| FOR                    IMMEDIATE RELEASE | FOR                    MORE INFORMATION |
|------------------------------------------|-----------------------------------------|
| February                    24, 2006     | Contact:                                | Mark                    Knox, re: N-955 |
|                                     |                                    | 630                    388-2529 |
|                                     | Media                    Contact:       | Don                    Ingle |
|                                     |                                    | 630                    388-2939 |

**NICOR          ANNOUNCES 2005 PRELIMINARY EARNINGS AND 2006 ANNUAL OUTLOOK**

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| ·   | Gas                  distribution operating income for the twelve months ended December                  31,                  2005 decreased to $116.9 million from $130.8 million in 2004. The                  year-to-date decline is due primarily to: |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Higher                    operating and maintenance costs ($19.9 million) including the                    impact of                    higher bad debt expense, increased storage-related natural gas                    costs and                    natural gas and fuel costs to operate company equipment and facilities,                    partially offset by lower net legal and claims costs; |
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|   | - | Higher                    depreciation ($5.7 million); lower property sale gains ($5.5                    million); and                    lower natural gas deliveries unrelated to weather (about $6 million). |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Partially                    offsetting these negative factors were the impact on revenues                    of higher                    average distribution rates ($12.8 million), due primarily to                    new tariffs                    filed in the fourth quarter 2005 to implement a base rate increase;                    and                    increased natural gas deliveries due to colder weather (about                    $4                    million). |
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| ·   | For                  the 2005 fourth quarter, gas distribution operating income increased                  to                  $44.8 million from $44.1 million in 2004. The quarter increase                  is due                  primarily to: |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Higher                    average distribution rates ($12.8 million), due primarily to                    the impact of                    new tariffs filed in 2005 to implement a base rate increase;                    and |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Increased                    natural gas deliveries due to colder weather (about $6                    million). |
|--------|---|------------------------------------------------------------------------------------------------------------------|

|   | - | Partially                    offsetting these positive factors were higher operating and maintenance                    costs ($15.1 million) including the impact of increased storage-related                    natural gas costs, natural gas and fuel costs to operate company                    equipment                    and facilities, and higher bad debt expense; and higher depreciation                    ($1.6                    million). |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Shipping                  operating income for the twelve months ended December 31, 2005                  increased                  to $40.4 million from $31.6 million in 2004, due primarily to higher                  average rates and increased volumes. For the 2005 fourth quarter,                  shipping                  operating income decreased to $8.6 million from $15.3 million in                  2004. The                  decline for the quarter was due primarily to lower volumes shipped                  and                  higher operating costs relating to higher transportation-related                  expenses                  (including fuel, inland-freight and vessel charter costs); and                  increased                  legal and audit fees (in connection with the repatriation of foreign                  earnings and a reorganization of the shipping business, which became                  effective in January 2006, to take advantage of potential benefits                  under                  the Jobs Act). Partially offsetting these negative factors were                  higher                  average rates. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | Corporate                  operating income for the 2005 twelve-month period included previously                  discussed net D&O recoveries of $29.9 million (pretax), as well as                  insurance recoveries of $2.8 million (pretax) related to previously                  incurred legal expenses. Corporate 2005 fourth quarter operating                  results,                  as compared to 2004, were impacted by higher corporate-related                  costs. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·   | 2005                  twelve-month financial results, as compared to 2004, were impacted                  by                  higher pretax equity investment income and higher net interest                  expense. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | 2005                  twelve-month and fourth-quarter financial results were also impacted                  by                  the previously noted income tax benefit of $17 million associated                  with the                  repatriation of foreign earnings under provisions of the Jobs Act.                  During                  December 2005, the company’s shipping business repatriated approximately                  $132 million of cumulative undistributed foreign earnings. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**2006          Earnings Outook**

** **

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**Conference          Call**

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**Caution          Concerning Forward-Looking Statements**

