• National Fuel Reports Second Quarter Earnings

    Source: Nasdaq GlobeNewswire / 01 May 2024 16:45:31   America/New_York

    WILLIAMSVILLE, N.Y., May 01, 2024 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the second quarter of its 2024 fiscal year and for the six months ended March 31, 2024.

    FISCAL 2024 SECOND QUARTER SUMMARY

    • GAAP net income of $166.3 million, or $1.80 per share, compared to GAAP net income of $140.9 million, or $1.53 per share, in the prior year, an increase of 18% per share.
    • Adjusted operating results of $165.3 million, or $1.79 per share, compared to $141.8 million, or $1.54 per share, in the prior year, an increase of 16% per share (see non-GAAP reconciliation on page 2).
    • Pipeline and Storage segment revenue was up $12.9 million, or 14%, from the prior year, primarily due to the resolution of the National Fuel Gas Supply Corporation (“Supply Corporation”) rate proceeding, which is expected to increase annual revenues by $56 million.
    • Exploration and Production segment produced 103 Bcf of natural gas, an increase of 10% from the prior year, driven by strong operational execution, particularly in the highly productive Eastern Development Area (“EDA”).
    • Gathering segment revenue increased $7.0 million, or 12%, from the prior year, primarily as a result of a 15% increase in throughput, driven by both Seneca Resources and third-party producers.
    • Utility segment earnings increased by $13.0 million, or 41%, from the prior year largely due to an increase in base rate delivery revenues from our 2023 Pennsylvania jurisdiction rate case settlement.
    • Company is revising its fiscal 2024 earnings guidance to a range of $4.75 to $5.05 per share, excluding items impacting comparability, while lowering capital expenditure guidance to a range of $885 to $980 million.

    MANAGEMENT COMMENTS

    David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel had an excellent second quarter with adjusted operating results increasing 16% compared to the prior year. Leading the way was strong performance from our regulated businesses, which collectively delivered earnings growth of 36%, primarily driven by the completion of rate proceedings in our FERC-regulated Supply Corporation and the Pennsylvania jurisdiction of our Utility business.

    “Operationally, we continue to execute on strategic objectives across our asset base. Of note, the ongoing transition to the EDA is exceeding expectations and was the main driver behind the double-digit growth in Seneca’s production and Gathering business throughput. While lower natural gas prices were a headwind compared to last year’s second quarter, our disciplined hedging program mitigated a majority of the commodity price impacts.

    “Looking ahead, the underlying strength of each of our businesses, and our commitment to hedging through the cycles, provide confidence in our long-term outlook for the Company. This outlook supports our long-standing commitment to shareholder returns, which was further enhanced in the second quarter with the commencement of a new $200 million share buyback program. Together, our outlook for growth and commitment to returning capital to shareholders position the Company to create value in the coming years.”

    RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

            
     Three Months Ended Six Months Ended
     March 31, March 31,
    (in thousands except per share amounts) 2024   2023   2024   2023 
    Reported GAAP Earnings$166,272  $140,880  $299,292  $310,570 
    Items impacting comparability:       
    Unrealized (gain) loss on derivative asset (E&P) (536)  2,471   3,662   2,273 
    Tax impact of unrealized (gain) loss on derivative asset 147   (677)  (1,004)  (623)
    Unrealized (gain) loss on other investments (Corporate / All Other) (769)  (1,068)  (1,818)  (1,278)
    Tax impact of unrealized (gain) loss on other investments 162   224   382   268 
    Adjusted Operating Results$165,276  $141,830  $300,514  $311,210 
            
    Reported GAAP Earnings Per Share$1.80  $1.53  $3.24  $3.37 
    Items impacting comparability:       
    Unrealized (gain) loss on derivative asset, net of tax (E&P) —   0.02   0.03   0.02 
    Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) (0.01)  (0.01)  (0.02)  (0.01)
    Rounding —   —   —   (0.01)
    Adjusted Operating Results Per Share$1.79  $1.54  $3.25  $3.37 


    FISCAL 2024 GUIDANCE UPDATE

    National Fuel is revising its fiscal 2024 earnings guidance to reflect the results of the second quarter along with updated forecast assumptions and projections. The Company is now projecting that earnings, excluding anticipated non-cash ceiling test impairment charges and other items impacting comparability, will be within the range of $4.75 to $5.05 per share, a decrease of $0.15 per share from the midpoint of the Company’s prior guidance range. The decrease from the Company’s prior earnings guidance primarily reflects the full year impact of lower natural gas prices and price-related production curtailments at Seneca during the second quarter, partially offset by an increase in revenue in the Pipeline and Storage segment.

    The Company is now assuming that NYMEX natural gas prices will average $2.00 per MMBtu for the remainder of fiscal 2024, a decrease of $0.40 per MMBtu. 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. Given the Company's price projections, we expect to experience a ceiling test impairment in each of the two remaining quarters of fiscal 2024.

    The Exploration and Production segment’s fiscal 2024 net production is now expected to be in the range of 390 to 405 Bcf, which reflects the impacts of approximately 5 Bcf of price-related curtailments due to low in-basin pricing during the second quarter. This guidance range does not incorporate any additional price-related curtailments over the remainder of the fiscal year. Seneca currently has firm sales contracts in place for approximately 95% of its projected remaining fiscal 2024 natural gas production, significantly limiting its exposure to in-basin markets. Approximately 74% of expected remaining production is either matched by a financial hedge or was entered into at a fixed price.

    The Pipeline and Storage segment’s revenues are now expected to be in the range of $400 to $420 million, a $10 million increase at the midpoint. The increase is attributable to several factors, including the settlement of the Supply Corporation rate case.

    The Company’s consolidated capital expenditures are now expected to be in the range of $885 to $980 million, a $10 million decrease at the midpoint. During the first half of the fiscal year, the Company operated a two-rig program with a dedicated completion crew, while also periodically utilizing a top-hole rig. As previously planned, the Company dropped a rig at the end of the second quarter and expects to maintain a reduced activity level for the balance of the fiscal year.

    The Company’s other guidance assumptions 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, 2024 is summarized in a tabular form on pages 8 and 9 of this report (earnings drivers for the six months ended March 31, 2024 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) 2024   2023 Variance
    GAAP Earnings$62,065  $60,982 $1,083 
    Unrealized (gain) loss on derivative asset, net of tax (389)  1,794  (2,183)
    Adjusted Operating Results$61,676  $62,776 $(1,100)
          
    Adjusted EBITDA$172,068  $154,574 $17,494 


    Seneca’s second quarter GAAP earnings increased $1.1 million versus the prior year. Higher natural gas production, lower per unit lease operating and transportation expense (“LOE”), and lower other taxes were partially offset by lower realized natural gas prices, and increases in per unit depreciation, depletion and amortization (“DD&A”) and interest expenses.

