Board of Directors Elects Indiana Energy CEO and CFO; Earnings, Dividends Reported.

INDIANAPOLIS--(BUSINESS WIRE)--Jan. 27, 1999--The boards of directors of Indiana Energy, Inc. (NYSE:IEI) and its principal operating unit, Indiana Gas Company, Inc. have elected Niel C. Ellerbrook as chief executive officer effective June 1, 1999.

Ellerbrook presently serves as president and chief operating officer of Indiana Energy and president of Indiana Gas and was elected to his new positions at board meetings held January 27, 1999. Ellerbrook will succeed Indiana Energy Chairman and Chief Executive Officer L.A. Ferger when he retires on June 1, 1999. Ferger will continue in his current position as chairman of the board, a position he has held since 1996.

Since joining the company 19 years ago, Ellerbrook has worked to transform the utility into a diversified energy company. Prior to serving as president and chief operating officer, Ellerbrook served as Indiana Energy executive vice president and chief financial officer. He has served on the boards of directors since 1991.

Prior to joining Indiana Gas in 1980 Ellerbrook, a graduate of Ball State University, was with the accounting firm of Arthur Andersen & Co. Ellerbrook serves on the board of directors of Fifth Third Bank of Indiana, Community Hospitals of Indiana, the Indianapolis Civic Theater, the Christian Theological Seminary and the Indiana Manufacturers Association.

"The election of Niel Ellerbrook to become chief executive officer in June continues the transition which began last year with his election as president," said L.A. Ferger, chairman and current chief executive officer. "Niel brings a level of maturity, experience and imagination that makes him an excellent choice to lead the company as it continues to meet the challenges of this rapidly changing industry."

The Indiana Energy board meeting also included the election of IEI Investments President Carl L. Chapman to senior vice president and chief financial officer of Indiana Energy, effective January 27, 1999. Chapman's relationship with Indiana Energy began in 1985 when he was hired to direct the company's planning. Since that time, he has also served as senior vice president corporate development, and president of ProLiance Energy, LLC., where he is still chairman of the board. Chapman, who will continue in his role as President of IEI Investments, has been a strong force behind many of the company's nonregulated initiatives.

Indiana Energy, Inc. reported consolidated net income of $14.3 million for the first quarter of fiscal 1999, which ended December 31, 1998, as compared to net income of $18.4 million for the same period in fiscal 1998. Earnings per average common share, as adjusted to reflect the four-for-three stock split October 2, 1998, were 48 cents for the current quarter, compared to 61 cents per share for the same quarter last year. The 13-cent decrease per share is primarily attributable to weather 19 percent warmer than the same period last year and 17 percent warmer than normal.

Net income for the twelve months ended December 31, 1998, was $36.1 million, compared to $21.6 million for the same period last year. Earnings per share, as adjusted to reflect the stock split, were $1.20 for the current twelve months, compared to 72 cents per share for last year. Last year's results include the effect of an after-tax restructuring charge of $24.5 million (81 cents per common share) at Indiana Gas. Before the restructuring charge, net income and earnings per share for the twelve months ended December 31, 1997, were $46.1 million and $1.53 per share, respectively.

The 33-cent decrease in earnings per share from last year, before the restructuring charge, is due primarily to weather 22 percent warmer than last year and 21 percent warmer than normal. The effects of the significantly warmer weather were offset somewhat by lower operation and maintenance expenses and by the addition of new residential and commercial customers.

The board of directors of Indiana Energy today also declared a cash dividend of 23 1/4 cents per share of common stock. This is unchanged from the previous quarter. The dividend is payable March 1, 1999, to shareholders of record February 15, 1999.

Indiana Energy, Inc. is the holding company of Indiana Gas Company, Inc., IEI Investments, Inc. and other subsidiaries. Indiana Gas provides natural gas distribution to nearly 500,000 customers in the central two-thirds of Indiana. Indiana Energy, Inc. is listed on the New York Stock Exchange and is traded under the ticker symbol IEI. -0-

SUMMARY OF CONSOLIDATED EARNINGS DATA:

                                           Three Months Ended Dec. 31
                                           ---------------------------
(In Thousands Except Per Share Data)           1998          1997
                                           ---------------------------

Operating Revenues                           $125,241     $170,335

Net Income                                   $ 14,276     $ 18,356

Basic and Diluted Earnings Per
     Average Common Share (1)                $    .48     $    .61

Average Common Shares Outstanding (1)          29,970       30,121


                                          Twelve Months Ended Dec. 31
                                          ----------------------------
(In Thousands Except Per Share Data)           1998         1997(2)
                                          ----------------------------

Operating Revenues                           $421,347     $528,414

Net Income                                   $ 36,124     $ 21,574

Basic and Diluted Earnings Per
     Average Common Share (1)                $   1.20     $    .72

Average Common Shares Outstanding (1)          30,078       30,111

(1)  Adjusted to reflect the four-for-three stock split Oct. 2, 1998.
(2)  Reflects an after-tax restructuring charge of $24.5 million or
     $.81 per common share recorded during the fourth quarter of
     fiscal 1997.

NOTE: Net income for the three-month period ended Dec. 31 is not
indicative of net income for an annual period due to the seasonal
sales of gas for space heating purposes.