Exhibit 99.1
ZaZa Energy Corporation
Estimated
Future Reserves and Income
Attributable to Certain
Leasehold Interests
In South Texas
SEC Parameters
As of
December 31, 2013
/s/ Michael F. Stell |
| /s/ Stuart L. Filler |
Michael F. Stell, P.E. |
| Stuart L. Filler, P.E. |
TBPE License No. 56416 |
| TBPE License No. 60823 |
Advising Senior Vice President |
| Senior Petroleum Engineer |
RYDER SCOTT COMPANY, L.P.
TBPE Firm Registration No. F-1580
RYDER SCOTT COMPANY PETROLEUM CONSULTANTS
TABLE OF CONTENTS
DISCUSSION |
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PETROLEUM RESERVES DEFINITIONS |
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| TABLE NO. |
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PROPERTY RANKING | A |
SUMMARY OF GROSS AND NET RESERVE AND INCOME DATA | B |
SUMMARY OF INITIAL BASIC DATA | C |
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GRAND SUMMARIES |
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TOTAL PROVED | 1 |
PROVED PRODUCING | 2 |
PROVED SHUT-IN | 3 |
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EAGLEVILLE, VARIOUS COS., TEXAS |
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BOENING UNIT A 1H (EAGLE FORD) - PROVED PRODUCING | 4 |
CONNIFF UNIT A 1H (EAGLE FORD) - PROVED PRODUCING | 5 |
GRAHMANN UNIT A 1H (EDWARDS) - PROVED PRODUCING | 6 |
KOENNING UNIT 1H 1H (EAGLE FORD) - PROVED PRODUCING | 7 |
LANGLEY UNIT 1H (EAGLE FORD) - PROVED SHUT-IN | 8 |
LONG UNIT 1H (EAGLE FORD) - PROVED UNDEVELOPED | 9 |
MAALI 1H 1 (EAGLE FORD) - PROVED PRODUCING | 10 |
MACHICEK 1H (EAGLE FORD) - PROVED SHUT-IN | 11 |
OTTO 1H 1H (EAGLE FORD) - PROVED PRODUCING | 12 |
PERKINS 1H 1H (EAGLE FORD) - PROVED PRODUCING | 13 |
THIELE UNIT 1H (EAGLE FORD) - PROVED UNDEVELOPED | 14 |
RYDER SCOTT COMPANY PETROLEUM CONSULTANTS - TBPE FIRM LICENSE No. F-1580
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| February 12, 2014 |
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ZaZa Energy Corporation
1301 McKinney, Suite 3000
Houston, Texas 77010
Attention: Mr. Todd Brooks
Gentlemen:
At your request, Ryder Scott Company, L.P. (Ryder Scott) has prepared an estimate of the proved reserves, future production, and income attributable to certain leasehold interests in south Texas of ZaZa Energy Corporation (ZaZa) as of December 31, 2013. The subject properties are located in the state of Texas. The reserves and income data were estimated based on the definitions and disclosure guidelines of the United States Securities and Exchange Commission (SEC) contained in Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009, in the Federal Register (SEC regulations). Our third party study, completed on February 12, 2014, and presented herein, was prepared in accordance with the disclosure requirements set forth in the SEC regulations.
The properties evaluated by Ryder Scott represent 100 percent of the total net proved liquid hydrocarbon reserves and 100 percent of the total net proved gas reserves of ZaZa in the Eagle Ford and Edwards reservoirs in various counties in south Texas, as of December 31, 2013.
The estimated reserves and future net income amounts presented in this report, as of December 31, 2013, are related to hydrocarbon prices. The hydrocarbon prices used in the preparation of this report 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, 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 results of this study are summarized below.
SUITE 600, 1015 4TH STREET, S.W. | CALGARY, ALBERTA T2R 1J4 | TEL (403) 262-2799 | FAX (403) 262-2790 |
621 17TH STREET, SUITE 1550 | DENVER, COLORADO 80293-1501 | TEL (303) 623-9147 | FAX (303) 623-4258 |
SEC PARAMETERS
Estimated Net Reserves and Income Data
Certain Leasehold Interests in the Utica Shale of
ZaZa Energy Company
As of December 31, 2013
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| Proved |
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| Developed |
| Developed |
| Total |
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| Producing |
| Non-Producing |
| Proved |
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Net Remaining Reserves |
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Oil/Condensate — Barrels |
| 14,459 |
| 11,630 |
| 26,089 |
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Plant Products — Barrels |
| 19,884 |
| 4,431 |
| 24,315 |
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Natural Gas — MMCF |
| 256 |
| 60 |
| 316 |
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Income Data |
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Future Gross Revenue |
| $ | 2,700,034 |
| $ | 1,371,876 |
| $ | 4,071,910 |
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Deductions |
| 1,971,861 |
| 597.668 |
| 2,569,529 |
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Future Net Income (FNI) |
| $ | 728,173 |
| $ | 774,208 |
| $ | 1,502,381 |
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Discounted FNI @ 10% |
| $ | 680,417 |
| $ | 673,128 |
| $ | 1,353,545 |
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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.
The estimates of the reserves, future production, and income attributable to properties in this report were prepared using the economic software package Aries™ System Petroleum Economic Evaluation Software, a copyrighted program of Halliburton. The program was used at the request of ZaZa. Ryder Scott has found this program to be generally acceptable, but notes that certain summaries and calculations may vary due to rounding and may not exactly match the sum of the properties being summarized. Furthermore, one line economic summaries may vary slightly from the more detailed cash flow projections of the same properties, also due to rounding. The rounding differences are not material.
The future gross revenue is after the deduction of production taxes. The deductions incorporate the normal direct costs of operating the wells, ad valorem taxes, and certain abandonment costs net of salvage. The future net income is before the deduction of state and federal income taxes and general administrative overhead, and has not been adjusted for outstanding loans that may exist, nor does it include any adjustment for cash on hand or undistributed income. Liquid hydrocarbon reserves account for approximately 75 percent and natural gas reserves account for the remaining 25 percent of total future gross revenue from proved reserves.
The discounted future net income shown above was calculated using a discount rate of 10 percent per annum compounded monthly. Future net income was discounted at five other discount rates, which were also compounded monthly. These results are shown in summary form as follows.
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| Discounted Future Net Income |
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| As of December 31, 2013 |
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Discount Rate |
| Total |
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Percent |
| Proved |
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5 |
| $ | 1,424,869 |
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15 |
| $ | 1,287,543 |
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20 |
| $ | 1,226,325 |
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25 |
| $ | 1,169,519 |
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30 |
| $ | 1,116,822 |
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The results shown above are presented for your information and should not be construed as our estimate of fair market value.
Reserves Included in This Report
The proved reserves included herein conform to the definition as set forth in the Securities and Exchange Commission’s Regulations Part 210.4-10(a). 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.
The various proved reserve status categories are defined under the attachment entitled “Petroleum Reserves Status Definitions and Guidelines” in this report. The proved developed non-producing reserves, which consist of the proved shut-in category, include wells that had been drilled and completed but had not commenced production by year-end.
No attempt was made to quantify or otherwise account for any accumulated gas production imbalances that may exist. The proved gas volumes presented herein do not include volumes of gas consumed in operations as reserves.
Reserves are “estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations.” All reserve estimates involve an assessment of the uncertainty relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered than proved reserves, and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty in their recoverability. At ZaZa’s request, this report addresses only the proved reserves attributable to the properties evaluated herein.
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 proved reserves included herein were estimated using deterministic methods. The SEC has defined reasonable certainty for proved reserves, when based on deterministic methods, as a “high degree of confidence that the quantities will be recovered.”
Proved reserve estimates will generally be revised only as additional geologic or engineering data become available or as economic conditions change. For proved reserves, the SEC states that “as changes due to increased availability of geoscience (geological, geophysical, and geochemical),
engineering, and economic data are made to the estimated ultimate recovery (EUR) with time, reasonably certain EUR is much more likely to increase or remain constant than to decrease.” Moreover, estimates of proved reserves may be revised as a result of future operations, effects of regulation by governmental agencies or geopolitical or economic risks. Therefore, the proved reserves included in this report are estimates only and should not be construed as being exact quantities, and if recovered, the revenues therefrom, and the actual costs related thereto, could be more or less than the estimated amounts.
ZaZa’s operations may be subject to various levels of governmental controls and regulations. These controls and regulations may include, but may not be limited to, matters relating to land tenure and leasing, the legal rights to produce hydrocarbons, drilling and production practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies including income tax and are subject to change from time to time. Such changes in governmental regulations and policies may cause volumes of proved reserves actually recovered and amounts of proved income actually received to differ significantly from the estimated quantities.
The estimates of proved reserves presented herein were based upon a detailed study of the properties in which ZaZa 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 liabilities to restore and clean up damages, if any, caused by past operating practices.
Estimates of Reserves
The estimation of reserves involves two distinct determinations. The first determination results in the estimation of the quantities of recoverable oil and gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities in accordance with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of estimating the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These analytical procedures fall into three broad categories or methods: (1) performance-based methods; (2) volumetric-based methods; and (3) analogy. These methods may be used singly or in combination by the reserve evaluator in the process of estimating the quantities of reserves. Reserve evaluators must select the method or combination of methods which in their professional judgment is most appropriate, given the nature and amount of reliable geoscience and engineering data available at the time of the estimate, the established or anticipated performance characteristics of the reservoir being evaluated, and the stage of development or producing maturity of the property.
In many cases, the analysis of the available geoscience and engineering data and the subsequent interpretation of this data may indicate a range of possible outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of reserves is identified, the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the reserve quantities are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity of the reserves is addressed by the reserve category assigned by the evaluator. Therefore, it is the categorization of reserve quantities as proved, probable and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For proved reserves, uncertainty is defined by the SEC as reasonable certainty wherein the “quantities actually recovered are much more likely than not to be achieved.” The SEC states that “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.” The SEC states that “possible reserves are those additional reserves that are less certain to be recovered than probable
reserves and the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves.” All quantities of reserves within the same reserve category must meet the SEC definitions as noted above.
Estimates of reserves quantities and their associated reserve categories may be revised in the future as additional geoscience or engineering data become available. Furthermore, estimates of reserves quantities and their associated reserve categories may also be revised due to other factors such as changes in economic conditions, results of future operations, effects of regulation by governmental agencies or geopolitical or economic risks as previously noted herein.
