Attached files
EXHIBIT 99.1
RYDER SCOTT COMPANY PETROLEUM CONSULTANTS
MAINLAND RESOURCES, INC.
ESTIMATED
FUTURE RESERVES AND INCOME
ATTRIBUTABLE TO CERTAIN
LEASEHOLD INTERESTS
SEC PARAMETERS
AS OF
FEBRUARY 28, 2009
/s/ JOSEPH E. BLANKENSHIP
____________________________
Joseph E. Blankenship, P.E.
TBPE License No. 62093
Senior Vice President
RYDER SCOTT COMPANY, L.P.
TBPE Firm Registration No. F-1580
RYDER SCOTT COMPANY PETROLEUM CONSULTANTS
RYDER SCOTT COMPANY
PETROLEUM CONSULTANTS
TBPE REGISTERED ENGINEERING FIRM F-1580 FAX (713) 651-0849
1100 LOUISIANA SUITE 3800 HOUSTON, TEXAS 77002-5218 TELEPHONE (713) 651-9191
March 2, 2010
Mainland Resources, Inc.
20333 State Highway 249, Suite 200
Houston, Texas 77070
Gentlemen:
At your request, we have prepared an estimate of the proved reserves,
future production, and income attributable to certain leasehold interests of
Mainland Resources, Inc. (Mainland) as of February 28, 2009. The subject
property is the Griffith 11-1 well, located in the Holly field, Desoto Parish,
Louisiana. The income data were estimated using the Securities and Exchange
Commission (SEC) requirements for future price and cost parameters which were in
effect as of February 28, 2009. Please note that the SEC requirements, used in
this report, are different than the new SEC requirements, which went into effect
as of December 31, 2009.
The estimated reserves and future income amounts presented in this
report are related to hydrocarbon prices. Hydrocarbon prices in effect at
February 28, 2009 were used in the preparation of this report as required by SEC
rules; however, actual future prices may vary significantly from February 28,
2009 prices. Therefore, volumes of reserves actually recovered and amounts of
income actually received may differ significantly from the estimated quantities
presented in this report. The results of this study are summarized below.
SEC PARAMETERS
Estimated Net Reserves and Income Data
Certain Leasehold Interests of
MAINLAND RESOURCES, INC.
As of February 28, 2009
___________________________________________________________________________
Total Proved
Developed
Producing
___________________
NET REMAINING RESERVES
Gas - MMCF 1,256
INCOME DATA
Future Gross Revenue $4,091,960
Deductions 1,653,361
__________
Future Net Income (FNI) $2,438,599
Discounted FNI @ 10% $2,167,985
1200, 530 8TH AVENUE, S.W.CALGARY, ALBERTA T2P 3S8
TEL (403) 262-2799 FAX (403) 262-2790
621 17TH STREET, SUITE 1550DENVER, COLORADO 80293-1501
TEL (303) 623-9147 FAX (303) 623-4258
Mainland Resources, Inc.
March 2, 2010
Page 2
All gas volumes are sales gas expressed in millions of cubic feet
(MMCF) at the official temperature and pressure bases of Louisiana, which are 60
degrees Fahrenheit and 15.025 psi.
The future gross revenue is after the deduction of production taxes.
The deductions comprise the normal direct costs of operating the wells, ad
valorem taxes, gathering fees and certain abandonment costs net of salvage. The
future net income is before the deduction of state and federal income taxes and
general administrative overhead, and has not been adjusted for outstanding loans
that may exist nor does it include any adjustment for cash on hand or
undistributed income. No attempt was made to quantify or otherwise account for
any accumulated gas production imbalances that may exist. Gas reserves account
for 100 percent of total future gross revenue.
The discounted future net income shown above was calculated using a
discount rate of 10 percent per annum compounded monthly. Future net income was
discounted at four other discount rates which were also compounded monthly.
These results are shown on the estimated projection of future production and
income presented in a later section of this report and in summary form as
follows.
Discounted Future Net Income
As of February 28, 2009
__________________________________________
Discount Rate Total
Percent Proved
____________________ _____________________
12 $2,122,583
15 $2,058,905
20 $1,963,152
25 $1,878,425
The results shown above are presented for your information and should
not be construed as our estimate of fair market value.
RESERVES INCLUDED IN THIS REPORT
The PROVED RESERVES included herein conform to the definition as set
forth in the Securities and Exchange Commission's Regulation S-X Part 210.4-10
(a) as clarified by subsequent Commission Staff Accounting Bulletins. The
definition of proved reserves is included under "Petroleum Reserves Definitions"
in this report.
