Beruflich Dokumente
Kultur Dokumente
OIL
COMPANY I1C
November 21 2008
LA
Gentlemen
Virgin
its
utilizes
Schlumberger-Holditch
Reservoir
Engineers
their
calculation
for
of
at
reserve
estimates
They have
just
completed
for
reserve
our
well
are enclosed
your information
you in estimating
interest
of your interest
first
will
1% now
net
ownership
On
in
page
at that future
column
you
will see
is
Reserves
have
$74518734
This
we
you
behind-pipe
we
will
be producing you
in the
near future
multiply
net income
will get
future
income
my example
the future
of
1% 1%
$74518734
discounted
$745187.34
to present
bottom row
at
of numbers
show
net income
estimate
10%
The
1%
would be $455116.41
Please assessed
be advised
at this
that
this
is
only an
estimate
of the reserves
based
on the information
less
time and
the
actual
production
may
Ii
OL_
iith
ki
Robert Presiden1
909
Poydras
Street
Suite
2200
New
Orleans
Louisiana
70112
504-52569O9
504-529-2362
Fax
Case 11-13028
Data Division Consulting Seivices of Schlumborger
Technology
1515
Street LA
Suite
2700
New
Tel
70112
Scklumherger
November 20 2008
Virgin Oil
Company Inc
Street Suite
909 Poydras
2200 70112
New
Orleans Louisiana
Attention
Mr
Tony Smith
Dear
Mr
Smith
of
At
the
request
Virgin
Oil
Company
Inc
Virgin
prepared
Data
DCS
owned below
has
of
oil
The
investors
and located
evaluation
onshore
in
of August
2008 The
results
of our
ESTIMATED GROSS RESERVES INCOME CERTAIN OIL GAS INTERESTS ONSHORE LOUISIANA EVALUATED FOR VIRGIN OIL COMPANY INC AS OF AUGUST 2008
Proved
Undeveloped
Reserves
Undeveloped
Reserves
Probable Reserves
All
Gross Reserves
Reserves
OilMBbls
Gas
996.841
996.841
6.365 937.739
MMscf
-MBbls
6.365 937.739
1003.206 6853.481
5915.743
5915.743
Net Reserves
Oil
747.631
747.63
GasMMscf
Income Data
4.774 703.304
4.774 703.304
752.405 5J40.111
4436.807
4436.807
M$
83391.805 83391.805 5257.311 5257.311
88649.1 17
Expenses Taxes
1015.000 7083.059
775.000 0.000
1015.000
1105.000
7083059
775.000 500.000
7210.634 1525.000
500.000
Abandonment
Future Net Income
74518.734
74018.734
4289.735
4289.735
78308.46
Discounted
FNI
10%
45511.641
45391.945
954.741
972.984
46364.930
Case 11-13028
Data
Division
Consulting
of
SeMcos
Technology
Schiumberger
Schiumberger
November Page
20 2008
The
been
tables
Gross
Reserves
for the
in the
above
table
are
to
100%
made
are to
working
interest
in
the
all
royalties net
and
lee
No
overriding
that
royalties
The
Net Reserves
deductions
in the
have above
and
interests
Virgin provided
and overriding
Appropriate
deductions
data
royalties
made
for royalties
in the tables
above
are
summaries
in
may
not add
EXhibit
up
arithmetically
due
rounding
prepare
the economic
projections
Exhibit
contains
contains
individual
by reserves
tables
In those cases
the the reserves
category
where
and
the
above
Proved
categories
Probable
or
in the to the
income
attributable
adjusted to reflect
varying
degrees
not comparable
of risk associated
RESERVE CATEGORIES
This report includes proved
to
and gas
categories
reserves
belong
and
probable
reserves
as
of August
2008 By
or
definition
oil
following
categories
status
are further
proved
categories
divided
probable
possible
These
appropriate
is
reserve
The
devekped
reserve
developed and
reserve
category
even
further
divided
undeveloped
status
into
the
categories reserves
producing
and
appropriate include
nonproducing
sub
Nonproducing
reserves
shut-in
and
behind-pipe
The by
reserve
the
categories
used
in
this
report
conform
to
the
definitions
Society
of Petroleum and
Deterministic
Engineers
proved probable
Method
The
approved of
March
1997
definitions
of this report
RESERVE ESTIMATES
The
reserves
that
DCS
estimated
or
audited
were by
estimated
engineering
practices
These
using
generally
reserves
accepted
estimated
petroleum and
performance
volumetric calculations
analysis
material
balance
Reserve
the
estimates
are
strictly
quality
of data available
accuracy
geological report are
prepared estimates
the
by or audited
only and
is
function
of
The
reserve
estimates
should
reasonable
may justify
however
they are
to
that
reservoir performance
subsequent
Case 11-13028
Data
Division
Consulting
of
Schiumberger
Schhinthorger November20
Page 2008
PRICING
All
oil
AND ESCALATION
gas product
escalation
PARAMETERS
operating expenses capital by Virgin prior to preparation abandonment costs and escalation
differentials
and and
prices
price
costs
parameters
were provided
Investments
differentials
expenses
of
this
investments
report
parameters
are listed
price
of $7.000
per
MMscf
was used
for
the
life
of the project
Gas
prices
were
Oil
An
oil price
of $70.00
used
for the
life
escalated
of the project
Oil prices
were
not
Monthly
Lease
Operating
lease
Expense
operating
Monthly
costs
lease
operating
Costs
were based on
estimates
Capital
The
capital capital
investments
were based
for
purposes been
of
this
report
the
investments were
Drilling
excluded The
capital
investments
not escalated
Abandonment
capital
Costs
The
abandonment
costs
investments
by Virgin
The
Severance
Tax
Louisiana
Severance
taxes
were included
OWNERSHIP
The leasehold
