Attached files
| file | filename |
|---|---|
| 10-K - FORM 10-K - TETRA TECHNOLOGIES INC | tti10k-20100301.htm |
| EX-21 - EXHIBIT 21 - TETRA TECHNOLOGIES INC | ex21.htm |
| EX-23.2 - EXHIBIT 23.2 - TETRA TECHNOLOGIES INC | ex23_2.htm |
| EX-32.1 - EXHIBIT 32.1 - TETRA TECHNOLOGIES INC | ex32_1.htm |
| EX-23.1 - EXHIBIT 23.1 - TETRA TECHNOLOGIES INC | ex23_1.htm |
| EX-31.2 - EXHIBIT 31.2 - TETRA TECHNOLOGIES INC | ex31_2.htm |
| EX-32.2 - EXHIBIT 32.2 - TETRA TECHNOLOGIES INC | ex32_2.htm |
| EX-23.3 - EXHIBIT 23.3 - TETRA TECHNOLOGIES INC | ex23_3.htm |
| EX-99.2 - EXHIBIT 99.2 - TETRA TECHNOLOGIES INC | ex99_2.htm |
| EX-31.1 - EXHIBIT 31.1 - TETRA TECHNOLOGIES INC | ex31_1.htm |
| EX-10.13 - EXHIBIT 10.13 - TETRA TECHNOLOGIES INC | ex10_13.htm |
| EX-10.12 - EXHIBIT 10.12 - TETRA TECHNOLOGIES INC | ex10_12.htm |
Exhibit
99.1
 |
||
| FAX (713) 651-0849 | ||
| 1100 LOUISIANA SUITE 3800 | HOUSTON, TEXAS 77002-5218 | TELEPHONE (713) 651-9191 |
January 19,
2010
Mr. Edgar A.
Anderson
Maritech Resources,
Incorporated
24955 I-45
North
The Woodlands,
Texas 77380
Gentlemen:
At the request of
Maritech Resources, Incorporated (Maritech), Ryder Scott Company (Ryder Scott)
has conducted a reserves audit of the estimates of the proved reserves as
prepared by Maritech’s engineering and geological staff based on 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 (SEC
regulations).
The reserves audit
conducted by Ryder Scott was completed on December 17, 2009. This
third party letter report presents the results of our reserves audit based on
the guidelines set forth under Section 229.1202(a)(7) and (8) of the SEC
regulations. The estimated reserves shown herein represent
Marictech’s estimated net reserves attributable to the leasehold and royalty
interests in certain properties owned by Maritech and reviewed by Ryder Scott,
as of December 31, 2009.
The properties
reviewed by Ryder Scott incorporate 277 reserve determinations and are located
in the state and federal waters offshore Louisiana and Texas.
The proved net
reserves attributable to the properties that we reviewed account for 84 percent
of the total proved net liquid hydrocarbon reserves and 38 percent of the total
proved net gas reserves based on estimates prepared by Maritech as of
December 31, 2009. On a barrels of oil equivalent (BOE) basis, the
properties that we reviewed accout for 64 percent of Maritech’s total estimated
reserve. Natural gas was converted to oil equivalent using a factor
of 6,000 cubic feet of natural gas per one barrel of oil
equivalent.
As prescribed by
the Society of Petroleum Engineers in Paragraph 2.2(f) of the Standards
Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information
(SPE auditing standards), a reserves audit is defined as “the process of
reviewing certain of the pertinent facts interpreted and assumptions made that
have resulted in an estimate of reserves prepared by others and the rendering of
an opinion about (1) the appropriateness of the methodologies employed; (2) the
adequacy and quality of the data relied upon; (3) the depth and thoroughness of
the reserves estimation process; (4) the classification of reserves appropriate
to the relevant definitions used; and (5) the reasonableness of the estimated
reserve quantities.”
Based on our
review, including the data, technical processes and interpretations presented by
Maritech, it is our opinion that the overall procedures and methodologies
utilized by Maritech in determining the proved reserves comply with the current
SEC regulations and the overall proved
Maritech Resources,
Incorporated
January 19, 2010
Page
2
reserves for the
reviewed properties as estimated by Maritech are, in the aggregate, reasonable
within the established audit tolerance guidelines set forth in the SPE auditing
standards based on a net BOE basis.
