National Fuel Gas investor continues to push non-core operations sale, MLP structure

By Angela McDaniels

Tacoma, Wash., Nov. 6 - National Fuel Gas Co. investors led by New Mountain Vantage, GP, LLC reiterated their recommendation that the company sell its non-core operations and said proceeds from such a divestiture could reach $450 million.

The investors made their case in a presentation included in a schedule 13D filing with the Securities and Exchange Commission.

New Mountain Vantage also recommended that National Fuel Gas:

• Develop a plan to maximize the value of its Appalachian exploration and production assets;

• Explore the master limited partnership structure for its pipeline and storage assets, California exploration and production assets and Appalachian exploration and production assets; and

• Eliminate the 10% poison pill and recommend elimination of the staggered board to shareholders.

The reporting persons own 8,078,606 shares, or 9.7%, of the Williamsville, N.Y., diversified energy company.

It was previously reported that New Mountain will nominate David DiDomenico, F. Fox Benton III and Frederic Salerno for election to the company's board of directors at National Fuel Gas's 2008 annual meeting.

New Mountain said that while the company has responded to some of its suggestions, it believes its most important ideas have not been actively pursued. The investor's slate of nominees will give shareholders "a seat at the table" and ensure that all alternatives to maximize shareholder value are considered, the filing stated.

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