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                                K N ENERGY, INC.

              (Formerly Kansas-Nebraska Natural Gas Company, Inc.)

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                                 B Y - L A W S

                        As Amended to February 10, 1998

                          Effective February 10, 1998

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                                   ARTICLE I

                                    OFFICES

         Section 1. Offices. The registered office shall be at 205 F Street in
the City of Phillipsburg, County of Phillips, State of Kansas. The Company's
principal executive office shall be at 370 Van Gordon Street, Lakewood, Colorado
80228-8304 (mailing address: Post Office Box 281304, Lakewood, Colorado
80228-8304).

         Section 2. Additional Offices. The corporation may also have offices
at such other places both within and without the State of Kansas as the Board
of Directors may from time to time determine or the business of the corporation
may require.


                                   ARTICLE II

                            MEETING OF STOCKHOLDERS

         Section 1. Time and Place. The annual meeting of the shareholders for
the election of directors and all special 




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meetings of shareholders for that or for any other purpose may be held at such
time and place within or without the State of Kansas as shall be stated in the
notice of the meeting, or in a duly executed waiver of notice thereof.

         Section 2. Annual Meeting. The annual meeting of the shareholders
shall be held each year at a time to be determined by the Board of Directors,
at which meeting the shareholders shall elect a Board of Directors, and
transact such other business as may be properly brought before the meeting.

         Section 3. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by statute may be called
by the Chairman of the Board, if any, the President or the Board of Directors,
and shall be called by the President or the Secretary at the request in writing
of a majority of the directors, or at the request in writing of shareholders
owning at least fifty-one percent (51%) in amount of the shares of the
Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting.

         Section 4. Notice. Written notice of the place, date and hour of any
annual or special meeting of shareholders shall be given personally or by mail
to each shareholder entitled to vote thereat, not less than ten (10) nor more
than fifty (50) days prior to the meeting.





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         The notice shall state in addition, the purpose or purposes for which
the meeting is called, and by, or at whose direction it is being issued.

         Section 5. Quorum. Except as otherwise provided by the Articles of
Incorporation, the holders of a majority of the shares of the Corporation
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be necessary to and shall constitute a quorum for
the transaction of business at all meetings of the shareholders.

         If, however, such quorum shall not be present or represented at any
meeting of the shareholders, the shareholders entitled to vote thereat present
in person or represented by proxy shall have power to adjourn the meeting from
time to time, but not for more than thirty (30) days, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed.

         Section 6. Voting. At any meeting of the shareholders every
shareholder having the right to vote shall be entitled to vote in person, or by
proxy. Except as otherwise provided by law or the Articles of Incorporation,
each shareholder of record shall be entitled, as to each proposal, to one vote
for each share of stock standing in his name on the books of the Corporation on
the date fixed as the record date for the 




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determination of its shareholders entitled to vote. All elections of directors
shall be by written ballot and shall be determined by a plurality vote, and,
except as otherwise provided by law or the Articles of Incorporation, all other
matters shall be determined by vote of a majority of the shares present or
represented at such meeting and voting on such questions.

         Section 7. Proxies. Every proxy must be executed in writing by the
shareholder or by his attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months from the date thereof, unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
shareholder executing it, except in those cases where an irrevocable proxy is
permitted by law.

         Section 8. Consents. Whenever by any provision of law or of the
Articles of Incorporation, the vote of shareholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action, the
meeting and vote of shareholders may be dispensed with, if all the shareholders
who would have been entitled to vote upon the action if such meeting were held,
shall consent in writing to such corporate action being taken.

         Section 9. Presiding Officer. Meetings of the shareholders shall be
presided over by the Chairman of the Board, if any, or if he is not present, by
the President, or, if he is not present, 




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by a Vice President or, if neither the Chairman of the Board, the President nor
a Vice President is present, by a chairman to be chosen at the meeting. The
Secretary of the Company or, if he is not present, an Assistant Secretary of
the Company or, if neither the Secretary nor an Assistant Secretary is present,
a secretary to be chosen at the meeting, shall act as secretary of the meeting.

