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-99.1 - EXHIBIT 99.1 - TETRA TECHNOLOGIES INC | ex99_1.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 99.2
DeGolyer
and MacNaughton
5001
Spring Valley Road
Suite
800 East
Dallas,
Texas 75244
January 11,
2010
Maritech Resources,
Inc.
24955 Interstate 45
North
The Woodlands,
Texas 77380
Ladies and
Gentlemen:
Pursuant to your
request, we have conducted a reserves audit of the proved developed oil,
condensate, natural gas liquids, and natural gas reserves, as of December 31,
2009, of certain selected properties in 12 fields in the Main Pass area offshore
from Louisiana owned by Maritech Resources, Inc. (Maritech). Maritech has
represented that these properties account for about 16 percent on a net
equivalent gas basis of Maritech’s net proved reserves as of December 31, 2009,
and that the net proved reserves estimates have been prepared in accordance with
the reserves definitions of Rules 4–10(a) (1)–(32) of Regulation S–X of the
Securities and Exchange Commission (SEC) of the United States. We have reviewed
information provided to us by Maritech that it represents to be Maritech’s
estimates of the net reserves, as of December 31, 2009, for the same properties
as those which we evaluated.
Petroleum reserves
included herein are expressed as net reserves as represented by Maritech. Gross
reserves are defined as the total estimated petroleum to be produced from these
properties after December 31, 2009. Net reserves are defined as that portion of
the gross reserves attributable to the interests owned by Maritech after
deducting all interests owned by others.
Maritech has
represented that estimated net proved reserves attributable to the reviewed
properties are based on the definitions of proved reserves of the SEC. Maritech
represents that its estimates of the net proved reserves attributable to these
properties which represent 16 percent of Maritech’s reserves on a net equivalent
basis are as follows, expressed in thousands of barrels (Mbbl), millions of
cubic feet (MMcf) and millions of Mcf of gas equivalent
(MMcfe):
Maritech’s
estimates of reserves:
|
Oil
and Condensate
(Mbbl)
|
Natural
Gas
(MMcf)
|
Net
Equivalent
(MMcfe)
|
|||||
|
12 Main Pass
Fields Audited by DeGolyer and MacNaughton
|
268
|
10,717
|
12,325
|
||||
|
Note: Net
equivalent million cubic feet is based on 1 barrel of oil, condensate, or
natural gas liquids being equivalent to 6,000 cubic feet of
gas.
|
|||||||
In our opinion, the
information relating to estimated proved reserves of oil , condensate, and
natural gas contained in this report has been prepared in accordance with
Paragraphs 932-235-50-4, 932-235-50-6, 932-235-50-7, and 932-235-50-9, of the
Accounting Standards Update 932-235-50, Extractive Industries – Oil and Gas
(Topic 932): Oil and Gas Reserve Estimation and Disclosures (January
2010) of the Financial Accounting Standards Board and Rules 4–10(a) (1)–(32) of
Regulation S–X and Rules 302(b) and 1201, 1202(a)(1), (2), (3), (4), (8) and
1203(a) of Regulation S–K of the SEC.
Estimates of oil,
condensate, NGL, and natural gas should be regarded only as estimates that may
change as further production history and additional information become
available. Not only are such reserves estimates based on that information which
is currently available, but such estimates are also subject to the uncertainties
inherent in the application of judgmental factors in interpreting such
information.
Data used in this
audit were obtained from reviews with Maritech personnel, Maritech files, from
records on file with the appropriate regulatory agencies, and from public
sources. Additionally, this information includes data supplied by Petroleum
Information/Dwights LLC; Copyright 2009 Petroleum Information/Dwights LLC. In
the preparation of this report we have relied, without independent verification,
upon such information furnished by Maritech with respect to property interests,
production from such properties, current costs of operation and development,
current prices for production, agreements relating to current and future
operations and sale of production, and various other information and data that
were accepted as represented. A field examination of the properties was not
considered necessary for the purposes of this letter.
3
Methodology and
Procedures
Estimates of
reserves were prepared by the use of standard geological and engineering methods
generally accepted by the petroleum industry. The method or combination of
methods used in the analysis of each reservoir was tempered by experience with
similar reservoirs, stage of development, quality and completeness of basic
data, and production history.
When applicable,
the volumetric method was used to estimate the original oil in place (OOIP) and
the original gas in place (OGIP). Structure and isopach maps were constructed to
estimate reservoir volume. Electrical logs, radioactivity logs, core analyses,
and other available data were used to prepare these maps as well as to estimate
representative values for porosity and water saturation. When adequate data were
available and when circumstances justified, material balance and other
engineering methods were used to estimate OOIP or OGIP.
Estimates of
ultimate recovery were obtained after applying recovery factors to OOIP or OGIP.
These recovery factors were based on consideration of the type of energy
inherent in the reservoirs, analyses of the petroleum, the structural positions
of the properties, and the production histories. When applicable, material
balance and other engineering methods were used to estimate recovery factors. An
analysis of reservoir performance, including production rate, reservoir
pressure, and gas-oil ratio behavior, was used in the estimation of
reserves.
For depletion-type
reservoirs or those whose performance disclosed a reliable decline in
producing-rate trends or other diagnostic characteristics, reserves were
estimated by the application of appropriate decline curves or other performance
relationships. In the analyses of production-decline curves, reserves were
estimated only to the limits of economic production.