    The GAAP earnings increase also includes an unrealized gain of $0.5 million ($0.4 million after-tax) recognized during the current-year second quarter related to an increase in the fair value of contingent consideration Seneca received in connection with the June 2022 divestiture of its California assets. In the prior year's second quarter, Seneca recorded an unrealized loss of $2.5 million ($1.8 million after-tax) on that contingent consideration. Excluding these unrealized gains and losses, Seneca's adjusted operating results decreased $1.1 million.

    During the second quarter, Seneca produced 102.9 Bcf of natural gas, an increase of 9.6 Bcf, or 10%, from the prior year, despite the impact of approximately 5 Bcf of price-related curtailments due to low in-basin pricing. The increase in production was largely due to production from new Marcellus and Utica wells in Seneca's EDA.

    Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.56 per Mcf, a decrease of $0.02 per Mcf from the prior year. Pre-hedging realized natural gas prices decreased 29% from the prior year; however, Seneca’s hedging portfolio, which experienced a gain of $0.58 per Mcf during the quarter, mitigated a significant portion of this impact.

    On a per unit basis, LOE was $0.68 per Mcf, a decrease of $0.03 per Mcf from the prior year. On an absolute basis, LOE increased $3.9 million primarily due to higher transportation and gathering costs as a result of increased production, partially offset by a decrease in water management costs. LOE included $58.1 million for gathering and compression services from the Company's Gathering segment to connect Seneca’s production to sales points along interstate pipelines.

    DD&A expense was $0.71 per Mcf, an increase of $0.08 per Mcf from the prior year. Absolute DD&A expense increased $14.8 million due to higher natural gas production and a higher per unit DD&A rate. The higher per unit rate was driven by an increase in Seneca's full cost pool due to a combination of higher capitalized costs and an increase in estimated future development costs related to proved undeveloped wells.

    Other taxes decreased $1.6 million largely as a result of lower Impact Fees in Pennsylvania due to the decline in NYMEX natural gas prices.

    Interest expense increased $2.9 million primarily due to a higher average amount of net borrowings combined with higher average interest rates.

    Midstream Businesses

    Pipeline and Storage Segment

    The Pipeline and Storage segment’s operations are carried out by 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) 2024  2023 Variance
    GAAP Earnings$30,737 $23,858 $6,879
          
    Adjusted EBITDA$70,033 $58,926 $11,107


    The Pipeline and Storage segment’s second quarter GAAP earnings increased $6.9 million versus the prior year primarily due to higher operating revenues, partly offset by higher operation and maintenance (“O&M”) and DD&A expenses.

    The increase in operating revenues of $12.9 million was primarily attributable to an increase in Supply Corporation’s transportation and storage rates effective February 1, 2024, in accordance with the approved interim rates in connection with its rate case settlement, which is pending final Federal Energy Regulatory Commission approval. In addition, Supply Corporation recorded a final true-up adjustment to a surcharge for pipeline safety and greenhouse gas costs that concluded with the effective date of its rate increase, reflective of investments made in those areas.

    O&M expense increased $1.8 million primarily due to an increase in personnel costs and compressor maintenance costs. The increase in DD&A expense of $1.8 million was attributable to higher average depreciable plant in service compared to the prior year.

    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) 2024  2023 Variance
    GAAP Earnings$28,706 $24,334 $4,372
          
    Adjusted EBITDA$53,103 $46,263 $6,840


    The Gathering segment’s second quarter GAAP earnings increased $4.4 million versus the prior year primarily due to higher operating revenues, partly offset by higher DD&A expense. Operating revenues increased $7.0 million, or 12%, which was the result of a $4.8 million increase in revenue from Seneca and a $2.2 million increase in revenue from non-affiliated parties. DD&A expense increased $0.7 million primarily due 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) 2024  2023 Variance
    GAAP Earnings$44,739 $31,720 $13,019
          
    Adjusted EBITDA$78,326 $65,820 $12,506


    The Utility segment’s second quarter GAAP earnings increased $13.0 million versus the prior year due to higher customer margins (operating revenues less purchased gas sold), lower interest expense and a lower effective income tax rate, partially offset by an increase in O&M expense.

    The $14.4 million increase in customer margin for the quarter was primarily due to the impact of the base rate increase in Distribution's Pennsylvania jurisdiction. Last year, the Company received approval for a $23 million annual rate increase that went into effect in August 2023 and the ability to implement a weather normalization adjustment (“WNA”), which serves to help mitigate the impact of temperature fluctuations on usage and margin revenues (subject to a 3% deadband). Despite lower usage due to warmer weather, the Company recovered approximately $4.6 million from the Pennsylvania WNA mechanism in the current quarter. Distribution continues to benefit from a WNA mechanism in its New York jurisdiction, which helped to mitigate the impact of warmer weather on margins in the current and prior year quarters. Higher revenues from the Company’s system modernization tracking mechanisms in its New York service territory also contributed to the increase.

    O&M expense increased by $2.9 million, primarily driven by higher personnel costs. These increases were partially offset by a decline in the accrual for uncollectible accounts due to a decrease in the natural gas commodity component of customer bills.

    Interest expense declined $1.2 million primarily due to lower average amount of net borrowings, partially offset by higher average interest rates.

    The reduction in the Utility segment's effective income tax rate was primarily driven by an increase in tax deductions related to certain repairs and maintenance expenditures as a result of updated IRS guidance published in 2023.

    Corporate and All Other

    The Company’s operations that are included in Corporate and All Other generated combined earnings of less than $0.1 million in the current-year second quarter, which was essentially flat compared to a combined net loss of less than $0.1 million in the prior-year second quarter.

    EARNINGS TELECONFERENCE

    The Company will host a conference call on Thursday, May 2, 2024, at 10 a.m. Eastern Time to discuss this announcement. To pre-register for the call (recommended), please visit https://www.netroadshow.com/events/login?show=08edd3c2&confId=63859. 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 Participant Access Code 450696. The teleconference will also be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. A telephone replay of the teleconference call will be available through the end of the day on Thursday, May 9, 2024. To access the replay, dial U.S. toll free 1-866-813-9403 and provide Replay Access Code 407920.

