Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Annual Report -- [x] Reg. S-K Item 405 42 244K
2: EX-4.3 Indenture Between Chase Manhattan and the Company 116 486K
3: EX-13 Portions of the Annual Report to Stockholders 26 188K
4: EX-21 Subsidiaries of the Company 1 6K
5: EX-23.1 Consent of Arthur Andersen LLP 1 6K
6: EX-23.2 Consent of Netherland, Sewell & Associates, Inc. 1 7K
7: EX-27 Financial Data Schedule 2 9K
8: EX-99.1 Letter Regarding U.S. Oil and Gas Reserve 4 19K
9: EX-99.2 Letter Regarding South America Oil and Gas Reserve 3 15K
EX-99.1 — Letter Regarding U.S. Oil and Gas Reserve
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EXHIBIT 99.1
[LETTERHEAD OF NETHERLAND, SEWELL & ASSOCIATES, INC. APPEARS HERE]
March 17, 1997
Mr. S. Craig George
Vintage Petroleum, Inc.
4200 One Williams Center
Tulsa, Oklahoma 74172
Dear Mr. George:
In accordance with your request, we have estimated the proved reserves and
future revenue, as of January 1, 1997, to the Vintage Petroleum, Inc. (Vintage)
interest in certain oil and gas properties located in the United States as
listed in the accompanying tabulations. This report has been prepared using
constant prices and costs and conforms to the guidelines of the Securities and
Exchange Commission (SEC).
As presented in the accompanying summary projections, Tables I through V,
we estimate the net reserves and future net revenue to the Vintage interest, as
of January 1, 1997, to be:
[Download Table]
Net Reserves Future Net Revenue (M$)
------------------------ --------------------------
Oil Gas Present Worth
Category (Barrels) (MCF) Total at 10%
------------------- ------------------------ --------------------------
Proved Developed
Producing 67,917,766 221,461,021 1,283,335.9 791,679.8
Non-Producing 11,324,486 68,003,199 366,588.8 190,921.8
Proved Undeveloped 15,087,464 35,623,354 308,279.8 148,367.8
Pipeline Revenue/(1)/
Proved Developed 0 0 17,001.8 10,363.5
---------- ----------- ----------- -----------
Total Proved 94,329,716 325,087,574 1,975,206.3 1,141,332.9
/(1)/ Revenue is from the operations of Vintage Pipeline, Inc. and Vintage
Marketing, Inc.
The oil reserves shown include crude oil, condensate, and gas plant
liquids. Oil volumes are expressed in barrels which are equivalent to 42 United
States gallons. Gas volumes are expressed in thousands of standard cubic feet
(MCF) at the contract temperature and pressure bases.
The estimates shown in the previous table do not include the effect of the
Section 29 non-conventional fuel federal income tax credit. However, at the
request of Vintage, we have prepared estimates of net reserves and future
revenue including the effect of the tax credit for certain oil wells
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located in the Cat Canyon and Santa Maria Valley Fields, Santa Barbara County,
California, which Vintage believes qualify for the tax credit. The basis used to
identify wells which qualify for the Section 29 tax credit and the methods used
to calculate the effect of this credit were provided by Vintage and have not
been independently verified. As presented in the accompanying summary
projections, Tables VI through X, we estimate the net reserves and future net
revenue to the Vintage interest, including the effect of the Section 29 tax
credit, as of January 1, 1997, to be:
[Download Table]
Net Reserves Future Net Revenue (M$)
------------------------ --------------------------
Oil Gas Present Worth
Category (Barrels) (MCF) Total at 10%
--------------------- ---------- ----------- ----------- -----------
Proved Developed
Producing 67,925,635 221,461,021 1,289,981.7 796,877.4
Non-Producing 11,324,440 68,003,199 367,442.0 191,578.4
Proved Undeveloped 15,087,464 35,623,354 311,110.4 150,456.4
Pipeline Revenue/(1)/
Proved Developed 0 0 17,001.8 10,363.5
---------- ----------- ----------- -----------
Total Proved 94,337,539 325,087,574 1,985,535.9 1,149,275.7
/(1)/ Revenue is from the operations of Vintage Pipeline, Inc. and Vintage
Marketing, Inc.
The effect of the Section 29 tax credit on estimated reserves and future revenue
is presented in the table following this letter, along with estimated reserves
and future revenue to the Vintage interest in certain oil and gas properties, as
of January 1, 1997, both excluding and including the effect of the tax credit.
As shown in the Table of Contents, this report includes summary projections
of reserves and revenue for each reserve category along with one-line summaries
of reserves, economics, and basic data by lease, excluding the effect of the
Section 29 tax credit. Also included are summary projections of reserves and
revenue for each reserve category along with one-line summaries of reserves,
economics, and basic data by lease, including the effect of the Section 29 tax
credit, for the Cat Canyon and Santa Maria Valley Fields. For the purposes of
this report, the term "lease" refers to a single economic projection.
