (MMcf)
Appalachia			93,241			83,565			9,676				183,815			164,954			18,861
West Coast			—			397			(397	)			—			805			(805	)
Total Production			93,241			83,962			9,279				183,815			165,759			18,056
Average Prices (Per Mcf)
Appalachia		$	2.79		$	3.97		$	(1.18	)		$	3.77		$	4.18		$	(0.41	)
West Coast		N/M				10.04		N/M				N/M				9.91		N/M
Weighted Average			2.79			4.00			(1.21	)			3.77			4.21			(0.44	)
Weighted Average after Hedging			2.58			2.60			(0.02	)			2.80			2.56			0.24
Oil Production/Prices:
Production (Thousands of Barrels)
Appalachia			7			1			6				15			1			14
West Coast			—			522			(522	)			—			1,070			(1,070	)
Total Production			7			523			(516	)			15			1,071			(1,056	)
Average Prices (Per Barrel)
Appalachia		$	74.12		$	78.32		$	(4.20	)		$	78.25		$	75.38		$	2.87
West Coast		N/M				94.95		N/M				N/M				85.93		N/M
Weighted Average			74.12			94.93			(20.81	)			78.25			85.93			(7.68	)
Weighted Average after Hedging			74.12			70.45			3.67				78.25			67.30			10.95
Total Production (MMcfe)			93,283			87,100			6,183				183,905			172,185			11,720
Selected Operating Performance Statistics:
General & Administrative Expense per Mcfe (1)		$	0.19		$	0.22		$	(0.03	)		$	0.18		$	0.21		$	(0.03	)
Lease Operating and Transportation Expense per Mcfe (1)(2)		$	0.71		$	0.83		$	(0.12	)		$	0.69		$	0.82		$	(0.13	)
Depreciation, Depletion & Amortization per Mcfe (1)		$	0.63		$	0.58		$	0.05			$	0.62		$	0.58		$	0.04

N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022)
(1)	Refer to page 15 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
(2)	Amounts include transportation expense of $0.58 and $0.55 per Mcfe for the three months ended March 31, 2023 and March 31, 2022, respectively. Amounts include transportation expense of $0.58 and $0.56 per Mcfe for the six months ended March 31, 2023 and March 31, 2022, respectively.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for Remaining Six Months of Fiscal 2023		Volume					Average Hedge Price
Gas Swaps
NYMEX		65,640,000		MMBTU		$	2.88 / MMBTU
No Cost Collars		47,880,000		MMBTU		$	3.43 / MMBTU (Floor) / $4.13 / MMBTU (Ceiling)
Fixed Price Physical Sales		41,700,181		MMBTU		$	2.25 / MMBTU
Total		155,220,181		MMBTU
Hedging Summary for Fiscal 2024		Volume					Average Hedge Price
Gas Swaps
NYMEX		119,180,000		MMBTU		$	3.28 / MMBTU
No Cost Collars		65,280,000		MMBTU		$	3.33 / MMBTU (Floor) / $4.17 / MMBTU (Ceiling)
Fixed Price Physical Sales		73,687,093		MMBTU		$	2.42 / MMBTU
Total		258,147,093		MMBTU
Hedging Summary for Fiscal 2025		Volume					Average Hedge Price
Gas Swaps
NYMEX		59,560,000		MMBTU		$	3.39 / MMBTU
No Cost Collars		43,960,000		MMBTU		$	3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)
Fixed Price Physical Sales		70,289,781		MMBTU		$	2.46 / MMBTU
Total		173,809,781		MMBTU
Hedging Summary for Fiscal 2026		Volume					Average Hedge Price
Gas Swaps
NYMEX		15,520,000		MMBTU		$	4.03 / MMBTU
No Cost Collars		42,720,000		MMBTU		$	3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
Fixed Price Physical Sales		62,893,544		MMBTU		$	2.37 / MMBTU
Total		121,133,544		MMBTU
Hedging Summary for Fiscal 2027		Volume					Average Hedge Price
Gas Swaps
NYMEX		12,000,000		MMBTU		$	4.29 / MMBTU
No Cost Collars		3,560,000		MMBTU		$	3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
Fixed Price Physical Sales		45,517,002		MMBTU		$	2.39 / MMBTU
Total		61,077,002		MMBTU
Hedging Summary for Fiscal 2028		Volume					Average Hedge Price
Gas Swaps
NYMEX		1,000,000		MMBTU		$	4.29 / MMBTU
Fixed Price Physical Sales		11,850,451		MMBTU		$	2.48 / MMBTU
Total		12,850,451		MMBTU
Hedging Summary for Fiscal 2029		Volume					Average Hedge Price
Fixed Price Physical Sales		766,673		MMBTU		$	2.54 / MMBTU

