National Fuel Gas : Summary Annual Report 2021

2021 Summary Annual Report

DAVID P. BAUER

President and

Chief Executive Officer

Dear Shareholders,

I am proud to write that fiscal 2021 was another strong year for National Fuel, with excellent operational and financial results across our organization.

Against the continued backdrop of the COVID-19 pandemic, our 2,100 dedicated and talented employees again rose to meet the challenge, executing on our growth plans while maintaining our long-standing focus on the safety, sustainability, and reliability of our production, gathering, pipeline and storage, and utility operations.

Year over year, the Company experienced an impressive

47% increase in our adjusted operating results per share, driven by the ongoing growth of our Appalachian drilling program, the tailwind of stronger commodity prices, and the continued expansion of our interstate pipeline business. We also achieved significant milestones across our diversified operations, successfully integrating an approximately $500 million Appalachian acquisition at our Exploration & Production and Gathering businesses, commencing construction of our FM100 modernization and expansion project - the largest ever for our Pipeline & Storage business - and completing our substantial

annual modernization program at our Utility business, including the replacement of more than 150 miles of delivery system mains. All this while maintaining the strength of our investment- grade balance sheet and increasing our dividend for the

51st consecutive year.

Throughout the year, the Company further enhanced our environmental, social, and governance (ESG) initiatives, culminating with the publication of our second annual Corporate Responsibility Report (Report) in September. In line with our commitment to continuous improvement, the Report includes additional climate-focused information under the Task Force on Climate-Related Financial Disclosures Framework and the announcement of significant greenhouse gas and methane emissions intensity reduction targets. Moreover, our focus on safety was unwavering and led to further improvement to our impressive track record. Thanks to our employees' commitment to a strong safety culture,

1. restored right-of-way for the Company's FM100 Project.

FIFTY-ONE YEARS OF DIVIDEND GROWTH	DIVERSIFICATION AND BALANCE
Annual Rate at Fiscal Year-End	Percent of Consolidated Total Assets by Segment

							$1.82 31%	31%	27%
									Exploration &	Pipeline &	Utility & All
									Production	Storage	Other
$0.19
											11%
1970	1980	1990	2000	2010	2021		Gathering

over the past three years we have accomplished a more than 30% reduction in our Occupational Safety and Health Administration recordable injury rate in both our regulated businesses and our Exploration & Production operations.

As we look ahead, we expect these accomplishments to provide the foundation for National Fuel to generate meaningful earnings growth and substantial and sustainable free cash flow, with fiscal 2022 poised to be a strong year for the Company. The completion of the FM100 Project in early fiscal 2022, along with a companion expansion project on the Transco pipeline system, will provide a valuable long-term outlet for our production and support the further development of our natural gas reserves and the growth of our wholly-owned gathering assets. We believe we will continue to have opportunities

to grow both our regulated and non-regulated operations, leveraging our existing asset base to generate strong returns on our investments for our shareholders.

Executing on Our Growth Plans

Exploration & Production and Gathering

Fiscal 2021 was an outstanding year for our Exploration & Production business, Seneca Resources Company, LLC (Seneca), as well as our Gathering business, National Fuel Gas Midstream Company, LLC (Midstream). Seneca produced a company-record 327 Bfce, growing its production by 36% from the prior year and driving Midstream revenue growth of 38%. Our significant Appalachian production growth was the result of the strong performance of the assets Seneca acquired

in late fiscal 2020 from Royal Dutch Shell (Shell), primarily in Tioga County, Pa., along with that of the Company's existing operations within our Western Development Area and Eastern Development Area (EDA), both in Pennsylvania. Throughout the year, we continued to see the benefits of our Appalachian

acquisition with per unit cash operating costs dropping

7% from the prior year due to our increased scale, along with tangible operational benefits in Tioga County, including

the ability to drill longer laterals and to leverage the acquired infrastructure to reduce water transportation costs. Additionally, as 100% of Seneca's production is collected by the Company's gathering systems, we continue to see the consolidated benefit of this transaction.

Over the year, Seneca remained focused on preparing for the upcoming addition of significant new firm transportation capacity on the Transco Leidy South Project, adding a second horizontal drilling rig in January 2021. We expect production from the first pad drilled in connection with this activity to come online in early fiscal 2022, allowing Seneca to fully utilize its 330,000 dekatherms per day of incremental pipeline capacity to reach premium markets during the winter heating season. The second drilling rig is expected to focus on the development of our highly-economic EDA assets, including the significant well inventory in Tioga County that we acquired from Shell.

In fiscal 2022, Seneca expects to maintain its current activity levels in Appalachia, operating two drilling rigs with a focus on optimizing our drilling program and fully utilizing our valuable firm transportation and firm sales portfolio. This will position National Fuel to generate substantial free cash flow.

During fiscal 2021, Seneca also advanced several key environmental and emissions-focused initiatives across its operations, demonstrating our continued commitment

to sustainability. In early July, Seneca announced its intent to pioneer an innovative study to evaluate the carbon emissions generated by various types of equipment commonly used for hydraulic fracturing of oil and natural gas wells. In late July, the Company announced the commencement of its first well completions using electric-powered fracturing technology

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Our Guiding

Principles

Safety

We embrace a culture of safety that extends to our customers, employees, and communities.

