- 40 -
that same period. The Tri-Power properties generated a total net
cash-flow in the amount of $6,819,185 during the period 1987
through 1997.
B. Pursuit of the Tri-Power Properties
After the acquisition, petitioner continued to market
production from its preacquisition properties primarily to KN
Energy. As management continued to evaluate the Tri-Power
properties, petitioner divested itself of certain properties and
pursued others.
Upon acquisition of Tri-Power, petitioner inventoried the
acquired properties and identified certain properties for
disposal. On the basis of past experience, petitioner's
management was not interested in retaining the Tri-Power
properties located in California, Kentucky, and Pennsylvania.
Additionally, petitioner decided not to pursue development of
certain Tri-Power properties located in the Northern Rocky
Mountains, an area with geologic faults that is difficult to
explore.
Petitioner pursued development of the Tri-Power properties
located in the Meeteetse field. Petitioner sought and acquired
the right to operate the Meeteetse wells, giving it the power to
control both the costs and the timing of work done on the
property. Additionally, petitioner successfully pursued and
acquired additional working interests in the Meeteetse field.
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