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(6) Equity Investment in Savoy | 12 Months Ended
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Dec. 31, 2013
Equity Investment In SELLP [Abstract] |
Equity Investment In SELLP | (6) Equity Investment in Savoy We own a 45% interest in Savoy Energy L.P. (Savoy), a private company engaged in the oil and gas business primarily in the state of Michigan. Savoy uses the successful efforts method of accounting. We account for our interest in Savoy using the equity method of accounting. Below (in thousands) to the 100% is a condensed balance sheet at December 31, for both years and a condensed statement of operations for both years. Condensed Balance Sheet
|  | 2013 |  |  | 2012 |
Current assets |  | $ | 29,182 |  |  | $ | 16,207 |
Oil and gas properties, net |  |  | 25,408 |  |  |  | 21,065 |
Other |  |  | 260 |  |  |  | 263 |
|  | $ | 54,850 |  |  | $ | 37,535 |
Total liabilities |  | $ | 16,447 |  |  | $ | 9,116 |
Partners' capital |  |  | 38,403 |  |  |  | 28,419 |
|  | $ | 54,850 |  |  | $ | 37,535 |
Condensed Statement of Operations
|  | 2013 |  |  | 2012 |
Revenue |  | $ | 42,248 |  |  | $ | 32,052 |
Expenses |  |  | (29,322 | ) |  |  | (27,527 | )
Net income |  | $ | 12,926 |  |  | $ | 4,525 |
Late last year Savoy engaged Energy Spectrum Advisors Inc. (ESA) to market its Trenton-Black River (TBR) oil properties located in southeast Michigan. ESA has offices in Dallas and Houston. More information will be posted to the ESA website in early March 2014. The reserve quantity and value information set forth in the tables below, do not agree to the Brock Engineering Report as such report only includes the TBR properties. The other properties are not significant, but have been included in the tables below. The TBR properties comprise about 95% of the PV10 amounts. We are looking forward to the opportunity to potentially effect a monetization of our Savoy investment. Unaudited Oil and Gas Reserve Quantity and Value Information (in thousands) The data below is shown proportionate to our approximate 45% ownership in Savoy. Costs incurred are as follows:
|  | 2013 |
Unproved property acquisition |  | $ | 1,287 |
Development |  |  | 858 |
Exploration |  |  | 7,061 |
Total |  | $ | 9,206 |
|  | Oil (Bbls) |  |  | NGLs (Bbls) |  |  | Natgas (Mcf) |
January 1, 2013 |  |  | 700 |  |  |  | 29 |  |  |  | 1,108 |
Extensions and discoveries |  |  | 898 |  |  |  | 58 |  |  |  | 442 |
Production |  |  | (153 | ) |  |  | (11 | ) |  |  | (96 | )
Revisions to previous estimates |  |  | 24 |  |  |  | 23 |  |  |  | (153 | )
December 31, 2013 |  |  | 1,469 |  |  |  | 99 |  |  |  | 1,301 |
Proved developed reserves |  |  | 746 |  |  |  | 60 |  |  |  | 450 |
Proved undeveloped reserves (PUDs) |  |  | 723 |  |  |  | 39 |  |  |  | 851 |
|  | Proved Developed |  |  | PUDs |  |  | Total Proved |
Future cash flows: |  |  |  |  |  |  |  |  |
Oil |  | $ | 70,582 |  |  | $ | 70,662 |  |  | $ | 141,244 |
NGLs |  |  | 2,551 |  |  |  | 1,669 |  |  |  | 4,220 |
Natgas |  |  | 1,365 |  |  |  | 976 |  |  |  | 2,341 |
Total cash flows |  |  | 74,498 |  |  |  | 73,307 |  |  |  | 147,805 |
Future production costs |  |  | (12,213 | ) |  |  | (12,233 | ) |  |  | (24,446 | )
Future development costs |  |  |  |  |  |  | (3,073 | ) |  |  | (3,073 | )
Future income tax (none since Savoy is a pass-through entity for income tax purposes) |  |  |  |  |  |  |  |  |  |  |  |
Future net cash flows |  |  | 62,285 |  |  |  | 58,001 |  |  |  | 120,286 |
10% annual discount for estimated timing of cash flows |  |  | (14,355 | ) |  |  | (15,111 | ) |  |  | (29,466 | )
Standardized measure of discounted future net cash flows |  | $ | 47,930 |  |  | $ | 42,890 |  |  | $ | 90,820 |
|  | 2013 |
Beginning of year |  | $ | 35,300 |
Sales, net of production costs |  |  | (12,640 | )
Net changes in prices and production costs |  |  | 1,600 |
Extensions and discoveries |  |  | 57,200 |
Revisions of previous quantity estimates |  |  | 2,100 |
Change in production timing and other |  |  | 3,700 |
Accretion of discount |  |  | 3,560 |
End of year |  | $ | 90,820 |
Average wellhead prices: |  |  |  |
Oil (per Bbl) |  | $ | 94.66 |
NGLs (per Bbl) |  |  | 42.45 |
Natgas (per Mcf) |  |  | 3.04 |
The 2013 reserve estimates shown above have been independently evaluated by Brock Engineering, LLC, which customarily prepares petroleum property analysis for industry and financial organizations and government agencies. Brock Engineering was founded in 1997 and performs consulting petroleum engineering services. Within Brock Engineering, the technical personnel responsible for preparing the estimates set forth in the Brock Engineering reserves report incorporated herein are Timothy J. Brock and Douglas J. Elenbaas. Mr. Brock has been practicing consulting petroleum engineering at Brock Engineering since 1997. Mr. Brock is a Licensed Professional Engineer in the State of Michigan (No. 39603) and has over 33 years of experience in the estimation and evaluation of reserves. He graduated from Michigan Technological University in 1980 with a Bachelor of Science Degree in Geological Engineering. He meets or exceeds the education, training, and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves promulgated by the Society of Petroleum Engineers; he is proficient in judiciously applying industry standard practices to engineering evaluations as well as applying SEC and other industry reserves definitions and guidelines. Mr. Elenbaas has been practicing consulting petroleum engineering at Brock Engineering since 2012. Mr. Elenbaas is a Licensed Professional Engineer in the State of Michigan (No. 32030) and has over 30 years of experience in the estimation and evaluation of reserves. He graduated from the University of Michigan in 1977 with a Bachelor of Science Degree in Chemical Engineering. He meets or exceeds the education, training, and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves promulgated by the Society of Petroleum Engineers; he is proficient in judiciously applying industry standard practices to engineering evaluations as well as applying SEC and other industry reserves definitions and guidelines. The estimates of proved reserves are inherently imprecise and are continually subject to revision based on production history, results of additional exploration and development, price changes and other factors.

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- Definition Describes our equity investment in SELLP + References No definition available. + Details
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- Details
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