Nicor Inc.
                                                                        Form 8-K
                                                                    Exhibit 99.1



NEWS RELEASE


FOR IMMEDIATE RELEASE          FOR MORE INFORMATION
July 31, 2003                  Contact:  Mark Knox, re: N-897
                               630 305-9500, ext. 2529

NICOR ANNOUNCES HIGHER SECOND QUARTER EARNINGS AND
REVISES ITS 2003 EARNINGS OUTLOOK

Naperville, IL - Nicor Inc. (NYSE: GAS) today reported
preliminary second quarter 2003 net income, operating income and
diluted earnings per common share of $23.8 million, $38.9
million and $.54, respectively. This compares to second quarter
2002 net income, operating income and diluted earnings per
common share of $22.4 million, $43.7 million and $.50,
respectively. Improved earnings per share results are primarily
attributable to significant mercury-related insurance recoveries
in the company's gas distribution business and a gain from the
wind-down of the company's 50-percent owned retail energy
marketing joint venture, Nicor Energy. Largely offsetting these
factors was the negative effect of a previously announced change
in the interim depreciation allocation method effective in 2003
and higher operating and maintenance costs in the gas
distribution segment. Had gas distribution depreciation been
determined using the same method as in 2003, second quarter 2002
consolidated net income, operating income and diluted earnings
per common share, would have been $15.3 million, $31.9 million
and $.34, respectively.

For the six months ended June 30, 2003 preliminary net income, operating income
and diluted earnings per common share were $69.7 million, $120.3 million and
$1.58, respectively. This compares to net income, operating income and diluted
earnings per common share for the same 2002 period of $58.9 million, $108.7
million and $1.32, respectively. Higher earnings per share results for the
six-months ended period are primarily attributable to the second quarter
mercury-related insurance recoveries, the gain from the wind-down of Nicor
Energy, the impact of the change in the interim depreciation allocation method
in the gas distribution segment, and higher operating results in the company's
shipping segment. Partially offsetting these positive factors were higher
operating and maintenance costs in the company's gas distribution segment. Had
gas distribution depreciation been determined using the same method as in 2003,
net income, operating income and diluted earnings per common share for the six
months ended June 30, 2002, would have been $65.2 million, $119.1 million and
$1.46, respectively.

"We are pleased with the substantial progress we have made with the wind-down
of Nicor Energy and the orderly disposition of all of Nicor Energy's customer
accounts. We have recovered some of our investment in this business as a
result," said Thomas L. Fisher, chairman and chief executive officer. "As the
year progresses, we continue to expect solid performance from our shipping
segment and growth in our retail energy-related services business. However,
higher operating costs at the utility continue to be the single biggest factor
impacting our operating results and are expected to offset these positive
contributions."

More details regarding 2003 preliminary second quarter and the six-month period
compared to 2002 financial results follow:

-- Gas distribution operating income decreased in the second quarter to
   $37.6 million from $41.1 million in 2002. The quarter-to-quarter decrease is
   due primarily to higher operating costs, including the impact of using a new
   method for allocating depreciation to interim periods in 2003, lower pension
   credits, and higher costs relating to legal, health care, insurance and
   company use of natural gas, as well as decreased customer demand unrelated to
   weather and lower Chicago Hub results. These negative factors were partially
   offset by $17.4 million net pretax mercury-related insurance recoveries and
   the absence of performance-based rate plan losses, as reported in 2002.
   For the six-months ended period June 30, 2003, operating income increased to
   $111.4 million, from $101.7 million in 2002. The year-to-year increase was
   due to the second quarter mercury-related insurance recoveries, the new
   interim depreciation allocation method and colder weather. These positive
   factors were partially offset by higher operating and maintenance costs,
   lower Chicago Hub results and lower property sale gains.

-- Tropical Shipping operating income for the second quarter of 2003 increased
   to $4.9 million from $3.9 million in 2002. Improvements for the quarter were
   due primarily to higher average rates, which more than offset lower volumes
   and higher operating costs. Lower volumes for the quarter reflect economic
   conditions and a reduction in less profitable services. For the six-month
   ended period June 30, 2003, operating income increased to $10.6 million from
   $8.0 million in 2002. Improvements for the year-to-date period were due to
   higher volumes shipped and higher average rates. Year-to-year volume
   improvements were due primarily to an acquisition made in April 2002.

-- Operating income (loss) for the company's other energy ventures for the
   second quarter 2003 decreased to a loss of $0.6 million from income of $1.4
   million in 2002 due to lower operating results in most businesses. For the
   six months ended June 30, 2003, operating income increased to $3.0 million
   from $2.1 million a year ago. Improvements for the six-month period were due
   to lower operating losses from the company's former energy system development
   activities, managed by Nicor Solutions, and higher operating results at Nicor
   Enerchange. The improvement at Nicor Enerchange resulted entirely from a
   previously announced required change in accounting method.

