Atmos Seeks Cash After Spending Billions on Gas Amid Freeze

(Bloomberg) -- Atmos Energy Corp., a U.S. distributor of natural gas, is looking to raise cash after committing to spend as much as $3.5 billion to secure fuel during last week’s unprecedented winter freeze.

The financial squeeze illustrates the turmoil caused by a chronic shortage of gas in Texas and other states after sub-zero temperatures froze up wells and pipelines. Prices at delivery hubs surged to hundreds of times their normal levels after buyers scrambled to secure supplies.

Atmos, with 3 million customers in eight states, said in a filing late Friday that it’s “evaluating a number of financing alternatives including available cash, short-term debt, long-term debt, and equity.”

“Unforeseeable and unprecedented” market pricing for gas costs in Colorado, Kansas, and Texas, led to gas purchases of approximately $2.5 billion to $3.5 billion, Dallas-based Atmos said. The bills will fall due by the end of March.

The company maintained its earnings forecast for the current fiscal year at $4.90 to $5.10 per share. The stock dropped 3.2% to $90.56 at 9:40 a.m. in New York trading.

Read More: The Two Hours That Nearly Destroyed Texas’s Electric Grid

Atmos is one of many energy companies to be caught up in the market volatility caused by the extreme cold. Germany’s RWE SE faces a hit of hundreds of millions of euros, it said last week.

Gas suppliers whose wells kept flowing reaped super-sized profits. Comstock Resources Inc., a driller controlled by Dallas Cowboys owner Jerry Jones, said it had been able to sell gas from its fields in east Texas and Louisiana at “super-premium” prices.

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