EXHIBIT 19.0
McCartney Engineering, LLC
Consulting Petroleum Engineers
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1888 Sherman Street, Suite 760 Denver, CO 80203 (303)830-7208 Fax(303)830-7004
December 14, 2000
Mr. Dan Dalke
American Warrior, Inc.
P.O. Box 399
Garden City, Kansas 67846
Re: Winco Petroleum Corporation Property Evaluation
Dear Mr. Dalke:
Pursuant to your request, we have estimated the remaining reserves and
future net revenue for certain developed oil properties owned by Winco
Petroleum Corporation in Kansas and Wyoming. The effective date of this
study is September 30, 2000. Results are summarized below:
<TABLE>
<CAPTION>
Net Remaining Reserve Estimated Future Net Revenue
As Of September 30, 2000 Discounted at
Reserve Category Oil (BBL) Undiscounted 10 Percent
---------------- --------- ------------ ----------
<S> <C> <C> <C>
Proved Producing 48,601 $ 618,811 $ 476,760
</TABLE>
Table #1 is a tabulation by lease of the working and net revenue interests,
gross and net reserves, and projected discounted net revenues of the
individual leases. Table #2 is a cash flow summary reflecting the
estimated remaining reserves and revenue of the Winco Petroleum Corporation
properties. Also included in the report are cash flow projections and
performance curves for the individual leases.
Source of Data
--------------
Winco Petroleum Corporation supplied lease names, locations, and
performance histories for use in this study. Working interests and net
revenue interests were also supplied by Winco personnel, as were oil prices
and historic lease operating expenses. This data was accepted by McCartney
Engineering, LLC as presented. McCartney Engineering, LLC reserves the
right to revise the associated reserve and economic projections if future
information indicates discrepancies in the data provided. No independent
well tests or property inspections were made in conjunction with this study.
<PAGE>
Mr. Dan Dalke
December 14, 2000
Page 2
Reserve Category
----------------
The reserves included in this report are classified in the proved developed
producing category. Proved developed producing reserves are those which
are expected to be recovered through existing wells with existing equipment
and operating methods from existing completion intervals now open for
production.
Method of Assigning Reserves
----------------------------
Reserves were determined through the application of industry-accepted
methods. Since sufficient production history was available, remaining
reserves were estimated from an extrapolation of past performance.
Oil and Gas Prices
------------------
At your request, future oil prices of $30.27/BBL were used for all
properties. No increases or decreases in future oil prices were considered
in these cash flow projections.
Expenses
--------
The estimated future operating costs were based on historic expense data
supplied by Winco Petroleum Corporation. These expenses were escalated at
a rate of 8% per year. Applicable severance, ad valorem and production
taxes were considered in the cash flow projections. No deductions were
made for general or corporate overhead, depletion, depreciation, or any
other indirect costs. The estimated net income is before state and federal
income tax and does not consider any encumbrances against the properties,
if such exist. Plugging and restoration expenses have not been included in
this evaluation since they are expected to be offset by salvageable equipment.
General
-------
The accuracy of any reserve estimate, especially when based on volumetric
analysis or limited production history, is a function of available data and
of engineering and geological interpretation and judgment. While the
reserve estimates used herein are believed reasonable, they should be
accepted with the understanding that subsequent reservoir performance,
changes in pricing structure, or market demand may justify their revision.
Reserve estimates based on volumetric analysis and reserves assigned to
behind pipe intervals are inherently less reliable than those based on a
lengthy production history.
In our opinion, the above reserve and revenue estimates fairly and
approximately present the proved producing reserves of Winco Petroleum
Corporation with respect to definitions,
<PAGE>
Mr. Dan Dalke
December 14, 2000
Page 3
assumptions, and methodology described above.
We appreciate the opportunity to provide you with this study. All related
data is in our file and is available for your review.
Very truly yours,
McCartney Engineering, LLC.
/s/ JACK A. MCCARTNEY
Jack A. McCartney
Manager
<PAGE>
McCartney Engineering, LLC
Consulting Petroleum Engineers
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1888 Sherman Street, Suite 760 Denver, CO 80203 (303)830-7208 Fax(303)830-7004
January 3, 2001
Mr. Dan Dalke
Winco Petroleum Corporation
P. O. Box 399
Garden City, Kansas
Dear Mr. Dalke:
At your request of in behalf of Winco Petroleum Corporation (Winco) we are
providing the following confirmation of the methodology used by McCartney
Engineering, LLC and the relationship with Winco the work was accomplished
under. This pertains to the analysis of Winco reserves as of September 30,
2000, which was transmitted to Winco Petroleum under cover of letter dated
December 14,2000.
