Naval Petroleum and Oil Shale Reserves Combined Financial Statements September 30, 1994 and 1993 and Management Overview and Supplemental Financial and Management Information

This report presents the results of the independent certified public accountant`s audit of the Department of Energy`s (Department) Naval Petroleum and Oil Shale Reserves (NPOSR) financial statements as of September 30, 1994. The auditors have expressed an unqualified opinion on the 1994 statements. Their reports on the NPOSR internal control structure and on compliance with laws and regulations, and management letter on addressing needed improvements are also provided. NPOSR consists of petroleum reserves in California and Wyoming, and oil shale reserves in Colorado and Utah. The Government`s interests in NPOSR are managed by the Department through its headquarters office in Washington, D.C. In addition, the Department has site offices in both California and Wyoming that are responsible for contractor oversight functions. Daily operations are conducted under contract by two management and operating contractors. By law, NPOSR was authorized to produce crude oil at the maximum efficient rate for six years. The law allowed production to be extended for three year periods, provided that the President of the United States certified that continued maximum production was in the best interest of the nation. The current three year period ends on April 5, 1997. Additional information about NPOSR is provided in the overview and notes to the financial statements