Various reserve status categories are defined under "Petroleum Reserves
Definitions" in this report.
ESTIMATES OF RESERVES
The reserves in this report were estimated by the performance method.
The performance method is based on analysis of various historical data trends.
The reserves are based on primary recovery. The reserves are unconventional in
nature; they are being produced from the Haynesville Shale. The well is a single
lateral horizontal type well.
The reserves included in this report are estimates only and should not
be construed as being exact quantities. They may or may not be actually
recovered, and if recovered, the revenues therefrom and the actual costs related
thereto could be more or less than the estimated amounts. Moreover, estimates of
reserves may increase or decrease as a result of future operations.
RIVER SCOTT COMPANY PETROLEUM CONSULTANTS
Mainland Resources, Inc.
March 2, 2010
Page 3
FUTURE PRODUCTION RATES
Initial production rate is based on the current producing rate. The
current decline trend was used as the basis for estimating future production
rates.
The future production rates may be more or less than estimated because
of changes in market demand or allowables set by regulatory bodies.
HYDROCARBON PRICES
In accordance with FASB Statement No. 69, February 28, 2009 market
prices were determined using the daily gas sales price ("spot price") adjusted
for gas gathering hub and wellhead price differences (e.g. grade,
transportation, and gravity) as appropriate. Also in accordance with SEC and
FASB specifications, changes in market prices subsequent to February 28, 2009
were not considered in this report.
The effects of derivative instruments designated as price hedges of gas
quantities were not considered or included in this report.
COSTS
Operating costs for the well in this report are based on the operating
expense reports of Mainland and include only those costs directly applicable to
the well. Operating costs for this non-operated property include the COPAS
overhead costs allocated directly to the well under terms of the operating
agreement. No deduction was made for loan repayments, interest expenses, and
exploration and development prepayments that are not charged directly to the
well.
The estimated net cost of abandonment after salvage was included for
this property. The estimates of the net abandonment costs furnished by Mainland
were accepted without independent verification.
Current costs were held constant throughout the life of the properties.
GENERAL
Table 1 presents our estimated projection of production and income by
years beginning March 1, 2009.
While it may reasonably be anticipated that the future prices received
for the sale of production and the operating costs and other costs relating to
such production may also increase or decrease from existing levels, such changes
were, in accordance with rules adopted by the SEC, omitted from consideration in
making this evaluation.
The estimates of reserves presented herein were based upon a detailed
study of the property in which Mainland owns an interest; however, we have not
made any field examination of the property. No consideration was given in this
report to potential environmental liabilities that may exist nor were any costs
included for potential liability to restore and clean up damages, if any, caused
by past operating practices. Mainland has informed us that they have furnished
us all of the accounts, records, geological and engineering data, and reports
and other data required for this investigation. The ownership interests, prices,
and other factual data furnished by Mainland were accepted without independent
verification. Please note that although this report is issued on March 2, 2010,
RIVER SCOTT COMPANY PETROLEUM CONSULTANTS
at Mainland's request, the estimates presented in this report are based only on
data available through March 2009.
Neither we nor any of our employees have any interest in the subject
property and neither the employment to make this study nor the compensation is
contingent on our estimates of reserves and future income for the subject
property.
This report was prepared for the exclusive use and sole benefit of
Mainland Resources, Inc. and may not be put to other use without our prior
written consent for such use. The data, work papers, and maps used in this
report are available for examination by authorized parties in our offices.
Please contact us if we can be of further service.
Very truly yours,
RYDER SCOTT COMPANY, L.P.
TBPE Firm Registration No. F-1580
/s/ JOSEPH E. BLANKENSHIP
Joseph E. Blankenship, P.E.
TBPE License No. 62093
Senior Vice President
[STATE SEAL - STATE OF TEXAS
PROFESSIONAL ENGINEERING]
JEB/sm
PETROLEUM RESERVES DEFINITIONS
SECURITIES AND EXCHANGE COMMISSION
INTRODUCTION
Reserves are those quantities of petroleum which are anticipated to be
commercially recovered from known accumulations from a given date forward. All
reserve estimates involve some degree of uncertainty. The uncertainty depends
chiefly on the amount of reliable geologic and engineering data available at the
time of the estimate and the interpretation of these data. The relative degree
of uncertainty may be conveyed by placing reserves into one of two principal
classifications, either proved or unproved. Unproved reserves are less certain
to be recovered than proved reserves and may be further sub-classified as
probable and possible reserves to denote progressively increasing uncertainty in
their recoverability. It should be noted that Securities and Exchange Commission
Regulation S-K prohibits the disclosure of estimated quantities of probable or
possible reserves of oil and gas and any estimated value thereof in any
documents publicly filed with the Commission.
