Attached files
| file | filename |
|---|---|
| EX-24 - POWER OF ATTORNEY - HKN, Inc. | ex24.htm |
| EX-21 - SUBSIDIARIES - HKN, Inc. | ex21.htm |
| EX-23.1 - CONSENT OF IRPAF - HKN, Inc. | ex23-1.htm |
| EX-32.1 - SECTION 906 CERTIFICATION - CEO - HKN, Inc. | ex32-1.htm |
| EX-23.2 - CONSENT OF ENGINEERS & GEOLOGISTS - HKN, Inc. | ex23-2.htm |
| EX-99.1 - COLLARINI RESERVE REPORT SUMMARY - HKN, Inc. | ex99-1.htm |
| EX-31.1 - CEO CERTIFICATION - HKN, Inc. | ex31-1.htm |
| EX-31.2 - CFO CERTIFICATION - HKN, Inc. | ex31-2.htm |
| EX-23.3 - CONSENT OF ENGINEERS & GEOLOGISTS - HKN, Inc. | ex23-3.htm |
| EX-32.2 - SECTION 906 CERTIFICATION - CFO - HKN, Inc. | ex32-2.htm |
| 10-K - ANNUAL REPORT - HKN, Inc. | hkn_10k-123109.htm |
EXHIBIT 99.2
|
CREST Engineering Services, Inc.
|
February 8, 2010
Mr. Kris
Hartmann
HKN, Inc.
28259 Daystrom Lane
Katy, Texas 77494
Re: Evaluation of Proved Reserves
attributable to HKN, Inc. in Main Pass 35 Field,
Plaquemines
Parish, Louisiana as of December 31, 2009
Mr. Hartmann:
At your
request we have estimated the proved reserves attributable to HKN, Inc. in
Main Pass 35
Field, Plaquemines Parish, Louisiana for the purpose of filing the annual 10-K
reports
for HKN, Inc. According to reserve data provided by the company, these reserves
represent
approximately 51% of the total reserves of HKN, Inc. on an oil
equivalent basis.
A summary of the results of our evaluation are as
follows:
Estimated Net Reserves
And Future Cash Flows
As of December 31, 2009
| Reserve | Net Reserves | Net | Discounted | |||||||||||||
|
Category
|
Oil, mbbl | Gas, Mcf | Revenue, m$ | Revenue, m$ | ||||||||||||
|
Proved
|
||||||||||||||||
|
Producing
|
744 | 0 | 174 | 3,667 | ||||||||||||
|
Behind Pipe
|
136 | 0 | 3,818 | 2,374 | ||||||||||||
|
Non-Producing
|
206 | 0 | 9,180 | 6,201 | ||||||||||||
|
Total Proved
|
1,087 | 0 | 13,172 | 12,242 | ||||||||||||
|
Total Probable
|
1,218 | 4,568 | 37,300 | 19,400 | ||||||||||||
|
Total Possible
|
114 | 0 | 2,646 | 903 | ||||||||||||
|
Total Reserves
|
2,421 | 4,568 | 53,120 | 32,545 | ||||||||||||
| 218 N. College St. | (903) 253-0452 |
| Tyler, Texas 75702 | fax (903) 642-0055 |
| HKN, Inc. | February 8, 2010 |
The
discounted cash flows summarized in the above table are calculated using a
discount
rate of
10 percent per annum. Reserves are classified according to the Petroleum
Reserve Definitions
approved by the Security and Exchange Commission. A copy of these classifications
has been included as part of this report.
Future
net cash flow as presented in this report are defined as the future cash
inflows attributable
to the evaluated interest less expenses for operating, taxes, transportation
and future
capital expenditures. This evaluation does not include any state or federal
income tax.
Future cost of abandonment has not been incorporated into this evaluation, nor
has any
expenditures for environmental remediation been
considered.
Prices and Expenses
This
evaluation was prepared using an index price of $61.18/bbl and
$3.87/MMBTU which was
the simple average of the price reported in the Wall Street Journal on the
first day of
each month in 2009. These index prices were assumed to represent the
prices received
for NYMEX (WTI) and Henry Hub respectively, and adjustments were made
on a lease
by lease basis for product quality, transportation and marketing. The
average differential
for 2009 (excluding the high and low data points) was -$1.80/bbl.
This differential
was assumed to remain constant throughout the life of the
reserves.
Expenses
were based on actual expenses incurred during the 12 month period
ending September
30, 2009 as depicted in lease operating statements provided by HKN,
Inc. The
expenses were reviewed, and no adjustments were made except for the removal
of insurance
and overhead expenses. The operating expenses were held constant for the
life of the
reserves.
