Net Reserves Future Net Revenue ($)  Oil NGL Gas     Present WorthCategory (Barrels) (Barrels) (MCF) Total at 10%Proved Developed Producing  1,211,755   26,347   4,457,678   37,279,400   37,529,700 Proved Developed Non-Producing  150,351   0   4,578,226   25,571,300   23,712,300 Proved Undeveloped  1,973,070   4,923   80,063,968   85,655,100   13,079,600                                           Total Proved  3,335,175   31,271   89,099,888   148,505,800   74,321,600 *Totals may not add because of rounding.*The oil reserves shown include crude oil and condensate. Oil and natural gas liquids (NGL) volumesare expressed in barrels that are equivalent to 42 United States gallons. Gas volumes areexpressed in thousands of cubic feet (MCF) at standard temperature and pressure bases.When compared on a field-by-field basis, some of the estimates of Endeavour are greater and someare less than the estimates of Netherland, Sewell & Associates, Inc. However, in our opinion theestimates of Endeavour’s proved reserves and future revenue shown herein are, in the aggregate,reasonable and have been prepared in accordance with generally accepted petroleum engineering andevaluation principles. These principles are set forth in the Standards Pertaining to theEstimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of PetroleumEngineers. We are satisfied with the methods and procedures used by Endeavour in preparing theDecember 31, 2009, estimates of reserves and future revenue, and we saw nothing of an unusualnature that would cause us to take exception with the estimates, in the aggregate, as prepared byEndeavour.The estimates shown herein are for proved reserves. As requested, Endeavour’s estimates ofprobable and possible reserves that exist for these properties have not been included. Endeavour’sestimates do not include any value for undeveloped acreage beyond those tracts for whichundeveloped reserves have been estimated. Endeavour has included estimates of proved undevelopedreserves for certain locations that would generate positive future net revenue but would havenegative present worth discounted at 10 percent based on the constant prices and costs discussed insubsequent paragraphs of this letter. These locations have been included based on the operators’declared intent to drill these wells, as evidenced by Endeavour’s internal budget and reservesestimates. Reserves categorization conveys the relative degree of certainty; reservessubcategorization is based on development and production status. The estimates of reserves andfuture revenue included herein have not been adjusted for risk.
 

 
Oil and NGL prices used by Endeavour are based on the 12-month unweighted arithmetic average of thefirst-day-of-the-month price for the period January through December 2009. For United Kingdomproperties, the average Dated Brent price of $60.40 per barrel is adjusted by field for quality,transportation fees, and regional price differentials. For United States properties, the averageWest Texas Intermediate price of $61.08 per barrel is adjusted by field for quality, transportationfees, and regional price differentials. All oil and NGL prices are held constant throughout thelives of the properties.Gas prices used by Endeavour are based on the 12-month unweighted arithmetic average of thefirst-day-of-the-month price for the period January through December 2009. For United Kingdomproperties, the average National Balancing Point spot price of 31.81 pence per therm (equivalent to$4.96 per MMBTU) is adjusted by field for energy content, transportation fees, and regional pricedifferentials. For United States properties, the average Henry Hub spot price of $3.86 per MMBTUis adjusted by lease for energy content, transportation fees, and regional price differentials.All gas prices are held constant throughout the lives of the properties.Lease and well operating costs used by Endeavour are based on historical operating expense records.These costs include the overhead expenses allowed under joint operating agreements along withestimates of costs to be incurred at and below the district and field levels. Headquarters generaland administrative overhead expenses of Endeavour are included to the extent that they are coveredunder joint operating agreements for the operated properties. Lease and well operating costs areheld constant throughout the lives of the properties. Endeavour’s estimates of capital costs areincluded as required for workovers, new development wells, production equipment, and abandonment.The future capital costs are held constant to the date of expenditure.The reserves shown in this report are estimates only and should not be construed as exactquantities. Proved reserves are those quantities of oil and gas which, by analysis of engineeringand geoscience data, can be estimated with reasonable certainty to be economically producible. Ifthe reserves are recovered, the revenues therefrom and the costs related thereto could be more orless than the estimated amounts. Because of governmental policies and uncertainties of supply anddemand, the sales rates, prices received for the reserves, and costs incurred in recovering suchreserves may vary from assumptions made while preparing these estimates. Estimates of reserves mayincrease or decrease as a result of future operations, market conditions, or changes inregulations.It should be understood that our audit does not constitute a complete reserves study of the auditedoil and gas properties. Our audit consisted primarily of substantive testing, wherein we conducteda detailed review of all properties. In the conduct of our audit, we have not independentlyverified the accuracy and completeness of information and data furnished by Endeavour with respectto ownership interests, oil and gas production, well test data, historical costs of operation anddevelopment, product prices, or any agreements relating to current and future operations of theproperties and sales of production. However, if in the course of our examination something came toour attention that brought into question the validity or sufficiency of any such information ordata, we did not rely on such information or data until we had
 

 
satisfactorily resolved our questions relating thereto or had independently verified suchinformation or data. We used standard engineering and geoscience methods, or a combination ofmethods, such as performance analysis, volumetric analysis, analogy, and reservoir modeling, thatwe considered to be appropriate and necessary to establish the conclusions set forth herein. Ouraudit did not include a review of Endeavour’s overall reserves management processes and practices.In evaluating the information at our disposal concerning this audit, we have excluded from ourconsideration all matters as to which the controlling interpretation may be legal or accounting,rather than engineering and geoscience. As in all aspects of oil and gas evaluation, there areuncertainties inherent in the interpretation of engineering and geoscience data; therefore, ourconclusions necessarily represent only informed professional judgment.Supporting data documenting this audit, along with data provided by Endeavour, are on file in ouroffice. The technical persons responsible for conducting this audit meet the requirementsregarding qualifications, independence, objectivity, and confidentiality set forth in the StandardsPertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by theSociety of Petroleum Engineers. We are independent petroleum engineers, geologists, geophysicists,and petrophysicists; we do not own an interest in these properties and are not employed on acontingent basis.      Sincerely,