Attached files
EXHIBIT 99.1
RESOURCES, LLC P.O. Box 252 Flora Vista, NM 87415
S 505-330-3523
M Postmaster@rsmresources.com
Oil and Gas Consulting
Project Management Expert Witness
March 22, 2014
Mr. George Harris Hinto Energy, Inc.
5350 South Roslyn Road
Greenwood Village, CO 80111
RE: Update to Reserve Study, Non-escalation cases
Cisco Field, Utah
Dear Mr. Harris:
Enclosed are the additional update runs for Cisco Field, effective December 31,
2013. I used decline rates from two previous reports provided by Max Sommer and
yourself. I used current oil and gas pricing for both the PDP and PUD scenarios.
Operating costs are estimated based upon my meeting with Max and discussion with
Edward Scartazenia. Investment levels are possibly high for the work anticipated
in the PUD scenario. To mirror and accurately update the previous report I did
not include any additional investment under the PDP scenario. Oil and gas that
is producing and shut in have been joined into the PDP category.
The values are:
Undiscounted
Category Net oil (bbl) Net Gas (mmcf) Future Revenue ($M)
-------------------------- ------------- -------------- -------------------
Proved developed Producing 23,127 20.8 $944,808
Proved Undeveloped 313,348 282.013 $23,672.881
Methodology employed was to carry forward existing production rates as reported
by Hinto Energy, Inc. Historic decline rates and a match was generated with
previous reserve/production data to minimize time but allow for a snapshot that
is representative of the situation in the field. This report version (no
escalation to product price and expense) is more appropriate to SEC reporting
standards. The reserved definitions are as defined by the Society of Petroleum
Engineers. No effort has been made to generate individual well decline curves,
or to generate volumetric reserve estimates. I understand that this report is
for internal use and may be used for SEC reporting.
Page 2 March 22, 2014
There are numerous uncertainties in estimating quantities of reserves and
projecting future rates of production and timing of development expenditures.
The reserve data set forth in this report are estimates only and may change as
additional data becomes available. The base assumptions used for the economic
models shown are displayed in the attachments.
/s/ Richard K. Dembowski, P.E.
President
Attachments:
1 - PDP Economics and Reserve Projection (non-escalated)
2 - PDP Assumptions (non-escalated)
3 - PUD Economic and Reserve Projection (non-escalated)
4 - PUD Assumptions (non-escalated)
ATTACHMENT # 1
RESERVES AND ECONOMICS
Cisco PDP Various
Cisco PDP SEC
Grand, Utah
Hinto Energy As of Date: 12/31/2013
-------------------------------------------------------------------------------------------------------------------
Gross Production Net Production Prices
------------------------------------------------------------------------------------
No. Year No. Wells Oil (MBbl) Gas (MMSCf) Oil (MBbl) Gas (MMSCf) Oil ($/Bbl) Gas (M$)
===================================================================================================================
