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Home My WebLink About212-077 OF TtJ� • • 0:t,\��y/ �A THE STATE Alaska Oil and Gas Of LAsKA Conservation Commission 333 West Seventh Avenue 1.111. 111-;*- C GOVERNOR BILL WALKER Anchorage, Alaska 99501-3572 Main: 907.279.1433 OF ALA*t Fax: 907.276.7542 www.aogcc.alaska.gov Matthew Ganley Unaatuq, LLC. 4600 Debarr Road, Suite 200 Anchorage, AK 99508 Re: Pilgrim Hot Springs Field, PS 12-1 Permit to Drill Number: 212-077 swimI\U( I. 8 2017, Sundry Number: 317-339 Dear Mr. Ganley: Enclosed is the approved application for sundry approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. Suspension is valid until August 11, 2022. Thirty days prior to that date, operator must submit a new Sundry Application for continued suspension. The application must contain sufficient information to determine that continued suspension of the PS 12-1, PS 12-2 and PS 12-3 wells are appropriate under 20 AAC 25.110. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the AOGCC grants for good cause shown,a person affected by it may file with the AOGCC an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, U2-( =71t___/ Hollis S. French Chair, Commissioner DATED this ( < day of August, 2017. RBDMS AUG 1 4 2017 • • F1ECEIVED STATE OF ALASKA ,U L 2 4 2017 ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS AOGCC 20 AAC 25.280 1.Type of Request: Abandon ❑ Plug Perforations❑ Fracture Stimulate❑ Repair Well 0 Operations shutdown D Rew e Suspend ® Perforate 0 Other Stimulate 0 Pull Tubing 0 Change Approved Program 0 Plug for Redrill 0 Perforate New Pool ❑ Re-enter Susp Well 0 Alter Casing 0 Other. 0 2.Operator Name: 4.Current Well Class: 5.Permit to Drill Number: UNAATUQ,LLC, Exploratory ®, Development D 212-077• 3.Address: 4600 Debarr Road Stratigraphic ❑ Service u 6.API Number: Suite 200 Anchorage,AK 50-031-20007-00-00 7.If perforating: 99508 8.Well Name and Number: What Regulation or Conservation Order governs well spacing in this pool? N/A - Will planned perforations require a spacing exception? Yes ❑ No ® / PS12-1 . (Formerly TG-1) 9.Property Designation(Lease Number: 10.Field/Pool(s): Private/Unaatuq,LLC(U.S.S.565)/F Pilgrim Hot Springs l� 1_ /6-44.442r / �/� 11. PRESENT WELL CONDITION SUMMARY lY1 `J Total Depth MD(ft): Total Depth ND(ft): Effective Depth MD: Effective Depth ND: MPSP(psi): Plugs(MD): Junk(MD): 1000 ft 1000 ft 1000 ft 1000 ft 990-1000 ft cement Casing Length Size MD TVD Burst Collapse Structural Conductor 100 ft 6 5/8 in steel Surface Intermediate 1000 ft HW 4 1.2 in steel Production Liner Perforation Depth MD(ft): Perforation Depth ND(ft): Tubing Size: Tubing Grade: Tubing MD(ft): N/A N/A N/A N/A N/A Packers and SSSV Type: Packers and SSSV MD(ft)and ND(ft): 12.Attachments: Proposal Summary ❑ Wellbore schematic ® 13.Well Class after proposed work: Detailed Operations Program ❑ BOP Sketch ❑ Exploratory [el/ Stratigraphic ❑ Development❑ Service 0 14.Estimated Date for 15.Well Status after proposed work: Commencing Operations: OIL ❑ WINJ ❑ WDSPL ❑ Suspended 1,3 16.Verbal Approval: Date: GAS 0 WAG ❑ GSTOR ❑ SPLUG ❑ Commission Representative: GINJ ❑ Op Shutdown LI Abandoned ❑ 17. I hereby certify that the foregoing is true and the procedure approved herein will not be deviated from without prior written approval. Authorized Name: Matthew Ganley Contact Name: Matthew Ganley Authorized Title: tr/.s / / Contact Email: mganley©berin9straits.com tr/b.s"..)4 Contact Phone: (907)344-7212 Authorized Signature: Date: 0719/2017 COMMISSION USE ONLY Conditions of approval: Notify Corn ion so that a representative may witness Sundry Number: k-7- 339 Plug Integrity❑ BOP Test 0 Mechanical Integrity Test ❑ Location Clearance 0 Other: )( Sem 7-0"k.fr,c,*• f:P Vic et--e-v-) Post Initial Injection MIT Req'd? Yes ❑ No 2 ,......, � Spacing Exception Required? Yes ❑ No Subsequent Form Required: s�-�'- �%►�"t z'�'"`' APPROVED BY Approved by: COMMISSIONER THE COMMISSION ,Date: ? , I i 4s)\\Afk?A3 $/10/7�' / k'�7 k/1r7 % Submit Form and pr 0- �RRe�ise 4/ t7 Approved application is valid for 12 months from e date of approval. Attachments in Duplicate 0 R I b I I IAL RBDMS (t._ F,.`.': 1 4 2017 • • . BERING STRaAITS RECEIVED JUL 2 4 2017 July 19th 2017 AOGCC Hollis S. French, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, AK 99501 RE: Request for Suspended status for wells PS-12-1 (212-077), PS-12-2 (212-109), and PS-12-3 212-126). Ms. Bettis: This letter is in response to your email of June 13, 2017, which requested submission of Application for Sundry Approval for three temperature gradient wells at Pilgrim Hot Springs. In response, I am forwarding two copies of the required information: 1) An Application for Sundry Approvals (Form 10-403) for each well (PS12-I, PS12-2, PS12-3, PS13-1); 2) A well schematic diagram for each well; 3) A letter from Graphite One, regarding potential power development at Pilgrim Hot Springs. 4) A summary sheet noting the justification for maintaining the current status of each well. 5) Report dated October 16, 2014, submitted by the Alaska Center for Energy and Power and titled, Utility of Maintaining Recent Wells at Pilgrim Hot Springs for Monitoring and On-Site Utilization. The PS-12 wells represent a significant investment and the plugging and abandoning of these assets would set back any future program that might use the resource for electrical generation or on-site power and heat. As an example of the need for maintaining the wells, Unaatuq, LLC received a grant from USDA/NRCS in 2016 for an agricultural pilot program that is expected to utilize on-site electrical power and heat for the region's food security. In addition to the agricultural project,a mining interest is considering working with Unaatuq to establish a geothermal plant that could produce power for their graphite project some 20 miles from the Hot Springs. I have attached a letter from Graphite One expressing their interest in working on such a program. To summarize, we are requesting that the wells PS-12-1 (212-077), PS-12-2 (212-109), and PS-12-3 212- 126), remain in Suspended Status due to the ongoing agricultural program there (and the future need for on-site power and heat), the potential for powering the Graphite One mining program, and the need to 4600 DeBarr KL.ici.Suite 200 • Anchorage. Alaska 99508-3126 • 907.563.3788 • Fax 907.563.2742 • www.beringstraits.com • • Apia BERING i STNativRAITS rporation keep these wells suspended for monitoring the reservoir when PS-13-1 (213-102) is brought into production. I appreciate the work of the Commission and will submit additional materials to support our request if needed. Regards, 1/ f Matt Ga VP Media and External Affairs Bering Straits Native Corporation (Managing Partner for Unaatuq, LLC) 4600 UeBarr Road.Suite 200 • Anchorage, Alaska 99508-3126 • 907.563.3788 • Fax 907.563.2742 • www.beringstraits.co; • High-pressure ball valve ► rs x 6 518-in OD conductor casing k 3 '' cemented to 100 ft below land surface 1 4.5-in OD casing F` cemented to 1000 ft below land surface r Schematic:PS 12-1: (Please refer to"Application for Application for Sundry Approvals,"Section 11 for Well Condition Summary). . 0 • / C / CU ® \ 0 CD ® & Y, _ $ § / 4 0 • § e '- » 0 ° _ L. L. • / c * E � _ / \ / \ $ ƒ o 2 c c o f i £ t £ t £ t e / U / � a) aj CO CU ( 2 t / = 0 / / / / / k a) / 2 m ~ ® ~ ® ~® \ E / \ ƒ c ( E 2 444 a A E A & 2 4— e — / \ -0 _ = _ c _ c _0 u ° . t .- . - 4.0 fa 1. £ / g - m — = 0.0 \ t $ \ a) ƒ 0- d \$ 3 \ # •. 2 S c JEr \ k / k E k c / /a, t13 / / 0 / 14 s. co2 � 2 � 2 co � � � � � 0 ( q q CO = ® c a) a = m ° = _� C / a) / ƒ \ { \ U \ EC ± \ a) ± 2 ) t / $ / [ 3 2 = 2 = 2 = 2 _ / } / 2 t k \ § \ "" E , U " c ro ° 7 g � — a 2 # am 0.0 & m m m 5 ƒ " m = E u C £ 3 % 2 R 0 R � � 0) ' $ a $ (U $ q $ q — u 0 k ® g a_ u a 0 0- u < e �3 < .E & / a / C \ (112 a) § & 2 CO k o v a) 01 Cr ci. ~ci7 2 ) $ { J 0 a) § / / k tiO f E / 0' 7 C CL g a) ¥ V) / a, co E } ] / k2 E aJ VI = ® al � / 2 \ \ - m } ■ \ \ a � � � § esi Et. k ■ 0 / co ro — mT 0 $% \ \ CCu >J � w \ m a) � a m = E E E Ci 3 \ / / C0U \ N m $ < $ 2 q % % � -c 2 2 2 % -ak ® E § a c ) e 2 N E L 4.1 N J g % 9 t \ tb a) % q d 2 j a A N N , _ • • Utility of Maintaining Recent Wells at Pilgrim Hot Springs for Monitoring and On-Site Utilization October 17,2014 By the Alaska Center for Energy and Power Since 2010,the Alaska Center for Energy and Power has been leading geothermal exploration efforts at Pilgrim Hot Springs. The property is owned by Unaatuq LLC., a partnership of seven organizations based on the Seward Peninsula. In 2012 and 2013 four wells were drilled on the property which fall under the jurisdiction of the Alaska Oil and Gas Conservation Commission. The wells drilled during this period are best left open and operational as a means to monitor the geothermal aquifer,and in the case of PS13-1 provide geothermal fluid for onsite use. Three of these wells, called P512-1, PS12-2, and PS 12-3 were drilled as temperature gradient holes to Mlgh•pressura ball valve ---► High•pressure ball valve 6 5/11-in 00 conductor casing 6 5/1-in OD conductor easing - a 66mented to 100 ft Hebra cemented to 200 ft below t r Land surface lend surface if 4.54n 00 casing j t cemented to 1000 ti Wow land surface I i 4.5-in OD casing csmrnted to MOO ft below lad Weis 2.19-in 00 cawing cemented from land surface to 160 ft below land surface,Grouted -^+, from tti0bt2114*below trod surface, Bottom cap i . Figure 1.PS 12-1(left)and PS 12-2(right) depths ranging from 1000 feet to 1294 feet. Diagrams of these wells are shown in figures 1-2. These wells are constructed with sealed casing which is plugged at the bottom. The casing is not perforated and the wells are not open to the formation. They do not have ability to flow artesian as other perforated wells at the site do. Once the wells were completed,the casing was filled with water and they serve as temperature gradient monitoring wells. Temperature logs, like the one shown in figure 3 are created using the temperature profiles measured in the wells. These wells are very useful for monitoring subtle long term changes in the geothermal field. • • Currently,there are plans to develop Pilgrim Hot Springs to generate electricity and export this power to Nome. A private developer, under the name Pilgrim Geothermal LLC., has signed a power purchase agreement with Nome Joint Utility Systems to supply up to two MW of electrical power to the utility. This would 8 5/84n OD conductor casing cemented to 144 ft below require the extraction and reinjection of large amounts of land surface geothermal fluid at Pilgrim Hot Springs. In order to maintain the long term health of the geothermal field, careful monitoring of the aquifer is necessary. The temperature gradient wells that were drilled in 2012 are ideally situated to monitor the temperatures of both the shallow and the deep aquifers at Pilgrim Hot Springs. 2.19-in OD casing cemented from land surface to 993 R. Because these wells are sealed from the aquifer,the risks associated with leaving these wells open are extremely limited. Rubber cement plug inbottamofcasing In addition to this larger geothermal power generation s 5/Lin holefacility being explored,the property owners of Pilgrim Hot drilled to 1183 ft. Grout-filled from Springs, are very interested in developing the site for 993 to 1183 ft. Figure 2.PS 12-3 small scale tourism use. Some of the uses for the geothermal waters that have been discussed include a small geothermal power plant for Temperature Profile of PS12-2 onsite electrical power generation,a small geothermal on 6 September 2014 district heating loop to provide space heating and snow melting, Temp("C) and of course hot soaking pools. 0 20 40 60 80 100 Just as in the large scale 0 geothermal power plant scenario 200 described above, using the 400 :7; 600 geothermal resource for onsite -c 800 production will require careful CU 1000 monitoring of the geothermal resource. The temperature 1200 gradient wells that were drilled 1400 in 2012 provide an excellent tool Figure 3.The temperature profile of PS 12-2 shows gives the static state to do this with. temperature of the geothermal aquifer • • • P513-1 was drilled in 2013. It was originally drilled to bedrock at 1036 feet, but when temperatures at this depth were cooler than had been hoped for,the well was completed in the shallow thermal aquifer. This well,shown in figure 4 was completed with 14"casing and well screen. The well has an artesian flow rate of approximately 70 gpm at 175°F.The closed in pressure at the wellhead is approximately 3.5 PSI. In September of 2013 the well was flow tested at 300 gpm, and had productivity measured at 27.5 gpm/psi, indicating a good productive well. This well has excellent potential to produce geothermal fluid for onsite district heating and power production purposes which the landowners are in the process of evaluating. PS-1 3-1 Completion Well Diagram _14"casing to surface Gvous.d t rai 24-Conductor Casing 21'---. =x-18'Surface Casing Gravel Backfin—=- Class C Neat Cement 1'Bentonite Crumbles Packer at 50' 18- I i l t 140' 188' � � III I I I MIMI 7.>50'WellScreen 5'Tail Pipe w/Plate I I I I 238'MD Welded to Bottom - 14° 243'MD �. 2'Cement Plug Back Filled with Sand 80S'MD 231'of 2"Galvanized Pipe 1036'MD Figure 4.PS 13-1 well schematic • • 0 etiann.e: March 21,2017 Bering Straits Native Corporation PO Box 1008 4600 DeBarr Road,Suite 200 Nome,Alaska 99762 Anchorage,AK 99508 Dear Gail, Pilgrim Hot Springs Geothermal Project Graphite One Resources is interested in the potential for Pilgrim Hot Springs to provide geothermally generated power to our proposed Graphite Creek Project and wish to explore this possibility with Bering Straits Native Corporation in its role as managing partner of Unaatuq, LLC, the owner of Pilgrim Hot Springs. Graphite One Resources Inc. continues to develop its Graphite One Project with its proposed graphite mine and mineral processing plant to be situated about 20 miles west of Pilgrim Hot Springs. A power demand of six megawatts at full production was estimated in total for these two facilities in the project's recently released Preliminary Economic Assessment ("PEA"), the first engineering report assessing the economic viability of the project's graphite resources. This study assumes the power requirements would be supplied by three,two-megawatt, diesel fired generators. We wish to explore with you the possibility of a geothermal generation facility at Pilgrim Hot Springs supplying all,or some of,this estimated demand. The Graphite One Project is proposed as a vertically integrated enterprise to mine, process and manufacture high grade coated spherical graphite ("CSG") primarily for the lithium-ion electric vehicle battery market. As set forth in the PEA, potential graphite mineralization mined from the Company's Graphite Creek Property, is expected to be processed into concentrate at a plant adjacent to the mine. The Graphite Creek Property is situated about 37 miles north of Nome. CSG and other value-added graphite products, would likely be manufactured from the concentrate at the Company's proposed graphite product manufacturing facility,the location of which is the subject of further study and analysis. We look forward to the opportunity to work with you on this. An economic alternative to diesel generated power would be a major enhancement to our project. Yours truly, Doug Smith 27 Executive Chairman GRAPHITE ONE RESOURCES INC. 604.240.6016 DougS@graphiteoneresources.com 600—777 Hornby Street l Vancouver,British Columbia I V6Z 154 • Bettis, Patricia K (DOA) 7: 2I —o7?" From: Bettis, Patricia K (DOA) Sent: Tuesday,June 13, 2017 2:28 PM To: Matt Ganley Subject: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126) Matt, Please submit immediately the required sundry applications for PS 12-1 (PTD 212-077), PS 12-2 (212-109),and PS 12-3 (PTD 212-126). See emails below. SChmED z IN: V,,' ,'. Original Message From: Matt Ganley [mailto:mganley@beringstraits.com] Sent:Thursday, May 4, 2017 2:46 PM To: Bettis, Patricia K(DOA)<patricia.bettis@alaska.gov> Subject: RE: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126): Denial of Sundry Applications for Suspension of Wells Thank you Patricia. I will send those along. Matt L. Ganley V.P. Media and External Affairs Bering Straits Native Corporation 4600 DeBarr Road, Suite 200 I Anchorage, AK 99508 Phone 907.563.3788 Direct 907. 344.7212 I Mobile 907.632.7197 mganley@beringstraits.com www.beringstraits.com WARNING:The information contained in this email (including any attachments) is CONFIDENTIAL and may be PRIVILEGED. If you are not the intended recipient of this email,you may not read, retain, copy, or distribute this email. If you have received this email in error, please advise us by return email and call the sender at 907.632.7197.Thank you. From: Bettis, Patricia K(DOA)<mailto:patricia.bettis@alaska.gov> Sent:Thursday, May 4, 2017 3:40 PM To: Matt Ganley<mailto:mganley@beringstraits.com> Subject: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126): Denial of Sundry Applications for Suspension of Wells Good afternoon Matt, Thank you for your letter dated April 12, 2017 concerning the above mentioned Pilgrim Springs wells. By letters dated January 18, 2017, Sundry Applications No. 315-746, No. 315-747, and No. 315-748 were denied as the AOGCC lacked sufficient information to determine that suspension of the PS 12-1, PS 12-2 and PS 12-3 wells was appropriate under 20 AAC 25.110(a)(2). Within 20 days of that date, Bering Straits Native Corporation had the right to file applications for reconsideration. i • In light of Graphite One Resources Inc. showing an interest in the potential for Pilgrim Hot Springs to provide geothermally generate power to the proposed Graphite Creek Project, please submit new sundry applications for the suspension of the wells under 20 AAC 25.110. A sundry application must be submitted for each well. If you have any questions concerning the matter, please do not hesitate to contact me. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Ave.,Ste 100 Anchorage,AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it,and, so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793- 1238 or patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov>. 2 • • Bettis, Patricia K (DOA) - 3-J 0/14 .cZ'.. From: Bettis, Patricia K(DOA) Sent: Tuesday,July 11, 2017 3:22 PM To: Matt Ganley Subject: RE: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126) Matt, The AOGCC will not process the sundry applications until the original documents are received. Please forward ASAP. Thank you, Patricia SUMS JUL 2 7 2 1? Original Message From: Matt Ganley [mailto:mganley@beringstraits.com] Sent: Saturday,June 24, 2017 12:49 PM To: Bettis, Patricia K(DOA)<patricia.bettis@alaska.gov> Subject: RE: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3(PTD 212-126) Patricia- Please find, attached the sundry applications(Form 10-403 and supporting materials)for the Temperature gradient wells at Pilgrim Hot Springs: PS 12-1(PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126). I am sending the original documents via standard USPS to your office address. If you require any additional information please let me know. Regards, Matt L. Ganley V.P. Media and External Affairs Bering Straits Native Corporation 4600 DeBarr Road,Suite 200 I Anchorage,AK 99508 Phone 907.563.3788 Direct 907. 344.7212 I Mobile 907.632.7197 mganley@beringstraits.com I www.beringstraits.com WARNING:The information contained in this email (including any attachments) is CONFIDENTIAL and may be PRIVILEGED. If you are not the intended recipient of this email,you may not read, retain, copy, or distribute this email. If you have received this email in error, please advise us by return email and call the sender at 907.632.7197.Thank you. Original Message From: Bettis, Patricia K(DOA) [mailto:patricia.bettis@alaska.gov] Sent:Tuesday,June 13,2017 2:28 PM To: Matt Ganley Subject: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126) 1 • • Matt, Please submit immediately the required sundry applications for PS 12-1 (PTD 212-077), PS 12-2 (212-109),and PS 12-3 (PTD 212-126). See emails below. Original Message From: Matt Ganley [mailto:mganley@beringstraits.com] Sent:Thursday, May 4,2017 2:46 PM To: Bettis, Patricia K(DOA)<patricia.bettis@alaska.gov> Subject: RE: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3(PTD 212-126): Denial of Sundry Applications for Suspension of Wells Thank you Patricia. I will send those along. Matt L.Ganley V.P. Media and External Affairs Bering Straits Native Corporation 4600 DeBarr Road,Suite 200 I Anchorage,AK 99508 Phone 907.563.3788 Direct 907. 344.7212 I Mobile 907.632.7197 mganley@beringstraits.com I www.beringstraits.com WARNING:The information contained in this email (including any attachments) is CONFIDENTIAL and may be PRIVILEGED. If you are not the intended recipient of this email,you may not read, retain,copy,or distribute this email. If you have received this email in error, please advise us by return email and call the sender at 907.632.7197.Thank you. From: Bettis, Patricia K(DOA)<mailto:patricia.bettis@alaska.gov> Sent:Thursday, May 4,2017 3:40 PM To: Matt Ganley<mailto:mganley@beringstraits.com> Subject: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126): Denial of Sundry Applications for Suspension of Wells Good afternoon Matt, Thank you for your letter dated April 12,2017 concerning the above mentioned Pilgrim Springs wells. By letters dated January 18, 2017, Sundry Applications No. 315-746, No. 315-747,and No. 315-748 were denied as the AOGCC lacked sufficient information to determine that suspension of the PS 12-1, PS 12-2 and PS 12-3 wells was appropriate under 20 AAC 25.110(a)(2). Within 20 days of that date, Bering Straits Native Corporation had the right to file applications for reconsideration. In light of Graphite One Resources Inc. showing an interest in the potential for Pilgrim Hot Springs to provide geothermally generate power to the proposed Graphite Creek Project, please submit new sundry applications for the suspension of the wells under 20 AAC 25.110. A sundry application must be submitted for each well. If you have any questions concerning the matter, please do not hesitate to contact me. Thank you, Patricia Patricia Bettis 2 • Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Ave.,Ste 100 Anchorage,AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission(AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it,and, so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793- 1238 or patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov>. 3 • • Bettis, Patricia K (DOA) 021 a - a7' From: Matt Ganley <mganley@beringstraits.com> Sent: Thursday, May 4, 2017 2:46 PM To: Bettis, Patricia K(DOA) Subject: RE: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126): Denial of Sundry Applications for Suspension of Wells Thank you Patricia. I will send those along. Matt L. Ganley V.P. Media and External Affairs Bering Straits Native Corporation 4600 DeBarr Road,Suite 200 I Anchorage,AK 99508 Phone 907.563.3788 Direct 907. 344.7212 I Mobile 907.632.7197 mganley@beringstraits.com I www.beringstraits.com WARNING:The information contained in this email (including any attachments) is CONFIDENTIAL and may be PRIVILEGED. If you are not the intended recipient of this email,you may not read, retain, copy,or distribute this email. If you have received this email in error, please advise us by return email and call the sender at 907.632.7197.Thank you. From: Bettis, Patricia K(DOA)<mailto:patricia.bettis@alaska.gov> Sent:Thursday, May 4,2017 3:40 PM To: Matt Ganley<mailto:mganley@beringstraits.com> Subject: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126): Denial of Sundry Applications for Suspension of Wells SCANNED ivIA'Y Good afternoon Matt, �i 3 �'+,�};�, Thank you for your letter dated April 12, 2017 concerning the above mentioned Pilgrim Springs wells. By letters dated January 18, 2017, Sundry Applications No. 315-746, No. 315-747, and No. 315-748 were denied as the AOGCC lacked sufficient information to determine that suspension of the PS 12-1, PS 12-2 and PS 12-3 wells was appropriate under 20 AAC 25.110(a)(2). Within 20 days of that date, Bering Straits Native Corporation had the right to file applications for reconsideration. In light of Graphite One Resources Inc. showing an interest in the potential for Pilgrim Hot Springs to provide geothermally generate power to the proposed Graphite Creek Project, please submit new sundry applications for the suspension of the wells under 20 AAC 25.110. A sundry application must be submitted for each well. If you have any questions concerning the matter, please do not hesitate to contact me. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Ave.,Ste 100 Anchorage,AK 99501 1 • • Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and, so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793- 1238 or patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov>. 2 • Bettis, Patricia K (DOA) ?TJ 02,E 2. - O?z From: Bettis, Patricia K (DOA) Sent: Thursday, May 4, 2017 2:40 PM To: Matt Ganley Subject: Pilgrim Springs PS 12-1 (PTD 212-077), PS 12-2 (212-109), PS 12-3 (PTD 212-126): Denial of Sundry Applications for Suspension of Wells Good afternoon Matt, Thank you for your letter dated April 12, 2017 concerning the above mentioned Pilgrim Springs wells. By letters dated January 18, 2017, Sundry Applications No. 315-746, No. 315-747,and No. 315-748 were denied as the AOGCC lacked sufficient information to determine that suspension of the PS 12-1, PS 12-2 and PS 12-3 wells was appropriate under 20 AAC 25.110(a)(2). Within 20 days of that date, Bering Straits Native Corporation had the right to file applications for reconsideration. In light of Graphite One Resources Inc. showing an interest in the potential for Pilgrim Hot Springs to provide geothermally generate power to the proposed Graphite Creek Project, please submit new sundry applications for the suspension of the wells under 20 AAC 25.110. A sundry application must be submitted for each well. If you have any questions concerning the matter, please do not hesitate to contact me. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Ave.,Ste 100 Anchorage,AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message,including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 1 • • -;b 2/%-o?7. • wilantlL I , fi a j E 201 ,. 4. _'C April 12, 2017 Cathy P. Foerster Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue SCANNED 0 8 r; Anchorage, AK 99501 RE: Request for Suspended status for wells PS-12-1 (212-077), PS-12-2 (212-109),and PS-12-3 212-126). Commissioner Foerster: This letter is in response to your letters of January 1gth 2017 concerning three geothermal temperature gradient wells on the Pilgrim Hot Springs property. The wells are numbered PS-12-1. PS-12-2, and PS-12- 3,and were drilled in 2012 as part of an ongoing geothermal assessment. At the time the wells were drilled, Unaatuq, LLC(the consortium of local Native organizations that own Pilgrim Hot Springs), was beginning to work towards the development of a geothermal electrical system to provide power to Nome, Alaska. Unfortunately,the economics that would have made the project feasible changed with the significant reduction in fuel prices. In December of 2015, we requested, on behalf of Unaatuq, LLC, that these wells be placed in suspended status because of their importance in any further research and development of the geothermal resource at Pilgrim Hot Springs. With the Application for Sundry Approvals,we provided a schematic of each well, as well as an explanation on the reason why the wells should be placed in suspended status. In short, these three wells are important for monitoring the fluid system when any testing or further development occurs on the property. They are necessary to fully utilize PS-13-1,a well which AOGCC approved "exploratory" status at the same time it denied the suspended status of the PS-12 wells. The PS-12 wells represent a significant investment and the plugging and abandoning of these assets would set back any future program that might use the resource for electrical generation or on-site power and heat. Asan example of the need for maintaining the wells, Unaatuq, LLC received a grant from USDA/NRCS in 2016 for an agricultural pilot program that is expected to utilize on-site electrical power and heat for the region's food security. In addition to the agricultural project, a mining interest is considering working with Unaatuq to establish a geothermal plant that could produce power for their graphite project some 20 miles from the Hot Springs. I have attached a letter from Graphite One expressing their interest in working on such a program. • • '?i3 ii z.- 0?7- I sill BER NG . ttt, mt. ..ft, k), i OAt ' CI To summarize,we are requesting that the wells PS-12-1(212-077), PS-12-2(212-109), and PS-12-3 212- 126), remain in Suspended Status due to the ongoing agricultural program there (and the future need for on-site power and heat),the potential for powering the Graphite One mining program, and the need to keep these wells suspended for monitoring the reservoir when PS-13-1(213-102) is brought into production. I appreciate the work of the Commission and will submit additional materials to support our request if needed. Rega ds, Matt Gan 41 VP Media and External Affairs Bering Straits Native Corporation (Managing Partner for Unaatuq, LLC) fu7-X 2. -7117 • 111 t 021Z eelsi'i.es March 21,2017 Bering Straits Native Corporation PO Box 1008 4600 DeBarr Road,Suite 200 Nome,Alaska 99762 Anchorage,AK 99508 Dear Gail, Pilgrim Hot Springs Geothermal Project Graphite One Resources is interested in the potential for Pilgrim Hot Springs to provide geothermally generated power to our proposed Graphite Creek Project and wish to explore this possibility with Bering Straits Native Corporation in its role as managing partner of Unaatuq, LLC, the owner of Pilgrim Hot Springs. Graphite One Resources Inc. continues to develop its Graphite One Project with its proposed graphite mine and mineral processing plant to be situated about 20 miles west of Pilgrim Hot Springs. A power demand of six megawatts at full production was estimated in total for these two facilities in the project's recently released Preliminary Economic Assessment ("PEA"), the first engineering report assessing the economic viability of the project's graphite resources. This study assumes the power requirements would be supplied by three,two-megawatt,diesel fired generators. We wish to explore with you the possibility of a geothermal generation facility at Pilgrim Hot Springs supplying all,or some of,this estimated demand. The Graphite One Project is proposed as a vertically integrated enterprise to mine, process and manufacture high grade coated spherical graphite ("CSG") primarily for the lithium-ion electric vehicle battery market. As set forth in the PEA, potential graphite mineralization mined from the Company's Graphite Creek Property, is expected to be processed into concentrate at a plant adjacent to the mine. The Graphite Creek Property is situated about 37 miles north of Nome. CSG and other value-added graphite products, would likely be manufactured from the concentrate at the Company's proposed graphite product manufacturing facility,the location of which is the subject of further study and analysis. . We look forward to the opportunity to work with you on this. An economic alternative to diesel generated power would be a major enhancement to our project. Yours truly, Doug Smith Cry Executive Chairman GRAPHITE ONE RESOURCES INC. 604.240.6016 Do ug S @g ra p h ite o n e re so u rce s.co m 600—777 Hornby Street I Vancouver,British Columbia 0 V6Z 1S4 • • • OF 7.4 4/)I yy�,sA THE STATE Alaska Oil and Gas `� 9 OA fLASIcCConservatiConservation Commission _- � 333 West Seventh Avenue l 2=— c GOVERNOR BILL WALKER Anchorage, Alaska 99501-3572 Main: 907.279.1433 ALAS Fax: 907.276.7542 www.aogcc.alaska.gov Matthew Ganley Vice President Unaatuq, LLCr 4600 Debarr Road, Suite 200tANNEJ Anchorage, AK 99508 Re: Pilgrim Hot Springs Field, Exploratory Pool, PS-12-1 Permit to Drill Number: 212-077 Sundry Number: 315-746 Dear Mr. Ganley: On December 15, 2015 Unaatuq, LLC (Unaatuq) submitted and application for sundry approval to suspend well PS-12-1. Since that time, the Alaska Oil and Gas Conservation Commission (AOGCC) has attempted to obtain additional documentation which would support Unaatuq's request. Unaatuq has not provided the information. Because AOGCC lacks sufficient information to determine that suspension of the PS-12-1 well is appropriate under 20 AAC 25.110(a)(2), the sundry application is denied. Because the PS-12-1 well does not meet the criteria to be placed in suspended status, within 90 days of the date of this denial,Unaatuq must submit for approval a sundry application with a viable plan to plug and abandon the PS-12-1 well. Within 20 days after this decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, P- 4-- Cathy P. Foerster Chair DATED this I day of January, 2017. RBDMS Mill 2 6 2617 • • RECEIVED DEC 15 2015 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION � �� APPLICATION FOR SUNDRY APPROVALS 20 AAC 25.280 1.Type of Request: Abandon ❑ Plug Perforations❑ Fracture Stimulate ❑ Repair Well ❑ Operations shutdown❑ Suspend ® Perforate (A Other Stimulate ❑ Pull Tubing ❑ Change Approved Program❑ Plug for Redrill ❑ Perforate New Pool ❑ Re-enter Susp Well ❑ Alter Casing ❑ Oth ❑ 2.Operator Name: 4.Current Well Class: 5.Permit -• Drill Number: Unaatuq, LLC - Exploratory ® . Development ❑ 21 '477 - 3.Address: 4600 Debarr Road,Suite 200 Stratigraphic ❑ Service ❑ 6. • I Number: Anchorage,AK 99508 . 0-031-20007-00-00 7.If perforating: 8.W I Name and Number: What Regulation or Conservation Order governs well spacing in this pool? N/A Will planned perforations require a spacing exception? Yes ❑ No ❑x J PS-12-1 (Previously TG-1) 9.Property Designation(Lease Number): 10.Field/Pool(s): Private/Unaatuq,LLC(USS 565) / FES. Pilgrim Hot Spri r gs EV)c•f 11. PRESENT WELL CONDITION SUMMARY Total Depth MD(ft): Total Depth TVD(ft): Effective Depth MD: Effective Depth TVD: MPSP .si): Plugs(MD): Junk(MD): 1000 ft • nnn ft • 1000 ft ' 1000 ft • 990-1000 ft ceme it Casing Length Size M TVD Burst Collapse Structural Conductor 100 ft. 6 5/8 in steel Surface - Intermediate 1000 ft. HW 4 1/2 in steel � `J � Production \ /" Liner ` Perforation Depth MD(ft): Perforation Depth TVD( Tub )49i Tubing Grade: Tubing MD(ft): N/A N/A N/A N/A Packers and SSSV Type: Packers and SSSV MD(ft)and TVD(ft): 12.Attachments: Proposal Summary ❑ Wellbore sch. at'..11 ® 13.Well Class after proposed work: Detailed Operations Program ❑ BOP Sketch _, Exploratory [71 • Stratigraphic El Development 7 Service [l 14.Estimated Date for 15.Well Status after proposed work: Commencing Operations: OIL ❑ WINJ El WDSPL ❑ Suspended ©• 16.Verbal Approval: Date: GAS ❑ WAG ❑ GSTOR ❑ SPLUG El Commission Representative: GINJ ❑ Op Shutdown ❑ Abandoned ❑ 17.I hereby certify that the foregoing is true and e procedure approved herein will not be deviated from without prior wr' en approval. Contact Matthew Ganley Email mganley@beringstraits.com Printed Name Matthew Ganl- Title VP /or k e 17-- 10 ,c' O Signature Phone ate (907)344-7212 COMMISSION USE ONLY Conditions of approval: Notify Com ission so that a representative may witness Sundry Number: 3t6 -"1`{Le Plug Integrity ❑ BOP Test ❑ Mechanical Integrity Test ❑ Location Clearance El Other: Post Initial Injection MIT r eq'd? Yes El No ❑ Spacing Exception Req red? Yes ❑ No 1 Subsequent Form Required: APPROVED BY Approved by: COMMISSIONER THE COMMISSION Date: Submit Form and Form 10-403 Revised 11/2015 Approved application is valid for 12 months from the date of approval. Attachments in Duplicate ORIGINAL RDD MJ /J?262 7 L • • RECEIVED BERING DEC 15 2015 * k411 Native STRoAIT,S AOGCC December 11, 2015 Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Ms. Bettis: I am writing on behalf of Unaatuq, LLC the landowner of Pilgrim Hot Springs, in response to your communications of November 17 and November 23, 2015. BSNC is the managing partner of Unaatuq, LLC. According to your emails, AOGCC requires that Unaatuq. LLC submit: 1) An Application for Sundry Approvals (Form 10-403) for each well (PS12-1, PS12-2, PS12-3, PS13-1); 2) A well schematic diagram for each well; 3) A summary sheet noting the justification for maintaining the current status of each well. 4) The Report dated October 16, 2014, submitted by the Alaska Center for Energy and Power and titled, Utility of Maintaining Recent Wells at Pilgrim Hot Springs for Monitoring and On-Site Utilization. I have prepared a separate package of material for each well/permit, containing this cover letter and the information noted above in 1-3. Enclosed are the required forms and attendant paperwork. If there are any deficiencies or omissions in the enclosed paperwork, please notify me at your convenience. Matt Gan VP Resources and External Affairs BSNC For Unaatuq, LLC. 4600 DeBarr Road,Suite 200 • Anchorage,Alaska 99508-3126 • 907.563.3788 • Fax 907 563.2742 • www.beringstraits.com • . imme High-pressure ball valve im inom 6 5!8-in OD conductor casing cemented to 100 ft below land surface 4.5-in OD casing cemented to 1000 ft ► below land surface Schematic: PS 12-1: (Please refer to"Application for Application for Sundry Approvals,"Section 11 for Well Condition Summary). • • U) o) 0 C ca a (,) u (C a i- 4... a .0 L D 0 3 0 " = Q J o • c —• c —• cUE a) a vs CD CO a a (6 L L C D a a ▪ `o o C i C i C i OA (D C a (o a (o a.) CO C a) D �O LES -0 "O Y O (0 oo (0 oo N oo c @ O co (a 44. OD ,7-- OA w OA .0 - +O. O O 7 (% 0 ,_ 0 O U O O_ 0.1 73 O C O C O C •E ..., 0 a Y V) Y , Y N N ate) Q a V c0 C) (a9 a (rO a U( p •Y w a) 0 a) 0 a 0 0 (1) — G1 Q -O . 0 0. 0 a C; p (a 0 'O D Cr E cu C E CU C E -o c CCY (a Y CO Y (a C CU C •C N d) Cr) U )--I ZS 4- o °1 cy)(a o * 0 0 c v• a 61 On ++ V U) �c r0 C O -0 E CZ a Q a Q a Q cv MS O p — E Q i+ Y Y Y a 0_ L a _, Y IA — 0 — 0 — 0 •,� i i0 O 33 C a '+-, 0 x CD •In N •t.n m •N N 3 C oA E J N OCA N bCD N hCD 3 Q "CS L w do J 0 LID (a v) (a VI v) (a C c +' a) +� a U a U a U I- 0 *' TO ECD CU - mo To CO(aa) o_ =v) c ) o .a = a — N O d � IA 3 LA IA o v 0 E °° CU C N 4+ v a CO O 'i V -0 Q 0 OCT fl. o C *' 0 O O O 0 O "O 'O › L o a (^ C C C a OA a O a 0 x a a) a) a) t a y 0 a 0 Q a. 0. 0 c .«_ _UI " C a) 4) O vi O O a W 0 J O OA N OC (i) V) V) C7 u a 0 s- (a (o CI 7 E o0 CO a >` co v o a .0 o_ (o C a _ - jU a C7 3 �, Q 4-IY a (o s 8 ea LL v) a) a) a) Qtaa d O ✓ -o C C C C Cl.) a L 3 CU a) a) a) 0. C 0 a-' i ate +CU Q O_ Q_ 4., •3 U• 0 N V) (n U 0 _0 0 0 N E o vi Al a aQ 2 U + 0 -0 C 00E Z - M 01 � _0y v '8 a1 O C 3 r1 cN-I r-I R Ol N U .., .— C.7 V) (n U d' Y Cr C > U H al d J L Q '-1 + O — Oao >- �- J co a) ON O Q a) a) a) a 0 CU m SD °: o E E E � o 0 Lim J }: a 0 O O co O U a u; CZ CD O --- ,--1 C 0 U . .--I V. 0 0- 6' _ Z .--I N m .--i = Up nt Q 0 ' N s Uj a u C 0- > a .--i r--1 r-i r-I .a 0 0 'O a-.+ t 3 (i-) v) (n ()) -o -0 -0 2 i E ' a a a a a) a L o o i+ (o N 7 w L -0 N U Y U E Y •C r 1 U a N J a0 o = O O a_ c _O Z N- 0-1 )0 N N a C •_ 6 0 a I- O N O CC O N io '-' a E p ,--1 i--I r•-1cu (° E N N N CO a , a C- co .> C C a O a) ' c r I N '6, a a D 0 v d N N N N -. N 0o m • RECEIVE DEC 152015 Utility of Maintaining Recent Wells at Pilgrim Hot Springs for Monitoring and On-Site UtilizationCC October 17,2014 By the Alaska Center for Energy and Power Since 2010,the Alaska Center for Energy and Power has been leading geothermal exploration efforts at Pilgrim Hot Springs. The property is owned by Unaatuq LLC., a partnership of seven organizations based on the Seward Peninsula. In 2012 and 2013 four wells were drilled on the property which fall under the jurisdiction of the Alaska Oil and Gas Conservation Commission. The wells drilled during this period are best left open and operational as a means to monitor the geothermal aquifer, and in the case of PS13-1 provide geothermal fluid for onsite use. Three of these wells, called P512-1, PS12-2, and PS 12-3 were drilled as temperature gradient holes to f�_�High-pressure ball valve - High-pressure ball valve 6 5/8-in OD conductor casing 6 5/8-in OD conductor casing cemented to 100 ft below cemented to 200 ft below land surface land surface 4.5-in OD casing cemented to 1000 ft below land surface 4.5-in OD casing cemented to 1000 ft below land surface 2.19-in OD casing cemented from land surface to 160 ft below land surface.Grouted from 160 to 1294 ft below land surface. Bottom cap Figure 1.PS 12-1(left)and PS 12-2(right) depths ranging from 1000 feet to 1294 feet. Diagrams of these wells are shown in figures 1-2. These wells are constructed with sealed casing which is plugged at the bottom. The casing is not perforated and the wells are not open to the formation. They do not have ability to flow artesian as other perforated wells at the site do. Once the wells were completed, the casing was filled with water and they serve as temperature gradient monitoring wells. Temperature logs, like the one shown in figure 3 are created using the temperature profiles measured in the wells. These wells are very useful for monitoring subtle long term changes in the geothermal field. • • Currently, there are plans to develop Pilgrim Hot Springs to generate electricity and export this power to Nome. A private developer, under the name Pilgrim Geothermal LLC. High-pressure ball valve , has signed a power purchase agreement with Nome Joint Utility Systems to supply up to two MW of electrical power to the utility. This would 6 5/8-in OD conductor casing cemented to 144 ft below require the extraction and reinjection of large amounts of land surface I I geothermal fluid at Pilgrim Hot Springs. In order to maintain the long term health of the geothermal field, careful monitoring of the aquifer is necessary. The temperature gradient wells that were drilled in 2012 are ideally situated to monitor the temperatures of both the shallow and the deep aquifers at Pilgrim Hot Springs. 2.19-in OD casing cemented from land surface to 993 ft. • Because these wells are sealed from the aquifer,the risks associated with leaving these wells open are extremely limited. Rubber cement plug in bottom of casing In addition to this larger geothermal power generation 551$-in hole I facility being explored, the property owners of Pilgrim Hot drilled to 11 • from Grout-filled from Springs, are very interested in developing the site for 993 to 1183 ft. Figure 2.P5 12-3 small scale tourism use. Some of the uses for the geothermal waters that have been discussed include a small geothermal power plant for Temperature Profile of PS12-2 onsite electrical power generation,a small geothermal on 6 September 2014 district heating loop to provide space heating and snow melting, Temp(°C) and of course hot soaking pools. 