WILLIAMSVILLE, N.Y., Aug. 04, 2022 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the third quarter of its 2022 fiscal year and for the nine months ended June 30, 2022.

FISCAL 2022 THIRD QUARTER SUMMARY

  • GAAP net income of $108.2 million, or $1.17 per share, compared to GAAP net income of $86.5 million, or $0.94 per share, in the prior year, an increase of 24% per share.
  • Adjusted operating results of $141.9 million, or $1.54 per share, an increase of 66%, compared to $0.93 per share, in the prior year (see non-GAAP reconciliation on page 2).
  • Adjusted EBITDA of $318.1 million, an increase of 36%, compared to $234.2 million in the prior year (see non-GAAP reconciliation on page 25).
  • Successfully closed the sale of the Company's California assets for net cash proceeds of approximately $241 million, after customary closing adjustments, and future contingent consideration with a potential value of up to $30 million.
  • Company is revising its fiscal 2022 earnings guidance to a range of $5.85 to $5.95 per share, excluding items impacting comparability, and initiating its fiscal 2023 earnings guidance with a range of $7.25 to $7.75 per share, an increase of 27% from fiscal 2022, at the midpoint (see Guidance Summary on page 8).

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel had an excellent third quarter, with adjusted operating results increasing 66% compared to the prior year. The benefits of our integrated approach to development were evident during the quarter, with the FM100 Project driving meaningful growth in our Pipeline and Storage segment, while providing a valuable outlet for Seneca’s natural gas production. Moreover, our coordinated approach to Appalachian development, in which we own and operate 100% of our gathering infrastructure, allowed us to maximize Seneca’s production during the quarter, capitalizing on the further improved commodity price environment.”

"As we look to next year, the Company is poised for continued earnings growth and sustained free cash flow generation. Underpinned by our highly-efficient Appalachian development program, our valuable firm transportation portfolio, and a strong natural gas price outlook, we expect to continue to grow our natural gas production base, with our gathering business growing in lockstep. This, coupled with our ongoing investment in modernizing our resilient and reliable transmission, storage, and distribution infrastructure, positions the Company to deliver value through further earnings growth, deleveraging our balance sheet, and the predictable return of an increasing amount of cash to shareholders.” 

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

                 
    Three Months Ended   Nine Months Ended
    June 30,   June 30,
(in thousands except per share amounts)     2022       2021       2022       2021  
Reported GAAP Earnings   $ 108,158     $ 86,475     $ 407,879     $ 276,685  
Items impacting comparability:                
Items related to West Coast asset sale:                
  Gain on sale of West Coast assets (E&P)     (12,736 )           (12,736 )      
  Tax impact of gain on sale of West Coast assets     3,225             3,225        
  Loss from discontinuance of crude oil cash flow hedges (E&P)     44,632             44,632        
  Tax impact of loss from discontinuance of crude oil cash flow hedges     (11,303 )           (11,303 )      
  Transaction and severance costs (E&P)     9,693             9,693        
  Tax impact of transaction and severance costs     (2,455 )           (2,455 )      
  Total items impacting comparability related to West Coast asset sale     31,056             31,056        
                 
Reduction of other post-retirement regulatory liability (Utility)                 (18,533 )      
Tax impact of reduction of other post-retirement regulatory liability                 3,892        
Unrealized (gain) loss on other investments (Corporate / All Other)     3,434       (1,025 )     10,093       (575 )
Tax impact of unrealized (gain) loss on other investments     (721 )     215       (2,120 )     120  
Impairment of oil and gas properties (E&P)                       76,152  
Tax impact of impairment of oil and gas properties                       (20,980 )
Gain on sale of timber properties (Corporate / All Other)                       (51,066 )
Tax impact of gain on sale of timber properties                       14,069  
Premium paid on early redemption of debt                       15,715  
Tax impact of premium paid on early redemption of debt                       (4,321 )
Adjusted Operating Results   $ 141,927     $ 85,665     $ 432,267     $ 305,799  
                 
Reported GAAP Earnings Per Share   $ 1.17     $ 0.94     $ 4.43     $ 3.02  
Items impacting comparability:                
Items related to West Coast asset sale:                
  Gain on sale of West Coast assets, net of tax (E&P)     (0.10 )           (0.10 )      
  Loss from discontinuance of crude oil cash flow hedges, net of tax (E&P)     0.36             0.36        
  Transaction and severance costs, net of tax (E&P)     0.08             0.08        
  Total items impacting comparability related to West Coast asset sale     0.34             0.34        
                 
Reduction of other post-retirement regulatory liability, net of tax (Utility)                 (0.16 )      
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)     0.03       (0.01 )     0.08        
Impairment of oil and gas properties, net of tax (E&P)                       0.60  
Gain on sale of timber properties, net of tax (Corporate / All Other)                       (0.40 )
Premium paid on early redemption of debt, net of tax                       0.12  
Adjusted Operating Results Per Share   $ 1.54     $ 0.93     $ 4.69     $ 3.34  

DISCUSSION OF GUIDANCE UPDATE

National Fuel is revising its fiscal 2022 earnings guidance range and is now projecting earnings, excluding items impacting comparability, will be within the range of $5.85 to $5.95 per share. This updated range reflects the results of the third quarter, along with updated assumptions for the balance of the year, as detailed on page 8.

The Exploration and Production segment’s fiscal 2022 net production is expected to be in the range of 350 to 355 Bcfe, an increase of 2.5 Bcfe from the prior midpoint. Seneca currently has firm sales contracts in place for approximately 90% of its projected remaining fiscal 2022 natural gas production, limiting its exposure to in-basin markets. Approximately 80% of expected remaining Appalachian production is either matched by a financial hedge or was entered into at a fixed price.

The Company is also initiating preliminary guidance for fiscal 2023 with earnings projected to be within a range of $7.25 to $7.75 per share, or $7.50 per share at the midpoint of the range, an increase of 27% from the midpoint of the fiscal 2022 guidance range. The anticipated increase in earnings is being driven largely by higher anticipated commodity price realizations, as well as forecasted growth in natural gas production and the associated impact on Gathering revenues.

Seneca’s fiscal 2023 net production is increasing to an expected range of 370 to 390 Bcfe, an increase of 27.5 Bcfe versus fiscal 2022 at the midpoint of the respective guidance ranges. When adjusting for the sale of Seneca’s California properties, fiscal 2023 production is expected to be 11% higher than fiscal 2022, at the midpoint of the respective guidance ranges.