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
		2023		2022		(Decrease)			2023		2022		(Decrease)
Firm Transportation - Affiliated		48,147		46,459		1,688			86,616		74,656		11,960
Firm Transportation - Non-Affiliated		182,934		185,571		(2,637	)		369,089		350,967		18,122
Interruptible Transportation		619		752		(133	)		1,927		1,520		407
		231,700		232,782		(1,082	)		457,632		427,143		30,489
Gathering Volume - (MMcf)
		Three Months Ended							Six Months Ended
		March 31,							March 31,
						Increase							Increase
		2023		2022		(Decrease)			2023		2022		(Decrease)
Gathered Volume		109,344		103,736		5,608			217,371		204,829		12,542
Utility Throughput - (MMcf)
		Three Months Ended							Six Months Ended
		March 31,							March 31,
						Increase							Increase
		2023		2022		(Decrease)			2023		2022		(Decrease)
Retail Sales:
Residential Sales		27,884		32,026		(4,142	)		48,037		49,521		(1,484	)
Commercial Sales		4,384		4,923		(539	)		7,378		7,466		(88	)
Industrial Sales		267		268		(1	)		418		392		26
		32,535		37,217		(4,682	)		55,833		57,379		(1,546	)
Transportation		22,788		25,745		(2,957	)		41,098		43,338		(2,240	)
		55,323		62,962		(7,639	)		96,931		100,717		(3,786	)

 

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 Adjusted Operating Results, Adjusted EBITDA and free cash flow, 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 or 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 Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the six months ended March 31, 2023 and 2022:

		Three Months Ended								Six Months Ended
		March 31,								March 31,
(in thousands except per share amounts)			2023				2022				2023				2022
Reported GAAP Earnings		$	140,880			$	167,328			$	310,570			$	299,720
Items impacting comparability:
Unrealized (gain) loss on derivative asset (E&P)			2,471				—				2,273				—
Tax impact of unrealized (gain) loss on derivative asset			(677	)			—				(623	)			—
Unrealized (gain) loss on other investments (Corporate / All Other)			(1,068	)			2,170				(1,278	)			6,659
Tax impact of unrealized (gain) loss on other investments			224				(456	)			268				(1,398	)
Reduction of other post-retirement regulatory liability (Utility)			—				(18,533	)			—				(18,533	)
Tax impact of reduction of other post-retirement regulatory liability			—				3,892				—				3,892
Adjusted Operating Results		$	141,830			$	154,401			$	311,210			$	290,340
Reported GAAP Earnings Per Share		$	1.53			$	1.82			$	3.37			$	3.26
Items impacting comparability:
Unrealized (gain) loss on derivative asset, net of tax (E&P)			0.02				—				0.02				—
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)			(0.01	)			0.02				(0.01	)			0.05
Reduction of other post-retirement regulatory liability, net of tax (Utility)			—				(0.16	)			—				(0.16	)
Rounding			—				—				(0.01	)			—
Adjusted Operating Results Per Share		$	1.54			$	1.68			$	3.37			$	3.15

Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the six months ended March 31, 2023 and 2022:

		Three Months Ended								Six Months Ended
		March 31,								March 31,
(in thousands)			2023				2022				2023				2022
Reported GAAP Earnings		$	140,880			$	167,328			$	310,570			$	299,720
Depreciation, Depletion and Amortization			100,964				91,245				197,564				179,823
Other (Income) Deductions			(2,884	)			(10,018	)			(9,203	)			(8,940	)
Interest Expense			33,444				31,598				66,892				62,889
Income Taxes			49,937				57,458				107,489				102,356
Adjusted EBITDA		$	322,341			$	337,611			$	673,312			$	635,848
Adjusted EBITDA by Segment
Pipeline and Storage Adjusted EBITDA		$	58,926			$	61,371			$	123,455			$	118,519
Gathering Adjusted EBITDA			46,263				43,056				92,977				87,088
Total Midstream Businesses Adjusted EBITDA			105,189				104,427				216,432				205,607
Exploration and Production Adjusted EBITDA			154,574				158,450				344,905				305,451
Utility Adjusted EBITDA			65,820				77,529				117,396				129,557
Corporate and All Other Adjusted EBITDA			(3,242	)			(2,795	)			(5,421	)			(4,767	)
Total Adjusted EBITDA		$	322,341			$	337,611			$	673,312			$	635,848

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES SEGMENT ADJUSTED EBITDA
		Three Months Ended								Six Months Ended
		March 31,								March 31,
(in thousands)			2023				2022				2023				2022
Exploration and Production Segment
Reported GAAP Earnings		$	60,982			$	71,121			$	152,174			$	133,490
Depreciation, Depletion and Amortization			58,605				50,547				114,164				100,054
Other (Income) Deductions			1,276				111				(402	)			241
Interest Expense			12,186				12,206				25,420				24,338
Income Taxes			21,525				24,465				53,549				47,328
Adjusted EBITDA		$	154,574			$	158,450			$	344,905			$	305,451
Pipeline and Storage Segment
Reported GAAP Earnings		$	23,858			$	25,470			$	53,335			$	50,637
Depreciation, Depletion and Amortization			17,728				17,294				35,142				33,095
Other (Income) Deductions			(2,288	)			(959	)			(5,482	)			(3,129	)
Interest Expense			10,877				10,618				21,829				20,750
Income Taxes			8,751				8,948				18,631				17,166
Adjusted EBITDA		$	58,926			$	61,371			$	123,455			$	118,519
Gathering Segment
Reported GAAP Earnings		$	24,334			$	22,092			$	49,072			$	45,229
Depreciation, Depletion and Amortization			8,918				8,362				17,626				16,753
Other (Income) Deductions			(262	)			38				(470	)			85
Interest Expense			3,900				4,071				7,943				8,219
Income Taxes			9,373				8,493				18,806				16,802
Adjusted EBITDA		$	46,263			$	43,056			$	92,977			$	87,088
Utility Segment
Reported GAAP Earnings		$	31,720			$	53,048			$	55,537			$	75,178
Depreciation, Depletion and Amortization			15,553				14,997				30,428				29,827
Other (Income) Deductions			(1,764	)			(13,312	)			(3,198	)			(9,510	)
Interest Expense			9,709				5,504				17,752				11,028
Income Taxes			10,602				17,292				16,877				23,034
Adjusted EBITDA		$	65,820			$	77,529			$	117,396			$	129,557
Corporate and All Other
Reported GAAP Earnings		$	(14	)		$	(4,403	)		$	452			$	(4,814	)
Depreciation, Depletion and Amortization			160				45				204				94
Other (Income) Deductions			154				4,104				349				3,373
Interest Expense			(3,228	)			(801	)			(6,052	)			(1,446	)
Income Taxes			(314	)			(1,740	)			(374	)			(1,974	)
Adjusted EBITDA		$	(3,242	)		$	(2,795	)		$	(5,421	)		$	(4,767	)

Management defines free cash flow as net cash provided by operating activities less capital expenditures. The Company is unable to provide a reconciliation of projected free cash flow as described in this release to its comparable financial measure calculated in accordance with GAAP without unreasonable efforts. This is due to our inability to reliably predict the comparable GAAP projected metrics, including operating income and total production costs, given the unknown effect, timing, and potential significance of certain income statement items.

CONTACT: Timothy J. Silverstein Treasurer 716-857-6987 Analyst Contact: Brandon J. Haspett 716-857-7697 Media Contact: Karen L. Merkel 716-857-7654