title
interests
were provided
or
ownership
evaluated
to verify
the
GENERAL
All data used
in this
study were
obtained
from
files
Virgin
the
operator
information
sources
of
DCS
to
field
made
in
connection
industry
was not
report
this
were included
operation
in this the
environmental
in this
liabilities
attendant
and/or
of
properties
report
In
evaluating
the
all
information
at
our
disposal legal
related
to
this
report
we have
excluded
from
consideration
matters
which
our
other
require
or accounting
interpretation
or geological nature In assessing the conclusions expressed in this report of oil and gas evaluations pertaining aspects especially to reserve pertaining evaluations there are uncertainties inherent in the interpretation of engineering such data and conclusions represent only informed professional judgments engineering
to
all
than those of an
or any interpretation
Case 11-13028
Data Division Consulting
of
Services Technology
Schiumberger
Schlumberger
November Page
20 2008
Data
and
worksheets
used
available
in the for
preparation
Orleans
and
will
be
will
be
maintained
in
inspection by anyone
our
files
in
New
proper
authorization
by Virgin
This
report
was prepared
this
solely
for the
use
by
said in
party of
of the party
to
whom
it is
addressed the
report
and any
disclosure
made
shall
no way
solely
constitute
any
representation
of any kind
whatsoever
of
addressed
Undersigned
with respect
to
further
assistance
in this
matter
DCS
employee
who
can
Principal
Petroleum
Engineer
New
Orleans
We
appreciate
the
opportunity
to
serve
you and
look forward
to
doing
business
with
you
in the
future
Very
truly
yours
DATA
DIVISION
TECHNOLOGy CORPORATION
James
Principal
Hubbard
Petroleum
P.13
Engineer
Case 11-13028
SI
Date
19-Jan-09
Virgin
Oil
Well State
Hookup
Lease
18165
Empire
AFE
Est Start Date Est
Comp
Date
Estimated
Intangibles
Expenses
Description
Mobilization Transportation
Total
Costs
Communications
Permitting Inspection Construction
Permanent
Temporary
Survey
Bonds
lE
Instrumentation/Electrical/SCADA
Construction
Overhead
lntanaibles total
194900
Estimated
Tangibles
Expenses
Description
Site Preparation
Total
93000
Equipment
Surface Production
SCADA
Gulf
Electrical
Equipment
Station Flowline
South
Meter
ATMOS
Pipe/Pipe
Energy
Hot Tap
Support/Fittings/ValvesHook-Up
Supplies
Pipeline
Chemicals Labor
Hot tap Materials
Gas
Sales
and
Tangibles
Contingencies
20%
146900
Grand
Total
881500
Days
25
Estimated
Construction
Prepared
By By
Earl
Landrv
Reviewed
Brennan
Disher
Case 11-13028
II
October
28
2008
MEMO TO
Re
Virgin
PARTNERS
Offshore
USA
Sidetrack
Empire Prospect
and Gentlemen
The
following
is
brief
summary of
to
the results
obtained
in
the drilling
last
of the above
as
referenced
well
have
tried
provide
daily updates
throughout
week
we
true as
encountered
vertical
the objective
Sands
have attached
LWD Sand
100
in
Sands Each
sands came
mapped
residual
which showed
saturations
of cross
fault
drainage
The
subject
well reached
its
planned
casing
total
depth
of
11860
will
is
MD 9537 TVD
to total
October
22 2008
in
5/8
production
run
place
We
are currently
laying
down
pipe
and
over the
course
completion
with
procedure work-over
currently
planned
designed and
effective tubing
be
implemented
completion
much more
well
cost
and
efficient
method
selective
Current
plans
i.e two
bore with
primary completion
each
string
producing
for immediate
simultaneously
and
completion
allows
production of an up-hole
Once same
this
procedure
zone immediately upon the depletion of the primary completion has been finalized and costs estimated we will immediately forward
in
to
you
Included
of
production than
facility to
including
gas
tank
100 yards
our
we
intend
to
expedite
the completion
first
production
of the
well
to
90 days
As
stated
above we
depletion
intend
to
dually
to
to
maximize
profiles
expedite
of the reserves
it is
the present
worth
to
on the reserves
more
on
tremendous boost
economics
My
current thoughts
this
Long
Primary Completion
Selective Short String
K-6 Sand
K-5 K-5
Sand
Estimated
rate
.75MMCFGD
rate
25BCPD 75BCPD
Completion
Lwr
Upr
Estimated
.75MMCFGD
25OBOPD
Primary Completion
Selective
Sand
Estimated
rate
Completion
K-2B Sand
Estimated
rate
25OBOPD
Case 11-13028
Consequently
pricing
would be
to
be
.75MMCFGD
flow
375B0PD
At current
is
and
after
expenses
estimated
to
be $750000.00
in
mind
Please keep
as
that
these rates
my estimates
upward
or
downward
of the
we
test
the
zones
do believe
in the
them to be reasonable
based on
my
knowledge
offset
production
Empire
Upon
depletion
to
of the Primary
in the
and Selective
Completions
would be worked-over
capture reserves
K-2A
the
K-i Sand
My
current
estimates 3.5
of reserves 500
are as follows
Proved
Possible
MBO
MBO
future net revenue
400
The Proved
reserves
yield estimated
under
current
approximately $3
8MM
nice
pricing
of
undiscounted
and before
lease operating
expenses These
engineers
future will
would
final
provide
multiple but
feel
on the investment
these estimates
Obviously
the reservoir
say on reserves
are reasonable
Sincerely
Charlie Roberts
Exploration
Manager