National Fuel Gas : 2022 Annual Report and Form 10-K

2022

Annual Report

David P. Bauer

President and Chief

Executive Officer

Dear Shareholders,

National Fuel's fiscal 2022 was an outstanding year for the Company, one in which we achieved several significant milestones that position us well for the future. Of note, we completed construction of the FM100 project at our Pipeline & Storage business, achieved record natural gas production and throughput from our Exploration & Production and Gathering businesses, and replaced more than 150 miles of pipeline mains as part of our Utility's long-standing modernization program.

These operational achievements, alongside an improved commodity price backdrop, drove an impressive 37% increase in our adjusted operating results per share from the prior year and further improved the strength of our investment-grade balance sheet. In addition, in line with our strong financial results, we increased our annual dividend rate by 4.4% -  making this our 52nd year of consecutive dividend increases and 120th year of uninterrupted dividend payments.

Further, National Fuel took important steps to enhance our environmental, social and governance (ESG) initiatives, positioning our business to play a meaningful role in a lower- carbon economy. In March, we published our inaugural Climate Report, expanding our ESG reporting to better align with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), a well-recognized framework for climate-focused disclosure. Likewise, in September, we published our third annual Corporate Responsibility Report, which describes the Company's progress toward achieving its methane emissions intensity targets, with reductions across the natural gas value chain. In addition, the Company had another outstanding year advancing our safety culture, accomplishing an impressive 20% reduction in our Occupational Safety and Health Administration recordable injury rate over the past three years, excluding cases of workplace COVID transmission.

Improving diversity, equity and inclusion in the workplace continues to be a focus. This year we formed four employee resource groups to support ethnically diverse, veteran, LGBTQ+ and female employees. And with the pandemic behind us, we reenergized our efforts to connect with our communities at deeper levels through corporate volunteerism and stewardship programs. In this regard, National Fuel launched an inaugural "Days of Doing" event in October 2022 in which employees provided more than 1,200 volunteer hours at various nonprofits within our operating footprint.

We believe these undertakings, in conjunction with our high-quality assets, talented workforce and organizational focus on continuous improvement across all aspects of our operations, leave National Fuel well positioned for success in the years ahead.

Operational Highlights

Record performance from our Appalachian Development program

In 2022, our Exploration & Production business, Seneca Resources Company, LLC (Seneca), grew its production by approximately 8% to 353 billion cubic feet equivalent (Bcfe), a Company record. On the heels of Seneca's growth, our Gathering business, National Fuel Gas Midstream Company, LLC (Midstream), which gathers 100% of our production, experienced an approximately 11% revenue increase from the prior year, evidencing the value of our integrated approach to Appalachian development. Throughout the year, we continued to leverage our high-quality acreage position within the Utica and Marcellus shales and our valuable marketing portfolio to take advantage of improved natural gas pricing, driving strong operational and financial results.

Fifty-Two Years of Dividend Growth

Annual Rate at Fiscal Year-End

$1.90

$0.19

1970

1980

1990

2000

2010

2022

Seneca transitioned to a pure-play natural gas producer in 2022, completing the divestiture of our California properties to Sentinel Peak Resources in June. Just as the spring of 2020 was an optimal time for us to acquire natural gas assets, this was an opportunistic time for Seneca to sell our California assets. These were great assets for National Fuel, generating over $1 billion in cash flow over the past decade that funded significant upstream and midstream growth in Appalachia; however, given the challenging regulatory environment in California, which made it difficult to grow these operations, the time was right to sell. We expect that Sentinel Peak will be a great owner of these assets, maintaining the focus on environmental stewardship that Seneca has long established.

As we move forward, Seneca is focused on its substantial development potential in the Appalachian basin. This tightened focus will continue to position us well for future growth, while significantly improving our expected per-unit cash operating costs and further reducing Seneca's emissions profile.

