UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
AMENDMENT NO. 1
 FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2000

Commission File Number 1-3880
NATIONAL FUEL GAS COMPANY
 (Exact name of registrant as specified in its charter)

         New Jersey                              13-1086010
         ----------                              ----------
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                   Identification No.)

   10 Lafayette Square
    Buffalo, New York                             14203
    ------------------                            -----
(Address of principal executive offices)         (Zip Code)

                      (716) 857-6980
   (Registrant's telephone number, including area code)
   ----------------------------------------------------	

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
Common stock, $1 par value, outstanding at July 31, 2000:
39,279,886 shares.

Explanatory Note
This amendment to National Fuel Gas Company's quarterly report on Form 10-Q for the quarter and nine month periods ended June 30, 2000 includes changes from the previous report to reflect reductions for the three and nine months ended June 30, 2000 in operating revenues and operating expenses of $8,556,000 and $3,158,000, respectively, and a reduction as of June 30, 2000 in other assets of $10,614,000, a reduction in current and accrued liabilities of $2,058,000 and a reduction in deferred credits of $3,158,000. This amendment is required to reflect the impact of additional mark-to-market losses related to derivative financial instruments used by the Energy Marketing segment that did not qualify for hedge accounting.
Company or Group of Companies for which Report is Filed:
NATIONAL FUEL GAS COMPANY (Company or Registrant)
DIRECT SUBSIDIARIES: National Fuel Gas Distribution Corporation (Distribution Corporation)
National Fuel Gas Supply Corporation (Supply Corporation) Seneca Resources Corporation (Seneca) Highland Forest Resources, Inc. (Highland) Leidy Hub, Inc. (Leidy Hub) Data-Track Account Services, Inc. (Data-Track) National Fuel Resources, Inc. (NFR) Horizon Energy Development, Inc. (Horizon) Upstate Energy, Inc. (Upstate) NFR Power, Inc. (NFR Power) Niagara Independence Marketing Company (NIM) Seneca Independence Pipeline Company (SIP)

                                      INDEX

               Part I. Financial Information                             Page
               -----------------------------                             ----

Item 1.  Financial Statements

         a.    Consolidated Statements of Income and
               Earnings Reinvested in the Business - Three
               and Nine Months Ended June 30, 2000 and 1999              4 - 5

         b.    Consolidated Balance Sheets - June 30, 2000
               and September 30, 1999                                    6 - 7

         c.    Consolidated Statement of Cash Flows - Nine Months
               Ended June 30, 2000 and 1999                                 8

         d.    Consolidated Statement of Comprehensive Income - Three
               and Nine Months Ended June 30, 2000 and 1999                 9

         e.    Notes to Consolidated Financial Statements                10 - 18

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                             19 - 41

Item 3.  Quantitative and Qualitative Disclosures About Market Risk         42

               Part II. Other Information
               --------------------------

Item 1.  Legal Proceedings                                                  42

Item 2.  Changes in Securities                                              42

Item 3.  Defaults Upon Senior Securities                                    o

Item 4.  Submission of Matters to a Vote of Security Holders                o

Item 5.  Other Information                                                  42

Item 6.  Exhibits and Reports on Form 8-K                                42 - 43

Signature                                                                   44

o The Company has nothing to report under this item.	

Reference to the "Company" in this report means the Registrant or the Registrant and its subsidiaries collectively, as appropriate in the context of the disclosure. All references to a certain year in this report are to the Company's fiscal year ended September 30 of that year, unless otherwise noted.
This Form 10-Q contains "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934. Forward-looking statements should be read with the cautionary statements and important factors included in this Form 10-Q at Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" (MD&A), under the heading "Safe Harbor for Forward-Looking Statements." Forward-looking statements are all statements other than statements of historical fact, including, without limitation, those statements that are designated with a "*" following the statement, as well as those statements that are identified by the use of the words "anticipates," "estimates," "expects," "intends," "plans," "predicts," "projects," and similar expressions.

Part I. Financial Information

Item 1. Financial Statements

                            National Fuel Gas Company
                            -------------------------
                 Consolidated Statements of Income and Earnings
                 ----------------------------------------------
                           Reinvested in the Business
                           --------------------------
                                   (Unaudited)
                                   -----------
                                                                                         Three Months Ended
                                                                                              June 30,
(Dollars in Thousands, Except Per Common Share Amounts)                                 2000
                                                                                     (Restated)          1999
                                                                                 -----------------------------------
INCOME

Operating Revenues                                                                     $281,201          $248,658
---------------------------------------------------------------------------------------------------------------------

Operating Expenses
  Purchased Gas                                                                          94,883            64,449
  Fuel Used in Heat and Electric Generation                                               9,896             9,530
  Operation                                                                              79,469            77,058
  Maintenance                                                                             5,710             5,753
  Property, Franchise and Other Taxes                                                    14,794            20,817
  Depreciation, Depletion and Amortization                                               35,083            31,985
  Income Taxes                                                                           11,323             7,747
--------------------------------------------------------------------------------------------------------------------
                                                                                        251,158           217,339
--------------------------------------------------------------------------------------------------------------------
Operating Income                                                                         30,043            31,319
Other Income                                                                              2,271             1,584
--------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges and
  Minority Interest in Foreign Subsidiaries                                              32,314            32,903
--------------------------------------------------------------------------------------------------------------------

Interest Charges
  Interest on Long-Term Debt                                                             17,550            16,180
  Other Interest                                                                          6,115             5,231
--------------------------------------------------------------------------------------------------------------------
                                                                                         23,665            21,411
--------------------------------------------------------------------------------------------------------------------
Minority Interest in Foreign Subsidiaries                                                   421               348
--------------------------------------------------------------------------------------------------------------------

Net Income Available for Common Stock                                                     9,070            11,840

EARNINGS REINVESTED IN THE BUSINESS
Balance at April 1                                                                      552,198           492,233
--------------------------------------------------------------------------------------------------------------------
                                                                                        561,268           504,073
Dividends on Common Stock
 (2000 - $0.48 per share; 1999 - $0.465 per share)                                       18,794            17,974
--------------------------------------------------------------------------------------------------------------------
Balance at June 30                                                                     $542,474          $486,099
====================================================================================================================

Earnings Per Common Share:
  Basic                                                                                   $0.23             $0.31
====================================================================================================================
  Diluted                                                                                 $0.23             $0.30
====================================================================================================================
Weighted Average Common Shares Outstanding:
  Used in Basic Calculation                                                          39,177,148        38,662,728
====================================================================================================================
  Used in Diluted Calculation                                                        39,677,909        39,000,553
====================================================================================================================	

See Notes to Consolidated Financial Statements

Item 1. Financial Statements (Cont.)

                            National Fuel Gas Company
                            -------------------------
                 Consolidated Statements of Income and Earnings
                 ----------------------------------------------
                           Reinvested in the Business
                           --------------------------
                                   (Unaudited)
                                   -----------
                                                                                         Nine Months Ended
                                                                                              June 30,
(Dollars in Thousands, Except Per Common Share Amounts)                                 2000
                                                                                     (Restated)           1999
                                                                                 -----------------------------------
INCOME

Operating Revenues                                                                   $1,175,999        $1,072,484
--------------------------------------------------------------------------------------------------------------------

Operating Expenses
  Purchased Gas                                                                         441,912           377,273
  Fuel Used in Heat and Electric Generation                                              46,563            47,311
  Operation                                                                             241,350           232,221
  Maintenance                                                                            17,101            17,400
  Property, Franchise and Other Taxes                                                    61,195            73,504
  Depreciation, Depletion and Amortization                                              102,685            92,820
  Income Taxes                                                                           73,839            60,327
--------------------------------------------------------------------------------------------------------------------
                                                                                        984,645           900,856
--------------------------------------------------------------------------------------------------------------------
Operating Income                                                                        191,354           171,628
Other Income                                                                              7,636             7,901
--------------------------------------------------------------------------------------------------------------------
Income Before Interest Charges and
  Minority Interest in Foreign Subsidiaries                                             198,990           179,529
--------------------------------------------------------------------------------------------------------------------

Interest Charges
  Interest on Long-Term Debt                                                             50,446            49,630
  Other Interest                                                                         21,300            16,755
--------------------------------------------------------------------------------------------------------------------
                                                                                         71,746            66,385
--------------------------------------------------------------------------------------------------------------------
Minority Interest in Foreign Subsidiaries                                                (2,255)           (2,540)
--------------------------------------------------------------------------------------------------------------------

Net Income Available for Common Stock                                                   124,989           110,604

EARNINGS REINVESTED IN THE BUSINESS
Balance at October 1                                                                    472,517           428,112
--------------------------------------------------------------------------------------------------------------------
                                                                                        597,506           538,716
Dividends on Common Stock
 (2000 - $1.41 per share; 1999 - $1.365 per share)                                       55,032            52,617
--------------------------------------------------------------------------------------------------------------------
Balance at June 30                                                                     $542,474          $486,099
====================================================================================================================

Earnings Per Common Share:
  Basic                                                                                   $3.20             $2.86
====================================================================================================================
  Diluted                                                                                 $3.17             $2.84
====================================================================================================================
Weighted Average Common Shares Outstanding:
  Used in Basic Calculation                                                          39,058,490        38,619,120
====================================================================================================================
  Used in Diluted Calculation                                                        39,470,417        38,969,822
====================================================================================================================	

See Notes to Consolidated Financial Statements

Item 1. Financial Statements (Cont.)

                            National Fuel Gas Company
                            -------------------------
                           Consolidated Balance Sheets
                           ---------------------------
                                   (Unaudited)
                                   -----------

                                                                                  June 30,
                                                                                    2000            September 30,
                                                                                 (Restated)              1999
                                                                                ----------------------------------------

(Thousands of Dollars)
ASSETS

Property, Plant and Equipment                                                       $3,779,061          $3,390,875
   Less - Accumulated Depreciation, Depletion
     and Amortization                                                                1,116,491           1,029,643
---------------------------------------------------------------------------------------------------------------------
                                                                                     2,662,570           2,361,232
---------------------------------------------------------------------------------------------------------------------
Current Assets
   Cash and Temporary Cash Investments                                                  55,354              29,222
   Receivables - Net                                                                   158,105              97,828
   Unbilled Utility Revenue                                                             17,756              18,674
   Gas Stored Underground                                                               23,406              41,099
   Materials and Supplies - at average cost                                             29,740              23,631
   Unrecovered Purchased Gas Costs                                                       2,741               4,576
   Prepayments                                                                          26,990              35,072
---------------------------------------------------------------------------------------------------------------------
                                                                                       314,092             250,102
---------------------------------------------------------------------------------------------------------------------

Other Assets
   Recoverable Future Taxes                                                             87,724              87,724
   Unamortized Debt Expense                                                             20,508              21,717
   Other Regulatory Assets                                                              20,247              25,214
   Deferred Charges                                                                     11,341              14,266
   Other                                                                                92,686              82,331
---------------------------------------------------------------------------------------------------------------------
                                                                                       232,506             231,252
---------------------------------------------------------------------------------------------------------------------

                                                                                    $3,209,168          $2,842,586
=====================================================================================================================	

See Notes to Consolidated Financial Statements

Item 1. Financial Statements (Cont.)

                            National Fuel Gas Company
                            -------------------------
                           Consolidated Balance Sheets
                           ---------------------------
                                   (Unaudited)
                                   -----------

                                                                                  June 30,
                                                                                    2000            September 30,
                                                                                (Restated)               1999
                                                                             ----------------------------------------
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Capitalization:
Common Stock Equity
   Common Stock, $1 Par Value
    Authorized  - 200,000,000 Shares; Issued
    and Outstanding - 39,223,061 Shares and
    38,837,499 Shares, Respectively                                                    $39,223             $38,837
   Paid in Capital                                                                     448,115             431,952
   Earnings Reinvested in the Business                                                 542,474             472,517
   Accumulated Other Comprehensive Loss                                                (18,668)             (4,013)
--------------------------------------------------------------------------------------------------------------------
Total Common Stock Equity                                                            1,011,144             939,293
Long-Term Debt, Net of Current Portion                                                 958,327             822,743
---------------------------------------------------------------------------------------------------------------------
Total Capitalization                                                                 1,969,471           1,762,036
---------------------------------------------------------------------------------------------------------------------

Minority Interest in Foreign Subsidiaries                                               26,052              27,589
---------------------------------------------------------------------------------------------------------------------

Current and Accrued Liabilities
   Notes Payable to Banks and
    Commercial Paper                                                                   518,774             393,495
   Current Portion of Long-Term Debt                                                    12,646              69,608
   Accounts Payable                                                                     95,659              82,747
   Amounts Payable to Customers                                                          3,070               5,934
   Other Accruals and Current Liabilities                                              138,609              87,310
---------------------------------------------------------------------------------------------------------------------
                                                                                       768,758             639,094
---------------------------------------------------------------------------------------------------------------------

Deferred Credits
   Accumulated Deferred Income Taxes                                                   305,777             275,008
   Taxes Refundable to Customers                                                        14,814              14,814
   Unamortized Investment Tax Credit                                                    10,214              11,007
   Other Deferred Credits                                                              114,082             113,038
---------------------------------------------------------------------------------------------------------------------
                                                                                       444,887             413,867
---------------------------------------------------------------------------------------------------------------------
Commitments and Contingencies                                                                -                   -
---------------------------------------------------------------------------------------------------------------------

                                                                                    $3,209,168          $2,842,586
=====================================================================================================================	

See Notes to Consolidated Financial Statements

Item 1. Financial Statements (Cont.)

