Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries National Fuel Reports Fourth Quarter and Full Year Fiscal 2023 Earnings By: National Fuel Gas Company via GlobeNewswire November 01, 2023 at 16:45 PM EDT WILLIAMSVILLE, N.Y., Nov. 01, 2023 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2023. FISCAL 2023 FOURTH QUARTER SUMMARY GAAP net income of $73.7 million, or $0.80 per share, compared to GAAP net income of $158.1 million, or $1.71 per share, in the prior year.Adjusted operating results of $72.2 million, or $0.78 per share, compared to $109.3 million, or $1.19 per share, in the prior year (see non-GAAP reconciliation on page 2 for fourth quarter and fiscal 2023).Both E&P segment net production and Gathering segment revenue increased by 7% versus the prior year, driven by continued strong operational execution in Appalachia.Supply Corporation entered into a precedent agreement with Seneca for its Tioga Pathway Project, which is an estimated $90 million modernization and expansion project that will add 190,000 Dth per day of firm transportation takeaway capacity from northwest Tioga County, Pennsylvania. FISCAL 2023 HIGHLIGHTS Generated consolidated net cash provided by operating activities of $1.24 billion for fiscal 2023, with free cash flow of $275 million (see non-GAAP reconciliation on page 27 for fiscal 2023).Increased the shareholder dividend for the 53rd consecutive year to an annual rate of $1.98 per share, an increase of 4.2%, continuing the Company’s long history of consistently returning capital to shareholders.Distribution Corporation settled a rate proceeding in Pennsylvania, which will increase annual base rate delivery revenues by $23 million.Seneca Resources bolstered its deep inventory of highly economic development locations in its Eastern Development Area with the acquisition of approximately 39,000 net acres in Tioga and Lycoming counties.NFG Midstream achieved certification of 100% of its assets under Equitable Origin’s EO100TM Standard for Responsible Energy Development, becoming the first gathering or midstream company to receive this ESG-focused certification. MANAGEMENT COMMENTS David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “Despite the headwinds of lower natural gas prices in fiscal 2023, National Fuel delivered strong results, both financially and operationally. As we move into fiscal 2024, the combination of a strong outlook for long-term growth in our regulated businesses, increasing capital efficiency in our non-regulated operations, and expectations of improving natural gas price realizations position us well to deliver long-term value to our shareholders.” RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS Three Months Ended Fiscal Year Ended September 30, September 30,(in thousands except per share amounts) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Items impacting comparability: Unrealized (gain) loss on derivative asset (E&P) (2,803) 4,395 899 4,395 Tax impact of unrealized (gain) loss on derivative asset 775 (1,203) (240) (1,203)Unrealized (gain) loss on other investments (Corporate / All Other) 719 1,532 (913) 11,625 Tax impact of unrealized (gain) loss on other investments (151) (322) 192 (2,441)Reversal of deferred tax valuation allowance — (24,850) — (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (28,406) — (28,406)Items impacting comparability from West Coast asset sale (E&P) (1) — — — 41,589 Tax impact of items impacting comparability from West Coast asset sale (1) — — — (10,533)Reduction of other post-retirement regulatory liability (Utility) — — — (18,533)Tax impact of reduction of other post-retirement regulatory liability — — — 3,892 Adjusted Operating Results$ 72,217 $ 109,289 $ 476,804 $ 541,556 Reported GAAP Earnings Per Share$ 0.80 $ 1.71 $ 5.17 $ 6.15 Items impacting comparability: Unrealized (gain) loss on derivative asset, net of tax (E&P) (0.02) 0.03 0.01 0.03 Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.01 0.01 (0.01) 0.10 Reversal of deferred tax valuation allowance — (0.27) — (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (0.31) — (0.31)Items impacting comparability from West Coast asset sale, net of tax (E&P) (1) — — — 0.34 Reduction of other post-retirement regulatory liability, net of tax (Utility) — — — (0.16)Rounding (0.01) 0.02 — — Adjusted Operating Results Per Share$ 0.78 $ 1.19 $ 5.17 $ 5.88 (1)Refer to non-GAAP reconciliation on page 24 for a separate breakout of items impacting comparability from the West Coast asset sale. FISCAL 2024 GUIDANCE UPDATE National Fuel is revising its fiscal 2024 earnings guidance to reflect updated forecast assumptions and projections since the Company’s preliminary guidance range was announced in August 2023. The Company is now projecting that earnings will be within the range of $5.40 to $5.90 per share, an increase of 9% from the Company’s 2023 adjusted operating results at the midpoint of the updated 2024 guidance range. Consistent with preliminary guidance, the Company is assuming that NYMEX natural gas prices will average $3.25 per MMBtu for the fiscal year. For guidance purposes, the Company’s updated natural gas price projections approximate the current NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts. Seneca currently has firm sales contracts in place for approximately 89% of its projected fiscal 2024 Appalachian production, limiting its exposure to in-basin markets. Approximately 69% of Seneca’s expected Appalachian production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price. Seneca’s depreciation, depletion and amortization guidance range was also revised to reflect current expectations for the fiscal year. The Company’s consolidated and individual segment capital expenditures guidance remain unchanged from the preliminary guidance. Other guidance assumptions remain largely unchanged from the previous guidance. The details are outlined in the table on page 7. DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT The following earnings discussion of each operating segment for the quarter ended September 30, 2023 is summarized in a tabular form on pages 8 and 9 of this report (earnings drivers for the fiscal years ended September 30, 2023 are summarized on pages 10 and 11). It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. Upstream Business Exploration and Production Segment The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC (“Seneca”). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 36,772 $ 116,077 $ (79,305)Unrealized (gain) loss on derivative asset, net of tax (2,028) 3,192 (5,220)Reversal of deferred tax valuation allowance — (28,589) 28,589 Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction — (16,152) 16,152 Adjusted Operating Results$ 34,744 $ 74,528 $ (39,784) Adjusted EBITDA$ 132,641 $ 166,238 $ (33,597) Seneca’s fourth quarter GAAP earnings decreased $79.3 million versus the prior year. Excluding several items impacting comparability as described below, Seneca's earnings decreased $39.8 million, with higher natural gas production more than offset by lower realized natural gas prices, higher operating expenses and higher income tax expense. Last year’s fourth quarter earnings included two one-time items related to state deferred income taxes that impacted comparability as shown in the table above. These items consisted of a reversal of a $28.6 million valuation allowance on deferred tax assets related to certain state net operating loss and credit carryforwards, along with a $16.2 million benefit from the remeasurement of state deferred income taxes related to a series of reductions in the Pennsylvania state corporate income tax rate that was signed into law in July 2022. Earnings were also impacted by an unrealized gain of $2.8 million ($2.0 million after-tax) recognized during the current-year fourth quarter related to an increase in the fair value of the contingent consideration Seneca received in connection with the June 2022 divestiture of its California assets. In the prior-year's fourth quarter, Seneca recorded an unrealized loss of $4.4 million ($3.2 million after-tax) on that contingent consideration. During this year's fourth quarter, Seneca produced 93.8 Bcfe, an increase of 5.9 Bcfe, or 7%, from the prior year, despite the impact of approximately 2 Bcfe of price-related curtailments due to low in-basin pricing. Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.33 per Mcf, a decrease of $0.51 per Mcf from the prior year. Lower natural gas prices, before the impact of hedging, were partially offset by an increase in the weighted average hedge price compared to the prior-year fourth quarter. On a per unit basis, lease operating and transportation expense (“LOE”) was $0.69 per Mcfe, a decrease of $0.02 per Mcfe from the prior year. On an absolute basis, LOE increased $1.7 million primarily due to higher water management costs, partially offset by lower rental and workover expenses. An increase in transportation and gathering costs as a result of increased production also contributed to the increase in absolute LOE. LOE includes $51.2 million for gathering and compression services from NFG Midstream to connect Seneca’s production to sales points along interstate pipelines. General and administrative (“G&A”) expense remained flat at $0.18 per Mcfe compared to the prior year. On an absolute basis, Seneca’s G&A expense increased $1.5 million primarily due to an increase in labor-related costs. Depreciation, depletion and amortization (“DD&A”) expense was $0.71 per Mcfe, an increase of $0.11 per Mcfe from the prior year. Absolute DD&A expense increased $13.4 million due to higher natural gas production and a higher per unit DD&A rate. The higher rate was driven by an increase in Seneca's full cost pool due to a combination of higher capitalized costs and an increase in estimated future development costs related to proved undeveloped wells. Other taxes decreased $1.7 million largely attributable to lower Impact Fees in Pennsylvania due to the decline in NYMEX natural gas prices. Excluding the impact of last year’s fourth quarter one-time items impacting comparability shown in the table above, the increase in Seneca’s effective tax rate was primarily driven by higher state income tax expense. Proved Reserves Year-End Update Seneca’s total proved reserves at September 30, 2023 were 4,536 Bcfe, an increase of 364 Bcfe, or 9%, from September 30, 2022. Seneca’s proved developed reserves at the end of fiscal 2023 were 3,551 Bcfe, representing 78% of total proved reserves, compared to 79% a year ago. In fiscal 2023, Seneca added 670 Bcfe of proved reserve extensions and discoveries, 34 Bcfe of proved developed reserves as a result of two separate upstream asset purchases during fiscal 2023, and 32 Bcfe of net positive revisions due primarily to improvements in well performance and changes in development plans. Seneca replaced 198% of its fiscal 2023 production. Midstream Businesses Pipeline and Storage Segment The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 23,354 $ 25,320 $ (1,966) Adjusted EBITDA$ 56,236 $ 59,819 $ (3,583) The Pipeline and Storage segment’s fourth quarter GAAP earnings decreased $2.0 million versus the prior year primarily due to lower operating revenues, partially offset by an increase in other income. The decrease in operating revenues of $3.7 million was primarily attributable to contract expirations that occurred earlier in the fiscal year, partially offset by an increase in new short-term contracts. The increase in other income of $1.1 million was primarily attributable to a higher weighted average interest rate on intercompany short-term notes receivable. Gathering Segment The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which delivers Seneca and other non-affiliated Appalachian production to the interstate pipeline system. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 26,517 $ 31,224 $ (4,707)Reversal of deferred tax valuation allowance — 3,739 (3,739)Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction — (11,856) 11,856 Adjusted Operating Results$ 26,517 $ 23,107 $ 3,410 Adjusted EBITDA$ 46,874 $ 43,335 $ 3,539 The Gathering segment’s fourth quarter GAAP earnings decreased $4.7 million versus the prior year. Similar to our Exploration and Production segment, last year’s fourth quarter earnings included two one-time items impacting comparability shown in the table above related to state deferred income taxes that did not recur this year. Excluding these items, the Gathering segment’s earnings increased $3.4 million primarily due to higher operating revenues. Operating revenues increased $3.9 million, or 7%, which was the result of a 12.6 Bcf increase in gathered volumes due to an increase in natural gas throughput from both non-affiliated parties and Seneca. Downstream Business Utility Segment The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ (7,179) $ (10,852) $ 3,673 Adjusted EBITDA$ 6,693 $ 6,270 $ 423 The Utility segment’s fourth quarter GAAP net loss was $3.7 million lower than the net loss in the prior year’s fourth quarter due to higher customer margins (operating revenues less purchased gas sold), a decrease in non-service pension and OPEB costs, higher other income and lower income tax expense, partially offset by increases in operation and maintenance (“O&M”) expense and interest expense. The increase in customer margin of $1.6 million was due primarily to the implementation of the recent Pennsylvania rate case settlement, which increased base rates by $23 million annually, effective August 1, 2023. Also contributing to the increase were adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation and higher revenues from the Company’s system modernization tracking mechanisms in its New York service territory. These increases were partially offset by a $1.1 million reduction in base rates in New York, which, consistent with prior quarters, was the result of a rate proceeding that temporarily reduced the Utility’s recovery of pension and other post-employment benefit (“OPEB”) expenses to zero effective October 1, 2022. In addition to lowering rates, the proceeding mandated a corresponding decrease in pension and OPEB expenses, most of which had been previously recorded in “below the line” non-service pension and OPEB costs. The increase in other income of $1.0 million was primarily attributable to interest earned on deferred gas costs. O&M expense increased by $1.7 million, primarily driven by higher labor-related costs. Interest expense increased $1.0 million due to the Company’s long-term debt issuance in May 2023. Corporate and All Other The Company’s operations that are included in Corporate and All Other generated a combined net loss of $5.8 million in the current year fourth quarter, which was $2.2 million higher than the combined net loss of $3.6 million in the prior-year fourth quarter. The increase in net loss was primarily driven by higher O&M expense as a result of an increase in professional services, which was partially offset by a lower amount of unrealized losses on investment securities recognized in the current quarter as compared to the prior-year fourth quarter. EARNINGS TELECONFERENCE The Company will host a conference call on Thursday, November 2, 2023, at 10 a.m. Eastern Time to discuss this announcement. To pre-register for the call (recommended), please visit https://www.netroadshow.com/events/login?show=2be14adf&confId=56623. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-833–470–1428 and provide Participant Access Code 568657. The teleconference will also be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. A telephone replay of the teleconference call will be available through the end of the day on Thursday, November 9, 2023. To access the replay, dial U.S. toll free 1-866-813-9403 and provide Replay Access Code 693074. 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. Haspett716-857-7697Media 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; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company’s ability to complete planned strategic transactions; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES GUIDANCE SUMMARY As discussed on page 2, the Company is revising its earnings guidance for fiscal 2024. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below. While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2024, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis. Previous FY 2024 Guidance Updated FY 2024 GuidanceAdjusted Consolidated Earnings per Share, excluding items impacting comparability$5.50 to $6.00 $5.40 to $5.90Consolidated Effective Tax Rate~ 25.5 - 26% ~ 25 - 25.5% Capital Expenditures (Millions) Exploration and Production$525 - $575 $525 - $575Pipeline and Storage$120 - $140 $120 - $140Gathering$90 - $110 $90 - $110Utility$130 - $150 $130 - $150 Consolidated Capital Expenditures$865 - $975 $865 - $975 Exploration & Production Segment Guidance Commodity Price Assumptions NYMEX natural gas price$3.25 /MMBtu $3.25 /MMBtuAppalachian basin spot price$2.45 /MMBtu $2.40 - $2.45 /MMBtu Production (Bcfe)390 to 410 390 to 410 E&P Operating Costs ($/Mcfe) LOE$0.69 - $0.71 $0.69 - $0.71G&A$0.17 - $0.19 $0.17 - $0.19DD&A$0.66 - $0.70 $0.69 - $0.74 Other Business Segment Guidance (Millions) Gathering Segment Revenues$240 - $260 $240 - $260Pipeline and Storage Segment Revenues$380 - $420 $380 - $420 NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGSQUARTER ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated* Fourth quarter 2022 GAAP earnings$ 116,077 $ 25,320 $ 31,224 $ (10,852) $ (3,626) $ 158,143 Items impacting comparability: Unrealized gain (loss) on derivative asset 4,395 4,395 Tax impact of unrealized gain (loss) on derivative asset (1,203) (1,203)Reversal of deferred tax valuation allowance (28,589) 3,739 (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (16,152) (11,856) (398) (28,406)Unrealized (gain) loss on other investments 1,532 1,532 Tax impact of unrealized (gain) loss on other investments (322) (322)Fourth quarter 2022 adjusted operating results 74,528 25,320 23,107 (10,852) (2,814) 109,289 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 13,121 13,121 Higher (lower) realized natural gas prices, after hedging (37,374) (37,374)Higher (lower) other operating revenues (734) (734)Midstream Revenues Higher (lower) operating revenues (2,932) 3,108 176 Downstream Margins*** Impact of usage and weather (386) (386)Impact of new rates in Pennsylvania 754 754 Impact of new rates in New York**** (893) (893)System modernization and improvement tracker revenues 366 366 Regulatory revenue adjustments 1,951 1,951 Operating Expenses Lower (higher) lease operating and transportation expenses (1,352) (1,352)Lower (higher) operating expenses (1,500) (314) (1,586) (2,800) (6,200)Lower (higher) property, franchise and other taxes 1,343 1,343 Lower (higher) depreciation / depletion (10,614) (529) (359) (679) (12,181)Other Income (Expense) (Higher) lower other deductions 815 1,192 (276) 1,731 (Higher) lower interest expense (627) 531 (998) 1,283 189 Income Taxes Lower (higher) income tax expense / effective tax rate (1,900) 474 402 3,648 (367) 2,257 All other / rounding (147) 206 42 304 (245) 160 Fourth quarter 2023 adjusted operating results 34,744 23,354 26,517 (7,179) (5,219) 72,217 Items impacting comparability: Unrealized gain (loss) on derivative asset 2,803 2,803 Tax impact of unrealized gain (loss) on derivative asset (775) (775)Unrealized gain (loss) on other investments (719) (719)Tax impact of unrealized gain (loss) on other investments 151 151 Fourth quarter 2023 GAAP earnings$ 36,772 $ 23,354 $ 26,517 $ (7,179) $ (5,787) $ 73,677 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHAREQUARTER ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / Production Storage Gathering Utility All Other Consolidated* Fourth quarter 2022 GAAP earnings per share$ 1.26 $ 0.27 $ 0.34 $ (0.12) $ (0.04) $ 1.71 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax 0.03 0.03 Reversal of deferred tax valuation allowance (0.31) 0.04 (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (0.18) (0.13) — (0.31)Unrealized (gain) loss on other investments, net of tax 0.01 0.01 Rounding 0.01 0.01 0.02 Fourth quarter 2022 adjusted operating results per share 0.81 0.27 0.25 (0.12) (0.02) 1.19 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 0.14 0.14 Higher (lower) realized natural gas prices, after hedging (0.40) (0.40)Higher (lower) other operating revenues (0.01) (0.01)Midstream Revenues Higher (lower) operating revenues (0.03) 0.03 — Downstream Margins*** Impact of usage and weather — — Impact of new rates in Pennsylvania 0.01 0.01 Impact of new rates in New York**** (0.01) (0.01)System modernization and improvement tracker revenues — — Regulatory revenue adjustments 0.02 0.02 Operating Expenses Lower (higher) lease operating and transportation expenses (0.01) (0.01)Lower (higher) operating expenses (0.02) — (0.02) (0.03) (0.07)Lower (higher) property, franchise and other taxes 0.01 0.01 Lower (higher) depreciation / depletion (0.11) (0.01) — (0.01) (0.13)Other Income (Expense) (Higher) lower other deductions 0.01 0.01 — 0.02 (Higher) lower interest expense (0.01) 0.01 (0.01) 0.01 — Income Taxes Lower (higher) income tax expense / effective tax rate (0.02) 0.01 — 0.04 — 0.03 All other / rounding — — — 0.01 (0.02) (0.01)Fourth quarter 2023 adjusted operating results per share 0.38 0.25 0.29 (0.08) (0.06) 0.78 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax 0.02 0.02 Unrealized gain (loss) on other investments, net of tax (0.01) (0.01)Rounding 0.01 0.01 Fourth quarter 2023 GAAP earnings per share$ 0.40 $ 0.25 $ 0.29 $ (0.08) $ (0.06) $ 0.80 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGSTWELVE MONTHS ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated* Fiscal 2022 GAAP earnings$ 306,064 $ 102,557 $ 101,111 $ 68,948 $ (12,659) $ 566,021 Items impacting comparability: Reduction of other post-retirement regulatory liability (18,533) (18,533)Tax impact of reduction of other post-retirement regulatory liability 3,892 3,892 Unrealized gain (loss) on derivative asset 4,395 4,395 Tax impact of unrealized gain (loss) on derivative asset (1,203) (1,203)Gain on sale of West Coast assets (12,736) (12,736)Tax impact of gain on sale of West Coast assets 3,225 3,225 Loss from discontinuance of crude oil cash flow hedges 44,632 44,632 Tax impact of loss from discontinuance of crude oil cash flow hedges (11,303) (11,303)Transaction and severance costs related to West Coast asset sale 9,693 9,693 Tax impact of transaction and severance costs related to West Coast asset sale (2,455) (2,455)Reversal of deferred tax valuation allowance (28,589) 3,739 (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (16,152) (11,856) (398) (28,406)Unrealized (gain) loss on other investments 11,625 11,625 Tax impact of unrealized (gain) loss on other investments (2,441) (2,441)Fiscal 2022 adjusted operating results 295,571 102,557 92,994 54,307 (3,873) 541,556 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 62,913 62,913 Higher (lower) crude oil production (88,063) (88,063)Higher (lower) realized natural gas prices, after hedging (48,413) (48,413)Higher (lower) other operating revenues (2,898) (2,898)Midstream Revenues Higher (lower) operating revenues 1,696 12,224 13,920 Downstream Margins*** Impact of usage and weather (1,104) (1,104)Impact of new rates in Pennsylvania 754 754 Impact of new rates in New York**** (12,019) (12,019)System modernization and improvement tracker revenues 3,829 3,829 Regulatory revenue adjustments 1,504 1,504 Higher (lower) other operating revenues 1,734 1,734 Operating Expenses Lower (higher) lease operating and transportation expenses 23,984 23,984 Lower (higher) operating expenses 11,145 (5,164) (4,851) (8,798) (3,389) (11,057)Lower (higher) property, franchise and other taxes 6,041 597 6,638 Lower (higher) depreciation / depletion (26,065) (2,470) (1,364) (1,335) (31,234)Other Income (Expense) (Higher) lower other deductions 2,735 3,624 561 14,030 (3,859) 17,091 (Higher) lower interest expense (724) (796) 1,184 (8,575) 7,120 (1,791)Income Taxes Lower (higher) income tax expense / effective tax rate (3,406) 411 (1,006) 3,503 (380) (878)All other / rounding 114 643 (18) (32) (369) 338 Fiscal 2023 adjusted operating results 232,934 100,501 99,724 48,395 (4,750) 476,804 Items impacting comparability: Unrealized gain (loss) on derivative asset (899) (899)Tax impact of unrealized gain (loss) on derivative asset 240 240 Unrealized gain (loss) on other investments 913 913 Tax impact of unrealized gain (loss) on other investments (192) (192)Fiscal 2023 GAAP earnings$ 232,275 $ 100,501 $ 99,724 $ 48,395 $ (4,029) $ 476,866 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARETWELVE MONTHS ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / Production Storage Gathering Utility All Other Consolidated*Fiscal 2022 GAAP earnings per share$ 3.32 $ 1.11 $ 1.10 $ 0.75 $ (0.13) $ 6.15 Items impacting comparability: Reduction of other post-retirement regulatory liability, net of tax (0.16) (0.16)Unrealized gain (loss) on derivative asset, net of tax 0.03 0.03 Gain on sale of West Coast assets, net of tax (0.10) (0.10)Loss from discontinuance of crude oil cash flow hedges, net of tax 0.36 0.36 Transaction and severance costs related to West Coast asset sale, net of tax 0.08 0.08 Reversal of deferred tax valuation allowance (0.31) 0.04 (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate deduction (0.18) (0.13) — (0.31)Unrealized (gain) loss on other investments, net of tax 0.10 0.10 Rounding 0.01 (0.01) — Fiscal 2022 adjusted operating results per share 3.21 1.11 1.01 0.59 (0.04) 5.88 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 0.68 0.68 Higher (lower) crude oil production (0.95) (0.95)Higher (lower) realized natural gas prices, after hedging (0.52) (0.52)Higher (lower) other operating revenues (0.03) (0.03)Midstream Revenues Higher (lower) operating revenues 0.02 0.13 0.15 Downstream Margins*** Impact of usage and weather (0.01) (0.01)Impact of new rates in Pennsylvania 0.01 0.01 Impact of new rates in New York**** (0.13) (0.13)System modernization and improvement tracker revenues 0.04 0.04 Regulatory revenue adjustments 0.02 0.02 Higher (lower) other operating revenues 0.02 0.02 Operating Expenses Lower (higher) lease operating and transportation expenses 0.26 0.26 Lower (higher) operating expenses 0.12 (0.06) (0.05) (0.10) (0.04) (0.13)Lower (higher) property, franchise and other taxes 0.07 0.01 0.08 Lower (higher) depreciation / depletion (0.28) (0.03) (0.01) (0.01) (0.33)Other Income (Expense) (Higher) lower other deductions 0.03 0.04 0.01 0.15 (0.04) 0.19 (Higher) lower interest expense (0.01) (0.01) 0.01 (0.09) 0.08 (0.02)Income Taxes Lower (higher) income tax expense / effective tax rate (0.04) — (0.01) 0.04 — (0.01)All other / rounding (0.02) 0.02 (0.01) (0.02) — (0.03)Fiscal 2023 adjusted operating results per share 2.52 1.09 1.08 0.52 (0.04) 5.17 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax (0.01) (0.01)Unrealized gain (loss) on other investments, net of tax 0.01 0.01 Rounding 0.01 (0.01) — Fiscal 2023 GAAP earnings per share$ 2.52 $ 1.09 $ 1.08 $ 0.52 $ (0.04) $ 5.17 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES (Thousands of Dollars, except per share amounts) Three Months Ended Twelve Months Ended September 30, September 30, (Unaudited) (Unaudited)SUMMARY OF OPERATIONS 2023 2022 2023 2022 Operating Revenues: Utility Revenues$ 78,865 $ 112,252 $ 941,779 $ 897,916 Exploration and Production and Other Revenues 220,348 252,035 958,455 1,010,629 Pipeline and Storage and Gathering Revenues 69,735 70,859 273,537 277,501 368,948 435,146 2,173,771 2,186,046 Operating Expenses: Purchased Gas (12,865) 22,925 437,595 392,093 Operation and Maintenance: Utility 48,354 46,535 205,239 193,058 Exploration and Production and Other 37,955 31,554 124,270 191,572 Pipeline and Storage and Gathering 39,901 39,138 149,247 136,571 Property, Franchise and Other Taxes 20,701 23,089 92,700 101,182 Depreciation, Depletion and Amortization 109,599 94,109 409,573 369,790 243,645 257,350 1,418,624 1,384,266 Gain on Sale of Assets — — — 12,736 Operating Income 125,303 177,796 755,147 814,516 Other Income (Expense): Other Income (Deductions) 5,384 (4,800) 18,138 (1,509)Interest Expense on Long-Term Debt (28,449) (30,207) (111,948) (120,507)Other Interest Expense (4,453) (3,289) (19,938) (9,850) Income Before Income Taxes 97,785 139,500 641,399 682,650 Income Tax Expense (Benefit) 24,108 (18,643) 164,533 116,629 Net Income Available for Common Stock$ 73,677 $ 158,143 $ 476,866 $ 566,021 Earnings Per Common Share Basic$ 0.80 $ 1.73 $ 5.20 $ 6.19 Diluted$ 0.80 $ 1.71 $ 5.17 $ 6.15 Weighted Average Common Shares: Used in Basic Calculation 91,818,933 91,476,535 91,748,890 91,410,625 Used in Diluted Calculation 92,378,675 92,218,581 92,285,918 92,107,066 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited) September 30, September 30,(Thousands of Dollars) 2023 2022 ASSETS Property, Plant and Equipment$ 13,635,303 $ 12,551,909 Less - Accumulated Depreciation, Depletion and Amortization 6,335,441 5,985,432 Net Property, Plant and Equipment 7,299,862 6,566,477 Current Assets: Cash and Temporary Cash Investments 55,447 46,048 Hedging Collateral Deposits — 91,670 Receivables - Net 160,601 361,626 Unbilled Revenue 16,622 30,075 Gas Stored Underground 32,509 32,364 Materials and Supplies - at average cost 48,989 40,637 Unrecovered Purchased Gas Costs — 99,342 Other Current Assets 100,260 59,369 Total Current Assets 414,428 761,131 Other Assets: Recoverable Future Taxes 69,045 106,247 Unamortized Debt Expense 7,240 8,884 Other Regulatory Assets 72,138 67,101 Deferred Charges 82,416 77,472 Other Investments 73,976 95,025 Goodwill 5,476 5,476 Prepaid Pension and Post-Retirement Benefit Costs 200,301 196,597 Fair Value of Derivative Financial Instruments 50,487 9,175 Other 4,891 2,677 Total Other Assets 565,970 568,654 Total Assets$ 8,280,260 $ 7,896,262 CAPITALIZATION AND LIABILITIES Capitalization: Comprehensive Shareholders' Equity Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 91,819,405 Shares and 91,478,064 Shares, Respectively$ 91,819 $ 91,478 Paid in Capital 1,040,761 1,027,066 Earnings Reinvested in the Business 1,885,856 1,587,085 Accumulated Other Comprehensive Loss (55,060) (625,733)Total Comprehensive Shareholders' Equity 2,963,376 2,079,896 Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,384,485 2,083,409 Total Capitalization 5,347,861 4,163,305 Current and Accrued Liabilities: Notes Payable to Banks and Commercial Paper 287,500 60,000 Current Portion of Long-Term Debt — 549,000 Accounts Payable 152,193 178,945 Amounts Payable to Customers 59,019 419 Dividends Payable 45,451 43,452 Interest Payable on Long-Term Debt 20,399 17,376 Customer Advances 21,003 26,108 Customer Security Deposits 28,764 24,283 Other Accruals and Current Liabilities 160,974 257,327 Fair Value of Derivative Financial Instruments 31,009 785,659 Total Current and Accrued Liabilities 806,312 1,942,569 Other Liabilities: Deferred Income Taxes 1,124,170 698,229 Taxes Refundable to Customers 268,562 362,098 Cost of Removal Regulatory Liability 277,694 259,947 Other Regulatory Liabilities 165,441 188,803 Other Post-Retirement Liabilities 2,915 3,065 Asset Retirement Obligations 165,492 161,545 Other Liabilities 121,813 116,701 Total Other Liabilities 2,126,087 1,790,388 Commitments and Contingencies — — Total Capitalization and Liabilities$ 8,280,260 $ 7,896,262 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Twelve Months Ended September 30,(Thousands of Dollars) 2023 2022 Operating Activities: Net Income Available for Common Stock$ 476,866 $ 566,021 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Gain on Sale of Assets — (12,736)Depreciation, Depletion and Amortization 409,573 369,790 Deferred Income Taxes 151,403 104,415 Stock-Based Compensation 20,630 19,506 Reduction of Other Post-Retirement Regulatory Liability — (18,533)Other 19,647 31,983 Change in: Receivables and Unbilled Revenue 213,579 (168,769)Gas Stored Underground and Materials, Supplies and Emission Allowances (8,406) 3,109 Unrecovered Purchased Gas Costs 99,342 (66,214)Other Current Assets (41,077) 291 Accounts Payable (37,095) 11,907 Amounts Payable to Customers 58,600 398 Customer Advances (5,105) 8,885 Customer Security Deposits 4,481 4,991 Other Accruals and Current Liabilities (67,664) 34,260 Other Assets (26,564) (58,924)Other Liabilities (31,135) (17,859)Net Cash Provided by Operating Activities$ 1,237,075 $ 812,521 Investing Activities: Capital Expenditures$ (1,009,868) $ (811,826)Net Proceeds from Sale of Oil and Gas Producing Properties — 254,439 Acquisition of Upstream Assets (124,758) — Sale of Fixed Income Mutual Fund Shares in Grantor Trust 10,000 30,000 Other 12,279 8,683 Net Cash Used in Investing Activities$ (1,112,347) $ (518,704) Financing Activities: Proceeds from Issuance of Short-Term Note Payable to Bank$ 250,000 $ — Repayment of Short-Term Note Payable to Bank (250,000) — Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper 227,500 (98,500)Reduction of Long-Term Debt (549,000) — Net Proceeds From Issuance of Long-Term Debt 297,306 — Dividends Paid on Common Stock (176,096) (168,147)Net Repurchases of Common Stock (6,709) (9,590)Net Cash Used in Financing Activities$ (206,999) $ (276,237) Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (82,271) 17,580 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 137,718 120,138 Cash, Cash Equivalents, and Restricted Cash at September 30$ 55,447 $ 137,718 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) UPSTREAM BUSINESS Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,EXPLORATION AND PRODUCTION SEGMENT 2023 2022 Variance 2023 2022 VarianceTotal Operating Revenues$ 220,348 $ 252,035 $ (31,687) $ 958,455 $ 1,010,464 $ (52,009)Operating Expenses: Operation and Maintenance: General and Administrative Expense 17,163 15,664 1,499 66,074 79,061 (12,987)Lease Operating and Transportation Expense 64,412 62,701 1,711 253,555 283,914 (30,359)All Other Operation and Maintenance Expense 2,357 1,957 400 9,327 20,140 (10,813)Property, Franchise and Other Taxes 3,775 5,475 (1,700) 17,717 25,364 (7,647)Depreciation, Depletion and Amortization 66,394 52,958 13,436 241,142 208,148 32,994 154,101 138,755 15,346 587,815 616,627 (28,812)Gain on Sale of Assets — — — — 12,736 (12,736)Operating Income 66,247 113,280 (47,033) 370,640 406,573 (35,933) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 347 (186) 533 1,389 (744) 2,133 Interest and Other Income (Deductions) 3,457 (3,080) 6,537 2,359 (2,466) 4,825 Interest Expense (15,268) (14,474) (794) (54,317) (53,401) (916)Income Before Income Taxes 54,783 95,540 (40,757) 320,071 349,962 (29,891)Income Tax Expense (Benefit) 18,011 (20,537) 38,548 87,796 43,898 43,898 Net Income$ 36,772 $ 116,077 $ (79,305) $ 232,275 $ 306,064 $ (73,789)Net Income Per Share (Diluted)$ 0.40 $ 1.26 $ (0.86) $ 2.52 $ 3.32 $ (0.80) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) MIDSTREAM BUSINESSES Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,PIPELINE AND STORAGE SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 64,846 $ 68,836 $ (3,990) $ 259,646 $ 265,415 $ (5,769)Intersegment Revenues 29,192 28,913 279 119,545 111,629 7,916 Total Operating Revenues 94,038 97,749 (3,711) 379,191 377,044 2,147 Operating Expenses: Purchased Gas 326 592 (266) 1,436 1,890 (454)Operation and Maintenance 29,154 28,868 286 106,654 100,117 6,537 Property, Franchise and Other Taxes 8,322 8,470 (148) 33,774 34,133 (359)Depreciation, Depletion and Amortization 17,953 17,283 670 70,827 67,701 3,126 55,755 55,213 542 212,691 203,841 8,850 Operating Income 38,283 42,536 (4,253) 166,500 173,203 (6,703) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Credit 1,330 767 563 5,319 3,069 2,250 Interest and Other Income 2,017 1,490 527 6,670 3,820 2,850 Interest Expense (10,796) (10,929) 133 (43,499) (42,492) (1,007)Income Before Income Taxes 30,834 33,864 (3,030) 134,990 137,600 (2,610)Income Tax Expense 7,480 8,544 (1,064) 34,489 35,043 (554)Net Income$ 23,354 $ 25,320 $ (1,966) $ 100,501 $ 102,557 $ (2,056)Net Income Per Share (Diluted)$ 0.25 $ 0.27 $ (0.02) $ 1.09 $ 1.11 $ (0.02) Three Months Ended Twelve Months Ended September 30, September 30,GATHERING SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 4,889 $ 2,023 $ 2,866 $ 13,891 $ 12,086 $ 1,805 Intersegment Revenues 53,129 52,061 1,068 216,426 202,757 13,669 Total Operating Revenues 58,018 54,084 3,934 230,317 214,843 15,474 Operating Expenses: Operation and Maintenance 11,123 10,725 398 44,375 38,234 6,141 Property, Franchise and Other Taxes 21 24 (3) 60 37 23 Depreciation, Depletion and Amortization 9,111 8,656 455 35,725 33,998 1,727 20,255 19,405 850 80,160 72,269 7,891 Operating Income 37,763 34,679 3,084 150,157 142,574 7,583 Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 37 (56) 93 150 (224) 374 Interest and Other Income 75 117 (42) 534 198 336 Interest Expense (3,433) (4,105) 672 (14,989) (16,488) 1,499 Income Before Income Taxes 34,442 30,635 3,807 135,852 126,060 9,792 Income Tax Expense (Benefit) 7,925 (589) 8,514 36,128 24,949 11,179 Net Income$ 26,517 $ 31,224 $ (4,707) $ 99,724 $ 101,111 $ (1,387)Net Income Per Share (Diluted)$ 0.29 $ 0.34 $ (0.05) $ 1.08 $ 1.10 $ (0.02) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) DOWNSTREAM BUSINESS Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,UTILITY SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 78,865 $ 112,252 $ (33,387) $ 941,779 $ 897,916 $ 43,863 Intersegment Revenues 81 60 21 581 305 276 Total Operating Revenues 78,946 112,312 (33,366) 942,360 898,221 44,139 Operating Expenses: Purchased Gas 14,743 49,692 (34,949) 548,195 497,959 50,236 Operation and Maintenance 49,056 47,369 1,687 208,539 196,254 12,285 Property, Franchise and Other Taxes 8,454 8,981 (527) 40,624 41,137 (513)Depreciation, Depletion and Amortization 16,026 15,167 859 61,450 59,760 1,690 88,279 121,209 (32,930) 858,808 795,110 63,698 Operating Income (Loss) (9,333) (8,897) (436) 83,552 103,111 (19,559) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 9 (492) 501 4 5,526 (5,522)Interest and Other Income 1,437 429 1,008 6,339 1,591 4,748 Interest Expense (8,041) (7,000) (1,041) (34,233) (24,115) (10,118)Income (Loss) Before Income Taxes (15,928) (15,960) 32 55,662 86,113 (30,451)Income Tax Expense (Benefit) (8,749) (5,108) (3,641) 7,267 17,165 (9,898)Net Income (Loss)$ (7,179) $ (10,852) $ 3,673 $ 48,395 $ 68,948 $ (20,553)Net Income (Loss) Per Share (Diluted)$ (0.08) $ (0.12) $ 0.04 $ 0.52 $ 0.75 $ (0.23) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,ALL OTHER 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ — $ — $ — $ — $ — $ — Intersegment Revenues — — — — 6 (6)Total Operating Revenues — — — — 6 (6)Operating Expenses: Purchased Gas — — — — 6 (6)Operation and Maintenance — — — 21 5 16 — — — 21 11 10 Operating Loss — — — (21) (5) (16)Other Income (Expense): Interest and Other Income (Deductions) (66) 1 (67) (517) 3 (520)Interest Expense (68) (4) (64) (157) (4) (153)Loss before Income Taxes (134) (3) (131) (695) (6) (689)Income Tax Expense (Benefit) (33) (1) (32) (164) 3 (167)Net Loss$ (101) $ (2) $ (99) $ (531) $ (9) $ (522)Net Loss Per Share (Diluted)$ — $ — $ — $ — $ — $ — Three Months Ended Twelve Months Ended September 30, September 30,CORPORATE 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ — $ — $ — $ — $ 165 $ (165)Intersegment Revenues 932 1,183 (251) 4,388 4,430 (42)Total Operating Revenues 932 1,183 (251) 4,388 4,595 (207)Operating Expenses: Operation and Maintenance 8,345 4,801 3,544 19,115 14,841 4,274 Property, Franchise and Other Taxes 129 139 (10) 525 511 14 Depreciation, Depletion and Amortization 115 45 70 429 183 246 8,589 4,985 3,604 20,069 15,535 4,534 Operating Loss (7,657) (3,802) (3,855) (15,681) �� (10,940) (4,741)Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Costs (354) (1,017) 663 (1,417) (4,069) 2,652 Interest and Other Income 36,337 33,712 2,625 147,935 126,648 21,287 Interest Expense on Long-Term Debt (28,449) (30,207) 1,758 (111,948) (120,507) 8,559 Other Interest Expense (6,089) (3,262) (2,827) (23,370) (8,211) (15,159)Loss before Income Taxes (6,212) (4,576) (1,636) (4,481) (17,079) 12,598 Income Tax Benefit (526) (952) 426 (983) (4,429) 3,446 Net Loss$ (5,686) $ (3,624) $ (2,062) $ (3,498) $ (12,650) $ 9,152 Net Loss Per Share (Diluted)$ (0.06) $ (0.04) $ (0.02) $ (0.04) $ (0.13) $ 0.09 Three Months Ended Twelve Months Ended September 30, September 30,INTERSEGMENT ELIMINATIONS 2023 2022 Variance 2023 2022 VarianceIntersegment Revenues$ (83,334) $ (82,217) $ (1,117) $ (340,940) $ (319,127) $ (21,813)Operating Expenses: Purchased Gas (27,934) (27,359) (575) (112,036) (107,762) (4,274)Operation and Maintenance (55,400) (54,858) (542) (228,904) (211,365) (17,539) (83,334) (82,217) (1,117) (340,940) (319,127) (21,813)Operating Income — — — — — — Other Income (Expense): Interest and Other Deductions (39,242) (36,485) (2,757) (150,627) (134,861) (15,766)Interest Expense 39,242 36,485 2,757 150,627 134,861 15,766 Net Income$ — $ — $ — $ — $ — $ — Net Income Per Share (Diluted)$ — $ — $ — $ — $ — $ — NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT INFORMATION (Continued)(Thousands of Dollars) Three Months Ended Twelve Months Ended September 30, September 30, (Unaudited) (Unaudited) Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Capital Expenditures: Exploration and Production(1)$ 144,938 (2)$ 160,056 (3)$ (15,118) $ 737,725 (2)(3)$ 565,791 (3)(4)$ 171,934 Pipeline and Storage 75,109 (2) 37,563 (3) 37,546 141,877 (2)(3) 95,806 (3)(4) 46,071 Gathering 47,917 (2) 26,957 (3) 20,960 103,295 (2)(3) 55,546 (3)(4) 47,749 Utility 51,246 (2) 40,061 (3) 11,185 139,922 (2)(3) 111,033 (3)(4) 28,889 Total Reportable Segments 319,210 264,637 54,573 1,122,819 828,176 294,643 All Other — — — — — — Corporate 305 549 (244) 754 1,212 (458)Total Capital Expenditures$ 319,515 $ 265,186 $ 54,329 $ 1,123,573 $ 829,388 $ 294,185 (1)The year ended September 30, 2023 includes $124.8 million related to the acquisition of upstream assets acquired from SWN, as well as $25.0 million related to the acquisition of assets from EXCO and UGI. The acquisition cost for the assets acquired from SWN is reported as a component of Acquisition of Upstream Assets on the Consolidated Statement of Cash Flows.