National Fuel Reports First Quarter Results

    Business Editors/Energy Writers

    WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--Jan. 27, 2005--National Fuel Gas Company ("National Fuel" or the "Company") (NYSE:NFG) today announced earnings for the first quarter of its 2005 fiscal year (the quarter ended December 31, 2004) of $50.4 million or $0.60 per share,(1) an increase of $1.2 million from the prior year's first quarter earnings of $49.2 million or $0.60 per share.(1) The increase in earnings compared to the first quarter of fiscal 2004 is primarily attributable to results in the Exploration and Production segment, where higher commodity prices more than offset slightly lower production volumes. Earnings also increased in the Utility segment and Pipeline and Storage segment. These increases were partially offset by decreased earnings in the International and Timber segments (see further discussion below).
    When the non-recurring $5.2 million benefit to deferred income tax expense in the International segment is excluded from the prior year's first quarter, earnings for that quarter were $44.0 million or $0.53 per share.(1) When compared to those results, the earnings for the first quarter of fiscal 2005 of $50.4 million or $0.60 per share,(1) were $6.4 million or $0.07 per share higher. During last year's first quarter, the government in the Czech Republic enacted legislation which gradually reduces the corporate statutory income tax rate from 31% to 24% (the reduction will be phased in over a three-year period). In accordance with generally accepted accounting principles, the full $5.2 million benefit resulting from the change in the income tax rate was reflected as a reduction to deferred income tax expense in last year's first quarter. There were no non-recurring items in the first quarter of fiscal 2005.

    DISCUSSION OF FIRST QUARTER EARNINGS BY SEGMENT

    Please note that the following discussion of earnings by segment excludes the non-recurring item in the first quarter of 2004 discussed above in an effort to provide a clearer picture of actual operating results for the period. A reconciliation of reported earnings to the earnings discussed below is provided on pages 5 and 6 of this document.

    Regulated segments

    The Utility segment's earnings of $18.1 million for the first quarter of fiscal 2005 were up $1.6 million from the prior year's first quarter. This increase was principally attributable to lower interest expense and a lower provision for bad debts in the New York Division in the first quarter of fiscal 2005 compared to the prior year's first quarter. During the first quarter of fiscal 2004, it was necessary to increase the provision for bad debts in order to adequately provide for the higher outstanding receivable balances resulting from increased gas prices and customer payment experience. Although a comparable provision was not recorded in the first quarter of fiscal 2005, sustained high gas prices may result in higher bad debt expense in the future.* Partially offsetting the reduction of the above expense items was higher pension and post retirement expense in the Pennsylvania Division. The 2003 settlement of the rate proceeding with the Pennsylvania Public Utility Commission allowed the Utility to record a one-time credit to pension expense ($2.35 million) which the Company recognized during the first quarter of fiscal 2004.
    In the Pipeline and Storage segment, earnings of $12.3 million for the first quarter of fiscal 2005 were up $1.8 million when compared with the same period in the prior fiscal year. The impact of higher efficiency gas revenues and lower interest expense were somewhat offset by lower transportation margins and the incurring of approximately $1.7 million of preliminary project costs for the proposed Empire-Millennium Connector project.