In addition, the Company anticipates its natural gas price realizations after hedging to increase by approximately $0.62 per Mcf from its estimated fiscal 2022 realizations, driven in large part by lower expected hedge losses. Overall, Seneca has firm sales contracts in place for approximately 87% of its expected fiscal 2023 natural gas production, limiting its exposure to in-basin markets, while also having 67% supported by financial hedges, limiting exposure to potential swings in natural gas prices in fiscal 2023.

The Company’s consolidated capital expenditures in fiscal 2023 are expected to be in a range of $830 million to $940 million, an increase of $77.5 million versus the midpoint of its fiscal 2022 guidance. This preliminary guidance range incorporates planned activity, as described below, as well as anticipated inflationary impacts across all segments.

The Exploration and Production segment expects to maintain its current two-rig program for the entirety of fiscal 2023, and modestly increase completion activity relative to fiscal 2022. This increased level of completion activity is expected to be coupled with a greater share of our development program targeting the prolific Tioga County acreage. This will require incremental near-term capital expenditures in the Gathering segment to build out necessary infrastructure to support Seneca's growing production in the region.

In the Company’s regulated Pipeline and Storage and Utility segments, capital expenditures are primarily focused on modernizing existing infrastructure, which is expected to drive rate base growth in the range of 3% to 5%, on average over the next several years. These modernization efforts continue to enhance the safety and resiliency of our infrastructure and contribute to the ongoing reduction in the Company’s emissions profile.

Additional details on the Company's updated forecast assumptions and business segment guidance for fiscal 2022 and fiscal 2023 are outlined in the table on page 8.

DISCUSSION OF THIRD QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended June 30, 2022 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the nine months ended June 30, 2022 are summarized on pages 11 and 12). 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 natural gas and oil reserves, primarily in Pennsylvania.

  Three Months Ended
  June 30,
(in thousands)   2022       2021   Variance
GAAP Earnings $ 56,497     $ 39,015   $ 17,482  
Gain on sale of West Coast assets, net of tax   (9,511 )         (9,511 )
Loss from discontinuance of crude oil cash flow hedges, net of tax   33,329           33,329  
Transaction and severance costs related to West Coast asset sale, net of tax   7,238           7,238  
Adjusted Operating Results $ 87,553     $ 39,015   $ 48,538  
           
Adjusted EBITDA $ 184,622     $ 116,052   $ 68,570  

Seneca’s third quarter GAAP earnings, which increased $17.5 million versus the prior year, include several items related to the sale of its California assets. In particular, Seneca recorded a $12.7 million ($9.5 million after-tax) gain related to assets that were not subject to the full cost method of accounting. The Company also recorded a loss of $44.6 million ($33.3 million after-tax) related to the termination of its remaining crude oil derivative contracts as a result of the sale. In addition, the Company incurred transaction and severance costs of $9.7 million ($7.2 million after-tax) related to the California asset sale. Excluding these items noted above, Seneca’s earnings increased $48.5 million primarily due to higher realized natural gas and crude oil prices, higher natural gas production, and a lower effective income tax rate, all of which were partially offset by higher operating expenses and higher interest expense.

Seneca produced 92.4 Bcfe during the third quarter, an increase of 9.4 Bcfe, or 11%, from the prior year. This is a result of a 9.5 Bcf increase in natural gas production primarily due to growth from Seneca's development program in Appalachia. Seneca's crude oil production decreased 32 MBbls, or 6%, versus the prior year primarily due to natural production decline in California.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.87 per Mcf, an increase of $0.67 per Mcf from the prior year. This increase was primarily due to higher NYMEX prices and higher spot prices at local sales points in Pennsylvania. Seneca's average realized oil price, after the impact of hedging, was $77.65 per Bbl, an increase of $18.43 per Bbl compared to the prior year.

Lease operating and transportation (“LOE”) expense increased $12.8 million primarily due to higher transportation costs in Appalachia as a result of increased production, and higher steam fuel, labor, utilities, well repair and workover expenses in California. LOE expense includes $53.1 million in intercompany expense for gathering and compression services used to connect Seneca's Appalachian production to sales points along interstate pipelines. Depreciation, depletion and amortization ("DD&A") expense increased $9.3 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. Excluding the impact of the transaction and severance costs related to the sale of Seneca's California assets noted above, Seneca's other operating expenses increased $6.1 million due primarily to the accrual of estimated plugging and abandonment expenses related to certain offshore Gulf of Mexico wells that were formerly owned by the Company. Several years ago, Seneca sold those wells to an operator that has since gone bankrupt. As a result of that bankruptcy, the cost of abandoning the wells will likely revert back to Seneca.

Interest expense increased $2.6 million due primarily to a higher average amount of intercompany short-term borrowings outstanding coupled with a higher weighted average interest rate on such borrowings. The reduction in Seneca's effective income tax rate was primarily driven by the realization of the Enhanced Oil Recovery tax credit in fiscal 2022, which was not available in 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
  June 30,
(in thousands)   2022     2021   Variance
GAAP Earnings $ 26,599   $ 21,948   $ 4,651
           
Adjusted EBITDA $ 62,565   $ 53,086   $ 9,479

The Pipeline and Storage segment’s third quarter GAAP earnings increased $4.7 million versus the prior year primarily due to an increase in operating revenues, partially offset by higher operation and maintenance ("O&M") expense and higher DD&A expense. The increase in operating revenues of $11.5 million was primarily attributable to higher transportation revenues from Supply Corporation's FM100 Project, which was placed in service in December 2021. O&M expense increased $1.7 million primarily due to an increase in personnel costs, as well as higher vehicle fuel costs and compressor station maintenance costs. The increase in DD&A expense of $1.7 million was primarily attributable to incremental depreciation expense from the FM100 Project.

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 primarily delivers Seneca’s gross Appalachian production to the interstate pipeline system.

  Three Months Ended
  June 30,
(in thousands)   2022     2021   Variance
GAAP Earnings $ 24,658   $ 20,427   $ 4,231
           
Adjusted EBITDA $ 46,151   $ 39,929   $ 6,222

The Gathering segment’s third quarter GAAP earnings increased $4.2 million versus the prior year primarily due to higher operating revenues, which was partially offset by higher O&M expense. Operating revenues increased $7.3 million, or 15%, primarily driven by an 18.0 Bcf increase in gathered volumes from new wells that were brought on-line in Appalachia. The increase in O&M expense of $1.1 million was primarily due to an increase in personnel costs, higher costs for materials, and an increase in compressor station operating and preventative maintenance activity during the quarter.