1 2014 6 1.324 1.191 1.158 1.042 85.00 3.50
2 2015 6 1.284 1.156 1.124 1.011 85.00 3.50
3 2016 6 1.246 1.121 1.090 0.981 85.00 3.50
4 2017 6 1.208 1.087 1.057 0.951 85.00 3.50
5 2018 6 1.172 1.055 1.025 0.923 85.00 3.50
6 2019 6 1.137 1.023 0.995 0.895 85.00 3.50
7 2020 6 1.103 0.992 0.965 0.868 85.00 3.50
8 2021 6 1.070 0.963 0.936 0.842 85.00 3.50
9 2022 6 1.037 0.934 0.908 0.817 85.00 3.50
10 2023 6 1.006 0.906 0.881 0.792 85.00 3.50
11 2024 6 0.976 0.879 0.854 0.769 85.00 3.50
12 2025 6 0.947 0.852 0.829 0.746 85.00 3.50
13 2026 6 0.918 0.827 0.804 0.726 85.00 3.50
14 2027 6 0.891 0.802 0.780 0.702 85.00 3.50
15 2028 6 0.864 0.778 0.756 0.681 85.00 3.50
16 2029 6 0.838 0.754 0.733 0.66 85.00 3.50
17 2030 6 8.13 0.732 0.711 0.64 85.00 3.50
18 2031 6 0.789 0.710 0.690 0.621 85.00 3.50
19 2032 6 0.765 0.689 0.669 0.602 85.00 3.50
20 2033 6 0.742 0.668 0.649 0.584 85.00 3.50
21 2034 6 0.72 0.648 0.630 0.567 85.00 3.50
22 2035 6 0.698 0.628 0.611 0.55 85.00 3.50
23 2036 6 0.677 0.610 0.593 0.533 85.00 3.50
24 2037 6 0.657 0.591 0.575 0.517 85.00 3.50
25 2038 6 0.637 0.574 0.558 0.502 85.00 3.50
26 2039 6 0.618 0.556 0.541 0.487 85.00 3.50
27 2040 6 0.600 0.540 0.525 0.472 85.00 3.50
28 2041 6 0.582 0.523 0.509 0.458 85.00 3.50
29 2042 6 0.564 0.508 0.494 0.444 85.00 3.50
30 2043 6 0.547 0.493 0.479 0.431 85.00 3.50
===================================================================================================================
Total 26.430 23.787 23.127 20.814
Cum. 250.000 25.000
Ult. 276.430 48.787
------------------------------------------------------------------------------------------------------------------- Continued...
Net Present Value @10% - M$ 410.98 Working Interest - fraction 1.000000
Remaining Prd. Life - Yrs 29.94 NRI - Oil, fraction 0.875000
Rate of Return, % >100 NRI - Gas, fraction 0.875000
Lease Operating Exp. - $/Month 2,500
Average Oil price - $/Bbl 85.90 Oil Sev. Tax - % or $/Bbl 4.6000
Average Gas Price - $/Mscf 3.50 Gas Sev. Tax - % or $/Mscf 4.6000
Economic Limit - Bbls/Month 45.00 Ad Valorem Tax - % 5.0000
1 of 2
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Net Operating Revenue Net Net Cum. Cum. CF
------------------------------------------------------------------------------------------------------------------------------------
Oil ($/Bbl) Gas (M$) Total (M$) OPEX (M$) CAPEX (M$) Taxes (M$) Cash Flow (M$) Cashflow (M$) Disc. @10% (M$
====================================================================================================================================
98.45 3.65 102.102 30.000 0.000 9.802 62.300 62.300 56.636
95.50 3.54 99.038 30.000 0.000 9.508 59.531 121.831 105.835
92.63 3.43 96.067 30.000 0.000 9.222 56.845 178.675 148.544
89.86 3.33 93.185 30.000 0.000 8.946 54.240 232.915 185.590
87.16 3.23 90.390 30.000 0.000 8.677 51.712 284.627 217.699
84.54 3.13 87.678 30.000 0.000 8.417 49.261 333.888 245.506
82.01 3.04 85.048 30.000 0.000 8.165 46.883 380.771 269.564
79.55 2.95 82.496 30.000 0.000 7.92 44.577 425.348 290.360
