RISEDEN
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SERVICES, INC.
ENGINEERING SERVICES
P.O. Box 56733 - HOUSTON, TEXAS 77256-6733
(713) 781-1537 - Fax (713) 781-5422
January 16, 1997
Mr. Reuven Hollo
Mr. Yossi Levy
Jay Resources Corporation
1221 McKinney, Suite 3100
Houston, Texas 77010
RE: Reserve Evaluation and
Net Income Projection
Farmers and Snyder Assets
Gentlemen:
As an extension of the reserve evaluation and cash flow projections I have
done for Comerica Bank-Texas, you have requested additional economic runs using
your proprietary oil and gas price schedules. With Comerica's permission to use
the data base and projections prepared on their behalf, attached are the
economic runs you requested.
I have made these reserve determinations and cash flow projections in
conformance with the definitions and procedures approved by the Society of
Petroleum Evaluation Engineers. The projections have been made using your
requested price and cost forecasts as follows:
Oil: $21.00/bbl plus or minus historical differentials for location and
quality plus applicable bonuses through the life of the bonus
contract, escalating at 3% per year.
Gas: $2.25/mcf plus or minus historical differentials for location and
quality, escalating at 3% per year.
LOE: Historical costs escalating at 3% per year.
I have independently evaluated the subject reserves for Comerica Bank and
for Jay Resources and confirm that no employee of Riseden Services, Inc. has a
financial interest in the results of this evaluation.
Mr. Reuven Hollo
Mr. Yossi Levy
January 17, 1997
(as revised)
page two
Following is a summary of the conclusions of this evaluation and the net
income projections:
Net income
Net Oil Net Gas @ 9%
Mbbl Mmcf M$
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FARMERS
Proved Developed
Producing 120.2 2179.6 2665.5
Proved
Non-Producing 222.4 3169.2 6230.8
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Sub Total 342.6 5348.8 7896.3
SNYDER
Proved Developed
Producing 161.5 2810.5 4598.4
Proved
Non-Producing 10.7 1143.5 794.3
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Sub Total 172.2 3954.0 5392.7
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GRAND TOTAL 514.8 9302.8 13289.1
Please advise if additional information is needed.
Yours truly,
/S/ J. E. RISEDEN
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J.E. Riseden, PE
President
[SEAL OF TEXAS OMITTED]
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