Jeffrey SchaugerGENERAL MANAGER

INTERSTATE MARKETING

NATIONAL FUEL GAS SUPPLY CORPORATION

National Fuel Gas Supply Corporation Empire Pipeline, Inc.

Marcellus Shale: Changing Gas Supply Dynamics and Pipeline Infrastructure

A Pipeline & Storage Perspective

Safe Harbor for Safe Harbor for Forward Looking StatementsForward Looking Statements

This presentation may contain “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995, including statements regarding future prospects, plans, performance and capital structure, anticipated capital expenditures and completion of construction projects, as well as statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may,” and similar expressions. 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 results referred to in the forward-looking statements: changes in economic conditions, including economic disruptions caused by terrorist activities, acts of war or major accidents, and downturns in economic activity including national or regional recessions; changes in demographic patterns and weather conditions, including the occurrence of severe weather such as hurricanes; changes in the availability and/or price of natural gas or oil and the effect of such changes on the accounting treatment of derivative financial instruments or the valuation of the Company’s natural gas and oil reserves; uncertainty of oil and gas reserve estimates; ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including shortages, delays or unavailability of equipment and services required in drilling operations; significant changes from expectations in the Company’s actual production levels for natural gas or oil; changes in the availability and/or price of derivative financial instruments; changes in the price differentials between various types of oil; inability to obtain new customers or retain existing ones; significant changes in competitive factors affecting the Company; changes in laws and regulations to which the Company is subject, including changes in tax, environmental, safety and employment laws and regulations; governmental/regulatory actions, initiatives and proceedings, including those involving acquisitions, financings, rate cases (which address, among other things, allowed rates of return, rate design and retained gas), affiliate relationships, industry structure, franchise renewal, and environmental/safety requirements; unanticipated impacts of restructuring initiatives in the natural gas and electric industries; significant changes from expectations in actual capital expenditures and operating expenses and unanticipated project delays or changes in project costs or plans; the nature and projected profitability of pending and potential projects and other investments, and the ability to obtain necessary governmental approvals and permits; occurrences affecting the Company’s ability to obtain funds from operations, from borrowings under our credit lines or other credit facilities or from issuances of other short-term notes or debt or equity securities to finance needed capital expenditures and other investments, including any downgrades in the Company’s credit ratings; ability to successfully identify and finance acquisitions or other investments and ability to operate and integrate existing and any subsequently acquired business or properties; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; changes in the market price of timber and the impact such changes might have on the types and quantity of timber harvested by the Company; significant changes in tax rates or policies or in rates of inflation or interest; significant changes in the Company’s relationship with its employees or contractors and the potential adverse effects if labor disputes, grievances or shortages were to occur; changes in accounting principles or the application of such principles to the Company; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; changes in actuarial assumptions and the return on assets with respect to the Company’s retirement plan and post-retirement benefit plans; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide post-retirement benefits; or increasing costs of insurance, changes in coverage and the ability to obtain insurance.

For a discussion of these risks and other factors that could cause actual results to differ materially from results referred to in the forward-looking statements, see “Risk Factors” in the Company’s Form 10-K for the fiscal year ended September 30, 2009 and and the Company’s Form 10-Q for the quarter ended December 31, 2009. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

National Fuel Gas CompanyNational Fuel Gas CompanyPrincipal BusinessesPrincipal Businesses

E&P

Seneca Resources Corporation

National Fuel Gas Company

Timber

Highland Forest

Resources, Inc. and NE Division of

Seneca Resources

Corp.

Energy Mktg

National Fuel

Resources, Inc.

