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Although it presented the investment package to numerous parties,
Tri-Power failed to attract any investors.18 Sometime during
July or August 1986, TPC decided sell Tri-Power in its entirety.
II. Petitioner's Acquisition of Tri-Power
A. TPC's Offer
Tri-Power first came to petitioner's attention about the
time that the Brock Exploration deal collapsed. Laura Dichter,
an independent oil and gas landman out of Denver, Colorado,
identified Tri-Power as a possible acquisition candidate for
petitioner. Sometime during early September 1986, Ms. Dichter
delivered to Mr. Reed, petitioner's vice president of finance, a
package of materials containing information about Tri-Power and
its properties. The package included the following: (1) A list
showing the average monthly production of Tri-Power's 79
producing wells for the first half of 1986, (2) excerpts from the
February 17, 1986, L.A. Martin & Associates, Inc. (LAM), "Reserve
Estimate and Economic Analysis" report, effective as of January
1, 1986 (the 1986 LAM reserve report), (3) LAM's updated
production history curves (through June 1986), (4) monthly
production statistics for each of Tri-Power's 79 wells from
inception to the most recent information then available, (5)
descriptions and locations for all of Tri-Power's leasehold
18 Although Tri-Power found no investors for its development
proposal, it did sell one minor property during that period.
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