                            National Fuel Gas Company
                            -------------------------
                      Consolidated Statement of Cash Flows
                      ------------------------------------
                                   (Unaudited)
                                   -----------

                                                                                        Nine Months Ended
                                                                                             June 30,
                                                                             -----------------------------------------
(Thousands of Dollars)                                                                2000
                                                                                    (Restated)              1999
                                                                             -----------------------------------------
OPERATING ACTIVITIES
   Net Income Available for Common Stock                                             $124,989              $110,604
   Adjustments to Reconcile Net Income to Net Cash
    Provided by Operating Activities:
         Depreciation, Depletion and Amortization                                     102,685                92,820
         Deferred Income Taxes                                                         11,399                12,912
         Minority Interest in Foreign Subsidiaries                                      2,255                 2,540
         Other                                                                          5,102                 5,597
         Change in:
           Receivables and Unbilled Utility Revenue                                  (53,959)              (56,195)
           Gas Stored Underground and Materials and
            Supplies                                                                   14,579                11,235
           Unrecovered Purchased Gas Costs                                              1,835                 6,316
           Prepayments                                                                  9,415               (6,284)
           Accounts Payable                                                               561              (13,234)
           Amounts Payable to Customers                                               (2,864)                15,703
           Other Accruals and Current Liabilities                                      51,810                46,637
           Other Assets                                                               (7,826)              (12,203)
           Other Liabilities                                                            1,030                31,576
----------------------------------------------------------------------------------------------------------------------
Net Cash Provided by
 Operating Activities                                                                 261,011               248,024
----------------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
   Capital Expenditures                                                             (184,862)             (205,859)
   Investment in Subsidiaries, Net of Cash Acquired                                 (123,809)                     -
   Investment in Partnerships                                                         (4,375)               (3,633)
   Other                                                                               11,390                 3,519
----------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                                               (301,656)             (205,973)
----------------------------------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
   Change in Notes Payable to Banks and Commercial Paper                              125,450                24,700
   Net Proceeds from Issuance of Long-Term Debt                                       149,334                98,736
   Reduction of Long-Term Debt                                                      (161,499)             (115,365)
   Dividends Paid on Common Stock                                                    (54,253)              (51,904)
   Proceeds from Issuance of Common Stock                                              11,128                 7,921
----------------------------------------------------------------------------------------------------------------------
Net Cash Provided By (Used in) Financing                                               70,160              (35,912)
Activities
----------------------------------------------------------------------------------------------------------------------

Effect of Exchange Rates on Cash                                                      (3,383)                 (728)
----------------------------------------------------------------------------------------------------------------------

Net Increase in Cash and Temporary Cash                                                26,132                 5,411
Investments

Cash and Temporary Cash Investments at October 1                                       29,222                30,437

----------------------------------------------------------------------------------------------------------------------

Cash and Temporary Cash Investments at June 30                                        $55,354               $35,848
======================================================================================================================	

See Notes to Consolidated Financial Statements

Item 1. Financial Statements (Cont.)

                            National Fuel Gas Company
                            -------------------------
                 Consolidated Statement of Comprehensive Income
                 ----------------------------------------------
                                   (Unaudited)
                                   -----------

                                                                                     Three Months Ended
                                                                                          June 30,
                                                                     ---------------------------------------------------
(Thousands of Dollars)                                                          2000
                                                                             (Restated)                     1999
                                                                     ---------------------------------------------------

Net Income Available for Common Stock                                               $9,070                   $11,840
------------------------------------------------------------------------------------------------------------------------
Other Comprehensive Income, Before Tax:
   Foreign Currency Translation Adjustment                                             762                     2,326
   Unrealized Gain on Securities Available for Sale
       Arising During the Period                                          447                       -
   Less:  Reclassification Adjustment for Gains
       Realized in Net Income                                            (103)                      -
                                                                     -----------              -----------
                                                                                       344                         -
------------------------------------------------------------------------------------------------------------------------
Other Comprehensive Gain, Before Tax                                                 1,106                     2,326
Income Tax Expense Related to Unrealized Gain
   on Securities Available for Sale Arising During the Period            (156)                      -
   Less:  Reclassification Adjustment for Income Tax
   Expense on Gains Realized in Net Income                                 36                       -
                                                                     -----------              -----------
                                                                                      (120)                        -
------------------------------------------------------------------------------------------------------------------------
Other Comprehensive Gain, Net of Tax                                                   986                     2,326
------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                                                               $10,056                   $14,166
========================================================================================================================	

                                                                                    Nine Months Ended
                                                                                         June 30,
                                                                  -------------------------------------------------------
(Thousands of Dollars)                                                        2000
                                                                           (Restated)                       1999
                                                                  -------------------------------------------------------
Net Income Available for Common Stock                                             $124,989                   $110,604
-------------------------------------------------------------------------------------------------------------------------
Other Comprehensive Income, Before Tax:
   Foreign Currency Translation Adjustment                                         (15,802)                    (16,719)
   Unrealized Gain on Securities Available for Sale
       Arising During the Period                                     1,867                          -
   Less:  Reclassification Adjustment for Gains
       Realized in Net Income                                         (103)                         -
                                                                  -----------                 -----------
                                                                                     1,764                          -
-------------------------------------------------------------------------------------------------------------------------
Other Comprehensive Loss, Before Tax                                               (14,038)                    (16,719)
Income Tax Expense Related to Unrealized Gain on
   Securities Available for Sale Arising During the Period            (653)                         -
   Less:  Reclassification Adjustment for Income Tax
   Expense on Gains Realized in Net Income                              36                          -
                                                                  -----------                 -----------
                                                                                      (617)                         -
-------------------------------------------------------------------------------------------------------------------------
Other Comprehensive Loss, Net of Tax                                               (14,655)                    (16,719)
-------------------------------------------------------------------------------------------------------------------------
Comprehensive Income                                                              $110,334                    $93,885
=========================================================================================================================	

See Notes to Consolidated Financial Statements

Item 1. Financial Statements (Cont.)

National Fuel Gas Company

Notes to Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Policies
Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its majority owned subsidiaries. The equity method is used to account for the Company's investment in minority owned entities. All significant intercompany balances and transactions have been eliminated where appropriate.
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Quarterly Earnings. The Company, in its opinion, has included all adjustments that are necessary for a fair statement of the results of operations for the reported periods. The consolidated financial statements and notes thereto, included herein, should be read in conjunction with the financial statements and notes for the years ended September 30, 1999, 1998 and 1997 that are included in the Company's combined Annual Report to Shareholders/Form 10-K for 1999. The 2000 consolidated financial statements will be examined by the Company's independent accountants after the end of the fiscal year.
The earnings for the nine months ended June 30, 2000 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2000. Most of the Company's business is seasonal in nature and is influenced by weather conditions. Because of the seasonal nature of the Company's heating business, earnings during the winter months normally represent a substantial part of earnings for the entire fiscal year. The impact of abnormal weather on earnings during the heating season is partially reduced by the operation of a weather normalization clause (WNC) included in Distribution Corporation's New York tariff. The WNC is effective for October through May billings. Distribution Corporation's tariff for its Pennsylvania jurisdiction does not have a WNC. In addition, Supply Corporation's straight fixed-variable rate design, which allows for recovery of substantially all fixed costs in the demand or reservation charge, reduces the earnings impact of weather fluctuations.
Consolidated Statement of Cash Flows. For purposes of the Consolidated Statement of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of generally three months or less to be cash equivalents. Cash interest payments during the nine months ended June 30, 2000 and 1999 amounted to $70.8 million and $64.1 million, respectively. Income taxes paid during the nine months ended June 30, 2000 and 1999 amounted to $33.0 million and $30.4 million, respectively. In November 1999, the Company entered into a non-cash investing activity whereby it issued 54,674 shares of Company common stock to Supply Corporation, which in turn exchanged those shares for the assets of Cunningham Natural Gas Corporation. The assets included approximately $1.2 million of property, plant and equipment and $1.6 million of other assets.
In June 2000, Seneca acquired 100% of the stock of Tri Link Resources, Ltd. (Tri Link). Details of the acquisition are as follows (dollars in millions):

Assets acquired                             $260.7
Liabilities assumed                         (136.9)
Cash acquired at acquisition                  -
                                            ------
Cash paid, net of cash acquired             $123.8
                                            ======	

Further discussion of this acquisition can be found at Note 3 - Stock Acquisition.

Item 1. Financial Statements (Cont.)
Reclassification. Certain prior year amounts have been reclassified to conform with current year presentation.
Accumulated Other Comprehensive Income (Loss). The components of Accumulated Other Comprehensive Income (Loss) are as follows (in thousands):

                                                       At June 30, 2000                 At September 30, 1999
                                                       ----------------                 ---------------------

Cumulative Foreign Currency Translation Adjustment            $(20,274)                          $(4,472)
Net Unrealized Gain on Securities
    Available for Sale                                           1,606                               459
                                                              --------                           -------
Accumulated Other Comprehensive Loss                          $(18,668)                          $(4,013)
                                                              ========                           =======	

Earnings Per Common Share. Basic earnings per common share is computed by dividing income available for common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The only potentially dilutive securities the Company has outstanding are stock options. The diluted weighted average shares outstanding shown on the Consolidated Statement of Income reflects the potential dilution that could result from the exercise of these stock options as determined using the Treasury Stock Method.
Note 2 - Income Taxes
The components of federal and state income taxes included in the Consolidated Statement of Income are as follows (in thousands):

                                                   Nine Months Ended
                                                       June 30,
                                        ---------------------------------------
                                                2000
                                             (Restated)             1999
                                        ------------------ --------------------

Operating Expenses:
  Current Income Taxes
     Federal                                   $49,979              $35,940
     State                                      13,538                6,050

  Deferred Income Taxes
     Federal                                     6,927               13,585
     State                                         409                1,706

  Foreign Income Taxes                           2,986                3,046
-------------------------------------------------------------------------------
                                                73,839               60,327

Other Income:
  Deferred Investment Tax Credit                  (788)                (499)

Minority Interest in Foreign Subsidiaries         (479)                (705)
-------------------------------------------------------------------------------

Total Income Taxes                             $72,572              $59,123
===============================================================================	

Item 1. Financial Statements (Cont.)
The U.S. and foreign components of income before income taxes are as follows (in thousands):

                                                Nine Months Ended
                                                    June 30,
                                           2000
                                        (Restated)             1999
--------------------------------------------------------------------------

U.S.                                     $184,486             $155,553
Foreign                                    13,075               14,174
--------------------------------------------------------------------------
                                         $197,561             $169,727
==========================================================================	

Total income taxes as reported differ from the amounts that were computed by applying the federal income tax rate to income before income taxes. The following is a reconciliation of this difference (in thousands):

                                                       Nine Months Ended
                                                           June 30,
                                            -----------------------------------
                                                    2000
                                                 (Restated)           1999
                                            -----------------------------------

Net income available for common stock              $124,989          $110,604
Total income taxes                                   72,572            59,123
-------------------------------------------------------------------------------

Income before income taxes                         $197,561          $169,727
===============================================================================

Income tax expense, computed at
 statutory rate of 35%                             $ 69,146          $ 59,404

Increase (reduction) in taxes resulting from:
  State income taxes                                  9,229             5,045
  Depreciation                                        1,387             1,492
  Prior years tax adjustment                             37           (1,329)
  Foreign tax in excess of (less than)
   statutory rate                                    (2,629)          (2,620)
  Miscellaneous                                      (4,598)          (2,869)
-------------------------------------------------------------------------------

  Total Income Taxes                               $ 72,572          $ 59,123
===============================================================================	

Significant components of the Company's deferred tax liabilities (assets) were as follows (in thousands):

                                                               At June 30, 2000
                                                                 (Restated)                 At September 30, 1999
                                                       --------------------------------------------------------------
Deferred Tax Liabilities:
  Excess of tax over book depreciation                              $219,521                     $227,881
  Exploration and intangible well drilling costs                     118,237                       95,034
  Other                                                               59,663                       39,040
---------------------------------------------------------------------------------------------------------------------
Total Deferred Tax Liabilities                                       397,421                      361,955
---------------------------------------------------------------------------------------------------------------------

Deferred Tax Assets:
  Capitalized overheads                                              (29,345)                     (26,861)
  Other                                                              (62,299)                     (60,086)
---------------------------------------------------------------------------------------------------------------------
Total Deferred Tax Assets                                            (91,644)                     (86,947)
---------------------------------------------------------------------------------------------------------------------

Total Net Deferred Income Taxes                                     $305,777                     $275,008
=====================================================================================================================	

Item 1. Financial Statements (Cont.)
The Internal Revenue Service audits of the Company for the years 1977
- 1994 were settled during December 1998. Net income for the nine months ended June 30, 1999 was increased by approximately $3.9 million as a result of interest, net of tax and other adjustments, related to this settlement.
Note 3 - Stock Acquisition
In June 2000, National Fuel Exploration Corporation (NFEC), a wholly-owned subsidiary of Seneca, acquired the outstanding shares of Tri Link, a Calgary-Alberta based oil and gas exploration and production company. The cost of acquiring the outstanding shares of Tri Link was approximately $123.8 million. The acquisition was financed with short-term borrowings. Upon completing this acquisition, Tri Link was amalgamated under the name of NFEC.
The acquisition of Tri Link was accounted for in accordance with the purchase method as specified by Accounting Principles Board Opinion No. 16. NFEC's results of operations were incorporated into the Company's consolidated financial statements for the period subsequent to the completion of the acquisition of Tri Link on June 15, 2000. See Note 4 - Capitalization for discussion of the redemption of long-term debt, which was assumed as part of the Tri Link stock acquisition.
Note 4 - Capitalization
Common Stock. During the nine months ended June 30, 2000, the Company issued 330,888 shares of common stock under the Company's stock and benefit plans. As previously discussed, 54,674 shares were issued for the purchase of the assets of Cunningham Natural Gas Corporation.
On February 17, 2000, 725,500 stock options were granted at an exercise price of $46.66 per share. On March 17, 2000, 25,000 stock options were granted at an exercise price of $41.56 per share. On June 15, 2000, 140,600 stock options were granted at an exercise price of $49.72 per share.
In February 2000, the Company issued $150.0 million of 7.30% medium-term notes due in February 2003. After deducting underwriting discounts and commissions, the net proceeds to the Company amounted to $149.3 million. The proceeds of this debt issuance were used to redeem $50.0 million of 6.60% medium-term notes which matured in February 2000 and to reduce short-term debt.
On June 27, 2000, NFEC paid approximately $96.2 million to redeem the bank loans (CND 70.0 million, USD 47.2 million) and subordinated convertible debentures (CND 72.7 million, USD 49.0 million) of the former Tri Link. Short-term debt was used to redeem the bank loans and subordinated convertible debentures.
Note 5 - Derivative Financial Instruments
Seneca has entered into certain price swap agreements, no cost collars and options to manage a portion of the market risk associated with fluctuations in the price of natural gas and crude oil in an effort to provide more stability to its operating results. These derivative financial instruments are not held for trading purposes. The price swap agreements call for Seneca to receive monthly payments from (or make payments to) other parties based upon the difference between a fixed and a variable price as specified by the agreement. The no cost collars call for Seneca to receive monthly payments from (or make payments to) other parties when a variable price falls below an established floor price (Seneca receives payment from the counterparty) or exceeds an established ceiling price (Seneca pays the counterparty). The variable prices specified in the price swap agreements and the no cost collars are either a crude oil price quoted on the New York Mercantile Exchange or a natural gas price quoted in "Inside FERC." These variable prices are highly correlated with the market prices received by Seneca for its natural gas and crude oil production. The fair value of outstanding natural gas and crude oil price swap agreements, no cost collars and options discussed below reflect the estimated amounts Seneca would pay or receive to terminate its derivative financial instruments at June 30, 2000.

