[LETTERHEAD OF RYDER SCOTT COMPANY APPEARS HERE]
January 14, 2000
EXHIBIT 99.1
Vastar Resources, Inc.
15375 Memorial Drive
Houston, Texas 77079
Gentlemen:
At your request, we have reviewed Vastar Resources, Inc.'s (Vastar)
estimates of remaining recoverable proved reserves as of December 31, 1999
attributable to the interests owned by Vastar in certain properties. The
properties reviewed by Ryder Scott Company Petroleum Engineers (Ryder Scott)
consist of 30 fields. The estimated net reserves as of December 31, 1999
attributable to Vastar's interests in the properties as estimated by Vastar and
reviewed by us, are summarized below and shown by field in Table 1 which is
attached.
Vastar Resources, Inc.
Estimated Net Remaining Proved Reserves
Attributable to Leasehold and Royalty Interests
For Properties Reviewed by Ryder Scott
As of December 31, 1999
-----------------------
Oil/Condensate--Barrels........................................ 58,106,260
Plant Products--Barrels........................................ 19,114,384
Gas--MMCF...................................................... 1,934,410
Oil, condensate, and natural gas liquids volumes are expressed in standard
42 gallon barrels. All gas volumes are expressed in millions of cubic feet
(MMCF) at the official temperature and pressure bases of the areas where the
gas reserves are located.
The proved reserves, which are attributable to the properties reviewed by
Ryder Scott, conform to the definition as set forth in the Securities and
Exchange Commission's Regulation S-X Part 210.4-10 Sec. (a) as clarified by
subsequent Staff Accounting Bulletins, and are based on the following
definitions and criteria:
Proved reserves of crude oil, condensate, natural gas, and natural gas
liquids are estimated quantities that geological and engineering data
demonstrate with reasonable certainty to be recoverable in the future from
known reservoirs under existing operating conditions using the cost and
price parameters discussed in other sections of this report. Reservoirs are
considered proved if economic producibility is supported by actual
production or formation tests. In certain instances, proved reserves are
assigned on the basis of a combination of core analysis and electrical and
other type logs which indicate the reservoirs are analogous to reservoirs
in the same field which are producing or have demonstrated the ability to
produce on a formation test. The area of a reservoir considered proved
includes (1) that portion delineated by drilling and defined by fluid
contacts, if any, and (2) the adjoining portions not yet drilled that can
be reasonably judged as economically productive on the basis of available
geological and engineering data. In the absence of data on
Vastar Resources, Inc.
January 14, 2000
Page 2
fluid contacts, the lowest known structural occurrence of hydrocarbons
controls the lower proved limit of the reservoir. Proved reserves are
estimates of hydrocarbons to be recovered from a given date forward. They may
be revised as hydrocarbons are produced and additional data become available.
Proved natural gas reserves are comprised of non-associated, associated and
dissolved gas. An appropriate reduction in gas reserves has been made for the
expected removal of natural gas liquids, for lease and plant fuel, and for the
exclusion of non-hydrocarbon gases if they occur in significant quantities and
are removed prior to sale. Reserves that can be produced economically through
the application of improved recovery techniques are included in the proved
classification when these qualifications are met: (1) successful testing by a
pilot project or the operation of an installed program in the reservoir
provides support for the engineering analysis on which the project or program
was based, and (2) it is reasonably certain the project will proceed. Improved
recovery includes all methods for supplementing natural reservoir forces and
energy, or otherwise increasing ultimate recovery from a reservoir, including
(1) pressure maintenance, (2) cycling, and (3) secondary recovery in its
original sense. Improved recovery also includes the enhanced recovery methods
of thermal, chemical flooding, and the use of miscible and immiscible
displacement fluids. Estimates of proved reserves do not include crude oil,
natural gas, or natural gas liquids being held in underground or surface
storage.
Review Procedure and Opinion
----------------------------
In performing our review, we have relied upon data furnished by Vastar with
respect to property interests owned, production and well tests from examined
wells, geological structural and isopach maps, well logs, core analyses, and
pressure measurements. These data were accepted as authentic and sufficient for
determining the reserves unless, during the course of our examination, a matter
in question came to our attention in which case the data were not accepted
until all questions were satisfactorily resolved. Our review included such
tests and procedures as we considered necessary under the circumstances to
render the conclusions set forth herein.
In our opinion Vastar's estimates of future reserves for the properties
reviewed by us were prepared in accordance with generally accepted procedures
for the estimation of future reserves, and we found no bias in the utilization
and analysis of data. In general, we were in reasonable agreement on an overall
30 field total net equivalent gas basis (6 MCF per barrel) with the estimates
prepared by Vastar.
Vastar furnished us with its estimates of gross and net remaining reserves
as of December 31, 1999 and we reviewed these data. There were some slight
variances in the reserves reviewed by Ryder Scott and the Vastar final reserves
report; however, these differences are insignificant in our opinion. Vastar
assured Ryder Scott that the correct net interests had been utilized to convert
the gross reserves to net reserves. As a consequence, it is our opinion that
the data presented herein for the properties we reviewed fairly reflect
Vastar's estimated net reserves.
Certain technical personnel of Vastar are responsible for the preparation of
reserve estimates on new properties and for the preparation of revised
estimates, when necessary, on old properties. These personnel assembled the
necessary data and maintained the data and work papers in an orderly manner. We
consulted with these technical personnel and had access to their work papers
and supporting data in the course of our review.
Vastar Resources, Inc.
