Exhibit
15.1

















CNOOC
LIMITED








Estimated




Future
Reserves and Income




Attributable
to Certain




Interests






SEC
Parameters






As
of




December
31, 2009
















RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS















FAX (713)
      651-08491100
      LOUISIANA
            SUITE
      3800
            HOUSTON,
      TEXAS 77002-5218
            TELEPHONE (713)
    651-9191





March 8,
2010





CNOOC
Limited


No. 25
Chaoyangmenbei Dajie


Dongcheng
District


Beijing
100010


China





Gentlemen:





At your request,
Ryder Scott Company (Ryder Scott) has prepared an independent estimate of the
proved reserves, future production and income attributable to certain interests
of CNOOC Limited as of December 31, 2009. The subject properties are located in
the countries of Australia, China, Indonesia and Nigeria. The reserves and
income data were estimated based on the definitions and disclosure guidelines of
the United States Securities and Exchange Commission (SEC) contained in Title
17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final
Rule released on January 14, 2009 in the Federal Register (SEC regulations). The
results of our third party study, completed on February 28, 2010 are presented
herein. The properties reviewed by Ryder Scott represent over 99 percent of the
total net proved liquid hydrocarbon reserves and over 99 percent of the total
net proved gas reserves of CNOOC Limited.





The estimated
reserves and future net income amounts presented in this report, as of December
31, 2009 are related to hydrocarbon prices. The hydrocarbon prices used in the
preparation of this report are based on the average prices during the 12-month
period prior to the ending date of the period covered in this report, determined
as unweighted arithmetic averages of the prices in effect on the first-day-of
-the-month for each month within such period, unless prices were defined by
contractual arrangements as required by the SEC regulations. Actual future
prices may vary significantly from the prices required by the SEC regulations;
therefore, the volumes of reserves actually recovered and the amounts of income
actually received may differ significantly from the estimated quantities
presented in this report. The results of this study are summarized
below.




SEC
      PARAMETERS
              Estimated Net
      Reserves and Income Data
              Attributable
      to Certain Interests of
              CNOOC
      Limited
              As of
      December 31, 2009




ProvedDevelopedProducing
            
            
            Non-Producing
            
            
            Undeveloped
            
            
            Total
                ProvedNet Remaining
      ReservesOil/Condensate
      – Barrels
            
            
            795,164,736
            
            
            
            94,753,842
            
            
            
            762,225,376
            
            
            
            1,652,143,954Plant
      Products – Barrels
            
            
            8,710,153
            
            
            
            1,005,315
            
            
            
            3,904,181
            
            
            
            13,619,649Gas –
      MMCF
            
            
            1,965,442
            
            
            
            280,339
            
            
            
            3,652,222
            
            
            
            5,898,003Income Data
      (M$)Future Gross
      Revenue
            
            
            $50,840,156
            
            
            
            $6,314,581
            
            
            
            $55,879,553
            
            
            
            $113,034,290Deductions
            
            
            18,816,739
            
            
            
            2,625,224
            
            
            
            28,740,333
            
            
            
            50,182,296Future Net
      Income (FNI)
            
            
            $32,023,417
            
            
            
            $3,689,357
            
            
            
            $27,139,220
            
            
            
            $62,851,994Discounted
      FNI @ 10%
            
            
            $24,855,573
            
            
            
            $2,355,074
            
            
            
            $12,904,924
            
            
            
            $40,115,571




1200,
      530  8TH AVENUE, S.W.
            CALGARY,
      ALBERTA T2P 3S8
            TEL
      (403) 262-2799
            FAX
      (403) 262-2790621
      17TH STREET, SUITE 1550
            DENVER,
      COLORADO 80293-1501
            TEL
      (303) 623-9147
            FAX
      (303) 623-4258










CNOOC Limited


March 8,
2010


Page 2








Liquid hydrocarbons
are expressed in standard 42 gallon barrels. All gas volumes are reported on an
as “sold basis” expressed in millions of cubic feet (MMCF) at the official
temperature and pressure bases of the areas in which the gas reserves are
located. All income data are expressed in thousands of U.S. Dollars
(M$).





