File No. 70-8963
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
____________________________________________
AMENDMENT NO. 2 TO
FORM U-1
APPLICATION-DECLARATION
under
the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
National Fuel Gas Company National Fuel Gas
10 Lafayette Square Distribution Corporation
Buffalo, New York 14203 10 Lafayette Square
Buffalo, New York 14203
National Fuel Gas Seneca Resources Corporation
Supply Corporation 10 Lafayette Square
10 Lafayette Square Buffalo, New York 14203
Buffalo, New York 14203
Utility Constructors, Inc. Highland Land & Minerals, Inc.
East Erie Extension 10 Lafayette Square
Linesville, Pennsylvania 16424 Buffalo, New York 14203
Leidy Hub, Inc. Data-Track Account
10 Lafayette Square Services, Inc.
Buffalo, New York 14203 10 Lafayette Square
Buffalo, New York 14203
National Fuel Resources, Inc. Horizon Energy
478 Main Street Development, Inc.
Buffalo, New York 14202 10 Lafayette Square
Buffalo, New York 14203
(Names of companies filing this statement
and addresses of principal executive offices)
_____________________________________________
NATIONAL FUEL GAS COMPANY
(Name of top registered holding company)
_____________________________________________
Philip C. Ackerman William T. Baker, Jr., Esq.
Senior Vice President Robert J. Reger, Jr., Esq.
National Fuel Gas Company Reid & Priest LLP
10 Lafayette Square 40 West 57th Street
Buffalo, New York 14203 New York, New York 10019
(Names and addresses of agents for service)
<PAGE>
Item 1. Description of Proposed Transactions.
Paragraph 1.5 of Item 1 is revised in its entirety to
read as follows:
"1.5 Financing by National System for the Project.
--------------------------------------------
Supply and/or the Affiliate will fund National's share of the
development costs to be paid by the Affiliate to Tennessee or one
of its designated affiliates, through borrowings from the money
pool arrangement between National and its subsidiaries described
in the following paragraph. In addition, as referenced above,
Supply may incur, in the normal course of its business certain
Project Materials and Land costs(3). These costs will also be
funded through borrowings from the money pool arrangement between
National and its subsidiaries described in the following
paragraph.
National may make loans to the Affiliate for the
financing of its activities, including financing of the
activities of the Special Purpose Entities. It is contemplated
that any loans to the Affiliate for the purpose of Construction
Financing may be made pursuant to, and in accordance with, the
current money pool arrangement between National and its
subsidiaries (the "Money Pool Arrangement") (see SEC File No. 70-
8729 for the current Money Pool Arrangement). Such loans to the
Affiliate and/or Supply, to the extent needed in connection with
---------------
3. As described above, it is contemplated that Supply will be
reimbursed, for such Project Material and Land costs by the
Special Purpose Entities upon receipt of Commission authorization
in this file. The Affiliate's portion of the development costs
will be in the form of a contribution by the Affiliate to the
Special Purpose Entities.
<PAGE>
the Project, shall not exceed in the aggregate $250 million in
principal amount at any one time outstanding. Any Construction
Financing made pursuant to the Money Pool Arrangement will be
repaid upon commencement of commercial operation of the Project.
Thereafter, it is contemplated that any loans by National to the
Affiliate for use as Interim Financing or equity contributions
may be made under the same terms, conditions and limitations
described in the current long-term financing arrangement between
National and certain of its subsidiaries. (see SEC File No. 70-
8541 for the current long-term financing arrangements). These
long-term loans to the Affiliate shall not exceed $210 million in
principal amount at any one time outstanding. All loans by
National to the Affiliate shall not in the aggregate exceed $250
million in principal amount at any one time outstanding.
