Attached files
Exhibit 99.2
[CAWLEY,
GILLESPIE & ASSOCIATES,
INC. LETTERHEAD]
January
8, 2010
Mr. J.
Douglas Lang
Vice
President - Reservoir
Engineering/Acquisitions
Whiting
Petroleum Corporation
1700
Broadway, Suite 2300
Denver,
Colorado 80290-2300
Re: Evaluation
Summary – SEC Price
Whiting Petroleum Corporation
Interests
Total Proved Reserves
Various
States
As of December 31, 2009
Dear Mr.
Lang:
As requested, we are submitting our
estimates of total proved reserves and forecasts of economics attributable to
the interests in certain oil properties located in various states within the
United States. This report, completed January 8, 2010 covers 100% of
the proved reserves estimated for Whiting Petroleum
Corporation. This report includes results for an SEC pricing
scenario. The results of this evaluation are presented in the
accompanying tabulations, with a composite summary presented below:
|
Proved
Developed Producing
|
Proved
Developed Behind Pipe
|
Proved
Developed
Non-Producing
|
Proved
Developed Shut-in
|
Proved
Undeveloped
|
Total
Proved
|
|||||||||||||||||||||||
|
Net Reserves
|
||||||||||||||||||||||||||||
|
Oil
|
-
Mbbl
|
104,286.4 | 2,227.8 | 22,589.5 | 0.0 | 64,190.1 | 193,293.9 | |||||||||||||||||||||
|
Gas
|
-
MMcf
|
156,867.2 | 13,497.6 | 8,417.6 | 0.0 | 128,611.0 | 307,393.4 | |||||||||||||||||||||
|
NGL
|
-
Mbbl
|
11,915.7 | 389.8 | 3,403.9 | 0.0 | 14,793.3 | 30,502.7 | |||||||||||||||||||||
|
Revenue
|
||||||||||||||||||||||||||||
|
Oil
|
- M$ | 5,675,469.0 | 124,878.6 | 1,264,256.0 | 0.0 | 3,534,746.0 | 10,599,348.0 | |||||||||||||||||||||
|
Gas
|
- M$ | 607,836.6 | 54,179.2 | 35,516.3 | 0.0 | 460,814.6 | 1,158,346.6 | |||||||||||||||||||||
|
NGL
|
- M$ | 422,278.5 | 13,695.2 | 124,731.6 | 0.0 | 520,419.2 | 1,081,124.4 | |||||||||||||||||||||
|
Other
|
- M$ | 208,572.3 | 0.0 | 10,068.8 | 0.0 | 19,694.0 | 238,335.6 | |||||||||||||||||||||
|
Severance
Taxes
|
- M$ | 469,657.6 | 12,289.9 | 68,532.8 | 0.0 | 286,985.8 | 837,466.1 | |||||||||||||||||||||
|
Ad
Valorem Taxes
|
- M$ | 69,227.0 | 1,449.1 | 30,770.8 | 0.0 | 66,694.0 | 168,141.0 | |||||||||||||||||||||
|
Operating
Expenses
|
- M$ | 3,035,857.0 | 39,221.4 | 381,330.2 | 0.0 | 1,206,881.8 | 4,663,289.0 | |||||||||||||||||||||
|
Investments
|
- M$ | 241,996.3 | 12,358.5 | 48,157.6 | 0.0 | 1,103,221.5 | 1,405,733.6 | |||||||||||||||||||||
|
Net
Operating Income
|
- M$ | 3,097,418.3 | 127,434.1 | 905,781.2 | 0.0 | 1,871,891.4 | 6,002,524.5 | |||||||||||||||||||||
|
Discounted
@ 10%
|
- M$ | 1,867,136.4 | 48,164.6 | 339,285.1 | 0.0 | 621,154.7 | 2,875,741.5 | |||||||||||||||||||||
The
discounted cash flow value shown above should not be construed to represent an
estimate of the fair market value by Cawley, Gillespie & Associates,
Inc.
Hydrocarbon
Pricing
As requested for the SEC scenario,
initial WTI spot oil and Henry Hub Gas Daily prices of $61.18 per bbl and $3.87
per MMBtu, respectively, were adjusted individually to WTI posted pricing at
$57.90 per bbl and Houston Ship Channel pricing at $3.64 per MMBtu, as of
December 31, 2009. Prices were not escalated in the SEC
scenario. Oil price differentials, gas price differentials and
heating values were applied as furnished by your office.
Expenses and
Taxes
Lease operating expenses, investments,
severance tax values, COPAS and Ad Valorem tax values were forecast as provided
by your office. Lease operating expenses were not
escalated.
Miscellaneous
An on-site field inspection of the
properties has not been performed. The mechanical operation or conditions of the
wells and their related facilities have not
been examined nor have the wells been tested by Cawley, Gillespie &
Associates, Inc. Possible environmental liability related to the
properties has not been investigated nor considered. The cost of
plugging and the salvage value of equipment at abandonment have not been
included.