77.16 2.86 80.021 30.000 0.000 7.682 42.339 467.687 308.316
74.85 2.77 77.621 30.000 0.000 7.452 40.169 507.857 323.803
72.60 2.69 75.292 30.000 0.000 7.228 38.064 545.921 337.144
70.42 2.61 73.033 30.000 0.000 7.011 36.022 581.943 348.622
68.31 2.53 70.842 30.000 0.000 6.801 34.042 615.984 358.482
66.26 2.46 68.717 30.000 0.000 6.597 32.120 648.105 366.940
64.27 2.38 66.656 30.000 0.000 6.399 30.257 678.361 374.184
62.35 2.31 64.656 30.000 0.000 6.207 28.449 706.810 380.375
60.48 2.24 62.716 30.000 0.000 6.021 26.695 733.506 385.656
58.66 2.17 60.835 30.000 0.000 5.84 24.995 758.500 390.152
56.90 2.11 59.01 30.000 0.000 5.665 23.345 781.845 393.969
55.19 2.05 57.24 30.000 0.000 5.495 21.744 803.590 397.201
53.54 1.98 55.522 30.000 0.000 5.33 20.192 823.782 399.930
51.93 1.92 53.857 30.000 0.000 5.17 18.686 842.468 402.225
50.37 1.87 52.241 30.000 0.000 5.015 17.226 859.694 404.149
48.86 1.81 50.674 30.000 0.000 4.865 15.809 875.503 405.754
47.40 1.76 49.153 30.000 0.000 4.719 14.435 889.937 407.086
45.98 1.70 47.68 30.000 0.000 4.577 13.102 903.039 408.186
44.60 1.65 46.25 30.000 0.000 4.44 11.809 914.848 409.086
43.26 1.60 44.86 30.000 0.000 4.307 10.554 925.402 409.818
41.96 1.55 43.52 30.000 0.000 4.177 9.338 934.740 410.407
40.70 1.51 42.21 28.089 0.000 4.052 10.068 944.808 410.984
====================================================================================================================================
1,965.75 72.85 2,038.603 898.089 0.000 195.706 944.808
------------------------------------------------------------------------------------------------------------------------------------
NPV Profile
----------------------------
@% NPV(M$)
10 410.98
20 251.27
30 179.69 Case: 1
40 139.65 Run Date: 3/22/2014
50 114.15 Run Time: 12:34 PM
60 96.51 Date File: Cisco
70 83.58
80 73.7
2 of 2
ATTACHMENT # 2
RESERVES AND ECONOMICS
Oil Well/Lease
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Well/ Lease Name Cisco PDP Case No: 1
Field, Location: Cisco LOE ($/Month): 5,000.00
County, State Grand, Utah Gas Sev. Tax: 4.600
Operator: Hinto Energy Oil Sev. Tax: 4.600
Ad Val. Tax: 5.000
Formation, Depth: Various Oil Price ($/bbl): 85.00
Reserve Category: PUD SEC Gas Price ($/Mscf): 3.50
GOR (Scf/Bbl): 900.0
Gross Investments: $ Year No. of Wells: 10
1,250 2014 Oil Rate (Bbl/M): 5,000
1,250 2015 Dec/Y - (%): 15.0
Erate (Ebl/M): 150
Interests Fraction Cum. Oil (MBbl): 0.000
---------
Working Int. 1.000000 Cum. Gas (MMScf): 0.000
NRI - OIL 0.875000 Beg. Year: 2014
NRI - Gas 0.875000 As of Date: 12/31/2013
Guess IRR 5.000000 File Name: Cisco
Please Page Down for Escalations
--------------------------------------------------------------------------------
Oil Well/Lease Escalations
--------------------------------------------------------------------------------
To
% Year
Oil Price Escalation 1 0.00 2025
2 0.00 2035
3 0.00 2045
Gas Price Escalation 1 0.00 2025
2 0.00 2035
3 0.00 2045
OPEX Escalation 1 0.00 2025
2 0.00 2035
3 0.00 2045
Note: Economic Limit is not calcluated for Escalated Economics,
Please Specify ERATE in the Main Menue Above.
