National Fuel Gas : Reports Third Quarter Earnings

Exhibit 99

6363 Main Street/Williamsville, NY 14221

Release Date:

Immediate August 1, 2019

Kenneth E. Webster	Karen M. Camiolo
Investor Relations	Treasurer
716-857-7067	716-857-7344

NATIONAL FUEL REPORTS THIRD QUARTER EARNINGS AND PROVIDES PRELIMINARY GUIDANCE FOR FISCAL 2020

WILLIAMSVILLE, N.Y.: National Fuel Gas Company ("National Fuel" or the "Company") (NYSE:NFG) today announced consolidated results for the third quarter of its 2019 fiscal year and for the nine months ended June 30, 2019.

FISCAL 2019 THIRD QUARTER SUMMARY

• • GAAP earnings of $63.8 million, or $0.73 per share, compared to $63.0 million, or $0.73 per share, in the prior year

• • Adjusted operating results of $61.8 million, or $0.71 per share, compared to $63.3 million, or $0.73 per share, in the prior year (see non-GAAP reconciliation on page 2)

• • Adjusted EBITDA of $182.9 million compared to $175.2 million in the prior year (non-GAAP reconciliation on page 24)

• • E&P segment net production of 54.7 Bcfe, an increase of 23% from the prior year and 12% from the second quarter

• • Average natural gas prices, after the impact of hedging, of $2.36 per Mcf, down $0.07 per Mcf from the prior year

• • Average oil prices, after the impact of hedging, of $62.92 per Bbl, up $4.18 per Bbl from the prior year

• • Gathering segment operating revenues increased $5.0 million on an 18% increase in gathered volumes

• • Utility segment net income increased $3.4 million, or 87%, on higher customer margins

FISCAL 2019 AND FISCAL 2020 GUIDANCE UPDATE SUMMARY

The Company is updating its fiscal 2019 guidance and providing preliminary fiscal 2020 guidance relating to earnings, capital expenditures, and production. See pages 5 and 6 for additional discussion.

Updated	Preliminary
FY 2019	FY 2020
Guidance	Guidance	Key Forecast Drivers
Earnings per Share	$3.40 to $3.50	$3.25 to $3.55	Increase in production offset by lower natural gas prices
Capital Expenditures ($MM)	$745 to $800	$725 to $820
E&P and Gathering	$525 to $550	$455 to $505	Seneca to drop rig in Q2 fiscal 2020
Pipeline and Storage	$130 to $150	$180 to $215	Empire North expansion project
Utility	$90 to $100	$90 to $100	System modernization backed by rate tracker in NY
E&P Production (Bcfe)	205 to 215	235 to 245	Utica and Marcellus development
MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: "Our fiscal third quarter results once again demonstrate why the integrated model is a significant advantage for National Fuel, particularly during periods of commodity price volatility. Our Utility and Gathering businesses led the way with significant year over year earnings growth, along with the strong operational performance of our Exploration and Production business. As we look to fiscal 2020, we do so with a close eye on longer-term natural gas prices and a focus on prudently deploying capital and maintaining our strong balance sheet. We plan to reduce our drilling activity accordingly but will continue to invest in pipeline expansion projects and utility system modernization opportunities that add shareholder value and position National Fuel for long-term growth and success."

Page 2.

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

Three Months EndedNine Months Ended

June 30,

June 30,

(in thousands except per share amounts)

2019

2018

2019

2018

Reported GAAP Earnings

• $ 63,025

• $ 63,753$

  $

  • 257,009 353,527

    Items impacting comparability

    Remeasurement of deferred income taxes under 2017 Tax Reform Mark-to-market adjustments due to hedge ineffectiveness (E&P) Tax impact of mark-to-market adjustments due to hedge ineffectiveness

    -

    (1,020)

    - 339

  • (5,000) (107,000)

  (783)

