Attached files
file | filename |
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10-K - FORM 10-K - BELDEN & BLAKE CORP /OH/ | c14667e10vk.htm |
EX-23.1 - EXHIBIT 23.1 - BELDEN & BLAKE CORP /OH/ | c14667exv23w1.htm |
EX-31.1 - EXHIBIT 31.1 - BELDEN & BLAKE CORP /OH/ | c14667exv31w1.htm |
EX-32.1 - EXHIBIT 32.1 - BELDEN & BLAKE CORP /OH/ | c14667exv32w1.htm |
EX-31.2 - EXHIBIT 31.2 - BELDEN & BLAKE CORP /OH/ | c14667exv31w2.htm |
EX-32.2 - EXHIBIT 32.2 - BELDEN & BLAKE CORP /OH/ | c14667exv32w2.htm |
Exhibit 99.1
January 17, 2011
EnerVest Operating, L.L.C.
300 Capitol Street, Suite 200
Charleston, WV 25301
300 Capitol Street, Suite 200
Charleston, WV 25301
ATTENTION: Mr. Kenneth Mariani
SUBJECT:
|
Evaluation of Oil and Gas
Reserves To the Interests of Belden & Blake Corporation In Certain Properties Located in Various States Pursuant to the Requirements of the Securities and Exchange Commission Effective January 1, 2011 Job 10.1215 |
At the request of EnerVest Operating, L.L.C. (EnerVest), Wright & Company, Inc. (Wright) has
performed an evaluation to estimate proved and unproved reserves and associated cash flow and
economics from certain properties to the interests of Belden & Blake Corporation (Belden & Blake).
This evaluation was authorized by Mr. Kenneth Mariani of EnerVest, agent of Belden & Blake.
Projections of the reserves and cash flow to the evaluated interests were based on specified
economic parameters, operating conditions, and government regulations considered applicable at the
effective date and are pursuant to the financial reporting requirements of the Securities and
Exchange Commission (SEC). It is the understanding of Wright that the purpose of this evaluation is
for inclusion in relevant registration statements or other filings to the Securities and Exchange
Commission (SEC). The effective date of this report is January 1, 2011. The report was completed
January 17, 2011. The following is a summary of the results of the evaluation.
Total | Total | |||||||||||||||||||||||
Belden & Blake | Proved Developed | Proved | Proved | Proved | Unproved | |||||||||||||||||||
Corporation | Producing | Nonproducing | Developed | Undeveloped | (PDP, PDNP | Probable | ||||||||||||||||||
SEC Parameters | (PDP) | (PDNP) | (PDP & PDNP) | (PUD) | & PUD) | (PROB) | ||||||||||||||||||
Net Reserves to the Evaluated Interests |
||||||||||||||||||||||||
Oil, Mbbl: |
4,014.288 | 77.167 | 4,091.456 | 1,040.385 | 5,131.841 | 142.252 | ||||||||||||||||||
Gas, MMcf: |
151,065.875 | 6,083.730 | 157,149.609 | 14,436.200 | 171,585.797 | 1,100.679 | ||||||||||||||||||
Gas Equivalent, MMcfe (1 bbl = 6 Mcfe) |
175,151.603 | 6,546.732 | 181,698.345 | 20,678.510 | 202,376.843 | 1,954.191 | ||||||||||||||||||
Cash Flow (BTAX), M$ Undiscounted: |
644,978.375 | 22,262.486 | 667,240.688 | 61,392.445 | 728,633.000 | 6,346.762 | ||||||||||||||||||
Discounted at 10% Per Annum: |
284,408.750 | 11,153.930 | 295,562.625 | 16,015.453 | 311,578.031 | 2,229.943 |
It should be noted that some minor differences might exist between the total summaries and the
table totals due to rounding techniques in the ARIES petroleum software program.
Twelve
Cadillac Drive Suite 260
Brentwood, Tennessee 37027
(615) 370-0755 Fax (615) 370-0756
mail@wrightandcompany.com
Brentwood, Tennessee 37027
(615) 370-0755 Fax (615) 370-0756
mail@wrightandcompany.com
Mr. Kenneth Mariani
EnerVest Operating, L.L.C.
January 17, 2011
Page 2
EnerVest Operating, L.L.C.
