Atmos Energy Corporation Agrees to Sell Indirect Equity Interest in Heritage Propane Partners.

Energy Editors/Business Editors

DALLAS--(BUSINESS WIRE)--Nov. 7, 2003

Atmos Energy Corporation (NYSE:ATO) said today it and three other utility partners have entered into an agreement to sell their interest in the general partnership and limited partnerships in Heritage Propane Partners, L.P., (NYSE:HPG) for $130 million. Atmos Energy expects to receive approximately $24.7 million and to record a $4.4 million pretax book gain.

The sale is part of a larger transaction that involves the merger of privately held Energy Transfer Company with Heritage Propane Partners. Closing of the transaction, which is conditional upon regulatory approvals, is expected by the end of 2003.

In February 2000, Atmos Energy, AGL Resources, TECO Energy and Piedmont Natural Gas formed a partnership to combine the propane assets of all four utilities into a single regional company, U.S. Propane, L.P. In August 2000, U.S. Propane merged with Heritage Propane Partners. Through their ownership of U.S. Propane, Atmos Energy and its partners acquired an indirect ownership of the general partner and a portion of the limited partnership interests of Heritage Propane Partners.

"The arrangement among Atmos Energy and its three utility partners has benefited us by allowing us to leverage our former propane operations and to convert them into assets of the much-larger Heritage Propane," said Robert W. Best, chairman, president and chief executive officer of Atmos Energy Corporation. "Selling our indirect interest lets us focus on our core business of delivering natural gas," he said.

Heritage Propane Partners, based in Tulsa, Okla., is the fourth-largest retail propane marketer in the United States.

Atmos Energy Corporation, headquartered in Dallas, is one of the largest natural gas distributors in the United States, serving about 1.7 million gas utility customers. Atmos Energy's utility operations serve more than 1,000 small and medium-size communities in 12 states from the Blue Ridge Mountains in the East to the Rocky Mountains in the West. Atmos Energy's nonutility operations, organized under Atmos Energy Holdings, Inc., operate in 18 states. They provide natural gas marketing and procurement services to municipal, industrial and commercial customers, manage company-owned natural gas storage and pipeline assets, construct small electric generating plants for industrial and municipal customers, and hold an indirect equity interest in Heritage Propane Partners, L.P. For more information, visit www.atmosenergy.com.

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