Item 1. Financial Statements (Cont.)
At June 30, 2000, Seneca had natural gas price swap agreements covering a notional amount of 36.4 billion cubic feet (Bcf) extending through 2003 at a weighted average fixed rate of $2.85 per thousand cubic feet (Mcf). Seneca also had crude oil price swap agreements covering a notional amount of 8,703,895 barrels (bbls) extending through 2003 at a weighted average fixed rate of $20.34 per bbl. The fair value of Seneca's outstanding natural gas and crude oil price swap agreements at June 30, 2000 was a net loss of approximately $74.6 million. This loss was offset by corresponding unrecognized gains from Seneca's anticipated natural gas and crude oil production over the terms of the price swap agreements.
Seneca recognized net losses of $12.6 million and $23.0 million related to settlements of its price swap agreements during the quarter and nine months ended June 30, 2000, respectively. During the quarter and nine months ended June 30, 1999, Seneca recognized net gains of $0.3 million and $6.2 million, respectively, related to its price swap agreements. Gains or losses from Seneca's price swap agreements are accrued in operating revenues on the Consolidated Statement of Income at the contract settlement dates. These gains or losses were offset by corresponding gains or losses from Seneca's natural gas and crude oil production.
At June 30, 2000, Seneca had no cost collars on natural gas covering a notional amount of 3.1 Bcf in 2001 with a weighted average floor price of $3.69 per Mcf and a weighted average ceiling price of $6.00 per Mcf. Seneca also had no cost collars on crude oil covering a notional amount of 1,500,000 bbls extending through 2002 with a weighted average floor price of $22.00 per bbl and a weighted average ceiling price of $29.03 per bbl. The fair value of Seneca's outstanding no cost collars on natural gas and crude oil at June 30, 2000 was a net loss of approximately $0.1 million. This loss was offset by corresponding gains or losses from Seneca's natural gas and crude oil production.
At June 30, 2000, Seneca had the following options outstanding:

Type of Option                                 Notional Amount               Weighted Average Strike Price
--------------                                 ---------------               -----------------------------
Written Call Options (1)               7.0 Bcf or 368,000 bbls                     $2.58/Mcf or $18.00/bbl
Written Put Option  368,000 bbls                    $12.50/bbl
Purchased Call Option                             368,000 bbls                                  $20.00/bbl	

(1) The counterparty has a choice between a natural gas call option and a crude oil call option, depending on whichever option has greater value to the counterparty.
Seneca's call and put options are being marked-to-market with gains or losses recorded in Operating Revenues on the Consolidated Statement of Income. The mark-to-market adjustment for the quarter and nine months ended June 30, 2000 was a loss of $7.4 million. The mark-to-market adjustment for the quarter and nine months ended June 30, 1999 was a loss of $1.1 million. The fair value of the call and put options at June 30, 2000 was a net liability of $11.1 million. During the quarter and nine months ended June 30, 2000, Seneca paid the counterparty $4.1 million and $7.5 million, respectively, related to the exercise of a portion of the written call options and received $3.1 million and $8.0 million, respectively, from the counterparty related to Seneca's exercise of a portion of the $20.00 per bbl call options that it had purchased. Settlements related to Seneca's call and put options during the quarter and nine months ended June 30, 1999 were minor payments of less than $100,000.
The Company is exposed to credit risk on the price swap agreements and no cost collars that Seneca has entered into, as well as on the call options that Seneca has purchased. Credit risk relates to the risk of loss that the Company would incur as a result of nonperformance by counterparties pursuant to the terms of their contractual obligations. To mitigate such credit risk, management performs an initial credit check and then on an ongoing basis monitors counterparty credit exposure.

Item 1. Financial Statements (Cont.)
NFR utilizes exchange-traded futures and exchange-traded options to manage a portion of the market risk associated with fluctuations in the price of natural gas. Such futures and options are not held for trading purposes.
At June 30, 2000, NFR had natural gas futures contracts that qualify for hedge accounting covering 0.3 Bcf of gas on a net basis (net long position) extending through 2002 at a weighted average contract price of $3.87 per Mcf. NFR had purchased natural gas options outstanding that qualify for hedge accounting covering 2.6 Bcf of gas extending through 2001 at a weighted average strike price of $3.41 per Mcf. NFR also had sold natural gas options outstanding that qualify for hedge accounting covering 2.6 Bcf of gas extending through 2001 at a weighted average strike price of $4.27 per Mcf. The exchange-traded futures and exchange-traded options are used to hedge NFR's purchase and sale commitments and storage gas inventory. The fair value of NFR's outstanding exchange-traded futures and exchange-traded options at June 30, 2000 was a net liability of approximately $2.0 million. This fair value reflects the estimated net amount that NFR would pay to terminate its exchange-traded futures and exchange-traded options at June 30, 2000. This liability was substantially offset by corresponding unrecognized gains from the related commodity transaction. NFR recognized net gains of $2.2 million and $4.0 million related to these futures contracts and options during the quarter and nine months ended June 30, 2000, respectively. During the quarter and nine months ended June 30, 1999, NFR recognized net losses of $1.1 million and $6.5 million, respectively, related to these futures contracts and options. These gains or losses were substantially offset by the related commodity transaction. NFR's accounting policy is to defer gains or losses from the natural gas futures that qualify for hedge accounting in either Other Deferred Credits or Deferred Charges on the Consolidated Balance Sheet until the hedged commodity transaction occurs, at which point they are reflected in operating revenues on the Consolidated Statement of Income. NFR's accounting policy for options that qualify for hedge accounting is to defer the premium paid or received on the Consolidated Balance Sheet and amortize the premium over the life of the option.
At June 30, 2000, NFR had purchased natural gas options outstanding that do not qualify for hedge accounting covering a notional amount of 67.7 Bcf extending through 2001 at a weighted average strike price of $4.24 per Mcf at June 30, 2000. It had also sold natural gas options outstanding that do not qualify for hedge accounting covering a notional amount of 90.0 Bcf extending through 2001 at a weighted average strike price of $4.51 per Mcf. The outstanding exchange-traded futures contracts that do not qualify for hedge accounting amounted to 1.2 Bcf of gas on a net basis (net short position), extending through 2001, at a weighted average contract price of $3.91 per Mcf. All of NFR's exchange-traded options and exchange-traded futures that do not qualify for hedge accounting are marked-to-market on a quarterly basis with resulting gains or losses recorded in operating revenues on the Consolidated Statement of Income. The mark-to-market adjustment for these instruments was a loss of $13.8 million for the quarter ending June 30, 2000. The fair value of these exchange-traded options and exchange-traded futures at June 30, 2000 was a net liability of $9.1 million. This fair value reflects the estimated net amount that NFR would pay to terminate its exchange-traded options and exchange-traded futures at June 30, 2000.
Privni severozapadni teplarenska, a.s. (PSZT) utilizes an interest rate swap to mitigate interest rate fluctuations on its Czech koruna (CZK) 1,436,331,600 term loan ($38.5 million at June 30, 2000), which carries a variable interest rate of six month Prague Interbank Offered Rate (PRIBOR) plus 0.475%. Under the terms of the interest rate swap, which extends until 2002, PSZT pays a fixed rate of 8.31% and receives a floating rate of six month PRIBOR. PSZT recognized a loss of approximately $0.3 million and $0.7 million related to this interest rate swap during the quarter and nine months ended June 30, 2000, respectively. The fair value of PSZT's interest rate swap at June 30, 2000 was a loss of approximately $1.8 million.

Item 1. Financial Statements (Cont.)
Note 6 - Commitments and Contingencies
Environmental Matters. It is the Company's policy to accrue estimated environmental clean-up costs (investigation and remediation) when such amounts can reasonably be estimated and it is probable that the Company will be required to incur such costs. Distribution Corporation and Supply Corporation have estimated their clean-up costs related to former manufactured gas plant and former gasoline plant sites and third party waste disposal sites will be in the range of $8.1 million to $9.1 million. The minimum liability of $8.1 million has been recorded on the Consolidated Balance Sheet at June 30, 2000. Other than as discussed in Note H of the 1999 Form 10-K (referred to below), the Company is currently not aware of any material additional exposure to environmental liabilities. However, adverse changes in environmental regulations or other factors could impact the Company.
The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. The Company has established procedures for the ongoing evaluation of its operations to identify potential environmental exposures and comply with regulatory policies and procedures.
For further discussion refer to Note H - Commitments and Contingencies under the heading "Environmental Matters" in Item 8 of the Company's 1999 Form 10-K.
Other. The Company is involved in litigation arising in the normal course of business. The Company is involved in regulatory matters arising in the normal course of business that involve rate base, cost of service and purchased gas cost issues. While the resolution of such litigation or regulatory matters could have a material effect on earnings and cash flows in the year of resolution, none of this litigation, and none of these regulatory matters, are expected to have a material adverse effect on the financial condition of the Company at this time.
Note 7 - Business Segment Information. The Company has six reportable segments:
Utility, Pipeline and Storage, Exploration and Production, International, Energy Marketing, and Timber. The breakdown of the Company's reportable segments is based upon a combination of factors including differences in products and services, regulatory environment and geographic factors.
The data presented in the tables below reflect the reportable segments and reconciliations to consolidated amounts. There have been no changes in the basis of segmentation nor in the basis of measuring segment profit or loss from those used in the 1999 Form 10-K. There have been no material changes in the amount of assets for any operating segment from the amounts disclosed in the 1999 Form 10-K, except for the Exploration and Production segment. On June 15, 2000, the Exploration and Production segment, through NFEC, acquired the outstanding shares of Tri Link, which included assets of $260.7 million. See further discussion of this acquisition in Note 3 - Stock Acquisition.

Item 1. Financial Statements (Cont.)

Quarter Ended June 30, 2000 (Thousands)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                    Total
                            Pipeline   Exploration               Energy           Reportable             Corporate and     Total
                            and           and                   Marketing          Segments              Intersegment  Consolidated
                  Utility   Storage    Production International (Restated) Timber (Restated)  All Other  Eliminations   (Restated)
-----------------------------------------------------------------------------------------------------------------------------------
Revenue from
External           $160,428   $19,736      $53,447    $15,303    $25,653   $10,662  $285,229  $(4,028)      $   -         $281,201
Customers

Intersegment
Revenues              4,022    22,104            -          -          -         -    26,126    4,322     (30,448)              -

Segment Profit:
Net Income (Loss)     5,565     7,324        6,026     (1,394)     (9,390)   1,155     9,286     (315)         99            9,070

  Nine Months Ended June 30, 2000 (Thousands)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                   Total
                            Pipeline   Exploration               Energy           Reportable            Corporate and    Total
                            and           and                   Marketing         Segments              Intersegment  Consolidated
                  Utility   Storage    Production International (Restated) Timber (Restated) All Other  Eliminations   (Restated)
-----------------------------------------------------------------------------------------------------------------------------------

Revenue from
External           $727,172   $61,775     $153,591    $92,985   $108,561   $30,933    $1,175,017 $982       $   -       $1,175,999
Customers

Intersegment
Revenues             16,868    66,425          224          -          -         -    83,517    4,323     (87,840)               -

Segment Profit:
Net Income (Loss)    68,843    26,762       21,910      7,606     (7,942)    6,175   123,354      212       1,423          124,989

  Quarter Ended June 30, 1999 (Thousands)
-----------------------------------------------------------------------------------------------------------------------------------

                            Pipeline   Exploration                                 Total                Corporate and
                            and           and                    Energy          Reportable             Intersegment     Total
                  Utility   Storage    Production International Marketing Timber  Segments   All Other  Eliminations  Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Revenue from
External           $141,960   $19,544      $38,655    $16,089    $25,979    $6,333  $248,560      $98       $   -         $248,658
Customers

Intersegment
Revenues              1,236    20,925        1,507          -          -         -    23,668        -     (23,668)               -

Segment Profit:
Net Income (Loss)     3,439     6,995        2,576     (2,495)       847       586    11,948      (43)        (65)          11,840

  Nine Months Ended June 30, 1999 (Thousands)
-----------------------------------------------------------------------------------------------------------------------------------

                            Pipeline   Exploration                                 Total                Corporate and
                            and           and                    Energy          Reportable             Intersegment     Total
                  Utility   Storage    Production International Marketing Timber  Segments   All Other  Eliminations  Consolidated
-----------------------------------------------------------------------------------------------------------------------------------

Revenue from
External
Customers          $705,581   $62,837      $99,001    $97,166    $82,253   $24,110 $1,070,948   $1,536          $   -    $1,072,484

Intersegment
Revenues              5,269    63,839        6,449          -          -         -     75,557        -        (75,557)            -

Segment Profit:
Net Income           62,438    30,094        2,982      7,996      1,730     4,445    109,685      162            757       110,604	

Item 1.  Financial Statements (Concl.)
         -----------------------------

Note 8 - Restatement.  The Company's  financial  statements at June 30, 2000 and
for the three months and nine months ended June 30, 2000 have been restated from
amounts previously  reported to reflect the impact of additional  mark-to-market
losses related to derivative financial  instruments used by the Energy Marketing
segment that did not qualify for hedge accounting. The following table shows the
income statement and balance sheet line items that have been restated:

                                                          Restated                  As Previously Reported
                                                          --------                  ----------------------
Operating Revenues:
       Three Months Ended June 30, 2000               $   281,201                        $   289,757
       Nine Months Ended June 30, 2000                  1,175,999                          1,184,555