(2)Capital expenditures for the quarter and year ended September 30, 2023, include accounts payable and accrued liabilities related to capital expenditures of $43.2 million, $31.8 million, $20.6 million, and $13.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at September 30, 2023, since they represent non-cash investing activities at that date.(3)Capital expenditures for the year ended September 30, 2023, exclude capital expenditures of $83.0 million, $15.2 million, $10.7 million and $11.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2022 and paid during the year ended September 30, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2023.(4)Capital expenditures for the year ended September 30, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2021 and paid during the year ended September 30, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2022. DEGREE DAYS Percent Colder (Warmer) Than:Three Months Ended September 30,Normal 2023 2022 Normal (1) Last Year (1)Buffalo, NY162 61 107 (62.3) (43.0)Erie, PA81 59 94 (27.2) (37.2) Twelve Months Ended September 30, Buffalo, NY6,617 5,717 5,769 (13.6) (0.9)Erie, PA6,104 5,493 5,368 (10.0) 2.3 (1)Percents compare actual 2023 degree days to normal degree days and actual 2023 degree days to actual 2022 degree days. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Gas Production/Prices: Production (MMcf) Appalachia 93,709 87,858 5,851 372,271 341,700 30,571 West Coast — 1 (1) — 1,211 (1,211)Total Production 93,709 87,859 5,850 372,271 342,911 29,360 Average Prices (Per Mcf) Appalachia$ 1.99 $ 6.16 $ (4.17) $ 2.78 $ 5.03 $ (2.25)West CoastN/M N/M N/M N/M 10.03 N/MWeighted Average 1.99 6.16 (4.17) 2.78 5.05 (2.27)Weighted Average after Hedging 2.33 2.84 (0.51) 2.55 2.71 (0.16) Oil Production/Prices: Production (Thousands of Barrels) Appalachia 8 7 1 30 16 14 West Coast — — — — 1,588 (1,588)Total Production 8 7 1 30 1,604 (1,574) Average Prices (Per Barrel) Appalachia$ 76.02 $ 90.22 $ (14.20) $ 75.64 $ 97.82 $ (22.18)West CoastN/M N/M N/M N/M 94.06 N/MWeighted Average 76.02 90.93 (14.91) 75.64 94.10 (18.46)Weighted Average after Hedging (1) 76.02 90.86 (14.84) 75.64 70.80 4.84 Total Production (MMcfe) 93,757 87,901 5,856 372,451 352,535 19,916 Selected Operating Performance Statistics: General & Administrative Expense per Mcfe (2)$ 0.18 $ 0.18 $ — $ 0.18 $ 0.20 $ (0.02)Lease Operating and Transportation Expense per Mcfe (2)(3)$ 0.69 $ 0.71 $ (0.02) $ 0.68 $ 0.81 $ (0.13)Depreciation, Depletion & Amortization per Mcfe (2)$ 0.71 $ 0.60 $ 0.11 $ 0.65 $ 0.59 $ 0.06 N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022) (1)Weighted average oil price after hedging for the twelve months ended September 30, 2022 excludes a loss on discontinuance of crude oil cash flow hedges of $44.6 million. (2)Refer to page 15 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. General and Administrative Expense per Mcfe for the twelve months ended September 30, 2022 excludes transaction and severance costs related to the California asset sale. (3)Amounts include transportation expense of $0.55 and $0.58 per Mcfe for the three months ended September 30, 2023 and September 30, 2022, respectively. Amounts include transportation expense of $0.57 and $0.57 per Mcfe for the twelve months ended September 30, 2023 and September 30, 2022, respectively. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Hedging Summary for Fiscal 2024 Volume Average Hedge PriceGas Swaps NYMEX 134,930,000 MMBTU $ 3.34 / MMBTUNo Cost Collars 65,280,000 MMBTU $ 3.33 / MMBTU (Floor) / $4.17 / MMBTU (Ceiling)Fixed Price Physical Sales 83,196,787 MMBTU $ 2.44 / MMBTUTotal 283,406,787 MMBTU Hedging Summary for Fiscal 2025 Volume Average Hedge PriceGas Swaps NYMEX 88,810,000 MMBTU $ 3.53 / MMBTUNo Cost Collars 43,960,000 MMBTU $ 3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)Fixed Price Physical Sales 75,047,438 MMBTU $ 2.49 / MMBTUTotal 207,817,438 MMBTU Hedging Summary for Fiscal 2026 Volume Average Hedge PriceGas Swaps NYMEX 38,020,000 MMBTU $ 3.98 / MMBTUNo Cost Collars 42,720,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)Fixed Price Physical Sales 66,821,415 MMBTU $ 2.39 / MMBTUTotal 147,561,415 MMBTU Hedging Summary for Fiscal 2027 Volume Average Hedge PriceGas Swaps NYMEX 13,500,000 MMBTU $ 4.25 / MMBTUNo Cost Collars 3,560,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)Fixed Price Physical Sales 46,128,777 MMBTU $ 2.39 / MMBTUTotal 63,188,777 MMBTU Hedging Summary for Fiscal 2028 Volume Average Hedge PriceGas Swaps NYMEX 1,000,000 MMBTU $ 4.29 / MMBTUFixed Price Physical Sales 12,208,068 MMBTU $ 2.48 / MMBTUTotal 13,208,068 MMBTU Hedging Summary for Fiscal 2029 Volume Average Hedge PriceFixed Price Physical Sales 788,352 MMBTU $ 2.54 / MMBTU NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Reserve Quantity Information(Unaudited) Gas MMcf U.S. Appalachian RegionProved Developed and Undeveloped Reserves: September 30, 2022 4,170,662 Extensions and Discoveries 670,438 Revisions of Previous Estimates 32,379 Production (372,271)Purchases of Minerals in Place 33,876 September 30, 2023 4,535,084 Proved Developed Reserves: September 30, 2022 3,312,568 September 30, 2023 3,550,034 Oil Mbbl U.S. Appalachian RegionProved Developed and Undeveloped Reserves: September 30, 2022 250 Extensions and Discoveries — Revisions of Previous Estimates (4)Production (30)September 30, 2023 216 Proved Developed Reserves: September 30, 2022 250 September 30, 2023 216 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES Pipeline & Storage Throughput - (millions of cubic feet - MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Firm Transportation - Affiliated 17,589 16,943 646 126,500 111,157 15,343 Firm Transportation - Non-Affiliated 161,750 171,983 (10,233) 689,984 679,260 10,724 Interruptible Transportation 168 3,886 (3,718) 2,192 5,612 (3,420) 179,507 192,812 (13,305) 818,676 796,029 22,647 Gathering Volume - (MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Gathered Volume 117,260 104,707 12,553 453,338 419,332 34,006 Utility Throughput - (MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Retail Sales: Residential Sales 3,765 4,146 (381) 61,401 64,011 (2,610)Commercial Sales 530 644 (114) 9,342 9,621 (279)Industrial Sales 42 75 (33) 548 541 7 4,337 4,865 (528) 71,291 74,173 (2,882)Transportation 9,419 9,720 (301) 62,986 65,993 (3,007) 13,756 14,585 (829) 134,277 140,166 (5,889) NATIONAL FUEL GAS COMPANYAND 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 and twelve months ended September 30, 2023 and 2022: Three Months Ended Twelve Months Ended September 30, September 30,(in thousands except per share amounts) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Items impacting comparability: Items related to West Coast asset sale: Gain on sale of West Coast assets (E&P) — — — (12,736)Tax impact of gain on sale of West Coast assets — — — 3,225 Loss from discontinuance of crude oil cash flow hedges (E&P) — — — 44,632 Tax impact of loss from discontinuance of crude oil cash flow hedges — — — (11,303)Transaction and severance costs (E&P) — — — 9,693 Tax impact of transaction and severance costs — — — (2,455)Total items impacting comparability related to West Coast asset sale — — — 31,056 Unrealized (gain) loss on derivative asset (E&P) (2,803) 4,395 899 4,395 Tax impact of unrealized (gain) loss on derivative asset 775 (1,203) (240) (1,203)Unrealized (gain) loss on other investments (Corporate / All Other) 719 1,532 (913) 11,625 Tax impact of unrealized (gain) loss on other investments (151) (322) 192 (2,441)Reversal of deferred tax valuation allowance — (24,850) — (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (28,406) — (28,406)Reduction of other post-retirement regulatory liability (Utility) — — — (18,533)Tax impact of reduction of other post-retirement regulatory liability — — — 3,892 Adjusted Operating Results$ 72,217 $ 109,289 $ 476,804 $ 541,556 Reported GAAP Earnings Per Share$ 0.80 $ 1.71 $ 5.17 $ 6.15 Items impacting comparability: Items related to West Coast asset sale: Gain on sale of West Coast assets, net of tax (E&P) — — — (0.10)Loss from discontinuance of crude oil cash flow hedges, net of tax (E&P) — — — 0.36 Transaction and severance costs, net of tax (E&P) — — — 0.08 Total items impacting comparability related to West Coast asset sale — — — 0.34 Unrealized (gain) loss on derivative asset, net of tax (E&P) (0.02) 0.03 0.01 0.03 Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.01 0.01 (0.01) 0.10 Reversal of deferred tax valuation allowance — (0.27) — (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (0.31) — (0.31)Reduction of other post-retirement regulatory liability, net of tax (Utility) — — — (0.16)Rounding (0.01) 0.02 — — Adjusted Operating Results Per Share$ 0.78 $ 1.19 $ 5.17 $ 5.88 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES (Continued) Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and twelve months ended September 30, 2023 and 2022: Three Months Ended Twelve Months Ended September 30, September 30,(in thousands) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Depreciation, Depletion and Amortization 109,599 94,109 409,573 369,790 Other (Income) Deductions (5,384) 4,800 (18,138) 1,509 Interest Expense 32,902 33,496 131,886 130,357 Income Taxes 24,108 (18,643) 164,533 116,629 Gain on Sale of Assets — — — (12,736)Loss from discontinuance of crude oil cash flow hedges (E&P) — — — 44,632 Transaction and severance costs related to West Coast asset sale (E&P) — — — 9,693 Adjusted EBITDA$ 234,902 $ 271,905 $ 1,164,720 $ 1,225,895 Adjusted EBITDA by Segment Pipeline and Storage Adjusted EBITDA$ 56,236 $ 59,819 $ 237,327 $ 240,904 Gathering Adjusted EBITDA 46,874 43,335 185,882 176,572 Total Midstream Businesses Adjusted EBITDA 103,110 103,154 423,209 417,476 Exploration and Production Adjusted EBITDA 132,641 166,238 611,782 656,310 Utility Adjusted EBITDA 6,693 6,270 145,002 162,871 Corporate and All Other Adjusted EBITDA (7,542) (3,757) (15,273) (10,762)Total Adjusted EBITDA$ 234,902 $ 271,905 $ 1,164,720 $ 1,225,895 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESSEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended September 30, September 30,(in thousands) 2023 2022 2023 2022 Exploration and Production Segment Reported GAAP Earnings$ 36,772 $ 116,077 $ 232,275 $ 306,064 Depreciation, Depletion and Amortization 66,394 52,958 241,142 208,148 Other (Income) Deductions (3,804) 3,266 (3,748) 3,210 Interest Expense 15,268 14,474 54,317 53,401 Income Taxes 18,011 (20,537) 87,796 43,898 Gain on Sale of West Coast Assets — — — (12,736)Loss from Discontinuance of Crude Oil Cash Flow Hedges — — — 44,632 Transaction and Severance Costs related to West Coast Asset Sale — — — 9,693 Adjusted EBITDA$ 132,641 $ 166,238 $ 611,782 $ 656,310 Pipeline and Storage Segment Reported GAAP Earnings$ 23,354 $ 25,320 $ 100,501 $ 102,557 Depreciation, Depletion and Amortization 17,953 17,283 70,827 67,701 Other (Income) Deductions (3,347) (2,257) (11,989) (6,889)Interest Expense 10,796 10,929 43,499 42,492 Income Taxes 7,480 8,544 34,489 35,043 Adjusted EBITDA$ 56,236 $ 59,819 $ 237,327 $ 240,904 Gathering Segment Reported GAAP Earnings$ 26,517 $ 31,224 $ 99,724 $ 101,111 Depreciation, Depletion and Amortization 9,111 8,656 35,725 33,998 Other (Income) Deductions (112) (61) (684) 26 Interest Expense 3,433 4,105 14,989 16,488 Income Taxes 7,925 (589) 36,128 24,949 Adjusted EBITDA$ 46,874 $ 43,335 $ 185,882 $ 176,572 Utility Segment Reported GAAP Earnings$ (7,179) $ (10,852) $ 48,395 $ 68,948 Depreciation, Depletion and Amortization 16,026 15,167 61,450 59,760 Other (Income) Deductions (1,446) 63 (6,343) (7,117)Interest Expense 8,041 7,000 34,233 24,115 Income Taxes (8,749) (5,108) 7,267 17,165 Adjusted EBITDA$ 6,693 $ 6,270 $ 145,002 $ 162,871 Corporate and All Other Reported GAAP Earnings$ (5,787) $ (3,626) $ (4,029) $ (12,659)Depreciation, Depletion and Amortization 115 45 429 183 Other (Income) Deductions 3,325 3,789 4,626 12,279 Interest Expense (4,636) (3,012) (15,152) (6,139)Income Taxes (559) (953) (1,147) (4,426)Adjusted EBITDA$ (7,542) $ (3,757) $ (15,273) $ (10,762) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESFREE CASH FLOW Management defines free cash flow as net cash provided by operating activities, less net cash used in investing activities, adjusted for acquisitions and divestitures. The following table reconciles National Fuel's free cash flow to Net Cash Provided by Operating Activities on the Consolidated Statement of Cash Flows for the twelve months ended September 30, 2023 and 2022: Twelve Months Ended September 30,(in thousands) 2023 2022 Net Cash Provided by Operating Activities$ 1,237,075 $ 812,521 Less: Net Cash Used in Investing Activities 1,112,347 518,704 Proceeds from Divestitures — 254,439 124,728 39,378 Plus: Acquisitions 124,758 — Upstream Acquisitions Included in Capital Expenditures(1) 25,057 — Free Cash Flow$ 274,543 $ 39,378 (1)$25.0 million related to the acquisition of assets from EXCO and UGI included in Capital Expenditures on the Consolidated Statement of Cash Flows. Brandon J. Haspett Investor Relations 716-857-7697 Timothy J. Silverstein Treasurer 716-857-6987 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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National Fuel Reports Fourth Quarter and Full Year Fiscal 2023 Earnings By: National Fuel Gas Company via GlobeNewswire November 01, 2023 at 16:45 PM EDT WILLIAMSVILLE, N.Y., Nov. 01, 2023 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2023. FISCAL 2023 FOURTH QUARTER SUMMARY GAAP net income of $73.7 million, or $0.80 per share, compared to GAAP net income of $158.1 million, or $1.71 per share, in the prior year.Adjusted operating results of $72.2 million, or $0.78 per share, compared to $109.3 million, or $1.19 per share, in the prior year (see non-GAAP reconciliation on page 2 for fourth quarter and fiscal 2023).Both E&P segment net production and Gathering segment revenue increased by 7% versus the prior year, driven by continued strong operational execution in Appalachia.Supply Corporation entered into a precedent agreement with Seneca for its Tioga Pathway Project, which is an estimated $90 million modernization and expansion project that will add 190,000 Dth per day of firm transportation takeaway capacity from northwest Tioga County, Pennsylvania. FISCAL 2023 HIGHLIGHTS Generated consolidated net cash provided by operating activities of $1.24 billion for fiscal 2023, with free cash flow of $275 million (see non-GAAP reconciliation on page 27 for fiscal 2023).Increased the shareholder dividend for the 53rd consecutive year to an annual rate of $1.98 per share, an increase of 4.2%, continuing the Company’s long history of consistently returning capital to shareholders.Distribution Corporation settled a rate proceeding in Pennsylvania, which will increase annual base rate delivery revenues by $23 million.Seneca Resources bolstered its deep inventory of highly economic development locations in its Eastern Development Area with the acquisition of approximately 39,000 net acres in Tioga and Lycoming counties.NFG Midstream achieved certification of 100% of its assets under Equitable Origin’s EO100TM Standard for Responsible Energy Development, becoming the first gathering or midstream company to receive this ESG-focused certification. MANAGEMENT COMMENTS David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “Despite the headwinds of lower natural gas prices in fiscal 2023, National Fuel delivered strong results, both financially and operationally. As we move into fiscal 2024, the combination of a strong outlook for long-term growth in our regulated businesses, increasing capital efficiency in our non-regulated operations, and expectations of improving natural gas price realizations position us well to deliver long-term value to our shareholders.” RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS Three Months Ended Fiscal Year Ended September 30, September 30,(in thousands except per share amounts) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Items impacting comparability: Unrealized (gain) loss on derivative asset (E&P) (2,803) 4,395 899 4,395 Tax impact of unrealized (gain) loss on derivative asset 775 (1,203) (240) (1,203)Unrealized (gain) loss on other investments (Corporate / All Other) 719 1,532 (913) 11,625 Tax impact of unrealized (gain) loss on other investments (151) (322) 192 (2,441)Reversal of deferred tax valuation allowance — (24,850) — (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (28,406) — (28,406)Items impacting comparability from West Coast asset sale (E&P) (1) — — — 41,589 Tax impact of items impacting comparability from West Coast asset sale (1) — — — (10,533)Reduction of other post-retirement regulatory liability (Utility) — — — (18,533)Tax impact of reduction of other post-retirement regulatory liability — — — 3,892 Adjusted Operating Results$ 72,217 $ 109,289 $ 476,804 $ 541,556 Reported GAAP Earnings Per Share$ 0.80 $ 1.71 $ 5.17 $ 6.15 Items impacting comparability: Unrealized (gain) loss on derivative asset, net of tax (E&P) (0.02) 0.03 0.01 0.03 Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.01 0.01 (0.01) 0.10 Reversal of deferred tax valuation allowance — (0.27) — (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (0.31) — (0.31)Items impacting comparability from West Coast asset sale, net of tax (E&P) (1) — — — 0.34 Reduction of other post-retirement regulatory liability, net of tax (Utility) — — — (0.16)Rounding (0.01) 0.02 — — Adjusted Operating Results Per Share$ 0.78 $ 1.19 $ 5.17 $ 5.88 (1)Refer to non-GAAP reconciliation on page 24 for a separate breakout of items impacting comparability from the West Coast asset sale. FISCAL 2024 GUIDANCE UPDATE National Fuel is revising its fiscal 2024 earnings guidance to reflect updated forecast assumptions and projections since the Company’s preliminary guidance range was announced in August 2023. The Company is now projecting that earnings will be within the range of $5.40 to $5.90 per share, an increase of 9% from the Company’s 2023 adjusted operating results at the midpoint of the updated 2024 guidance range. Consistent with preliminary guidance, the Company is assuming that NYMEX natural gas prices will average $3.25 per MMBtu for the fiscal year. For guidance purposes, the Company’s updated natural gas price projections approximate the current NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts. Seneca currently has firm sales contracts in place for approximately 89% of its projected fiscal 2024 Appalachian production, limiting its exposure to in-basin markets. Approximately 69% of Seneca’s expected Appalachian production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price. Seneca’s depreciation, depletion and amortization guidance range was also revised to reflect current expectations for the fiscal year. The Company’s consolidated and individual segment capital expenditures guidance remain unchanged from the preliminary guidance. Other guidance assumptions remain largely unchanged from the previous guidance. The details are outlined in the table on page 7. DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT The following earnings discussion of each operating segment for the quarter ended September 30, 2023 is summarized in a tabular form on pages 8 and 9 of this report (earnings drivers for the fiscal years ended September 30, 2023 are summarized on pages 10 and 11). It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. Upstream Business Exploration and Production Segment The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC (“Seneca”). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 36,772 $ 116,077 $ (79,305)Unrealized (gain) loss on derivative asset, net of tax (2,028) 3,192 (5,220)Reversal of deferred tax valuation allowance — (28,589) 28,589 Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction — (16,152) 16,152 Adjusted Operating Results$ 34,744 $ 74,528 $ (39,784) Adjusted EBITDA$ 132,641 $ 166,238 $ (33,597) Seneca’s fourth quarter GAAP earnings decreased $79.3 million versus the prior year. Excluding several items impacting comparability as described below, Seneca's earnings decreased $39.8 million, with higher natural gas production more than offset by lower realized natural gas prices, higher operating expenses and higher income tax expense. Last year’s fourth quarter earnings included two one-time items related to state deferred income taxes that impacted comparability as shown in the table above. These items consisted of a reversal of a $28.6 million valuation allowance on deferred tax assets related to certain state net operating loss and credit carryforwards, along with a $16.2 million benefit from the remeasurement of state deferred income taxes related to a series of reductions in the Pennsylvania state corporate income tax rate that was signed into law in July 2022. Earnings were also impacted by an unrealized gain of $2.8 million ($2.0 million after-tax) recognized during the current-year fourth quarter related to an increase in the fair value of the contingent consideration Seneca received in connection with the June 2022 divestiture of its California assets. In the prior-year's fourth quarter, Seneca recorded an unrealized loss of $4.4 million ($3.2 million after-tax) on that contingent consideration. During this year's fourth quarter, Seneca produced 93.8 Bcfe, an increase of 5.9 Bcfe, or 7%, from the prior year, despite the impact of approximately 2 Bcfe of price-related curtailments due to low in-basin pricing. Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.33 per Mcf, a decrease of $0.51 per Mcf from the prior year. Lower natural gas prices, before the impact of hedging, were partially offset by an increase in the weighted average hedge price compared to the prior-year fourth quarter. On a per unit basis, lease operating and transportation expense (“LOE”) was $0.69 per Mcfe, a decrease of $0.02 per Mcfe from the prior year. On an absolute basis, LOE increased $1.7 million primarily due to higher water management costs, partially offset by lower rental and workover expenses. An increase in transportation and gathering costs as a result of increased production also contributed to the increase in absolute LOE. LOE includes $51.2 million for gathering and compression services from NFG Midstream to connect Seneca’s production to sales points along interstate pipelines. General and administrative (“G&A”) expense remained flat at $0.18 per Mcfe compared to the prior year. On an absolute basis, Seneca’s G&A expense increased $1.5 million primarily due to an increase in labor-related costs. Depreciation, depletion and amortization (“DD&A”) expense was $0.71 per Mcfe, an increase of $0.11 per Mcfe from the prior year. Absolute DD&A expense increased $13.4 million due to higher natural gas production and a higher per unit DD&A rate. The higher rate was driven by an increase in Seneca's full cost pool due to a combination of higher capitalized costs and an increase in estimated future development costs related to proved undeveloped wells. Other taxes decreased $1.7 million largely attributable to lower Impact Fees in Pennsylvania due to the decline in NYMEX natural gas prices. Excluding the impact of last year’s fourth quarter one-time items impacting comparability shown in the table above, the increase in Seneca’s effective tax rate was primarily driven by higher state income tax expense. Proved Reserves Year-End Update Seneca’s total proved reserves at September 30, 2023 were 4,536 Bcfe, an increase of 364 Bcfe, or 9%, from September 30, 2022. Seneca’s proved developed reserves at the end of fiscal 2023 were 3,551 Bcfe, representing 78% of total proved reserves, compared to 79% a year ago. In fiscal 2023, Seneca added 670 Bcfe of proved reserve extensions and discoveries, 34 Bcfe of proved developed reserves as a result of two separate upstream asset purchases during fiscal 2023, and 32 Bcfe of net positive revisions due primarily to improvements in well performance and changes in development plans. Seneca replaced 198% of its fiscal 2023 production. Midstream Businesses Pipeline and Storage Segment The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 23,354 $ 25,320 $ (1,966) Adjusted EBITDA$ 56,236 $ 59,819 $ (3,583) The Pipeline and Storage segment’s fourth quarter GAAP earnings decreased $2.0 million versus the prior year primarily due to lower operating revenues, partially offset by an increase in other income. The decrease in operating revenues of $3.7 million was primarily attributable to contract expirations that occurred earlier in the fiscal year, partially offset by an increase in new short-term contracts. The increase in other income of $1.1 million was primarily attributable to a higher weighted average interest rate on intercompany short-term notes receivable. Gathering Segment The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which delivers Seneca and other non-affiliated Appalachian production to the interstate pipeline system. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 26,517 $ 31,224 $ (4,707)Reversal of deferred tax valuation allowance — 3,739 (3,739)Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction — (11,856) 11,856 Adjusted Operating Results$ 26,517 $ 23,107 $ 3,410 Adjusted EBITDA$ 46,874 $ 43,335 $ 3,539 The Gathering segment’s fourth quarter GAAP earnings decreased $4.7 million versus the prior year. Similar to our Exploration and Production segment, last year’s fourth quarter earnings included two one-time items impacting comparability shown in the table above related to state deferred income taxes that did not recur this year. Excluding these items, the Gathering segment’s earnings increased $3.4 million primarily due to higher operating revenues. Operating revenues increased $3.9 million, or 7%, which was the result of a 12.6 Bcf increase in gathered volumes due to an increase in natural gas throughput from both non-affiliated parties and Seneca. Downstream Business Utility Segment The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ (7,179) $ (10,852) $ 3,673 Adjusted EBITDA$ 6,693 $ 6,270 $ 423 The Utility segment’s fourth quarter GAAP net loss was $3.7 million lower than the net loss in the prior year’s fourth quarter due to higher customer margins (operating revenues less purchased gas sold), a decrease in non-service pension and OPEB costs, higher other income and lower income tax expense, partially offset by increases in operation and maintenance (“O&M”) expense and interest expense. The increase in customer margin of $1.6 million was due primarily to the implementation of the recent Pennsylvania rate case settlement, which increased base rates by $23 million annually, effective August 1, 2023. Also contributing to the increase were adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation and higher revenues from the Company’s system modernization tracking mechanisms in its New York service territory. These increases were partially offset by a $1.1 million reduction in base rates in New York, which, consistent with prior quarters, was the result of a rate proceeding that temporarily reduced the Utility’s recovery of pension and other post-employment benefit (“OPEB”) expenses to zero effective October 1, 2022. In addition to lowering rates, the proceeding mandated a corresponding decrease in pension and OPEB expenses, most of which had been previously recorded in “below the line” non-service pension and OPEB costs. The increase in other income of $1.0 million was primarily attributable to interest earned on deferred gas costs. O&M expense increased by $1.7 million, primarily driven by higher labor-related costs. Interest expense increased $1.0 million due to the Company’s long-term debt issuance in May 2023. Corporate and All Other The Company’s operations that are included in Corporate and All Other generated a combined net loss of $5.8 million in the current year fourth quarter, which was $2.2 million higher than the combined net loss of $3.6 million in the prior-year fourth quarter. The increase in net loss was primarily driven by higher O&M expense as a result of an increase in professional services, which was partially offset by a lower amount of unrealized losses on investment securities recognized in the current quarter as compared to the prior-year fourth quarter. EARNINGS TELECONFERENCE The Company will host a conference call on Thursday, November 2, 2023, at 10 a.m. Eastern Time to discuss this announcement. To pre-register for the call (recommended), please visit https://www.netroadshow.com/events/login?show=2be14adf&confId=56623. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-833–470–1428 and provide Participant Access Code 568657. The teleconference will also be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. A telephone replay of the teleconference call will be available through the end of the day on Thursday, November 9, 2023. To access the replay, dial U.S. toll free 1-866-813-9403 and provide Replay Access Code 693074. 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. Haspett716-857-7697Media 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; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company’s ability to complete planned strategic transactions; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES GUIDANCE SUMMARY As discussed on page 2, the Company is revising its earnings guidance for fiscal 2024. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below. While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2024, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis. Previous FY 2024 Guidance Updated FY 2024 GuidanceAdjusted Consolidated Earnings per Share, excluding items impacting comparability$5.50 to $6.00 $5.40 to $5.90Consolidated Effective Tax Rate~ 25.5 - 26% ~ 25 - 25.5% Capital Expenditures (Millions) Exploration and Production$525 - $575 $525 - $575Pipeline and Storage$120 - $140 $120 - $140Gathering$90 - $110 $90 - $110Utility$130 - $150 $130 - $150 Consolidated Capital Expenditures$865 - $975 $865 - $975 Exploration & Production Segment Guidance Commodity Price Assumptions NYMEX natural gas price$3.25 /MMBtu $3.25 /MMBtuAppalachian basin spot price$2.45 /MMBtu $2.40 - $2.45 /MMBtu Production (Bcfe)390 to 410 390 to 410 E&P Operating Costs ($/Mcfe) LOE$0.69 - $0.71 $0.69 - $0.71G&A$0.17 - $0.19 $0.17 - $0.19DD&A$0.66 - $0.70 $0.69 - $0.74 Other Business Segment Guidance (Millions) Gathering Segment Revenues$240 - $260 $240 - $260Pipeline and Storage Segment Revenues$380 - $420 $380 - $420 NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGSQUARTER ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated* Fourth quarter 2022 GAAP earnings$ 116,077 $ 25,320 $ 31,224 $ (10,852) $ (3,626) $ 158,143 Items impacting comparability: Unrealized gain (loss) on derivative asset 4,395 4,395 Tax impact of unrealized gain (loss) on derivative asset (1,203) (1,203)Reversal of deferred tax valuation allowance (28,589) 3,739 (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (16,152) (11,856) (398) (28,406)Unrealized (gain) loss on other investments 1,532 1,532 Tax impact of unrealized (gain) loss on other investments (322) (322)Fourth quarter 2022 adjusted operating results 74,528 25,320 23,107 (10,852) (2,814) 109,289 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 13,121 13,121 Higher (lower) realized natural gas prices, after hedging (37,374) (37,374)Higher (lower) other operating revenues (734) (734)Midstream Revenues Higher (lower) operating revenues (2,932) 3,108 176 Downstream Margins*** Impact of usage and weather (386) (386)Impact of new rates in Pennsylvania 754 754 Impact of new rates in New York**** (893) (893)System modernization and improvement tracker revenues 366 366 Regulatory revenue adjustments 1,951 1,951 Operating Expenses Lower (higher) lease operating and transportation expenses (1,352) (1,352)Lower (higher) operating expenses (1,500) (314) (1,586) (2,800) (6,200)Lower (higher) property, franchise and other taxes 1,343 1,343 Lower (higher) depreciation / depletion (10,614) (529) (359) (679) (12,181)Other Income (Expense) (Higher) lower other deductions 815 1,192 (276) 1,731 (Higher) lower interest expense (627) 531 (998) 1,283 189 Income Taxes Lower (higher) income tax expense / effective tax rate (1,900) 474 402 3,648 (367) 2,257 All other / rounding (147) 206 42 304 (245) 160 Fourth quarter 2023 adjusted operating results 34,744 23,354 26,517 (7,179) (5,219) 72,217 Items impacting comparability: Unrealized gain (loss) on derivative asset 2,803 2,803 Tax impact of unrealized gain (loss) on derivative asset (775) (775)Unrealized gain (loss) on other investments (719) (719)Tax impact of unrealized gain (loss) on other investments 151 151 Fourth quarter 2023 GAAP earnings$ 36,772 $ 23,354 $ 26,517 $ (7,179) $ (5,787) $ 73,677 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHAREQUARTER ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / Production Storage Gathering Utility All Other Consolidated* Fourth quarter 2022 GAAP earnings per share$ 1.26 $ 0.27 $ 0.34 $ (0.12) $ (0.04) $ 1.71 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax 0.03 0.03 Reversal of deferred tax valuation allowance (0.31) 0.04 (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (0.18) (0.13) — (0.31)Unrealized (gain) loss on other investments, net of tax 0.01 0.01 Rounding 0.01 0.01 0.02 Fourth quarter 2022 adjusted operating results per share 0.81 0.27 0.25 (0.12) (0.02) 1.19 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 0.14 0.14 Higher (lower) realized natural gas prices, after hedging (0.40) (0.40)Higher (lower) other operating revenues (0.01) (0.01)Midstream Revenues Higher (lower) operating revenues (0.03) 0.03 — Downstream Margins*** Impact of usage and weather — — Impact of new rates in Pennsylvania 0.01 0.01 Impact of new rates in New York**** (0.01) (0.01)System modernization and improvement tracker revenues — — Regulatory revenue adjustments 0.02 0.02 Operating Expenses Lower (higher) lease operating and transportation expenses (0.01) (0.01)Lower (higher) operating expenses (0.02) — (0.02) (0.03) (0.07)Lower (higher) property, franchise and other taxes 0.01 0.01 Lower (higher) depreciation / depletion (0.11) (0.01) — (0.01) (0.13)Other Income (Expense) (Higher) lower other deductions 0.01 0.01 — 0.02 (Higher) lower interest expense (0.01) 0.01 (0.01) 0.01 — Income Taxes Lower (higher) income tax expense / effective tax rate (0.02) 0.01 — 0.04 — 0.03 All other / rounding — — — 0.01 (0.02) (0.01)Fourth quarter 2023 adjusted operating results per share 0.38 0.25 0.29 (0.08) (0.06) 0.78 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax 0.02 0.02 Unrealized gain (loss) on other investments, net of tax (0.01) (0.01)Rounding 0.01 0.01 Fourth quarter 2023 GAAP earnings per share$ 0.40 $ 0.25 $ 0.29 $ (0.08) $ (0.06) $ 0.80 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGSTWELVE MONTHS ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated* Fiscal 2022 GAAP earnings$ 306,064 $ 102,557 $ 101,111 $ 68,948 $ (12,659) $ 566,021 Items impacting comparability: Reduction of other post-retirement regulatory liability (18,533) (18,533)Tax impact of reduction of other post-retirement regulatory liability 3,892 3,892 Unrealized gain (loss) on derivative asset 4,395 4,395 Tax impact of unrealized gain (loss) on derivative asset (1,203) (1,203)Gain on sale of West Coast assets (12,736) (12,736)Tax impact of gain on sale of West Coast assets 3,225 3,225 Loss from discontinuance of crude oil cash flow hedges 44,632 44,632 Tax impact of loss from discontinuance of crude oil cash flow hedges (11,303) (11,303)Transaction and severance costs related to West Coast asset sale 9,693 9,693 Tax impact of transaction and severance costs related to West Coast asset sale (2,455) (2,455)Reversal of deferred tax valuation allowance (28,589) 3,739 (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (16,152) (11,856) (398) (28,406)Unrealized (gain) loss on other investments 11,625 11,625 Tax impact of unrealized (gain) loss on other investments (2,441) (2,441)Fiscal 2022 adjusted operating results 295,571 102,557 92,994 54,307 (3,873) 541,556 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 62,913 62,913 Higher (lower) crude oil production (88,063) (88,063)Higher (lower) realized natural gas prices, after hedging (48,413) (48,413)Higher (lower) other operating revenues (2,898) (2,898)Midstream Revenues Higher (lower) operating revenues 1,696 12,224 13,920 Downstream Margins*** Impact of usage and weather (1,104) (1,104)Impact of new rates in Pennsylvania 754 754 Impact of new rates in New York**** (12,019) (12,019)System modernization and improvement tracker revenues 3,829 3,829 Regulatory revenue adjustments 1,504 1,504 Higher (lower) other operating revenues 1,734 1,734 Operating Expenses Lower (higher) lease operating and transportation expenses 23,984 23,984 Lower (higher) operating expenses 11,145 (5,164) (4,851) (8,798) (3,389) (11,057)Lower (higher) property, franchise and other taxes 6,041 597 6,638 Lower (higher) depreciation / depletion (26,065) (2,470) (1,364) (1,335) (31,234)Other Income (Expense) (Higher) lower other deductions 2,735 3,624 561 14,030 (3,859) 17,091 (Higher) lower interest expense (724) (796) 1,184 (8,575) 7,120 (1,791)Income Taxes Lower (higher) income tax expense / effective tax rate (3,406) 411 (1,006) 3,503 (380) (878)All other / rounding 114 643 (18) (32) (369) 338 Fiscal 2023 adjusted operating results 232,934 100,501 99,724 48,395 (4,750) 476,804 Items impacting comparability: Unrealized gain (loss) on derivative asset (899) (899)Tax impact of unrealized gain (loss) on derivative asset 240 240 Unrealized gain (loss) on other investments 913 913 Tax impact of unrealized gain (loss) on other investments (192) (192)Fiscal 2023 GAAP earnings$ 232,275 $ 100,501 $ 99,724 $ 48,395 $ (4,029) $ 476,866 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARETWELVE MONTHS ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / Production Storage Gathering Utility All Other Consolidated*Fiscal 2022 GAAP earnings per share$ 3.32 $ 1.11 $ 1.10 $ 0.75 $ (0.13) $ 6.15 Items impacting comparability: Reduction of other post-retirement regulatory liability, net of tax (0.16) (0.16)Unrealized gain (loss) on derivative asset, net of tax 0.03 0.03 Gain on sale of West Coast assets, net of tax (0.10) (0.10)Loss from discontinuance of crude oil cash flow hedges, net of tax 0.36 0.36 Transaction and severance costs related to West Coast asset sale, net of tax 0.08 0.08 Reversal of deferred tax valuation allowance (0.31) 0.04 (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate deduction (0.18) (0.13) — (0.31)Unrealized (gain) loss on other investments, net of tax 0.10 0.10 Rounding 0.01 (0.01) — Fiscal 2022 adjusted operating results per share 3.21 1.11 1.01 0.59 (0.04) 5.88 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 0.68 0.68 Higher (lower) crude oil production (0.95) (0.95)Higher (lower) realized natural gas prices, after hedging (0.52) (0.52)Higher (lower) other operating revenues (0.03) (0.03)Midstream Revenues Higher (lower) operating revenues 0.02 0.13 0.15 Downstream Margins*** Impact of usage and weather (0.01) (0.01)Impact of new rates in Pennsylvania 0.01 0.01 Impact of new rates in New York**** (0.13) (0.13)System modernization and improvement tracker revenues 0.04 0.04 Regulatory revenue adjustments 0.02 0.02 Higher (lower) other operating revenues 0.02 0.02 Operating Expenses Lower (higher) lease operating and transportation expenses 0.26 0.26 Lower (higher) operating expenses 0.12 (0.06) (0.05) (0.10) (0.04) (0.13)Lower (higher) property, franchise and other taxes 0.07 0.01 0.08 Lower (higher) depreciation / depletion (0.28) (0.03) (0.01) (0.01) (0.33)Other Income (Expense) (Higher) lower other deductions 0.03 0.04 0.01 0.15 (0.04) 0.19 (Higher) lower interest expense (0.01) (0.01) 0.01 (0.09) 0.08 (0.02)Income Taxes Lower (higher) income tax expense / effective tax rate (0.04) — (0.01) 0.04 — (0.01)All other / rounding (0.02) 0.02 (0.01) (0.02) — (0.03)Fiscal 2023 adjusted operating results per share 2.52 1.09 1.08 0.52 (0.04) 5.17 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax (0.01) (0.01)Unrealized gain (loss) on other investments, net of tax 0.01 0.01 Rounding 0.01 (0.01) — Fiscal 2023 GAAP earnings per share$ 2.52 $ 1.09 $ 1.08 $ 0.52 $ (0.04) $ 5.17 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES (Thousands of Dollars, except per share amounts) Three Months Ended Twelve Months Ended September 30, September 30, (Unaudited) (Unaudited)SUMMARY OF OPERATIONS 2023 2022 2023 2022 Operating Revenues: Utility Revenues$ 78,865 $ 112,252 $ 941,779 $ 897,916 Exploration and Production and Other Revenues 220,348 252,035 958,455 1,010,629 Pipeline and Storage and Gathering Revenues 69,735 70,859 273,537 277,501 368,948 435,146 2,173,771 2,186,046 Operating Expenses: Purchased Gas (12,865) 22,925 437,595 392,093 Operation and Maintenance: Utility 48,354 46,535 205,239 193,058 Exploration and Production and Other 37,955 31,554 124,270 191,572 Pipeline and Storage and Gathering 39,901 39,138 149,247 136,571 Property, Franchise and