National, Supply, National Fuel Gas Distribution Corporation,
Seneca Resources Corporation, Utility Constructors, Inc.,
Highland Land & Minerals, Inc., Leidy Hub, Inc., Data-Track
Account Services, Inc., National Fuel Resources, Inc., and
Horizon Energy Development, Inc. request that the Affiliate be
added to the group of subsidiary companies of National which can
make short-term borrowings pursuant to the authorization in File
No. 70-8729(4) for the purpose of (i) financing the development
---------------
4. As appropriate, various financings and extensions of credit,
by, and among, National, Supply, the Affiliate and the subsidiary
companies, and affiliates, of the Affiliate, in the future will,
or may be, exempt from Commission authorization pursuant to Rules
under the Act, as in effect, or as they may be amended from time
-2-
<PAGE>
fee and Affiliate's share of the development costs and (ii)
Construction Financing. National and Affiliate request that to
the extent long-term borrowings are required by Affiliate from
National such borrowings may be provided under the same terms,
conditions and limitations described in the system's current
long-term financing arrangement. (See SEC File No. 70-8541 for
the current long-term financing arrangement).
It is contemplated that National may enter into
guarantee arrangements, obtain letters of credit, and otherwise
provide credit support with respect to obligations of the
Affiliate and one-half of the obligations of the Special Purpose
Entities(5), to third parties as may be needed and appropriate to
enable them to carry on in the ordinary course of their
respective businesses, including as necessary for the
Construction Financing. If Interim Financing is necessary,
National may be required to enter into additional credit support
arrangements with respect to obligations of the Special Purpose
Entities to the extent of the Excess Amount(6). Any credit
support may be made under the same terms, conditions and
limitations described in the current credit support arrangement
between National and its subsidiaries. (See SEC File No. 70-8251
for the current credit support arrangements). The maximum
----------------
4.(...continued)
to time.
5. Any credit support made by National with respect to
obligations of the Special Purpose Entities, except for credit
support obligations in connection with the Excess Amount, will be
accompanied by a similar credit support arrangement in equal
amount from Tennessee or an affiliate thereof.
6. Tennessee will not be responsible for the credit support
arrangements necessary for the Excess Amount, if any.
-3-
<PAGE>
aggregate limit on all credit support by National to the
Affiliate and the Special Purpose Entities will be $175 million
at any one time outstanding, including as necessary for the
Interim Financing and the Construction Financing. National
requests that to the extent Affiliate or the Special Purpose
Entities require credit support from National such credit support
may be made under the same terms, conditions and limitations
described in the current credit support arrangement between
National and its subsidiaries. (See SEC File No. 70-8251 for the
current credit support arrangements)(7). National further
requests that the Affiliate, either by itself or together with
National, be permitted to provide such credit support to the
Special Purpose Entities up to the $175 million limit at any one
time outstanding."
Item 6. Exhibits
The following exhibit is made a part of this
Application-Declaration:
(a) Exhibits
F-1 Opinion of Reid & Priest LLP, Counsel for
National.
F-2 Opinion of Stryker, Tams & Dill LLP, New Jersey
Counsel for National.
---------------
7. As appropriate, various financings and extensions of credit,
by, and among, National, Supply, the Affiliate and the subsidiary
companies, and affiliates, of the Affiliate, in the future will,
or may be, exempt from Commission authorization pursuant to Rules
under the Act, as in effect, or as they may be amended from time
to time.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned companies have duly
caused this amendment to be signed on their behalf by the
undersigned thereunto duly authorized.
NATIONAL FUEL GAS COMPANY NATIONAL FUEL GAS DISTRIBUTION
CORPORATION
By /s/ P.C. Ackerman By /s/ David F. Smith
-------------------------- ---------------------------
Name: P.C. Ackerman Name: David F. Smith
Title: Senior Vice President Title: Senior Vice
President
NATIONAL FUEL GAS SUPPLY SENECA RESOURCES CORPORATION
CORPORATION
By /s/ Richard Hare By /s/ James A. Beck
-------------------------- ---------------------------
Name: Richard Hare Name: James A. Beck
Title: President Title: President
UTILITY CONSTRUCTORS, INC. HIGHLAND LAND & MINERALS, INC.
