TULSA, Okla., Sept. 11, 2023 /PRNewswire/ -- ONE Gas, Inc.
("ONE Gas") (NYSE: OGS) announced today that it has priced its
public offering of 1,200,000 shares of its common stock for
approximate gross proceeds of $88,800,000 (before offering expenses and
underwriting discounts and commissions, assuming the underwriter
does not exercise its option to purchase additional shares and
upon, and assuming, full physical settlement of the forward sale
agreement). In connection with the offering, ONE Gas entered into a
forward sale agreement with Bank of America, N.A., referred to in
such capacity as the forward purchaser. In connection with the
forward sale agreement, the forward purchaser or its affiliate,
acting as forward seller, at ONE Gas' request, is borrowing from
third parties and selling 1,200,000 shares of ONE Gas' common stock
to the underwriter in the offering in connection with the forward
sale agreement described below. As part of the offering, ONE
Gas has granted to the underwriter an option to purchase up to
180,000 additional shares of ONE Gas' common stock. If such option
is exercised, ONE Gas may, in its sole discretion, enter into an
additional forward sale agreement with the forward purchaser with
respect to such additional shares, and ONE Gas currently expects
that, if such option is exercised, it will do so. The offering is
expected to close on September 14,
2023, subject to satisfaction of customary conditions to
closing.
BofA Securities is acting as the sole underwriter for the
offering and proposes to offer the shares of common stock from time
to time for sale in one or more transactions on the New York Stock
Exchange, in the over-the-counter market, through negotiated
transactions or otherwise at market prices prevailing at the time
of sale, at prices related to prevailing market prices or at
negotiated prices.
Pursuant to the terms of the forward sale agreement, ONE Gas has
agreed to sell to the forward purchaser or its affiliate (subject
to ONE Gas' right to elect net share or cash settlement of the
forward sale agreement) 1,200,000 shares of ONE Gas' common stock
(or 1,380,000 shares if the underwriter's option to purchase
additional shares is exercised in full and ONE Gas elects to enter
into an additional forward sale agreement with respect to such
exercise, as described above), at a price per share equal to the
price at which the underwriter purchases the shares from the
forward seller. Settlement of the forward sale agreement is
expected to occur no later than December 31,
2024.
ONE Gas will not initially receive any proceeds from the sale of
shares of its common stock by the forward seller or its affiliate,
unless an event occurs that requires ONE Gas to sell its common
stock to the underwriter in lieu of the forward seller borrowing
and selling shares of ONE Gas' common stock to the underwriter.
Although ONE Gas expects to settle the forward sale agreement
entirely by the full physical delivery of shares of its common
stock in exchange for cash proceeds, ONE Gas may elect cash
settlement or net share settlement for all or a portion of its
obligations under the forward sale agreement. If ONE Gas elects to
cash settle or net share settle the forward sale agreement, ONE Gas
may not receive any proceeds from the issuance of shares, and ONE
Gas will instead receive or pay cash (in the case of cash
settlement) or receive or deliver shares of its common stock (in
the case of net share settlement). ONE Gas intends to use any net
proceeds received for general corporate purposes, which may include
repayment or refinancing of debt, working capital, construction and
acquisition expenditures and investments.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of these securities, in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. The offering of these securities may be made only by
means of a prospectus supplement and accompanying base prospectus
relating to this offering.
The public offering is being made pursuant to an effective shelf
registration statement that has been filed with the Securities and
Exchange Commission (the "SEC"). A preliminary prospectus
supplement related to the offering has been filed with the SEC and
is available on the SEC's website. In addition, copies of the
preliminary prospectus supplement and accompanying base prospectus
relating to the shares of common stock being offered may be
obtained by contacting: BofA Securities, NC1-022-02-25, 201 North
Tryon Street, Charlotte, NC 28255-0001, Attention: Prospectus
Department, Email: dg.prospectus_requests@bofa.com.
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ONE Gas is a 100% regulated natural gas utility, and trades on
the New York Stock Exchange under the symbol "OGS." ONE Gas is
included in the S&P MidCap 400 Index and is one of the largest
natural gas utilities in the United
States.
