• National Fuel Reports First Quarter Earnings

    المصدر: Nasdaq GlobeNewswire / 03 فبراير 2022 16:45:01   America/New_York

    WILLIAMSVILLE, N.Y., Feb. 03, 2022 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the first quarter of its 2022 fiscal year.

    FISCAL 2022 FIRST QUARTER SUMMARY

    • GAAP net income of $132.4 million, or $1.44 per share, compared to GAAP net income of $77.8 million, or $0.85 per share, in the prior year.
    • Adjusted operating results of $135.9 million, or $1.48 per share, an increase of 40%, compared to $1.06 per share, in the prior year (see non-GAAP reconciliation on page 2).
    • Adjusted EBITDA of $298.2 million, an increase of 18%, compared to $251.7 million in the prior year (see non-GAAP reconciliation on page 21).
    • E&P segment Adjusted EBITDA of $147.0 million, an increase of 46%, compared to $100.7 million in the prior year.
    • E&P segment net production of 85.1 Bcfe, an increase of 5.6 Bcfe, or 7%, higher than both the prior year and Fiscal 2021 fourth quarter.
    • Average realized natural gas prices of $2.52 per Mcf, up $0.38 per Mcf from the prior year.
    • Average realized oil prices of $64.29 per Bbl, up $14.38 per Bbl from the prior year.
    • Gathering segment Adjusted EBITDA of $44.0 million, an increase of 11%, compared to $39.8 million in the prior year.
    • Company is revising its fiscal 2022 earnings guidance to a range of $5.20 to $5.50 per share, an increase of $0.10 at the midpoint.

    MANAGEMENT COMMENTS

    David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel had an outstanding start to fiscal 2022, with adjusted operating results increasing 40% from the prior year, primarily driven by strong performance from our Exploration & Production business. We continued to execute on our growth plans by placing the FM100 expansion and modernization project into service in December. This project, which was completed on-time and under budget, provides significant new capacity on our FERC-regulated pipeline system which, along with Transco’s companion Leidy South project, is an important, long-term valuable outlet for the Company’s Appalachian production. Further, the project incorporated best-in-class emissions controls, including the installation of vent gas recovery systems and compressed air pneumatics, maintaining our focus on reducing the methane intensity of our operations.

    “Additionally, throughout the quarter, National Fuel continued to make significant progress on its sustainability initiatives, achieving certification of 100% of our Appalachian production under Equitable Origin’s EO100TM Standard for Responsible Energy Development. This accreditation along with our ongoing investments to achieve our emission reduction targets, positions National Fuel to differentiate its responsibly sourced production in the marketplace, including all of our volumes transported on the Leidy South project.

    “As we look forward, National Fuel’s integrated businesses are well-positioned for the future. Our unique mix of assets and the strength of our balance sheet enable us to deliver growth, while enhancing our ability to generate long-term free cash flow.”

    RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

        
     Three Months Ended
      December 31,
    (in thousands except per share amounts) 2021   2020 
    Reported GAAP Earnings$132,392  $77,774 
    Items impacting comparability:   
    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 
    Unrealized (gain) loss on other investments (Corporate / All Other) 4,490   1,298 
    Tax impact of unrealized (gain) loss on other investments (943)  (272)
    Adjusted Operating Results$135,939  $96,975 
        
    Reported GAAP Earnings Per Share$1.44  $0.85 
    Items impacting comparability:   
    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)
    Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.04   0.01 
    Adjusted Operating Results Per Share$1.48  $1.06 

    FISCAL 2022 GUIDANCE UPDATE

    National Fuel is revising its fiscal 2022 earnings guidance range to reflect the results of the first quarter, along with updated assumptions for the balance of the year. The Company is now projecting that earnings, excluding items impacting comparability, will be within the range of $5.20 to $5.50 per share, an increase of $0.10 per share from the midpoint of the Company’s prior guidance range. The increase reflects changes in the Exploration and Production segment, including higher expected oil price realizations and lower expected cash unit costs, partially offset by higher operation and maintenance expense at the Company’s regulated businesses.

    The Company is now assuming that NYMEX natural gas prices will average $4.50 per MMBtu for the remainder of fiscal 2022, an average increase of $0.17 per MMBtu from the $4.33 per MMBtu average assumed in the previous guidance over the remaining nine months of the fiscal year. Additionally, the Company is now projecting that WTI oil prices will average $80.00 per Bbl in fiscal 2022, a $5.00 increase from the $75.00 per Bbl assumed in the previous guidance. For guidance purposes, the Company’s updated projections approximate the current NYMEX forward markets for natural gas and oil and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts.

    The Exploration and Production segment’s fiscal 2022 net production is now expected to be in the range of 340 to 365 Bcfe, an increase of 2.5 Bcfe at the midpoint of the Company’s prior guidance. Seneca currently has firm sales contracts in place for approximately 92% of its projected remaining fiscal 2022 Appalachian production, limiting its exposure to in-basin markets. Approximately 79% of Seneca’s expected remaining Appalachian production is either matched by a financial hedge or were entered into at a fixed price.

    The Company’s consolidated capital expenditures are now expected to be in the range of $665 to $810 million, a $37.5 million increase from the midpoint of previous guidance. This increase is relatively balanced between two items related to the Exploration and Production segment. First, the new guidance range incorporates moderately higher costs per well due to inflationary pressures. Second, additional growth capital is being incorporated, including highly economic enhanced completion designs expected to increase well productivity and more frequent use of a top-hole rig. This activity is expected to accelerate production and increase free cash flow generation beginning in fiscal 2023. The Company has added incremental long-term firm sales contracts to bolster its already strong marketing portfolio, mitigating price-related risk of this incremental production.

    The Company's other guidance assumptions remain largely unchanged from the previous guidance. Additional details on the Company's updated forecast assumptions and business segment guidance for fiscal 2022 are outlined in the table on page 7.