By /s/ David F. Smith By /s/ P.C. Ackerman
-------------------------- --------------------------
Name: David F. Smith Name: P.C. Ackerman
Title: Secretary Title: President
LEIDY HUB, INC. DATA-TRACK ACCOUNT
SERVICES, INC.
By /s/ Walter E. DeForest By /s/ David F. Smith
-------------------------- ---------------------------
Name: Walter E. DeForest Name: David F. Smith
Title: President Title: Secretary
NATIONAL FUEL RESOURCES, INC. HORIZON ENERGY
DEVELOPMENT, INC.
By /s/ R.J. Tanski By /s/ Bruce H. Hale
-------------------------- ---------------------------
Name: R.J. Tanski Name: Bruce H. Hale
Title: Secretary Title: Vice President
DATED: January 28, 1997
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
F-1 Opinion of Reid & Priest LLP,
Counsel for National.
F-2 Opinion of Stryker, Tams & Dill LLP,
New Jersey Counsel for National.
EXHIBIT F-1
-----------
REID & PRIEST LLP
40 West 57th Street
New York, New York 10019
New York, New York
January 28, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Form U-1 Application-Declaration (File No.70-8963)
National Fuel Gas Company
National Fuel Gas Distribution Corporation
National Fuel Gas Supply Corporation
Seneca Resources Corporation
Utility Constructors, Inc.
Highland Land & Minerals, Inc.
Leidy Hub, Inc.
Data-Track Account Services, Inc.
National Fuel Resources, Inc.
Horizon Energy Development, Inc.
--------------------------------------------------
Ladies and Gentlemen:
This opinion relates to the joint Application-
Declaration, filed on November 15, 1996, as heretofore
amended (as amended, the "Application-Declaration"), by
National Fuel Gas Company ("National"), National Fuel Gas
Distribution Corporation, National Fuel Gas Supply
Corporation ("Supply"), Seneca Resources Corporation,
Utility Constructors, Inc., Highland Land & Minerals, Inc.,
Leidy Hub, Inc., Data-Track Account Services, Inc.,
National Fuel Resources, Inc., and Horizon Energy
Development, Inc. under the Public Utility Holding Company
Act of 1935, as amended. Capitalized terms used but not
defined herein have the respective meanings assigned
thereto in the Application-Declaration.
The Application-Declaration seeks authorization
for the participation by National and Supply in a joint
venture with one or more subsidiaries of Tennessee Gas
Pipeline Company ("Tennessee") to develop, construct,
finance, own and operate certain natural gas gathering and
processing facilities and to engage in certain related
transactions, as more fully described in the Application-
Declaration (the "Project").
Insofar as it relates specifically to National,
the Application-Declaration seeks authorization for the
following transactions (the "Transactions"):
(a) The organization of a direct, wholly-owned
subsidiary of National or, in the
alternative, the purchase by National of all
of the outstanding voting stock of a
corporation to be organized by Tennessee
(such subsidiary or acquired corporation
being hereinafter referred to as the
"National Affiliate"), in either case for
the purpose of investing in the Project;
(b) The organization by the National Affiliate
and an affiliate of Tennessee of one or more
special purpose entities (the "Special
Purpose Entities") to own, manage and
operate the Project, and the acquisition by
the National Affiliate of a 50% equity
interest therein;
(c) The capitalization of the National Affiliate
through debt and equity financing (including
the participation by the National Affiliate
in National's current money pool arrangement
between National and its subsidiaries,
heretofore approved by the Securities and
Exchange Commission in SEC File No. 70-8729)
subject, in the case of debt financing, to
the limitation that the aggregate amount
thereof shall not exceed $250 million at any
one time outstanding, of which no more than
$210 million may be in the form of long-term
loans;
(d) The provision by National of credit support
(including, but not limited to, issuing
guaranties and obtaining, and assuming
reimbursement obligations with respect to,
letters of credit) with respect to
obligations and liabilities incurred by the
National Affiliate or the Special Purpose
Entities to third parties in connection with
the construction, ownership, operation and
financing of the Project, subject to the
limitation that such credit support
facilities shall not exceed in the aggregate
the sum of $175 million at any one time
outstanding.
