Oil Gas Developed Acreage
Gross Net Gross Net Gross Net
75 42 15 5 21,320 11,037
In addition, Odessa Exploration serves as operator of two injection wells. As
operator, Odessa Exploration receives fees from other working interest owners as
reimbursement for the general and administrative expenses attendant to the
operation of the wells.
Odessa Exploration's oil and gas properties are subject to royalty,
overriding royalty and other outstanding interests customary in the industry.
The properties are also subject to burdens such as liens incident to operating
agreements, current taxes, development obligations under oil and gas leases and
other encumbrances, easements and restrictions. Management believes that the
existence of such burdens does not materially detract from the value of its
leasehold interests. Moreover, certain of Odessa Exploration's properties are
subject to liens securing debt. See Note 5 of Notes to Consolidated Financial
Statements of Key.
Exploration and Development Activities. The following table shows gross
and net wells drilled in which Odessa Exploration had a working interest (all of
which were developed wells) during the years ended June 30, 1995 and 1994:
Gross Net Gross Net
Productive 8.0 6.2 1.0 0.1
Dry - - - -
Since the beginning of the current fiscal year, Odessa Exploration has
participated in or drilled five wells on its operated properties, and it expects
the total number of such wells for the current fiscal year to be 14.
Oil and Gas Reserve Information. Estimates of Odessa Exploration's
proved oil and gas reserves as of June 30, 1995 and 1994 were prepared by Key
and reviewed by Victor J. Sirgo, P.E., an independent petroleum reservoir
engineer. All estimates were made in accordance with guidelines established by
the Commission. Proved oil and gas reserves are the estimated quantities of
crude oil and natural gas which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic conditions, that is, prices and costs as of the date the
estimate is made. Prices utilized reflect consideration of changes in existing
prices provided by contractual arrangements if any, but not of escalations based
upon future conditions.
Proved developed oil and gas reserves are reserves that can be expected
to be recovered through existing equipment and operating methods. Proved
undeveloped oil and gas reserves are proved reserves that are expected to be
recovered from new wells on undrilled acreage or from existing wells where a