    DISCUSSION OF FIRST QUARTER RESULTS BY SEGMENT

    The following earnings discussion of each operating segment for the quarter ended December 31, 2021 is summarized in a tabular form on pages 8 and 9 of this report. 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 and California.

     Three Months Ended
     December 31,
    (in thousands) 2021  2020  Variance
    GAAP Earnings$62,369 $(29,623) $91,992 
    Impairment of oil and gas properties, net of tax —  55,172   (55,172)
    Adjusted Operating Results$62,369 $25,549  $36,820 
          
    Adjusted EBITDA$146,999 $100,744  $46,255 

    Seneca’s first quarter GAAP earnings increased $92.0 million versus the prior year, primarily due to the prior-year first quarter impact of a non-cash ceiling test impairment charge of $55.2 million (after-tax). Excluding this item, Seneca’s first quarter earnings increased $36.8 million primarily due to higher natural gas production and higher realized natural gas and crude oil prices, as well as lower interest expense, partially offset by higher operating expenses.

    Seneca produced 85.1 Bcfe during the first quarter, an increase of 5.6 Bcfe, or 7%, from the prior year. The improvement was due to a 5.7 Bcf increase in natural gas production, primarily due to production growth from Seneca's two-rig development program on its core acreage positions in Appalachia. Approximately 4.9 Bcf of the natural gas production increase came from the Western Development Area ("WDA") with the remainder attributable to Seneca’s Eastern Development Area ("EDA"). Seneca's crude oil production in California decreased 15 MBbls, or 3%, versus the prior year due to natural production declines.

    Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.52 per Mcf, an increase of $0.38 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 $64.29 per Bbl, an increase of $14.38 per Bbl compared to the prior year.

    Lease operating and transportation (“LOE”) expense increased $3.6 million primarily due to higher transportation costs in Appalachia related to Seneca's increased production, as well as higher steam fuel costs in California that were a result of higher natural gas prices. LOE expense includes $48.2 million in intercompany expense for gathering and compression services used to connect Seneca’s Appalachian production to sales points along interstate pipelines, which is an increase of $1.5 million from the prior-year first quarter. Depreciation, depletion and amortization ("DD&A") expense increased $4.2 million due largely to higher natural gas production. Other taxes increased $1.3 million primarily due to a higher Impact Fee in Pennsylvania, resulting from increased per well fees caused by higher NYMEX natural gas prices for calendar 2021. Impact Fees are variable fees that move based on calendar year NYMEX prices.

    Interest expense decreased $3.4 million due primarily to a decrease in outstanding principal balances associated with Seneca's long-term intercompany borrowings coupled with lower weighted average interest rates as a result of the Company's issuance of a 2.95% coupon 10-year note in February 2021, which replaced a 4.9% coupon 10-year note that was retired in March 2021.  

    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
     December 31,
    (in thousands) 2021  2020 Variance
    GAAP Earnings$25,168 $24,183 $985 
          
    Adjusted EBITDA$57,150 $58,134 $(984)

    The Pipeline and Storage segment’s first quarter GAAP earnings increased $1.0 million versus the prior year primarily due to higher operating revenues and an increase in other income, partially offset by higher operation and maintenance ("O&M") expense. The increase in operating revenues of $0.6 million was primarily due to new demand charges for transportation service from Supply Corporation's FM100 Project, which was placed in service in December 2021, partially offset by a decrease in transportation revenue from miscellaneous contract revisions. The increase in other income of $1.2 million was primarily due to an increase in allowance for funds used during construction (AFUDC) related to the construction of the FM100 Project. O&M expense increased $1.0 million primarily due to power costs related to Empire's electric motor drive compressor station, as well as higher personnel costs. Power costs related to the electric motor drive compressor station are offset by an equal amount of revenue through a surcharge mechanism.

    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
     December 31,
    (in thousands) 2021  2020 Variance
    GAAP Earnings$23,137 $20,550 $2,587
          
    Adjusted EBITDA$44,032 $39,793 $4,239

    The Gathering segment’s first quarter GAAP earnings increased $2.6 million versus the prior year. The earnings increase was primarily driven by higher operating revenues, which was partially offset by higher O&M expense and a modest increase in DD&A expense. Operating revenues increased $5.2 million, or 11%, primarily driven by a 12.7 Bcf increase in gathered volume due to an increase in non-affiliated natural gas production in Appalachia and, to a lesser extent, an increase in Seneca's gross natural gas production in Appalachia. The increase in O&M expense of $1.0 million was primarily due to higher personnel costs, higher fuel costs, as well as higher compressor station operating and preventative maintenance activity during the quarter. The increase in DD&A expense of $0.5 million was primarily attributable to higher average depreciable plant in service compared to the prior year.

    Downstream Businesses

    Utility Segment

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

     Three Months Ended
     December 31,
    (in thousands) 2021  2020 Variance
    GAAP Earnings$22,130 $23,037 $(907)
          
    Adjusted EBITDA$52,028 $56,968 $(4,940)

    The Utility segment’s first quarter GAAP earnings decreased $0.9 million versus the prior year primarily due to lower customer margin (operating revenues less purchased gas sold), higher O&M expense and higher DD&A expense, partially offset by a decrease in other deductions and a lower effective income tax rate. The decrease in customer margin was due primarily to a decrease in base rates that reflects the elimination of other post-employment benefit (“OPEB”) expenses from customer rates in Distribution’s Pennsylvania service territory in accordance with a regulatory proceeding that became effective October 1, 2021, combined with the impact of adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation. These items were partially offset by higher revenues from the Company's system modernization tracking mechanism in its New York service territory.