The future gross
revenue is after royalty and government profit share of in-kind hydrocarbons and
deduction of value added (VAT) taxes. The deductions incorporate the normal
direct costs of operating the wells, windfall profit taxes, recompletion costs,
development costs, and certain abandonment costs net of salvage. The future net
income is before the deduction of state and federal or foreign government income
taxes and general administrative overhead, and has not been adjusted for
outstanding loans that may exist nor does it include any adjustment for cash on
hand or undistributed income. Liquid hydrocarbon reserves account for
approximately 78 percent and gas reserves account for the remaining 22 percent
of total future gross revenue from proved reserves.





The discounted
future net income shown above was calculated using a discount rate of 10 percent
per annum compounded monthly. Future net income was discounted at four other
discount rates which were also compounded monthly. These results are shown in
summary form as follows.








Discounted
      Future Net IncomeDiscount
      Rate
            
            As of
      December 31, 2009TotalPercent
            
            Proved
      (M$)7
            
            
            $45,357,3178
            
            
            $43,493,5899
            
            
            $41,749,64211
            
            
            $38,582,435




The results shown
above are presented for your information and should not be construed as our
estimate of fair market value.





Reserves
Included in This Report





The proved reserves
included herein conform to the definition as set forth in the Securities and
Exchange Commission’s Regulations Part 210.4-10(a). An abridged version of the
SEC reserves definitions from 210.4-10(a) entitled “Petroleum Reserves
Definitions” is included as an attachment to this report.





The various reserve
status categories are defined under the attachment entitled “Petroleum Reserves
Definitions” in this report. The developed non-producing reserves included
herein consist of the shut-in and behind pipe categories.





No attempt was made
to quantify or otherwise account for any accumulated gas production imbalances
that may exist. The gas volumes included herein do not attribute gas consumed or
flared in operations as reserves. Non-hydrocarbon or inert gas volumes have been
excluded from the reserves reported herein.





Reserves are those
estimated remaining quantities of petroleum which are anticipated to be
economically producible, as of a given date, from known accumulations under
defined conditions. All reserve estimates involve some degree of uncertainty.
The uncertainty depends chiefly on the amount





RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS









CNOOC Limited


March 8,
2010


Page
3





of
reliable geologic and engineering data available at the time of the estimate and
the interpretation of these data.





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. The reserves included herein
were estimated using deterministic methods.





Reserves estimates
will generally be revised as additional geologic or engineering data become
available or as economic conditions change. Moreover, estimates of reserves may
increase or decrease as a result of future operations, effects of regulation by
governmental agencies or geopolitical or economic risks. As a result, the
estimates of oil and gas reserves have an intrinsic uncertainty. The reserves
included in this report are therefore estimates only and should not be construed
as being exact quantities. They may or may not be actually recovered, and if
recovered, the revenues therefrom, and the actual costs related thereto, could
be more or less than the estimated amounts.





The reserves
reported herein are limited to the period prior to expiration of current
contracts providing the legal rights to produce or a revenue interest in such
production unless evidence indicates that contract renewal is reasonably
certain. Furthermore, properties in the different countries may be subjected to
significantly varying contractual fiscal terms that affect the net revenue to
CNOOC Limited for the production of these volumes. The prices and economic
return received for these net volumes can vary significantly based on the terms
of these contracts. Therefore, when applicable, Ryder Scott reviewed the fiscal
terms of such contracts and discussed with CNOOC Limited the net economic
benefit attributed to such operations for the determination of the net
hydrocarbon volumes and income thereof. Ryder Scott has not conducted an
exhaustive audit or verification of such contractual information. Neither our
review of such contractual information nor our acceptance of CNOOC Limited’s
representations regarding such contractual information should be construed as a
legal opinion on this matter.





Ryder Scott did not
evaluate the country and geopolitical risks in the countries where CNOOC Limited
operates or has interests. CNOOC Limited’s operations may be subject to various
levels of governmental controls and regulations. These controls and regulations
may include matters relating to land tenure, drilling, production practices,
environmental protection, marketing and pricing policies, royalties, various
taxes and levies including income tax, and foreign trade and investment and are
subject to change from time to time. Such changes in governmental regulations
and policies may cause volumes of reserves actually recovered and amounts of
income actually received to differ significantly from the estimated
quantities.