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| **Nicor                  Inc.**                                      |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|----------------------------------------------------------------------|--------|-----------------------------------------------------------|---------|--------------------------------------------|--------|--------|--------|--------|---------|--------|--------|---------|---------|
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| PRELIMINARY                  CONSOLIDATED STATEMENTS OF OPERATIONS   |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| *Unaudited                  (millions, except per share data)*       |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|                                                                      |   |                  Three                  months ended |    |  Twelve                  months ended |   |
|                                                                      |   |  December                  31                        |    |  December                  31         |   |
|                                                                 |   |                                                      | 2005    |                                       |   | 2004   |   |   | 2005    |   |   | 2004    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Operating                  revenues**                              |   | $                                                         | 1,357.5 |                                       | $      | 894.6  |   | $      | 3,357.8 |   | $      | 2,739.7 |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Operating                  expenses**                              |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| ** **Gas                  distribution                          |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| Cost                  of gas                                         |   |                                                      | 1,010.2 |                                       |   | 583.9  |   |   | 2,212.4 |   |   | 1,695.0 |    |
| Operating                  and maintenance                           |   |                                                      | 76.3    |                                       |   | 61.2   |   |   | 254.8   |   |   | 234.9   |    |
| Depreciation                                                         |   |                                                      | 38.6    |                                       |   | 37.0   |   |   | 154.5   |   |   | 148.8   |    |
| Taxes,                  other than income taxes                      |   |                                                      | 47.0    |                                       |   | 37.6   |   |   | 171.0   |   |   | 158.5   |    |
| Mercury-related                  costs (recoveries), net             |   |                                                      | .3      |                                       |   | .2     |   |   | .4      |   |   | -       |    |
| Property                  sale gains                                 |   |                                                      | (.2     | )                                          |   | (.4    | )      |   | (.4     | )      |   | (5.9    | )       |
| ** **Shipping                                                   |   |                                                      | 95.2    |                                       |   | 82.0   |   |   | 338.1   |   |   | 279.1   |    |
| ** **Other energy                  ventures                |   |                                                      | 44.6    |                                       |   | 39.9   |   |   | 142.9   |   |   | 136.0   |    |
| ** **Litigation                  charges (recoveries), net      |   |                                                      | -       |                                       |   | -      |   |   | (29.9   | )      |   | 38.5    |    |
| ** **Other                  corporate expenses and eliminations |   |                                                      | (27.8   | )                                          |   | (26.7  | )      |   | (87.7   | )      |   | (82.9   | )       |
| ** **Total                  operating expenses                  |   |                                                      | 1,284.2 |                                       |   | 814.7  |   |   | 3,156.1 |   |   | 2,602.0 |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Operating                  income**                                |   |                                                      | 73.3    |                                       |   | 79.9   |   |   | 201.7   |   |   | 137.7   |    |
| **Interest                  expense, net of amounts capitalized**    |   |                                                      | 14.0    |                                       |   | 10.8   |   |   | 46.8    |   |   | 41.2    |    |
| **Equity                  investment income (loss), net**            |   |                                                      | 2.6     |                                       |   | 2.3    |   |   | 9.3     |   |   | 6.3     |    |
| **Interest                  income**                                 |   |                                                      | 1.6     |                                       |   | .6     |   |   | 6.0     |   |   | 2.3     |    |
| **Other                  income (expense), net**                     |   |                                                      | .3      |                                       |   | (.1    | )      |   | .8      |   |   | .2      |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Income                  before income taxes**                      |   |                                                      | 63.8    |                                       |   | 71.9   |   |   | 171.0   |   |   | 105.3   |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Income                  tax expense, net of benefits**             |   |                                                      | 1.8     |                                       |   | 24.2   |   |   | 34.7    |   |   | 30.2    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Net                  income**                                      |   |                                                      | 62.0    |                                       |   | 47.7   |   |   | 136.3   |   |   | 75.1    |    |
| **Dividends                  on preferred stock**                    |   |                                                      | -       |                                       |   | -      |   |   | -       |   |   | -       |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Earnings                  applicable to common stock**             |   | $                                                         | 62.0    |                                       | $      | 47.7   |   | $      | 136.3   |   | $      | 75.1    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Average                  shares of common stock outstanding**      |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| Basic                                                                |   |                                                      | 44.3    |                                       |   | 44.1   |   |   | 44.2    |   |   | 44.1    |    |