The proved reserve classifications used
conform to the criteria of the Securities and Exchange
Commission (“SEC”). The estimates were prepared based on the
definitions and regulations contained in the United States Securities and
Exchange Commission Modernization of Oil and Gas Reporting; Final
Rule, Title 17 CFR Parts 210, 211 et al. released January 14, 2009 in the
Federal Register. 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 and economics are predicated on regulatory agency
classifications, rules, policies, laws, taxes and royalties in effect as noted
herein. The possible effects of changes in legislation or other
Federal or State restrictive actions have not been considered. All
reserve estimates represent our best judgment based on data available at the
time of preparation, and assumptions as to future economic and regulatory
conditions. It should be realized that the reserves actually
recovered, the revenue derived therefrom and the actual cost incurred could be
more or less than the estimated amounts.
The reserve estimates were based on
interpretations of factual data furnished by your office. We have
used all methods and procedures as we considered necessary under the
circumstances to prepare the report. We believe that the assumptions,
data, methods and procedures were appropriate for the purpose served by this
report. Production data, gas prices, gas price differentials, expense
data, tax values and ownership interests were also supplied by you and were
accepted as furnished. To some extent information from public records
has been used to check and/or supplement these data. The basic
engineering and geological data were subject to third party reservations and
qualifications. Nothing has come to our attention, however, that
would cause us to believe that we are not justified in relying on such
data.
This letter was prepared for the
exclusive use of Whiting Petroleum Corporation. Third parties should
not rely on it without the written consent of the above and Cawley, Gillespie
& Associates, Inc. Our work papers and related data are available
for inspection and review by authorized, interested parties.
The professional qualifications of the
undersigned, the technical person primarily responsible for the preparation of
this report, are included as an attachment to this letter.
|
|
Yours very truly, |
|
|
/s/
Robert D. Ravnaas
|
|
|
Robert D. Ravnaas, P.E. |
|
|
Cawley,
Gillespie & Associates
|
|
Texas
Registered Engineering Firm
F-693
|
[CAWLEY,
GILLESPIE & ASSOCIATES, INC. LETTERHEAD]
January
27, 2010
Mr. J.
Douglas Lang
Vice
President - Reservoir
Engineering/Acquisitions
Whiting
Petroleum Corporation
1700
Broadway, Suite 2300
Denver,
Colorado 80290-2300
Re: Evaluation
Summary – SEC Price
Whiting Petroleum Corporation
Interests
Probable and Possible
Reserves
Various
States
As of December 31, 2009
Dear Mr.
Lang:
As requested, we are submitting our
estimates of total probable and possible reserves and forecasts of economics
attributable to the interests in certain oil properties located in various
states within the United States. This report, completed January 27,
2010 covers 100% of the probable and possible reserves estimated for Whiting
Petroleum Corporation. . This report includes results for
an SEC pricing scenario. The results of this evaluation are presented
in the accompanying tabulations, with a composite summary presented
below:
|
Probable
|
Probable
|
Total
|
Possible
|
Possible
|
Total
|
|||||||||||||||||||||||
|
Developed
|
Undeveloped
|
Probable
|
Developed
|
Undeveloped
|
Possible
|
|||||||||||||||||||||||
|
Net Reserves
|
||||||||||||||||||||||||||||
|
Oil
|
-
Mbbl
|
1,222.8 | 44,051.2 | 45,273.9 | 20,570.7 | 114,082.6 | 134,653.3 | |||||||||||||||||||||
|
Gas
|
-
MMcf
|
9,843.8 | 172,045.5 | 181,889.3 | 9,254.2 | 175,656.2 | 184,910.4 | |||||||||||||||||||||
|
NGL
|
-
Mbbl
|
136.9 | 13,412.0 | 13,548.9 | 2,157.5 | 29,829.1 | 31,986.7 | |||||||||||||||||||||
|
Revenue
|
||||||||||||||||||||||||||||
|
Oil
|
- M$ | 69,382.8 | 2,462,479.3 | 2,531,862.3 | 1,069,535.5 | 6,219,719.5 | 7,289,254.5 | |||||||||||||||||||||
|
Gas
|
- M$ | 36,908.4 | 553,909.9 | 590,818.3 | 27,944.8 | 574,597.5 | 602,542.3 | |||||||||||||||||||||
|
NGL
|
- M$ | 4,678.2 | 429,681.9 | 434,360.1 | 56,092.1 | 1,002,513.4 | 1,058,605.6 | |||||||||||||||||||||
|
Other
|
- M$ | 0.0 | 0.3 | 0.1 | 0.0 | 9,921.5 | 9,921.5 | |||||||||||||||||||||
|
Severance
Taxes
|
- M$ | 6,436.3 | 188,963.7 | 195,400.0 | 130,210.3 | 519,737.8 | 649,947.9 | |||||||||||||||||||||
|
Ad
Valorem Taxes
|
- M$ | 1,181.3 | 71,572.8 | 72,754.1 | 478.8 | 115,523.5 | 116,002.3 | |||||||||||||||||||||
|
Operating
Expenses
|
- M$ | 33,527.5 | 641,710.4 | 675,237.9 | 18,954.0 | 1,185,225.3 | 1,204,179.4 | |||||||||||||||||||||
|
Investments
|
- M$ | 8,431.8 | 797,294.3 | 805,726.1 | 3,714.3 | 1,435,208.3 | 1,438,922.5 | |||||||||||||||||||||
|
Net
Operating Income
|
- M$ | 61,392.6 | 1,746,531.0 | 1,807,923.3 | 1,000,215.3 | 4,551,056.5 | 5,551,271.5 | |||||||||||||||||||||
|
Discounted
@ 10%
|
- M$ | 29,243.2 | 463,220.6 | 492,463.8 | 203,390.2 | 721,333.4 | 924,723.6 | |||||||||||||||||||||
The
discounted cash flow value shown above should not be construed to represent an
estimate of the fair market value by Cawley, Gillespie & Associates,
Inc.