The estimates of
reserves presented herein were based upon a detailed study of the properties in
which CNOOC Limited owns an interest; however, we have not made any field
examination of the properties. No consideration was given in this report to
potential environmental liabilities that may exist nor were any costs included
for potential liabilities to restore and clean up damages, if any, caused by
past operating practices.





Estimates
of Reserves





The reserves for
the properties included herein were estimated by performance methods, the
volumetric method or analogy. In general, reserves attributable to producing
wells and/or reservoirs were estimated by performance methods such as decline
curve analysis and/or material balance, which utilized extrapolations of
historical production and pressure data available through October 31, 2009, in those cases where such data
were considered to be definitive. In certain cases, producing reserves were
estimated by the volumetric method or analogy where there were inadequate
historical




RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS









CNOOC Limited


March 8,
2010


Page
4





performance data to
establish a definitive trend and where the use of production performance data as
a basis for the reserve estimates was considered to be inappropriate. Reserves
attributable to non-producing and undeveloped reserves included herein were
estimated by the volumetric method or analogy which utilized all pertinent well
and seismic data available through November 30, 2009.





To estimate
economically recoverable oil and gas reserves and related future net cash flows,
we consider many factors and assumptions including, but not limited to, the use
of reservoir parameters derived from geological, geophysical and engineering
data which cannot be measured directly, economic criteria based on current costs
and SEC pricing requirements, and forecasts of future production rates. Under
the SEC regulations 210.4-10(a)(22)(v) and (26), proved reserves must be
anticipated to be economically producible based on existing economic conditions
including the prices and costs at which economic producibility from a reservoir
is to be determined. While it may reasonably be anticipated that the future
prices received for the sale of production and the operating costs and other
costs relating to such production may increase or decrease from those under
existing economic conditions, such changes were, in accordance with rules
adopted by the SEC, omitted from consideration in making this
evaluation.





CNOOC Limited has
informed us that they have furnished us all of the accounts, records, geological
and engineering data, and reports and other data required for this
investigation. In preparing our forecast of future production and income, we
have relied upon data furnished by CNOOC Limited with respect to property
interests owned, production and well tests from examined wells, normal direct
costs of operating the wells or leases, other costs such as transportation
and/or processing fees, ad valorem and production taxes, recompletion and
development costs, abandonment costs after salvage, product prices based on the
SEC regulations, geological structural and isochore maps, well logs, core
analyses, and pressure measurements. Ryder Scott reviewed such factual data for
its reasonableness; however, we have not conducted an independent verification
of the data supplied by CNOOC Limited. We consider the assumptions, data,
methods and procedures used in this report appropriate for the purpose hereof,
and we have used all such methods and procedures that we consider necessary and
appropriate to prepare the estimates of reserves and future net revenues
herein.





Future
Production Rates





Our forecasts of
future production rates are based on historical performance from wells currently
on production. Test data and other related information were used to estimate the
anticipated initial production rates for those wells or locations that are not
currently producing. If no production decline trend has been established, future
production rates were held constant, or adjusted for the effects of curtailment
where appropriate, until a decline in ability to produce was anticipated. An
estimated rate of decline was then applied to depletion of the reserves. If a
decline trend has been established, this trend was used as the basis for
estimating future production rates. For reserves not yet on production, sales
were estimated to commence at the anticipated date furnished by CNOOC
Limited.





The future
production rates from wells currently on production may be more or less than
estimated because of changes in market demand or allowables set by regulatory
bodies. Wells or locations that are not currently producing may start producing
earlier or later than anticipated in our estimates.





Hydrocarbon
Prices





As previously
stated, the hydrocarbon prices used herein are based SEC price parameters using
the average prices during the 12-month period prior to the ending date of the
period covered in this report, determined as the unweighted arithmetic averages
of the prices in effect on the first-day-of-the-month for each month within such
period, unless prices were defined by contractual arrangements.




RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS









CNOOC Limited


March 8,
2010


Page
5





For hydrocarbon
products sold under contract, the contract prices, including fixed and
determinable escalations, exclusive of inflation adjustments, were used until
expiration of the contract. Upon contract expiration, the prices were adjusted
to the 12-month unweighted arithmetic average as previously described. Product
prices which were actually used for each property reflect adjustment for
gravity, quality, local conditions, and/or distance from market.





