**NEWS
      RELEASE**








FOR
      IMMEDIATE RELEASE      FOR
      MORE
      INFORMATION


December
      5, 2006       Contact:  Mark
      Knox, re: N-970


630
      388-2529


Media
      Contact:  Annette
      Martinez


630
      388-2781





**NICOR
      INFORMED BY THE DEPARTMENT OF JUSTICE THAT INQUIRY IS
      CLOSED**





Naperville,
      IL - Nicor Inc. (NYSE: GAS) today announced that it has been advised by the
      Office of the United States Attorney for the Northern District of Illinois
      (the
“U.S. Attorney”) that it is closing its inquiry and will not seek to prosecute
      the company or any individuals in connection with Nicor Gas’ former
      Performance-Based Rate (PBR) plan. As previously disclosed, in 2002 the U.S.
      Attorney issued a notification of inquiry related to the company’s actions in
      connection with the accounting for natural gas costs pursuant to the PBR plan.




In
      a
      press release dated July 7, 2006 the Company previously announced that it had
      reached a tentative agreement with the Staff of the Enforcement Division of
      the
      United States Securities and Exchange Commission (the “SEC”) in settlement of an
      anticipated civil action relating to the PBR plan to which the company and
      SEC
      will be parties. The tentative settlement is subject to the approval of the
      SEC
      Commissioners. The SEC commissioners have the authority to approve, modify
      or
      reject the tentative settlement.




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Nicor
      Inc. (NYSE: GAS) is a holding company and is a member of the Standard &
Poor’s 500 Index. Its principal businesses are Nicor Gas, one of the nation’s
      largest natural gas distribution companies, and Tropical Shipping, a
      containerized shipping business serving the Caribbean region and the Bahamas.
      Nicor also owns and has an equity interest in several energy-related businesses.
      For more information, visit the Nicor Web site at www.nicor.com .





**Caution
      Concerning Forward-Looking Statements**


This
      document includes certain forward-looking statements about the expectations
      of
      Nicor and its subsidiaries and affiliates. Although Nicor believes these
      statements are based on reasonable assumptions, actual results may vary
      materially from stated expectations. Such forward-looking statements may be
      identified by the use of forward-looking words or phrases such as “anticipate,”
“believe,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,”
“would,” “project,” “estimate,” “ultimate,” or similar phrases. Actual results
      may differ materially from those indicated in the company’s forward-looking
      statements due to the direct or indirect effects of legal contingencies
      (including litigation) and the resolution of those issues, including the effects
      of an Illinois Commerce Commission review and United States Securities and
      Exchange Commission inquiry, and undue reliance should not be placed on such
      statements.




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      3




Other
      factors that could cause materially different results include, but are not
      limited to, weather conditions; natural disasters; natural gas and other fuel
      prices; fair value accounting adjustments; inventory valuation; health care
      costs; insurance costs or recoveries; legal costs; borrowing needs; interest
      rates; credit conditions; economic and market conditions; tourism and
      construction in the Bahamas and Caribbean region; energy conservation;
      legislative and regulatory actions; tax rulings or audit results; asset sales;
      significant unplanned capital needs; future mercury-related charges or credits;
      changes in accounting principles, interpretations, methods, judgments or
      estimates; performance of major suppliers and contractors; labor relations;
      and
      acts of terrorism.





Readers
      are cautioned not to place undue reliance on these forward-looking statements,
      which speak only as of the date of this release. Nicor undertakes no obligation
      to publicly release any revision to these forward-looking statements to reflect
      events or circumstances after the date of this release.




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