SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the month of February, 1997
ISRAMCO, INC.
-----------------------------------------------
(Exact name of registrant as specified in charter)
Delaware
----------------------
(State of Incorporation)
575 Madison Avenue, New York, New York 10022 Suite 1006
-----------------------------------------------------------
(Address of principal executive offices)
212-605-0417
---------------
(Telephone number)
0-12500 13-3145265
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Commission File No. IRS Employer ID No.
<PAGE>
Item 2. Acquisition of Assets
---------------------
The Company on February 5, 1997 acquired for $1.2 million an interest in
Jay Petroleum LLC. The Company (i) pursuant to a letter agreement (a copy of
which is attached hereto as Exhibit A) paid to NIR Resources Inc. the sum of
$677,500 for its 50% Membership Interest before recovery of contributions in Jay
Petroleum LLC which interest for profit allocation purposes reduces to 37.5%
after recovery of capital contribution; and (ii) pursuant to a letter agreement
(a copy of which is attached hereto as Exhibit B) paid to Stonewall Resources
LLC the sum of $363,750 for its 25% Membership Interest before recovery of
contributions in Jay Petroleum LLC which interest for profit allocation purposes
reduces to 18.75% after recovery of capital contributions. (NIR Resources Inc.
is a wholly owned subsidiary of Naphtha Israel Petroleum Corp. Ltd. Naphta
Israel Petroleum Corp. Ltd. owns approximately 36.5% of the Company's common
stock and warrants.) Mr. Yossi Levy, the Branch Manager for the Israel Branch
Office of the Company is the General Manager of Naphtha Israel Petroleum Corp.
Ltd. Mr. Youval Ran, the President of the Company is also a director of Naphtha
Israel Petroleum Corp. Ltd. In addition, officers and directors of the Company
are associates of officers and directors of Naphtha Israel Petroleum Corp. Ltd.
In addition, the Company made a $132,640 capital contribution to Jay
Petroleum LLC and received from Jay Resources Corp. pursuant to a separate
agreement (a copy of which is attached hereto as Exhibit C) a 7.9% Membership
Interest in Jay Petroleum LLC which interest increases to an allocation of
profits percentage of 13.81% after recovery of capital contributions. The total
capital contribution made by the members to Jay Petroleum LLC to date is
$846,000.
In connection with this acquisition the Company received a Fair Market
Value Letter from the firm of Albrecht and Associates Inc., independent
petroleum engineers, with regard to (i) the oil and gas properties held by Jay
Petroleum LLC and (ii) the interest in Jay Petroleum LLC acquired by the Company
from NIR Resources Inc. and Stonewall Resources LLC. The Fair Market Value
Letter was based in part upon reserve evaluation and net income projections
prepared by Riseden Services Inc., independent petroleum engineers. A copy of
the Fair Market Value Letter dated January 27, 1997 and the Riseden Report dated
January 16, 1997 are attached hereto as Exhibit D and Exhibit E, respectfully.
In the aggregate the Company holds an 82.9% Membership Interest in Jay
Petroleum LLC. The Company's share of profits before recovery of capital
contribution in Jay Petroleum LLC is 82.9% and after recovery of capital
contribution the allocation of profit participation will be reduced to 70.06%.
The membership of Jay Petroleum LLC is comprised of the Company which holds
an 82.9% Membership Interest, Jay Resources Corporation which holds a 10.65%
Membership Interest and Jay Natural Resources Inc. which holds a 6.45%
Membership Interest, all of which interests are subject to adjustment after
recovery of capital contributions.
- 2 -
<PAGE>
Jay Petroleum LLC has entered into a Management Agreement with Jay
Management Company LLC, a newly formed Texas limited liability company for the
purpose of operating certain oil and gas interests and managing certain oil and
gas interests owned or to be acquired by Jay Petroleum LLC. For a capital
contribution of $350.00 the Company has acquired a 35% interest in Jay
Management Company LLC. Pursuant to the Management Agreement (a copy of which is
attached hereto as Exhibit F), Jay Petroleum LLC will pay to Jay Management
Company LLC a management fee of $12,500 per month. The Management Company will
also receive all payments to Operator for operations pursuant to the Operating
Agreement for the contract wells. The term of the Management Agreement is for
ten (10) years, unless terminated by either party on not less than one hundred
eighty (180) days notice.
The designated Manager of Jay Petroleum LLC is Dr. Reuven Hollo. Dr. Hollo
will receive a Management fee of $5,000 per month. Dr. Hollo is also the Manager
of Jay Management Company LLC, as well as the controlling Member in Jay
Resources Corp. and Jay Natural Resources, Inc.
