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Tengasco Opens Distribution System in East Tennessee

Tengasco Opens Distribution System in East Tennessee

Gas began flowing to industrial, residential and municipal customers on Tengasco Inc.'s East Tennessee pipeline system. The East Tennessee communities of Sneedville and Rogersville began receiving service one day after the State of Tennessee Regulatory Authority issued a permit allowing Tengasco to open the valves of its 28-mile line. The line, which gathers Appalachian production and carries it directly to end users, currently is supplying about 10 MMcf/d, but at maximum capacity can provide 48 MMcf/d.

Customers are being served through The Natural Gas Utility District of Hawkins County. "Now that we are selling natural gas from our Swan Creek Field in Hancock County, this is the most exciting event in the history of our three-year-old company," said Tengasco President Robert M. Carter.

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

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

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

Joe Fisher, Houston

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