Environmental

Stewardship

We operate our assets in a manner that respects and protects the environment.

Community

We are committed to the health and vitality of our local communities.

Innovation

We strive to exceed the standards for safe, clean, and reliable energy development.

Satisfaction

We work to deliver reliable, high-quality service and to address the distinct needs of our stakeholders.

Transparency

We believe that open communication is key to maintaining strong relationships.

on a six-well pad in Lycoming County, Pa., within our EDA. Likewise, in September, we announced an agreement with Project Canary to seek an independent responsibly sourced gas certification for approximately 300 million cubic feet per day of Seneca's Appalachian production, as well as a commitment to seek certification of 100% of our Appalachian natural gas production under Equitable Origin's EO100™ Standard for Responsible Energy Development - a set of rigorous ESG performance standards. We expect that these commitments will allow National Fuel to continue to showcase the quality of our assets, our innovative processes, and our ongoing investments in environmental protection.

Pipeline & Storage

Our Pipeline & Storage business, comprised of our two FERC-regulated pipeline companies, National Fuel Gas Supply Corporation (Supply Corporation) and Empire Pipeline, Inc. (Empire), continues to leverage our existing footprint within Appalachia to drive growth opportunities. Following on the heels of our $129 million Empire North Project, which was placed into service in September 2020 and added $27 million in incremental annual revenues, construction of the FM100 modernization and expansion project commenced in February 2021. This approximately $240 million investment by Supply Corporation is expected to generate $50 million per year in incremental revenues while facilitating, along

with the Transco Leidy South Project, a valuable outlet for our Appalachian production to reach markets in the Mid-Atlantic region. A substantial majority of the pipeline facilities for this project - all of which are in Pennsylvania - parallel existing corridors, minimizing environmental impacts. In addition, the FM100 Project utilizes best-in-class emissions reduction technologies, including vent gas recovery systems at the newly constructed compression facilities, limiting the carbon footprint of our growing operations.

As we look beyond the FM100 Project, we continue to evaluate opportunities to utilize our significant existing assets and our proximity to Appalachian producers, along with end-users, to drive further growth at this business. In addition, we will continue to invest in the safety and reliability of our transmission and storage assets with a keen focus on reducing our operational and fugitive emissions.

Utility

Our Utility business, National Fuel Gas Distribution Corporation (Distribution), safely, reliably, and affordably provides natural gas service to more than 2 million residents in Western New York and northwestern Pennsylvania. During fiscal 2021, Distribution maintained its long-standing focus on system modernization. Over the past five years, Distribution has invested nearly $360 million on these efforts, replacing 750 miles of older vintage mains, further enhancing system reliability while driving significant emissions reductions as we upgrade our facilities with more modern pipeline materials. Since 1990, we have reduced our delivery system (EPA subpart W) greenhouse gas emissions by more than 64%. We are targeting a 75% reduction by 2030 and a 90% reduction by 2050, which exceeds the requirements of New York State's Climate Leadership and Community

2 NATIONAL FUEL GAS COMPANY

Two Supply Corporation employees oversee the construction of the FM100 Project, which went into service in December 2021.

Protection Act. In addition, despite these significant capital investments, the Company has maintained the lowest residential natural gas delivery rates in New York and Pennsylvania, and the first and second lowest delivery rates in the entire Northeast, according to the U.S. Energy Information Administration.

As we look ahead, our Utility will continue to invest in the modernization of our distribution network, while steadfastly maintaining our commitments to customer service and providing cost-effective energy supplies through our safe and resilient pipeline system.

SENECA RESOURCES PRODUCTION (Bcfe)

2022E				335-365
2021	327
2020	241
2019	212
2018	178

GATHERING REVENUES ($ millions)

2022E$200-$225

2021	$193

2020$143

2019$127

2018$108

Our Focus on the Energy Transition and Reducing Our Carbon Footprint

As we sit here today, policymakers, including those in Albany, N.Y., and Washington, D.C., are moving swiftly to transition the nation's energy supply towards renewable resources. In many instances, this is occurring with limited consideration of the need for ongoing energy resilience and the importance of long-term energy equity - two key topics that must remain front and center. As the shift to a lower-carbon economy continues, it brings to the forefront the need for an orderly and thoughtful energy transition that focuses on the significant potential financial impacts to consumers and the overall reliability and availability of energy delivery systems. Our Utility service territory, in which a significant majority of households use natural gas to heat their homes, is a prime example of the ongoing importance of these critical issues. For example, the temperatures that crippled Texas and the Midwest during winter storm Uri last February are the norm in Western New York for the three coldest months of the winter, and the median household income in our service territory is well below the national average.

In a similar vein, even in cold weather climates, we continue to see a push to rapidly "electrify everything," and in many cases without appropriate discussion of the importance of maintaining readily dispatchable energy generation facilities and delivery systems to ensure the reliability of the overall energy eco-system. This approach often overlooks the value of utilizing existing natural gas infrastructure as part of the long-term energy solution. If used as part of a more inclusive "all-of-the-above" approach, this highly reliable infrastructure would provide energy supplies during times when intermittent generation sources are unavailable, as well as limit constraints on the power grid during periods of peak energy demand and reduce the need to construct otherwise unnecessary, high-cost electric transmission and delivery infrastructure.

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