    O&M expense increased $2.2 million primarily due to higher personnel costs and an increase in vehicle fuel costs, partially offset by lower accruals for the allowance for uncollectible accounts, which were higher in the prior-year first quarter as a result of the economic backdrop brought on by COVID-19. The $0.8 million increase in DD&A expense was primarily attributable to higher average depreciable plant in service compared to the prior year. The decrease in other deductions of $2.1 million reflects the aforementioned elimination of OPEB expenses from customer rates in Distribution's Pennsylvania service territory that became effective October 1, 2021. The reduction in the Utility segment's effective income tax rate was due primarily to differences in permanent book and tax deductions related to stock compensation activity and a reduction in current state income taxes related to OPEB activity.

    Corporate and All Other

    The Company’s operations that are included in Corporate and All Other generated a combined net loss of $0.4 million in the current year first quarter, which was a $40.0 million decrease over combined earnings of $39.6 million generated in the prior-year first quarter. The decrease was primarily driven by the prior-year first quarter impact of a gain recognized on the sale of the Company's timber properties of $37.0 million (after-tax).

    EARNINGS TELECONFERENCE

    The Company will host a conference call on Friday, February 4, 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: http://www.directeventreg.com/registration/event/8375065. To access the webcast, visit the Events Calendar under the News & Events page on the NFG Investor Relations website at investor.nationalfuelgas.com. A replay of the conference call will be available approximately two hours following the teleconference at the same website link and by phone at 855-859-2056 or 800-585-8367 using conference ID number “8375065”. Both the webcast and conference call replay will be available until the close of business on Friday, February 11, 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. Haspett716-857-7697
    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: 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; the length and severity of the ongoing COVID-19 pandemic, including its impacts across our businesses on demand, operations, global supply chains and liquidity; 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 or oil; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; impairments under the SEC’s full cost ceiling test for natural gas and oil 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 or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; 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 and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; 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 or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; 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. 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 an after-tax unrealized loss on other investments, which reduced earnings by $0.04 per share, and impacted the comparability of earnings during the quarter ended December 31, 2021. While the Company expects to record certain adjustments to unrealized gain or loss on investments during the nine 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 Previous FY 2022 Guidance
    Consolidated Earnings per Share, excluding items impacting comparability$5.20 to $5.50 $5.05 to $5.45
    Consolidated Effective Tax Rate~ 25-26% ~ 25-26%
        
    Capital Expenditures (Millions)   
    Exploration and Production$425 - $500 $400 - $450
    Pipeline and Storage$100 - $150 $100 - $150
    Gathering$50 - $60 $50 - $60
    Utility$90 - $100 $90 - $100
    Consolidated Capital Expenditures$665 - $810 $640 - $760
        
    Exploration & Production Segment Guidance*   
        
    Commodity Price Assumptions   
    NYMEX natural gas price (Oct - Mar | Apr - Sep)$4.50 /MMBtu $5.50 /MMBtu | $3.75 /MMBtu
    Appalachian basin spot price (Oct - Mar | Apr - Sep)$3.65 /MMBtu $4.80 /MMBtu | $2.75 /MMBtu
    NYMEX (WTI) crude oil price$80.00 /Bbl $75.00 /Bbl
    California oil price premium (% of WTI)97% 97%
        
    Production (Bcfe)340 to 365 335 to 365
        
    E&P Operating Costs ($/Mcfe)   
    LOE$0.81 - $0.84 $0.83 - $0.86
    G&A$0.19 - $0.21 $0.19 - $0.21
    DD&A$0.59 - $0.62 $0.59 - $0.62
        
    Other Business Segment Guidance (Millions)   
    Gathering Segment Revenues$200 - $225 $200 - $225
    Pipeline and Storage Segment Revenues$360 - $380 $360 - $380

    * Commodity price assumptions are for the remaining 9 months of the fiscal year. Previous guidance included separate pricing assumptions for October - March and April - September.

    NATIONAL FUEL GAS COMPANY
    RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
    QUARTER ENDED DECEMBER 31, 2021
    (Unaudited)
                
     Upstream Midstream Downstream    
                
     Exploration & Pipeline &     Corporate /  
    (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated*
                
    First quarter 2021 GAAP earnings$(29,623) $24,183  $20,550  $23,037  $39,627  $77,774 
    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 
    Unrealized (gain) loss on other investments         1,298   1,298 
    Tax impact of unrealized (gain) loss on other investments         (272)  (272)
    First quarter 2021 adjusted operating results 25,549   24,183   20,550   23,037   3,656   96,975 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production 9,594           9,594 
    Higher (lower) crude oil production (615)          (615)
    Higher (lower) realized natural gas prices, after hedging 24,610           24,610 
    Higher (lower) realized crude oil prices, after hedging 6,223           6,223 
    Higher (lower) other operating revenues 1,904           1,904 
    Midstream and All Other Revenues           
    Higher (lower) operating revenues   463   4,121       4,584 
    Downstream Margins***           
    Impact of new rates       (1,785)    (1,785)
    System modernization tracker revenues       781     781 
    Regulatory revenue adjustments       (903)    (903)
    Higher (lower) energy marketing margins         1,345   1,345 
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses (2,808)          (2,808)
    Lower (higher) operating expenses (1,347)  (789)  (778)  (1,432)    (4,346)
    Lower (higher) property, franchise and other taxes (1,018)          (1,018)
    Lower (higher) depreciation / depletion (3,297)  (263)  (385)  (661)    (4,606)
    Other Income (Expense)           
    (Higher) lower other deductions   1,160     1,695   873   3,728 
    (Higher) lower interest expense 2,653   473       (777)  2,349 
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate 873   393   (195)  2,019   (2,426)  664 
    All other / rounding 48   (452)  (176)  (621)  464   (737)
    First quarter 2022 adjusted operating results 62,369   25,168   23,137   22,130   3,135   135,939 
    Items impacting comparability:           
    Unrealized gain (loss) on other investments         (4,490)  (4,490)
    Tax impact of unrealized gain (loss) on other investments         943   943 
    First quarter 2022 GAAP earnings$62,369  $25,168  $23,137  $22,130  $(412) $132,392 
                