    Exploration and Production segment

    The Exploration and Production segment's earnings for the first quarter of fiscal 2005 were $13.9 million, up $3.4 million from the prior year's first quarter primarily due to the positive impact of higher crude oil and natural gas prices. Lower production volumes partially offset the impact of higher prices. For the first quarter of fiscal 2005, the weighted average oil price (after hedging) was $26.35/Bbl, an increase of $2.23/Bbl or 9.2% from the comparable quarter of the prior fiscal year. The weighted average natural gas price (after hedging) was $5.99/Mcf, an increase of $1.41/Mcf or 30.8% over the comparable quarter of the prior fiscal year.
    For the quarter, Seneca Resources Corporation's ("Seneca") production was 13.3 Bcfe and Seneca remains on track to meet its previously announced production target of 50 to 55 Bcfe for the year.* Moreover, in Canada, the previously announced Sukunka 60E well, in which Seneca has a 20% working interest, was on production for only 18 days during the quarter, and in the Gulf, the recently recompleted High Island A-345 well was on production for 31 days at an average rate of 5.1 MMcf per day. Seneca's working interest in this well is 100%.
    Seneca drilled 44 gross wells during the quarter with a 98% success rate; 23 in California, 5 in Canada, 14 in the East and 2 in the Gulf. The most significant of these wells was in the Gulf. The Vermilion 225 #A-2 well was drilled to a depth of 12,600 feet and encountered 65 feet of net pay. It is anticipated that this well will be put on production by March 2005.* In addition, the East Cameron 213 #1 well has logged 48 feet of net pay in five sands. Production from this well is expected to commence in fiscal 2006.* Seneca's working interest in both of these wells is 100%.
    For the remainder of fiscal 2005, Seneca has 12.8 Bcf of gas production hedged at an average price of $5.75 per Mcf, and 2.1 million barrels of oil production hedged at an average price of $30.46 Bbl. For 2006, 10.6 Bcf of natural gas is hedged at an average price of $6.23 per Mcf, while 1.9 million barrels of oil production is hedged at an average price of $34.14 Bbl. The current hedging summary is included in the table at page 13 of this document. In addition, in an effort to control the recent variability in pricing between the Alberta Exchange (AECO) and NYMEX on its Canadian production, Seneca locked in the AECO basis differential at US $0.88 per MMBtu on 9,479 MMBtu per day of its Alberta gas production through the end of fiscal 2006.

    Other segments

    The International segment's fiscal 2005 first quarter earnings of $4.2 million were $1.3 million higher when compared to recurring earnings in the first quarter of fiscal 2004. The increase was mainly due to an increase in the value of the Czech koruna compared to the U.S. Dollar which offset a decrease in sales. Heat and electric throughput decreased due to weather that was approximately 6% warmer than the prior year.
    The Energy Marketing segment's earnings for the first quarter of fiscal 2005 of $0.8 million were flat compared with the comparable quarter of the prior fiscal year.
    The Timber segment's first quarter earnings of $0.8 million were $0.6 million less than the prior year's first quarter primarily due to a decrease in harvested timber volumes which was caused by poor weather conditions.
    Philip C. Ackerman, Chairman, President and Chief Executive Officer of National Fuel Gas Company stated: "Overall, the first quarter's results were in line with our expectations, with each segment contributing positively to earnings. In addition, our Exploration and Production segment's initial production volumes from the Sukunka well are encouraging and the discoveries at Vermillion and East Cameron bode well for the future.* Commodity pricing allowed us to maintain a solid hedge position for future production, and we've taken steps to reduce the volatility associated with the basis differential in our Canadian production. Work continues on the Empire-Millennium Connector, and strong cash flows are expected to continue, which will allow us to complete this capital project without negatively affecting our balance sheet."*

    EARNINGS GUIDANCE

    The Company expects earnings for the second quarter of fiscal 2005 to be in the range of $0.78 to $0.88 per share.* The Company is reaffirming its previously disclosed fiscal 2005 earnings per share guidance of $1.75 to $1.85 per share.*

    EARNINGS TELECONFERENCE

    The Company will host a conference call on Friday, January 28, 2005 at 11:00 a.m. (Eastern Time) to discuss this announcement. There are two ways to access this call. For those with Internet access, you may go to National Fuel's Web site at www.nationalfuelgas.com and click on the "For Investors" link at the top of the homepage. For those without Internet access, you may access the live call by dialing (toll-free) 1-800-573-4752, and use the passcode "54347000". For those unable to listen to the live conference call, a replay will be available approximately one hour after the conclusion of the call at the same Web site link and by phone at (toll-free) 1/888-286-8010 using passcode "75979039." Both the webcast and telephonic replay will be available until the close of business on Friday, February 4, 2005.
    National Fuel is an integrated energy company with $3.9 billion in assets comprised of the following six operating segments: Utility, Pipeline and Storage, Exploration and Production, International, Energy Marketing, and Timber. Additional information about National Fuel is available on its Internet Web site: http://www.nationalfuelgas.com or through its investor information service at 1-800-334-2188.