    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:Natalie M. Fischer716-857-7315
    Media Contact:Karen L. Merkel716-857-7654
     

    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: impairments under the SEC’s full cost ceiling test for natural gas reserves; changes in the price of natural gas; 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; 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; 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; 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, water availability and disposal or recycling opportunities of used water, 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; the Company’s ability to complete strategic transactions; 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 2024. 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, 2024, including: (1) after-tax unrealized losses on a derivative asset, which reduced earnings by $0.03 per share; and (2) after-tax unrealized gains on other investments, which increased earnings by $0.02 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, 2024, the amounts of these and other potential adjustments and charges, including ceiling test impairments, 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 2024 Guidance Updated FY 2024 Guidance
    Adjusted Consolidated Earnings per Share, excluding items impacting comparability$4.90 to $5.20 $4.75 to $5.05
    Consolidated Effective Tax Rate~ 25 - 25.5% ~ 25%
        
    Capital Expenditures (Millions)   
    Exploration and Production$525 - $575 $525 - $555
    Pipeline and Storage$120 - $140 $120 - $140
    Gathering$90 - $110 $90 - $110
    Utility$150 - $175 $150 - $175
    Consolidated Capital Expenditures$885 - $1,000 $885 - $980
        
    Exploration and Production Segment Guidance*   
        
    Commodity Price Assumptions   
    NYMEX natural gas price$2.40 /MMBtu $2.00 /MMBtu
    Appalachian basin spot price$1.70 /MMBtu $1.60 /MMBtu
        
    Production (Bcf)395 to 410 390 to 405
        
    E&P Operating Costs ($/Mcf)   
    LOE$0.69 - $0.70 $0.69 - $0.70
    G&A$0.17 - $0.19 $0.17 - $0.19
    DD&A$0.69 - $0.74 $0.69 - $0.74
        
    Other Business Segment Guidance (Millions)   
    Gathering Segment Revenues$245 - $260 $240 - $255
    Pipeline and Storage Segment Revenues$380 - $420 $400 - $420

    * 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, 2024
    (Unaudited)
                
     Upstream Midstream Downstream    
                
     Exploration & Pipeline &     Corporate /  
    (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated*
                
    Second quarter 2023 GAAP earnings$60,982  $23,858  $24,334  $31,720  $(14) $140,880 
    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 adjusted operating results 62,776   23,858   24,334   31,720   (858)  141,830 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production 19,687           19,687 
    Higher (lower) realized natural gas prices, after hedging (2,006)          (2,006)
    Higher (lower) other operating revenues (1,830)          (1,830)
    Midstream Revenues           
    Higher (lower) operating revenues   10,204   5,539       15,743 
    Downstream Margins***           
    Impact of usage and weather       4,452     4,452 
    Impact of new rates in Pennsylvania       8,530     8,530 
    System modernization and improvement tracker revenues       1,764     1,764 
    Regulatory revenue adjustments       (1,554)    (1,554)
    Higher (lower) other operating revenues       (987)    (987)
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses (3,064)          (3,064)
    Lower (higher) operating expenses   (1,412)    (2,320)  (676)  (4,408)
    Lower (higher) property, franchise and other taxes 1,261           1,261 
    Lower (higher) depreciation / depletion (11,726)  (1,392)  (547)      (13,665)
    Other Income (Expense)           
    Higher (lower) other income   941         941 
    (Higher) lower interest expense (2,308)  (981)    730   900   (1,659)
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate (521)  (463)  (498)  2,429   178   1,125 
    All other / rounding (593)  (18)  (122)  (25)  (126)  (884)
    Second quarter 2024 adjusted operating results 61,676   30,737   28,706   44,739   (582)  165,276 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset 536           536 
    Tax impact of unrealized gain (loss) on derivative asset (147)          (147)
    Unrealized gain (loss) on other investments         769   769 
    Tax impact of unrealized gain (loss) on other investments         (162)  (162)
    Second quarter 2024 GAAP earnings$62,065  $30,737  $28,706  $44,739  $25  $166,272 
                
    * 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 MARCH 31, 2024
    (Unaudited)
                
     Upstream Midstream Downstream     
                
     Exploration & Pipeline &     Corporate /  
     Production Storage Gathering Utility All Other Consolidated*
                
    Second quarter 2023 GAAP earnings per share$0.66  $0.26  $0.26  $0.35  $—  $1.53 
    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 adjusted operating results per share 0.68   0.26   0.26   0.35   (0.01)  1.54 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production 0.21           0.21 
    Higher (lower) realized natural gas prices, after hedging (0.02)          (0.02)
    Higher (lower) other operating revenues (0.02)          (0.02)
    Midstream Revenues           
    Higher (lower) operating revenues   0.11   0.06       0.17 
    Downstream Margins***           
    Impact of usage and weather       0.05     0.05 
    Impact of new rates in Pennsylvania       0.09     0.09 
    System modernization and improvement tracker revenues       0.02     0.02 
    Regulatory revenue adjustments       (0.02)    (0.02)
    Higher (lower) other operating revenues       (0.01)    (0.01)
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses (0.03)          (0.03)
    Lower (higher) operating expenses   (0.02)    (0.03)  (0.01)  (0.06)
    Lower (higher) property, franchise and other taxes 0.01           0.01 
    Lower (higher) depreciation / depletion (0.13)  (0.02)  (0.01)      (0.16)
    Other Income (Expense)           
    Higher (lower) other income   0.01         0.01 
    (Higher) lower interest expense (0.02)  (0.01)    0.01   0.01   (0.01)
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate (0.01)  (0.01)  (0.01)  0.03   —   — 
    All other / rounding —   0.01   0.01   (0.01)  0.01   0.02 
    Second quarter 2024 adjusted operating results per share 0.67   0.33   0.31   0.48   —   1.79 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset, net of tax —           — 
    Unrealized gain (loss) on other investments, net of tax         0.01   0.01 
    Second quarter 2024 GAAP earnings per share$0.67  $0.33  $0.31  $0.48  $0.01  $1.80 
                
    * 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
    SIX MONTHS ENDED MARCH 31, 2024
    (Unaudited)
                