The estimated reserves and future revenue shown in this report are for
proved developed producing, proved developed non-producing, and proved
undeveloped reserves. In accordance with SEC guidelines, our estimates do not
include any value for probable or possible reserves which may exist for these
properties. This report does not include any value which could be attributed to
interests in undeveloped acreage beyond those tracts for which undeveloped
reserves have been estimated.
Future gross revenue to the Vintage interest is prior to deducting state
production taxes and ad valorem taxes. Future net revenue is after deducting
these taxes, future capital costs, and
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operating expenses, but before consideration of federal income taxes. Estimates
are presented which include the effect of the Section 29 tax credit. In
accordance with SEC guidelines, the future net revenue has been discounted at an
annual rate of 10 percent to determine its "present worth." The present worth is
shown to indicate the effect of time on the value of money and should not be
construed as being the fair market value of the properties.
For the purposes of this report, a field inspection of the properties has
not been performed nor has the mechanical operation or condition of the wells
and their related facilities been examined. We have not investigated possible
environmental liability related to the properties; therefore, our estimates do
not include any costs which may be incurred due to such possible liability.
Also, our estimates do not include any salvage value for the lease and well
equipment nor the cost of abandoning the properties.
Oil prices used in this report are based on a December 31, 1996 West Texas
Intermediate posted price of $24.25 per barrel, adjusted by lease for gravity,
transportation fees, premiums, and regional posted price differentials. As
requested, additional oil premiums have been included for certain fields when
Vintage is receiving premiums through purchaser contracts over and above those
at the lease level. Oil prices are held constant in accordance with SEC
guidelines.
Gas prices used in this report are based on either the most current price
available for each lease, adjusted to a December 1996 regional spot market
price, or the contract price. At the expiration of existing contracts, gas
prices are adjusted to the December 1996 regional spot market price and held
constant thereafter. All other gas prices are held constant in accordance with
SEC guidelines.
Lease and well operating costs are based on operating expense records of
Vintage. For recently acquired properties for which there are not adequate
historical operating expense records, the operating expense estimates of Vintage
have been used. For non-operated properties, these costs include the per-well
overhead expenses allowed under joint operating agreements along with costs
estimated to be incurred at and below the district and field levels. As
requested, lease and well operating costs for the operated properties include
only direct lease and field level costs. Headquarters general and
administrative overhead expenses of Vintage are not included. Lease and well
operating costs are held constant in accordance with SEC guidelines. Capital
costs are included as required for workovers, new development wells, and
production equipment.
We have made no investigation of potential gas volume and value imbalances
which may have resulted from overdelivery or underdelivery to the Vintage
interest. Therefore, our estimates of reserves and future revenue do not
include adjustments for the settlement of any such imbalances; our projections
are based on Vintage receiving its net revenue interest share of estimated
future gross gas production.
The reserves included in this report are estimates only and should not be
construed as exact quantities. They may or may not be recovered; if recovered,
the revenues therefrom and the costs related thereto could be more or less than
the estimated amounts. The sales rates, prices received for the reserves, and
costs incurred in recovering such reserves may vary from assumptions
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included in this report due to governmental policies and uncertainties of supply
and demand. Also, estimates of reserves may increase or decrease as a result of
future operations.
In evaluating the information at our disposal concerning this report, we
have excluded from our consideration all matters as to which legal or
accounting, rather than engineering and geological, interpretation may be
controlling. As in all aspects of oil and gas evaluation, there are
uncertainties inherent in the interpretation of engineering and geological data;
therefore, our conclusions necessarily represent only informed professional
judgments.
The titles to the properties have not been examined by Netherland, Sewell &
Associates, Inc., nor has the actual degree or type of interest owned been
independently confirmed. The data used in our estimates were obtained from
Vintage Petroleum, Inc.; other interest owners; various operators of the
properties; and the nonconfidential files of Netherland, Sewell & Associates,
Inc. and were accepted as accurate. We are independent petroleum engineers,
geologists, and geophysicists; we do not own an interest in these properties and
are not employed on a contingent basis. Basic geologic and field performance
data together with our engineering work sheets are maintained on file in our
office.
Very truly yours,
/s/ FREDERIC D. SEWELL
TJT:LJH
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
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| This ‘10-K405’ Filing | | Date | | First | | Last | | | Other Filings |
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| |  |
| Filed on: | | 3/27/97 | | | | | | | DEF 14A |
| | 3/17/97 | | 1 |
| | 1/1/97 | | 1 | | 2 |
| For Period End: | | 12/31/96 | | 3 |
| List all Filings |
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