0 20 40 60 80 100 Just as in the large scale 0 — _ geothermal power plant scenario 200 described above, using the 400 LL geothermal resource for onsite -- 600 T 800 -_____ �__»__.._____.. production will require careful el-cu monitoring of the geothermal 1000 I resource. The temperature 1200 f— gradient wells that were drilled L1400 in 2012 provide an excellent tool Figure 3.The temperature profile of PS 12-2 shows gives the static state to do this with. temperature of the geothermal aquifer • • PS13-1 was drilled in 2013. It was originally drilled to bedrock at 1036 feet, but when temperatures at this depth were cooler than had been hoped for, the well was completed in the shallow thermal aquifer. This well, shown in figure 4 was completed with 14" casing and well screen. The well has an artesian flow rate of approximately 70 gpm at 175° F.The closed in pressure at the wellhead is approximately 3.5 PSI. In September of 2013 the well was flow tested at 300 gpm, and had productivity measured at 27.5 gpm/psi, indicating a good productive well. This well has excellent potential to produce geothermal fluid for onsite district heating and power production purposes which the landowners are in the process of evaluating. PS-13-1 Completion Well Diagram 14 casing to surface Gruurnl Lo j ' f - ^- -=-24"Conductor Casing 21 - a - __ ---18"Surface Casing Gravel Backfill--= -- Class C Neat Cement --_- 1'gen tonite Crumbles -._ 'Ar -` Ill- _—.Packer at SO' ..-......_.J 140' 188' I i I l i ' i I '\ I ! i l ill ! I ; I 250'Well Screen I i 1 i i l Zy 5'tailPipe wiPlate - --- 238'MD Welded to Bottom " _ __..._:,..- 243'MD _ - 2'Cement Plug ------ Back Filled with Sand 9 718"-.__._ ray Csdng 805'Mt) --- \ ' I) -231'of 2"Galvanized Pipe L ________� 1036'MD Figure 4.PS 13-1 well schematic +, • • Bettis, Patricia K (DOA) ,2/2 -077. From: Matt Ganley <mganley@beringstraits.com> Sent: Tuesday, May 03, 2016 2:26 PM To: Bettis, Patricia K(DOA) Subject: RE: Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1(PTD Nos. 212-077, 212-109, 212-126 and 213-102) Patricia, Thank you for the notification. I was assured by Mr.Trott that he would follow up with you,so I'll contact him, again. I would also like to update you (and I will submit an updated suspension request)to tell you that we have received an NRCS (Dept. Of Agriculture)for a pilot program to reintroduce agricultural production to the property and continue to work with ACEP on deploying on site geothermally produced electricity. We are also improving the bathing pool this summer for public use. All of these activities will need the use of the remaining wells. I will explain in more detail within the amended paperwork. Matt L. Ganley V.P. Media and External Affairs Bering Straits Native Corporation 4600 DeBarr Road, Suite 200 I Anchorage,AK 99508 Phone 907.563.3788 Direct 907. 344.7212 I Mobile 907.632.7197 mganley@beringstraits.com I www.beringstraits.com From: Bettis, Patricia K(DOA)<mailto:patricia.bettis@alaska.gov> Sent: Monday, May 2, 2016 2:48 PM To: Matt Ganley<mailto:mganley@beringstraits.com> Subject: FW: Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1(PTD Nos. 212-077, 212-109, 212-126 and 213-102) Matt, In regards to our email exchange below, the AOGCC has not received any information on Pilgrim Geothermal LLC. I am still holding the sundry applications for suspension of the PS 12-1, PS 12-2, PS 12-3 and PS 13-1. Under regulation 20 AAC 25.110, an operator may apply to the AOGCC to approve the suspension of a well. The operator must state the reasons why each well should be suspended, and not completed or abandoned. This includes demonstrating that each well has a practical future utility. If a geothermal electric generation project is not in the works, then Unaatuq, LLC needs to provide justification on why the wells should be suspended, and not completed or abandoned. Thank you, Patricia Original Message From: Matt Ganley [mailto:mganley@beringstraits.com] Sent: Monday,January 04, 2016 3:39 PM To: Bettis, Patricia K(DOA)<patricia.bettis@alaska.gov> Subject: RE: Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1(PTD Nos.212-077, 212-109, 212-126 and 213-102) 1 • • Thank you Patricia. I have contacted the company and requested that they send to appropriate information to you. Matt L. Ganley V.P. Media and External Affairs Bering Straits Native Corporation 4600 DeBarr Road, Suite 200 I Anchorage,AK 99508 Phone 907.563.3788 Direct 907. 344.7212 I Mobile 907.632.7197 mganley@beringstraits.com I www.beringstraits.com<http://www.beringstraits.com> From: Bettis, Patricia K(DOA)<mailto:patricia.bettis@alaska.gov> Sent: Monday,January 4, 2016 4:26 PM To: Matt Ganley<mailto:mganley@beringstraits.com> Subject: Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1(PTD Nos. 212-077,212-109, 212-126 and 213-102) Good afternoon Matt, In reference to the statement in the applications that Unaatuq has a letter of Intent and MOU with Pilgrim Geothermal LLC for future development of a geothermal electric generation project, a search of the Corporations Database, Department of Commerce,Community and Economic Development, shows that Pilgrim Geothermal LLC does not hold a license to conduct business in the State of Alaska. Would you please provide more information on Pilgrim Geothermal LLC. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907) 793- 1238 or patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov>. 2 Bettis, Patricia K (DOA) From: Bettis, Patricia K(DOA) Sent: Monday, May 02, 2016 1:48 PM To: 'Matt Ganley' Subject: FW: Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1(PTD Nos. 212-077, 212-109, 212-126 and 213-102) Matt, In regards to our email exchange below,the AOGCC has not received any information on Pilgrim Geothermal LLC. I am still holding the sundry applications for suspension of the PS 12-1, PS 12-2, PS 12-3 and PS 13-1. Under regulation 20 AAC 25.110, an operator may apply to the AOGCC to approve the suspension of a well. The operator must state the reasons why each well should be suspended, and not completed or abandoned. This includes demonstrating that each well has a practical future utility. If a geothermal electric generation project is not in the works,then Unaatuq, LLC needs to provide justification on why the wells should be suspended,and not completed or abandoned. Thank you, Patricia Original Message From: Matt Ganley [mailto:mganley@beringstraits.com] Sent: Monday,January 04, 2016 3:39 PM To: Bettis, Patricia K(DOA)<patricia.bettis@alaska.gov> Subject: RE: Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1(PTD Nos. 212-077,212-109, 212-126 and 213-102) Thank you Patricia. I have contacted the company and requested that they send to appropriate information to you. Matt L. Ganley V.P. Media and External Affairs Bering Straits Native Corporation 4600 DeBarr Road,Suite 200 I Anchorage,AK 99508 Phone 907.563.3788 Direct 907. 344.7212 ( Mobile 907.632.7197 mganley@beringstraits.com I www.beringstraits.com From: Bettis, Patricia K(DOA)<mailto:patricia.bettis@alaska.gov> Sent: Monday,January 4,2016 4:26 PM To: Matt Ganley<mailto:mganley@beringstraits.com> Subject: Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1(PTD Nos.212-077,212-109,212-126 and 213-102) Good afternoon Matt, In reference to the statement in the applications that Unaatuq has a letter of Intent and MOU with Pilgrim Geothermal LLC for future development of a geothermal electric generation project,a search of the Corporations Database, Department of Commerce,Community and Economic Development, shows that Pilgrim Geothermal LLC does not hold a • S license to conduct business in the State of Alaska.Would you please provide more information on Pilgrim Geothermal LLC. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage,AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907) 793- 1238 or patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov>. 2 Pr6 SCANNED JAN 1 8 2017 High-pressure ball valve -i 6 5/8-in OD conductor casing cemented to 100 ft below land surface Well: TG4 ,� 4.5-in OD casing cemented to 1000 ft 1 below land surface �� 1 41/ • • Bettis, Patricia K (DOA) ?It .21Z.-077- From: Bettis, Patricia K (DOA) Sent: Tuesday, November 17, 2015 12:05 PM To: 'Matt Ganley' Subject: Pilgrim Springs Geothermal Wells: PS 12- PTD 212-077) PS 12-2 (PTD 212-109), PS 12-3 (PTD 212-126), and PS 13-1 (PTD 213-102) Good afternoon Matt, As per my email dated January 29, 2015, Unaatuq, LLC cannot leave PS 12-1, PS 12-2, PS 12-3 and PS 13-1 in the current status quo. Under regulation 20 AAC 25.110, an operator may apply to the AOGCC to approve the suspension of a well. The operator must state the reasons why each well should be suspended, and not completed or abandoned. This includes demonstrating that each well has a practical future utility. A separate application is required for each individual well. An Application for Sundry Approvals form (Form 10-403) for the submittal of a plan of abandonment or a plan of suspension for a well can be found at http://doa.alaska.gov/ogc/forms/forms.html. Note, a current well schematic diagram must be submitted with each Application for Sundry Approvals and a proposed well schematic diagram shall also be submitted with the application to show proposed downhole well design changes for plug and abandonment plans. All information required by 20 AAC 25.110 must be included or the application will be denied and the AOGCC will at that time will look to Unaatuq, LLC to plug and abandoned the wells in conformance with State Regulations. Please submit to the AOGCC, within fifteen (15) business days from the date of this email, the required sundry applications for suspension or abandonment of PS 12-1, PS 12-2, PS 12-3 and PS 13-1. If applications for the suspension or abandonment of the wells are not received in that time frame, the AOGCC may issue Notices of Violation under 20 AAC.535 for violation or failure to comply with a provision of AS 31.05 and Title 20, Chapter 25 of the Alaska Administration Code. If you have questions, please do not hesitate to call me. Best Regards, Patricia SCANNED APR ® g 2016 Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If 1 • you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it, and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. From: Bettis, Patricia K(DOA) Sent:Thursday,January 29, 2015 2:10 PM To: matt@beringstraits.com Cc: Colombie,JodyJ (DOA)<jody.colombie@alaska.gov> Subject: Pilgrim Springs Geothermal Wells (Docket No: OTH-14-019) Matt, This email is to summarize our phone conversation on January 28, 2015, regarding the Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1 geothermal wells. If AOGCC approves Unaatuq, LLC's request to be designated operator, Unaatuq, LLC will bear full responsibility for assuring those wells are in compliance with all of AOGCC's statutes, regulations and orders. Unaatuq, LLC is responsible for knowledge of those statutes, regulations and orders. Regarding the status of Unaatuq, LLC's request to approve the change in operator,the submitted documentation is incomplete. Specifically Unaatuq, LLC needs to submit a signed copy of the September 12, 2014 Unaatuq, LLC Management Board Meeting, signed by a Management Board Member. Unaatuq, LLC also understands that the wells shall not be left in the current status quo. If Unaatuq, LLC does not demonstrate to AOGCC that the wells should be suspended, and not completed and put into production or abandoned, then the AOGCC will likely order the wells be property plugged and abandoned. See, 20 AAC 25.105 and 20 AAC 25.112. Responsibility for plugging and abandoning the wells, as well as all costs associated with the abandonment procedure, rests with Unaatuq, LLC. Applications for Sundry Approvals to suspend the wells must be submitted to the AOGCC within 15 business days of the date that AOGCC approves the change in operator. A separate application is required for each individual well. A Sundry application form(Form 10-403)for the submittal of a plan of abandonment or a plan of suspension for a well to the AOGCC can be found at: http://doa.alaska.gov/ogc/forms/forms.html. Note, a current well schematic diagram must be submitted with each Application for Sundry Approval and a proposed well schematic diagram shall also be submitted with the sundry application to show proposed downhole well design changes for plug and abandonment plans. All information required by 20 AAC 25.110 must be included or the application will be denied and the AOGCC will at that time will look to Unaatuq, LLC to plug and abandoned the wells to the satisfaction of the AOGCC. If you have questions, please do not hesitate to call me. Best Regards, Patricia Patricia Bettis 2 • • Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage,AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission(AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law.If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it, and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 3 • • Bettis, Patricia K (DOA) ?7-1) e2( —6 ?" From: Matt Ganley <mganley@beringstraits.com> Sent: Tuesday, November 17, 2015 2:08 PM To: Bettis, Patricia K (DOA) Subject: Re: Pilgrim Springs Geothermal Wells P 212-077), S 12-2 (PTD 212-109), PS 12-3 (PTD 212-126), and PS 13-1 (PID 21"3-102) Thank you. We will get the completed paperwork to you. Matt L. Ganley V.P. Media and External Affairs VANEDAPR 0 8 2016 Bering Straits Native Corporation 4600 DeBarr Road, Suite 200 I Anchorage, AK 99508<x-apple-data-detectors://7/1> Phone 907.563.3788<te1:907.563.3788> Direct 907. 344.7212<te1:907.%20344.7212> I Mobile 907.632.7197<te1:907.632.7197> mganley@beringstraits.com<mailto:mganley@beringstraits.com> www.beringstraits.com<http://www.beringstraits.com/> WARNING: The information contained in this email (including any attachments) is CONFIDENTIAL and may be PRIVILEGED. If you are not the intended recipient of this email,you may not read, retain, copy, or distribute this email. If you have received this email in error, please advise us by return email and call the sender at 907.632.7197<te1:907.632.7197>.Thank you. On Nov 17, 2015, at 1:05 PM, Bettis, Patricia K(DOA) <patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov» wrote: Good afternoon Matt, As per my email dated January 29, 2015, Unaatuq, LLC cannot leave PS 12-1, PS 12-2, PS 12-3 and PS 13-1 in the current status quo. Under regulation 20 AAC 25.110, an operator may apply to the AOGCC to approve the suspension of a well. The operator must state the reasons why each well should be suspended, and not completed or abandoned. This includes demonstrating that each well has a practical future utility. A separate application is required for each individual well. An Application for Sundry Approvals form (Form 10-403)for the submittal of a plan of abandonment or a plan of suspension for a well can be found at http://doa.alaska.gov/ogc/forms/forms.html. Note, a current well schematic diagram must be submitted with each Application for Sundry Approvals and a proposed well schematic diagram shall also be submitted with the application to show proposed downhole well design changes for plug and abandonment plans. All information required by 20 AAC 25.110 must be included or the application will be denied and the AOGCC will at that time will look to Unaatuq, LLC to plug and abandoned the wells in conformance with State Regulations. Please submit to the AOGCC, within fifteen (15) business days from the date of this email, the required sundry applications for suspension or abandonment of PS 12-1, PS 12-2, PS 12-3 and PS 13-1. If applications for the suspension or abandonment of the wells are not received in that time frame, the AOGCC may issue Notices of Violation under 20 1 • • AAC.535 for violation or failure to comply with a provision of AS 31.05 and Title 20, Chapter 25 of the Alaska Administration Code. If you have questions, please do not hesitate to call me. Best Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907) 793- 1238 or patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov>. From: Bettis, Patricia K (DOA) Sent: Thursday,January 29, 2015 2:10 PM To: matt@beringstraits.com<mailto:matt@beringstraits.com> Cc: Colombie,Jody J (DOA)<jody.colombie@alaska.gov<mailto:jody.colombie@alaska.gov>> Subject: Pilgrim Springs Geothermal Wells (Docket No: OTH-14-019) Matt, This email is to summarize our phone conversation on January 28, 2015, regarding the Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1 geothermal wells. If AOGCC approves Unaatuq, LLC's request to be designated operator, Unaatuq, LLC will bear full responsibility for assuring those wells are in compliance with all of AOGCC's statutes, regulations and orders. Unaatuq, LLC is responsible for knowledge of those statutes, regulations and orders. Regarding the status of Unaatuq, LLC's request to approve the change in operator, the submitted documentation is incomplete. Specifically Unaatuq, LLC needs to submit a signed copy of the September 12, 2014 Unaatuq, LLC Management Board Meeting, signed by a Management Board Member. Unaatuq, LLC also understands that the wells shall not be left in the current status quo. If Unaatuq, LLC does not demonstrate to AOGCC that the wells should be suspended, and not completed and put into production or abandoned, then the AOGCC will likely order the wells be property plugged and abandoned. See, 20 AAC 25.105 and 20 AAC 25.112. 2 • • Responsibility for plugging and abandoning the wells, as well as all costs associated with the abandonment procedure, rests with Unaatuq, LLC. Applications for Sundry Approvals to suspend the wells must be submitted to the AOGCC within 15 business days of the date that AOGCC approves the change in operator. A separate application is required for each individual well. A Sundry application form (Form 10-403) for the submittal of a plan of abandonment or a plan of suspension for a well to the AOGCC can be found at: http://doa.alaska.gov/ogc/forms/forms.html. Note, a current well schematic diagram must be submitted with each Application for Sundry Approval and a proposed well schematic diagram shall also be submitted with the sundry application to show proposed downhole well design changes for plug and abandonment plans. All information required by 20 AAC 25.110 must be included or the application will be denied and the AOGCC will at that time will look to Unaatuq, LLC to plug and abandoned the wells to the satisfaction of the AOGCC. If you have questions, please do not hesitate to call me. Best Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at (907)793- 1238 or patricia.bettis@alaska.gov<mailto:patricia.bettis@alaska.gov>. 3 Bettis, Patricia K (DOA) ?Ti 02/2\-0??.- From: 21 ,-0?7- From: Bettis, Patricia K (DOA) Sent: Monday, July 20, 2015 2:44 PM To: 'Matt Ganley' Subject: Pilgrim Springs PS 12-11(PTD 212-077), S 12-2 (PTD 212-109), PS 12-3 (PTD 212-126), and PS 13-1 (PTD 213-102) Good afternoon Matt, Unaatuq, LLC needs to submit Sundry Applications for the suspension of the PS 12-1, PS 12-2, PS 12-3 and PS 13-1 geothermal wells. A sundry application (Form 10-403) needs to be submitted for each well. Form 10-403 can be found on the AOGCC website at the following address: http://doa.alaska.gov/ogc/forms/forms.html. Under 20 AAC 25.110. Suspended wells, Unaatuq, LLC must state the reasons the wells should be suspended, and not completed or abandoned, and must demonstrate to the commission's satisfaction that the wells have future utility. Other requirements under 20 AAC 25.110 must also be met. The complete regulation may be found on the AOGCC website at the following address: http://www.legis.state.ak.us/basis/aac.asp#20.25.110. If you have any questions, please do not hesitate to call or email me. Thank you, Patricia SEAMED JUL 2 12015 Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907) 793-1238 or patricia.bettis@alaska.gov. 1 • Nvi PK+3 ® BERINGI h j i A, of gi�lor- p).'4 , L WA`r, Native STRAITSAiatoion dr-Arw-e.Ar‘iS ls, PPb November 25th,2014 Cathy P.Foerster,Commissioner State of Alaska Alaska Oil&Gas Conservation Commission 333 W.7th Ave. Anchorage,AK 99501-3539 Wells SCAB ® JUL ' 8 2-017'RE: Pilgrim Springs Geothermal Docket No: OTH-14-019 Commissioner Foerster: This letter is in response to your letter dated September 12, 2014 concerning the geothermal wells located at Pilgrim Hot Springs and identified as PS 12-1, PS 12-2, PS 12-3,and PS 13-1,which had been drilled by UAF's Alaska Center for Energy and Power(ACEP). Unaatuq, LLC and ACEP have worked diligently to define the geothermal resource at Pilgrim for the past 4 years,however,the current agreement between the parties ends on December 31,2014. It is anticipated that ACEP and Unaatuq will pursue joint projects that will further our understanding of the resource and bring its benefits to the residents of the region. Bering Straits Native Corporation serves as the managing member for Unaatuq, LLC,a consortium of seven organizations in the Bering Strait region who now own the property known as Pilgrim Hot Springs (Attachment A:U.S.Survey 565). Unaatuq,LLC and ACE?have been involved in a multi-year exploration and characterization program at the springs,with the ultimate goal of on-site development of the geothermal resource(greenhouses,district heating,electricity),and perhaps generating electricity for transmission to Nome. Your recent letter states that the wells at the hot springs must be "either plugged and abandoned in compliance with 20 MC 25.105 and 20 MC 25.112 or suspended under 20 AAC 25.110." Unaatuq,LLC respectfully requests that we,as the landowners having a continued interest in developing the resources only available through the currently existing wells,be allowed to assume the responsibility as Operator. As Operator,Unaatuq,LLC would prefer to refrain from plugging,abandoning,or suspending the wells because further development of the geothermal resource is only possible if the wells remain functioning and accessible. For example,we are working with a company that intends to pursue electrical generation at Pilgrim,and intends to utilize the existing wells (12-1 to 12-3 and 13-1)for pump tests and reservoir monitoring. Closure of these wells would effectively set back any development for on-site geothermal use and electrical production for transmission to Nome. Attached you will find a statement outlining the Utility of Maintaining the Wells,which also contains a schematic for each well as requested in your letter(Attachment B). Through this correspondence we are requesting that the Operator of Record,currently listed as UAF/ACEP be changed to Unaatuq, LLC. We are submitting a completed Designation of Operator • • rte •► BERING on / STRAITSCorporative , form(20 AAC 25.020) (Attachment C). On September 12, 2014,the Board of Directors for Unaatuq, LLC met and voted to assume the responsible for the wells as the operator,as well as be the agency to post the necessary bond with the State of Alaska for maintain the wells in their current,accessible status (Attachment D: Meeting Minutes,Excerpt). Please forward the required information,requirements and costs for submission of a bond to the State of Alaska to cover the wells, PS 12-1,PS 12-2,PS 12-3,and PS 13-1 to Matt Ganley,Bering Straits Native Corporation,4600 DeBarr Road, Suite 200,Anchorage,Alaska 99508. Sincerely, Matt Ganley Bering Straits Native Corporation, Managing Member Unaatuq,LLC (907)344-7212 e_ r Gwen Holdman University of Alaska Fairbanks Alaska Cen• r for Energy and Power,Director dfr ' Kit Duke University of Alaska Facilities and Land Management,Associate Vice President Enclosures: U.S.Survey 565 Utility of Maintaining Recent Wells at Pilgrim Hot Springs for Monitoring and On-Site Utilization Designation of Operator Form 10-411 September 12, 2014 Unaatuq,LLC Meeting Minutes Excerpt • • ATTACHMENT A: U.S. Survey 565-Pilgrim Hot Springs • • •• I • lag 151ii1iIi • !;iiiii ! I& gg ;g p ' .. (f;++ii � ; i 41F� ' . .. ., .•. ' N. .1,.; : , --•�: , `t �s !t ' . ' ��I j i `y •V`m` Lti�^P • + ` 4s td f • •• assmpmet.ms r ,, r..su.a* j .`:' 1 V. d a�aJ. ' / I �5 l ; r;i f. §ti':+-�, ... r, YO' r; S."; r�csa,�rMs,.m� R1... 'r c �'`s pssi't yy < it . t t 1 111 11 114 110111 i1 111 , ' l ! l11Ia �t�� I�y t wY �y 1 .• '' � . ,. ki EX LIC_UNIVERSITY_PHS_061812 10 ATTACHMENT B: Utility of Maintaining Recent Wells At Pilgrim Hot Springs • • Utility of Maintaining Recent Wells at Pilgrim Hot Springs for Monitoring and On-Site Utilization October 17, 2014 Since 2010, the Alaska Center for Energy and Power has been leading geothermal exploration efforts at Pilgrim Hot Springs. The property is owned by Unaatuq LLC., a partnership of seven organizations based on the Seward Peninsula. In 2012 and 2013 four wells were drilled on the propertywhich fall under the jurisdiction of the Alaska Oil and Gas Conservation Commission. The wells drilled during this period are best left open and operational as a means to monitor the geothermal aquifer, and in the case of PS13-1 provide geothermal fluid for onsite use. Three of these wells, called P512-1, PS12-2, and PS 12-3 were drilled as temperature gradient holes to High-pressure ball valve -► High-pressure ball valve 6 518-in OD conductor casing 6 518-in OD conductor casing cemented to 100 ft below cemented to 200 ft below land surface land surface 4.5-in OD casing cemented to 1000 ft below land surface 4.5-in OD casing cemented to 1000 ft below land surface 2.19-in OD casing cemented from land surface to 160 ft below land surface.Grouted from 160 l0 1294 ft below land surface. Bottom cap Figure 1. PS 12-1(left)and PS 12-2(right) depths ranging from 1000 feet to 1294 feet. Diagrams of these wells are shown in figures 1-2. These wells are constructed with sealed casing which is plugged at the bottom. The casing is not perforated and the wells are not open to the formation. They do not have ability to flow artesian as other perforated wells at the site do. Once the wells were completed, the casing was filled with water and they serve as temperature gradient monitoring wells. Temperature logs, like the one shown in figure 3 are created using the temperature profiles measured in the wells. These wells are very useful for monitoring subtle long term changes in the geothermal field. • • Currently, there are plans to develop Pilgrim Hot Springs to generate electricity and export this power to Nome. A private developer, under the name Pilgrim High-pressure ball valve ----. Geothermal LLC., has signed a power purchase agreement with Nome Joint Utility Systems to supply up to two MW of electrical power to the utility. This would 6 5/8-in OD conductor casing cemented to 144 ft below require the extraction and reinjection of large amounts of land surface ----r geothermal fluid at Pilgrim Hot Springs. In order to maintain the long term health of the geothermal field, careful monitoring of the aquifer is necessary. The temperature gradient wells that were drilled in 2012 are ideally situated to monitor the temperatures of both the shallow and the deep aquifers at Pilgrim Hot Springs. 2.19-in OD casing cemented from land surface to 993 ft. Because these wells are sealed from the aquifer, the risks associated with leaving these wells open are extremely limited. Rubber cement plug in bottom of casing In addition to this larger geothermal power generation 55/8-insole facility being explored, the property owners of Pilgrim Hot drilled to,193ft. Springs, are very interested in developing the site for Grout-filled from 993 to 1183 ft. Figure 2.PS 12-3 small scale tourism use. Some of the uses for the geothermal waters that have been discussed include a small geothermal power plant for Temperature Profile of PS12-2 onsite electrical power generation, a small geothermal on 6 September 2014 district heating loop to provide space heating and snow melting, Temp(°C) and of course hot soaking pools. 0 20 40 60 80 100 Just as in the large scale 0 geothermal power plant scenario 200 — described above, using the 400 — — geothermal resource for onsite r 600 — production will require careful 0 800 monitoring of the geothermal 1000 — resource. The temperature 1200 gradient wells that were drilled 1400 --_ in 2012 provide an excellent tool Figure 3.The temperature profile of PS 12-2 shows gives the static state to do this with. temperature of the geothermal aquifer • PS13-1 was drilled in 2013. It was originally drilled to bedrock at 1036 feet, but when temperatures at this depth were cooler than had been hoped for, the well was completed in the shallow thermal aquifer. This well, shown in figure 4 was completed with 14" casing and well screen. The well has an artesian flow rate of approximately 70 gpm at 175° F.The closed in pressure at the wellhead is approximately 3.5 PSI. In September of 2013 the well was flow tested at 300 gpm, and had productivity measured at 27.5 gpm/psi, indicating a good productive well. This well has excellent potential to produce geothermal fluid for onsite district heating and power production purposes which the landowners are in the process of evaluating. PS-13-1 Completion Well Diagram _-14"casing to surface Ground Level =—24"Conductor Casing 21'— —18"Surface Casing Gravel Backfill–= Class C Neat Cement _- Shale Packer 1"Bentonite Crumbles Packer at 50' 18" 140' 11111111i11111 188 11111 111111111 11 I 1 1 1 1 1 1 1 1 1 I I 50'Well Screen 5'Tail Pipe w/Plate - I I I I I I I I I I I I I I 238'MD Welded to Bottom ` 14" 243'MD 2'Cement Plug Back Filled with Sand ______9 718" w ceunu 805'MD 231'of 2"Galvanized Pipe 1036'MD Figure 4.PS 13-1 well schematic • ATTACHMENT C: Designation of Operator 20 AAC 25.020 • • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION DESIGNATION OF OPERATOR 20 AAC 25.020 1.Name and Address of Current Owner of Record: w _ University of Alaska Fairbanks PO Box 755280 Fairbanks,Alaska 99775-5282 2.Notice is hereby given of a designation of operatorship for the oil and gas property described below: Legal description of property: U.S.Survey 565 Agregating approximatly 320 acres Refer to the attached map for representation of Lands described above. Property Plat Attached: n 3. Name and Address of Designated Operator: Unaatuq,LLC do Bering Straits Native Corporation P.O.Box 1008 Nome,Alaska 99762 4. Effective Date of Designation: 5. Acceptance of operatorship for the above described property with all attendant responsibilities and obligations is hereby acknowledged (attach Power of Attorney or other evidence of authority of person signing): Signature Date /2/40 Printed Name 1 Title _g f.OrNG r 1,14 s7V4l 1-1-C• 6. The Owner hereby certifies that the foregoing i true and correct(attach Power of Attorney or other evidence of authority of person signing): Signature ,, � Date 12/3/2014 Printed Name Gwen Holdtnann Title Director,Alaska Center for Energy and Power 7. Approved: Commissioner Date Approved: Commissioner Date Approved: Commissioner Date (Requires approval by Iwo Commissioners) Form 10-411 Rev.712009 Submit in duplicate • ATTACHMENT D: Unaatuq, LLC Meeting Minutes Excerpt September 12, 2014 Unaatuq, LLC • S Management Board Meeting September 12, 2014 Call to Order Roy Ashenfelter called the Unaatuq, LLC Management Board meeting to order at 12:30 p.m. on September 12, 2014 in the BSNC Boardroom at Nome, Alaska. Roll Call Organization Representative Others present BSNC Clara Langton Robert Evans, Jerald Brown, Kevin Bahnke, Matt Ganley* Kawerak Kirsten Timbers, who took minutes MINC Thomas Denise Topkok, Daniel O. Komok, John Topkok, Ablowaluk Dora Hughes NSEDC Janis lvanoff* Kyan Olanna* SNC Chuck Fagerstrom Andrew Miller Jr. TNC Isaac Okleasik Jr. William Topsekok WMNC Roy Ashenfelter Unaatuq Cheryl McKay* ACEP Gwen Holdmann *via teleconference Waive Notice of Meeting Roy Ashenfelter asked for a motion to waive the notice of the meeting. Clara Langton moved and William Topsekok seconded the motion to waive the notice of the meeting. Question called. Motion passed by voice vote. Wells Roy Ashenfelter asked for a motion to transfer the liability of the wells from ACEP to Unaatuq. Clara Langton moved and Isaac Okleasik second the motion to approve of the transfer of liability for Unaatuq wells PS 12-1, 2, 3 and PS 13-1, 2, 3 and transfer of the bond from ACEP to Unaatuq as required. Question called. Motion passed by voice vote. Matt Ganley requested that each organization send him a letter informing Unaatuq who their representative and alternates • K.i �� r P -1' y n isd" 4..---------Et-----77----; - -.—.__ - - 333 West Sevenih Avenue :^`' ' (OVERNOR SEAN PARNEI L Anchorage, Alaska 99501-3572 r � ��/" Main: 907-279 11133 September 12, 2014 CERTIFIED MAIL- RETURN RECEIPT REQUESTED 7012 3050 0001 4812 6808 (Unaatuq) 7012 3050 0001 4812 6815 (DCED) 7012 3050 0001 4812 6822 (UAF) Matt Ganley, Resources and External Affairs Unaatuq, LLC c/o Bering Straits Native Corporation P.O. Box 1008 Nome,AK 99762 Ms. Susan K. Bell, Commissioner Alaska Department of Commerce, Community,and Economic Development P.O. Box 110800 Juneau,AK 99811-0800 Gwen Holdmann, Director UAF Alaska Center for Energy&Power P.O. Box 755910 Fairbanks,AK 99775-5910 Re: Pilgrim Springs Geothermal Wells Docket No: OTH-14-019 Dear Mr. Ganley, Ms. Bell and Ms. Holdmann: As operators or landowner of record, you are advised that the ten geothermal wells drilled in the area of Pilgrim Springs, Alaska (see attached list) must either be plugged and abandoned in compliance with 20 AAC 25.105 and 20 AAC 25.112 or suspended under 20 AAC 25.110. Alaska Oil and Gas Conservation AOGCC regulations can be found at the following internet address: http://doa.alaska.gov/ogc/Regulations/Reglndex.html. A Sundry application form (Form 10-403) for the submittal of a plan of abandonment or a plan of suspension for a well to the AOGCC can be found at: http://doa.alaska.gov/ogc/forms/forms.html. Please note that each application for Sundry Approval must include a well schematic diagram showing the well's current condition and a well schematic diagram showing proposed downhole well design changes to comply with applicable regulations for plug and abandonment or suspension. 9 • Pilgrim Springs Geothermal Wel1T' September 12,2014 Page 2 of 2 If the AOGCC does not receive an acceptable plan and schedule for all ten wells within ninety (90) days of receipt of this letter, the AOGCC will notice a public hearing to determine whether remedial action is necessary with regard to the wells and which entity will bear responsibility for compliance. The applicable University of Alaska, Fairbanks Alaska Center for Energy& Power's (UAF) lease will be expiring soon relative to the PS# 12-1, PS 12-2, PS 12-3 and PS 13-1 wells. Under 20 AAC 25.105, all permitted wells on a property must be properly abandoned before expiration of the operator's rights. Upon expiration of the lease, if these wells are not plugged and abandoned to the satisfaction of the AOGCC, UAF's bond will be forfeited. Forfeiture of the bond will not relieve UAF of responsibility for plugging and abandoning of the wells under AS 31.05. If Unaatuq, LLC desires to take over operatorship of these four wells, a Designation of Operator Form (Form 10-411) must be submitted to and approved by the AOGCC, as provided under 20 AAC 25.020 in addition to filing the bond required by 20 AAC 25.025. Please call Ms. Patricia Bettis at (907) 793-1238 if you have question concerning this matter. Sincerely, /°-9<,e-i4/e ---- Cathy Cathy P Foerster Chair, Commissioner Attachment cc: Kit Duke,Associate Vice President University of Alaska Facilities and Land Management 1815 Bragaw St., Ste. 101 Anchorage,AK 99508 Larry Hartig, Commissioner Department of Environmental Conservation P.O. Box 111800 Juneau,AK 99811-1800 • • ri C a) E u (0 V) CCCCCC Cl.) Cl.) a) 0) Q C C C C Q O 7 7 = 7 0 a) Cl.) a) 0) I- C C t C L t 0_ Q 0_ 0_ V), V) V) V) V) V) V) V) O O 7 N V) V) V) 1— a W 0 a) 0 0 Ln tr) 0 CO 0 0 O a) o0 M Jv r-I r I N 00 Cr) O N r-I O Q r-I ri ri s--1 r-I 1'- 0 1- 0 W WCr) 1- -i 01 N 00 CO CO CO ri r-I r-1 r-I Q J 01 0) 01 01 01 01 0 0 0 0 0 CC r-I .-i r-1 r-1 r-1 i-1 N N N N 0 N J L v cc cc cc cc cc cc cc cc cc cc 3 Y Y Y Y Y Y Y Y Y Y 0 Q o C ,-1 ri ri ri ,--1 -1 %-1r� 1-1r� C G m M M m m m Co CO Co m its OC u CC CC CC ac CC CC CC CC CC cL >- W J N V) V) N V) V) N V) V) V) i- 00 Cr cU _ 1- V) 111 V) V) V) 1— i— 1-- E- w W '-p m M M M M L lD LD Vr M O O O O O m M M M 4E) C Z 3 3 3 3 > CC * * * * * * 0 0 0 0 E O- M n. a n. a N 0 `v a`) a) a a 0) o6 oZS QS o?S C cc 3 3 3 3 3 3 T >, >, >, 00 aE O 0 0 0 0 0 0 n 110U Cl. s 0. a. a s L L L L O oWC o?S oZS QS 0ZS 0ZS oZS c c c c o J LL >- A >- >. > >? 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N N 0 0 0 -I .-1r 1 ,-.1 w- a ri ri r-I ri ri r-1 N N N N 0 C r I N M d- LI) a) W in v) v) V) S) E 2 00 00 0 0 00 a0 `- 0 Q Q 'Q 'Q 'Q 'Q 0 CO Z 3. on a) J V) V) V) V) V) a-1 N M ri 0 W E E E E •E w N N N M 0 '0 '� '00 '00 CO ri ri ri ri O a a a a E. 2 a a a a * • CDIT o a- a U.S. Postal Servicer, CD Q N ro CO CERTIFIED MAILTM RECEIPT • ¢Q >'..! z o (Domestic Mail Only;No Insurance Coverage Provided) 0 0 o 0 0 g 0 co `� °a co r For delivery Information visit our website at www.usps.com® d -13 n Ili • ( •. q u°i Tvru O O 0 3 1 cI3Postage $ O az".a `n o E a) J] C -o • m O PI ru r11 Certified Fee 0 a tK c 0 0�0 r-3 , `, Postmark U !Li, �-✓\ a.-_— `° a) cfl i O Return Receipt Fee - y > ® 2 ® {Endorsement Required) cp Here cO a_ -o k Restricted Delivery Fee ti ` -) m a> m `S - p r (}J` 0 (Endorsement Required) W or L a ® ° ° a Lii W 1" cp Vj ° a 'a) ca 0 CI 1� Total Postage a cis v ) a Ui U .S m •� rn Matt Ganley, Resources and External Affairs o `�`@ & y = n 0 0 0 o rc ru Sent To Unaatuq, LLC rJ a - ai rj M v a E I-4 p sweet,Apr.No.; c/o Bering Straits Native Corporation frt48 p.. or PO Box No. r rUcc Post Office Box 1008 City,State,ZIP +Nome,AK 99762 C3 >• ,'e � a, 0) o PS Form 3800,•r•. , - a) y .- To' O° O O v? E rn rn� >. J ` UN0co_c vi ao °aoU.S. Postal ServiceTt a.. : 0 CERTIFIED MAIL, RECEIPT ns a) ,..I (Domestic Mail Only;No Insurance Coverage Provided)Lri ti m,�as ma' u -� CO IL p c.c ° ti oo 17 For delivery information visit our website at www•usps.com®CO tu r c ..- a o O Z 0 0) cv rq 0 +_ 2 c ° ° ° 2 T J rn m Ql N N 7- CO Postage $ U N X U) rn•.- N J oA v Y .E o w o 3 .c < m Q .c ° Q 2 co Certified Fee _. ,-, E�t+-• C ° c a) U +� v O G) m m E 0 E c+•' ., O U f0 m y1 U C Return Receipt Fee CI Postmark rk Z o.�t•i Q o Q C O `�° Li C:1 (Endorsement Required) ■ ® T 2 u 0. z Q 0 Restricted Delivery Fee -- cV p (Endorsement Required) I.17 0 Total Po m Ms.Susan K. Bell,Commissioner ru Sent To Alaska Department of Commerce, Community, 1:7 Street Apt and Economic Development N or PO Box City,State. Post Office Box 110800 Juneau, AK 99811-0800 &C "1i'`'f'%" PS Form 3., ••• ••• -•- - • • • U.S. Postal Service • CERTIFIED MAIL,. 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September 15,2014 8:14 Arrived at Unit FAIRBANKS,AK 99775 am September 13,2014,9:19 Departed USPS Facility ANCHORAGE,AK 99530 Pm September 12,2014 9.06 Arrived at USPS Facility ANCHORAGE,AK 99530 Pm Track Another Package Tracking(or receipt)number Track It HELPFUL LINKS ON ABOUT.USPS.COM OTHER USPS SITES LEGAL INFORMATION Contact Us About USPS Home Business Customer Gateway Privacy Policy Site Index Newsroom Postal Inspectors Terms of Use FAQs USPS Service Updates Inspector General FOIA Forms&Publications Postal Explorer No FEAR Act EEO Data Government Services National Postal Museum Careers Resources for Developers Copyright©2014 USPS.All Rights Reserved. 12/2/2014 • • Colombie, Jody J (DOA) From: Bettis, Patricia K (DOA) Sent: Tuesday, March 03, 2015 2:30 PM To: Colombie, Jody J (DOA) Subject: FW:ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Attachments: AppD_wellhead repairs.pdf For OTH-14-019 From: Alan P. Baldivieso [mailto:ABaldivieso@aidea.orq] Sent: Tuesday, March 03, 2015 1:00 PM To: Bettis, Patricia K (DOA); Schwartz, Guy L (DOA) Subject: RE: ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Thank you, Patricia. I spoke with Chris and he sent the attached report detailing the repairs that the University had done to some of the wellheads. Based on the conversation I had with Guy this morning,the application for sundry approvals will need to include specifics from the contractor that is ultimately selected to perform the work. I have identified several contractors that are familiar with the Pilgrim Hot Springs wells, but will need to accept bids through our procurement process prior to awarding the contract. I anticipate that the earliest the work can begin will be in July, although the road to the site may be clear of snow earlier than usual this year. I will specify that the work be completed by Sept 30, 2015. Is this approach to plugging and abandoning the 6 wells acceptable? Thank you, Alan Baldivieso Program Manager Geothermal, Hydrokinetic, Emerging Energy Technologies Alaska Energy Authority (907) 771-3027 From: Bettis, Patricia K(DOA) [mailto:patricia.bettis@alaska.gov] Sent:Tuesday, March 03, 2015 11:51 AM To:Schwartz, Guy L(DOA) Cc:Alan P. Baldivieso Subject: ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Guy and Alan, This report may be of use to you. UAF may have worked on some of the wells. Christopher Pike may be able to provide you with that information. His telephone number is (907) 272-1522; cell is(907) 888-3850. Regards, Patricia 1 • ! 0 • - - • '1 6.; • s at♦ • i f ' t • 7 Vii . s Figure 3.P5-3 ,y aqo "tiY 11016Z *41116/ 4' I a g rt. 44— 9,1' r !1 %tt / 4 - +4.t : ' «, + i"j` `4 �� t t. 0%..":"/ N.1): it i, e' �t i� Figure 4.PS-4 • • • i f 4r i .10r;. 4* 'R.si 4 ti t . ,r 4 4 . 1 C7 44 Figure 5.PS-5 • , I ,.. 1 . ... , . t •74 ' sus. . ,` ,t-.„:-0-,,rein „ .• J Figure 6.MI-1 • - _0 • 0 .", . . vt lir .. 0 - 11, lb "'le 4 .r y� 1 , ir AI M1: 4 t - '4.4-it t4 . ..,,,,,N ., 503000 mew -1°'11';',471 • `�;, .Y .ahs 0. • :yfit / g / S( 11' , , . ..s , , ,, l r ." ' 4j 40.! � 3! N it.' . -,....x.... 4 '''.. % . -. :4:'1,..., 0.0 4 „.4r i4 • S _i i n .> ' OW f • • { yr$ / I,. �. . la ,.