The proved reserves for the properties included herein were estimated by performance methods or the analogy method. All of the proved producing reserves attributable to producing wells and/or reservoirs that we evaluated were estimated by decline curve analysis, which utilized extrapolations of historical production data available through December 2013, in those cases where such data were considered to be definitive. The data utilized in this analysis were furnished to Ryder Scott by ZaZa or obtained from public data sources and were considered sufficient for the purpose thereof. All of the proved developed non-producing reserves that we evaluated were estimated by the analogy method. The data utilized from the analogues incorporated into our analysis, which consisted of offset wells to the currently non-producing wells, were considered sufficient for the purpose thereof. Two proved undeveloped locations that have been proposed by the operator of the properties in which ZaZa has an interest were evaluated by the analogy method and were uneconomic at current estimates of reserves, hydrocarbon prices, and development costs. These cash flows are included as zero value in the evaluation.
To estimate economically recoverable proved oil and gas reserves and related future net cash flows, we consider many factors and assumptions including, but not limited to, the use of reservoir parameters derived from geological, geophysical and engineering data that 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 anticipated to be economically producible from a given date forward based on existing economic conditions including the prices and costs at which economic producibility from a reservoir is to be determined. 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 increase or decrease from those under existing economic conditions, such changes were, in accordance with rules adopted by the SEC, omitted from consideration in making this evaluation.
ZaZa has informed us that they have furnished us all of the material accounts, records, geological and engineering data, and reports and other data required for this investigation. In preparing our forecast of future proved production and income, we have relied upon data furnished by ZaZa 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, adjustments or differentials to product prices, 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 furnished by ZaZa. We consider the factual data used in this report appropriate and sufficient for the purpose of preparing the estimates of reserves and future net revenues herein.
In summary, we consider the assumptions, data, methods and analytical procedures used in this report appropriate for the purpose hereof, and we have used all such methods and procedures that we consider necessary and appropriate to prepare the estimates of reserves herein. The proved
reserves included herein were determined in conformance with the United States Securities and Exchange Commission (SEC) Modernization of Oil and Gas Reporting; Final Rule, including all references to Regulation S-X and Regulation S-K, referred to herein collectively as the “SEC Regulations.” In our opinion, the proved reserves presented in this report comply with the definitions, guidelines and disclosure requirements as required by the SEC regulations.
Future Production Rates
For wells currently on production, our forecasts of future production rates are based on historical performance data. If no production decline trend has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate, until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves. If a decline trend has been established, this trend was used as the basis for estimating future production rates.
Test data and other related information were used to estimate the anticipated initial production rates for those wells or locations that are not currently producing. For reserves not yet on production, sales were estimated to commence at an anticipated date furnished by ZaZa. Wells or locations that are not currently producing may start producing earlier or later than anticipated in our estimates due to unforeseen factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the availability of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.
The future production rates from wells currently on production or wells or locations that are not currently producing may be more or less than estimated because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities, compression and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints set by regulatory bodies.
Hydrocarbon Prices
The hydrocarbon prices used herein are based on SEC price parameters using 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.
ZaZa furnished us the above-mentioned average prices in effect on December 31, 2013. These initial SEC hydrocarbon prices were determined using the 12-month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are sold. These benchmark prices are prior to the adjustments for differentials as described herein. The table below summarizes the “benchmark prices” and “price reference” used for the geographic area included in the report.
The product prices that were actually used to determine the future gross revenue for each property reflect adjustments to the benchmark prices for gravity, quality, local conditions, and/or distance from market, referred to herein as “differentials.” The differentials used in the preparation of this report were furnished to us by ZaZa. The differentials furnished to us were accepted as factual
data and reviewed by us for their reasonableness; however, we have not conducted an independent verification of the data used by ZaZa to determine these differentials.
In addition, the table below summarizes the net volume weighted benchmark prices adjusted for differentials and referred to herein as the “average realized prices.” The average realized prices shown in the table below were determined from the total future gross revenue before production taxes and the total net reserves for the geographic area and presented in accordance with SEC disclosure requirements for the geographic area included in the report.
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| Price |
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| Average |
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Geographic Area |
| Product |
| Reference |
| Benchmark Prices |
| Realized Prices |
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North America |
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| Oil/Condensate |
| WTI Cushing |
| $96.89/Bbl |
| $97.39/Bbl |
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United States |
| NGLs |
| WTI Cushing |
| $96.89/Bbl |
| $28.85/Bbl* |
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| Natural Gas |
| Henry Hub |
| $3.67/MCF |
| $3.42/MCF |
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* NGL prices are based on a percentage of the oil prices.
The effects of derivative instruments designated as price hedges of oil and gas quantities are not reflected in our individual property evaluations.
Costs
Operating costs for the leases and wells in this report were furnished by ZaZa and are based on the operating expense reports of ZaZa 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. No deduction was made for loan repayments, interest expenses, or exploration and development prepayments that were not charged directly to the leases or wells.
Development costs were furnished to us by ZaZa and are based on authorizations for expenditure for the proposed work or actual costs for similar projects. Net abandonment costs of $125,000 per well were included as requested by ZaZa and were accepted without verification.
Current costs used by ZaZa were held constant throughout the life of the properties.
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-five 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 material portion of our annual revenue. We do not serve as officers or directors of any privately-owned or 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.
Prior to becoming an officer of the Company, Ryder Scott requires that staff engineers and geoscientists have received professional accreditation in the form of 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.
We are independent petroleum engineers with respect to ZaZa. 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 results of this study, presented herein, are based on technical analysis conducted by teams of geoscientists and engineers from Ryder Scott. The professional qualifications of the undersigned, the technical person primarily responsible for overseeing the evaluation of the reserves information discussed in this report, are included as an attachment to this letter.
Terms of Usage
The results of our third party study, presented in report form herein, were prepared in accordance with the disclosure requirements set forth in the SEC regulations.
We have provided ZaZa with a digital version of the original signed copy of this report letter. In the event there are any differences between the digital version included in presentations made by ZaZa and the original signed report letter, the original signed report letter shall control and supersede the digital version.
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, |
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| RYDER SCOTT COMPANY, L.P. |
| TBPE Firm Registration No. F-1580 |
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| /s/ Michael F. Stell |
| Michael F. Stell, P.E. |
| TBPE License No. 56416 |
| Advising Senior Vice President |
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| /s/ Stuart L. Filler |
| Stuart L. Filler, P.E. |
| TBPE License No. 60823 |
| Senior Petroleum Engineer |
MFS-SLF (FWZ)/pl
Professional Qualifications of Primary Technical Person
The conclusions presented in this report are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder Scott Company, L.P. Mr. Michael F. Stell was the primary technical person responsible for overseeing the estimate of the reserves, future production and income.
Mr. Stell, an employee of Ryder Scott Company L.P. (Ryder Scott) since 1992, is an Advising Senior Vice President and is responsible for coordinating and supervising staff and consulting engineers of the company in ongoing reservoir evaluation studies worldwide. Before joining Ryder Scott, Mr. Stell served in a number of engineering positions with Shell Oil Company and Landmark Concurrent Solutions. For more information regarding Mr. Stell’s geographic and job specific experience, please refer to the Ryder Scott Company website at www.ryderscott.com/Experience/Employees.
Mr. Stell earned a Bachelor of Science degree in Chemical Engineering from Purdue University in 1979 and a Master of Science Degree in Chemical Engineering from the University of California, Berkeley, in 1981. He is a licensed Professional Engineer in the State of Texas. He is also a member of the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers.
In addition to gaining experience and competency through prior work experience, the Texas Board of Professional Engineers requires a minimum of fifteen hours of continuing education annually, including at least one hour in the area of professional ethics, which Mr. Stell fulfills. As part of his 2009 continuing education hours, Mr. Stell attended an internally presented 13 hours of formalized training as well as a day-long public forum relating to 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. Mr. Stell attended an additional 15 hours of formalized in-house training as well as an additional five hours of formalized external training during 2009 covering such topics as the SPE/WPC/AAPG/SPEE Petroleum Resources Management System, reservoir engineering, geoscience and petroleum economics evaluation methods, procedures and software and ethics for consultants. As part of his 2010 continuing education hours, Mr. Stell attended an internally presented six hours of formalized training and ten hours of formalized external training covering such topics as updates concerning the implementation of the latest SEC oil and gas reporting requirements, reserve reconciliation processes, overviews of the various productive basins of North America, evaluations of resource play reserves, evaluation of enhanced oil recovery reserves, and ethics training. For each year starting 2011 through 2013, as of the date of this report, Mr. Stell has 20 hours of continuing education hours relating to reserves, reserve evaluations, and ethics.
Based on his educational background, professional training and over 30 years of practical experience in the estimation and evaluation of petroleum reserves, Mr. Stell has attained the professional qualifications for a Reserves Estimator and Reserves Auditor set forth in Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of Petroleum Engineers as of February 19, 2007.
PETROLEUM RESERVES DEFINITIONS
As Adapted From:
RULE 4-10(a) of REGULATION S-X PART 210
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC)
PREAMBLE
On January 14, 2009, the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas Reporting; Final Rule” in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas Reporting; Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions to the oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization of Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to herein collectively as the “SEC regulations”. The SEC regulations take effect for all filings made with the United States Securities and Exchange Commission as of December 31, 2009, or after January 1, 2010. Reference should be made to the full text under Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) for the complete definitions (direct passages excerpted in part or wholly from the aforementioned SEC document are denoted in italics herein).
Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. All reserve estimates involve an assessment of the uncertainty relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty in their recoverability. Under the SEC regulations as of December 31, 2009, or after January 1, 2010, a company may optionally disclose estimated quantities of probable or possible oil and gas reserves in documents publicly filed with the SEC. The SEC regulations continue to prohibit disclosure of estimates of oil and gas resources other than reserves and any estimated values of such resources in any document publicly filed with the SEC unless such information is required to be disclosed in the document by foreign or state law as noted in §229.1202 Instruction to Item 1202.
Reserves estimates will generally be revised only as additional geologic or engineering data become available or as economic conditions change.
Reserves may be attributed to either natural energy or improved recovery methods. Improved recovery methods include all methods for supplementing natural energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance, natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible displacement fluids. Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.
Reserves may be attributed to either conventional or unconventional petroleum accumulations. Petroleum accumulations are considered as either conventional or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree of processing prior to sale. Examples of unconventional petroleum accumulations include coalbed or coalseam methane
(CBM/CSM), basin-centered gas, shale gas, gas hydrates, natural bitumen and oil shale deposits. These unconventional accumulations may require specialized extraction technology and/or significant processing prior to sale.