The effects of
derivative instruments designated as price hedges of oil and gas quantities are
not reflected in our individual property evaluations.





Costs





Operating costs for
the leases and wells in this report are based on the operating expense reports
of CNOOC Limited and include only those costs directly applicable to the leases
or wells. The operating costs include a portion of general and administrative
costs allocated directly to the leases and wells. No deduction was made for loan
repayments, interest expenses, or exploration and development prepayments that
were not charged directly to the leases or wells.





Development costs
were furnished to us by CNOOC Limited and are based on authorizations for
expenditure for the proposed work or actual costs for similar projects. The
estimated net cost of abandonment after salvage was included for properties
where abandonment costs net of salvage were significant. The estimates of the
net abandonment costs furnished by CNOOC Limited were accepted without
independent verification.





Because of the
direct relationship between volumes of proved undeveloped reserves and
development plans, we include in the proved undeveloped category only reserves
assigned to undeveloped locations that we have been assured will definitely be
drilled. CNOOC Limited has assured us of their intent and ability to proceed
with the development activities included in this report, and that they are not
aware of any legal, regulatory, political or economic obstacles that would
significantly alter their plans.





Current costs used
by CNOOC Limited were held constant throughout the life of the
properties.





Standards
of Independence and Professional Qualification





Ryder Scott is an
independent petroleum engineering consulting firm that has been providing
petroleum consulting services throughout the world for over seventy years. Ryder
Scott is employee-owned and maintains offices in Houston, Texas; Denver,
Colorado; and Calgary, Alberta, Canada. We have over eighty engineers and
geoscientists on our permanent staff. By virtue of the size of our firm and the
large number of clients for which we provide services, no single client or job
represents a material portion of our annual revenue. We do not serve as officers
or directors of any publicly-traded oil and gas company and are separate and
independent from the operating and investment decision-making process of our
clients. This allows us to bring the highest level of independence and
objectivity to each engagement for our services.





Ryder Scott
actively participates in industry related professional societies and organizes
an annual public forum focused on the subject of reserves evaluations and SEC
regulations. Many of our staff have authored or co-authored technical papers on
the subject of reserves related topics. We encourage our staff to maintain and
enhance their professional skills by actively participating in ongoing
continuing education.





Prior to becoming
an officer of the Company, Ryder Scott requires that staff engineers and
geoscientists have received professional accreditation in the form of a
registered or certified








RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS









CNOOC Limited


March 8,
2010


Page
6





professional
engineer’s license or a registered or certified professional geoscientist’s
license, or the equivalent thereof, from an appropriate governmental authority
or a recognized self-regulating professional organization.





We are independent
petroleum engineers with respect to CNOOC Limited. Neither we nor any of our
employees have any interest in the subject properties and neither the engagement
to do this work nor the compensation is contingent on our estimates of reserves
for the properties which were reviewed.





The results of this
study, presented herein, are based on technical analysis conducted by teams of
geoscientists and engineers from Ryder Scott. The professional qualifications of
the undersigned, the technical person primarily responsible for overseeing the
evaluation of the reserves information discussed in this report, are included as
an attachment to this letter.





Terms
of Usage





This report was
prepared for the exclusive use and sole benefit of CNOOC Limited and may not be
put to other use without our prior written consent for such use. The data and
work papers used in the preparation of this report are available for examination
by authorized parties in our offices. Please contact us if we can be of further
service.











HG/sm





RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS











Professional Qualifications of Primary
Technical Engineer





The conclusions presented
in this third party report for CNOOC Limited dated March 8, 2010 are the result
of technical analysis conducted by teams of geoscientists and engineers from
Ryder Scott Company, L.P. Harris Ghozali was the primary technical
person responsible for the estimate of the reserves, future production and
income presented herein.




Mr. Ghozali, an employee
of Ryder Scott Company L.P. (Ryder Scott) since 1997, is a Senior Vice President
and an Engineering Group Coordinator responsible for coordinating and
supervising staff and consulting engineers of the company in ongoing reservoir
evaluation studies worldwide. Before joining Ryder Scott, Mr. Ghozali served in
a number of engineering positions with ExxonMobil. For more information
regarding Mr. Ghozali’s geographic and job specific experience, please refer to
the Ryder Scott Company website at
www.ryderscott.com/Experience/Employees.