    (1) Note: all references to earnings per share are to diluted earnings per share and all amounts are stated in U.S. dollars. Weighted Average Common Shares used in the diluted calculation were 84,638,106 at 12/31/2004 and 82,307,835 at 12/31/2003.

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

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES RECONCILIATION TO REPORTED EARNINGS

Three Months Three Months (Thousands of Dollars) Ended Ended December 31, 2004 December 31, 2003 (unaudited) (unaudited) ----------------- ----------------- Utility ------- ----------------- ----------------- Reported earnings $18,072 $16,481 ----------------- -----------------

Pipeline and Storage -------------------- ----------------- ----------------- Reported earnings 12,277 10,494 ----------------- -----------------

Exploration and Production -------------------------- ----------------- ----------------- Reported earnings 13,923 10,508 ----------------- -----------------

International ------------- Reported earnings 4,170 8,038 Tax rate change - (5,174) ----------------- ----------------- Earnings before non-recurring items 4,170 2,864 ----------------- -----------------

Energy Marketing ---------------- ----------------- ----------------- Reported earnings 750 806 ----------------- -----------------

Timber ------ ----------------- ----------------- Reported earnings 753 1,303 ----------------- -----------------

Corporate and All Other ----------------------- ----------------- ----------------- Reported earnings 493 1,584 ----------------- -----------------

Consolidated ------------ Reported earnings 50,438 49,214 Total non-recurring items from above - (5,174) ----------------- ----------------- Earnings before non-recurring items $50,438 $44,040 ================= =================

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES RECONCILIATION TO REPORTED EARNINGS

Three Months Three Months (Diluted Earnings Per Share) Ended Ended December 31, 2004 December 31, 2003 (unaudited) (unaudited) ----------------- ----------------- Utility ------- ----------------- ----------------- Reported earnings $0.21 $0.20 ----------------- -----------------

Pipeline and Storage -------------------- ----------------- ----------------- Reported earnings 0.15 0.13 ----------------- -----------------

Exploration and Production -------------------------- ----------------- ----------------- Reported earnings 0.16 0.13 ----------------- -----------------

International ------------- Reported earnings 0.05 0.10 Tax rate change - (0.07) ----------------- ----------------- Earnings before non-recurring items 0.05 0.03 ----------------- -----------------

Energy Marketing ---------------- ----------------- ----------------- Reported earnings 0.01 0.01 ----------------- -----------------

Timber ------ ----------------- ----------------- Reported earnings 0.01 0.01 ----------------- -----------------

Corporate and All Other (Including Rounding) ---------------------------------- ----------------- ----------------- Reported earnings 0.01 0.02 ----------------- -----------------

Consolidated ------------ Reported earnings 0.60 0.60 Total non-recurring items from above - (0.07) ----------------- ----------------- Earnings before non-recurring items $0.60 $0.53 ================= =================

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES

(Thousands of Dollars, except per share amounts) Three Months Ended December 31, (Unaudited) ----------------------- SUMMARY OF OPERATIONS 2004 2003 --------------------- ----------- ----------- Operating Revenues $544,258 $532,513 ----------- -----------

Operating Expenses: Purchased Gas 256,156 250,777 Fuel Used in Heat and Electric Generation 22,211 21,056 Operation and Maintenance 100,846 100,183 Property, Franchise and Other Taxes 18,168 18,222 Depreciation, Depletion and Amortization 46,940 46,458 ----------- ----------- 444,321 436,696

Operating Income 99,937 95,817

Other Income (Expense): Income from Unconsolidated Subsidiaries 785 83 Other Income 1,650 2,031 Interest Expense (20,962) (25,333) ----------- -----------

Income Before Income Taxes and Minority Interest in Foreign Subsidiaries 81,410 72,598

Income Tax Expense 30,035 21,567 Minority Interest in Foreign Subsidiaries 937 1,817 ----------- -----------

Net Income Available for Common Stock $50,438 $49,214 =========== ===========

Earnings Per Common Share: Basic $0.61 $0.60 =========== =========== Diluted $0.60 $0.60 =========== ===========