Reserves do not include quantities of petroleum being held in inventory.
Because of the differences in uncertainty, caution should be exercised when aggregating quantities of petroleum from different reserves categories.
RESERVES (SEC DEFINITIONS)
Securities and Exchange Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:
Reserves. Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.
Note to paragraph (a)(26): Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).
PROVED RESERVES (SEC DEFINITIONS)
Securities and Exchange Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves 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 be economically 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.
PROVED RESERVES (SEC DEFINITIONS) CONTINUED
(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.
PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINES
As Adapted From:
RULE 4-10(a) of REGULATION S-X PART 210
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC)
and
PETROLEUM RESOURCES MANAGEMENT SYSTEM (SPE-PRMS)
Sponsored and Approved by:
SOCIETY OF PETROLEUM ENGINEERS (SPE)
WORLD PETROLEUM COUNCIL (WPC)
AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS (AAPG)
SOCIETY OF PETROLEUM EVALUATION ENGINEERS (SPEE)
Reserves status categories define the development and producing status of wells and reservoirs. Reference should be made to Title 17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are based on excerpts from the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are denoted in italics herein).
DEVELOPED RESERVES (SEC DEFINITIONS)
Securities and Exchange Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:
Developed oil and gas reserves are reserves of any category that can be expected to be recovered:
(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.
Developed Producing (SPE-PRMS Definitions)
While not a requirement for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified according to the guidance contained in the SPE-PRMS as Producing or Non-Producing.
Developed Producing Reserves
Developed Producing Reserves are expected to be recovered from completion intervals that are open and producing at the time of the estimate.
Improved recovery reserves are considered producing only after the improved recovery project is in operation.
Developed Non-Producing
Developed Non-Producing Reserves include shut-in and behind-pipe reserves.
Shut-In
Shut-in Reserves are expected to be recovered from:
(1) completion intervals which are open at the time of the estimate, but which have not started producing;
(2) wells which were shut-in for market conditions or pipeline connections; or
(3) wells not capable of production for mechanical reasons.
Behind-Pipe
Behind-pipe Reserves are expected to be recovered from zones in existing wells, which will require additional completion work or future re-completion prior to start of production.
In all cases, production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.
UNDEVELOPED RESERVES (SEC DEFINITIONS)
Securities and Exchange Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:
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 paragraph (a)(2) of this section, or by other evidence using reliable technology establishing reasonable certainty.
|
| TABLE A |
PROPERTY RANKING BY PROVED DISCOUNTED FUTURE NET INCOME |
| |
ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS |
| |
AS OF DECEMBER 31, 2013 |
| |
(SEC PARAMETERS) |
|
|
|
|
|
|
|
|
|
|
| $ |
|
|
|
|
|
|
|
|
| RANK/ |
| NET RESERVES |
| $ |
| FUTURE NET |
| PERCENT |
| CUMULATIVE |
|
|
| ||
|
| RESV. |
| (BARRELS) |
| (MMCF) |
| FUTURE NET |
| INCOME DISC. |
| OF |
| PERCENT |
| TABLE |
|
|
| TYPE (A) |
| OIL/COND |
| GAS |
| INCOME (B) |
| AT 10.0% |
| TOTAL |
| OF TOTAL |
| NUMBER |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEWITT COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MACHICEK 1H (EAGLE FORD) |
| PV-SI |
| 8,881 |
| 32 |
| 521,162 |
| 432,436 |
| 31.948 |
| 31.948 |
| 11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEWITT COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOENING UNIT A 1H (EAGLE FORD) |
| PV-PD |
| 6,693 |
| 69 |
| 378,109 |
| 378,577 |
| 27.969 |
| 59.918 |
| 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LAVACA COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAHMANN UNIT A 1H (EDWARDS) |
| PV-PD |
| 4,332 |
| 186 |
| 286,047 |
| 291,662 |
| 21.548 |
| 81.466 |
| 6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEWITT COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LANGLEY UNIT 1H (EAGLE FORD) |
| PV-SI |
| 2,749 |
| 28 |
| 253,045 |
| 240,692 |
| 17.782 |
| 99.248 |
| 8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GONZALES COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAALI 1H 1 (EAGLE FORD) |
| PV-PD |
| 2,533 |
| 0 |
| 153,408 |
| 93,345 |
| 6.896 |
| 106.144 |
| 10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GONZALES COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KOENNING UNIT 1H 1H (EAGLE FORD) |
| PV-PD |
| 543 |
| 0 |
| 24,735 |
| 20,224 |
| 1.494 |
| 107.639 |
| 7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GONZALES COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTTO 1H 1H (EAGLE FORD) |
| PV-PD |
| 358 |
| 0 |
| 13,922 |
| 12,669 |
| 0.936 |
| 108.574 |
| 12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEWITT COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG UNIT 1H (EAGLE FORD) |
| PV-UD |
| 0 |
| 0 |
| 0 |
| 0 |
| 0.000 |
| 108.574 |
| 9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEWITT COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIELE UNIT 1H (EAGLE FORD) |
| PV-UD |
| 0 |
| 0 |
| 0 |
| 0 |
| 0.000 |
| 108.574 |
| 14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GONZALES COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERKINS 1H 1H (EAGLE FORD) |
| PV-PD |
| 0 |
| 0 |
| -3,047 |
| -2,900 |
| -0,214 |
| 108.360 |
| 13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAGLEVILLE |
| 11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LAVACA COUNTY, TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONNIFF UNIT A 1H (EAGLE FORD) |
| PV-PD |
| 0 |
| 0 |
| -125,000 |
| -113,159 |
| -8.360 |
| 100.000 |
| 5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PROVED |
|
|
| 26,089 |
| 316 |
| 1,502,381 |
| 1,353,545 |
| 100.000 |
| 100.000 |
|
|
|
(A) RESERVE TYPES: | PV = PROVED | STATUS: | PD = PRODUCING | DP = DEPLETED |
| PB = PROBABLE |
| BP = BEHIND PIPE | PB = PAYBACK |
| PS = POSSIBLE |
| SI = SHUT IN | NP = NON-PRODUCING |
|
| UD = UNDEVELOPED |
| |
(B) BEFORE FEDERAL OR STATE INCOME TAXES |
|
| ||
|
| TABLE B |
SUMMARY OF GROSS AND NET RESERVES AND INCOME DATA |
| |
ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS |
| |
AS OF DECEMBER 31, 2013 |
| |
(SEC PARAMETERS) |
|
|
|
|
| ESTIMATED REMAINING RESERVES |
| ESTIMATED FUTURE DOLLARS, $ |
| ||||||||||||
|
|
|
| 100% GROSS |
| NET |
| GROSS REV |
|
|
| NET INCOME BEFORE FIT |
| ||||||
EAGLEVILLE |
| RESV |
| (BARRELS) |
| (MMCF) |
| (BARRELS) |
| (MMCF) |
| AFTER |
| TOTAL |
|
|
| DISCOUNT |
|
VARIOUS COS., TEXAS |
| TYPE (A) |
| OIL/COND |
| GAS |
| OIL/COND |
| SALES GAS |
| PROD TAX |
| DEDUCTION |
| UNDISC |
| AT 10.00% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOENING UNIT A 1H (EAGLE FORD) |
| PV-PD |
| 9,427 |
| 111 |
| 6,693 |
| 69 |
| 1,098,938 |
| 720,829 |
| 378,109 |
| 378,577 |
|
CONNIFF UNIT A 1H (EAGLE FORD) |
| PV-PD |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 125,000 |
| (125,000 | ) | (113,159 | ) |
GRAHMANN UNIT A 1H (EDWARDS) |
| PV-PD |
| 5,854 |
| 293 |
| 4,332 |
| 186 |
| 1,268,778 |
| 982,731 |
| 286,047 |
| 291,662 |
|
KOENNING UNIT 1H 1H (EAGLE FORD) |
| PV-PD |
| 21,298 |
| 18 |
| 543 |
| 0 |
| 52,583 |
| 27,848 |
| 24,735 |
| 20,224 |
|
LANGLEY UNIT 1H (EAGLE FORD) |
| PV-SI |
| 16,213 |
| 191 |
| 2,749 |
| 28 |
| 451,336 |
| 198,290 |
| 253,045 |
| 240,692 |
|
LONG UNIT 1H (EAGLE FORD) |
| PV-UD |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