Income Taxes:
       Three Months Ended June 30, 2000                    11,323                             14,481
       Nine Months Ended June 30, 2000                     73,839                             76,997

Net Income Available for Common Stock:
       Three Months Ended June 30, 2000                     9,070                             14,468
       Nine Months Ended June 30, 2000                    124,989                            130,387

Basic Earnings Per Common Share:
       Three Months Ended June 30, 2000                      0.23                               0.37
       Nine Months Ended June 30, 2000                       3.20                               3.34

Diluted Earnings Per Common Share:
       Three Months Ended June 30, 2000                      0.23                               0.36
       Nine Months Ended June 30, 2000                       3.17                               3.30

Deferred Charges                                           11,341                             21,955
Earnings Reinvested in the Business                       542,474                            547,872
Other Accruals and Current Liabilities                    138,609                            140,667
Accumulated Deferred Income Taxes                         305,777                            308,935
Total Assets                                            3,209,168                          3,219,782
Total Capitalization and Liabilities                    3,209,168                          3,219,782	

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations
RESULTS OF OPERATIONS
Earnings. The Company's earnings were $9.1 million, or $0.23 per common share (basic and diluted), for the quarter ended June 30, 2000. This compares with earnings of $11.8 million, or $0.31 per common share ($0.30 per common share on a diluted basis), for the quarter ended June 30, 1999. The decrease in earnings of approximately $2.7 million is the result of a loss in the Energy Marketing segment this year compared with the earnings reported in the prior year's quarter. This was offset in part by higher earnings in the Exploration and Production, Utility, Timber, and Pipeline and Storage segments and a lower loss in the current quarter for the International segment. .
The Company's earnings were $125.0 million, or $3.20 per common share ($3.17 per common share on a diluted basis), for the nine months ended June 30, 2000. This compares with earnings of $110.6 million, or $2.86 per common share ($2.84 per common share on a diluted basis), for the nine months ended June 30, 1999. The increase in earnings of $14.4 million is the result of higher earnings in the Exploration and Production, Utility and Timber segments. These increases were offset in part by lower earnings in the Pipeline and Storage and International segments and a loss in the Energy Marketing segment.
Due to the precipitous rise in natural gas prices this quarter, the Company took a $21.3 million pretax, or $13.7 million after tax charge to earnings for the quarter ended June 30, 2000. This charge recognizes the estimated net value related to derivative financial instruments that do not qualify for hedge accounting. Generally Accepted Accounting Principles require the Company to mark these derivative financial instruments to market at the end of each quarter. The contracts relate to price risk management activities in the Exploration and Production and Energy Marketing segments. This mark-to-market adjustment does not reflect the actual gain or loss that will be realized upon settlement of the option contracts.
Additional discussion of earnings in each of the business segments can be found in the business segment information that follows.

Earnings (Loss) by Segment
------------------------------------------------ ---------------------------------- ----------------------------------
                                                      Three Months Ended                  Nine Months Ended
                                                           June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(Thousands)                                             2000                               2000
                                                     (Restated)           1999          (Restated)           1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
Utility                                                $ 5,565           $ 3,439         $ 68,843          $ 62,438
Pipeline and Storage                                     7,324             6,995           26,762            30,094
Exploration and Production                               6,026             2,576           21,910             2,982
International                                           (1,394)           (2,495)           7,606             7,996
Energy Marketing                                        (9,390)              847           (7,942)            1,730
Timber                                                   1,155               586            6,175             4,445
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
   Total Reportable Segments                             9,286            11,948          123,354           109,685
All Other                                                 (315)              (43)             212               162
Corporate                                                   99               (65)           1,423               757
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
   Total Consolidated                                   $9,070           $11,840         $124,989          $110,604
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
Utility

Utility Operating Revenues
------------------------------------------------ ---------------------------------- ----------------------------------
                                                          Three Months Ended                  Nine Months Ended
                                                               June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(Thousands)                                             2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
  Retail Sales Revenues:
    Residential                                       $107,883          $100,924         $515,703          $521,457
    Commercial                                          15,856            15,214           84,418            93,444
    Industrial                                           3,742             2,618           13,217            11,988
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                       127,481           118,756          613,338           626,889
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
  Off-System Sales                                       9,417             5,401           38,605            22,897
  Transportation                                        24,861            19,331           90,167            65,996
  Other                                                  2,691              (292)           1,930            (4,932)
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                      $164,450          $143,196         $744,040          $710,850
------------------------------------------------ ---------------- ----------------- ---------------- -----------------

Utility Throughput
------------------------------------------------ ---------------------------------- ----------------------------------
                                                          Three Months Ended                  Nine Months Ended
                                                               June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(MMcf)                                                  2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
  Retail Sales:
    Residential                                         11,305            11,222           62,766            66,199
    Commercial                                           1,907             1,926           11,425            13,055
    Industrial                                             851               747            2,929             2,978
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                        14,063            13,895           77,120            82,232
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
  Off-System Sales                                       2,295             2,223           10,916            10,195
  Transportation                                        17,085            15,608           60,763            53,638
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                        33,443            31,726          148,799           146,065
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

2000 Compared with 1999
Operating revenues for the Utility segment increased $21.3 million and $33.2 million, respectively, for the quarter and nine months ended June 30, 2000 as compared with the same periods a year ago. For the quarter, this increase resulted from higher retail, transportation, off-system sales and other revenue. For the nine months ended, this increase resulted from higher transportation, off-system sales and other revenue, offset in part by lower retail gas sales revenues.
The increase in retail gas sales revenue for the quarter was primarily the result of the recovery of higher gas costs and slightly higher volumes sold. The recovery of higher gas costs resulted from a much higher cost of purchased gas (the average cost of purchased gas was $5.21 per Mcf and $3.87 per Mcf for the three months ended June 30, 2000 and 1999, respectively). The slight increase in sales volumes was the result of colder weather, offset by the impact of the migration of residential and small commercial retail customers to transportation service in both the New York and Pennsylvania jurisdictions. This migration to transportation service was also the primary cause of the increase in volumes transported and transportation revenue.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
The decrease in retail gas sales revenue for the nine months was the result of lower volumes of retail gas sales because of the migration of residential and small commercial retail customers to transportation service. This was offset in part by a higher average cost of purchased gas (the average cost of purchased gas was $4.55 per Mcf and $3.64 per Mcf, for the nine months ended June 30, 2000 and 1999, respectively). This migration to transportation service was also the primary cause of the increase in volumes transported and transportation revenue. Restructuring in the Utility segment's service territory is further discussed in the "Rate Matters" section that follows.
Off-system gas sales revenue increased $4.0 million and $15.7 million, respectively, for the quarter and nine months ended June 30, 2000, as compared with the same periods a year ago, largely due to increased gas prices in combination with higher volumes. However, due to profit sharing with retail customers, the margins resulting from off-system sales are minimal.
Other operating revenues increased $3.0 million and $6.9 million, respectively, for the quarter and nine months ended June 30, 2000, as compared with the same periods a year ago. Other operating revenues in the quarter and nine months ended June 30, 1999 were reduced by $1.6 million and $6.5 million, respectively, for the recording of a special gas restructuring reserve to be applied against incremental costs that could result from the New York Public Service Commission's (NYPSC) gas restructuring effort. No such reserve is required in 2000 by the terms of the New York rate settlement of 1998. Other operating revenues for the quarter and nine months ended June 30, 2000, include revenue of $2.0 million accrued to offset additional state income taxes which resulted from the enactment of tax changes in New York State. The revenue and related regulatory asset were recorded as the NYPSC has provided for the opportunity of rate recovery by New York State utilities of such additional taxes. Partly offsetting these increases to other operating revenues, Distribution Corporation accrued an estimated refund provision for a 50% sharing with customers of earnings over a predetermined amount in accordance with the New York rate settlement of 1998. The estimated refund provision was $1.1 million for the quarter ended June 30, 2000 and $3.3 million for the nine months ended June 30, 2000.
The Utility segment's third quarter 2000 earnings were $5.6 million, an increase of $2.1 million when compared with third quarter 1999 earnings. The most significant reasons for the increase were that last year's quarter included a portion (approximately $1.0 million reduction to earnings) of the 1999 special gas restructuring reserve, as discussed above, and the current quarter had lower operation and maintenance (O&M) expense of approximately $1.3 million (after tax). This lower O&M expense is due in part to a charge for an early retirement offer in 1999. Partially offsetting these increases, the third quarter 2000 earnings included an estimated refund provision (approximately $0.7 million reduction to earnings), which is also discussed above.
The Utility segment's earnings for the nine months ended June 30, 2000 were $68.8 million, an increase of $6.4 million when compared with the earnings for the nine months ended June 30, 1999. This increase can be attributed primarily to expenses related to early retirement offers in 1999 (approximately $3.7 million reduction to earnings in 1999) as well as the 1999 special gas restructuring reserve (approximately $4.2 million reduction to earnings in 1999), which was discussed above. Both the early retirement offers and the gas restructuring reserve did not recur in 2000. Partly offsetting these increases, the nine months ended June 30, 2000 earnings included an estimated refund provision (approximately $2.1 million reduction to earnings), as previously discussed.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)

Degree Days
---------------------------------- -------------- -------------- -------------------- --------------------------------
                                                                                             Percent (Warmer)
Three Months Ended                                                                              Colder Than
                                                                                      --------------------------------
June 30                               Normal          2000              1999               Normal        Prior Year
---------------------------------- -------------- -------------- -------------------- ----------------- --------------
Buffalo                                 976            936               817                (4.1%)           14.6%
Erie                                    874            835               755                (4.5%)           10.6%
---------------------------------- -------------- -------------- -------------------- ----------------- --------------
Nine Months Ended
June 30
---------------------------------- -------------- -------------- -------------------- ----------------- --------------
Buffalo                                6,733          6,090             6,066               (9.5%)           0.4%
Erie                                   6,130          5,478             5,513              (10.6%)          (0.6%)
---------------------------------- -------------- -------------- -------------------- ----------------- --------------	

Pipeline and Storage

Pipeline and Storage Operating Revenues
------------------------------------------------ ---------------------------------- ----------------------------------
                                                          Three Months Ended                  Nine Months Ended
                                                               June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(Thousands)                                             2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
Firm Transportation                                    $22,663           $21,810          $69,078           $68,951
Interruptible Transportation                               826               243            1,800               995
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                        23,489            22,053           70,878            69,946
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
Firm Storage Service                                    15,594            15,654           47,706            47,117
Interruptible Storage Service                               38                 9              211               172
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                        15,632            15,663           47,917            47,289
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
Other                                                    2,719             2,753            9,405             9,441
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                       $41,840           $40,469         $128,200          $126,676
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

Pipeline and Storage Throughput
------------------------------------------------ ---------------------------------- ----------------------------------
                                                          Three Months Ended                  Nine Months Ended
                                                               June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(MMcf)                                                  2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
Firm Transportation                                     52,834            53,970          237,575           240,395
Interruptible Transportation                             4,752               418            7,199             4,099
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                        57,586            54,388          244,774           244,494
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

2000 Compared with 1999
Operating revenues for the Pipeline and Storage segment increased $1.4 million and $1.5 million for the quarter and nine months ended June 30, 2000, respectively, as compared with the same period a year ago. Approximately, $1.3 million of these increases relates to a "pass through" type item (which did not recur in 2000) that reduced revenues in the prior year and correspondingly reduced O&M expense in the prior year, thus having no bottom line earnings impact.
The Pipeline and Storage segment's third quarter 2000 earnings were $7.3 million, an increase of $0.3 million when compared with the third quarter of 1999's earnings. Lower O&M expense, due in part to a charge in the prior year for an early retirement, increased earnings for the quarter. The impact of the recently enacted New York State tax changes, as discussed in the Utility segment above, mostly offset the O&M savings. The Federal Energy Regulatory Commission (FERC), which regulates this segment, has not provided for the recovery of additional taxes as has the NYPSC.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
The Pipeline and Storage segment's earnings for the nine months ended June 30, 2000 were $26.8 million, a decrease of $3.3 million when compared with the earnings for the nine months ended June 30, 1999. The most significant reason for this decrease is that the prior year's earnings included interest income and a reduction in income taxes related to the final settlement of Internal Revenue Service audits of years 1977-1994. This, coupled with the negative impact of New York State tax changes, discussed above, resulted in decreased earnings.
Exploration and Production

Exploration and Production Operating Revenues
------------------------------------------------ ---------------------------------- ----------------------------------
                                                      Three Months Ended                 Nine Months Ended
                                                           June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(Thousands)                                            2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
  Gas (after Hedging)                                  $28,321           $23,823          $83,532           $61,502
  Oil (after Hedging)                                   28,624            14,271           66,059            35,585
  Gas Processing Plant                                   4,170             2,734           12,541             8,326
  Other                                                 (7,668)            (666)           (8,317)               37
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                       $53,447           $40,162         $153,815          $105,450
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

2000 Compared with 1999
Operating revenues for the Exploration and Production segment increased $13.3 million and $48.4 million, respectively, for the quarter and nine months ended June 30, 2000, as compared with the same periods a year ago. For the quarter ended June 30, 2000, gas production revenue (after hedging) increased $4.5 million and oil production revenue (after hedging) increased $14.4 million due to increased production and prices. For the nine months ended June 30, 2000, gas production revenue (after hedging) and oil production revenue (after hedging) increased $22.0 million and $30.5 million, respectively, due to increased production and prices. Refer to the tables below for production volumes and average price information. Revenue from Seneca's gas processing plant was up $1.4 million and $4.2 million, respectively, for the quarter and nine months ended June 30, 2000 as compared with the same periods a year ago due to increased prices for gas liquids and residue. Other revenue decreased $7.0 million and $8.4 million, respectively, for the quarter and nine months ended June 30, 2000, as compared with the same periods a year ago. The decreases to other revenues resulted primarily from mark-to-market and other revenue adjustments related to written options. Refer to further discussion of written options in the "Market Risk Sensitive Instruments" section that follows and in Item 1, Note 5 - Derivative Financial Instruments.
The Exploration and Production segment's third quarter 2000 earnings were $6.0 million, an increase of $3.4 million when compared with third quarter 1999 earnings. As discussed above, significant improvement in oil and gas pricing combined with an increase in production were the main reasons for higher earnings. A 20% increase in oil production was attributable largely to production from the Canadian wells acquired by National Fuel Exploration Corporation (NFEC) (a 100% wholly-owned subsidiary of Seneca) as part of the Tri Link Resources, Ltd. (Tri Link) stock acquisition in mid-June. Partly offsetting these increases in revenues were increases in depletion expense (due to higher production volumes and higher depletable base), lease operating costs (due to increased production), a negative mark-to-market revenue adjustment related to written options, and increased interest expense due to higher borrowings and higher weighted average interest rates.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
The Exploration and Production segment's earnings for the nine months ended June 30, 2000 were $21.9 million, an increase of $18.9 million when compared with the earnings for the nine months ended June 30, 1999. As discussed above, significant improvement in oil and gas pricing combined with an increase in production were the main reasons for higher earnings. Partly offsetting these increases were higher depletion expense and lease operating costs. Earnings were also reduced due to revenue adjustments related to written options discussed above. Also, there was a decrease in interest income as 1999 included nonrecurring interest received from the final settlement of the IRS audits in December 1998. In addition, there was an increase in interest expense as a result of increased borrowings and higher weighted average interest rates.

