Shares of ONE Gas (OGS) plummeted 5.03% during Friday's trading session, following the announcement of a $198 million equity offering. The Tulsa, Oklahoma-based regulated natural gas utility priced 2.5 million shares at $79 each, representing a 0.9% discount to the stock's previous closing price of $79.71.

The offering, which is expected to close on May 12, involves a forward sale agreement with JPMorgan Chase Bank. This structure allows ONE Gas to lock in current prices while delaying the issuance of new shares and receipt of proceeds until the funds are needed, avoiding immediate earnings-per-share dilution.

ONE Gas plans to use the net proceeds from the offering for general corporate purposes, including debt repayment or refinancing, as well as construction and acquisition expenditures. The company has granted the underwriter an option to purchase up to an additional 375,000 shares.

Despite the sharp decline following the announcement, ONE Gas shares have shown strong performance year-to-date, with a 15% gain prior to this offering. The stock has also appreciated by approximately 25% over the past 12 months. However, analysts remain cautious, with 5 out of 9 rating the stock as "hold" and a median price target of $74, according to LSEG data.