UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) -
April 29, 1998
NATIONAL FUEL GAS COMPANY
(Exact name of registrant in its charter)
New Jersey 1-3880 13-1086010
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) No.)
10 Lafayette Square, Buffalo, New York 14203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 857-6980
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) No financial statements are filed herewith.
(b) No pro forma financial information is filed herewith.
(c) Exhibits
99 - News Release of the Company dated April 29, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NATIONAL FUEL GAS COMPANY
(Registrant)
/s/ Joseph P. Pawlowski
-------------------------
Joseph P. Pawlowski
Treasurer and Principal
Accounting Officer
Date: May 1, 1998
-----------
Exhibit 99
Immediate April 29, 1998
NATIONAL FUEL REPORTS
SECOND QUARTER RESULTS
Buffalo, New York: National Fuel Gas Company (National Fuel) (NYSE:NFG) today
reported earnings, exclusive of a special oil and gas item, of $57.8 million, or
$1.51 per share for the second quarter of fiscal 1998 ended March 31, 1998. This
compares with earnings of $57.1 million, or $1.50 per share for the second
quarter of fiscal 1997. Including the non-cash special item, National Fuel had a
loss of $21.3 million, or $0.56 per share. The special item is a $79.1 million
(after-tax) non-cash impairment of Seneca Resources Corporation's (Seneca) (a
wholly-owned subsidiary of National Fuel) oil and gas assets. This quarter's
earnings also reflect $5.0 million of after-tax income from the settlement of
the primary issues relating to IRS audits of years 1977 - 1994.
Earnings for the first six months of fiscal 1998, exclusive of the
non-cash impairment of Seneca's oil and gas assets and the non-cash cumulative
effect of a change in accounting, were $95.4 million, or $2.50 per share. This
compares with earnings of $95.7 million, or $2.52 per share for the first six
months of fiscal 1997. Including the non-cash special items, earnings for the
first six months of fiscal 1998 were $7.2 million, or $0.19 per share. The
accounting change was a change in depletion methods for Seneca's oil and gas
assets, which had a $9.1 million (after-tax) non-cash cumulative effect through
October 1, 1997.
DISCUSSION OF ASSET IMPAIRMENT AND CUMULATIVE EFFECT OF A CHANGE IN DEPLETION
METHOD
Seneca follows the full-cost method of accounting for its oil and gas
operations. Under this method, capitalized costs are limited by a present worth
calculation of future revenues from oil and gas assets (full-cost ceiling). The
surplus of crude oil world-wide has caused oil prices to drop to their lowest
level in recent years, and gas prices have been negatively impacted by a warmer
than normal winter influenced by "El Nino." As a result of these lower prices, a
non-cash asset impairment of $129 million (pre-tax) was recorded as of March 31,
1998.
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<PAGE>
Page 2
Seneca has changed its method of depletion for oil and gas properties
from the gross revenue method to the units of production method. The new method
was adopted because it provides a better measure of depletion expense and is the
preferable method used by oil and gas producing companies. Seneca's recent
acquisition activities will increase its scope of operations in relation to
National Fuel's operations1,2,3 making now the right time for the change in
depletion methods. The units of production method has been applied retroactively
to prior years to determine the $9.1 million, net of income tax, cumulative
effect as of October 1, 1997. Depletion of oil and gas properties for the
quarter and six months ended March 31, 1998, has been computed under the newly
adopted units of production method. Since Seneca changed its method of depletion
for its oil and gas producing properties in the second quarter of its fiscal
year, the first quarter financial results of National Fuel have been restated
and are included on page 7 of this release.
DISCUSSION OF SECOND QUARTER EARNINGS
Bernard J. Kennedy, Chairman, President and Chief Executive Officer,
remarked: "The non-cash write-down of Seneca's oil and gas assets is just that,
a non-cash event. The oil and gas reserves are still in the ground, they will be
produced and sold in the market place for cash in the future.1,2 Excluding the
non-cash write-down, earnings for the quarter were up from last year in spite of
the warmer than normal weather served up by Mother Nature and her son, El Nino,
and its impact on sales volumes and prices. Our diversification effort in recent
years along with the strong performance of our management team and workforce has
made this positive performance possible."