I. We confirm the following;
A) I, Jack A. McCartney, am a Registered Professional Engineer in
the State of Colorado. My license number is 14618. I have
practiced as an independent qualified reserve estimator for over
23 years.
B) There are no financial relationships between me or our firm and
Winco including investments in the Company's securities,
indebtedness to or from the Company and participation in joint
venture operations in which the Company is also a participant.
C) There have been no limitations and/or restrictions placed upon me
by officials of Winco Petroleum in my evaluation of the Winco
Petroleum estimated reserves and the preparation of our reports
thereon.
D) There has been no information obtained by me subsequent to
September 30, 2000 that would have a material effect on the
various amounts and classifications of reserves reported as of
September 30, 2000.
E) Our compensation is not contingent in whole or in part on the
results of our report.
<PAGE>
Mr. Dan Dalke
January 3, 2000
Page 2
F) There were no outstanding fees owed to our firm by Winco as of
September 30, 2000.
G) There were no services performed by our firm for Winco during the
past year other than an independent evaluation of reserves.
II. In order to comply with recent Securities and Exchange Commission
releases (Accounting Series Release Number 253, 257, 258, 269, and
270), the following criteria were met.
A) A ten percent discount rate was used to derive the present worth
of revenues and costs.
B) Prices used to determine revenues were the latest prices received
for the minerals and were not escalated for an inflation factor.
C) Costs are not escalated for an inflation factor and are
determined on current amounts.
D) Estimated future costs include anticipated development and
restoration costs (if material).
III. This completed statement is transmitted to Winco Petroleum Corporation
per the instructions of Mr. Dan Dalke of Winco along with a copy of
our December 14, 2000 report letter and cash flow summaries.
Yours truly,
McCartney Engineering, LLC
/s/ JACK A. MCCARTNEY
Jack A. McCartney
Manager
<PAGE>
<TABLE>
<CAPTION>
TABLE #1
WINCO PETROLEUM CORPORATION
INDIVIDUAL WELL DISCOUNTED CASH FLOW SUMMARY
AS OF SEPTEMBER 30, 2000
CATEGORY, STATE, FIELD NAME, WORKING REVENUE GROSS OIL GROSS GAS NET OIL NET GAS DISCOUNTED
AND LEASE NAME INTEREST INTEREST (BBL) (MCF) (BBL) (MCF) REVENUE @ 10%
------------------------------------------- --------- --------- --------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
PROVED PRODUCING RESERVES
KANSAS
ALDRICH FIELD
EVERETT #1 1.0000000 0.8203130 14583 0 11962 0 $ 120707
--------- ---------- --------- --------- -----------
TOTAL - ALDRICH FIELD 14583 0 11962 0 $ 120707
BEAVER FIELD
HOFMEISTER A 1.0000000 0.8500000 11286 0 9593 0 $ 122390
--------- ---------- --------- --------- -----------
TOTAL - BEAVER FIELD 11286 0 9593 0 $ 122390
DISTRICT 57 NORTH FIELD
ERBERT #1 0.9375000 0.7500000 0 0 0 0 $ 0
--------- ---------- --------- --------- -----------
TOTAL - DISTRICT 57 NORTH FIELD 0 0 0 0 $ 0
GORHAM FIELD
COADY 1.0000000 0.8750000 4881 0 4272 0 $ 29032
--------- ---------- --------- --------- -----------
TOTAL - GORHAM FIELD 4881 0 4272 0 $ 29032
HALL-GURNEY FIELD
HOLL 1.0000000 0.8750000 0 0 0 0 $ 0
--------- ---------- --------- --------- -----------
TOTAL - HALL-GURNEY FIELD 0 0 0 0 $ 0
LAKIN NW FIELD
GANO #1-17 1.0000000 0.6891400 10585 0 7295 0 $ 52216
--------- ---------- --------- --------- -----------
TOTAL - LAKIN NW FIELD 10585 0 7295 0 $ 52216
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE #1 (CONT'D)