   The new accounting method adopted at Nicor Enerchange resulted in a $4.5
   million cumulative effect loss, net of taxes, for Nicor Inc. in the first
   quarter of 2003. This cumulative effect adjustment removed all previously
   recorded unrealized mark-to-market gains on natural gas inventory and
   non-derivative energy-related contracts for storage and transportation
   services.

-- Higher corporate operating expenses, relating primarily to legal and auditing
   costs, negatively impacted results for both the quarter and year-to-date
   periods.

-- The company recorded higher results in 2003 for the quarter and six-month
   ended periods from its equity investment in Nicor Energy. The company wrote
   down its equity investment in the 50-percent owned joint venture to zero in
   the third quarter 2002, and has taken significant steps to withdraw from its
   continued involvement in Nicor Energy. During the second quarter, the company
   received a cash distribution from the joint venture and recorded a $5.6
   million pretax gain as a result of Nicor Energy's successful efforts to
   dispose of its assets. The company reported losses from Nicor Energy in 2002
   for both the second quarter and year-to-date periods. The company also
   anticipates that it may recognize an estimated $3 to $5 million of additional
   pretax earnings during the remainder of 2003 relating to the wind-down
   efforts at Nicor Energy.

                        2003 Earnings Guidance
                        ----------------------
The company further announced that it has revised its previously provided 2003
annual diluted earnings per common share estimate to be in the range of $2.55 to
$2.75. This revised estimate reflects the second quarter mercury-related
insurance recoveries, as well as reported and potential future gains from the
disposition of Nicor Energy. The revised estimate also assumes lower than
anticipated operating results in the gas distribution segment due to higher
operating and maintenance costs, decreased industrial volumes, and lower Chicago
Hub results. Other factors contributing to the revised estimate include higher
legal costs, and the timing of recognizing income as a result of the required
accounting change by Nicor Enerchange. Furthermore, the revised estimate also
assumes, among other things, normal weather, no impacts from the Illinois
Commerce Commission's (ICC) PBR plan and purchase gas adjustment (PGA) review,
and no further impacts from the company's mercury-related activities.


                            Conference Call
                            ---------------
As previously announced, the company will be holding a conference call to
discuss its second quarter financial results and 2003 outlook. The conference
call will be held on Friday, August 1, 2003 at 8:30 a.m. central, 9:30 a.m.
eastern time.

To hear the conference call live, please logon to Nicor's corporate website at
www.nicor.com, choose "Investor Info" and then select the webcast icon on the
Overview page. A replay of the call will be available until 5:00 p.m. central
time, Friday, August 15, 2003. To access the recording, call 1-888-286-8010, or
617-801-6888 for callers outside the United States, and enter reservation number
24835862. The call will also be archived on Nicor's corporate website for 90
days.

Nicor Inc. (NYSE: GAS) is a holding company and is a member of the S&P 500. 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. Nicor also owns and has equity interest in several
energy-related businesses. For more information, visit the Nicor website at
www.nicor.com.

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements about the earnings
expectations of Nicor Inc. and its subsidiaries. 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," 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 the results of legal contingencies (including litigation)
and the resolution of those issues, including the effects of an ICC review, and
undue reliance should not be placed on such statements. Other factors that
could cause materially different results include, but are not limited to,
weather conditions; natural gas and fuel prices; fair value accounting
adjustments; health care costs; insurance costs; legal costs; borrowing needs;
interest rates; credit conditions; economic and market conditions; Caribbean
tourism; energy conservation; legislative and regulatory actions, results, or
adjustments; additional adjustments related to Nicor's retail energy marketing
joint venture; asset sales; significant unplanned capital needs; future
mercury-related charges or credits; changes in accounting principles;
performance of major suppliers and contractors 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.

Nicor Inc.

PRELIMINARY CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------
Unaudited (millions, except per share data)

                                       Three months ended     Six months ended
                                              June 30             June 30
                                      --------------------   ------------------
                                        2003         2002      2003       2002
                                       -------     -------   --------  -------

Operating revenues                     $ 452.8     $ 352.2   $1,624.1  $ 940.2
                                       -------     -------   --------  -------

Operating expenses
     Gas distribution
         Cost of gas                     241.0       146.9    1,103.9    461.9
         Operating and maintenance        54.7        45.8      113.1     95.2
         Depreciation                     36.0        22.6       72.1     79.2
         Taxes, other than income taxes   28.0        23.4       93.9     63.7
         Mercury-related costs
          (recoveries)                   (17.4)          -      (17.8)      .2
         Property sale (gains) losses      (.4)          -        (.4)    (3.4)
     Shipping                             62.2        61.3      123.0    117.0
     All other                             9.8         8.5       16.0     17.7
                                       -------     -------   --------  -------
                                         413.9       308.5    1,503.8    831.5
                                       -------     -------   --------  -------