    * 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 DECEMBER 31, 2021
    (Unaudited)
                
     Upstream Midstream Downstream     
                
     Exploration & Pipeline &     Corporate /  
     Production Storage Gathering Utility All Other Consolidated*
                
    First quarter 2021 GAAP earnings per share$(0.32) $0.26  $0.22  $0.25  $0.44  $0.85 
    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)
    Unrealized (gain) loss on other investments, net of tax         0.01   0.01 
    First quarter 2021 adjusted operating results per share 0.28   0.26   0.22   0.25   0.05   1.06 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production 0.10           0.10 
    Higher (lower) crude oil production (0.01)          (0.01)
    Higher (lower) realized natural gas prices, after hedging 0.27           0.27 
    Higher (lower) realized crude oil prices, after hedging 0.07           0.07 
    Higher (lower) other operating revenues 0.02           0.02 
    Midstream and All Other Revenues           
    Higher (lower) operating revenues   0.01   0.04       0.05 
    Downstream Margins***           
    Impact of new rates       (0.02)    (0.02)
    System modernization tracker revenues       0.01     0.01 
    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 (0.03)          (0.03)
    Lower (higher) operating expenses (0.01)  (0.01)  (0.01)  (0.02)    (0.05)
    Lower (higher) property, franchise and other taxes (0.01)          (0.01)
    Lower (higher) depreciation / depletion (0.04)  —   —   (0.01)    (0.05)
    Other Income (Expense)           
    (Higher) lower other deductions   0.01     0.02   0.01   0.04 
    (Higher) lower interest expense 0.03   0.01       (0.01)  0.03 
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate 0.01   —   —   0.02   (0.03)  — 
    All other / rounding —   (0.01)  —   —   0.01   — 
    First quarter 2022 adjusted operating results per share 0.68   0.27   0.25   0.24   0.04   1.48 
    Items impacting comparability:           
    Unrealized gain (loss) on other investments, net of tax         (0.04)  (0.04)
    First quarter 2022 GAAP earnings per share$0.68  $0.27  $0.25  $0.24  $—  $1.44 
                
    * 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
     December 31,
     (Unaudited)
    SUMMARY OF OPERATIONS 2021   2020 
    Operating Revenues:   
    Utility and Energy Marketing Revenues$236,684  $189,466 
    Exploration and Production and Other Revenues 244,281   192,035 
    Pipeline and Storage and Gathering Revenues 65,592   59,659 
      546,557   441,160 
    Operating Expenses:   
    Purchased Gas 101,628   51,620 
    Operation and Maintenance:   
    Utility and Energy Marketing 46,644   44,886 
    Exploration and Production and Other 45,619   42,027 
    Pipeline and Storage and Gathering 29,928   28,098 
    Property, Franchise and Other Taxes 24,501   22,781 
    Depreciation, Depletion and Amortization 88,578   83,120 
    Impairment of Oil and Gas Producing Properties —   76,152 
      336,898   348,684 
    Gain on Sale of Timber Properties —   51,066 
    Operating Income 209,659   143,542 
        
    Other Income (Expense):   
    Other Income (Deductions) (1,079)  (2,176)
    Interest Expense on Long-Term Debt (30,130)  (32,256)
    Other Interest Expense (1,161)  (1,919)
        
    Income Before Income Taxes 177,289   107,191 
        
    Income Tax Expense 44,897   29,417 
        
    Net Income Available for Common Stock$132,392  $77,774 
        
    Earnings Per Common Share   
    Basic$1.45  $0.85 
    Diluted$1.44  $0.85 
        
    Weighted Average Common Shares:   
    Used in Basic Calculation 91,266,300   91,007,657 
    Used in Diluted Calculation 92,032,775   91,508,259 


    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
      
     December 31, September 30,
    (Thousands of Dollars) 2021   2021 
    ASSETS   
    Property, Plant and Equipment$13,293,191  $13,103,639 
    Less - Accumulated Depreciation, Depletion and Amortization 6,802,436   6,719,356 
    Net Property, Plant and Equipment 6,490,755   6,384,283 
    Current Assets:   
    Cash and Temporary Cash Investments 79,065   31,528 
    Hedging Collateral Deposits —   88,610 
    Receivables - Net 264,255   205,294 
    Unbilled Revenue 56,836   17,000 
    Gas Stored Underground 22,767   33,669 
    Materials, Supplies and Emission Allowances 47,351   53,560 
    Unrecovered Purchased Gas Costs 32,602   33,128 
    Other Current Assets 64,314   59,660 
    Total Current Assets 567,190   522,449 
    Other Assets:   
    Recoverable Future Taxes 124,439   121,992 
    Unamortized Debt Expense 10,162   10,589 
    Other Regulatory Assets 57,178   60,145 
    Deferred Charges 69,981   59,939 
    Other Investments 106,483   149,632 
    Goodwill 5,476   5,476 
    Prepaid Pension and Post-Retirement Benefit Costs 158,009   149,151 
    Other —   1,169 
    Total Other Assets 531,728   558,093 
    Total Assets$7,589,673  $7,464,825 
    CAPITALIZATION AND LIABILITIES   
    Capitalization:   
    Comprehensive Shareholders' Equity   
    Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and   
    Outstanding - 91,436,837 Shares and 91,181,549 Shares, Respectively$91,437  $91,182 
    Paid in Capital 1,013,821   1,017,446 
    Earnings Reinvested in the Business 1,281,963   1,191,175 
    Accumulated Other Comprehensive Loss (277,026)  (513,597)
    Total Comprehensive Shareholders' Equity 2,110,195   1,786,206 
    Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,629,602   2,628,687 
    Total Capitalization 4,739,797   4,414,893 
    Current and Accrued Liabilities:   
    Notes Payable to Banks and Commercial Paper 166,000   158,500 
    Accounts Payable 129,934   171,655 
    Amounts Payable to Customers 36   21 
    Dividends Payable 41,604   41,487 
    Interest Payable on Long-Term Debt 45,017   17,376 
    Customer Advances 14,620   17,223 
    Customer Security Deposits 20,273   19,292 
    Other Accruals and Current Liabilities 187,965   194,169 
    Fair Value of Derivative Financial Instruments 290,690   616,410 
    Total Current and Accrued Liabilities 896,139   1,236,133 
    Other Liabilities:   
    Deferred Income Taxes 799,599   660,420 
    Taxes Refundable to Customers 350,628   354,089 
    Cost of Removal Regulatory Liability 249,208   245,636 
    Other Regulatory Liabilities 204,476   200,643 
    Pension and Other Post-Retirement Liabilities 4,775   7,526 
    Asset Retirement Obligations 208,128   209,639 
    Other Liabilities 136,923   135,846 
    Total Other Liabilities 1,953,737   1,813,799 
    Commitments and Contingencies —   — 
    Total Capitalization and Liabilities$7,589,673  $7,464,825 