The estimated
reserves presented in this report are related to hydrocarbon
prices. Maritech has informed us that in the preparation of their
reserve and income projections, as of December 31, 2009, they used 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 SEC regulations; therefore, volumes of reserves actually
recovered and the amounts of income actually received may differ significantly
from the estimated quantities presented in this report. The net
reserves as estimated by Maritech attributable to Maritech's interest in
properties that we reviewed are summarized as follows:
SEC
PARAMETERS
Estimated
Net Reserves
Attributable
to Certain Properties of
Maritech
Resources Incorporated
|
As
of December 31, 2009
|
|
Proved
|
||||||||
|
Developed
|
Total
|
|||||||
|
Producing
|
Non-Producing
|
Undeveloped
|
Proved
|
|||||
|
Net
Reserves of Properties
Audited by Ryder Scott
|
||||||||
|
Oil/Condensate
– Barrels
|
2,565,970
|
1,913,560
|
1,367,400
|
5,846,930
|
||||
|
Plant
Products – Barrels
|
52,480
|
37,120
|
15,680
|
105,280
|
||||
|
Gas
– MMCF
|
4,628
|
7,116
|
1,124
|
12,869
|
||||
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.
Reserves
Included in This Report
In our opinion, the
proved reserves presented in this report comply with the definitions, guidelines
and disclosure requirements as required by the SEC regulations.
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. Moreover,
estimates of reserves may increase or decrease as a result of future operations,
effects of regulation by governmental agencies or geopolitical
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, could be more or less than the estimated amounts.
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.
Maritech Resources,
Incorporated
January 19,
2010
Page
3
Audit
Data, Methodology, Procedure and Assumptions
The reserves for
the properties that we reviewed were estimated by performance methods or the
volumetric method. In general, reserves attributable to producing
wells and/or reservoirs were estimated by performance methods such as decline
curve analysis and/or material balance based on extrapolations of historical
production and pressure data available generally through September, 2009 in
those cases where such data were considered to be definitive. In
certain cases, producing reserves were estimated by the volumetric method where
there were inadequate historical 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, which utilized all pertinent well and
seismic data available through December, 2009.
To estimate
economically recoverable oil and gas reserves, 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 demonstrated 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 as of the effective date of the report. Maritech 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 performing our audit of Maritech’s proven reserves,
we have relied upon data furnished by Maritech 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 Maritech.
As previously
stated, the hydrocarbon prices used by Maritech 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 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. 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.
The effects of
derivative instruments designated as price hedges of oil and gas quantities are
not reflected in Maritech’s individual property evaluations.
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 also increase or decrease from existing levels, such changes were, in
accordance with rules adopted by the SEC, omitted from consideration in making
this evaluation.
Gas imbalances, if
any, were not taken into account in the gas reserve estimates reviewed. The gas
volumes noted herein include gas consumed in operations as reserves. These
volumes have been offset with the appropriate operating expenses as if fuel gas
was purchased for lease operations. Quantities of liquid hydrocarbons
contained in inventory or storage as of December 31, 2009 are not included in
the reserve estimates in this report.
Maritech Resources,
Incorporated
January 19,
2010
Page
4
Operating costs
used by Maritech are based on the operating expense reports of Maritech 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. When applicable for operated
properties, the operating costs include an appropriate level of corporate
general administrative and overhead costs. The operating costs for
non-operated properties include the COPAS overhead costs that are allocated
directly to the leases and wells under terms of operating agreements. No
deduction was made for loan repayments, interest expenses, or exploration and
development prepayments that were not charged directly to the leases or
wells. The operating costs used by Maritech were accepted as
presented without independent verification.
Development costs
used by Maritech 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 Maritech 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 Maritech 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 or political obstacles that would
significantly alter their plans. Some of the undeveloped reserves
included in Maritech’s estimates are scheduled to to start producing after
January 1, 2015. This would put them outside of the five year window
that the SEC guidelines suggest is acceptable for drilling of undeveloped
locations. However, these reserves do not require drilling new
wells. The reserves are behind pipe in existing wells but Maritech
has classified them as undeveloped due to the significant cost of the workover
that will be required to place them on production. These undeveloped
reserves account for 9 percent of the present value of the properties audited by
Ryder Scott as estimated by Maritech.
