NATIONAL FUEL GAS CO

The Company is engaged in the exploration for and the development of naturalgas reserves in the Appalachian region of the United States. The Company’s development activities in the Appalachian region are focused primarily in the Marcellus and Utica shales. Further discussion of exploration and production activities is included in Item 8, Note N — Supplementary Information for Exploration and Production Activities. Note N sets forth proved developed and undeveloped reserve information for Seneca. The September 30, 2024, 2023 and 2022 reserves shown in Note N are valued using an unweighted arithmetic average of first day of the month commodity price for each month within the twelve-month period prior to the end of the reporting period. The reserves were estimated by Seneca’s petroleum engineers and were audited by independent petroleum engineers from Netherland, Sewell & Associates, Inc. Note N discusses the qualifications of the Company’s petroleum engineers, internal controls over the reserve estimation process and audit of the reserve estimates and changes in proved developed and undeveloped gas reserves year over year.

Seneca’s proved developed and undeveloped natural gas reserves increased from 4,535 Bcf at September 30, 2023 to 4,752 Bcf at September 30, 2024. This increase is attributed to extensions and discoveries of 602 Bcf and revisions of previous estimates of 7 Bcf, partially offset by production of 392 Bcf. Upward revisions of 145 Bcf are mainly attributed to positive performance improvements, changes to the booked lateral length and optimized development layout. The additions and upward revisions were partially offset by downward revisions of 138 Bcf from the removal of nine PUD locations related to schedule changes and price-related revisions. The Company has no near term plans to develop the reserves at these PUD locations.

Seneca’s proved developed and undeveloped natural gas reserves increased from 4,171 Bcf at September 30, 2022 to 4,535 Bcf at September 30, 2023. This increase was attributed to extensions and discoveries of 670 Bcf, purchases of minerals in place of 34 Bcf, and revisions of previous estimates of 32 Bcf, partially offset by production of 372 Bcf. Upward revisions of 94 Bcf were mainly attributed to positive performance improvements and adding back one PUD location. The additions and upward revisions were partially offset by downward revisions of 62 Bcf from the removal of seven PUD locations related to pad layout changes and price-related revisions. The Company has no near term plans to develop the reserves at these PUD locations.

At September 30, 2024, the Company’s Exploration and Production segment had delivery commitments for natural gas production of 1,896 Bcf. The Company expects to meet those commitments through the future production of reserves that are currently classified as proved reserves and future extensions and discoveries.

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The following is a summary of certain oil and gas information taken from Seneca’s records.

Production

N/M Sales price amounts are considered not meaningful as oil production is insignificant.

(1)Average sales prices per Mcf of gas reflect sales of gas in the Marcellus and Utica Shale fields. The Marcellus Shale fields (which exceed 15% of total reserves at September 30, 2024, 2023 and 2022) contributed 645 MMcfe, 521 MMcfe and 574 MMcfe of daily production in 2024, 2023 and 2022, respectively. The average lifting costs (per Mcfe) were $0.72 in 2024, $0.73 in 2023 and $0.71 in 2022. The Utica Shale fields (which exceed 15% of total reserves at September 30, 2024, 2023 and 2022) contributed 423 MMcfe, 495 MMcfe and 357 MMcfe of daily production in 2024, 2023 and 2022, respectively. The average lifting costs (per Mcfe) were $0.64 in 2024, $0.62 in 2023 and $0.63 in 2022.

(2)West Coast region properties were sold at June 30, 2022. Information for the years ended September 30, 2023 and 2024 is not applicable (N/A) as a result of the sale.

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Productive Wells

Developed and Undeveloped Acreage

(1)Of the 1,321,090 Total Developed and Undeveloped Net Acreage in the Appalachian region as of September 30, 2024, there are a total of 1,249,213 net acres in Pennsylvania. Of the 1,249,213 total net acres in Pennsylvania, shale development in the Marcellus, Utica or Geneseo shales has occurred on approximately 144,551 net acres, or 12% of Seneca’s total net acres in Pennsylvania. Developed Acreage in the table reflects previous development activities in the Upper Devonian formation, but does not include the potential for development beneath this formation in areas of previous development, which includes the Marcellus, Utica and Geneseo shales.

As of September 30, 2024, the aggregate amounts of gross undeveloped acreage expiring under lease in the next three years and thereafter are as follows: 1,547 acres in 2025 (1,388 net acres), 13,650 acres in 2026 (13,503 net acres), 9,267 acres in 2027 (8,398 net acres) and 204,655 acres thereafter (197,901 net acres). The remaining 472,004 gross acres (438,044 net acres) represent non-expiring oil and gas rights owned by the Company. Of the acreage that is currently scheduled to expire in 2025, 2026 and 2027, Seneca has 633.7 Bcf of associated proved undeveloped gas reserves. As a part of its management approved development plan, Seneca generally commences development of these reserves prior to the expiration of the leases and/or proactively extends/renews these leases.

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Drilling Activity

(1)Fiscal 2023 and 2022 Appalachian region dry wells include 0.5 and 2.5 net wells, respectively, drilled prior to 2013 that were never completed under a joint venture in which the Company was the nonoperator. The Company became the operator of the properties in 2017 and plugged and abandoned the wells in 2023 and 2022 after the Company determined it would not continue development activities.

Present Activities

(1)Includes wells awaiting completion.