EX-10.4



 Exhibit 10.4 
 (1 of 2) 
  

			
	



	  	 PRESIDENT - ROBERT C. BARG

 
 VICE
PRESIDENTS
 ALLEN E. EVANS, JR.

RANDOLPH K. GREEN
 JOHN G. HATTNER
 C. H. (SCOTT)
REES III
 DANNY S. SIMMONS

DAN PAUL SMITH
 THOMAS M. SOUERS


 February 22, 2013 
 Ing. Carlos A. Morales Gil 
 Director General 

Pemex-Exploración y Producción 

Avenida Marina Nacional 329 
 Torre Ejecutiva,
Piso 41 
 Col. Petróleos Mexicanos, C.P. 11311 
 Del. Miguel Hidalgo, México, D.F. 
 México 

Dear Ing. Morales: 
 In
accordance with your request, we have audited the estimates prepared February 20, 2013, by Pemex-Exploración y Producción (PEP), as of January 1, 2013, of the gross (100 percent) proved reserves in 28 fields of the
Northeastern Marine Region located in the Bay of Campeche, offshore west of the Yucatan Peninsula of Mexico. It is our understanding that the proved reserves estimates shown herein constitute approximately 44.4 percent of all proved reserves owned
by the United Mexican States. Economic analysis was performed by PEP only to confirm economic producibility and determine economic limits for the properties, using the price and cost parameters discussed in subsequent paragraphs of this letter. We
have examined the estimates with respect to reserves quantities, reserves categorization, and future producing rates, using the definitions set forth in U.S. Securities and Exchange Commission (SEC) Regulation S-X Rule 4-10(a). The estimates of
reserves have been prepared in accordance with the definitions and regulations of the SEC and conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities—Oil and Gas. We completed our audit on or about the date of
this letter. This report has been prepared for Petroleos Mexicanos’ use in filing with the SEC; in our opinion the assumptions, data, methods, and procedures used in the preparation of this report are appropriate for such purpose. 

The following table sets forth PEP’s estimates of the gross (100 percent) reserves, as of January 1, 2013, for the audited
properties: 
  

																					
	 	  	Gross (100 Percent) Reserves	 
	 Category
	  	Crude Oil
(MMBBL)	 	  	Condensate
(MMBBL)	 	  	Plant Liquids
(MMBBL)	 	  	Dry Gas(1)
(MMBOE)	 	  	BOE
(MMBBL)	 
						
	 Proved Developed Producing
	  	 	3,209.7	  	  	 	58.4	  	  	 	109.7	  	  	 	217.0	  	  	 	3,594.9	  
	 Proved Developed Non-Producing
	  	 	1,277.9	  	  	 	15.6	  	  	 	47.8	  	  	 	94.5	  	  	 	1,435.7	  
	 Proved Undeveloped
	  	 	1,051.5	  	  	 	16.2	  	  	 	21.1	  	  	 	44.5	  	  	 	1,133.3	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
						
	 Total Proved
	  	 	5,539.2	  	  	 	90.2	  	  	 	178.6	  	  	 	355.9	  	  	 	6,163.9	  

 Totals may not add because of rounding. 

 

	(1) 	 Dry gas reserves are the dry, sweetened gas available for sale by Pemex-Gas y Petroquímica Básica at the tailgate of the processing
plants. 


 Crude oil, condensate, plant liquids, and barrels of oil equivalent (BOE) volumes are expressed in
millions of barrels (MMBBL); a barrel is equivalent to 42 United States gallons. Dry gas volumes are expressed in millions of barrels of oil equivalent (MMBOE), determined using dry gas conversion factors provided by PEP. 