The increase in earnings for the quarter (exclusive of the asset
impairment noted above) as compared with the prior year's quarter resulted from
higher earnings in the Exploration and Production, International, and Pipeline
and Storage segments offset in part by lower earnings in the Utility segment.
In the Exploration and Production segment, earnings are up (exclusive
of the asset impairment noted above) due to Seneca's portion of interest income
related to the previously mentioned recent settlement of IRS audits. Partly
offsetting this increase was lower income from operations mainly because of
lower production and prices of both oil and gas. Details of production and
prices can be found on page 9 of this release. The expected decline in
production of West Cameron 552 and delays in drilling due to rig unavailability
are the major causes of the production decline.
- more -
<PAGE>
Page 3
During the quarter, Seneca announced the acquisition of the oil and gas
assets of the Whittier Trust, as well as the signing of a definitive purchase
agreement for the tender offer on the outstanding shares of HarCor Energy, Inc.
Additionally, Seneca announced its intention to acquire the assets of the
Bakersfield Energy Group. Combined, these three acquisitions will cost
approximately $260.5 million, including the assumption of debt.1,3 Seneca's
proved reserves will then total 68.2 million barrels of oil, and 301 billion
cubic feet of natural gas.1,3
The International segment has experienced increases from Horizon Energy
Development, Inc.'s (Horizon) share of earnings from its two main investments in
district heating and power generation operations located in the Czech Republic.
Horizon initially invested in Serveroceske Teplarny, a.s. (SCT) in April 1997,
and owned a 75.2% interest at March 31, 1998 (Horizon's ownership interest
increased to 82.6% in April 1998, upon completion of a tender offer). More
recently, in January 1998, Horizon invested in Prvni severozapadni teplarenska,
a.s. (PSZT), and owns a 75.3% interest at March 31, 1998.
In the Pipeline and Storage segment, earnings are up due to National
Fuel Gas Supply Corporation's (Supply Corporation) portion of interest income
related to the previously mentioned recent settlement of IRS audits. Additional
income taxes related to certain unsettled issues were also recorded. Mostly
offsetting the net increase related to the IRS audits was lower revenue from
unbundled pipeline sales and open access transportation and reserves established
for preliminary costs incurred to date related to proposed pipeline projects.
Certain of these costs for which reserves were established may be recovered at a
future date.
In the Utility segment, earnings are down from the prior year's mainly
because of the impact of warmer weather in the Pennsylvania jurisdiction and the
consequent overall lower usage per account. In addition, the Utility segment
incurred interest expense, net of related rate recovery, related to the
previously referred to recent settlement of IRS audits.
Kennedy added: "We are very optimistic about our long-term earnings
growth potential in both our Exploration and Production and International
segments where we have been busy with acquisitions.1,2,3,4 The California oil
and gas acquisitions significantly enhance the long-term growth potential of
Seneca by more than doubling its reserve base to 710 billion cubic feet
equivalent.1,2,3 In the Czech Republic, we have acquired a majority interest in
two companies that produce electric power and steam heat within the northern
Bohemia region. This should provide us with both significant synergistic and
other growth opportunities.1,4 In addition, in the Pipeline and Storage segment,
the Independence Pipeline partnership recently announced that it executed and
filed with the Federal Energy
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<PAGE>
Page 4
Regulatory Commission a precedent agreement with a new shipper for 99,000
dekatherms of gas per day. This brings the level of capacity subscribed on the
Independence Pipeline to just over 68%."