January 17, 2011
Page 2
It is the understanding of Wright that EnerVest is the agent for EnerVest Energy
Institutional Fund X which acquired the stock of the previous owner of Belden & Blake in 2005. In
addition to acting as agent for Belden & Blake, EnerVest also acts as agent on behalf of the fund.
It is also the understanding of Wright that Belden & Blake remains a corporation under the laws of
the state of Ohio.
The properties evaluated in this report are located in the states of Michigan, New York, Ohio
and Pennsylvania. According to EnerVest, the total proved and unproved reserves included in this
evaluation represent 100 percent of the reported total proved and unproved reserves of Belden &
Blake.
Proved oil and gas reserves are those quantities of oil and gas which can be estimated with
reasonable certainty to be economically producible under existing economic conditions, operating
methods, and government regulations. As specified by SEC regulations, when calculating economic
producibilty, the base product price must be the 12-month average price, calculated as the
unweighted arithmetic average of the first-day-of-the-month price for each month within the prior
12-month period. The benchmark base prices used for this evaluation were $4.376 per million British
thermal unit (MMBtu) for natural gas at Henry Hub, LA, and $79.43 per barrel for West Texas
Intermediate oil at Cushing, OK. These benchmark prices were adjusted for energy content, quality
and basis differential, as appropriate. The average adjusted product prices used to estimate proved
reserves are $4.764 per Mcf of gas and $74.63 per bbl of oil. Prices for oil and gas were held
constant for the life of the properties.
Oil and other liquid hydrocarbons are expressed in thousands of United States (U.S.) barrels
(Mbbl), one barrel equaling 42 U.S. gallons. Gas volumes are expressed in millions of standard
cubic feet (MMcf) at 60 degrees Fahrenheit and at the legal pressure base that prevails in the
state in which the reserves are located. No adjustment of the individual gas volumes to a common
pressure base has been made.
Net income to the evaluated interests is the cash flow after consideration of royalty revenue
payable to others, standard state and county taxes, operating expenses, and investments as
applicable. The cash flow is before federal income tax (BTAX) and excludes consideration of any
encumbrances against the properties if such exist. The cash flow (BTAX) was discounted at an
annual rate of 10.00 percent (PCT) in accordance with the reporting requirements of the SEC.
The estimates of reserves contained in this report were determined by acceptable industry
methods, and the procedures used in this evaluation are appropriate for the purpose served by the
report. Where sufficient production history and other data were available, reserves for producing
properties were determined by extrapolation of historical production or sales trends. Analogy to
similar producing properties was used for development projects and for those properties that lacked
sufficient production history to yield a definitive estimate of reserves. When appropriate, Wright
may have also utilized volumetric calculations and log correlations in the determination of
estimated ultimate recovery (EUR). These calculations are often based upon limited log and/or core
analysis data and incomplete formation fluid and rock data. Since these limited data must
frequently be extrapolated over an assumed drainage area, subsequent production performance trends
or material balance calculations may cause the need for significant revisions to the estimates of
reserves. Wright used all methods and procedures as it considered necessary under the circumstances
to prepare this report.
Mr. Kenneth Mariani
EnerVest Operating, L.L.C.
January 17, 2011
Page 3
EnerVest Operating, L.L.C.
January 17, 2011
Page 3
Oil and gas
reserves were evaluated for the proved developed producing (PDP), proved
developed nonproducing (PDNP), proved undeveloped (PUD), and probable (PROB)
reserves categories. The summary classification of total proved
reserves combines the PDP, PDNP,
and PUD categories. In preparing this evaluation, no attempt has been made to quantify the element
of uncertainty associated with any category. Reserves were assigned to each category as warranted.
Wright is not aware of any local, state, or federal regulations that would preclude Belden & Blake
from continuing to produce from currently active wells or to fully develop those properties
included in this report.
There are significant uncertainties inherent in estimating reserves, future rates of
production, and the timing and amount of future costs. Oil and gas reserves estimates must be
recognized as a subjective process that cannot be measured in an exact way and estimates of others
might differ materially from those of Wright. The accuracy of any reserves estimate is a function
of the quantity and quality of available data and of subjective interpretations and judgments. It
should be emphasized that production data subsequent to the date of these estimates or changes in
the analogous properties may warrant revisions of such estimates. Accordingly, reserves estimates
are often different from the quantities of oil and gas that ultimately are recovered.