  
 1601
ELM STREET, SUITE 4500 — DALLAS, TEXAS 75201-4754 — PH: 214-969-5401 — FAX: 214-969-5411 









 



 
  

 When compared on a field-by-field basis, some of the estimates of PEP are greater and
some are less than the estimates of Netherland, Sewell International, S. de R.L. de C.V. (NSI). However, in our opinion the estimates of gross (100 percent) proved reserves prepared by PEP shown herein are, in the aggregate, reasonable and have been
prepared in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers (SPE Standards). Additionally, these estimates are within the recommended 10
percent tolerance threshold set forth in the SPE Standards. We are satisfied with the methods and procedures used by PEP in preparing the January 1, 2013, estimates of reserves, and we saw nothing of an unusual nature that would cause us to
take exception with the estimates, in the aggregate, as prepared by PEP. 
 The estimates shown herein are for proved reserves.
PEP’s estimates do not include probable or possible reserves that may exist for these properties. Reserves categorization conveys the relative degree of certainty; reserves subcategorization is based on development and production status. The
estimates of reserves included herein have not been adjusted for risk. 
 Oil and gas prices were used only to confirm economic
producibility and determine economic limits for the properties. It is our understanding that prices used by PEP are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through
December 2012. All prices are held constant throughout the lives of the properties. 
 Costs were used only to confirm economic
producibility and determine economic limits for the properties. Operating costs used by PEP are based on historical operating expense records. These costs include district and regional overhead expenses along with costs incurred at the field level.
No headquarters general and administrative overhead expenses of PEP or Petróleos Mexicanos are included. Capital costs used by PEP are based on authorizations for expenditure and actual costs from recent activity. Capital costs are included
as required for workovers, new development wells, pipelines, platforms, and production equipment. Abandonment costs used are PEP’s estimates of the costs to abandon the wells, platforms, and production facilities; these estimates do not include
any salvage value for the lease and well equipment. Operating costs are held constant throughout the lives of the properties, and capital costs and abandonment costs are held constant to the date of expenditure. 

The reserves shown in this report are estimates only and should not be construed as exact quantities. Proved reserves are those
quantities of oil and gas which, by analysis of engineering and geoscience data, can be estimated with reasonable certainty to be economically producible; probable and possible reserves are those additional reserves which are sequentially less
certain to be recovered than proved reserves. Estimates of reserves may increase or decrease as a result of market conditions, future operations, changes in regulations, or actual reservoir performance. In addition to the primary economic
assumptions discussed herein, estimates of PEP and NSI are based on certain assumptions including, but not limited to, that the properties will be developed consistent with current development plans, that the properties will be operated in a prudent
manner, that no governmental regulations or controls will be put in place that would impact the ability of PEP to recover the reserves, and that projections of future production will prove consistent with actual performance. If the reserves are
recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts used to confirm economic producibility and determine economic limits for the properties. Because of governmental policies and
uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while preparing these estimates. 

It should be understood that our audit does not constitute a complete reserves study of the audited oil and gas properties. Our audit
consisted primarily of substantive testing, wherein we conducted a detailed review of all properties making up the total proved reserves in the Northeastern Marine Region. In the conduct of our audit, we have not independently verified the accuracy
and completeness of information and data furnished by PEP with respect to oil and gas production, well test data, historical costs of operation and development, product prices, or any agreements relating to current and future operations of the
properties and sales of production. However, if in the course of our examination something came to our attention that brought into question the validity or sufficiency of any such information or data, we did not rely on such information or data
until we had satisfactorily resolved our questions relating thereto or had independently verified such information or data. Our audit did not include a review of PEP’s overall reserves management processes and practices. 








 



 
  

 We used standard engineering and geoscience methods, or a combination of methods,
including performance analysis, volumetric analysis, analogy, and reservoir modeling, that we considered to be appropriate and necessary to establish the conclusions set forth herein. As in all aspects of oil and gas evaluation, there are
uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment. 
 Supporting data documenting this audit, along with data provided by PEP, are on file in our office. The technical persons responsible for conducting this audit meet the requirements regarding
qualifications, independence, objectivity, and confidentiality set forth in the SPE Standards. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties nor are we employed
on a contingent basis. 
  

											
		 		 		 		 	Sincerely,
					
		 		 		 		 	NETHERLAND, SEWELL INTERNATIONAL, S. DE R.L. DE C.V.
						