Reserves estimates will generally be revised as additional geologic or
engineering data become available or as economic conditions change. Reserves do
not include quantities of petroleum being held in inventory, and may be reduced
for usage or processing losses if required for financial reporting.
Reserves may be attributed to either natural energy or improved
recovery methods. Improved recovery methods include all methods for
supplementing natural energy or altering natural forces in the reservoir to
increase ultimate recovery. Examples of such methods are pressure maintenance,
cycling, waterflooding, thermal methods, chemical flooding, and the use of
miscible and immiscible displacement fluids. Other improved recovery methods may
be developed in the future as petroleum technology continues to evolve.
PROVED RESERVES (SEC DEFINITIONS)
Securities and Exchange Commission Regulation S-X Rule 4-10 paragraph
(a) defines proved reserves as follows:
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
PETROLEUM RESERVES DEFINITIONS
Page 2
(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.
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.
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 HAVE BEEN PROVED EFFECTIVE BY ACTUAL TESTS
IN THE AREA AND IN THE SAME RESERVOIR.
Certain Staff Accounting Bulletins published subsequent to the
promulgation of Regulation S-X have dealt with matters relating to the
application of financial accounting and disclosure rules for oil and gas
producing activities. In particular, the following interpretations extracted
from Staff Accounting Bulletins set forth the Commission staff's view on
specific questions pertaining to proved oil and gas reserves.
PETROLEUM RESERVES DEFINITIONS
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ECONOMIC PRODUCIBILITY OF ESTIMATED PROVED RESERVES CAN BE SUPPORTED TO
THE SATISFACTION OF THE OFFICE OF ENGINEERING IF GEOLOGICAL AND ENGINEERING DATA
DEMONSTRATE WITH REASONABLE CERTAINTY THAT THOSE RESERVES CAN BE RECOVERED IN
FUTURE YEARS UNDER EXISTING ECONOMIC AND OPERATING CONDITIONS. THE RELATIVE
IMPORTANCE OF THE MANY PIECES OF GEOLOGICAL AND ENGINEERING DATA WHICH SHOULD BE
EVALUATED WHEN CLASSIFYING RESERVES CANNOT BE IDENTIFIED IN ADVANCE. IN CERTAIN
INSTANCES, PROVED RESERVES MAY BE ASSIGNED TO RESERVOIRS ON THE BASIS OF A
COMBINATION OF ELECTRICAL AND OTHER TYPE LOGS AND CORE ANALYSES WHICH INDICATE
THE RESERVOIRS ARE ANALOGOUS TO SIMILAR RESERVOIRS IN THE SAME FIELD WHICH ARE
PRODUCING OR HAVE DEMONSTRATED THE ABILITY TO PRODUCE ON A FORMATION TEST.
(EXTRACTED FROM SAB-35)
IN DETERMINING WHETHER "PROVED UNDEVELOPED RESERVES" ENCOMPASS ACREAGE
ON WHICH FLUID INJECTION (OR OTHER IMPROVED RECOVERY TECHNIQUE) IS CONTEMPLATED,
IS IT APPROPRIATE TO DISTINGUISH BETWEEN (I) FLUID INJECTION USED FOR PRESSURE
MAINTENANCE DURING THE EARLY LIFE OF A FIELD AND (II) FLUID INJECTION USED TO
EFFECT SECONDARY RECOVERY WHEN A FIELD IS IN THE LATE STAGES OF DEPLETION? ...