„ e /.,..i ..i '''''',1'ti'IC ' i m isim iiiiiimiiiiiminiiimmoiii Meters Legend 0 165 330 660 990 1,320 N Man Made Structures 1 .9 7 3 A yVt Well Locations 6 1 centimeter = 94 metersA Figure 7.Map of Pilgrim Hot Spring Well Locations • 0 Appendix D Pilgrim Hot Springs Well Head Repairs S Pilgrim Hot Springs Geothermal Exploration Project Pilgrim Hot Springs Wellhead Repair Prepared by: Dan Brotherton,Arctic Drilling, Inc. & Markus Mager,ACEP Fairbanks Alaska,September 2010 Ac E p Alaska Center for Energy an(' Alaska Center for Energy and Power University of Alaska PO Box 755910 Fairbanks,AK 99775-5910 1 • • Pilgrim Hot Springs Wellhead Repair Prepared by: Dan Brotherton,Arctic Drilling, Inc. & Markus Mager,ACEP Overview This task was completed in two phases, including: 1)an initial site visit in July 2010 to assess the condition of the six existing wells and develop a work plan for replacing the wellhead assemblies as needed, and 2)a second trip to the site to complete the work outlined in the work plan. This trip took place September 13th-18th. The goal was to stop the wells from leaking, and make them accessible for instrumentation as part of the DOE funded project'Innovative Geothermal Exploration of Pilgrim Hot Springs,Alaska'. This report details the work performed on the individual wellheads during the September trip,which included replacing the gate valves on 4 of the 6 wells, including PS-1, PS-3, PS-4 and MI-1. At this time, none of the wells are leaking to the surface although there are still weak points which need to be addressed in the future. Recommendations for future work are outlined in this report. The team performing the work included Dan Brotherton from Arctic Drilling, Richard Eggert,and Max lyapana from Bering Straits Development Company(BSDC), and Markus Mager from ACEP. For each of the four wellheads that were repaired,the team removed the existing gate valves by pumping down the water level in order to access the well and installing new, stainless steel valves.A detailed work description for each well can be found on the following pages. The team did not alter the configuration of the wellheads except for installing an additional fitting on top of the blind flanges capping the gate valves that can accept a 3" stainless standpipe with a tee and a valve to allow future installation of monitoring and logging equipment. A 1" access port with a plug was also built into the top of the blind flange. We recommend installing chains and locks on all the new valves and that all valves should be tested for functionality(opened/closed) at least once a year. Winterization of all the wells is necessary in order to prevent freezing and cracking of the gate valves. A plan for winterization has been forwarded in a separate communication that is attached to this report. Mobilization All new valves (6), parts,tools and supplies,totaling 3,842Ibs,were purchased or rented by ACEP and shipped to Nome via Northern Air Cargo (NAC). Additional heavy equipment such as 4 wheelers,trailers, a bobcat and an air compressor were rented in Nome from BSDC. All parts,tools and equipment were transported to the side on September 13th and 14th and staged at the central staging area (Figure 1). Repair work began on the 15th, and was completed on the 18th 2 • • central staging area for repair work hot tub am COM t :ter �► • ylr _ PS-4 APtlithr Figure 1.Central staging area for repairs. PS-4 (Completed September 14-15th) PS-4 supplies the water for the hot tub from a 2in lower valve. The well was leaking from a%2 inch hole in the blind flange on top of the 10in well gate valve and from the corroded 2in valves on each side of the 10in casing underneath the 10in valve (Figure 2). The lower bolt flange of the 10in valve was covered with mineral buildup and corrosion scale. There was a small pond around the well at the level of the 2in side valves from the constant leaking and overflow from the tub. The team laid down timbers and planks to create a stable work platform and removed mineral build up and rust scale from the lower bolt flange (Figure 3).After various failed attempts to release the old 10in valve from the well flange,the bolts had to be cut off with a torch (Figure 4& 5). 3 • • PS-4 67 . • tlI \ ., I. _ '.:: ' .,. i TJt je . 3 / 7#1. . It moi.. }j +j�!i J � ff r ` i/ 4 �, 1 �', �i r . �. i f II 1 *47';71'1' 1 y_ 7 r 1 w , t // t. A 1 T 6 ,it 1 'yb 8 �� 7` , , ,,,, ,„, f, i i kX '„,: , , , ,4 k '�l 1' + , 1' w,, i3 y,,,,,, .,,,, ,,,,, , ,i, ,,....rs lA,�iilt 4 ,i ,, si ,,,,,,, .,, ...‘ , , , ,... ,, .. ,,, ,,,. .. 6,, , , . / , ... . . .. Figure 2.Arrows show areas of leaking on PS-4. PS-4 Removing mineral buildup and corrosion scale from lower flange ift . ocee4 + .. e w " .•r .WDA �f, '.: it.\ Figure 3.Removing buildup and scale and attempting unsuccessfully to cut the flange bolts with a Sawzall. 4 . PS-4 Dan cutting bolts off old valve � te: � i �ry Figure 4.Cutting bolts to remove old gate valve. PS-4 Removing old valve - " y4. 40111. 4:4411,, ...4,,,,,° TrAii1 4 . ,- f• Figure 5.Removing gate valve with Bobcat—note artesian flow from well. 5 • • PS-4 has an inner 8in and an outer 10in casing.The outer casing is corroded and thin. The 8in/10in annulus (space between the two casings) continued to produce water after the water level inside the 8in casing was drawn down. This indicates a likelihood that they are set to different depths and water is produced from a different production zone in the annular space than through the main hole. In order to weld on new 2in nipples, this water would need to be drawn down. We were able to partly draw this water down with a 1in suction tube, but it was ultimately decided to not risk changing the 2in nipples after it was determined they are corroded but still sound (probably just as sound as the casing). Dan was not confident that the casing could be welded given its state of deterioration,so rather than risk creating a difficult to stop leak, the original nipples were left in place and only the 2in valves were replaced with new stainless 2"valves (Figure 6). PS-4 new valves 81 M ,:4 a.4.w - kgs A'0 New 2in,vaIves but nipples they attach to were n• ll tilL M• • e- Corroded old„casing and th'` -, '• ;;-still weaknesses Figure 6.New valves. The flange on this well is partly eaten away but still appears to be sound. The well is artesian and produces clear water. We installed a new 10in stainless steel valve with reducer flange on top connected to a 3in threaded nipple with a stainless cap. The well has no visible leaks and has been re-connected to the hot tub via one of the new 2in valves. Further repairs on this wellhead will be needed in the near future. The 10in casing and the 2in nipples are thin and will eventually start leaking with no way to control or stop the flow. Dan recommends that the 8-10in annulus be cemented from the bottom up to the top via tremie pipe which would seal off the corroded outer casing from the well water and would extend the life of the well. We are also recommending locks on the 2in valves to guarantee flow to the hot tub, prevent accidently closure (or opening) and to prevent well freeze up since this well will presumably not be shut in through the winter. If this is the case, it is imperative that the 2in valve remains open to prevent the new gate valve from freezing. 6 • • PS-3 (Completed September 15-16`h) Prior to repairs,this well was leaking through the standpipe at the top of the well and later, after we started to remove buildup and scale (Figure 8),from a hole in the side of the 10in valve (Figure 7). We were unable to plug this leak so we dug a sump hole to drain the fluid and temporarily pump it away from the well and surrounding work space. P -3 r- PS-3 example of corroded standpipe cutting off LI of wellhead I _*q L`„%i 1. _ .. + Mr w Td P t.� � I'' • , Figure 7.Image showing leaks and corroded standpipe. 7 • • PS-3 remove scale & mineral buildup from old valve i4 r f ''''44L 4 4r;'',."4 .�t i Y fr % ;^ •; 1111 Figure 8.Removing scale and buildup. There was significant corrosion to several of the bolts connecting the existing gate valve to the wellhead flange, which necessitated cutting them off with a torch. We were able to drive out some of the bolts once they were cut, but several posed additional challenges and had to be removed in chunks. The torch was damaged during this process. Eventually we were able to remove the old 10in valve and replace it with the new stainless valve and bolts. The lower flange of the wellhead is severely corroded and the new flange bolts are exposed. The flange thickness is about half of original thickness and there is barely enough material left to secure new flange bolts (Figure 9). The well was completed with a new capped gate valve and blind flange, with a 3in nipple and cap. There is a 2in valve below the flange which was left in place as it is not currently leaking. Dan was not confident the well casing is sound enough to permit replacement of this valve. P5-3 PS-3 • exposed bolts and old 2 inch valve with new valve exposed bolts �* y """ old flange in bad condition - ' , a old 2inch valve not replaced Figure 9.Exposed bolts,new valves. 8 • • PS-3 is hotter than PS-4 and produces clear water. There is also a 6in inner casing in this well that comes to the top of the 10in casing. Once the old valve was replaced,there were no visible leaks. Figure 10 shows a comparison of the old PS-4 valve flange and the old PS-3 valve flange. PS-3 & PS-4 old valves �k x 'x�+ t. .- ,x.^" rte" s PS-4 a y%' , Figure 10.Old 10in valves from P5-3 and PS-4. Note severe corrosion on lower P5-3 flange. Further repairs will be needed to this wellhead soon. Dan recommends cementing the 6-10"annulus from the bottom up with tremie pipe so that the side valve can be removed and the main well flange can be replaced. This will protect the well from a permanent leak if one develops from the corroded casing. MI-1 (Completed September 16-18`h) This well is located on adjacent Mary's Igloo Native Corporation land.The top of the 10in gate valve was split in half, probably due to a freeze break. We were able to open and close the old gate valve but could not completely stop the flow of the well. MI-1 is colder than PS-4,and the water temperature of this artesian well appears to fluctuate. When flowed for a short period of time it produced gray, silty fluids. The well has no visible inner well casing. Due to leaks in the wellhead, a small pond had formed around the well several inches deep. We cleaned out an existing trench leading away from the well and the pond drained away to ground level. We built a work platform around the well and removed mineral build up, rust and scale from the bolts. Dan cut the bolts and drove them out with the torch. We removed and replaced the 10in valve with new stainless steel valve and bolts (Figure 11). The new gate valve is capped with a blind flange with 3in welded nipple and cap. 9 • • MI-1 MI-1 delivering new valve new valve /a e - _ • `• �[ ., :.., fitix ^,L ti ' Figure 11. Work commences on MI-1. Note artesian flow prior to pumping. Prior to repairs,the well was also leaking from several holes corroded through the casing below the gate valve flange. These leaks continued after installing, capping and shutting the new gate valve. The casing is paper thin midway between the flange and the cement. Dan welded a sleeve around the casing from about 2in above the cement level up to the flange,totaling about 14in. In order to weld on the sleeve, he completely removed the side valve, nipple and weldolet from the 10in casing.The sleeve stopped the leaks temporarily but the casing below the sleeve is thin and remains a significant weakness (Figure 12). Dan recommends installing a 6in inner casing and cementing the annulus from the bottom to the top via tremie in order to prevent further leaking once the casing corrodes further. M{- k. MI-3 corroded case ... repair work on casing ", installation of new sleeves fr ,. tom► � .� ...:\ .4 f.,,„_ ._ 4 4 „ , , .......,. ,, . • _. . ,,,, ,.. . ,,,,,...... *5. .., _ ,, -,..... ,, I ti , .mpletely removed Figure 12.Casing conditions ui ivii i. 10 • • PS-1 (Completed September 18th) PS-1 is the hottest of the repaired wells. This well was buried past the valve handle and covered with several inches of mineral buildup. Before repairs, it leaked out of a corroded two inch elbow from the top of the wellhead, as well as the remains of a tin valve and a 1in hole in the top of the well cap (Figure 13). These holes were plugged with sticks driven into the openings after some of the mineral build up was removed. We then excavated around the well to just below the lower valve flange covering an 8ft by loft area, dug a sump hole for the water pump and laid down blocking and timbers for a work platform. We removed the mineral build up and de-scaled what remained of the bolts (Figure 14). PS-1 a before repair work st$- m x • Figure 13.PS-1 after excavation but before repair work. 11 410 • PS-1 Richard and Max remove scale & mineral buildup from old valve xK} --,„,...c. w ,.;,..,...- , .... . ,. \ . . , - , ,. ,it, , .:, ,,, i ..,,,,,,,., ? ,... ,,,,,,,:,,, , , ,.... ' - ,..-.,-,i'--,,,T, ,, ,.....,.., .. "rt.:, 'tit. ,c# - ' , ..,At - plugged leaks Figure 14.Removing scale and buildup prior to replacing gate valve. When the gate valve was removed, it was evident that the lower flange was almost completed corroded away with no bolt heads remaining and the bolt threads visible from the side of the flange. We used the torch to remove the bolts, removed the old gate valve, cleaned up the flange as much as possible, and installed the new 6in stainless valve topped with a stainless blind flange, 3in nipple and cap(Figure 15). PS-1 h new valve t ;0 l' # s. * 1 , --s LL {t d_ • sd'"• 'r F W . v paroundthewell .� ,, collapsed suction hos- ,,�.� f- xn , lli g 've installed on PS-1. Note collapsed suction hose due to high temperatures. This well has a 4in inner casing inside the 6in outer casing, and does not have any lower casing 2in valves. There is not much left of the well flange,just barely enough to bolt on the new valve. The well is sealed and does not 12 leak at this time. We backfilled around the well but not to the previous level so it is possible to access valve handle. We left the remaining dirt piled to the side of the excavated area. Dan recommends installing a short (18in) spool section underneath the new gate valve to raise the valve above ground level and permit the well to be backfilled to ground level. This would also eliminate the standing water around the well, which is now below grade. He also recommends cementing the 4in-6in annulus and welding on a new casing flange in order to prevent future leaks. PS-2 This well is buried but inaccessible with rubber tired backhoe. We did not attempt to dig up this well. The wellhead valve is not corroded or leaking. We will attempt to make it accessible for instrumentation in 2011. \t d II 41:4 4 r '✓i r P � 1 •l'. � J1w e ` . . .� `.t „ A 4 Xitistia Figure 16.PS-2 buries.uut ,, ti k diving. We will need to excavate and replace valve before this well can be accessed with instruments. PS-5 This well is also not corroded or leaking so we did not replace the valve at this time. We will attempt to make it accessible for instrumentation in 2011. 13 • • • * '4.: i �i A titnit R4 R. Figure 17.PS-5 still appears to be in good shape;but not accessible by instrumentation. Winterization Plan for Wellheads (Dick Benoit and Gwen Holdmann) The trick to keeping a wellhead from freezing and then breaking during sub freezing weather is to inject a liquid that is both less dense than water and has a very low freezing point into the wellhead. This fluid needs to be environmentally benign so that when (not if) it is spilled or leaks out of the wellhead it does no environmental damage. Typically a food grade vegetable oil has been used in the lower 48. A small pump is used to pump the oil into the highest opening in the wellhead but if the pressures are very low even a hand operated pump may be enough to do the job. We expect this to be the case for the Pilgrim wells. This pump obviously needs to be able to overcome the internal wellhead pressure and can pump at low rates. You will need to know how much oil has been pumped into the wellhead. Enough oil needs to be pumped into the wellhead to push or displace the water down the well to a point below the freezing level,which is probably not more than a few feet. Therefore, it is necessary to calculate the volume of the wellhead above ground and a few feet of wellbore below ground. We expect this might amount of a few tens of gallons per well. It is important to check the wellhead for leaks, no matter how slow, before injecting the vegetable oil. If the oil leaks out of the wellhead then the water will flow back up in the wellhead and freeze. We recommend doing this on the 4 wells with new gate valves prior to hard freeze-up. 14 • • Colombie, Jody J (DOA) From: Bettis, Patricia K(DOA) Sent: Tuesday, March 03, 2015 2:30 PM To: Colombie,Jody J (DOA) Subject: FW:ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Attachments: AppD_wellhead repairs.pdf For OTH-14-019 From: Alan P. Baldivieso [mailto:ABaldivieso@aidea.orq] Sent: Tuesday, March 03, 2015 1:00 PM To: Bettis, Patricia K(DOA); Schwartz, Guy L(DOA) Subject: RE: ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Thank you, Patricia. I spoke with Chris and he sent the attached report detailing the repairs that the University had done to some of the wellheads. Based on the conversation I had with Guy this morning,the application for sundry approvals will need to include specifics from the contractor that is ultimately selected to perform the work. I have identified several contractors that are familiar with the Pilgrim Hot Springs wells, but will need to accept bids through our procurement process prior to awarding the contract. I anticipate that the earliest the work can begin will be in July, although the road to the site may be clear of snow earlier than usual this year. I will specify that the work be completed by Sept 30,2015. Is this approach to plugging and abandoning the 6 wells acceptable? Thank you, Alan Baldivieso Program Manager Geothermal, Hydrokinetic, Emerging Energy Technologies Alaska Energy Authority (907) 771-3027 From: Bettis, Patricia K(DOA) [mailto:patricia.bettis@alaska.gov] Sent:Tuesday, March 03, 2015 11:51 AM To:Schwartz, Guy L(DOA) Cc:Alan P. Baldivieso Subject:ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Guy and Alan, This report may be of use to you. UAF may have worked on some of the wells. Christopher Pike may be able to provide you with that information. His telephone number is(907) 272-1522; cell is(907) 888-3850. Regards, Patricia 1 • • Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage,AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message,including any attachments,contains information from the Alaska Oil and Gas Conservation Commission(AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 2 • Colombie, Jody J (DOA) From: Bettis, Patricia K (DOA) Sent: Tuesday, March 03, 2015 2:29 PM To: Colombie,Jody J (DOA) Subject: FW:ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Attachments: 20100629 ACEP Reconnaissance Report Pilgrim Spring Geothermal Wells.pdf Jody, For OTH-14-19 From: Bettis, Patricia K(DOA) Sent: Tuesday, March 03, 2015 11:52 AM To: Schwartz, Guy L (DOA) Cc: Baldivieso, Alan P (AIDEA) (abaldivieso@aidea.orq) Subject: FW: ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 This time with the report attached. From: Bettis, Patricia K (DOA) Sent: Tuesday, March 03, 2015 11:51 AM To: Schwartz, Guy L(DOA) Cc: Baldivieso, Alan P (AIDEA) (abaldivieso@aidea.org) Subject: ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Guy and Alan, This report may be of use to you. UAF may have worked on some of the wells. Christopher Pike may be able to provide you with that information. His telephone number is(907)272-1522;cell is(907) 888-3850. Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage,AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message,including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 1 ' • • Colombie, Jody J (DOA) From: Bettis, Patricia K(DOA) Sent: Tuesday, March 03, 2015 2:29 PM To: Colombie,Jody J (DOA) Subject: FW:ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Attachments: 20100629 ACEP Reconnaissance Report Pilgrim Spring Geothermal Wells.pdf Jody, For OTH-14-19 From: Bettis, Patricia K(DOA) Sent: Tuesday, March 03, 2015 11:52 AM To: Schwartz, Guy L(DOA) Cc: Baldivieso, Alan P (AIDEA) (abaldiviesoaidea.orq) Subject: FW: ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 This time with the report attached. From: Bettis, Patricia K(DOA) Sent: Tuesday, March 03, 2015 11:51 AM To: Schwartz, Guy L(DOA) Cc: Baldivieso, Alan P (AIDEA) (abaldivieso(aaidea.orq) Subject: ACEP Reconnaissance Trip Report Pilgrim Springs Geothermal Wells Dated 2010 Guy and Alan, This report may be of use to you. UAF may have worked on some of the wells. Christopher Pike may be able to provide you with that information. His telephone number is (907) 272-1522; cell is(907)888-3850. Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage,AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission(AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 1 -t- • • • a ACEP S A rr Ata}k:i Cfrit+.l io,Fcµ'-gv era!Pav4 6-29-10 Preliminary Reconnaissance Trip Report Pilgrim Hot Springs Geothermal Exploration Prepared by:Peter Illig,Alaska Center for Energy and Power,University of Alaska Fairbanks Goals Our preliminary trip to Pilgrim H.S.was intended to locate,map,and determine the status of all 6 wells located at Pilgrim Hot Springs,including those on adjoining MINC land,and to get a general feel for stable ground in the area and potential challenges associated with ground-based surveys planned for later this summer. Notes on Geographic Coordinates When acquiring GPS points for this project,we determined it would be best to use Universal Transverse Mercator(UTM)as normal distances between lat long lines are distorted due to the high latitude arctic location of the site.UTM provides an easy to use square grid system. For this report I used NAD 1927 Alaska(5003),and the units are in meters. Please make sure that when using coordinates in the area to use this coordinate system. Site Overview Pilgrim Hot Springs is road accessible,although the last mile or so is in bad shape.There is a fair amount of stable ground in the surrounding area,and it seems possible to access all 6 existing wells with equipment needed to replace the wellheads without the aid of helicopter during appropriate times of the year.There are numerous historic buildings, including the church,dominating the north section of the area.To the south is the MI-1(see figure 7),with the Mary's Igloo well being furthest west. Well Descriptions We were able to locate all 6 wells during the trip,and have provided current descriptions of their condition below,with images from the wellheads included in Figures 1-6. Figure 7 shows the relative locations of all the wells. My colleague, Dan Brotherton,is preparing a plan to refit wellheads for all but one or two of these wells so they can be accessed to collect additional data.We have located the original well completion diagrams and other critical information related to the original drilling program in the report'Results of Drilling,Testing,and Resource Confirmation—Geothermal Energy Development at Pilgrim Hot Springs,Alaska'prepared by Woodward-Clyde Consultants in 1983.This report will be very helpful in developing a plan to rework the individual wells as needed. PS-1 (0503536mW 7218438mN) This well is located furthest north (closest to the church and nearest the main trail).It may very well be the hottest of the wells and appears to have significant artesian flow as evidenced through the leakages. The wellhead has a thick layer of silicious deposits on the exterior which has capped some of the leaks. This well will need to be refitted for further use. P5-2 (0503477mW 7218374mN) Located SW from PS-1 is PS-2.This well seems to be in fairly good shape,and is marked by a large white PVC tube.It is located close to the ground,and does not seem to be leaking. It does not appear • -- • • • necessary to replace this wellhead,although access with appropriate instrumentation may necessitate retrofitting a 2in valve to the wellhead. PS-3 (0503411mW 7218346mN) West of PS-2 is PS-3.It stands out clearly when surveying the area due to its higher wellhead compared to the others.It is also leaking,and will require refitting in order to access the hole.The silicious seal has sealed past cracks in the metal, however there is a constant artesian flow from at least unsealed leak. PS-4 (0503475mW 7218298mN) This is the well which feeds the main hot tub on the property.It leaks considerably,and has a few tubes connected to the wellhead which are presumably used to feed the tub.As with all the wells described thus far,it will require extensive work to be fully operational. PS-5 (0503478mW 7218122mN) PS-5 is the located furthest to the south.Additionally,it is in the best shape of all of the wells.The valves seem to be operational,and there is little rust on the wellhead. Hot water comes out of the valve that we tested which is attached to a garden hose.Getting to the well should not present an issue,however it should be noted there is a lake that was covered with a floating mat of grass that both Dan and I fell into. MI-1 (0503262mW 7218327mN) MI-1 is located furthest west on the field.It was drilled for a hot water source on behalf of Mary's Igloo Native Corporation(MINC).It has extensive damage to the upper part of the well,where a large crack can be seen in the wellhead.The flow is constant from the crack,with much of it being sealed with silica. This wellhead should also be replaced if it is to be accessed in the future for research or development purposes. Conclusions Dan Brotherton will be writing a report suggesting further steps to be taken on the existing wells to make them operational.This report will be shared with the well owners, Unaatuq, LLC and MINC.The next step will be to map culturally sensitive areas(grave sites, historical buildings,etc.)and property boundaries.This task is scheduled for late July or early August. Prior to this trip we will set up a phone conference with all the parties involved to address questions and concerns regarding that trip,to go over schedules,and to develop a backup plan. Figure 7,which is located on the next page,includes all of the well locations and some of the buildings on the property.Once more information on historic sites,and other important cultural features are identified,they will be added to this map.Any future drilling objectives will take all of this information into account so that any effects are minimized. For additional information or questions about this report please contact: Peter Illig,ACEP illie.ak@gmail.com 907-602-1332(cell) • • z �= .' ''',i. '"-.:41. P' - ' * -a - ::4:::. 1. ,44.".„. ..... *, • C'r r 119 ti:rOs, re 1 A of • t. . . a'- Figure 1.PS-1 ,, • • .r'" {r ra ( .‘„ ' .Y , - - \i •-!,„ , . s.' ,, ..i.r, . 4.,V.,ii, i _ 1 4`iA .4-'0 ‘*'I:,,j. --- i ' ,,, / , b j, Ir' .• tt .0.400 !' , .4 lA rmay, i ., ,.� l' 1 T t ter, f r r �/J, Pr ' ,, _ ,' ,- ts-' / -, \41$4,,,,, 4 ..,/ , , e v iitw. pot. ii ly 4 ..- ,r,-.)c. 1‘,, g 1rt : 4 --*/4'. .......",11( ?is , ""' Figure 2.P5-2 r • • Colombie, Jody J (DOA) From: Bettis, Patricia K(DOA) Sent: Tuesday, February 24, 2015 10:35 AM To: Colombie,Jody J (DOA) Subject: FW: Pilgrim Springs Geothermal Wells Jody, For your records OTH-14-019. Patricia From: Alan P. Baldivieso [mailto:ABaldivieso@aidea.orq] Sent: Tuesday, February 24, 2015 10:24 AM To: Bettis, Patricia K(DOA) Cc: Schwartz, Guy L (DOA) Subject: RE: Pilgrim Springs Geothermal Wells Thanks, Patricia. Alan Baldivieso Program Manager Geothermal, Hydrokinetic, Emerging Energy Technologies Alaska Energy Authority (907)771-3027 From: Bettis, Patricia K(DOA) [mailto:patricia.bettis@alaska.gov] Sent:Tuesday, February 24, 2015 10:23 AM To:Alan P. Baldivieso Cc:Schwartz, Guy L(DOA) Subject: Pilgrim Springs Geothermal Wells Alan, I was missing the capital A. From: Bettis, Patricia K (DOA) Sent: Tuesday, February 24, 2015 10:16 AM To: 'abaldivieso@aidea.gov' Cc: Schwartz, Guy L (DOA) Subject: FW: Pilgrim Springs Geothermal Wells Alan, The attached wellbore schematics are what the AOGCC has on files for the listed wells. I am including Guy Schwartz on this e-mail as an introduction. Guy's telephone number is 793-1226. 1 • • Guy,Alan's telephone number is 771-3027. From the AEA Home Page,Alan is the Geothermal Program Manager. Alan may need help to fill out the sundry applications to plug and abandon the old Pilgrim Springs MI-1, PS-3, PS-4, PS-5, PS-1 and PS-2 wells. Patricia From: Parady, Fred E (CED) Sent: Wednesday, December 03, 2014 9:36 AM To: Fishergoad, Sara L(AIDEA) Cc: Bettis, Patricia K(DOA); Bittner, Jon S (CED) Subject: FW: Pilgrim Springs Geothermal Wells Sara: Attached is a copy of a letter we received regarding DCCED well closure obligations from the Pilgrim Springs Geothermal project from 1979-1982. The operator is listed as DCCED Division of Energy and Power. Did that migrate into AEA, and can you help me run this to ground? We need to come up with an abandonment plan or plan of suspension. We also likely need to apply for an extension. We are working against a 12/15/14 deadline. Thanks for your help. Fred From: Bettis, Patricia K(DOA) Sent: Wednesday, December 03, 2014 9:21 AM To: Parady, Fred E (CED) Cc: Schwartz, Guy L (DOA) Subject: Pilgrim Springs Geothermal Wells Good morning Acting Commissioner Parady, I checked the USPS certified return receipt(green card) and the Alaska Department of Commerce, Community, and Economic Development received the Pilgrim Springs Geothermal Wells letter dated September 12,2014 on September 15, 2014. I attached the wellbore schematics for those wells operated by the Division of Energy& Power for which the AOGCC has a record. This includes Mary's Igloo-1, PS-3, PS-4 and PS-5. Please note that these are old wellbore schematics contained in a 1983 Woodward-Clyde Consultants report entitled "Geothermal Energy Development at Pilgrim Springs, Alaska, Phase II: Results of Drilling,Testing and Resource Confirmation" and may not reflect the current conditions of the wells. If you have any further questions, please do not hesitate to call or e-mail me. Regards, Patricia 2 • • Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission(AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 3 s • • Colombie, Jody J (DOA) From: Matt Ganley <mganley@beringstraits.com> Sent: Friday, February 20, 2015 1:22 PM To: Bettis, Patricia K(DOA) Cc: Colombie,Jody J (DOA) Subject: RE: Pilgrim Springs Geothermal Wells (Docket No: OTH-14-019) Patricia: An Unaatuq Board meeting is scheduled for March 7th and we can have the minutes recertified and signed then. They were approved at the last meeting on October, but were not signed at that time. I will get you a copy of the minutes immediately as well as our documentation and request concerning maintaining the current well status. Thanks. Matt Ganley From: Bettis, Patricia K(DOA) [mailto:patricia.bettis@alaska.gov] Sent:Thursday, February 19, 2015 2:35 PM To:Matt Ganley Cc: Colombie,Jody J (DOA) Subject: FW: Pilgrim Springs Geothermal Wells(Docket No: OTH-14-019) Good afternoon Matt, What is the status of submitting to the AOGCC a signed copy of the September 12, 2014 Unaatuq, LLC Management Board Meeting, signed by a Management Board Member? Please see my January 29th email. Thank you, Patricia From: Bettis, Patricia K(DOA) Sent: Thursday, January 29, 2015 2:10 PM To: matt@beringstraits.com Cc: Colombie, Jody J (DOA) Subject: Pilgrim Springs Geothermal Wells (Docket No: OTH-14-019) Matt, This email is to summarize our phone conversation on January 28, 2015, regarding the Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1 geothermal wells. If AOGCC approves Unaatuq, LLC's request to be designated operator, Unaatuq, LLC will bear full responsibility for assuring those wells are in compliance with all of AOGCC's statutes, regulations and orders. Unaatuq, LLC is responsible for knowledge of those statutes, regulations and orders. 1 se • • Regarding the status of Unaatuq, LLC's request to approve the change in operator, the submitted documentation is incomplete. Specifically Unaatuq, LLC needs to submit a signed copy of the September 12, 2014 Unaatuq, LLC Management Board Meeting, signed by a Management Board Member. Unaatuq, LLC also understands that the wells shall not be left in the current status quo. If Unaatuq, LLC does not demonstrate to AOGCC that the wells should be suspended, and not completed and put into production or abandoned,then the AOGCC will likely order the wells be property plugged and abandoned. See, 20 AAC 25.105 and 20 AAC 25.112. Responsibility for plugging and abandoning the wells, as well as all costs associated with the abandonment procedure, rests with Unaatuq, LLC. Applications for Sundry Approvals to suspend the wells must be submitted to the AOGCC within 15 business days of the date that AOGCC approves the change in operator. A separate application is required for each individual well. A Sundry application form (Form 10-403) for the submittal of a plan of abandonment or a plan of suspension for a well to the AOGCC can be found at: http://doa.alaska.gov/ogc/forms/forms.html. Note, a current well schematic diagram must be submitted with each Application for Sundry Approval and a proposed well schematic diagram shall also be submitted with the sundry application to show proposed downhole well design changes for plug and abandonment plans. All information required by 20 AAC 25.110 must be included or the application will be denied and the AOGCC will at that time will look to Unaatuq, LLC to plug and abandoned the wells to the satisfaction of the AOGCC. If you have questions, please do not hesitate to call me. Best Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail,please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 2 • • Bettis, Patricia K (DOA) From: Bettis, Patricia K (DOA) Sent: Thursday,January 29, 2015 2:10 PM To: matt@beringstraits.com Cc: Colombie,Jody J (DOA) Subject: Pilgrim Springs Geothermal Wells (Docket No: OTH-14-019) Matt, This email is to summarize our phone conversation on January 28, 2015, regarding the Pilgrim Springs PS 12-1, PS 12-2, PS 12-3 and PS 13-1 geothermal wells. If AOGCC approves Unaatuq, LLC's request to be designated operator, Unaatuq, LLC will bear full responsibility for assuring those wells are in compliance with all of AOGCC's statutes, regulations and orders. Unaatuq, LLC is responsible for knowledge of those statutes, regulations and orders. Regarding the status of Unaatuq, LLC's request to approve the change in operator, the submitted documentation is incomplete. Specifically Unaatuq, LLC needs to submit a signed copy of the September 12, 2014 Unaatuq, LLC Management Board Meeting, signed by a Management Board Member. Unaatuq, LLC also understands that the wells shall not be left in the current status quo. If Unaatuq, LLC does not demonstrate to AOGCC that the wells should be suspended, and not completed and put into production or abandoned, then the AOGCC will likely order the wells be property plugged and abandoned. See, 20 AAC 25.105 and 20 AAC 25.112. Responsibility for plugging and abandoning the wells, as well as all costs associated with the abandonment procedure, rests with Unaatuq, LLC. Applications for Sundry Approvals to suspend the wells must be submitted to the AOGCC within 15 business days of the date that AOGCC approves the change in operator. A separate application is required for each individual well. A Sundry application form (Form 10-403) for the submittal of a plan of abandonment or a plan of suspension for a well to the AOGCC can be found at: http://doa.alaska.gov/ogc/forms/forms.html. Note, a current well schematic diagram must be submitted with each Application for Sundry Approval and a proposed well schematic diagram shall also be submitted with the sundry application to show proposed downhole well design changes for plug and abandonment plans. All information required by 20 AAC 25.110 must be included or the application will be denied and the AOGCC will at that time will look to Unaatuq, LLC to plug and abandoned the wells to the satisfaction of the AOGCC. If you have questions, please do not hesitate to call me. Best Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 1 ti - . S CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission(AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it, and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 2 • • • Bettis, Patricia K (DOA) From: Bettis, Patricia K (DOA) Sent: Monday, December 29, 2014 11:19 AM To: Gwen Holdmann (gholdman@alaska.edu); 'matt@beringstraits.com' Cc: Colombie, Jody J (DOA) Subject: Pilgrim Springs: Designation of Operator Form 10-411 (Rev. 7/2009) and Bonding Requirements Attachments: 20141021 Pilgrim Hot Springs well bonding.pdf Re: Designation of Operator Form 10-411 (Rev. 7/2009) and Bonding Requirements: Pilgrim Springs Geothermal Wells PS 12-1, PS 12-2. PS 12-3, and PS 13-1 Dear Mr. Ganley and Ms. Holdmann: The Designation of Operator Form 10-411 (Rev. 7/2009) submitted to the Alaska Oil and Gas Conservation Commission (AOGCC) on December 12, 2014 via e-mail is incomplete and therefore not accepted. As required by 20 AAC 25.025, Unaatuq, LLC must first establish a new bond with the AOGCC. The AOGCC must receive and approve this bond before any other forms will be processed. The AOGCC will not accept the transfer of the existing bond from the University of Alaska, Fairbanks Alaska Center for Energy & Power's (UAF) to Unaatuq. For the Designation of Operator form, please submit a completed form with original signatures to the AOGCC. Box 4, Effective Date of Designation, must be filled in reflecting the date the designated operator changes. This effective date must not be earlier than the date that Unaatuq, LLC's bond becomes effective. Per the instructions in Box 5 and Box 6, a Power of Attorney or other evidence of authority must be attached for each person signing the form. The applicable UAF lease will be expiring soon relative to the aforementioned geothermal wells. Under 20 AAC 25.105, all permitted wells on a property must be properly abandoned before expiration of the operator's rights. In consideration of the holidays, the AOGCC will grant UAF and Unaatuq, LLC until January 31, 2015 to establish a new bond and to submit all required information to effect the change of operator. After that date, the AOGCC will be looking to UAF to submit an acceptable plan for the plugging and abandonment of the wells. Absent the parties providing AOGCC with the information and bond required to effect a change of operator, forfeiture of the UAF's bond will occur as of February 1, 2015. Please call Ms. Jody Colombie at (907) 793-1221 if you have questions concerning posting of a bond or information required to complete The Designation of Operator Form 10-411 (Rev. 7/2009). Best Regards, Patricia i PS I attached AOGCCinstructions concerning well bonding sent to UAF on October 21, 2014 for reference. Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage,AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you,contact Patricia Bettis at(907)793-1238 or patricia.bettisPalaska.gov. 2 ` • • From: Colombie,Jody 3(DOA) To: Bettis,Patricia K(DOA) Subject: FW: Pilgrim Hot Springs well bonding Date: Monday,December 29,2014 11:11:14 AM From: Colombie, Jody J (DOA) Sent: Tuesday, October 21, 2014 2:10 PM To: Christopher Pike Subject: RE: Pilgrim Hot Springs well bonding Christopher,please see below. Bond Instructions Each operating company ("operator: see 20 AAC 25,990(46)) establishes a single-well bond or a statewide bond with Alaska Oil and Gas Conservation Commission (AOGCC) under Regulation 20 AAC 25.025 to drill, produce, and maintain oil and gas wells. An operator's bond remains active from the time the operator applies for a Permit to Drill for its first well until all wells operated by that particular company are plugged and abandoned according to state regulations and all well sites are restored in conformance with Regulations 20 AAC 25.170 or 20 AAC 25.172. The AOGCC does not establish bonds solely for the purpose of dismantling, removing and restoring wells. The AOGCC's website contains a general discussion of bonding requirements and the permit to drill process at the following hyperlink: http://www.doa.alaska.gov/ogc/functions/OvrSurvindex.html. This link will take you to a web page that is titled "Oversight and Surveillance." This is a long page, but it explains both processes and the imbedded hyperlinks will take you to all of the regulations and forms. Each of the headings on the page are hyperlinks. Clicking on them brings the text and descriptions into view. This web page is provided for your convenience; please be sure to review the Alaska State Statutes and the Alaska Administrative Code, which are the ultimate authorities. Operators can choose to submit either a surety bond (Form 10-402A) or a personal bond (Form 10- 402B), depending on the financial instrument used. AOGCC's bond forms are available online through our website using the "Forms& Functions" hyperlink. Form 10-402A is required to establish a Surety Bond. A Personal Bond is established using Form 10-402B. If a surety bond is used,the insurer must be authorized in Alaska. You can check this online at: http://www,dced.state,ak.us/ins/apps/companysearch/InsCompanyStart.cfm. Type in the insurance company name, click on the "Submit" button, then click on the hyperlink in the "Company Name" column, click on the "Line of Business" hyperlink, and scan down the "Line Name" . �� o list to find "Surety" and then across to find the effective date for that company's license in the State of Alaska. If"Surety" is not in the list, then the company is not authorized to provide that service in Alaska. If an operator chooses to use a Certificate of Deposit (CD) as the financial backing for the bond, then the operator must submit: 1. Personal Bond form (Form 10-402B), 2. CD documentation or receipt, and 3. Assignment of Cform (available on AOGCC's "Forms" page beneath the Personal Bond (10- 402B)form). The CD must clearly state that the certificate of deposit is issued in the sole favor of the Alaska Oil and Gas Conservation Commission, and it must be obtained from a bank authorized to do business in the State of Alaska. If you chose to use an out-of-state bank or credit union, you can check whether or not that institution is authorized by going online to: http://conmrnwrce.a|aska.Qov/6nn/dbs/Bankins/yWo6e|FonwigngmnkLoenAct.aspu. Please note that Powers of Attorney are required for every representative signing these forms. These Powers of Attorney must demonstrate that each person signing has the legal authority to bind the corporation to lease agreements. The bond cannot be processed until the AOGCC has Powers of Attorney for every representative signing these forms. Jody J. Colombie Special Staff Assistant Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, Alaska 99501 Jodn.Co/urnbie@a/osko.0nn Office: (907) 793-I221 Fax: (907)276-7542 CONFIDENTIALITY NOTICE:This e-mail message,including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it and,so that the AOGCC is aware of the mistake in sending itfo you, contact Jody Colombie at 907.793.1221 or jody.colombie@alaska.gov From: Christopher Pike [mai|to:q)ike6(aa|aska.edu] Sent: Tuesday, October 21, 2014 11:40 AM To: Colombie, Jody 3 (DOA) Subject: Pilgrim Hot Springs well bonding • J 1 • • Hello Jody- I work for the Alaska Center for Energy and Power at UAF and I'm working on the Pilgrim Hots Springs project. We are currently completing the geothermal exploration program that we've been leading at the site. Blanket surety bond # 105781660 was issued in July 2012 for the wells drilled as part of this project. I've been in contact with Guy Schwartz and Patricia Bettis and they indicated that I should bring bonding questions to you. The landowners are interested in maintaining the three temperature gradient wells that were drilled in 2012 for aquifer monitoring as well as a larger production well that was drilled in 2013. All parties realize that the bonding obligations must be met, however UAF cannot maintain their bond after our role in the project ends. Can you explain the necessary steps that must be taken by both UAF and Unaatuq (the landowner). My understanding is that the landowners must take out a bond and have it approved by the AOGCC and at that time, the AOGCC will release UAF from its bonding obligations. Is this understanding correct? What forms must be filled out . Any guidance you could give is appreciated. Thanks, Chris Chris Pike Research Professional Alaska Center for Energy and Power tel: 907-272-1522 c: (907) 888-3850 www.uaf.edulacep • • Bettis, Patricia K (DOA) From: Sara Fisher-Goad <SFisherGoad@aidea.org> Sent: Wednesday, December 03, 2014 2:12 PM To: Bettis, Patricia K (DOA) Cc: Parady, Fred E (CED); Bittner,Jon S (CED) Subject: RE: Pilgrim Springs Thank you. Although we have no one on staff who was here during that time, it does appear with some of the documents we uncovered that it was a division in Department of Commerce and not a part of AEA or old APA. Fred— regardless of that issue, we can still help get this issue addressed. Sara From: Bettis, Patricia K(DOA) [mailto:patricia.bettis@alaska.gov] Sent:Wednesday, December 03, 2014 2:01 PM To: Sara Fisher-Goad Cc: Parady, Fred E (CED);Jon Bittner Subject: Pilgrim Springs Sara, The AOGCC records show the Division of Energy& Power as the operator of record for Pilgrim Springs-1, Pilgrim Springs- 2, Pilgrim Springs-3, Pilgrim Springs-4, Pilgrim Springs-5 and Mary's Igloo-1 geothermal wells. Hence, AOGCC's September 12, 2014 Pilgrim Springs Geothermal Wells letter was sent to the Alaska Department of Commerce, Community, and Economic Development. Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907)793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it, and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 1 • Bettis, Patricia K (DOA) From: Bettis, Patricia K(DOA) Sent: Wednesday, December 03, 2014 2:01 PM To: Fishergoad, Sara L(AIDEA) Cc: Parady, Fred E (CED); Bittner,Jon S (CED) Subject: Pilgrim Springs Sara, The AOGCC records show the Division of Energy& Power as the operator of record for Pilgrim Springs-1, Pilgrim Springs- 2, Pilgrim Springs-3, Pilgrim Springs-4, Pilgrim Springs-5 and Mary's Igloo-1 geothermal wells. Hence,AOGCC's September 12, 2014 Pilgrim Springs Geothermal Wells letter was sent to the Alaska Department of Commerce, Community, and Economic Development. Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 1 �, • • Bettis, Patricia K (DOA) From: Sara Fisher-Goad <SFisherGoad@aidea.org> Sent: Wednesday, December 03, 2014 11:41 AM To: Parady, Fred E (CED) Cc: Bettis, Patricia K (DOA); Bittner,Jon S (CED) Subject: RE: Pilgrim Springs Geothermal Wells I have our geothermal project manager looking into this and we have a call into Gwen at UAF. The years associated with the drilling from "Division of Energy and Power" is probably old AEA nea APA(Alaska Power Authority). This is an interesting puzzle and I was not aware of this deadline or requirement prior to your email earlier today. It will take us at least a day to close the loop with UAF and come up with a plan,we are researching our library on old documentation. I agree with you, we need to apply for an extension. Patricia—do you know why this was not sent to AEA directly? Do the original documents from 1979 and 1982 mention Alaska Power Authority(I think the name change to AEA happened in 1990)? Sara PS—congratulations on the Acting Commissioner assignment. Sara Fisher-Goad Executive Director Alaska Energy Authority 907-771-3012 (Office) 907-301-0103 (Cell) From: Parady, Fred E (CED) [mailto:fred.parady@alaska.gov] Sent:Wednesday, December 03, 2014 9:36 AM To: Sara Fisher-Goad Cc: Bettis, Patricia K (DOA);Jon Bittner Subject: FW: Pilgrim Springs Geothermal Wells Sara: Attached is a copy of a letter we received regarding DCCED well closure obligations from the Pilgrim Springs Geothermal project from 1979-1982. The operator is listed as DCCED Division of Energy and Power. Did that migrate into AEA, and can you help me run this to ground? We need to come up with an abandonment plan or plan of suspension. We also likely need to apply for an extension. We are working against a 12/15/14 deadline. Thanks for your help. Fred 1 l � • • From: Bettis, Patricia K (DOA) Sent: Wednesday, December 03, 2014 9:21 AM To: Parady, Fred E (CED) Cc: Schwartz, Guy L (DOA) Subject: Pilgrim Springs Geothermal Wells Good morning Acting Commissioner Parady, I checked the USPS certified return receipt (green card) and the Alaska Department of Commerce, Community, and Economic Development received the Pilgrim Springs Geothermal Wells letter dated September 12, 2014 on September 15, 2014. I attached the wellbore schematics for those wells operated by the Division of Energy& Power for which the AOGCC has a record. This includes Mary's Igloo-1, PS-3, PS-4 and PS-5. Please note that these are old wellbore schematics contained in a 1983 Woodward-Clyde Consultants report entitled "Geothermal Energy Development at Pilgrim Springs, Alaska, Phase II: Results of Drilling, Testing and Resource Confirmation" and may not reflect the current conditions of the wells. If you have any further questions, please do not hesitate to call or e-mail me. Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it, and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 2 • Bettis, Patricia K (DOA) From: Parady, Fred E (CED) Sent: Wednesday, December 03, 2014 9:36 AM To: Fishergoad, Sara L (AIDEA) Cc: Bettis, Patricia K(DOA); Bittner,Jon S (CED) Subject: FW: Pilgrim Springs Geothermal Wells Attachments: MI-1.pdf; PS-3 Wellbore schematic.pdf; PS-4 Wellbore schematic.pdf; PS-5 Wellbore schematic.pdf; Pilgrim Springs Geothermal Wells.pdf Sara: Attached is a copy of a letter we received regarding DCCED well closure obligations from the Pilgrim Springs Geothermal project from 1979-1982. The operator is listed as DCCED Division of Energy and Power. Did that migrate into AEA, and can you help me run this to ground? We need to come up with an abandonment plan or plan of suspension. We also likely need to apply for an extension. We are working against a 12/15/14 deadline. Thanks for your help. Fred From: Bettis, Patricia K(DOA) Sent: Wednesday, December 03, 2014 9:21 AM To: Parady, Fred E (CED) Cc: Schwartz, Guy L (DOA) Subject: Pilgrim Springs Geothermal Wells Good morning Acting Commissioner Parady, I checked the USPS certified return receipt (green card) and the Alaska Department of Commerce,Community, and Economic Development received the Pilgrim Springs Geothermal Wells letter dated September 12, 2014 on September 15, 2014. I attached the wellbore schematics for those wells operated by the Division of Energy& Power for which the AOGCC has a record. This includes Mary's Igloo-1, PS-3, PS-4 and PS-5. Please note that these are old wellbore schematics contained in a 1983 Woodward-Clyde Consultants report entitled "Geothermal Energy Development at Pilgrim Springs, Alaska, Phase II: Results of Drilling,Testing and Resource Confirmation" and may not reflect the current conditions of the wells. If you have any further questions, please do not hesitate to call or e-mail me. Regards, Patricia 1 • . Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it, and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 2 • • Bettis, Patricia K (DOA) From: Bettis, Patricia K(DOA) Sent: Wednesday, December 03, 2014 9:21 AM To: Parady, Fred E (CED) Cc: Schwartz, Guy L (DOA) Subject: Pilgrim Springs Geothermal Wells Attachments: MI-1.pdf; PS-3 Wellbore schematic.pdf; PS-4 Wellbore schematic.pdf; PS-5 Wellbore schematic.pdf Good morning Acting Commissioner Parady, I checked the USPS certified return receipt(green card) and the Alaska Department of Commerce, Community, and Economic Development received the Pilgrim Springs Geothermal Wells letter dated September 12, 2014 on September 15, 2014. I attached the wellbore schematics for those wells operated by the Division of Energy& Power for which the AOGCC has a record. This includes Mary's Igloo-1, PS-3, PS-4 and PS-5. Please note that these are old wellbore schematics contained in a 1983 Woodward-Clyde Consultants report entitled "Geothermal Energy Development at Pilgrim Springs, Alaska, Phase II: Results of Drilling,Testing and Resource Confirmation" and may not reflect the current conditions of the wells. If you have any further questions, please do not hesitate to call or e-mail me. Regards, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it, and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 1 • • Ashok K.Roy.Ph.D..CIA.CBA Butrovich Building Vice President for Finance&Administration/CFO910 Yukon Drive.Suite 208 &Associate Professor of Business Administration P.O.Box 755120 ` Phone:(907)450-8028 l- Fairbanks,AK 99775-5120 Fax: (907)450-8023 akro).g alaska.edu UNIVERSITY of ALASKA Ma,iv 71'R/ilho,s Ow Alaska DATE: April 18,2013 TO: Kit Duke,Associate Vice President Facilities&Land Management FROM: Dr.Ashok Roy O.• C.C.: Connie Hooper,Wei Guo,Myron Dosch&Nikki Pittman SUBJECT: Delegation of Authority-Board of Regents Policy 05.11 Real Property Transactions Pursuant to Board of Regents' Polity 05.11 concerning university real property, you are hereby delegated authority to: 1) Approve: a) Disposal Plans; • b) Development Plans that do not require Board of Regents approval; c) Development Projects that are expected to result in disbursements of not more than $500,000 in value;and 2) Execute all documents necessary to complete any and all real property transactions on behalf of the University of Alaska, which do not require subordination of the university's interest in real property, and: a) Have been approved by the Board of Regents,individually,or as part of a Development Plan;or b) Are expected to result in receipts or disbursements of not more than$1,000,000 in value. You are responsible for providing advance notice to me of all real,property transactions which are expected to result in receipts or disbursements greater than$250,000 in value. No further delegation is permitted without my written approval. This authorization replaces any previous delegation that may have been granted with regard to signatory authority for the execution of real property transactions,other than the acquisition of office and other space leases that are addressed under delegation of procurement authority. This delegation is subject to annual review and approval. I ace:rt this delegatii ac dan a with its terms: jtk_ / q , 1/, ( 71 b uke,AVP Facilities&Land Management Date • • Kit Duke,AVP FLM UA Facilities and Land Managemei 'hone: (907)786-7766 1815 Bragaw Street Suite 101 Fax: (907)786-7733 p Anchorage,AK 99508-3438 Email: kdukel@alaska.edu Web: www.ualand.com UNIVERSITY of ALASKA Many%inditions One Alaska MEMORANDUM DATE: January 12,2015 TO: Tina Schimschat,Regional Resource Manager Facilities and Land Management FROM: Kit Duke,Associate Vice President's =� SUBJECT: Limited Delegation of Authority During my absence from the office on January 13,2015 through January 22,2015 you are hereby delegated the authority to act on my behalf and shall have signatory authority for all matters pertaining to the Statewide Office of Facilities and Land Management including, but not limited to, budget, purchasing, procurement,travel and personnel with the following exceptions: 1. This delegation does not extend to the execution of documents related to the transfer of acquisition of real property interests. 2. This delegation does not extend to procurement authority under AS 36.30. 3. This delegation does not extend to execution of documents related to your own travel or to out-of- state travel for Facilities and Land Management staff. This authorization replaces any previous delegation that may have been granted with regard to signatory authority for matters pertaining to the Statewide Office of Facilities and Land Management as described above. My expectation is that if you have any questions or concerns with regards to any matter pertaining to the Statewide Office of Facilities and Land Management that you will contact me such that we may discuss the issues and resolve your concerns.Please sign below,retain the original and return a copy to me. I accept this delegation in accordance with its terms: /// �. (Tina Schimschat,Regional Resource Manager) Date • • REGENTS' POLICY PART V—FINANCE AND BUSINESS MANAGEMENT Chapter 05.11 —Real Property P05.11.010. Purpose and Scope. A. This chapter establishes guidelines for the prudent management, including trust management, and use of all university real property. B. Except as provided in C. of this section, this policy applies to all real property owned by the university or in which the university has a substantial beneficial interest. C. This policy does not apply to university acquisitions of certain space leasehold interests that are administered in accordance with university regulation relating to procurement or to the development of educational facilities. Any third party use of such facilities is subject to this chapter. (06-08-06) P05.11.020.Definitions. In this chapter,unless the context requires otherwise, A. "development plan"means a brief, general description of the major actions to be taken by or on behalf of the university as part of a development project,to include location,type of development, approximate acreage, and property map, and any amendments to the development plan. B. "development project" means a substantial, purposeful alteration of investment property. "Development project" includes activities occurring on investment property such as subdivision and related construction activities; commercial timber harvest, other than to clear the land or for personal use; materials extraction for commercial purposes; oil and gas leasing, exploration or development; mining leasing, exploration or development; or construction of significant structures, not including repairs, maintenance, expansion, or upgrade which does not materially change the essential character of the structure. "Development project" does not include; the grant of an easement or right-of-way or related construction activities; the development of educational facilities; activities to enhance the value of investment property where such activities are minor or incidental to the development of investment property such as clearing land, investigating soils, incidental filling, drilling water wells, constructing driveways, installing utilities, landscaping, or minor construction; and environmental remediation or other actions specifically required by government agencies. C. "disposal plan" means a brief, general description including location, acreage, property map, minimum price and the terms and conditions of the disposal, if available, of the real property for which a sale, lease, exchange or transfer of interest, excluding easements and rights-of-way, is proposed by the university. 05.11 1 Real Property • • D. "educational facilities" means campus facilities, buildings, improvements, fixtures and major equipment items situated on educational property. E. "educational property" means all university real property designated for education. research, related support, or administrative purposes. F. "investment property" means all university real property not designated as educational property. G. "trust land" means all land and interests in land directly or indirectly acquired in connection with federal grants under the March 4, 1915 and January 29, 1929 Acts of Congress, or otherwise received by or granted to the board for purposes of funding the land-grant endowment established pursuant to the 1929 Act of Congress and AS 14.40.400. For purposes of this definition, "indirectly acquired" land and interests in land include replacement land acquired from the State of Alaska and land exchanged for trust land. The Board of Regents, as a constitutionally created instrumentality of the State of Alaska, has been named by the legislature as trustee and holds such land in trust for the exclusive benefit of the university. H. "university real property" means all land and interests in land of any kind or nature, including all appurtenances, where title is held by either the board or the university, whether acquired through purchase, grant, gift, exchange, or other means. (09-19-14) P05.11.030. Fiduciary Responsibility. A. The board affirms its fiduciary responsibility to prudently manage all university real property for the exclusive benefit of the university, subject to restrictions imposed by law, conveyance documents or gift instruments. B. All trust land shall be managed in accordance with sound trust management principles, consistent with the specific fiduciary duties and legal obligations applicable to such land. The chief finance officer is charged with the responsibility of managing trust land in a manner consistent with the fiduciary duties and legal obligations of the board, and shall be directly accountable to the board for the management of such land. (06-08-06) P05.11.040. Classification of Real Property. The chief finance officer shall designate which university real property parcels will be managed as investment property and which will be managed as educational property. Such designations will not preclude the compatible use of such university real property parcels for both educational and investment purposes. The president will resolve any disputes regarding classification of properties for investment or educational purposes. (06-08-06) 05.11 2 Real Property • • P05.11.041. Plans and Reports for University Real Property. The Office of Land Management shall: A. develop, maintain, and periodically update a general strategic plan for the comprehensive management and development of investment property that includes a statement of the goals and objectives to be accomplished; B. prepare and publish proposed development plans that describe development projects being considered for university real property; C. prepare and publish proposed disposal plans that describe university real property parcels being considered for disposal by sale, lease, exchange or transfer of interest; and D. prepare an annual report for the board that contains a summary of the financial performance of the university's land management operations for the prior fiscal year including a summary of receipts, land sales and acquisitions, and land-grant endowment trust fund balances. The report shall distinguish between receipts from trust land and from all other university real property. (09-19-14) P05.11.042.Development Plan and Disposal Plan Notice Requirements. The Office of Land Management shall provide public notice and seek public comment prior to approval of development plans and disposal plans. Notice shall be provided not less than 30 days before the proposed action. (09-19-14) P05.11.044. Fair Market Value and Other Considerations. In exercising its fiduciary responsibility, the board must administer university real property for the exclusive benefit of the university. In the absence of conflict with the board's fiduciary duties and responsibilities, the administration will consider the following principles in managing and developing university real property: A. Fair Market Value. Disposals of university real property interests shall be at not less than fair market value, and acquisitions of real property or interests shall be at not more than fair market value, unless a direct and substantial benefit to the university can be documented, such as when adjacent university property will become more accessible, marketable, or valuable due to increased availability of utilities or access, or when the transaction offers other tangible benefits to the university. Reasonable fees may be established for routine transactions such as permits and temporary uses of university real property. 05.11 3 Real Property • • B. Economic Feasibility. Development projects shall not be undertaken unless the estimated return exceeds the estimated cost of development in an amount commensurate with the risk involved or the project will position the university to benefit from future opportunities. C. Legally and Environmentally Sound Development. University real property shall be developed consistent with local zoning and platting ordinances and in an environmentally responsible manner, consistent with applicable environmental laws and regulations, including those governing wetlands, water and wastewater, forests, wildlife and habitat, and the coastal zone. D. Jobs for Alaskans. To the extent economically feasible and prudent, development projects will provide an opportunity for the creation of jobs for Alaskans by encouraging development of in-state value-added industries. E. Access Through University Real Property. Subject to receipt of acceptable indemnification or tort immunity, the chief finance officer shall: 1. recognize, or provide alternative access for, RS 2477 rights-of-way and existing state-identified historic trails that cross university real property; and 2. consider the grant of access easements and rights-of-way at fair market value, including any diminution of value, provided such easements and rights-of-way do not interfere with the ability to develop or use such real property or other university real property. F. Reasonable Public Uses of University Real Property. To the extent practicable, the university shall permit reasonable activities of the public on university real property that do not interfere with the university's use or the management of such real property. G. Compatible Research and Educational Uses of Investment Property. Investment property shall be made available to faculty and staff for research and educational purposes provided such use is compatible with development plans and disposal plans and approved by the chief finance officer. Academic units will be responsible for all costs and liabilities associated with such research/educational use. (09-19-14) 05.11 4 Real Property • • • P05.11.050. Real Property Acquisitions. A. Campus Land Acquisitions. In order to provide an adequate land base to support current and future campus programs, the chief finance officer shall pursue strategic land acquisitions that meet the goals of the university's educational mission. To facilitate such real property acquisitions, the chief finance officer shall consider relevant campus land acquisition plans, as approved by the board as part of campus master plans. B. Federal and State Land Grants. The board will seek to acquire additional real property through state and federal grants in order to rectify inequities in the land grants to the State of Alaska compared to other states for their universities. When selecting new grant lands, the chief finance officer will attempt to acquire parcels where the selection: 1. is consistent with and enhances the goals of the university's educational mission; 2. is located near communities that have a need for expansion and economic development, provided that such selections do not conflict with selections under the Municipal Entitlements Act; 3. enhances or diversifies the university real property portfolio; or 4. has potential for residential, recreational or commercial development, timber harvesting, materials extraction, oil and gas development or mineral development. C. Other Real Property Acquisitions. The chief finance officer shall consider acquisitions or exchanges of property adjacent to existing university real property, when such property consolidates university real property holdings or enhances the access or development potential of other university real property. When economically feasible, and in the university's best interests, the chief finance officer may acquire or invest in real property that will enhance the university real property portfolio. (09-19-14) P05.11.060. Negotiation, Approval, and Execution of University Real Property Transactions. All university real property transactions and agreements are subject to the following: A. Only individuals authorized under AS 36.30 to execute space leases or in writing by the chief finance officer to negotiate real property transactions may do so on behalf of the university or the board. These real property transactions include, without limitation, any transaction involving lease, sale, cooperative development, right of occupancy, use, permit, license, or contract relating to any real property, or any other real property 05.11 5 Real Property • is • transaction whether or not similar to the foregoing. All other persons or university officials discussing prospective real property transactions with potential third parties must disclose that they do not have authorization to negotiate or commit the university or the board to any transactions, terms, conditions, or diminution of an interest in real property. B. The board shall approve: 1. strategic plans for the management and development of Investment Property; 2. development plans that consist of: a. subdivisions that will result in the development of 10 or more lots; b. timber sales, unless the president determines the sale will have minimal impact; c. material extractions that are anticipated to result in the sale of 100,000 cubic yards or more of material from a new source; or d. oil and gas leases and mining leases encompassing 5,000 or more acres; 3. development projects that are expected to result in disbursements of$1,000,000 or more in value; 4. real property transactions that have not been approved as part of a development plan and are expected to result in receipts or disbursements of$1,000,000 or more in value; and 5. Real property transactions that require the subordination of an interest in university real property of$1,000,000 or more in value. C. The chief finance officer or the officer's designee shall approve the following: 1. disposal plans; 2. development plans that do not require the approval of the board ; 3. development projects that are expected to result in disbursements of not more than $1,000,000 in value; 4. real property transactions that have been approved by the board as part of a development plan or are expected to result in receipts or disbursements of not more than$1,000,000 in value; 5. Real property transactions that require the subordination of an interest in university real property of not more than$1,000,000 in value; and 05.11 6 Real Property • • 6. Project cost increases for development projects previously approved by the board, not to exceed 20 percent of the original project cost estimate. D. The chief finance officer is authorized to execute all properly approved real property transactions and may delegate signatory authority to other university officials, provided that any such delegation shall be in writing. Any further delegation must be approved, in writing,by the chief finance officer. (09-19-14) 05.11 7 Real Property Image Project Well History File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable b4direct inspection of the file. - 0 77' Well History ile Identifier Organizing (done) Two-sided ❑ Rescan Needed RES N: OVERSIZED: NOTES: olor Items: ❑ Maps: Grayscale Items: GI/4s: ❑ Poor Quality Originals: ❑ Other: El Other: BY: MIS Date: ` III 4 /s/Project Proofing BY: aria) Date: 1,t r 7/1 9.0 Is/ yv I'I Scanning Preparation 7 x 30 = c2 10 + `5- = TOTAL PAGES o4 as (Count does not include cover sheet) Li BY: Maria Date: /s/ Production Scanning Stage 1 Page Count from Scanned File: .((Count does include cover eet) Pa.e Count Matches Number in Scanning Preparation: YES NO BY: OM Date: 1 1/ 1 7/11.1 ' /s/ rvif Stage 1 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Maria Date: /s/ Stage 2 Additional Well Reports: YES NO TOTAL PAGES: Digital version appended by: Meredith Michel Date: /s/ Final Page Count: Stage 1 + Stage 2: TOTAL PAGES: Scanning is complete at this point unless rescanning is required. ReScanned BY: Maria Date: /s/ Comments about this file: Quality Checked 7/8/2014 Well History File Cover Page_20140708.doc G - - -- - - -- -- - 7 O O co CV a y r- N. a) m a n a E A c a) N c Z E a V v � a Z ch o N co E -o 0 y �� 0 a a o o H o) L V ✓ U I N N_ N_ N > 0 _ _ N a) a) a) U U U co O. = co a) LL LL (n ch ch aa)i a a a -o -0 N c w a) Le) > 0 2 o o a a a .c 3 31 c pa v, o ca cn • �. _N N a) a) a) O O O O O O J C m L Z > O 2 2 % @E E J O O O O o d co a) J _ A <- ,- <- ... „�, o N = N N N " �1 �1 e- A-- �i �1 N i-,1- U m C coN — it LL it O N N N N N a� 0 o H O 2 a) C C - - - o (9 V o N N N a L-. cis co cn (n cn N 9' w co N o y C O O 0) co J a a a a a H a <18 J D 0 Co C m O O N m co N N N a).,_ a) N a) N N a)M N c.,= _N cn fO g J a a 0 c 0 0 LL a it LL LL LL LL it LE U) it N a U mo 0...m. U U U U U U U U N U N 7 co E m 'Et) 'E .40 C C C a C C C C En_ C y C x QQ co o o i o O N O L '� 7, o Z N } } } 1 '.o o • U NI m O O D ,N L 0,1 _T. 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C VR Uv •� a o a E 1a oO a) 0 0 m LLO Q ai O O Ti)a� oO d 2 'W 1 1 Z 0 a C7 0 0 a 0 10 Bettis, Patricia K (DOA) From: Bettis, Patricia K(DOA) Sent: Wednesday, September 18, 2013 1:54 PM To: 'Max Frey' Cc: Schwartz, Guy L (DOA) Subject: Pilgrim Springs Max, Per your request, Plugging and Abandonment of Wells 20 AAC 25.105(a) states"All wells that have been permitted on a property under 20 AAC 25.005 must be abandoned before expiration of the owner's rights [lease] in that property... If the owner is the landowner, all wells that have been permitted on a property by 20 AAC 25.005 must be abandoned within one year following permanent cessation of the operator's...activity within the field..." Designation of Operator 20 AAC 25.020, "If an owner of a property wishes to designate a new operator for the property, the owner shall submit to the commission for approval a Designation of Operator(Form 10-411). The commission will not approve the designation of a new operator without the signature of the newly designated operator on the same Designation of Operator form... The newly designate operator shall furnish a bond and, if required, security as provided for in 20 AAC 25.025." Bonding 20 AAC 25.025(b), "A bond and, if required, security must be in the amount...of not less than $200,000 for a blanket bond covering all of the operator's wells in the state." For more information on bonding, you may contact Jody Colombie with the AOGCC at (907) 793-1221. Forms may be found at the following link: http://doa.alaska.gov/ogc/forms/forms.html. Let me know if you have any other questions. Thanks, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 CONFIDENTIALITY NOTICE:This e-mail message, including any attachments,contains information from the Alaska Oil and Gas Conservation Commission (AOGCC),State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information.The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it,without first saving or forwarding it,and,so that the AOGCC is aware of the mistake in sending it to you, contact Patricia Bettis at(907)793-1238 or patricia.bettis@alaska.gov. 1 RECEIVED AUG 26 2013 I 4:90 AcEp Alaska Center for Energy and Power AOGCC August 21, 2013 Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Ms. Bettis: The University of Alaska Fairbanks (UAF) would like to make a request to change the names of the three temperature gradient wells drilled at Pilgrim Hot Springs, Alaska in the summer of 2012. Currently they are known to the AOGCC as TG-1, PS-12-3, and PS-12-9. UAF would like to request that these well names be changed accordingly: From To 3 , 8S 11 TG-1 PS-12-1 A 12 ' n 1 1 , C PS-12-3 PS-12-2 PS-12-9 PS-12-3 We appreciate you consideration in regards to this issue and we apologize for any confusion it may have caused. Be wen Holdmann Director Alaska Center for Energy and Power Alaska Center for Energy and Power• University of Alaska Fairbanks•814 Alumni Drive•P.O. Box 755910 •Fairbanks,Alaska 99775-5910•Tel: (907)474-5402• Fax: (907)474-5475 V Or T� r„,c9 I%%4's THE STATE Alaska Oil and Gas ALASKA ° ConservationALASKA ° Cjtilh ` GOVERNOR SEAN PARNELL 333 West Seventh Avenue Op L yob Anchorage, Alaska 99501-3572 Main: 907 279.1433 Fax: 907.276.7542 August 8, 2013 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7009 2250 0004 3911 3415 Gwen Holdmann Director, ACEP University of Alaska Fairbanks P.O. Box 755280 Fairbanks, AK 99755 Re: Pilgrim Springs Wells, Missing Log Data Dear Ms. Holdmann: In 2012, the University of Alaska Fairbanks ACEP drilled three wells in the Pilgrim Springs area: Pilgrim Spring TG-1/PS-12-1 (Permit to Drill No. 212-077), Pilgrim Springs PS-12-3 (Permit to Drill No. 212-109), and Pilgrim Springs PS-12-9 (Permit to Drill No. 212-126). To date, the Alaska Oil and Gas Conservation Commission (AOGCC) has not received all required information for these wells. AOGCC regulation 20 AAC 25.071, Geologic data and logs, requires the operator to submit a sepia and reproduced copy of a complete mud log or a lithology log. A digital image file may substituted for the sepia. A digital data file of all the logs run, composited and preferably in LAS format, is also required. This same regulation also requires a complete set of washed and dried, legibly identified samples of all drill cuttings be submitted. If conventional core was cut, a representative chip sample from each foot recovered is required as well as a lithologic description, a porosity, permeability and fluid analysis report and, if available, photographs of the core. Within 10 business days, please submit this information to the AOGCC. If you have any questions, please contact me at(907) 793-1238 or at Patricia.Bettis@alaska.gov. Sincerely, Patricia Bettis Senior Petroleum Geologist • U.S. Postal Service CERTIFIED MAIL, RECEIPT N (Domestic Mail Only;No Insurance Coverage Provided) rR For delivery information visit our website at www.usps.com: m , 1-4 p- Postage $ m Certified Fee Postmark p Return Receipt Fee Here p (Endorsement Required) p Restricted Delivery Fee (Endorsement Required) O LF) ru Total Postage r Sent To Q' Gwen Holdmann ,19 Street,Apt.No.; or PO Box No. Director,ACEP University of Alaska Fairbanks City,State,ZIP+ Post Office Box 755280 PS Form 3800, - ...F.- ... - •• SENDER: COMPLETE THIS SECTION COMPLETE THIS SECTION ON DELIVERY ■ Complete items 1,2,and 3.Also complete A. Sig . re item 4 if Restricted Delivery is desired- ■ Print your name and address on the reverse X ��•1l 0 Agent �' so that we can return the card to you. ' ��'- ❑Addressee • Attach this card to the back of the mailpiece, 1 Received• • • �� C, .ate Deliv ry nt=. or on the front if space permits. 141/1,.:_4( 4111rl<< t 1. Article Addressed to: D. Is delivery address d erent from item 1? 0 Yes If YES,enter delivery address below: 0 No Gwen Holdmann 3. SerViceType Director,ACEP Q Carted Mail 0 Express University of Alaska Fairbanks 0 Registered Return Receipt for Merchandise Mail Post Office Box 755280 0 Insured Mail 0 C.O.D. Fairhankc DK gg7SS 4. Restricted Delivery?(Extra Fee) 2. Article Number ❑Yes (Transfer from service label) 7009 2250 0004 3911 3415 PS Form 3811,February 2004 Domestic Return Receipt 102595-02-M-1540 \ 14, �� /7 s7 THE STATE Alaska Oil and Gas g� �� °fALASKA _ ==a, Conservation Commission GOVERNOR SEAN PARNELL 333 West Seventh Avenue O� n'r�TMAnchorage, Alaska 99501-3572 ALAR Main: 907.279.1433 Fax: 907.276.7542 Gwen Holdmann Director, ACEP �, f7 University of Alaska Fairbanks 7 P.O. Box 755280 Fairbanks, AK 99775-5280 Re: Pilgrim Hot Springs Field, Pilgrim Hot Springs Pool, PS-12-01/TG-1 Sundry Number: 313-038 Dear Ms. Holdmann: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, , /7-4_ 0(7Z. Cathy P oerster Chair DK- DATED this / / day of March, 2013. Encl. • %, .,0 RECEIVED . � 3STATE OF ALASKA 3 ALASKA OIL AND GAS CONSERVATION COMMISSION A OG VV APPLICATION FOR SUNDRY APPROVALS ,�•� 20 AAC 25.280 1.Type of Request: Abandon 0 Plug for Redrill 0 Perforate New Pod 0 Repair Well 0 Change Approved Program 0 Suspend Q• Plug Perforations 0 Perforate 0 Pull Tubing 0 Time Extension 0 Operations Shutdown 0 Re-enter Susp.Well 0 Stimulate 0 Alter Casing 0 Other. 0 2.Operator Name: 4.Current Well Class: 5.Permit to Drill Number. University of Alaska Fairbanks• Development 0 Exploratory Q• 212077• 3.Address: Stratigraphic 0 Service o 6.API Number. PO Box 755280,Fairbanks AK 99775-5280 50-031-20007-00-00' 7.If perforating,closest approach in pool(s)opened by this operation to nearest 8.Well Name and Number property line where ownership or landownership changes: Spacing Exception Required? Yes 0 NO 0 Pilgrim Hot Springs PS-12-01 a Yl? —1 9.Property Designation(Lease Number): 10.Field/Pool(s). Fee-BSNC • ( 'I Iii► 4.4 •Sp r- S 11. PRESENT WELL CONDITIOIiSUMMARY Total Depth MD(ft): Total Depth TVD(ft): Effective Depth MD(ft): Effective Depth TVD(ft): Plugs(measured): Junk(measured). 1000 ft • 1000 ft 1000 ft 1000 ft 990-1000 ft cement N/A Casing Length Size MD TVD Burst Collapse Structural Conductor 100 ft 6-5/8 in steel Surface Intermediate 1000 ft HW 4-1/2 in steel Production Liner Perforation Depth MD(ft): Perforation Depth TVD(ft): Tubing Size: Tubing Grade: Tubing MD(ft): N/A N/A N/A N/A N/A Comments Packers and SSSV MD(ft)and ND(ft): 1500 psi 3 in valve installed on wellhead 12.Attachments: Description Summary of Proposal 0 13.Well Class after proposed work: Detailed Operations Program 0 BOP Sketch 0 Exploratory El- Development 0 Service 0 14.Estimated Date for prior to September 1,2012 15.Well Status after proposed work: Commencing Operations: Oil 0 Gas 0 WDSPL 0 Suspended 0• 16.Verbal Approval: Date: 7/27/2012 WINJ 0 GINJ 0 WAG 0 Abandoned 0 Commission Representative: Stephen Davies GSTOR 0 SPLUG 0 17.I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Printed Name Gwen Holdmann Title Director,ACEP,UAF Signature Phone 907-590-4577 Date 7/31/2012 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: 3 (3- 03 s• Plug Integrity ❑ BOP Test 0 Mechanical Integrity Test 0 �Locationn Clearance �y,.�+ MAR 2 0 Other ,KEt--S 0�[ (/Li�tit9 cL-/�- e.. (� ii• I S+ Z C I�p4M�7 Sf 4'A5 Lx hen ?w l: D `11= 2013 . Subsequent Form Required: /0 ...4/ 6-- I ; .A.4.4.__ APPROVED BY Approved by: ,. / COMMISSIONER THE COMMISSION Date: 3—7q—/3 3•/c/7 ?lito `,A196 Form 10-403 Revised 1/2010 ORIINAL e /4,- Submit in Duplicate v\w4 o E 2 m I 0 E e 13 ve 8 - E >g _ £ $ °,, cN • o r o q sNr SAN $ v 3 E o .e -_ - ^' �n !1, ,e ry ry '7' 3 mg Ea$35 - `9 4774a y 3 V E p w v E s E L o t 5 !,f,'T! - 2 ° i e i e v-° 3 E. 5 ET, v o -- 2mv E - UP a ia Mi., _cEc _ ry`_ r&$�2 m ++ eq -- A S E-° o _ -A 0 - E ° -- a e �M 3�nu 'Veca.. oav ac 5 a` 5 E 00 mm` 0° �", i.E - a "t71 ot c - m 3 0- o $ 3 0 g _ c! 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E `I Ai/IA::: 11E1P1 Alaska Center for Energy and Power � II Permit Number : 212 - 077 Contact Information: Gwen Holdmann: gholdman@alaska.edu Max Frey: mefrey@alaska.edu Pilgrim Hot Springs Field Season, 2012 N- 1 0 F— a) c u) co> V O $ m L d 0,o cvc �a � � caIt > V 'N r ca a c c.) � -0 a 0 0 ft 0 m = i) V O d O N -a c-) .0 N 3 U)) O d ,t ' E O L C 7 . 0, d Q 00 d 0 M V .0 Co V ca 2 Alaska Center for Energy and Power 2012 Pilgrim Hot Springs Well Drilling Logs Drilling Logs for Pilgrim Hot Springs Wells TG-1,P5-12-3, and P5-12-9 Date Activity description Hours worked 5-Jun Art and Jeff arrive in Nome.Pick up two rental vehicles.Inspect snow conditions on Pilgrim access road(still considerable). 12 6-Jun Working in town on equipment preparation.Load Louie Green's backhoe onto our trailer for transport to PHS to dig snow from access road.Northland barge arrives in Nome. 12 7-Jun Equipment preparation continues.Haul Louie's backhoe and unload at PHS access road intersection. 12 8-Jun Pick up dump truck at Northland.Start equipment engines in town.Drive to site to check on Louie's progress. Drill crew flies from Denver to Anchorage. 12 Pick up remaining three rental vehicles.Crew arrives in Nome on morning flight.Still working on equipment 9-Jun preparation in Nome.Louie has access road dug to the BLM gravel pit.Begin moving equipment to the pit as it's ready.Get backhoe from Northland. 12 10-Jun Continue equipment prep in Nome(Geoprobe hydraulics etc).Move backhoe to access road and begin working with Louie to clear snow.Move more equipment to BLM gravel pit. 12 11-Jun Continue equipment prep in Nome.Begin hauling gravel for access road repair.Locate and mark first ten geoprobe sites. 12 Using rented loader,begin mining rock from MINC site at top of Golden Gate and hauling it for access road 12-Jun improvement.Continue work in Nome and moving equipment to BLM gravel pit.Move supplies from Northland to Icy View. 12 13-Jun Move geoprobe to PHS and drive first well to 80 ft.Continue access road repair work,moving equipment to BLM pit,and painting rig in Nome. 12 14-Jun Geoprobe 3 sites.Continue access road repair work.Move more supplies from Northland to Icy View. 12 15-Jun Pick up pipe at Northland and move it,and additonal equipment,to BLM pit.Continue access road work. Geoprobe 2 sites. 13 16-Jun Finish getting supplies from Northland.Continue access road work and geoprobing.Install new culvert at churchyard springs crossing. 12 17-Jun Continue road work.Begin moving equipment from BLM pit to PHS runway parking area.Continue geoprobing using 2-pipe method. 