Jay Petroleum LLC owns both operated and non-operated varying working
interests in over fifty (50) oil and gas wells in the United States. Independent
estimates of the reserves held by Jay Petroleum LLC, which are located in Texas,
Oklahoma, Wyoming, Louisiana and New Mexico are approximately 120,000 net
barrels of proven developed producing oil reserves; 2 billion net cubic feet of
proven developed producing natural gas reserves; 220,000 net barrels of proven
non-producing oil reserves; and, 3 billion net cubic feet of proven
non-producing natural gas reserves.
The acquisition of the interests in Jay Petroleum LLC, as well as the
capital contribution made by the Company to Jay Petroleum LLC was made out of
working capital funds available to the Company.
On February 13, 1997 Jay Petroleum LLC acquired from Snyder Oil Corporation
of Fort Worth, Texas, various operated and non-operated interests in oil and gas
wells in Louisiana, Texas and Wyoming for a cost of $3.1 million. The
acquisition was financed primarily with bank financing obtained by Jay Petroleum
LLC through a $10 million Master Note Facility with Comerica Bank - Texas,
Houston, Texas. The Company is not a borrower or guarantor under this Master
Note Facility.
Based on outside reserve engineering reports, the newly acquired reserves
consist of approximately 160,000 net barrels of proven developed producing oil
reserves; 2.8 billion cubic feet of proven developed producing gas reserves;
11,000 net barrels of proven non-producing oil reserves; and, 1.1 billion net
cubic feet of proven non-producing gas reserves.
- 3 -
<PAGE>
After the completion of the Snyder Oil Corporation transaction, based on
outside reserve engineering reports, Jay Petroleum LLC will have average net
daily production of 133 barrels of oil per day (BOPD) and 1,800 thousand cubic
feet of gas per day (MCFD) through the development of proven behind pipe and
proven undeveloped reserves which Jay Petroleum LLC has in its possession, net
daily production could potentially increase to 200 BOPD and 2,400 MCFD of gas.
Financial statements relating to the interests acquired by the Company in
Jay Petroleum LLC and the interests in oil and gas acquired by Jay Petroleum LLC
shall be filed for the periods specified in Rule 3-05(b) to Regulation S-X
within sixty (60) days after the date of this report.
Item 7. Exhibits
--------
Exhibit A - Letter Agreement with NIR Resources Inc.;
Exhibit B - Letter Agreement with Stonewall Resources LLC;
Exhibit C - Agreement with Jay Resources Corp.;
Exhibit D - Fair Market Value Letter prepared by Albrecht and
Associates Inc. dated January 27, 1997;
Exhibit E - Riseden Engineering Report dated January 16, 1997;
Exhibit F - Management Agreement between Jay Petroleum LLC and Jay
Management Company LLC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Isramco, Inc.
(registrant)
February 14, 1997 By: /S/ HAIM TSUFF
- ----------------- ----------------------------------
(date) Haim Tsuff
Chairman of the Board
- 4 -
[Isramco Letterhead Omitted]
January 16, 1997
Mr. Yossi Levy
N.I.R. Resources, Inc.
Shavit House, 4 Raoul Wallenberg St.
Tel Aviv ISRAEL 69174
Dear Mr. Levy:
This letter is written to set forth our agreement for Isramco, Inc. ("Isramco")
to purchase 100% Membership Interest and 100% After Payout Percentage in Jay
Petroleum, L.L.C. ("LLC") from N.I.R Resources, Inc.
The purchase price and Membership Interest are as follows:
Name Membership Interest Purchase Price Allocation
- ---- ------------------- -------------------------
N.I.R. Resources, Inc. 50% $677,500
Isramco will wire transfer the monies to N.I.R. Resources, Inc.'s Account No.
101-8045711, ABA No. 102000076, Norwest Bank of Denver, N.A. on or before
February 3, to be immediately disbursed as set forth above in accordance with
this Agreement. Effective upon receipt of these monies, N.I.R. Resources, Inc.
will assign all of its right, title and interest in the LLC to Isramco. Isramco
agrees to become a Member of the LLC and to be bound by and comply with the
Regulations of the LLC, a copy of which I have reviewed. The effective date of
this transaction is February 3, 1997.
N.I.R. Resources, Inc. represents and warrants to Isramco that its interest it
is assigning in the LLC is free and clear of any liens. This Agreement may be
signed in counterparts. If the foregoing represents your understanding, please
sign in the space provided.
Sincerely,
ISRAMCO, Inc.