Mr. Ghozali earned a
Bachelor of Science degree in Petroleum Engineering from the Colorado School of
Mines in 1991 and a Master of Science degree in Petroleum Engineering from the
University of Houston in 1997. He is a registered Professional Engineer in
the State of Texas and also a member of the Society of Petroleum
Engineers.




As part of his 2009
continuing education hours, Mr. Ghozali attended an internally presented 13
hours of formalized SEC-related training as well as a day long public forum,
and/or various professional society presentations specifically on the new SEC
regulations relating to the definitions and disclosure guidelines contained in
the United States Securities and Exchange Commission Title 17, Code of Federal
Regulations, Modernization of Oil and Gas Reporting, Final Rule released January
14, 2009 in the Federal Register. Mr. Ghozali attended an additional 7 hours of
formalized in-house training as well as 10 hours of formalized external training
during 2009 covering such topics as the SPE/WPC/AAPG/SPEE Petroleum Resources
Management System, reservoir engineering, geoscience and petroleum economics
evaluation methods, procedures and software and ethics for consultants. Mr.
Ghozali is also an instructor and has taught several one day and three day
seminars on Hydrocarbon Reserves and Resources Evaluation Methods.




Based on his educational
background, professional training and more than 19 years of practical experience
in the estimation and evaluation of petroleum reserves, Mr. Ghozali has
attained the professional qualifications as a Reserves Estimator and Reserves
Auditor set forth in Article III of the “Standards Pertaining to the Estimating
and Auditing of Oil and Gas Reserves Information” promulgated by the
Society of Petroleum Engineers as of February 19, 2007.


RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS











PETROLEUM
RESERVES DEFINITIONS





As
Adapted From:





RULE
4-10(a) of REGULATION S-X PART 210


UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (SEC)





PREAMBLE





On January 14,
2009, the United States Securities and Exchange Commission (“the Commission”)
published the “Modernization of Oil and Gas Reporting; Final Rule” in the
Federal Register of National Archives and Records Administration (NARA) . The
“Modernization of Oil and Gas Reporting; Final Rule” includes revisions and
additions to the definition section in Rule 4-10 of Regulation S -X, revisions
and additions to the oil and gas reporting requirements in Regulation S-K, and
amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization of
Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X
and Regulation S-K, shall be referred to herein collectively as the “SEC
Regulations”. The SEC Regulations take effect with all filings made with the
United States Securities and Exchange Commission as of December 31, 2009, or
after January 1, 2010. Reference should be made to the full text under Title 17,
Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10 (a) for the
complete definitions, as the following definitions, descriptions and
explanations rely wholly or in part on excerpts from the original document
(direct passages excerpted from the aforementioned SEC document are denoted in
italics herein).





Reserves are those
quantities of petroleum which are anticipated to be commercially recovered from
known accumulations from a given date forward under defined conditions. All
reserve estimates involve some degree of uncertainty. The uncertainty depends
chiefly on the amount of reliable geologic and engineering data available at the
time of the estimate and the interpretation of these data. The relative degree
of uncertainty may be conveyed by placing reserves into one of two principal
classifications, either proved or unproved. Unproved reserves are less certain
to be recovered than proved reserves and may be further sub-classified as
probable and possible reserves to denote progressively increasing uncertainty in
their recoverability. Under the SEC Regulations as of December 31, 2009, or
after January 1, 2010, a company may optionally disclose estimated quantities of
probable or possible oil and gas reserves in documents publicly filed with the
Commission. The SEC Regulations continue to prohibit disclosure of estimates of
oil and gas resources other than reserves and any estimated values of such
resources in any document publicly filed with the Commission unless such
information is required to be disclosed in the document by foreign or state law
as noted in §229.102 (5).








Reserves estimates
will generally be revised as additional geologic or engineering data become
available or as economic conditions change.