     Upstream Midstream Downstream    
                
     Exploration & Pipeline &     Corporate /  
    (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated*
    Six months ended March 31, 2023 GAAP earnings$152,174  $53,335  $49,072  $55,537  $452  $310,570 
    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 adjusted operating results 153,824   53,335   49,072   55,537   (558)  311,210 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production 43,811           43,811 
    Higher (lower) realized natural gas prices, after hedging (42,547)          (42,547)
    Higher (lower) other operating revenues (3,593)          (3,593)
    Midstream Revenues           
    Higher (lower) operating revenues   7,642   10,418       18,060 
    Downstream Margins***           
    Impact of usage and weather       1,694     1,694 
    Impact of new rates in Pennsylvania       15,378     15,378 
    System modernization and improvement tracker revenues       2,682     2,682 
    Regulatory revenue adjustments       (1,950)    (1,950)
    Higher (lower) other operating revenues       (1,488)    (1,488)
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses (7,432)          (7,432)
    Lower (higher) operating expenses (4,346)  (2,938)    (5,014)  (1,144)  (13,442)
    Lower (higher) property, franchise and other taxes 3,898           3,898 
    Lower (higher) depreciation / depletion (24,687)  (2,024)  (1,139)  (1,483)    (29,333)
    Other Income (Expense)           
    Higher (lower) other income   890     1,089   (1,170)  809 
    (Higher) lower interest expense (3,916)  (1,591)  404     2,180   (2,923)
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate 1,482   (336)  (981)  4,245   207   4,617 
    All other / rounding 712   (186)  (243)  599   181   1,063 
    Six months ended March 31, 2024 adjusted operating results 117,206   54,792   57,531   71,289   (304)  300,514 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset (3,662)          (3,662)
    Tax impact of unrealized gain (loss) on derivative asset 1,004           1,004 
    Unrealized gain (loss) on other investments         1,818   1,818 
    Tax impact of unrealized gain (loss) on other investments         (382)  (382)
    Six months ended March 31, 2024 GAAP earnings$114,548  $54,792  $57,531  $71,289  $1,132  $299,292 
                
    * 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
    SIX MONTHS ENDED MARCH 31, 2024
    (Unaudited)
                
     Upstream Midstream Downstream    
                
     Exploration & Pipeline &     Corporate /  
     Production Storage Gathering Utility All Other Consolidated*
    Six months ended March 31, 2023 GAAP earnings per share$1.65  $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 adjusted operating results per share 1.67   0.58   0.53   0.60   (0.01)  3.37 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production 0.47           0.47 
    Higher (lower) realized natural gas prices, after hedging (0.46)          (0.46)
    Higher (lower) other operating revenues (0.04)          (0.04)
    Midstream Revenues           
    Higher (lower) operating revenues   0.08   0.11       0.19 
    Downstream Margins***           
    Impact of usage and weather       0.02     0.02 
    Impact of new rates in Pennsylvania       0.17     0.17 
    System modernization and improvement tracker revenues       0.03     0.03 
    Regulatory revenue adjustments       (0.02)    (0.02)
    Higher (lower) other operating revenues       (0.02)    (0.02)
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses (0.08)          (0.08)
    Lower (higher) operating expenses (0.05)  (0.03)    (0.05)  (0.01)  (0.14)
    Lower (higher) property, franchise and other taxes 0.04           0.04 
    Lower (higher) depreciation / depletion (0.27)  (0.02)  (0.01)  (0.02)    (0.32)
    Other Income (Expense)           
    Higher (lower) other income   0.01     0.01   (0.01)  0.01 
    (Higher) lower interest expense (0.04)  (0.02)  —     0.02   (0.04)
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate 0.02   —   (0.01)  0.05   —   0.06 
    All other / rounding 0.01   (0.01)  —   —   0.01   0.01 
    Six months ended March 31, 2024 adjusted operating results per share 1.27   0.59   0.62   0.77   —   3.25 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset, net of tax (0.03)          (0.03)
    Unrealized gain (loss) on other investments, net of tax         0.02   0.02 
    Six months ended March 31, 2024 GAAP earnings per share$1.24  $0.59  $0.62  $0.77  $0.02  $3.24 
                
    * 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 Six Months Ended
     March 31, March 31,
     (Unaudited) (Unaudited)
    SUMMARY OF OPERATIONS 2024   2023   2024   2023 
    Operating Revenues:       
    Utility Revenues$290,198  $406,758  $492,119  $718,376 
    Exploration and Production and Other Revenues 264,614   244,552   518,633   521,525 
    Pipeline and Storage and Gathering Revenues 75,127   65,951   144,549   136,218 
      629,939   717,261   1,155,301   1,376,119 
    Operating Expenses:       
    Purchased Gas 105,940   243,839   162,491   415,035 
    Operation and Maintenance:       
    Utility 59,288   56,453   112,993   106,805 
    Exploration and Production and Other 32,794   31,782   67,620   58,655 
    Pipeline and Storage and Gathering 39,340   37,479   74,303   70,740 
    Property, Franchise and Other Taxes 23,019   25,367   45,434   51,572 
    Depreciation, Depletion and Amortization 118,935   100,964   234,725   197,564 
      379,316   495,884   697,566   900,371 
            
    Operating Income 250,623   221,377   457,735   475,748 
            
    Other Income (Expense):       
    Other Income (Deductions) 6,070   2,884   9,801   9,203 
    Interest Expense on Long-Term Debt (28,453)  (27,583)  (56,915)  (57,188)
    Other Interest Expense (6,636)  (5,861)  (12,910)  (9,704)
            
    Income Before Income Taxes 221,604   190,817   397,711   418,059 
            
    Income Tax Expense 55,332   49,937   98,419   107,489 
            
    Net Income Available for Common Stock$166,272  $140,880  $299,292  $310,570 
            
    Earnings Per Common Share       
    Basic$1.81  $1.53  $3.25  $3.39 
    Diluted$1.80  $1.53  $3.24  $3.37 
            
    Weighted Average Common Shares:       
    Used in Basic Calculation 92,114,415   91,794,765   92,011,772   91,686,110 
    Used in Diluted Calculation 92,512,447   92,256,348   92,478,604   92,264,717 