|
MAALI 1H 1 (EAGLE FORD) |
| PV-PD |
| 85,141 |
| 73 |
| 2,533 |
| 0 |
| 245,092 |
| 91,684 |
| 153,408 |
| 93,345 |
|
MACHICEK 1H (EAGLE FORD) |
| PV-SI |
| 48,772 |
| 198 |
| 8,881 |
| 32 |
| 920,540 |
| 399,378 |
| 521,162 |
| 432,436 |
|
OTTO 1H 1H (EAGLE FORD) |
| PV-PD |
| 13,979 |
| 7 |
| 358 |
| 0 |
| 34,643 |
| 20,721 |
| 13,922 |
| 12,669 |
|
PERKINS 1H 1H (EAGLE FORD) |
| PV-PD |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 3,047 |
| (3,047 | ) | (2,900 | ) |
THIELE UNIT 1H (EAGLE FORD) |
| PV-UD |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVED PRODUCING |
|
|
| 135,700 |
| 501 |
| 14,459 |
| 256 |
| 2,700,034 |
| 1,971,861 |
| 728,173 |
| 680,417 |
|
PROVED SHUT-IN |
|
|
| 64,985 |
| 389 |
| 11,630 |
| 60 |
| 1,371,876 |
| 597,668 |
| 774,208 |
| 673,128 |
|
PROVED UNDEVELOPED |
|
|
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
|
TOTAL PROVED |
|
|
| 200,684 |
| 891 |
| 26,089 |
| 316 |
| 4,071,910 |
| 2,569,529 |
| 1,502,381 |
| 1,353,545 |
|
GRAND SUMMARIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVED PRODUCING |
|
|
| 135,700 |
| 501 |
| 14,459 |
| 256 |
| 2,700,034 |
| 1,971,861 |
| 728,173 |
| 680,417 |
|
PROVED SHUT-IN |
|
|
| 64,985 |
| 389 |
| 11,630 |
| 60 |
| 1,371,876 |
| 597,668 |
| 774,208 |
| 673,128 |
|
PROVED UNDEVELOPED |
|
|
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
| 0 |
|
TOTAL PROVED |
|
|
| 200,684 |
| 891 |
| 26,089 |
| 316 |
| 4,071,910 |
| 2,569,529 |
| 1,502,381 |
| 1,353,545 |
|
(A) RESERVE TYPES: | PV = PROVED | STATUS: | PD | = PRODUCING | DP=DEPLETED |
| PB = PROBABLE |
| BP | = BEHIND PIPE | PB = PAYBACK |
| PS = POSSIBLE |
| SI | = SHUT IN | NP = NON-PRODUCING |
|
| UD = UNDEVELOPED |
| ||
|
| TABLE C |
SUMMARY OF INITIAL BSIC DATA |
| |
ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS |
| |
AS OF DECEMBER 31, 2013 |
| |
(SEC PARAMETERS) |
|
|
|
|
| (A) |
| NO. |
|
|
| INTERESTS |
| LIQUIDS |
| GAS DATA |
| GROSS |
| ||||
EAGLEVILLE |
| PRIM |
| RESV |
| OF |
| LOCATION |
| EVALUATED |
| PRICE |
| PRICE |
|
|
| COST |
| ||
VARIOUS COS., TEXAS |
| PROD |
| TYPE |
| WELLS |
| SEC TWP RNG |
| W.I. |
| N.R.I. |
| $/bbl |
| $/Mcf |
| BTU |
| $/MO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BOENING UNIT A 1H (EAGLE FORD) |
| GAS |
| PV-PD |
| 1 |
|
|
| 1.000000 |
| 0.710000 |
| 96.78 |
| 3.42 |
| 1,000 |
| 9,000 |
|
CONNIFF UNIT A 1H (EAGLE FORD) |
| GAS |
| PV-PD |
| 0 |
|
|
| 1.000000 |
| 0.737711 |
| 96.78 |
| 3.42 |
| 1,000 |
| 9,000 |
|
GRAHMANN UNIT A 1H (EDWARDS) |
| GAS |
| PV-PD |
| 1 |
|
|
| 1.000000 |
| 0.740000 |
| 96.78 |
| 3.42 |
| 1,000 |
| 15,000 |
|
KOENNING UNIT 1H 1H (EAGLE FORD) |
| OIL |
| PV-PD |
| 1 |
|
|
| 0.024375 |
| 0.025512 |
| 101.44 |
| 3.67 |
| 1,000 |
| 9,900 |
|
LANGLEY UNIT 1H (EAGLE FORD) |
| GAS |
| PV-SI |
| 1 |
|
|
| 0.250000 |
| 0.169550 |
| 96.78 |
| 3.42 |
| 1,000 |
| 9,000 |
|
LONG UNIT 1H (EAGLE FORD) |
| GAS |
| PV-UD |
| 0 |
|
|
| 0.250000 |
| 0.177500 |
| 96.78 |
| 3.42 |
| 1,000 |
| 9,000 |
|
MAALI 1H 1 (EAGLE FORD) |
| OIL |
| PV-PD |
| 1 |
|
|
| 0.032500 |
| 0.029746 |
| 101.44 |
| 3.67 |
| 1,000 |
| 9,200 |
|
MACHICEK 1H (EAGLE FORD) |
| OIL |
| PV-SI |
| 1 |
|
|
| 0.250000 |
| 0.182100 |
| 96.78 |
| 3.42 |
| 1,000 |
| 9,000 |
|
OTTO 1H 1H (EAGLE FORD) |
| OIL |
| PV-PD |
| 1 |
|
|
| 0.024375 |
| 0.025608 |
| 101.44 |
| 3.67 |
| 1,000 |
| 12,400 |
|
PERKINS 1H 1H (EAGLE FORD) |
| OIL |
| PV-PD |
| 0 |
|
|
| 0.024375 |
| 0.025608 |
| 101.44 |
| 3.67 |
| 1,000 |
| 20,000 |
|
THIELE UNIT 1H (EAGLE FORD) |
| GAS |
| PV-UD |
| 0 |
|
|
| 0.250000 |
| 0.177500 |
| 96.78 |
| 3.42 |
| 1,000 |
| 9,000 |
|
(A) RESERVE TYPES: | PV = PROVED | STATUS: | PD = PRODUCING | DP = DEPLETED |
| PB = PROBABLE |
| BP = BEHIND PIPE | PB = PAYBACK |
| PS = POSSIBLE |
| SI = SHUT IN | NP = NON-PRODUCING |
|
| UD = UNDEVELOPED |
| |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 1 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31,2013 GRAND SUMMARY (SEC PARAMETERS) TOTAL PROVEDD ALL CATEGORIED REVENUE INTEREST PRODUCT PRICES DISCOUNTE Expense Oil/ Plant Oil/Cond Pit. Prod. Gas FU1TURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) CONPOUNDED MONTHLY INITIAL 500% 1,424,869 FINAL 1500% 1,287,543 REMARKS 2000% 1,226,325 2500% 1,169,519 3000% 1,116,822 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTIONTON AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas Oil/Cond. Pit Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 7 41,845 20,996 279 7,537 8,540 102 97.08 28.52 3.42 2015 7 28,720 11,262 174 4,832 5,385 70 97.17 29.05 3.42 2016 7 22,460 8,188 131 3,617 4,126 55 97.22 29.27 3.42 2017 7 18,730 6,543 107 2,930 3,381 46 97.26 29.39 3.42 2018 7 15,135 4,791 74 2,215 2,356 29 97.31 28.62 3.42 2019 5 10,891 1,838 31 1,050 526 5 97.64 26.23 3.42 2020 3 8,842 0 16 644 0 2 98.08 0.00 3.42 2021 3 8,066 0 14 579 0 1 98.11 0.00 3.42 2022 3 5,967 0 11 490 0 1 97.88 0.00 3.42 2023 2 5,399 0 10 447 0 1 97.87 0.00 3.42 2024 2 5,054 0 10 415 0 1 97.89 0.00 3.42 2025 2 4,719 0 9 386 0 1 97.90 0.00 3.42 2026 2 4,287 0 8 336 0 1 97.99 0.00 3.42 2027 1 2,746 0 2 82 0 0 101.44 0.00 0.00 2028 1 2,588 0 2 77 0 0 101.44 0.00 0.00 Sub-Total 185,448 53,619 879 25,636 24,315 316 97.32 28.85 3.42 Remainder 15,236 0 12 453 0 0 101.44 0.00 0.00 Total Future 200,684 53,619 891 26,089 24,315 316 97.39 28.85 3.42 Cumulative 264,287 0 789 Ultimate 464,971 53,619 1,680 COMPANY FUTURE GROSS REVENUE (FGR)-$ PRODUCTION TAXES - $ FGRAFTER From From From Oil/ Plant Prod./ PROCJUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate ate Other Gas TAXES - $ 2014 731,719 243,595 348,489 0 1,323,803 33,659 18,270 26,137 1,245,738 2015 469,523 156,452 239,816 0 865,791 21,598 11,734 17,986 814,473 2016 351,667 120,790 188,716 0 661,173 16,177 9,059 14,154 621,783 2017 284,948 99,378 156,916 0 541,242 13,108 7,453 11,769 508,913 2018 215,492 67,442 98,027 0 380,961 9,913 5,058 7,352 358,638 2019 102,557 13,804 18,035 0 134,395 4,718 1,035 1,353 127,290 2020 63,144 0 5,689 0 68,833 2,905 0 427 65,502 2021 56,765 0 5,063 0 61,828 2,611 0 380 58,837 2022 47,963 0 4,581 0 52,545 2,206 0 344 49,995 2023 43,751 0 4,190 0 47,941 2,013 0 314 45,614 2024 40,651 0 3,876 0 44,527 1,870 0 291 42,366 2025 37,773 0 3,591 0 41,364 1,738 0 269 39,357 2026 32,885 0 3,044 0 35,929 1,513 0 228 34,188 2027 8,286 0 0 0 8,286 381 0 0 7,905 2028 7,810 0 0 0 7,810 359 0 0 7,451 Sub-Total 2,494,935 701,461 1,080,034 0 4,276,429 114,767 52,6100 81,003 4,028,050 Remainder 45,974 0 0 0 45,974 2,115 0 0 43,859 Total Futur 2,540,909 701,461 1,080,034 0 4,322,404 116,882 52,610 81,003 4,071,910 DEDUCTIONS - $ FUTURE NET IN;OME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Cots Taxes Cost Other Total Annual Cumulative @ 10.00% 2014 345,361 32,638 3,047 0 381,046 864,692 864,692 826,665 2015 352,111 21,351 125,000 0 498,462 316,011 1,180,703 268,610 2016 352,111 16,303 0 0 368,414 253,370 1,434,073 198,444 2017 352,111 13,345 0 0 365,455 143,457 1,577,530 101,713 2018 275,077 9,398 0 0 284,475 74,163 1,651,693 47,671 2019 83,169 3,334 128,047 0 214,549 -87,260 1,564,434 -49 57 2020 33,484 1,721 156,250 0 191,455 -125,952 1,438,481 -66,999 2021 33,484 1,546 0 0 35,029 23,808 1,462,289 11,303 2022 30,845 1,314 0 0 32,159 17,836 1,480,125 7,667 2023 30,588 1,199 3,047 0 34,833 10,781 1,490,906 4,147 2024 30,588 1,113 0 0 31,701 10,665 1,501,570 3 57 2025 30,588 1,034 0 0 31,622 7,735 1,509,305 2,466 2026 28,010 898 0 0 28,908 5,280 1,514,585 1,525 2027 3,588 207 31,250 0 35,045 -27,140 1,487,445 -6,756 2028 3,588 195 0 0 3,783 3,667 1,491,113 867 Sub-Total 984,702 105,595 446,641 0 2,536,938 1,491,113 1,351,324 Remainder 27,379 1,149 4,063 0 32,591 11,268 1,502,381 2,221 Total Future 012,081 106,745 450,703 0 2,569,529 1,502,381 1,353,545 Life of summary is: 22.64 years. These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 2 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) GRAND SUMMARY PROVED PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 5.00% 703,132 FINAL 15.00% 658,098 REMARKS 20.00% 635,694 25.00% 613,298 30.00% 591,175 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cod. Plant Products Sales Gas Oil/Cond.t Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) (5 $/bbl) ($/Mcf) 2014 5 22,568 9,005 144 4,120 6,507 81 97.33 29.24 3.42 2015 5 17,921 6,268 106 2,904 4,539 60 97.42 29.58 3.42 2016 5 15,109 4,932 86 2,304 3,574 48 97.48 29.74 3.42 2017 5 13,082 4,088 72 1,921 2,965 41 97.51 29.84 3.42 2018 5 10,500 2,797 45 1,386 2,018 24 97.62 29.02 3.42 2019 3 7,092 397 9 370 282 2 99.24 26.23 3.42 2020 2 6,289 0 5 179 0 0 101.44 0.00 0.00 2021 2 5,794 0 5 165 0 0 101.44 0.00 0.00 2022 2 3,911 0 3 116 0 0 101.44 0.00 0.00 2023 1 3,519 0 3 105 0 0 101.44 0.00 0.00 2024 1 3,315 0 3 99 0 0 101.44 0.00 0.00 2025 1 3,108 0 2 92 0 0 101.44 0.00 0.00 2026 1 2,921 0 2 87 0 0 101.44 0.00 0.00 2027 1 2,746 0 2 82 0 0 101.44 0.00 0.00 2028 1 2,588 0 2 77 0 0 101.44 0.00 0.00 Sub-Total 120,464 27,487 490 14,006 19,884 256 97.77 29.43 3.42 Remainder 15,236 0 12 453 0 0 101.44 0.00 0.00 Total Future 135,700 27,487 501 14,459 19,884 256 97.89 29.43 3.42 Cumulative 264,287 0 789 Ultimate 399,987 27,487 1,291 COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES-$ 2014 401,021 190,266 277,444 0 868,731 18,447 14,270 20,808 815,206 2015 282,970 134,246 204,055 0 621,271 13,017 10,068 15,304 582,881 2016 224,568 106,307 164,706 0 495,581 10,330 7,973 12,353 464,925 2017 187,274 88,458 138,580 0 414,313 8,615 6,634 10,394 388,671 2018 135,306 58,573 83,026 0 276,906 6,224 4,393 6,227 260,062 2019 36,689 7,394 6,192 0 50,275 1,688 555 464 47,569 2020 18,157 0 0 0 18,157 835 0 0 17,322 2021 16,729 0 0 0 16,729 770 0 0 15,960 2022 11,737 0 0 0 11,737 540 0 0 11,197 2023 10,618 0 0 0 10,618 488 0 0 10,130 2024 10,003 0 0 0 10,003 460 0 0 9,543 2025 9,377 0 0 0 9,377 431 0 0 8,945 2026 8,815 0 0 0 8,815 405 0 0 8,409 2027 8,286 0 0 0 8,286 381 0 0 7,905 2028 7,810 0 0 0 7,810 359 0 0 7,451 Sub-Total 1,369,360 585,245 874,003 0 2,828,609 62,991 43,893 65,550 2,656,175 Remainder 45,974 0 0 0 45,974 2,115 0 0 43,859 Total Future 1,415,335 585,245 874,003 0 2,874,583 65,105 43,893 65,550 2 00,034 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @10.00 % 2014 298,111 21,362 3,047 0 322,519 492,687 492,687 471,490 2015 298,111 15,280 125,000 0 438,391 144,491 637,177 120,047 2016 298,111 12,190 0 0 310,301 154,624 791,801 121,137 2017 298,111 10,192 0 0 308,303 80,368 872,169 57,034 2018 221,077 6,813 0 0 227,890 32,172 904,340 20 54 2019 33,650 1,243 128,047 0 162,940 -115,371 788,969 -66,073 2020 6,484 454 125,000 0 131,938 -114,616 674,353 -61,635 2021 6,484 418 0 0 6,902 9,058 683,411 4,297 2022 3,845 293 0 0 4,139 7,059 690,470 3,033 2023 3,588 265 3,047 0 6,900 3,229 693,699 1,207 2024 3,588 250 0 0 3,838 5,705 699,404 2,007 2025 3,588 234 0 0 3,822 5,123 704,527 1,632 2026 3,588 220 0 0 3,808 4,601 709,128 1,326 2027 3,588 207 0 0 3,795 4,110 713,238 1,073 2028 3,588 195 0 0 3,783 3,667 716,905 867 Sub-Total 1,485,511 69,618 384,141 0 1,939,270 716,905 678,196 Remainder 27,379 1,149 4,063 0 32,591 11,268 728,173 2,221 Total Future 1,512,890 70,767 388,203 0 1,971,861 728,173 680,417 Life of summary is: 22.64 years. These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 3 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) GRAND SUMMARY PROVED SHUT-IN REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 5.00% 721,736 FINAL 15.00% 629,445 REMARKS 20.00% 590,630 25.00% 556,220 30.00% 525,647 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 2 19,277 11,991 136 3,417 2,033 21 96.78 26.23 3.42 2015 2 10,799 4,993 68 1,928 847 10 96.78 26.23 3.42 2016 2 7,351 3,256 45 1,313 552 7 96.78 26.23 3.42 2017 2 5,647 2,455 35 1,009 416 5 96.78 26.23 3.42 2018 2 4,635 1,994 28 829 338 4 96.78 26.23 3.42 2019 2 3,799 1,441 22 681 244 3 96.78 26.23 3.42 2020 1 2,553 0 10 465 0 96.78 0.00 3.42 2021 1 2,272 0 9 414 0 96.78 0.00 3.42 2022 1 2,056 0 8 374 0 96.78 0.00 3.42 2023 1 1,880 0 8 342 0 96.78 0.00 3.42 2024 1 1,739 0 7 317 0 96.78 0.00 3.42 2025 1 1,611 0 7 293 0 96.78 0.00 3.42 2026 1 1,366 0 6 249 0 96.78 0.00 3.42 2027 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 64,985 26,132 389 11,630 4,431 60 96.78 26.23 3.42 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 64,985 26,132 389 11,630 4,431 60 96.78 26.23 3.42 Cumulative 0 0 0 Ultimate 64,985 26,132 389 COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Plant Products Gas Other Total Other Gas TAXES - $ 2014 330,697 53,329 71,046 0 455,072 15,212 4,000 5,328 430,532 2015 186,554 22,206 35,761 0 244,521 8,581 1,665 2,682 231,592 2016 127,099 14,482 24,010 0 165,592 5,847 1,086 1,801 156,858 2017 97,674 10,919 18,336 0 126,929 4,493 819 1,375 120,242 2018 80,186 8,869 15,001 0 104,055 3,689 665 1,125 98,577 2019 65,868 6,410 11,842 0 84,120 3,030 481 888 79 21 2020 44,987 0 5,689 0 50,676 2,069 0 427 48,180 2021 40,036 0 5,063 0 45,099 1,842 0 380 42,878 2022 36,226 0 4,581 0 40,807 1,666 0 344 38 97 2023 33,133 0 4,190 0 37,323 1,524 0 314 35,485 2024 30,648 0 3,876 0 34,524 1,410 0 291 32,823 2025 28,396 0 3,591 0 31,987 1,306 0 269 30,412 2026 24,071 0 3,044 0 27,115 1,107 0 228 25 79 2027 0 0 0 0 0 0 0 0 0 Sub-Total 1,125,574 116,216 206,030 0 1,447,821 51,776 8,716 15,452 1,371,876 Remainder 0 0 0 0 0 0 0 0 0 Total Future 1,125,574 116,216 206,030 0 1,447,821 51,776 8,716 15,452 1,371,876 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 47,250 11,277 0 0 58,527 372,005 372,005 355,175 2015 54,000 6,071 0 0 60,071 171,521 543,526 148,562 2016 54,000 4,113 0 0 58,113 98,746 642,271 77,308 2017 54,000 3,153 0 0 57,153 63,089 705,361 44,680 2018 54,000 2,585 0 0 56,585 41,992 747,353 26,916 2019 49,518 2,091 0 0 51,609 28,112 775,464 16,316 2020 27,000 1,267 31,250 0 59,517 -11,337 764,128 -5,364 2021 27,000 1,127 0 0 28,127 14,750 778,878 7,006 2022 27,000 1,020 0 0 28,020 10,777 789,655 4,634 2023 27,000 933 0 0 27,933 7,551 797,206 2,940 2024 27,000 863 0 0 27,863 4,960 802,166 1 50 2025 27,000 800 0 0 27,800 2,612 804,778 835 2026 24,422 678 0 0 25,100 679 805,458 198 2027 0 0 31,250 0 31,250 -31,250 774,208 -7,829 Sub-Total 499,190 35,978 62,500 0 597,668 774,208 673,128 Remainder 0 0 0 0 0 0 774,208 0 Total Future 499,190 35,978 62,500 0 597,668 774,208 673,128 Life of summary is: 12.90 years. These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 4 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, DEWITT COUNTY, TEXAS GAS LEASE ZAZA ENERGY, LLC - OPERATOR PROVED BOENING UNIT A 1H PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) (S/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 1.00000000 0.71000000 0.71000000 0.71000000 96.78 26.23 3.42 5.00% 381,264 FINAL 1.00000000 0.71000000 0.71000000 0.71000000 96.78 26.23 3.42 15.00% 372,086 REMARKS 20.00% 363,215 25.00% 352,952 30.00% 341,977 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 1 3,241 5,223 38 2,301 3,708 24 96.78 26.23 3.42 2015 1 2,069 3,334 24 1,469 2,367 15 96.78 26.23 3.42 2016 1 1,556 2,509 18 1,105 1,781 11 96.78 26.23 3.42 2017 1 1,255 2,023 15 891 1,436 9 96.78 26.23 3.42 2018 1 1,060 1,709 12 753 1,213 8 96.78 26.23 3.42 2019 1 246 397 3 175 282 2 96.78 26.23 3.42 2020 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 9,427 15,194 111 6,693 10,788 69 96.78 26.23 3.42 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 9,427 15,194 111 6,693 10,788 69 96.78 26.23 3.42 Cumulative 7,019 0 86 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 16,446 15,194 197 SHRINKAGE = 12.