Plains Petroleum Company and Subsidiaries - Page 28




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                                        Oil            Gas                            
                                       MBBL1          MMCF2                          
               Gross reserves      2264.159       51521.452                           
               Net reserves        404.925     10136.649                              
               1  MBBL is the abbreviation for 1,000 barrels of crude oil             
          or liquid petroleum products.                                               
               2   MMCF is the abbreviation for 1 million cf of gas.                  
          At the standard conversion ratio of 6,000 cf of gas to 1 barrel             
          of oil, these reserves translate into 2.1 million BOE                       
          (rounded).20  The 1986 LAM updated reserve report indicated that            
          several of the wells evaluated in the report had a "relatively              
          short or no production history and therefore production                     
          extrapolations are subject to a higher degree of inaccuracy."               
               LAM made available to petitioner, for inspection and review,           
          the data underlying both the 1986 LAM reserve report and the 1986           
          LAM updated reserve report.  Much of the data underlying LAM's              
          1986 reserve reports is no longer available.                                
               As part of petitioner's investigation into Tri-Power,                  
          Messrs. Billings and Wagner traveled to Houston on at least two             
          occasions to interview Tri-Power's personnel and evaluate the               


          20   The barrel of oil equivalent (BOE), on the basis of the                
          reserves reflected in the 1986 LAM updated reserve report, is               
          computed as follows:                                                        
               Oil BBL                       404,925.0                                
               Gas BOE                                                                
               10,136,649,000 cf                                                      
               6000 cf             =         1,689,441.5                              
                    Total BOE                2,094,366.5                              

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