DeGolyer and MacNaughton5001 Spring Valley Road
Suite 800 East
Dallas, Texas 75244




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2   Methodology and Procedures




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3  Definition of Reserves
 Regulation SX
 Proved oil and gas reserves Proved oil and gas reserves are those quantities of
oil and gas, which, by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be economically produciblefrom a given
date forward, from known reservoirs, and under existing economic conditions,
operating methods, and government regulationsprior to the time at which
contracts providing the right to operate expire, unless evidence indicates that
renewal is reasonably certain, regardless of whether deterministic or
probabilistic methods are used for the estimation. The project to extract the
hydrocarbons must have commenced or the operator must be reasonably certain that
it will commence the project within a reasonable time.
 (i) The area of the reservoir considered as proved includes:
(A) The area identified by drilling and limited by fluid contacts, if any,
and (B) Adjacent undrilled portions of the reservoir that can, with
reasonable certainty, be judged to be continuous with it and to contain
economically producible oil or gas on the basis of available geoscience
and engineering data.(ii) In the absence of data on fluid contacts, proved quantities in a
reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a
well penetration unless geoscience,




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4  engineering, or performance data and reliable technology establishes a
lower contact with reasonable certainty.(iii) Where direct observation from well penetrations has defined a
highest known oil (HKO) elevation and the potential exists for an
associated gas cap, proved oil reserves may be assigned in the
structurally higher portions of the reservoir only if geoscience,
engineering, or performance data and reliable technology establish the
higher contact with reasonable certainty.(iv) Reserves which can be produced economically through application of
improved recovery techniques (including, but not limited to, fluid
injection) are included in the proved classification when:
(A) Successful testing by a pilot project in an area of the reservoir with
properties no more favorable than in the reservoir as a whole, the
operation of an installed program in the reservoir or an analogous
reservoir, or other evidence using reliable technology establishes the
reasonable certainty of the engineering analysis on which the project or
program was based; and (B) The project has been approved for development
by all necessary parties and entities, including governmental entities.(v) Existing economic conditions include prices and costs at which
economic producibility from a reservoir is to be determined. The price
shall be the average price during the 12-month period prior to the ending
date of the period covered by the report, determined as an unweighted
arithmetic average of the first-day-of-the-month price for each month
within such period, unless prices are defined by contractual arrangements,
excluding escalations based upon future conditions.
 Developed oil and gas reserves Developed oil and gas reserves are reserves of
any category that can be expected to be recovered:
 (i) Through existing wells with existing equipment and operating methods
or in which the cost of the required




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5 
  equipment is relatively minor compared to the cost of a new well; and(ii) Through installed extraction equipment and infrastructure operational
at the time of the reserves estimate if the extraction is by means not
involving a well.
 Undeveloped reserves Undeveloped oil and gas reserves are reserves of any
category 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.
 (i) Reserves on undrilled acreage shall be limited to those directly
offsetting development spacing areas that are reasonably certain of
production when drilled, unless evidence using reliable technology exists
that establishes reasonable certainty of economic producibility at greater
distances.(ii) Undrilled locations can be classified as having undeveloped reserves
only if a development plan has been adopted indicating that they are
scheduled to be drilled within five years, unless the specific
circumstances, justify a longer time.(iii) Under no circumstances shall estimates for 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 projects in the same reservoir or an
analogous reservoir, as defined in [section 210.410 (a) Definitions], or
by other evidence using reliable technology establishing reasonable
certainty.
 Primary Economic Assumptions