| Diluted                                                              |   |                                                      | 44.4    |                                       |   | 44.3   |   |   | 44.4    |   |   | 44.3    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Earnings                  per average share of common stock**      |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| Basic                  earnings per share                            |   | $                                                         | 1.40    |                                       | $      | 1.08   |   | $      | 3.08    |   | $      | 1.71    |    |
| Diluted                  earnings per share                          |   | $                                                         | 1.40    |                                       | $      | 1.08   |   | $      | 3.07    |   | $      | 1.70    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Nicor                  Inc.**                                      |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| PRELIMINARY                  FINANCIAL HIGHLIGHTS                    |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| *Unaudited                  (millions, except per share data)*       |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|                                                                 |   |  Three                  months ended                 |    |  Twelve                  months ended |   |
|                                                                 |   |  December                  31                        |    |  December                  31         |   |
|                                                                 |   |                                                      | 2005    |                                       |   | 2004   |   |   | 2005    |   |   | 2004    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Operating                  revenues**                              |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| Gas                  distribution                                    |   | $                                                         | 1,217.0 |                                       | $      | 763.6  |   | $      | 2,909.6 |   | $      | 2,362.1 |    |
| Shipping                                                             |   |                                                      | 103.8   |                                       |   | 97.3   |   |   | 378.5   |   |   | 310.7   |    |
| Other                  energy ventures                               |   |                                                      | 67.3    |                                       |   | 60.4   |   |   | 157.0   |   |   | 155.3   |    |
| Corporate                  and eliminations                          |   |                                                      | (30.6   | )                                          |   | (26.7  | )      |   | (87.3   | )      |   | (88.4   | )       |
|                                                                 |   | $                                                         | 1,357.5 |                                       | $      | 894.6  |   | $      | 3,357.8 |   | $      | 2,739.7 |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Operating                  income (loss)**                         |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| Gas                  distribution                                    |   | $                                                         | 44.8    |                                       | $      | 44.1   |   | $      | 116.9   |   | $      | 130.8   |    |
| Shipping                                                             |   |                                                      | 8.6     |                                       |   | 15.3   |   |   | 40.4    |   |   | 31.6    |    |
| Other                  energy ventures                               |   |                                                      | 22.7    |                                       |   | 20.5   |   |   | 14.1    |   |   | 19.3    |    |
| Corporate                  and eliminations                          |   |                                                      | (2.8    | )                                          |   | -      |   |   | 30.3    |   |   | (44.0   | )  |
|                                                                 |   | $                                                         | 73.3    |                                       | $      | 79.9   |   | $      | 201.7   |   | $      | 137.7   |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Net                  income**                                      |   | $                                                         | 62.0    |                                       | $      | 47.7   |   | $      | 136.3   |   | $      | 75.1    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Earnings                  applicable to common stock**             |   | $                                                         | 62.0    |                                       | $      | 47.7   |   | $      | 136.3   |   | $      | 75.1    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Average                  shares of common stock outstanding**      |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| Basic                                                                |   |                                                      | 44.3    |                                       |   | 44.1   |   |   | 44.2    |   |   | 44.1    |    |
| Diluted                                                              |   |                                                      | 44.4    |                                       |   | 44.3   |   |   | 44.4    |   |   | 44.3    |    |
|                                                                 |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| **Earnings                  per average share of common stock**      |   |                                                      |    |                                       |   |   |   |   |    |   |   |    |    |
| Basic                  earnings per share                            |   | $                                                         | 1.40    |                                       | $      | 1.08   |   | $      | 3.08    |   | $      | 1.71    |    |
| Diluted                  earnings per share                          |   | $                                                         | 1.40    |                                       | $      | 1.08   |   | $      | 3.07    |   | $      | 1.70    |    |