EXHIBIT 19.2
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 7, 1999
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, 1999. Results are summarized below:
<TABLE>
<CAPTION>
Net Remaining Reserve Estimated Future Net Revenue
As Of September 30, 1999 Discounted at
Reserve Category Oil (BBL) Undiscounted 10 Percent
---------------- --------- ------------ ----------
<S> <C> <C> <C>
Proved Producing 124,241 $ 1,061,688 $ 627,820
</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
--------------
Lease names, locations, and performance history was supplied by Winco
Petroleum Corporation for use in this study. Working interests and net
revenue interests were supplied by Winco personnel, as were historic oil
prices and 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 7, 1999
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 $21.00/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. No provisions were made for
increases or decreases in future operating expenses. 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 7, 1999
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 17, 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,
1999, which was transmitted to Winco Petroleum under cover of letter dated
December 7, 1999.
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, 1999 that would have a material effect on the
various amounts and classifications of reserves reported as of
September 30, 1999.
E) Our compensation is not contingent in whole or in part on the
results of our report.
<PAGE>
Mr. Dan Dalke
January 17, 2001
Page 2
F) There were no outstanding fees owed to our firm by Winco as of
September 30, 1999.
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 7, 1999 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, 1999
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 50560 0 41476 0 $ 207840
--------- ---------- --------- --------- -----------
TOTAL - ALDRICH FIELD 50560 0 41476 0 $ 207840
BEAVER FIELD
HOFMEISTER A 1.0000000 0.8500000 18654 0 15856 0 $ 82896
--------- ---------- --------- --------- -----------
TOTAL - BEAVER FIELD 18654 0 15856 0 $ 82896
DISTRICT 57 NORTH FIELD
ERBERT #1 0.9375000 0.7500000 9440 0 7083 0 $ 33686
--------- ---------- --------- --------- -----------
TOTAL - DISTRICT 57 NORTH FIELD 9440 0 7083 0 $ 33686
GORHAM FIELD
COADY 1.0000000 0.8750000 12143 0 10626 0 $ 41958
--------- ---------- --------- --------- -----------
TOTAL - GORHAM FIELD 12143 0 10626 0 $ 41958
HALL-GURNEY FIELD
HOLL 1.0000000 0.8750000 8361 0 7316 0 $ 21433
--------- ---------- --------- --------- -----------
TOTAL - HALL-GURNEY FIELD 8361 0 7316 0 $ 21433
LAKIN NW FIELD
GANO #1-17 1.0000000 0.6891400 3953 0 2724 0 $ 2372
--------- ---------- --------- --------- -----------
TOTAL - LAKIN NW FIELD 3953 0 2724 0 $ 2372
</TABLE>
<PAGE>
<TABLE>
<CATPION>
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 10603 0 7955 0 $ 46557
GAGE A 1.0000000 0.8000000 16583 0 13267 0 $ 75048
--------- ---------- --------- --------- -----------
TOTAL - TRAPP FIELD 27186 0 21222 0 $ 121605
TOTAL - KANSAS 130297 0 106303 0 $ 511790
WYOMING
MIKES DRAW FIELD
MADSEN #12-9 0.5113220 0.4092770 43824 0 17938 0 $ 116030
--------- ---------- --------- --------- -----------
TOTAL - MIKES DRAW FIELD 43824 0 17938 0 $ 116030
TOTAL - WYOMING 43824 0 17938 0 $ 116030
TOTAL - PROVED PRODUCING RESERVES 174121 0 124241 0 $ 627820
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE #2
WINCO PETROLEUM CORPORATION
SUMMARY
AS OF SEPTEMBER 30, 1999
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) ($/BBL) ($) ($/MCF) ($)
---- ------- --------- --------- ------- ------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 19.00 18117 0 12941 0 21.00 271761 0.000 0
2 19.00 15710 0 11260 0 21.00 236460 0.000 0
3 18.00 13547 0 9757 0 21.00 204897 0.000 0
4 18.00 12739 0 9190 0 21.00 192990 0.000 0
5 18.00 11981 0 8656 0 21.00 181776 0.000 0
6 18.00 11265 0 8152 0 21.00 171192 0.000 0
7 18.00 9893 0 7067 0 21.00 148407 0.000 0
8 14.00 8970 0 6364 0 21.00 133644 0.000 0
9 14.00 8441 0 6000 0 21.00 126000 0.000 0
10 14.00 7559 0 5322 0 21.00 111762 0.000 0
11 7.00 6035 0 4145 0 21.00 87045 0.000 0
12 6.00 5644 0 3882 0 21.00 81522 0.000 0
13 6.00 5320 0 3667 0 21.00 77007 0.000 0
14 6.00 5017 0 3470 0 21.00 72870 0.000 0
15+ 6.00 33883 0 24368 0 21.00 511728 0.000 0
--------- --------- --------- --------- -------- -------- -------- ---------
174121 0 124241 0 21.00 2609061 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 271761 119263 22074 0 0 130424 130424 124356 124356
2 236460 102463 19308 0 0 114689 245113 99411 223767
3 204897 85663 16831 0 0 102403 347516 80692 304459
4 192990 85663 15835 0 0 91492 439008 65542 370001
5 181776 85663 14901 0 0 81212 520220 52887 422888
6 171192 85663 14017 0 0 71512 591732 42337 465225
7 148407 73423 12224 0 0 62760 654492 33778 499003
8 133644 67303 11043 0 0 55298 709790 27055 526058
9 126000 67303 10398 0 0 48299 758089 21484 547542
10 111762 60715 9261 0 0 41786 799875 16897 564439
11 87045 43037 7346 0 0 36662 836537 13476 577915
12 81522 42269 6875 0 0 32378 868915 10821 588736
13 77007 42269 6482 0 0 28256 897171 8584 597320
14 72870 42269 6123 0 0 24478 921649 6762 604082
15+ 511728 329885 41804 0 0 140039 1061688 23738 627820
--------- -------- -------- --------- -------- -------- -------- --------- --------
2609061 1332851 214522 0 0 1061688 1061688 627820 627820
</TABLE>
TABLE #2 (CONT'D)
WINCO PETROLEUM CORPORATION
SUMMARY
AS OF SEPTEMBER 30, 1999
PROVED PRODUCING RESERVES
DISCOUNTED PRESENT WORTH VALUE PROFILE
DISCOUNT RATE PRESENT WORTH
------------- -------------
0.100 627,820
0.110 603,684
0.120 581,462
0.130 560,943
0.140 541,929
0.150 524,273
0.160 507,837
0.170 492,489
0.180 478,136
0.190 464,683
0.200 452,045
0.210 440,156
0.220 428,945
0.230 418,361
0.240 408,352
0.250 398,873
0.260 389,881
0.270 381,338
0.280 373,214
0.290 365,479
0.300 358,105
0.310 351,068
0.320 344,343
0.330 337,913
0.340 331,756
0.350 325,856
0.360 320,197
0.370 314,764
0.380 309,546
0.390 304,526
0.400 299,697
0.410 295,045
0.420 290,562
0.430 286,240
0.440 282,071
0.450 278,045
0.460 274,147
0.470 270,388
0.480 266,748
0.490 263,221
0.500 259,811
