Exhibit 99.1



  DATE: Nov. 4, 1996     ATMOS MEDIA CONTACT: Margaret Watson 
                                             (972) 450-4050
FOR RELEASE: Immediately   ATMOS INVESTOR/ANALYST 
                                    CONTACT:  Jack Eversull     
                                             (972) 788-3729
                         UNITED CITIES CONTACT: Linda Kelley
                                   (615) 373-0104, ext. 224
                         
                         
           UNITED CITIES, ATMOS ENERGY REACH AGREEMENT
               WITH SOUTHERN UNION REGARDING MERGER

Brentwood, Tenn., and Dallas, Texas -- United Cities Gas Company
(NASDAQ:UCIT) and Atmos Energy Corporation (NYSE: ATO) announced
today that they have entered into an agreement with Southern
Union Company pursuant to which Southern Union has agreed not to
exercise dissenters' rights with respect to the United
Cities/Atmos merger and has agreed not to solicit United Cities
shareholders to exercise their dissenters' rights to vote against
the merger. United Cities and Atmos have agreed to stop
contesting the legality of Southern Union's ownership of United
Cities shares and the Atmos shares into which those shares will
be converted in the merger.

The agreement also grants Southern Union a right of first offer
in respect of certain properties which Atmos may choose to
dispose of during the two-year period following the consummation
of the merger. Atmos does not currently contemplate the sale of
any properties.

The United Cities and Atmos shareholders are scheduled to
consider the proposed merger at meetings to be held on Nov. 12.

United Cities Gas Company distributes natural gas and propane gas
to approximately 340,000 customers in 10 states. The company is
also engaged in other energy-related business.

Atmos Energy Corporation provides natural gas service to
approximately 674,000 customers in Texas, Colorado, Kansas,
Missouri, Louisiana and Kentucky through its operating companies
- - Energas Company, Greeley Gas Company, Trans Louisiana Gas
Company and Western Kentucky Gas Company.

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