    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
      
     March 31, September 30,
    (Thousands of Dollars) 2024  2023 
    ASSETS   
    Property, Plant and Equipment$14,056,169 $13,635,303 
    Less - Accumulated Depreciation, Depletion and Amortization 6,548,662  6,335,441 
    Net Property, Plant and Equipment 7,507,507  7,299,862 
    Current Assets:   
    Cash and Temporary Cash Investments 50,769  55,447 
    Receivables - Net 180,717  160,601 
    Unbilled Revenue 46,571  16,622 
    Gas Stored Underground 8,565  32,509 
    Materials and Supplies - at average cost 47,258  48,989 
    Other Current Assets 85,123  100,260 
    Total Current Assets 419,003  414,428 
    Other Assets:   
    Recoverable Future Taxes 77,416  69,045 
    Unamortized Debt Expense 6,418  7,240 
    Other Regulatory Assets 69,609  72,138 
    Deferred Charges 89,004  82,416 
    Other Investments 78,744  73,976 
    Goodwill 5,476  5,476 
    Prepaid Pension and Post-Retirement Benefit Costs 222,834  200,301 
    Fair Value of Derivative Financial Instruments 196,291  50,487 
    Other 4,723  4,891 
    Total Other Assets 750,515  565,970 
    Total Assets$8,677,025 $8,280,260 
    CAPITALIZATION AND LIABILITIES   
    Capitalization:   
    Comprehensive Shareholders' Equity   
    Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and   
    Outstanding - 92,031,724 Shares and 91,819,405 Shares, Respectively$92,032 $91,819 
    Paid in Capital 1,045,929  1,040,761 
    Earnings Reinvested in the Business 2,090,172  1,885,856 
    Accumulated Other Comprehensive Income (Loss) 75,340  (55,060)
    Total Comprehensive Shareholders' Equity 3,303,473  2,963,376 
    Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,386,574  2,384,485 
    Total Capitalization 5,690,047  5,347,861 
    Current and Accrued Liabilities:   
    Notes Payable to Banks and Commercial Paper 278,900  287,500 
    Accounts Payable 93,996  152,193 
    Amounts Payable to Customers 72,346  59,019 
    Dividends Payable 45,563  45,451 
    Interest Payable on Long-Term Debt 22,553  20,399 
    Customer Advances —  21,003 
    Customer Security Deposits 30,600  28,764 
    Other Accruals and Current Liabilities 183,966  160,974 
    Fair Value of Derivative Financial Instruments —  31,009 
    Total Current and Accrued Liabilities 727,924  806,312 
    Other Liabilities:   
    Deferred Income Taxes 1,199,909  1,124,170 
    Taxes Refundable to Customers 316,455  268,562 
    Cost of Removal Regulatory Liability 288,819  277,694 
    Other Regulatory Liabilities 165,023  165,441 
    Other Post-Retirement Liabilities 2,803  2,915 
    Asset Retirement Obligations 161,027  165,492 
    Other Liabilities 125,018  121,813 
    Total Other Liabilities 2,259,054  2,126,087 
    Commitments and Contingencies —  — 
    Total Capitalization and Liabilities$8,677,025 $8,280,260 


        
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
     Six Months Ended
     March 31,
    (Thousands of Dollars) 2024   2023 
        
    Operating Activities:   
    Net Income Available for Common Stock$299,292  $310,570 
    Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
    		   
    Depreciation, Depletion and Amortization 234,725   197,564 
    Deferred Income Taxes 65,187   80,745 
    Stock-Based Compensation 10,477   11,286 
    Other 11,874   10,758 
    Change in:   
    Receivables and Unbilled Revenue (50,123)  71,760 
    Gas Stored Underground and Materials and Supplies 25,675   21,243 
    Unrecovered Purchased Gas Costs —   72,491 
    Other Current Assets 15,201   (15,864)
    Accounts Payable (15,641)  (29,169)
    Amounts Payable to Customers 13,327   2,411 
    Customer Advances (21,003)  (26,108)
    Customer Security Deposits 1,836   10,099 
    Other Accruals and Current Liabilities 26,927   28,741 
    Other Assets (22,165)  (26,901)
    Other Liabilities (9,328)  (8,417)
    Net Cash Provided by Operating Activities$586,261  $711,209 
        
    Investing Activities:   
    Capital Expenditures$(481,958) $(496,362)
    Deposit Paid for Upstream Assets —   (12,700)
    Sale of Fixed Income Mutual Fund Shares in Grantor Trust —   10,000 
    Other (1,189)  14,413 
    Net Cash Used in Investing Activities$(483,147) $(484,649)
        
    Financing Activities:   
    Proceeds from Issuance of Short-Term Note Payable to Bank$—  $250,000 
    Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper (8,600)  100,000 
    Shares Repurchased Under Repurchase Plan (4,230)  — 
    Reduction of Long-Term Debt —   (549,000)
    Dividends Paid on Common Stock (91,048)  (87,051)
    Net Repurchases of Common Stock Under Stock and Benefit Plans (3,914)  (6,694)
    Net Cash Used in Financing Activities$(107,792) $(292,745)
        
    Net Decrease in Cash, Cash Equivalents, and Restricted Cash (4,678)  (66,185)
    Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 55,447   137,718 
    Cash, Cash Equivalents, and Restricted Cash at March 31$50,769  $71,533 


              
    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 2024   2023  Variance  2024  2023 Variance
    Total Operating Revenues$264,614  $244,552  $20,062  $518,633 $521,525 $(2,892)
    Operating Expenses:         
    Operation and Maintenance:         
    General and Administrative Expense 17,165   17,435   (270)  34,958  33,033  1,925 
    Lease Operating and Transportation Expense 69,662   65,783   3,879   136,736  127,328  9,408 
    All Other Operation and Maintenance Expense 2,644   2,089   555   8,188  4,612  3,576 
    Property, Franchise and Other Taxes 3,075   4,671   (1,596)  6,713  11,647  (4,934)
    Depreciation, Depletion and Amortization 73,448   58,605   14,843   145,413  114,164  31,249 
      165,994   148,583   17,411   332,008  290,784  41,224 
              
    Operating Income 98,620   95,969   2,651   186,625  230,741  (44,116)
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit Credit 100   347   (247)  201  694  (493)
    Interest and Other Income (Deductions) 1,170   (1,623)  2,793   (342) (292) (50)
    Interest Expense (15,108)  (12,186)  (2,922)  (30,377) (25,420) (4,957)
    Income Before Income Taxes 84,782   82,507   2,275   156,107  205,723  (49,616)
    Income Tax Expense 22,717   21,525   1,192   41,559  53,549  (11,990)
    Net Income$62,065  $60,982  $1,083  $114,548 $152,174 $(37,626)
    Net Income Per Share (Diluted)$0.67  $0.66  $0.01  $1.24 $1.65 $(0.41)
              


              
    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 2024   2023  Variance  2024  2023 Variance
    Revenues from External Customers$71,210  $64,223  $6,987  $136,036 $131,844 $4,192 
    Intersegment Revenues 36,810   30,880   5,930   66,397  60,915  5,482 
    Total Operating Revenues 108,020   95,103   12,917   202,433  192,759  9,674 
    Operating Expenses:         
    Purchased Gas 325   462   (137)  926  887  39 
    Operation and Maintenance 29,062   27,275   1,787   55,013  51,294  3,719 
    Property, Franchise and Other Taxes 8,600   8,440   160   17,320  17,123  197 
    Depreciation, Depletion and Amortization 19,490   17,728   1,762   37,704  35,142  2,562 
      57,477   53,905   3,572   110,963  104,446  6,517 
              