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
  June 30,
(in thousands)   2022     2021   Variance
GAAP Earnings $ 4,622   $ 4,841   $ (219 )
           
Adjusted EBITDA $ 27,042   $ 29,431   $ (2,389 )

The Utility segment’s third quarter GAAP earnings were essentially flat versus the prior year as the benefit of higher customer margin (operating revenues less purchased gas sold) and a decrease in non-service post-retirement benefit costs recorded in other income (deductions) were offset by higher O&M expense. The increase in customer margin was due primarily to higher revenues from the Company's system modernization tracking mechanism in its New York service territory, partially offset by a reduction in base rates in Pennsylvania as a result of a rate proceeding in Pennsylvania that concluded in the second quarter whereby the Utility agreed to lower the amount of other post-employment benefit (“OPEB”) expense it recovers in rates. With the elimination of OPEB expenses in rates, there was also a decrease in non-service post-retirement benefit costs recorded in other income (deductions). The increase in O&M expense was primarily attributable to higher personnel costs and an increase in vehicle fuel costs.

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated a combined net loss of $4.2 million in the current year third quarter, which was a $4.4 million decrease from the combined earnings of $0.2 million generated in the prior-year third quarter. The decrease in earnings was primarily driven by unrealized losses on investment securities recognized in the current quarter compared to unrealized gains on investment securities in the prior-year third quarter.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, August 5, 2022, at 11 a.m. Eastern Time to discuss this announcement. Pre-registration is required to access the teleconference by phone in a listen-only mode by following this link: https://conferencingportals.com/event/LUMnWUbV. To access the webcast, visit the Events Calendar on the NFG Investor Relations website at investor.nationalfuelgas.com. An audio replay of the teleconference call will be available approximately two hours following the teleconference at the same website link and by phone at 800-770-2030 or 647-362-9199 using conference ID number “99543”. Both the webcast and conference call replay will be available until the close of business on Friday, August 12, 2022.

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

     
     
Analyst Contact: Brandon J. Haspett 716-857-7697
Media Contact: Karen L. Merkel 716-857-7654


 

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 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; the length and severity of the ongoing COVID-19 pandemic, including its impacts across our businesses on demand, operations, global supply chains and liquidity; 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, including disruptions due to the COVID-19 pandemic, 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; the Company's ability to successfully integrate acquired assets and achieve expected cost synergies; 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, 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 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; 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 2022 and initiating guidance for fiscal 2023. Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2022 and fiscal 2023 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 nine months ended June 30, 2022, including: (1) the after-tax gain on the sale of West Coast assets, which increased earnings by $0.10 per share; (2) the after-tax loss from the discontinuance of crude oil cash flow hedges, which reduced earnings by $0.36 per share; (3) after-tax transaction and severance costs related to the West Coast asset sale, which reduced earnings by $0.08 per share; (4) the after-tax reduction of an other post-retirement regulatory liability, which increased earnings by $0.16 per share; and (5) after-tax unrealized losses on other investments, which reduced earnings by $0.08 per share. While the Company expects to record certain adjustments to unrealized gain or loss on investments during the three months ending September 30, 2022, 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.

  Updated FY 2022 Guidance   Preliminary FY 2023 Guidance
Consolidated Earnings per Share, excluding items impacting comparability $5.85 to $5.95   $7.25 to $7.75
Consolidated Effective Tax Rate ~ 25 - 25.5%   ~ 25.5 - 26%
       
Capital Expenditures (Millions)      
Exploration and Production $525 - $550   $525 - $575
Pipeline and Storage $100 - $120   $110 - $130
Gathering $50 - $60   $85 - $105
Utility $100 - $110   $110 - $130
Consolidated Capital Expenditures $775 - $840   $830 - $940
       
Exploration & Production Segment Guidance*      
       
Commodity Price Assumptions      
NYMEX natural gas price (Oct - Mar | Apr - Sep) $7.75 /MMBtu   $7.50 /MMBtu l $5.00 /MMBtu
Appalachian basin spot price (Oct - Mar | Apr - Sep) $7.20 /MMBtu   $6.50 /MMBtu l $3.90 /MMBtu
       
Production (Bcfe) 350 to 355   370 to 390
       
E&P Operating Costs ($/Mcfe)      
LOE $0.70 - $0.71   $0.67 - $0.69
G&A ~$0.18   $0.17 - $0.19
DD&A $0.57 - $0.59   $0.60 - $0.64
       
Other Business Segment Guidance (Millions)      
Gathering Segment Revenues $210 - $220   $235 - $250
Pipeline and Storage Segment Revenues $365 - $375   $360 - $380

* Fiscal 2022 commodity price assumptions and operating costs are for the remaining 3 months of the fiscal year.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED JUNE 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
(Thousands of Dollars) Production   Storage   Gathering   Utility   All Other   Consolidated*
                       
Third quarter 2021 GAAP earnings $ 39,015     $ 21,948     $ 20,427     $ 4,841     $ 244     $ 86,475  
Items impacting comparability:                      
Unrealized (gain) loss on other investments                   (1,025 )     (1,025 )
Tax impact of unrealized (gain) loss on other investments                   215       215  
Third quarter 2021 adjusted operating results   39,015       21,948       20,427       4,841       (566 )     85,665  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   16,589                       16,589  
Higher (lower) crude oil production   (1,499 )                     (1,499 )
Higher (lower) realized natural gas prices, after hedging   47,404                       47,404  
Higher (lower) realized crude oil prices, after hedging   7,663                       7,663  
Midstream Revenues                      
Higher (lower) operating revenues       9,174       5,747               14,921  
Downstream Margins***                      
Impact of usage and weather               232           232  
Impact of new rates               (1,105 )         (1,105 )
System modernization tracker revenues               1,345           1,345  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (10,129 )                     (10,129 )
Lower (higher) operating expenses   (4,806 )     (1,360 )     (833 )     (2,629 )     1,616       (8,012 )
Lower (higher) depreciation / depletion   (7,308 )     (1,353 )                 (8,661 )
Other Income (Expense)                      
(Higher) lower other deductions               1,938       (1,781 )     157  
(Higher) lower interest expense   (2,039 )     (587 )         (508 )     965       (2,169 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   3,267       (658 )     (317 )     388       (1,715 )     965  
All other / rounding   (604 )     (565 )     (366 )     120       (24 )     (1,439 )
Third quarter 2022 adjusted operating results   87,553       26,599       24,658       4,622       (1,505 )     141,927  
Items impacting comparability:                      
Gain on sale of West Coast assets   12,736                       12,736  
Tax impact of gain on sale of West Coast assets   (3,225 )                     (3,225 )
Loss from discontinuance of crude oil cash flow hedges   (44,632 )                     (44,632 )
Tax impact of loss from discontinuance of crude oil cash flow hedges   11,303                       11,303  
Transaction and severance costs related to West Coast asset sale   (9,693 )                     (9,693 )
Tax impact of transaction and severance costs related to West Coast asset sale   2,455                       2,455  
Unrealized gain (loss) on other investments                   (3,434 )     (3,434 )
Tax impact of unrealized gain (loss) on other investments                   721       721  
Third quarter 2022 GAAP earnings $ 56,497     $ 26,599     $ 24,658     $ 4,622     $ (4,218 )   $ 108,158  
                       
