National Fuel Files Proxy Materials and Sends Letter to Shareholders

WILLIAMSVILLE, N.Y.--(Business Wire)--National Fuel Gas Company (NYSE: NFG) ("National Fuel" or the
"Company") has sent to its shareholders its Annual Report for the 2007
Fiscal Year and Proxy materials related to the 2008 Annual Meeting of
Shareholders. Included with this mailing were a letter and a
"Shareholder Information Paper" that address the disruptive proxy
contest that has been launched by a group led by hedge fund, New
Mountain Vantage Advisers, LLC ("New Mountain"). Both the letter to
shareholders and the Shareholder Information Paper are incorporated in
this news release.

In its letter and Shareholder Information Paper, the Company
provides a clear and thorough discussion of the claims made by New
Mountain, a fact-based analysis of why it believes New Mountain's
position is flawed and urges shareholders to reject New Mountain's
nominees to the National Fuel Gas Company Board of Directors.

"New Mountain's recommendations for how to manage National Fuel's
assets and structure our business are plainly and simply not in the
best interest of all of our shareholders," said Philip C. Ackerman,
Chairman and Chief Executive Officer, National Fuel. "Our Management
Team and Board of Directors have experience in all facets of the
energy industry and they, along with our uniquely qualified business
unit experts, continue to formulate and execute strategies that have
provided our shareholders with superior returns over the long-term. To
embark on the course New Mountain suggests would imperil our ability
to continue our elite record of dividend payments and lead to the
break-up of the Company," Ackerman continued.

Even with its long history of providing exceptional value to
shareholders, National Fuel finds itself in the midst of a proxy
contest. The circumstances are unusual, the Company notes, in that the
more likely and usual candidates for such action are under-performing
companies.

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Total Return to One Year Three Years Five Years Ten Years
Shareholders Ending Ending Ending Ending
9/30/07 9/30/07 9/30/07 9/30/07
----------------------------------------------------------------------
S&P 500 16% 45% 105% 89%
----------------------------------------------------------------------
S&P 400 Utilities 19% 55% 130% 185%
----------------------------------------------------------------------
National Fuel 32% 83% 185% 214%
----------------------------------------------------------------------
*T

In spite of having no real experience in managing assets in the
energy industry, New Mountain continues to insist that its
recommendations should be adopted. "We believe their short-term
interests and personal financial motivation to capitalize on
short-term gains in our stock price have overshadowed the facts. Their
proposals have been thoroughly analyzed by the Company, along with our
top-tier financial and legal advisors, and we have provided a
knowledge-based response that explains why their course of action will
not lead to more value for our shareholders and would, instead, prove
to be costly, harmful to our assets and erode shareholder value,"
Ackerman said.

New Mountain is seeking to have three of its nominees elected to
the Company's Board of Directors. The Company believes that the
election of these individuals, who lack any real experience in
managing the types of assets that comprise National Fuel Gas Company,
is not just an attempt to secure a voice on the Board of Directors,
but is rather an attempt to gain effective control of the Company. "As
a shareholder with nearly 10% interest in the Company, one seat on our
10-member Board would represent an interest equivalent to their
ownership position. Instead, New Mountain is seeking 30% of the voting
power on the Board. This effort belies this group's claims that they
are merely a shareholder with 'suggestions' or 'alternatives' to be
considered," Ackerman said.

The Company is urging its shareholders to re-elect Robert Brady,
Rolland Kidder and John Riordan - who collectively share more than 25
years of service and experience on the National Fuel Board of
Directors. "National Fuel has become a leader in the energy industry
under the guidance of these nominees and the rest of our Board. It is
in all of our shareholders' best interests to re-elect them to our
Board so that they may continue to chart the disciplined,
knowledge-based course that has provided superior results to our
investors over the long-term," Ackerman said.

National Fuel is an integrated energy company with $3.9 billion in
assets comprised of the following five operating segments: Utility,
Pipeline and Storage, Exploration and Production, Energy Marketing,
and Timber. Additional information about National Fuel is available on
its Internet Web site: http://www.nationalfuelgas.com or through its
investor information service at 1-800-334-2188.

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Analyst Contact: James C. Welch (716) 857-6987
Media Contact: Julie C. Cox (716) 857-7079
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IMPORTANT INFORMATION AND WHERE TO FIND IT

In connection with its 2008 Annual Meeting, National Fuel Gas
Company has filed a definitive proxy statement, WHITE proxy card and
other materials with the U.S. Securities and Exchange Commission
("SEC"). WE URGE INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER
MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT NATIONAL FUEL GAS COMPANY AND THE MATTERS
TO BE CONSIDERED AT ITS ANNUAL MEETING. Investors may contact Morrow &
Co., LLC, National Fuel Gas Company's proxy advisor for the 2008
Annual Meeting, at (800) 252-1959 or by email at nfginfo@morrowco.com.
Investors may also obtain a free copy of the proxy statement and other
relevant documents as well as other materials filed with the SEC
concerning National Fuel Gas Company at the SEC's website at
http://www.sec.gov. Free copies of National Fuel Gas Company's SEC
filings are also available on National Fuel Gas Company's website at
http://www.nationalfuelgas.com. These materials and other documents
may also be obtained for free from: Secretary, National Fuel Gas
Company, 6363 Main Street, Williamsville, New York 14221, (716)
857-7000.