Methodology
Reserve
estimates for producing wells were estimated using decline curve analysis
where production
trends have been established. When trends were not established,
reserves were
estimated based on volumetric calculations supported by analogies to
similar completions
in the fields. The reserves reported herein are approximations based
on engineering
calculation, but should not be construed as exact
quantities.
In
conducting this evaluation, we relied upon information provided by HKN, Inc.
and
third
party data providing services. No independent well test, inspections, title
reviews or financial
audits were conducted as part of this evaluation. Information such
as ownership,
lease operating expenses, product prices, accounting and production imbalances
were accepted as reported by HKN, Inc.
| CREST Engineering Services, Inc. | (903) 253-0452 |
| Tyler, Texas | fax (903) 642-0055 |
| HKN, Inc. | February 8, 2010 |
The
estimate that this report encompasses approximately 51% of the total reserves
of HKN Inc.
is based on information provided by the company with regard to the reserves
of HKN Inc.
which were not evaluated by CREST Engineering Services, Inc. CREST accepted
these values as provided and has not performed an independent evaluation
of any
assets other than those stated by this report. Our signature below should not
be regarded
as confirmation of the evaluation of the additional assets of the company
other than
those assets specifically referenced in this
report.
Engineering
data used to support this evaluation is available for review in our
offices with the
approval of HKN, Inc.
Sincerely,
/s/
W. Waterson Calhoun [REGISTERED
SEAL OF W.W. CALHOUN, STATE OF TEXAS]
W.
Waterson Calhoun
CREST
Engineering Services
| CREST Engineering Services, Inc. | (903) 253-0452 |
| Tyler, Texas | fax (903) 642-0055 |
|
CREST Engineering Services, Inc.
|
DEFINITIONS OF PROVED RESERVES
SEC Reg § 210.4-10 (a) (2-4)
(2) Proved Oil and Gas Reserves
Proved
oil and gas reserves are the estimated quantities of crude oil, natural gas, and
natural gas liquids which
geological and engineering data demonstrate with reasonable certainty to be
recoverable in future years
from known reservoirs under existing economic and operating conditions, i.e.,
prices and costs as of the date
the estimate is made. Prices include consideration of changes in existing prices
provided only by contractual
arrangements, but not on escalations based upon future
conditions.
(i)
Reservoirs are considered proved if economic producibility is supported by
either actual production or conclusive
formation test. The area of a reservoir considered proved
includes:
| (A) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and | |
| (B) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir. |
(ii)
Reserves which can be produced economically through application of improved
recovery techniques (such as
fluid injection) are included in the proved classification when successful
testing by a pilot project,
or the operation of an installed program in the reservoir, provides support for
the engineering analysis
on which the project or program was based.
(iii) Estimates of proved reserves do not include the
following:
| (A) oil that may become available from known reservoirs but is classified separately as indicated additional reserves.; | |
| (B) crude oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors; | |
| (C) crude oil, natural gas, and natural gas liquids, that may occur in undrilled prospects; and | |
| (D) crude oil, natural gas, and natural gas liquids, that may be recovered from oil shales, coal, gilsonite and other such sources. |
(3) Proved Developed Oil and Gas
Reserves
Proved
developed oil and gas reserves are reserves that can be expected to be recovered
through existing wells
with existing equipment and operating methods. Additional oil and gas expected
to be obtained through
the application of fluid injection or other improved recovery techniques for
supplementing the natural forces
and mechanisms of primary recovery should be included as proved developed
reserves only after testing
by a pilot project or after the operation of an installed program has confirmed
through production response
that increased recovery will be achieved.
(4) Proved Undeveloped Reserves
Proved
undeveloped oil and gas reserves are reserves that are expected to be recovered
from new wells on undrilled
acreage, or from existing wells where a relatively major expenditure is required
for recompletion. Reserves
on undrilled acreage shall be limited to those drilling units offsetting
productive units that are reasonably
certain of production when drilled. Proved reserves for other undrilled units
can be claimed only where it
can be demonstrated with certainty that there is continuity of production from
the existing productive formation.
Under no circumstances should estimates, for proved undeveloped reserves be
attributable to any
acreage for which an application of fluid injection or other improved recovery
technique is contemplated, unless
such techniques Leave been proved effective by actual tests in the area and in
the same reservoir.
| 218 N. College St. | (903) 253-0452 |
| Tyler, Texas 75702 | fax (903) 642-0055 |