         Section 10. Notice of Shareholder Business. At an annual meeting of
shareholders, only such business shall be conducted as shall have been properly
brought before the meeting (a) by or at the direction of the Board of Directors
or (b) by a shareholder who is a shareholder of record at the time of giving
such notice, who shall be entitled to vote at such meeting and who complies
with the notice procedures set forth in this Section. For business to be
properly brought before an annual meeting by a shareholder, the shareholder
must have given timely notice thereof in writing to the Secretary. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation, not less than 40 days prior
to the meeting. A shareholder's notice to the Secretary shall set forth as to
each matter the shareholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at 




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the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business, (c) the class
and number of shares of the Corporation which are beneficially owned by the
shareholder, and (d) any material interest of the shareholder in such business.
Notwithstanding anything in these By-Laws to the contrary, no business shall be
conducted at an annual meeting except in accordance with the procedures set
forth in this Section. The Chairman of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting and in accordance with the provisions of this
Section, and if he should so determine, he shall so declare to the meeting and
any such business not properly brought before the meeting shall not be
transacted. Notwithstanding the foregoing provisions of this Section, a
shareholder shall also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended and the rules and regulations thereunder with
respect to the matters set forth in this Section.



                                  ARTICLE III

                                   DIRECTORS

         Section 1. Number and Tenure. The whole Board of Directors of the
Corporation shall consist of fifteen members, with one 




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position on the Board being reserved for Charles W. Battey for a period of one
year ending at the Annual Meeting of Shareholders in 1999, at which time the
number of members on the Board of Directors of the Corporation shall be reduced
to consist of fourteen members. The directors shall be classified with respect
to the time for which they shall severally hold office by dividing them into
three classes, which were first approved at the annual meeting of shareholders
in 1975; Class I shall consist of three directors whose initial term of office
shall expire in 1994, Class II shall consist of four directors whose initial
term of office shall expire in 1995, and Class III shall consist of three
directors whose initial term of office shall expire in 1996. Each director
shall hold office until his successor is duly elected and qualified or until
his resignation in writing has been filed with the corporation. At each annual
election, the successors of the class of directors whose terms shall expire
that year shall be elected to hold office for a term of three years, so that
the term of office of one class of directors shall expire in each year, except
where the Board of Directors determines that a newly elected director shall be
elected by the shareholders to fill a vacancy of a directorship created
subsequent to the previous annual meeting, such director shall be elected to
hold office for the balance of the term of the class of directors of which he
is to be a member, as determined by the Board of Directors, and until his
successor is elected and qualified.




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         Section 2. Vacancies. A vacancy on the Board of Directors or a newly
created directorship may be filled by a majority of the remaining directors,
though less than a quorum, or by the sole director, by election of a new
director, who at the time of his election shall be designated as a member of
one of the classes of directors and shall hold office until the next election
of the class of which he has become a member, unless his term of office is
terminated by death, resignation, or otherwise.

         Section 3. Resignation, Retirement; Removal. Any director may resign
at any time. Any director who experiences a change in his personal or business
circumstances or principal employment shall immediately tender his resignation
as a director of the Corporation to the Executive Committee of the Board of
Directors. Any director who is not an employee of the Corporation shall retire
his position as a director at the annual meeting of the shareholders of the
Corporation next occurring after such director attains the age of 72 years. The
Board of Directors may by unanimous vote of other directors then in office,
remove a director with or without cause. The shareholders entitled to vote for
the election of directors may remove a director, with cause as provided in the
Articles of Incorporation.




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         Section 4. Advisory Directors and Directors Emeritus. The Board of
Directors by a vote of a majority of the directors present and entitled to
vote, at any regular or special meeting at which a quorum is present, may
designate such number of persons as it may from time to time determine, as an
"Advisory Director" or may designate a former member of the Board as a
"Director Emeritus," if such former member is willing to so serve. Each
Advisory Director and each Director Emeritus shall serve, subject to the
pleasure of the regular Board of Directors, until the next succeeding annual
meeting of the regular Board of Directors, following the annual meeting of the
stockholders, at which such regular directors are elected, unless he shall have
resigned. Each Advisory Director and each Director Emeritus shall be notified
of all regular or special meetings of the regular Board of Directors, shall be
entitled to attend and participate therein, but shall not be entitled to vote.
Each Advisory Director and each Director Emeritus shall be reimbursed for any
necessary expenses of attending directors' meetings.