CERTAIN INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION

National Fuel Gas Company and its directors are, and certain of
its officers and employees may be deemed to be, participants in the
solicitation of proxies from National Fuel Gas Company's stockholders
with respect to the matters considered at National Fuel Gas Company's
2008 Annual Meeting. Information regarding these directors, and these
certain officers and employees, is included in the definitive proxy
statement on Schedule 14A filed with the SEC on January 11, 2008, and
on National Fuel Gas Company's website at
http://www.nationalfuelgas.com. Security holders can also obtain
information with respect to the identity of the participants and
potential participants in the solicitation and a description of their
direct or indirect interests, by security holdings or otherwise, for
free, by contacting: Secretary, National Fuel Gas Company, 6363 Main
Street, Williamsville, New York 14221, (716) 857-7000. More detailed
information with respect to the identity of the participants, and
their direct or indirect interests, by security holdings or otherwise,
will be set forth in the proxy statement and other materials to be
filed with the SEC in connection with National Fuel Gas Company's 2008
Annual Meeting.

FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" as defined by
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are all statements other than statements of historical
fact, including, without limitation, statements regarding future
prospects, plans, performance, capital structure and business
structure, and anticipated or potential capital expenditures,
acquisitions or dispositions, as well as statements that are
identified by the use of the words "anticipates," "estimates,"
"expects," "forecasts," "intends," "plans," "predicts," "projects,"
"believes," "seeks," "will," and "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 are expressed in good faith and
are believed by the Company to have a reasonable basis, but there can
be no assurance that management's expectations, beliefs or projections
will result or be achieved or accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are
important factors that could cause actual results to differ materially
from those discussed in the forward-looking statements: changes in
economic conditions, including economic disruptions caused by
terrorist activities, acts of war or major accidents; 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; 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;
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; 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. The Company
disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof.

January 11, 2008

Dear Fellow National Fuel Shareholder:

As you know, a disruptive proxy contest has been launched by a
group of U.S. and Cayman Island entities led by the hedge fund New
Mountain Vantage Advisers, LLC and its principal Steven B. Klinsky
(collectively, "New Mountain") to propose their own slate of directors
to serve on the Board of National Fuel Gas Company ("National Fuel" or
the "Company"). We believe that, if New Mountain's candidates are
elected, they will pursue a course of action that may serve New
Mountain's short-term interests, but would harm the majority of our
shareholders.

National Fuel has delivered extraordinary returns for you. We are
asking for your vote so that we can continue to work for your
interests.

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Total Return to One Year Three Years Five Years Ten Years
Shareholders Ending Ending Ending Ending
9/30/07 9/30/07 9/30/07 9/30/07
----------------------------------------------------------------------
S&P 500 16% 45% 105% 89%
----------------------------------------------------------------------
S&P 400 Utilities 19% 55% 130% 185%
----------------------------------------------------------------------
National Fuel 32% 83% 185% 214%
----------------------------------------------------------------------
*T

Now, more than ever, your vote counts. Even if you have already
voted New Mountain's blue card, the enclosed WHITE proxy card gives
you an opportunity to support your Company's outstanding record of
providing value to shareholders by voting to re-elect Robert Brady,
Rolland Kidder and John Riordan - who collectively have more than 25
years of experience and service on your Board, and many more years
than that in the natural gas industry. They also own a total of 51,190
shares of Company stock, many times the personal investment of New
Mountain's candidates.

For more information on New Mountain's recommendations and your
Company's responses, see the enclosed Shareholder Information Paper
(the "Shareholder Information Paper"), or you can go to
www.nationalfuelgas.com and click on "Important Information for
National Fuel Shareholders."

We believe that New Mountain's fund managers have strong personal
financial incentives to favor short-term gains, at the expense of our
long-term sustainable business strategy. As a result, we believe that
they are not trying to build your Company; instead, they propose
effectively to liquidate it by selling off the ownership of important
pieces of a successful integrated energy company. From New Mountain's
public filings, it appears that New Mountain already has an on-paper
profit of close to $80 million in National Fuel shares, and we suspect
that their aggressive actions are motivated in part by their desire
for increased trading liquidity so that they can realize their profit.
In reading any material from New Mountain we ask that you keep in mind
the personal monetary interests of the New Mountain fund managers,
which we believe are at odds with the interests of a majority of the
Company's shareholders.

You may receive one or more communications from New Mountain
urging you to vote for their candidates. We disagree with many of the
statements made by New Mountain in their soliciting materials, as we
discuss below and in the enclosed Shareholder Information Paper.

