Oneok Boosts Sycamore Gathering Share
Oneok bought an additional 55% of the Sycamore gathering system
in Carter County, OK, from Continental Natural Gas of Tulsa, OK,
giving it 97% of the system. Oneok is operator of the system and a
major producer in the area.
"This is a continuation of our strategy of concentrating
ownership in areas where we have a growing reserve base to maximize
value for our shareholders," said David Kyle, Oneok COO.
Continental acquired its share of the system during the first
quarter of 1998. But Continental CEO Gary Adams said the system is
non-strategic to the company. Oneok acquired its previously held
share of Sycamore about a year ago.
"This was an opportunity for us to get most of the rest of that
system," said spokesman Weldon Watson. "I'm sure that we will
expand it as we continue to drill in the area, and we are doing
development drilling in the area. This is part of our strategy. As
the production potential grows, obviously the gathering system will
grow." The Sycamore system has throughput of about 30 MMcf/d.
Watson said smaller systems in the area may also be acquired.
In a separate deal, Continental acquired Oneok Product Company's
minority ownership in the Laverne gas processing plant in Harper
County, OK. Continental is the plant's operator and now will have
about 66% of the plant. Terms were not disclosed.
Continental also signed a five-year purchase and sale agreement
for about 10,000 MMBtu/d of gas owned by Oneok Resources. Oneok
also will sell gas from additional wells in the Mocane-Laverne
areas. The agreement allows Continental to process the gas at its
own facilities and, in addition to all associated processing
revenues, will increase the volume of gas Continental has available
In other Oneok news, subsidiary Oneok Resources Co. signed a
stock purchase agreement to acquire a 40% equity interest in K.
Stewart Petroleum Corp., an Oklahoma City, OK-based independent oil
and gas producer. Terms of the agreement were not disclosed. "This
is an opportunity for Oneok's production operation to join forces
with a very respected technology-driven exploration company to help
us achieve our strategic objectives of growing our reserve base in
areas where we have other energy-related operations," said David
Kyle, Oneok COO.
K. Stewart is active in the Anadarko Basin of Western Oklahoma
and the Texas Panhandle. Gross cumulative discoveries through Dec.
31, 1997 exceed 100 Bcfe. Oneok will have a first right to
participate in all prospects generated by K. Stewart, which will
continue to operate under its current leadership. Oneok will gain
two seats on the K. Stewart board.
Joe Fisher, Houston
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