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EXHIBIT 99.1
[RYDER SCOTT COMPANY LETTERHEAD]
January 17, 1997
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,
1996 attributable to the interests owned by Vastar in certain properties. The
properties reviewed by Ryder Scott Company Petroleum Engineers (Ryder Scott)
consist of 14 fields. The estimated net reserves as of December 31, 1996
attributable to Vastar's interests in the properties as estimated by Vastar and
reviewed by Ryder Scott, 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, 1996
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Properties
Reviewed by
Ryder Scott
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Oil/Condensate - Barrels 46,909,100
Plant Products - Barrels 13,285,100
Gas - MMCF 1,444,950
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
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January 17, 1997
Page 2
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 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 Ryder Scott 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 14 field total net equivalent gas basis (6 MCF per
barrel) with the estimates prepared by Vastar.
Vastar furnished Ryder Scott with its estimates in final form
of gross and net remaining reserves as of December 31, 1996 and Ryder Scott
reviewed these data to determine whether the gross reserves corresponded to the
gross reserves reviewed and approved by Ryder Scott. There were some slight
variances in the reserves reviewed by Ryder Scott and the reserves report in
final form by Vastar; however, these variances resulted in an overall
difference in reserves which is 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
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January 17, 1997
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presented herein for the properties reviewed by Ryder Scott fairly reflect the
estimated net reserves of Vastar.
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. Ryder Scott consulted with these technical personnel and had
access to their work papers and supporting data in the course of our review.
ESTIMATES OF RESERVES
In general, the reserves for the properties reviewed by Ryder
Scott were 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 Ryder Scott, 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 reviewed
by Ryder Scott are based on data available through the third quarter of 1996.
Gas imbalances, if any, were not taken into account in the gas reserve
estimates reviewed by Ryder Scott.
At Vastar's request, Ryder Scott's 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.
Ryder Scott was 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. In all
other cases, a review of Vastar's forecasts of future yearly production rates
was beyond the scope of our examination.
Neither Ryder Scott nor any of its 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.
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January 17, 1997
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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
PETROLEUM ENGINEERS
/s/ FRED P. RICHOUX
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Fred P. Richoux, P.E.
FPR/sw Group Vice President
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VASTAR RESOURCES, INC.
Properties Reviewed by Ryder Scott
As of December 31, 1996
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Net Reserves
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Oil/Condensate Gas Plant Products Gas Equivalent
Field Barrels MMCF Barrels MMCFE
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Fruitland - 522,721 - 522,721
South Pass 60 20,414,400 73,018 3,898,500 218,889
Hugoton - 123,466 2,822,400 140,400
Grand Isle Complex 10,855,100 70,278 798,600 140,199
Wilburton - 121,929 - 121,929
Carthage 1,262,600 75,881 2,717,700 99,762
West Cameron 66 1,749,600 68,993 1,216,600 86,791
Basin F. Coal - 121,601 - 121,601
High Island 24L 278,200 61,535 - 63,205
Joaquin/Logansport/Spider 128,000 67,743 - 68,511
Eugene Island 175 7,814,200 19,650 168,700 67,548
Panoma - 47,346 1,173,900 54,389
South Panola - 46,972 - 46,972
West Delta 106 4,407,000 23,817 488,700 53,191
Total 46,909,100 1,444,950 13,285,100 1,806,108
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