News Release
July 28, 1998


HOUSTON - - Duke Energy Field Services, Inc. and Koch Midstream Gathering and Processing Company, a subsidiary of Koch Industries, have signed a letter of intent to exchange natural gas gathering and processing systems located in Texas, Mississippi, New Mexico, Alabama and Oklahoma.

Duke Energy will acquire Koch’s gathering and processing systems in South Texas and Oklahoma that Koch purchased in November 1997 from Delhi. Koch will acquire Duke Energy’s Black Warrior system in Alabama, the AIM Pipeline in Mississippi and certain gathering and processing assets in West Texas and New Mexico. The agreement is subject to certain contingencies and terms were not disclosed. The exchange is expected to take place by the end of the third quarter.

"These assets are an excellent strategic fit with our existing systems in South Texas and Oklahoma and will significantly expand our operations and services in these areas," said Jim Mogg, president. "Duke Energy Field Services is continuing its strategy of acquiring and optimizing assets in the Mid-continent. Additionally, this transaction greatly advances our expansion strategy in South Texas."

"This exchange will enhance our ability to provide customers a full range of solutions -including risk management, operating and financial services," said John W. Gibson, president of Koch Midstream Gathering and Processing Company. "As we expand those activities and grow our trading and customer services, we will continue to focus on growth, profitability and operational excellence. Our business will be better able to offer superior value for gas producers and consumers by providing more efficient field and financial services."

Koch Midstream Gathering and Processing is a subsidiary of the Wichita, Kansas-based Koch Industries, Inc. the second largest privately held company in the United States. Koch Industries and its subsidiaries employ 16,000 people worldwide and are involved in virtually all phases of the oil and gas industry, as well as in agriculture, chemicals, chemical technology products, energy services, asphalt products, metals and minerals services, real estate and financial investments. Overall, Koch companies own and operate one of the largest pipeline systems in the U.S. and Canada, with more than 37,000 total miles. For more information on Koch, refer to Koch’s home page at on the Internet.

Duke Energy Field Services, Inc. gathers and processes natural gas and is the nation’s fourth largest producer and a leading marketer of natural gas liquids. The company also provides intrastate natural gas transportation and storage, and financial services for producers.

Duke Energy (NYSE:DUK) is a global energy company with more than $24 billion in assets. Duke Energy companies provide electric service to approximately 2 million customers; operate pipelines that deliver 12 percent of the natural gas consumed in the United States; and are leading marketers of electricity, natural gas and natural gas liquids. Globally the companies develop, own and operate energy facilities and provide engineering, management, operating and environmental services. Contact Duke Energy on the World Wide Web at

Contact: John P. Barnett
Phone: (713) 627-4072
24 Hour Phone: (703) 382-8333
Contact: Michael Wilson
Phone: (316) 828-3279
24 Hour Phone: (703) 382-8333