Other Taxes 20,701 23,089 92,700 101,182 Depreciation, Depletion and Amortization 109,599 94,109 409,573 369,790 243,645 257,350 1,418,624 1,384,266 Gain on Sale of Assets — — — 12,736 Operating Income 125,303 177,796 755,147 814,516 Other Income (Expense): Other Income (Deductions) 5,384 (4,800) 18,138 (1,509)Interest Expense on Long-Term Debt (28,449) (30,207) (111,948) (120,507)Other Interest Expense (4,453) (3,289) (19,938) (9,850) Income Before Income Taxes 97,785 139,500 641,399 682,650 Income Tax Expense (Benefit) 24,108 (18,643) 164,533 116,629 Net Income Available for Common Stock$ 73,677 $ 158,143 $ 476,866 $ 566,021 Earnings Per Common Share Basic$ 0.80 $ 1.73 $ 5.20 $ 6.19 Diluted$ 0.80 $ 1.71 $ 5.17 $ 6.15 Weighted Average Common Shares: Used in Basic Calculation 91,818,933 91,476,535 91,748,890 91,410,625 Used in Diluted Calculation 92,378,675 92,218,581 92,285,918 92,107,066 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited) September 30, September 30,(Thousands of Dollars) 2023 2022 ASSETS Property, Plant and Equipment$ 13,635,303 $ 12,551,909 Less - Accumulated Depreciation, Depletion and Amortization 6,335,441 5,985,432 Net Property, Plant and Equipment 7,299,862 6,566,477 Current Assets: Cash and Temporary Cash Investments 55,447 46,048 Hedging Collateral Deposits — 91,670 Receivables - Net 160,601 361,626 Unbilled Revenue 16,622 30,075 Gas Stored Underground 32,509 32,364 Materials and Supplies - at average cost 48,989 40,637 Unrecovered Purchased Gas Costs — 99,342 Other Current Assets 100,260 59,369 Total Current Assets 414,428 761,131 Other Assets: Recoverable Future Taxes 69,045 106,247 Unamortized Debt Expense 7,240 8,884 Other Regulatory Assets 72,138 67,101 Deferred Charges 82,416 77,472 Other Investments 73,976 95,025 Goodwill 5,476 5,476 Prepaid Pension and Post-Retirement Benefit Costs 200,301 196,597 Fair Value of Derivative Financial Instruments 50,487 9,175 Other 4,891 2,677 Total Other Assets 565,970 568,654 Total Assets$ 8,280,260 $ 7,896,262 CAPITALIZATION AND LIABILITIES Capitalization: Comprehensive Shareholders' Equity Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 91,819,405 Shares and 91,478,064 Shares, Respectively$ 91,819 $ 91,478 Paid in Capital 1,040,761 1,027,066 Earnings Reinvested in the Business 1,885,856 1,587,085 Accumulated Other Comprehensive Loss (55,060) (625,733)Total Comprehensive Shareholders' Equity 2,963,376 2,079,896 Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,384,485 2,083,409 Total Capitalization 5,347,861 4,163,305 Current and Accrued Liabilities: Notes Payable to Banks and Commercial Paper 287,500 60,000 Current Portion of Long-Term Debt — 549,000 Accounts Payable 152,193 178,945 Amounts Payable to Customers 59,019 419 Dividends Payable 45,451 43,452 Interest Payable on Long-Term Debt 20,399 17,376 Customer Advances 21,003 26,108 Customer Security Deposits 28,764 24,283 Other Accruals and Current Liabilities 160,974 257,327 Fair Value of Derivative Financial Instruments 31,009 785,659 Total Current and Accrued Liabilities 806,312 1,942,569 Other Liabilities: Deferred Income Taxes 1,124,170 698,229 Taxes Refundable to Customers 268,562 362,098 Cost of Removal Regulatory Liability 277,694 259,947 Other Regulatory Liabilities 165,441 188,803 Other Post-Retirement Liabilities 2,915 3,065 Asset Retirement Obligations 165,492 161,545 Other Liabilities 121,813 116,701 Total Other Liabilities 2,126,087 1,790,388 Commitments and Contingencies — — Total Capitalization and Liabilities$ 8,280,260 $ 7,896,262 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Twelve Months Ended September 30,(Thousands of Dollars) 2023 2022 Operating Activities: Net Income Available for Common Stock$ 476,866 $ 566,021 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Gain on Sale of Assets — (12,736)Depreciation, Depletion and Amortization 409,573 369,790 Deferred Income Taxes 151,403 104,415 Stock-Based Compensation 20,630 19,506 Reduction of Other Post-Retirement Regulatory Liability — (18,533)Other 19,647 31,983 Change in: Receivables and Unbilled Revenue 213,579 (168,769)Gas Stored Underground and Materials, Supplies and Emission Allowances (8,406) 3,109 Unrecovered Purchased Gas Costs 99,342 (66,214)Other Current Assets (41,077) 291 Accounts Payable (37,095) 11,907 Amounts Payable to Customers 58,600 398 Customer Advances (5,105) 8,885 Customer Security Deposits 4,481 4,991 Other Accruals and Current Liabilities (67,664) 34,260 Other Assets (26,564) (58,924)Other Liabilities (31,135) (17,859)Net Cash Provided by Operating Activities$ 1,237,075 $ 812,521 Investing Activities: Capital Expenditures$ (1,009,868) $ (811,826)Net Proceeds from Sale of Oil and Gas Producing Properties — 254,439 Acquisition of Upstream Assets (124,758) — Sale of Fixed Income Mutual Fund Shares in Grantor Trust 10,000 30,000 Other 12,279 8,683 Net Cash Used in Investing Activities$ (1,112,347) $ (518,704) Financing Activities: Proceeds from Issuance of Short-Term Note Payable to Bank$ 250,000 $ — Repayment of Short-Term Note Payable to Bank (250,000) — Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper 227,500 (98,500)Reduction of Long-Term Debt (549,000) — Net Proceeds From Issuance of Long-Term Debt 297,306 — Dividends Paid on Common Stock (176,096) (168,147)Net Repurchases of Common Stock (6,709) (9,590)Net Cash Used in Financing Activities$ (206,999) $ (276,237) Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (82,271) 17,580 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 137,718 120,138 Cash, Cash Equivalents, and Restricted Cash at September 30$ 55,447 $ 137,718 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) UPSTREAM BUSINESS Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,EXPLORATION AND PRODUCTION SEGMENT 2023 2022 Variance 2023 2022 VarianceTotal Operating Revenues$ 220,348 $ 252,035 $ (31,687) $ 958,455 $ 1,010,464 $ (52,009)Operating Expenses: Operation and Maintenance: General and Administrative Expense 17,163 15,664 1,499 66,074 79,061 (12,987)Lease Operating and Transportation Expense 64,412 62,701 1,711 253,555 283,914 (30,359)All Other Operation and Maintenance Expense 2,357 1,957 400 9,327 20,140 (10,813)Property, Franchise and Other Taxes 3,775 5,475 (1,700) 17,717 25,364 (7,647)Depreciation, Depletion and Amortization 66,394 52,958 13,436 241,142 208,148 32,994 154,101 138,755 15,346 587,815 616,627 (28,812)Gain on Sale of Assets — — — — 12,736 (12,736)Operating Income 66,247 113,280 (47,033) 370,640 406,573 (35,933) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 347 (186) 533 1,389 (744) 2,133 Interest and Other Income (Deductions) 3,457 (3,080) 6,537 2,359 (2,466) 4,825 Interest Expense (15,268) (14,474) (794) (54,317) (53,401) (916)Income Before Income Taxes 54,783 95,540 (40,757) 320,071 349,962 (29,891)Income Tax Expense (Benefit) 18,011 (20,537) 38,548 87,796 43,898 43,898 Net Income$ 36,772 $ 116,077 $ (79,305) $ 232,275 $ 306,064 $ (73,789)Net Income Per Share (Diluted)$ 0.40 $ 1.26 $ (0.86) $ 2.52 $ 3.32 $ (0.80) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) MIDSTREAM BUSINESSES Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,PIPELINE AND STORAGE SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 64,846 $ 68,836 $ (3,990) $ 259,646 $ 265,415 $ (5,769)Intersegment Revenues 29,192 28,913 279 119,545 111,629 7,916 Total Operating Revenues 94,038 97,749 (3,711) 379,191 377,044 2,147 Operating Expenses: Purchased Gas 326 592 (266) 1,436 1,890 (454)Operation and Maintenance 29,154 28,868 286 106,654 100,117 6,537 Property, Franchise and Other Taxes 8,322 8,470 (148) 33,774 34,133 (359)Depreciation, Depletion and Amortization 17,953 17,283 670 70,827 67,701 3,126 55,755 55,213 542 212,691 203,841 8,850 Operating Income 38,283 42,536 (4,253) 166,500 173,203 (6,703) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Credit 1,330 767 563 5,319 3,069 2,250 Interest and Other Income 2,017 1,490 527 6,670 3,820 2,850 Interest Expense (10,796) (10,929) 133 (43,499) (42,492) (1,007)Income Before Income Taxes 30,834 33,864 (3,030) 134,990 137,600 (2,610)Income Tax Expense 7,480 8,544 (1,064) 34,489 35,043 (554)Net Income$ 23,354 $ 25,320 $ (1,966) $ 100,501 $ 102,557 $ (2,056)Net Income Per Share (Diluted)$ 0.25 $ 0.27 $ (0.02) $ 1.09 $ 1.11 $ (0.02) Three Months Ended Twelve Months Ended September 30, September 30,GATHERING SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 4,889 $ 2,023 $ 2,866 $ 13,891 $ 12,086 $ 1,805 Intersegment Revenues 53,129 52,061 1,068 216,426 202,757 13,669 Total Operating Revenues 58,018 54,084 3,934 230,317 214,843 15,474 Operating Expenses: Operation and Maintenance 11,123 10,725 398 44,375 38,234 6,141 Property, Franchise and Other Taxes 21 24 (3) 60 37 23 Depreciation, Depletion and Amortization 9,111 8,656 455 35,725 33,998 1,727 20,255 19,405 850 80,160 72,269 7,891 Operating Income 37,763 34,679 3,084 150,157 142,574 7,583 Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 37 (56) 93 150 (224) 374 Interest and Other Income 75 117 (42) 534 198 336 Interest Expense (3,433) (4,105) 672 (14,989) (16,488) 1,499 Income Before Income Taxes 34,442 30,635 3,807 135,852 126,060 9,792 Income Tax Expense (Benefit) 7,925 (589) 8,514 36,128 24,949 11,179 Net Income$ 26,517 $ 31,224 $ (4,707) $ 99,724 $ 101,111 $ (1,387)Net Income Per Share (Diluted)$ 0.29 $ 0.34 $ (0.05) $ 1.08 $ 1.10 $ (0.02) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) DOWNSTREAM BUSINESS Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,UTILITY SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 78,865 $ 112,252 $ (33,387) $ 941,779 $ 897,916 $ 43,863 Intersegment Revenues 81 60 21 581 305 276 Total Operating Revenues 78,946 112,312 (33,366) 942,360 898,221 44,139 Operating Expenses: Purchased Gas 14,743 49,692 (34,949) 548,195 497,959 50,236 Operation and Maintenance 49,056 47,369 1,687 208,539 196,254 12,285 Property, Franchise and Other Taxes 8,454 8,981 (527) 40,624 41,137 (513)Depreciation, Depletion and Amortization 16,026 15,167 859 61,450 59,760 1,690 88,279 121,209 (32,930) 858,808 795,110 63,698 Operating Income (Loss) (9,333) (8,897) (436) 83,552 103,111 (19,559) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 9 (492) 501 4 5,526 (5,522)Interest and Other Income 1,437 429 1,008 6,339 1,591 4,748 Interest Expense (8,041) (7,000) (1,041) (34,233) (24,115) (10,118)Income (Loss) Before Income Taxes (15,928) (15,960) 32 55,662 86,113 (30,451)Income Tax Expense (Benefit) (8,749) (5,108) (3,641) 7,267 17,165 (9,898)Net Income (Loss)$ (7,179) $ (10,852) $ 3,673 $ 48,395 $ 68,948 $ (20,553)Net Income (Loss) Per Share (Diluted)$ (0.08) $ (0.12) $ 0.04 $ 0.52 $ 0.75 $ (0.23) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,ALL OTHER 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ — $ — $ — $ — $ — $ — Intersegment Revenues — — — — 6 (6)Total Operating Revenues — — — — 6 (6)Operating Expenses: Purchased Gas — — — — 6 (6)Operation and Maintenance — — — 21 5 16 — — — 21 11 10 Operating Loss — — — (21) (5) (16)Other Income (Expense): Interest and Other Income (Deductions) (66) 1 (67) (517) 3 (520)Interest Expense (68) (4) (64) (157) (4) (153)Loss before Income Taxes (134) (3) (131) (695) (6) (689)Income Tax Expense (Benefit) (33) (1) (32) (164) 3 (167)Net Loss$ (101) $ (2) $ (99) $ (531) $ (9) $ (522)Net Loss Per Share (Diluted)$ — $ — $ — $ — $ — $ — Three Months Ended Twelve Months Ended September 30, September 30,CORPORATE 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ — $ — $ — $ — $ 165 $ (165)Intersegment Revenues 932 1,183 (251) 4,388 4,430 (42)Total Operating Revenues 932 1,183 (251) 4,388 4,595 (207)Operating Expenses: Operation and Maintenance 8,345 4,801 3,544 19,115 14,841 4,274 Property, Franchise and Other Taxes 129 139 (10) 525 511 14 Depreciation, Depletion and Amortization 115 45 70 429 183 246 8,589 4,985 3,604 20,069 15,535 4,534 Operating Loss (7,657) (3,802) (3,855) (15,681) �� (10,940) (4,741)Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Costs (354) (1,017) 663 (1,417) (4,069) 2,652 Interest and Other Income 36,337 33,712 2,625 147,935 126,648 21,287 Interest Expense on Long-Term Debt (28,449) (30,207) 1,758 (111,948) (120,507) 8,559 Other Interest Expense (6,089) (3,262) (2,827) (23,370) (8,211) (15,159)Loss before Income Taxes (6,212) (4,576) (1,636) (4,481) (17,079) 12,598 Income Tax Benefit (526) (952) 426 (983) (4,429) 3,446 Net Loss$ (5,686) $ (3,624) $ (2,062) $ (3,498) $ (12,650) $ 9,152 Net Loss Per Share (Diluted)$ (0.06) $ (0.04) $ (0.02) $ (0.04) $ (0.13) $ 0.09 Three Months Ended Twelve Months Ended September 30, September 30,INTERSEGMENT ELIMINATIONS 2023 2022 Variance 2023 2022 VarianceIntersegment Revenues$ (83,334) $ (82,217) $ (1,117) $ (340,940) $ (319,127) $ (21,813)Operating Expenses: Purchased Gas (27,934) (27,359) (575) (112,036) (107,762) (4,274)Operation and Maintenance (55,400) (54,858) (542) (228,904) (211,365) (17,539) (83,334) (82,217) (1,117) (340,940) (319,127) (21,813)Operating Income — — — — — — Other Income (Expense): Interest and Other Deductions (39,242) (36,485) (2,757) (150,627) (134,861) (15,766)Interest Expense 39,242 36,485 2,757 150,627 134,861 15,766 Net Income$ — $ — $ — $ — $ — $ — Net Income Per Share (Diluted)$ — $ — $ — $ — $ — $ — NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT INFORMATION (Continued)(Thousands of Dollars) Three Months Ended Twelve Months Ended September 30, September 30, (Unaudited) (Unaudited) Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Capital Expenditures: Exploration and Production(1)$ 144,938 (2)$ 160,056 (3)$ (15,118) $ 737,725 (2)(3)$ 565,791 (3)(4)$ 171,934 Pipeline and Storage 75,109 (2) 37,563 (3) 37,546 141,877 (2)(3) 95,806 (3)(4) 46,071 Gathering 47,917 (2) 26,957 (3) 20,960 103,295 (2)(3) 55,546 (3)(4) 47,749 Utility 51,246 (2) 40,061 (3) 11,185 139,922 (2)(3) 111,033 (3)(4) 28,889 Total Reportable Segments 319,210 264,637 54,573 1,122,819 828,176 294,643 All Other — — — — — — Corporate 305 549 (244) 754 1,212 (458)Total Capital Expenditures$ 319,515 $ 265,186 $ 54,329 $ 1,123,573 $ 829,388 $ 294,185 (1)The year ended September 30, 2023 includes $124.8 million related to the acquisition of upstream assets acquired from SWN, as well as $25.0 million related to the acquisition of assets from EXCO and UGI. The acquisition cost for the assets acquired from SWN is reported as a component of Acquisition of Upstream Assets on the Consolidated Statement of Cash Flows.(2)Capital expenditures for the quarter and year ended September 30, 2023, include accounts payable and accrued liabilities related to capital expenditures of $43.2 million, $31.8 million, $20.6 million, and $13.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at September 30, 2023, since they represent non-cash investing activities at that date.(3)Capital expenditures for the year ended September 30, 2023, exclude capital expenditures of $83.0 million, $15.2 million, $10.7 million and $11.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2022 and paid during the year ended September 30, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2023.(4)Capital expenditures for the year ended September 30, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2021 and paid during the year ended September 30, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2022. DEGREE DAYS Percent Colder (Warmer) Than:Three Months Ended September 30,Normal 2023 2022 Normal (1) Last Year (1)Buffalo, NY162 61 107 (62.3) (43.0)Erie, PA81 59 94 (27.2) (37.2) Twelve Months Ended September 30, Buffalo, NY6,617 5,717 5,769 (13.6) (0.9)Erie, PA6,104 5,493 5,368 (10.0) 2.3 (1)Percents compare actual 2023 degree days to normal degree days and actual 2023 degree days to actual 2022 degree days. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Gas Production/Prices: Production (MMcf) Appalachia 93,709 87,858 5,851 372,271 341,700 30,571 West Coast — 1 (1) — 1,211 (1,211)Total Production 93,709 87,859 5,850 372,271 342,911 29,360 Average Prices (Per Mcf) Appalachia$ 1.99 $ 6.16 $ (4.17) $ 2.78 $ 5.03 $ (2.25)West CoastN/M N/M N/M N/M 10.03 N/MWeighted Average 1.99 6.16 (4.17) 2.78 5.05 (2.27)Weighted Average after Hedging 2.33 2.84 (0.51) 2.55 2.71 (0.16) Oil Production/Prices: Production (Thousands of Barrels) Appalachia 8 7 1 30 16 14 West Coast — — — — 1,588 (1,588)Total Production 8 7 1 30 1,604 (1,574) Average Prices (Per Barrel) Appalachia$ 76.02 $ 90.22 $ (14.20) $ 75.64 $ 97.82 $ (22.18)West CoastN/M N/M N/M N/M 94.06 N/MWeighted Average 76.02 90.93 (14.91) 75.64 94.10 (18.46)Weighted Average after Hedging (1) 76.02 90.86 (14.84) 75.64 70.80 4.84 Total Production (MMcfe) 93,757 87,901 5,856 372,451 352,535 19,916 Selected Operating Performance Statistics: General & Administrative Expense per Mcfe (2)$ 0.18 $ 0.18 $ — $ 0.18 $ 0.20 $ (0.02)Lease Operating and Transportation Expense per Mcfe (2)(3)$ 0.69 $ 0.71 $ (0.02) $ 0.68 $ 0.81 $ (0.13)Depreciation, Depletion & Amortization per Mcfe (2)$ 0.71 $ 0.60 $ 0.11 $ 0.65 $ 0.59 $ 0.06 N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022) (1)Weighted average oil price after hedging for the twelve months ended September 30, 2022 excludes a loss on discontinuance of crude oil cash flow hedges of $44.6 million. (2)Refer to page 15 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. General and Administrative Expense per Mcfe for the twelve months ended September 30, 2022 excludes transaction and severance costs related to the California asset sale. (3)Amounts include transportation expense of $0.55 and $0.58 per Mcfe for the three months ended September 30, 2023 and September 30, 2022, respectively. Amounts include transportation expense of $0.57 and $0.57 per Mcfe for the twelve months ended September 30, 2023 and September 30, 2022, respectively. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Hedging Summary for Fiscal 2024 Volume Average Hedge PriceGas Swaps NYMEX 134,930,000 MMBTU $ 3.34 / MMBTUNo Cost Collars 65,280,000 MMBTU $ 3.33 / MMBTU (Floor) / $4.17 / MMBTU (Ceiling)Fixed Price Physical Sales 83,196,787 MMBTU $ 2.44 / MMBTUTotal 283,406,787 MMBTU Hedging Summary for Fiscal 2025 Volume Average Hedge PriceGas Swaps NYMEX 88,810,000 MMBTU $ 3.53 / MMBTUNo Cost Collars 43,960,000 MMBTU $ 3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)Fixed Price Physical Sales 75,047,438 MMBTU $ 2.49 / MMBTUTotal 207,817,438 MMBTU Hedging Summary for Fiscal 2026 Volume Average Hedge PriceGas Swaps NYMEX 38,020,000 MMBTU $ 3.98 / MMBTUNo Cost Collars 42,720,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)Fixed Price Physical Sales 66,821,415 MMBTU $ 2.39 / MMBTUTotal 147,561,415 MMBTU Hedging Summary for Fiscal 2027 Volume Average Hedge PriceGas Swaps NYMEX 13,500,000 MMBTU $ 4.25 / MMBTUNo Cost Collars 3,560,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)Fixed Price Physical Sales 46,128,777 MMBTU $ 2.39 / MMBTUTotal 63,188,777 MMBTU Hedging Summary for Fiscal 2028 Volume Average Hedge PriceGas Swaps NYMEX 1,000,000 MMBTU $ 4.29 / MMBTUFixed Price Physical Sales 12,208,068 MMBTU $ 2.48 / MMBTUTotal 13,208,068 MMBTU Hedging Summary for Fiscal 2029 Volume Average Hedge PriceFixed Price Physical Sales 788,352 MMBTU $ 2.54 / MMBTU NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Reserve Quantity Information(Unaudited) Gas MMcf U.S. Appalachian RegionProved Developed and Undeveloped Reserves: September 30, 2022 4,170,662 Extensions and Discoveries 670,438 Revisions of Previous Estimates 32,379 Production (372,271)Purchases of Minerals in Place 33,876 September 30, 2023 4,535,084 Proved Developed Reserves: September 30, 2022 3,312,568 September 30, 2023 3,550,034 Oil Mbbl U.S. Appalachian RegionProved Developed and Undeveloped Reserves: September 30, 2022 250 Extensions and Discoveries — Revisions of Previous Estimates (4)Production (30)September 30, 2023 216 Proved Developed Reserves: September 30, 2022 250 September 30, 2023 216 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES Pipeline & Storage Throughput - (millions of cubic feet - MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Firm Transportation - Affiliated 17,589 16,943 646 126,500 111,157 15,343 Firm Transportation - Non-Affiliated 161,750 171,983 (10,233) 689,984 679,260 10,724 Interruptible Transportation 168 3,886 (3,718) 2,192 5,612 (3,420) 179,507 192,812 (13,305) 818,676 796,029 22,647 Gathering Volume - (MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Gathered Volume 117,260 104,707 12,553 453,338 419,332 34,006 Utility Throughput - (MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Retail Sales: Residential Sales 3,765 4,146 (381) 61,401 64,011 (2,610)Commercial Sales 530 644 (114) 9,342 9,621 (279)Industrial Sales 42 75 (33) 548 541 7 4,337 4,865 (528) 71,291 74,173 (2,882)Transportation 9,419 9,720 (301) 62,986 65,993 (3,007) 13,756 14,585 (829) 134,277 140,166 (5,889) NATIONAL FUEL GAS COMPANYAND 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 and twelve months ended September 30, 