    Operating Income 50,543   41,198   9,345   91,470  88,313  3,157 
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit Credit 1,257   1,330   (73)  2,515  2,660  (145)
    Interest and Other Income 2,046   958   1,088   3,978  2,822  1,156 
    Interest Expense (12,119)  (10,877)  (1,242)  (23,843) (21,829) (2,014)
    Income Before Income Taxes 41,727   32,609   9,118   74,120  71,966  2,154 
    Income Tax Expense 10,990   8,751   2,239   19,328  18,631  697 
    Net Income$30,737  $23,858  $6,879  $54,792 $53,335 $1,457 
    Net Income Per Share (Diluted)$0.33  $0.26  $0.07  $0.59 $0.58 $0.01 
              
              
     Three Months Ended Six Months Ended
     March 31, March 31,
    GATHERING SEGMENT 2024   2023  Variance  2024  2023 Variance
    Revenues from External Customers$3,917  $1,728  $2,189  $8,513 $4,374 $4,139 
    Intersegment Revenues 60,076   55,253   4,823   118,068  109,020  9,048 
    Total Operating Revenues 63,993   56,981   7,012   126,581  113,394  13,187 
    Operating Expenses:         
    Operation and Maintenance 10,796   10,715   81   20,300  20,403  (103)
    Property, Franchise and Other Taxes 94   3   91   117  14  103 
    Depreciation, Depletion and Amortization 9,611   8,918   693   19,068  17,626  1,442 
      20,501   19,636   865   39,485  38,043  1,442 
              
    Operating Income 43,492   37,345   6,147   87,096  75,351  11,745 
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit Credit 9   37   (28)  19  75  (56)
    Interest and Other Income 72   225   (153)  143  395  (252)
    Interest Expense (3,701)  (3,900)  199   (7,431) (7,943) 512 
    Income Before Income Taxes 39,872   33,707   6,165   79,827  67,878  11,949 
    Income Tax Expense 11,166   9,373   1,793   22,296  18,806  3,490 
    Net Income$28,706  $24,334  $4,372  $57,531 $49,072 $8,459 
    Net Income Per Share (Diluted)$0.31  $0.26  $0.05  $0.62 $0.53 $0.09 
              


              
    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 2024   2023  Variance  2024  2023 Variance
    Revenues from External Customers$290,198  $406,758  $(116,560) $492,119 $718,376 $(226,257)
    Intersegment Revenues 306   358   (52)  393  420  (27)
    Total Operating Revenues 290,504   407,116   (116,612)  492,512  718,796  (226,284)
    Operating Expenses:         
    Purchased Gas 140,836   271,881   (131,045)  224,886  470,301  (245,415)
    Operation and Maintenance 60,229   57,292   2,937   114,913  108,568  6,345 
    Property, Franchise and Other Taxes 11,113   12,123   (1,010)  21,019  22,531  (1,512)
    Depreciation, Depletion and Amortization 16,268   15,553   715   32,305  30,428  1,877 
      228,446   356,849   (128,403)  393,123  631,828  (238,705)
              
    Operating Income 62,058   50,267   11,791   99,389  86,968  12,421 
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit Credit (Costs) 857   (5)  862   1,327  (13) 1,340 
    Interest and Other Income 1,340   1,769   (429)  3,250  3,211  39 
    Interest Expense (8,528)  (9,709)  1,181   (16,986) (17,752) 766 
    Income Before Income Taxes 55,727   42,322   13,405   86,980  72,414  14,566 
    Income Tax Expense 10,988   10,602   386   15,691  16,877  (1,186)
    Net Income$44,739  $31,720  $13,019  $71,289 $55,537 $15,752 
    Net Income Per Share (Diluted)$0.48  $0.35  $0.13  $0.77 $0.60 $0.17 
              


    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 2024   2023  Variance  2024  2023 Variance
    Total Operating Revenues$—  $—  $—  $— $— $— 
    Operating Expenses:         
    Operation and Maintenance —   —   —   —  21  (21)
      —   —   —   —  21  (21)
              
    Operating Loss —   —   —   —  (21) 21 
    Other Income (Expense):         
    Interest and Other Income (Deductions) (41)  (62)  21   (119) (387) 268 
    Interest Expense (84)  (28)  (56)  (165) (49) (116)
    Loss before Income Taxes (125)  (90)  (35)  (284) (457) 173 
    Income Tax Benefit (29)  (21)  (8)  (67) (107) 40 
    Net Loss$(96) $(69) $(27) $(217)$(350)$133 
    Net Loss Per Share (Diluted)$—  $—  $—  $— $— $— 
          
     Three Months Ended Six Months Ended
     March 31, March 31,
    CORPORATE 2024   2023  Variance  2024  2023 Variance
    Revenues from External Customers$—  $—  $—  $— $— $— 
    Intersegment Revenues 1,286   1,153   133   2,571  2,304  267 
    Total Operating Revenues 1,286   1,153   133   2,571  2,304  267 
    Operating Expenses:         
    Operation and Maintenance 5,121   4,265   856   8,916  7,447  1,469 
    Property, Franchise and Other Taxes 137   130   7   265  257  8 
    Depreciation, Depletion and Amortization 118   160   (42)  235  204  31 
      5,376   4,555   821   9,416  7,908  1,508 
              
    Operating Loss (4,090)  (3,402)  (688)  (6,845) (5,604) (1,241)
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit Costs (387)  (354)  (33)  (774) (709) (65)
    Interest and Other Income 40,234   37,409   2,825   81,262  75,286  5,976 
    Interest Expense on Long-Term Debt (28,453)  (27,583)  (870)  (56,915) (57,188) 273 
    Other Interest Expense (7,683)  (6,308)  (1,375)  (15,767) (11,250) (4,517)
    Income (Loss) before Income Taxes (379)  (238)  (141)  961  535  426 
    Income Tax Benefit (500)  (293)  (207)  (388) (267) (121)
    Net Income$121  $55  $66  $1,349 $802 $547 
    Net Income Per Share (Diluted)$0.01  $—  $0.01  $0.02 $0.01 $0.01 
              
              
     Three Months Ended Six Months Ended
     March 31, March 31,
    INTERSEGMENT ELIMINATIONS 2024   2023  Variance  2024  2023 Variance
    Intersegment Revenues$(98,478) $(87,644) $(10,834) $(187,429)$(172,659)$(14,770)
    Operating Expenses:         
    Purchased Gas (35,221)  (28,504)  (6,717)  (63,321) (56,153) (7,168)
    Operation and Maintenance (63,257)  (59,140)  (4,117)  (124,108) (116,506) (7,602)
      (98,478)  (87,644)  (10,834)  (187,429) (172,659) (14,770)
    Operating Income —   —   —   —  —  — 
    Other Income (Expense):         
    Interest and Other Deductions (40,587)  (37,147)  (3,440)  (81,659) (74,539) (7,120)
    Interest Expense 40,587   37,147   3,440   81,659  74,539  7,120 
    Net Income$—  $—  $—  $— $— $— 
    Net Income Per Share (Diluted)$—  $—  $—  $— $— $— 