        
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
     Three Months Ended
     December 31,
    (Thousands of Dollars) 2021   2020 
        
    Operating Activities:   
    Net Income Available for Common Stock$132,392  $77,774 
    Adjustments to Reconcile Net Income to Net Cash
    Provided by Operating Activities:    		   
    Gain on Sale of Timber Properties —   (51,066)
    Impairment of Oil and Gas Producing Properties —   76,152 
    Depreciation, Depletion and Amortization 88,578   83,120 
    Deferred Income Taxes 44,122   26,591 
    Stock-Based Compensation 5,487   3,933 
    Other 4,675   2,887 
    Change in:   
    Receivables and Unbilled Revenue (98,688)  (63,606)
    Gas Stored Underground and Materials, Supplies and Emission Allowances 17,111   13,873 
    Unrecovered Purchased Gas Costs 526   (367)
    Other Current Assets (4,654)  (251)
    Accounts Payable (10,888)  (541)
    Amounts Payable to Customers 15   (4,965)
    Customer Advances (2,603)  713 
    Customer Security Deposits 981   424 
    Other Accruals and Current Liabilities 5,044   27,615 
    Other Assets (6,838)  10,066 
    Other Liabilities (3,777)  2,391 
    Net Cash Provided by Operating Activities$171,483  $204,743 
        
    Investing Activities:   
    Capital Expenditures$(213,491) $(183,301)
    Net Proceeds from Sale of Timber Properties —   104,582 
    Sale of Fixed Income Mutual Fund Shares in Grantor Trust 30,000   — 
    Other 13,781   11,849 
    Net Cash Used in Investing Activities$(169,710) $(66,870)
        
    Financing Activities:   
    Changes in Notes Payable to Banks and Commercial Paper$7,500  $(5,000)
    Dividends Paid on Common Stock (41,487)  (40,475)
    Net Repurchases of Common Stock (8,859)  (3,526)
    Net Cash Used in Financing Activities$(42,846) $(49,001)
        
    Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (41,073)  88,872 
    Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 120,138   20,541 
    Cash, Cash Equivalents, and Restricted Cash at December 31$79,065  $109,413 


          
          
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
          
    UPSTREAM BUSINESS
          
          
     Three Months Ended
    (Thousands of Dollars, except per share amounts)December 31,
    EXPLORATION AND PRODUCTION SEGMENT 2021   2020  Variance
    Total Operating Revenues$244,198  $191,395  $52,803 
    Operating Expenses:     
    Operation and Maintenance:     
    General and Administrative Expense 17,756   16,953   803 
    Lease Operating and Transportation Expense 69,136   65,581   3,555 
    All Other Operation and Maintenance Expense 4,573   3,671   902 
    Property, Franchise and Other Taxes 5,734   4,446   1,288 
    Depreciation, Depletion and Amortization 49,506   45,332   4,174 
    Impairment of Oil and Gas Producing Properties —   76,152   (76,152)
      146,705   212,135   (65,430)
          
    Operating Income (Loss) 97,493   (20,740)  118,233 
          
    Other Income (Expense):     
    Non-Service Pension and Post-Retirement Benefit Costs (186)  (285)  99 
    Interest and Other Income 56   91   (35)
    Interest Expense (12,132)  (15,490)  3,358 
    Income (Loss) Before Income Taxes 85,231   (36,424)  121,655 
    Income Tax Expense (Benefit) 22,862   (6,801)  29,663 
    Net Income (Loss)$62,369  $(29,623) $91,992 
    Net Income (Loss) Per Share (Diluted)$0.68  $(0.32) $1.00 
          


          
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
          
    MIDSTREAM BUSINESSES
          
     Three Months Ended
    (Thousands of Dollars, except per share amounts)December 31,
    PIPELINE AND STORAGE SEGMENT 2021   2020  Variance
    Revenues from External Customers$61,547  $59,308  $2,239 
    Intersegment Revenues 26,803   28,456   (1,653)
    Total Operating Revenues 88,350   87,764   586 
    Operating Expenses:     
    Purchased Gas 448   13   435 
    Operation and Maintenance 22,172   21,173   999 
    Property, Franchise and Other Taxes 8,580   8,444   136 
    Depreciation, Depletion and Amortization 15,801   15,468   333 
      47,001   45,098   1,903 
          
    Operating Income 41,349   42,666   (1,317)
          
    Other Income (Expense):     
    Non-Service Pension and Post-Retirement Benefit Credit 767   125   642 
    Interest and Other Income 1,402   856   546 
    Interest Expense (10,132)  (10,731)  599 
    Income Before Income Taxes 33,386   32,916   470 
    Income Tax Expense 8,218   8,733   (515)
    Net Income$25,168  $24,183  $985 
    Net Income Per Share (Diluted)$0.27  $0.26  $0.01 
          