Utility

National Fuel Gas

Distribution Corporation

P&S

National Fuel Gas Supply

Corporation &

Empire Pipeline

MidstreamNational Fuel Gas

Midstream Corporation

Own/Operate 27 Fields; Co-Own/Operate 4 FieldsStorage Capacity ~70 bcf

PL&S: ~3,000 Miles of Pipeline, 60,000+

hp

LDC: ~725,000 Customers Served

throughout Western NY and

Northwestern PA

Niagara

CANADACANADA

Lake OntarioLake OntarioLake Ontario

LakeErie

LakeLakeErieErie

Ellisburg

NYNY

PAPA

PAPAOH

OH

Chippawa

Corning

A-5 LineIndependence

Millennium

Tuscarora Storage

TCPL Interconnects:Niagara, Chippawa

Leidy Interconnects:Transco, TETCO, DTI

National Fuel Gas Company

NFGSC System Storages

NFGSC System Pipelines

Empire State Pipeline

Interconnects

Empire Pipeline

Leidy

Nati

onal

Fue

l’s P

ipel

ine

& S

tora

ge S

yste

m

Ellisburg Interconnects:TGP, DTI

Empire Connector

Bristoria Interconnect:TETCO – M2

Corning Interconnects:Empire, Millennium

FACT: North American Shale has dramatically altered the domestic gas Supply picture.

Shale Gas Plays in the United

States

FACT: North American Shale has dramatically altered the domestic gas Supply picture.

Relatively low Unconventional costs vs Conventional

The Key- Technological advances

Shale production has grown from 3% of the U.S. Gas Supply in 2005 to 20% in early 2010

In 2009 US Local Natural gas production highest since 1973.

PA production has doubled since the pre-shale days

Marcellus - “The Beast in the Marcellus - “The Beast in the East”East”

Recoverable area > 95,000 sq mi

Depth 5,000 ft +, Thickness 50 ft – 250 ft

Potentially the largest field in the U.S. - recoverable reserves estimated in the 100’s of TCFs

Low breakeven costs – maybe lowest of major U.S. shale plays

Marcellus Shale play is vast – and it’s still early

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2009 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045

MM

cf/d

0

500

1,000

1,500

2,000

2,500

3,000

# Wells F

irst Delivered

Production Forecast Wells First Delivered

Source: Black & Veatch Analysis

Marcellus Shale Production Marcellus Shale Production ForecastForecast

(Based on Conservative 50 Tcf Recoverable Reserve Estimate)(Based on Conservative 50 Tcf Recoverable Reserve Estimate)

Other Telling Indicators….Other Telling Indicators…. What large players are saying:

“…We continue to ramp up our activities in the Marcellus…” “…accelerate sharply our development of the Marcellus.. “ “…able to utilize new drilling techniques that allows (us) to affordably

reach gas supplies in the Marcellus…that previously had been too expensive to tap.’

Producers taking on firm capacity positions to ensure production flows: Range, EQT, Chesapeake, Statoil, Cabot, East Resources, Fortuna

Majors and investors jumping into the Marcellus fray

Pittsburgh area exploding – tightening labor market

TGP 300 Line

EASTHEREFORD

EASTHEREFORD

DRACUTDRACUT

DOVERDOVER BROOKFIELDBROOKFIELD

RAMAPORAMAPOELLISBURGELLISBURG

LEIDYLEIDY

DAWNDAWN

NIAGARANIAGARA

CHIPPAWACHIPPAWA

NAPIERVILLENAPIERVILLE

IROQUOISIROQUOIS PHILLISBURGPHILLISBURG

ST. CLAIRST. CLAIR

Eastern Mainline Export Points and Other Major Pipelines

Pre-Marcellus Gas Supply Sources in North America

Pre-Marcellus Gas Supply Sources in North America

Pre-Marcellus Gas Supply Sources to the Northeast

LEIDY

Pennsylvania

New York

Traditionally gas supply sources have come from Canada, the Rockies, and the Gulf Coast Region.

NIAGARA

ONTARIO

Rockies

Midcontinent

Southeast/ Gulf

Displacem

ent

Displacement

Displacement

D

ispl

acem

ent

Appalachia

Post Marcellus Gas Supply Sources in North America

Post-Marcellus Gas Supply Sources to the Northeast

LEIDY

Pennsylvania

New York

Marcellus Shale has resulted in the

traditional gas supply being displaced.