Headquartered in Tulsa,
Oklahoma, ONE Gas provides a reliable and affordable energy
choice to more than 2.3 million customers in Kansas, Oklahoma and Texas. Its divisions include Kansas Gas
Service, the largest natural gas distributor in Kansas; Oklahoma Natural Gas, the largest in
Oklahoma; and Texas Gas Service,
the third largest in Texas, in
terms of customers.
Some of the statements contained and incorporated in this news
release are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The
forward-looking statements relate to, without limitation, the
offering (including size and proceeds, if any, and use of
proceeds), our anticipated financial performance, liquidity,
management's plans and objectives for our future operations, our
business prospects, the outcome of regulatory and legal
proceedings, market conditions and other matters. We make these
forward-looking statements in reliance on the safe harbor
protections provided under the Private Securities Litigation Reform
Act of 1995. The following discussion is intended to identify
important factors that could cause future outcomes to differ
materially from those set forth in the forward-looking
statements.
Forward-looking statements include the items identified in the
preceding paragraph, the information concerning possible or assumed
future results of our operations and other statements contained or
incorporated in this news release identified by words such as
"anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," "should," "goal," "forecast," "guidance," "could,"
"may," "continue," "might," "potential," "scheduled," "likely," and
other words and terms of similar meaning.
One should not place undue reliance on forward-looking
statements, which are applicable only as of the date of this news
release. Known and unknown risks, uncertainties and other factors
may cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by forward-looking statements.
Those factors may affect our operations, markets, products,
services and prices. In addition to any assumptions and other
factors referred to specifically in connection with the
forward-looking statements, factors that could cause our actual
results to differ materially from those contemplated in any
forward-looking statement include, among others, the following:
- our ability to recover costs, income taxes and amounts
equivalent to the cost of property, plant and equipment, regulatory
assets and our allowed rate of return in our regulated rates or
other recovery mechanisms;
- cyber-attacks, which, according to experts, continue to
increase in volume and sophistication, or breaches of technology
systems that could disrupt our operations or result in the loss or
exposure of confidential or sensitive customer, employee or Company
information; further, increased remote working arrangements have
required enhancements and modifications to our information
technology infrastructure (e.g. Internet, Virtual Private Network,
remote collaboration systems, etc.), and any failures of the
technologies, including third-party service providers, that
facilitate working remotely could limit our ability to conduct
ordinary operations or expose us to increased risk or effect of an
attack;
- our ability to manage our operations and maintenance
costs;
- the concentration of our operations in Oklahoma, Kansas, and Texas;
- changes in regulation of natural gas distribution services,
particularly those in Oklahoma,
Kansas and Texas;
- the economic climate and, particularly, its effect on the
natural gas requirements of our residential and commercial
customers;
- the length and severity of a pandemic or other health crisis,
which could significantly disrupt or prevent us from operating our
business in the ordinary course for an extended period;
- competition from alternative forms of energy, including, but
not limited to, electricity, solar power, wind power, geothermal
energy and biofuels;
- adverse weather conditions and variations in weather, including
seasonal effects on demand and/or supply, the occurrence of severe
storms in the territories in which we operate, and climate change,
and the related effects on supply, demand, and costs;
- indebtedness could make us more vulnerable to general adverse
economic and industry conditions, limit our ability to borrow
additional funds and/or place us at competitive disadvantage
compared with competitors;
- our ability to secure reliable, competitively priced and
flexible natural gas transportation and supply, including decisions
by natural gas producers to reduce production or shut-in producing
natural gas wells and expiration of existing supply and
transportation and storage arrangements that are not replaced with
contracts with similar terms and pricing;
- our ability to complete necessary or desirable expansion or
infrastructure development projects, which may delay or prevent us
from serving our customers or expanding our business;
- operational and mechanical hazards or interruptions;
- adverse labor relations;
- the effectiveness of our strategies to reduce earnings lag,
revenue protection strategies and risk mitigation strategies, which
