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considered rich in hydrocarbons. Proven producing and nonproducing reserves exist in
two wells in the Los MedaIios field area adjacent to the southwest corner of the site area.
Proved undeveloped, probable, and possible reserves exist at six potential drilling
locations in the Los Medaiios field. Probable and possible reserves were assigned to 15
other potential drilling locations in the northwest and south-central portions of the WIPP
site area. Total recoverable reserves projected for these wells we~" 62,253,244 MCF of
gas and 409,628 bbls oil. The future net undiscounted revenue to oil producers was
estimated to be $48,410,821. The future net revenue was estimated to be $21,216,899,
discounted at 10% per year. Fair market value for these projected reserves was estimated
to be $12,730,139, assuming a fair market factor of 0.60.
Lee Keeling and Associates, Inc., 1977a
This report is a fair market value appraisal of potash rights in four tracts of State
of New Mexico land (301, 302, 303, and 304) in the WIPP site area. Core-hole data used
were from a preliminary 1977 version of the U S. Geological Survey (1978b) report by
John, Cheeseman, Lorenz, and Millgate. Summary data for two drill holes (D-203 and
D-160) near the southwest border of WIPP were received verbally from the Duval
Sulphur and Potash Company (now Western Ag-Minerals), but were not verified by the
appraiser. Langbeinite ore reserves in the fourth ore zone in Tract 303 were based
entirely on the information on hole D-I60.
With minimum thicknesses of 4.5 ft and minimum grade of 12.0% K 2 0 as sylvite
or 5.0% K 2 0 as langbeinite, tonnages (in-place and recoverable at 80% extraction) were
calculated. The tota. recoverable tonnage for all four tracts of land was 17.832 million
short tons (million st) of langbeinite and 4.912 Mt of sylvite. If a new mine and plant
were part of development, all four tracts were considered uneconomic. However, one
(Tract 303) was considered to be economically attractive because of the proximity to
existing plant facilities. In the case of Tracts 301 and 302 with indicated reserves,
nominal values of $25 per acre were assigned. For Tract 303 with measured reserves, the
approximate income due the lessor in the future, discounted to current (1977) value, was
used. For Tract 304, a nominal value of $10 per acre was used. The total value for the
four tracts was $565,106 for the lessee, $812,491 for the lessor (only for State of New
Mexico land, no federal land) for a grand total of $1,377,597.
Accompanying reviews by two U.S. Army Corps of Engineers appraisers
questioned the many assumptions made by the authors, but both reviewers approved of
the valuations.
Lee Keeling and Associates, Inc., 1977b
This appraisal was of the value of the oil and gas lease in S"h sec. 31 T22S R31E
if access to the surface and the subsurface rights to 6000 ft were retained by the federal
government. The Atoka Formation of Middle Pennsylvanian age was considered to be the
primary objective. "ithough Morrow (Lower Pennsylvanian) was a possibility as well.
Gas and condensate; were considered to be the prime hydrocarbon targets.
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