EXHIBIT 99.2
NATURAL RESOURCE GROUP, INC.
ESTIMATED REMAINING RESERVES
AND FUTURE NET REVENUE
COLORADO OIL & GAS PROPERTIES
AS OF NOVEMBER 1, 2012
McCartney Engineering, LLC
Consulting Petroleum Engineers
4251 Kipling Street, Suite 575 Wheat Ridge, CO 80033 (303)830-7208 Fax
(303)830-7004
McCartney Engineering, LLC
Consulting Petroleum Engineers
4251 Kipling Street, Suite 575 Wheat Ridge, Colorado 80033 (303)830-7208 Fax
(303)830-7004 Email: jack@mccartneyengineering.com ron@mccartneyengineering.com
September 24, 2013
Dear Mr. Laird:
Pursuant to your request, we have estimated the remaining reserves and future
net revenue for certain oil & gas properties owned by Natural Resource Group,
Inc. in the state of Colorado. The estimated remaining reserves and future net
revenue are based NYMEX futures oil and gas pricing. Only the proved developed
producing category has been included in this analysis. The effective date is
November 1, 2012. Results are summarized below:
Net Remaining Reserves Estimated Future Net Revenue
---------------------- ----------------------------
As of November 1, 2012 Discounted at
Reserve Category Oil (BBL) Gas (MCF) Undiscounted 10 Percent
---------------- -------- --------- ------------ -------------
Proved Producing 5,334 28,667 $308,425 $182,854
A grand total summary cash flow is attached for each the proved developed
producing reserves. Also included is an individual well tabulation of the gross
and net reserves, and discounted present worth value of the individual leases
for the proved developed reserves. Production graphs and individual cash flows
for each producing property also included.
Source of Data
Lease names, locations, and historic pricing data were supplied by your office
as well as working and net revenue interests, tax rates, and operating expense
data. This data was accepted by McCartney Engineering, LLC as presented.
McCartney reserves the right to revise the associated reserve and economic
projections if future information indicates discrepancies in the data provided.
A grand total summary cash flow is attached for each proved developed producing
reserves. Also included is an individual well tabulation of the gross and net
reserves, and discounted present worth value of the individual leases for the
proved developed reserves. Production graphs and individual cash flows for each
producing property also included.
Source of Data
Lease names, locations, and historic pricing data were supplied by your office,
as well as working and net revenue interests, tax rates, and operating expense
data. This data was accepted by McCartney Engineering, LLC as presented.
McCartney reserves the right to revise the associated reserve and economic
projections if future information indicates discrepancies in the data provided.
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Reserve Categories
The reserves included in this report are classified in the proved developed
producing category. Proved oil and gas reserves are the estimated quantities of
crude oil, natural gas, and natural gas liquids which geological and engineering
data demonstrate with reasonable certainty to be commercially recoverable in
future years from known oil and gas reservoirs under existing economic and
operating conditions. These reserves are segregated into two categories, proved
developed producing and proved undeveloped.
Proved developed producing reserves are those which are expected to be produced
from existing completion intervals now open for production in existing wells.
Method of Assigning Reserves
Reserves were determined through the application of industry accepted evaluation
methods. Since sufficient production history was available, remaining reserves
were estimated from an extrapolation of past performance.
Oil & Gas Prices
Oil & gas prices used in this analysis were based on the previous 12-month
average actual prices. These prices were held constant for the life of the
properties.
Expenses and Production Taxes
Operating expenses for the individual properties were based on information
supplied by your office. Production tax rates were calculated from the supplied
revenue data.
Summary
The accuracy of any reserve estimate, especially when based on limited
production history, is a function of available data and of engineering and
geological interpretation and judgment. While the reserve estimates used herein
are believed reasonable, they should be accepted with the understanding that
subsequent reservoir performance, changes in pricing structure, or market demand
may justify their revision. Reserve estimates based on limited performance
history and reserves assigned to undrilled acreage are inherently less reliable
than those based on lengthy production history.
McCartney Engineering, LLC makes no representation or warranty as to the
ownership or title of the properties described herein, nor represents or
warrants the economic viability of any oil and gas development conducted
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thereon. In our opinion, the above reserve and revenue estimates fairly and
approximately present the proved reserves of the subject properties with respect
to the definitions, assumptions, and methodology described herein.
We appreciate the opportunity to provide you with this analysis. All related
data is in our office and is available for your review.
Yours very truly,
McCartney Engineering, LLC
/s/ Jack A. McCartney
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Jack A. McCartney, Manager