over a four-year period and a contract of affreightment covering the transportation of peruvian ore marcona does not confirm the peruvian government's valuation however because there is no assurance that the iron ore pellets will be marketed profitably over the four-year period or that profits will be realized on the contract of affreightment in fiscal 1975 reflecting the uncertainty at that time of receiving any compensation for the expropriated assets utah had written off the full book value of its share of marcona's peruvian investments benefits from the recent agreement are being re corded as their realization is assured oil and gas strengthened by new discoveries on july 31 1976 utah's wholly-owned ladd petroleum corporation had either a whole or partial interest in 3,794 producing oil wells and 551 producing gas wells ladd's expectations for the 1 976 calendar year were that it could produce 2,260,000 barrels of oil and 27,1 35,000 thousands of cubic feet of natural gas it has lease holds in 1 7 states of the u.s and three canadian provinces over the past two years ladd has sharply increased its participa tion in exploratory activities new crude oil and natural gas dis coveries in louisiana oklahoma and alberta have contributed to an unusually high success ratio for these ventures further develop ment of these discovery areas is expected to provide important additions to ladd's reserves at the end of the 1 975 calendar year ladd esti mated that its proven oil reserves exceeded 14 million barrels and its natural gas reserves totaled more than 258,000,000 thousands of cubic feet ladd's undeveloped oil and gas properties included mineral interests in more than 1 7 million acres of land accelerating utah's mineral exploration in response to the growing demand for raw materials and energy related resources utah has sharply expanded expenditures on its minerals exploration program over recent years the resulting acceleration of utah's exploration efforts is aimed at the discovery of new reserves and the expansion of existing reserves utah con centrates its search on energy minerals coking coal and some of the base and precious metals — commodities which overthe long term appear likely to benefit from strong market demand these forward steps are in line with a growing worldwide recog nition that mineral development is an essential part of sound economic growth ocean shipping varied interests the need to transport its natural resources has overthe years led utah into varied ocean shipping operations its earliest interests held through marcona 46%-owned by utah have been undergoing a transition since the peruvian expro priation in 1 975 with 60 of its shipping capacity employed in transporting ore from the peruvian mine marcona experienced a sudden loss of trade that despite efforts to gain third-party cargoes and redeploy its vessels has kept its shipping business operating at a loss in response marcona has sold three of its twelve owned vessels scrapped two and laid up two others until the shipping market permits profitable redeployment in addition to the interest in marcona's shipping activities utah manages and directs charter shipments of australian coking coal and canadian copper concentrates during 1 976 two new 1 26,000-ton dry bulk carriers were delivered to two corporations in which utah development company has a 50 share managed by oil and natural gas production and ex ploration are the domain of utah's wholly-owned ladd petroleum corpora tion above drilling for oil in california