Oneok Inc. CEO Larry Brummett told the Oklahoma CorporationCommission (OCC) that rumors and allegations about a 1993 gaspurchase contract may jeopardize the planned merger of Oneok andLas Vegas-based Southwest Gas.

At issue is a 1993 gas purchase contract between OklahomaNatural Gas Co. (ONG, a division of Oklahoma City-based Oneok) andDynamic Energy Resources, a Tulsa-based firm. Dynamic’s owners,Eugene and Nora Lum, have pleaded guilty to federal campaignfinance and tax violations. Rumors have persisted that the ONGcontract was somehow related to the Lums’ illegal activities, inspite of what Oneok calls repeated findings to the contrary. Thecompany pointed to a 1996 investigation by the staff of the OCC’sPublic Utility Division that concluded the Dynamic contract did notharm ratepayers and there was no evidence of impropriety.

Brummett reminded Commission Chairman Bob Anthony of a 1997letter in which Brummett challenged Anthony to reveal any evidenceof wrongdoing by ONG. The company said Anthony has yet to respondto the letter.

Referring to the delay by Arizona regulators, Brummett said “itis no secret this merger — a $1.8 billion transaction — may bejeopardized by the continuing campaign to distort the Dynamiccontract.”

The merger has already been approved by Southwest Gasshareholders and regulators in Nevada, and awaits decisions inArizona and California. If completed, Oneok would become thecountry’s largest independent natural gas distributor.

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