          
     Three Months Ended
     December 31,
    GATHERING SEGMENT 2021   2020  Variance
    Revenues from External Customers$4,045  $351  $3,694 
    Intersegment Revenues 48,180   46,658   1,522 
    Total Operating Revenues 52,225   47,009   5,216 
    Operating Expenses:     
    Operation and Maintenance 8,188   7,203   985 
    Property, Franchise and Other Taxes 5   13   (8)
    Depreciation, Depletion and Amortization 8,391   7,904   487 
      16,584   15,120   1,464 
          
    Operating Income 35,641   31,889   3,752 
          
    Other Income (Expense):     
    Non-Service Pension and Post-Retirement Benefit Costs (56)  (68)  12 
    Interest and Other Income 9   234   (225)
    Interest Expense (4,148)  (4,131)  (17)
    Income Before Income Taxes 31,446   27,924   3,522 
    Income Tax Expense 8,309   7,374   935 
    Net Income$23,137  $20,550  $2,587 
    Net Income Per Share (Diluted)$0.25  $0.22  $0.03 
          


          
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
          
    DOWNSTREAM BUSINESS
          
     Three Months Ended
    (Thousands of Dollars, except per share amounts)December 31,
    UTILITY SEGMENT 2021   2020  Variance
    Revenues from External Customers$236,684  $188,901  $47,783 
    Intersegment Revenues 75   100   (25)
    Total Operating Revenues 236,759   189,001   47,758 
    Operating Expenses:     
    Purchased Gas 127,212   77,032   50,180 
    Operation and Maintenance 47,461   45,252   2,209 
    Property, Franchise and Other Taxes 10,058   9,749   309 
    Depreciation, Depletion and Amortization 14,831   13,994   837 
      199,562   146,027   53,535 
          
    Operating Income 37,197   42,974   (5,777)
          
    Other Income (Expense):     
    Non-Service Pension and Post-Retirement Benefit Costs (4,326)  (6,684)  2,358 
    Interest and Other Income 525   738   (213)
    Interest Expense (5,524)  (5,452)  (72)
    Income Before Income Taxes 27,872   31,576   (3,704)
    Income Tax Expense 5,742   8,539   (2,797)
    Net Income$22,130  $23,037  $(907)
    Net Income Per Share (Diluted)$0.24  $0.25  $(0.01)
          


     
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
          
     Three Months Ended
    (Thousands of Dollars, except per share amounts)December 31,
    ALL OTHER 2021   2020  Variance
    Revenues from External Customers$—  $1,110  $(1,110)
    Intersegment Revenues 6   20   (14)
    Total Operating Revenues 6   1,130   (1,124)
    Operating Expenses:     
    Purchased Gas 6   2,287   (2,281)
    Operation and Maintenance 5   764   (759)
    Property, Franchise and Other Taxes —   8   (8)
    Depreciation, Depletion and Amortization —   386   (386)
      11   3,445   (3,434)
    Gain on Sale of Timber Properties —   51,066   (51,066)
    Operating Income (Loss) (5)  48,751   (48,756)
    Other Income (Expense):     
    Non-Service Pension and Post-Retirement Benefit Costs —   (4)  4 
    Interest and Other Income 2   185   (183)
    Income (Loss) before Income Taxes (3)  48,932   (48,935)
    Income Tax Expense 4   11,372   (11,368)
    Net Income (Loss)$(7) $37,560  $(37,567)
    Net Income (Loss) Per Share (Diluted)$—  $0.41  $(0.41)
      
     Three Months Ended
     December 31,
    CORPORATE 2021   2020  Variance
    Revenues from External Customers$83  $95  $(12)
    Intersegment Revenues 1,082   663   419 
    Total Operating Revenues 1,165   758   407 
    Operating Expenses:     
    Operation and Maintenance 3,008   2,599   409 
    Property, Franchise and Other Taxes 124   121   3 
    Depreciation, Depletion and Amortization 49   36   13 
      3,181   2,756   425 
          
    Operating Loss (2,016)  (1,998)  (18)
    Other Income (Expense):     
    Non-Service Pension and Post-Retirement Benefit Costs (1,017)  (923)  (94)
    Interest and Other Income 33,177   38,979   (5,802)
    Interest Expense on Long-Term Debt (30,130)  (32,256)  2,126 
    Other Interest Expense (657)  (1,535)  878 
    Income (Loss) before Income Taxes (643)  2,267   (2,910)
    Income Tax Expense (Benefit) (238)  200   (438)
    Net Income (Loss)$(405) $2,067  $(2,472)
    Net Income (Loss) Per Share (Diluted)$—  $0.03  $(0.03)
          
          
     Three Months Ended
     December 31,
    INTERSEGMENT ELIMINATIONS 2021   2020  Variance
    Intersegment Revenues$(76,146) $(75,897) $(249)
    Operating Expenses:     
    Purchased Gas (26,038)  (27,712)  1,674 
    Operation and Maintenance (50,108)  (48,185)  (1,923)
      (76,146)  (75,897)  (249)
    Operating Income —   —   — 
    Other Income (Expense):     
    Interest and Other Deductions (31,432)  (35,420)  3,988 
    Interest Expense 31,432   35,420   (3,988)
    Net Income$—  $—  $— 
    Net Income Per Share (Diluted)$—  $—  $— 


          
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    SEGMENT INFORMATION (Continued)
    (Thousands of Dollars)
          
          
     Three Months Ended
     December 31,
     (Unaudited)
         Increase
      2021  2020 (Decrease)
          
    Capital Expenditures:     
    Exploration and Production$139,212(1)(2)$81,339(3)(4)$57,873 
    Pipeline and Storage 24,061(1)(2) 43,723(3)(4) (19,662)
    Gathering 8,920(1)(2) 8,320(3)(4) 600 
    Utility 19,383(1)(2) 17,345(3)(4) 2,038 
    Total Reportable Segments 191,576  150,727  40,849 
    All Other —  —  — 
    Corporate 225  39  186 
    Eliminations —  154  (154)
    Total Capital Expenditures$191,801 $150,920 $40,881 


    (1)Capital expenditures for the quarter ended December 31, 2021, include accounts payable and accrued liabilities related to capital expenditures of $69.9 million, $5.4 million, $2.6 million, and $3.1 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 December 31, 2021, since they represent non-cash investing activities at that date.
      
