361 



In April of 1982, updated resource estimates were developed for 

 the sale 52 secretarial issue document and in designing a bidding 

 system to use in the sale. They conditionally mean resource esti- 

 mates were 56 million barrels of oil and 280 billion cubic feet of 

 gas. This dramatic decrease in resource estimates was a result of 

 additional geophysical and geological information and some further 

 analysis of the well results — the results of the first three wells that 

 were drilled on Georges Bank. 



The new seismic data was on a tighter grid and did provide much 

 better quality of coverage. 



The initial three wells drilled on Georges Bank indicated a lack 

 of potential hydrocarbon reservoir formations in the deeper strati- 

 graphic section, and condemned several structures, including two 

 patch reefs and a geophysical bright spot. These new data resulted 

 in elimination of many potential deep stratigraphic prospects, and 

 increased the risks associated with others. These are the primary 

 reasons for the sharp reduction. 



It should be pointed out, that, although resource estimates and 

 methodologies may be precise, the estimates themselves are rarely 

 accurate, never precise, and they include very subjective judg- 

 ments. I will definitely vouch for that. 



While the resource estimates previously discussed were condi- 

 tional, and commercial accumulation within the proposed area, 

 they do include subjective judgments as to the probability of each 

 prospect lacking hydrocarbons. If a discovery was made in one of 

 the prospects, there would be a reassessment of all the risk analy- 

 ses and an adjustment in the resource figures. 



That concludes my summary. 



[Statement of Mr. Danenberger follows:] 



28-914 0—84- 