DISCUSSION OF SIX-MONTH RESULTS
The slight decrease in earnings for the six months ended March 31, 1998
(exclusive of the two special oil and gas items noted above) as compared with
the prior year reflects lower earning of the Utility and the Exploration and
Production segments, mostly offset by higher earnings in the International and
Pipeline and Storage segments. Both the Utility and Exploration and Production
segments were negatively impacted by warmer than normal weather, which reduced
demand and prices. The International segment's earnings increased because of its
share of earnings from its investments in the Czech Republic. In addition, the
December 1996 quarter included non-recurring significant expenses associated
with the dissolution of Sceptre Power Company. As noted in the quarter
discussion above, the impacts of the settlement of the primary issues relating
to IRS audits contributed to higher earnings in the Pipeline and Storage segment
and partially offset the decreased earnings in the Exploration and Production
segment, while reducing the earnings of the Utility segment.
National Fuel is an integrated natural gas company with $2.7
billion in assets. Its principal subsidiaries are National Fuel Gas Distribution
Corporation, a public utility serving over 731,000 customers in western New York
and northwestern Pennsylvania, National Fuel Gas Supply Corporation, which owns
and operates a 3,171 mile gas pipeline network extending from southwestern
Pennsylvania to the New York-Canadian border at Niagara Falls, Seneca Resources
Corporation, an exploration and production company headquartered in Houston,
Texas, and active in the Gulf Coast region of Texas and Louisiana, California
and the Appalachian region, and Horizon Energy Development, Inc. a company that
invests in international energy operations with its primary focus currently in
the Czech Republic.
- ------------------------
1 This statement is a forward-looking statement as defined by the Private
Securities Litigation Reform Act of 1995. While National Fuel's expectations,
beliefs and projections are expressed in good faith and are believed to have a
reasonable basis, actual results may differ materially. Furthermore, such
statement speaks only as of the date on which it is made, and National Fuel
undertakes no obligation to update the statement to reflect events or
circumstances after the date on which it is made or to reflect the occurrence of
unanticipated events.
- more -
<PAGE>
Page 5
- ------------------------
2 See Note 1. In addition to other factors, the following are important factors
that could cause actual results to differ materially: Competitive conditions,
availability and/or price of natural gas and oil, ability to produce gas and
oil, availability and/or price of derivative financial instruments, inability of
counterparties to meet their obligations with respect to derivative financial
instruments and changes in accounting principles and/or the application of such
principles to National Fuel.
3 See Note 1. In addition to other factors, the following are important factors
that could cause actual results to differ materially: The outcome of the tender
offer for HarCor Energy, Inc. (HarCor), the results of due diligence
investigations, and any material changes in HarCor prior to closing, the timing
and extent of changes in commodity prices, and the timing and extent of success
in discovery, developing and producing oil and gas reserves.
4 See Note 1. In addition to other factors, the following are important factors
that could cause actual results to differ materially: Past and future actions of
PSZT and SCT, changes in economic conditions and competitive conditions
affecting those entities, and governmental/regulatory initiatives and actions.
- 30 -
<PAGE>
Page 6
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Unaudited)
(Thousands of Dollars, except per share amounts)
Three Months Ended Six Months Ended
March 31, March 31,
-------------------- --------------------
SUMMARY OF OPERATIONS 1998 1997 1998 1997
- --------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Operating Revenues $ 462,648 $ 498,704 $ 833,669 $ 862,196
Operating Expenses:
Purchased Gas 188,874 251,573 353,141 415,664
Operation Expense and Maintenance 113,267 77,345 189,461 151,239
Property, Franchise and Other Taxes 30,680 35,676 54,891 60,233
Depreciation, Depletion and Amortization 26,798 29,096 57,918 55,685
