Gas began flowing to industrial, residential and municipalcustomers on Tengasco Inc.’s East Tennessee pipeline system. TheEast Tennessee communities of Sneedville and Rogersville beganreceiving service one day after the State of Tennessee RegulatoryAuthority issued a permit allowing Tengasco to open the valves ofits 28-mile line. The line, which gathers Appalachian productionand carries it directly to end users, currently is supplying about10 MMcf/d, but at maximum capacity can provide 48 MMcf/d.

Customers are being served through The Natural Gas UtilityDistrict of Hawkins County. “Now that we are selling natural gasfrom our Swan Creek Field in Hancock County, this is the mostexciting event in the history of our three-year-old company,” saidTengasco President Robert M. Carter.

In March the company completed its East Tennessee pipeline. In asecond construction phase, Tengasco plans to build a 13-mile,8-inch diameter extension, which will expand Tengasco’s gasmarketing into the entire eastern region of the United States. Thecompany has customers in Kentucky and West Virginia. Constructionof the extension should begin Aug. 1 and be completed by November.

Knoxville-based Tengasco also is acquiring Twister Gas Servicesand its affiliate Twister Partners of Oklahoma City for $15 millionin cash and stock. The deal should be completed Aug. 1. Twister,with properties in Oklahoma and Texas, is a privately-held gasmarketing, oil and gas exploration and production company with 1997gross revenues of $162.2 million and net income of $2.6 million. Itcurrently owns interests in about 270 gas and oil wells, and 60miles of gas gathering pipelines. The Twister acquisition willboost Tengasco’s proven gas and oil wells to 490 and increaseproven gas reserves by 24% to 80.7 Bcf.

CEO Michael Ratliff said revenue from gas marketing last yearwas $162 million and is expected to be $200 million this year.

Joe Fisher, Houston

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