CATEGORY, STATE, FIELD NAME, WORKING REVENUE GROSS OIL GROSS GAS NET OIL NET GAS DISCOUNTED
AND LEASE NAME INTEREST INTEREST (BBL) (MCF) (BBL) (MCF) REVENUE @ 10%
------------------------------------------- --------- --------- --------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C. <C>
TRAPP FIELD
MICHEL A 1.0000000 0.7500000 3393 0 2545 0 $ 16511
GAGE A 1.0000000 0.8000000 1674 0 1339 0 $ 8156
--------- ---------- --------- --------- -----------
TOTAL - TRAPP FIELD 5067 0 3884 0 $ 24667
TOTAL - KANSAS 46402 0 37006 0 $ 349012
WYOMING
MIKES DRAW FIELD
MADSEN #12-9 0.5113220 0.4092770 28331 0 11595 0 $ 127748
--------- ---------- --------- --------- -----------
TOTAL - MIKES DRAW FIELD 28331 0 11595 0 $ 127748
TOTAL - WYOMING 28331 0 11595 0 $ 127748
TOTAL - PROVED PRODUCING RESERVES 74733 0 48601 0 $ 476760
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE #2
WINCO PETROLEUM CORPORATION
SUMMARY
AS OF SEPTEMBER 30, 2000
PROVED PRODUCING RESERVES
GROSS GROSS OIL GROSS GAS NET OIL NET GAS OIL PRICE OIL SALES GAS PRICE GAS SALES
YEAR WELLS (BBL) (MCF) (BBL) (MCF) ($/BBL) ($) ($/MCF) ($)
---- ------- --------- --------- ------- ------- --------- --------- --------- ---------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 14.00 13041 0 8983 0 30.27 271916 0.000 0
2 14.00 12226 0 8426 0 30.27 255056 0.000 0
3 14.00 10998 0 7536 0 30.27 228115 0.000 0
4 13.00 9342 0 6235 0 30.27 188733 0.000 0
5 6.00 8067 0 5282 0 30.27 159886 0.000 0
6 3.00 5491 0 3517 0 30.27 106460 0.000 0
7 3.00 5170 0 3323 0 30.27 100588 0.000 0
8 3.00 4393 0 2737 0 30.27 82849 0.000 0
9 2.00 2262 0 1030 0 30.27 31178 0.000 0
10 1.00 1866 0 764 0 30.27 23126 0.000 0
11 1.00 1738 0 711 0 30.27 21522 0.000 0
12 1.00 139 0 57 0 30.26 1725 0.000 0
--------- --------- --------- --------- -------- -------- -------- ---------
74733 0 48601 0 30.27 1471154 0.000 0
TOTAL OPERATING PRODUCTION SECTION 29 OTHER NET CUM NET DISC P.W. CUM P.W.
YEAR SALES ($) COSTS TAXES TAX CREDITS EXPENSE REVENUE REVENUE AT 10.0% AT 10.0%
---- --------- --------- ---------- ----------- ------- ------- ------- --------- --------
1 271916 104817 22616 0 0 144483 144483 137759 137759
2 255056 113202 21197 0 0 120657 265140 104583 242342
3 228115 111710 19030 0 0 97375 362515 76730 319072
4 188733 96952 15942 0 0 75839 438354 54327 373399
5 159886 87110 13654 0 0 59122 497476 38503 411902
6 106460 50944 9531 0 0 45985 543461 27224 439126
7 100588 55021 8982 0 0 36585 580046 19690 458816
8 82849 51629 7552 0 0 23668 603714 11580 470396
9 31178 19299 3584 0 0 8295 612009 3690 474086
10 23126 15513 2891 0 0 4722 616731 1909 475995
11 21522 16754 2690 0 0 2078 618809 764 476759
12 1725 1507 216 0 0 2 618811 1 476760
--------- -------- -------- --------- -------- -------- -------- --------- --------
1471154 724458 127885 0 0 618811 618811 476760 476760
</TABLE>
<PAGE>
TABLE #2 (CONT'D)
WINCO PETROLEUM CORPORATION
SUMMARY
AS OF SEPTEMBER 30, 2000
PROVED PRODUCING RESERVES
DISCOUNTED PRESENT WORTH VALUE PROFILE
DISCOUNT RATE PRESENT WORTH
------------- -------------
0.100 476,760
0.110 466,073
0.120 455,873
0.130 446,123
0.140 436,799
0.150 427,877
0.160 419,327
0.170 411,137
0.180 403,277
0.190 395,735
0.200 388,490
0.210 381,525
0.220 374,831
0.230 368,385
0.240 362,181
0.250 356,204
0.260 350,438
0.270 344,878
0.280 339,511
0.290 334,327
0.300 329,320
0.310 324,480
0.320 319,799
0.330 315,269
0.340 310,884
0.350 306,637
0.360 302,519
0.370 298,530
0.380 294,661
0.390 290,905
0.400 287,260
0.410 283,724
0.420 280,284
0.430 276,945
0.440 273,694
0.450 270,537
0.460 267,463
0.470 264,471
0.480 261,558
0.490 258,723
0.500 255,955