  436

  214

  Unrealized (gain) loss on other investments (Corporate / All Other) Tax impact of unrealized (gain) loss on other investments

  (1,420)

  298

  (83) - -

  164 1,096 (230)

  (107)

  - -

  Adjusted Operating Results

• $ 63,281

  Reported GAAP Earnings per share

  $ $

  61,825

  • $ 246,856

    $ 252,256

    0.73

    Items impacting comparability

    Remeasurement of deferred income taxes under 2017 Tax Reform Mark-to-market adjustments due to hedge ineffectiveness (E&P) Tax impact of mark-to-market adjustments due to hedge ineffectiveness

    - (0.01)

    Unrealized (gain) loss on other investments (Corporate / All Other) Tax impact of unrealized (gain) loss on other investments Rounding

    - (0.02)

    Adjusted Operating Results per share

    • $ 0.73

    $

    - 0.01 0.71

  • $ 0.73 - - - - - -

• $ 2.96 $ 4.09

  (0.06) (1.24) (0.01) 0.01

  - 0.01 - 0.01

  - - - -

  $ 2.86

  $

  2.91

  DISCUSSION OF RESULTS BY SEGMENT

  The following discussion of earnings of each operating segment for the quarter ended June 30, 2019, is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the nine months ended June 30, 2019, are summarized on pages 11 and 12). It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

  Upstream Business

  Exploration and Production Segment

  The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC ("Seneca"). Seneca explores for, develops and produces natural gas and oil reserves, primarily in Pennsylvania and California.

  Three Months Ended

  June 30,

  (in thousands)

  Variance

  2019

  2018

  GAAP Earnings

  • $ 26,512$

    27,817$ (1,305)

    Mark-to-market adjustments due to hedge ineffectiveness

  • $ (1,020) $

    339 $ (1,359)

    Tax impact of mark-to-market adjustments due to hedge ineffectiveness Adjusted Operating Results

  • $ 214

    $

    (83) $

    297

  • $ 28,073

    $

    25,706$

    (2,367)

    Adjusted EBITDA

  • $ 88,175

  $ 77,567

  $

  10,608

  The Exploration and Production segment's third quarter GAAP earnings decreased $1.3 million versus the prior year, which includes the net impact of non-cash mark-to-market adjustments recorded during the current and prior year quarters relating to hedge ineffectiveness. Excluding these adjustments (see table above), the $2.4 million reduction in the Exploration and Production

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segment's third quarter earnings was due primarily to a higher effective income tax rate, which was largely the result of tax benefits realized in the prior year that did not recur in the current year. Before considering these tax items, Seneca's third quarter earnings were higher due primarily to the positive impacts of higher natural gas production and better realized crude oil prices, which were partially offset by the impacts of lower crude oil production, lower realized natural gas prices, higher lease operating and transportation ("LOE") expense, and higher depreciation, depletion and amortization ("DD&A") expense.

Seneca's third quarter net production was 54.7 Bcfe, an increase of 10.1 Bcfe, or 23 percent, from the prior year. Natural gas production increased 10.3 billion cubic feet ("Bcf"), or 25 percent, due primarily to production from new Marcellus and Utica wells completed and connected to sales in Appalachia. Net production increased 4.8 Bcf in Seneca's Eastern Development Area due largely to increased Utica development in the EDA-Tioga area and Marcellus development in the EDA-Lycoming area. Net gas production increased 5.5 Bcf in the WDA-Clermont area, where Seneca added a second rig in May 2018 and continues to experience stronger production and shallower declines from its Utica development program. Seneca's oil production for the third quarter decreased 25 thousand barrels ("Mbbl"), or 4 percent, from the prior year.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.36 per thousand cubic feet ("Mcf"), a decrease of $0.07 per Mcf from the prior year. Seneca's average realized oil price, after the impact of hedging, was $62.92 per barrel ("Bbl"), an increase of $4.18 per Bbl over the prior year. The improvement in oil price realizations was due primarily to stronger price differentials at local sales points in California relative to West Texas Intermediate (WTI) prices.

