Atmos Energy announced last week that it plans to spend about$33 million in stock to buy the remaining 55% share of WoodwardMarketing that it does not already own. The Houston-based marketersells about 125 Bcf/year of natural gas primarily to municipalitiesand industrial end-users in the Southeast and Gulf Coast regions.

Atmos said the acquisition is expected to add $0.04 -$0.06/share to its consolidated earnings during the first full yearof complete ownership. The purchase will not require shareholderapproval but will require regulatory approval in six of the 13states in which Atmos operates.

“Woodward Marketing LLC has a track record of strong financialgrowth accompanied by some of the highest customer satisfactionratings in the industry under the leadership of J. D. Woodward andJim Kifer,” said Atmos Chairman Robert W. Best. “The acquisition ofthe remaining interest in Woodward Marketing will increase theprofitability, scale and scope of Atmos’ non-utility operations.”

For Woodward, the purchase provides greater financialflexibility at a time of greatly increasing volatility in thecommodity markets and rising credit risk. “For a relatively smallcompany, and particularly with rising product prices, the creditscenario has gotten to be a big issue for anybody that is workingin this business,” said J. D. Woodward, president of WoodwardMarketing, who will become senior vice president of non-utilityoperations for Atmos upon completion of the transaction. Woodwardstarted the company in 1986. “I think where we see continuedopportunities, Atmos certainly provides a larger financial platformfor us to build off of, and to some extent we also see that throughthat relationship we’ll gain potential business opportunities inthe states that Atmos operates in.”

Atmos acquired its 45% interest in the company as part of theacquisition of United Cities Gas in 1997. Since then, Woodward’srealized pretax income has increased by more than 20% each year,the company said. For the nine months ended June 30, Woodward’spretax realized income increased about 44% compared to the ninemonths ended June 30, 1999.

“Our business is growing right now as opposed to diminishing,”said Woodward. “The history of our company is that we’ve stayedpretty focused on the municipalities and have a pretty goodreputation particularly on the Texas Eastern System and Trunkline,where we serve a significant number of municipalities.”

Rocco Canonica

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