    (2)Capital expenditures for the quarter ended December 31, 2021, 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 quarter ended December 31, 2021. 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 December 31, 2021.
      
    (3)Capital expenditures for the quarter ended December 31, 2020, include accounts payable and accrued liabilities related to capital expenditures of $35.1 million, $11.2 million, $2.3 million, and $3.5 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 December 31, 2020, since they represent non-cash investing activities at that date.
      
    (4)Capital expenditures for the quarter ended December 31, 2020, 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 quarter ended December 31, 2020. 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 December 31, 2020.


              
    DEGREE DAYS         
           Percent Colder
           (Warmer) Than:
    Three Months Ended December 31,Normal 2021 2020 Normal (1) Last Year (1)
    Buffalo, NY2,253 1,704 1,921 (24.4) (11.3)
    Erie, PA2,044 1,560 1,697 (23.7) (8.1)

    (1)   Percents compare actual 2021 degree days to normal degree days and actual 2021 degree days to actual 2020 degree days.

          
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    EXPLORATION AND PRODUCTION INFORMATION
          
          
     Three Months Ended
     December 31,
         Increase
      2021  2020 (Decrease)
          
    Gas Production/Prices:     
    Production (MMcf)     
    Appalachia 81,389  75,669  5,720 
    West Coast 408  441  (33)
    Total Production 81,797  76,110  5,687 
          
    Average Prices (Per Mcf)     
    Appalachia$4.39 $2.17 $2.22 
    West Coast 9.79  5.03  4.76 
    Weighted Average 4.42  2.19  2.23 
    Weighted Average after Hedging 2.52  2.14  0.38 
          
    Oil Production/Prices:     
    Production (Thousands of Barrels)     
    Appalachia —  —  — 
    West Coast 548  563  (15)
    Total Production 548  563  (15)
          
    Average Prices (Per Barrel)     
    Appalachia$70.86 $38.53 $32.33 
    West Coast 77.34  43.48  33.86 
    Weighted Average 77.34  43.48  33.86 
    Weighted Average after Hedging 64.29  49.91  14.38 
          
    Total Production (MMcfe) 85,085  79,488  5,597 
          
    Selected Operating Performance Statistics:     
    General & Administrative Expense per Mcfe (1)$0.21 $0.21 $— 
    Lease Operating and Transportation Expense per Mcfe (1)(2)$0.81 $0.83 $(0.02)
    Depreciation, Depletion & Amortization per Mcfe (1)$0.58 $0.57 $0.01 
          


    (1)Refer to page 13 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 $0.56 and $0.57 per Mcfe for the three months ended December 31, 2021 and December 31, 2020, respectively.


    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    EXPLORATION AND PRODUCTION INFORMATION
     
          
    Hedging Summary for Remaining Nine Months of Fiscal 2022Volume  Average Hedge Price
    Oil Swaps     
    Brent855,000BBL $58.28 / BBL
    NYMEX117,000BBL $51.00 / BBL
    Total972,000BBL $57.40 / BBL
    Gas Swaps     
    NYMEX160,740,000MMBTU $2.76 / MMBTU
    Fixed Price Physical Sales46,554,848MMBTU $2.47 / MMBTU
    Total207,294,848MMBTU   
         
    Hedging Summary for Fiscal 2023Volume  Average Hedge Price
    Oil Swaps     
    Brent480,000BBL $58.48 / BBL
    Total480,000BBL $58.48 / BBL
    Gas Swaps     
    NYMEX116,200,000MMBTU $2.79 / MMBTU
    No Cost Collars52,800,000MMBTU $3.06 / MMBTU (Floor) / $3.65 / MMBTU (Ceiling)
    Fixed Price Physical Sales64,673,984MMBTU $2.33 / MMBTU
    Total233,673,984MMBTU   
         
    Hedging Summary for Fiscal 2024Volume  Average Hedge Price
    Oil Swaps     
    Brent120,000BBL $50.30 / BBL
    Total120,000BBL $50.30 / BBL
    Gas Swaps     
    NYMEX61,080,000MMBTU $2.72 / MMBTU
    No Cost Collars40,000,000MMBTU $3.18 / MMBTU (Floor) / $3.86 / MMBTU (Ceiling)
    Fixed Price Physical Sales59,398,923MMBTU $2.21 / MMBTU
    Total160,478,923MMBTU   
         
    Hedging Summary for Fiscal 2025Volume  Average Hedge Price
    Oil Swaps     
    Brent120,000BBL $50.32 / BBL
    Total120,000BBL $50.32 / BBL
    Gas Swaps     
    NYMEX23,660,000MMBTU $2.74 / MMBTU
    No Cost Collars3,200,000MMBTU $3.20 / MMBTU (Floor) / $3.88 / MMBTU (Ceiling)
    Fixed Price Physical Sales56,479,649MMBTU $2.21 / MMBTU
    Total83,339,649MMBTU   
          
    Hedging Summary for Fiscal 2026Volume  Average Hedge Price
    Gas Swaps     
    NYMEX1,720,000MMBTU $2.75 / MMBTU
    Fixed Price Physical Sales48,105,111MMBTU $2.22 / MMBTU
    Total49,825,111MMBTU   
          