Impairment of Oil and Gas Producing
Properties 128,996 - 128,996 -
Income Taxes - Current 40,505 36,731 62,100 53,463
- Deferred (50,244) (2,529) (48,890) 2,948
---------- ---------- ---------- ----------
478,876 427,892 797,617 739,232
---------- ---------- ---------- ----------
Operating Income (Loss) (16,228) 70,812 36,052 122,964
Other Income 25,594 584 26,762 1,322
---------- ---------- ---------- ----------
Income Before Interest Charges and Minority
Interest in Foreign Subsidiaries 9,366 71,396 62,814 124,286
Interest Charges 28,226 14,287 43,713 28,587
Minority Interest in Foreign Subsidiaries (2,402) - (2,829) -
---------- ---------- ---------- ----------
Income (Loss) Before Cumulative Effect (21,262) 57,109 16,272 95,699
Cumulative Effect of Change in Accounting for
Depletion - - (9,116) -
---------- ---------- ---------- ----------
Net Income (Loss) Available for Common Stock $ (21,262) $ 57,109 $ 7,156 $ 95,699
========== ========== ========== ==========
Basic Earnings Per Common Share:
Income (Loss) Before Cumulative Effect $ (0.56) $ 1.50 $ 0.43 $ 2.52
Cumulative Effect of Change in Accounting
for Depletion - - (0.24) -
---------- ---------- ---------- ----------
Net Income (Loss) Available for Common
Stock $ (0.56) $ 1.50 $ 0.19 $ 2.52
========== ========== ========== ==========
Diluted Earnings per Common Share:
Income Before Cumulative Effect N/A $ 1.48 $ 0.42 $ 2.49
Cumulative Effect of Change in Accounting
for Depletion - - (0.24) -
---------- ---------- ---------- ----------
Net Income Available for Common Stock N/A $ 1.48 $ 0.18 $ 2.49
========== ========== ========== ==========
Weighted Average Common Shares:
Used in Basic Calculation 38,263,632 38,090,435 38,230,331 38,020,555
========== ========== ========== ==========
Used in Diluted Calculation N/A 38,463,700 38,673,312 38,369,701
========== ========== ========== ==========
Pro Forma Amounts*
Net Income (Loss) Available for Common
Stock $ (21,262) $ 57,637 $ 16,272 $ 95,597
========== ========== ========== ==========
Earnings (Loss) per Common Share:
Basic $ (0.56) $ 1.51 $ 0.43 $ 2.51
========== ========== ========== ==========
Diluted N/A $ 1.50 $ 0.42 $ 2.49
========== ========== ========== ==========
</TABLE>
N/A - Not applicable due to antidilution.
* Assumes retroactive application of new depletion method to provide
comparability of periods presented.
<PAGE>
Page 7
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Unaudited)
(Thousands of Dollars, except per share amounts)
Three Months Ended
December 31,
SUMMARY OF OPERATIONS 1997* 1996
- --------------------- ---------- -----------
Operating Revenues $ 371,021 $ 363,492
Operating Expenses:
Purchased Gas 164,267 164,091
Operation Expense and Maintenance 76,194 73,894
Property, Franchise and Other Taxes 24,210 24,556
Depreciation, Depletion and Amortization 31,120 26,589
Income Taxes - Current 21,595 16,732
- Deferred 1,355 5,477
---------- -----------
318,741 311,339
---------- -----------
Operating Income 52,280 52,153
Other Income 1,168 737
---------- -----------
Income Before Interest Charges and Minority
Interest in Foreign Subsidiaries 53,448 52,890
Interest Charges 15,487 14,300
Minority Interest in Foreign Subsidiaries (427) -
---------- -----------
Income Before Cumulative Effect 37,534 38,590
Cumulative Effect of Change in Accounting
for Depletion (9,116) -
---------- -----------
Net Income Available for Common Stock $ 28,418 $ 38,590
========== ===========
Basic Earnings Per Common Share:
Income Before Cumulative Effect $ 0.98 $ 1.02
Cumulative Effect of Change in Accounting
for Depletion (0.24) -
---------- ----------
Net Income Available for Common Stock $ 0.74 $ 1.02
========== ==========
Diluted Earnings per Common Share:
Income Before Cumulative Effect $ 0.97 $ 1.01
Cumulative Effect of Change in Accounting
for Depletion (0.24) -
---------- ----------
Net Income Available for Common Stock $ 0.73 $ 1.01
========== ==========
Weighted Average Common Shares:
Used in Basic Calculation 38,197,757 37,952,194
========== ==========
Used in Diluted Calculation 38,630,484 38,277,745
========== ==========
Pro Forma Amounts**
Net Income Available for Common Stock $ 37,534 $ 37,960
========== ==========
Earnings per Common Share:
Basic $ 0.98 $ 1.00
========== ==========
Diluted $ 0.97 $ 0.99
========== ==========
* Restated to reflect cumulative effect in the change in accounting for
depletion in the first quarter of fiscal 1998.