NIAGARA

ONTARIO

Trends…

NFGSC SystemNFGSC SystemIncreased Producer ActivityIncreased Producer Activity

79

104

161

0

20

40

60

80

100

120

140

160

180

2003 2004 2005 2006 2007 2008 2009 2010

NFGSC Interconnect Requests

55% increase in IC requests from 2009-2010

NFGSC System NFGSC System Volumes Associated with IC Volumes Associated with IC

RequestsRequests

1,214,750

56,600

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Cum

ulati

ve E

xp D

aily

Vol

(MCF

D)

Producer Requested Flow Date

Interconnect Request Volumes

Basis Differential ShiftBasis Differential Shift

-0.277

-0.145 -0.130-0.083

-$0.60

-$0.40

-$0.20

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

Ap

r-06

Jun

-06

Au

g-0

6

Oct

-06

Dec

-06

Feb

-07

Ap

r-07

Jun

-07

Au

g-0

7

Oct

-07

Dec

-07

Feb

-08

Ap

r-08

Jun

-08

Au

g-0

8

Oct

-08

Dec

-08

Feb

-09

Ap

r-09

Jun

-09

Au

g-0

9

Oct

-09

Dec

-09

Feb

-10

Ap

r-10

Jun

-10

Au

g-1

0

Domininon SP to Niagara Basis (Average Monthly Prices)

Su

mm

er

12

Su

mm

er

11

Estimates Derived from Forward Basis Numbers

Win

ter

11

/12

Win

ter

10

/11

Summer 06 Avg. 0.119

Winter 06 /07 Avg. (0.028)

Summer 07 Avg. 0.092

Winter 07/08 Avg. (0.145)

Summer 08 Avg. 0.122

Winter 08/09 Avg. (0.115)

Summer 09 Avg. (0.07)

Winter 09/10 Avg. (0.136)

Summer 10 Avg. (0.198)

Sept

-10

Canadian ImportsCanadian Imports

Source: EIA

98,344

31,019

44,252

36,271

0

20,000

40,000

60,000

80,000

100,000

120,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Mcf

US LNG Imports

Effects of Shales on LNG ImportsEffects of Shales on LNG Imports

Source: Bentek/EIA

Observations…Observations… “Pipeline Geology”

Displacement

Significant gas supply being added to large long-haul pipes: TGP, TETCO, TCO, DTI, NFG

Shift in flows due not only to Marcellus but effects of REX, LNG, and other shale plays

The Interstate Pipeline System Downstream of Storage (Ellisburg/Leidy and Oakford) is at Capacity

Key Market Segment: Power Gen Markets in NYC, Mid-Atlantic, and Ontario. Rate of growth?

Overall market will grow – rate depends on economy, but unlikely to match increase in gas supply in market area.

……And Effects of Marcellus in the And Effects of Marcellus in the NortheastNortheast Pricing DynamicsPricing Dynamics

New West to East pipeline infrastructure will increase the Western Basis and put downward pressure on Eastern Market Prices

Overall flattening of basis and decreased price volatility.

FlowsFlows

Displacement of traditional gas supply, and reverse flow south Displacement of traditional gas supply, and reverse flow south to northto north

Focus on Unconventional playsFocus on Unconventional plays

Reduced reliance on LNGReduced reliance on LNG

Shifting plans related to Alaskan gas supply Shifting plans related to Alaskan gas supply

InfrastructureInfrastructure

NE Markets have competitive advantage as transportation and fuel costs decrease from transporting gas a shorter distance

Long haul pipelines will likely see lower utilization and decreased revenue on pipelines from the Gulf to the Northeast

Infrastructure, Infrastructure, Infrastructure.