Based upon the foregoing and subject to the
qualifications and assumptions herein specified, we are of
the opinion that:
1. National is a corporation duly incorporated
and validly existing under the laws of the State of New
Jersey.
2. If (i) the Transactions are approved by the
Board of Directors of National and the National Affiliate,
and consummated in accordance with the order or orders of
the Securities and Exchange Commission (the "Commission")
with respect thereto and, in the case of short-term debt
financing by National of the National Affiliate, the orders
heretofore entered by the Commission in connection with
National's current money pool arrangement (see File No. 70-
8729), (ii) the respective Boards of Directors (or other
governing bodies) of the National Affiliate and the Special
Purpose Entities duly authorize the incurrence of the
obligations and liabilities to be guaranteed or assumed by
National, or with respect to which National will otherwise
provide credit support, (iii) the obligations so incurred
by the National Affiliate and the Special Purpose Entities
are legal, valid, binding and enforceable obligations of those
obligors and have been incurred solely in connection with
the Project, (iv) all debt obligations of the National
Affiliate to National are appropriately documented and
properly reflected on the respective books of the National
Affiliate and National, (v) the capital stock of the
National Affiliate to be issued to National upon the
organization of the National Affiliate is duly authorized
by the Board of Directors of the National Affiliate and
validly issued to National, and the consideration fixed
therefor is duly paid by National, or, if applicable, the
capital stock of the National Affiliate to be purchased by
National has been duly authorized, validly issued, is fully
paid and nonassessable, is duly and validly transferred to
National, and the consideration therefor is duly paid by
National, (vi) the equity interests in the Special Purpose
Entities to be issued to the National Affiliate upon the
organization of the Special Purpose Entities are duly
authorized by all appropriate action and the consideration
prescribed therefor is duly paid by the National Affiliate,
and (vii) all authorizations and approvals from appropriate
governmental and regulatory authorities, if required in
connection with the debt and/or equity investments by
National and the National Affiliate in the Project, are
duly obtained:
A. All state laws applicable to the
Transactions (other than so-called "blue-sky"laws or
similar laws, upon which we do not pass herein) will
have been complied with; and
B. The legal rights of the holders of any
securities heretofore issued by National will not have
been violated.
In rendering the opinions expressed in paragraph
2, we have made the following assumptions and those
opinions are qualified accordingly:
(a) No property or assets of National will be
pledged as security for its obligations
under any debt or credit support instrument
that it may issue in connection with the
Transactions;
(b) The National Affiliate will not own,
directly or indirectly, a majority of the
equity interests in any Special Purpose
Entity;
(c) Any and all indebtedness incurred by
National or the National Affiliate (I) for
the repayment of money borrowed from third
parties or representing deferred obligations
for the payment of the purchase price of
property purchased from a third party, and
(II) which matures by its terms, or is
renewable or extendible at the option of the
obligor to a date, more than one year from
the date of incurrence ("Funded Debt"), will
be in compliance with Sections 6.05 and 6.06
of that certain Indenture, dated as of
October 15, 1974, between National and The
Bank of New York (formerly, Irving Trust
Company), as Trustee, as heretofore
supplemented and amended (as so supplemented
and amended, the "Indenture"); and
(d) Any guaranty or assumption by National of,
and any other credit support provided by
National with respect to, obligations of the
National Affiliate or any of the Special
Purpose Entities representing Funded Debt
will be in compliance with Section 6.05 of
the Indenture.