THE OFFICE OF ENGINEERING BELIEVES THAT THE DISTINCTION IDENTIFIED IN THE ABOVE
QUESTION MAY BE APPROPRIATE IN A FEW LIMITED CIRCUMSTANCES, SUCH AS IN THE CASE
OF CERTAIN FIELDS IN THE NORTH SEA. THE STAFF WILL REVIEW ESTIMATES OF PROVED
RESERVES ATTRIBUTABLE TO FLUID INJECTION IN THE LIGHT OF THE STRENGTH OF THE
EVIDENCE PRESENTED BY THE REGISTRANT IN SUPPORT OF A CONTENTION THAT ENHANCED
RECOVERY WILL BE ACHIEVED. (EXTRACTED FROM SAB-35)
COMPANIES SHOULD REPORT RESERVES OF NATURAL GAS LIQUIDS WHICH ARE NET
TO THEIR LEASEHOLD INTEREST, I.E., THAT PORTION RECOVERED IN A PROCESSING PLANT
AND ALLOCATED TO THE LEASEHOLD INTEREST. IT MAY BE APPROPRIATE IN THE CASE OF
NATURAL GAS LIQUIDS NOT CLEARLY ATTRIBUTABLE TO LEASEHOLD INTERESTS OWNERSHIP TO
FOLLOW INSTRUCTION (B) OF ITEM 2(B)(3) OF REGULATION S-K AND REPORT SUCH
RESERVES SEPARATELY AND DESCRIBE THE NATURE OF THE OWNERSHIP. (EXTRACTED FROM
SAB-35)
THE STAFF BELIEVES THAT SINCE COALBED METHANE GAS CAN BE RECOVERED FROM
COAL IN ITS NATURAL AND ORIGINAL LOCATION, IT SHOULD BE INCLUDED IN PROVED
RESERVES, PROVIDED THAT IT COMPLIES IN ALL OTHER RESPECTS WITH THE DEFINITION OF
PROVED OIL AND GAS RESERVES AS SPECIFIED IN RULE 4-10(A)(2) INCLUDING THE
REQUIREMENT THAT METHANE PRODUCTION BE ECONOMICAL AT CURRENT PRICES, COSTS, (NET
OF THE TAX CREDIT) AND EXISTING OPERATING CONDITIONS. (EXTRACTED FROM SAB-85)
Statements in Staff Accounting Bulletins are not rules or
interpretations of the Commission nor are they published as bearing the
Commission's official approval; they represent interpretations and practices
followed by the Division of Corporation Finance and the Office of the Chief
Accountant in administering the disclosure requirements of the Federal
securities laws.
SUB-CATEGORIZATION OF DEVELOPED RESERVES (SPE/WPC DEFINITIONS)
In accordance with guidelines adopted by the Society of Petroleum
Engineers (SPE) and the World Petroleum Congress (WPC), developed reserves may
be sub-categorized as producing or non-producing.
PRODUCING. Reserves sub-categorized as producing are expected to be recovered
from completion intervals which are open and producing at the time of the
estimate. Improved recovery reserves are considered producing only after the
improved recovery project is in operation.
PETROLEUM RESERVES DEFINITIONS
Page 4
NON-PRODUCING. Reserves sub-categorized as non-producing include shut-in and
behind pipe reserves. Shut-in reserves are expected to be recovered from (1)
completion intervals which are open at the time of the estimate but which have
not started producing, (2) wells which were shut-in awaiting pipeline
connections or as a result of a market interruption, or (3) wells not capable of
production for mechanical reasons. Behind pipe reserves are expected to be
recovered from zones in existing wells, which will require additional completion
work or future recompletion prior to the start of production.
RYDER SCOTT COMPANY
PETROLEUM CONSULTANTS
TBPE FIRM LIC. NO. F-1580 TABLE 1
MAINLAND RESOURCES, INC.
