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                                 NEWS RELEASE


[ATMOS LOGO]                                                  [UNITED CITIES
                                                             GAS COMPANY LOGO]


JUNE 10, 1997                             ATMOS MEDIA CONTACT: Margaret Watson
                                                                (972) 855-4050

FOR RELEASE: IMMEDIATELY             ATMOS INVESTOR/ANALYST CONTACT: Don James
                                                                (972) 855-3720
                                             UNITED CITIES CONTACT: Jim Ford
                                                        (615) 373-5310 ext.302

                PROPOSED ORDER FILED WITH ILLINOIS COMMISSION
                    IN ATMOS ENERGY, UNITED CITIES MERGER

      Dallas, TX -- Atmos Energy Corporation (NYSE: ATO) and United Cities Gas
Company (NASDAQ: UCIT) of Brentwood, Tennessee, have joined with the staff of
the Illinois Commerce Commission in filing a proposed order which, if approved
by the Commission, will grant approval of the merger of Atmos and United Cities.

      In April, the hearing examiner issued a proposed order recommending that
the merger not be approved. The hearing examiner's order was based upon his
finding that Atmos and United Cities had not submitted sufficient evidence to
show the merger would have produced net benefits to Illinois customers. United
Cities and Atmos have now submitted a study which demonstrates such net
benefits, and have agreed to pass those benefits on to the Illinois customers.

      The proposed order, if accepted by the hearing examiner, can at the
earliest, be considered by the Commission at its June 25 public meeting.
Following Commission approval, the parties will then have 30 days in which to
seek rehearing. The parties to the proceeding are Atmos, United Cities and the
Commission staff.

      In November 1996, shareholders of both companies approved the merger in
which Atmos would be the surviving entity. Regulatory approval is required in
10 of the 13 states in which the combined companies will operate. To date,
approvals have been received in all states requiring approval except Illinois.

      Atmos Chairman, President and Chief Executive Officer, Robert W. Best
said, "We are still on target to close the merger by the end of July. We are
confident that our settlement with the Illinois Commerce Commission staff will
be approved by the Commission later this month."

      United Cities Gas Company distributes natural gas and propane gas to
approximately 350,000 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.