         Section 5.  Nomination of Director Candidates.

         (a) Eligibility to Make Nominations. Nominations of candidates for
election as directors of the Corporation at any meeting of shareholders called
for election of directors, in whole or in part (an "Election Meeting"), may be
made by the Board of Directors or by any shareholder who is a shareholder of




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record at the time of giving notice, who shall be entitled to vote at such
Election Meeting and who complies with the notice procedures set forth in this
Section.

         (b) Procedure for Nominations by Shareholders. Nominations, other than
those made by the Board of Directors, shall be made pursuant to timely notice
in writing to the Secretary. To be timely, shareholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 40 days prior to the date of the Election Meeting.
Such shareholder's notice shall set forth (i) the name, age, business address
and residence address of each nominee proposed in such notice, (ii) the
principal occupation or employment of each such nominee, (iii) the number of
shares of capital stock of the Corporation which are beneficially owned by each
such nominee and (iv) such other information concerning each such nominee as
would be required, under the rules of the SEC, in a proxy statement soliciting
proxies for the election of such nominees. Such notice shall include a signed
consent to serve as a director of the Corporation, if elected, of each such
nominee. Such notice shall also set forth as to the shareholder giving the
notice (i) the name and address, as they appear on the Corporation's books, of
such shareholder and (ii) the class and number of shares of the Corporation
which are beneficially owned by such shareholder.





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         (c) Meeting Procedures. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with the procedures
set forth in this Section. The Chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by this Section 5, and if he should
so determine, he shall so declare to the meeting and the defective nomination
shall be disregarded.

         (d) Substitution of Nominees. In the event that a person is validly
designated as a nominee to the Board and shall thereafter become unable or
unwilling to stand for election to the Board of Directors, the Board of
Directors or the shareholder who proposed such nominee, as the case may be, may
designate a substitute nominee.

         (e) Securities Exchange Act of 1934. Notwithstanding the foregoing
provisions of this Section, a shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended and the rules
and regulations thereunder with respect to the matters set forth in this
Section.




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                                   ARTICLE IV

                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 1. Place. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Kansas.

         Section 2. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board.

         Section 3. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, if any, or by the
President on two days' notice to each director, either personally or by mail or
by telegram; special meetings shall be called by the Chairman, President or
Secretary in like manner and on like notice on the written request of two
directors.

         Section 4. Quorum. At all meetings of the Board of Directors a
majority of the entire Board shall be necessary to and constitute a quorum for
the transaction of business and the act of a majority of the directors present
at any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by
the Articles of Incorporation. If a quorum shall not be present at any meeting
of the Board of Directors the 





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directors present thereat may adjourn the meeting from time to time until a
quorum shall be present. Notice of such adjournment shall be given to any
directors who were not present and, unless announced at the meeting, to the
other directors.

         Section 5. Consents. Unless otherwise restricted by the Articles of
Incorporation or these By-Laws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or of such committee as the case
may be, consent thereto in writing and such written consent is filed with the
minutes of the Board or committee. Such consents may be in counterpart so that
each member will have signed a consent, but all members need not sign the same
document.

         Section 6. Compensation. Directors, as such, shall not receive any
stated salary for their services, but, by resolution of the Board of Directors
an annual fee, plus a fee and expenses for attendance at meetings may be
allowed, provided that nothing herein contained shall be construed to preclude
any director from serving the Corporation in any other capacity and receiving
compensation therefor.

         Section 7. Presiding Officer. Meetings of the Board of Directors shall
be presided over by the Chairman of the Board, if any, or, if he is not
present, by the President or, if he is not present, by a chairman to be chosen
at the meeting. The 




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Secretary of the Company, or, if he is not present, an Assistant Secretary of
the Company, or, if neither the Secretary nor an Assistant Secretary is
present, a secretary to be chosen at the meeting, shall act as secretary of the
meeting.