By: /S/ Y. LEVY
-------------------------------------
Title: /S/ G.M.
---------------------------------
Isramco Inc., Israel Branch, Shavit House,
4 Raoul Wallenberg St., Tel-Avia 69174
Tel: 973-3-6490330 - Fax: 972-3-6490340
<PAGE>
Accepted and Agreed to this 23 day of January , 1997.
---- -------
N.I.R. Resources, Inc.
By: /S/ Y. LEVY By: /S/ JACKOB MAIMON
----------------------------- ------------------------------
Yossi Levy, President Jackob Maimon, Chairman
(Isramco Letterhead Omitted)
January 27, 1997
Mr. Ishay Mor
Stonewall Resources, L.L.C.
30 Kalisher Street
Tel Aviv, Israel 65257
Dear Mr. Mor,
This letter is written to set forth our agreement for Isramco, Inc.
("Isramco") to Purchase 25% Membership Interest and 18.75% After Payout
Percentage in Jay Petroleum L.L.C., a Texas limited liability company ("LLC")
from Stonewall Resources, L.L.C. ("Stonewall") for the purchase price of Three
Hundred Sixty Three Thousand Seven Hundred Fifty and NO/100 Dollars
($363,750.00).
Isramco will wire transfer the purchase price monies to Welborn Sullivan
Meck & Tooley, P.C. ("Escrow Agent"), COLTAF Account, Account No. 101-9035805,
ABA No. 102000076, Norwest Bank of Denver, N.A. on or before February 3, 1997.
Isramco will fax this originally executed letter agreement to Escrow Agent to be
received by Escrow Agent on or before February 3, 1997. If Escrow Agent does not
receive the monies and the agreement as set forth above, Escrow Agent will
immediately return monies received, if any, to Isramco and the agreement
received, if any, to Stonewall.
This letter will serve as Irrevocable Instructions to Escrow Agent that
upon receipt of(I) the monies from Isramco and (II) the fax agreement from
Isramco, Escrow Agent shall immediately disburse as follows:
1. $327,375, the purchase price monies less 10% for U.S. tax withholdings
($363,750 - 36,375 = $327,375) to Stonewall Resources, Inc. Account No. -
101-8156059, Norwest Bank of Denver, N.A.
2. $36,375 to U.S. Internal Revenue Service on Isramco's behalf for the
benefit of Stonewall.
3. The originally or faxed executed letter agreement to Isramco.
Effective upon Escrow Agent's disbursement as set forth above, Stonewall
assigns all of its right, title and interest in the L.L.C. to Isramco. Isramco
agrees to become a member of the L.L.C. and to be bound by and comply with the
Regulations of the L.L.C., a copy of which it has reviewed. Stonewall represents
and warrants to Isramco that its interest it is assigning in the L.L.C., is free
and clear of any liens.
Isramco Inc., Israel Branch, Shavit House,
4 Raoul Wallenberg St., Tel-Avia 69174
Tel: 973-3-6490330 - Fax: 972-3-6490340
<PAGE>
[ISRAMCO LETTERHEAD OMITTED]
The effective date of this transaction is December 31, 1996. This agreement may
be signed in counterparts. If the foregoing represents your understanding,
please sign in the space provided.
Sincerely,
ISRAMCO, INC.
By: /S/ Y LEVY
-----------------------------------
Title: General Manager
-------------------------------
Accepted and agreed to this 23 day of January, 1997.
--- -------
STONEWALL RESOURCES, L.L.C.
By: /S/ I. MOR
---------------------------------
Title: Manager
Jay Resources Corporation
One Houston Center
1221 McKinney, Suite 3100
Houston TX 77010
(713) 759-1122
February 4, 1997
Isramco, Inc.
Shavit House, 4 Raoul Wallenberg St.
Tel Aviv, ISRAEL 69174
Attn: Yossi Levy
Dear Yossi:
This letter is written to set forth our agreement to transfer 7.9%
Membership Interest and 13.81% After Payout Percentage in Jay Petroleum, L.L.C.
("Transferred Interest") to Isramco, Inc. The consideration for said transfer of
interest is the $132,640 additional capital contribution made to Jay Petroleum
L.L.C. by Isramco, Inc.
Upon the execution of this letter agreement, Jay Resources Corporation
automatically assigns and transfers the Transferred Interest to Isramco, Inc.
Jay Resources Corporation represents to Isramco, Inc. that it has the requisite
corporate approval and authority to transfer the Transferred Interest and it
further represents and warrants that the Transferred Interest is free and clear
of any liens.