We are troubled by New Mountain's continuing refusal to share with
us the Schlumberger Data & Consulting report, the very document they
cite as the foundation of their principal claim, and which they
purport to summarize on their website. We dispute their continuing
claim that we have not even considered their recommendations despite
our detailed public responses. We also question their continuing
tactic, in their discussions of master limited partnerships and
elsewhere, of selecting examples of companies with business mixes and
assets that differ from ours in significant ways and, without
explaining these important differences, instead implying that the
implementation of New Mountain's recommendations or the election of
their candidates would somehow bring that aspect of your Company's
performance up to that "best in class" level.

We are also troubled by New Mountain's attempts to portray
themselves as the guardians of individual pension investments without
fairly disclosing the extent to which their owners are something
entirely different. And we question New Mountain's attempts to take
credit for actions the Company was taking before New Mountain had ever
proposed their suggestions. National Fuel had determined to replace
its senior Exploration & Production ("E&P") management, and was
accelerating Appalachian drilling, well before New Mountain made its
move on your Company (see the enclosed Shareholder Information Paper
for more information). National Fuel sold its European assets at a
considerable profit, unlike almost all of the similar companies who
diversified overseas, before New Mountain intervened. We were
seriously considering selling the Canadian E&P assets long before New
Mountain intervened, and in fact sold our Canadian oil properties in
2003. We left it for the new E&P management team to weigh in on the
final decision to sell the rest of our Canadian assets, which was
accomplished at the end of 2007 (contributing to your Company's record
profits in 2007).

New Mountain complains about your Company's "corporate governance"
arrangements such as a staggered board and a shareholder rights plan,
when those takeover defenses have prevented New Mountain from simply
buying more shares and seizing effective control of your Company in a
single stroke. In other words, your Company's corporate governance
arrangements have ensured that all the shareholders have the
opportunity to fairly and carefully consider the different positions
on these issues and then to voice their opinions, which we believe is
of paramount importance given all that is at stake. At the same time,
those corporate governance arrangements have certainly not prevented
either New Mountain from voicing their opinions, or your Company from
carefully analyzing and responding to their suggestions.

We note that New Mountain could have nominated a single director
to hold 10% of the voting power on your Board to match New Mountain's
ownership of 9.6% of the Company's outstanding stock. Instead, they
currently seek 30% of the voting power on your Board, revealing a plan
that belies their claims that they are merely a shareholder with
"suggestions" or "alternatives" for National Fuel's consideration.

We respect New Mountain's right as a shareholder to express its
opinions regarding National Fuel, and we will continue to keep an open
mind. Contrary to New Mountain's statements, however, they have not
sought to "work constructively" with your Company. We have, for more
than a year, engaged in discussions with New Mountain about their
ideas for how your Company should be structured and how your assets
should be developed. They have made recommendations without providing
support that we find credible. After careful consideration, we believe
that New Mountain's recommendations are flawed by inadequate analysis,
and are not in the best interests of all of National Fuel's
shareholders at this time. We disagree with what we believe to be New
Mountain's unwise financial engineering schemes, and we are not
willing to risk your Company's reputation on financial gimmicks that
would not stand the test of time. Rather than relying on unsupported
recommendations, we believe that your Company is more likely to
prosper in the future by relying on real assets and careful analysis
of real data.

Your vote counts, no matter how many shares you own, and we ask
you to cast your vote using each WHITE proxy card you receive in order
to protect your Company from New Mountain's "recommendations."

Respectfully,

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Phil Ackerman Dave Smith Ron Tanski
Chairman and Chief President and Chief Treasurer and Principal
Executive Officer Operating Officer Financial Officer
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Important!

-- Regardless of how many shares you own, your vote is very
important. Please sign, date and mail the enclosed WHITE proxy
card.

-- Please vote each WHITE proxy card you receive since each
account must be voted separately. Only your latest dated proxy
counts. We urge you NOT to sign any Blue proxy card sent to
you by New Mountain.

-- Even if you have sent a Blue proxy card to New Mountain, you
have every right to change your vote. You may revoke that
proxy, and vote as recommended by management by signing,
dating and mailing the enclosed WHITE proxy card in the
enclosed envelope.

-- If your shares are registered in your own name, please sign,
date and mail the enclosed WHITE proxy card in the
postage-paid envelope provided today. You may also vote via
the Internet or by telephone by following the voting
instructions on the WHITE proxy card.

-- If your shares are held in the name of a brokerage firm or
bank nominee, please sign, date and mail the enclosed WHITE
proxy card in the postage paid envelope to give your broker or
bank specific instructions on how to vote your shares.
Depending upon your broker or custodian, you may be able to
vote either by toll-free telephone or by the Internet. Please
refer to the enclosed voting form for instructions on how to
vote electronically. You may also vote by signing, dating and
returning the enclosed voting form.