Production Volumes
----------------------------------------------- ---------------------------------- ----------------------------------
                                                      Three Months Ended                  Nine Months Ended
                                                           June 30,                           June 30,
----------------------------------------------- ---------------------------------- ----------------------------------
                                                         2000              1999             2000              1999
----------------------------------------------- ---------------- ----------------- ---------------- -----------------
Gas Production (MMcf)
  Gulf Coast                                            8,860             8,532           24,948            21,473
  West Coast                                            1,058             1,050            3,301             2,839
  Appalachia                                            1,100             1,069            3,252             3,381
  Canada                                                   17                 -               17                 -
----------------------------------------------- ---------------- ----------------- ---------------- -----------------
                                                       11,035            10,651           31,518            27,693
----------------------------------------------- ---------------- ----------------- ---------------- -----------------
Oil Production (thousands of barrels)
  Gulf Coast                                              372               352            1,025             1,022
  West Coast                                              714               664            2,106             1,957
  Appalachia                                                3                 2                7                 7
  Canada                                                  128                 -              128                 -
----------------------------------------------- ---------------- ----------------- ---------------- -----------------
                                                        1,217             1,018            3,266             2,986
----------------------------------------------- ---------------- ----------------- ---------------- -----------------	

Average Prices
----------------------------------------------- ---------------------------------- ----------------------------------
                                                       Three Months Ended                 Nine Months Ended
                                                            June 30,                           June 30,
----------------------------------------------- ---------------------------------- ----------------------------------
                                                          2000              1999             2000              1999
----------------------------------------------- ---------------- ----------------- ---------------- -----------------
Average Gas Price/Mcf
  Gulf Coast                                             $3.57             $2.19            $2.93             $1.99
  West Coast                                             $3.58             $2.30            $3.02             $2.17
  Appalachia                                             $3.03             $2.31            $2.94             $2.42
  Canada                                                 $2.68                 -            $2.68                 -
  Weighted Average                                       $3.52             $2.22            $2.94             $2.06
  Weighted Average After Hedging                         $2.57             $2.24            $2.65             $2.22

Average Oil Price/bbl
  Gulf Coast                                            $28.83            $16.54           $27.06            $13.41
  West Coast                                            $24.15            $12.60           $22.70            $10.19
  Appalachia                                            $27.16            $14.95           $24.23            $13.19
  Canada                                                $28.58                 -           $28.58                 -
  Weighted Average                                      $26.06            $13.97           $24.30            $11.30
  Weighted Average After Hedging                        $23.52            $14.02           $20.22            $11.92
----------------------------------------------- ---------------- ----------------- ---------------- -----------------	

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
International

International Operating Revenues
----------------------------------------------- ---------------------------------- ----------------------------------
                                                      Three Months Ended                  Nine Months Ended
                                                           June 30,                           June 30,
----------------------------------------------- ---------------------------------- ----------------------------------
(Thousands)                                              2000              1999             2000              1999
----------------------------------------------- ---------------- ----------------- ---------------- -----------------

   Heating                                               $7,601          $8,221            $64,291         $68,020
   Electricity                                            7,141           7,853             25,466          27,224
   Other                                                    561              15              3,228           1,922
----------------------------------------------- ---------------- ----------------- ---------------- -----------------
                                                        $15,303         $16,089            $92,985         $97,166
----------------------------------------------- ---------------- ----------------- ---------------- -----------------	

International Heating and Electric Volumes
----------------------------------------------- ---------------------------------- ----------------------------------
                                                     Three Months Ended                  Nine Months Ended
                                                          June 30,                           June 30,
----------------------------------------------- ---------------------------------- ----------------------------------
                                                       2000              1999             2000              1999
----------------------------------------------- ---------------- ----------------- ---------------- -----------------

   Heating Sales (Gigajoules) (1)                     1,199,835         1,266,929        9,464,307         9,502,415
   Electricity Sales (megawatt hours)                   271,823           279,987          911,520           897,829

----------------------------------------------- ---------------- ----------------- ---------------- -----------------	

(1) Gigajoules = one billion joules. A joule is a unit of energy.
2000 Compared with 1999
Operating revenues for the International segment decreased $0.8 million and $4.2 million, respectively, for the quarter and nine months ended June 30, 2000 as compared to the same periods a year ago. The decrease reflects a decrease in the value of the Czech koruna as well as the impact of warm weather and conservation efforts by customers.
The International segment experienced a loss of $1.4 million for the third quarter 2000, $1.1 million lower than the loss of $2.5 million for the third quarter of 1999. This lower loss was primarily due to lower O&M expenses and additional consideration received on the sale of a previous project.
The International segment's earnings for the nine months ended June 30, 2000 were $7.6 million, a decrease of $0.4 million when compared with the earnings for the nine months ended June 30, 1999. This decrease can be attributed primarily to lower margins stemming from warm weather and conservation efforts by customers combined with the decline in the value of the Czech koruna. These factors were offset, in part, by lower O&M expenses.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
Energy Marketing

Energy Marketing Operating Revenues
------------------------------------------------ ---------------------------------- ----------------------------------
                                                        Three Months Ended                 Nine Months Ended
                                                             June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(Thousands)                                             2000                             2000
                                                     (Restated)           1999        (Restated)             1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------

Natural Gas (after Hedging)                             $38,631           $25,407         $120,193           $81,693
Electricity                                                 536               471            1,290             1,179
Other                                                   (13,514)              101          (12,922)             (619)
------------------------------------------------ ---------------- ----------------- ---------------- -----------------
                                                        $25,653           $25,979         $108,561           $82,253
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

Energy Marketing Volumes
------------------------------------------------ ---------------------------------- ----------------------------------
                                                        Three Months Ended                 Nine Months Ended
                                                             June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
                                                           2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------

Natural Gas - (MMcf)                                      9,233             8,892           31,496            29,231
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

2000 Compared with 1999
Operating revenues for the Energy Marketing segment decreased $0.3 million for the quarter ended June 30, 2000, as compared with the same period a year ago. For the nine months ended June 30, 2000, operating revenues increased $26.3 million over last year's nine months ended June 30, 1999. Operating revenues for both the quarter and the nine month period reflect higher marketing volumes and revenues as NFR's customer base continues to increase. However, NFR recognized a negative $13.8 million mark-to-market adjustment related to derivative financial instruments for the quarter and nine months ended June 30, 2000 (included in "Other" on the table above). See further discussion of NFR's exchange-traded futures and exchange-traded options in the "Market Risk Sensitive Instruments" section that follows and in Item 1, Note 5 - Derivative Financial Instruments.
The Energy Marketing segment incurred losses for both the quarter and nine months ended June 30, 2000. When compared to the same periods a year ago, earnings decreased $10.2 million for the quarter and $9.7 million for the nine month period. The most significant reason for these decreases were the mark-to-market adjustments related to derivative financial instruments, noted above.
Timber

Timber Operating Revenues
------------------------------------------------ ---------------------------------- ----------------------------------
                                                        Three Months Ended                 Nine Months Ended
                                                             June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
(Thousands)                                                2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------

Log Sales                                                $6,334            $2,757          $19,688           $14,610
Green Lumber Sales                                        1,272             1,045            3,401             3,142
Kiln Dry Lumber Sales                                     2,950             2,518            7,414             5,840
Other                                                       106                13              430               518
                                                 ---------------- ----------------- ---------------- -----------------
                                                        $10,662            $6,333          $30,933           $24,110
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)

------------------------------------------------ ---------------------------------- ----------------------------------
                                                        Three Months Ended                 Nine Months Ended
                                                             June 30,                           June 30,
------------------------------------------------ ---------------------------------- ----------------------------------
Board Feet (Thousands)                                     2000              1999             2000              1999
------------------------------------------------ ---------------- ----------------- ---------------- -----------------

Log Sales                                                 2,331             1,111            7,439             5,000
Green Lumber Sales                                        2,251             2,135            6,405             6,767
Kiln Dry Lumber Sales                                     2,046             1,818            5,343             4,122
                                                 ---------------- ----------------- ---------------- -----------------
                                                          6,628             5,064           19,187            15,889
------------------------------------------------ ---------------- ----------------- ---------------- -----------------	

2000 Compared with 1999
Operating revenues for the Timber segment increased $4.3 million and $6.8 million, respectively, for the quarter and nine months ended June 30, 2000, as compared with the same periods a year ago. The increase for the quarter and nine month period resulted primarily from higher veneer log sales and kiln dry lumber sales. The increase in kiln dry lumber sales is due to the operation of additional kilns purchased late in the quarter ended December 31, 1998.
Earnings in the Timber segment increased $0.6 million and $1.7 million, respectively, for the quarter and nine months ended June 30, 2000, as compared with the same periods a year ago. The increase for the quarter and nine months is the result of higher log and lumber sales, partly offset by higher interest expense resulting from higher debt related to the PennzEnergy Company acquisition in July 1999. For the nine month period a pretax gain of $2.3 million ($1.5 million after tax) on the sale of land and standing timber increased earnings of this segment.
Other Income and Interest Charges
Although variances in Other Income items and Interest Charges are discussed in the earnings discussion by segment above, following is a recap on a consolidated basis:
Other Income
Other income increased $0.6 million for the quarter ended June 30, 2000 compared with the quarter ended June 30, 1999. This increase resulted primarily from the $0.5 million of additional consideration received on the sale of a previous project in the International segment.
Other income decreased $0.2 million for the nine months ended June 30, 2000 compared with the nine months ended June 30, 1999. This decrease resulted mainly from approximately $3.2 million of interest income related to the final settlement of IRS audits for years 1977 - 1994 which was recorded during 1999 and did not recur this year. Partially offsetting this decrease was the gain on the sale of land and standing timber in the second quarter of 2000, as well as the additional consideration received on the sale of a previous project, both noted above.
Interest Charges
Interest on long-term debt increased $1.4 million and $0.8 million for the quarter and nine months ended June 30, 2000, respectively, as compared with the quarter and nine months ended June 30, 1999. This increase can be attributed primarily to a higher average amount of long-term debt outstanding combined with higher weighted average interest rates.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
Other interest charges increased $0.8 million for the quarter ended June 30, 2000. This increase resulted mainly from higher weighted average interest rates in the current quarter, offset partially by a decrease in the average amount of short-term debt outstanding. For the nine months ended June 30, 2000, other interest charges increased $4.5 million. Higher weighted average interest rates for the nine-month period together with an increase in the average amount of short-term debt outstanding contributed to this increase. Also, a reduction in interest charges was recorded in 1999 related to the final settlement of IRS audits of years 1977 - 1994.
CAPITAL RESOURCES AND LIQUIDITY
The Company's primary sources of cash during the nine-month period ended June 30, 2000, consisted of cash provided by operating activities, long-term debt and short-term bank loans and commercial paper. These sources were supplemented by issuances of common stock under the Company's stock and benefit plans.
Operating Cash Flow.
Internally generated cash from operating activities consists of net income available for common stock, adjusted for non-cash expenses, non-cash income and changes in operating assets and liabilities. Non-cash items include depreciation, depletion and amortization, deferred income taxes and minority interest in foreign subsidiaries.
Cash provided by operating activities in the Utility and the Pipeline and Storage segments may vary from period to period because of the impact of rate cases. In the Utility segment, supplier refunds, over- or under-recovered purchased gas costs and weather also significantly impact cash flow. The impact of weather on cash flow is tempered in the Utility segment's New York rate jurisdiction by its WNC and in the Pipeline and Storage segment by Supply Corporation's straight fixed-variable rate design.
Because of the seasonal nature of the Company's heating business, revenues are relatively high during the nine months ended June 30 and receivables historically increase from September to June because of winter weather.
The storage gas inventory normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters. For storage gas inventory accounted for under the last-in, first-out (LIFO) method, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets and is included under the caption "Other Accruals and Current Liabilities." Such reserve is reduced as the inventory is replenished.
Net cash provided by operating activities totaled $261.1 million for the nine months ended June 30, 2000, an increase of $13.0 million compared with $248.0 million provided by operating activities for the nine months ended June 30, 1999. The increase can be attributed primarily to higher cash receipts from the sale of oil and gas and lower interest payments in the Exploration and Production segment. Higher cash receipts for oil and gas production resulted from increased oil and gas production and significantly higher prices. Interest payments are down in this segment due to the retirement of the HarCor Energy, Inc. 14.875% Senior Secured Notes in March 1999 and July 1999.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
Investing Cash Flow.
Expenditures for Long-Lived Assets
Expenditures for long-lived assets include additions to property, plant and equipment (capital expenditures) and investments in corporations (stock acquisitions) or partnerships, net of any cash acquired.
The Company's expenditures for long-lived assets totaled $314.2 million during the nine months ended June 30, 2000. The table below presents these expenditures:

--------------------------------------------- ----------------------- ----------------------- -----------------------
Nine Months Ended June 30, 2000
(in millions of dollars)
--------------------------------------------- ----------------------- ----------------------- -----------------------
                                                                          Investments in              Total
                                                     Capital               Corporations          Expenditures for
                                                   Expenditures          and Partnerships        Long-Lived Assets
--------------------------------------------- ----------------------- ----------------------- -----------------------

