National Fuel Update Drilling Operations on New Pennsylvania State Leases

Seneca Resources, a wholly owned subsidiary of National Fuel Gas Company announced that it has completed drilling and coring a vertical Marcellus Shale well on Pennsylvania’s Department of Conservation and Natural Resources (“DCNR”) Tract 595 in Tioga County, Pennsylvania. Seneca acquired tract 595 at the DCNR lease sale in September 2008. At that same sale, Seneca also acquired Tract 100 in Lycoming County, where drilling is expected to commence this week.

Matthew D. Cabell, President of Seneca Resources, stated, “Preliminary results from our first three Seneca-operated vertical wells are positive and we are excited about the Marcellus Shale potential on the tracts acquired through the DCNR lease sale. These wells are part of a 10-well vertical Marcellus Shale drilling program operated by Seneca that will provide the data needed to evaluate our acreage across seven counties and help us to plan our horizontal development drilling which is to begin this summer. Seneca anticipates drilling more than 100 horizontal wells on tract 595 and tract 100 over the next several years.”

Two other tracts from the September 2008 lease sale, totaling 8,408 acres, for which Seneca was high bidder, will not be acquired due to unanticipated gas pipeline routing issues. Pipeline routes acceptable to the state were more than twice the length of what was anticipated at the time of bidding.