Isramco, Inc. agrees to become a Member of the LLC and to be bound by and
comply with the First Restated Regulations of the LLC, a copy of which Isramco,
Inc. has reviewed. The effective date of this transaction is February 4, 1997.
If the foregoing represents your understanding and agreement, please sign
in the space provided.
Sincerely,
JAY RESOURCES CORPORATION
By: /S/ REUVEN HOLLO
-------------------------------
Title:
----------------------------
<PAGE>
Accepted and Agreed to this 4 day of February , 1997.
ISRAMCO, INC.
By: /S/ Y. LEVY
-------------------------------
Title:
-----------------------------
albrecht & associates, inc.
January 27, 1997
Mr. Yossi Levy
Isramco Inc.
460 Park Ave
New York, NY 10022
RE: Fair Market Value
Farmers Acquisition
Dear Mr. Levy:
Per your request, I have estimated the current Fair Market Value (FMC) of the
following
1) The Farmers Acquisition
2) Isramco's 82.9% WI BPO (69.5% APO) in the Farmers Acquisition
For this appraisal, I have relied heavily upon the engineering provided to you
by Riseden Services, Inc. dated Januiary 16, 1997. Further, my firm has
independently engineered the Proved Producing reserves in the Farmers
Acquisition and have no material disagreements with the Riseden engineering on
that portion of the reserves. (My firm has not engineered the non-producing
reserves in the Farmers Acquisition.)
Based on the foregoing, our appraisals as of February 1, 1997, of the subject
properties are as follows:
Farmers Acquisition
Proved Producing: $2,200,000
Proved Behind Pipe: 300,000
Proved Undeveloped: 1,500,000
----------
Total FMV $4,000,000
1111 Fanin, Suite 1470 1660 Lincoln, Suite 2700
Houston, Texas 77002 Denver, Colorado 80262
713-931-9586 303-839-5627
<PAGE>
Isramco Interest in Farmers Properties
WI = 82.9%
----------
Proved Producing: $1,459,000
Proved Behind Pipe: 199,000
Proved Undeveloped: 995,000
----------
Total FMV $2,658,000
Albrecht & Associates, Inc. has represented sellers of approximately $800
million of oil and gas properties, including over $150 million in 1996. Please
be advised, however, that the appraisal process is not an exact science and is
subject to many variables including changing market conditions for properties,
oil and gas prices, engineering uncertainties, as well as many other unknowns.
Our appraisal of the Fair Market Value is our best estimate taking into account
current conditions, but is made without any warranties whatsoever, either
express or implied. Untimately, the Fair Market Value is the value paid for a
property by a willing buyer to a willing seller.
If we may be of further service, please advise.
Sincerely,
/S/ ROBERT A. ALBRECHT
- ----------------------------------
Robert A. Albrecht
President
RISEDEN
-------
SERVICES, INC.
ENGINEERING SERVICES
P.O. Box 56733 - HOUSTON, TEXAS 77256-6733
(713) 781-1537 - Fax (713) 781-5422
January 16, 1997
Mr. Reuven Hollo
Mr. Yossi Levy
Jay Resources Corporation
1221 McKinney, Suite 3100
Houston, Texas 77010
RE: Reserve Evaluation and
Net Income Projection
Farmers and Snyder Assets
Gentlemen:
As an extension of the reserve evaluation and cash flow projections I have
done for Comerica Bank-Texas, you have requested additional economic runs using
your proprietary oil and gas price schedules. With Comerica's permission to use
the data base and projections prepared on their behalf, attached are the
economic runs you requested.
I have made these reserve determinations and cash flow projections in
conformance with the definitions and procedures approved by the Society of
Petroleum Evaluation Engineers. The projections have been made using your
requested price and cost forecasts as follows:
Oil: $21.00/bbl plus or minus historical differentials for location and
quality plus applicable bonuses through the life of the bonus
contract, escalating at 3% per year.
Gas: $2.25/mcf plus or minus historical differentials for location and
quality, escalating at 3% per year.
LOE: Historical costs escalating at 3% per year.
I have independently evaluated the subject reserves for Comerica Bank and
for Jay Resources and confirm that no employee of Riseden Services, Inc. has a
financial interest in the results of this evaluation.