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If you have any questions on how to vote your shares,
please call our proxy solicitor:
MORROW & CO., LLC at (800) 252-1959
*T

IMPORTANT INFORMATION AND WHERE TO FIND IT

In connection with its 2008 Annual Meeting, National Fuel Gas
Company has filed a definitive proxy statement, WHITE proxy card and
other materials with the U.S. Securities and Exchange Commission
("SEC"). WE URGE INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER
MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT NATIONAL FUEL GAS COMPANY AND THE MATTERS
TO BE CONSIDERED AT ITS ANNUAL MEETING. Investors may contact Morrow &
Co., LLC, National Fuel Gas Company's proxy advisor for the 2008
Annual Meeting, at (800) 252-1959 or by email at nfginfo@morrowco.com.
Investors may also obtain a free copy of the proxy statement and other
relevant documents as well as other materials filed with the SEC
concerning National Fuel Gas Company at the SEC's website at
http://www.sec.gov. Free copies of National Fuel Gas Company's SEC
filings are also available on National Fuel Gas Company's website at
http://www.nationalfuelgas.com. These materials and other documents
may also be obtained for free from: Secretary, National Fuel Gas
Company, 6363 Main Street, Williamsville, New York 14221, (716)
857-7000.

CERTAIN INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION

National Fuel Gas Company and its directors are, and certain of
its officers and employees may be deemed to be, participants in the
solicitation of proxies from National Fuel Gas Company's stockholders
with respect to the matters considered at National Fuel Gas Company's
2008 Annual Meeting. Information regarding these directors, and these
certain officers and employees, is included in the definitive proxy
statement on Schedule 14A filed with the SEC on January 11, 2008, and
on National Fuel Gas Company's website at
http://www.nationalfuelgas.com. Security holders can also obtain
information with respect to the identity of the participants and
potential participants in the solicitation and a description of their
direct or indirect interests, by security holdings or otherwise, for
free, by contacting: Secretary, National Fuel Gas Company, 6363 Main
Street, Williamsville, New York 14221, (716) 857-7000. More detailed
information with respect to the identity of the participants, and
their direct or indirect interests, by security holdings or otherwise,
will be set forth in the proxy statement and other materials to be
filed with the SEC in connection with National Fuel Gas Company's 2008
Annual Meeting.

FORWARD-LOOKING STATEMENTS

This letter contains "forward-looking statements" as defined by
the Private Securities Litigation Reform Act of 1995. Forward-looking
statements are all statements other than statements of historical
fact, including, without limitation, statements regarding future
prospects, plans, performance, capital structure and business
structure, and anticipated or potential capital expenditures,
acquisitions or dispositions, as well as statements that are
identified by the use of the words "anticipates," "estimates,"
"expects," "forecasts," "intends," "plans," "predicts," "projects,"
"believes," "seeks," "will," and "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 are expressed in good faith and
are believed by the Company to have a reasonable basis, but there can
be no assurance that management's expectations, beliefs or projections
will result or be achieved or accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are
important factors that could cause actual results to differ materially
from those discussed in the forward-looking statements: changes in
economic conditions, including economic disruptions caused by
terrorist activities, acts of war or major accidents; 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; 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;
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; 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. The Company
disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof.

January 11, 2008

SHAREHOLDER INFORMATION PAPER

This paper addresses the following:

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1. Your Company has a track record of outstanding returns to
shareholders.

2. Your Company is developing its Appalachian oil and gas assets at
the right pace.

3. Your Company is pursuing the deeper Marcellus Shale formation in
Appalachia with joint venture partner EOG Resources, an industry
leader in shale exploration and development.

4. Your Company has refocused its Gulf of Mexico oil and gas
operations.

5. The master limited partnerships (MLPs) recommended by New Mountain
do not add value and present significant cost and risk.

6. The disposal of what New Mountain considers "non-core" assets is
not a significant opportunity for your Company.
*T

Topic 1: Your Company has a track record of outstanding returns to
shareholders.

National Fuel is an integrated company with complementary business
segments that we believe over the long run provide more consistent
earnings and returns than those provided by a specialized energy
company. For more than 100 years we have delivered an elite record of
dividends complemented by exceptional returns in the last 10 years.

Over the past fiscal year, three years, five years and ten years,
National Fuel shareholders have enjoyed overall total returns
substantially better than the overall total returns of the S&P 500
Index and the S&P 400 Utilities Index over those same time periods.
Stock analysts most often compare your Company's stock performance to
that of other utility companies, which typically generate returns for
shareholders in the form of cash dividends and stock price
appreciation.

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Total Return to One Year Three Years Five Years Ten Years
Shareholders Ending Ending Ending Ending
9/30/07 9/30/07 9/30/07 9/30/07
----------------------------------------------------------------------
S&P 500 16% 45% 105% 89%
----------------------------------------------------------------------
S&P 400 Utilities 19% 55% 130% 185%
----------------------------------------------------------------------
National Fuel 32% 83% 185% 214%
----------------------------------------------------------------------
*T

These outstanding returns are due in part to our payments of cash
dividends to shareholders for 105 consecutive years, including
dividends that have increased annually for the last 37 years.