                
    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
      2024  2023 (Decrease)  2024  2023 (Decrease)
                
    Capital Expenditures:           
    Exploration and Production$124,184(1)$155,112(3)$(30,928) $285,141(1)(2)$323,617(3)(4)$(38,476)
    Pipeline and Storage 18,025(1) 16,838(3) 1,187   42,579(1)(2) 33,265(3)(4) 9,314 
    Gathering 19,949(1) 20,788(3) (839)  39,518(1)(2) 34,081(3)(4) 5,437 
    Utility 37,741(1) 23,942(3) 13,799   68,251(1)(2) 49,230(3)(4) 19,021 
    Total Reportable Segments 199,899  216,680  (16,781)  435,489  440,193  (4,704)
    All Other —  —  —   —  —  — 
    Corporate 121  391  (270)  182  403  (221)
    Total Capital Expenditures$200,020 $217,071 $(17,051) $435,671 $440,596 $(4,925)


    (1)Capital expenditures for the quarter and six months ended March 31, 2024, include accounts payable and accrued liabilities related to capital expenditures of $44.4 million, $5.0 million, $5.5 million, and $8.0 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at March 31, 2024, since they represent non-cash investing activities at that date.
    (2)Capital expenditures for the six months ended March 31, 2024, exclude capital expenditures of $43.2 million, $31.8 million, $20.6 million and $13.6 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, 2023 and paid during the six months ended March 31, 2024. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2023, 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, 2024.
    (3)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 were excluded from the Consolidated Statement of Cash Flows at March 31, 2023, since they represented non-cash investing activities at that date.
    (4)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.


              
    DEGREE DAYS         
           Percent Colder
           (Warmer) Than:
    Three Months Ended March 31,Normal 2024 2023 Normal (1) Last Year (1)
    Buffalo, NY3,326 2,705 2,820 (18.7) (4.1)
    Erie, PA(2)3,057 2,576 2,645 (15.7) (2.6)
              
    Six Months Ended March 31,         
    Buffalo, NY5,579 4,563 4,868 (18.2) (6.3)
    Erie, PA(2)4,951 4,240 4,632 (14.4) (8.5)


    (1)Percents compare actual 2024 degree days to normal degree days and actual 2024 degree days to actual 2023 degree days.
    (2)Normal degree days changed from NOAA 30-year degree days to NOAA 15-year degree days with the implementation of new base rates in Pennsylvania in August 2023.


                
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
                
    EXPLORATION AND PRODUCTION INFORMATION
                
     Three Months Ended Six Months Ended
     March 31, March 31,
         Increase     Increase
      2024  2023 (Decrease)  2024  2023 (Decrease)
                
    Gas Production/Prices:           
    Production (MMcf)           
    Appalachia 102,883  93,241  9,642   203,640  183,815  19,825 
                
    Average Prices (Per Mcf)           
    Weighted Average$1.98 $2.79 $(0.81)  2.14  3.77  (1.63)
    Weighted Average after Hedging 2.56  2.58  (0.02)  2.53  2.80  (0.27)
                
    Selected Operating Performance Statistics:           
    General and Administrative Expense per Mcf (1)$0.17 $0.19 $(0.02) $0.17 $0.18 $(0.01)
    Lease Operating and Transportation Expense per Mcf (1)(2)$0.68 $0.71 $(0.03) $0.67 $0.69 $(0.02)
    Depreciation, Depletion and Amortization per Mcf (1)$0.71 $0.63 $0.08  $0.71 $0.62 $0.09 


    (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 $0.57 and $0.58 per Mcf for the three months ended March 31, 2024 and March 31, 2023, respectively. Amounts include transportation expense of $0.57 and $0.58 per Mcf for the six months ended March 31, 2024 and March 31, 2023, respectively.


    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
           
    EXPLORATION AND PRODUCTION INFORMATION
     
    Hedging Summary for Remaining Six Months of Fiscal 2024 Volume  Average Hedge Price
    Gas Swaps      
    NYMEX 77,340,000MMBTU $3.35 / MMBTU
    No Cost Collars 28,800,000MMBTU $3.22 / MMBTU (Floor) / $3.79 / MMBTU (Ceiling)
    Fixed Price Physical Sales 40,856,860MMBTU $2.34 / MMBTU
    Total 146,996,860MMBTU   
           
    Hedging Summary for Fiscal 2025 Volume  Average Hedge Price
    Gas Swaps      
    NYMEX 101,080,000MMBTU $3.50 / MMBTU
    No Cost Collars 43,960,000MMBTU $3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)
    Fixed Price Physical Sales 76,440,261MMBTU $2.47 / MMBTU
    Total 221,480,261MMBTU   
           
    Hedging Summary for Fiscal 2026 Volume  Average Hedge Price
    Gas Swaps      
    NYMEX 40,060,000MMBTU $3.96 / MMBTU
    No Cost Collars 42,720,000MMBTU $3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
    Fixed Price Physical Sales 71,623,404MMBTU $2.42 / MMBTU
    Total 154,403,404MMBTU   
           
    Hedging Summary for Fiscal 2027 Volume  Average Hedge Price
    Gas Swaps      
    NYMEX 21,750,000MMBTU $4.16 / MMBTU
    No Cost Collars 3,560,000MMBTU $3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
    Fixed Price Physical Sales 53,921,121MMBTU $2.46 / MMBTU
    Total 79,231,121MMBTU   
           
    Hedging Summary for Fiscal 2028 Volume  Average Hedge Price
    Gas Swaps      
    NYMEX 1,750,000MMBTU $4.16 / MMBTU
    Fixed Price Physical Sales 17,189,881MMBTU $2.61 / MMBTU
    Total 18,939,881MMBTU   
           
    Hedging Summary for Fiscal 2029 Volume  Average Hedge Price
    Fixed Price Physical Sales 3,891,892MMBTU $2.85 / MMBTU
           
    Hedging Summary for Fiscal 2030 Volume  Average Hedge Price
    Fixed Price Physical Sales 131,856MMBTU $2.93 / MMBTU


    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
                
    Pipeline and Storage Throughput - (millions of cubic feet - MMcf)
                