ESTIMATED FUTURE RESERVES AND INCOME
ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS
(SEC PARAMETERS)
AS OF FEBRUARY 28, 2009
HOLLY FIELD, DESOTO PARISH, LOUISIANA GAS LEASE
PETROHAWK - OPERATOR S11-T13N-R14W PROVED
GRIFFITH 11-1 (HAYNESVILLE SHALE) API #17031244560000 PRODUCING
REVENUE INTEREST PRODUCT PRICES
________________________________ _________________________________ DISCOUNTED
Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $
Interest Condensate Products Gas ($bbl) ($bbl) ($/Mcf) COMPOUNDED MONTHLY
__________ __________ __________ __________ __________ __________ __________ ______________________
INITIAL 0.40000000 0.30000000 3.55 10.00% 2,167,985
FINAL 0.40000000 0.30000000 3.55 12.00% 2,122,583
15.00% 2,058,905
20.00% 1,963,152
25.00% 1,878,425
REMARKS HORIZONTAL WELL WITH 12 STAGE FRAC - GAS SALES BEGAN 1/29/2009
SINGLE LATERAL - APPROXIMATELY 5000 FT LENGTH
4,054 FT OF LATERAL PERF'ED (12,099 - 16,153'MD)
OTHER DEDUCTIONS ARE GATHERING FEES
ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES
__________________________________ ________________________________________ _________________________________
Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Procuts Sales Gas (A) Oil/Cond. Plt Prod. Gas
Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($Mcf)
____ ________ _________ ______________ _______ _________ ______________ _____________ ___________ _________ _______
2009 1 0 0 1,872 0 0 550 0.00 0.00 3.55
2010 1 0 0 754 0 0 222 0.00 0.00 3.55
2011 1 0 0 445 0 0 131 0.00 0.00 3.55
2012 1 0 0 318 0 0 93 0.00 0.00 3.55
2013 1 0 0 246 0 0 72 0.00 0.00 3.55
2014 1 0 0 202 0 0 59 0.00 0.00 3.55
2015 1 0 0 171 0 0 50 0.00 0.00 3.55
2016 1 0 0 148 0 0 44 0.00 0.00 3.55
2017 1 0 0 115 0 0 34 0.00 0.00 3.55
2018 0 0 0 0 0 0 0 0.00 0.00 3.55
Sub-Total 0 0 4,271 0 0 1,256 0.00 0.00 3.55
Remainder 0 0 0 0 0 0 0.00 0.00 0.00
Total Future 0 0 4,271 0 0 1,256 0.00 0.00 3.55
Cumulative 0 0 437 0 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES,
Ultimate 0 0 4,708 0 SHRINKAGE = 2.00%
COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $
__________________________________________________________________________ ______________________________________ FGR AFTER
From From From Oil/ Plant Prod./ PRODUCTION
Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $
____ ___________________ ______________ __________ _________ ______________ _____________ ___________ _________ __________
2009 0 0 1,953,303 0 1,953,303 0 0 160,138 1,793,165
2010 0 0 787,113 0 787,113 0 0 64,530 722,582
2011 0 0 464,768 0 464,768 0 0 38,103 426,665
2012 0 0 331,811 0 331,811 0 0 27,203 304,608
2013 0 0 257,154 0 257,154 0 0 21,082 236,072
2014 0 0 210,426 0 210,426 0 0 17,251 193,174
2015 0 0 178,102 0 178,102 0 0 14,601 163,500
2016 0 0 154,798 0 154,798 0 0 12,691 142,107
2017 0 0 119,918 0 119,918 0 0 9,831 110,087
2018 0 0 0 0 0 0 0 0 0
Sub-Total 0 0 4,457,391 0 4,457,391 0 0 365,432 4,091,960
Remainder 0 0 0 0 0 0 0 0 0
Total Future 0 0 4,457,391 0 4,457,391 0 0 365,432 4,091,960
DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $
__________________________________________________________________________ ________________________________________
Undiscounted
Operating Ad Valorem Development __________________________ Discounted
Year Costs Taxes Costs Other Toal Annual Cumulative @ 10.00%
____ ___________________ ______________ __________ _________ ______________ _____________ ___________ _________
2009 80,000 19,533 0 336,920 436,453 1,356,711 1,356,711 1,316,846
2010 96,000 7,871 0 135,767 239,638 482,944 1,839,656 425,656
2011 96,000 4,648 0 80,167 180,814 245,850 2,085,506 195,748
2012 96,000 3,318 0 57,233 156,551 148,056 2,233,563 106,629
2013 96,000 2,572 0 44,356 142,927 93,144 2,326,707 60,699
2014 96,000 2,104 0 36,296 134,400 58,774 2,385,481 34,677
2015 96,000 1,781 0 30,720 128,501 34,999 2,420,480 18,704
2016 96,000 1,548 0 26,701 124,249 17,858 2,438,338 8,658
2017 83,943 1,199 0 20,684 105,826 4,261 2,442,599 1,890
2018 0 0 4,000 0 4,000 -4,000 2,438,599 -1,521
Sub-Total 835,943 44,574 4,000 768,844 1,653,361 2,438,599 2,167,985
Remainder 0 0 0 0 0 0 2,438,599 0
Total Future 835,943 44,574 4,000 768,844 1,653,361 2,438,599 2,167,985
Life of evaluation is 8.71 years.
Final production rate: 10.418 MMcf/month
These data are part of a Ryder Scott report and are subject to the
conditions in the text of the report