12 18-Jun Continue geoprobe work(plugging and driving with larger points).Move trailers to chuchyard area and begin moving into Nun's Quarters.Continue access road work. 13 19-Jun More geoprobe work and access road work.Move two loads of pipe from Nome to runway staging area. 12 20-Jun Continued geoprobe and access road work.Move two more loads of pipe from Nome to runway staging area. 12 21-Jun Continued geoprobe and access road work.Move loader to BSNC gravel pit on main road to get smaller material.Move pallets of cement and drill mud from Nome to runway staging area. 12 22-Jun Continue geoprobe and access road work using smaller BSNC material.Move drill rig from Nome to runway staging area.Install mast extension and large-diameter tires for improved site access.Waiting on AOGCC permit- 12 23-Jun Continue geoprobe work.Move loader to BLM pit in anticipation of gaining access to this material on 6/25. Begin rig and pipe pallet construction. 12 BEGIN WORK ON TG-1, PERMIT NO.:212-077 24-Jun Continue geoprobe work.Begin moving equipment into churchyard area in preparation to move to well TG-1. Continue pallet construction etc. 12 25-Jun Geoprobe work and TG-1 preparation continue. 12 26-Jun t Geoprobe work and TG-1 preparation continue.Build tripod to use for running geophysical logs in existing wells. 12 27-Jun Continue geoprobe work.Get permission to use BLM"gravel"and begin hauling it for access road improvement. Set up and run gamma login last year's S-9 well. 12 28-Jun Continue geoprobe,access road work,and preparation for well TG-1. Run gamma log on last year's S-1 well. 12 Continue geoprobe,access road work,and preparation for well TG-1.Disassemble and move last year's rig pallet 29-Jun from S-1 site to churchyard staging area.Dispose of last year's stored cuttings in S-1 dug sump and move tanks to staging area. 12 30-Jun More geoprobe and access road work.Begin stockpiling road material at landing strip staging area for future use.Repair(weld)PHS entry gate. 12 More geoprobe work.Begin preparing site TG-1(PS-12-1).Haul material in dump trailer for Louie Green to fill 1-Jul and repair trail leading to boat launch area in case we need to dispose of cuttings there.Run gamma log in well MI-1. 12 More geoprobe and moving of road material to runway staging area.Decide to set up rig pallet at PS-12-1 to 2-Jul allow for BOP installation w/o the need to move rig(raise rig on pallet to required height).Run 2-in water lines from boat-launch slough to site and fill tanks with water.Move mudpump and shaker trailer onto site. 12 After finding out that we can drill to 500 ft w/o AOGCC permits,drill and drive 10 ft of 10-in surface casing and 3-Jul finalize site to where we're ready to begin conductor casing drilling in morning.Finish geoprobe work and collect gamma log from well PS-5. 12 4-Jul Drill 10-in hole to 100 ft disposing of liquid waste in sump behind garbage pile.Begin moving road material to build base on which backhoe and work to enlarge sump and dump solids. 12 Alaska Center for Energy and Power • 2012 Pilgrim Hot Springs Well Drilling Logs 5-Jul Set and cement 6 5/8-in casing to 100 ft.Clean equipment and bring in new light-weight rotary rods for drilling below casing.Continue working on trash-pile cuttings disposal area. 12 Cut pumping sub from 6-in casing,drill cement out from inside casing,and drill 6-in hole to 290 ft.After tripping 6-Jul out drill steel at end of day,well begins flowing-'100 gpm at surface(clay boot around bit"swabbed"the well). Trip in rods to 120 ft and pump drill mud to stop flow.Trip to 220 ft,mix weighted mud and pump.Trip out pipe. 20 7-Jul Trip to bottom and drill to 470 ft.Pull drill pipe from hole. 20 8-Jul Trip to bottom and drill to 500 ft.Let rods stand w/o circulation for 2 hrs then run Kuster log inside pipe. Circulate and trip pipe from hole.Run gamma,caliper,induction,and resistivity logs in open hole. 20 Although we don't have AOGCC permit to drill below 500 ft,decide to hold off on cementing casing at this depth 9-Jul in the hopes that the permit-to-drill will be finalized today.Install knife-valve and 2-in kill lines on 6-in casing. Take geoprobe and pull rods from 2 sites that weren't yet pulled.Receive AOGCC permit at end of day. 20 10-Jul Trip rods to bottom and drill to 730 ft.Pull rods from well. 20 11-Jul Trip rods to bottom and drill to 1000 ft.Circulate and pull rods from well. 20 Trip and flush drill rods to bottom.Circulate and pull rod from hole.Run gamma,caliper,induction,and Kuster 12-Jul temperature logs in open hole.Prepare site and equipment to set and cement HW casing to 1000 ft.Run casing to 450 ft. 20 13-Jul Finish running casing to 1000 ft and circulate.Mix and pump geolite cement thru casing to surface.....big mess but get it done.Clean equipment and site as much as possible. 22 Trip in drill pipe with 3 7/8-in bit and tag cement at 600 ft.Drill out cement to 990 ft leaving 10 ft in bottom. 14-Jul Flush well and fill with water.Trip pipe,install valve at surface,and clean equipment and site, 20 July 15-July 25 Crew returns to Denver for break.Jeff remains in Nome to take care of BOP-related and other issues(60 total hrs worked). 60 26-Jul Crew flies Denver-Nome.Jeff and Don(arrived 7-25)move BOP to Pilgrim.Assist Josh and Charlie in running Kuster in 12-1 well....only get down to 400 ft. 10 Install BOP flange on 12-1 and trip steel to well bottom circulating and flushing fluid.Trip pipe and dig out well 27-Jul head for BOP installation 20 Install BOP and system.Trip steel to 200 ft and circulate per test requirements.Pressure system but it leaks. 28-Jul After Ron makes several calls,he opens/closes the bag in quick succession.Discover that we don't have the recording unit so test will have to wait until tomorrow. 20 Install pressure recorder and Ron Tate attempts to run test @ 3000 lbs pressure.The bag bursts and hyd fluid 29-Jul runs from the BOP head.Ron takes off and we remove the BOP and all plumbing from the well.Set up to run Kuster log in well.Begin clearing site and hauling rock material to runway. 20 BEGIN WORK ON PS-12-3, PERMIT NO.:212-109 30-Jul Remove all equipment from site and install ball valve on well.Begin moving gravel to site 12-2 20 31-Jul Set rig pallet on site and move rig onto pallet.Move rock onto access trail and lay tundra mats over the rock. Move equipment on site.Install 2-in water hose from slough to site and set up and fill water storage tanks. 20 1-Aug Set and cement 10-in surface casing.Drilled 9 7/8-in hole to 125 ft. 20 2-Aug Drill 9 7/8-in hole to 204 ft.Set and cement 6-in casing to 204 ft. 20 Pull 10-in casing and cement in large washout hole that was undercutting around the casing.Install 6-in knife 3-Aug valve and drill cement out of 6-in casing to bottom. 20 4-Aug Drill 5 7/8-in hole to 464 ft.Trip pipe at day's end. 20 5-Aug Drill to 754 ft.Trip pipe. 20 6-Aug Intall new bit,trip pipe to bottom and drill to 1004 ft.Trip pipe from hole. 20 Trip to bottom and flush well.Set up for logging and log well to bottom.Run HW casing to 270 ft with cement 7-Aug sub and shoe installed. 20 8-Aug Trip/wash HW casing to bottom.Mix cement and pump thru HW cement shoe.Shut in casing and begin moving BOP into place. 20 Install BOP flange and set BOP in place.Set up hyd actuator and run preliminary test.Run and record BOP test 9-Aug for AOGCC. 20 Trip 3 7/8-in bit to bottom and drill out aluminum float shoe.Drill to 1024 and conduct formation leak test per 10-Aug AOGCC.Drill to 1078....basement rock at about 1040?Trip bit from hole. 20 Tricone bit is very worn so install 3 7/8-in PDC bit and trip to bottom.Drill to 1223 ft and pull bit back into HW 11-Aug casing. 20 Trip to bottom and drill to 1249 ft...very slow drilling.Circulate well and trip out bit.Get rig set up for wireline 12-Aug coring and trip core rods to 980 ft. 20 13-Aug Trip core rods to bottom,pump down inner-tube,and core from 1249 ft to 1294 ft thru biotite shist and other metasedimentary basement rock.Fill well with abandonment mud and pull core rods from well. 20 14-Aug Set up for logging and collect geophysical and temperature logs from well.Run capped BQ rods to 1295 ft and fill with water.Begin moving equipment from site. 20 Alaska Center for Energy and Power 2012 Pilgrim Hot Springs Well Drilling Logs BEGIN WORK ON PS-12-9, PERMIT NO.:212-126 Run tremie pipe in annular area to 160 ft and cement top of hole.Remove BOP and flanges.Begin building trail 15-Aug and running water line to site 12-3.Move rig pallet to site. 20 16-Aug Use BSNC skid-steer to begin moving equipment onto 12-3 site.Very soft and muddy.Lay turf mats in worst spots. 20 17-Aug Finish moving equipment and setting up site.Drill and set 5 ft of 10-in surface casing. 20 18-Aug Drill 9 7/8-in hole to 144 ft.Trip out pipe and run geophysical logs. 20 Begin running 6-in casing but it stops at 30 ft.Pull casing and ream well to bottom.Trip out and run 6-in casing 19-Aug to 144 ft.Trip tremie to annular bottom and mix and pump cement. 20 Well flange to casing,install knife valve,and install diverter system.Trip 5 5/8-in tricone to bottom and drill to 20-Aug 263 ft.Trip pipe from well. 20 21-Aug Install chisel-tooth tricone bit and drill to 423 ft.Very hard drilling in spots.Trip pipe from well. 20 22-Aug Trip pipe to bottom and drill to 723 ft.Pull pipe. 20 23-Aug Trip pipe to bottom w/o problem and drill to 983 ft.Still drilling numerous hard zones. 20 Trip pipe to bottom and monitor mud temp when ciculation starts(145 F max).Drill to 1133 thru varying hard 24-Aug and soft layers.Drills/looks like basement rock at 1083 ft.Trip pipe from well. 20 25-Aug Trip pipe in hole but have to circulate every 40 ft from 700 ft to 1033 ft then ream to bottom.Drill to 1183 very slow drilling through basement rock.Trip pipe from well. 20 Run steel to 860 ft and ream to bottom.Thin mud and trip rods from well.Begin geophysical logging but caliper 26-Aug tool becomes stuck at 1065 ft.Trip drill steel into hole to try and wash out logging tool but can't get it washed down to that depth.Pull pipe. 20 Run BQ rods with reaming shoe on bottom to 993 ft.Mix and circulate fresh mud from that point but discover rods are stuck when done circulating....still have perfect circ.Decide to leave rods at this depth rather than 27-Aug trying further to retrieve so that we can at least get temp logs to this depth.Further retrieval efforts will likely result in fractured rods and total loss of the well. 20 28-Aug Cut logging cable.Circulate fluid thru rods.Mix and pump cement thru rods followed by rubber cement plug and 130 gallons fresh water.Begin moving equipment to town. 20 29-Aug Well begins flowing 150-200 gpm hot water from annular area.Run tremie into annular and kill flow with heavy mud.Run tremie to 126 ft,mix and pump cement in annular. 20 DRILLING ACTIVITY SUSPENDED 30-Au Begin moving equipment from site to runway with skid-steer.Weather conditions are horrible and everything is g a total quagmire.Begin moving items to Nome at day's end. 20 Cleaning,packing,moving equipment from site to runway and from runway to Nome.With exception of what 31-Aug will be left in Nome for final P&A of wells next year(PU truck,white trailer,ATV,and AN trailer)all items are moved to Northland to catch early Oct barge south. 20 1-Sep Continue cleaning,packing and moving.Return skid-steer and ATVs to BSNC. 20 2-Sep Continue cleaning,packing,and moving equipment to Nome. 20 3-Sep Continue cleaning,packing,and moving equipment to Nome. 20 Make final Pilgrim-Nome run with equipment.Finish loading conex box for ACEP,make trash run,turn in rental 4-Sep vehicles,and leave truck,trailer,and AN at BSNC Icy View yard. 20 5-Sep Crews fly from Nome to Denver.END OF PROJECT. Sep 16-Sep 21 Art and helper return to Nome to rehead logging cable,move equipment to Pilgrim,and collect gamma and equilibrated temperature logs from the 12-3 well. Bettis, Patricia K (DOA) From: Schwartz, Guy L (DOA) Sent: Monday, January 28, 2013 4:02 PM To: Bettis, Patricia K(DOA); gholdman@alaska.edu Cc: Roby, David S (DOA); Davies, Stephen F (DOA) Subject: RE: Pilgrim Hot Springs TG-1 (PS-12-01) Suspension Markus was going to get some kind of authorization letter from the landowner that stated they want wells left there for possible future use as resource wells. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Bettis, Patricia K (DOA) Sent: Monday, January 28, 2013 3:51 PM To: gholdman@alaska.edu Cc: Roby, David S (DOA); Schwartz, Guy L (DOA) Subject: Pilgrim Hot Springs TG-1 (PS-12-01) Suspension Gwen, Please provide some information on what the long-term plans are for the well. 20 AAC 25.110(a) requires that the operator must state in writing the reasons for the well to be suspended, and not completed or abandoned. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 1 Bettis, Patricia K (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Monday, January 28, 2013 4:11 PM To: Schwartz, Guy L (DOA) Cc: Bettis, Patricia K(DOA); Roby, David S (DOA); Davies, Stephen F (DOA); Max Frey Subject: Re: Pilgrim Hot Springs TG-1 (PS-12-01) Suspension Patricia, The primary reason for the request to suspend operation is our desire to acquire additional temperature data from the holes next summer before plugging and abandoning. These holes were primarily drilled as temperature gradient holes, and as such we would like to take an additional measurement after giving the hole plenty of time to equilibrate. In addition, as Guy has stated, we anticipate the land owners would prefer to leave the holes open and accessible for long-term resource monitoring. If this is the case, we are supportive of that decision but would like to understand the implications to the bond which is currently in place, given my understanding that it is not transferrable. Gwen On Mon, Jan 28, 2013 at 4:02 PM, Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov> wrote: Markus was going to get some kind of authorization letter from the landowner that stated they want wells left there for possible future use as resource wells. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Bettis, Patricia K (DOA) Sent: Monday, January 28, 2013 3:51 PM To: iholdman@alaska.edu Cc: Roby, David S (DOA); Schwartz, Guy L (DOA) Subject: Pilgrim Hot Springs TG-1 (PS-12-01) Suspension Gwen, 1 Please provide some information on what the long-term plans are for the well. 20 AAC 25.110(a) requires that the operator must state in writing the reasons for the well to be suspended, and not completed or abandoned. Thank you, Patricia Patricia Bettis Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 Tel: (907) 793-1238 Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ua£edu/acep 2 RECEIVED FEB 19 2013 AOGCC 4::((at Ai‘1:::11E11) Alaska Center for Energy and Power Permit Number : 212 - 077 Contact Information: Gwen Holdmann: gholdman@alaska.edu Max Frey: mefrey@alaska.edu Pilgrim Hot Springs Field Season, 2012 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOG la.Well Status: Oil❑ Gas ❑ SPLUG ❑ Other Abandoned ❑ Suspended[ lb.Well Class: 20MC 25 105 20MC 26 110 Development ❑ Exploratory L GINJ ❑ WINJ❑ WAG ❑ WDSPL❑ No.of Completions: Service ❑ Stratigraphic Test ❑ - '2.Operator Name: 5.Date Comp.,Susp.,or 12.Permit to Drill Number: University of Alaska Fairbanks Aband.: 7/29/2012 212077 3.Address: 6.Date Spudded: 13.API Number: PO Box 755280,Fairbanks,AK 99775-5282 7/3/2012 50-031-20007-00-00- 4a.Location of Well(Governmental Section): 7.Date TD Reached: 14.Well Name and Number: Surface: 1012'FSL,245'FEL,S.36,T4S,R31 W i K P" 7/11/2012 TG-1 - Top of Productive Horizon: �i}N� 8.KB(ft above MSL): -45' ' 15.Field/Pool(s): same il�� GL(ft above MSL): -45' Pilgrim Hot Springs Total Depth: 9.Plug Back Depth(MD+TVD): same 0' 4b.Location of Well(State Base Plane Coordinates,NAD 27): 10.Total Depth(MD+TVD): 16.Property Designation: Surface: x- 888318' y-4055973 Zone- $ 1000' • Pilgrim Hot Springs TPI: x- y- Zone- 11.SSSV Depth(MD+ND): 17.Land Use Permit: Total Depth: x- y- Zone- N/A Unaatuq,LLC 18. Directional Survey: Yes ❑ No ❑ 19.Water Depth,if Offshore: 20.Thickness of Permafrost MD/TVD: (Submit electronic and printed information per 20 MC 25.050) N/A (ft MSL) 0' 21.Logs Obtained(List all logs here and submit electronic and printed information per 20AAC25.071): 22.Re-drill/Lateral Top Window MD/TVD: mud logs,induction,resistivity,gamma,caliper,temperature N/A 23. CASING,LINER AND CEMENTING RECORD WT.PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASINGFr. GRADE TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD PULLED 10 3/4 21.2 ppf sch 40 0 10 0 10 12 1/4in 10' 10 6 5/8 18.97 ppf sch 40 0 `100 0 100 9 7/8in 10(7 0 4.5 11.7 ppf HW 0 1000 •:0 1000 :5 7/8in 1000' 0 24.Open to production or injection? Yes 0 No Q 25. TUBING RECORD If Yes,list each interval open(MD+TVD of Top and Bottom;Perforation SIZE DEPTH SET(MD) PACKER SET(MD/TVD) Size and Number): RECEIVED 26. ACID,FRACTURE,CEMENT SQUEEZE,ETC. Was hydraulic fracturing used during completion? Yes❑ No Q FEB 19 2013 DEPTH INTERVAL(MD) AMOUNT AND KIND OF MATERIAL USED AOGCC .., 27. PRODUCTION TEST Date First Production: Method of Operation(Flowing,gas lift,etc.): Date of Test: Hours Tested: Production for Oil-Bbl: Gas-MCF: Water-Bbl: Choke Size. Gas-Oil Ratio: Test Period Flow Tubing Casing Press: Calculated Oil-Bbl: Gas-MCF: Water-Bbl Oil Gravity-API(corr): Press. 24-Hour Rate - 28. CORE DATA Conventional Core(s)Acquired? Yes ❑ No Q Sidewall Cores Acquired? Yes ❑ No Q If Yes to either question,list formations and intervals cored(MD+TVD of top and bottom of each),and summarize lithology and presence of oil,gas or water (submit separate sheets with this form,if needed).Submit detailed descriptions,core chips,photographs and laboratory analytical results per 20 AAC 25.071. Form 10-407 Revised 10/2012 CONTINUED ON REVERSE / Submit original only 2.1343 -lam a),�' �' G �3 29 GEOLOGIC MARKERS (List all formations and markers encountered): 30. FORMATION TESTS NAME MD TVD Well tested? ❑ Y@s ❑ NO If yes,list intervals and formations tested, briefly summarizing test results Attach separate sheets to this form,if needed, Permafrost-Top and submit detailed test information per 20 AAC 25.071. Permafrost-Base See cuttings descriptions Formation at total depth: 31. List of Attachments: 32. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Alaska Center for Energy and Power Email: gwen.holdmann@alaska.edu Printed Name: Gwen Holdmann Title: Director,ACEP,UAF Signature: C� ._`�Y�.l- Phone: (907)590-4577 Date: 2/7/2013 INSTRUCTIONS General: This form is designed for submitting a complete and correct well completion report and log on all types of lands and leases in Alaska. Submit a well schematic diagram with each 10-407 well completion report and 10-404 well sundry report when the downhole well design is changed. Item 1 b. Classification of Service wells: Gas Injection,Water Injection,Water-Alternating-Gas Injection,Salt Water Disposal,Water Supply for Injection,Observation,or Other.Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI(Top of Producing Interval). Item 8: The Kelly Bushing and Ground Level elevations in feet above mean sea level. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits(ex:50-029-20123-00-00). Item 20: Report true vertical thickness of permafrost in Box 20. Provide MD and TVD for the top and base of permafrost in Box 28. Item 23: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 24: If this well is completed for separate production from more than one interval(multiple completion),so state in item 1,and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced, showing the data pertinent to such interval). Item 27: Method of Operation: Flowing,Gas Lift,Rod Pump,Hydraulic Pump,Submersible,Water Injection,Gas Injection,Shut-in,or Other(explain). Item 28: Provide a listing of intervals cored and the corresponding formations,and a brief description in this box. Submit detailed description and analytical laboratory information required by 20 AAC 25.071. Item 30: Provide a listing of intervals tested and the corresponding formation,and a brief summary in this box. Submit detailed test and analytical laboratory information required by 20 AAC 25.071. Form 10-407 Revised 10/2012 McMains, Stephen E (DOA) From: Schwartz, Guy L(DOA) Sent: Thursday, February 07, 2013 8:53 AM To: Gwen Holdmann Cc: Max Frey; McMains, Stephen E(DOA) Subject: RE: Clarification on TG 12-1 (PTD 212-077) Gwen, I do recall that conversation about P &A in 2013 now. But we have never received the normal 10-407 completion report like PS 12-3 and PS 12-9. It seems we only got only those to completion reports last month .(we got those two just a week ago) ... if you sent a third 10-407 for TG-1 (PS12-1) we never got it. TG-1 (PS 12-1) should be categorized as suspended just like the other two wells. Once the P &A is completed in 2013 then another 10-407 can be submitted with "abandoned" status. lastemail from Markuson TG-1 (PS12-1) too. I am goingto forward my Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) From: Gwen Holdmann [mailto:gwen.holdmann@alaska.edu] Sent: Wednesday, February 06, 2013 3:15 PM To: Schwartz, Guy L(DOA) Cc: Max Frey Subject: Clarification on TG 12-1 Guy, I just received a call from Steve McMains. He told me AOGCC has 'absolutely no information on record for TG-1', and wanted to know when we would send the information related to final P&A of the hole. It is my understanding that we did submit all of the paperwork related to the completion of that hole last month. Steve also stated that since we had submitted a P&A request in August(which was subsequently approved with some minor comments/modifications), it was the understanding of AOGCC that the P&A procedure to be completed at that time. Our primary reason for submitting the request last August was to ensure our P&A plan was approved, since it would not require the drill rig to be on site. We have always intended to complete the P&A program this summer- 2013, to allow additional measurements to be made. Steve stated that in his conversation with you, the expectation was that the P&A procedure would be completed in 2012. Is that correct? Gwen Gwen Holdmann,Director Alaska Center for Energy and Power Fairbanks AK 99775-5910 University of Alaska Cell.(907) 590-4577 Physical Address: 814 Alumni Drive www.uaf.edu/acep Mailing Address: PO Box 755910 i High-pressure ball valve 6 5/8-in OD conductor casing cemented to 100 ft below land surface ► Well: TG-1 4.5-in OD casing cemented to 1000 ft -► below land surface r�! 'e' Alaska Center for Energy and Power 2012 Pilgrim Hot Springs Well Drilling Logs Drilling Logs for Pilgrim Hot Springs Wells TG-1,PS-12-3, and PS-12-9 Date Activity description Hours worked Art and Jeff arrive in Nome.Pick up two rental vehicles.Inspect snow conditions on Pilgrim access road(still 5-Jun considerable). 12 Working in town on equipment preparation.Load Louie Green's backhoe onto our trailer for transport to PHS to 6-Jun dig snow from access road.Northland barge arrives in Nome. 12 7-Jun Equipment preparation continues.Haul Louie's backhoe and unload at PHS access road intersection. 12 Pick up dump truck at Northland.Start equipment engines in town.Drive to site to check on Louie's progress. 8-Jun Drill crew flies from Denver to Anchorage. 12 Pick up remaining three rental vehicles.Crew arrives in Nome on morning flight.Still working on equipment 9-Jun preparation in Nome.Louie has access road dug to the BLM gravel pit.Begin moving equipment to the pit as it's ready.Get backhoe from Northland. 12 10-Jun Continue equipment prep in Nome(Geoprobe hydraulics etc).Move backhoe to access road and begin working with Louie to clear snow.Move more equipment to BLM gravel pit. 12 Continue equipment prep in Nome.Begin hauling gravel for access road repair.Locate and mark first ten 11-Jun geoprobe sites. 12 Using rented loader,begin mining rock from MINC site at top of Golden Gate and hauling it for access road 12-Jun improvement.Continue work in Nome and moving equipment to BLM gravel pit.Move supplies from Northland to Icy View. 12 Move geoprobe to PHS and drive first well to 80 ft.Continue access road repair work,moving equipment to BLM 13-Jun pit,and painting rig in Nome. 12 14-Jun Geoprobe 3 sites.Continue access road repair work.Move more supplies from Northland to Icy View. 12 Pick up pipe at Northland and move it,and additonal equipment,to BLM pit.Continue access road work. 15-Jun Geoprobe 2 sites. 13 Finish getting supplies from Northland.Continue access road work and geoprobing.Install new culvert at 16-Jun churchyard springs crossing. 12 Continue road work.Begin moving equipment from BLM pit to PHS runway parking area.Continue geoprobing 17-Jun using 2-pipe method. 12 Continue geoprobe work(plugging and driving with larger points).Move trailers to chuchyard area and begin 18-Jun moving into Nun's Quarters.Continue access road work. 13 19-Jun More geoprobe work and access road work.Move two loads of pipe from Nome to runway staging area. 12 20-Jun Continued geoprobe and access road work.Move two more loads of pipe from Nome to runway staging area. 12 Continued geoprobe and access road work.Move loader to BSNC gravel pit on main road to get smaller 21-Jun material.Move pallets of cement and drill mud from Nome to runway staging area. 12 Continue geoprobe and access road work using smaller BSNC material.Move drill rig from Nome to runway 22-Jun staging area.Install mast extension and large-diameter tires for improved site access.Waiting on AOGCC permit- 12 23-Jun Continue geoprobe work.Move loader to BLM pit in anticipation of gaining access to this material on 6/25. Begin rig and pipe pallet construction. 12 BEGIN WORK ON TG-1, PERMIT NO.:212-077 Continue geoprobe work.Begin moving equipment into churchyard area in preparation to move to well TG-1. 24-Jun Continue pallet construction etc. 12 25-Jun Geoprobe work and TG-1 preparation continue. 12 26-Jun Geoprobe work and TG-1 preparation continue.Build tripod to use for running geophysical logs in existing wells. 12 Continue geoprobe work.Get permission to use BLM"gravel"and begin hauling it for access road improvement. 27-Jun Set up and run gamma log in last year's 5-9 well. 12 28-Jun Continue geoprobe,access road work,and preparation for well TG-1. Run gamma logon last year's S-1 well. 12 Continue geoprobe,access road work,and preparation for well TG-1.Disassemble and move last year's rig pallet 29-Jun from S-1 site to churchyard staging area.Dispose of last year's stored cuttings in S-1 dug sump and move tanks to staging area. 12 More geoprobe and access road work.Begin stockpiling road material at landing strip staging area for future 30-Jun use.Repair(weld)PHS entry gate. 12 More geoprobe work.Begin preparing site TG-1(PS-12-1).Haul material in dump trailer for Louie Green to fill 1-Jul and repair trail leading to boat launch area in case we need to dispose of cuttings there.Run gamma login well MI-1. 12 More geoprobe and moving of road material to runway staging area.Decide to set up rig pallet at PS-12-1 to 2-Jul allow for BOP installation w/o the need to move rig(raise rig on pallet to required height).Run 2-in water lines from boat-launch slough to site and fill tanks with water.Move mudpump and shaker trailer onto site. 12 After finding out that we can drill to 500 ft w/o AOGCC permits,drill and drive 10 ft of 10-in surface casing and 3-Jul finalize site to where we're ready to begin conductor casing drilling in morning.Finish geoprobe work and collect gamma log from well PS-5. 12 Drill 10-in hole to 100 ft disposing of liquid waste in sump behind garbage pile.Begin moving road material to 4-Jul build base on which backhoe and work to enlarge sump and dump solids. 12 Alaska Center for Energy and Power 2012 Pilgrim Hot Springs Well Drilling Logs 5-Jul Set and cement 6 5/8-in casing to 100 ft.Clean equipment and bring in new light-weight rotary rods for drilling below casing.Continue working on trash-pile cuttings disposal area. 12 Cut pumping sub from 6-in casing,drill cement out from inside casing,and drill 6-in hole to 290 ft.After tripping 6-Jul out drill steel at end of day,well begins flowing^'100 gpm at surface(clay boot around bit"swabbed"the well). Trip in rods to 120 ft and pump drill mud to stop flow.Trip to 220 ft,mix weighted mud and pump.Trip out pipe. 20 7-Jul Trip to bottom and drill to 470 ft.Pull drill pipe from hole. 20 Trip to bottom and drill to 500 ft.Let rods stand w/o circulation for 2 hrs then run Kuster log inside pipe. 8-Jul Circulate and trip pipe from hole.Run gamma,caliper,induction,and resistivity logs in open hole. 20 Although we don't have AOGCC permit to drill below 500 ft,decide to hold off on cementing casing at this depth 9-Jul in the hopes that the permit-to-drill will be finalized today.Install knife-valve and 2-in kill lines on 6-in casing. Take geoprobe and pull rods from 2 sites that weren't yet pulled.Receive AOGCC permit at end of day. 20 10-Jul Trip rods to bottom and drill to 730 ft.Pull rods from well. 20 11-Jul Trip rods to bottom and drill to 1000 ft.Circulate and pull rods from well. 20 _ Trip and flush drill rods to bottom.Circulate and pull rod from hole.Run gamma,caliper,induction,and Kuster 12-Jul temperature logs in open hole.Prepare site and equipment to set and cement HW casing to 1000 ft.Run casing to 450 ft. 20 Finish running casing to 1000 ft and circulate.Mix and pump geolite cement thru casing to surface.....big mess 13-Jul but get it done.Clean equipment and site as much as possible. 22 Trip in drill pipe with 3 7/8-in bit and tag cement at 600 ft.Drill out cement to 990 ft leaving 10 ft in bottom. 14-Jul Flush well and fill with water.Trip pipe,install valve at surface,and clean equipment and site. 20 July 15-July 25 Crew returns to Denver for break.Jeff remains in Nome to take care of BOP-related and other issues(60 total hrs worked). 60 26-Jul Crew flies Denver-Nome.Jeff and Don(arrived 7-25)move BOP to Pilgrim.Assist Josh and Charlie in running Kuster in 12-1 well....only get down to 400 ft. 10 27-Jul Install BOP flange on 12-1 and trip steel to well bottom circulating and flushing fluid.Trip pipe and dig out well head for BOP installation 20 Install BOP and system.Trip steel to 200 ft and circulate per test requirements.Pressure system but it leaks. 28-Jul After Ron makes several calls,he opens/closes the bag in quick succession.Discover that we don't have the recording unit so test will have to wait until tomorrow. 20 Install pressure recorder and Ron Tate attempts to run test @ 3000 lbs pressure.The bag bursts and hyd fluid 29-Jul runs from the BOP head.Ron takes off and we remove the BOP and all plumbing from the well.Set up to run Kuster log in well.Begin clearing site and hauling rock material to runway. 20 BEGIN WORK ON PS-12-3, PERMIT NO.:212-109 30-Jul Remove all equipment from site and install ball valve on well.Begin moving gravel to site 12-2 20 31-Jul Set rig pallet on site and move rig onto pallet.Move rock onto access trail and lay tundra mats over the rock. Move equipment on site.Install 2-in water hose from slough to site and set up and fill water storage tanks. 20 1-Aug Set and cement 10-in surface casing.Drilled 9 7/8-in hole to 125 ft. 20 2-Aug Drill 9 7/8-in hole to 204 ft.Set and cement 6-in casing to 204 ft. 20 Pull 10-in casing and cement in large washout hole that was undercutting around the casing.Install 6-in knife 3-Aug valve and drill cement out of 6-in casing to bottom. 20 4-Aug Drill 5 7/8-in hole to 464 ft.Trip pipe at day's end. 20 5-Aug Drill to 754 ft.Trip pipe. 20 6-Aug Intall new bit,trip pipe to bottom and drill to 1004 ft.Trip pipe from hole. 20 Trip to bottom and flush well.Set up for logging and log well to bottom.Run HW casing to 270 ft with cement 7-Aug sub and shoe installed. 20 Trip/wash HW casing to bottom.Mix cement and pump thru HW cement shoe.Shut in casing and begin moving 8-Aug BOP into place. 20 Install BOP flange and set BOP in place.Set up hyd actuator and run preliminary test.Run and record BOP test 9-Aug for AOGCC. 20 Trip 3 7/8-in bit to bottom and drill out aluminum float shoe.Drill to 1024 and conduct formation leak test per 10-Aug AOGCC.Drill to 1078....basement rock at about 1040?Trip bit from hole. 20 Tricone bit is very worn so install 3 7/8-in PDC bit and trip to bottom.Drill to 1223 ft and pull bit back into HW 11-Aug casing. 20 Trip to bottom and drill to 1249 ft...very slow drilling.Circulate well and trip out bit.Get rig setup for wireline 12-Aug coring and trip core rods to 980 ft. 20 Trip core rods to bottom,pump down inner-tube,and core from 1249 ft to 1294 ft thru biotite shist and other 13-Aug metasedimentary basement rock.Fill well with abandonment mud and pull core rods from well. 20 Set up for logging and collect geophysical and temperature logs from well.Run capped BQ rods to 1295 ft and 14-Aug fill with water.Begin moving equipment from site. 20 Alaska Center for Energy and Power 2012 Pilgrim Hot Springs Well Drilling Logs BEGIN WORK ON PS-12-9, PERMIT NO.:212-126 Run tremie pipe in annular area to 160 ft and cement top of hole.Remove BOP and flanges.Begin building trail 15-Aug and running water line to site 12-3.Move rig pallet to site. 20 16-Aug Use BSNC skid-steer to begin moving equipment onto 12-3 site.Very soft and muddy.Lay turf mats in worst spots. 20 17-Aug Finish moving equipment and setting up site.Drill and set 5 ft of 10-in surface casing. 20 18-Aug Drill 9 7/8-in hole to 144 ft.Trip out pipe and run geophysical logs. 20 19-Aug Begin running 6-in casing but it stops at 30 ft.Pull casing and ream well to bottom.Trip out and run 6-in casing to 144 ft.Trip tremie to annular bottom and mix and pump cement. 20 20-Aug Well flange to casing,install knife valve,and install diverter system.Trip 5 5/8-in tricone to bottom and drill to 263 ft.Trip pipe from well. 20 21-Aug Install chisel-tooth tricone bit and drill to 423 ft.Very hard drilling in spots.Trip pipe from well. 20 22-Aug Trip pipe to bottom and drill to 723 ft.Pull pipe. 20 23-Aug Trip pipe to bottom w/o problem and drill to 983 ft.Still drilling numerous hard zones. 20 Trip pipe to bottom and monitor mud temp when ciculation starts(145 F max).Drill to 1133 thru varying hard 24-Aug and soft layers.Drills/looks like basement rock at 1083 ft.Trip pipe from well. 20 25-Aug Trip pipe in hole but have to circulate every 40 ft from 700 ft to 1033 ft then ream to bottom.Drill to 1183.....very slow drilling through basement rock.Trip pipe from well. 20 Run steel to 860 ft and ream to bottom.Thin mud and trip rods from well.Begin geophysical logging but caliper 26-Aug tool becomes stuck at 1065 ft.Trip drill steel into hole to try and wash out logging tool but can't get it washed down to that depth.Pull pipe. 20 Run BQ rods with reaming shoe on bottom to 993 ft.Mix and circulate fresh mud from that point but discover rods are stuck when done circulating....still have perfect circ.Decide to leave rods at this depth rather than 27-Aug trying further to retrieve so that we can at least get temp logs to this depth.Further retrieval efforts will likely result in fractured rods and total loss of the well. 20 28 Aug Cut logging cable.Circulate fluid thru rods.Mix and pump cement thru rods followed by rubber cement plug and 130 gallons fresh water.Begin moving equipment to town. 20 29 Aug Well begins flowing 150-200 gpm hot water from annular area.Run tremie into annular and kill flow with heavy mud.Run tremie to 126 ft,mix and pump cement in annular. 20 DRILLING ACTIVITY SUSPENDED 30-Aug Begin moving equipment from site to runway with skid-steer.Weather conditions are horrible and everything is a total quagmire.Begin moving items to Nome at day's end. 20 Cleaning,packing,moving equipment from site to runway and from runway to Nome.With exception of what 31-Aug will be left in Nome for final P&A of wells next year(PU truck,white trailer,AN,end AN trailer)all items are moved to Northland to catch early Oct barge south. 20 1-Sep Continue cleaning,packing and moving.Return skid-steer and ATVs to BSNC. 20 2-Sep Continue cleaning,packing,and moving equipment to Nome. 20 3-Sep Continue cleaning,packing,and moving equipment to Nome. 20 4-Sep Make final Pilgrim-Nome run with equipment.Finish loading conex box for ACEP,make trash run,turn in rental vehicles,and leave truck,trailer,and AN at BSNC Icy View yard. 20 5-Sep Crews fly from Nome to Denver.END OF PROJECT. Art and helper return to Nome to rehead logging cable,move equipment to Pilgrim,and collect gamma and Sep 16-Sep 21 equilibrated temperature logs from the 12-3 well. Pilgrim Future Development Questions Prepared by Gwen Holdmann,Dick Benoit,and Ronnie Daanen University of Alaska Fairbanks Jan. 13th,2012 What we know about Pilgrim Hot Springs: 1. Temperature:The UAF drilling project was hoping to encounter temperatures significantly above 200°F above a depth of 1000 ft but only documented a maximum downhole temperature of 195°F in PS-12-3 at a depth of approximately 140 ft.The maximum measured bottom hole temperature at or near bedrock was 193°F(in PS-12-2). It now appears that any significantly higher temperatures would have to be at depths far below about 1000 ft,and not necessarily directly below the hot springs. In fact,it is more likely that there is a significant component of lateral flow below bedrock,given the measured temperatures in the basement rock. There is also the chance that the cation geothermometers that were used to estimate maximum reservoir temperatures("300°F)are not accurate predictors for this resource,although there is no direct evidence to suspect this at this time. 2. Available heat:Our models estimate the total natural state heat flow from the geothermal system to be approximately 20 MWth.This value includes warm water escaping into the river through the groundwater.This is significantly higher than previous estimates of between 10 and 15 MWth. The amount of electrical megawatts that might be produced is on the order of 10%of the thermal megawatts and will depend upon the efficiency of a power plant that might be developed on this site. As a crude rule of thumb,the amount of electrical power that might be sustainably produced over a period of 30 years could be up to about 10 times the natural state value but it does not have to be ten times. As a minimum the system will obviously support its natural thermal discharge. It needs to be remembered that this is a very hypothetical estimate as it does not consider the likelihood of wells being commercially productive. 3. Upflow Zone:While the UAF drilling program did not intersect the actual upflow zone,the data allowed us to determine its location to within a few hundred feet.This means that the shallowest part of the resource appears to primarily underlie the center portion of the western side of the Unaatuq property. The upflow zone appears to be small at a depth of 1000 feet, but depending on flow characteristics this could be a viable place to extract the geothermal heat. Nonetheless,there is a significant risk of cold groundwater potentially mixing with the geothermal water in this small target area. The permeable gravels in the vicinity of the upflow zone will most likely also have to be a significant source of thermal water for there to be a viable project in this area.At present, most of the hot water(-190"F) is stored in a shallow aquifer at approximately 100 feet depth stretching over a larger area centered near well PS-12-3. Using this stored heat will not be sustainable in the long run,so it is critical to be able to produce fluids closer to the unflow zone. 4. Depth to bedrock: Prior to the 2012 drilling the depth to bedrock could only be inferred from geophysical surveys. The drilling has proven bedrock to be present below a depth of approximately 1100 ft directly beneath the main hot springs.The extent of bedrock topography is estimate using geophysical observations, but these data need to be analyzed further to determine a depth to bedrock map for the hot springs area. It appears that the bedrock surface is deeper in the south west compared to the hot spring area.Above bedrock unconsolidated material consisting of gravel,sand,silt,and clays have been deposited by the Pilgrim River to fill the valley over a million+years. 5. Flow rates:There have been no efforts to produce hot water from the reservoir other than by the natural artesian flow.The natural state discharge of thermal fluid is estimated to be 140 gpm from the bedrock at a temperature of 200°F.This water makes its way up through the unconsolidated materials,cooling off as it flows up to the surface. It can be expected that lowering the pressure head in a production well through pumping can stimulate the geothermal water to flow faster and therefore become warmer over time,however the flow rate increase (and corresponding pressure decrease)can also attract colder water from the larger valley. 6. Permeability:In addition volume of water available,the permeability controls the rate at which fluid can be produced from the reservoir. For Pilgrim Hot Springs,the permeability can be separated into the shallow(unconsolidated material)and deep(bedrock) portions of the resource. Given the unconsolidated nature of the materials hosting the shallow reservoir, permeability(and consequently recharge)is assumed to be high.This is desirable for development,as a tight system would limit options. Permeability is less well understood for the deeper reservoir which is feeding the shallow system.This will be a significant challenge for effectively utilizing the deeper part of the resource, however the geological activity in the region is significant and this helps create open fractures in the bedrock that could increase permeability in the bedrock. 