Current costs used
by Maritech were held constant throughout the life of the
properties.
Maritech’s
forecasts of future production rates are based on historical performance from
wells now on production or estimated initial production rates based on test data
and other related information for those wells or locations that are not
currently producing. Forecasts of future production rates 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 the forecasts
prepared by Maritech.
Maritech’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
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 Maritech 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 liability to restore and clean up damages, if any, caused by past
operating practices.
Maritech Resources,
Incorporated
January 19,
2010
Page
5
Certain technical
personnel of Maritech are responsible for the preparation of reserve estimates
on new properties and for the preparation of revised estimates, when necessary,
on old properties. These personnel assembled the necessary data and
maintained the data and workpapers in an orderly manner. We consulted
with these technical personnel and had access to their workpapers and supporting
data in the course of our audit.
The data described
herein were accepted as authentic and sufficient for determining the reserves
unless, during the course of our examination, a matter of question came to our
attention in which case the data were not accepted until all questions were
satisfactorily resolved. Our audit included such tests and procedures
as we considered necessary under the circumstances to render the conclusions set
forth herein.
Audit
Opinion
In our opinion,
Maritech's estimates of future reserves for the reviewed properties were
prepared in accordance with generally accepted petroleum engineering and
evaluation principles for the estimation of future reserves as set forth in the
Society of Petroleum Engineers’ Standards Pertaining to the Estimating and
Auditing of Oil and Gas Reserves Information, and we found no bias in the
utilization and analysis of data in estimates for these properties.
The overall proved
reserves for the reviewed properties as estimated by Maritech are, in the
aggregate, reasonable within the established audit tolerance guidelines of 10
percent as set forth in the Standards Pertaining to the Estimating and Auditing
of Oil and Gas Reserves Information promulgated by the Society of Petroleum
Engineers.
In general, we were
in reasonable agreement with Maritech's estimates of proved reserves for the
properties which we reviewed; however, in certain cases there was more than an
acceptable variance between Maritech's estimates and our estimates due to a
difference in interpretation of data or due to our having access to data which
were not available to Maritech when its reserve estimates were
prepared. In these cases, Maritech revised certain of its estimates
to conform to our estimates to insure that the overall reserve difference was
less than 10 percent. As a consequence, it is our opinion that the
data presented herein for the properties that we reviewed fairly reflect the
estimated net reserves owned by Maritech.
Other
Properties
Other properties,
as used herein, are those properties of Maritech which we did not
review. The proved net reserves attributable to the other properties
account for 16 percent of the total proved net liquid hydrocarbon reserves and
62 percent of the total proved net gas reserves based on estimates prepared by
Maritech as of December 31, 2009.
The same technical
personnel of Maritech were responsible for the preparation of the reserve
estimates for the properties that we reviewed as well as for the properties not
reviewed by Ryder Scott.
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
Maritech Resources,
Incorporated
January 19,
2010
Page
6
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.
Ryder Scott
requires that staff engineers and geoscientists have received professional
accreditation, and are maintaining in good standing, a registered or certified
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
prior to becoming an officer of the Company.
We are independent
petroleum engineers with respect to Maritech. Neither we nor any of
our employees have any interest in the subject properties, and neither the
employment to do this work nor the compensation is contingent on our estimates
of reserves for the properties which were reviewed.
The professional
qualifications of the undersigned, the technical person primarily responsible
for auditing 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 of Maritech Resources Incorporated 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.
Very truly yours,
RYDER SCOTT COMPANY, L.P.
TBPE Firm Registration No. F-1580
/s/ Fred P. Richoux
Fred P. Richoux, P.E.
TBPE License No. 33949
Executive Vice
President [SEAL]
/sm
MARITECH
RESOURCES, INCORPORATED
Estimated
Future
Reserves
Attributable
to Certain
Leasehold
and Royalty Interests
SEC
Parameters
As
of
December
31, 2009
|
/s/ Fred P.
Richoux
|
|
Fred P.
Richoux, P.E.
|
|
Executive
Vice President
|
RYDER
SCOTT COMPANY, L.P.
TBPE Firm
Registration No. F-1580
[SEAL]