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IOWA-ILLINOIS GAS AND ELECTRIC COMPANY ANNOUNCES ACQUISITION

 DAVENPORT, Iowa, Sept. 1 /PRNewswire/ -- Iowa-Illinois Gas and Electric Company announced the acquisition of all the outstanding capital stock of DKM Resources Inc. (DKMR) by its oil and gas unit, Tulsa, Oklahoma-based Medallion Production Company. DKMR has been acquired from the Dyson-Kissner-Moran Corporation, N.Y. The transaction totaled in excess of $50 million and more than doubles Medallion's oil and gas reserve base.
 DKMR, located in Houston, Texas, is a privately owned oil and gas acquisitions company. Medallion Production Company, an independent oil and gas company, actively participates in the development, acquisition, exploration and marketing of oil and gas reserves. Medallion is owned by InterCoast Energy Company, a wholly owned non-regulated subsidiary of Iowa-Illinois. InterCoast has more than $500 million of assets in energy-related businesses.
 After the acquisition, Medallion will have interests in 659 oil and gas properties and 224 operated wells. Medallion's reserve base will total about 29 million barrels of oil equivalent (BOE), including 117 billion cubic feet (Bcf) of natural gas.
 "The acquisition significantly adds to our pool of low-cost oil and gas reserves," said Stanley Bright, Iowa-Illinois chairman and president. "We believe the result will be further enhancement of shareholder values for Iowa-Illinois."
 DKMR has proved oil and gas assets estimated at 14.8 million barrels of oil equivalent, including 55 billion cubic feet of natural gas. DKMR's reserves are located in 10 states throughout the mid-continent area of the United States and in California. Medallion already owns and operates oil and gas properties in these areas.
 Medallion plans to merge the two companies later this year, with the surviving entity being Medallion.
 Medallion's current net production is 7,200 BOE per day. After the acquisition, production will increase to 11,000 BOE per day, including 46 million cubic feet of gas per day.
 Annualized cash flow from operations will be more than $35 million.
 Over the last 18 months, the company has acquired proved reserves on transactions totaling more than $66 million. Other transactions in 1993 included:
 -- A 2.2 million acquisition of Wolverine Exploration Company's interest in certain oil and gas properties in eastern Colorado's Cheyenne County.
 -- A $2.5 million acquisition in oil and gas properties in Beauregard Parish, La.
 -- A $2.3 million acquisition of interest of Zeit Exploration Company Inc. and Patrick Petroleum Company in certain oil and gas properties in south Louisiana.
 -- A $1.75 million acquisition of interest of Solatex Resources Ltd., Houston, Texas, in certain oil and gas properties in southeast Texas.
 Iowa-Illinois' stock is traded on the New York Stock Exchange under the symbol: IWG. Common stock quotations are listed in the New York Stock Exchange Composite Transactions under: Iowa-IllGas.
 -0- 9/1/93 R
 /CONTACT: Kim Koster (media), 319-326-73645, or Barbara VenHorst (investor relations), 319-326-7277, both of Iowa-Illinois/
 (IWG)


CO: Iowa-Illinois Gas and Electric Company; DKM Resources Inc.;
 Medallion Production Company ST: Iowa, Oklahoma IN: OIL SU: TNM


KH-DB -- MN010R -- 8160 09/01/93 18:01 EDT
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Publication:PR Newswire
Date:Sep 1, 1993
Words:491
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