Please PgUp for Main Menu
--------------------------------------------------------------------------------
ATTACHMENT # 3
RESERVES AND ECONOMICS
Cisco PDP Various
Cisco PUD SEC
Grand, Utah
Hinto Energy As of Date: 12/31/2013
------------------------------------------------------------------------------------------------------------------
Gross Production Net Production Prices
-----------------------------------------------------------------------------------
No. Year No. Wells Oil (MBbl) Gas (MMSCf) Oil (MBbl) Gas (MMSCf) Oil ($/Bbl) Gas (M$)
==================================================================================================================
1 2014 10 55.378 49.840 48.456 43.610 85.00 3.50
2 2015 10 47.071 42.364 41.188 37.069 85.00 3.50
3 2016 10 40.011 36.010 35.009 31.508 85.00 3.50
4 2017 10 34.009 30.608 29.758 26.782 85.00 3.50
5 2018 10 28.908 26.017 25.294 22.765 85.00 3.50
6 2019 10 24.572 22.114 21.50 19.350 85.00 3.50
7 2020 10 20.886 18.797 18.275 16.448 85.00 3.50
8 2021 10 17.753 15.978 15.534 13.980 85.00 3.50
9 2022 10 15.090 13.581 13.204 11.883 85.00 3.50
10 2023 10 12.827 11.544 11.223 10.101 85.00 3.50
11 2024 10 10.903 9.812 9.540 8.586 85.00 3.50
12 2025 10 9.267 8.340 8.109 7.298 85.00 3.50
13 2026 10 7.877 7.089 6.892 6.203 85.00 3.50
14 2027 10 6.696 6.026 5.859 5.273 85.00 3.50
15 2028 10 5.694 5.122 4.980 4.482 85.00 3.50
16 2029 10 4.838 4.354 4.233 3.810 85.00 3.50
17 2030 10 4.112 3.701 3.598 3.238 85.00 3.50
18 2031 10 3.495 3.146 3.058 2.752 85.00 3.50
19 2032 10 2.971 2.674 2.599 2.340 85.00 3.50
20 2033 10 5.525 2.273 2.210 1.989 85.00 3.50
21 2034 10 2.146 1.932 1.878 1.690 85.00 3.50
22 2035 10 1.087 0.979 0.952 0.856 85.00 3.50
23 2036 10 0.000 0.000 0.000 0.000 85.00 3.50
24 2037 10 0.000 0.000 0.000 0.000 85.00 3.50
25 2038 10 0.000 0.000 0.000 0.000 85.00 3.50
26 2039 10 0.000 0.000 0.000 0.000 85.00 3.50
27 2040 10 0.000 0.000 0.000 0.000 85.00 3.50
28 2041 10 0.000 0.000 0.000 0.000 85.00 3.50
29 2042 10 0.000 0.000 0.000 0.000 85.00 3.50
30 2043 10 0.000 0.000 0.000 0.000 85.00 3.50
==================================================================================================================
Total 358.112 322.301 313.348 282.013
Cum. 0.000 0.000
Ult. 358.112 322.301
------------------------------------------------------------------------------------------------------------------ Continued...
Net Present Value @10% - M$ 14860.55 Working Interest - fraction 1.000000
Remaining Prd. Life - Yrs 21.58 NRI - Oil, fraction 0.875000
Rate of Return, % #NUM! NRI - Gas, fraction 0.875000
Lease Operating Exp. - $/Month 5,000
Average Oil price - $/Bbl 85.00 Oil Sev. Tax - % or $/Bbl 4.6000
Average Gas Price - $/Mscf 3.50 Gas Sev. Tax - % or $/Mscf 4.6000
Economic Limit - Bbls/Month 150.00 Ad Valorem Tax - % 5.0000
1 of 2
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Net Operating Revenue Net Net Cum. Cum. CF
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Oil ($/Bbl) Gas (M$) Total (M$) OPEX (M$) CAPEX (M$) Taxes (M$) Cash Flow (M$) Cashflow (M$) Disc. @10% (M$)
====================================================================================================================================
4,118.75 152.64 4,271.387 60.000 1.250 410.053 3,800.084 3,800.084 3,454.622
3,500.94 129.74 3,630.679 60.000 1.250 348.545 3,220.884 7,020.968 6,116.509
2,975.80 110.28 3,086.077 60.000 0.000 296.263 2,729.814 9,750.781 8,167.459