                                   ARTICLE V

                            COMMITTEES OF DIRECTORS

         Section 1. Designation. The Board of Directors, by resolution adopted
by a majority of the whole Board, may designate from among its members one or
more committees, each consisting of two or more directors, each of which, to
the extent provided in such resolution, shall have and may exercise the powers
of the Board of Directors in the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it.

         The Board may designate one or more directors as alternate members of
any committee who may replace any absent or disqualified member at any meeting
of the committee.

         Section 2. Tenure; Reports. Each such committee shall serve at the
pleasure of the Board. It shall keep minutes of its meetings and report the
same to the Board.




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                                   ARTICLE VI

                              EXECUTIVE COMMITTEE

         Section 1. Appointment and Authority. The Board of Directors may by
resolution or resolutions passed by a majority of the whole Board create and
designate an Executive Committee consisting of the officer who is designated as
Chief Executive Officer and two or more other directors of the Company who
shall hold office subject to the pleasure of the Board of Directors, and the
Board shall have the power at any time to remove any of the members of the
Executive Committee and to appoint to the Committee other directors in lieu of
the directors so removed. The Chief Executive Officer shall serve as Chairman
of the Executive Committee. During the intervals between the meetings of the
Board of Directors the Executive Committee shall possess and may exercise the
powers delegated by the Board of Directors, including the power to authorize
the seal of the Company to be affixed to all papers which may require it, to
authorize the payment of dividends, to authorize the issuance of stock, to
serve as a nominating committee for the Board of Directors and to approve
resolutions necessary for the day-to-day operations of the Company; provided,
however, that the Executive Committee shall not have power to amend these
By-Laws or to fill vacancies on the Board of Directors or to fill vacancies in,
or to change 





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the membership of, said Committee. The Executive Committee shall also have and
may exercise all the powers of the Board of Directors except as aforesaid
whenever a quorum of the Board shall fail to be present at any meeting of the
Board.

         Section 2. Report of Action Taken. All action of the Executive
Committee shall be reported to the Board of Directors at its meeting next
succeeding such action, and shall be subject to revision and alteration by the
Board, provided that no rights of third parties shall be affected by any such
revision or alteration. Regular minutes of the proceedings of the Executive
Committee shall be kept in a book provided for that purpose.

         Section 3. Quorum and Procedure. A majority of the members of the
Executive Committee shall be necessary to constitute a quorum, and, in every
case, an affirmative vote of a majority of the members shall be necessary for
the passage of any resolution. It shall fix its own rules of procedure and
shall meet as provided by such rules or by resolution of the Board, and it
shall also meet at the call of the Chairman or of any two members of the
Committee. Should the Executive Committee fail to fix its own rules therefor,
the provisions of these By-Laws, pertaining to the calling of meetings and
conduct of business by the Board of Directors, shall apply as nearly as may be.

         Section 4. Consent. Unless otherwise restricted by statute, the
Articles of Incorporation or these By-Laws, any 





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action required or permitted to be taken at any meeting of the Executive
Committee thereof may be taken without a meeting, if a written consent thereto
is signed by each member of the Executive Committee, and such written consent
is filed with the minutes of proceedings of the Executive Committee. Such
consents may be in counterpart so that each member will have signed a consent
but all members need not sign the same document.



                                  ARTICLE VII

                                    NOTICES

         Section 1. Form; Delivery. Notices to directors and shareholders shall
be in writing and delivered personally or mailed to the directors or
shareholders at their addresses appearing on the books of the Corporation.
Notice by mail shall be deemed to be given at the time when the same shall be
mailed. Notice to directors may also be given by telegram.

         Section 2. Waiver. Whenever any notice is required to be given under
the provisions of the statutes or of the Articles of Incorporation or of these
By-Laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto. In addition, any shareholder attending a meeting of
shareholders in person or by proxy without protesting at the beginning of the
meeting the lack of notice thereof to 




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him, and any director attending a meeting of the Board of Directors without
protesting prior to the meeting or at its commencement such lack of notice
shall be conclusively deemed to have waived notice of such meeting.



                                  ARTICLE VIII

                                    OFFICERS

         Section 1. Executive Officers. The executive officers of the
Corporation shall be a President and one or more Vice Presidents, a Secretary,
a Treasurer and may include a Chairman of the Board.

