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The following is an excerpt from an Interface Consulting work product issued for use in litigation, arbitration, or mediation (dispute resolution). Names, dates, and other information has been modified for client confidentiality purposes.

…We have been asked to provide our comments relative to two experts’ opinions that have been provided on behalf of Wallis Oil. This report incorporates....

 
Mitchell Offshore v. Wallis Oil and Gas Litigation

I. Introduction

I.A. Background

Wallis Oil’s Walston Block 375 Platform X (Platform) is approximately 29 miles off the coast of Galveston, Texas. During the morning of April 23, 2008, the motor vessel, Mitchell Master, collided with the Platform. Interface Consulting understands that no pollution occurred nor was anyone injured relative to the allision.

The Platform is a 3-leg tripod platform in approximately....

 

Wallis Oil’s Walston Block 375 Platform X

 

 

…[P]roject records indicate that wells TL 621 A-3/A-5 and DM 375 B-3 had ceased production before the allision....


DM 524 D-1Well Gas Production, August 2001 - April 2008

... 

I.B. Wallis Oil Alleged Damages

Mr. Kirk Wagner, a principal surveyor with Sunderland Consulting, submitted an Expert Witness Report dated April 20, 2009. His report summarizes....

Mr. Steve Mathson of Abel Petroleum Engineers, submitted a Petroleum Engineering Evaluation and Expert Report. In this report, Mr. Mathson concludes that....

 

II. Summary of Opinions

In his report dated April 20, 2009, Mr. Wagner summarizes, among other items, the allision, the damages to the Platform, and recommended repair options....

Wallis Oil, however, did not choose to repair the Platform. As such, any potential repair cost of the Platform are irrelevant, as....

Mr. Mathson’s report dated April 28, 2009, concludes that the future net revenue for the DM 524 D-1 well is….Mr. Mathson’s projected well economic life is contrary to documentation provided by Wallis Oil, which indicated the economic life of the DM 524 D-1 well had ceased before the allision. In addition....

In summary, Mr. Mathson’s opinion that the DM 524 D-1 well was economically viable is refuted by....

 

III. Discussion of Opinions

...

III.A. Well DM 524 D-1 was Essentially Shut In and not Economically Viable

Well DM 524 D-1 began production in the summer of 2001 and its production of oil essentially ceased in 2004. Furthermore, as shown in the following graphic, well DM 524 D-1’s production of gas declined significantly from....

 

 

Production of Oil (red) and Gas (yellow) from Well DM 524 D-1

 

 

Approximately eight (8) days after the allision, Wallis Oil notified the US Minerals and Management Service (MMS) that the four (4) wells associated with the Platform were no longer economically producible, and....

...

III.B. Depletion of Well DM 524 D-1

…[I]t is our opinion that….In fact, Wallis Oil routinely engaged consultants, such as Highland Consulting, to appraise the reserves and economics of the well....

 

Projected Reserves and Sales Revenues from Well DM 524 D-1

 

As shown in the graphic above, Wallis Oil’s 2004 reserves and economic projection estimated that well DM 524 D-1 contained $1,517,598 in sales gas revenues and that the well would essentially be depleted in 3.3 years, or....

 

III.C. Sunderland Consulting – Opinion on Platform Repair

...

 III.D. Abel Petroleum Engineers – Opinion on Revenue

...    

 

IV. Conclusion

It is our opinion that....

 

V. Signature

 

VI. Exhibits