<PAGE>
Mr. Reuven Hollo
Mr. Yossi Levy
January 17, 1997
(as revised)
page two
Following is a summary of the conclusions of this evaluation and the net
income projections:
Net income
Net Oil Net Gas @ 9%
Mbbl Mmcf M$
------- ------- ----------
FARMERS
Proved Developed
Producing 120.2 2179.6 2665.5
Proved
Non-Producing 222.4 3169.2 6230.8
----- ------ ------
Sub Total 342.6 5348.8 7896.3
SNYDER
Proved Developed
Producing 161.5 2810.5 4598.4
Proved
Non-Producing 10.7 1143.5 794.3
----- ------- -------
Sub Total 172.2 3954.0 5392.7
===== ====== ======
GRAND TOTAL 514.8 9302.8 13289.1
Please advise if additional information is needed.
Yours truly,
/S/ J. E. RISEDEN
------------------------------------
J.E. Riseden, PE
President
[SEAL OF TEXAS OMITTED]
attachments
MANAGEMENT AGREEMENT
THIS AGREEMENT, made and entered into this 4 day of Feb., 1997, by and
between Jay Petroleum LLC (hereinafter referred to as "Owner") and Jay
Management Company, LLC (hereinafter referred to as "Manager"), WITNESSETH:
I
Premises
--------
1.1 Owner either owns or controls certain producing oil and gas wells
located in the States of Oklahoma, Texas, Louisiana, Michigan, New Mexico and
Wyoming, which wells are more fully described in Exhibit A, attached hereto and
by this reference made a part hereof. For convenience of reference, such
producing oil and gas wells shall hereinafter be referred to as the "Contract
Wells".
1.2 Manager, upon the terms and provisions hereinafter set forth, has
agreed to supervise and manage the operation of the Contract Wells and Owner
will cause Manager to be appointed as the Operator of such wells on behalf of
Owner.
1.3 The consideration for this contract shall be good and valuable
consideration and the mutual promises and covenants set forth herein, the
receipt and sufficiency of which are hereby confessed and acknowledged.
II
Manager's Duties
----------------
2.1 On behalf of Owner, Manager shall assume and perform the entire general
management and supervision of the operation of the Contract Wells and shall make
its staff available for such purposes. Manager's duties of managing and
supervising the operations of the Contract Wells on behalf of Owner shall
include all responsibilities as the Operator of the Contract Wells as conducted
by a prudent operator including the following:
(a) The general supervision and management of all personnel, including
well-pumpers and field roustabouts, which are assigned or employed in
connection with the field operation of the Contract Wells;
(b) The securing of third party services for the purposes of maintaining
the Contract Wells in a good operating condition;
(c) The preparation of Authorities For Expenditure (AFE's) for reworking,
recompleting and drilling of new wells and the general supervision and
management of such operations;
(d) Manager shall keep and maintain the books of account and other records
which are necessary to the operation of the Contract Wells including
performing the
1
<PAGE>
joint interest billing and disbursement of revenues to other working
interest owners;
(e) Manager shall prepare and submit all reports relative to the Contract
Wells which may be required by state regulatory bodies.
III
Manager's Compensation
----------------------
3.1 Owners shall pay to Manager monthly as compensation for the services
which Manager shall perform under the terms of this Agreement Twelve Thousand
Five Hundred Dollars ($12,500.00). Manager shall also receive all payments to
Operator for operations pursuant to the Operating Agreements for the Contract
Wells.
3.2 The amount which is to be paid to Manager as set forth in Paragraph 3.1
may be amended from time to time by the parties hereto if they so mutually
agree.
IV
Miscellaneous
-------------
4.1 The Manager shall not be liable for any losses sustained in or on each
well or on the property where each well is located, or for any damage to the
well or productive capacity thereof, caused by the act of God, fire, storm,
flood, explosion, strike, riots, theft or the act of any person not under
direction or supervision of Manager. Manager's liability shall be limited to any
loss or losses resulting from the bad faith, gross negligence, or willful
misconduct of the supervisory employees of Manager.
4.2 This Agreement shall remain in force and effect for the term of ten
(10) years or until terminated by either party hereto. Such termination shall be
effected by either party hereto giving the other party not less than 180 days'
written notice that the contract shall be terminated on a date certain. Notice
of termination shall be in writing sent by courier, to the other party at the
following address:
Owner: Jay Petroleum LLC
One Houston Center
1221 McKinney, Suite 3100
Houston, TX 77010
Manager: Jay Management Company LLC
One Houston Center
1221 McKinney, Suite 3100
Houston, TX 77010
2
<PAGE>
Such notice shall be deemed to have been given on the day following the date of
mailing. Upon termination hereof, Manager shall be entitled to payment of any
and all amounts owning to it pursuant to the terms and provisions hereof.
4.3 Neither party hereto shall execute any assignment or transfer of its
rights hereunder without the consent of the other party first obtained.