* 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.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED JUNE 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
  Production   Storage   Gathering   Utility   All Other   Consolidated*
                       
Third quarter 2021 GAAP earnings per share $ 0.43     $ 0.24     $ 0.22     $ 0.05     $     $ 0.94  
Items impacting comparability:                      
Unrealized (gain) loss on other investments, net of tax                   (0.01 )     (0.01 )
Third quarter 2021 adjusted operating results per share   0.43       0.24       0.22       0.05       (0.01 )     0.93  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   0.18                       0.18  
Higher (lower) crude oil production   (0.02 )                     (0.02 )
Higher (lower) realized natural gas prices, after hedging   0.51                       0.51  
Higher (lower) realized crude oil prices, after hedging   0.08                       0.08  
Midstream Revenues                      
Higher (lower) operating revenues       0.10       0.06               0.16  
Downstream Margins***                      
Impact of usage and weather                          
Impact of new rates               (0.01 )         (0.01 )
System modernization tracker revenues               0.01           0.01  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (0.11 )                     (0.11 )
Lower (higher) operating expenses   (0.05 )     (0.01 )     (0.01 )     (0.03 )     0.02       (0.08 )
Lower (higher) depreciation / depletion   (0.08 )     (0.01 )                 (0.09 )
Other Income (Expense)                      
(Higher) lower other deductions               0.02       (0.02 )      
(Higher) lower interest expense   (0.02 )     (0.01 )         (0.01 )     0.01       (0.03 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   0.04       (0.01 )                 (0.02 )     0.01  
All other / rounding   (0.01 )     (0.01 )           0.02              
Third quarter 2022 adjusted operating results per share   0.95       0.29       0.27       0.05       (0.02 )     1.54  
Items impacting comparability:                      
Gain on sale of West Coast assets, net of tax   0.10                       0.10  
Loss from discontinuance of crude oil cash flow hedges, net of tax   (0.36 )                     (0.36 )
Transaction and severance costs related to West Coast asset sale, net of tax   (0.08 )                     (0.08 )
Unrealized gain (loss) on other investments, net of tax                   (0.03 )     (0.03 )
Third quarter 2022 GAAP earnings per share $ 0.61     $ 0.29     $ 0.27     $ 0.05     $ (0.05 )   $ 1.17  
                       
* 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.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
NINE MONTHS ENDED JUNE 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
(Thousands of Dollars) Production   Storage   Gathering   Utility   All Other   Consolidated*
                       
Nine months ended June 30, 2021 GAAP earnings $ 46,213     $ 71,060     $ 61,677     $ 59,922     $ 37,813     $ 276,685  
Items impacting comparability:                      
Impairment of oil and gas properties   76,152                       76,152  
Tax impact of impairment of oil and gas properties   (20,980 )                     (20,980 )
Gain on sale of timber properties                   (51,066 )     (51,066 )
Tax impact of gain on sale of timber properties                   14,069       14,069  
Premium paid on early redemption of debt   14,772           943               15,715  
Tax impact of premium paid on early redemption of debt   (4,062 )         (259 )             (4,321 )
Unrealized (gain) loss on other investments                   (575 )     (575 )
Tax impact of unrealized (gain) loss on other investments                   120       120  
Nine months ended June 30, 2021 adjusted operating results   112,095       71,060       62,361       59,922       361       305,799  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   30,188                       30,188  
Higher (lower) crude oil production   (3,787 )                     (3,787 )
Higher (lower) realized natural gas prices, after hedging   93,251                       93,251  
Higher (lower) realized crude oil prices, after hedging   19,312                       19,312  
Higher (lower) other operating revenues   4,772                       4,772  
Midstream Revenues                      
Higher (lower) operating revenues       15,550       11,717               27,267  
Downstream Margins***                      
Impact of usage and weather               3,194           3,194  
Impact of new rates               (5,945 )         (5,945 )
System modernization tracker revenues               3,719           3,719  
Regulatory revenue adjustments               (1,047 )         (1,047 )
Higher (lower) energy marketing margins                   1,301       1,301  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (17,314 )                     (17,314 )
Lower (higher) operating expenses   (7,841 )     (5,878 )     (2,180 )     (4,542 )     1,756       (18,685 )
Lower (higher) property, franchise and other taxes   (3,136 )     (751 )                 (3,887 )
Lower (higher) depreciation / depletion   (14,089 )     (2,853 )     (957 )             (17,899 )
Other Income (Expense)                      
(Higher) lower other deductions       710           8,828       (1,875 )     7,663  
(Higher) lower interest expense   3,176               (679 )         2,497  
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   3,833       (436 )     (1,019 )     1,243       (2,943 )     678  
All other / rounding   583       (166 )     (35 )     466       342       1,190  
Nine months ended June 30, 2022 adjusted operating results   221,043       77,236       69,887       65,159       (1,058 )     432,267  
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 )
Gain on sale of West Coast assets   12,736                       12,736  
Tax impact of gain on sale of West Coast assets   (3,225 )                     (3,225 )
Loss from discontinuance of crude oil cash flow hedges   (44,632 )                     (44,632 )
Tax impact of loss from discontinuance of crude oil cash flow hedges   11,303                       11,303  
Transaction and severance costs related to West Coast asset sale   (9,693 )                     (9,693 )
Tax impact of transaction and severance costs related to West Coast asset sale   2,455                       2,455  
Unrealized gain (loss) on other investments                   (10,093 )     (10,093 )
Tax impact of unrealized gain (loss) on other investments                   2,120       2,120  
Nine months ended June 30, 2022 GAAP earnings $ 189,987     $ 77,236     $ 69,887     $ 79,800     $ (9,031 )   $ 407,879  
                       
