Tengasco, Inc. subsidiary Tengasco Pipeline Corp. signed afranchise agreement with the Powell Valley Utility District toinstall and operate a new gas utility service to residential,commercial and industrial users in Hancock County, TN.

Tengasco Pipeline will immediately begin installation of thenecessary backbone facilities to begin to serve up to 1,500residential and industrial consumers in the City of Sneedville,county seat of Hancock County. Its existing eight-inch mainlinefrom its Swan Creek field passes through the city limits ofSneedville, and completion of one-half mile of interconnectingdistribution line is expected to occur in the next 90 days. ThePowell Valley Utility District encompasses Hancock County butpresently has no gas distribution facilities. Hancock County hasabout 6,900 residents, and distribution facilities will be expandedto serve as many as economically possible.

The agreement is for an initial term of 10 years and can berenewed for another 10 years. Tengasco Pipeline will contract topurchase gas from Tengasco Inc. The resale price for gas to be soldto customers of the district is to be based on an average of theprices charged in three surrounding districts. Current retailprices exceed $8/Mcf.

From its Swan Creek field in Hancock County Tengasco has 25 MMcf/dof gas deliverability and more than 200 boe/d of oilproduction. Tengasco of Knoxville began selling gas from the SwanCreek field in eastern Tennessee in November (see Daily GPI, Nov. 4) through an agreement with HawkinsCounty Utility District in Rogersville.

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