Generally, a dissident shareholder's primary argument in a proxy
contest would criticize the target company's management for either
falling stock prices or negative returns to shareholders. This proxy
contest is unusual because National Fuel's total returns to
shareholders have been excellent, both before and after New Mountain
became a National Fuel shareholder. The usual underperformance
argument is often supplemented by claims that the board is not
knowledgeable and needs an infusion of expertise, but your Company's
uniquely qualified Board members have deep experience in pipelines,
gas utilities and exploration and production, particularly in
Appalachia.

As you know, we had a very successful 2007 fiscal year with record
earnings that were enhanced by the sale of our Canadian assets at a
favorable price. We expect to continue that success in fiscal 2008,
with earnings currently projected to be in the range of $2.50 to $2.70
per diluted share. Our plan is to continue our longstanding record of
increasing our dividend and delivering outstanding returns to our
shareholders in 2008 and beyond.

Topic 2: Your Company is developing its shallow Appalachian oil
and gas assets at the right pace.

The pace of activity in Appalachia is the most significant issue
raised by New Mountain's recommendations. New Mountain's proposed
drilling program in the shallow Appalachian formations is purportedly
supported by recommendations from a report by Schlumberger Data &
Consulting - which New Mountain has refused to share with us or our
shareholders.

We infer that New Mountain's starting point must have been from a
Schlumberger document that was largely based on publicly available
information about production from the geographically extensive (and
varied) Appalachian Basin. Such data from other parts of the
Appalachian Basin is simply not consistent with what we know about our
own acreage. A representative from Schlumberger has told us that their
report "was a 50,000 foot view."

We have an aggressive and well-planned long-term strategy for
developing its Appalachian properties, which relies on our extensive
experience and proprietary knowledge of our acreage. New Mountain's
plan would not result in a short-term bonanza for investors and would
likely erode the long-term value of the Company's assets by greatly
increasing the risk of uneconomic activity.

Although New Mountain states that your Company increased its
investment in Appalachia only "following months of prodding," the fact
is that we have increased the number of wells drilled in Appalachia
every year since 2004, substantially before New Mountain began
acquiring Company shares in 2006. We drilled 233 Appalachian wells in
2007, a 53% increase over the prior year. In 2007 we also increased
proved developed Appalachian reserves by 20% and total proved
Appalachian reserves by 33% compared to the prior year, and did it
while improving its estimated ultimate recovery per well from 70
million cubic feet equivalent ("MMCFE") in 2006 to 97 MMCFE in 2007.
We anticipate drilling another 280 wells in 2008 and another 350 wells
in 2009 in shallow Appalachian formations.

National Fuel is one of the most active drillers in Appalachia and
the single most active driller in our core area. At 25 wells per
100,000 acres, our 2007 Appalachian drilling pace exceeds the per-acre
pace of our competitors Equitable, Dominion, and Chesapeake and is
close to those of Range and Cabot. Moreover, within the four-county
area of Pennsylvania where National Fuel is most active, we drilled
almost twice as many wells in 2007 as any of our competitors.

The key difference between National Fuel's business strategies and
New Mountain's is that our plans are based on a thorough analysis of
real data on our real assets. For example, our Appalachian drilling
plans are based on our experience with the extreme variability of the
shallow producing horizons on our acreage. Highly successful wells
with estimated ultimate recoveries exceeding 300 MMCFE can have
adjacent wells that are not economic. In northwestern Pennsylvania,
where our acreage is located, wells in one part of a county can have
average estimated ultimate recoveries that are twice the average
estimated ultimate recoveries of wells 30 miles away in the same
county.

It would be reckless to embark on a drilling program that failed
to take into account the complex geology of the actual formations to
be drilled. Drilling too many wells too rapidly would likely cause
average well quality to decline, lead to a delay in first production
and, significantly reduce the net present value of assets as compared
to our ongoing strategy of development at an informed pace.

Our Appalachian acreage is a very attractive asset, but one that
must be developed appropriately in order not to destroy shareholder
value. Because our acreage is in a part of the Appalachian Basin with
complex and variable geology, all available information must be
utilized in order to optimize the location of future wells rather than
the simpler, essentially arbitrary well location methodologies that
New Mountain's strategy would entail. New Mountain seems to propose
little more than to drill more Appalachian wells, but to do it much
faster and with much better results per well. Simply urging a
management team to go faster and do better is not a strategy; it is at
best cheerleading, and it illustrates New Mountain's lack of real
experience in exploration and production in our part of Appalachia.
Faster and better is a worthy goal, but haste frequently makes waste
and returns on capital erode quickly if well costs increase, reserves
per well decrease or the time between drilling and production
lengthens.