2023 and 2022: Three Months Ended Twelve Months Ended September 30, September 30,(in thousands except per share amounts) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Items impacting comparability: Items related to West Coast asset sale: Gain on sale of West Coast assets (E&P) — — — (12,736)Tax impact of gain on sale of West Coast assets — — — 3,225 Loss from discontinuance of crude oil cash flow hedges (E&P) — — — 44,632 Tax impact of loss from discontinuance of crude oil cash flow hedges — — — (11,303)Transaction and severance costs (E&P) — — — 9,693 Tax impact of transaction and severance costs — — — (2,455)Total items impacting comparability related to West Coast asset sale — — — 31,056 Unrealized (gain) loss on derivative asset (E&P) (2,803) 4,395 899 4,395 Tax impact of unrealized (gain) loss on derivative asset 775 (1,203) (240) (1,203)Unrealized (gain) loss on other investments (Corporate / All Other) 719 1,532 (913) 11,625 Tax impact of unrealized (gain) loss on other investments (151) (322) 192 (2,441)Reversal of deferred tax valuation allowance — (24,850) — (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (28,406) — (28,406)Reduction of other post-retirement regulatory liability (Utility) — — — (18,533)Tax impact of reduction of other post-retirement regulatory liability — — — 3,892 Adjusted Operating Results$ 72,217 $ 109,289 $ 476,804 $ 541,556 Reported GAAP Earnings Per Share$ 0.80 $ 1.71 $ 5.17 $ 6.15 Items impacting comparability: Items related to West Coast asset sale: Gain on sale of West Coast assets, net of tax (E&P) — — — (0.10)Loss from discontinuance of crude oil cash flow hedges, net of tax (E&P) — — — 0.36 Transaction and severance costs, net of tax (E&P) — — — 0.08 Total items impacting comparability related to West Coast asset sale — — — 0.34 Unrealized (gain) loss on derivative asset, net of tax (E&P) (0.02) 0.03 0.01 0.03 Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.01 0.01 (0.01) 0.10 Reversal of deferred tax valuation allowance — (0.27) — (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (0.31) — (0.31)Reduction of other post-retirement regulatory liability, net of tax (Utility) — — — (0.16)Rounding (0.01) 0.02 — — Adjusted Operating Results Per Share$ 0.78 $ 1.19 $ 5.17 $ 5.88 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES (Continued) Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and twelve months ended September 30, 2023 and 2022: Three Months Ended Twelve Months Ended September 30, September 30,(in thousands) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Depreciation, Depletion and Amortization 109,599 94,109 409,573 369,790 Other (Income) Deductions (5,384) 4,800 (18,138) 1,509 Interest Expense 32,902 33,496 131,886 130,357 Income Taxes 24,108 (18,643) 164,533 116,629 Gain on Sale of Assets — — — (12,736)Loss from discontinuance of crude oil cash flow hedges (E&P) — — — 44,632 Transaction and severance costs related to West Coast asset sale (E&P) — — — 9,693 Adjusted EBITDA$ 234,902 $ 271,905 $ 1,164,720 $ 1,225,895 Adjusted EBITDA by Segment Pipeline and Storage Adjusted EBITDA$ 56,236 $ 59,819 $ 237,327 $ 240,904 Gathering Adjusted EBITDA 46,874 43,335 185,882 176,572 Total Midstream Businesses Adjusted EBITDA 103,110 103,154 423,209 417,476 Exploration and Production Adjusted EBITDA 132,641 166,238 611,782 656,310 Utility Adjusted EBITDA 6,693 6,270 145,002 162,871 Corporate and All Other Adjusted EBITDA (7,542) (3,757) (15,273) (10,762)Total Adjusted EBITDA$ 234,902 $ 271,905 $ 1,164,720 $ 1,225,895 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESSEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended September 30, September 30,(in thousands) 2023 2022 2023 2022 Exploration and Production Segment Reported GAAP Earnings$ 36,772 $ 116,077 $ 232,275 $ 306,064 Depreciation, Depletion and Amortization 66,394 52,958 241,142 208,148 Other (Income) Deductions (3,804) 3,266 (3,748) 3,210 Interest Expense 15,268 14,474 54,317 53,401 Income Taxes 18,011 (20,537) 87,796 43,898 Gain on Sale of West Coast Assets — — — (12,736)Loss from Discontinuance of Crude Oil Cash Flow Hedges — — — 44,632 Transaction and Severance Costs related to West Coast Asset Sale — — — 9,693 Adjusted EBITDA$ 132,641 $ 166,238 $ 611,782 $ 656,310 Pipeline and Storage Segment Reported GAAP Earnings$ 23,354 $ 25,320 $ 100,501 $ 102,557 Depreciation, Depletion and Amortization 17,953 17,283 70,827 67,701 Other (Income) Deductions (3,347) (2,257) (11,989) (6,889)Interest Expense 10,796 10,929 43,499 42,492 Income Taxes 7,480 8,544 34,489 35,043 Adjusted EBITDA$ 56,236 $ 59,819 $ 237,327 $ 240,904 Gathering Segment Reported GAAP Earnings$ 26,517 $ 31,224 $ 99,724 $ 101,111 Depreciation, Depletion and Amortization 9,111 8,656 35,725 33,998 Other (Income) Deductions (112) (61) (684) 26 Interest Expense 3,433 4,105 14,989 16,488 Income Taxes 7,925 (589) 36,128 24,949 Adjusted EBITDA$ 46,874 $ 43,335 $ 185,882 $ 176,572 Utility Segment Reported GAAP Earnings$ (7,179) $ (10,852) $ 48,395 $ 68,948 Depreciation, Depletion and Amortization 16,026 15,167 61,450 59,760 Other (Income) Deductions (1,446) 63 (6,343) (7,117)Interest Expense 8,041 7,000 34,233 24,115 Income Taxes (8,749) (5,108) 7,267 17,165 Adjusted EBITDA$ 6,693 $ 6,270 $ 145,002 $ 162,871 Corporate and All Other Reported GAAP Earnings$ (5,787) $ (3,626) $ (4,029) $ (12,659)Depreciation, Depletion and Amortization 115 45 429 183 Other (Income) Deductions 3,325 3,789 4,626 12,279 Interest Expense (4,636) (3,012) (15,152) (6,139)Income Taxes (559) (953) (1,147) (4,426)Adjusted EBITDA$ (7,542) $ (3,757) $ (15,273) $ (10,762) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESFREE CASH FLOW Management defines free cash flow as net cash provided by operating activities, less net cash used in investing activities, adjusted for acquisitions and divestitures. The following table reconciles National Fuel's free cash flow to Net Cash Provided by Operating Activities on the Consolidated Statement of Cash Flows for the twelve months ended September 30, 2023 and 2022: Twelve Months Ended September 30,(in thousands) 2023 2022 Net Cash Provided by Operating Activities$ 1,237,075 $ 812,521 Less: Net Cash Used in Investing Activities 1,112,347 518,704 Proceeds from Divestitures — 254,439 124,728 39,378 Plus: Acquisitions 124,758 — Upstream Acquisitions Included in Capital Expenditures(1) 25,057 — Free Cash Flow$ 274,543 $ 39,378 (1)$25.0 million related to the acquisition of assets from EXCO and UGI included in Capital Expenditures on the Consolidated Statement of Cash Flows. Brandon J. Haspett Investor Relations 716-857-7697 Timothy J. Silverstein Treasurer 716-857-6987
WILLIAMSVILLE, N.Y., Nov. 01, 2023 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2023. FISCAL 2023 FOURTH QUARTER SUMMARY GAAP net income of $73.7 million, or $0.80 per share, compared to GAAP net income of $158.1 million, or $1.71 per share, in the prior year.Adjusted operating results of $72.2 million, or $0.78 per share, compared to $109.3 million, or $1.19 per share, in the prior year (see non-GAAP reconciliation on page 2 for fourth quarter and fiscal 2023).Both E&P segment net production and Gathering segment revenue increased by 7% versus the prior year, driven by continued strong operational execution in Appalachia.Supply Corporation entered into a precedent agreement with Seneca for its Tioga Pathway Project, which is an estimated $90 million modernization and expansion project that will add 190,000 Dth per day of firm transportation takeaway capacity from northwest Tioga County, Pennsylvania. FISCAL 2023 HIGHLIGHTS Generated consolidated net cash provided by operating activities of $1.24 billion for fiscal 2023, with free cash flow of $275 million (see non-GAAP reconciliation on page 27 for fiscal 2023).Increased the shareholder dividend for the 53rd consecutive year to an annual rate of $1.98 per share, an increase of 4.2%, continuing the Company’s long history of consistently returning capital to shareholders.Distribution Corporation settled a rate proceeding in Pennsylvania, which will increase annual base rate delivery revenues by $23 million.Seneca Resources bolstered its deep inventory of highly economic development locations in its Eastern Development Area with the acquisition of approximately 39,000 net acres in Tioga and Lycoming counties.NFG Midstream achieved certification of 100% of its assets under Equitable Origin’s EO100TM Standard for Responsible Energy Development, becoming the first gathering or midstream company to receive this ESG-focused certification. MANAGEMENT COMMENTS David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “Despite the headwinds of lower natural gas prices in fiscal 2023, National Fuel delivered strong results, both financially and operationally. As we move into fiscal 2024, the combination of a strong outlook for long-term growth in our regulated businesses, increasing capital efficiency in our non-regulated operations, and expectations of improving natural gas price realizations position us well to deliver long-term value to our shareholders.” RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS Three Months Ended Fiscal Year Ended September 30, September 30,(in thousands except per share amounts) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Items impacting comparability: Unrealized (gain) loss on derivative asset (E&P) (2,803) 4,395 899 4,395 Tax impact of unrealized (gain) loss on derivative asset 775 (1,203) (240) (1,203)Unrealized (gain) loss on other investments (Corporate / All Other) 719 1,532 (913) 11,625 Tax impact of unrealized (gain) loss on other investments (151) (322) 192 (2,441)Reversal of deferred tax valuation allowance — (24,850) — (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (28,406) — (28,406)Items impacting comparability from West Coast asset sale (E&P) (1) — — — 41,589 Tax impact of items impacting comparability from West Coast asset sale (1) — — — (10,533)Reduction of other post-retirement regulatory liability (Utility) — — — (18,533)Tax impact of reduction of other post-retirement regulatory liability — — — 3,892 Adjusted Operating Results$ 72,217 $ 109,289 $ 476,804 $ 541,556 Reported GAAP Earnings Per Share$ 0.80 $ 1.71 $ 5.17 $ 6.15 Items impacting comparability: Unrealized (gain) loss on derivative asset, net of tax (E&P) (0.02) 0.03 0.01 0.03 Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.01 0.01 (0.01) 0.10 Reversal of deferred tax valuation allowance — (0.27) — (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (0.31) — (0.31)Items impacting comparability from West Coast asset sale, net of tax (E&P) (1) — — — 0.34 Reduction of other post-retirement regulatory liability, net of tax (Utility) — — — (0.16)Rounding (0.01) 0.02 — — Adjusted Operating Results Per Share$ 0.78 $ 1.19 $ 5.17 $ 5.88 (1)Refer to non-GAAP reconciliation on page 24 for a separate breakout of items impacting comparability from the West Coast asset sale. FISCAL 2024 GUIDANCE UPDATE National Fuel is revising its fiscal 2024 earnings guidance to reflect updated forecast assumptions and projections since the Company’s preliminary guidance range was announced in August 2023. The Company is now projecting that earnings will be within the range of $5.40 to $5.90 per share, an increase of 9% from the Company’s 2023 adjusted operating results at the midpoint of the updated 2024 guidance range. Consistent with preliminary guidance, the Company is assuming that NYMEX natural gas prices will average $3.25 per MMBtu for the fiscal year. For guidance purposes, the Company’s updated natural gas price projections approximate the current NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts. Seneca currently has firm sales contracts in place for approximately 89% of its projected fiscal 2024 Appalachian production, limiting its exposure to in-basin markets. Approximately 69% of Seneca’s expected Appalachian production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price. Seneca’s depreciation, depletion and amortization guidance range was also revised to reflect current expectations for the fiscal year. The Company’s consolidated and individual segment capital expenditures guidance remain unchanged from the preliminary guidance. Other guidance assumptions remain largely unchanged from the previous guidance. The details are outlined in the table on page 7. DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT The following earnings discussion of each operating segment for the quarter ended September 30, 2023 is summarized in a tabular form on pages 8 and 9 of this report (earnings drivers for the fiscal years ended September 30, 2023 are summarized on pages 10 and 11). It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. Upstream Business Exploration and Production Segment The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC (“Seneca”). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 36,772 $ 116,077 $ (79,305)Unrealized (gain) loss on derivative asset, net of tax (2,028) 3,192 (5,220)Reversal of deferred tax valuation allowance — (28,589) 28,589 Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction — (16,152) 16,152 Adjusted Operating Results$ 34,744 $ 74,528 $ (39,784) Adjusted EBITDA$ 132,641 $ 166,238 $ (33,597) Seneca’s fourth quarter GAAP earnings decreased $79.3 million versus the prior year. Excluding several items impacting comparability as described below, Seneca's earnings decreased $39.8 million, with higher natural gas production more than offset by lower realized natural gas prices, higher operating expenses and higher income tax expense. Last year’s fourth quarter earnings included two one-time items related to state deferred income taxes that impacted comparability as shown in the table above. These items consisted of a reversal of a $28.6 million valuation allowance on deferred tax assets related to certain state net operating loss and credit carryforwards, along with a $16.2 million benefit from the remeasurement of state deferred income taxes related to a series of reductions in the Pennsylvania state corporate income tax rate that was signed into law in July 2022. Earnings were also impacted by an unrealized gain of $2.8 million ($2.0 million after-tax) recognized during the current-year fourth quarter related to an increase in the fair value of the contingent consideration Seneca received in connection with the June 2022 divestiture of its California assets. In the prior-year's fourth quarter, Seneca recorded an unrealized loss of $4.4 million ($3.2 million after-tax) on that contingent consideration. During this year's fourth quarter, Seneca produced 93.8 Bcfe, an increase of 5.9 Bcfe, or 7%, from the prior year, despite the impact of approximately 2 Bcfe of price-related curtailments due to low in-basin pricing. Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.33 per Mcf, a decrease of $0.51 per Mcf from the prior year. Lower natural gas prices, before the impact of hedging, were partially offset by an increase in the weighted average hedge price compared to the prior-year fourth quarter. On a per unit basis, lease operating and transportation expense (“LOE”) was $0.69 per Mcfe, a decrease of $0.02 per Mcfe from the prior year. On an absolute basis, LOE increased $1.7 million primarily due to higher water management costs, partially offset by lower rental and workover expenses. An increase in transportation and gathering costs as a result of increased production also contributed to the increase in absolute LOE. LOE includes $51.2 million for gathering and compression services from NFG Midstream to connect Seneca’s production to sales points along interstate pipelines. General and administrative (“G&A”) expense remained flat at $0.18 per Mcfe compared to the prior year. On an absolute basis, Seneca’s G&A expense increased $1.5 million primarily due to an increase in labor-related costs. Depreciation, depletion and amortization (“DD&A”) expense was $0.71 per Mcfe, an increase of $0.11 per Mcfe from the prior year. Absolute DD&A expense increased $13.4 million due to higher natural gas production and a higher per unit DD&A rate. The higher rate was driven by an increase in Seneca's full cost pool due to a combination of higher capitalized costs and an increase in estimated future development costs related to proved undeveloped wells. Other taxes decreased $1.7 million largely attributable to lower Impact Fees in Pennsylvania due to the decline in NYMEX natural gas prices. Excluding the impact of last year’s fourth quarter one-time items impacting comparability shown in the table above, the increase in Seneca’s effective tax rate was primarily driven by higher state income tax expense. Proved Reserves Year-End Update Seneca’s total proved reserves at September 30, 2023 were 4,536 Bcfe, an increase of 364 Bcfe, or 9%, from September 30, 2022. Seneca’s proved developed reserves at the end of fiscal 2023 were 3,551 Bcfe, representing 78% of total proved reserves, compared to 79% a year ago. In fiscal 2023, Seneca added 670 Bcfe of proved reserve extensions and discoveries, 34 Bcfe of proved developed reserves as a result of two separate upstream asset purchases during fiscal 2023, and 32 Bcfe of net positive revisions due primarily to improvements in well performance and changes in development plans. Seneca replaced 198% of its fiscal 2023 production. Midstream Businesses Pipeline and Storage Segment The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 23,354 $ 25,320 $ (1,966) Adjusted EBITDA$ 56,236 $ 59,819 $ (3,583) The Pipeline and Storage segment’s fourth quarter GAAP earnings decreased $2.0 million versus the prior year primarily due to lower operating revenues, partially offset by an increase in other income. The decrease in operating revenues of $3.7 million was primarily attributable to contract expirations that occurred earlier in the fiscal year, partially offset by an increase in new short-term contracts. The increase in other income of $1.1 million was primarily attributable to a higher weighted average interest rate on intercompany short-term notes receivable. Gathering Segment The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which delivers Seneca and other non-affiliated Appalachian production to the interstate pipeline system. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ 26,517 $ 31,224 $ (4,707)Reversal of deferred tax valuation allowance — 3,739 (3,739)Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction — (11,856) 11,856 Adjusted Operating Results$ 26,517 $ 23,107 $ 3,410 Adjusted EBITDA$ 46,874 $ 43,335 $ 3,539 The Gathering segment’s fourth quarter GAAP earnings decreased $4.7 million versus the prior year. Similar to our Exploration and Production segment, last year’s fourth quarter earnings included two one-time items impacting comparability shown in the table above related to state deferred income taxes that did not recur this year. Excluding these items, the Gathering segment’s earnings increased $3.4 million primarily due to higher operating revenues. Operating revenues increased $3.9 million, or 7%, which was the result of a 12.6 Bcf increase in gathered volumes due to an increase in natural gas throughput from both non-affiliated parties and Seneca. Downstream Business Utility Segment The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania. Three Months Ended September 30(in thousands) 2023 2022 VarianceGAAP Earnings$ (7,179) $ (10,852) $ 3,673 Adjusted EBITDA$ 6,693 $ 6,270 $ 423 The Utility segment’s fourth quarter GAAP net loss was $3.7 million lower than the net loss in the prior year’s fourth quarter due to higher customer margins (operating revenues less purchased gas sold), a decrease in non-service pension and OPEB costs, higher other income and lower income tax expense, partially offset by increases in operation and maintenance (“O&M”) expense and interest expense. The increase in customer margin of $1.6 million was due primarily to the implementation of the recent Pennsylvania rate case settlement, which increased base rates by $23 million annually, effective August 1, 2023. Also contributing to the increase were adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation and higher revenues from the Company’s system modernization tracking mechanisms in its New York service territory. These increases were partially offset by a $1.1 million reduction in base rates in New York, which, consistent with prior quarters, was the result of a rate proceeding that temporarily reduced the Utility’s recovery of pension and other post-employment benefit (“OPEB”) expenses to zero effective October 1, 2022. In addition to lowering rates, the proceeding mandated a corresponding decrease in pension and OPEB expenses, most of which had been previously recorded in “below the line” non-service pension and OPEB costs. The increase in other income of $1.0 million was primarily attributable to interest earned on deferred gas costs. O&M expense increased by $1.7 million, primarily driven by higher labor-related costs. Interest expense increased $1.0 million due to the Company’s long-term debt issuance in May 2023. Corporate and All Other The Company’s operations that are included in Corporate and All Other generated a combined net loss of $5.8 million in the current year fourth quarter, which was $2.2 million higher than the combined net loss of $3.6 million in the prior-year fourth quarter. The increase in net loss was primarily driven by higher O&M expense as a result of an increase in professional services, which was partially offset by a lower amount of unrealized losses on investment securities recognized in the current quarter as compared to the prior-year fourth quarter. EARNINGS TELECONFERENCE The Company will host a conference call on Thursday, November 2, 2023, at 10 a.m. Eastern Time to discuss this announcement. To pre-register for the call (recommended), please visit https://www.netroadshow.com/events/login?show=2be14adf&confId=56623. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-833–470–1428 and provide Participant Access Code 568657. The teleconference will also be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. A telephone replay of the teleconference call will be available through the end of the day on Thursday, November 9, 2023. To access the replay, dial U.S. toll free 1-866-813-9403 and provide Replay Access Code 693074. 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. Haspett716-857-7697Media 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; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company’s ability to complete planned strategic transactions; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES GUIDANCE SUMMARY As discussed on page 2, the Company is revising its earnings guidance for fiscal 2024. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below. While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2024, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis. Previous FY 2024 Guidance Updated FY 2024 GuidanceAdjusted Consolidated Earnings per Share, excluding items impacting comparability$5.50 to $6.00 $5.40 to $5.90Consolidated Effective Tax Rate~ 25.5 - 26% ~ 25 - 25.5% Capital Expenditures (Millions) Exploration and Production$525 - $575 $525 - $575Pipeline and Storage$120 - $140 $120 - $140Gathering$90 - $110 $90 - $110Utility$130 - $150 $130 - $150 Consolidated Capital Expenditures$865 - $975 $865 - $975 Exploration & Production Segment Guidance Commodity Price Assumptions NYMEX natural gas price$3.25 /MMBtu $3.25 /MMBtuAppalachian basin spot price$2.45 /MMBtu $2.40 - $2.45 /MMBtu Production (Bcfe)390 to 410 390 to 410 E&P Operating Costs ($/Mcfe) LOE$0.69 - $0.71 $0.69 - $0.71G&A$0.17 - $0.19 $0.17 - $0.19DD&A$0.66 - $0.70 $0.69 - $0.74 Other Business Segment Guidance (Millions) Gathering Segment Revenues$240 - $260 $240 - $260Pipeline and Storage Segment Revenues$380 - $420 $380 - $420 NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGSQUARTER ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated* Fourth quarter 2022 GAAP earnings$ 116,077 $ 25,320 $ 31,224 $ (10,852) $ (3,626) $ 158,143 Items impacting comparability: Unrealized gain (loss) on derivative asset 4,395 4,395 Tax impact of unrealized gain (loss) on derivative asset (1,203) (1,203)Reversal of deferred tax valuation allowance (28,589) 3,739 (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (16,152) (11,856) (398) (28,406)Unrealized (gain) loss on other investments 1,532 1,532 Tax impact of unrealized (gain) loss on other investments (322) (322)Fourth quarter 2022 adjusted operating results 74,528 25,320 23,107 (10,852) (2,814) 109,289 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 13,121 13,121 Higher (lower) realized natural gas prices, after hedging (37,374) (37,374)Higher (lower) other operating revenues (734) (734)Midstream Revenues Higher (lower) operating revenues (2,932) 3,108 176 Downstream Margins*** Impact of usage and weather (386) (386)Impact of new rates in Pennsylvania 754 754 Impact of new rates in New York**** (893) (893)System modernization and improvement tracker revenues 366 366 Regulatory revenue adjustments 1,951 1,951 Operating Expenses Lower (higher) lease operating and transportation expenses (1,352) (1,352)Lower (higher) operating expenses (1,500) (314) (1,586) (2,800) (6,200)Lower (higher) property, franchise and other taxes 1,343 1,343 Lower (higher) depreciation / depletion (10,614) (529) (359) (679) (12,181)Other Income (Expense) (Higher) lower other deductions 815 1,192 (276) 1,731 (Higher) lower interest expense (627) 531 (998) 1,283 189 Income Taxes Lower (higher) income tax expense / effective tax rate (1,900) 474 402 3,648 (367) 2,257 All other / rounding (147) 206 42 304 (245) 160 Fourth quarter 2023 adjusted operating results 34,744 23,354 26,517 (7,179) (5,219) 72,217 Items impacting comparability: Unrealized gain (loss) on derivative asset 2,803 2,803 Tax impact of unrealized gain (loss) on derivative asset (775) (775)Unrealized gain (loss) on other investments (719) (719)Tax impact of unrealized gain (loss) on other investments 151 151 Fourth quarter 2023 GAAP earnings$ 36,772 $ 23,354 $ 26,517 $ (7,179) $ (5,787) $ 73,677 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHAREQUARTER ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / Production Storage Gathering Utility All Other Consolidated* Fourth quarter 2022 GAAP earnings per share$ 1.26 $ 0.27 $ 0.34 $ (0.12) $ (0.04) $ 1.71 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax 0.03 0.03 Reversal of deferred tax valuation allowance (0.31) 0.04 (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (0.18) (0.13) — (0.31)Unrealized (gain) loss on other investments, net of tax 0.01 0.01 Rounding 0.01 0.01 0.02 Fourth quarter 2022 adjusted operating results per share 0.81 0.27 0.25 (0.12) (0.02) 1.19 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 0.14 0.14 Higher (lower) realized natural gas prices, after hedging (0.40) (0.40)Higher (lower) other operating revenues (0.01) (0.01)Midstream Revenues Higher (lower) operating revenues (0.03) 0.03 — Downstream Margins*** Impact of usage and weather — — Impact of new rates in Pennsylvania 0.01 0.01 Impact of new rates in New York**** (0.01) (0.01)System modernization and improvement tracker revenues — — Regulatory revenue adjustments 0.02 0.02 Operating Expenses Lower (higher) lease operating and transportation expenses (0.01) (0.01)Lower (higher) operating expenses (0.02) — (0.02) (0.03) (0.07)Lower (higher) property, franchise and other taxes 0.01 0.01 Lower (higher) depreciation / depletion (0.11) (0.01) — (0.01) (0.13)Other Income (Expense) (Higher) lower other deductions 0.01 0.01 — 0.02 (Higher) lower interest expense (0.01) 0.01 (0.01) 0.01 — Income Taxes Lower (higher) income tax expense / effective tax rate (0.02) 0.01 — 0.04 — 0.03 All other / rounding — — — 0.01 (0.02) (0.01)Fourth quarter 2023 adjusted operating results per share 0.38 0.25 0.29 (0.08) (0.06) 0.78 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax 0.02 0.02 Unrealized gain (loss) on other investments, net of tax (0.01) (0.01)Rounding 0.01 0.01 Fourth quarter 2023 GAAP earnings per share$ 0.40 $ 0.25 $ 0.29 $ (0.08) $ (0.06) $ 0.80 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGSTWELVE MONTHS ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated* Fiscal 2022 GAAP earnings$ 306,064 $ 102,557 $ 101,111 $ 68,948 $ (12,659) $ 566,021 Items impacting comparability: Reduction of other post-retirement regulatory liability (18,533) (18,533)Tax impact of reduction of other post-retirement regulatory liability 3,892 3,892 Unrealized gain (loss) on derivative asset 4,395 4,395 Tax impact of unrealized gain (loss) on derivative asset (1,203) (1,203)Gain on sale of West Coast assets (12,736) (12,736)Tax impact of gain on sale of West Coast assets 3,225 3,225 Loss from discontinuance of crude oil cash flow hedges 44,632 44,632 Tax impact of loss from discontinuance of crude oil cash flow hedges (11,303) (11,303)Transaction and severance costs related to West Coast asset sale 9,693 9,693 Tax impact of transaction and severance costs related to West Coast asset sale (2,455) (2,455)Reversal of deferred tax valuation allowance (28,589) 3,739 (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction (16,152) (11,856) (398) (28,406)Unrealized (gain) loss on other investments 11,625 11,625 Tax impact of unrealized (gain) loss on other investments (2,441) (2,441)Fiscal 2022 adjusted operating results 295,571 102,557 92,994 54,307 (3,873) 541,556 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 62,913 62,913 Higher (lower) crude oil production (88,063) (88,063)Higher (lower) realized natural gas prices, after hedging (48,413) (48,413)Higher (lower) other operating revenues (2,898) (2,898)Midstream Revenues Higher (lower) operating revenues 1,696 12,224 13,920 Downstream Margins*** Impact of usage and weather (1,104) (1,104)Impact of new rates in Pennsylvania 754 754 Impact of new rates in New York**** (12,019) (12,019)System modernization and improvement tracker revenues 3,829 3,829 Regulatory revenue adjustments 1,504 1,504 Higher (lower) other operating revenues 1,734 1,734 Operating Expenses Lower (higher) lease operating and transportation expenses 23,984 23,984 Lower (higher) operating expenses 11,145 (5,164) (4,851) (8,798) (3,389) (11,057)Lower (higher) property, franchise and other taxes 6,041 597 6,638 Lower (higher) depreciation / depletion (26,065) (2,470) (1,364) (1,335) (31,234)Other Income (Expense) (Higher) lower other deductions 2,735 3,624 561 14,030 (3,859) 17,091 (Higher) lower interest expense (724) (796) 1,184 (8,575) 7,120 (1,791)Income Taxes Lower (higher) income tax expense / effective tax rate (3,406) 411 (1,006) 3,503 (380) (878)All other / rounding 114 643 (18) (32) (369) 338 Fiscal 2023 adjusted operating results 232,934 100,501 99,724 48,395 (4,750) 476,804 Items impacting comparability: Unrealized gain (loss) on derivative asset (899) (899)Tax impact of unrealized gain (loss) on derivative asset 240 240 Unrealized gain (loss) on other investments 913 913 Tax impact of unrealized gain (loss) on other investments (192) (192)Fiscal 2023 GAAP earnings$ 232,275 $ 100,501 $ 99,724 $ 48,395 $ (4,029) $ 476,866 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYRECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARETWELVE MONTHS ENDED SEPTEMBER 30, 2023(Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / Production Storage Gathering Utility All Other Consolidated*Fiscal 2022 GAAP earnings per share$ 3.32 $ 1.11 $ 1.10 $ 0.75 $ (0.13) $ 6.15 Items impacting comparability: Reduction of other post-retirement regulatory liability, net of tax (0.16) (0.16)Unrealized gain (loss) on derivative asset, net of tax 0.03 0.03 Gain on sale of West Coast assets, net of tax (0.10) (0.10)Loss from discontinuance of crude oil cash flow hedges, net of tax 0.36 0.36 Transaction and severance costs related to West Coast asset sale, net of tax 0.08 0.08 Reversal of deferred tax valuation allowance (0.31) 0.04 (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate deduction (0.18) (0.13) — (0.31)Unrealized (gain) loss on other investments, net of tax 0.10 0.10 Rounding 0.01 (0.01) — Fiscal 2022 adjusted operating results per share 3.21 1.11 1.01 0.59 (0.04) 5.88 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 0.68 0.68 Higher (lower) crude oil production (0.95) (0.95)Higher (lower) realized natural gas prices, after hedging (0.52) (0.52)Higher (lower) other operating revenues (0.03) (0.03)Midstream Revenues Higher (lower) operating revenues 0.02 0.13 0.15 Downstream Margins*** Impact of usage and weather (0.01) (0.01)Impact of new rates in Pennsylvania 0.01 0.01 Impact of new rates in New York**** (0.13) (0.13)System modernization and improvement tracker revenues 0.04 0.04 Regulatory revenue adjustments 0.02 0.02 Higher (lower) other operating revenues 0.02 0.02 Operating Expenses Lower (higher) lease operating and transportation expenses 0.26 0.26 Lower (higher) operating expenses 0.12 (0.06) (0.05) (0.10) (0.04) (0.13)Lower (higher) property, franchise and other taxes 0.07 0.01 0.08 Lower (higher) depreciation / depletion (0.28) (0.03) (0.01) (0.01) (0.33)Other Income (Expense) (Higher) lower other deductions 0.03 0.04 0.01 0.15 (0.04) 0.19 (Higher) lower interest expense (0.01) (0.01) 0.01 (0.09) 0.08 (0.02)Income Taxes Lower (higher) income tax expense / effective tax rate (0.04) — (0.01) 0.04 — (0.01)All other / rounding (0.02) 0.02 (0.01) (0.02) — (0.03)Fiscal 2023 adjusted operating results per share 2.52 1.09 1.08 0.52 (0.04) 5.17 Items impacting comparability: Unrealized gain (loss) on derivative asset, net of tax (0.01) (0.01)Unrealized gain (loss) on other investments, net of tax 0.01 0.01 Rounding 0.01 (0.01) — Fiscal 2023 GAAP earnings per share$ 2.52 $ 1.09 $ 1.08 $ 0.52 $ (0.04) $ 5.17 * Amounts do not reflect intercompany eliminations.** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.*** Downstream margin defined as operating revenues less purchased gas expense.**** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES (Thousands of Dollars, except per share amounts) Three Months Ended Twelve Months Ended September 30, September 30, (Unaudited) (Unaudited)SUMMARY OF OPERATIONS 2023 2022 2023 2022 Operating Revenues: Utility Revenues$ 78,865 $ 112,252 $ 941,779 $ 897,916 Exploration and Production and Other Revenues 220,348 252,035 958,455 1,010,629 Pipeline and Storage and Gathering Revenues 69,735 70,859 273,537 277,501 368,948 435,146 2,173,771 2,186,046 Operating Expenses: Purchased Gas (12,865) 22,925 437,595 392,093 Operation and Maintenance: Utility 48,354 46,535 205,239 193,058 Exploration and Production and Other 37,955 31,554 124,270 191,572 Pipeline and Storage and Gathering 39,901 39,138 149,247 136,571 Property, Franchise and Other Taxes 20,701 23,089 92,700 101,182 Depreciation, Depletion and Amortization 109,599 94,109 409,573 369,790 243,645 257,350 1,418,624 1,384,266 Gain on Sale of Assets — — — 12,736 Operating Income 125,303 177,796 755,147 814,516 Other Income (Expense): Other Income (Deductions) 5,384 (4,800) 18,138 (1,509)Interest Expense on Long-Term Debt (28,449) (30,207) (111,948) (120,507)Other Interest Expense (4,453) (3,289) (19,938) (9,850) Income Before Income Taxes 97,785 139,500 641,399 682,650 Income Tax Expense (Benefit) 24,108 (18,643) 164,533 116,629 Net Income Available for Common Stock$ 73,677 $ 158,143 $ 476,866 $ 566,021 Earnings Per Common Share Basic$ 0.80 $ 1.73 $ 5.20 $ 6.19 Diluted$ 0.80 $ 1.71 $ 5.17 $ 6.15 Weighted Average Common Shares: Used in Basic Calculation 91,818,933 91,476,535 91,748,890 91,410,625 Used in Diluted Calculation 92,378,675 92,218,581 92,285,918 92,107,066 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited) September 30, September 30,(Thousands of Dollars) 2023 2022 ASSETS Property, Plant and Equipment$ 13,635,303 $ 12,551,909 Less - Accumulated Depreciation, Depletion and Amortization 6,335,441 5,985,432 Net Property, Plant and Equipment 7,299,862 6,566,477 Current Assets: Cash and Temporary Cash Investments 55,447 46,048 Hedging Collateral Deposits — 91,670 Receivables - Net 160,601 361,626 Unbilled Revenue 16,622 30,075 Gas Stored Underground 32,509 32,364 Materials and Supplies - at average cost 48,989 40,637 Unrecovered Purchased Gas Costs — 99,342 Other Current Assets 100,260 59,369 Total Current Assets 414,428 761,131 Other Assets: Recoverable Future Taxes 69,045 106,247 Unamortized Debt Expense 7,240 8,884 Other Regulatory Assets 72,138 67,101 Deferred Charges 82,416 77,472 Other Investments 73,976 95,025 Goodwill 5,476 5,476 Prepaid Pension and Post-Retirement Benefit Costs 200,301 196,597 Fair Value of Derivative Financial Instruments 50,487 9,175 Other 4,891 2,677 Total Other Assets 565,970 568,654 Total Assets$ 8,280,260 $ 7,896,262 CAPITALIZATION AND LIABILITIES Capitalization: Comprehensive Shareholders' Equity Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 91,819,405 Shares and 91,478,064 Shares, Respectively$ 91,819 $ 91,478 Paid in Capital 1,040,761 1,027,066 Earnings Reinvested in the Business 1,885,856 1,587,085 Accumulated Other Comprehensive Loss (55,060) (625,733)Total Comprehensive Shareholders' Equity 2,963,376 2,079,896 Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,384,485 2,083,409 Total Capitalization 5,347,861 4,163,305 Current and Accrued Liabilities: Notes Payable to Banks and Commercial Paper 287,500 60,000 Current Portion of Long-Term Debt — 549,000 Accounts Payable 152,193 178,945 Amounts Payable to Customers 59,019 419 Dividends Payable 45,451 43,452 Interest Payable on Long-Term Debt 20,399 17,376 Customer Advances 21,003 26,108 Customer Security Deposits 28,764 24,283 Other Accruals and Current Liabilities 160,974 257,327 Fair Value of Derivative Financial Instruments 31,009 785,659 Total Current and Accrued Liabilities 806,312 1,942,569 Other Liabilities: Deferred Income Taxes 1,124,170 698,229 Taxes Refundable to Customers 268,562 362,098 Cost of Removal Regulatory Liability 277,694 259,947 Other Regulatory Liabilities 165,441 188,803 Other Post-Retirement Liabilities 2,915 3,065 Asset Retirement Obligations 165,492 161,545 Other Liabilities 121,813 116,701 Total Other Liabilities 2,126,087 1,790,388 Commitments and Contingencies — — Total Capitalization and Liabilities$ 8,280,260 $ 7,896,262 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Twelve Months Ended September 30,(Thousands of Dollars) 2023 2022 Operating Activities: Net Income Available for Common Stock$ 476,866 $ 566,021 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Gain on Sale of Assets — (12,736)Depreciation, Depletion and Amortization 409,573 369,790 Deferred Income Taxes 151,403 104,415 Stock-Based Compensation 20,630 19,506 Reduction of Other Post-Retirement Regulatory Liability — (18,533)Other 19,647 31,983 Change in: Receivables and Unbilled Revenue 213,579 (168,769)Gas Stored Underground and Materials, Supplies and Emission Allowances (8,406) 3,109 Unrecovered Purchased Gas Costs 99,342 (66,214)Other Current Assets (41,077) 291 Accounts Payable (37,095) 11,907 Amounts Payable to Customers 58,600 398 Customer Advances (5,105) 8,885 Customer Security Deposits 4,481 4,991 Other Accruals and Current Liabilities (67,664) 34,260 Other Assets (26,564) (58,924)Other Liabilities (31,135) (17,859)Net Cash Provided by Operating Activities$ 1,237,075 $ 812,521 Investing Activities: Capital Expenditures$ (1,009,868) $ (811,826)Net Proceeds from Sale of Oil and Gas Producing Properties — 254,439 Acquisition of Upstream Assets (124,758) — Sale of Fixed Income Mutual Fund Shares in Grantor Trust 10,000 30,000 Other 12,279 8,683 Net Cash Used in Investing Activities$ (1,112,347) $ (518,704) Financing Activities: Proceeds from Issuance of Short-Term Note Payable to Bank$ 250,000 $ — Repayment of Short-Term Note Payable to Bank (250,000) — Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper 227,500 (98,500)Reduction of Long-Term Debt (549,000) — Net Proceeds From Issuance of Long-Term Debt 297,306 — Dividends Paid on Common Stock (176,096) (168,147)Net Repurchases of Common Stock (6,709) (9,590)Net Cash Used in Financing Activities$ (206,999) $ (276,237) Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (82,271) 17,580 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 137,718 120,138 Cash, Cash Equivalents, and Restricted Cash at September 30$ 55,447 $ 137,718 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) UPSTREAM BUSINESS Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,EXPLORATION AND PRODUCTION SEGMENT 2023 2022 Variance 2023 2022 VarianceTotal Operating Revenues$ 220,348 $ 252,035 $ (31,687) $ 958,455 $ 1,010,464 $ (52,009)Operating Expenses: Operation and Maintenance: General and Administrative Expense 17,163 15,664 1,499 66,074 79,061 (12,987)Lease Operating and Transportation Expense 64,412 62,701 1,711 253,555 283,914 (30,359)All Other Operation and Maintenance Expense 2,357 1,957 400 9,327 20,140 (10,813)Property, Franchise and Other Taxes 3,775 5,475 (1,700) 17,717 25,364 (7,647)Depreciation, Depletion and Amortization 66,394 52,958 13,436 241,142 208,148 32,994 154,101 138,755 15,346 587,815 616,627 (28,812)Gain on Sale of Assets — — — — 12,736 (12,736)Operating Income 66,247 113,280 (47,033) 370,640 406,573 (35,933) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 347 (186) 533 1,389 (744) 2,133 Interest and Other Income (Deductions) 3,457 (3,080) 6,537 2,359 (2,466) 4,825 Interest Expense (15,268) (14,474) (794) (54,317) (53,401) (916)Income Before Income Taxes 54,783 95,540 (40,757) 320,071 349,962 (29,891)Income Tax Expense (Benefit) 18,011 (20,537) 38,548 87,796 43,898 43,898 Net Income$ 36,772 $ 116,077 $ (79,305) $ 232,275 $ 306,064 $ (73,789)Net Income Per Share (Diluted)$ 0.40 $ 1.26 $ (0.86) $ 