New Mountain waits for National Fuel Gas' response to its recommendations

By Lisa Kerner

Charlotte, N.C., Sept. 14 - Investor New Mountain Vantage GP, LLC said it has "been quite forthcoming" with its thinking and analysis and looks forward to National Fuel Gas Co.'s response to the recommendations it made on Sept. 11.

The response was included in a schedule 13D filing with the Securities and Exchange Commission.

New Mountain said it reviewed with the company in detail its estimates of the potential value of National Fuel Gas' Appalachian acreage and supporting data from Schlumberger Data & Consulting Services in a three-hour meeting that included several National Fuel Gas executives.

On Thursday, National Fuel Gas said it would consider New Mountain's suggestions. The suggestions include:

• Develop and communicate a plan to maximize the value of National Fuel Gas' Appalachian exploration and production assets;

• Retain a top-tier investment bank to advise the board on the master limited partnership structure, and disclose the identity of the board's advisors and the expected timing of the board's conclusions;

• Retain a top-tier investment bank to sell the company's miscellaneous non-core operations, using the proceeds for a special shareholder dividend or to repurchase shares; and

• Eliminate the 10% poison pill and recommend shareholder approval of the elimination of its staggered board at the 2008 annual meeting.

However, National Fuel Gas took issue with New Mountain's analysis prepared by Schlumberger regarding its Appalachian reserves. National Fuel Gas is waiting for final results of an independent valuation of the reserves from Netherland, Sewell & Associates.

New Mountain owns 8,106,346 shares, or 9.7%, of the Williamsville, N.Y., diversified energy company.

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