** Assumes retroactive application of new depletion method to provide
comparability of periods presented.
<PAGE>
Page 8
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION
-------------------
(Thousands of Dollars)
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------------------- -------------------------------
Increase Increase
1998 1997 (Decrease) 1998 1997 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
--------- --------- ---------- ---------- --------- ---------
Operating Revenues:
- ------------------
Utility $ 342,370 $ 417,961 $ (75,591) $ 633,211 $ 715,580 $ (82,369)
Pipeline and Storage 42,332 43,661 (1,329) 88,189 88,155 34
Exploration and
Production 24,819 32,297 (7,478) 49,528 62,379 (12,851)
International 42,558 796 41,762 54,147 1,524 52,623
Other Nonregulated 37,149 35,794 1,355 61,326 51,540 9,786
--------- --------- --------- ---------- --------- ---------
489,228 530,509 (41,281) 886,401 919,178 (32,777)
--------- --------- --------- ---------- --------- ---------
Intersegment Revenues (26,580) (31,805) 5,225 (52,732) (56,982) 4,250
--------- --------- --------- ---------- --------- ---------
$ 462,648 $ 498,704 $ (36,056) $ 833,669 $ 862,196 $ (28,527)
========= ========= ========= ========== ========= =========
Operating Income (Loss)
Before Income Taxes:
- ---------------------
Utility $ 72,378 $ 73,299 $ (921) $ 119,854 $ 119,023 $ 831
Pipeline and Storage 14,166 18,320 (4,154) 37,016 37,783 (767)
Exploration and
Production(1) (119,815) 11,870 (131,685) (116,368) 24,446 (140,814)
International 6,024 1,504 4,520 6,909 (1,587) 8,496
Other Nonregulated 1,870 790 1,080 2,943 1,189 1,754
Corporate (590) (769) 179 (1,092) (1,479) 387
--------- --------- --------- ---------- --------- ---------
$ (25,967) $ 105,014 $(130,981) $ 49,262 $ 179,375 $(130,113)
========= ========= ========= ========== ========= =========
Depreciation, Depletion
and Amortization:
- ------------------
Utility $ 8,650 $ 8,282 $ 368 $ 17,300 $ 16,565 $ 735
Pipeline and Storage 5,557 5,453 104 11,148 10,843 305
Exploration and
Production(2) 9,121 13,585 (4,464) 23,926 25,155 (1,229)
International 2,067 67 2,000 2,616 75 2,541
Other Nonregulated 1,402 1,708 (306) 2,926 3,045 (119)
Corporate 1 1 - 2 2 -
---------- --------- --------- ---------- --------- ---------
$ 26,798 $ 29,096 $ (2,298) $ 57,918 $ 55,685 $ 2,233
========== ========= ========= ========== ========= =========
Capital Expenditures:
- --------------------
Utility $ 11,585 $ 14,126 $ (2,541) $ 25,190 $ 30,291 $ (5,101)
Pipeline and Storage 5,582 4,449 1,133 9,633 6,678 2,955
Exploration and
Production 159,484 29,751 129,733 179,428 45,781 133,647
International 4,143 37 4,106 5,192 241 4,951
Other Nonregulated 1,118 12,319 (11,201) 1,447 12,386 (10,939)
---------- --------- --------- ---------- --------- ---------
$ 181,912 $ 60,682 $ 121,230 $ 220,890 $ 95,377 $ 125,513
========== ========= ========= ========== ========= =========
</TABLE>
(1) Includes noncash impairment charge of $128,996,000.