         Section 2. Designation; Term of Office; Removal. All officers shall be
elected by the Board of Directors and shall hold office for such term as may be
prescribed by the Board or until their successors are chosen and qualified or
until their resignation is filed in the office of the Secretary, whichever
first occurs. Any officer elected by the Board may be removed with or without
cause at any time by the Board.

         Section 3. Authority and Duties. All officers, as between themselves
and the Corporation, shall have such authority and perform such duties in the
management of the Corporation as may be provided in these By-Laws, or, to the
extent not so provided, by the Board of Directors.



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         Section 4. Compensation. The compensation of all officers of the
Corporation shall be fixed by the Board of Directors and the compensation of
agents shall either be so fixed or shall be fixed by officers thereunto duly
authorized.

         Section 5. Vacancies. If an office becomes vacant for any reason, the
Board of Directors shall fill such vacancy. Any officer so elected by the Board
shall serve only until such time as the unexpired term of his predecessor shall
have expired unless re-elected or reappointed by the Board.

         Section 6. The Chairman of the Board. The Chairman of the Board of
Directors, if there be a Chairman, shall preside at all meetings of the
shareholders and directors and shall have such other powers and duties as may
from time to time be assigned by the Board including designation as Chief
Executive Officer if the President is not so designated.

         Section 7. The President. The President shall be the Chief Executive
Officer of the Corporation unless the Chairman of the Board is so designated,
in which event the President shall be Chief Operating Officer of the
Corporation. In the absence of the Chairman of the Board, or if there be no
Chairman, he shall preside at all meetings of the shareholders and directors.
The Chief Executive Officer, whether the Chairman of the Board or the
President, shall be ex officio a member of all standing committees, shall have
general and active management and control 





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of the business and affairs of the Corporation subject to the control of the
Board of Directors, and shall see that all orders and resolutions of the Board
are carried into effect.

         Section 8. Vice Presidents. The Vice Presidents in the order of their
seniority or in any other order determined by the Board, shall in the absence
or disability of the President, perform the duties and exercise the powers of
the President, and shall generally assist the President and perform such other
duties as the Board of Directors or the President shall prescribe.

         Section 9. The Secretary. The Secretary shall attend all meetings of
the Board and all meetings of the shareholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give,
or cause to be given, notice of all meetings of the shareholders and special
meetings of the Board of Directors, and shall perform such other duties as may
be prescribed by the Board of Directors or President, under whose supervision
he shall act. He shall keep in safe custody the seal of the Corporation and,
when authorized by the Board, affix the same to any instrument requiring it
and, when so affixed, it shall be attested by his signature or by the signature
of the Treasurer or an Assistant Secretary or Assistant Treasurer. He shall
keep in safe custody the certificate books 




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and shareholder records and such other books and records as the Board may
direct and shall perform all other duties incident to the office of the
Secretary.

         Section 10. Assistant Secretaries. The Assistant Secretaries, if any,
in order of their seniority or in any other order determined by the Board
shall, in the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary and shall perform such other duties as the
Board of Directors or the Secretary shall prescribe.

         Section 11. The Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the President and the Board of Directors at its regular
meetings, or when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the Corporation. He
shall establish and execute programs for the provision of the capital required
by the Company, including negotiating the procurement of capital and
maintaining the 




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required financial arrangements. He shall establish and maintain an adequate
market for the Company's securities and, in connection therewith, maintain
adequate liaison with investment bankers, financial analysts and shareholders.
He shall maintain adequate sources for the Company's current borrowings from
commercial banks and other lending institutions.

         He shall maintain banking arrangements to receive, have custody of and
disburse the Company's moneys and securities. He shall invest the Company's
funds as required and establish and coordinate policies for investment in
pension and other similar trusts.

         Section 12. Assistant Treasurers. The Assistant Treasurers, if any, in
the order of their seniority or in any other order determined by the Board,
shall in the absence or disability of the Treasurer, perform the duties and
exercise the power of the Treasurer and shall perform such other duties as the
Board of Directors or the Treasurer shall prescribe.