Weighted Average Common Shares: Used in Basic Calculation 83,150,086 81,572,025 =========== =========== Used in Diluted Calculation 84,638,106 82,307,835 =========== ===========

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

December 31, September 30, (Thousands of Dollars) 2004 2004 ----------------------------------------------------------------------

ASSETS Property, Plant and Equipment $4,707,674 $4,602,779 Less - Accumulated Depreciation, Depletion and Amortization 1,669,626 1,596,015 ---------------------------------------------------------------------- Net Property, Plant and Equipment 3,038,048 3,006,764 ----------------------------------------------------------------------

Current Assets: Cash and Temporary Cash Investments 78,611 66,153 Receivables - Net 197,739 129,825 Unbilled Utility Revenue 84,835 18,574 Gas Stored Underground 50,613 68,511 Materials and Supplies - at average cost 57,014 43,922 Unrecovered Purchased Gas Costs 6,896 7,532 Prepayments 36,916 38,760 Fair Value of Derivative Financial Instruments 1,469 23 ---------------------------------------------------------------------- Total Current Assets 514,093 373,300 ------------------------------------------- --------------------------

Other Assets: Recoverable Future Taxes 83,847 83,847 Unamortized Debt Expense 19,065 19,573 Other Regulatory Assets 66,167 66,862 Deferred Charges 3,069 3,411 Other Investments 74,291 72,556 Investments in Unconsolidated Subsidiaries 15,730 16,444 Goodwill 5,476 5,476 Intangible Assets 45,328 45,994 Other 20,498 17,571 ------------------------------------------- -------------------------- Total Other Assets 333,471 331,734 ------------------------------------------- -------------------------- Total Assets $3,885,612 $3,711,798 ------------------------------------------- --------------------------

CAPITALIZATION AND LIABILITIES Capitalization: Comprehensive Shareholders' Equity Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 83,214,892 Shares and 82,990,340 Shares, Respectively $83,215 $82,990 Paid in Capital 509,977 506,560 Earnings Reinvested in the Business 746,090 718,926 ------------------------------------------- -------------------------- Total Common Shareholder Equity Before Items of Other Comprehensive Income (Loss) 1,339,282 1,308,476 Accumulated Other Comprehensive Income (Loss) 603 (54,775) ---------------------------------------------------------------------- Total Comprehensive Shareholders' Equity 1,339,885 1,253,701 Long-Term Debt, Net of Current Portion 1,130,290 1,133,317 ------------------------------------------- -------------------------- Total Capitalization 2,470,175 2,387,018 ------------------------------------------- --------------------------

------------------------------------------- -------------------------- Minority Interest in Foreign Subsidiaries 42,903 37,048 ------------------------------------------- --------------------------

Current and Accrued Liabilities: Notes Payable to Banks and Commercial Paper 170,100 156,800 Current Portion of Long-Term Debt 15,073 14,260 Accounts Payable 162,506 115,979 Amounts Payable to Customers 10,794 3,154 Other Accruals and Current Liabilities 114,119 91,164 Fair Value of Derivative Financial Instruments 61,629 95,099 ---------------------------------------------------------------------- Total Current and Accrued Liabilities 534,221 476,456 ----------------------------------------------------------------------

Deferred Credits: Accumulated Deferred Income Taxes 474,504 458,095 Taxes Refundable to Customers 11,065 11,065 Unamortized Investment Tax Credit 7,322 7,498 Cost of Removal Regulatory Liability 83,315 82,020 Other Regulatory Liabilities 70,039 67,669 Pension Liability 92,680 91,587 Asset Retirement Obligation 32,954 32,292 Other Deferred Credits 66,434 61,050 ------------------------------------------- -------------------------- Total Deferred Credits 838,313 811,276 ------------------------------------------- -------------------------- Commitments and Contingencies - - ------------------------------------------- -------------------------- Total Capitalization and Liabilities $3,885,612 $3,711,798 ------------------------------------------- --------------------------

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended December 31, (Thousands of Dollars) 2004 2003 ----------------------------------------------------------------------

