Fitch Rates National Fuel Gas Notes 'A-'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 12, 2003

National Fuel Gas Company's (NYSE:NFG) $250 million 5.25% notes due 2013 are rated 'A-' by Fitch Ratings. Note proceeds will be used to repay $150 million of maturing medium term notes and reduce short-term debt. The Rating Outlook for NFG is Stable.

NFG's rating is supported by the predictable performance of its New York and Pennsylvania natural gas distribution utilities and regulated regional pipeline and storage operations. While the relative contribution from 'regulated operations' had gradually decreased in recent years, this trend has stabilized. With the Empire State Pipeline (Empire) acquisition NFG's regulated gas distribution and pipeline and storage segments are projected to generate more than two-thirds of consolidated earnings and cash flow. Also considered in the rating are NFG's capital structure and near-term financial flexibility, as well as, recent operating results from oil and natural gas activities at Seneca Resources Corporation (Seneca) and the company's other non-regulated businesses.

NFG completed the purchase of Empire from Duke Energy on Feb. 6, 2003. The purchase price of $180 million plus $57.8 million of project debt was initially funded with short-term debt. It is expected that proceeds from the sale of timber assets to be received later in the year will be utilized to repay short-term debt.

A matter of ongoing consideration is the business risk associated with non-regulated activities, both domestic and international. Existing oil and natural gas exploration and production operations at Seneca prospectively represent about one-third of NFG's consolidated earnings and cash flow. Over the near term, Seneca's capital spending will be funded from free cash flow. Also, NFG's hedging strategy has been relatively conservative. However, commodity price exposure from Seneca's unhedged

production remains a potential source of volatility in financial performance.

NFG's consolidated company cash flow derived credit ratios remain strong and are consistent with expectations. For the twelve months ended Sept. 30, 2002, cash flow coverage of interest was 4.7 times (x) and funds from operations to debt was 24%. Of moderate concern is the strength of NFG's capital structure, which was approximately 61% debt and 39% equity at Sept. 30, 2002. Any further leveraging would put downward pressure on NFG's ratings.