                                   ARTICLE IX

                             CERTIFICATE OF SHARES

         Section 1. Form; Signature. The certificates for shares of the
Corporation shall be in such form as shall be determined by the Board of
Directors and shall be numbered consecutively and entered in the books of the
Corporation as they are issued. Each 




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certificate shall exhibit the registered holder's name and the number and class
of shares, and shall be signed by the President or a Vice President and the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary,
and shall bear the seal of the Corporation or a facsimile thereof. Where any
such certificate is countersigned by a transfer agent or by a registrar other
than the Corporation, the signature of any such officer may be a facsimile
signature. In case any officer who signed, or whose facsimile signature or
signatures were placed on any such certificate shall have ceased to be such
officer before such certificate is issued, it may nevertheless be issued by the
Corporation with the same effect as if he were such officer at the date of
issue.

         Section 2. Lost Certificates. The Board of Directors may direct a new
share certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate to be lost or destroyed. When authorizing such issue of a new
certificate or certificates, the Board of Directors may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
give the Corporation a bond in such sum as it may direct as indemnity 




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against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed.

         Section 3. Registration of Transfer. Upon surrender to the Corporation
or any transfer agent of the Corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the Corporation, or such
transfer agent to issue a new certificate to the person entitled thereto,
cancel the old certificate and record the transaction upon its books.

         Section 4. Registered Shareholders. Except as otherwise provided by
law, the Corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends or
other distributions, and to vote as such owner, and to hold liable for calls a
person registered on its books as the owner of shares, and shall not be bound
to recognize any equitable or legal claim to or interest in such share or
shares on the part of any other person.

         Section 5. Record Date. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the




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purpose of any other action affecting the interests of shareholders, the Board
of Directors may fix, in advance, a record date. Such date shall not be more
than sixty (60) nor less than ten (10) days before the date of any such
meeting, nor more than sixty (60) days prior to any other action.

         In each such case, except as otherwise provided by law, only such
persons as shall be shareholders of record on the date so fixed shall be
entitled to notice of, and to vote at, such meeting and any adjournment
thereof, or to express such consent or dissent, or to receive payment of such
dividend, or such allotment of rights, or otherwise to be recognized as
shareholders for the related purpose, notwithstanding any registration of
transfer of shares on the books of the Corporation after any such record date
so fixed.



                                   ARTICLE X

                               GENERAL PROVISIONS

         Section 1. Dividends. Subject to the provisions of the Articles of
Incorporation, if any, dividends upon the outstanding shares of the Corporation
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law and may be paid in cash, in property, or in shares of the
Corporation.





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         Section 2. Reserves. Before payment of any dividends, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the directors shall think conducive to the interest
of the Corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.

         Section 3. Annual Statement. The Board of Directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.

         Section 4. Instruments Under Seal. All deeds, bonds, mortgages,
contracts, and other instruments requiring a seal may be signed in the name of
the Corporation by the President or by any other officer authorized to sign
such instrument by the President or the Board of Directors.

         Section 5. Checks. All checks or demands for money and notes or other
instrument evidencing indebtedness or obligation of the Corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.




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<PAGE>   27



         Section 6. Fiscal Year. The fiscal year of the Corporation shall begin
on the first day of January of each year and shall end on the thirty-first day
of December following.

         Section 7. Seal. The corporate seal shall have inscribed thereon the
name of the corporation and the words "Corporate Seal, Kansas 1927." The seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.

                                   ARTICLE XI

                                   AMENDMENTS

         Section 1. These By-Laws may be altered or repealed at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors if notice of such alteration or repeal be contained in the notice of
such special meeting.



                                  ARTICLE XII

                         SPECIAL MANAGEMENT PROVISIONS

         Section 1. General. The provisions of this Article XII of the By-Laws
have been adopted by the Board of Directors of the Corporation pursuant to that
certain Agreement of Merger by and between the Corporation, KNE Acquisition
Corporation, a Delaware corporation, and American Oil and Gas Corporation, a
Delaware 




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<PAGE>   28



corporation dated March 24, 1994 (the "Merger Agreement"). Capitalized terms
used in this Article XII not otherwise defined herein shall have the meaning
ascribed to them in the Merger Agreement. The provisions of this Article XII
shall be effective from and after the Effective Time notwithstanding any other
provisions of these By-Laws to the contrary. In the event of a conflict between
the provisions of this Article XII and other provisions of the By-Laws, the
provisions of this Article XII shall control.