January 14, 2000
Page 3
Estimates of Reserves
---------------------
In general, the reserves for the properties we reviewed are estimated by
performance methods or the volumetric method; however, other methods were used
in certain cases where characteristics of the data indicated such methods were
more appropriate.
The estimates of reserves by the performance method utilized extrapolations
of various historical data in those cases where such data were definitive.
Reserves were estimated by the volumetric method in those cases where there was
inadequate historical data to establish a definitive trend or where the use of
production performance data as a basis for the reserve estimates was considered
to be inappropriate and the volumetric data were adequate for a reasonable
estimate.
The reserves presented herein, as estimated by Vastar and reviewed by us,
are estimates only and should not be construed as being exact quantities.
Moreover, estimates of reserves may increase or decrease as a result of future
operations.
General
-------
Our opinion on estimated proved reserves is based on a review of data in
Vastar's files; however, we have not made any field examination of the
properties. In general, the reserve estimates for the properties we reviewed
are based on data available through the third quarter of 1999. Gas imbalances,
if any, were not taken into account in the gas reserve estimates reviewed by
Ryder Scott.
At Vastar's request, our review was limited to an examination of reserve
quantities; therefore, we accepted without independent verification Vastar's
representation that they applied economic parameters consistent with the
guidelines of the Securities and Exchange Commission in their estimates of
future income from the reserves presented in this report. We were not requested
to review Vastar's estimates of future yearly production rates; however, a
number of Vastar's estimates were based on an extrapolation of historical
production trends and, in these cases, future yearly production rates were
reviewed as a part of our reserve review.
Neither we nor any of our employees has 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.
This report was prepared for the exclusive use of Vastar. 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,
RYDER SCOTT COMPANY, L.P.
/s/ John R. Warner, P.E.
-----------------------------
John R. Warner, P.E.
Senior Vice President
JRW/plk
TABLE 1
VASTAR RESOURCES, INC.
Properties Reviewed by Ryder Scott
As of December 31, 1999
-----------------------
Net Reserves
----------------------------------------------
Plant Gas
Oil/Condensate Products Equivalent
Field Barrels Gas MMCF Barrels MMCFE
----- -------------- --------- ---------- ----------
ING BLANCO-FRUITLAND............ 0 545,317 0 545,317
SOUTH PASS 61................... 18,935,720 53,410 2,514,209 182,109
WILBURTON....................... 0 147,000 0 147,000
HUGOTON GAS AREA................ 22,538 81,992 4,546,922 109,408
GRANT COUNTY GATHERING.......... 169,424 2,784 82,800 4,298
TOTAL HUGOTON................... 191,962 84,776 4,629,722 113,706
PANOMA COUNCIL GROVE............ 0 26,382 1,453,499 35,103
CARTHAGE........................ 1,192,620 75,042 4,373,281 108,437
CARTHAGE, SE.................... 100,368 4,907 0 5,509
CARTHAGE(SMITH-ALLISON)......... 43,386 477 30,912 923
TOTAL CARTHAGE.................. 1,336,374 80,426 4,404,193 114,869
BASIN FRUITLAND COAL............ 0 102,148 0 102,148
WEST CAMERON 66................. 2,738,341 68,344 1,331,540 92,763
EUGENE ISLAND 175............... 10,337,017 15,175 249,272 78,692
THOMPSONVILLE, NE............... 4,804 73,025 0 73,054
BLANCO MESAVERDE GAS............ 153,501 57,643 0 58,564
BASIN DAKOTA.................... 30,419 33,646 0 33,828
ANGEL PEAK GALLUP............... 0 0 0 0
TAPACITO GALLUP................. 0 0 0 0
BLANCO P.C. GAS................. 0 3,171 0 3,171
TOTAL BLANCO MESAVERDE GAS...... 183,920 94,460 0 95,563
PANOLA, SOUTH................... 0 57,603 0 57,603
WEST CAMERON 71/102............. 523,621 36,417 2,236,234 52,976
SOUTH TIMBALIER 37.............. 5,693,525 16,984 296,240 52,922
WEST DELTA 106.................. 4,176,047 21,554 571,743 50,041
LOGANSPORT...................... 119,256 48,293 0 49,008
JOAQUIN......................... 9,001 6,607 0 6,661
TOTAL JOAQUIN/LOGANSPORT........ 128,257 54,899 0 55,669
SPIDER.......................... 54,208 32,676 0 33,002
GOLDEN TREND.................... 808,233 43,810 0 48,660
RED OAK-NORRIS.................. 0 47,719 0 47,719
OKLAHOMA DEEP ANADARKO.......... 43,329 46,936 0 47,196
GRAND ISLE 90/93/94/95.......... 703,149 41,216 0 45,435
WEST DELTA 133.................. 4,772,233 14,773 174,314 44,452
SOUTH PELTO 10.................. 3,081,935 25,212 0 43,703
HIGH ISLAND A-573............... 3,263,611 22,357 0 41,939
IGNACIO BLANCO.................. 4,425 36,822 0 36,848
PUTNAM.......................... 237,786 34,198 50,767 35,930
STAGECOACH DRAW................. 432,287 22,026 1,202,651 31,835
MOBILE BAY 904.................. 0 26,729 0 26,729
HIGH ISLAND 24-L................ 455,476 23,398 0 26,131
MANSFIELD....................... 0 15,519 0 15,519
ALTUS........................... 0 14,235 0 14,235
CLARKSVILLE..................... 0 8,008 0 8,008
GREASY CREEK.................... 0 856 0 856
TOTAL ARKANSAS(AMOCO)........... 0 38,618 0 38,618
GRAND TOTALS.................... 58,106,260 1,934,410 19,114,384 2,397,734