   Utility                                            $ 43.1                    $  -                   $43.1
   Pipeline and Storage                                 27.8(1)                  1.8                    29.6
   Exploration and Production                           96.4                   123.8                   220.2
   International                                         6.3                       -                     6.3
   Timber                                               11.4                       -                    11.4
   Energy Marketing                                        -                       -                       -
   All Other                                             1.0                     2.6                     3.6
--------------------------------------------- ----------------------- ----------------------- -----------------------
                                                     $186.0(1)                $128.2                  $314.2
--------------------------------------------- ----------------------- ----------------------- -----------------------	

(1)Includes non-cash acquisition of $1.2 million in a stock-for-asset swap.
Utility
The majority of the Utility capital expenditures were made for replacement of mains and main extensions, as well as for the replacement of service lines.
Pipeline and Storage
The majority of the Pipeline and Storage capital expenditures were made for additions, improvements, and replacements to this segment's transmission and storage systems. Of the total capital expenditures, $9.2 million was related to Supply Corporation's acquisition of another company's interest in the Niagara Spur Loop Line and the Ellisburg-Leidy pipeline in January 2000. This acquisition was financed with short-term borrowings. The capital expenditures also include approximately $1.2 million of natural gas wells and related pipelines as well as some undeveloped timber property acquired from Cunningham Natural Gas Corporation (Cunningham) in November 1999. These assets were acquired through the issuance of 54,674 shares of Company common stock. In addition to the assets identified above, the Company received Cunningham's temporary cash investments in exchange for the shares of Company common stock.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
During the nine months ended June 30, 2000, SIP made a $1.8 million investment in Independence Pipeline Company, a Delaware general partnership (Independence), and had an aggregate investment balance of $12.9 million at June 30, 2000. This investment represents a one-third partnership interest. The investment has been financed with short-term borrowings. Independence intends to build a 370 mile natural gas pipeline (the Independence Pipeline) from Defiance, Ohio to Leidy, Pennsylvania at an estimated cost of $680 million.* If construction never begins on the Independence Pipeline project, SIP's share of the development costs (including SIP's investment in Independence) is estimated not to exceed $15.0 million.*
On July 12, 2000, the FERC issued a certificate of public convenience and necessity (the Certificate) authorizing, among other things, the construction and operation of the Independence Pipeline, subject to satisfaction of various conditions spelled out in the Certificate and in previous FERC orders. Among those conditions is the requirement that, before construction may commence, Independence must file at FERC executed, firm transportation agreements with "no out" clauses for at least 68.2% of its capacity. (Independence already filed, on June 26 and July 6, 2000, precedent agreements for firm transportation amounting to about 38% of the capacity of the Independence Pipeline, thereby satisfying a FERC requirement previously imposed as a precondition to FERC's issuance of the Certificate.) The Independence Pipeline sponsors are working on obtaining the required customer commitments. The Certificate also requires that the Independence Pipeline be constructed and placed in service by July 12, 2003. Assuming contracts are in place in quantities satisfactory to the partners, the Independence Pipeline's planned in service date is November 1, 2002.*
Exploration and Production
The Exploration and Production segment capital expenditures for the nine months ended June 30, 2000 included approximately $76.4 million for Seneca's offshore program in the Gulf of Mexico, including offshore drilling expenditures, offshore construction, lease acquisition costs and geological and geophysical expenditures. The remaining $20.0 million of capital expenditures included onshore drilling, construction and recompletion costs for wells located in Louisiana, Texas and California as well as onshore geological and geophysical costs, including the purchase of certain 3-D seismic data and fixed asset purchases.
In June 2000, NFEC acquired the outstanding shares of Tri Link, a Calgary-Alberta based oil and gas exploration and production company. This acquisition builds Seneca's total reserve base to approximately one trillion cubic feet equivalent.* The cost of acquiring the outstanding shares of Tri Link was approximately $123.8 million. The acquisition was financed with short-term borrowings. Refer to "Financing Cash Flow" for a discussion of the redemption of the debt that was assumed as part of the Tri Link acquisition.
International
The majority of the International segment capital expenditures were concentrated in the areas of improvements and replacements within the district heating and power generation plants in the Czech Republic.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)

Timber
The majority of the Timber segment capital expenditures were made for the purchase of land and timber in Pennsylvania, and the construction and/or purchase of new facilities and equipment for this segment's sawmill and kiln operations. As discussed under the Timber segment's results of operations, in January 2000, this segment sold land and timber with a book value of $3.0 million for $5.3 million. The resulting gain on this sale of $2.3 million is included in earnings for the nine months ending June 30, 2000.
All Other
Expenditures for Long-Lived Assets for all other subsidiaries consisted of Upstate's purchase of a 50% interest in a gas processing facility and NFR Power's purchase of a 50% partnership interest in Seneca Energy II, LLC (Seneca Energy). Seneca Energy generates and sells electricity to a public utility. Seneca Energy generates the electricity by using methane gas obtained from a landfill in Seneca Falls, New York, which is owned by an outside party.
The Company continuously evaluates capital expenditures and investments in corporations and partnerships. The amounts are subject to modification for opportunities such as the acquisition of attractive oil and gas properties, timber or storage facilities and the expansion of transmission line capacities. While the majority of capital expenditures in the Utility segment are necessitated by the continued need for replacement and upgrading of mains and service lines, the magnitude of future capital expenditures or other investments in the Company's other business segments depends, to a large degree, upon market conditions.*
Financing Cash Flow.
Consolidated short-term debt increased $125.3 million during the first nine months of 2000. The Company continues to consider short-term debt an important source of cash for temporarily financing capital expenditures and investments in corporations and/or partnerships, gas-in-storage inventory, unrecovered purchased gas costs, exploration and development expenditures and other working capital needs. Fluctuations in these items can have a significant impact on the amount and timing of short-term debt.
In June 2000, NFEC paid approximately $96.2 million to redeem the bank loans and convertible debentures of the former Tri Link. These redemptions were financed with short-term debt.
In February 2000, the Company issued $150.0 million of 7.30% medium-term notes due in February 2003. After deducting underwriting discounts and commissions, the net proceeds to the Company amounted to $149.3 million. The proceeds of this debt issuance were used to redeem $50.0 million of 6.60% medium-term notes which matured in February 2000 and to reduce short-term debt.
In March 1998, the Company obtained authorization from the Securities and Exchange Commission (SEC), under the Public Utility Holding Company Act of 1935, to issue long-term debt securities and equity securities in amounts not exceeding $2.0 billion at any one time outstanding during the order's authorization period, which extends to December 31, 2002. In August 1999, the Company registered $625.0 million of debt and equity securities under the Securities Act of 1933. After the February 2000 medium-term note issuance discussed above, the Company currently has $475.0 million of debt and equity securities registered under the Securities Act of 1933.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
The Company's present liquidity position is believed to be adequate to satisfy known demands.* Under the Company's existing indenture covenants, at June 30, 2000, the Company would have been permitted to issue up to a maximum of $521.0 million in additional long-term unsecured indebtedness at projected market interest rates. In addition, at June 30, 2000, the Company had regulatory authorizations and unused short-term credit lines that would have permitted it to borrow an additional $231.2 million of short-term debt.
The amounts and timing of the issuance and sale of debt and/or equity securities will depend on market conditions, regulatory authorizations, and the requirements of the Company.
The Company is involved in litigation arising in the normal course of business. The Company is involved in regulatory matters arising in the normal course of business that involve rate base, cost of service and purchased gas cost issues, among other things. While the resolution of such litigation or regulatory matters could have a material effect on earnings and cash flows in the year of resolution, none of this litigation, and none of these regulatory matters are expected to change materially the Company's present liquidity position, nor have a material adverse effect on the financial condition of the Company.*
Market Risk Sensitive Instruments
For a complete discussion of market risk sensitive instruments, refer to "Market Risk Sensitive Instruments" in Item 7 of the Company's 1999 Form 10-K. The following discussion is an update to that disclosure.
Energy Commodity Price Risk
Certain of the Company's subsidiaries (primarily Seneca and NFR) utilize various derivative financial instruments (derivatives), including price swap agreements, options, no cost collars, exchange-traded futures and exchange-traded options, as part of the Company's overall energy commodity price risk management strategy. Under this strategy, the Company manages a portion of the market risk associated with fluctuations in the price of natural gas and crude oil, thereby providing more stability to operating results. The derivatives entered into by these subsidiaries are not held for trading purposes.
The following tables disclose natural gas and crude oil price swap information by expected maturity dates for agreements in which Seneca receives a fixed price in exchange for paying a variable price as quoted in "Inside FERC" or on the New York Mercantile Exchange. Notional amounts (quantities) are used to calculate the contractual payments to be exchanged under the contract. The tables do not reflect the earnings impact of the physical transactions that are expected to offset any financial gains and losses arising from the use of the price swap agreements. The weighted average variable prices represent the prices as of June 30, 2000. At June 30, 2000, Seneca had not entered into any natural gas or crude oil price swap agreements with maturity dates extending beyond 2003.

Natural Gas Price Swap Agreements

-------------------------------------------------- -----------------------------------------------------------------
                                                                        Expected Maturity Dates
                                                   -----------------------------------------------------------------
                                                         2000         2001          2002         2003        Total
-------------------------------------------------- ------------ ------------ ------------- ------------ ------------

Notional Quantities (Equivalent Bcf)                      6.6         17.9          10.8          1.1         36.4
Weighted Average Fixed Rate (per Mcf)                   $2.63        $2.79         $3.08        $2.78        $2.85
Weighted Average Variable Rate (per Mcf)                $4.58        $4.56         $4.56        $4.55        $4.56
-------------------------------------------------- ------------ ------------ ------------- ------------ ------------	

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)

Crude Oil Price Swap Agreements

-------------------------------------------------- ----------------------------------------------------------------------
                                                                           Expected Maturity Dates
                                                          2000           2001          2002          2003         Total
-------------------------------------------------- ------------- -------------- ------------- ------------- -------------

Notional Quantities (Equivalent bbls)                  574,000      3,717,915     2,608,980     1,803,000     8,703,895
Weighted Average Fixed Rate (per bbl)                   $18.88         $21.04        $19.93        $19.93        $20.34
Weighted Average Variable Rate (per bbl)                $31.53         $31.53        $31.53        $31.53        $31.53
-------------------------------------------------- ------------- -------------- ------------- ------------- -------------	

At June 30, 2000, Seneca would have had to pay the respective counterparties to its natural gas price swap agreements an aggregate of approximately $40.7 million to terminate the natural gas price swap agreements outstanding at that date. Seneca would have had to pay an aggregate of approximately $33.9 million to the counterparties to its crude oil price swap agreements to terminate the crude oil price swap agreements outstanding at June 30, 2000.
The following table discloses the notional quantities, the weighted average ceiling price and the weighted average floor price for the no cost collars utilized by Seneca to manage natural gas and crude oil price risk. The table does not reflect the earnings impact of the physical transactions that are expected to offset any financial gains and losses arising from the use of the no cost collars. At June 30, 2000, Seneca had not entered into any no cost collars with maturity dates extending beyond 2002.
No Cost Collars

---------------------------------------------------------------------- ---------------------------------------------
                                                                                  Expected Maturity Dates
                                                                               2001           2002           Total
---------------------------------------------------------------------- -------------- -------------- ---------------
Crude Oil
       Notional Quantities (Equivalent bbls)                              1,245,000        255,000       1,500,000
       Weighted Average Ceiling Price (per bbl)                              $29.13         $28.58          $29.03
       Weighted Average Floor Price (per bbl)                                $22.10         $21.53          $22.00
---------------------------------------------------------------------- -------------- -------------- ---------------
Natural Gas
       Notional Quantities (Equivalent Bcf)                                     3.1              -             3.1
       Weighted Average Ceiling Price (per Mcf)                               $6.00              -           $6.00
       Weighted Average Floor Price (per Mcf)                                 $3.69              -           $3.69
---------------------------------------------------------------------- -------------- -------------- ---------------	

The following tables disclose the notional quantities and weighted average strike prices for options utilized by Seneca to manage natural gas and crude oil price risk. The tables do not reflect the earnings impact of the physical transactions that are expected to offset any financial gains or losses that might arise if an option were to be exercised. At June 30, 2000, Seneca held no options with maturity dates extending beyond December 2000.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)

Written Call Options(1)

---------------------------------------------------------------------- ---------------------------------------------
                                                                                  Expected Maturity Dates
                                                                       ---------------------------------------------
                                                                               2000           2001           Total
---------------------------------------------------------------------- -------------- -------------- ---------------
Crude Oil
   Notional Quantities (Equivalent bbls)                                    184,000        184,000         368,000
   Weighted Average Strike Price (per bbl)                                   $18.00         $18.00          $18.00
Natural Gas
   Notional Quantities (Equivalent Bcf)                                         3.5            3.5             7.0
   Weighted Average Strike Price (per Mcf)                                    $2.42          $2.74           $2.58
---------------------------------------------------------------------- -------------- -------------- ---------------	

(1) The counterparty has a choice between a natural gas call option and a crude oil call option, depending on whichever option has greater value to the counterparty.
Written Put Options

---------------------------------------------------------------------- ---------------------------------------------
                                                                                  Expected Maturity Dates
                                                                       ---------------------------------------------
                                                                               2000           2001           Total
---------------------------------------------------------------------- -------------- -------------- ---------------
Crude Oil
   Notional Quantities (Equivalent bbls)                                    184,000        184,000         368,000
   Weighted Average Strike Price (per bbl)                                   $12.50         $12.50          $12.50
---------------------------------------------------------------------- -------------- -------------- ---------------	

Purchased Call Option

-------------------------------------------------------------------------
                                          Expected Maturity Date - 2000
-------------------------------------------------------------------------
Crude Oil

   Notional Quantities (Equivalent bbls)            368,000
   Weighted Average Strike Price (per bbl)           $20.00
-------------------------------------------------------------------------	

