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(RYDER SCOTT COMPANY LOGO)
    
    
    
    FAX (713) 651-08491100 LOUSIANA     SUITE 3800
    
    HOUSTON, TEXAS 77002-5218
    
    TELEPHONE (713) 651-9191
  
     
 ProvedDeveloped
    
    
    
    
    
    TotalProducing
    
    Non-Producing
    
    Undeveloped
    
    ProvedNet Reserves of PropertiesAudited by Ryder ScottOil/Condensate  Barrels
    
    
    17,799,977
    
    
    
    6,555,134
    
    
    
    39,473,411
    
    
    
    63,828,522Plant Products  Barrels
    
    
    6,093,833
    
    
    
    894,881
    
    
    
    1,560,132
    
    
    
    8,548,846Gas  MMCF
    
    
    1,270,718
    
    
    
    229,839
    
    
    
    475,149
    
    
    
    1,975,706Total Gas Equivalents  MMCFE*
    
    
    1,414,081
    
    
    
    274,539
    
    
    
    721,350
    
    
    
    2,409,970




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ProvedDeveloped
    
    
    
    
    
    TotalProducing
    
    Non-Producing
    
    Undeveloped
    
    ProvedNet Reserves of PropertiesNot Audited by Ryder ScottOil/Condensate  Barrels
    
    
    9,119,632
    
    
    
    2,275,468
    
    
    
    7,160,589
    
    
    
    18,555,689Plant Products  Barrels
    
    
    584,911
    
    
    
    558,258
    
    
    
    421,833
    
    
    
    1,565,002Gas  MMCF
    
    
    164,132
    
    
    
    92,050
    
    
    
    65,978
    
    
    
    322,160Total Gas Equivalents  MMCFE*
    
    
    222,359
    
    
    
    109,052
    
    
    
    111,473
    
    
    
    442,884Total Net ReservesOil/Condensate  Barrels
    
    
    26,919,609
    
    
    
    8,830,602
    
    
    
    46,634,000
    
    
    
    82,384,211Plant Products  Barrels
    
    
    6,678,744
    
    
    
    1,453,139
    
    
    
    1,981,965
    
    
    
    10,113,848Gas  MMCF
    
    
    1,434,850
    
    
    
    321,889
    
    
    
    541,127
    
    
    
    2,297,866Total Gas Equivalents  MMCFE*
    
    
    1,636,440
    
    
    
    383,591
    
    
    
    832,823
    
    
    
    2,852,854
 
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    1 bbl liquid  6 MCF gas equivalents  Reserves Included in This Report
  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:




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(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.
  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




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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)
   Audit Procedure and Opinion




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Other Properties
  Reserves Estimates
   General
    Very truly yours,RYDER SCOTT COMPANY, L.P./s/ Jeffrey D. Wilson, P.E.Jeffrey D. Wilson, P.E.Senior Vice President