Topic 3: Your Company is pursuing the deeper Marcellus Shale
formation in Appalachia with joint venture partner EOG Resources, an
industry leader in shale exploration and development.

We believe that the Marcellus Shale, a deeper formation in
Appalachia, presents a significant opportunity for National Fuel. We
have been pursuing that opportunity since before New Mountain bought
any National Fuel stock.

In 2005, we started months of careful research and initiated
conversations with thirteen potential partners to explore the
Marcellus Shale. In 2006, we received and evaluated proposals from
seven of those companies. Later in 2006, we entered into negotiations
with EOG Resources that culminated in a joint venture involving
development of both their and our acreage in the Marcellus Shale. EOG
Resources is widely recognized as an industry leader in shale
exploration and development, and achieved excellent results in their
development of the Barnett Shale formation in Texas.

We expect that it will be an extensive and expensive process to
perfect the horizontal well technology to develop the Marcellus Shale,
and we will not start drilling large numbers of wells there until we
understand how to do so economically. Our joint venture with EOG
reflects our attention to the risk of loss, while New Mountain's
criticism reflects their exclusive focus on upside possibilities.
Contrary to New Mountain's assertions, our Marcellus Shale acreage was
not "farmed out to a third party who paid nothing up front for the
privilege." EOG Resources contributed the oil and gas rights on
130,000 acres to this 50/50 joint venture, and they are committed to
spending their own money to drill at least ten wells, which, at about
$1.5 million per well, is $15 million more than "nothing." Depending
on the number of vertical and horizontal wells they drill as part of
this joint venture, EOG Resources has the opportunity to earn a 50%
interest in up to 200,000 National Fuel acres. Both parties have the
opportunity to participate 50/50 in any Marcellus Shale wells drilled
on the acreage contributed by either party to this joint venture.

Through the EOG Resources joint venture we are expecting to drill
18 wells, including 10 horizontal wells, in the Marcellus Shale
formation in fiscal year 2008.

Topic 4: Your Company has refocused its Gulf of Mexico oil and gas
operations.

New Mountain recommends the sale of our oil and gas properties in
the Gulf of Mexico. In fact, representatives of New Mountain appeared
at the February 2007 annual meeting of Company shareholders and
strongly suggested that we sell the Gulf of Mexico properties, as well
as form a master limited partnership to own the Company's California
heavy oil properties.

Our history since last February reinforces our belief that careful
operation and management of real assets is preferable to a quick sale
or financial engineering. In February 2007, our Gulf of Mexico
production was 40 million cubic feet equivalent (MMCFE) per day. Today
it is 45 MMCFE per day. In February 2007 the price for California
heavy oil was $50.61 per barrel. Today it is about $84 per barrel. Had
we immediately followed New Mountain's recommendations, these
significant increases would not have benefited the Company's
shareholders.

National Fuel is an asset-based company, not a virtual gas
company. We believe that, generally, valuable assets tend to become
more valuable. While New Mountain urges a quick liquidation of the
Company's Gulf of Mexico assets due to the "robust property
acquisition market," they ignore the fact that the Company would have
to compete in that same market, and pay similarly "robust" prices, to
replace the assets that it sold. We fail to see the advantage in
simply liquidating operating assets and shrinking your Company.

Because the results of the past several years have been
inconsistent, our Gulf of Mexico strategy has changed significantly
from what it was in fiscal 2006. Our new President of Seneca
Resources, who has considerable experience in the Gulf, believes that
our very large 3D seismic database combined with a more focused and
selective drilling program, provide an economic opportunity that
should be pursued. We agree with him. We expect that with the new
management team in place at Seneca, and with this different approach,
we will lower our finding costs and improve our returns in the region.
If we do not accomplish this, we will reevaluate our entire position
in the Gulf, as we did with the Canadian assets that we sold.

Topic 5: The master limited partnerships (MLPs) recommended by New
Mountain do not add value and present significant cost and risk.

New Mountain's proposals to restructure your Company by
financially engineering the Exploration and Production ("E&P") assets,
and/or the Pipeline and Storage ("P&S") assets, into MLPs are
similarly founded on insufficient analysis of incomplete data. It is
not true that, as New Mountain states, "most of (their)
recommendations have not been considered." In fact, the Company
responded in detail to New Mountain's principal economic
recommendations in a letter to New Mountain dated December 11, 2007.
That letter was incorporated in a press release that was widely
disseminated, was filed with the SEC, and is publicly available at
www.sec.gov or our website www.nationalfuelgas.com. It is hard to
imagine that New Mountain is not aware of what we said. Apparently
they believe that, because we rejected their ideas, we did not
consider them. We began evaluating the prospect of forming an MLP long
before New Mountain became a shareholder, and after evaluating New
Mountain's particular MLP proposals, we found them to be inappropriate
for your Company.

After a thorough analysis of real data, we have concluded - with
the concurrence of our financial advisor, Morgan Stanley - that MLPs
are not an attractive strategic or financial alternative at this time.
We rely on real data and a knowledge-based analysis when making
decisions on how to manage the assets of your Company. We do not rely
on misleading comparisons to "best-in-class," well-established MLPs
that are not comparable.