7. Reinjection: Injection of the spent geothermal fluid back into the resource to maintain pressures(fluid levels)and mine heat from the formation is an essential part of a successful geothermal development. If an effective reinjection strategy is not possible, it could prohibit development or result in a failed project. In addition, it is not known if the State of Alaska would even allow surface discharge of thermal fluids,which in the case of Pilgrim is much more saline than the Pilgrim River. Injection into shallow gravels is a much simpler task to accomplish than is finding a deeply buried fracture in the bedrock.The development of the resource could consider using a reinjection method that would minimize cold water entry into the production wells. Outstanding Questions: 1. Is there adequate temperature to allow development of the resource? Cation geothermometers indicate a maximum reservoir temperature as high as almost 300°F. To date a maximum of about 195°F has actually been measured. If the higher temperatures are present in the bedrock below 1000 ft,then will it be possible to actually find the deep fracture(s) storing this fluid? If significantly higher fluid temperatures are not present then can the known temperatures support a project? The simple answer is yes,as Chena is utilizing 165 °F water to make about Y4 MW but these temperatures require about 1500 gpm of flow to make a megawatt. Thus a 2 megawatt plant would require a production rate on the order of 3000 gpm. . Three small power plants near Reno,Nevada have produced a megawatt or two with initial fluid temperatures of 225°F and surface discharge of the fluid. However,with some resource cooling to approximately the known Pilgrim temperatures these plants are only marginally operational now. 2. Is there adequate fluid available at Pilgrim to support pumping of a couple of thousand of gallons per minute? A small geothermal project has difficulty paying for deep wells but large fluid level drawdowns require pumps to be set relatively deep to avoid cavitation. Thus a key question becomes:is injection mandatory at Pilgrim to maintain an adequate fluid level in the reservoir and wells? If a well at Pilgrim is pumped hard,will it tend to draw in additional hot geothermal fluid from depth(the ideal scenario),or is there a way for cold groundwater or perhaps even surface water to access the production interval? Cold water inflow may be prevented with strategic injection of geothermal fluid. 3. If injection is required for either environmental or pressure support reasons,can a suitable injection location and strategy be identified at a reasonable cost? In part this depends upon the amount of fluid to be injected. It is always easier to inject smaller quantities. Is it possible to permit a "large" pumped flow test of 1000 to 2000 gpm of hot water and then discharge this water to the surface? If not,then an injection well or strategy would need to be developed before a flow test could occur, increasing the upfront costs. Recommended strategies/next steps to answer outstanding questions: We believe that the quickest and lowest cost path to answer these outstanding questions is to drill and pump test a well near PS-12-3 that terminates at the top of the bedrock (-1000 ft)to test the ability of the entire unconsolidated geologic section to supply fluid to the plant. Obviously the more that can be pumped from the well,the more convincing the results will be. Ideally,we would wish to pump up to 2000 gpm over a period of days to weeks,which would require a hole of approximately 14 in diameter. The key question on a drilling rig is its ability to circulate the cuttings up from a depth of 1000' in a hole of this diameter,which will require a mud pump capable of circulating hundreds of gallons per minute. In addition,the rig would need to be able to handle and lift a 12" casing or screen for installation. This sort of drilling program would require a fairly substantial mobilization effort, including supplies and equipment almost certainly not currently available in Nome. For example,the casing would need to be ordered,and substantial additional support equipment procured from Anchorage or outside the state. In addition, permitting for such an effort can be expected to take several months. For these reasons and because of the challenges associated with cold-weather drilling,we do not recommend a winter/spring drilling program.Any such drilling program will require a substantial amount of access road improvement work and the building of a drill pad. Flow testing of the well will require that the well be pumped,which means a pump and a method for powering it. Schwartz, Guy L (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Tuesday, December 11, 2012 5:00 PM To: Schwartz, Guy L(DOA) Cc: McMains, Stephen E(DOA); Gwen Holdmann Subject: Re: Pilgrim Hot Springs. Hello Guy, I will forward you the email with the 407 report for TG-1. As discussed before, we will provide well sketches, photos and logs for each well in a separate email once we receive the final invoice from the driller's (USGS) . So far the project provided AOGCC with a brief daily summary, pictures and the 407's for the 3 wells. The daily logs that will accompany the final USGS invoice will definitely be more robust. I expect the USGS invoice to come in before Christmas. Basically I just want to send one email for every well at the end without you or Steve having to sort through all the past emails again. Each email will include 407, photos, well operation/drilling activity log, well logs and a completed well schematic. Land owners: I will talk to the landowner regarding their permission and approval. Let me know if that works for you. On another note. I'm leaving ACEP the end of the year but I hope to get things with AOGCC finished up before Christmas (hope that the driller's invoice comes in before that) . In 2013, please contact Gwen directly if there are any other questions. Best regards, Markus On Tue, Dec 11, 2012 at 3:23 PM, Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov> wrote: > Markus, > We never got a 407 report for TG-1 (PS12-1) ... PTD 212-077. Can also > supply a current wellbore sketch showing cement and casing, Plugs and > fish etc. for each of the three wells. Also any pictures showing the > wellhead or surface location should be submitted for each well. > > Also, as we discussed in order to leave the wells as suspended the > landowner must give permission. Please provide documentation that the > landowner has approved the wells being left as shown in the 407 reports. > > Guy Schwartz > Senior Petroleum Engineer > AOGCC > . > 793-1226 (office) 1 I > 444-3433 (cell) > Markus Mager Project Manager Pilgrim Hot Springs Exploration Project Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergvnetwork.com/ 2 McMains, Stephen E (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Thursday, November 08, 2012 6:23 AM To: McMains, Stephen E (DOA) Subject: Pilgrim: 10-407-email 1/2 Attachments: AOGCC_PS-12-3.JPG; AOGCC_PS-12-9.JPG; Smirl-201-o12102210010.pdf; PHS 2012 daily activities for AOGCC.xlsx Hello Steve, My Name is Markus Mager and I'm the project manager for the Pilgrim Hot Springs project. Gwen Holdmann, the project PI, -Forwarded me your email. Below are my email conversations with Guy and the documents are attached again. Feel -Free to contact me if you have any additional questions. Best regards, Markus Forwarded message From: Markus Mager <markus.mager@alaska.edu> Date: Mon, Oct 22, 2012 at 10:24 AM Subject: Pilgrim: 10-407 To: "Schwartz, Guy L (DOA)" <guy.schwartz@alaska.gov> Cc: Gwen Holdmann <gwen.holdmann(alalaska.edu> Hello Guy, Attached you will find form 10-407 for the 2nd and 3rd well drilled at Pilgrim this year. I also included a write up on our daily activities (drillers report) and two pictures that show the labeled wells. Both wells are shut above surface so I used 0-Ft as Plug Back Depth. The project will provide AOGCC with bag samples once they arrive from Nome. Best regards, Markus Markus Mager Project Manager Pilgrim Hot Springs Exploration Project Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergynetwork.com/ 1 Schwartz, Guy L (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Wednesday, October 10, 2012 2:43 PM To: m_igloo@hotmail.com; mganley@beringstraits.com; LPederson@beringstraits.com; kbahnke@beringstraits.com;jbrown@beringstraits.com; WRose@kawerak.org; gwen.holdmann@alaska.edu; prakash@gi.alaska.edu; rdaanen@alaska.edu; arvind@gi.alaska.edu;jkmiller3@alaska.edu; Imstowell@alaska.edu; aclark@usgs.gov; jdeman@usgs.gov; perimp@aidea.org; Skaling, Sean M (AIDEA); Lockard, David A(AIDEA); eric.hass@go.doe.gov; Swenson, Robert F(DNR); Foster, Neal W(LAA);johnh@njus.org; Olson, Donny(LAA); DMichels@kawerak.org; Labolle, Paul C (LAA); bjsheets2@alaska.edu; ljwalls@alaska.edu;jwschmid@alaska.edu; thjohnson@alaska.edu; david.light@alaska.edu; julie.estey@alaska.edu;jason.meyer@alaska.edu; mdcavanaughmoen@alaska.edu; mmuellerstoffels@alaska.edu; ahpathan@uaa.alaska.edu; alrath@alaska.edu; rjnewberry@alaska.edu; Chuck_Kleeschulte@energy.senate.gov; DDaniels@denali.gov; chris@realaska.org;jbatir@gmail.com; rwinner@winnerlaw.com; akfisherwoman@yahoo.com;jjgadamus@alaska.edu; nancyegreen@hotmail.com; TSparks@blm.gov; iris@stellargp.com; mrohr3@alaska.edu; info@ak-geothermal.com; sboatwright@alaska.edu; chha@gi.alaska.edu; Clough, James G(DNR); desneige@email.arizona.edu; flwilliams@alaska.edu; Davies, Stephen F (DOA); Schwartz, Guy L (DOA); Brian.Hirsch@nrel.gov;jimdrewry@aol.com; zcwoodbury@alaska.edu; cparr4 @alaska.edu; wcumming@wcumming.com; dickbenoit@hotmail.com; ethanalaska@gmail.com Subject: Pilgrim Hot Springs: Final field season update All, The field season officially ended on September 21st after Art and I collected the final temperature & gamma logs on the 3rd well. Now it's time to crunch the numbers and to analyze the collected data! With this email I want to thank the USGS drilling crew, especially Jeff Eman & Art Clark, who did a tremendous job under the given circumstances; the UAF field crew, especially Joshua Miller, Charlie Parr, Lisa Stowell, Zach Woodbury and Frank Williams, who worked hard and made the best out of their stay at the Cottonwood cabins; and the UAF project team, especially Christian Haselwimmer, Ronnie Daanen, Gwen Holdmann, Anupma Prakash, Bill Cumming and Dick Benoit, who helped tremendously in the form of advice and guidance. I also want to thank folks in Nome and Teller for their support and help, especially Kevin & Larry from BSNC, Blanch from MINC and Louie Green. They all played key roles to make this a successful 2012 field season. If you want to stay informed about the Pilgrim project please check the project's website periodically as we plan to post results and progress reports there. In fact, I just updated the list of selected publications and presentations. http://energy-alaska.wikidot.com/pilgrim-hot-springs-project-phase-1#toc7 Check it out when you get a chance, let me know if you have any questions and best regards, Markus Markus Mager Project Manager Pilgrim Hot Springs Exploration Project Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 1 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS 20 MC 25.280 1.Type of Request. Abandon 0 Plug for ReddIl 0 Perforate New Pod 0 Repair Well 0 Change Approved Program 0 Suspend❑' Plug Perforations 0 Perforate 0 Pull Tubing 0 Time Extension 0 Operations Shutdown 0 Re-enter Susp.Well 0 Stimulate 0 Alter Casing 0 Other. 0 2.Operator Name: 4.Current Well Class: 5.Permit to Drill Number. University of Alaska Fairbanks Development 0 Exploratory Q 212077 3.Address. Stratigraphic 0 Service o 6.API Number: PO Box 755280,Fairbanks AK 99775-5280 50-031-20007-00-00 7.If perforating,closest approach in pool(s)opened by this operation to nearest 8.Well Name and Number property line where ownership or landownership changes: Spacing Exception Required? Yes 0 No 0 Pilgrim Hot Springs PS-12-01 9.Property Designation(Lease Number). 10.Field/Pool(s). Fee-BSNC 11. PRESENT WELL CONDITION SUMMARY Total Depth MD(ft). Total Depth TVD(ft): Effective Depth MD(ft): Effective Depth TVD(ft). Plugs(measured). Junk(measured). 1000 ft 1000 ft 1000 ft 1000 ft 990-1000 ft cement N/A Casing Length Size MD TVD Burst Collapse Structural Conductor 100 ft 6-5/8 in steel Surface Intermediate 1000 ft HW 4-1/2 in steel Production Liner Perforation Depth MD(ft). Perforation Depth TVD(ft). Tubing Size. Tubing Grade. Tubing MD(ft). N/A N/A N/A N/A N/A Comments Packers and SSSV MD(ft)and TVD(ft). 1500 psi 3 in valve installed on wellhead 12.Attachments: Description Summary of Proposal 0 13 Well Class after proposed work: Detailed Operations Program 0 BOP Sketch ❑ Exploratory Q Development 0 Service 0 14 Estimated Date for prior to September 1,2012 15.Well Status after proposed work: Commencing Operations: Oil 0 Gas 0 WDSPL 0 Suspended 9 16.Verbal Approval: Date: 7/27/2012 WINJ 0 GINJ 0 WAG 0 Abandoned 0 Commission Representative. Stephen Davies GSTOR 0 SPLUG 0 17. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Printed Name Gwen Holdmann Title Director,ACEP,UAF Signature -- - Phone 907-590-4577 Date 7/31/2012 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: Plug Integrity 0 BOP Test 0 Mechanical Integrity Test 0 Location Clearance 0 Other: Subsequent Form Required: APPROVED BY Approved by: COMMISSIONER THE COMMISSION Date: Form 10-403 Revised 1/2010 Submit in Duplicate , Supplemental information: DOE Technical Review Team Meeting July 24th, 2012 Plan for deepening PS-12-1 During the 07/03/2012 review meeting the Pilgrim Hot Springs project team proposed drilling one or two additional 500ft holes to better define the deeper geothermal anomaly before committing to drill a 1000ft or deeper hole. PS-12-1 was spudded on 07/03 and reached 500ft on 07/08. A preliminary temperature log in the drilling mud in the then recently completed hole showed a very promising positive temperature gradient beneath the shallow thermal aquifer. Given the encouraging temperature results and the ability to drill deeper the project team, in coordination with the TMT, decided to minimize rig moves and deepen this hole to 1000ft. On 07/11 we reached 1000ft in PS-12-1 and set and cemented HW casing by 07/15. The cementing job had unexpectedly early returns of cement which suggests some channeling of the cement. While cementing a hose broke and some cement was sprayed on site. However, there was cement to the surface so no top job was necessary. The drilling crew also encountered cement inside the HW casing below a depth of 650ft that has already been drilled out to 990ft. Throughout the drilling of PS-12-1 the UAF crew performed detailed logging of the cuttings and monitored the temperature and properties of the drilling mud. This is required by AOGCC and DOE. We will include these data in future updates to DOE/TMT but the formations were all unconsolidated sand, clay, and lesser gravel. Upon reaching 1000ft, resistivity and natural gamma ray logs were acquired in the mud-filled open hole (Figure 1) to a depth of 1000ft. We also ran temperature logs in the mud filled open hole on 07/12 and in the water filled casing on 07/17 (Figure 2). Correlations of gamma ray activity will be made within a few days between P512-1 and the other wells for which we have gamma ray logs. Project field work is on hold right now since the drilling crew is on a scheduled break. The crew will return on 07/26 and work will resume on 07/27. We also want to reiterate again that the project is not planning to produce any fluid from any of the 2012 wells but if any unexpected opportunity arises water samples will be collected in plastic bottles. Hypothetical temperature cross sections (Figures 3) were prepared by two members of the UAF group based on the existing data and both suggest that the shallow upwelling is located to the south of PS1-12. The differences between the two temperature cross sections give some indication of the current uncertainty of the deeper temperatures. This upwelling provides a future shallow drilling target to simply try to document the maximum temperature of the system but it does little to demonstrate that the system has a large enough lateral extent for both production and injection areas. Proposal to the TMT Due to the measured gradient in PS-12-1, the encouraging results and the invested time and money in PS-12-1 the project team unanimously decided to continue drilling at P5-12-1 as permitted by AOGCC. The following scenarios are possible: Scenario 1 (most optimistic): Bedrock is at a deeper depth than expected and the temperature gradient is modestly higher than currently known,then the borehole could reach 300°F(150°C) at a depth of approximately 2000-2500ft and there is high permeability. Does this mean all the potential for the project is reached?What are the remaining goals? 1) More geophysics such as MT to define the resource either before or after drilling additional holes? 2) Further defining the resource with the equipment at hand meaning more boreholes: a) We can continue exploration at proposed permitted site number 5, a short distance south- southeast of the hot springs with a 500 ft borehole and potentially drill it deeper if the temperatures appear encouraging at 500ft. b) If proposed drill site number 5 is not encouraging at a depth of 500 ft then we could move to the proposed location number 1. A hard layer(travertine or silica deposits?)was encountered with several of the geoprobe holes in this area. An absence of cuttings from these holes precludes certain identification of the hard layer but it is apparently associated with the highest shallow temperatures in the area. Scenario 2 (realistic): It is possible on the basis of a preliminary gravity interpretation to reach crystalline bedrock at approximately 1500ft below the surface (see figure 3 first cross section).The current temperature gradient (crudely calculated at about 6 F/100') holds till bedrock is reached. In this scenario the temperature at 1500 ft will be approximately 195°F (90°C),the same as the maximum measured to date in the shallow thermal aquifer. We would ideally want to drill at least 100' into the bedrock before terminating the drilling so that we could determine the temperature gradient within the bedrock. The higher thermal conductivity of the bedrock should result in about a 50%decline in the temperature gradient in the overlying unconsolidated material. However, if penetration rates in the bedrock are unacceptably low with a tricone bit then a decision will need to be made as to whether to switch to coring operations or to simply complete the hole and move to other sites where new temperature information can be gained in an acceptable time frame. Scenario3 (pessimistic): Bedrock is reached at 1100ft and penetration rates are low and temperatures are not rising dramatically in the bedrock with low permeability. 1) Further exploration to the North West would not show promise with less predicted sediment cover according to the gravity data. 2) This leaves exploring closer to the springs at depths largely above the bedrock. A BOP is required by AOGCC once we drill deeper than 1000ft. If the TMT aggress with our assessment and to our proposal we will inform AOGCC about our decision and schedule a BOP test on 07/29. Summary Once PS-12-1 is completed it is very likely that we would want move to another site to drill one of the additional 500ft temperature gradient holes. Depending on timing and the temperature gradient of the additional 500ft hole the project team will decide to drill an additional 500ft hole or continue drilling the second hole to a target depth in or near the top of the bedrock. This decision depends on the project team and the TMT being able to convincingly narrow down the size of the deeper target for a 2500ft hole at that time. Possible desired results in a second hole could be penetrating higher temperatures, penetrating similar temperatures at shallower depths, or perhaps increasing the known extent of the deep higher temperatures. a1 i. -0-77 Ps-,12- ( GI ; e- : _ DS-12-1 J a1 gamma CIYLiPE+}i TENSON I I AD-SR 25.7, 2 4,Z:— 10 0 .-DS 2.)::: 0 10 _ — - 20I 30 50 60 70 50 --4 90 100 110 I 1a I 130 11 140 g- I _ t 150 t 160 1 0 - II r 100 } 1 1 190 1 I 200 l X 10 - I, I 220 ; 1 230 240 : 1.1 C., 250 260 I ti 270 E 1 I 280 I. 290 , 1, I 300 310 ,,amu I i :k 330 340 ',_____--- 350i- 360 r 370 380 380 400 - - 410 420 `i - _-= - 430 440 450 i 460 40 480 r- 490 500 =------ 5 1 51 0 1- _ 520 530 ~� 540 _ 550 + 560 570 580 - 590 4 600 610 620 630 640 650 660 670 - - 680 690 - 700 --- — f ti �f 710 � z--- {I — —�____- r 720 +� I , _-, 740 j , r'i 750 z I 760 I (� r f 770 ' (�'yy �_ 3 11 790 800 -k ______=a- --- - 810 - — 820 830 — 840 = - C ornII u;Ju I _ I - , fin+0 ;{ II i _ 070 880 , 890 ' 900 'I 9101 ;5- 920 930 — ti 940 950 I I 960 970 i . 900 I 990 [ , 1000 C _ • , I.. .. -€.,S • A : 1 l ) Figure 1 PS-12-1—1000ft gamma-induction&gamma-caliper logs PS-12- I .........(L4_. (OA -_-- ';'S-12-1 ler-9r:ga—r is CCM I 1 —1 RES I 1 AP—00610 — ` ` _D` 1 0 t 10 •=` 30 40 { 50 60 7o er 80 o 100 I 110 / ___ _-_-~_ '� .. �=-- --- ,- - _____________:::11_11-: I'1 120 . __ —_ �I , - , 1 130 ---- ti -'0L--- I 1 i I ( 1 4 0 1 --.I -.. I II-- . "`- i! 1.\ ____ .. __ 1 -- , , 1501 ./. -5-.L-- ---__ . ,., _ 1 -- I I, _ .-_.._ I . .1 ',.. 11 6 0 ...._-____ / / ._....- ..... II--- r .., Il 17- rr . 11 II 110 _-- -,__ ,I ...I' -`7...- I' r- ,- --- _......-• . .._. 1 . '---..+•-- - -wr-^ -,_ .11._ 180 -;•-_--- IL ifi .1 1 190 * ,,, , 1 , . . II 200 _ ___I _ - __ __ ___-- __ _-- __- „-- .._- J____--- ___ 210 ---------- 1 '''' .. III /---'-- __----------- --,- ) •1 220 -s- 1 .,_ _,-- -1 ----_, I -3 i„. ! ......_, 230 , -...I. -,-- .i, ...., _ __.... ...„ •, ___. - , f".-- 240 :i - .- I r .. - . __5._ 250 , •,,.._._ _ -----..___ I 1 .... __-. ..„....._ __ •___ = ...., --, 260 -____.,_ .... . 'I, „.......„..... , , , . . 270 -. mrI; ii.-... I. ,-- ..../im. II II ' .... . 280 -. . , 1,, ,...i. , -- . I L- 1 •:, 290 .- ,. , - ..__ II .. _. „. ---- II (.\\). .1 . ... 300 • -___ .., . --,_ I., -" I .1 I ) 310 ....,--- __ __,..._ .." ..,. I c. ()L --L._ __-=-- 320 — • , .. 330 ,- . 1 ) __-- __..... r--: ) ) . . ....-- 1I . ...------' ____, f..' ...-=• 1 ---.-- .. --.,-- - .= \\I 360 .,.- _ -...,., - --- 370 , -:'—,._ ---__ _L_ l() —__ ....-=.-_ 380 ---, -__ .-- -, ---,- , rI re5 ----, 400 ___..._ ---, 420 , -L. HI, -r- ...- --1.- '.- I j) --- I. ---__ ._,... 430 •—__ -1- - ...7 •,--- ... 1 ,._ . -"---.- ---"- II : -6.- ._,_.. .. /- ,--- .-------- „------- 470 —..______ .-5 -.. - _- ,--- -IP I ... --'"- -i___ -- - -. .---- 480 _----.--. _,._. -----..._ ___-- C --•./ 9 3 U Z.: ".= -• I III ‘,.....) D•, - - M. I .... __---- I (--- 500 -, (FS _------j .•--- --- . ..7. 1 ....„ ....__ .......,_ 510 _ .....s 520 i ...---- ---__ r 530 ....._ .II. „..._ -... -'1 .. L \ 540 , le -,. I -c-- ( ,...:-...- —J,._-- .,... ,..... -...s . ..„. 1 .,, --,_ ---- 'k, , '- - J -•-•_.. .. 560 - S :-.i...,. .I-..........i •........_7 (6, 570 ___,,._ ,. -- .... E' - .C- 580 --=._ ,. . .... ,_ ----..... 1 13 --.. :., 590 — ) c.:,-, _- • 600I., __ c- \\ --___ ...... —,. —...z--- ( ,r-- ------ r.--- -_--' .._=,.. ---"N. 610 ...---• __---- I..... _... 620 - ) ._. 630 ----__ --2-- ) L-------_( ) -- . 640 _ . L.------- , (. ._.,._ . \ 650 . , ..,.. .....,,_ ., ..., _ .. J --- 660 ..._ ,:. ------ - _ , 1-., -- , .___ • 670 ---- , . — _- 680 A: ---- 17-- -m- , -.Gm. li--- ...A- ? , ,----• ...--- 2,— ".-----------,. ii ----,--- \s. 700 .,..— 1 _. --- 1 . ... , 1----- I '-'") ...._ . . 710 _ -- __, -------,-- \ ., 1 „ 720 ,-- -----,— ,, ---) . 1 I-.--' . - --....._ I. .- . ) ...___ ... ---- 730 : I „------- k --) .., f .._.„ . I,, ,---.----, 740 —_ III .... 1 _...--- fil 750 = _ — , , ,_ ,...., ) :I 760 ..„,..____,_ . ( f _----- -- '(II __--- ..= 780 , __.. _______. ____----- (.) — __--- 790 ------ -,-- ..—i& <2. , „... 800 —,. -s.,.._. --- 810 ?--. ..,.; Th. ... 820 ,r- - - _ r 830 -- ------ - -----.7- -kr 840 .= , I 5 — ____ - III '1 850 —I I : i ti 860 — -r 1 I 1 _�— i ! 1• 870 } II 880 r� 1) L '1 I 11 1'. I 890 _ - �, ,f 1 1_ I 1 900ti 7 910l— l 1l ? II I' 1 I ; 940 k 't I 950 i IIL 1 r 1II 960 _ 1 r �� r S. 1 90 — ' ' _ ti I 980 ----- _ {' - _- c 11 99a r ti. - ) r=---_ ill 1000 i PS-12-1 log Temp in degrees F 70 80 90 100 110 120 130 140 150 160 170 180 100 -- 200 - 300 400 ^ SPS 12 1 07/17 07/12 # 50o 600 700 800 - 900 1000 I Figure 2 PS-12-1 temperature logs PS5 PS4 PS1 PS 1-12 Si 15 4 5 6 7 8 100 ft 200 ft 300 ft 400 ft80 F 500 ft 80 F 1000 ft 120E 120E 140F 111 140 F Bedrock 1500 ft 160 F 180 160 F 2000 ft 200F 180F 200 F 2500 ft 220 F 240 F 220 F 3000 ft 2601 240 F 280E 280 F 60 F SOD r. 60- 60F 600. 100= 00 F epp \\\:\ 120 F woo./ 100 F ou 120 F 0V 140 F 1200 160 F 140 0= gyp' 200E 60 E Oar tsar 220 r tape 1100' 200 F 1tar MO" Aar 220` Figure 3 possible cross sections Capuano Engineering Pilgrim Hot Springs BOP Testing Procedure BOP Testing Procedure Purpose Once a section of a well is drilled and casing is installed to surface, a Blowout Prevention Stack will be made up on top of the wellhead. The procedure described below is to test the BOP stack and valves to a low pressure(250 psi)and a high pressure (500 psi). For the purposes of this testing procedure, the stack will consist of an annular blowout preventer and side outlet valves. Before beginning the test, examine all wellhead equipment such as: valves,BOP equipment and piping. All materials must be at least rated to withstand 750 psi or greater. Do not begin testing until all pressure control devices are visually inspected and confirmed. Low Pressure Testing Procedure 1. Pick up and run into the well open ended with drill pipe to 200'. // 'if 2. Circulate the hole for 45 min. 3. Shut down circulation 4. Close annular preventer around drill pipe. 5. Close side outlet valves. 6. Pressure up through drill pipe to 250 psi and hold for 30 min. 7. Visually inspect the valves and annular for leakage. 8. If pressure drops less than 10% in 3_` 1_m n.. a 5'11 8.1. Relieve Pressure. 8.2. Cycle all valves and BOP open and close. 8.3. Move on to high pressure test. 9. If pressure drops more than 10% in 30 min. sf.,1, 9.1. Check and repair leaks. 9.2. Relieve pressure. 9.3. Pick up 100' additional feet of drill pipe and return to step 2. 1 Capuano Engineering Pilgrim Hot Springs BOP Testing Procedure High Pressure Testing Procedure 1. Pick up and run into the well open ended with drill pipe to 200'. 2. Circulate the hole for 45 min. 3. Shut down circa ion 4. Close annu} rr preventer around dri ipe. 5. Close side outlet valves. 6. Pressure up through drill pipe to 500psi and hold for 30 min. 7. Visually inspect the valves and annular for leakage. 8. If pressure drops less than 10% in 30 min. 8.1. Relieve Pressure_ 8.2. Cycle all valves and BOP open and close. 8.3. Move on to high pressure test. 9. If pressure drops more than 10% in 30 min. 9.1. Check and repair leaks. 9.2. Relieve pressure. 9.3. Pick up 100' additional feet of drill pipe and return to step 2. j.,LL (Jr/zip /01 2 Schwartz, Guy L (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Saturday, July 21, 2012 4:12 PM To: Schwartz, Guy L (DOA); Davies, Stephen F (DOA) Subject: Pilgrim: PS-12-1 Drilling Notes Attachments: 001.jpg; 002.jpg; 003.jpg; 004.jpg; 005.jpg; 006.jpg; 007.jpg; 008.jpg; 009.jpg; 010.jpg _____,::,.i \r A, +.� ___Ij OO1.jpg(476 KB) 002.jpg(537 KB) 003.jpg (3661 KB) 004.jpg(479 KB) 005.jpg (449 KB) 006.jpg(495 KB) 007.jpg(447 KB) J ' _2—'3' ___ ',J 008.jpg (567 KB) 009.jpg (469 KB) 010.jpg (269 KB) Hello Guy and Steve, I've attached the notes from PS-12-1. Josh and Charlie, the UAF crew members who work on the cuttings descriptions, used abbreviations in their observations. dk = dark It = light gy = grey br = brown qtz = quartz py = pyrite They also gave the visual estimation of grain size distributions based on the sampled mud. Our sampling procedure was sampling from the well head/diverter pipe, the coarse, and fine grain shaker table. We washed the drilling mud off of the samples and placed them on our table. We also took some of the clay from the sample and washed it completely out to see which grains were found inside the thick clay portions. We noted the lithology (listing the most abundant first, then in descending order of relative abundance) by naming the mineral or rock fragment. Schist and granite rock fragments were common and based on the texture, mineralogy, morphology, weathering, etc. Grain shape and sorting was also noted. In the observations column, we reported what the drillers (either Jason Parllet or Steve Grant) told us they were encountering while drilling and where major lithologic changes occurred. Prior to the run, mud temperatures were recorded and monitored alongside drill cutting samples at every 5 ft. I kept the drillers informed of the temperature as it increased in order to adjust their mud properties or take precaution against high temperatures. The mud temperatures increased to -55 C by 600 ft and remained constant (varying between 52-55 C for 300 ft) until 930 ft where it increased to a peak of 60.5 C and varied between 59.1-60.5 C to 1000 ft. The mud temperature was cooled however by adding cold water to the circulation. The head drillers (Jason Parllet and Steve Grant) were informed at every temperature measurement. Temperature was measured using an infrared laser Raytek handheld device. I calibrated the device multiple times using the Thermistor probe and the Raytek accuracy was within 0.3 C every time. The Raytek was preferred because it afforded us adequate distance from the diverter pipe at the rig to monitor mud temperature without being too close to the turning pipe. It also took 5 seconds to equilibrate whereas the Thermistor takes over a minute at best. We are working on a first draft lithology log which will be correlated to temperature and gamma. I hope to have this by Tuesday. As mentioned in my phone message on Friday, we are planning to drill deeper in PS-12-1 (depending on DOE approval) and we are aiming for having a BOP equipment test on 07/29/2012. Best regards, 1 ' Markiia Markus Mager Project Manager Pilgrim Hot Springs Exploration Project Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Cell (907) 322-7012 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergynetwork.com/ 2 Schwartz, Guy L (DOA) ! Z y Z - ©°77 From: Markus Mager[markus.mager©alaska.edu] Sent: Sunday, July 29, 2012 7:42 PM To: Thorsteinsson, Hildiqunnur Cc: Coy, Ava (GO); Segneri, Brittany(CONTR); Pat Dobson; Joel Renner; Visser, Charles (NREL); Doug Blankenship; Steve Knudsen; Gwen Holdmann; Baldivieso, Alan P (AIDEA); Dick Benoit; Davies, Stephen F (DOA); Schwartz, Guy L (DOA) Subject: Pilgrim: 07/28 & 07/29 update for TMT Attachments: BOPinstlof4.JPG: BOPinst2of4.JPG: BOPinst3of4.JPG: BOPinst4of4.JPG: BOPtest.JPG: BOPtightening.JPG; Request to deepen PS 12-1 without a BOP to 1650 feet July 29, 2012.doc; failedBOPtest.JPG; BOP_after_failed_testl of2.JPG; BOP after failed test2of2.JPG BOPinstlof4.JPG BOPinst2of4.JPG BOPinst3of4.JPG BOPinst4of4.JPG BOPtest.JPG(142 BOPtightening.JPG Request to deepen (124 KB) (115 KB) (124 KB) (128 KB) KB) (123 KB) PS 12-1 with... failedBOPtest.JPG BOP after failed t BOP after failed_t (104 KB) estlof2.JPG ... est2of2.JPG ... All, li As planned, the drillers put the BOP on PS-12-1 yesterday morning (see BOPinst pictures) . After that the UAF crew ran a temperature log with the Kuster. The run was successful in a clean casing and we reached 985' . A temperature chart comparison of the 3 runs is included in the attached Word document. Once we finished logging, we connected the BOP with the accumulator and tested the system (see BOPtest) . We lost some pressure during the first test run and decided to extend the hole around the well in order to use a bigger hammer to tighten bolts and nuts and to double check fittings (see BOPtightening) . However, these or the cement in the shoe seemed not to be the reason for the pressure loss. The pressure loss was eliminated after opening/closing the bag and pressurizing the hole again. 07/29 The drillers installed the required pressure reader unit as requested this morning and we started the official BOP test. The BOP got closed and within less than a minute we heard a loud bang coming from the BOP unit. After evaluating the situation we decided to take off the BOP. The attached pictures show the current condition of the BOP (see BOP_after_failed test) . Detailed BOP test procedure reports are requested from Ron Tate (Capuano Engineering) and will be forwarded to the group as soon as I receive them. The attached Word document outlines the project teams current thinking and I suggest a phone conference tomorrow morning at loam AK time to discuss our situation. Please call: 1-800-893-8850 code 8417297 Best regards, Markus Markus Mager Project Manager Pilgrim Hot Springs Exploration Project Alaska Center for Energy . Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Cell (907) 322-7012 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ httb://www.akeneravnetwork.com/ Schwartz, Guy L (DOA) From: Schwartz, Guy L(DOA) Sent: Monday, July 30, 2012 11:39 AM To: 'gwen.holdmannnalaska.edu' Subject: FW: Pilgrim: Update and next steps Gwen, Can you pass this on to Marcus please. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) Original Message From: Schwartz, Guy L (DOA) Sent: Monday, July 30, 2012 11:14 AM To: 'Markus Mager' Cc: Davies, Stephen F (DOA) Subject: RE: Pilgrim: Update and next steps Marcus. As we discussed, the Commission will not approve drilling ahead past 10001 ft on PS12-1 without an operational and tested Annular BOP. Additionally, since you are planning on moving the rig off the well a temporary "operational Shutdown" sundry needs to be submitted per 20 AAC 25.072. This sundry must include how you will leave the well secured and fluids left in the wellbore etc. I apologize that I did not tell you this when we were talking this morning. You can email this information to me and send in the forms later if that works better for you. The 10-403 Sundry form is found in our website http://doa.alaska.gov/ogc/forms/forms.html Good luck, Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) Original Message From: Markus Mager [mailto:markus.mager@alaska.edu] Sent: Sunday, July 29, 2012 4:33 PM To: Schwartz, Guy L (DOA) ; Davies, Stephen F (DOA) Cc: Thorsteinsson, Hildigunnur; Coy, Ava (GO) ; Segneri, Brittany (CONTR) ; Pat Dobson; Joel Renner; Visser, Charles (NREL) ; Doug Blankenship; Steve Knudsen; Gwen Holdmann; Baldivieso. Alan P (AIDEA) ; Dick Benoit Subject: Pilgrim: Update and next steps Hello Guy, As discussed on the phone today the project would like to requests to deepen PS 12-1 without a BOP to 1650ft. The attached document describes our current status and thinking. I will discuss the current situation and this request with our DOE project advisory committee as well. The advisory members are "cced" on this email. I will try to call you 8am tomorrow morning to discuss any of your question. Thank you, Markus 1 Markus Mager Project Manager Pilgrim Hot Springs Exploration Prosect Alaska Center tor Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Cell (907) 322-7012 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akeneravnetwork.com/ The PS12-1 hole is currently at a depth of 1000 feet and has cemented casing to this depth. The cement inside the casing has been cleaned out to a depth of 990 feet. Three static temperature logs have been run in the well since it reached its total depth on July 11. These three logs show a normal thermal rebound after the drilling disturbance and agree well with each other. The log run on July 28 was run shortly after some mud was cleaned out of the bottom 100' of the well and reached a depth of 975' and recorded a maximum temperature of 176 F. It shows a linear temperature gradient of 5.5 F/100'which is only approximately 2 to 3 times the expected PS-12-1 log Temp in degrees F 70 80 90 100110120130140150160170180190 0 200 400 —PS-12-1 07/17 —PS-12-1 07/12 600 PS-12-1 07/28 v 800 1000 1200 regional background temperature gradient. The formations at Pilgrim to a depth of 1000' consist of unconsolidated Quaternary fluvial sediments ranging in size from clay to gravel. Preliminary modeling of a gravity survey suggests that the underlying crystalline metamorphic bedrock is present below a depth of 1300 to 1500' but this is a poorly constrained number. The drilling rig on site has 2500'of drillpipe, which is about its depth limit. If the 5.5 F/100'temperature gradient below the temperature minimum at 400' is linearly extrapolated to greater depths it suggests a temperature of 212 F that should be encountered near a depth of 1650' and a temperature of about 260 F would be present at 2500'. However, if the hole encounters the crystalline bedrock, which should have approximately twice the thermal conductivity of the overlying unconsolidated fluvial material,then the temperature gradient will decline by approximately 50%to maintain a constant heat flow across the boundary between the two units. This will effectively move the predicted isotherms deeper in the earth than the previous linear extrapolations. There is no reason to expect the temperature gradient beneath the current bottom of hole PS1-12 to increase with greater depth. The small "toe" at the bottom of the July 28 log simply represents the very bottom of the hole being less thermally affected by the prior mud cleanout. On the morning of July 29 the BOP test on hole P512-1 failed when the BOP bladder was damaged during the test. I will take at least until August 1 to repair the BOP on site and redo the test. The deeper temperatures measured in the hole to date are somewhat disappointing relative to the higher predicted chemical geothermometry and there is only a limited desire to take to hole to a depth of 2000 or 2500'. This is especially true if the crystalline bedrock drills at its expected low penetration rate of a few feet per hour. The project money can be better spent looking for higher temperatures and gradients at shallower depths in other locations. However, knowing or confirming the depth to crystalline bedrock will allow much better extrapolations of all deeper temperature gradients in the Pilgrim area. This makes the case that it may be a prudent use of time and money to try to deepen the P512-1 hole to test the geophysical depth prediction. Therefore, it is requested that approval be given to deepening the P512-1 hole to a maximum depth of 1650'without use of a blow out preventer. At this depth boiling temperatures might be reached but above it temperatures will be below boiling providing no opportunity for a steam driven flow of the well. In other words, until a depth of 1650'is reached PS12-1 is simply like any other water well rather than being a true geothermal well. If bedrock is encountered near its geophysically predicted depth then drilling up to 100' into the bedrock will provide a solid "bedrock"temperature gradient that can be more accurately extrapolated to even greater depths. However,drilling up to 100'in the bedrock will require an acceptable penetration rate. If approval for this deepening cannot be quickly granted then it makes sense for the project to move the rig to a new site where higher temperatures at shallower depths might be present. AL mr . ,, , j. , r r y ° ' .. ..M... . . M1116, V1 .4— , ....A „IA ...... . . tiviitt: 4 p • et 1 1:111:: ..'" . _ 3 /I.:I'', 4 ;. r I�' 4 - . 4 4,6„.. . .... , 1 . f at.., .'1. .. ' . ' ie ''.. 104* ' 4 1 '- z rilk ti cNiiir R 47. ILI.. a.,tom. a;' Y:�r ,,.. ,. ,i . ,otif- - .., ilf �, �Ir s . livi,s. , 4 ,,, ,-).. .0,.. .— . .,,,e.,, . , ., . , , ...A., . . .1 a 1101 . fit ^}' ,-'r t l' . j r ; at i P e Y R '+nR. 4ot ? ii. 1. x e ' x r. r, r t t 114, I ~ ill., ,fc.,..*.: d Ot 4' / : * r TL. •. x- 4 ! r f r' a a • . y L - J M fir.. 4 4 r 'kik r'r 1;4;': '''.'4 4 p • P. 4 . fig , A i f rs y • • Jilt" .. i e A. 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' '' ,.. , . v , , ,, ,, -i . ..., . .......... .... 4 ' .•• . ....., • - ' , .. .. .., ,. .,.,..., . * ik.„ • 4 . . ' 4.- • !, . ..,. . • ., - ,,,i', „ • It., ,,. .. ,, . ,..., .0, „ ..***. , , . . ...., -- -,...... * , . I ', % ---•' ' fliktAr#WAISP'P' ,. - ,, ... t . , .,. „... . : • t. ., - V> ,limara , '-• ‘'‘,' ,, /V T-7-7 .. - • , , .. . - : .• . •. . . . . - . ..•• . , . ,, # . b. . ai• . - - „....`4.4.40,0‘ • , , ..- ,A04..11f; - ...to • st„.„:-N-4-.; ..... , ,...4,0r-lak- wiNNifi f,..34, ... • .frelo, / .,, . ... ., .- . . - . mc .... - * .1 . .,, . .. . . . ...,.. ifalar' -• ,.. ••. , A, ;4° *00' ••., lir . '--,/ 10•0"."1 •, 49 •-, . ‘ , ..4.,.,A ..1,4; .....„ A ... lo ,, 4+. vr tK 4 if.' !O. lok• „.„ . 4, 11 �� ,q ALAEA SEAN PARNELL,GOVERNOR l� ALASKA OIL AND GAS 333 W 7th AVENUE,SUITE 100 CONSERVATION COMMISSION ANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 FAX (907)276-7542 Gwen Holdmann Director, ACEP7 University of Alaska Fairbanks P.O. Box 755280 Fairbanks, AK 99775-5280 Re: Exploratory Field, Exploratory Pool, Pilgrim Hot Springs PS-12-01 Sundry Number: 312-317 Dear Ms. Holdmann: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration. A request for reconsideration is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. Sincerely, Cathy P. oerster Chair DATED this- day of August, 2012. Encl. vi -, 7 RECEIVED III catI9),' ( :, 16 2012 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION �1/� OGn APPLICATION FOR SUNDRY APPROVALS V V 20 AAC 25 280 1 Type of Request Abandon Plug for Redd! ri Perforate New Pool[] Repair Well] Change Approved Program[] Suspend Plug Perforations Perforate Pull Tubing Time Extension Operations Shutdown Re-enter Susp Well _ Stimulate_ Alter Casing Other 2 Operator Name 4 Current Well Class 5 Permit to Drill Number University of Alaska Fairbanks Development Exploratory212077 • 3 Address Stratigraphic Service ® 6 API Number PO Box 755280,Fairbanks AK 99775-5280 50-031-20007-00-00 7 If perforating,closest approach in pool(s)opened by this operation to nearest 8 Well Name and Number property line where ownership or landownership changes Spacing Exception Required? Yes ❑ No ® Pilgrim Hot Springs PS-12-01 • 9 Property Designation(Lease Number) 10 Field/Pool(s) Fee-BSNC • 11 PRESENT WELL CONDITION SUMMARY Total Depth MD(ft) Total Depth TVD(ft) Effective Depth MD(ft) Effective Depth TVD(ft) Plugs(measured) Junk(measured) 1000ft 1000ft 1000ft 1000ft 990-1000ft(cement) N/A Casing Length Size I MD TVD Burst Collapse Structural Conductor 100ft 6-5/8 in steel Surface Intermediate 1000ft HW 4-1/2 in steel Production Liner Perforation Depth MD(ft) Perforation Depth TVD(ft) Tubing Size Tubing Grade Tubing MD(ft) N/A N/A N/A N/A N/A Packers and SSSV Type Packers and SSSV MD(ft)and TVD(ft) 12 Attachments Description Summary of Proposal ® 13 Well Class after proposed work Detailed Operations Program I I BOP Sketch I I Exploratory IXI • Development I I Service I I 14 Estimated Date for decision on p&a prior 12/31/2012 15 Well Status after proposed work Commencing Operations Oil ❑ Gas 0 WDSPL ❑ Suspended El 16 Verbal Approval Date WINJ ❑ GINJ ❑ WAG _ Abandoned ® • Commission Representative GSTOR _ SPLUG ❑ 17 I hereby certify that the foregoing is true and correct to the best of my knowledge Contact Printed Name Gwen Hold. ni, Title Director,ACEP UAF Signatu �� Phone 907-590-4577 Date 8/6/12 c"- COMMISSION USE ONLY Conditions of approval Notify Commission so that a representative may witness Sundry Number` 3/62,72//7Plug Integrity [27 BOP Test Mechanical Integrity Test ❑ Location ClearanceEr Other 16_ Alm„ ,./4,..,..,...i_ 79,., /'Z„'l. zD /"`c L5 .If2- C,l •, r")+6 4WD L41-es t 4.S i K 4 G Subsequent Form Required /.7..4107 v� APPROVED BY Approved by ..../ 792L.44.6___ COMMISSIONER THE COMMISSION Date ZZ-/ RpI Form 10-40 evised 11/M§ AUG 2 3 20 1 1 ` 1100 v1 �� ;',01e ZC1'(L Submit in Duplicate ?