4.4 Manager shall comply with all laws and regulations of all governmental
bodies applicable to the operations of the Contract Wells.
4.5 This Agreement shall be binding upon the parties hereto and upon their
successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
OWNER:
JAY PETROLEUM LLC
By: /S/ Y. LEVY / REUVEN HOLLO
------------------------------------
Title:
---------------------------------
Date: 2/4/97 / 2/4/97
---------------------------------
MANAGER:
JAY MANAGEMENT COMPANY LLC
By:
-----------------------------------
Title:
--------------------------------
Date: 2/4/97
--------------------------------
3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
Farmers Acquisition - Average Expenses
Lease Name County/Parish Operator WI NRI
Louisiana
<S> <C> <C> <C> <C>
COWLEY NO. 1 Bossier Grigsby 0.25000000 0.17500000
COWLEY NO. 2 Bossier Grigsby 0.25000000 0.17500000
COWLEY NO. 3 Bossier Grigsby 0.25000000 0.17500000
CORLEY NO. 6 Bossier Grigsby 0.25000000 0.17500000
Michigan
JOSEPH NO. 1-25A Manistee WW Energy 0.12500000 0.09296900
New Mexico
HANSON FEDERAL NO. 1 Eddy Anadarko 0.25000000 0.17750000
Oklahoma
HALL UNIT NO. 1 Caddo MW Petroleum 0.00000000 0.00146500
STRATTON FARMS NO. 26 Custer Sonat 0.01327700 0.01033600
BRAKHAGE L UNT/2 Garfield Farmers 0.25000000 0.21533200
BRAKHAGE NO. 1 Garfield Farmers 0.25000000 0.21533200
HOOVER-A NO. 1 Garfield Jay 0.37191900 0.31186900
HOOVER NO. 1 Garfield Jay 0.75490700 0.61729100
RHODES-MORRIS Garfield Continental 0.00000000 0.01702500
BAGWELL EST NO. 1 Beckham Jay 0.78125000 0.67557800
MEADOR NO. 1 Beckham Jay 1.00000000 0.85403600
PUTHUFF NO. 1 Beckham Jay 1.00000000 0.87500000
TURNER NO. 1 Beckham Jay 1.00000000 0.87500000
WHITE NO. 1 Beckham Jay 1.00000000 0.86458400
WHITE NO. 2 Beckham Jay 1.00000000 0.87500000
ALBRIGHT NO. 19-1 Grant Echo 0.40500000 0.42875000
JONES A NO. 1-32 Coal Payne WC 0.08668400 0.07068000
BERNARD NO. 1&2 Alfalfa Mack Energy 0.00000000 0.02734300
WOODWARD NO. 1 Alfalfa Mack Energy 0.00000000 0.02734400
WOODARD NO. 4 Alfalfa Mack Energy 0.00000000 0.02734400
GIFT A Garfield Parker & Parley 0.00000000 0.02734400
ISBEL #2 Garfield Jay 1.00000000 0.82031000
JEWELL #1 Garfield Jay 1.00000000 0.82031000
SAWYER GAS UNIT NO. 2 Garfield Parker & Parley 0.24752500 0.18952500
RICHARDS NO. 2-21 McLain Whitmar 0.37500000 0.28875000
Texas
DENTON NO. 1 Howard Jay 0.75000000 0.58187500
DENTON NO. 2 Howard Jay 0.75000000 0.58187500
4
<PAGE>
EXHIBIT A (Continued)
Farmers Acquisition - Average Expenses
GROSS (8/8th) NET
Lease Name LOE* Overhead Total LOE Overhead Total
Jay Expenses*** Jay Expenses
Operator** Operator
Louisiana
COWLEY NO. 1 $2,148 $0 $2,148 $537 $0 $537
COWLEY NO. 2 $2,112 $0 $2,112 $528 $0 $528
COWLEY NO. 3 $1,868 $0 $1,868 $467 $0 $467
CORLEY NO. 6 $1,732 $0 $1,732 $433 $0 $433