During fiscal 2022, Seneca made great progress advancing several key environmental and emissions-focused programs across our operations. Seneca's principal focus is reducing methane emissions by replacing natural gas actuated pneumatic devices with compressed air to eliminate vented emissions. Seneca also conducted its first facility-scale monitoring pilot using aerial light detection and ranging (LIDAR) technology to provide real-time assessments of facility emissions, enabling us to identify opportunities to improve our emissions profile.

In addition, over the past year, Seneca received multiple responsibly sourced gas certifications, demonstrating our commitment to environmental stewardship and sustainability. In January 2022, Seneca announced the certification of

100% of our natural gas production under Equitable Origin's EO100™ Standard for Responsible Energy Development - a series of rigorous ESG performance metrics. Likewise,

in March, Seneca achieved certification under Project Canary's TrustWellTM program for a pilot of 121 wells, all of which received Platinum or Gold ratings. Similarly, in August, Seneca announced its achievement of an "A" certification grade - the highest available certification level - for 100% of its production under MiQ's Standard for Methane Emissions Performance. These accreditations, along with ongoing investments and efforts to achieve emission reduction targets, position National Fuel to differentiate our production in the marketplace.

Looking ahead, in fiscal 2023, we expect to maintain our current activity levels in Appalachia, operating two drilling rigs with a focus on developing our highly economic Eastern Development Area (EDA) assets which, assuming the midpoint of our production guidance, should drive natural gas production growth of 8% over fiscal 2022. Additionally, Seneca plans to deploy a full-time, fully integrated electric hydraulic fracturing fleet in early calendar 2023, which is expected to deliver optimal performance while decreasing emissions.

Seneca employee speaks with a contractor about a Well Done Foundation (WDF) plugging project in Bradford, PA. Seneca provided funding to WDF, a nonprofit aimed at plugging orphaned and abandoned wells, to support WDF's first orphaned well plugging in PA.

Seneca Resources Production	Gathering Revenues
(Bcfe)							($ millions)
2023E			370-390		2023E				$230-$245
2022	352.5			2022		$215
2021	327.4				2021		$193
2020	241.5					2020		$143
2019	211.8						2019		$127

2022 ANNUAL REPORT 1

Successful completion of the FM100 project

National Fuel's FERC-regulated Pipeline & Storage subsidiaries, National Fuel Gas Supply Corporation (Supply) and Empire Pipeline, Inc. (Empire), continue to leverage our existing asset footprint to drive growth opportunities in Appalachia. In December 2021, Supply placed into service the $230 million FM100 project. This project, the largest in the Company's history, was completed on time and substantially under budget, which is a testament to the hard work of our dedicated workforce. On an annual basis, we expect the FM100 project to add approximately $50 million in revenues to our Pipeline & Storage business, while also providing, in conjunction with a companion third-party pipeline expansion, 330,000 dekatherms per day (Dth/d) of high-value firm transportation capacity for Seneca's production.

Supply employee inspects an upgraded compressor unit in Mercer County, PA. New unit equipment helps to improve efficiency and lower emissions.

As we move into fiscal 2023, we will continue to pursue opportunities to expand our pipeline system, leveraging our interconnectivity to other long-haul pipelines and proximity to producers, while further investing in the safety, integrity and reliability of our transmission and storage assets through

our ongoing modernization program. Over the last five years, Supply and Empire have invested more than $450 million on safety and modernization efforts, helping to drive a 24% reduction in methane intensity in calendar year 2021 from 2020, when methane intensity reduction targets were established at each of our businesses.

Significant progress in Utility modernization

Our Utility business, National Fuel Gas Distribution Corporation (Distribution), remains focused on safely and reliably providing natural gas service to more than 2 million residents in Western New York and Northwestern Pennsylvania. Over the past five years, our Utility has invested approximately $380 million on system modernization efforts, replacing 770 miles of pipeline mains over this period. These investments are a win-win for our customers and the Company, furthering the safety and reliability of our distribution network while driving additional reductions in EPA-reported greenhouse gas (GHG) emissions. Since 1990, our modernization program has driven a more than 65% reduction in delivery system GHG emissions, keeping the Company on track to achieve its targeted 75% reduction by 2030 and 90% reduction by 2050, which exceeds the requirements of New York State's Climate Leadership and Community Protection Act.