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES-$ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 222,671 97,270 81,464 0 401,405 10,243 7,295 6,110 377,757 2015 142,150 62,096 52,006 0 256,252 6,539 4,657 3,900 241,155 2016 106,946 46,717 39,126 0 192,789 4,919 3,504 2,934 181,431 2017 86,234 37,670 31,549 0 155,452 3,967 2,825 2,366 146,294 2018 72,848 31,822 26,651 0 131,322 3,351 2,387 1,999 123,585 2019 16,926 7,394 6,192 0 30,513 779 555 464 28 15 2020 0 0 0 0 0 0 0 0 0 Sub-Total 647,775 282,969 236,989 0 1,167,732 29,798 21,223 17,774 1,098,938 Remainder 0 0 0 0 0 0 0 0 0 Total Future 647,775 282,969 236,989 0 1,167,732 29,798 21,223 17,774 1,098,938 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 108,000 9,853 0 0 117,853 259,905 259,905 249,020 2015 108,000 6,290 0 0 114,290 126,866 386,770 109,854 2016 108,000 4,732 0 0 112,732 68,699 455,469 53,842 2017 108,000 3,816 0 0 111,816 34,478 489,947 24,476 2018 108,000 3,223 0 0 111,223 12,362 502,309 7,981 2019 27,166 749 0 0 27,915 800 503,109 481 2020 0 0 125,000 0 125,000 -125,000 378,109 -67,078 Sub-Total 567,166 28,663 125,000 0 720,829 378,109 378,577 Remainder 0 0 0 0 0 0 378,109 0 Total Future 567.166 28.663 125,000 0 720,829 378,109 378,577 Life of evaluation is: 5.25 years. Final production rate: 0.932 MMcf/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 5 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, LAVACA COUNTY, TEXAS GAS LEASE ZAZA ENERGY, LLC - OPERATOR PROVED CONNIFF UNIT A 1H PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME-$ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 1.00000000 5.00% -118,920 FINAL 1.00000000 15.00% -107 00 REMARKS 20.00% -102,524 UNECONOMIC AT CURRENT PRICES. 25.00% -97,617 30.00% -92,963 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 0 0 0 0 0 0 0 0.00 0.00 0.00 2015 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 0 0 0 0 0 0 0.00 0.00 0.00 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 0 0 0 0 0 0 0.00 0.00 0.00 Cumulative 3,527 0 115 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 3,527 0 115 SHRINKAGE = 16.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 0 0 0 0 0 0 0 0 0 2015 0 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 0 0 Remainder 0 0 0 0 0 0 0 0 0 Total Future 0 0 0 0 0 0 0 0 0 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative ® 10.00 % 2014 0 0 0 0 0 0 0 0 2015 0 0 125,000 0 125,000 -125,000 -125,000 -113,159 Sub-Total 0 0 125,000 0 125,000 -125,000 -113,159 Remainder 0 0 0 0 0 0 -125,000 0 Total Future 0 0 125,000 0 125,000 -125,000 -113,159 Life of evaluation is: 0.00 years. Final production rate: 1.809 MMcf/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 6 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, LAVACA COUNTY, TEXAS GAS LEASE ZAZA ENERGY, LLC - OPERATOR PROVED GRAHMANN UNIT A 1H PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Pit. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 1.00000000 0.74000000 0.74000000 0.74000000 96.78 33.23 3.42 5.00% 291,328 FINAL 1.00000000 0.74000000 0.74000000 0.74000000 96.78 33.23 3.42 15.00% 288,591 REMARKS 20.00% 283,233 25.00% 276,397 30.00% 268,663 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond, Plant Products Sales Gas (A) Oil/Cond. Pit Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 1 1,801 3,782 90 1,333 2,799 57 96.78 33.23 3.42 2015 1 1,397 2,934 70 1,034 2,171 44 96.78 33.23 3.42 2016 1 1,154 2,423 58 854 1,793 37 96.78 33.23 3.42 2017 1 984 2,065 49 728 1,528 31 96.78 33.23 3.42 2018 1 518 1,088 26 383 805 16 96.78 33.23 3.42 2019 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 5,854 12,293 293 4,332 9,096 186 96.78 33.23 3.42 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 5,854 12,293 293 4,332 9,096 186 96.78 33.23 3.42 Cumulative 7,987 0 387 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 13,841 12,293 680 SHRINKAGE = 14.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 128,974 92,996 195,979 0 417,949 5,933 6,975 14,698 390,343 2015 100,063 72,150 152,049 0 324,262 4,603 5,411 11,404 302,844 2016 82,644 59,590 125,580 0 267,813 3,802 4,469 9,418 250,124 2017 70,437 50,789 107,032 0 228,258 3,240 3,809 8,027 213,181 2018 37,100 26,751 56,375 0 120,226 1,707 2,006 4,228 112,285 2019 0 0 0 0 0 0 0 0 0 Sub-Total 419,218 302,276 637,014 0 1,358,509 19,284 22,671 47,776 1,268,778 Remainder 0 0 0 0 0 0 0 0 0 Total Future 419,218 302,276 637,014 0 1,358,509 19,284 22,671 47,776 1,268,778 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 180,000 10,274 0 0 190,274 200,069 200,069 191,260 2015 180,000 7,971 0 0 187,971 114,873 314,942 99,397 2016 180,000 6,584 0 0 186,584 63,540 378,482 49,809 2017 180,000 5,611 0 0 185,611 27,570 406,053 19,607 2018 104,335 2,956 0 0 107,291 4,994 411,047 3,282 2019 0 0 125,000 0 125,000 -125,000 286,047 -71,692 Sub-Total 824,335 33,396 125,000 0 982,731 286,047 291,662 Remainder 0 0 0 0 0 0 286,047 0 Total Future 824,335 33,396 125,000 0 982,731 286,047 291,662 Life of evaluation is; 4,59 years. Final production rate; 3,552 MMcf/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 7 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, GONZALES COUNTY, TEXAS OIL LEASE RILEY EXPLORATION, LLC - OPERATOR PROVED KOENNING UNIT 1H 1H PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME-$ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.02437500 0.02551170 0.02551170 101.44 3.67 5.00% 22,342 FINAL 0.02437500 0.02551170 0.02551170 101.44 3.67 15.00% 18,371 REMARKS 20.00% 16 62 25.00% 15,366 30.00% 14,154 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 1 4,159 0 4 106 0 0 101.44 0.00 0.00 2015 1 3,431 0 3 88 0 0 101.44 0.00 0.00 2016 1 2,943 0 3 75 0 0 101.44 0.00 0.00 2017 1 2,573 0 2 66 0 0 101.44 0.00 0.00 2018 1 2,298 0 2 59 0 0 101.44 0.00 0.00 2019 1 2,080 0 2 53 0 0 101.44 0.00 0.00 2020 1 1,908 0 2 49 0 0 101.44 0.00 0.00 2021 1 1,755 0 1 45 0 0 101.44 0.00 0.00 2022 1 152 0 0 4 0 0 101.44 0.00 0.00 2023 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 21,298 0 18 543 0 0 101.44 0.00 0.00 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 21,298 0 18 543 0 0 101.44 0.00 0.00 Cumulative 65,742 0 50 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 87,040 0 68 SHRINKAGE = 100.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES-$ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 10,763 0 0 0 10,763 495 0 0 10,268 2015 8,879 0 0 0 8,879 408 0 0 8,471 2016 7,616 0 0 0 7,616 350 0 0 7,265 2017 6,659 0 0 0 6,659 306 0 0 6,353 2018 5,946 0 0 0 5,946 274 0 0 5,673 2019 5,382 0 0 0 5,382 248 0 0 5,134 2020 4,936 0 0 0 4,936 227 0 0 4 09 2021 4,542 0 0 0 4,542 209 0 0 4,333 2022 394 0 0 0 394 18 0 0 376 2023 0 0 0 0 0 0 0 0 0 Sub-Total 55,118 0 0 0 55,118 2,535 0 0 52,583 Remainder 0 0 0 0 0 0 0 0 0 Total Future 55,118 0 0 0 55,118 2,535 0 0 52,583 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 2,896 269 0 0 3,165 7,103 7,103 6 77 2015 2,896 222 0 0 3,118 5,353 12,456 4,622 2016 2,896 190 0 0 3,086 4,179 16,635 3,265 2017 2,896 166 0 0 3,062 3,291 19,926 2,327 2018 2,898 149 0 0 3,044 2,628 22,554 1,682 2019 2,896 135 0 0 3,030 2,104 24,658 1,219 2020 2,896 123 0 0 3,019 1,690 26,349 887 2021 2,896 114 0 0 3,009 1,324 27,672 628 2022 257 10 0 0 267 109 27,781 49 2023 0 0 3,047 0 3,047 -3,047 24,735 -1,233 Sub-Total 23,423 1,378 3,047 0 27,848 24,735 20,224 Remainder 0 0 0 0 0 0 24,735 0 Total Future 23,423 1,378 3,047 0 27,848 24,735 20,224 Life of evaluation is: 8.09 years. Final production rate: 140 bbl/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 8 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, DEWITT COUNTY, TEXAS GAS LEASE ZAZA ENERGY, LLC - OPERATOR PROVED LANGLEY UNIT1H SHUT-IN REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.25000000 0.16955000 0.16955000 0.16955000 96.78 26.23 3.42 5.00% 247,429 FINAL 0.25000000 0.16955000 0.16955000 0.16955000 96.78 26.23 3.42 15.00% 233,395 REMARKS 20.00% 225,905 25.00% 218,459 30.00% 211,200 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond, Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 7,440 11,991 88 1,261 2,033 13 96.78 26.23 3.42 2015 3,098 4,993 36 525 847 5 96.78 26.23 3.42 2016 2,020 3,256 24 343 552 4 96.78 26.23 3.42 2017 1,523 2,455 18 258 416 3 96.78 26.23 3.42 2018 1,237 1,994 15 210 338 2 96.78 26.23 3.42 2019 894 1,441 11 152 244 2 96.78 26.23 3.42 2020 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 16,213 26,132 191 2,749 4,431 28 96.78 26.23 3.42 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 16,213 26,132 191 2,749 4,431 28 96.78 26.23 3.42 Cumulative 0 0 0 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 16,213 26,132 191 SHRINKAGE = 12.