Operating income                          38.9        43.7      120.3    108.7
Equity investment income (loss), net       6.7        (2.6)       8.0     (4.9)
Other income (expense), net                 .6          .7        1.1      1.8
Interest expense, net of amounts
  capitalized                              9.2         8.9       18.9     18.7
                                       -------     -------   --------  -------

Income before income taxes and cumulative
    effect of accounting change           37.0        32.9      110.5     86.9
Income taxes                              13.2        10.5       36.3     28.0
                                       -------     -------   --------  -------

Income before cumulative effect of
    accounting change                     23.8        22.4       74.2     58.9
Cumulative effect of accounting change,
    net of $3.0 income tax benefit           -           -       (4.5)       -
                                       -------     -------   --------  -------

Net income                                23.8        22.4       69.7     58.9
Dividends on preferred stock                 -          .1          -       .1
                                       -------     -------   --------  -------

Earnings applicable to common stock    $  23.8     $  22.3   $   69.7  $  58.8
                                       =======     =======   ========  =======

Average shares of common stock outstanding
    Basic                                 44.0        44.1       44.0     44.2
    Diluted                               44.2        44.4       44.1     44.5

Earnings per average share of common stock
    Basic
      Before cumulative effect of
        accounting change              $   .54       $ .51    $  1.68  $  1.33
      Cumulative effect of accounting
        change, net of tax                   -           -       (.10)       -
                                       -------     -------   --------  -------
      Basic earnings per share         $   .54     $   .51   $   1.58  $  1.33
                                       =======     =======   ========  =======
    Diluted
      Before cumulative effect of
        accounting change               $   .54     $   .50   $   1.68  $  1.32
      Cumulative effect of accounting
        change, net of tax                    -           -       (.10)       -
                                        -------     -------   --------  -------
      Diluted earnings per share        $   .54     $   .50   $   1.58  $  1.32
                                        =======     =======   ========  =======
Nicor Inc.

PRELIMINARY FINANCIAL HIGHLIGHTS
--------------------------------
Unaudited (millions, except per share data)

                                       Three months ended     Six months ended
                                              June 30             June 30
                                      --------------------   ------------------
                                        2003         2002      2003       2002
                                       -------     -------   --------  -------

Operating revenues
    Gas distribution                   $ 379.5     $ 279.8   $1,476.2  $ 798.5
    Shipping                              67.1        65.2      133.6    125.0
    Other energy ventures                 17.5        15.1       38.6     24.4
    Corporate and eliminations           (11.3)       (7.9)     (24.3)    (7.7)
                                       -------     -------   --------  -------
                                       $ 452.8     $ 352.2   $1,624.1  $ 940.2
                                       =======     =======   ========  =======

Operating income (loss)
    Gas distribution                   $  37.6     $  41.1   $  111.4  $ 101.7
    Shipping                               4.9         3.9       10.6      8.0
    Other energy ventures                  (.6)        1.4        3.0      2.1
    Corporate and eliminations            (3.0)       (2.7)      (4.7)    (3.1)
                                       -------     -------   --------  -------
                                       $  38.9     $  43.7   $  120.3  $ 108.7
                                       =======     =======   ========  =======
Other income (expense), net
    Interest income                    $    .5     $    .6   $    1.1  $   1.5
    Other                                   .1          .1          -       .3
                                       -------     -------   --------  -------
                                       $    .6     $    .7   $    1.1  $   1.8
                                       =======     =======   ========  =======

Income before cumulative effect
   of accounting change                $  23.8     $  22.4   $   74.2  $  58.9

Cumulative effect of accounting change,
   net of $3.0 income tax benefit            -           -       (4.5)       -
                                       -------     -------   --------  -------
Net income                             $  23.8     $  22.4   $   69.7  $  58.9
                                       =======     =======   ========  =======

Earnings applicable to common stock    $  23.8     $  22.3   $   69.7  $  58.8

Average shares of common stock outstanding
     Basic                                44.0        44.1       44.0     44.2
     Diluted                              44.2        44.4       44.1     44.5

Earnings per average share of common stock
     Basic
       Before cumulative effect of
         accounting change             $   .54     $   .51   $   1.68  $  1.33
       Cumulative effect of accounting
         change, net of tax                  -           -       (.10)       -
                                       -------     -------   --------  -------
       Basic earnings per share        $   .54     $   .51   $   1.58  $  1.33
                                       =======     =======   ========  =======
     Diluted
       Before cumulative effect of
         accounting change             $   .54     $   .50   $   1.68  $  1.32
       Cumulative effect of accounting
         change, net of tax                  -           -       (.10)       -
                                       -------     -------   --------  -------
       Diluted earnings per share      $   .54     $   .50   $   1.58  $  1.32
                                       =======     =======   ========  =======