         Section 2. Cabot Director. For so long as Cabot Corporation shall
continue to own beneficially (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission) 10% or more of the issued and
outstanding voting stock of the Corporation, Cabot Corporation shall have the
right to designate one person to serve as an advisory director of the
Corporation. In the event beneficial ownership of Cabot Corporation of the
issued and outstanding voting stock of the Corporation falls below 10% but
constitutes more than 5%, the Board of Directors shall appoint the Cabot
Corporation advisory director as a full director, to serve the then remaining
term of a Class II director. For so long as Cabot Corporation continues to own
beneficially less than 10% but more than 5% of the issued and outstanding
voting stock of the Corporation, the Board of Directors shall nominate a Cabot
Corporation designee (provided 




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<PAGE>   29



that such nominee is otherwise qualified as required by these By-Laws) for
election by the Corporation's stockholders as a director. The Corporation shall
at all times during which Cabot Corporation shall beneficially own in excess
10% of the issued and outstanding voting stock of the Corporation, maintain a
vacancy on its Board of Directors for such Cabot designee.

         Section 3. Vacancies in Certain Offices. Any vacancy arising following
the Effective Time and prior to the Corporation's Annual Meeting of
Stockholders in 1996, in the offices of the Chairman of the Board,
Vice-Chairman of the Board, President, Chief Executive Officer or Chief
Operating Officer, or on the Management Committee or the Chairman of the
Management Committee, shall be filled by the Board of Directors upon
recommendation by a Special Nominating Committee of the Board of Directors. The
Board of Directors shall by majority vote establish a Special Nominating
Committee in the event of a vacancy in any of the foregoing positions. The
Special Nominating Committee shall consist of four directors, two of whom shall
be designated by the Board of Directors from the directors of the Corporation
who served as a director prior to the Effective Time, and two of whom shall be
designated by the directors designated by American Oil and Gas Corporation in
the Merger Agreement.




                                      29
<PAGE>   30




         Section 4. Continuation of Retirement Policy. The Corporation shall
continue its present retirement policy that officers of the Corporation
(including the Chairman of the Board, Vice-Chairman of the Board, President and
Chief Executive Officer or Chief Operating Officer) shall be ineligible and
cease to serve as an officer of the Corporation as of the first of the month
coincident with or next following his or her 65th birthday.

         Section 5. Super-Majority Vote. For purposes of this Article XII, the
term "Super-Majority Vote" shall mean the affirmative vote of at least 12 of a
14-member Board of Directors; at least 11 of a 13-member Board of Directors; at
least 10 of a 12-member Board of Directors; at least 9 of an 11-member Board of
Directors; or in all other cases, the affirmative vote of a number of directors
equal to at least 85% of the total number of directors. A Super-Majority Vote
shall be required for the following actions to be taken by the Board of
Directors; (i) amendment, modification or revocation of any provision of this
Article XII; (ii) amendment, modification or revocation of the current
retirement policy of the Corporation; and (iii) any increase in the number of
members to serve on the Board of Directors; provided that, no Super-Majority
Vote shall be required for any such action taken by the Board of Directors from
and after the date of the annual stockholders meeting for 1997.




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<PAGE>   31




         I hereby certify that the foregoing are the By-Laws of K N Energy,
Inc. as the same were adopted at the meeting of the Board of Directors on May
20, 1975, and subsequently amended at meetings of the Board of Directors on
November 20, 1975, November 8, 1978, August 5, 1983, November 11, 1983,
November 16, 1984, January 9, 1988, March 24, 1989, August 10, 1989, January
20, 1991, November 10, 1993, June 24, 1994, July 13, 1994, April 11, 1996,
February 10, 1998, and are still in force and effect on this 10th day of
February, 1998.


                                        /s/ Martha B. Wyrsch
                                        ---------------------------------------
                                        Martha B. Wyrsch
                                        Secretary



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