/�\I/ O grim Hot Springs Project PS-12-01 plug and abandoning procedure Date Submitted:08/06/2012 Submitted to: Cathy Foerster Alaska Oil & Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Submitted by: Gwen Holdmann, Markus Mager Alaska Center for Energy and Power(ACEP) (907) 590-4577,gwen.holdmann@alaska.edu (907)474-1143, markus.mager@alaska.edu Plug and abandoning procedure for PS-12-01 at Pilgrim Hot Springs Permit to drill#:212077 1. After collecting final temperature log, fill HW casing with silica sand from well bottom to 100 ft below land surface. — No f-: ri rKyG` '_v- a. Slowly pour sand from land surface to avoid bridging. / (0 j.-wa......-- . i. Monitor depth to sand with ing tape. 2. Install 1-in tubing inside of HW casing to ft, mix cement, and pump to surface. a. Leave 1-in tubing in place. 3. Excavate to 3 ft below land surface, cut and remove 6%-in, HW, and 1-in cas sn a. Save excavated material for use as fill - : cpr ‘A.A.' .1 1.15 7:79 4. Fill excavation with saved material and reclaim site. P4-- Zm htC-eig": t'2.0 a. Use front-loader to spread and smooth top-soil material removed and set aside during initial site preparation. Thank you for your attention to this sundry. / `,trh Sincerely, . �� ; ZdL 6/1"724"-- n i_. ,, c,'wen Holdmann Director,ACEP Attachment 1—plug and abandoning well sketch Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive•P.O. Box 755910• Fairbanks, Alaska 99775-5910•Tel: (907)474-5402• Fax: (907)474-5475 ' Attachment 1 well cap —> land surface 9 7/8-in hole drilled to 100 ft a v 6 5/8-in casing set and ti cemented to 100 ft `r �J 6-in hole drilled to a 1,000 ft > Hw(41/2in)casing with 10ft cement I bottom cap set and cemented to ti 1,000 ft—water filled Alaska Center for Energy and Power•University of Alaska Fairbanks•814 Alumni Drive•P.O. Box 755910• Fairbanks,Alaska 99775-5910•Tel:(907)474-5402•Fax: (907)474-5475 4111 7AlcE [F AlnZEA SEAN PARNELL,GOVERNOR ALASKA OIL AND GAS 333 W.7th AVENUE,SUITE 100 CONSERVATION COMMISSION ANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 William E. Schnabel FAX (907)276-7542 INE Associate Director University of Alaska PO Box 755280 �—k Fairbanks, Alaska 99775 PS Re: Pilgram Hot Springs, TG-1 University of Alaska Permit No: 212-077 Surface Location: 1012' FSL, 245' FEL, Sec. 36, T4S, R31W, KRM Bottomhole Location: 1012' FSL, 245' FEL, Sec. 36, T4S, R31W, KRM Dear Mr. Schnabel: Enclosed is the approved application for permit to drill the above referenced development well. All dry ditch sample sets submitted to the Commission must be in no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. Operator's request under 20 AAC 25.715 for a variance from the wellbore surveying requirements of 20 AAC 25.050 is granted. TG-1 will be a vertical, non-commercial, research, geothermal gradient well located about 1,000' from the nearest property boundary and about 400' from the nearest geothermal gradient well. Operator's request for a variance from the land surveying requirements of 20 AAC 25.070(2) is granted. Global Positioning measurements coupled with aerial photographs provide an equally effective means of locating this non-commercial, research geothermal well. This permit to drill does not exempt you from obtaining additional permits or an approval required by law from other governmental agencies and does not authorize conducting drilling operations until all other required permits and approvals have been issued. In addition, the Commission reserves the right to withdraw the permit in the event it was erroneously issued. Operations must be conducted in accordance with AS 31.05 and Title 20, Chapter 25 of the Alaska Administrative Code unless the Commission specifically authorizes a variance. Failure to comply with an applicable provision of AS 31.05, Title 20, Chapter 25 of the Alaska Administrative Code, or a Commission order, or the terms and conditions of this permit may result in the revocation or suspension of the permit. Sincerely, 111 Daniel T. Seamount, Jr. oy Commissioner DATED this ` day of July, 2012. cc: Department of Fish 86 Game, Habitat Section w/o encl. (via e-mail) Department of Environmental Conservation w/o encl. (via e-mail) • STATE OF ALASKA RECEIVED ALA, .OIL AND GAS CONSERVATION COMMIS. ,JUN A 7 2012 • PERMIT TO DRILL 20 AAC 25.005 (lC la.Type of Work: lb.Proposed Well Class: Development-Oil Li Service- Winj ❑ Single Zone El lc.Speci i i o osed for: Drill ❑., ' Redrill ❑ Stratigraphic Test ❑ Development-Gas❑ Service-Supply ❑ Multiple Zone ❑ Coalbed Gas ❑ Gas Hydrates ❑ Re-entry ❑ Exploratory 2 • Service- WAG ❑ Service-Disp ❑ Shale Gas ❑ 2.Operator Name: 5. Bond: Blanket Q, Single Well II 11.Well Name and Number University of Alaska Bond No. /QS7S f 66o ill 1N 1. TG-1 . 3.Address: P.O. Box 755280, Fairbanks,AK 99775-5280 6.Proposed Depth: 12.Field/Pool(s): MD: 2500' • ND: 2500'• Pilgrim Hot Springs . 4a. Location of Well(Governmental Section): 7.Property Designation(Lease Number): Surface: /v/L(/' 5[.. 21-(5-(/'6•7--2yc'/ EL./ 5. 56�T'-/SJ 123/te rFE - 233/(f� A-7.-3-/z_ Top of Productive Horizon: --Dia-_41_41,v___ krzia 8.Land Use Permit: 13.Approximate Spud Date: 6/15/2012 Total Depth: 2800r' trljd ,(�7 J2 9.Acres in Property: 14..��©ce to Nearest rop `v��j, 4b.Location of Well(State Base Plane Coordinates-,LIT-M-821-17X/1172 7 10.KB Elevation above MSL: -45 feet 15.Distance to Nearest Well Open Surface: ��9533U'. / 4 929950" Zone- F GL Elevation above MSL:-45 feet to Same Pool: • �`- (.1- Surface: X� f,/-4,3( ' eL/5 c'175; 11 16.Deviated wells: Kickoff depth: N/A feet<7.io'f i7.Maximum Anticipated Pressures in psig(see 20 AAC 25.035) Maximum Hole Angle: N/A degrees Downhole: 1075 @ 2500ft Surface: 0 18.Casing Program: Specifications Top - Setting Depth - Bottom Cement Quantity,c.f.or sacks Hole Casing Weight Grade Coupling Length MD ND MD ND (including stage data) 9 7/8 in 10 3/4 OD 21.2 ppf sch 40 n/a 21 ft 0 0 20 ft 20 ft n/a 9 7/8 in 6 5/8 OD 18.97 ppf sch 40 weldable 15t ft 0 0 150 ft _150 ft Neat cement,60cf 8 in S OD 4.2 ppf BQ TFJ fpO0 ft 0 0 IOW ft jct:.3 ft 10 ppg abandonment bentonite grout 3 -2.19 k.Z,),F BQ z,Sao n O 1500 256o w/150 ft neat cement at surface 1 G 2i-r1... 19. PRESENT WELL CONDITION SUMMARY(To be completed for'Redrill and Re-Entry Operations) Total Depth MD(ft): Total Depth ND(ft): Plugs(measured): Effect.Depth MD(ft): Effect.Depth ND(ft): Junk(measured). Casing Length Size Cement Volume MD TVD Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD(ft): Perforation Depth ND(ft): 20. Attachments: Property Plat ❑ BOP Sketch❑ Drilling Program Q Time v.Depth Plot ❑ Shallow Hazard Analysis0 t Diverter Sketch Seabed Report ❑ Drilling Fluid Program Q,. 20 AAC 25.050 requirements❑ 21. Verbal Approval: Commission Representative: Date 22. I hereby certify that the foregoing� lis true and correct. J �}(� p.�Contact Printed Name Li1111 v4 1 F-3 1 i Title ' e OS Cfl t) 1'CCS Signature / 4- / Phone 4 - Date £4NjsQ. Commission Use Only Permit to Drill / API Number: rr \�Permit Approval 1 / \I j See cover letter for other Number: / Z�77 50-Ute -2C. �' ):C6Date: l"N1 requirements. Conditions of approval: If box is checked,well may not be used to explore for,test,or produce coalbed me hane,gas hydrates,or gas contained in shales. [r Other: 4 '$ Ca i Sz ,Qsii,,,,,c,` �S� Samples req'd: Yes[r No❑ Mud log req'd. Yes 2No Illc H2S measures: Yes❑ Nog' Directional svy req'd: Yes ❑ No g Al key^ Cep...... jor.......2.. <ty,r fr.` zo 4& Zs. o Ea e•,; ) A( 130t° e 3 o eirro -u ,-c Zo A.4c- Zs. o 3 STA)C 1) SLcn,.-� re-1K-.:.rc� 1e„` ? '' �� (� APPROVED BY THE COMMISSION DATE: 4 ,COMMISSIONER e- .29. )2 ` ,�2- p7 ORI ' NAI. f U.kV Form 10-401(Revised 7/2009) This permit is valid for 24 months from the date of approval(20 AAC 25.005(g)) Submit in Duplicate 4- _ff /ADD, µ Proposed Pilgrim Springs drilling methodology for deep temperature-gradient w s 1. Set up drilling equipment on site. a. Site size is' 100ftx100ft i. Minimal site disturbance is anticipated ii. Disturbed top soil will be scraped off with a front-loader and set aside in separate area for use in site reclamation. b. On-site equipment will consist of: i. Atlas-Copco P6L drilling rig set on fabricated wooden structure (12 ft x 20 ft) ii. Drill pipe pallet(10 ft x 30 ft) iii. 600 gallon shaker tank w/sump pump(12 ft x 8 ft) iv. Skid-mounted Gardner-Denver 200 gpm duplex mudpump(12 ft x 8 ft) v. Four 800-gallon drill cuttings holding tanks(8 ft x 6 ft ea) vi. Light tower(8 ft x 6 ft) vii. Storage trailer(15 ft x 8 ft) c. Mud sump dimensions will be 3 ft x 3 ft x 2 ft deep. Drill mud will flow from the well into a short(10-15 ft)dug ditch and into the sump.A 200 gpm sump pump will transfer the mud from the sump to the shaker tank. 2. Mix water-based bentonite drill mud.Additives used will include: a. Quick-Gel high-yield bentonite (hole stability,circulation control,clay-shale control) b. Pac-L and Pac-R powdered cellulose polymer(clay-shale control,water loss,viscosity control) c. Baroid 41 barite weighting material (mud density control) if necessary 3. Pick up 9%-in triconebit,drill and drive 10%-in conductor pipe to 10-20 ft as conditions warrant. 4. Drill 91%-in vertical hole with bentonite mud to 150 ft. a. Condition mud and circulate to clean hole. b. Run caliper log to determine well bore volume. 5. Run 6%-in schedule 40 casing(18.97 lbs/ft)to bottom and cement from bottom up to surface.-- bbs a a. Mix and pump 110%cement based on calculated caliper log volume. b. If cement failed to return to the surface,conduct top job by tagging the top of cement c,4 with a 1-in tremie pipe and pumping additional cement through the tremie pipe to bring cement up to the surface 6. Pull 10%-in conductor pipe. 7. Install 6-in ID low-profile full-opening 150 psi,300°Fknife gate valve and diverter head on flanges welded tothe 6%-in casing. 1,3 •"°.4-A4A'' a. Install port and 2-in 1500 psi valve below the 6-in gate valve for kill line attachment. I 8. Install 5%-in rotary(tricone or PDC) bit and drill to 1,000 ft.✓ A 04)k-wad- a. 4)k-wa(a. Collect drill cuttings every 10 ft. 1.-4 or 2—$6e F A b. Continuously monitor drill fluidin and out temperature and record every 10 ft. c. If drill fluid temperature exceeds 170°F,stop and run Kuster temperature log inside drill rodsto bottom of well to determine true formation temperatures. d. If borehole temperature of 280°F is encountered, cease drilling, circulate,and remove drill rods from well. 9. Run geophysical and temperature logs (assuming max well temperature is within tool operational limits). a. Geophysical logs run will be natural gamma, resistivity,conductivity, and caliper. Based on the geophysical and temperature logs obtained at this point, a determination will be made whether to drill ahead with BOPE or to install temperature monitor casing at this depth. If drilling does not continue, insert and grout BQ casing per the following steps 19 thru 27. If drilling continues: 10. Cement HW casing in place. ( 0" cMT 4' S4`rf�--) C -/00D MI) MI) a. Run HW casing to total depth. b. Remove bull plugs from the 6%-in casing, install 2-in ball valves and hoses to take returns while cementing. c. Pump fresh water through system to ensure adequate circulation. d. Mix 110%cement based on caliper log volume calculations and pump. Wb = 1'! /5/345 e. Pump volume of fresh water or drill mud calculated to displace cement from inside HW casing. f. Shut surface valves and standby 12 hours for cement to cure. g. If cement failed to return to the surface, conduct top job by running a 1-in tremie pipe outside the casing as deep as possible and pumping additional cement through the tremie pipe to bring cement up to the surface. 11. Thread on 4%-in wellhead assembly v- 12. Make up the following BOPE _______Nr, /U- ,+` �'tse °y LJk:_{mss Avi1 256P 7 a. Install 2-in check valve on surface with high pressure line to manual ball valve on fill-up 4$ itrs side of wellhead assembly. Install highpressure line from mud pumpto check valve to act C Y g as kill line. b. Install manual ball valve on blowdown side of wellhead assembly with high pressure line to pneumatic HCR valve (located on surface). HCR valve is actuated by Nitrogen and is close-on-fail. Install 20 ft of 2-in hard line from HCR valve in a direction away from rig operator to act as a blow down line. Anchor 2-in hard line to prevent it from moving in use. c. Install 3M annular preventer(type: Regan Torus) d. Install top flange with pipe stub on top of annular preventer. See--- e. Install diverter with flow line to return tank. f. Connect annular preventer to accumulator. 13. Function test HCR valve and annular preventer,checking for leaks and inspect hydraulic accumulator. 14. Install test plug in wellhead.Test HCR valve,fill-up and blowdown line valves to 500 psi. a: s�3/" D p 2 .( ' 2 `�' 15. Test annular preventer to 500 psi. Chain down drill pipe and top drive before testing. 16. Install 3%-in rock bit, and 2%-in drill pipe and insert to well bottom. Drill any cement from inside HW casing. --'i► L----,,5 if. C4-5 t le sem' Cs; b ' Dr;Il`-»-1 a 17. Drill to+/-2500 ft(TD). L----,, J� - ,-� LrT 4-,24_1--- 4&.. 20 a1 s e 18. Remove drill rods and run geophysical logs(natural gamma, resistivity, conductivity,and caliper) assuming wellbore temperatures are within tool operating limits. 19. Trip drill rods to well bottom, mix abandonment bentonite grout,and fill well with grout. 20. Remove drill rods and hang BQ casing(2.19-in OD, 1.81-in ID)with bottom plugto total depth. a. Fill BQ casing with fresh water while running to total depth. 21. Cement top 150 ft of annular area between HW and BQ casing using 1-in tremie pipe. - 13° Se6 4„.... e 22. Install 2-in lockable protectivesurface valve on top of BQ casing. L--9' ies4- e"„ l SoDps:. 23. Rig down,clean up,decommission sump,and remove all drilling equipment and supplies from well j site. 24. After collecting final temperature log,fill BQ casing with silica sand from well bottom to 100 ft lit. below land surface. a. Slowly pour sand from land surface to avoid bridging. N c cimii, i. Monitor depth to sand with tagging tape. J 25. Install 1-in tubing inside of BQ casing to 100 ft, mix cement,and pump to surface. 7,......,..zd,,a. Leave 1-in tubing in place. 26. Excavate to 3 ft below land surface,cut and remove 6%-in, BQ,and 1-in casings. 1 a. Save excavated material for use as fill 27. Fill excavation with savedmaterial and reclaim site. a. Use front-loader to spread and smooth top-soil material removed and set aside during initial site preparation. Pilgrim Hot Springs Project 2012 drilling plan and procedure Date Submitted:05/30/2012 Application for: • Permit to Drill Alaska Oil and Gas Conservation Commission(AOGCC) Submitted to: Cathy Foerster Alaska Oil & Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Submitted by: Gwen Holdmann, Markus Mager Alaska Center for Energy and Power(ACEP) (907) 590-4577,gwen.holdmann@alaska.edu (907)474-1143, markus.mager@alaska.edu I. Background &Purpose In 2010,ACEP received funding through the U.S. Department of Energy and Alaska Energy Authority to conduct a resource assessment of the Pilgrim Hot Springs(PHS)geothermal resource. This project is currently underway, and includes a number of phases and tasks. One of these tasks, Phase 2 Task 3.2, involves drilling a minimum of two 1,000 ft-2,500 ft confirmation holes during the 2012 field season. The goal of the drilling is to verify the conceptual model. During the 2011 field season we drilled two 500ft temperature gradient(TG) holes.The information gained from these holes and other data that was collected during the 2011 field season gave us a better understanding of the geothermal resource and led to an update of the drilling targets.The map below outlines the 6 drilling target areas we want to focus on in 2012 (Figure 1).The red "X" represents preliminary drilling locations and we are pursuing permitting for all of the locations due to unknown exact 2012 field conditions.Coordinates of the preliminary locations are provided below.The exact drilling locations within the identified areas will be provided to AOGCC and other permitting agencies within 1 week before drilling starts.We are planning to start drilling in mid-June. Alaska Center for Energy and Power•University of Alaska Fairbanks•814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402 •Fax: (907)474-5475 503000 603500 504000 ' �,. h . YA1 a 'tt ' re t ' �'t'+��Y�'7?'e{{�`".,,, .....,,.., .V�f 3 , . . ...„. ‘.,,..,.,.,,,,,_, .., a0,..,..,,,........ .. :::..7" � 1 rysa+. ' ,40101111414t s t A' s 0 : '14 '44-�' i y 3 i-t ."R A a aQ ti P'''''''...'‘,*:'' SGOYi ..y-�;'& ` , PSLE3 ('..� t,. -...--,1-''''.1,:‘'..-..‘ t ! . t,y� G3'�9 k,yits b �' v'r 2 } x Q •t F � .j;>5k. �� © r :, 4 i r..f �ivi r-... tip' E. /07000 007000 W1000 Pilgrim Hot Springs Legend Scale 1 70 000 dnliing_poirds 1. • Wells i--� 0 62.5125 250 375 500 . Meters • Geoprobe Mosaicked D700 aerial imagery Coordinate System WGS 1984 UTM Zone 3N Figure 1 2012 Targeted Drilling Areas Alaska Center for Energy and Power• University of Alaska Fairbanks• 814 Alumni Drive•P.O. Box 755910 • Fairbanks,Alaska 99775-5910•Tel: (907)474-5402 •Fax: (907)474-5475 • ''i:- - ;0 }y k a�,,, . 'I y'K, h i" .',,..--.;':.•'....0,,,;•.,:, i.10..,'tk',,. s�J,°+IS' t�'"''" j., ,. -- �� ; ,a i • iC% w ., y wr ' Y i ,,,,1«.ti`� iw1' ,�tl 1 •"`#' �.hsr .,¢, ,4 �'�! eV as �, , "";"1•;,..t,.; r,7h ` w44. 1 Vii.. f. J i * S x. . '. .4',,;'"'.'1,1'.';',.‘,"`-44 "f' "1 ,V i", dV ,:',''',!,57,4;!'..,,,''' •'1 tr•Y r vet.. 4 �+ " � {' 54°41 4 F��17 P.S-GEO 56 A° c�� ' • r. •�*1 y4, �v i`' 4:1 fiats ' Jr4 „� a ;.Si,,. w 1'k - 1 4 �"� '.4 , -1 » •t l`' . > 1 f..:*,. ..'1.",:7•E' • ft: e r. PS-GEO3r;xv� n It: b 7; n q. ' - ' : 4 P GEO-4 9 A-e 1,"•- AL1+w. hyo v 1... ^A V� - k +s`y.+ ,,..,..virs, ,...... ..x. $ kt ' ,, G�K� ,..%,:...- ,,.,,-,4,...,....,::,-„,,,,,•4. 7:..,....1,,, - -, ' tip. • S ..w, M��""sfiii tptp .9, 4 - Y'r t '.`"?,N'ir,,,li,Zt‘lit.;,!-:40t-',.1:— r © ,, ";,4,....16..., >Z' !,-,:,::#1,..?,.......,'.-...„ )1,, lil 'M/'A'(\ 'SY S A3 .„ ,.. ..„ Q)/L :r V i.A S3 5 t f 1f: h }>` PS-GE0 14 /1 C 1 Pc 3 � • . .Ik ; .,40s ' G� •4A.J , -, {r • y 5.. 'A.,X • - 1 &. • a'.y ` 11 ;rp.. • {' ,fiS3'rJ Vt7 S •4.5 ti jilt, •R • ♦ + •'P fr ? .,, { 4; • f h.. ~ '�.G. II. Potential Drilling Locations in the Preliminary Drilling Areas "Id" "Lat" "Lon" 1. 65.091780, -164.925990 2. 65.093470, -164.925430 3. 65.090980, -164.925120 4. 65.090150, -164.924690 5. 65.091380, -164.922450 (TG-2) 6. 65.095330, -164.929950 (TG-1) Drill site#5 and#6(TG-2 and TG-1)were selected for application purposes only.The exact drilling location coordinates will be provided to AOGCC within one week before drilling starts. - Figure 1 drilling areas are all on the Pilgrim Hot Springs property located at USGS Bendeleben A-6, Kateel River meridian,Township 4S, Range 30W, Section 31& Range 31W,Section 3 and 36. Property Owner Unaatuq LLC - 110 Front Street,Suite 300 Nome,AK 99762 Matt Ganley, Vice President, Land and Resources (907)443-4314 mganley@beringstraits.com III. Plan of operations The project team has identified 6 possible drill areas(see Figure 1)and plans to start mobilizing equipment out of Nome in early June. Drilling will occur in accordance with Alaska Oil and Gas Conservation Commission (AOGCC) rules and regulations.A detailed drilling plan is attached (attachment 1).We are using an Atlas Copco CS-1000-P6L drilling rig for the drilling operation. Water from the Pilgrim River will be used as drilling fluid at the site. Drilling fluid will consist of straight river water whenever possible. If well conditions require,the project will mix a bentonite slurry consisting of Quik-Gel (Baroid Industries—NSF certified),and river water.A natural cellulosic polymer(Quik-Trol, Baroid Industries—NSF certified)will be added to the slurry to improve borehole stability or circulation conditions if necessary.Quik-Gel is a finely ground, premium-grade, sodium based bentonite,which is commonly used as a drilling fluid.The project expects to use approximately 50,000 gal of water per 2,500ft hole. 111.1 Wastewater Discharge Drilling Waste Solids The project drilled two temperature gradient holes in 2011 and solids were handled, sampled and stored accordingly at the site.The samples were tested and passed the standards set by ADEC. Drilling waste solids are still stored at the 2011 drill sites(51 &S9) in the above ground tanks.They will be disposed in two sumps during the 2012 field season.An 8 ft x 8 ft x 3 ft deep sump will be dug at each of the 2011 drill sites and solids will be transferred from the tank to the sump.Once completed,the sump will be backfilled with the soil that was removed to dig the sump and the project will provide closure confirmation to ADEC for the sump, including: o GPS coordinates for the sump location, and Alaska Center for Energy and Power•University of Alaska Fairbanks•814 Alumni Drive•P.O. Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 o photographs showing the sump after it is backfilled. Mary's Igloo Native Corporation, the property owner, agreed to the waste management plan. 2012 drilling operations and waste handling will be similar to the 2011 execution. Upon reaching land surface, drilling fluid and cuttings will flow from the well bore over a set of shaker screens,through desanding cones, and into a shaker tank. The solids, removed at the screens and cones, will be deposited through a chute and into above-ground holding tanks (Picture 1 and 2).The fluid, cleaned of solids, will be re-circulated from the shaker tank down the borehole. A 1,500-ft, 5 7/8-in diameter hole would generate—282 ft3 of cuttings. After setting and cementing a 4-in casing to 1,500 ft, a 3 7/8-in hole drilled from 1,500-2,500 ft would generate an additional "'82 ft3 of cuttings. Each of the project's five storage tanks has a holding capacity of'10 ft3. Solids will be removed from the drilling fluid and contained in above-ground tanks. Any fluid that accumulates in the solids tank during the drilling process will be pumped back into the shaker tank or onto nearby land surfaces.The holding tanks will be emptied once full and the solids will be disposed in a 10 ft x 10 ft x 5 ft deep sump. lse ff' • Qlr • r Imo\17' p1'ti • �a, _: °I" :; Picture 1 Rig and Equipment at S9 in 2011 Alaska Center for Energy and Power• University of Alaska Fairbanks• 814 Alumni Drive• P.O. Box 755910• Fairbanks,Alaska 99775-5910 •Tel: (907)474-5402 •Fax: (907)474-5475 avow f:. OP ram► ‘.1% �� 4 5.• r. 7 r r Picture 2 Shaker and Storage Tank with Solids at S9 in 2011 After drilling is completed at the site the sump will be backfilled with the soil that was removed to dig the sump. The project will provide closure confirmation to ADEC for the sump, including: o An estimate of the total volume of drilling waste disposed o GPS coordinates for the sump location, and o photographs showing the drilling waste management in operation, and the sump after it is backfilled. Upon completion of the drilling, drill fluid in the borehole and shaker tank will be pumped to the sump where the solids can settle out and remainintfluids will be pumped onto nearby land surfaces.,Extreme care will be taken to ensure that the sump locations are not close to any open water bodies.The developed land use agreement with the property owner is in signature stage and reflects the proposed drilling waste handling. We will dispose drilling solids at the Nome landfill if the project is not allowed to dispose them in a sump on site. IV. Water Withdrawal Location Water will be withdrawn at a rate of 2,500—10,000 gallons per day using a 3-inch centrifugal pump (avg. 20-35 gallons per minute).The maximum amount of water that will be used in 2012 (June to mid- September) is estimated to be 250,000 gallon (Temporary Water Use Authorization TWUP A 2011-30& A2011-125). Our pumping rate during flushing of the well or rotary drilling, the maximum rate will be about 150 gpm. Since fluid is being re-circulated (assuming no circulation loss into formation)the gpm estimate multiplied with the minutes drilled does not equal the amount of fluid used. We are providing a high estimate of usage due to the possibility of circulation loss. If we encounter lost circulation,the pumping rate does equal the fluid use estimate which is the max. of 10,000 gallon/day. Alaska Center for Energy and Power• University of Alaska Fairbanks• 814 Alumni Drive• P.O. Box 755910 • Fairbanks,Alaska 99775-5910•Tel: (907)474-5402 •Fax: (907)474-5475 The water intake locations and the intake system are shown in Figure 2, 3 and 4. We are planning to pump water from the same locations as in 2011 and to use the same system set up. The intake barrel has holes in the side which are covered with 0.04 mesh to prevent fish impregnation (Fish Habitat Permit FH11-III-0052). ,. ' It: , 2 r. 1400‘,„- . • F.I, ., ., Ar r r { ' • . r 13- — '. � , E N,..,0414,. , ' - 1 iri u.„..:_ :,.. ‘," 441 1.1 . . . I ..; ; ..:-1'..\ # ,,, , 4„.ti: ,i ..4,57;, (i,,, , Figure 2 59&51—2011 drill sites and water intake locations .tcrIll 3 , w . • *, I in 1 y s. • - 4ft Figure 3 51 water intake Figure 4 S9 water intake Alaska Center for Energy and Power• University of Alaska Fairbanks• 814 Alumni Drive• P.O. Box 755910 • Fairbanks,Alaska 99775-5910 •Tel: (907)474-5402•Fax: (907)474-5475 Water intake location Si and S9 are on Mary's Igloo Native Corporation (MINC) property located at USGS Bendeleben A-6, Kateel River meridian,Township 45, Range 30W, Section 31. Property Owner Mary's Igloo Native Corporation (MINC) PO Box 650 Teller,AK 99778 Richard Komok, President (907) 642-2308 m igloo@hotmail.com Thank you for your attention to this application. Sincerely, 4.1.1624.1 ":": )11/"" - GWen 1oldmann Director,ACEP Attachment 1-proposed drilling methodology Attachment 2-AOGCC well sketch Attachment 3—stability analysis Attachment 4—two- Permit to Drill—applications Attachment 5—Contracting with the State of Alaska: Insurance and Indemnification Provision • Alaska Center for Energy and Power•University of Alaska Fairbanks•814 Alumni Drive•P.O. Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 Attachment 1 Proposed Pilgrim Springs drilling methodology for deep temperature-gradient wells 1. Set up drilling equipment on site. a. Site size is^' 100 ft x 100 ft i. Minimal site disturbance is anticipated ii. Disturbed top soil will be scraped off with a front-loader and set aside in separate area for use in site reclamation. b. On-site equipment will consist of: i. Atlas-Copco P6L drilling rig set on fabricated wooden structure (12 ft x 20 ft) ii. Drill pipe pallet(1O x 30 ft) iii. 600 gallon shaker t c k w/sump pump(12 ft x 8 ft) iv. Skid-mounted Gard er-Denver 200 gpm duplex mudpump (12 ft x 8 ft) v. Two 800-gallon drill Cuttings holding tanks(8 ft x 6 ft ea) vi. Light tower(8 ft x 6 ft) vii. Storage trailer(15 ft x 8 ) c. Mud sump dimensions will be 3 ft 3 ft x 2 ft deep. Drill mud will flow from the well into a short(10-15 ft)dug ditch and into t - sump.A 200 gpm sump pump will transfer the mud from the sump to the shaker tank. 2. Mix water-based bentonite drill mud.Additives ,sed will include: a. Quick-Gel high-yield bentonite (hole sta•'lity,circulation control, clay-shale control) b. Pac-L and Pac-R powdered cellulose poly -r(clay-shale control,water loss,viscosity control) c. Baroid 41 barite weighting.,;5 -al ( d den 'ty control) if necessary 3. Pick up 9%s-in tricone bit,drill a • .- ) s3/ ' conducto •ipe to 10-20 ft as conditions warrant. 4. Drill 9%s-in vertical hole wi ••,j '• ' I'46150-200 ft a conditions allow. ' ,i►0/ r a. Condition .�,r�`,•9 i I. -A,5' lean hole. b. Run caR o • ' lk = well bore volume. 5. Run 6%-in sche•'ir,• 4d c iii: 1..•7 lbs/ft)to bottom and cemenfrom bottom up to surface.' a. Mix an• purr'. '10%cement based on calculated caliper I. volume. b. If cement'fai r to return to the surface,a top job will be perf. med by running a tremie pipe outside the casing as deep as possible and additional cem: t will be pumped through the tremie pipe to bring cement up to the surface. 6. Pull 103/4-in conductor pipe. ? 7. Install 6-in ID low-profile full-opening 150 psi, 300°F knife gate valve and dive -r head on flanges welded to the 6%-in casing. a. Install port and 2-in 1500 psi valve below the 6-in gate valve for kill line attachment. 8. Pick up 5%.-in rotary(tricone or PDC) bit and drill to 1,000>0 depending on 6%-in casing depth (max 10X the 6%-in casing depth) and temperatures encountered. a. Collect drill cuttings every 10 ft. ' ( Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 b. Continuously monitor drill fluid in and out temperature and record every 10 ft. ' c. If drill fluid temperat - exceeds 170°F, stop and run Kuster temperature log inside drill 7 rods to bottom of well t• determine true formation temperatures. d. If borehole temperature o 280°F is encountered,cease drilling, circulat:,and remove drill rods from well. 9. Run geophysical logs (assuming max -II temperature is within tool opera 'onal limits). Note:Logging tools are only rated to 1 •°F and will likely fail at tempers tures much above 200°F. Therefore, if high temperatures are enco,ntered, there is a good ch. ce that we won't be able to collect geophysical logs. We are currently .oking for portable hi. -temperature systems available that we could rent or adapt to our 4-pin Ce ury Geophysical Corporation logging system. a. Logs run will be natural gamma, res tivity,conduc ' itv, and caliper. ***If drilling is to continue to greate depths, ru and cement HW casing(4.5-in OD,4.0-in ID)to hole bottom, install annular 8O' , and c. tinue per separately-submitted methodology document. If HW casing i• cern- ted in place, attempts may be made to flow and/or inject into the well to obtain geo er al fluid samples and determine formation permeability. 10. Mix abandonment bentonite grout,trip drill rods o bottom and fill well with grout. `', 11. Remove drill rods and hang BQ casing(2.19-in f.D, 1.:1-in ID)with bottom seal to total depth. a. Fill BQ casing with fresh water whit= running o total depth. 12. Cement top 150-200 ft of annular area (be' een 6%-in :nd BQ casings) using tremie pipe. 13. Install 2-in lockable protective surface v. e S./ if Bit casing. 14. Rig down, clean up,decommission su 1•, and rem,• ''I 40 illing equipment and supplies from well site. 15. After collecting final temperature log,fill BQ casi ., ith sili : a a., ell bottom to 100 ft (-- below land surface. a. Slowly pour sand fro and surface to avoid bridging. ,c'Z/. p i. Monitor depth o sand with tagging tape. -,rL. 10,4', J 16. Install 1-in tubing inside of .Q casing to 100 ft, mix cement,and ump to surface. SuA,,f"� a. Leave 1-in tubin in place. 17. Excavate to 3 ft below I nd surface,cut and remove 6%-in, BQ, an. 1-in casings. Tl{ a. Save excava d material for use as fill 18. Fill excavation with aved material and reclaim site. a. Use fro -loader to spread and smooth top-soil material rem•ved and set aside during initial e preparation. Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 to'7X Proposed Pilgrim Springs>280*F drilling methodology for deep temperature-gradient wells 1. Run 4.5" HW casing to 1000' • 1.1.Make up float collar and guide shoe for a 40'shoe track. 1.2.Make u• swab cup-type formation packer on casing joint to be set at 300' 1.3.Run 4-1/2' W casing in hole leaving a minimum of 2'clear of the bottom of the hole. Space out casing in or. -r to leave the box end of the top joint of casing located 6"above the planned floor of the ce .r. Strap carefully while RIH and use a landing joint to position the casing. 2. Cement HW casing in • ace. 2.1.Load plug and make • plug dropping head. 2.2.Using open hole caliper •lume, pump 1.0 bbl fresh water ahead of the calculated volume of 13.5 ppg TC GeoLite premi m cement containing 30%silica flour by dry weight in order to place 300 linear feet of cement to rface following fin. •isplacement.—Calculate cement volume equal to 50%excess open hole volume, 15%e ess between casing annuluses. 2.3.Pump a calculated volume of 9.2 pp. 50 vi mud to act as a spacer between surface cement and shoe cement. Base volume on th- :liper log. Do not use any excess mud. 2.4.Pump 77 gallons/10.29 cu.ft. of 13.5 •pg C GeoLite premium cement containing 30%silica flour by dry weight in order to pla - 100 line:r feet of cement around the shoe and to fill the shoe track. s 2.5.Drop and bump displacement ,lug. RCEDED 2.6.Pump cement and displace -ith mud until good - • stars come to ace 2.7.Wait on cement. 3. Nipple down diverter and ro -gh cut 6-5/8"casing. 4. Construct cellar to accom 'date wellhead and annular preventer. 5. Split and cut off 6-5/8" c..ing to bottom of cellar. Hammer and chip cement to the connection between the top casing oint and the landing joint. Back out landing joint. 6. Thread on 4-1/2" well -ad assembly—Refer to figure 1. 6.1.Thoroughly clean hreads on pin-end of casing. 6.2.Dope threads an• manually thread on wellhead (not to full torque). 6.3.Remove wellhead and thoroughly clean all threads. 6.4.BakerLock threads, and thread on wellhead to full torque. Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 7. Notify AOGCC representative a minimum of 48 hours before testing BOPE 8. Make up the following BOPE—Refer to figure 2. 8.1.Install 2" check valve on surface with high pressure line to manual ball valve on fill-up side of wellhead assembly. Install high pressure line from mud pump to check valve to act as kill line. 8.2.Install manual ball valve on blowdown side of wellhead assembly with high pressure line to pneumatic HCR valve (located on surface). HCR valve is actuated by Nitrogen and is close-on- fail. Install 20'of 2" hard line from HCR valve in a direction away from rig operators to act as a blow down line. Anchor 2" hard line to prevent it from moving in use. 8.3.Install 3M annular preventer(type: Regan Torus) 8.4.Install top flange with pipe stub on top of annular preventer.—Refer to figure 3. 8.5.Install diverter with flow lin: to return tank. 8.6.Connect annular preventer o accumulator. 9. Function test HCR valve and an ular preventer,checking for leaks. 10. Inspect hydraulic accumulator performed by AOGCC representative). 11. Install test plug in wellhead. T:st HCR valve,fill-up and blowdown line valves to 500 psi. 12. Test annular preventer to 500 psi. Chain down drill pipe and top drive before testing. 13. Prior to drilling ahead, ensure ,OGCC has signed off on inspection. 14. Make up BHA with 3-7/8" rock bit, and 2-3/4" drill pipe and RIH. 15. Drill to+/-2500' (TD). 15.1. Maintain optimum hydraulics for ROP and hole • :111).:. 15.2. Catch samples of c ttings at 10' intery Bole as needed 16. Circulate and spot 10 ppg weig ted mud oV ole. ,� 0 17. POH LID 3-7/8" rock bit and 2- 4" drei le. Keep hole ll at all times and monitor for indications of flow. y�,9' 18. Run open hole caliper. 19. Hang BQ casing (2.19-in OD, 1.8 -in ID)with bottom seal to total depth. 19.1. Fill BQ casing with fr, sh water while running to total depth. 20. Cement top 150-200 ft of annula area (between 6%-in and BQ casings) using tremie pipe. 21. Rough cut BQ. Nipple down BOPE and lift over landing joint. 22. Dress BQ casing stub. Install 7-1/16" 3M center bore flange on 7-1/16" 3M wellhead. Install 2.19"x 3" bushing on BQ stub using epoxy and set screws. Install 3" locking ball valve on top. Bull plug and lock.—Refer to figure 4. Alaska Center for Energy and Power•University of Alaska Fairbanks•814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 23. Run a sinker bar and tag top of float collar to ensure that casing is clear. 24. Leave one valve in place on one of the two side outlets and bull plug everything else. 25. Rig down and move off. Perform site remediation as required. S upE RC Alaska Center for Energy and Power•University of Alaska Fairbanks•814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402 •Fax: (907)474-5475 Drilling Fluids Program—Pilgrim Hot Springs Exploration Wells The hole will be drilled using standard fresh water bentonite drilling fluids.Additives to be used include (all listed products are NL Baroid trade names): • Quick-Gel high yield bentonite (hole stability,circulation control, clay-shale control) • Pac-L and Pac-R powdered cellulose polymer(clay-shale control, water loss,viscosity control) • Baroid 41 barite weighting material (mud density control) • 2-3%micronized cellulose (water loss, lost circulation control) Maintain a density of 8.8-9.0 ppg unless concerns of formation pressure dictate changing the density. Drill fluids will be monitored for viscosity, weight, and temperature on a continuous basis. Drilling fluids will have cuttings removed and will be recirculated via a 600 gallon trailer-mounted shaker system incorporating shaker screens and centrifugal desilting cones. Cuttings and used drill mud will be contained in above-ground tanks.At project's end, cuttings/mud will be disposed of per Alaska DNR requirements. Rotary drilling and reaming operations will be conducted using a skid-mounted Gardner-Denver 5"x 6", 200 gpm, duplex mud pump. If returns are lost, drilling may be continued using fresh water with polymer sweeps prior to connections. Maintain sufficient barite on location to raise the weight of 2 (two) hole volumes a total of 1 ppg if needed while drilling with mud. Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 a) _a a) U O v L- EE ,i,4 L N O = � 73 O -0 O -0 r3 ^1 d.) C — W 4- 4- O 0 O _c L.. an Cn 3 C v4 .0 "- v o CD C a) o v E — •- oE O O .070 N 00 o c +, 4- E rl ri 0 4 , ix) -0 " C lD U Ni C cz fO CU CO• N O ai Q -0 U 1 V V i E a Ln Ln co Q) +-, 4— Ca II: ro cu ro CO O L.01 -0 CU \ - L ^ L CU CY) 73 0 1 ` E a)_or3 • . 5 �0o .._ no EUa)vU O i � v N N UQ� +3 ,II Q a)) a j bp a) mumi a3 0 c4= U 4-' tiv an r+ 2ova)nCo o c 4-, bp a) to }, cI- _0o NN w U OC U O c6 C +-, 4 ' a) �I o ' c E a) • v, oo CO c'4E Lt, E e-I z 7:3 c t.0 U c O a Ni O < .Q U m N 111111111 _ _........._ _ . ,, _ ism.,. .„___ ____._________ .. A f 'I- "-I a) i10 0 CUO , + O e-! L \ N2cu O 0 C 0 O T m O cu co tea) iin -0 h -0 a.) U Q. O U co L U 4- v) E ° 0 4.-; -0 0) U CD c "' ani' o c -0 +-+ t0 o o o — / -0 u `� +-+ p c-1 u i Co C U O � O L O . Lr 1n LI a C O O 00 N V 1 �p a) -a E 4-' .-i 2 O a� NO Q) -0 O a, a) I U a -0 U Ca LYNNI‘ i V I gillimilnimiminlimilli j I apejins puel of luawao :slq aj ppl of wolloq IIaM woJ4 pues eJ!I!s MMINIMMMINIMMINMa 1 rilill cu r. (13U 75 _1 W L 75 a) Q _c 10 a) O- Ln 4- O e-I 00 N ..0 2 CU O C 0 M4-, 00 Q) C O n 00 a) Lf1 -0 'L a) t to o O R / t • c II . c ` C) �` a d °i . > I o CLj m Y_c: Ni N CO N U a, 73 °' rn c = a) M t/) c > a> Q) R c o = 73 c 2 CO ; (I) - a as L A,-,� 5. > O Q j a� Y U ) ET)2ca cn E U � N 0 •C ca cr, 5 = c LL N t~ IL C -0 6O co L 111 N -0 a I LIII > a C • .f � a nno�}pine niCD N .� Q n II �L 01 0 A II m C tit St • _ C L O • C T +8' N L p V yO N L cD a •� at N O 15 r 0. 0. . fl O COj - V > t G > 0 o O O 10 c d '2 ` Co CI) 0 O d = t0 0 Figure 1: Wellhead for 4-1/2"Casing—Pilgrim Hot Springs Confirmation Wells 12 7-1/16"3M RTJ FLANGE 10 8 6 4-%2"OD 4" ID HW CASING 4 2"XXH FNPT 2"XXH FNPT 2 - r 0 I I I I I I I I 4.5" WELLHEAD (TWO EACH) Alaska Center for Energy and Power•University of Alaska Fairbanks • 814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402•Fax: (907)474-5475 Figure 2: BOPE recommendation for 4-1/2"wellhead—Pilgrim Hot Springs Confirmation Wells 11111111111111 . Diverter Type: Divertech'"3022 I u ' 7-1/16"Companion Flange with 6-5/8"Pipe Stub for rCompression Lock on Diverter n f A 7-1/16"3M Annular Preventer Type:Regan Torus H HI I 4.5"x 7-1/16"3M Wellhead (two)2"Ball Valve WOG 1,500 psi At surface: Ic/ At surface: Check valve _ High Pressure Hose Pneumatic HCR _ Low Pressure Hose Valve(1000 psi 1500 psi ) —Fill up lined _ Blow down line—► minimum CELLAR FLOOR 1044 4.s L5j Alaska Center for Energy and Power• University of Alaska Fairbanks•814 Alumni Drive• P.O. Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402 •Fax: (907)474-5475 Figure 3: Top flange with 6-5/8"casing stub for diverter—Pilgrim Hot Springs Confirmation Wells --�--- 12 10 6-5/8" OD 8 Plain End Casing 0.188 WT 6.249" ID 6 4 6.625" ► 4 2 7-1/16" 3M RTJ FLANGE 0 TOP FLANGE W/ PIPE STUB FOR DIVERTER (ONE EACH) Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive• P.O. Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402 •Fax: (907)474-5475 Figure 4: BQ Rod x 3"Valve Bushing—Pilgrim Hot Springs Confirmation Wells F I r_ I 1— r r � 3" FRT r '-I r -� 4 1.91" ► 2.21 1 (OF 4) Set Screws O 4 2.19" BQ Rod (1.81" ID) BQ ROD X 3" VALVE BUSHING (TWO EACH) Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive•P.O. Box 755910• Fairbanks,Alaska 99775-5910 •Tel: (907)474-5402•Fax: (907)474-5475 Figure 5: Composite Temperature Logs—Pilgrim Hot Springs Confirmation Wells ///4/riziata./.‘,/7 //e/i ifbiryfp>7///// im//////i, / • 200 300 Yll 1!t - � 1 FJ 400 X 1500 600 EXPLANATION -- -- PS-' ...------ -- - PS-2 P5-3 700 _- ------ P5-4 PS-5 _..__.... ILII-1 800 900 l_. L I 20 30 40 50 50 70 80 90 Tem iiu•e, in 0C Woodward-Clyde Consultants—Figure 19; Results of Drilling, Testing and Resource Confirmation, Geothermal Energy Development at Pilgrim Springs,Alaska, 1983. Alaska Center for Energy and Power•University of Alaska Fairbanks• 814 Alumni Drive•P.O.Box 755910• Fairbanks,Alaska 99775-5910•Tel: (907)474-5402 •Fax: (907)474-5475 Pressure-Temperature Stability—Pilgrim Springs Exploratory Wells Exploratory wells are scheduled to be drilled in the Pilgrim Springs KGRA(Known Geothermal Resource Area during the summer of 2012. A key question regarding the wells is whether it is necessary to drill with a blowout preventer in place. Evaluation of such a need includes determination of the temperature-depth profile at which the saturated steam pressure equals that exerted by the borehole- filled mud column. Saturated steam absolute pressures, in psi,vs.temperature, in °F, were computed with the Antoine equation via use of an on-line calculator, available at www.watervaporpressure.com. Gage pressures, computed by subtracting 14.7 psi atmospheric pressure from the absolute pressures, are plotted as the red line in Figure 1.The mud column,for a weight of 9.5 lb/gal., exerts a pressure of 0.495 psi/ft, resulting in the stability relationship shown by the black line in Figure 1. As an example, from Figure 1, if an ambient temperature of 350°F were encountered at a depth of less than 250 ft, the mud column confining pressure would be inadequate to prevent pore water from flashing to steam, resulting in a blowout, whereas encountering that temperature at greater depth should not cause a problem. 