Reserves may be
attributed to either natural energy or improved recovery methods. Improved
recovery methods include all methods for supplementing natural energy or
altering natural forces in the reservoir to increase ultimate recovery. Examples
of such methods are pressure maintenance, cycling, waterflooding, thermal
methods, chemical flooding, and the use of miscible and immiscible displacement
fluids. Other improved recovery methods may be developed in the future as
petroleum technology continues to evolve.







RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS









PETROLEUM RESERVES DEFINITIONS


Page 2








RESERVES (SEC
DEFINITIONS)





Securities and
Exchange Commission Regulation S-X §229.4-10(a) (26) defines reserves as
follows:





Reserves.Reserves are
estimated remaining quantities of oil and gas and related substancesanticipated to be
economically producible, as of a given date, by application of development
projects to known accumulations. In addition, there must exist, or there must be
a reasonable expectation that there will exist, the legal right to produce or a
revenue interest in the production, installed means of delivering oil and gas or
related substances to market, and all permits and financing required to
implement the project.





Note to paragraph (a)(26):Reserves should not be assigned to adjacent reservoirs isolated by
major,potentially
sealing, faults until those reservoirs are penetrated and evaluated as
economically producible. Reserves should not be assigned to areas that are
clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of
reservoir, structurally low reservoir, or negative test results). Such areas may
contain prospective resources (i.e., potentially
recoverable resources from undiscovered accumulations).








PROVED RESERVES (SEC
DEFINITIONS)





Securities and
Exchange Commission Regulation S-X §229.4-10(a) (22) defines proved oil and gas
reserves as follows:





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, 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.








RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS









RESERVES DEFINITIONS


Page 3








(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.





[Remainder of this
page is left blank intentionally]






RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS













RESERVES STATUS DEFINITIONS AND GUIDELINES





As
Adapted From:





RULE
4-10(a) of REGULATION S-X PART 210


UNITED
STATES SECURITIES AND EXCHANGE COMMISSION (SEC)





and





PETROLEUM
RESOURCES MANAGEMENT SYSTEM (SPE-PRMS)





Sponsored
and Approved by:





SOCIETY
OF PETROLEUM ENGINEERS (SPE),





WORLD
PETROLEUM COUNCIL (WPC)





AMERICAN
ASSOCIATION OF PETROLEUM GEOLOGISTS (AAPG)





SOCIETY
OF PETROLEUM EVALUATION ENGINEERS (SPEE)














Reserves status
categories define the development and producing status of wells and
reservoirs.








DEVELOPED RESERVES (SEC
DEFINITIONS)





Securities and
Exchange Commission Regulation S-X §229.4-10(a) (6) defines developed oil and
gas reserves as follows:





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 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.





Developed Producing
(SPE-PRMS Definitions)


While not a
requirement for disclosure under the SEC regulations, developed oil and gas
reserves may be further sub-classified according to the guidance contained in
the SPE-PRMS as Producing or Non-Producing.





Developed Producing
Reserves


Developed
Producing Reserves are expected to be recovered from completion intervals that
are open and producing at the time of the estimate.





Improved
recovery reserves are considered producing only after the improved recovery
project is in operation.





Developed
Non-Producing


Developed
Non-Producing Reserves include shut-in and behind-pipe reserves.







RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS









RESERVES STATUS DEFINITIONS AND GUIDELINES


Page 2





Shut-In


Shut-in
Reserves are expected to be recovered from:


(1)
            completion
      intervals which are open at the time of the estimate but which have not
      yet started producing;


(2)
            wells
      which were shut-in for market conditions or pipeline connections;
      or


(3)
            wells
      not capable of production for mechanical
  reasons.





Behind-Pipe


Behind-pipe
Reserves are expected to be recovered from zones in existing wells which will
require additional completion work or future re-completion prior to start of
production.





In
all cases, production can be initiated or restored with relatively low
expenditure compared to the cost of drilling a new well.




UNDEVELOPED RESERVES (SEC
DEFINITIONS)





Securities and
Exchange Commission Regulation S-X §229.4-10(a) (31) defines undeveloped oil and
gas reserves as follows:





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 paragraph (a)(2) of this section, or by other evidence using reliable
technology establishing reasonable certainty.








RYDER SCOTT
COMPANY  PETROLEUM CONSULTANTS