All data utilized in the preparation of this report were provided by EnerVest. No inspection
of the properties was made as this was not considered to be within the scope of this evaluation.
Wright has not independently verified the accuracy and completeness of information and data
furnished by EnerVest with respect to ownership interests, oil and gas production or sales,
historical costs of operation and development, product prices, or agreements relating to current
and future operations and sales of production. Wright requested and received detailed information
allowing Wright to check and confirm any calculations provided by EnerVest with regard to product
pricing, appropriate adjustments, lease operating expenses, and capital investments for drilling
the undeveloped locations. Furthermore, if in the course of Wrights examination something came to
our attention that brought into question the validity or sufficiency of any information or data,
we did not rely on such information or data until we had satisfactorily resolved our questions
relating thereto or independently verified such information or data. In accordance with the
requirements of the SEC, all operating costs were held constant for the life of the properties.
It should be noted that neither salvage values nor abandonment costs were included in the
economic parameters in accordance with the instructions of EnerVest. It was assumed that any
salvage value would be directly offset by the cost to abandon the property. Wright has not
performed a detailed study of the abandonment costs or the salvage values and offers no opinion as
to EnerVests assumptions.
No consideration was given in this report to potential environmental liabilities that may
exist concerning the properties evaluated. There are no costs included in this evaluation for
potential liability for restoration and to clean up damages, if any, caused by past or future
operating practices.
Wright is an independent petroleum consulting firm founded in 1988 and does not own any
interests in the oil and gas properties covered by this report. No employee, officer, or director
of Wright is an employee, officer, or director of Belden & Blake or EnerVest, nor does Wright or
any of its employees have direct financial interest in Belden & Blake or EnerVest. Neither the
employment of nor the compensation received by Wright is contingent upon the values assigned or the
opinions rendered regarding the properties covered by this report.
Mr. Kenneth Mariani
EnerVest Operating, L.L.C.
January 17, 2011
Page 4
EnerVest Operating, L.L.C.
January 17, 2011
Page 4
This report is prepared for the information of Belden & Blake, EnerVest, their shareholders,
and for the information and assistance of their independent public accountants in connection with
their
review of and report upon the financial statements of Belden & Blake and EnerVest, and for
reporting disclosures as required by the SEC. It is also intended for public disclosure as an
exhibit in filings made to the SEC by Belden & Blake and EnerVest, as appropriate.
Based on data and information provided by Belden & Blake and Enervest, and the specified
economic parameters, operating conditions, and government regulations considered applicable at the
effective date, it is Wrights conclusion that this report provides a fair and accurate
representation of the oil and gas reserves to the interests of Belden & Blake in those certain
properties included in this report.
The professional qualifications of the petroleum consultants responsible for the evaluation of
the reserves and economics information presented in this report meet the standards of Reserves
Estimator as defined in the Standards Pertaining to the Estimating and Auditing of Oil and Gas
Reserves Information as promulgated by the Society of Petroleum Engineers.
It has been a pleasure to serve you by preparing this evaluation. All related data will be
retained in our files and are available for your review.
Very truly yours, Wright & Company, Inc. |
||||
By: | /s/ D. Randall Wright | |||
D. Randall Wright | ||||
President | ||||
DRW/TWB/EKL/CF/TS
Professional Qualifications
D. Randall Wright
President
D. Randall Wright
President
I, D. Randall Wright, am the primary technical person in charge of the estimates of reserves and
associated cash flow and economics on behalf of Wright & Company, Inc. (Wright) for the results
presented in this report to Belden & Blake Corporation and EnerVest Operating, L.L.C. I have a
Master of Science degree in Mechanical Engineering from Tennessee Technological University.
I am a qualified Reserves Estimator as set forth in the Standards Pertaining to the Estimating and
Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers.
This qualification is based on more than 37 years of practical experience in the estimation and
evaluation of petroleum reserves with Texaco, Inc., First City National Bank of Houston, Sipes,
Williamson & Associates, Inc., Williamson Petroleum Consultants, Inc., and Wright which I founded
in 1988.
I am a registered Professional Engineer in the state of Texas (TBPE #43291), granted in 1978, a
member of the Society of Petroleum Engineers (SPE) and a member of the Order of the Engineer.
/s/ D. Randall Wright | ||||
D. Randall Wright, P.E. | ||||