Michigan
JOSEPH NO. 1-25A $4,264 $0 $4,264 $533 $0 $533
New Mexico
HANSON FEDERAL NO. 1 $980 $0 $980 $245 $0 $245
Oklahoma
HALL UNIT NO. 1 $0 $0 $0 $0 $0 $0
STRATTON FARMS NO. 26 $5,423 $0 $5,423 $72 $0 $72
BRAKHAGE L UNT/2 $720 $0 $720 $180 $0 $180
BRAKHAGE NO. 1 $720 $0 $720 $180 $0 $180
HOOVER-A NO. 1 $262 $428 $690 $97 $159 $257
HOOVER NO. 1 $211 $431 $642 $159 $325 $485
RHODES-MORRIS $0 $0 $0 $0 $0 $0
BAGWELL EST NO. 1 $395 $593 $988 $309 $463 $772
MEADOR NO. 1 $336 $593 $929 $336 $593 $929
PUTHUFF NO. 1 $491 $593 $1,084 $491 $593 $1,084
TURNER NO. 1 $455 $593 $1,048 $455 $593 $1,048
WHITE NO. 1 $178 $593 $771 $178 $593 $771
WHITE NO. 2 $232 $593 $825 $232 $593 $825
ALBRIGHT NO. 19-1 $2,629 $0 $2,629 $1,065 $0 $1,085
JONES A NO. 1-32 $3,333 $0 $3,333 $289 $0 $289
BERNARD NO. 1&2 $0 $0 $0 $0 $0 $0
WOODWARD NO. 1 $0 $0 $0 $0 $0 $0
WOODARD NO. 4 $0 $0 $0 $0 $0 $0
GIFT A $0 $0 $0 $0 $0 $0
ISBEL #2 $178 $593 $771 $178 $593 $771
JEWELL #1 $178 $593 $771 $178 $593 $771
SAWYER GAS UNIT NO. 2 $723 $0 $723 $179 $0 $179
RICHARDS NO. 2-21 $3,629 $0 $3,629 $1,361 $0 $1,361
Texas
DENTON NO. 1 $602 $501 $1,103 $452 $376 $827
DENTON NO. 2 $4,000 $501 $4,501 $3,000 $376 $3,376
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A (Continued)
Farmers Acquisition - Average Expenses
Lease Name County/Parish Operator WI NRI
<S> <C> <C> <C> <C>
GLASS NO. 1 Howard Jay 0.75000000 0.56250000
SHANNON A NO. 1 Crockett Crockett 0.39875000 0.27710000
GOREE Bee Bee 0.25000000 0.20312500
RICHARDS B NO. 1 Jack Jay 1.00000000 0.80000000
CHERRYHOMES NO. 1-4 Jack Jay 1.00000000 0.81250000
CHERRY D/4/5/7/9 Jack Jay 1.00000000 0.75000000
CHERRYHOMES M/2/3/4 Jack Jay 1.00000000 0.81250000
CHERRYHOMES B NO. 1 Jack Jay 1.00000000 0.81250000
MCLAUGHLIN Nolan Boyd&McWilliams 0.18750000 0.13500000
LOPEZ CREEK 1-5 Irion Boyd&McWilliams 0.18750000 0.11812500
FRYSAK NO. 1 Glasscock Boyd&McWilliams 0.25000000 0.16958300
ELENBURG NO. 1 Clay Jay 1.00000000 0.81250000
LOPEZ CREEK 3/6 Irion Boyd&McWilliams 0.18750000 0.11812500
Wyoming
FLAT TOP FED #32-10 Converse Equitable 0.20250000 0.17218800
Farmers Acquisition - Average Expenses
GROSS (8/8th) NET
Lease Name LOE* Overhead Total LOE Overhead Total
Jay Expenses*** Jay Expenses
Operator** Operator
GLASS NO. 1 $285 $501 $786 $214 $376 $590
SHANNON A NO. 1 $449 $867 $1,316 $179 $346 $525
GOREE $1,080 $0 $1,080 $270 $0 $270
RICHARDS B NO. 1 $164 $598 $762 $164 $598 $762
CHERRYHOMES NO. 1-4 $819 $1,105 $1,924 $819 $1,105 $1,924
CHERRY D/4/5/7/9 $1,053 $886 $1,939 $1,053 $886 $1,939
CHERRYHOMES M/2/3/4 $5,293 $3,900 $9,193 $5,293 $3,900 $9,193
CHERRYHOMES B NO. 1 $258 $571 $829 $258 $571 $829
MCLAUGHLIN $1,845 $0 $1,845 $346 $0 $346
LOPEZ CREEK 1-5 $2,550 $0 $2,550 $478 $0 $478
FRYSAK NO. 1 $2,162 $0 $2,162 $541 $0 $541
ELENBURG NO. 1 $282 $593 $875 $282 $593 $875