2,529.43 93.74 2,623.166 60.000 0.000 251.824 2,311.342 12,062.123 9,746.136
2,150.01 79.68 2,229.691 60.000 0.000 214.050 1,955.640 14,017.764 10,960.435
1,827.51 67.73 1,895.237 60.000 0.000 181.943 1,653.294 15,671.058 11,893.676
1,553.38 57.57 1,610.952 60.000 0.000 154.651 1,396.300 17,067.358 12,610.199
1,320.38 48.93 1,369.309 60.000 0.000 131.454 1,177.855 18,245.213 13,159.677
1,122.32 41.59 1,163.912 60.000 0.000 111.736 992.177 19,237.390 13,580.457
953.97 35.35 989.326 60.000 0.000 94.975 834.350 20,071.741 13,902.135
810.88 30.05 840.927 60.000 0.000 80.729 700.198 20,771.938 14,147.551
689.25 25.54 714.788 60.000 0.000 68.620 586.168 21,358.106 14,334.322
585.86 21.71 607.570 60.000 0.000 58.327 489.243 21,847.349 14,476.038
497.98 18.45 516.434 60.000 0.000 49.578 406.856 22,254.206 14,583.176
423.28 15.69 438.969 60.000 0.000 42.141 336.828 22,591.034 14,663.810
359.79 13.33 373.124 60.000 0.000 35.820 277.304 22,868.338 14,724.159
305.82 11.33 317.155 60.000 0.000 30.447 226.708 23,095.046 14,769.012
259.95 9.63 269.582 60.000 0.000 25.880 183.702 23,278.748 14,802.053
220.96 8.19 229.145 60.000 0.000 21.998 147.147 23,425.895 14,826.112
187.81 6.96 194.773 60.000 0.000 18.698 116.075 23,541.969 14,843.366
159.64 5.92 165.557 60.000 0.000 15.893 89.663 23,631.633 14,855.482
80.88 3.00 83.879 34.578 0.000 8.052 41.248 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
0.000 0.000 0.000 0.000 0.000 0.000 0.000 23,672.881 14,860.550
===================================================================================================================================
26,634.59 987.05 27,621.636 1,294.578 2.500 2651.677 23,672.881
-----------------------------------------------------------------------------------------------------------------------------------
NPV Profile
------------------------------
1.000000 @% NPV(M$)
0.875000 10 14,860.55
0.875000 20 10,729.84
30 8,378.83 Case: 1
4.6000 40 6,869.03 Run Date: 3/22/2014
4.6000 50 5,819.12 Run Time: 12:37 PM
5.0000 60 5,047.17 Date File: Cisco
70 4,455.86
80 3,988.48
2 of 2
ATTACHMENT # 4
RESERVES AND ECONOMICS
Oil Well/Lease
--------------------------------------------------------------------------------
Well/ Lease Name Cisco PDP Case No: 1
Field, Location: Cisco LOE ($/Month): 2,500.00
County, State Grand, Utah Gas Sev. Tax: 4.600
Operator: Hinto Energy Oil Sev. Tax: 4.600
Ad Val. Tax: 5.000
Formation, Depth: Various Oil Price ($/bbl): 85.00
Reserve Category: PUD SEC Gas Price ($/Mscf): 3.50
GOR (Scf/Bbl): 900.0
Gross Investments: $ Year No. of Wells: 6
0 2014 Oil Rate (Bbl/M): 112
0 2015 Dec/Y - (%): 3.0
Erate (Ebl/M): 45
Interests Fraction Cum. Oil (MBbl): 250.000
---------
Working Int. 1.000000 Cum. Gas (MMScf): 25.000
NRI - OIL 0.875000 Beg. Year: 2014
NRI - Gas 0.875000 As of Date: 12/31/2013
Guess IRR 1.000000 File Name: Cisco
Please Page Down for Escalations
--------------------------------------------------------------------------------
Oil Well/Lease Escalations
--------------------------------------------------------------------------------
To
% Year
Oil Price Escalation 1 0.00 2025
2 0.00 2035
3 0.00 2045
Gas Price Escalation 1 0.00 2025
2 0.00 2035
3 0.00 2045
OPEX Escalation 1 0.00 2025
2 0.00 2035
3 0.00 2045
Note: Economic Limit is not calcluated for Escalated Economics,
Please Specify ERATE in the Main Menue Above.
Please PgUp for Main Menu
-------------------------------------------------------------------------------