(2) Effective October 1, 1997, the Exploration & Production segment changed
its method of depletion for its oil and gas operations from the Gross
Revenue method to the Unit of Production method. Fiscal 1998 depletion
was determined under the newly adopted Unit of Production method, while
fiscal 1997 depletion was determined under the Gross Revenue method. Had
1997 depletion been determined under the Unit of Production method,
depletion for the three and six months ended March 31, 1997 would have
been $860,000 lower and $167,000 higher, respectively, than the amounts
shown.
<PAGE>
Page 9
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
--------------------------------------
Three Months Ended Six Months Ended
March 31, March 31,
-------------------------- ---------------------------
Increase Increase
1998 1997 (Decrease) 1998 1997 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
------ ------- --------- ------ ------ ---------
Gas Production/Prices:
- ---------------------
Production (MMcf)
Gulf Coast 5,860 7,719 (1,859) 12,701 15,520 (2,819)
West Coast 157 337 (180) 412 551 (139)
Appalachia 1,276 1,293 (17) 2,484 2,574 (90)
------ ------ ------ ------ ------ ------
7,293 9,349 (2,056) 15,597 18,645 (3,048)
Weighted Average Prices (Per Mcf)
Gulf Coast $ 2.27 $ 2.96 $(0.69) $ 2.68 $ 2.95 $(0.27)
West Coast 1.69 2.18 (0.49) 2.13 1.96 0.17
Appalachia 3.10 3.97 (0.87) 3.06 3.22 (0.16)
Average 2.40 3.07 (0.67) 2.73 2.95 (0.22)
Average after Hedging 2.38 2.46 (0.08) 2.21 2.30 (0.09)
Oil Production/Prices:
- ---------------------
Production (Thousands of Barrels)
Gulf Coast 296 362 (66) 610 746 (136)
West Coast 80 124 (44) 194 250 (56)
Appalachia 2 3 (1) 5 5 -
------ ------ ------ ------ ------ ------
378 489 (111) 809 1,001 (192)
====== ====== ====== ====== ====== ======
Weighted Average Prices (Per Barrel)
Gulf Coast $14.83 $22.44 $(7.61) $16.98 $23.39 $(6.41)
West Coast 11.81 19.97 (8.16) 14.20 20.41 (6.21)
Appalachia 15.80 23.16 (7.36) 17.93 23.05 (5.12)
Average 14.19 21.82 (7.63) 16.32 22.64 (6.32)
Average after Hedging 15.98 18.32 (2.34) 16.62 18.84 (2.22)
</TABLE>
<PAGE>
Page 10
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SYSTEM NATURAL GAS VOLUMES
--------------------------
(millions of cubic feet - MMcf)
Three Months Ended Six Months Ended
March 31, March 31,
--------------------------- ---------------------------
Increase Increase
1998 1997 (Decrease) 1998 1997 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
------- ------- ------- ------- ------- -------
Utility Gas Sales
Residential 31,221 37,720 (6,499) 56,010 63,524 (7,514)
Commercial 7,273 10,153 (2,880) 13,187 16,989 (3,802)
Industrial 1,227 1,725 (498) 2,469 3,023 (554)
Off-System 6,470 4,381 2,089 10,948 8,428 2,520
------- ------- ------- ------- ------- -------
46,191 53,979 (7,788) 82,614 91,964 (9,350)
------- ------- ------- ------- ------- -------
Non-Utility Gas Sales
Production (in equivalent
MMcf) 9,563 12,284 (2,721) 20,453 24,652 (4,199)
------- ------- ------- ------- ------- -------
Total Gas Sales 55,754 66,263 (10,509) 103,067 116,616 (13,549)
------- ------- ------- ------- ------- -------
Transportation
Utility Operation 20,682 19,149 1,533 35,332 33,036 2,296
Pipeline and Storage 101,490 109,093 (7,603) 195,893 195,093 800
Nonregulated - 60 (60) 276 60 216
------- ------- ------- ------- ------- -------
122,172 128,302 (6,130) 231,501 228,189 3,312
------- ------- ------- ------- ------- -------
Marketing Volumes 9,339 7,304 2,035 14,520 11,820 2,700
------- ------- ------- ------- ------- -------
Less Inter and Intrasegment Volumes:
Transportation 58,351 66,982 (8,631) 102,743 110,665 (7,922)
Production 1,064 1,038 26 2,058 2,154 (96)
------- ------- ------- ------- ------- -------
59,415 68,020 (8,605) 104,801 112,819 (8,018)
------- ------- ------- ------- ------- -------
Total System Natural Gas Volume 127,850 133,849 (5,999) 244,287 243,806 481
======= ======= ======= ======= ======= =======
</TABLE>
DEGREE DAYS
-----------
Percent Colder
(Warmer) Than:
Three Months Ended March 31 Normal 1998 1997 Normal Last Year
- --------------------------- ------ ---- ---- ------ ---------
Buffalo, NY 3,344 2,785 3,194 (16.7) (12.8)
Erie, PA 3,198 2,547 2,996 (20.4) (15.0)
Six Months Ended March 31
- -------------------------
Buffalo, NY 5,606 5,079 5,450 (9.4) (6.8)
Erie, PA 5,243 4,643 5,123 (11.4) (9.4)
<PAGE>
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Unaudited)
Quarter Ended March 31 1998 1997
- ---------------------- -------------- --------------
Operating Revenues $ 462,648,000 $ 498,704,000
============== ==============
Net Income (Loss) Available for Common Stock $ (21,262,000) $ 57,109,000
============== ==============
Earnings (Loss) Per Common Share:
Basic $ (0.56) $ 1.50
============== ==============
Diluted N/A 1.48
============== ==============
Weighted Average Common Shares:
Used in Basic Calculation 38,263,632 38,090,435
=============== ==============
Used in Diluted Calculation N/A 38,463,700
=============== ==============
Six Months Ended March 31
- -------------------------
Operating Revenues $ 833,669,000 $ 862,196,000
============== ==============
Income Before Cumulative Effect $ 16,272,000 $ 95,699,000
Cumulative Effect of Change in Accounting
for Depletion (9,116,000) -
-------------- --------------
Net Income Available for Common Stock $ 7,156,000 $ 95,699,000
============== ==============
Basic Earnings (Loss) Per Common Share:
Income Before Cumulative Effect $ 0.43 $ 2.52
Cumulative Effect of Change in Accounting
for Depletion (0.24) -
-------------- --------------
Net Income Available for Common Stock $ 0.19 $ 2.52
============== ==============
Diluted Earnings (Loss) Per Common Share:
Income Before Cumulative Effect $ 0.42 $ 2.49
Cumulative Effect of Change in Accounting
for Depletion (0.24) -
-------------- --------------
Net Income Available for Common Stock $ 0.18 $ 2.49
============== ==============
Weighted Average Common Shares:
Used in Basic Calculation 38,230,331 38,020,555
============== ==============
Used in Diluted Calculation 38,673,312 38,369,701
============== ==============
Twelve Months Ended March 31
Operating Revenues $1,237,284,000 $1,261,509,000
============== ==============
Income Before Cumulative Effect $ 35,261,000 $ 112,287,000
Cumulative Effect of Change in Accounting
for Depletion (9,116,000) -
-------------- --------------
Net Income Available for Common Stock $ 26,145,000 $ 112,287,000
============== ==============
Basic Earnings (Loss) Per Common Share:
Income Before Cumulative Effect $ 0.92 $ 2.96
Cumulative Effect of Change in Accounting
for Depletion (0.24) -
-------------- --------------
Net Income Available for Common Stock $ 0.68 $ 2.96
============== ==============
Diluted Earnings (Loss) Per Common Share:
Income Before Cumulative Effect $ 0.91 $ 2.94
Cumulative Effect of Change in Accounting
for Depletion (0.24) -
-------------- --------------
Net Income Available for Common Stock $ 0.67 $ 2.94
============== ==============
Weighted Average Common Shares:
Used in Basic Calculation 38,188,112 37,875,142
============== ==============
Used in Diluted Calculation 38,591,405 38,172,308
============== ==============
N/A - Not applicable due to antidilution.
