Table a: Mw Petroleum's Estimated Reserves Oil(MMB) Gas (MMCF) Total (MMBOE Proved developed producing 73.6 381.1 137.1 Proved developed non-producing 7.9 61.5 18.1 Proved undeveloped 25.6 Total Probable 70.4 258 Total Possible 44.5 75 Total Reserves 1559 Mr Plank was interested in Mw because most of its properties fit well with Apache's Unfortunately, MW was simply too large for Apache to finance. As a result, Apache intended to exclude from its proposal a group of properties located in Michigan and the Gulf of Mexico that fit less well with its own portfolio. Amoco, for its part, indicated it would entertain such a proposal and, if it seemed promising, might even be willing to help locate financing producing and non-producing we w had proved developed reserves associated with both Proved developed reserves They included projected production both from currently functioning wellbores and from others that required only modest expenditures to become fully operational. Apache was interested in 121.4 MMBOE of MW's proved developed reserves, or about 80% of the total. More than half of the reserves Apache proposed to exclude were gas. Annual production of oil and gas from the wells to be purchased would decline over time as the reserves were depleted. Though production could be slowed to extend the life of the reserves, this practice of"shutting in"reserves was rare in the United States. Oil production was expected to start at 9.4 MB in 1991 and decline to 1.2 MB in 2005. By that time, only 24% of the beginning proved developed crude oil reserves would remain in the ground. Similarly, gas production was expected to drop from 45.3 to 6.2 MMCF over the fifteen years from 1991 to 2005. At the end of 2005, only about 14% of the beginning gas reserves would remain. Exhibit 3 presents projections for the production of proved developed reserves along with associated cash flows, excluding the above-mentioned fields in Michigan and the Gulf of Mexico Proved undeveloped reserves MW had other reserves that were proved but not developed. Developing these reserves would require drilling additional wells adjacent to existin wells, recompleting existing wellbores, or, in some cases, utilizing so-called"secondary"and tertiary"recovery techniques. The most common of these was waterflooding, whereby a producing field is injected with water at selected sites to increase pressure in the field and push more oil and gas out of the ground. The properties in which Apache terested comprised about 75% of MW,s proved undeveloped reserves, including more than 80% of the available oil reserves Bringing these reserves into production would require estimated expenditures for development of about $35 million over two years, and only minimal capital spending afterwards. Once these reserves were developed, about 70% of the oil and 90% of the gas could be extracted during the first fifteen years of production. In most fields, MW could leave these reserves undeveloped while retaining the right to develop them later. How long it could wait without forfeiting its rights varied from property to property, depending on the terms of the lease, on sharing arrangements with other companies, and on the level of production from other wells on the property. In virtually all cases, MW could wait 5-7 years without jeopardizing its rights. Exhibit 4 shows production andDO NOT COPY 295-029 MW Petroleum Corporation (A) 4 Table A: MW Petroleum's Estimated Reserves Oil (MMB) Gas (MMCF) Total (MMBOE) Proved developed producing 73.6 381.1 137.1 Proved developed non-producing 7.9 61.5 18.1 Proved undeveloped 15.8 58.5 25.6 Total Proved 97.3 501.1 180.8 Total Probable 14.1 70.4 25.8 Total Possible 44.5 75.4 57.1 Total Reserves 155.9 646.9 263.7 Mr. Plank was interested in MW because most of its properties fit well with Apache's. Unfortunately, MW was simply too large for Apache to finance. As a result, Apache intended to exclude from its proposal a group of properties located in Michigan and the Gulf of Mexico that fit less well with its own portfolio. Amoco, for its part, indicated it would entertain such a proposal and, if it seemed promising, might even be willing to help locate financing. Proved developed reserves xxx MW had proved developed reserves associated with both producing and non-producing wells. They included projected production both from currently functioning wellbores and from others that required only modest expenditures to become fully operational. Apache was interested in 121.4 MMBOE of MW's proved developed reserves, or about 80% of the total. More than half of the reserves Apache proposed to exclude were gas. Annual production of oil and gas from the wells to be purchased would decline over time as the reserves were depleted. Though production could be slowed to extend the life of the reserves, this practice of “shutting in” reserves was rare in the United States. Oil production was expected to start at 9.4 MB in 1991 and decline to 1.2 MB in 2005. By that time, only 24% of the beginning proved developed crude oil reserves would remain in the ground. Similarly, gas production was expected to drop from 45.3 to 6.2 MMCF over the fifteen years from 1991 to 2005. At the end of 2005, only about 14% of the beginning gas reserves would remain. Exhibit 3 presents projections for the production of proved developed reserves along with associated cash flows, excluding the above-mentioned fields in Michigan and the Gulf of Mexico. Proved undeveloped reserves xxx MW had other reserves that were proved but not developed. Developing these reserves would require drilling additional wells adjacent to existing wells, recompleting existing wellbores, or, in some cases, utilizing so-called "secondary" and “tertiary” recovery techniques. The most common of these was waterflooding, whereby a producing field is injected with water at selected sites to increase pressure in the field and push more oil and gas out of the ground. The properties in which Apache was interested comprised about 75% of MW's proved undeveloped reserves, including more than 80% of the available oil reserves. Bringing these reserves into production would require estimated expenditures for development of about $35 million over two years, and only minimal capital spending afterwards. Once these reserves were developed, about 70% of the oil and 90% of the gas could be extracted during the first fifteen years of production. In most fields, MW could leave these reserves undeveloped while retaining the right to develop them later. How long it could wait without forfeiting its rights varied from property to property, depending on the terms of the lease, on sharing arrangements with other companies, and on the level of production from other wells on the property. In virtually all cases, MW could wait 5-7 years without jeopardizing its rights. Exhibit 4 shows production and