- 30 -
leases and an examination to confirm that Tri-Power held good
title to its properties.
Petitioner concluded from its investigation of the Tri-Power
properties that the 1986 LAM reserve report undervalued certain
properties and overvalued others. In particular, petitioner's
acquisition team believed that the 1986 LAM reserve report
underestimated Tri-Power's reserves located in the Meeteetse and
Hough fields and that it overestimated the value of Tri-Power's
reserves located in a Texas field known as South Atlanta. With
respect to the Meeteetse field, Mr. Wagner discovered at least
two promising wells that had been excluded from the 1986 LAM
reserve report. Discussions with Mr. Cassell also revealed that
a well owned and operated by Tri-Power in the Hough field,
located in Mississippi, was producing at a rate 10 times greater
than had previously been projected for that well. Mr. Billings
discovered, also through discussions with Mr. Cassell, that the
Tri-Power properties located in the South Atlanta field were
troubled. South Atlanta produced "sour gas",21 and one of Tri-
Power's two South Atlanta wells suffered from mechanical problems
that severely limited its production. On the whole, however,
petitioner's management found the 1986 LAM reserve report to be a
reliable estimate of Tri-Power's reserves.
21 "Sour gas" contains large amounts of hydrogen sulfide.
Page: Previous 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 NextLast modified: May 25, 2011