LOE expense increased $10.1 million due mostly to higher gathering expenses in Appalachia resulting from the increase in natural gas production coupled with an increase in well repair costs in California. DD&A expense increased $8.8 million due to the increase in production and a $0.03 per Mcfe increase in the unit depletion rate.

Midstream Businesses

Pipeline and Storage Segment

The Pipeline and Storage segment's operations are carried out by National Fuel Gas Supply Corporation ("Supply Corporation") and Empire Pipeline, Inc. ("Empire"). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania.

Three Months Ended

June 30,

(in thousands)	2019
GAAP Earnings	$	15,792$	20,723$	(4,931)
Adjusted EBITDA	$	(8,744)

Variance

2018

37,328

$

46,072

$

The Pipeline and Storage segment's third quarter GAAP earnings decreased $5.0 million versus the prior year. The decrease was driven primarily by lower operating revenues and higher operation and maintenance ("O&M") expenses, which were partially offset by the impact of a lower effective tax rate. The $5.0 million decrease in operating revenues was due largely to the expiration of a significant firm transportation contract on the Empire system in December 2018. The impact of the contract expiration was partially offset by an increase in Empire's transportation rates following the settlement of Empire's rate case that was effective starting in January 2019. O&M expense increased $3.5 million due primarily to an increase in pipeline integrity maintenance activity during the quarter and higher personnel costs. The reduction in the Pipeline and Storage segment's effective tax rate was due mostly to the impact of the 2017 Tax Reform Act, which lowered the Company's statutory federal income tax rate from a blended 24.5 percent in fiscal 2018 to 21 percent in fiscal 2019, and decreased income tax expense on current period income by $0.6 million.

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Page 4.

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 currently delivers Seneca's gross Appalachian production to the interstate pipeline system.

Three Months Ended

June 30,

(in thousands)
GAAP Earnings	$	11,566$	3,072
Adjusted EBITDA	$	4,762

Variance

2019 14,638$

2018

27,852

$

23,090

$

The Gathering segment's third quarter GAAP earnings increased $3.1 million over the prior year. The increase was driven primarily by higher operating revenues, which were partially offset by an increase in DD&A expense. Operating revenues increased $5.0 million, or 18 percent, due primarily to a 9.4 Bcf net increase in gathered volume from Seneca's Appalachian natural gas production. Throughput on the Gathering segment's Wellsboro, Clermont, and Trout Run systems increased 4.9 Bcf, 3.6 Bcf, and 2.6 Bcf, respectively. The $1.0 million increase in DD&A expense was largely due to a $0.7 million impairment recorded during the quarter to write-down the Company's minority ownership in a non-operated gas processing facility. The benefit of a lower statutory federal income tax rate due to the 2017 Tax Reform Act was offset by the net impact of other items that increased the Gathering segment's effective tax rate, including the non-recurrence of a tax benefit recorded in the prior year relating to the blended federal rate's impact on deferred taxes.

Downstream Businesses

Utility Segment

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

Three Months Ended

June 30,

(in thousands)	2019
GAAP Earnings	$	7,362$	3,432
Adjusted EBITDA	$	2,863

Variance

2018

3,930$

33,163

$

30,300

$

The Utility segment's third quarter GAAP earnings increased $3.4 million over the prior year. The increase was due primarily tohighercustomermargin(operatingrevenueslesspurchasedgassold)andlowerinterestexpense. Anumberofitemscontributed to the increase in customer margin, including changes in customer usage and a modest increase in residential customers, an increase in revenues relating to a system modernization tracking mechanism, and the net impact of adjustments related to regulatory rate mechanisms. These positive items were partially offset by $1.8 million increase in the refund provision recorded by the Utility segment during the quarter to return the net effect of the 2017 Tax Reform Act to its customers. Interest expense decreased $0.8 million due primarily to the Company's early refinancing of an 8.75 percent coupon 10-year note that was set to mature in May 2019.