2.52 $ 3.32 $ (0.80) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) MIDSTREAM BUSINESSES Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,PIPELINE AND STORAGE SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 64,846 $ 68,836 $ (3,990) $ 259,646 $ 265,415 $ (5,769)Intersegment Revenues 29,192 28,913 279 119,545 111,629 7,916 Total Operating Revenues 94,038 97,749 (3,711) 379,191 377,044 2,147 Operating Expenses: Purchased Gas 326 592 (266) 1,436 1,890 (454)Operation and Maintenance 29,154 28,868 286 106,654 100,117 6,537 Property, Franchise and Other Taxes 8,322 8,470 (148) 33,774 34,133 (359)Depreciation, Depletion and Amortization 17,953 17,283 670 70,827 67,701 3,126 55,755 55,213 542 212,691 203,841 8,850 Operating Income 38,283 42,536 (4,253) 166,500 173,203 (6,703) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Credit 1,330 767 563 5,319 3,069 2,250 Interest and Other Income 2,017 1,490 527 6,670 3,820 2,850 Interest Expense (10,796) (10,929) 133 (43,499) (42,492) (1,007)Income Before Income Taxes 30,834 33,864 (3,030) 134,990 137,600 (2,610)Income Tax Expense 7,480 8,544 (1,064) 34,489 35,043 (554)Net Income$ 23,354 $ 25,320 $ (1,966) $ 100,501 $ 102,557 $ (2,056)Net Income Per Share (Diluted)$ 0.25 $ 0.27 $ (0.02) $ 1.09 $ 1.11 $ (0.02) Three Months Ended Twelve Months Ended September 30, September 30,GATHERING SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 4,889 $ 2,023 $ 2,866 $ 13,891 $ 12,086 $ 1,805 Intersegment Revenues 53,129 52,061 1,068 216,426 202,757 13,669 Total Operating Revenues 58,018 54,084 3,934 230,317 214,843 15,474 Operating Expenses: Operation and Maintenance 11,123 10,725 398 44,375 38,234 6,141 Property, Franchise and Other Taxes 21 24 (3) 60 37 23 Depreciation, Depletion and Amortization 9,111 8,656 455 35,725 33,998 1,727 20,255 19,405 850 80,160 72,269 7,891 Operating Income 37,763 34,679 3,084 150,157 142,574 7,583 Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 37 (56) 93 150 (224) 374 Interest and Other Income 75 117 (42) 534 198 336 Interest Expense (3,433) (4,105) 672 (14,989) (16,488) 1,499 Income Before Income Taxes 34,442 30,635 3,807 135,852 126,060 9,792 Income Tax Expense (Benefit) 7,925 (589) 8,514 36,128 24,949 11,179 Net Income$ 26,517 $ 31,224 $ (4,707) $ 99,724 $ 101,111 $ (1,387)Net Income Per Share (Diluted)$ 0.29 $ 0.34 $ (0.05) $ 1.08 $ 1.10 $ (0.02) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) DOWNSTREAM BUSINESS Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,UTILITY SEGMENT 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ 78,865 $ 112,252 $ (33,387) $ 941,779 $ 897,916 $ 43,863 Intersegment Revenues 81 60 21 581 305 276 Total Operating Revenues 78,946 112,312 (33,366) 942,360 898,221 44,139 Operating Expenses: Purchased Gas 14,743 49,692 (34,949) 548,195 497,959 50,236 Operation and Maintenance 49,056 47,369 1,687 208,539 196,254 12,285 Property, Franchise and Other Taxes 8,454 8,981 (527) 40,624 41,137 (513)Depreciation, Depletion and Amortization 16,026 15,167 859 61,450 59,760 1,690 88,279 121,209 (32,930) 858,808 795,110 63,698 Operating Income (Loss) (9,333) (8,897) (436) 83,552 103,111 (19,559) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 9 (492) 501 4 5,526 (5,522)Interest and Other Income 1,437 429 1,008 6,339 1,591 4,748 Interest Expense (8,041) (7,000) (1,041) (34,233) (24,115) (10,118)Income (Loss) Before Income Taxes (15,928) (15,960) 32 55,662 86,113 (30,451)Income Tax Expense (Benefit) (8,749) (5,108) (3,641) 7,267 17,165 (9,898)Net Income (Loss)$ (7,179) $ (10,852) $ 3,673 $ 48,395 $ 68,948 $ (20,553)Net Income (Loss) Per Share (Diluted)$ (0.08) $ (0.12) $ 0.04 $ 0.52 $ 0.75 $ (0.23) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS(UNAUDITED) Three Months Ended Twelve Months Ended(Thousands of Dollars, except per share amounts)September 30, September 30,ALL OTHER 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ — $ — $ — $ — $ — $ — Intersegment Revenues — — — — 6 (6)Total Operating Revenues — — — — 6 (6)Operating Expenses: Purchased Gas — — — — 6 (6)Operation and Maintenance — — — 21 5 16 — — — 21 11 10 Operating Loss — — — (21) (5) (16)Other Income (Expense): Interest and Other Income (Deductions) (66) 1 (67) (517) 3 (520)Interest Expense (68) (4) (64) (157) (4) (153)Loss before Income Taxes (134) (3) (131) (695) (6) (689)Income Tax Expense (Benefit) (33) (1) (32) (164) 3 (167)Net Loss$ (101) $ (2) $ (99) $ (531) $ (9) $ (522)Net Loss Per Share (Diluted)$ — $ — $ — $ — $ — $ — Three Months Ended Twelve Months Ended September 30, September 30,CORPORATE 2023 2022 Variance 2023 2022 VarianceRevenues from External Customers$ — $ — $ — $ — $ 165 $ (165)Intersegment Revenues 932 1,183 (251) 4,388 4,430 (42)Total Operating Revenues 932 1,183 (251) 4,388 4,595 (207)Operating Expenses: Operation and Maintenance 8,345 4,801 3,544 19,115 14,841 4,274 Property, Franchise and Other Taxes 129 139 (10) 525 511 14 Depreciation, Depletion and Amortization 115 45 70 429 183 246 8,589 4,985 3,604 20,069 15,535 4,534 Operating Loss (7,657) (3,802) (3,855) (15,681) �� (10,940) (4,741)Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Costs (354) (1,017) 663 (1,417) (4,069) 2,652 Interest and Other Income 36,337 33,712 2,625 147,935 126,648 21,287 Interest Expense on Long-Term Debt (28,449) (30,207) 1,758 (111,948) (120,507) 8,559 Other Interest Expense (6,089) (3,262) (2,827) (23,370) (8,211) (15,159)Loss before Income Taxes (6,212) (4,576) (1,636) (4,481) (17,079) 12,598 Income Tax Benefit (526) (952) 426 (983) (4,429) 3,446 Net Loss$ (5,686) $ (3,624) $ (2,062) $ (3,498) $ (12,650) $ 9,152 Net Loss Per Share (Diluted)$ (0.06) $ (0.04) $ (0.02) $ (0.04) $ (0.13) $ 0.09 Three Months Ended Twelve Months Ended September 30, September 30,INTERSEGMENT ELIMINATIONS 2023 2022 Variance 2023 2022 VarianceIntersegment Revenues$ (83,334) $ (82,217) $ (1,117) $ (340,940) $ (319,127) $ (21,813)Operating Expenses: Purchased Gas (27,934) (27,359) (575) (112,036) (107,762) (4,274)Operation and Maintenance (55,400) (54,858) (542) (228,904) (211,365) (17,539) (83,334) (82,217) (1,117) (340,940) (319,127) (21,813)Operating Income — — — — — — Other Income (Expense): Interest and Other Deductions (39,242) (36,485) (2,757) (150,627) (134,861) (15,766)Interest Expense 39,242 36,485 2,757 150,627 134,861 15,766 Net Income$ — $ — $ — $ — $ — $ — Net Income Per Share (Diluted)$ — $ — $ — $ — $ — $ — NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES SEGMENT INFORMATION (Continued)(Thousands of Dollars) Three Months Ended Twelve Months Ended September 30, September 30, (Unaudited) (Unaudited) Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Capital Expenditures: Exploration and Production(1)$ 144,938 (2)$ 160,056 (3)$ (15,118) $ 737,725 (2)(3)$ 565,791 (3)(4)$ 171,934 Pipeline and Storage 75,109 (2) 37,563 (3) 37,546 141,877 (2)(3) 95,806 (3)(4) 46,071 Gathering 47,917 (2) 26,957 (3) 20,960 103,295 (2)(3) 55,546 (3)(4) 47,749 Utility 51,246 (2) 40,061 (3) 11,185 139,922 (2)(3) 111,033 (3)(4) 28,889 Total Reportable Segments 319,210 264,637 54,573 1,122,819 828,176 294,643 All Other — — — — — — Corporate 305 549 (244) 754 1,212 (458)Total Capital Expenditures$ 319,515 $ 265,186 $ 54,329 $ 1,123,573 $ 829,388 $ 294,185 (1)The year ended September 30, 2023 includes $124.8 million related to the acquisition of upstream assets acquired from SWN, as well as $25.0 million related to the acquisition of assets from EXCO and UGI. The acquisition cost for the assets acquired from SWN is reported as a component of Acquisition of Upstream Assets on the Consolidated Statement of Cash Flows.(2)Capital expenditures for the quarter and year ended September 30, 2023, include accounts payable and accrued liabilities related to capital expenditures of $43.2 million, $31.8 million, $20.6 million, and $13.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at September 30, 2023, since they represent non-cash investing activities at that date.(3)Capital expenditures for the year ended September 30, 2023, exclude capital expenditures of $83.0 million, $15.2 million, $10.7 million and $11.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2022 and paid during the year ended September 30, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2023.(4)Capital expenditures for the year ended September 30, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2021 and paid during the year ended September 30, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2022. DEGREE DAYS Percent Colder (Warmer) Than:Three Months Ended September 30,Normal 2023 2022 Normal (1) Last Year (1)Buffalo, NY162 61 107 (62.3) (43.0)Erie, PA81 59 94 (27.2) (37.2) Twelve Months Ended September 30, Buffalo, NY6,617 5,717 5,769 (13.6) (0.9)Erie, PA6,104 5,493 5,368 (10.0) 2.3 (1)Percents compare actual 2023 degree days to normal degree days and actual 2023 degree days to actual 2022 degree days. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Gas Production/Prices: Production (MMcf) Appalachia 93,709 87,858 5,851 372,271 341,700 30,571 West Coast — 1 (1) — 1,211 (1,211)Total Production 93,709 87,859 5,850 372,271 342,911 29,360 Average Prices (Per Mcf) Appalachia$ 1.99 $ 6.16 $ (4.17) $ 2.78 $ 5.03 $ (2.25)West CoastN/M N/M N/M N/M 10.03 N/MWeighted Average 1.99 6.16 (4.17) 2.78 5.05 (2.27)Weighted Average after Hedging 2.33 2.84 (0.51) 2.55 2.71 (0.16) Oil Production/Prices: Production (Thousands of Barrels) Appalachia 8 7 1 30 16 14 West Coast — — — — 1,588 (1,588)Total Production 8 7 1 30 1,604 (1,574) Average Prices (Per Barrel) Appalachia$ 76.02 $ 90.22 $ (14.20) $ 75.64 $ 97.82 $ (22.18)West CoastN/M N/M N/M N/M 94.06 N/MWeighted Average 76.02 90.93 (14.91) 75.64 94.10 (18.46)Weighted Average after Hedging (1) 76.02 90.86 (14.84) 75.64 70.80 4.84 Total Production (MMcfe) 93,757 87,901 5,856 372,451 352,535 19,916 Selected Operating Performance Statistics: General & Administrative Expense per Mcfe (2)$ 0.18 $ 0.18 $ — $ 0.18 $ 0.20 $ (0.02)Lease Operating and Transportation Expense per Mcfe (2)(3)$ 0.69 $ 0.71 $ (0.02) $ 0.68 $ 0.81 $ (0.13)Depreciation, Depletion & Amortization per Mcfe (2)$ 0.71 $ 0.60 $ 0.11 $ 0.65 $ 0.59 $ 0.06 N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022) (1)Weighted average oil price after hedging for the twelve months ended September 30, 2022 excludes a loss on discontinuance of crude oil cash flow hedges of $44.6 million. (2)Refer to page 15 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. General and Administrative Expense per Mcfe for the twelve months ended September 30, 2022 excludes transaction and severance costs related to the California asset sale. (3)Amounts include transportation expense of $0.55 and $0.58 per Mcfe for the three months ended September 30, 2023 and September 30, 2022, respectively. Amounts include transportation expense of $0.57 and $0.57 per Mcfe for the twelve months ended September 30, 2023 and September 30, 2022, respectively. NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Hedging Summary for Fiscal 2024 Volume Average Hedge PriceGas Swaps NYMEX 134,930,000 MMBTU $ 3.34 / MMBTUNo Cost Collars 65,280,000 MMBTU $ 3.33 / MMBTU (Floor) / $4.17 / MMBTU (Ceiling)Fixed Price Physical Sales 83,196,787 MMBTU $ 2.44 / MMBTUTotal 283,406,787 MMBTU Hedging Summary for Fiscal 2025 Volume Average Hedge PriceGas Swaps NYMEX 88,810,000 MMBTU $ 3.53 / MMBTUNo Cost Collars 43,960,000 MMBTU $ 3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)Fixed Price Physical Sales 75,047,438 MMBTU $ 2.49 / MMBTUTotal 207,817,438 MMBTU Hedging Summary for Fiscal 2026 Volume Average Hedge PriceGas Swaps NYMEX 38,020,000 MMBTU $ 3.98 / MMBTUNo Cost Collars 42,720,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)Fixed Price Physical Sales 66,821,415 MMBTU $ 2.39 / MMBTUTotal 147,561,415 MMBTU Hedging Summary for Fiscal 2027 Volume Average Hedge PriceGas Swaps NYMEX 13,500,000 MMBTU $ 4.25 / MMBTUNo Cost Collars 3,560,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)Fixed Price Physical Sales 46,128,777 MMBTU $ 2.39 / MMBTUTotal 63,188,777 MMBTU Hedging Summary for Fiscal 2028 Volume Average Hedge PriceGas Swaps NYMEX 1,000,000 MMBTU $ 4.29 / MMBTUFixed Price Physical Sales 12,208,068 MMBTU $ 2.48 / MMBTUTotal 13,208,068 MMBTU Hedging Summary for Fiscal 2029 Volume Average Hedge PriceFixed Price Physical Sales 788,352 MMBTU $ 2.54 / MMBTU NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Reserve Quantity Information(Unaudited) Gas MMcf U.S. Appalachian RegionProved Developed and Undeveloped Reserves: September 30, 2022 4,170,662 Extensions and Discoveries 670,438 Revisions of Previous Estimates 32,379 Production (372,271)Purchases of Minerals in Place 33,876 September 30, 2023 4,535,084 Proved Developed Reserves: September 30, 2022 3,312,568 September 30, 2023 3,550,034 Oil Mbbl U.S. Appalachian RegionProved Developed and Undeveloped Reserves: September 30, 2022 250 Extensions and Discoveries — Revisions of Previous Estimates (4)Production (30)September 30, 2023 216 Proved Developed Reserves: September 30, 2022 250 September 30, 2023 216 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES Pipeline & Storage Throughput - (millions of cubic feet - MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Firm Transportation - Affiliated 17,589 16,943 646 126,500 111,157 15,343 Firm Transportation - Non-Affiliated 161,750 171,983 (10,233) 689,984 679,260 10,724 Interruptible Transportation 168 3,886 (3,718) 2,192 5,612 (3,420) 179,507 192,812 (13,305) 818,676 796,029 22,647 Gathering Volume - (MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Gathered Volume 117,260 104,707 12,553 453,338 419,332 34,006 Utility Throughput - (MMcf) Three Months Ended Twelve Months Ended September 30, September 30, Increase Increase 2023 2022 (Decrease) 2023 2022 (Decrease)Retail Sales: Residential Sales 3,765 4,146 (381) 61,401 64,011 (2,610)Commercial Sales 530 644 (114) 9,342 9,621 (279)Industrial Sales 42 75 (33) 548 541 7 4,337 4,865 (528) 71,291 74,173 (2,882)Transportation 9,419 9,720 (301) 62,986 65,993 (3,007) 13,756 14,585 (829) 134,277 140,166 (5,889) NATIONAL FUEL GAS COMPANYAND 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 and twelve months ended September 30, 2023 and 2022: Three Months Ended Twelve Months Ended September 30, September 30,(in thousands except per share amounts) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Items impacting comparability: Items related to West Coast asset sale: Gain on sale of West Coast assets (E&P) — — — (12,736)Tax impact of gain on sale of West Coast assets — — — 3,225 Loss from discontinuance of crude oil cash flow hedges (E&P) — — — 44,632 Tax impact of loss from discontinuance of crude oil cash flow hedges — — — (11,303)Transaction and severance costs (E&P) — — — 9,693 Tax impact of transaction and severance costs — — — (2,455)Total items impacting comparability related to West Coast asset sale — — — 31,056 Unrealized (gain) loss on derivative asset (E&P) (2,803) 4,395 899 4,395 Tax impact of unrealized (gain) loss on derivative asset 775 (1,203) (240) (1,203)Unrealized (gain) loss on other investments (Corporate / All Other) 719 1,532 (913) 11,625 Tax impact of unrealized (gain) loss on other investments (151) (322) 192 (2,441)Reversal of deferred tax valuation allowance — (24,850) — (24,850)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (28,406) — (28,406)Reduction of other post-retirement regulatory liability (Utility) — — — (18,533)Tax impact of reduction of other post-retirement regulatory liability — — — 3,892 Adjusted Operating Results$ 72,217 $ 109,289 $ 476,804 $ 541,556 Reported GAAP Earnings Per Share$ 0.80 $ 1.71 $ 5.17 $ 6.15 Items impacting comparability: Items related to West Coast asset sale: Gain on sale of West Coast assets, net of tax (E&P) — — — (0.10)Loss from discontinuance of crude oil cash flow hedges, net of tax (E&P) — — — 0.36 Transaction and severance costs, net of tax (E&P) — — — 0.08 Total items impacting comparability related to West Coast asset sale — — — 0.34 Unrealized (gain) loss on derivative asset, net of tax (E&P) (0.02) 0.03 0.01 0.03 Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.01 0.01 (0.01) 0.10 Reversal of deferred tax valuation allowance — (0.27) — (0.27)Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction — (0.31) — (0.31)Reduction of other post-retirement regulatory liability, net of tax (Utility) — — — (0.16)Rounding (0.01) 0.02 — — Adjusted Operating Results Per Share$ 0.78 $ 1.19 $ 5.17 $ 5.88 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIES NON-GAAP FINANCIAL MEASURES (Continued) Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and twelve months ended September 30, 2023 and 2022: Three Months Ended Twelve Months Ended September 30, September 30,(in thousands) 2023 2022 2023 2022 Reported GAAP Earnings$ 73,677 $ 158,143 $ 476,866 $ 566,021 Depreciation, Depletion and Amortization 109,599 94,109 409,573 369,790 Other (Income) Deductions (5,384) 4,800 (18,138) 1,509 Interest Expense 32,902 33,496 131,886 130,357 Income Taxes 24,108 (18,643) 164,533 116,629 Gain on Sale of Assets — — — (12,736)Loss from discontinuance of crude oil cash flow hedges (E&P) — — — 44,632 Transaction and severance costs related to West Coast asset sale (E&P) — — — 9,693 Adjusted EBITDA$ 234,902 $ 271,905 $ 1,164,720 $ 1,225,895 Adjusted EBITDA by Segment Pipeline and Storage Adjusted EBITDA$ 56,236 $ 59,819 $ 237,327 $ 240,904 Gathering Adjusted EBITDA 46,874 43,335 185,882 176,572 Total Midstream Businesses Adjusted EBITDA 103,110 103,154 423,209 417,476 Exploration and Production Adjusted EBITDA 132,641 166,238 611,782 656,310 Utility Adjusted EBITDA 6,693 6,270 145,002 162,871 Corporate and All Other Adjusted EBITDA (7,542) (3,757) (15,273) (10,762)Total Adjusted EBITDA$ 234,902 $ 271,905 $ 1,164,720 $ 1,225,895 NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESSEGMENT ADJUSTED EBITDA Three Months Ended Twelve Months Ended September 30, September 30,(in thousands) 2023 2022 2023 2022 Exploration and Production Segment Reported GAAP Earnings$ 36,772 $ 116,077 $ 232,275 $ 306,064 Depreciation, Depletion and Amortization 66,394 52,958 241,142 208,148 Other (Income) Deductions (3,804) 3,266 (3,748) 3,210 Interest Expense 15,268 14,474 54,317 53,401 Income Taxes 18,011 (20,537) 87,796 43,898 Gain on Sale of West Coast Assets — — — (12,736)Loss from Discontinuance of Crude Oil Cash Flow Hedges — — — 44,632 Transaction and Severance Costs related to West Coast Asset Sale — — — 9,693 Adjusted EBITDA$ 132,641 $ 166,238 $ 611,782 $ 656,310 Pipeline and Storage Segment Reported GAAP Earnings$ 23,354 $ 25,320 $ 100,501 $ 102,557 Depreciation, Depletion and Amortization 17,953 17,283 70,827 67,701 Other (Income) Deductions (3,347) (2,257) (11,989) (6,889)Interest Expense 10,796 10,929 43,499 42,492 Income Taxes 7,480 8,544 34,489 35,043 Adjusted EBITDA$ 56,236 $ 59,819 $ 237,327 $ 240,904 Gathering Segment Reported GAAP Earnings$ 26,517 $ 31,224 $ 99,724 $ 101,111 Depreciation, Depletion and Amortization 9,111 8,656 35,725 33,998 Other (Income) Deductions (112) (61) (684) 26 Interest Expense 3,433 4,105 14,989 16,488 Income Taxes 7,925 (589) 36,128 24,949 Adjusted EBITDA$ 46,874 $ 43,335 $ 185,882 $ 176,572 Utility Segment Reported GAAP Earnings$ (7,179) $ (10,852) $ 48,395 $ 68,948 Depreciation, Depletion and Amortization 16,026 15,167 61,450 59,760 Other (Income) Deductions (1,446) 63 (6,343) (7,117)Interest Expense 8,041 7,000 34,233 24,115 Income Taxes (8,749) (5,108) 7,267 17,165 Adjusted EBITDA$ 6,693 $ 6,270 $ 145,002 $ 162,871 Corporate and All Other Reported GAAP Earnings$ (5,787) $ (3,626) $ (4,029) $ (12,659)Depreciation, Depletion and Amortization 115 45 429 183 Other (Income) Deductions 3,325 3,789 4,626 12,279 Interest Expense (4,636) (3,012) (15,152) (6,139)Income Taxes (559) (953) (1,147) (4,426)Adjusted EBITDA$ (7,542) $ (3,757) $ (15,273) $ (10,762) NATIONAL FUEL GAS COMPANYAND SUBSIDIARIESNON-GAAP FINANCIAL MEASURESFREE CASH FLOW Management defines free cash flow as net cash provided by operating activities, less net cash used in investing activities, adjusted for acquisitions and divestitures. The following table reconciles National Fuel's free cash flow to Net Cash Provided by Operating Activities on the Consolidated Statement of Cash Flows for the twelve months ended September 30, 2023 and 2022: Twelve Months Ended September 30,(in thousands) 2023 2022 Net Cash Provided by Operating Activities$ 1,237,075 $ 812,521 Less: Net Cash Used in Investing Activities 1,112,347 518,704 Proceeds from Divestitures — 254,439 124,728 39,378 Plus: Acquisitions 124,758 — Upstream Acquisitions Included in Capital Expenditures(1) 25,057 — Free Cash Flow$ 274,543 $ 39,378 (1)$25.0 million related to the acquisition of assets from EXCO and UGI included in Capital Expenditures on the Consolidated Statement of Cash Flows. Brandon J. Haspett Investor Relations 716-857-7697 Timothy J. Silverstein Treasurer 716-857-6987