		 		 		 		 	By:	 	 





		 		 		 		 		 	Robert C. Barg, P.E.
		 		 		 		 		 	President
					
	By:	 	 




	 		 	By:	 	




		 	Randolph K. Green, P.E. 72951	 		 		 	John G. Hattner, P.G. 559
		 	Vice President	 		 		 	Vice President
			
	Date Signed: February 22, 2013	 		 	Date Signed: February 22, 2013
				
	RKG:VLG	 	 




	 		 	 





		 	 		 








 Exhibit 10.4 
 (2 of 2) 
  

			
	



	  	PRESIDENT - ROBERT C. BARG
	  	  
 VICE
PRESIDENTS

	  	ALLEN E. EVANS, JR.
	  	RANDOLPH K. GREEN
	  	JOHN G. HATTNER
	  	C. H. (SCOTT) REES III
	  	DANNY S. SIMMONS
	  	DAN PAUL SMITH
	  	THOMAS M. SOUERS

 February 22, 2013 
 Ing. Carlos A. Morales Gil 
 Director General 

Pemex-Exploración y Producción 

Avenida Marina Nacional 329 
 Torre Ejecutiva,
Piso 41 
 Col. Petróleos Mexicanos, C.P. 11311 
 Del. Miguel Hidalgo, México, D.F. 
 México 

Dear Ing. Morales: 
 In
accordance with your request, we have audited the estimates prepared February 20, 2013, by Pemex-Exploración y Producción (PEP), as of January 1, 2013, of the gross (100 percent) proved reserves in 108 fields of the Southern
Region located in the states of Chiapas, Tabasco, and Veracruz, Mexico. It is our understanding that the proved reserves estimates shown herein constitute approximately 28 percent of all proved reserves owned by the United Mexican States. Economic
analysis was performed by PEP only to confirm economic producibility and determine economic limits for the properties, using the price and cost parameters discussed in subsequent paragraphs of this letter. We have examined the estimates with respect
to reserves quantities, reserves categorization, and future producing rates, using the definitions set forth in U.S. Securities and Exchange Commission (SEC) Regulation S-X Rule 4-10(a). The estimates of reserves have been prepared in accordance
with the definitions and regulations of the SEC and conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities—Oil and Gas. We completed our audit on or about the date of this letter. This report has been prepared
for Petroleos Mexicanos’ use in filing with the SEC; in our opinion the assumptions, data, methods, and procedures used in the preparation of this report are appropriate for such purpose. 

The following table sets forth PEP’s estimates of the gross (100 percent) reserves, as of January 1, 2013, for the audited properties:

  

																					
	 	  	Gross (100 Percent) Reserves	 
	 Category
	  	Crude Oil
(MMBBL)	 	  	Condensate
(MMBBL)	 	  	Plant Liquids
(MMBBL)	 	  	Dry Gas(1)
(MMBOE)	 	  	BOE
(MMBBL)	 
						
	 Proved Developed Producing
	  	 	754.8	  	  	 	31.8	  	  	 	262.0	  	  	 	415.9	  	  	 	1,464.6	  
	 Proved Developed Non-Producing
	  	 	638.0	  	  	 	17.1	  	  	 	112.3	  	  	 	184.9	  	  	 	952.3	  
	 Proved Undeveloped
	  	 	897.1	  	  	 	43.4	  	  	 	191.0	  	  	 	302.1	  	  	 	1,433.7	  
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
						
	 Total Proved
	  	 	2,290.0	  	  	 	92.4	  	  	 	565.3	  	  	 	902.9	  	  	 	3,850.6	  

 Totals may not add because of rounding. 

 

	(1) 	 Dry gas reserves are the dry, sweetened gas available for sale by Pemex-Gas y Petroquímica Básica at the tailgate of the processing
plants. 


 Crude oil, condensate, plant liquids, and barrels of oil equivalent (BOE) volumes are expressed in
millions of barrels (MMBBL); a barrel is equivalent to 42 United States gallons. Dry gas volumes are expressed in millions of barrels of oil equivalent (MMBOE), determined using dry gas conversion factors provided by PEP. 