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Page 5.

Energy Marketing Segment

The Energy Marketing segment's operations are carried out by National Fuel Resources, Inc. ("NFR"). NFR markets natural gas to industrial, wholesale, commercial, public authority, and residential customers primarily in western and central New York and northwestern Pennsylvania.

Three Months Ended

June 30,

(in thousands)	2019
GAAP Earnings	$	(1,441)$	(190)$	(1,251)
Adjusted EBITDA	$	(2,075) $	(295) $	(1,780)

Variance

2018

The Energy Marketing segment's third quarter GAAP earnings decreased $1.3 million due primarily to a decline in customer margins (operating revenues less purchased gas sold).

Corporate and All Other

Corporate and All Other operations had combined earnings of $0.9 million in the current year third quarter, which was $1.7 million higher than the loss of $0.8 million in the prior-year third quarter. The increase in earnings was primarily attributable to the impact of $1.4 million in unrealized gains on investments in equity securities recorded during the quarter ($1.1 million after-tax), lower interest expense and a lower effective tax rate. Unrealized gains and losses on investments in equity securities are now recognized in earnings following the adoption of new accounting guidance in the current year. These unrealized gains and losses had been previously recorded as other comprehensive income. These increases were partially offset by lower operating revenues from the sale of standing timber by the Company's land and timber operations.

DISCUSSION OF GUIDANCE UPDATE

National Fuel is revising its full-year earnings guidance for fiscal 2019. The Company projects that earnings on a non-GAAP basis will be within the range of $3.40 to $3.50 per share, or $3.45 per share at the midpoint of the range. The Company's revised earnings guidance range reflects the impact of actual results for the nine months ended June 30, 2019, and, among other forecast updates, lower commodity price assumptions to reflect current market prices for natural gas and crude oil for the remaining three months of the fiscal year. The Company is reaffirming its Exploration and Production segment's fiscal 2019 net production guidance, which is expected to be in the range of 205 to 215 Bcfe. The Company now expects fiscal 2019 consolidated capital expenditures to be within the range of $745 million to $800 million, or $772.5 million at the midpoint.

The Company is also initiating preliminary guidance for fiscal 2020. National Fuel is projecting that its fiscal 2020 earnings will be within a range of $3.25 to $3.55 per share, or $3.40 per share at the midpoint of the range and generally in line with fiscal 2019. The Company's fiscal 2020 earnings projections are largely being driven by an increase in Seneca's forecasted natural gas production and the associated impact on Gathering segment revenues, offset by lower expected natural gas price realizations and modest increases in operating expenses. Seneca's fiscal 2020 net production is expected to be in the range of 235 to 245 Bcfe, an increase of 30 Bcf versus fiscal 2019. The Company is projecting its natural gas price realizations after hedging to decline approximately $0.20 per Mcf, driven in large part by lower expected NYMEX and regional spot prices for natural gas.

In response to the deterioration in near-term commodity prices, the Company's Exploration and Production segment is planning to reduce its development activity in Appalachia and drop one of the three horizontal drilling rigs it is currently operating during the second quarter of fiscal 2020. As a result, the Exploration and Production segment's capital expenditures are expected to be in the range of $415 million to $455 million, a $50 million reduction versus fiscal 2019 at the midpoint. At the reduced activity level, Seneca expects to generate production to fully utilize its firm sales and transportation commitments. Gathering segment capital expenditures are expected to be $40 million to $50 million in fiscal 2020, a decline of $7.5 million at the midpoint.

Pipeline and Storage segment capital expenditures are expected to be in the range of $180 million to $215 million. The $57.5 million increase at the midpoint of the range is due primarily to higher spending on expansion projects, including the fully-subscribed Empire North project that is expected to add $25 million in annual revenues after the project goes into service,

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