Operating Activities: Net Income Available for Common Stock $50,438 $49,214 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation, Depletion and Amortization 46,940 46,458 Deferred Income Taxes (1,864) (4,728) (Income) Loss from Unconsolidated Subsidiaries, Net of Cash Distributions 715 437 Minority Interest in Foreign Subsidiaries 937 1,817 Other 2,684 1,160 Change in: Receivables and Unbilled Utility Revenue (132,963) (114,267) Gas Stored Underground and Materials and Supplies 5,324 30,601 Unrecovered Purchased Gas Costs 636 9,425 Prepayments 1,903 9,941 Accounts Payable 43,950 46,411 Amounts Payable to Customers 7,640 (271) Other Accruals and Current Liabilities 22,514 29,248 Other Assets (3,958) 951 Other Liabilities 13,258 (5,727) ---------------------------------------------------------------------- Net Cash Provided by Operating Activities $58,154 $100,670 ----------------------------------------------------------------------

Investing Activities: Capital Expenditures ($40,022) ($46,282) Other (1,046) (623) ---------------------------------------------------------------------- Net Cash Used in Investing Activities ($41,068) ($46,905) ----------------------------------------------------------------------

Financing Activities: Change in Notes Payable to Banks and Commercial Paper $13,300 ($8,000) Reduction of Long-Term Debt (3,509) (4,318) Dividends Paid on Common Stock (23,210) (21,952) Proceeds From Issuance of Common Stock 3,452 3,761 ---------------------------------------------------------------------- Net Cash Used In Financing Activities ($9,967) ($30,509) ---------------------------------------------------------------------- Effect of Exchange Rates on Cash 5,339 1,710 ---------------------------------------------------------------------- Net Increase (Decrease) in Cash and Temporary Cash Investments 12,458 24,966 Cash and Temporary Cash Investments at Beginning of Period 66,153 51,421 ---------------------------------------------------------------------- Cash and Temporary Cash Investments at December 31 $78,611 $76,387 ----------------------------------------------------------------------

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES

SEGMENT INFORMATION (Thousands of Dollars)

Three Months Ended December 31, (Unaudited) --------------------------------

Increase 2004 2003 (Decrease) ----------- --------- ---------- Operating Revenues ------------------ Utility $321,134 $325,220 $(4,086) Pipeline and Storage 53,044 50,018 3,026 Exploration and Production 71,838 68,851 2,987 International 43,975 42,148 1,827 Energy Marketing 63,494 56,953 6,541 Timber 12,995 13,331 (336) ----------- --------- ---------- Total Reportable Segments 566,480 556,521 9,959 All Other 3,762 2,778 984 Corporate 628 - 628 Intersegment Eliminations (26,612) (26,786) 174 ----------- --------- ---------- Total Consolidated $544,258 $532,513 $11,745 =========== ========= ==========

Operating Income (Loss) ----------------------- Utility $35,875 $34,774 $1,101 Pipeline and Storage 22,560 20,615 1,945 Exploration and Production 31,620 28,708 2,912 International 7,611 7,434 177 Energy Marketing 1,070 1,219 (149) Timber 1,631 2,487 (856) ----------- --------- ---------- Total Reportable Segments 100,367 95,237 5,130 All Other 589 1,056 (467) Corporate (1,019) (476) (543) ----------- --------- ---------- Total Consolidated $99,937 $95,817 $4,120 =========== ========= ==========

Net Income ---------- Utility $18,072 $16,481 $1,591 Pipeline and Storage 12,277 10,494 1,783 Exploration and Production 13,923 10,508 3,415 International 4,170 8,038 (3,868) Energy Marketing 750 806 (56) Timber 753 1,303 (550) ----------- --------- ---------- Total Reportable Segments 49,945 47,630 2,315 All Other 600 551 49 Corporate (107) 1,033 (1,140) ----------- --------- ---------- Total Consolidated $50,438 $49,214 $1,224 =========== ========= ==========

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES

SEGMENT INFORMATION (Continued) (Thousands of Dollars)