We are members of the New York Bar and do not
hold ourselves out as experts on the laws of any other
state. Accordingly, in giving this opinion, we have
relied, as to all matters governed by the law of the State
of New Jersey, upon the opinion of Stryker, Tams & Dill
LLP, New Jersey Counsel for National, which is to be filed
as an exhibit to the Application-Declaration.
We hereby consent to the use of this opinion as
an exhibit to the Application-Declaration.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
EXHIBIT F-2
-----------
STRYKER, TAMS & DILL LLP
TWO PENN PLAZA EAST
NEWARK, NJ 07105
_________
(201) 491-9500
January 28, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: National Fuel Gas Company
National Fuel Gas Supply Corporation
National Fuel Gas Distribution Corporation
Seneca Resources Corporation
Utility Constructors, Inc.
Highland Land & Minerals, Inc.
Leidy Hub, Inc.
Data-Track Account Services, Inc.
National Fuel Resources, Inc.
Horizon Energy Development, Inc.
Application-Declaration on Form U-1
File No. 70-8963
------------------------------------------
Ladies and Gentlemen:
This opinion relates to the joint application-
declaration, filed on or about November 15, 1996, as thereafter
amended (as amended, the "Application-Declaration"), by National
Fuel Gas Company ("National") and each of the above-referenced,
wholly-owned subsidiaries of National under the Public Utility
Holding Company Act of 1935, as amended. Capitalized terms used
but not defined herein have the meanings assigned thereto in the
Application-Declaration.
The Application-Declaration seeks authorization for the
participation by National and National Fuel Gas Supply
Corporation in a joint venture with one or more subsidiaries of
Tennessee Gas Pipeline Company ("Tennessee") to develop,
construct, finance, own and operate certain natural gas gathering
and processing facilities and to engage in certain related
transactions, as more fully described in the Application-
Declaration (the "Project").
Insofar as it relates specifically to National, the
Application-Declaration seeks authorization for the following
transactions (the "Transactions"):
(i) The organization of a direct, wholly-owned
subsidiary of National or, in the alternative, the purchase by
National of all of the outstanding voting stock of a corporation
to be organized by Tennessee (such subsidiary or acquired
corporation being hereinafter referred to as the "National
Affiliate"), in either case for the purpose of investing in the
Project;
(ii) The organization by the National Affiliate and an
affiliate of Tennessee of one or more special purpose entities
(the "Special Purpose Entities") to own, manage and operate the
Project, and the acquisition by the National Affiliate of a 50%
equity interest therein;
(iii) The capitalization of the National Affiliate
through debt and equity financing (including, in the case of debt
financing, the participation by the National Affiliate in
National's current money pool arrangement, heretofore approved by
the Securities and Exchange Commission in SEC File No. 70-8729),
subject, in the case of debt financing, to the limitation that
the aggregate amount thereof shall not exceed $250 million at any
one time outstanding, of which no more than $210 million may be
in the form of long-term loans; and
(iv) The provision by National of credit support
(including, but not limited to, issuing guaranties and obtaining,
and assuming reimbursement obligations with respect to, letters
of credit) with respect to obligations and liabilities incurred
by the National Affiliate or the Special Purpose Entities to
third parties in connection with the construction, ownership,
operation and financing of the Project, subject to the limitation
that such credit support facilities shall not exceed in the
aggregate the sum of $175 million at any one time outstanding.
Based upon the foregoing and subject to the
qualifications and assumptions hereinafter set forth, we are of
the opinion that:
1. National is a corporation duly incorporated and
validly existing under the laws of the State of New Jersey.