Hydrocarbon
Pricing
As requested for the SEC scenario,
initial WTI spot oil and Henry Hub Gas Daily prices of $61.18 per bbl and $3.87
per MMBtu, respectively, were adjusted individually to WTI posted pricing at
$57.90 per bbl and Houston Ship Channel pricing at $3.64 per MMBtu, as of
December 31, 2009. Prices were not escalated in the SEC
scenario. Oil price differentials, gas price differentials and
heating values were applied as furnished by your office.
Expenses and
Taxes
Lease operating expenses, investments,
severance tax values, COPAS and Ad Valorem tax values were forecast as provided
by your office. Lease operating expenses were not
escalated.
Miscellaneous
An on-site field inspection of the
properties has not been performed. The mechanical operation or conditions of the
wells and their related facilities have not
been examined nor have the wells been tested by Cawley, Gillespie &
Associates, Inc. Possible environmental liability related to the
properties has not been investigated nor considered. The cost of
plugging and the salvage value of equipment at abandonment have not been
included.
The probable and possible reserve
classifications used conform to the criteria of the Securities and Exchange
Commission (“SEC”). The estimates were prepared based on the
definitions and regulations contained in the United States Securities and
Exchange Commission Modernization of Oil and Gas Reporting; Final
Rule, Title 17 CFR Parts 210, 211 et al. released January 14, 2009 in the
Federal Register. Probable reserves are those additional
reserves that are less certain to be recovered than proved reserves but which,
together with proved reserves, are as likely as not to be
recovered. Possible reserves are those additional reserves that are
less certain to be recovered than probable reserves. Estimates of
probable and possible reserves are by nature more uncertain than estimates of
proved reserves and accordingly are subject to substantially greater risk of not
actually being realized.
The reserves and economics are predicated on regulatory agency
classifications, rules, policies, laws, taxes and royalties in effect as noted
herein. The possible effects of changes in legislation or other
Federal or State restrictive actions have not been considered. All
reserve estimates represent our best judgment based on data available at the
time of preparation, and assumptions as to future economic and regulatory
conditions. It should be realized that the reserves actually
recovered, the revenue derived therefrom and the actual cost incurred could be
more or less than the estimated amounts.
The reserve estimates were based on
interpretations of factual data furnished by your office. We have used all
methods and procedures as we considered necessary under the circumstances to
prepare the report. We believe that the assumptions, data, methods
and procedures were appropriate for the purpose served by this
report. Production data, gas prices, gas price differentials, expense
data, tax values and ownership interests were also supplied by you and were
accepted as furnished. To some extent information from public records
has been used to check and/or supplement these data. The basic
engineering and geological data were subject to third party reservations and
qualifications. Nothing has come to our attention, however, that
would cause us to believe that we are not justified in relying on such
data.
This letter was prepared for the
exclusive use of Whiting Petroleum Corporation. Third parties should
not rely on it without the written consent of the above and Cawley, Gillespie
& Associates, Inc. Our work papers and related data are available for
inspection and review by authorized, interested parties.
The
professional qualifications of the undersigned, the technical person primarily
responsible for the preparation of this report, are included as an attachment to
this letter.
|
|
Yours very truly, |
|
|
/s/
Robert D. Ravnaas
|
|
|
Robert D. Ravnaas, P.E. |
|
|
Cawley,
Gillespie & Associates
|
|
Texas
Registered Engineering Firm
F-693
|
[CAWLEY, GILLESPIE &
ASSOCIATES, INC. LETTERHEAD]
Professional Qualifications of Robert
D. Ravnaas, P.E.
Executive Vice President of Cawley, Gillespie &
Associates
Mr.
Ravnaas has been a Petroleum Consultant for Cawley, Gillespie & Associates
(CG&A) since 1983, and became Executive Vice President in
1999. He has completed numerous field studies, reserve evaluations
and reservoir simulation, waterflood design and monitoring, unit equity
determinations and producing rate studies. He has testified before
the Texas Railroad Commission in unitization and field rules
hearings. Prior to CG&A he worked as a Production Engineer for
Amoco Production Company. Mr. Ravnaas received a B.S. with special
honors in Chemical Engineering from the University of Colorado at Boulder, and a
M.S. in Petroleum Engineering from the University of Texas at
Austin. He is a registered professional engineer in Texas, No. 61304,
and a member of the Society of Petroleum Engineers (SPE), the Society of
Petroleum Evaluation Engineers, the American Association of Petroleum Geologists
and the Society of Professional Well Log Analysts.