Three Months Ended December 31, (Unaudited) ----------------------------

Increase 2004 2003 (Decrease) -------- -------- ----------

Depreciation, Depletion and Amortization: ----------------------------------------- Utility $9,980 $9,452 $528 Pipeline and Storage 9,094 8,886 208 Exploration and Production 21,828 22,598 (770) International 4,235 3,783 452 Energy Marketing 21 29 (8) Timber 1,477 1,494 (17) -------- -------- ---------- Total Reportable Segments 46,635 46,242 393 All Other 193 165 28 Corporate 112 51 61 -------- -------- ---------- Total Consolidated $46,940 $46,458 $482 ======== ======== ==========

Expenditures for Long-Lived Assets ---------------------------------- Utility $11,335 $12,907 $(1,572) Pipeline and Storage 4,887 4,803 84 Exploration and Production 21,008 22,659 (1,651) International 1,903 1,100 803 Energy Marketing 11 1 10 Timber 852 1,664 (812) -------- -------- ---------- Total Reportable Segments 39,996 43,134 (3,138) All Other 7 2 5 Corporate 19 3,146 (3,127) -------- -------- ---------- Total Consolidated $40,022 $46,282 $(6,260) ======== ======== ==========

DEGREE DAYS ----------- Percent Colder (Warmer) Than: Last Three Months Ended December 31 Normal 2004 2003 Normal Year ------------------------------ ------ ------ ------ ------ -----

Buffalo, NY 2,260 2,172 2,127 (3.9) 2.1 Erie, PA 2,081 1,997 1,922 (4.0) 3.9

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES

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

Three Months Ended December 31, -------------------------- Increase 2004 2003 (Decrease) ------- ------- ----------

Gas Production/Prices: ---------------------- Production (MMcf) Gulf Coast 3,225 4,664 (1,439) West Coast 1,039 996 43 Appalachia 1,206 1,350 (144) Canada 1,665 1,684 (19) ------- ------- ---------- 7,135 8,694 (1,559) ======= ======= ========== Average Prices (Per Mcf) Gulf Coast $6.50 $4.75 $1.75 West Coast 6.55 5.01 1.54 Appalachia 7.73 5.17 2.56 Canada 5.45 4.58 0.87 Weighted Average 6.47 4.81 1.66 Weighted Average after Hedging 5.99 4.58 1.41

Oil Production/Prices: ---------------------- Production (Thousands of Barrels) Gulf Coast 289 376 (87) West Coast 653 682 (29) Appalachia 3 7 (4) Canada 76 84 (8) ------- ------- ---------- 1,021 1,149 (128) ======= ======= ==========

Average Prices (Per Barrel) Gulf Coast $47.08 $29.49 $17.59 West Coast 37.14 26.56 10.58 Appalachia 44.33 27.28 17.05 Canada 38.43 26.25 12.18 Weighted Average 40.08 27.50 12.58 Weighted Average after Hedging 26.35 24.12 2.23

Total Production (Mmcfe) 13,261 15,588 (2,327) ------------------------ ======= ======= ==========

Selected Operating Performance Statistics: ------------------------------------------ General & Administrative Expense per Mcfe $0.39 $0.35 $0.04 Lease Operating Expense per Mcfe $0.88 $0.71 $0.17 Depreciation, Depletion & Amortization per Mcfe $1.65 $1.45 $0.20

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES

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

Hedging Summary for Fiscal 2005

SWAPS Volume Average Hedge Price ----- ------ ------------------- Oil 2.1 MMBBL $30.46 / BBL Gas 8.3 BCF $5.57 / MCF

No-cost Collars Volume Floor Price Ceiling Price --------------- ------ ----------- ------------- Gas 4.5 BCF $5.40 / MCF $8.39 / MCF

Hedging Summary for Fiscal 2006

SWAPS Volume Average Hedge Price ----- ------ ------------------- Oil 1.9 MMBBL $34.14 / BBL Gas 8.7 BCF $6.10 / MCF

No-cost Collars Volume Floor Price Ceiling Price --------------- ------ ----------- ------------- Gas 1.9 BCF $5.86 / MCF $10.14 / MCF

Hedging Summary for Fiscal 2007

SWAPS Volume Average Hedge Price ----- ------ ------------------- Oil 0.9 MMBBL $37.03 / BBL Gas 0.7 BCF $5.76 / MCF