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 122,082 53,329 44,664 0 220,075 5,616 4,000 3,350 207,110 2015 50,834 22,206 18,598 0 91,638 2,338 1,665 1,395 86,240 2016 33,153 14,482 12,129 0 59,765 1,525 1,086 910 56,244 2017 24,997 10,919 9,145 0 45,061 1,150 819 686 42,407 2018 20,302 8,869 7,427 0 36,598 934 665 557 34,442 2019 14,674 6,410 5,368 0 26,452 675 481 403 24,894 2020 0 0 0 0 0 0 0 0 0 Sub-Total 266,042 116,216 97,332 0 479,590 12,238 8,716 7,300 451,336 Remainder 0 0 0 0 0 0 0 0 0 Total Future 266,042 116,216 97,332 0 479,590 12,238 8,716 7,300 451,336 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 24,750 5,402 0 0 30,152 176,958 176,958 169,927 2015 27,000 2,249 0 0 29,249 56,990 233,948 49,426 2016 27,000 1,467 0 0 28,467 27,777 261,725 21 77 2017 27,000 1,106 0 0 28,106 14,301 276,026 10,147 2018 27,000 898 0 0 27,898 6,543 282,569 4,210 2019 22,518 649 0 0 23,168 1,726 284,295 1,019 2020 0 0 31,250 0 31,250 -31,250 253,045 -15,815 Sub-Total 155,268 11,772 31,250 0 198,290 253,045 240,692 Remainder 0 0 0 0 0 0 253,045 0 Total Future 155,268 11,772 31,250 0 198,290 253,045 240,692 Life of evaluation is: 5.84 years. Final production rate: 0.976 MMcf/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 9 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, DEWITT COUNTY, TEXAS GAS LEASE ZAZA ENERGY, LLC - OPERATOR PROVED LONG UNIT 1H UNDEVELOPED REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.25000000 5.00% 0 FINAL 0.25000000 15.00% 0 REMARKS 20.00% 0 UNECONOMIC AT CURRENT PRICES. 25.00% 0 30.00% 0 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products 5 Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 0 0 0 0 0 0 0 0.00 0.00 0.00 2015 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 0 0 0 0 0 0 0.00 0.00 0.00 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 0 0 0 0 0 0 0.00 0.00 0.00 Cumulative 0 0 0 (A) NET GAS VOLUME. S ACCOUNT FOR S URFACE LOSSSES. Ultimate 0 0 0 SHRINKAGE = 12.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From From Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other TAXES - $ 2014 0 0 0 0 0 0 0 0 0 2015 0 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 0 0 Remainder 0 0 0 0 0 0 0 0 0 Total Future 0 0 0 0 0 0 0 0 0 DEDUCTIONS - $ FUTURE NET INCOME BEFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 0 0 0 0 0 0 0 0 2015 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 Remainder 0 0 0 0 0 0 0 0 Total Future 0 0 0 0 0 0 0 Life of evaluation is; 0.00 years. Final production rate: 21.201 MMcf/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY ZAZA ENERGY CORP. PETROLEUM CONSULTANTS ESTIMATED FUTURE RESERVES AND INCOME TABLE 10 TBPE FIRM LIC. NO. F-1580 ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, GONZALES COUNTY, TEXAS OIL LEASE RILEY EXPLORATION. LLC - OPERATOR PROVED MAALI 1H 1 PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.03250000 0.02974620 0.02974620 101.44 3.67 5.00% 116 89 FINAL 0.03250000 0.02974620 0.02974620 101.44 3.67 15.00% 77,539 REMARKS 20.00% 66,340 25.00% 58,048 30.00% 51,675 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 1 9,264 0 10 276 0 0 101.44 0.00 0.00 2015 1 7,721 0 7 230 0 0 101.44 0.00 0.00 2016 1 6,668 0 6 198 0 0 101.44 0.00 0.00 2017 1 5,859 0 5 174 0 0 101.44 0.00 0.00 2018 1 5,251 0 4 156 0 0 101.44 0.00 0.00 2019 1 4,766 0 4 142 0 0 101.44 0.00 0.00 2020 1 4,381 0 4 130 0 0 101.44 0.00 0.00 2021 1 4,039 0 3 120 0 0 101.44 0.00 0.00 2022 1 3,759 0 3 112 0 0 101.44 0.00 0.00 2023 1 3,519 0 3 105 0 0 101.44 0.00 0.00 2024 1 3,315 0 3 99 0 0 101.44 0.00 0.00 2025 1 3,108 0 2 92 0 0 101.44 0.00 0.00 2026 1 2,921 0 2 87 0 0 101.44 0.00 0.00 2027 1 2,746 0 2 82 0 0 101.44 0.00 0.00 2028 1 2,588 0 2 77 0 0 101.44 0.00 0.00 Sub-Total 69,905 0 61 2,079 0 0 101.44 0.00 0.00 Remainder 15,236 0 12 453 0 0 101.44 0.00 0.00 Total Future 85,141 0 73 2,533 0 0 101.44 0.00 0.00 Cumulative 56,847 0 57 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 141,988 0 129 SHRINKAGE = 100.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXE - $ FGR AFTER From From Form Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 27,953 0 0 0 27,953 1,286 0 0 26,667 2015 23,299 0 0 0 23,299 1,072 0 0 22,227 2016 20,121 0 0 0 20,121 926 0 0 19,195 2017 17,680 0 0 0 17,680 813 0 0 16,867 2018 15,844 0 0 0 15,844 729 0 0 15,115 2019 14,381 0 0 0 14,381 662 0 0 13 19 2020 13,221 0 0 0 13,221 608 0 0 12,612 2021 12,187 0 0 0 12,187 561 0 0 11,627 2022 11,343 0 0 0 11,343 522 0 0 10,821 2023 10,618 0 0 0 10,618 488 0 0 10,130 2024 10,003 0 0 0 10,003 460 0 0 9,543 2025 9,377 0 0 0 9,377 431 0 0 8,945 2026 8,815 0 0 0 8,815 405 0 0 8,409 2027 8,286 0 0 0 8,286 381 0 0 7,905 2028 7,810 0 0 0 7,810 359 0 0 7,451 Sub-Total 210,936 0 0 0 210,936 9,703 0 0 201,233 Remainder 45,974 0 0 0 45,974 2,115 0 0 43,859 Total Future 256,910 0 0 0 256,910 11,818 0 0 245,092 DEDUCTIONS - $ FUTURE NET INCOME BRFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 3,588 699 0 0 4,287 22,380 22,380 21,341 2015 3,588 582 0 0 4,170 18,056 40,436 15,582 2016 3,588 503 0 0 4,091 15,104 55,540 11 95 2017 3,588 442 0 0 4,030 12,837 68,377 9,072 2018 3,588 396 0 0 3,984 11,131 79,508 7,121 2019 3,588 360 0 0 3,948 9,772 89,280 5,659 2020 3,588 331 0 0 3,919 8,694 97,974 4,557 2021 3,588 305 0 0 3,893 7,734 105,708 3,669 2022 3,588 284 0 0 3,872 6,950 112,657 2,984 2023 3,588 265 0 0 3,853 6,276 118,934 2,440 2024 3,588 250 0 0 3,838 5,705 124,639 2,007 2023 3,588 234 0 0 3,822 5,123 129,762 1,632 2026 3,588 220 0 0 3,808 4,601 134,362 1,326 2027 3,588 207 0 0 3,795 4,110 138,472 1,073 2028 3,588 195 0 0 3,783 3,667 142,139 867 Sub-Total 53,820 5,273 0 0 59,093 142,139 91,124 Remainder 27,379 1,149 4,063 0 32,591 11,268 153,408 2,221 Total Future 81,199 6,423 4,063 0 91,684 153,408 93,345 Life of evaluation is: 22.64 years. Final production rate: 130 bbl/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY ZAZA ENERGY CORP. PETROLEUM CONSULTANTS ESTIMATED FUTURE RESERVES AND INCOME TABLE 11 TBPE FIRM LIC. NO. F-1580 ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, DEWITT COUNTY, TEXAS OIL LEASE ZAZA ENERGY, LLC - OPERATOR PROVED MACHICEK 1H SHUT-IN REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.25000000 0.18210000 0.18210000 96.78 3.42 5.00% 474,308 FINAL 0.25000000 0.18210000 0.18210000 96.78 3.42 15.00% 396,050 REMARKS 20.00% 364,725 25.00% 337,762 30.00% 314,447 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 1 11,837 0 48 2,156 0 8 96.78 0.00 3.42 2015 1 7,701 0 31 1,402 0 5 96.78 0.00 3.42 2016 1 5,331 0 22 971 0 3 96.78 0.00 3.42 2017 1 4,124 0 17 751 0 3 96.78 0.00 3.42 2018 1 3,398 0 14 619 0 2 96.78 0.00 3.42 2019 1 2,905 0 12 529 0 2 96.78 0.00 3.42 2020 1 2,553 0 10 465 0 2 96.78 0.00 3.42 2021 1 2,272 0 9 414 0 1 96.78 0.00 3.42 2022 1 2,056 0 8 374 0 1 96.78 0.00 3.42 2023 1 1,880 0 8 342 0 1 96.78 0.00 3.42 2024 1 1,739 0 7 317 0 1 96.78 0.00 3.42 2025 1 1,611 0 7 293 0 1 96.78 0.00 3.42 2026 1 1,366 0 6 249 0 1 96.78 0.00 3.42 2027 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 48,772 0 198 8,881 0 32 96.78 0.00 3.42 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 48,772 0 198 8,881 0 32 96.78 0.00 3.42 Cumulative 0 0 0 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 48,772 0 198 SHRINKAGE = 12.