Midcoast Energy Resources Inc. grew its Texas asset base withthe acquisition of two gathering systems in two separate dealsworth a combined $4.55 million. Midcoast bought the Mendotagathering pipeline and processing plant from Seagull Energy Corp.for $3.75 million in cash. The Mendota facilities are in RobertsCounty, TX, and include about 35 miles of gathering pipeline, a 10MMcf/d cryogenic gas processing plant and compression facilitieswith a combined 2,400 horsepower. The system gathers gas from morethan 70 active wells and has a total throughput of 7,200 Mcf/d. TheMendota pipeline is located adjacent to the Anadarko system, whichMidcoast purchased from El Paso Energy Corp. in September 1998, andMidcoast plans to integrate the operations of the Mendota andAnadarko systems. Also as part of the transaction, Seagull hasdedicated production from all of its existing acreage in the areato Midcoast for the next five years.

In a separate deal, Midcoast bought the Tynan system from TexasSoutheastern Gas Gathering Co. for $0.8 million in cash. The Tynanfacilities consist of about 24.5 miles of gathering pipeline in Beeand Live Oak Counties, TX. The pipeline has a current throughput of4,000 Mcf/day and is interconnected with the Bruni gatheringsystem, which Midcoast said earlier this month it would acquirefrom Koch Gateway Pipeline Co.

“Both these acquisitions are strong complements to otherpipelines which we recently purchased and illustrate our strategyto continue improving the assets which we acquire through furtherexpansion and operational improvements,” said Midcoast PresidentDan Tutcher. “The Mendota acquisition will immediately result inincreased volumes at our Hobart processing facility, and we foreseefurther operational cost savings with the integration of theMendota and Anadarko systems. The Tynan pipeline is a natural fitwith the Bruni system and gives us control of additional upstreamsupplies for Bruni.

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