may be affected by risks beyond our control such as commodity price
volatility, counterparty performance or creditworthiness and
interest rate risk;
- the capital-intensive nature of our business, and the
availability of and access to, in general, funds to meet our debt
obligations prior to or when they become due and to fund our
operations and capital expenditures, either through (i) cash on
hand, (ii) operating cash flow, or (iii) access to the capital
markets and other sources of liquidity;
- our ability to obtain capital on commercially reasonable terms,
or on terms acceptable to us, or at all;
- limitations on our operating flexibility, earnings and cash
flows due to restrictions in our financing arrangements;
- cross-default provisions in our borrowing arrangements, which
may lead to our inability to satisfy all of our outstanding
obligations in the event of a default on our part;
- changes in the financial markets during the periods covered by
the forward-looking statements, particularly those affecting the
availability of capital and our ability to refinance existing debt
and fund investments and acquisitions to execute our business
strategy;
- actions of rating agencies, including the ratings of debt,
general corporate ratings and changes in the rating agencies'
ratings criteria;
- changes in inflation and interest rates;
- our ability to recover the costs of natural gas purchased for
our customers and any related financing required to support our
purchase of natural gas supply;
- impact of potential impairment charges;
- volatility and changes in markets for natural gas and our
ability to secure additional and sufficient liquidity on reasonable
commercial terms to cover costs associated with such
volatility;
- possible loss of local distribution company franchises or other
adverse effects caused by the actions of municipalities;
- payment and performance by counterparties and customers as
contracted and when due, including our counterparties maintaining
ordinary course terms of supply and payments;
- changes in existing or the addition of new environmental,
safety, tax and other laws to which we and our subsidiaries are
subject, including those that may require significant expenditures,
significant increases in operating costs or, in the case of
noncompliance, substantial fines or penalties;
- the effectiveness of our risk-management policies and
procedures, and employees violating our risk-management
policies;
- the uncertainty of estimates, including accruals and costs of
environmental remediation;
- advances in technology, including technologies that increase
efficiency or that improve electricity's competitive position
relative to natural gas;
- population growth rates and changes in the demographic patterns
of the markets we serve, and economic conditions in these areas'
housing markets;
- acts of nature and the potential effects of threatened or
actual terrorism and war, including recent events in Europe;
- the sufficiency of insurance coverage to cover losses;
- the effects of our strategies to reduce tax payments;
- changes in accounting standards;
- changes in corporate governance standards;
- existence of material weaknesses in our internal controls;
- our ability to comply with all covenants in our indentures and
our $1.0 billion unsecured revolving
credit agreement, a violation of which, if not cured in a timely
manner, could trigger a default of our obligations;
- our ability to attract and retain talented employees,
management and directors, and shortage of skilled-labor;
- unexpected increases in the costs of providing health care
benefits, along with pension and postemployment health care
benefits, as well as declines in the discount rates on, declines in
the market value of the debt and equity securities of, and
increases in funding requirements for, our defined benefit plans;
and
- our ability to successfully complete merger, acquisition or
divestiture plans, regulatory or other limitations imposed as a
result of a merger, acquisition or divestiture, and the success of
the business following a merger, acquisition or divestiture.
These factors are not necessarily all of the important factors
that could cause actual results to differ materially from those
expressed in any of our forward-looking statements. Other
factors could also have material adverse effects on our future
results. These and other risks are described in greater detail in
our filings with the SEC, including in Part 1, Item 1A, Risk
Factors, in our Annual Report on Form 10-K for the year ended
December 31, 2022. All
forward-looking statements attributable to us or persons acting on
our behalf are expressly qualified in their entirety by these
factors. Other than as required under securities laws, we undertake
no obligation to update publicly any forward-looking statement
whether as a result of new information, subsequent events or change
in circumstances, expectations or otherwise.
###
Analyst
Contact:
|
Erin
Dailey
918-947-7411
|
Media
Contact:
|
Leah
Harper
918-947-7123
|
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SOURCE ONE Gas, Inc.