    Hedging Summary for Fiscal 2027Volume  Average Hedge Price
    Fixed Price Physical Sales31,447,783MMBTU $2.25 / MMBTU
          
    Hedging Summary for Fiscal 2028Volume  Average Hedge Price
    Fixed Price Physical Sales5,317,246MMBTU $2.26 / MMBTU
          
    Hedging Summary for Fiscal 2029Volume  Average Hedge Price
    Fixed Price Physical Sales255,558MMBTU $2.26 / MMBTU


          
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
          
    Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
          
     Three Months Ended
     December 31,
         Increase
     2021 2020 (Decrease)
    Firm Transportation - Affiliated28,197 29,964 (1,767)
    Firm Transportation - Non-Affiliated165,397 173,064 (7,667)
    Interruptible Transportation767 590 177 
     194,361 203,618 (9,257)
          
    Gathering Volume - (MMcf)     
     Three Months Ended
     December 31,
         Increase
     2021 2020 (Decrease)
    Gathered Volume101,094 88,345 12,749 
          
          
    Utility Throughput - (MMcf)     
     Three Months Ended
     December 31,
         Increase
     2021 2020 (Decrease)
    Retail Sales:     
    Residential Sales17,496 18,412 (916)
    Commercial Sales2,543 2,528 15 
    Industrial Sales123 153 (30)
     20,162 21,093 (931)
    Transportation17,593 17,935 (342)
     37,755 39,028 (1,273)
          

    NATIONAL FUEL GAS COMPANY

    AND SUBSIDIARIES

    NON-GAAP FINANCIAL MEASURES

    In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding Adjusted Operating Results, Adjusted EBITDA and free cash flow, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results or liquidity and for comparing the Company’s financial performance to other companies. The Company's management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.

    Management defines Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the three months ended December 31, 2021 and 2020:

     Three Months Ended
     December 31,
    (in thousands except per share amounts) 2021   2020 
    Reported GAAP Earnings$132,392  $77,774 
    Items impacting comparability:   
    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 
    Unrealized (gain) loss on other investments (Corporate/All Other) 4,490   1,298 
    Tax impact of unrealized (gain) loss on other investments (943)  (272)
    Adjusted Operating Results$135,939  $96,975 
        
    Reported GAAP Earnings Per Share$1.44  $0.85 
    Items impacting comparability:   
    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)
    Unrealized (gain) loss on other investments, net of tax (Corporate/All Other) 0.04   0.01 
    Adjusted Operating Results Per Share$1.48  $1.06 

    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 months ended December 31, 2021 and 2020:

     Three Months Ended
     December 31,
    (in thousands) 2021   2020 
    Reported GAAP Earnings$132,392  $77,774 
    Depreciation, Depletion and Amortization 88,578   83,120 
    Other (Income) Deductions 1,079   2,176 
    Interest Expense 31,291   34,175 
    Income Taxes 44,897   29,417 
    Impairment of Oil and Gas Producing Properties —   76,152 
    Gain on Sale of Timber Properties —   (51,066)
    Adjusted EBITDA$298,237  $251,748 
        
    Adjusted EBITDA by Segment   
    Pipeline and Storage Adjusted EBITDA$57,150  $58,134 
    Gathering Adjusted EBITDA 44,032   39,793 
    Total Midstream Businesses Adjusted EBITDA 101,182   97,927 
    Exploration and Production Adjusted EBITDA 146,999   100,744 
    Utility Adjusted EBITDA 52,028   56,968 
    Corporate and All Other Adjusted EBITDA (1,972)  (3,891)
    Total Adjusted EBITDA$298,237  $251,748 

    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    NON-GAAP FINANCIAL MEASURES
    SEGMENT ADJUSTED EBITDA

     Three Months Ended
     December 31,
    (in thousands) 2021   2020 
    Exploration and Production Segment   
    Reported GAAP Earnings$62,369  $(29,623)
    Depreciation, Depletion and Amortization 49,506   45,332 
    Other (Income) Deductions 130   194 
    Interest Expense 12,132   15,490 
    Income Taxes 22,862   (6,801)
    Impairment of Oil and Gas Producing Properties —   76,152 
    Adjusted EBITDA$146,999  $100,744 
        
    Pipeline and Storage Segment   
    Reported GAAP Earnings$25,168  $24,183 
    Depreciation, Depletion and Amortization 15,801   15,468 
    Other (Income) Deductions (2,169)  (981)
    Interest Expense 10,132   10,731 
    Income Taxes 8,218   8,733 
    Adjusted EBITDA$57,150  $58,134 
        
    Gathering Segment   
    Reported GAAP Earnings$23,137  $20,550 
    Depreciation, Depletion and Amortization 8,391   7,904 
    Other (Income) Deductions 47   (166)
    Interest Expense 4,148   4,131 
    Income Taxes 8,309   7,374 
    Adjusted EBITDA$44,032  $39,793 
        
    Utility Segment   
    Reported GAAP Earnings$22,130  $23,037 
    Depreciation, Depletion and Amortization 14,831   13,994 
    Other (Income) Deductions 3,801   5,946 
    Interest Expense 5,524   5,452 
    Income Taxes 5,742   8,539 
    Adjusted EBITDA$52,028  $56,968 
        
    Corporate and All Other   
    Reported GAAP Earnings$(412) $39,627 
    Depreciation, Depletion and Amortization 49   422 
    Gain on Sale of Timber Properties —   (51,066)
    Other (Income) Deductions (730)  (2,817)
    Interest Expense (645)  (1,629)
    Income Taxes (234)  11,572 
    Adjusted EBITDA$(1,972) $(3,891)

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


    Brandon J. Haspett
Investor Relations
716-857-7697

Karen M. Camiolo
Treasurer
716-857-7344

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