Drilling Program Quarter Ended December 31, 2004: ------------------------------------------------- Gross Wells Drilled ------------------- Gulf West East Canada Total ------ ------ ------ ------ ----- Exploratory Successful 2 0 0 5 7 Unsuccessful 0 0 1 0 1 Developmental Successful 0 23 13 0 36 Unsuccessful 0 0 0 0 0 Total Successful 2 23 13 5 43 Unsuccessful 0 0 1 0 1

Success Ratio 100% 100% 93% 100% 98%

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES

Utility Throughput - (millions of cubic feet - MMcf)

Three Months Ended December 31, -------------------------------- Increase 2004 2003 (Decrease) ---------- ---------- ---------- Retail Sales: Residential Sales 19,869 20,434 (565) Commercial Sales 3,454 3,600 (146) Industrial Sales 176 595 (419) ---------- ---------- ---------- 23,499 24,629 (1,130) ---------- ---------- ---------- Off-System Sales - 5,914 (5,914) Transportation 14,103 14,599 (496) ---------- ---------- ---------- 37,602 45,142 (7,540) ========== ========== ==========

Pipeline & Storage Throughput- (MMcf) Three Months Ended December 31, -------------------------------- Increase 2004 2003 (Decrease) ---------- ---------- ---------- Firm Transportation - Affiliated 32,202 35,020 (2,818) Firm Transportation - Non- Affiliated 51,540 53,748 (2,208) Interruptible Transportation 1,662 2,034 (372) ---------- ---------- ---------- 85,404 90,802 (5,398) ========== ========== ==========

Energy Marketing Volumes Three Months Ended December 31, -------------------------------- Increase 2004 2003 (Decrease) ---------- ---------- ---------- Natural Gas (MMcf) 8,007 9,561 (1,554) ========== ========== ==========

International Sales Volumes Three Months Ended December 31, -------------------------------- Increase 2004 2003 (Decrease) ---------- ---------- ---------- Heating (Gigajoules) 2,845,470 3,070,292 (224,822) ========== ========== ==========

Electricity (Megawatt hours) 264,808 315,752 (50,944) ========== ========== ==========

Timber Board Feet (Thousands) Three Months Ended December 31, -------------------------------- Increase 2004 2003 (Decrease) ---------- ---------- ---------- Log Sales 1,745 1,824 (79) Green Lumber Sales 2,164 2,670 (506) Kiln Dry Lumber Sales 3,366 3,109 257 ---------- ---------- ---------- 7,275 7,603 (328) ========== ========== ==========

NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES

Quarter Ended December 31 (unaudited) 2004 2003 ------------------------------------- --------------- ---------------

Operating Revenues $544,258,000 $532,513,000 =============== ===============

Net Income Available for Common Stock $50,438,000 $49,214,000 =============== ===============

Earnings Per Common Share: Basic $0.61 $0.60 =============== =============== Diluted $0.60 $0.60 =============== ===============

Weighted Average Common Shares: Used in Basic Calculation 83,150,086 81,572,025 =============== =============== Used in Diluted Calculation 84,638,106 82,307,835 =============== ===============

Twelve Months Ended December 31 (unaudited) -------------------------------

Operating Revenues $2,043,138,000 $2,088,278,000 =============== ===============

Net Income Available for Common Stock $167,810,000 $190,117,000 =============== ===============

Earnings Per Common Share: Basic 2.04 $2.34 =============== =============== Diluted 2.01 $2.32 =============== ===============

Weighted Average Common Shares: Used in Basic Calculation 82,442,202 81,103,183 =============== =============== Used in Diluted Calculation 83,520,574 81,810,778 =============== ===============

--30--SS/ny*

CONTACT: National Fuel Gas Company Analyst Contact: Margaret M. Suto, 716-857-6987 OR Media Contact: Julie Coppola Cox, 716-857-7079

KEYWORD: NEW YORK INDUSTRY KEYWORD: OIL/GAS ADVERTISING/MARKETING ENERGY UTILITIES EARNINGS CONFERENCE CALLS SOURCE: National Fuel Gas Company

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