The strategic reasons that have led other publicly traded energy
companies to form captive MLPs are less applicable to National Fuel.
With comprehensive assistance from Morgan Stanley, and the Company's
legal and tax advisor Andrews Kurth, National Fuel has undergone a
rigorous review process to consider the potential after-tax impact of
forming one or more MLP(s) from a financial and strategic perspective.
This intense review has led us to the conclusion that forming an MLP
of either the California E&P assets or the P&S business at this time
would not create additional shareholder value, and would in fact
entail significant cost and risk, for several reasons:

-- Most importantly, neither MLP could be shown to create
additional after-tax value to your Company.

-- The relatively low tax basis of our assets, particularly the
P&S assets, causes income tax obligations to be a significant
negative in the overall equation.

-- Your Company is adequately capitalized with a very healthy
debt/equity ratio, has access to the public capital markets
and does not need to raise cash by divesting a partial
interest in its assets by selling MLP units in order to pursue
its growth opportunities, especially those in Appalachia.

-- Your shares already trade at roughly the same multiple as E&P
MLPs. Moreover, of the E & P MLPs currently in existence, the
oldest went public approximately two years ago, so the
operating performance of such MLPs and their long-term
viability is difficult to evaluate.

-- There are potential operational, regulatory and administrative
impediments to forming an MLP with the Company's P&S assets
given their integration with our other operations.

Changed circumstances could lead to a different conclusion at a
different time. Your Company remains alert to opportunities to enhance
shareholder value, but MLPs do not currently present such an
opportunity.

Topic 6: The disposal of what New Mountain considers "non-core"
assets is not a significant opportunity for your Company.

We have also undertaken a review of those assets that New Mountain
views as "non-core," including the energy marketing business, the
timber assets, the landfill gas operations and the electric generating
business, to determine their strategic relevance and value to the
Company.

Energy Marketing

New Mountain's website urges the sale of the Company's energy
marketing business, which is carried out by National Fuel Resources,
Inc. ("NFR"). NFR markets natural gas to industrial, commercial,
public authority and residential customers and also offers
competitively priced energy and energy management services.

NFR is an important component of National Fuel and is
strategically aligned with the Company's commitment to participate in
all segments of the natural gas business. The complementary nature of
NFR's business and other National Fuel businesses contradicts New
Mountain's claim that NFR is a "non-core" asset, and New Mountain's
latest letter to shareholders urges the sale of other supposedly
"non-core" businesses without mentioning NFR.

Timber

Highland Forest Resources, Inc. and the Northeast Division of
Seneca Resources Corporation carry out National Fuel's timber segment
activities. This segment markets veneer logs, export logs, sawlogs and
green and kiln dry lumber from its timber holdings of more than
100,000 acres and nearly 400 million board feet in Pennsylvania and
New York. Our timber is located in the heart of the world's best
source of black cherry hardwood. Each year we typically harvest timber
at about the same rate the timber asset increases through natural
growth.

-- While the timber asset has become valuable, it is a byproduct
of our landholdings that support our Appalachian E&P, our P&S
and our Utility operations. National Fuel owns the oil and gas
rights underlying 90% of our timber acreage, including in the
Marcellus Shale. Ownership of surface rights and private roads
facilitates drilling, gathering, processing and transporting
gas on this acreage.

-- We continually review and carefully consider the best use of
the Company's timber assets. In fact, in 2003, we exchanged
about half of the timber assets to acquire the Empire State
Pipeline in a tax-advantaged transaction.

-- Depending on what kind of greenhouse gas legislation becomes
law, an asset that absorbs substantial quantities of carbon
dioxide may turn out to be useful in a carbon credit trading
system.

-- This segment occupies a very small portion of management's
time and the Company's capital, while contributing positively
to net income.

Consequently, we have no current plans to sell the timber asset
but remains alert to advantageous opportunities.

Landfill Gas

Horizon LFG, Inc. ("Horizon LFG") is the Company's landfill gas
business that owns and operates short-distance landfill gas pipeline
companies that purchase, process, transport and resell landfill gas to
customers in six states.

Landfill gas is recognized as a renewable, "green" energy that has
environmental and economic benefits. Again, depending on the form
greenhouse gas legislation takes, the value of this asset could be
further enhanced under a carbon credit trading system.

Horizon LFG is an attractive, yet small, component of National
Fuel's overall asset base. This segment contributes positively to net
income and requires a very small portion of management's time and the
Company's capital - the balance sheet value of its net plant is only
about 50 cents per share. The Company is currently in the process of
determining whether to add to this asset position or to sell these
assets. Once a conclusion is reached, it will be publicly disclosed to
all shareholders.