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6  Oil and NGL Prices
 Nippon Oil has represented that the oil and NGL prices were based on a
12-month average price (reference price), calculated as the unweighted
arithmetic average of the first-day-of-the-month price for each month
within the 12-month period prior to the end of the reporting period,
unless prices are defined by contractual arrangements. Nippon Oil supplied
differentials by field to the relevant reference prices and the prices
were held constant thereafter.
 Natural Gas Prices
 Nippon Oil has represented that the natural gas prices were based on a
reference price, calculated as the unweighted arithmetic average of the
first-day-of-the-month price for each month within the 12-month period
prior to the end of the reporting period, unless prices are defined by
contractual arrangements. The gas prices were calculated for each property
using differentials to the reference prices furnished by Nippon Oil and
held constant thereafter.
 Operating Expenses and Capital Costs
 Operating expenses and capital costs, based on information provided by
Nippon Oil, were used in estimating future costs required to operate the
properties. In certain cases, future costs, either higher or lower than
existing costs, may have been used because of anticipated changes in
operating conditions. These costs were not escalated for inflation.




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7




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8   Net Proved Reservesas of March 31, 2010Oil and
    
    
    Natural
    
    
    OilNGL
    
    
    Gas
    
    
    Equivalent(MMbbl)
    
    
    (MMcf)
    
    
    (MMboe)Geographic Location 1  OceaniaProved Developed
    
    
    5.4
    
    
    
    0
    
    
    
    5.4Proved Undeveloped
    
    
    9.1
    
    
    
    375,207
    
    
    
    71.6Total Proved
    
    
    14.5
    
    
    
    375,207
    
    
    
    77.0Geographic Location 2  Southeast AsiaProved Developed
    
    
    17.4
    
    
    
    965,810
    
    
    
    178.4Proved Undeveloped
    
    
    3.9
    
    
    
    399,741
    
    
    
    70.6Total Proved
    
    
    21.3
    
    
    
    1,365,551
    
    
    
    249.0Geographic Location 3  United KingdomProved Developed
    
    
    9.9
    
    
    
    45,285
    
    
    
    17.4Proved Undeveloped
    
    
    0.2
    
    
    
    26
    
    
    
    0.2Total Proved
    
    
    10.1
    
    
    
    45,311
    
    
    
    17.6Geographic Location 4  United StatesProved Developed
    
    
    6.3
    
    
    
    70,891
    
    
    
    18.1Proved Undeveloped
    
    
    5.7
    
    
    
    10,910
    
    
    
    7.5Total Proved
    
    
    12.0
    
    
    
    81,801
    
    
    
    25.6Geographic Location 5  CanadaProved Developed
    
    
    144.0
    
    
    
    0
    
    
    
    144.0Proved Undeveloped
    
    
    0.0
    
    
    
    0
    
    
    
    0.0Total Proved
    
    
    144.0
    
    
    
    0
    
    
    
    144.0Grand Total
    
    
    201.9
    
    
    
    1,867,870
    
    
    
    513.2
 
 Note:
    
    Gas is converted to oil equivalent using a factor of 6,000 cubic feet of gas per 1
barrel of oil equivalent.




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9  Extractive Industries  Oil and Gas (Topic 932): Oil and Gas Reserve Estimation
and Disclosures
   Submitted,/s/ DeGOLYER and MacNAUGHTONDeGOLYER and MacNAUGHTON
Texas Registered Engineering Firm F-716/s/ R. M. Shuck, P.E.R. M. Shuck, P.E.
Senior Vice President
DeGolyer and MacNaughton




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CERTIFICATE of QUALIFICATION
  1.
    
    That I am a Senior Vice President with DeGolyer and MacNaughton, which company did
prepare the letter report addressed to Nippon Oil dated June 16, 2010, and that I, as
Senior Vice President, was responsible for the preparation of this report.
 2.
    
    That I attended University of Houston, and that I graduated with a Bachelor of
Science degree in Chemical Engineering in the year 1977; that I am a Registered
Professional Engineer in the State of Texas; that I am a member of the International
Society of Petroleum Engineers; and that I have in excess of 32 years of experience in the
oil and gas reservoir studies and reserves evaluations.
 /s/ R. M. Shuck, P.E.R. M. Shuck, P.E.
Senior Vice President
DeGolyer and MacNaughton