At June 30, 2000, Seneca would have had to pay the counterparty to its call options $11.1 million on a net basis to terminate its call options. Seneca would have paid the counterparty $15.0 million related to the exercise of the written call and put options but would have received $3.9 million related to Seneca's exercise of its purchased call option.
The Company is exposed to credit risk on the price swap agreements and no cost collars that Seneca has entered into as well as on the call options that Seneca has purchased. Credit risk relates to the risk of loss that the Company would incur as a result of nonperformance by counterparties pursuant to the terms of their contractual obligations. To mitigate such credit risk, management performs a credit check and then on an ongoing basis monitors counterparty credit exposure. The Company does not anticipate any material impact to its financial position, results of operations, or cash flows as a result of nonperformance by counterparties.*
The following table discloses the net notional quantities, weighted average contract prices and weighted average settlement prices by expected maturity date for exchange-traded futures contracts utilized by NFR to manage natural gas price risk. These instruments qualify for hedge accounting. The table does not reflect the earnings impact of the physical transactions that are expected to offset any financial gains or losses arising from the use of the futures contracts. At June 30, 2000, NFR held no futures contracts with maturity dates extending beyond 2002.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)

Exchange-Traded Futures Contracts
------------------------------------------------------------ ------------- ---------------- ---------------------------

                                                                            Expected Maturity Dates
                                                             ----------------------------------------------------------
                                                                  2000             2001         2002          Total
                                                               (Restated)       (Restated)    (Restated)    (Restated)
------------------------------------------------------------ ------------- ---------------- ------------- -------------

Contract Volumes Purchased (Sold) (Equivalent Bcf)                  1.5            (1.2)            -*          0.3
Weighted Average Contract Price (per Mcf)                         $3.99            $3.82        $3.57         $3.87
Weighted Average Settlement Price (per Mcf)                       $4.69            $4.41        $3.66         $4.46
------------------------------------------------------------ ------------- ---------------- ------------- -------------	

*Volumes purchased amount to approximately 38,000 Mcf.
At June 30, 2000, NFR would have received approximately $0.1 million to settle these exchange-traded futures.
The following table discloses the net notional quantities, weighted average contract prices and weighted average settlement prices by expected maturity date for exchange-traded futures contracts utilized by NFR to manage natural gas price risk. These instruments do not qualify for hedge accounting. At June 30, 2000, NFR held no futures contracts with maturity dates extending beyond 2001.

Exchange-Traded Futures Contracts
------------------------------------------------------------ ------------- ---------------- ---------------------------

                                                                                   Expected Maturity Dates
                                                             ------------- --------------------------------------------
                                                                                    2000         2001         Total
                                                                                 (Restated)   (Restated)    (Restated)
------------------------------------------------------------ ------------- ---------------- ------------- -------------

Contract Volumes Purchased (Sold) (Equivalent Bcf)                                  (2.0)         0.8          (1.2)
Weighted Average Contract Price (per Mcf)                                          $3.92        $3.83         $3.91
Weighted Average Settlement Price (per Mcf)                                        $4.69        $4.45         $4.68
------------------------------------------------------------ ------------- ---------------- ------------- -------------	

At June 30, 2000, NFR would have paid approximately $3.9 million to settle these exchange-traded futures.
The following table discloses the notional quantities and weighted average strike prices by expected maturity dates for exchange-traded options utilized by NFR to manage natural gas price risk. These instruments qualify for hedge accounting. The table does not reflect the earnings impact of the physical transactions that would offset any financial gains or losses that might arise if an option were to be exercised. At June 30, 2000, NFR held no options with maturity dates extending beyond 2001.

Exchange-Traded Options Purchased

----------------------------------------------------------------------------
                                                Expected Maturity Date
                                          ----------------------------------
                                                          2001
                                                        (Restated)
----------------------------------------------------------------------------

Notional Quantities (Equivalent Bcf)                       2.6
Weighted Average Strike Price (per Mcf)                  $3.41
----------------------------------------------------------------------------	

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)

Exchange-Traded Options Sold
----------------------------

--------------------------------------------------------------------------------
                                                      Expected Maturity Date
                                                  ------------------------------
                                                               2001
                                                            (Restated)
--------------------------------------------------------------------------------

Notional Quantities (Equivalent Bcf)                           2.6
Weighted Average Strike Price (per Mcf)                      $4.27
--------------------------------------------------------------------------------

         NFR  would  have  paid  approximately  $2.0  million  to  settle  these	

exchange-traded options outstanding at June 30, 2000.
The following table discloses the notional quantities and weighted average strike prices by expected maturity dates for exchange-traded options utilized by NFR to manage natural gas price risk. These instruments do not qualify for hedge accounting. At June 30, 2000, NFR held no such options with maturity dates extending beyond 2002.
Exchange-Traded Options Purchased

--------------------------------------------------------------- -----------------------------------------------------
                                                                              Expected Maturity Dates
                                                                -----------------------------------------------------
                                                                         2000              2001             Total
                                                                      (Restated)       (Restated)         (Restated)
--------------------------------------------------------------- ------------------ ---------------- -----------------

Notional Quantities (Equivalent Bcf)                                        59.9             7.8              67.7
Weighted Average Strike Price (per Mcf)                                    $4.27           $3.99             $4.24
--------------------------------------------------------------- ------------------ ---------------- -----------------	

Exchange-Traded Options Sold

-------------------------------------------------- ----------------------------------------------------
                                                              Expected Maturity Dates
                                                   ----------------------------------------------------
                                                             2000             2001            Total
                                                          (Restated)       (Restated)       (Restated)
-------------------------------------------------- ------------------ ---------------- ----------------

Notional Quantities (Equivalent Bcf)                           74.8            15.2             90.0
Weighted Average Strike Price (per Mcf)                       $4.55           $4.33            $4.51
-------------------------------------------------- ------------------ ---------------- ----------------	

NFR would have paid approximately $5.2 million to settle these exchange-traded options outstanding at June 30, 2000.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
Exchange Rate Risk
Seneca's investment in NFEC is valued in Canadian dollars, and, as such, this investment is subject to currency exchange risk when the Canadian dollars are translated into U.S. dollars. Subsequent to the completion of the acquisition of Tri Link on June 15, 2000, the Canadian dollar decreased in value in relation to the U.S. dollar resulting in a $0.8 million negative adjustment to the Cumulative Foreign Currency Translation Adjustment (a component of Accumulated Other Comprehensive Loss). Further valuation charges to the Canadian dollar would result in corresponding positive or negative adjustments to the Cumulative Foreign Currency Translation Adjustment. Management cannot predict whether the Canadian dollar will increase or decrease in value against the U.S. dollar.*
RATE MATTERS
Utility Operation
New York Jurisdiction
On October 21, 1998, the NYPSC approved a rate plan for Distribution Corporation for the period beginning October 1, 1998 and ending September 30, 2000. The plan was the result of a settlement agreement entered into by Distribution Corporation, Staff for the NYPSC (Staff), Multiple Intervenors (an advocate for large industrial customers) and the State Consumer Protection Board. Under the plan, Distribution Corporation's rates decreased by $7.2 million, or 1.1%. In addition, the plan provided customers with up to $6.0 million in bill credits, disbursed volumetrically over the two year term, reflecting a predetermined share of excess earnings under a 1996 settlement. An allowed return on equity of 12%, above which additional earnings are to be shared equally with the customers, was maintained from a 1996 settlement. Finally, as provided by the rate plan, $7.2 million of 1999 revenues were set aside in a special reserve to be applied against Distribution Corporation's incremental costs resulting from the NYPSC's gas restructuring effort further described below.
On July 28, 2000, Distribution Corporation distributed a plan to extend the above-described rate plan for a period beyond the expiration date of September 30, 2000. The proposal was served on the rate plan parties identified above and interested marketers. In addition to extending the term of the current rate plan, Distribution Corporation's proposal includes service and rate modifications designed to further the NYPSC's gas restructuring initiative. Discussions are currently under way to determine if the parties might reach an agreement on the Distribution Corporation's proposal.
On November 3, 1998, the NYPSC issued its Policy Statement Concerning the Future of the Natural Gas Industry in New York State and Order Terminating

Capacity Assignment (Policy Statement). The Policy Statement sets forth the NYPSC's "vision" on "how best to ensure a competitive market for natural gas in New York." That vision includes the following goals:
(1) Effective competition in the gas supply market for retail customers;
(2) Downward pressure on customer gas prices;
(3) Increased customer choice of gas suppliers and service options;
(4) A provider of last resort (not necessarily the utility);
(5) Continuation of reliable service and maintenance of operations procedures that treat all participants fairly;
(6) Sufficient and accurate information for customers to use in making informed decisions;

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
(7) The availability of information that permits adequate oversight of the market to ensure fair competition; and
(8) Coordination of Federal and State policies affecting gas supply and distribution in New York State.
The Policy Statement provides that the most effective way to establish a competitive market in gas supply is "for local distribution companies to cease selling gas." The NYPSC indicated in its order that it hopes to accomplish that objective over a three-to-seven year transition period from the date the Policy Statement was issued, taking into account "statutory requirements" and the individual needs of each local distribution company (LDC).* The Policy Statement directs Staff to schedule "discussions" with each LDC on an "individualized plan that would effectuate our vision." In preparation for negotiations, LDCs will be required to address issues such as a strategy to hold new capacity contracts to a minimum, a long-term rate plan with a goal of reducing or freezing rates, and a plan for further unbundling. In addition, Staff was instructed to hold collaborative sessions with multiple parties to discuss generic issues including reliability and market power regulation. Distribution Corporation has participated in the collaborative sessions. These collaborative sessions have not yet produced a consensus document on all issues before the NYPSC. Distribution Corporation will continue to participate in all future collaborative sessions.*
On March 22, 2000, the NYPSC issued an order directing electric and gas utilities to file tariff amendments "to accommodate the wishes of retail access customers who prefer to receive combined, single bills from either their utility company or their [marketer]" (the Billing Order). The tariff amendments will provide for marketer single-bill or utility single-bill services, thereby allowing a customer to choose a billing preference through the customer's choice of suppliers - utility or marketer. Distribution Corporation has permitted marketer single billing since 1996. The Billing Order will permit Distribution Corporation to provide a single retail bill service for marketers.
Included in the Billing Order is a requirement that utilities design a "back-out" credit equal to the long run costs avoided by each utility when billing is provided by another party. On April 24, 2000 Distribution Corporation submitted draft tariff sheets setting forth a proposed back-out credit methodology for review and comment by NYPSC Staff and other interested parties. Although a methodology is described, no back-out credit was calculated. Distribution Corporation's filing included provisions for a billing service to be provided by Distribution Corporation, together with additional rules and regulations governing marketer-provided retail billing.
Several utilities filed requests for rehearing of the Billing Order. The requests include, among other things, arguments challenging the NYPSC's authority to impose a back-out credit based on long run avoided costs. Distribution Corporation chose against joining the other utilities on rehearing and may, if necessary, pursue other avenues of relief.* At this time, Distribution Corporation is unable to ascertain the outcome of matters relating to the Billing Order.
In conversations with NYPSC Staff prior to the release of the Billing Order, Distribution Corporation requested approval for a temporary, interim billing service to be provided in response to marketer inquiries. As a result of Distribution Corporation's efforts, the Billing Order included a provision for a billing service as requested. Accordingly, beginning on May 1, 2000, Distribution Corporation commenced a retail billing service for two marketers serving approximately 2000 retail customers. The billing service is being offered to the marketer community for a per-bill fee of $0.50, subject to modification pursuant to the Billing Order. The temporary billing service will remain available for interested marketers until it is replaced by a permanent billing service under the Billing Order.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
On March 30, 2000, a collaborative was convened to address the NYPSC's Order Instituting Proceeding in the so-called "Provider of Last Resort" (POLR) case. The collaborative was charged with the task of helping the NYPSC to "refine our concept of the mature competitive retail energy markets (especially the future role of the regulated utilities) and to identify and remove obstacles to its achievement." This case is expected to address, among other things, issues arising from utilities exiting the merchant function. The proceeding is also focusing on utilities' responsibility to provide low-income assistance programs. Currently the parties are meeting on a periodic basis to establish a procedure for identifying the issues and managing the proceeding. At this time, Distribution Corporation is unable to ascertain the outcome of the POLR proceeding.*
On April 12, 2000, the NYPSC issued an order setting forth procedures for implementation of electronic data interchange (EDI) for electronic exchange of retail access data in New York (EDI Order). As described by the NYPSC, EDI is the computer-to-computer exchange of routine business information in a standard form. The NYPSC believes that EDI is necessary to develop uniform data exchange protocol for the state's customer choice initiatives. The EDI Order adopts provisions of a report prepared after an EDI collaborative involving utilities, marketers and other interests. Distribution Corporation submitted its EDI implementation plans on May 31, 2000. At this time, Distribution Corporation is unable to ascertain the outcome of the EDI proceeding.
The NYPSC continues to address, through various proceedings and "collaboratives," upstream pipeline capacity issues arising from the restructuring. At this point, Distribution Corporation remains authorized to release upstream intermediate capacity to marketers serving former sales customers. Costs relating to retained upstream transmission capacity are recovered through a transition cost surcharge. At this time, Distribution Corporation does not foresee any material changes to upstream capacity requirements in the near term.*
Pennsylvania Jurisdiction
Distribution Corporation currently does not have a rate case on file with the Pennsylvania Public Utility Commission (PaPUC). Management will continue to monitor its financial position in the Pennsylvania jurisdiction to determine the necessity of filing a rate case in the future.
A natural gas restructuring bill was signed into law on June 22, 1999. Entitled the Natural Gas Choice and Competition Act (Act), the new law requires all Pennsylvania LDCs to file tariffs designed to provide retail customers with direct access to competitive gas markets. Distribution Corporation submitted its compliance filing on October 1, 1999 for an effective date on or about July 1, 2000. The filing largely mirrored the company's System Wide Energy Select program previously in effect, which substantially complied with the Act's requirements. After negotiations with PaPUC Staff and intervenors, a settlement was reached with all parties except for the Pennsylvania Office of Consumer Advocate (OCA). The settlement parties generally agreed that Distribution Corporation's proposal needed only modest changes to meet the requirements of the Act. Hearings were held and briefs filed on OCA's open issues. In a Recommended Decision issued on March 31, 2000, the Administrative Law Judge rejected the OCA's arguments and recommended approval of the settlement agreement. On June 29, 2000, the PaPUC entered an Opinion and Order adopting the settlement, with immaterial changes. Distribution Corporation's restructured rates and services became effective on July 1, 2000.
Base rate adjustments in both the New York and Pennsylvania jurisdictions do not reflect the recovery of purchased gas costs. Such costs are recovered through operation of the purchased gas adjustment clauses of the appropriate regulatory authorities.