* 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.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
NINE MONTHS ENDED JUNE 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
  Production   Storage   Gathering   Utility   All Other   Consolidated*
Nine months ended June 30, 2021 GAAP earnings per share $ 0.50     $ 0.78     $ 0.67     $ 0.65     $ 0.42     $ 3.02  
Items impacting comparability:                      
Impairment of oil and gas properties, net of tax   0.60                       0.60  
Gain on sale of timber properties, net of tax                   (0.40 )     (0.40 )
Premium paid on early redemption of debt, net of tax   0.12                         0.12  
Unrealized (gain) loss on other investments, net of tax                          
Rounding           0.01           (0.01 )      
Nine months ended June 30, 2021 adjusted operating results per share   1.22       0.78       0.68       0.65       0.01       3.34  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   0.33                       0.33  
Higher (lower) crude oil production   (0.04 )                     (0.04 )
Higher (lower) realized natural gas prices, after hedging   1.01                       1.01  
Higher (lower) realized crude oil prices, after hedging   0.21                       0.21  
Higher (lower) other operating revenues   0.05                       0.05  
Midstream Revenues                      
Higher (lower) operating revenues       0.17       0.13               0.30  
Downstream Margins***                      
Impact of usage and weather               0.03           0.03  
Impact of new rates               (0.06 )         (0.06 )
System modernization tracker revenues               0.04           0.04  
Regulatory revenue adjustments               (0.01 )         (0.01 )
Higher (lower) energy marketing margins                   0.01       0.01  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (0.19 )                     (0.19 )
Lower (higher) operating expenses   (0.09 )     (0.06 )     (0.02 )     (0.05 )     0.02       (0.20 )
Lower (higher) property, franchise and other taxes   (0.03 )     (0.01 )                 (0.04 )
Lower (higher) depreciation / depletion   (0.15 )     (0.03 )     (0.01 )             (0.19 )
Other Income (Expense)                      
(Higher) lower other deductions       0.01           0.10       (0.02 )     0.09  
(Higher) lower interest expense   0.03               (0.01 )         0.02  
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   0.04             (0.01 )     0.01       (0.03 )     0.01  
All other / rounding   0.01       (0.02 )     (0.01 )     0.01       (0.01 )     (0.02 )
Nine months ended June 30, 2022 adjusted operating results per share   2.40       0.84       0.76       0.71       (0.02 )     4.69  
Items impacting comparability:                      
Reduction of other post-retirement regulatory liability, net of tax               0.16           0.16  
Gain on sale of West Coast assets, net of tax   0.10                       0.10  
Loss from discontinuance of crude oil cash flow hedges, net of tax   (0.36 )                     (0.36 )
Transaction and severance costs related to West Coast asset sale, net of tax   (0.08 )                     (0.08 )
Unrealized gain (loss) on other investments, net of tax                   (0.08 )     (0.08 )
Nine months ended June 30, 2022 GAAP earnings per share $ 2.06     $ 0.84     $ 0.76     $ 0.87     $ (0.10 )   $ 4.43  
                       
* 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.


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
               
(Thousands of Dollars, except per share amounts)              
  Three Months Ended   Nine Months Ended
  June 30,   June 30,
  (Unaudited)   (Unaudited)
SUMMARY OF OPERATIONS   2022       2021       2022       2021  
Operating Revenues:              
Utility and Energy Marketing Revenues $ 179,888     $ 126,933     $ 785,664     $ 587,247  
Exploration and Production and Other Revenues   252,638       209,618       758,594       621,933  
Pipeline and Storage and Gathering Revenues   70,098       57,846       206,642       177,491  
    502,624       394,397       1,750,900       1,386,671  
Operating Expenses:              
Purchased Gas   67,948       18,737       369,168       177,018  
Operation and Maintenance:              
Utility and Energy Marketing   46,403       42,577       146,523       139,521  
Exploration and Production and Other   64,593       43,112       160,016       127,033  
Pipeline and Storage and Gathering   33,988       31,239       97,434       87,471  
Property, Franchise and Other Taxes   25,874       24,492       78,093       71,259  
Depreciation, Depletion and Amortization   95,857       84,170       275,681       251,632  
Impairment of Oil and Gas Producing Properties                     76,152  
    334,663       244,327       1,126,915       930,086  
Gain on Sale of Assets   12,736             12,736       51,066  
Operating Income   180,697       150,070       636,721       507,651  
               
Other Income (Expense):              
Other Income (Deductions)   (5,649 )     (2,028 )     3,291       (15,078 )
Interest Expense on Long-Term Debt   (30,091 )     (30,220 )     (90,300 )     (111,296 )
Other Interest Expense   (3,882 )     (1,012 )     (6,561 )     (4,630 )
               
Income Before Income Taxes   141,075       116,810       543,151       376,647  
               
Income Tax Expense   32,917       30,335       135,272       99,962  
               
Net Income Available for Common Stock $ 108,158     $ 86,475     $ 407,879     $ 276,685  
               
Earnings Per Common Share              
Basic $ 1.18     $ 0.95     $ 4.46     $ 3.04  
Diluted $ 1.17     $ 0.94     $ 4.43     $ 3.02  
               
Weighted Average Common Shares:              
Used in Basic Calculation   91,456,265       91,172,683       91,388,417       91,113,973  
Used in Diluted Calculation   92,168,518       91,762,898       92,083,560       91,642,849  


