Oneok bought an additional 55% of the Sycamore gathering systemin Carter County, OK, from Continental Natural Gas of Tulsa, OK,giving it 97% of the system. Oneok is operator of the system and amajor producer in the area.

“This is a continuation of our strategy of concentratingownership in areas where we have a growing reserve base to maximizevalue for our shareholders,” said David Kyle, Oneok COO.

Continental acquired its share of the system during the firstquarter of 1998. But Continental CEO Gary Adams said the system isnon-strategic to the company. Oneok acquired its previously heldshare of Sycamore about a year ago.

“This was an opportunity for us to get most of the rest of thatsystem,” said spokesman Weldon Watson. “I’m sure that we willexpand it as we continue to drill in the area, and we are doingdevelopment drilling in the area. This is part of our strategy. Asthe production potential grows, obviously the gathering system willgrow.” 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’sminority ownership in the Laverne gas processing plant in HarperCounty, OK. Continental is the plant’s operator and now will haveabout 66% of the plant. Terms were not disclosed.

Continental also signed a five-year purchase and sale agreementfor about 10,000 MMBtu/d of gas owned by Oneok Resources. Oneokalso will sell gas from additional wells in the Mocane-Laverneareas. The agreement allows Continental to process the gas at itsown facilities and, in addition to all associated processingrevenues, will increase the volume of gas Continental has availableto market.

In other Oneok news, subsidiary Oneok Resources Co. signed astock purchase agreement to acquire a 40% equity interest in K.Stewart Petroleum Corp., an Oklahoma City, OK-based independent oiland gas producer. Terms of the agreement were not disclosed. “Thisis an opportunity for Oneok’s production operation to join forceswith a very respected technology-driven exploration company to helpus achieve our strategic objectives of growing our reserve base inareas where we have other energy-related operations,” said DavidKyle, Oneok COO.

K. Stewart is active in the Anadarko Basin of Western Oklahomaand the Texas Panhandle. Gross cumulative discoveries through Dec.31, 1997 exceed 100 Bcfe. Oneok will have a first right toparticipate in all prospects generated by K. Stewart, which willcontinue to operate under its current leadership. Oneok will gaintwo seats on the K. Stewart board.

Joe Fisher, Houston

©Copyright 1998 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.