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Cont.)
Pipeline and Storage
Supply Corporation currently does not have a rate case on file with the FERC. Management will continue to monitor Supply Corporation's financial position to determine the necessity of filing a rate case in the future.
Other Matters
Environmental Matters
It is the Company's policy to accrue estimated environmental clean-up costs (investigation and remediation) when such amounts can reasonably be estimated and it is probable that the Company will be required to incur such costs. Distribution Corporation and Supply Corporation have estimated their clean-up costs related to former manufactured gas plant and former gasoline plant sites and third party waste disposal sites will be in the range of $8.1 million to $9.1 million.* The minimum liability of $8.1 million has been recorded on the Consolidated Balance Sheet at June 30, 2000. Other than discussed in Note H of the 1999 Form 10-K (referred to below), the Company is currently not aware of any material additional exposure to environmental liabilities. However, adverse changes in environmental regulations or other factors could impact the Company.*
The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. The Company has established procedures for the ongoing evaluation of its operations to identify potential environmental exposures and comply with regulatory policies and procedures.
For further discussion refer to Note H - Commitments and Contingencies under the heading "Environmental Matters" in Item 8 of the Company's 1999 Form 10-K.
Safe Harbor for Forward-Looking Statements. The Company is including the following cautionary statement in this Form 10-Q to make applicable and take advantage of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 for any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. From time to time, the Company may publish or otherwise make available forward-looking statements of this nature. All such subsequent forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are also expressly qualified by these cautionary statements. Certain statements contained herein, including without limitation those which are designated with a "*", are forward-looking statements and accordingly involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The forward-looking statements contained herein are based on various assumptions, many of which are based, in turn, upon further assumptions. The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including, without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties, 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, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements:
1. Changes in economic conditions, demographic patterns and weather conditions
2. Changes in the availability and/or price of natural gas and oil

Item 2. Management's Discussion and Analysis of Financial Condition and Results

of Operations (Concl.)
3. Inability to obtain new customers or retain existing ones
4. Significant changes in competitive factors affecting the Company
5. Governmental/regulatory actions and initiatives, including those affecting acquisitions, financings, allowed rates of return, industry and rate structure, franchise renewal, and environmental/safety requirements
6. Unanticipated impacts of restructuring initiatives in the natural gas and electric industries
7. Significant changes from expectations in actual capital expenditures and operating expenses and unanticipated project delays or changes in project costs
8. The nature and projected profitability of pending and potential projects and other investments
9. Occurrences affecting the Company's ability to obtain funds from operations, debt or equity to finance needed capital expenditures and other investments
10. Uncertainty of oil and gas reserve estimates
11. Ability to successfully identify and finance oil and gas property acquisitions and ability to operate existing and any subsequently acquired businesses and/or properties
12. Ability to successfully identify, drill for and produce economically viable natural gas and oil reserves
13. Changes in the availability and/or price of derivative financial instruments
14. Changes in the price of natural gas or oil and the related effect given the accounting treatment or valuation of these financial instruments.
15. Inability of the various counterparties to meet their obligations with respect to the Company's financial instruments
16. Regarding foreign operations - changes in foreign trade and monetary policies, laws and regulations related to foreign operations, political and governmental changes, inflation and exchange rates, taxes and operating conditions
17. Significant changes in tax rates or policies or in rates of inflation or interest
18. Significant changes in the Company's relationship with its employees and the potential adverse effects if labor disputes or grievances were to occur
19. Changes in accounting principles and/or the application of such principles to the Company
The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Refer to the "Market Risk Sensitive Instruments" section in Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.
Part II. Other Information

Item 1. Legal Proceedings
For a discussion of various environmental matters, refer to Part I, Item 1 at Note 6 and to Part I, Item 2 - MD&A of this report under the heading "Other Matters."
Item 2. Changes in Securities
On April 3, 2000, the Company issued 600 unregistered shares of Company common stock to the non-employee directors of the Company. The shares were issued as partial consideration for the directors' service during the quarter ended June 30, 2000, pursuant to the Company's Retainer Policy for Non-Employee Directors. These transactions were exempt from registration by Section 4(2) of the Securities Act of 1933, as amended, as transactions not involving a public offering.
Item 5. Other Information
In June, John F. Riordan was elected to the Board of Directors for a term that will expire in February 2001. Mr. Riordan's election filled a vacancy created in February when George H. Schofield retired from the Board.
Also in June, Highland Land & Minerals, Inc. changed its name to Highland Forest Resources, Inc.
Item 6. Exhibits and Reports on Form 8-K

(a)      Exhibits

         Exhibit
         Number            Description of Exhibit
         ------            ----------------------

         3 (ii)            By-Laws:

         3.1*              National Fuel Gas Company By-Laws as amended
                           on February 17, 2000.

         (10)              Material Contracts

         10.1*             Amended and Restated Split Dollar  Insurance
                           Agreement,  effective  June 15,  2000  among
                           National   Fuel  Gas  Company,   Bernard  J.
                           Kennedy,  and Joseph B. Kennedy,  as Trustee
                           of  the  Trust  under  the  Agreement  dated
                           January 9, 1998.

         10.2*             Contingent Benefit Agreement  effective June
                           15, 2000 between  National  Fuel Gas Company
                           and Bernard J. Kennedy.	

*Previously filed.

Item 6. Exhibits and Reports on Form 8-K (Concl.)

(a)      Exhibits

         Exhibit
         Number            Description of Exhibit
         ------            ----------------------

         (12)              Statements regarding Computation of Ratios:

                           Restated  Ratio of Earnings to Fixed Charges
                           for the Twelve  Months  Ended June 30,  2000
                           and the Fiscal  Years  Ended  September  30,
                           1995 through 1999.

         (27)              Financial Data Schedules

         27.1              Restated  Financial  Data  Schedule  for the
                           Nine Months Ended June 30, 2000.

         27.2*             Restated  Financial  Data  Schedule  for the
                           Nine Months Ended June 30, 1999.

         (99)              Restated    National    Fuel   Gas   Company
                           Consolidated  Statement  of  Income  for the
                           Twelve Months Ended June 30, 2000 and 1999.	

*Previously filed.
(b) Reports on Form 8-K
On April 24, 2000, the Company filed a Form 8-K regarding an agreement whereby Seneca Resources Corporation agreed to offer to acquire all of the outstanding common shares of Tri Link Resources, Ltd., a Calgary, Alberta based exploration and production company. This report did not include any financial statements.

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized.
NATIONAL FUEL GAS COMPANY
 (Registrant)

                               /s/Joseph P. Pawlowski
                               -------------------------------------
                               Joseph P. Pawlowski
                               Treasurer and
                               Principal Accounting Officer

Date:  November 14, 2000
       -----------------	

EXHIBIT INDEX
 (Form 10Q)

Exhibit 12              Statements regarding Computation of Ratios:

                        Ratio of Earnings to Fixed Charges for the Twelve Months
                        Ended June 30, 2000 and the Years Ended September 30,
                        1995 through 1999.

Exhibit 27.1            Financial Data Schedule for the Nine Months Ended
                        June 30, 2000.

Exhibit 99              National Fuel Gas Company Consolidated Statement of
                        Income for the Twelve Months Ended June 30, 2000 and
                        1999.	

EXHIBIT 12

                                                                                                 COMPUTATION OF RATIO OF
                                                                                                 EARNINGS TO FIXED CHARGES
                                                                                                                 UNAUDITED

                                                        For the Twelve                           Fiscal Year Ended September 30
                                                                         --------------------------------------------------------
                                                         Months Ended
                                                         June 30, 2000         1999       1998       1997       1996       1995
                                                    -----------------------------------------------------------------------------
EARNINGS:

Income Before Interest Charges and Minority Interest
     in Foreign Subsidiaries (2)                          $221,885          $202,512   $118,085     $169,783  $159,599   $128,061
Allowance for Borrowed Funds Used in Construction              485               303        110          346       205        195
Federal Income Tax                                          51,970            44,583     43,626       57,807    55,148     30,522
State Income Tax                                            13,894             6,215      6,635        7,067     7,266      4,905
Deferred Inc. Taxes - Net (3)                               12,512            14,030    (26,237)       3,800     3,907      8,452
Investment Tax Credit - Net                                 (1,019)             (729)      (663)        (665)     (665)      (672)
Rentals (1)                                                  4,184             4,281      4,672        5,328     5,640      5,422
                                                    ------------------------------------------------------------------------------

                                                          $303,911          $271,195   $146,228     $243,466  $231,100   $176,885
                                                    ==============================================================================

FIXED CHARGES:

Interest & Amortization of Premium and
   Discount of Funded Debt                                 $66,218           $65,402    $53,154      $42,131   $40,872    $40,896
Interest on Commercial Paper and
   Short-Term Notes Payable                                 19,436            17,319     13,605        8,808     7,872      6,745
Other Interest (2)                                           5,963             2,835     16,919        4,502     6,389      4,721
Rentals (1)                                                  4,184             4,281      4,672        5,328     5,640      5,422
                                                    ------------------------------------------------------------------------------

                                                           $95,801           $89,837    $88,350      $60,769   $60,773    $57,784
                                                    ==============================================================================

RATIO OF EARNINGS TO FIXED CHARGES                            3.17              3.02       1.66         4.01      3.80       3.06	

Notes:
(1) Rentals shown above represent the portion of all rentals (other than delay rentals) deemed representative of the interest factor.
(2) The twelve months ended June 30, 2000 and fiscal 1999, 1998, 1997, 1996 and 1995 reflect the reclassification of $1,927, $1,839, $1,716, $1,716, $1716 and $1,716 representing the loss on reacquired debt amortized during each period, from Other Interest Charges to Operation Expense.
(3) Deferred Income Taxes - Net for fiscal 1998 excludes the cumulative
effect of change in accounting.

ARTICLE UT	
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL FUEL GAS COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.	
MULTIPLIER: 1,000	

		
PERIOD TYPE	9 MOS	
FISCAL YEAR END	SEP 30 2000	
PERIOD START	OCT 01 1999	
PERIOD END	JUN 30 2000	
BOOK VALUE	PER BOOK	
TOTAL NET UTILITY PLANT	2,662,570	
OTHER PROPERTY AND INVEST	0	
TOTAL CURRENT ASSETS	314,092	
TOTAL DEFERRED CHARGES	11,341	
OTHER ASSETS	221,165	
TOTAL ASSETS	3,209,168	
COMMON	39,223	
CAPITAL SURPLUS PAID IN	448,115	
RETAINED EARNINGS	542,474	
TOTAL COMMON STOCKHOLDERS EQ	1,011,144	
PREFERRED MANDATORY	0	
PREFERRED	0	
LONG TERM DEBT NET	958,327	
SHORT TERM NOTES	318,774	
LONG TERM NOTES PAYABLE	0	
COMMERCIAL PAPER OBLIGATIONS	200,000	
LONG TERM DEBT CURRENT PORT	12,646	
PREFERRED STOCK CURRENT	0	
CAPITAL LEASE OBLIGATIONS	0	
LEASES CURRENT	0	
OTHER ITEMS CAPITAL AND LIAB	708,277	
TOT CAPITALIZATION AND LIAB	3,209,168	
GROSS OPERATING REVENUE	1,175,999	
INCOME TAX EXPENSE	73,839	
OTHER OPERATING EXPENSES	910,806	
TOTAL OPERATING EXPENSES	984,645	
OPERATING INCOME LOSS	191,354	
OTHER INCOME NET	7,636	
INCOME BEFORE INTEREST EXPEN	198,990	
TOTAL INTEREST EXPENSE	71,746	
NET INCOME	124,989	
PREFERRED STOCK DIVIDENDS	0	
EARNINGS AVAILABLE FOR COMM	124,989	
COMMON STOCK DIVIDENDS	55,032	
TOTAL INTEREST ON BONDS	0	
CASH FLOW OPERATIONS	261,011	
EPS BASIC	3.20	
EPS DILUTED	3.17	

Exhibit 99
Form 10-Q/A
June 30, 2000
NATIONAL FUEL GAS
CONSOLIDATED STATEMENT OF INCOME
 (UNAUDITED)

                                                   Twelve Months Ended
                                                         June 30,
                                                   --------------------

                                                   2000            1999
(Thousands of Dollars)

INCOME
Operating Revenues                                $1,366,789      $1,249,892
                                                  ----------      ----------

Operating Expenses
  Purchased Gas                                      470,564         400,791
  Fuel Used in Heat and Electric Generation           55,040          54,988
  Operation                                          312,736         308,169
  Maintenance                                         23,582          23,846
  Property, Franchise and Other Taxes                 78,836          90,715
  Depreciation, Depletion and Amortization           135,920         126,399
  Income Taxes - Net                                  78,376          59,203
                                                  ----------      ----------
                                                   1,155,054       1,064,111
                                                  ----------      ----------

Operating Income                                     211,735         185,781
Other Income                                          12,077          11,358
                                                  ----------      ----------
Income Before Interest Charges and
  Minority Interest in Foreign Subsidiary            223,812         197,139
                                                  ----------      ----------

Interest Charges
  Interest on Long-Term Debt                          66,218          65,267
  Other Interest                                      26,841          22,626
                                                  ----------      ----------
                                                      93,059          87,893
                                                  ----------      ----------
Minority Interest in Foreign Subsidiary               (1,331)         (1,717)
                                                  ----------      ----------

Net Income Available for Common Stock             $  129,422      $  107,529
                                                  ==========      ==========

Basic Earnings Per Common Share:                  $     3.32      $     2.79
                                                  ==========      ==========

Diluted Earnings Per Common Share:                $     3.28      $     2.76
                                                  ==========      ==========

Weighted Average Common Shares Outstanding

    Used in Basic Calculation                     38,994,910      38,574,864
                                                  ==========      ==========
    Used in Diluted Calculation                   39,414,923      38,917,221
                                                  ==========      ==========