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
   
  June 30,   September 30,
(Thousands of Dollars)   2022       2021  
ASSETS      
Property, Plant and Equipment $ 12,299,545     $ 13,103,639  
Less - Accumulated Depreciation, Depletion and Amortization   5,914,097       6,719,356  
Net Property, Plant and Equipment   6,385,448       6,384,283  
Current Assets:      
Cash and Temporary Cash Investments   432,576       31,528  
Hedging Collateral Deposits   154,470       88,610  
Receivables - Net   399,033       205,294  
Unbilled Revenue   18,525       17,000  
Gas Stored Underground   12,336       33,669  
Materials, Supplies and Emission Allowances   39,634       53,560  
Unrecovered Purchased Gas Costs   32,412       33,128  
Other Current Assets   61,359       59,660  
Total Current Assets   1,150,345       522,449  
Other Assets:      
Recoverable Future Taxes   125,576       121,992  
Unamortized Debt Expense   9,308       10,589  
Other Regulatory Assets   58,075       60,145  
Deferred Charges   77,542       59,939  
Other Investments   96,566       149,632  
Goodwill   5,476       5,476  
Prepaid Pension and Post-Retirement Benefit Costs   187,692       149,151  
Fair Value of Derivative Financial Instruments   12,571        
Other   3,487       1,169  
Total Other Assets   576,293       558,093  
Total Assets $ 8,112,086     $ 7,464,825  
CAPITALIZATION AND LIABILITIES      
Capitalization:      
Comprehensive Shareholders' Equity      
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and      
Outstanding - 91,465,569 Shares and 91,181,549 Shares, Respectively $ 91,466     $ 91,182  
Paid in Capital   1,022,954       1,017,446  
Earnings Reinvested in the Business   1,472,395       1,191,175  
Accumulated Other Comprehensive Loss   (582,868 )     (513,597 )
Total Comprehensive Shareholders' Equity   2,003,947       1,786,206  
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs   2,082,463       2,628,687  
Total Capitalization   4,086,410       4,414,893  
Current and Accrued Liabilities:      
Notes Payable to Banks and Commercial Paper   400,000       158,500  
Current Portion of Long-Term Debt   549,000        
Accounts Payable   145,320       171,655  
Amounts Payable to Customers   292       21  
Dividends Payable   43,446       41,487  
Interest Payable on Long-Term Debt   45,017       17,376  
Customer Advances         17,223  
Customer Security Deposits   25,200       19,292  
Other Accruals and Current Liabilities   254,383       194,169  
Fair Value of Derivative Financial Instruments   703,788       616,410  
Total Current and Accrued Liabilities   2,166,446       1,236,133  
Other Liabilities:      
Deferred Income Taxes   767,207       660,420  
Taxes Refundable to Customers   346,577       354,089  
Cost of Removal Regulatory Liability   256,092       245,636  
Other Regulatory Liabilities   199,094       200,643  
Pension and Other Post-Retirement Liabilities   4,732       7,526  
Asset Retirement Obligations   152,100       209,639  
Other Liabilities   133,428       135,846  
Total Other Liabilities   1,859,230       1,813,799  
Commitments and Contingencies          
Total Capitalization and Liabilities $ 8,112,086     $ 7,464,825  


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
    Nine Months Ended
    June 30,
(Thousands of Dollars)     2022       2021  
         
Operating Activities:        
Net Income Available for Common Stock   $ 407,879     $ 276,685  
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
       
Gain on Sale of Assets     (12,736 )     (51,066 )
Impairment of Oil and Gas Producing Properties           76,152  
Depreciation, Depletion and Amortization     275,681       251,632  
Deferred Income Taxes     121,150       89,277  
Premium Paid on Early Redemption of Debt           15,715  
Stock-Based Compensation     15,178       12,296  
Reduction of Other Post-Retirement Regulatory Liability     (18,533 )      
Other     27,527       7,795  
Change in:        
Receivables and Unbilled Revenue     (194,832 )     (40,733 )
Gas Stored Underground and Materials, Supplies and Emission Allowances     24,141       19,024  
Unrecovered Purchased Gas Costs     716        
Other Current Assets     (1,699 )     (4,282 )
Accounts Payable     19,259       7,474  
Amounts Payable to Customers     271       (3,595 )
Customer Advances     (17,223 )     (15,319 )
Customer Security Deposits     5,908       2,073  
Other Accruals and Current Liabilities     61,322       23,154  
Other Assets     (44,184 )     5,839  
Other Liabilities     (15,809 )     (311 )
   Net Cash Provided by Operating Activities   $ 654,016     $ 671,810  
         
Investing Activities:        
Capital Expenditures   $ (592,487 )   $ (512,775 )
Net Proceeds from Sale of Oil and Gas Producing Properties     254,439        
Net Proceeds from Sale of Timber Properties           104,582  
Sale of Fixed Income Mutual Fund Shares in Grantor Trust     30,000        
Other     13,528       11,223  
   Net Cash Used in Investing Activities   $ (294,520 )   $ (396,970 )
         
Financing Activities:        
Changes in Notes Payable to Banks and Commercial Paper   $ 241,500     $ (30,000 )
Reduction of Long-Term Debt           (515,715 )
Dividends Paid on Common Stock     (124,701 )     (121,606 )
Net Proceeds From Issuance of Long-Term Debt           495,267  
Net Repurchases of Common Stock     (9,387 )     (3,605 )
   Net Cash Provided by (Used in) Financing Activities   $ 107,412     $ (175,659 )
         
Net Increase in Cash, Cash Equivalents, and Restricted Cash     466,908       99,181  
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period     120,138       20,541  
Cash, Cash Equivalents, and Restricted Cash at June 30   $ 587,046     $ 119,722  


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
UPSTREAM BUSINESS
                   
                   
  Three Months Ended   Nine Months Ended
(Thousands of Dollars, except per share amounts) June 30,   June 30,
EXPLORATION AND PRODUCTION SEGMENT   2022       2021     Variance     2022     2021   Variance
Total Operating Revenues $ 252,638     $ 209,535     $ 43,103     $ 758,428   $ 621,116   $ 137,312  
Operating Expenses:                  
Operation and Maintenance:                  
General and Administrative Expense   26,844       16,165       10,679       63,396     51,017     12,379  
Lease Operating and Transportation Expense   79,529       66,708       12,821       221,213     199,296     21,917  
All Other Operation and Maintenance Expense   8,854       3,757       5,097       18,183     10,944     7,239  
Property, Franchise and Other Taxes   7,114       6,853       261       19,888     15,918     3,970  
Depreciation, Depletion and Amortization   55,136       45,886       9,250       155,190     137,356     17,834  
Impairment of Oil and Gas Producing Properties                         76,152     (76,152 )
    177,477       139,369       38,108       477,870     490,683     (12,813 )
Gain on Sale of Assets   12,736             12,736       12,736         12,736  
Operating Income   87,897       70,166       17,731       293,294     130,433     162,861  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs   (186 )     (289 )     103       (558 )   (860 )   302  
Interest and Other Income   482       18       464       613     176     437  
Interest Expense on Long-Term Debt                         (15,119 )   15,119  
Interest Expense   (14,589 )     (12,008 )     (2,581 )     (38,927 )   (42,601 )   3,674  
Income Before Income Taxes   73,604       57,887       15,717       254,422     72,029     182,393  
Income Tax Expense   17,107       18,872       (1,765 )     64,435     25,816     38,619  
Net Income $ 56,497     $ 39,015     $ 17,482     $ 189,987   $ 46,213   $ 143,774  
Net Income Per Share (Diluted) $ 0.61     $ 0.43     $ 0.18     $ 2.06   $ 0.50   $ 1.56  
                   


