In an effort to strengthen its balance sheet, Tulsa, OK-based Oneok Inc. said last week it has agreed to sell certain natural gas and oil-producing properties for $300 million in cash to an undisclosed producer.

Up for sale are 1,900 wells of Oneok Resources Co. in Oklahoma, Kansas and Texas, with a net daily production of approximately 43.5 MMcf/d of gas and 650 barrels of oil. Not included in the sale are Oneok’s oil and gas production properties in the Cement, Chitwood and Mocane Laverne fields in Oklahoma, the company said.

Oneok said it plans to use the net proceeds from the deal to pay down debt and for other corporate purposes. The transaction is expected to close in January 2003. The company said it expects to record a pre-tax gain on the sale of approximately $75 million in the first quarter of next year.

Upon completion of the sale, Oneok said it will retain approximately one-third of its current proved oil and gas reserves, with expected annual production of 7.8 Bcf of gas and 370,000 barrels of oil.

The company estimated it will generate, after the sale, operating income from its oil and gas production segment of $8-12 million in 2003, based on gas prices of $4.12/Mcf and oil prices of $25.23 per barrels, with capital expenditures of $7-11 million for the same period.

In addition to production, the Oklahoma company is involved in gas processing, gathering, storage and transmission in the Mid-Continent areas, as well as energy marketing and trading, and gas distribution in Kansas and Oklahoma.

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