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production data from 1986. During 1986, some of the wells valued
in the 1986 LAM reserve report experienced improved performance,
and some experienced deteriorated performance.
The 1986 LAM updated reserve report, dated October 14, 1986,
estimated the discounted future net revenue from Tri-Power's
proved and producing reserves to be $19,114,541 as of November 1,
1986, using a 10-percent discount rate. In a schedule to the
1986 LAM updated reserve report, LAM also presented a range of
present worth estimates using different discount rates. LAM
estimated the present net worth of Tri-Power's proved and
producing reserves to be $14,447,362, using a 20-percent
before-tax discount rate. The 1986 LAM updated reserve report
indicated that the estimated future net revenues presented
therein were not to be construed as LAM's opinion of the fair
market value of the properties included in the report. Instead,
the report presented LAM's opinion of the future net revenue that
would be derived from the recovery of the estimated reserves
under the assumed timing and economic conditions.
The 1986 LAM updated reserve report estimated Tri-Power's
proved and producing reserves, as of November 1, 1986, to be as
follows:
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