#United States #Tulsa #stock offering #ONE Gas #OGS

ONE Gas, Inc. Plans a Major Stock Offering

Recently, ONE Gas, Inc. has made headlines with its announcement regarding a significant public offering. The company, listed on the New York Stock Exchange as OGS, intends to offer 2.5 million shares of common stock to the public. This move is expected to draw attention, especially given the company's stature as one of the premier natural gas utilities in the United States.

Details of the Offering

According to the press release dated May 8, 2025, the offering will include a forward sale agreement with JPMorgan Chase Bank, National Association, acting as the forward purchaser. This agreement enables the forward seller to borrow shares from third parties and sell them to underwriters. To bolster the offering, ONE Gas will also provide its underwriter the option to buy up to 375,000 additional shares. Should this option be exercised, ONE Gas may enter into a second forward sale agreement concerning those shares.

The underwriter, J.P. Morgan Securities LLC, will be responsible for facilitating the sale, which can occur via the New York Stock Exchange, negotiated transactions, or other methods depending on market conditions at the time of sale. It’s noteworthy that the price per share will be determined at the time of the transaction between the underwriter and the forward seller.

Forward Sale Agreement Highlights

ONE Gas has agreed to sell a total of 2.5 million shares to the forward purchaser based on the purchase price set by the underwriter. If the option for additional shares is fully exercised, this could increase the total to 2,875,000 shares. Settlement for the forward sale agreement is expected to occur by December 31, 2026.

As with any forward sale agreement, ONE Gas may choose to negotiate terms that allow for net share settlement or cash settlement. This gives the company flexibility in terms of its financial strategy, particularly regarding how it manages proceeds from the sale of shares. Depending on the election made by the company, proceeds could assist in various corporate purposes, including debt repayment, construction, or general operational costs.

What This Means for the Market

This offering comes as ONE Gas continues to demonstrate its commitment to providing reliable natural gas services to over 2.3 million customers across Kansas, Oklahoma, and Texas. The company operates under key divisions such as Kansas Gas Service, the largest distributor in the state, as well as Oklahoma Natural Gas and Texas Gas Service.

The company's strategic move to offer shares could indicate an optimistic outlook regarding future growth trajectories and market conditions. Moreover, as it is included in the SP MidCap 400 Index, this offering will likely enhance its visibility and bolster investor confidence. The forward-looking statement section of the press release suggests that ONE Gas maintains a cautious yet proactive stance regarding operational and financial metrics, anticipating a range of potential market factors that can affect performance.

Conclusion

While ONE Gas’s share offering reflects its robust standing in the energy sector, it also highlights the complexities faced by utilities in today's market. From navigating regulatory landscapes to addressing evolving customer energy needs, the company’s approach to capital generation via stock offerings showcases its versatility in managing operational and financial challenges. For current and potential investors, this move may present an opportunity to engage with a leading utility poised for continued growth in a competitive energy market.