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Oneok Boosts Sycamore Gathering Share

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 to market.

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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