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
MIDSTREAM BUSINESSES
                   
  Three Months Ended   Nine Months Ended
(Thousands of Dollars, except per share amounts) June 30,   June 30,
PIPELINE AND STORAGE SEGMENT   2022       2021     Variance     2022     2021   Variance
Revenues from External Customers $ 67,236     $ 57,258     $ 9,978     $ 196,579   $ 175,881   $ 20,698  
Intersegment Revenues   28,312       26,805       1,507       82,716     82,651     65  
Total Operating Revenues   95,548       84,063       11,485       279,295     258,532     20,763  
Operating Expenses:                  
Purchased Gas   (139 )     (11 )     (128 )     1,298     219     1,079  
Operation and Maintenance   24,639       22,918       1,721       71,249     63,809     7,440  
Property, Franchise and Other Taxes   8,483       8,070       413       25,664     24,713     951  
Depreciation, Depletion and Amortization   17,322       15,609       1,713       50,417     46,806     3,611  
    50,305       46,586       3,719       148,628     135,547     13,081  
                   
Operating Income   45,243       37,477       7,766       130,667     122,985     7,682  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Credit   767       125       642       2,302     376     1,926  
Interest and Other Income   735       1,364       (629 )     2,330     3,159     (829 )
Interest Expense   (10,813 )     (10,070 )     (743 )     (31,564 )   (31,353 )   (211 )
Income Before Income Taxes   35,932       28,896       7,036       103,735     95,167     8,568  
Income Tax Expense   9,333       6,948       2,385       26,499     24,107     2,392  
Net Income $ 26,599     $ 21,948     $ 4,651     $ 77,236   $ 71,060   $ 6,176  
Net Income Per Share (Diluted) $ 0.29     $ 0.24     $ 0.05     $ 0.84   $ 0.78   $ 0.06  
                   
                   
  Three Months Ended   Nine Months Ended
  March 31,   June 30,
GATHERING SEGMENT   2022       2021     Variance     2022     2021   Variance
Revenues from External Customers $ 2,862     $ 588     $ 2,274     $ 10,063   $ 1,610   $ 8,453  
Intersegment Revenues   53,069       48,068       5,001       150,696     144,317     6,379  
Total Operating Revenues   55,931       48,656       7,275       160,759     145,927     14,832  
Operating Expenses:                  
Operation and Maintenance   9,770       8,715       1,055       27,509     24,750     2,759  
Property, Franchise and Other Taxes   10       12       (2 )     12     30     (18 )
Depreciation, Depletion and Amortization   8,589       8,131       458       25,343     24,132     1,211  
    18,369       16,858       1,511       52,864     48,912     3,952  
                   
Operating Income   37,562       31,798       5,764       107,895     97,015     10,880  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs   (56 )     (68 )     12       (168 )   (203 )   35  
Interest and Other Income   53       10       43       81     253     (172 )
Interest Expense on Long-Term Debt                         (965 )   965  
Interest Expense   (4,164 )     (4,102 )     (62 )     (12,383 )   (12,435 )   52  
Income Before Income Taxes   33,395       27,638       5,757       95,425     83,665     11,760  
Income Tax Expense   8,737       7,211       1,526       25,538     21,988     3,550  
Net Income $ 24,658     $ 20,427     $ 4,231     $ 69,887   $ 61,677   $ 8,210  
Net Income Per Share (Diluted) $ 0.27     $ 0.22     $ 0.05     $ 0.76   $ 0.67   $ 0.09  
                   


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
DOWNSTREAM BUSINESS
                   
                   
  Three Months Ended   Nine Months Ended
(Thousands of Dollars, except per share amounts) June 30,   June 30,
UTILITY SEGMENT   2022       2021     Variance     2022     2021   Variance
Revenues from External Customers $ 179,888     $ 126,934     $ 52,954     $ 785,664   $ 586,618   $ 199,046  
Intersegment Revenues   60       74       (14 )     245     271     (26 )
Total Operating Revenues   179,948       127,008       52,940       785,909     586,889     199,020  
Operating Expenses:                  
Purchased Gas   95,587       44,848       50,739       448,268     255,011     193,257  
Operation and Maintenance   47,176       43,296       3,880       148,885     141,412     7,473  
Property, Franchise and Other Taxes   10,143       9,433       710       32,156     30,181     1,975  
Depreciation, Depletion and Amortization   14,765       14,505       260       44,592     42,811     1,781  
    167,671       112,082       55,589       673,901     469,415     204,486  
                   
Operating Income   12,277       14,926       (2,649 )     112,008     117,474     (5,466 )
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Credit (Costs)   (2,678 )     (5,747 )     3,069       6,018     (24,674 )   30,692  
Interest and Other Income   349       960       (611 )     1,162     2,142     (980 )
Interest Expense   (6,087 )     (5,510 )     (577 )     (17,115 )   (16,457 )   (658 )
Income Before Income Taxes   3,861       4,629       (768 )     102,073     78,485     23,588  
Income Tax Expense (Benefit)   (761 )     (212 )     (549 )     22,273     18,563     3,710  
Net Income $ 4,622     $ 4,841     $ (219 )   $ 79,800   $ 59,922   $ 19,878  
Net Income Per Share (Diluted) $ 0.05     $ 0.05     $     $ 0.87   $ 0.65   $ 0.22  
                   


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
  Three Months Ended   Nine Months Ended
(Thousands of Dollars, except per share amounts) June 30,   June 30,
ALL OTHER   2022       2021     Variance     2022     2021   Variance
Revenues from External Customers $     $ (1 )   $ 1     $   $ 1,174   $ (1,174 )
Intersegment Revenues         2       (2 )     6     22     (16 )
Total Operating Revenues         1       (1 )     6     1,196     (1,190 )
Operating Expenses:                  
Purchased Gas         4       (4 )     6     2,297     (2,291 )
Operation and Maintenance         17       (17 )     5     701     (696 )
Property, Franchise and Other Taxes                         47     (47 )
Depreciation, Depletion and Amortization                         394     (394 )
          21       (21 )     11     3,439     (3,428 )
Gain on Sale of Assets                         51,066     (51,066 )
Operating Income (Loss)         (20 )     20       (5 )   48,823     (48,828 )
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs                         (7 )   7  
Interest and Other Income         3       (3 )     2     229     (227 )
Income (Loss) before Income Taxes         (17 )     17       (3 )   49,045     (49,048 )
Income Tax Expense (Benefit)         (1,056 )     1,056       4     11,428     (11,424 )
Net Income (Loss) $     $ 1,039     $ (1,039 )   $ (7 ) $ 37,617   $ (37,624 )
Net Income (Loss) Per Share (Diluted) $     $ 0.01     $ (0.01 )   $   $ 0.41   $ (0.41 )
           