  
 1601
ELM STREET, SUITE 4500 — DALLAS, TEXAS 75201-4754 — PH: 214-969-5401 — FAX: 214-969-5411 









 



 
  

 When compared on a field-by-field basis, some of the estimates of PEP are greater and
some are less than the estimates of Netherland, Sewell International, S. de R.L. de C.V. (NSI). However, in our opinion the estimates of gross (100 percent) proved reserves prepared by PEP shown herein are, in the aggregate, reasonable and have been
prepared in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers (SPE Standards). Additionally, these estimates are within the recommended 10
percent tolerance threshold set forth in the SPE Standards. We are satisfied with the methods and procedures used by PEP in preparing the January 1, 2013, estimates of reserves, and we saw nothing of an unusual nature that would cause us to
take exception with the estimates, in the aggregate, as prepared by PEP. 
 The estimates shown herein are for proved reserves.
PEP’s estimates do not include probable or possible reserves that may exist for these properties. Reserves categorization conveys the relative degree of certainty; reserves subcategorization is based on development and production status. The
estimates of reserves included herein have not been adjusted for risk. 
 Oil and gas prices were used only to confirm economic
producibility and determine economic limits for the properties. It is our understanding that prices used by PEP are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through
December 2012. All prices are held constant throughout the lives of the properties. 
 Costs were used only to confirm economic
producibility and determine economic limits for the properties. Operating costs used by PEP are based on historical operating expense records. These costs include district and regional overhead expenses along with costs incurred at the field level.
No headquarters general and administrative overhead expenses of PEP or Petróleos Mexicanos are included. Capital costs used by PEP are based on authorizations for expenditure and actual costs from recent activity. Capital costs are included
as required for workovers, new development wells, and production equipment. Operating costs are held constant throughout the lives of the properties, and capital costs are held constant to the date of expenditure. Estimates do not include any
salvage value for the lease and well equipment or the cost of abandoning the properties. 
 The reserves shown in this report
are estimates only and should not be construed as exact quantities. Proved reserves are those quantities of oil and gas which, by analysis of engineering and geoscience data, can be estimated with reasonable certainty to be economically producible;
probable and possible reserves are those additional reserves which are sequentially less certain to be recovered than proved reserves. Estimates of reserves may increase or decrease as a result of market conditions, future operations, changes in
regulations, or actual reservoir performance. In addition to the primary economic assumptions discussed herein, estimates of PEP and NSI are based on certain assumptions including, but not limited to, that the properties will be developed consistent
with current development plans, that the properties will be operated in a prudent manner, that no governmental regulations or controls will be put in place that would impact the ability of PEP to recover the reserves, and that projections of future
production will prove consistent with actual performance. If the reserves are recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts used to confirm economic producibility and determine
economic limits for the properties. Because of governmental policies and uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while
preparing these estimates. 
 It should be understood that our audit does not constitute a complete reserves study of the
audited oil and gas properties. Our audit consisted primarily of substantive testing, wherein we conducted a detailed review of major properties making up approximately 88 percent of the company’s total proved reserves in the Southern Region.
In the conduct of our audit, we have not independently verified the accuracy and completeness of information and data furnished by PEP with respect to oil and gas production, well test data, historical costs of operation and development, product
prices, or any agreements relating to current and future operations of the properties and sales of production. However, if in the course of our examination something came to our attention that brought into question the validity or sufficiency of any
such information or data, we did not rely on such information or data until we had satisfactorily resolved our questions relating thereto or had independently verified such Information or data. Our audit did not include a review of PEP’s
overall reserves management processes and practices. 








 



 
  

 We used standard engineering and geoscience methods, or a combination of methods,
including performance analysis, volumetric analysis, analogy, and reservoir modeling, that we considered to be appropriate and necessary to establish the conclusions set forth herein. As in all aspects of oil and gas evaluation, there are
uncertainties inherent in the interpretation of engineering and geoscience data; therefore, our conclusions necessarily represent only informed professional judgment. 
 Supporting data documenting this audit, along with data provided by PEP, are on file in our office. The technical persons responsible for conducting this audit meet the requirements regarding
qualifications, independence, objectivity, and confidentiality set forth in the SPE Standards. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties nor are we employed
on a contingent basis. 
  

											
		 		 		 		 	Sincerely,
					
		 		 		 		 	NETHERLAND, SEWELL INTERNATIONAL, S. DE R.L. DE C.V.
						
		 		 		 		 	By:	 	




		 		 		 		 		 	Robert C. Barg, P.E.
		 		 		 		 		 	President
					
	By:	 	



	 		 	By:	 	




		 	Dan Paul Smith, P.E. 49093	 		 		 	Allen E. Evans, Jr., P.G. 1286
		 	Vice President	 		 		 	Vice President
			
	Date Signed: February 22, 2013	 		 	Date Signed: February 22, 2013
					
	DPS:ART