6c.

The reserve figures which may be volunteered by independent producers may have no sound engineering base. Production records are often haphazardly kept, and reserve figures are highly subjective estimates at best. What use can you make of such data, whose credibility is suspect?

The thrust of proposed Form EIA-23 in this regard is two-fold:

1)

2)

To gather from the operators concerned their data

and estimates concerning proved oil and gas reserves
and production, and

To assess the validity and quality of the data
submitted through our own independent evaluation and
analysis of the available geological and engineering
data upon which the respondents' estimates were
based, for a sample of respondents.

While it is widely known and agreed that reserve estimates may vary in quality and are, in certain respects, subjective, the operator is privy to the best estimates available concerning the reserves and production for his specific property.

In sum,

these data constitute the best data presently available. The

audit procedures to be employed will determine the quality of data submitted and will permit us to quantitatively assess

APPENDIX IV

ANALYSIS OF PROVISIONS INTENDED TO BE INCORPORATED IN THE NATIONAL ENERGY ACT

Department of Energy
Washington, D.C. 20461

ANALYSIS MEMORANDUM NO. AM/IA-7802

AN EVALUATION OF NATURAL GAS PRICING PROPOSALS

This analysis was prepared at the request of the Senate Committee on
Energy and Natural Resources. The assumptions unless otherwise noted
have been provided by the Committee. The Energy Information Adminis-
tration does not endorse or provide point forecasts or make policy
recommendations.

ACKNOWLEDGEMENTS

This analysis represents the combined efforts of the Division of Mid-Range
Analysis in the Office of Integrative Analysis, Division of Oil and Gas

Analysis in the Office of Energy Source Analysis and the Division of
Demand Analysis in the Office of Energy Use Analysis.

The overall project coordination was directed by Kenneth Kincel, Director of the Office of Integrative Analysis.

The use of the Project Independence Evaluation System (PIES) to analyze the proposals was directed by Frederic Murphy, Acting Division Director, Division of Mid-Range Analysis. The design and implementation of the changes needed to represent the proposals in PIES was done by Reginald Sanders and Richard Thrasher. Supporting in the analysis and writing were Robert Eynon, Phyllis Gilmore, Susan Shaw and Richard Thrasher. Invaluable support was also provided by Irvin Chamberlain, William Kurator, Benjamin Lev, Hilda McDaniel, and Alan Tawshunsky.

The revenue calculations were provided by Charles Everett, Director of the Division of Oil and Gas Analysis under the direction of David T. Hulett. Contributors to this effort were Nora Mahn and James McCarrick. The work could not have been completed without the cooperation of the Office of Energy Data EIA and the Denver Field Office of EIA. Other contributors include Gordon Koelling, John Reiss, Kim Jones and Richard Thrasher.

The analysis of natural gas demand adjustments was under the direction of Frank Hopkins, Acting Director of the Division of Demand Analysis under the direction of Howard Walton. John Holt, John Neri, and Lewis Rubin provided the analysis for this effort.

The typing of this memorandum was accomplished under extremely tight time constraints by Purla Doster and Sylvia Norris. Their efforts are most appreciated. Additional typing support was provided by Edie Adams, Hattie Ramseur, Helen Shamwell, Joy Stempson, and Anne Woodward.