     Three Months Ended Six Months Ended
     March 31, March 31,
         Increase     Increase
     2024 2023 (Decrease) 2024 2023 (Decrease)
    Firm Transportation - Affiliated42,561 48,147 (5,586) 74,056 86,616 (12,560)
    Firm Transportation - Non-Affiliated179,697 182,934 (3,237) 348,303 369,089 (20,786)
    Interruptible Transportation1,271 619 652  1,389 1,927 (538)
     223,529 231,700 (8,171) 423,748 457,632 (33,884)
                
    Gathering Volume - (MMcf)           
     Three Months Ended Six Months Ended
     March 31, March 31,
         Increase     Increase
     2024 2023 (Decrease) 2024 2023 (Decrease)
    Gathered Volume125,565 109,344 16,221  249,388 217,371 32,017 
                
                
    Utility Throughput - (MMcf)           
     Three Months Ended Six Months Ended
     March 31, March 31,
         Increase     Increase
     2024 2023 (Decrease) 2024 2023 (Decrease)
    Retail Sales:           
    Residential Sales27,063 27,884 (821) 45,045 48,037 (2,992)
    Commercial Sales4,293 4,384 (91) 7,093 7,378 (285)
    Industrial Sales190 267 (77) 327 418 (91)
     31,546 32,535 (989) 52,465 55,833 (3,368)
    Transportation22,637 22,788 (151) 40,166 41,098 (932)
     54,183 55,323 (1,140) 92,631 96,931 (4,300)
                

      

    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 and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results 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 three and six months ended March 31, 2024 and 2023:

     Three Months Ended Six Months Ended
     March 31, March 31,
    (in thousands except per share amounts) 2024   2023   2024   2023 
    Reported GAAP Earnings$166,272  $140,880  $299,292  $310,570 
    Items impacting comparability:       
    Unrealized (gain) loss on derivative asset (E&P) (536)  2,471   3,662   2,273 
    Tax impact of unrealized (gain) loss on derivative asset 147   (677)  (1,004)  (623)
    Unrealized (gain) loss on other investments (Corporate / All Other) (769)  (1,068)  (1,818)  (1,278)
    Tax impact of unrealized (gain) loss on other investments 162   224   382   268 
    Adjusted Operating Results$165,276  $141,830  $300,514  $311,210 
            
    Reported GAAP Earnings Per Share$1.80  $1.53  $3.24  $3.37 
    Items impacting comparability:       
    Unrealized (gain) loss on derivative asset, net of tax (E&P) —   0.02   0.03   0.02 
    Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) (0.01)  (0.01)  (0.02)  (0.01)
    Rounding —   —   —   (0.01)
    Adjusted Operating Results Per Share$1.79  $1.54  $3.25  $3.37 


    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 three and six months ended March 31, 2024 and 2023:

     Three Months Ended Six Months Ended
     March 31, March 31,
    (in thousands) 2024   2023   2024   2023 
    Reported GAAP Earnings$166,272  $140,880  $299,292  $310,570 
    Depreciation, Depletion and Amortization 118,935   100,964   234,725   197,564 
    Other (Income) Deductions (6,070)  (2,884)  (9,801)  (9,203)
    Interest Expense 35,089   33,444   69,825   66,892 
    Income Taxes 55,332   49,937   98,419   107,489 
    Adjusted EBITDA$369,558  $322,341  $692,460  $673,312 
            
    Adjusted EBITDA by Segment       
    Pipeline and Storage Adjusted EBITDA$70,033  $58,926  $129,174  $123,455 
    Gathering Adjusted EBITDA 53,103   46,263   106,164   92,977 
    Total Midstream Businesses Adjusted EBITDA 123,136   105,189   235,338   216,432 
    Exploration and Production Adjusted EBITDA 172,068   154,574   332,038   344,905 
    Utility Adjusted EBITDA 78,326   65,820   131,694   117,396 
    Corporate and All Other Adjusted EBITDA (3,972)  (3,242)  (6,610)  (5,421)
    Total Adjusted EBITDA$369,558  $322,341  $692,460  $673,312 


    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) 2024   2023   2024   2023 
    Exploration and Production Segment       
    Reported GAAP Earnings$62,065  $60,982  $114,548  $152,174 
    Depreciation, Depletion and Amortization 73,448   58,605   145,413   114,164 
    Other (Income) Deductions (1,270)  1,276   141   (402)
    Interest Expense 15,108   12,186   30,377   25,420 
    Income Taxes 22,717   21,525   41,559   53,549 
    Adjusted EBITDA$172,068  $154,574  $332,038  $344,905 
            
    Pipeline and Storage Segment       
    Reported GAAP Earnings$30,737  $23,858  $54,792  $53,335 
    Depreciation, Depletion and Amortization 19,490   17,728   37,704   35,142 
    Other (Income) Deductions (3,303)  (2,288)  (6,493)  (5,482)
    Interest Expense 12,119   10,877   23,843   21,829 
    Income Taxes 10,990   8,751   19,328   18,631 
    Adjusted EBITDA$70,033  $58,926  $129,174  $123,455 
            
    Gathering Segment       
    Reported GAAP Earnings$28,706  $24,334  $57,531  $49,072 
    Depreciation, Depletion and Amortization 9,611   8,918   19,068   17,626 
    Other (Income) Deductions (81)  (262)  (162)  (470)
    Interest Expense 3,701   3,900   7,431   7,943 
    Income Taxes 11,166   9,373   22,296   18,806 
    Adjusted EBITDA$53,103  $46,263  $106,164  $92,977 
            
    Utility Segment       
    Reported GAAP Earnings$44,739  $31,720  $71,289  $55,537 
    Depreciation, Depletion and Amortization 16,268   15,553   32,305   30,428 
    Other (Income) Deductions (2,197)  (1,764)  (4,577)  (3,198)
    Interest Expense 8,528   9,709   16,986   17,752 
    Income Taxes 10,988   10,602   15,691   16,877 
    Adjusted EBITDA$78,326  $65,820  $131,694  $117,396 
            
    Corporate and All Other       
    Reported GAAP Earnings$25  $(14) $1,132  $452 
    Depreciation, Depletion and Amortization 118   160   235   204 
    Other (Income) Deductions 781   154   1,290   349 
    Interest Expense (4,367)  (3,228)  (8,812)  (6,052)
    Income Taxes (529)  (314)  (455)  (374)
    Adjusted EBITDA$(3,972) $(3,242) $(6,610) $(5,421)

    Natalie M. Fischer
Investor Relations 
716-857-7315

Timothy J. Silverstein
Treasurer
716-857-6987

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