2. If (i) the Transactions are approved by the Boards
of Directors of National and the National Affiliate, and
consummated in accordance with the order or orders of the
Securities and Exchange Commission (the "Commission") thereon
and, in the case of short-term debt financing by National of the
National Affiliate, the orders heretofore entered by the
Commission in connection with National's current money pool
arrangement, (ii) the respective Boards of Directors (or other
governing bodies) of the National Affiliate and the Special
Purpose Entities duly authorize the incurrence of the obligations
and liabilities to be guaranteed or assumed by National, or with
respect to which National will otherwise provide credit support,
(iii) the obligations so incurred by the National Affiliate and
the Special Purpose Entities are legal, valid, binding and
enforceable obligations of those obligors and have been incurred
solely in connection with the Project, (iv) all debt obligations
of the National Affiliate to National are appropriately
documented and properly reflected on the respective books of the
National Affiliate and National, (v) the capital stock of the
National Affiliate to be issued to National upon the organization
of the National Affiliate is duly authorized by the Board of
Directors of the National Affiliate and validly issued to
National and the consideration fixed therefor is duly paid by
National, or, if applicable, the capital stock of the National
Affiliate to be purchased by National has been duly authorized,
validly issued, fully paid and nonassessable, is duly and validly
transferred to National, and the consideration therefor is duly
paid by National, (vi) the equity interests in the Special
Purpose Entities to be issued to the National Affiliate upon the
organization of the Special Purpose Entities are duly authorized
by all appropriate action and the consideration prescribed
therefor is duly paid by the National Affiliate, and (vii) all
authorizations and approvals from appropriate governmental and
regulatory authorities, if required in connection with the debt
and/or equity investments by National and the National Affiliate
in the Project are duly obtained.
A. All laws of the State of New Jersey applicable to
the Transactions will have been complied with;
B. Upon the due execution and delivery by National of
appropriate credit support instruments, the obligations incurred
by National thereunder, insofar as New Jersey law is applicable,
will be duly authorized and within the power and authority of
National and, to that extent, will be valid and binding
obligations of National;
C. Insofar as New Jersey law is applicable, National
will legally acquire (i) the capital stock of the National
Affiliate either issued to National upon the organization of the
National Affiliate or acquired by National by purchase from the
original equity owner of the National Affiliate, and (ii) the
debt obligations of the National Affiliate owing to National in
connection with debt financings (including, without limitation,
obligations evidencing borrowings by the National Affiliate under
National's money pool arrangement which, by the terms of that
arrangement, are owing to National); and
D. The legal rights of the holders of any securities
heretofore issued by National will not have been violated.
In rendering the opinions expressed in paragraph 2, we
have made the following assumptions and those opinions are
qualified accordingly:
(a) No property or assets of National will be pledged
as security for its obligations under any debt or credit support
instrument that it may issue in connection with the Transactions;
(b) The National Affiliate will not own, directly or
indirectly, a majority of the equity interests in any Special
Purpose Entity;
(c) Any and all indebtedness incurred by National or
the National Affiliate (I) for the repayment or money borrowed
from third parties or representing deferred obligations for the
payment of the purchase price of property purchased from a third
party, and (II) which matures by its terms, or is renewable or
extendible at the option of the obligor to a date, more than one
year from the date of incurrence ("Funded Debt"), will be in
compliance with Sections 6.05 and 6.06 of that certain Indenture,
dated as of October 15, 1974, between National and The Bank of
New York (formerly, Irving Trust Company), as Trustee, as
heretofore supplemented and amended (so supplemented and amended,
the "Indenture"); and
(d) Any guaranty or assumption by National of, and any
other credit support provided by National with respect to,
obligations of the National Affiliate or any of the Special
Purpose Entities representing Funded Debt will be in compliance
with Section 6.05 of the Indenture.
A copy of this opinion is being delivered to Reid &
Priest LLP who, in its opinion to you of even date herewith, is
entitled to rely upon the opinions expressed herein concerning
matters of New Jersey law to the same extent as if this opinion
had been addressed to it.
We consent to the use of this opinion as an exhibit to
the Application-Declaration.
Very truly yours,
/s/ Stryker, Tams & Dill LLP
STRYKER, TAMS & DILL LLP