As we move ahead, we believe our multi-pronged approach to reducing our carbon footprint - focused on operational emissions reductions, energy conservation and embracing new and emerging technology, as well as leveraging our highly reliable and weather-hardened pipeline network for the delivery of low and no-carbonfuels - provides a solid foundation for National Fuel's long-term role in the energy complex. We expect that Distribution will continue to make significant investments

Utility Investment in Safety

(Fiscal Year - $ millions)

2022	$83
2021	$80
2020	$71
2019	$74
2018	$70

Utility Delivery System GHG Emissions
(Calendar Year - Thousand Metric Tons, CO2e)*
800						~65%
700
					Reduction
600
					Since 1990
500
400
300
200
100
0
1990	1995	2000	2005	2010	2015	2020
*EPA Subpart W, using AR5 Global Warming Potential

2 NATIONAL FUEL GAS COMPANY

to ensure the long-term safety, reliability and resilience of its system, while remaining steadfastly committed to the sustainability of our operations.

Our Continued and Important Role in the Energy Complex

The importance of an "all-of-the-above" approach

The affordability, reliability and security offered by natural gas is unmatched by any other source of energy today. Fortunately, the United States has an abundant supply of this low-cost and low-emissions-intensity energy readily available in the Marcellus and Utica shales. Natural gas and its safe, reliable and resilient delivery network, should continue to be a central component in an "all-of-the-above" approach to energy policy. One need only look to the challenges facing Europe to see the perils of going "all-in" on intermittent resources.

Nevertheless, we continue to see policymakers in New York and elsewhere pushing the narrative that growth in wind and solar alone can meet the needs of a fully electric world - including for winter heating in cold climates like Buffalo - without sacrificing affordability and reliability. They fully believe the electric

grid can nearly triple in size without impacting cost, and they have complete faith that massive amounts of dispatchable, emissions-free generation solutions will be developed when no such technologies exist today at scale. The gap between aspirations and reality is truly remarkable.

Internationally, there is a growing and renewed appreciation for the role of natural gas. The European Union, which is several years ahead of the U.S. in its efforts to decarbonize its economy, now has committed to building new natural gas facilities and included natural gas to its taxonomy of "green energy."

Balance and Diversification

Percentage of Consolidated Total Assets by Segment

27%	32%
Utility and
Exploration &
All Other
Production

30%	11%
Pipeline &	Gathering
Storage

National Fuel Utility employees tour a customer site of facilities that control the blending of hydrogen and natural gas to demonstrate reduced boiler emissions in Tonawanda, NY.

I am optimistic that one day the U.S. will reach this same level of appreciation and affirm natural gas as an essential component of an "all-of-the-above" approach to energy that ensures reliability, affordability and security.

The natural gas industry stands ready and willing to do its part to help alleviate the ongoing energy challenge both domestically and globally. I firmly believe increased natural gas production and pipeline infrastructure will be needed if the U.S. is serious about achieving its emission reduction goals and ensuring energy security. National Fuel is well positioned to play a long-term role in developing this resource and building the facilities needed to move critical energy supplies to markets.

Our Bright Future

Fiscal 2022 was undoubtedly a great year for National Fuel -  a year which further built upon the strong foundation of our business and positioned the Company for continued success. As we look ahead, we expect that our significant footprint of high-quality assets in one of the lowest-emissions-intensity basins in the world will provide the Company with meaningful opportunities to further grow the business.

Our strong operational execution has laid the groundwork for National Fuel to generate significant and durable free cash flow across our businesses. We believe this puts us in the very enviable position in which we can simultaneously grow the business, strengthen our investment-grade balance sheet and increase the amount of capital we return to shareholders through our dividend, all of which we expect will deliver considerable value to shareholders over the long-term.

David P. Bauer

President and Chief Executive Officer

January 6, 2023

2022 ANNUAL REPORT 3