LOPEZ CREEK 3/6 $1,020 $0 $1,020 $191 $0 $191
Wyoming
FLAT TOP FED #32-10 $1,283 $0 $1,283 $260 $0 $260
$56,342 $15,626 $71,968 $22,481 $14,225 $36,706
</TABLE>
6
<PAGE>
EXHIBIT A (Continued)
<TABLE>
<CAPTION>
Snyder Acquisition - Average Expense
Lease Name County/Parish Operator WI NRI
Louisiana
<S> <C> <C> <C> <C>
ST MARY PARISH (SN) St. Mary Parker&Parsley 0.3623470 0.2572660
KG LEE 1,2,3,5 (SN) Concordia Ross Production 0.5463750 0.3961210
COTTEN NO. 1 (SN) Iberia An-Son 0.0946800 0.0736690
COTTON LD CP 1 (SN) Iberia Parker&Parsley 0.0138990 0.0107880
HERO Plaqumine Parker&Parsley 0.3675290 0.2613530
Texas
VAN VORST W 1-L (SN) Harris Sonora Petroleum 0.2500000 0.1682270
WILBER B.E NO.1 (SN) Jefferson Snyder (Jay) 0.8127520 0.6502070
KIRKENDALL B-1 (SN) Hardin Snyder (Jay) 0.3129520 0.2465220
Wyoming
BCU-1ST CODY (SN) Fremont Amoco 0.0025870
BCU-2ND CODY (SN) Fremont Amoco 0.0045750
BCU-FORT UNION (SN) Fremont Amoco 0.0010000
BCU-FRONTR/DAK (SN) Fremont Amoco 0.0027080
BCU-MADISON (SN) Fremont Amoco 0.0025200
BCU-PHOSPORIA (SN) Fremont Amoco 0.0039990
BCU-TENSLEEP (SN) Fremont Amoco 0.0025710
OFF-RK 1-14&5-14 (SN) Campbell Wellstar 0.0977600 0.0806520
OFF-ROURK 2-14 (SN) Campbell Wellstar 0.0977600 0.0806520
MILLER JAC #1 (SN) Campbell Lep Operating 0.2500000 0.1725000
ARMSTRNG FED 1D (SN) Campbell Presidio 0.1497500 0.1323800
ARMSTRNG FED 1F (SN) Campbell Presidio 0.1497500 0.1323800
ARMSTRNG FED 2-23 (SN) Campbell Presidio 0.1955180 0.1535940
GROSS (8/8th) NET
Lease Name LOE* Overhead Total LOE Overhead Total
Jay Expenses** Jay Expenses
Operator** Operator
Louisiana
ST MARY PARISH (SN) $5,671 $0 $5,671 $2,055 $0 $2,055
KG LEE 1,2,3,5 (SN) $9,776 $0 $9,776 $5,341 $0 $5,341
COTTEN NO. 1 (SN) $7,955 $0 $7,955 $753 $0 $753
COTTON LD CP 1 (SN) $7,512 $0 $7,512 $104 $0 $104
HERO $7,821 $0 $7,821 $2,874 $0 $2,874
Texas
VAN VORST W 1-L (SN) $4,881 $0 $4,881 $1,220 $0 $1,220
WILBER B.E NO.1 (SN) $1,339 $947 $2,286 $1,088 $770 $1,858
KIRKENDALL B-1 (SN) $3,299 $687 $3,986 $1,032 $215 $1,247
Wyoming
BCU-1ST CODY (SN) $0 $0 $0 $0 $0 $0
BCU-2ND CODY (SN) $0 $0 $0 $0 $0 $0
BCU-FORT UNION (SN) $0 $0 $0 $0 $0 $0
BCU-FRONTR/DAK (SN) $0 $0 $0 $0 $0 $0
BCU-MADISON (SN) $0 $0 $0 $0 $0 $0
BCU-PHOSPORIA (SN) $0 $0 $0 $0 $0 $0
BCU-TENSLEEP (SN) $0 $0 $0 $0 $0 $0
OFF-RK 1-14&5-14 (SN) $6,212 $0 $6,212 $607 $0 $607
OFF-ROURK 2-14 (SN) $3,106 $0 $3,106 $304 $0 $304
MILLER JAC #1 (SN) $1,565 $0 $1,565 $391 $0 $391
ARMSTRNG FED 1D (SN) $2,194 $0 $2,194 $329 $0 $329
ARMSTRNG FED 1F (SN) $1,907 $0 $1,907 $286 $0 $286
ARMSTRNG FED 2-23 (SN) $4,526 $0 $4,526 $885 $0 $885
$67,764 $1,634 $69,398 $17,270 $985 $18,255
LOE* Lease Operating Expenses
Overhead** Overhead charged to working interest owners on wells operated by Jay.
Total Expenses *** Gross Expenses - LOE plus Overhead
7
</TABLE>