Petroleum reserves
estimated by Maritech and by us are classified as proved developed and are
judged to be economically producible in future years from known reservoirs under
existing economic and operating conditions and assuming continuation of current
regulatory practices using conventional production methods and equipment. In the
analyses of production-decline curves, reserves were estimated only to the limit
of economic rates of production under existing economic and operating conditions
using prices and costs consistent with the effective date of this report,
including consideration of changes in existing prices provided only by
4
contractual
arrangements but not including escalations based upon future conditions. The
petroleum reserves are classified as follows:
Classification of
Reserves
Petroleum reserves
included herein are classified as proved. Reserves classifications used in this
letter are in accordance with the reserves definitions of Rules 4–10(a) (1)–(32)
of Regulation S–X of the SEC for reserves reported beginning January 1, 2010.
Reserves are judged to be economically producible in future years from known
reservoirs under existing economic and operating conditions and assuming
continuation of current regulatory practices using conventional production
methods and equipment. In the analyses of production-decline curves, reserves
were estimated only to the limit of economic rates of production under existing
economic and operating conditions using prices and costs consistent with the
effective date of this report, including consideration of changes in existing
prices provided only by contractual arrangements but not including escalations
based upon future conditions. The petroleum reserves are classified 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 beeconomically 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.
5
(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.
(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:
6
(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.
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
The following
economic assumptions were used for estimating existing and future prices and
costs:
Oil
and Condensate Prices
Maritech has
represented that the oil and condensate 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. Maritech supplied differentials by field to a West Texas
Intermediate reference price of $61.04 per barrel and the prices were held
constant thereafter.
NGL
Prices
Maritech has
represented that the NGL prices were based on a 12-month average 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. These
prices were held constant over the lives of the properties.
Natural
Gas Prices
Maritech has
represented that the natural gas prices were based on a reference price of
$3.866 per MMbtu, 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 furnished by Maritech and held constant
thereafter.
Operating
Expenses and Capital Costs
Operating expenses
and capital costs, based on information provided by Maritech, 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.
While the oil and
gas industry may be subject to regulatory changes from time to time that could
affect an industry participant’s ability to recover its oil and gas reserves, we
are not aware of any such governmental actions which would restrict the recovery
of the December 31, 2009 estimated oil and gas volumes. The reserves estimated
in this report can be produced under current regulatory guidelines.
In comparing the
detailed net proved reserves estimates prepared by us and by Maritech, we have
found differences, both positive and negative, with a total difference of less
than 1 percent. It is our opinion that the net proved reserves estimates
prepared by Maritech on the properties reviewed by us and referred to above,
when compared on the basis of net equivalent gas, do not differ materially from
those prepared by us.
DeGolyer and
MacNaughton is an independent petroleum engineering consulting firm that has
been providing petroleum consulting services throughout the world for over 70
years. DeGolyer and MacNaughton does not have any financial interest, including
stock ownership, in Maritech. Our fees were not contingent on the results of our
evaluation. This letter report has been prepared at the request of Maritech and
should not be used for purposes other than those for which it is intended. DeGolyer and MacNaughton has
used all procedures and methods that it considers necessary to prepare this
report.
| Submitted, | |
| DeGOLYER and MacNAUGHTON | |
| Texas Registered Engineering Firm F-716 | |
| Paul J. Szatkowski, P.E. | |
| Senior Vice President | |
| DeGolyer and MacNaughton |
CERTIFICATE of
QUALIFICATION
I, Paul J.
Szatkowski, Petroleum Engineer with DeGolyer and MacNaughton, 5001 Spring
Valley Road, Suite 800 East, Dallas, Texas, 75244 U.S.A., hereby
certify:
|
1.
|
That I am a
Senior Vice President of DeGolyer and MacNaughton, which company did
prepare the letter report addressed to Maritech Resources dated January
11, 2010, and that I, as Senior Vice President, was responsible for the
preparation of this report.
|
|
2.
|
That I
attended the Texas A&M University, and that I graduated with a
Bachelor of Science degree in Petroleum Engineering in 1974; 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 the American
Association of Petroleum Geologists; and that I have in excess of 35 years
of experience in oil and gas reservoir studies and reserves
evaluations.
|
| /s/ Paul J. Szatkowski PE / | |
| Paul J. Szatkowski, P.E. | |
| Senior Vice President | |
| DeGolyer and MacNaughton |
|
Table
1
PROVED
NET RESERVES
as
of
DECEMBER
31, 2009
of
AUDITED
FIELDS
prepared
by
MARITECH
RESOURCES INC.
|
||||
|
Net
Liquids Reserves
|
Net
Gas Reserves
|
|||
|
Field
|
(Mbbl)
|
(MMcf)
|
||
|
Main
Pass 99
|
38
|
2,204
|
||
|
Main Pass
163
|
2
|
1,750
|
||
|
Main Pass
175
|
0
|
42
|
||
|
Main Pass
185
|
1
|
477
|
||
|
Main Pass
187
|
0
|
1,899
|
||
|
Main Pass
200
|
5
|
1,208
|
||
|
Main Pass
207
|
0
|
97
|
||
|
Main Pass
211
|
0
|
688
|
||
|
Main Pass
232
|
0
|
317
|
||
|
Main Pass
233
|
203
|
1,327
|
||
|
Main Pass
241
|
0
|
355
|
||
|
Main Pass
279
|
19
|
353
|
||
|
|
|
|
||
|
Total
|
268
|
10,717
|
||
|
|
|
|
||