Effects of Marcellus Shale in the Effects of Marcellus Shale in the NortheastNortheast

34 Potential New Projects Planned through 2014

Total Increased Potential Capacity of 13,693 MMcf/d

Changing the Pipeline Infrastructure in the NortheastChanging the Pipeline Infrastructure in the Northeast

Source: Bentek

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0

5

10

15

20

25

30

35

40

2010 2011 2012 2013 2014

MM

cf/d

Cap

acit

y

Proj

ects

Northeast Expansion Projects

New Pojects Total Expansion Capacity (MMcf/d)

2010 Pipeline Expansion 2010 Pipeline Expansion Projects MapProjects Map

Source: Bentek

National Fuel GasNational Fuel GasPL&S Infrastructure Expansion PL&S Infrastructure Expansion PlansPlans

Y-M53 to Leidy

Lamont Compressor Station

Line N Expansion

Northern Access Expansion

Tioga County Extension

31

PIPELINE & STORAGE EXPANSION INITIATIVES

Y-M53 Direct Interconnects

Initial Capacity 100,000 Dth/d

In-Service Date November 2010

Producer Commitments of 20,000 - others Pending

Y-M53 DIRECT INTERCONNECTS

32

LAMONTCOMPRESSOR

STATION PHASE 1 & 2

PIPELINE & STORAGEEXPANSION INITIATIVES

Lamont Compressor Station Phase I & II

Planned Capacity 40,000 Dth/d (I)50,000 Dth/d (II)

Planned Compression (2 units) 1,150 HP (I)1,700 HP(II)

Anticipated In-Service Date July 2010 (I)June 2011 (II)

Estimated CAPEX Investment ~$6 MM~$7 MM

LAMONTCOMPRESSOR

STATION PHASE I & II

33

LINE “N”EXPANSION PHASE I & II

PIPELINE & STORAGE EXPANSION INITIATIVES

Line “N” Expansion Phase I & II

Planned Capacity 160,000 Dth/d (I)150,000 Dth/d (II)

Planned Compression 4,700 HP (I)13,000 HP (II)

Anticipated In-Service Date Sept 2011 (I)Nov 2012 (II)

Estimated CAPEX Investment $23 MM (I)$30 MM (II)

34

NATIONAL FUEL PIPELINE & STORAGE EXPANSION INITIATIVES

NORTHERN ACCESS EXPANSION

Northern Access Expansion

Planned Capacity 320,000 Dth/d

Planned Compression- Ellisburg 12,000 HP

Planned Compression- East Aurora 2,300 HP

Anticipated In-Service Date Fall 2012

Estimated CAPEX Investment $60 MM

Full Producer Commitment

35

PIPELINE & STORAGE EXPANSION INITIATIVES

Tioga County Extension Phase I & II

Planned Capacity 350,000 Dth/d (I)260,000 Dth/d (II)

Anticipated In-Service Date September 2011 (I)2012/2013 (II)

Estimated CAPEX Investment $47 MM (I)$125 MM (II)

TIOGACOUNTY

EXTENSION PHASE I & II

36

WEST TO EAST

APPALACHIANLATERAL

LAMONTCOMPRESSOR

STATION PHASE I & II

TIOGACOUNTY

EXTENSION PHASE I & II

LINE “N”EXPANSION PHASE I & II

PIPELINE & STORAGEEXPANSION INITIATIVES

NORTHERN ACCESS EXPANSION

Y-M53 DIRECT INTERCONNECTS

Infrastructure and Transporter-Infrastructure and Transporter-related Challengesrelated Challenges

GQ

Creditworthiness

Timelines

Shifting Pipeline Grid Dynamics & Valuation

Producer risk tolerances

IC requests

On the Horizon….On the Horizon….

New supply areas will continue crowd out traditional ones “Non-firm” production eventually at risk All bets off with regard to traditional flows, basis, and

commodity pricing - price and gas supply-driven changes Certain oversupplied producing areas/pipes could see

price bloodletting Canadian markets will soon gain access to Marcellus

supply Large need for midstream/gathering infrastructure Utilities: encouraged by proliferation of Marcellus gas

supply but will adjust portfolios with caution

Thank YouThank You

Please visit us at www.nationalfuelgas.com