  Three Months Ended   Nine Months Ended
  June 30,   June 30,
CORPORATE   2022       2021     Variance     2022     2021   Variance
Revenues from External Customers $     $ 83     $ (83 )   $ 166   $ 272   $ (106 )
Intersegment Revenues   1,082       1,027       55       3,247     2,718     529  
Total Operating Revenues   1,082       1,110       (28 )     3,413     2,990     423  
Operating Expenses:                  
Operation and Maintenance   3,195       5,224       (2,029 )     10,039     11,566     (1,527 )
Property, Franchise and Other Taxes   124       124             373     370     3  
Depreciation, Depletion and Amortization   45       39       6       139     133     6  
    3,364       5,387       (2,023 )     10,551     12,069     (1,518 )
                   
Operating Loss   (2,282 )     (4,277 )     1,995       (7,138 )   (9,079 )   1,941  
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs   (1,017 )     (923 )     (94 )     (3,052 )   (2,769 )   (283 )
Interest and Other Income   31,019       33,433       (2,414 )     92,937     107,728     (14,791 )
Interest Expense on Long-Term Debt   (30,091 )     (30,220 )     129       (90,300 )   (95,212 )   4,912  
Other Interest Expense   (3,346 )     (236 )     (3,110 )     (4,948 )   (2,412 )   (2,536 )
Loss before Income Taxes   (5,717 )     (2,223 )     (3,494 )     (12,501 )   (1,744 )   (10,757 )
Income Tax Benefit   (1,499 )     (1,428 )     (71 )     (3,477 )   (1,940 )   (1,537 )
Net Income (Loss) $ (4,218 )   $ (795 )   $ (3,423 )   $ (9,024 ) $ 196   $ (9,220 )
Net Income (Loss) Per Share (Diluted) $ (0.05 )   $ (0.01 )   $ (0.04 )   $ (0.10 ) $ 0.01   $ (0.11 )
                   
                   
  Three Months Ended   Nine Months Ended
  June 30,   June 30,
INTERSEGMENT ELIMINATIONS   2022       2021     Variance     2022     2021   Variance
Intersegment Revenues $ (82,523 )   $ (75,976 )   $ (6,547 )   $ (236,910 ) $ (229,979 ) $ (6,931 )
Operating Expenses:                  
Purchased Gas   (27,500 )     (26,104 )     (1,396 )     (80,404 )   (80,509 )   105  
Operation and Maintenance   (55,023 )     (49,872 )     (5,151 )     (156,506 )   (149,470 )   (7,036 )
    (82,523 )     (75,976 )     (6,547 )     (236,910 )   (229,979 )   (6,931 )
Operating Income                              
Other Income (Expense):                  
Interest and Other Deductions   (35,117 )     (30,914 )     (4,203 )     (98,376 )   (100,628 )   2,252  
Interest Expense   35,117       30,914       4,203       98,376     100,628     (2,252 )
Net Income $     $     $     $   $   $  
Net Income Per Share (Diluted) $     $     $     $   $   $  


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                       
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
                       
  Three Months Ended   Nine Months Ended
  June 30,   June 30,
  (Unaudited)   (Unaudited)
          Increase           Increase
    2022     2021     (Decrease)     2022     2021     (Decrease)
                       
Capital Expenditures:                      
Exploration and Production $ 131,776 (1) $ 94,152   (3) $ 37,624     $ 405,736 (1)(2) $ 263,763   (3)(4) $ 141,973  
Pipeline and Storage   19,778 (1)   63,863   (3)   (44,085 )     58,243 (1)(2)   155,556   (3)(4)   (97,313 )
Gathering   8,614 (1)   6,209   (3)   2,405       28,588 (1)(2)   25,628   (3)(4)   2,960  
Utility   27,664 (1)   24,866   (3)   2,798       70,972 (1)(2)   66,691   (3)(4)   4,281  
Total Reportable Segments   187,832     189,090       (1,258 )     563,539     511,638       51,901  
All Other                              
Corporate   166     129       37       663     218       445  
Eliminations       (1,898 )     1,898           (2,118 )     2,118  
Total Capital Expenditures $ 187,998   $ 187,321     $ 677     $ 564,202   $ 509,738     $ 54,464  

(1) Capital expenditures for the quarter and nine months ended June 30, 2022, include accounts payable and accrued liabilities related to capital expenditures of $62.0 million, $5.2 million, $2.5 million, and $4.7 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2022, since they represent non-cash investing activities at that date.

(2) Capital expenditures for the nine months ended June 30, 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 nine months ended June 30, 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 June 30, 2022.

(3) Capital expenditures for the quarter and nine months ended June 30, 2021, include accounts payable and accrued liabilities related to capital expenditures of $49.7 million, $25.8 million, $0.9 million, and $5.1 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 June 30, 2021, since they represent non-cash investing activities at that date.

(4) Capital expenditures for the nine months ended June 30, 2021, exclude capital expenditures of $45.8 million, $17.3 million, $13.5 million and $10.7 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, 2020 and paid during the nine months ended June 30, 2021. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2020, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2021.

                   
DEGREE DAYS                  
              Percent Colder
              (Warmer) Than:
Three Months Ended June 30, Normal   2022   2021   Normal (1)   Last Year (1)
Buffalo, NY 912   797   794   (12.6 )   0.4  
Erie, PA 871   741   741   (14.9 )    
                   
Nine Months Ended June 30,                  
Buffalo, NY 6,455   5,662   5,693   (12.3 )   (0.5 )
Erie, PA 6,023   5,274   5,188   (12.4 )   1.7  
                   

(1) Percents compare actual 2022 degree days to normal degree days and actual 2022 degree days to actual 2021 degree days.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                         
EXPLORATION AND PRODUCTION INFORMATION
                         
    Three Months Ended   Nine Months Ended
    June 30,   June 30,
            Increase           Increase
      2022     2021   (Decrease)     2022     2021   (Decrease)
                         
Gas Production/Prices:                        
Production (MMcf)                        
Appalachia     88,888     79,314     9,574       253,842     236,429     17,413  
West Coast     405     431     (26 )     1,210     1,300     (90 )
Total Production     89,293     79,745     9,548       255,052     237,729     17,323  
                         
Average Prices (Per Mcf)                        
Appalachia   $ 5.50   $ 2.29   $ 3.21     $ 4.64   $ 2.25   $ 2.39  
West Coast     10.29     5.36     4.93       10.04     5.83     4.21  
Weighted Average     5.52     2.31     3.21       4.67     2.27     2.40  
Weighted Average after Hedging     2.87     2.20     0.67       2.67     2.21     0.46  
                         
Oil Production/Prices:                        
Production (Thousands of Barrels)                        
Appalachia     7     1     6       8     2     6  
West Coast     519     557     (38 )     1,589     1,681     (92 )
Total Production     526     558     (32 )     1,597