EXHIBIT 99.2

           [ATMOS ENERGY CORPORATION AND UNITED CITIES
                  GAS COMPANY LOGOS APPEAR HERE]

                          NEWS RELEASE

DATE:  April 9, 1997                  ATMOS MEDIA CONTACT:
                                      Margaret Watson
                                      (972)855-4050

FOR RELEASE:  IMMEDIATELY             ATMOS INVESTOR/
                                      ANALYST CONTACT:
                                      Jack Eversull
                                      (972)855-3729

                                      UNITED CITIES
                                      CONTACT:
                                      Linda Kelley
                                      (615)373-0104 ext.224

         ILLINOIS HEARING EXAMINER ISSUES PROPOSED ORDER
                 ON ATMOS-UNITED CITIES MERGER

Dallas, TX -- Atmos Energy Corporation (NYSE: ATO) and United
Cities Gas Company (Nasdaq: UCIT) of Brentwood, Tennessee jointly
announced today that the hearing examiner in the regulatory
proceeding in Illinois is recommending, in a proposed order, that
the Illinois Commerce Commission deny the companies' petition to
merge.  Although the hearing examiner stated that the proposed
structure of the merger was appropriate under Illinois law, he
noted that the companies need to provide more information
regarding the benefits of the merger to Illinois ratepayers.

     In November 1996, shareholders of both companies approved
the merger in which Atmos would be the surviving entity.  The
merger is subject to receipt of regulatory approvals in 10 of the
13 states in which the combined companies would have operations.
To date, the companies have received regulatory approvals in all
states requiring approval except Illinois.

     The companies will have an opportunity to respond to the
hearing examiner's proposed order within the next two weeks.
Following the companies' response, the hearing examiner could
modify the proposed order.  Thereafter, the hearing examiner's
proposed order would be submitted to the Illinois Commerce
Commission, which is vested with the regulatory authority in
Illinois to approve the merger.  At that time, the companies
would also have an opportunity to brief the Illinois commission
on the merger.

     "While we are disappointed by the hearing examiner's
proposed order, we remain hopeful that the hearing examiner will
reconsider his findings following submissions of our briefs.  We
are optimistic that the full Illinois commission will ultimately
approve the merger," said Gene C. Koonce, United Cities Chairman,
President and Chief Executive Officer.

     Atmos' Chairman, President and Chief Executive Officer,
Robert W. Best, said, "We remain fully committed to the
completion of the merger at the earliest practicable date.  We
believe that the Illinois commission will recognize the benefits
of this merger to Illinois ratepayers and will ultimately approve
the merger."

     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
more than 680,000 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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