Horizon Power

New Mountain also urges the sale of the four electric generation
facilities owned by the Company's subsidiary Horizon Power, Inc. Three
of these plants are owned 50% and operated by a partner who has a
first option to buy prior to any sale of our interest. These three
plants generate electricity from landfill gas in western New York
State, and produce an excellent tax-advantaged return by selling this
"green" power at premium prices in the Northeast. Horizon Power also
owns a 50% interest in a small gas-fired combined cycle independent
power plant in northwestern Pennsylvania and we have been evaluating a
sale of our interest in this facility.

Horizon Power occupies a very small portion of management's time
and less than 1% of the Company's net plant, while contributing
positively to net income.

To summarize the "non-core" asset review, even assuming New
Mountain were correct that the energy marketing, timber, landfill gas
and small electric generation assets could be sold for the prices that
New Mountain assumes, following New Mountain's recommendations would
not result in a significant incremental benefit to National Fuel's
shareholders. We have determined (1) not to sell the core energy
marketing segment or its 50% interest in three small "green" electric
plants, (2) to hold the timber assets available for the right
opportunity, and (3) to actively consider the future of the small
landfill gas business.

CONCLUSION

After careful consideration, your Board believes that New
Mountain's recommendations are flawed by inadequate analysis, and are
not in the best interests of all of National Fuel's shareholders. We
urge you to vote each WHITE proxy card you receive to protect your
Company from New Mountain's "recommendations."

-0-
*T
If you have any questions on how to vote your shares,
please call our proxy solicitor:
MORROW & CO., LLC at (800) 252-1959
*T

IMPORTANT INFORMATION AND WHERE TO FIND IT

In connection with its 2008 Annual Meeting, National Fuel Gas
Company has filed a definitive proxy statement, WHITE proxy card and
other materials with the U.S. Securities and Exchange Commission
("SEC"). WE URGE INVESTORS TO READ THE PROXY STATEMENT AND THESE OTHER
MATERIALS CAREFULLY WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT NATIONAL FUEL GAS COMPANY AND THE MATTERS
TO BE CONSIDERED AT ITS ANNUAL MEETING. Investors may contact Morrow &
Co., LLC, National Fuel Gas Company's proxy advisor for the 2008
Annual Meeting, at (800) 252-1959 or by email at nfginfo@morrowco.com.
Investors may also obtain a free copy of the proxy statement and other
relevant documents as well as other materials filed with the SEC
concerning National Fuel Gas Company at the SEC's website at
http://www.sec.gov. Free copies of National Fuel Gas Company's SEC
filings are also available on National Fuel Gas Company's website at
http://www.nationalfuelgas.com. These materials and other documents
may also be obtained for free from: Secretary, National Fuel Gas
Company, 6363 Main Street, Williamsville, New York 14221, (716)
857-7000.

CERTAIN INFORMATION REGARDING PARTICIPANTS IN THE SOLICITATION

National Fuel Gas Company and its directors are, and certain of
its officers and employees may be deemed to be, participants in the
solicitation of proxies from National Fuel Gas Company's stockholders
with respect to the matters considered at National Fuel Gas Company's
2008 Annual Meeting. Information regarding these directors, and these
certain officers and employees, is included in the definitive proxy
statement on Schedule 14A filed with the SEC on January 11, 2008, and
on National Fuel Gas Company's website at
http://www.nationalfuelgas.com. Security holders can also obtain
information with respect to the identity of the participants and
potential participants in the solicitation and a description of their
direct or indirect interests, by security holdings or otherwise, for
free, by contacting: Secretary, National Fuel Gas Company, 6363 Main
Street, Williamsville, New York 14221, (716) 857-7000. More detailed
information with respect to the identity of the participants, and
their direct or indirect interests, by security holdings or otherwise,
will be set forth in the proxy statement and other materials to be
filed with the SEC in connection with National Fuel Gas Company's 2008
Annual Meeting.

FORWARD-LOOKING STATEMENTS

This Shareholder Information Paper contains "forward-looking
statements" as defined by the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are all statements other than
statements of historical fact, including, without limitation,
statements regarding future prospects, plans, performance, capital
structure and business structure, and anticipated or potential capital
expenditures, acquisitions or dispositions, as well as statements that
are identified by the use of the words "anticipates," "estimates,"
"expects," "forecasts," "intends," "plans," "predicts," "projects,"
"believes," "seeks," "will," and "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 are expressed in good faith and
are believed by the Company to have a reasonable basis, but there can
be no assurance that management's expectations, beliefs or projections
will result or be achieved or accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are
important factors that could cause actual results to differ materially
from those discussed in the forward-looking statements: changes in
economic conditions, including economic disruptions caused by
terrorist activities, acts of war or major accidents; 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; 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;
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; 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. The Company
disclaims any obligation to update any forward-looking statements to
reflect events or circumstances after the date hereof.

National Fuel Gas Company
Analyst:
James C. Welch, 716-857-6987
or
Media:
Julie C. Cox, 716-857-7079

Copyright Business Wire 2008