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From Form Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 208,616 0 26,382 0 234,998 9,596 0 1,979 223,423 2015 135,719 0 17,163 0 152,882 6,243 0 1,267 145,352 2016 93,946 0 11,881 0 105,827 4,322 0 891 100,614 2017 72,677 0 9,191 0 81,868 3,343 0 689 77,835 2018 59,884 0 7,573 0 67,458 2,755 0 568 64,135 2019 51,194 0 6,474 0 57,668 2,355 0 486 54,827 2020 44,987 0 5,689 0 50,676 2,069 0 427 48,180 2021 40,036 0 5,063 0 45,099 1,842 0 380 42,878 2022 36,226 0 4,581 0 40,807 1,666 0 344 38 97 2023 33,133 0 4,190 0 37,323 1,524 0 314 35,485 2024 30,648 0 3,876 0 34,524 1,410 0 291 32,823 2025 28,396 0 3,591 0 31,987 1,306 0 269 30,412 2026 24,071 0 3,044 0 27,115 1,107 0 228 25 79 2027 0 0 0 0 0 0 0 0 0 Sub-Total 859,532 0 108,699 0 968,231 39,538 0 8,152 920,540 Remainder 0 0 0 0 0 0 0 0 0 Total Future 859,532 0 108,699 0 968,231 39,538 0 8,152 920,540 DEDUCTIONS - $ FUTURE NET INCOME BRFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 22,500 5,875 0 0 28,375 195,048 195,048 185,248 2015 27,000 3,822 0 0 30,822 114,530 309,578 99,136 2016 27,000 2,646 0 0 29,646 70,969 380,546 55,531 2017 27,000 2,047 0 0 29,047 48,789 429,335 34,532 2018 27,000 1,686 0 0 28,686 35,448 464,783 22 06 2019 27,000 1,442 0 0 28,442 26,386 491,169 15,297 2020 27,000 1,267 0 0 28,267 19,913 511,083 10,451 2021 27,000 1,127 0 0 28,127 14,750 525,833 7,006 2022 27,000 1,020 0 0 28,020 10,777 536,610 4,634 2023 27,000 933 0 0 27,933 7,551 544,161 2,940 2024 27,000 863 0 0 27,863 4,960 549,121 1 50 2025 27,000 800 0 0 27,800 2,612 551,733 835 2026 24,422 678 0 0 25,100 679 552,412 198 2027 0 0 31,250 0 31,250 -31,250 521,162 -7,829 Sub-Total 343,922 24,206 31,250 0 399,378 521,162 432,436 Remainder 0 0 0 0 0 0 521,162 0 Total Future 343,922 24,206 31,250 0 399,378 521,162 432,436 Life of evaluation is: 12.90 years. Final production rate: 122 bbl/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY PETROLEUM CONSULTANTS ZAZA ENERGY CORP. TABLE 12 TBPE FIRM LIC. NO. F-1580 ESTIMATED FUTURE RESERVES AND INCOME ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, GONZALES COUNTY, TEXAS OIL LEASE RILEY EXPLORATION. LLC - OPERATOR PROVED OTTO 1H 1H PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.02437500 0.02560797 0.02560797 101.44 3.67 5.00% 13,303 FINAL 0.02437500 0.02560797 0.02560797 101.44 3.67 15.00% 12,040 REMARKS 20.00% 11,431 25.00% 10,849 30.00% 10,299 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 1 4,104 0 2 105 0 0 101.44 0.00 0.00 2015 1 3,302 0 2 85 0 0 101.44 0.00 0.00 2016 1 2,788 0 1 71 0 0 101.44 0.00 0.00 2017 1 2,411 0 1 62 0 0 101.44 0.00 0.00 2018 1 1,374 0 1 35 0 0 101.44 0.00 0.00 2019 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 13,979 0 7 358 0 0 101.44 0.00 0.00 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 13,979 0 7 358 0 0 101.44 0.00 0.00 Cumulative 54,181 0 45 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 68,160 0 52 SHRINKAGE =100.0% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From Form Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 10,661 0 0 0 10,661 490 0 0 10,170 2015 8,579 0 0 0 8,579 395 0 0 8,184 2016 7,242 0 0 0 7,242 333 0 0 6,909 2017 6,264 0 0 0 6,264 288 0 0 5,976 2018 3,568 0 0 0 3,568 164 0 0 3,404 2019 0 0 0 0 0 0 0 0 0 Sub-Total 36,314 0 0 0 36,314 1,670 0 0 34,643 Remainder 0 0 0 0 0 0 0 0 0 Total Future 36,314 0 0 0 36,314 1,670 0 0 34,643 DEDUCTIONS - $ FUTURE NET INCOME BRFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 3,627 267 0 0 3,894 6,277 6,277 5,992 2015 3,627 214 0 0 3,841 4,343 10,619 3 52 2016 3,627 181 0 0 3,808 3,101 13,721 2,425 2017 3,627 157 0 0 3,784 2,192 15,913 1,551 2018 2,258 89 0 0 2,348 1,056 16,969 688 2019 0 0 3,047 0 3,047 -3,047 13,922 -1,740 Sub-Total 16,766 908 3,047 0 20,721 13,922 12,669 Remainder 0 0 0 0 0 0 13,922 0 Total Future 16,766 908 3,047 0 20,721 13,922 12,669 Life of evaluation is: 4.63 years. Final production rate: 175 bbl/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY ZAZA ENERGY CORP. PETROLEUM CONSULTANTS ESTIMATED FUTURE RESERVES AND INCOME TABLE 13 TBPE FIRM LIC. NO. F-1580 ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, GONZALES COUNTY, TEXAS OIL LEASE RILEY EXPLORATION. LLC - OPERATOR PROVED PERKINS 1H 1H PRODUCING REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.02437500 5.00% -2,972 FINAL 0.02437500 15.00% -2,830 REMARKS 20.00% -2,762 NO REMAINING ECONOMIC RESERVES. 25.00% -2,631 30.00% -2,631 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 0 0 0 0 0 0 0.00 0.00 0.00 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 0 0 0 0 0 0 0.00 0.00 0.00 Cumulative 68,984 0 50 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 68,984 0 50 SHRINKAGE = 100.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From Form Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 0 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 0 0 Remainder 0 0 0 0 0 0 0 0 0 Total Future 0 0 0 0 0 0 0 0 0 DEDUCTIONS - $ FUTURE NET INCOME BRFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 0 0 3,047 0 3,047 -3,047 -3,047 -2,900 Sub-Total 0 0 3,047 0 3,047 -3,047 -2,900 Remainder 0 0 0 0 0 0 -3,047 0 Total Future 0 0 3,047 0 3,047 -3,047 -2,900 Life of evaluation is: 0.00 years. Final production rate; 0 bbl/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
| RS RYDER SCOTT COMPANY ZAZA ENERGY CORP. PETROLEUM CONSULTANTS ESTIMATED FUTURE RESERVES AND INCOME TABLE 14 TBPE FIRM LIC. NO. F-1580 ATTRIBUTABLE TO CERTAIN LEASEHOLD INTERESTS AS OF DECEMBER 31, 2013 (SEC PARAMETERS) EAGLEVILLE, GONZALES COUNTY, TEXAS GAS LEASE ZAZA ENERGY, LLC - OPERATOR PROVED THIELE UNIT 1H UNDEVELOPED REVENUE INTEREST PRODUCT PRICES DISCOUNTED Expense Oil/ Plant Oil/Cond Plt. Prod. Gas FUTURE NET INCOME - $ Interest Condensate Products Gas ($/bbl) ($/bbl) ($/Mcf) COMPOUNDED MONTHLY INITIAL 0.25000000 5.00% 0 FINAL 0.25000000 15.00% 0 REMARKS 20.00% 0 UNECONOMIC AT CURRENT PRICES. 25.00% 0 30.00% 0 ESTIMATED 8/8THS PRODUCTION COMPANY NET PRODUCTION AVERAGE PRICES Number Oil/Cond. Plant Products Gas Oil/Cond. Plant Products Sales Gas (A) Oil/Cond. Plt Prod. Gas Year of Wells (Barrels) (Barrels) (MMcf) (Barrels) (Barrels) (MMcf) ($/bbl) ($/bbl) ($/Mcf) 2014 0 0 0 0 0 0 0 0.00 0.00 0.00 2015 0 0 0 0 0 0 0 0.00 0.00 0.00 2016 0 0 0 0 0 0 0 0.00 0.00 0.00 2017 0 0 0 0 0 0 0 0.00 0.00 0.00 2018 0 0 0 0 0 0 0 0.00 0.00 0.00 2019 0 0 0 0 0 0 0 0.00 0.00 0.00 2020 0 0 0 0 0 0 0 0.00 0.00 0.00 2021 0 0 0 0 0 0 0 0.00 0.00 0.00 2022 0 0 0 0 0 0 0 0.00 0.00 0.00 2023 0 0 0 0 0 0 0 0.00 0.00 0.00 2024 0 0 0 0 0 0 0 0.00 0.00 0.00 2025 0 0 0 0 0 0 0 0.00 0.00 0.00 2026 0 0 0 0 0 0 0 0.00 0.00 0.00 2027 0 0 0 0 0 0 0 0.00 0.00 0.00 2028 0 0 0 0 0 0 0 0.00 0.00 0.00 Sub-Total 0 0 0 0 0 0 0.00 0.00 0.00 Remainder 0 0 0 0 0 0 0.00 0.00 0.00 Total Future 0 0 0 0 0 0 0.00 0.00 0.00 Cumulative 0 0 0 (A) NET GAS VOLUMES ACCOUNT FOR SURFACE LOSSES, Ultimate 0 0 0 SHRINKAGE = 12.00% COMPANY FUTURE GROSS REVENUE (FGR) - $ PRODUCTION TAXES - $ FGR AFTER From From Form Oil/ Plant Prod./ PRODUCTION Year Oil/Condensate Plant Products Gas Other Total Condensate Other Gas TAXES - $ 2014 0 0 0 0 0 0 0 0 0 2015 0 0 0 0 0 0 0 0 0 2016 0 0 0 0 0 0 0 0 0 2017 0 0 0 0 0 0 0 0 0 2018 0 0 0 0 0 0 0 0 0 2019 0 0 0 0 0 0 0 0 0 2020 0 0 0 0 0 0 0 0 0 2021 0 0 0 0 0 0 0 0 0 2022 0 0 0 0 0 0 0 0 0 2023 0 0 0 0 0 0 0 0 0 2024 0 0 0 0 0 0 0 0 0 2025 0 0 0 0 0 0 0 0 0 2026 0 0 0 0 0 0 0 0 0 2027 0 0 0 0 0 0 0 0 0 2028 0 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 0 0 Remainder 0 0 0 0 0 0 0 0 0 Total Future 0 0 0 0 0 0 0 0 0 DEDUCTIONS - $ FUTURE NET INCOME BRFORE TAXES - $ Operating Ad Valorem Development Undiscounted Discounted Year Costs Taxes Costs Other Total Annual Cumulative @ 10.00 % 2014 0 0 0 0 0 0 0 0 2015 0 0 0 0 0 0 0 0 2016 0 0 0 0 0 0 0 0 2017 0 0 0 0 0 0 0 0 2018 0 0 0 0 0 0 0 0 2019 0 0 0 0 0 0 0 0 2020 0 0 0 0 0 0 0 0 2021 0 0 0 0 0 0 0 0 2022 0 0 0 0 0 0 0 0 2023 0 0 0 0 0 0 0 0 2024 0 0 0 0 0 0 0 0 2025 0 0 0 0 0 0 0 0 2026 0 0 0 0 0 0 0 0 2027 0 0 0 0 0 0 0 0 2028 0 0 0 0 0 0 0 0 Sub-Total 0 0 0 0 0 0 0 Remainder 0 0 0 0 0 0 0 0 Total Future 0 0 0 0 0 0 0 Life of evaluation is: 0.00 years. Final production rate: 21.201 MMcf/month These data are part of a Ryder Scott report and are subject to the conditions in the text of the report. |