0 0 100 — — 100 Temperature •- 200 — — 200y Pressure Unstable _ _ Stable 0 300 — — 300 400 — — 400 500 I I I 200 250 300 350 400 Temperature,°F Figure 1. Graph showing the temperature-depth relationship governing blowout potential in a geothermal system.The black line provides the depth at which stability occurs for a specified temperature, and the red line the critical pressure, in psi. The maximum temperature for which computations were made is 400°F, based on geothermometry using water chemistry, as provided by Liss and Motyka (1994). According to that reference, the silica geothermometer provides a geothermal source water temperature of 275°F; the cation geothermometer(Na/K, Na-K-Ca) a water temperature of 300°F; the K-Mg geothermometer a water temperature of 320°F; and the Mg-Li geothermometer a water temperature of 375 °F.The maximum geothermometer temperature was rounded up to 400°F to provide a probable upper limit to the temperature likely to be encountered at depth. Note that this temperature maximum must be encountered at a depth of less than 500 ft to result in blowout potential. The minimum temperature in the stability chart is 212 °F, which is higher than any temperature measured in temperature logs of wells drilled in the Pilgrim Springs KGRA. Representative temperature logs of 4 of the 6 legacy wells (PS-1, PS-3, PS-4, and MI-1, drilled in 1982 and 1983 [Kunze and Lofgren, 19831), and the two wells drilled in 2011 (PS11—S1 and PS11-S9) are shown in Figure 2. Note that the maximum logged temperature is less than 200°F. 0 100 — /- — j 200 — — a PS11-S9 / Geo 1 - 0. PS11-S1 300 — Geo 3 - --- PS-1 PS-3 - PS-4 400 — MI-1 — 500 I I I 40 80 120 160 200 Temperature, °F Figure 2.Temperature logs for selected wells in the Pilgrim Springs KGRA, showing that maximum temperatures are less than 200°F. Temperature logs were also obtained from several GeoprobeTM wells installed to depths of 65 to 100 ft in 2011. Selected logs are shown in Figure 3. Note that maximum temperatures are less than 200°F, whereas instability at a depth of 100 ft requires a temperature of about 300°F (Figure 1). 0 I I 20 — — 6 40 — — s - Y ca. a) 60 — geo_15 — geo 6 geo 8 - geo 9 80 — geo 16 - - geo 13 100 I I 50 100 150 200 Temperature, °F Figure 3.Temperature logs for selected Geoprobe wells. In conclusion, geothermometry suggests that there is a potential for water temperature at depth to reach about 400°F. If temperatures of 220 to 400°F were encountered at depths of less than 500 ft, the potential exists for a blowout to occur. However, none of the eight wells drilled to date have encountered temperatures greater than 200°F. Based on these facts, we recommend that drilling progress without a blowout preventer, but that mud temperature be monitored. Should mud temperature reach a specified threshold, say 200°F, drilling would be interrupted to monitor bottom- hole mud temperature. If estimated bottom-hole temperature approached that indicating instability, as shown in Figure 1,the blowout preventer would be added to the drill string. References Kunze,J.F., and Lofgren, B.E., 1983, Pilgrim Springs, Alaska geothermal resource exploration, drilling and testing: Geothermal Resources Council,Transactions,v. 7, p.301 -304. Liss, S.A. and Motyka, R.J., 1994, Pilgrim Springs KGRA, Seward Peninsula, Alaska:Assessment of fluid geochemistry: Geothermal Resources Council Transactions, Vol. 18, p. 213-219. Suggested, Additional Text for Letter of Approval Operator's request under 20 AAC 25.715 for a variance from the wellbore surveying requirements of 20 AAC 25.050 is granted. TG-1 will be a vertical, non-commercial, research, geothermal gradient well located about 1,000' from the nearest property boundary and about 400' from the nearest geothermal gradient well. Operator's request for a variance from the land surveying requirements of 20 AAC 25.070(2) is granted. Global Positioning measurements coupled with aerial photographs provide an equally effective means of locating this non-commercial, research geothermal well. Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Friday, July 06, 2012 1:49 PM To: 'chha@gi.alaska.edu' Cc: Markus Mager Subject: RE: Pilgrim Hot Springs bounds coordinates for proposed wells? Christian, My conversions of (NAD27 -164.921734, 65.094043) and (FSL: 1012' , FEL:245' ) to NAD27 Alaska State Plane Coordinates differ by X = 32', Y = 73' . Much better. Thanks for your help. Steve Davies AOGCC Original Message From: Christian Haselwimmer [mailto:cehaselwimmer@alaska.edu] Sent: Friday, July 06, 2012 11:01 AM To: Davies, Stephen F (DOA) Cc: Markus Mager Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? Hi Steve, The NAD27 long/lat coordinates of the well are -164.921734, 65.094043. This much is certain. The bounds coordinates of FSL: 1012' and FEL: 245' should correspond to this location but if there is any discrepancy then please let me know. I am out at Pilgrim at the moment but will make sure to be internet accessible so we can get this sorted asap. My apologies for all the issues with this. Best, Christian On Fri, Jul 6, 2012 at 9:46 AM, Davies, Stephen F (DOA) <steve.davies@alaska.gov> wrote: > Christian, > I'm a bit confused by your email, and need clarification. Do the coordinates FSL: 1012' and FEL: 245' represent the surface coordinates of the well? Do the NAD27 long/lat coordinates of -164.921734, 65.094043 correspond to FSL: 1012' and FEL: 245' ? > Note: Per regulation 20 AAC 25.005, for the Permit to Drill Application AOGCC requires the surface location specified in metes and bounds coordinates (footages from section lines) and in Alaska State Plane referenced to NAD27. If you provide NAD27 long/lat coordinates, I can convert them to Alaska State Plane NAD27. > Thanks, > Steve Davies > AOGCC Original Message > From: Christian Haselwimmer [mailto:cehaselwimmer@alaska.edu] > Sent: Thursday, July 05, 2012 9:03 PM > To: Davies, Stephen F (DOA) 1 Davies, Stephen F (DOA) From: Christian Haselwimmer[cehaselwimmer@alaska.edu] Sent: Friday, July 06, 2012 11:01 AM To: Davies, Stephen F (DOA) Cc: Markus Mager Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? Hi Steve, The NAD27 long/lat coordinates of the well are -164.921734, 65.094043. This much is certain. The bounds coordinates of FSL: 1012' and FEL: 245' should correspond to this location but if there is any discrepancy then please let me know. I am out at Pilgrim at the moment but will make sure to be internet accessible so we can get this sorted asap. My apologies for all the issues with this. Best, Christian On Fri, Jul 6, 2012 at 9:46 AM, Davies, Stephen F (DOA) <steve.davies@alaska.gov> wrote: > Christian, > > I'm a bit confused by your email, and need clarification. Do the coordinates FSL: 1012' and FEL: 245' represent the surface coordinates of the well? Do the NAD27 long/lat coordinates of -164.921734, 65.094043 correspond to FSL: 1012' and FEL: 245' ? > > Note: Per regulation 20 AAC 25.005, for the Permit to Drill Application AOGCC requires the surface location specified in metes and bounds coordinates (footages from section lines) and in Alaska State Plane referenced to NAD27. If you provide NAD27 long/lat coordinates, I can convert them to Alaska State Plane NAD27. > > > Thanks, > Steve Davies > AOGCC > > Original Message > From: Christian Haselwimmer [mailto:cehaselwimmer@alaska.edu] > Sent: Thursday, July 05, 2012 9:03 PM > To: Davies, Stephen F (DOA) > Cc: Markus Mager; Gwen Holdmann > Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? > > Hi Stephen, > you are correct that the coordinates we provided do not seem to be in > NAD27. I did the transformation and the correct coordinates should be: > -164.921734, 65.094043 > > In addition, the bounding coordinates I provided previously were with > reference to the proposed site for the well and not the actual GPS > surveyed point for the well pad. I have re-measured and the new > bounding coordinates are: FSL: 1012' and FEL: 245' . > All the best, > Christian > > > On Thu, Jul 5, 2012 at 11:31 AM, Markus Mager <markus.mager@alaska.edu> wrote: 1 Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Friday, July 06, 2012 9:46 AM To: 'cehaselwimmer@alaska.edu' Cc: Markus Mager; Gwen Holdmann Subject: RE: Pilgrim Hot Springs bounds coordinates for proposed wells? Christian, I'm a bit confused by your email, and need clarification. Do the coordinates FSL: 1012' and FEL: 245' represent the surface coordinates of the well? Do the NAD27 long/lat coordinates of -164.921734, 65.094043 correspond to FSL: 1012' and FEL: 245' ? Note: Per regulation 20 AAC 25.005, for the Permit to Drill Application AOGCC requires the surface location specified in metes and bounds coordinates (footages from section lines) and in Alaska State Plane referenced to NAD27. If you provide NAD27 long/lat coordinates, I can convert them to Alaska State Plane NAD27. Thanks, Steve Davies AOGCC Original Message From: Christian Haselwimmer [mailto:cehaselwimmer@alaska.edu] Sent: Thursday, July 05, 2012 9:03 PM To: Davies, Stephen F (DOA) Cc: Markus Mager; Gwen Holdmann Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? Hi Stephen, you are correct that the coordinates we provided do not seem to be in NAD27. I did the transformation and the correct coordinates should be: -164.921734, 65.094043 In addition, the bounding coordinates I provided previously were with reference to the proposed site for the well and not the actual GPS surveyed point for the well pad. I have re- measured and the new bounding coordinates are: FSL: 1012' and FEL: 245' . All the best, Christian On Thu, Jul 5, 2012 at 11:31 AM, Markus Mager <markus.mager@alaska.edu> wrote: > Steve, > I'm not able to explain these differences. Christian, can you please clarify? > Thank you, > Markus > > On Thu, Jul 5, 2012 at 11:16 AM, Davies, Stephen F (DOA) > <steve.davies@alaska.gov> wrote: » Markus, 1 Davies, Stephen F (DOA) From: Christian Haselwimmer[cehaselwimmer@alaska.edu] Sent: Thursday, July 05, 2012 9:03 PM To: Davies, Stephen F (DOA) Cc: Markus Mager; Gwen Holdmann Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? Hi Stephen, you are correct that the coordinates we provided do not seem to be in NAD27. I did the transformation and the correct coordinates should be: -164.921734, 65.094043 In addition, the bounding coordinates I provided previously were with reference to the proposed site for the well and not the actual GPS surveyed point for the well pad. I have re- measured and the new bounding coordinates are: FSL: 1012' and FEL: 245' . All the best, Christian On Thu, Jul 5, 2012 at 11:31 AM, Markus Mager <markus.mager@alaska.edu> wrote: > Steve, > I'm not able to explain these differences. Christian, can you please clarify? > Thank you, > Markus > On Thu, Jul 5, 2012 at 11:16 AM, Davies, Stephen F (DOA) > <steve.davies@alaska.gov> wrote: » Markus, » Are you certain about the Datum of NAD27 as listed in the email below? When I convert the NAD27 lat/long coordinates below to Alaska State Plane Zone 8 NAD27 and compare them with the calculated Alaska State Plane Zone 8 NAD27 coordinates for the metes and bounds of Y = 1088' FSL (from the south line of Section 36) and X = 416' FEL (from the east line of Section 36) provided by Christian, I get a difference of 288' in the X direction and 397' in the Y direction. » However, if I assume that the lat/long cords below have a datum of NAD83 (WGS84), convert them to Alaska State Plane Zone 8 NAD27 and compare them to the calculated Alaska State Plane Zone 8 NAD27 coordinates for the metes and bounds of 1088' FSL and 416' FEL provided by Christian, I get a difference of 116' in the X direction and 116' in the Y direction. » Thanks, » Steve Davies » AOGCC » Original Message » From: Markus Mager [mailto:markus.mager@alaska.edu] » Sent: Thursday, July 05, 2012 10:41 AM » To: Davies, Stephen F (DOA) » Cc: cehaselwimmer@alaska.edu; Gwen Holdmann » Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? 1 Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Thursday, July 05, 2012 11:17 AM To: 'Markus Mager' Cc: cehaselwimmer@alaska.edu; Gwen Holdmann Subject: RE: Pilgrim Hot Springs bounds coordinates for proposed wells? Markus, Are you certain about the Datum of NAD27 as listed in the email below? When I convert the NAD27 lat/long coordinates below to Alaska State Plane Zone 8 NAD27 and compare them with the calculated Alaska State Plane Zone 8 NAD27 coordinates for the metes and bounds of Y = 1088' FSL (from the south line of Section 36) and X = 416' FEL (from the east line of Section 36) provided by Christian, I get a difference of 288' in the X direction and 397' in the Y direction. However, if I assume that the lat/long cords below have a datum of NAD83 (WGS84), convert them to Alaska State Plane Zone 8 NAD27 and compare them to the calculated Alaska State Plane Zone 8 NAD27 coordinates for the metes and bounds of 1088' FSL and 416' FEL provided by Christian, I get a difference of 116' in the X direction and 116' in the Y direction. Thanks, Steve Davies AOGCC Original Message From: Markus Mager [mailto:markus.mager@alaska.edu] Sent: Thursday, July 05, 2012 10:41 AM To: Davies, Stephen F (DOA) Cc: cehaselwimmer@alaska.edu; Gwen Holdmann Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? Hello Steve, Here are the exact information about site #2, our first drill site. Lat: 65.093377 decimal degrees North Long: 164.924537 decimal degrees West Datum: NAD27 (converted from WGS 84 in ArcMap 10) These coordinates were derived using a Leica GS50+ GPS receiver configured to receive real time kinematic corrections from a base station mounted at National Geodetic Survey Marker UW4079, stamped "Golden Gate." This station mark is found at 65 03 26.94475" N, 164 48 07.64292" W. Summary of our drilling application: We identified 6 potential drill sites and are planning to drill 2 deep holes. The coordinates in our permit to drill applications (TG-1 and TG-2) were just placeholders and are the coordinates of the potential drill site #6 and #5. (see our 2012 drilling plan and procedure p. 3 - "The exact drilling location coordinates will be provided to AOGCC within one week before drilling starts"). Actual drill sites: 1 Davies, Stephen F (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Thursday, July 05, 2012 10:41 AM To: Davies, Stephen F (DOA) Cc: cehaselwimmer@alaska.edu; Gwen Holdmann Subject: Re: Pilgrim Hot Springs bounds coordinates for proposed wells? Attachments: site2.jpg; PHS_2012_Geospatial_Survey.docx Hello Steve, Here are the exact information about site #2, our first drill site. Lat: 65.093377 decimal degrees North Long: 164.924537 decimal degrees West Datum: NAD27 (converted from WGS 84 in ArcMap 10) These coordinates were derived using a Leica GS50+ GPS receiver configured to receive real time kinematic corrections from a base station mounted at National Geodetic Survey Marker UW4079, stamped "Golden Gate." This station mark is found at 65 03 26.94475" N, 164 48 07.64292" W. Summary of our drilling application: We identified 6 potential drill sites and are planning to drill 2 deep holes. The coordinates in our permit to drill applications (TG-1 and TG-2) were just placeholders and are the coordinates of the potential drill site #6 and #5. (see our 2012 drilling plan and procedure p. 3 - "The exact drilling location coordinates will be provided to AOGCC within one week before drilling starts") . Actual drill sites: The location of the first deep hole (TG-1) was determined by the project team and is drill site #2. The location for the second deep hole (TG-2) is not determined yet and will depend on the results of the 1st deep hole and the 500ft holes that will be drilled. Right now we are aiming for drilling the second deep hole from 08/13 - 09/03/2012. We will provide the exact coordinates for TG-2 in the beginning of August. Does that work for you or should we submit additional permit to drill applications for the other potential drill sites? I have attached an image of site #2 and a more detailed description of the GPS unit we are using for your convenience. I will try to call you after I sent that email. If I don't get a chance to talk to you, please call my cell (590-7278) if you have any questions or concerns. Best regards, Markus On Thu, Jul 5, 2012 at 9:56 AM, Davies, Stephen F (DOA) <steve.daviesOalaska.gov> wrote: > Hi Christian and Gwen, > In nearly all other instances, surface location coordinates are > determined by a registered land surveyor based on one or more > surveying monuments in the area. t • ^ -7 . �(I y >I •r e .,t ,.., y � ql F' CL_ ' , V ,# a-x � eh . 'C: • 5 !';X°� „,�.e• .t�„+"�i:�.'.`. yFr•• .r,A-,..,:-..,,,4.4"-''t 1-.:. ',•:' •74: . ,�rae �y . 6'v�,.��1 'T.{i-, ,` -1 , f1 ,,�«y.cC,„ } t ..+ • .141;16.- -tk 1 T }.. .,•,•.. .*•-',., ..iv ' w •- i •• ! -• r> ..V <t 11, 0.. ..' .� .1'04,jt "4 f+ .'-'..:'7....,-'.'. . +t•x.•3,4 .rye• 5 �: - yam,, ' 4. l S y t' t - 1 h -T' 1 0 d{t !1 w�- ;_' • *Or ilk Orir • 7. r. SO +. i. 3�i •;4 ' Jk . _ .i. . 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M h k$k a -`4-,-.7--.” 4.SXr :y •t.,,"r iii'• ' • •••**?...,.t pp r ,y-s `, ii. /1 k �.'Jr WR` }' z tt4 ; .a 4 ,. s y• a , .ti F t' • : fie' w t+w.Y ,- :.ti :.. ;';H ..y AILj' "i11,Aii r 1 t 1 J - r• .k( i µ ,1:. � A ti" Pilgrim Hot Springs—2012 Geospatial Survey High resolution surveying and mapping of the Pilgrim Hot Springs(PHS) area will enhance modeling capabilities and products as well as provide a precise reference to all well and hole locations. Survey efforts will also include the creation of a digital elevation model for the geothermal area. The survey is conducted with a dual f `rs __ - ter" frequency Leica Geosystems GS50+sensor • which is a 12-channel L1/L2 code and phase `' '* + ' ` ' .* — a SH1v;� ; GPS receiver. With real time kinematic (RTK) :, AN6 � • measurements,coordinates can be calculated r , q4't/ `l . r with one centimeter precision. WGS84 is the ` ... r ` r datum preferred by this device, but ti transformation to NAD27 is practical using the ESRI ArcMap software suite.All geospatial information and products from the survey will be added to the Pilgrim Hot Springs . geodatabase. r` RTL corrections are broadcast from a National Picture 1 Golden Gate-National Geodetic Survey benchmark Geodetic Survey benchmark designated "Golden Gate" (permanent ID UW4079) located at N 65°03' 26.94475" , W 164°48' 07.64292" (NAD83) as per the NGS online database (see picture 1 and 2). Survey equipment is available and on site between June 15th 2012 and July 12th 2012, and is also available at the end of the 2012 field season to survey any late season developments. Picture 2 Base station set up at Golden Gate The existing wells (PS-1, PS-2, PS-3, PS-4, PS-5 and MI-1)from earlier exploration efforts at Pilgrim,the two 500ft temperature gradient (TG) holes drilled in 2011, as well as the shallower GeoProbe holes at Pilgrim Hot Springs are spatially registered using this survey grade GPS with RTK corrections.The TG holes (target depth 2500ft)we are planning to drill during the 2012 field season will be spatially registered utilizing this system as well. Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Thursday, July 05, 2012 9:57 AM To: 'cehaselwimmer@alaska.edu' Cc: 'Gwen Holdmann'; 'Markus Mager' Subject: RE: Pilgrim Hot Springs bounds coordinates for proposed wells? Hi Christian and Gwen, In nearly all other instances, surface location coordinates are determined by a registered land surveyor based on one or more surveying monuments in the area. I'm having trouble reconciling surface coordinates provided for the proposed TG-1 well. The Permit to Drill Application for TG-1 provides surface location coordinates of latitude 65.095330/ longitude-164.929950. When I convert these lat/long coordinates into Alaska State Plane Zone 8 NAD 27 coordinates and then convert your metes and bounds coordinates (from the email below) into Alaska State Plane Zone 8 NAD 27 coordinates, I get a difference of many hundreds of feet. Please confirm that the latitude/ longitude coordinates provided on the TG-1 Permit to Drill Application are for the current surface location,which I believe is informally called Site 2 by the ACEP field team. How were these latitude/ longitude coordinates obtained? I presume they are referenced to NAD83, correct? Thanks, Steve Davies AOGCC 907-793-1224 From: Christian Haselwimmer [mailto:cehaselwimmer@alaska.edu] Sent: Wednesday, July 04, 2012 9:57 AM To: Davies, Stephen F (DOA) Cc: Gwen Holdmann Subject: Pilgrim Hot Springs bounds coordinates for proposed wells? Hi Steve, Gwen passed on a request from you for bounds coordinates for the proposed wells at Pilgrim Hot Springs. I am a little confused about how to produce these coordinates so I was hoping you could provide some guidance? From the info you provided my first attempt at this for well site #2 is 416 (X) by 1088 (Y) feet: I have attached a screen-grab of how I defined this based upon distance in feet from the intersection of grid lines on the topomap. Could you advise whether this is correct or how these coordinates should be determined so I can get these to you asap. All the best, Christian Christian Haselwimmer- Postdoctoral Research Fellow Geophysical Institute, University of Alaska Fairbanks, 903 Koyukuk Dr; PO Box 757320, Fairbanks, AK 99775-7320, USA Tel: 1-907-4747676 1 Email: chha@,gi.alaska.edu Web: http://www.gi.alaska.edu/—chha 2 Davies, Stephen F (DOA) From: Christian Haselwimmer[cehaselwimmer@alaska.edu] Sent: Wednesday, July 04, 2012 9:57 AM To: Davies, Stephen F (DOA) Cc: Gwen Holdmann Subject: Pilgrim Hot Springs bounds coordinates for proposed wells? Attachments: PHS_well_2_bounds.jpg Hi Steve, Gwen passed on a request from you for bounds coordinates for the proposed wells at Pilgrim Hot Springs. I am a little confused about how to produce these coordinates so I was hoping you could provide some guidance? From the info you provided my first attempt at this for well site #2 is 416 (X) by 1088 (Y) feet: I have attached a screen-grab of how I defined this based upon distance in feet from the intersection of grid lines on the topomap. Could you advise whether this is correct or how these coordinates should be determined so I can get these to you asap. All the best, Christian Christian Haselwimmer- Postdoctoral Research Fellow Geophysical Institute, University of Alaska Fairbanks, 903 Koyukuk Dr; PO Box 757320, Fairbanks, AK 99775-7320, USA Tel: 1-907-4747676 Email: chha@gi.alaska.edu Web: http://www.gi.alaska.edu/—chha 1 Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Tuesday, July 03, 2012 3:44 PM To: 'Gwen Holdmann' Subject: TG-1 Permit to Drill Application: Items Outstanding Gwenn, You're welcome. The only items that I know of that are lacking before the TG-1 application can go to the Commissioners for review are the Power of Attorney for the bond and the final location for the well. Regards, Steve Davies AOGCC From: Gwen Holdmann [mailto:gwen.holdmann@aalaska.edu] Sent: Tuesday, July 03, 2012 3:36 PM To: Davies, Stephen F (DOA) Cc: Foerster, Catherine P (DOA); Norman, John K(DOA); Seamount, Dan T(DOA); Schwartz, Guy L(DOA) Subject: Re: Shallow Research Geothermal Gradient Holes Steve, Thanks to both you and the Commissioners for your for your impressive speed in addressing this request. We appreciate your efforts in pragmatically balancing the need for safety and with appropriate risk management. Gwen Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ua£edu/acep On Tue, Jul 3, 2012 at 3:28 PM, Davies, Stephen F (DOA) <steve.davies@alaska.gov> wrote: Gwen, See the attached letter from Commissioner Foerster. Please call me if you have any questions. 1 Regards, Steve Davies AOGCC 2 in ,. Xs �. i l III g f 111,11, X it 111111111j "twirl ktil A Laid; Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Tuesday, July 03, 2012 1:41 PM To: Davies, Stephen F (DOA) Cc: Markus Mager Subject: Nancy Spink Power of Attorney Attachments: Travelers Indemnity Agreement with Univ of AK.pdf Steve, Is this sufficient? UAF forwarded it to me in response to your request. Gwen Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.uaf.edu/acep 1 • General Contract TRAVELERS CASUALTY AND SUR 1 1 Y COMPANY OF AMERICA Hartford, Connecticut 06183 Of Indemnity (Form B) We, the undersigned, hereinafter referred to, individually and/or collectively, as "Indemnitors," hereby request, have requested and/or will request TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, ST. PAUL FIRE AND MARINE INSURANCE COMPANY, any of their present or future direct or indirect parent companies, any of the respective present or future direct or indirect affiliates or subsidiaries of such companies and parent companies, and/or any of the aforementioned entities' successors or assigns, hereinafter referred to, individually and/or collectively, as "Company," to execute or procure bonds, undertakings, guarantees, and/or contractual obligations, including renewals and extensions thereof, whether before or after the date of this Agreement, and bonds and undertakings for which Company has obligations as a result of an asset purchase, acquisition, merger or like transaction, hereinafter referred to, individually and/or collectively, as "Bond(s)." As an inducement therefore we make the following representations of fact, promises and agreements: REPRESENTATIONS OF FACT: 1. In the transaction of business one, some or all of the Indemnitors are required, or may desire to give such Bond(s). 2. Indemnitors have a substantial, material and beneficial interest(a) in the obtaining of Bond(s) by any of the Indemnitors and(b) in the transaction(s) for which any other Indemnitor has applied or will apply to Company for Bond(s) pursuant to this General Contract of Indemnity, hereinafter referred to as "Agreement." It is understood that the purpose of this Agreement is to induce Company to furnish Bond(s); however, Company is under no obligation to furnish Bond(s)to lndemnitors. 3. lndemnitors have the full power and authority to execute, deliver and perform this Agreement and to carry out the obligations stated herein. 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To pay all premiums for each Bond, as they fall due, until Company has been provided with competent legal evidence that the Bond has been duly discharged. 2. To indemnify and exonerate Company from and against any and all loss, cost and expense of whatever kind which it may incur or sustain as a result of or in connection with the furnishing of Bond(s),the assumption of obligations by Company of Bond(s), and/or the enforcement of this Agreement, including unpaid premiums, interest, court costs and counsel fees, and any expense incurred or sustained by reason of making any investigation, hereinafter referred to as"Loss." 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(a) The validity and effect of this Agreement shall not be impaired by, and Company shall incur no liability on account of, and Indemnitors need not be notified of: (1) Company's failure or refusal to furnish Bond(s), including final Bond(s)where Company has furnished a bid Bond; S-24126(04-04c) Page 1 of 1 S-2412B(04-04c)Government indemnity Agreement for signature (2) Company's consent or failure to consent to changes in the terms and provisions of any Bond, or the obligation or performance secured by any Bond; (3) The taking, failing to take, or release of security, collateral, assignment, indemnity agreements and the like, as to any Bond; (4) The release by Company,on terms satisfactory to it,of any Indemnitors;or (5) Information which may come to the attention of Company which affects or might affect its rights and liabilities or those of any of the Indemnitors. 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Any collateral or letters of credit provided to Company by any Indemnitor or any third party, or the proceeds thereof, may be applied to any Loss. 8. Indemnitors also understand and agree that their obligations remain in full force and effect for any Bond(s)issued pursuant to this Agreement, notwithstanding that the entity on whose behalf Bond(s) were issued has been sold, dissolved or whose ownership has been otherwise altered in any way. 9. This Agreement shall remain in full force and effect until terminated. lndemnitors may only terminate participation in this Agreement by providing written notice to Company of lndemnitors' intent to terminate. Such notice shall be addressed to St. Paul Travelers Bond, Attention: Senior Vice President Commercial Surety, One Tower Square, Hartford, Connecticut 06183. Such notice of termination shall become effective thirty (30) days after Company's receipt of the same. The obligations and liability of Indemnitors giving such notice shall thereafter be limited to Bond(s)furnished before the effective date of the notice,which liability shall include any Bond(s) which were originally issued prior to the effective date of notice and renewed or otherwise extended subsequent to the notice or effective date of termination. 10. Whereas, the obligee or beneficiary under certain Bond(s) may make a demand for payment ("Demand") against the Bond(s). When such Demand is made, Company must pay the amount of the Demand, not to exceed the penal sum of the Bond(s), as well as ail necessary fees, within the time period required by the Demand. 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Failure to make payment to Company as herein provided shall cause the indemnitors to be additionally liable for any and all costs and expenses, including attorney's fees, incurred by Company in enforcing this Agreement, together with interest on unpaid amounts due Company. Interest shall accrue, commencing the date Company pays the amount of the Demand, at 130% of the prime rate of interest in effect on December 31 of the previous calendar year as published in the Wall Street Journal. Indemnitors stipulate and agree that the Company will suffer immediate irreparable harm and will have no adequate remedy at law should Indemnitors fail to perform this obligation, and therefore Company shall be entitled to specific performance of this obligation. 11. Indemnitors hereby expressly authorize Company to access credit records and to make such pertinent inquiries as may be necessary from third party sources for underwriting purposes, claim purposes and/or debt collection. To the extent required by law, Company will, upon request, provide notice whether or not a consumer report has been requested by Company, and if so,the name and address of the consumer reporting agency furnishing the report. 12. In the event of a claim or notice of a potential claim, Company shall have the right, at all times, to free access to the books, records,and accounts of the lndemnitors for the purpose of examining the same. 13. Company may furnish copies of any and all statements, agreements,financial statements and any information which it now has or may hereafter obtain concerning Indemnitors, to other persons or companies for the purpose of procuring co-suretyship or reinsurance. 14. A duplicate or facsimile copy or electronic reproduction of the original document shall have the same force and effect as the original. S-24128(04-040 Page 2 of 2 5-2412B(04-04c)Government Indemnity Agreement for signature 15. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. 16. If any provision or portion of this Agreement shall be unenforceable, this Agreement shall not be void, but shall be construed and enforced with the same effect as though such provision or portion were omitted. 17. This Agreement is in addition to and not in lieu of any other agreements and obligations undertaken in favor of Company, whether now existing or entered into hereafter. 18. The rights and remedies afforded to Company by the terms of this Agreement can only be impaired by a written rider to this Agreement signed by an authorized employee of the Company. 19. Company's failure to act to enforce any or all of its rights under this Agreement shall not be construed as a waiver of these rights. 20. The date of this Agreement shall be the earliest date any Indemnitor executes this Agreement. 21. Special Provisions: Notwithstanding anything to the contrary herein, it is agreed and understood that the definition of Loss under this Agreement shall not include any loss, cost or expense incurred by Company due to the wrongful acts or omissions of Company or its employees WE HAVE READ THIS CONTRACT OF INDEMNITY CAREFULLY. THERE ARE NO SEPARATE AGREEMENTS OR UNDERSTANDINGS WHICH IN ANY WAY LESSEN OUR OBLIGATIONS AS ABOVE SET FORTH. IN TESTIMONY HEREOF,WE THE INDEMNITORS HAVE SET OUR HANDS AND FIXED OUR SEALS AS SET FORTH BELOW. If Indemnitor a Governmental Entity, sign below: Instructions: Two signatures are required for all entities except where otherwise instructed by Company and all signatures must be notarized and dated. Please provide the entity's federal tax identification number on the tine provided. Each of the undersigned hereby affirms to Company as follows: I am a duly authorized official of the governmental entity Indemnitor on whose behalf I am executing this Agreement. In such capacity I am familiar with all of the documents which set forth and establish the rights which govern the affairs, power and authority of such governmental entity including,to the extent applicable,the certificate or articles of incorporation, bylaws, resolutions and/or operating agreements of such entity. Having reviewed all such applicable documents and instruments and such other facts as deemed appropriate. I hereby affirm that such entity has the power and authority to enter into this Agreement and ttt that the individuals executing this Agreementfon behalf of such entityareare duly authorized to do so. V Vf 1�1 ers t 71 &9 i(3564,1� ' `'W� (Seal) (Indemnitor Name) (Firs;..Signatur Co 0001Li '7 Q (Federal Tax ID) �� , �� • G� f e� I �f�� Ce(r ( rin or Type(Name -nd Title • ( ate) �t `r Pi) (.t// t (Seal) (Second Signature) //m li' 'u i�'r'ilc��? GFFice masa ye (Print ype Name and Title) (Date) ACKNOWLEDGEME T STATE OF A IO.s Oounty-of• F NSA A r,�'_ "" t� On this 41 day of .a t� , before me personally appeared 1 otme. Sp�i.vi>P�., , known or proven to me to tie the i _ •_ • of the enti exec&ting the foregoing instrument ("Entity") and Ptont.\ b 5[,1.L�,tvQ11 , known or proven to me to be the QPGL r ) QY� of the Entity, and t y acknowledged said instrument to be the free and voluntary act and deed of said Entity,for the us and purposes therein mentioned and on oath stated that they executed said instrument by authority of the Entity. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my OFFICIAL SEAL the day and year first above written. 'C66' A ->* Notary Public re !dine , Official Seal (Commission expires '0 IT° /0,_ State of AlasRa DIAN E. „EGFRIED Not. 'tiblic M'i Commissi' : resJ YVl it Office S-24126(04-04c) Page 3 of 3 Pilgrim Hot Springs Bond revised from UA Legal 2012-S-24126(04-04c) Government Indemnity Agreement for signature Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Tuesday, July 03, 2012 3:29 PM To: 'Gwen Holdmann' Cc: Foerster, Catherine P (DOA); Norman, John K (DOA); Seamount, Dan T (DOA); Schwartz, Guy L (DOA) Subject: Shallow Research Geothermal Gradient Holes Attachments: S45C-212070315150.pdf Gwen, See the attached letter from Commissioner Foerster. Please call me if you have any questions. Regards, Steve Davies AOGCC AlAsEA /sEANPARNELLGovERNOR ALASKA. OIL AND GAS 333 W 7th AVENUE.SUITE 100 CONSERVATION COM IISSIO1 / ANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 FAX (907)276-7542 July 3,2012 Ms. Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska PO Box 755910 Fairbanks, Alaska 99775-5910 Dear Ms. Holdmann: The Alaska Oil and Gas Conservation Commission (AOGCC) has reviewed your email correspondence of July 3, 2012 to Steve Davies and prior AOGCC email correspondence to Markus Mager dated October 21, 2010. The AOGCC understands that the expected bottom-hole temperature in your proposed drilling area does not exceed 93 degrees C. Based on this expected temperature, the AOGCC will not assert jurisdiction at this time over geothermal gradient holes drilled for research purposes that do not exceed 500' depth, and no permits will be required for them. However, should you encounter temperatures that exceed 93 degrees C, please contact the AOGCC at that time for further discussion. An AOGCC Permit to Drill will be required for research geothermal gradient holes that exceed 500 feet depth or 93 degrees C. If you have any questions, please feel free to contact Mr. Guy Schwartz or Mr. Steve Davies. Sincerely, Cathy P. 'oerst Commi .ioner, Chair Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Tuesday, July 03, 2012 2:28 PM To: Davies, Stephen F (DOA) Cc: Markus Mager Subject: Pilgrim: AOGCC history and permit application Attachments: S45C-210090809400.pdf; AOGCC supplemental drilling plan information 7-3-12.doc Steve, To follow up on our phone conversation, we would like to request permission to drill a single 500 ft hole at site v 2 (lat_NAD 1723662.535230, long_NAD -511406.032956), using the same protocol as was used during 2011 to drill S-1 and S-9 (also to 500 ft). We are making this request for two reasons: 1) The drill crew is currently idle and we are unsure when the final permit with your agency will be approved. 2) We have been continuing an aggressive geoprobe drilling program that has nicely delineated the shallow geothermal system, but has not provided much insight into the deeper aquifer. Another TG hole of intermediate depth would allow us to better select a final drilling target for a 2500 ft confirmation hole, which is the subject of our permit request. AOGCC did not require a bond for the repair work on the existing wells at Pilgrim Hot Springs (see attached letter), or for the 500 ft TG holes drilled last summer (see e-mail below from Winton Aubert). As per the program last summer, we do not expect the bottom hole temperature in this new 500 ft hole to exceed 93°C. We anticipate accessing the shallow thermal aquifer relatively near the surface, with cooler gradients beneath as has been observed repeatedly throughout the area. We are interested in measuring the gradient below the shallow aquifer at site 2, which would be accomplished through the completion of an additional 500 ft hole. Should temperatures below the shallow aquifer climb rapidly and suggest the possibility of encountering higher temperature fluids, we would confer with AOGCC about the appropriate next steps. I have attached a brief overview of our rationale for this request. I would like to emphasize that our permit request for the deeper drilling program remains our top priority, and if this supplemental request in any way should interfere or delay completion of the full permit, we would withdraw this proposal. Gwen Forwarded message From: Aubert, Winton G (DOA) <winton.aubert@alaska.gov> Date: Thu, Oct 21, 2010 at 3:08 PM Subject: RE: TG holes Pilgrim Hot Springs To: Markus Mager <markus.mager@alaska.edu> Cc: "Seamount, Dan T (DOA)" <dan.seamount(a,alaska.gov>, "Norman, John K (DOA)" <john.norman@alaska.gov>, "Foerster, Catherine P (DOA)" <cathy.fo erster@alaska.gov> Markus, Thank you for the information on your Pilgrim Hot Springs 2011 drilling program. 1 The Commission understands that the expected bottom hole temperature in your proposed drilling area is in the range of 85 degrees C to 93 degrees C. Based upon this expected temperature, the Commission will not assert jurisdiction at this time, and no Commission permits are necessary for your drilling program. However, should you encounter temperatures that vary significantly from that expected, please contact the Commission at that time for further discussion. Thank you, Winton Aubert AOGCC 907 793-1231 ----> So let's use the same assumption in 2012 for the 500ft hole and if we see different/higher temperatures we will let them know. If that's what it takes, go for it! ----> To back that up: PS-5: 894ft, 48C S-1: 503ft, 36C S-9: 491.5ft, 22.4C Art will call me in lh, so can you run that by Steve ASAP? They would sure like to set the 10inch casing today. Markus Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ualiedu/acep 2 Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Tuesday, July 03, 2012 12:50 PM To: Davies, Stephen F (DOA) Subject: FORWARDED: 2010 Correspondence on 500ft TG holes Forwarded message From: Aubert, Winton G (DOA) <winton.aubert(aalaska.gov> Date: Thu, Oct 21, 2010 at 3:08 PM Subject: RE: TG holes Pilgrim Hot Springs To: Markus Mager<markus.mager@alaska.edu> Cc: "Seamount, Dan T (DOA)" <dan.seamount@alaska.gov>, "Norman, John K (DOA)" <john.norman@alaska.gov>, "Foerster, Catherine P (DOA)" <cathy.fo erster@ al aska.gov> Markus, Thank you for the information on your Pilgrim Hot Springs 2011 drilling program. The Commission understands that the expected bottom hole temperature in your proposed drilling area is in the range of 85 degrees C to 93 degrees C. Based upon this expected temperature, the Commission will not assert jurisdiction at this time, and no Commission permits are necessary for your drilling program. However, should you encounter temperatures that vary significantly from that expected, please contact the Commission at that time for further discussion. Thank you, Winton Aubert AOGCC 907 793-1231 Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.uafedu/acep 1 Li\LAsEL7 SEANPARNELL,GOVERNOR ALASKA OIL AND GA333 W.7th AVENUE,SUITE 100 CONSERVATION COMMISSIOANCHORAGE,ALASKA 99501-3539 PHONE (907)279-1433 FAX (907)276-7542 September 8,2010 Ms. Gwen Holdmann, Director Alaska Center for Energy and Power E-mailed and sent by U. S. Mail University of Alaska PO Box 755910 Fairbanks AK 99775-5910 Dear Ms. Holdmann: The Alaska Oil and Gas Conservation Commission (Commission) has reviewed your August 19, 2010 correspondence to Winton Aubert. Based upon information previously provided and the contents of your correspondence, the Commission understands that 1) the temperature of the geothermal resources at Pilgrim does not exceed 120 Celsius, and 2) the re-entering of the wells is being undertaken solely for the purposes of research, i.e., to test the validity of an innovative geothermal exploration technique. As a result of these representations, the Commission will not exercise its jurisdiction at this time. The Commission's decision is based solely on the representations provided to it. Should the geothermal resources be used for any purposes other than the gathering of information, the Commission reserves the right to revisit the issue of its jurisdiction. In addition to the above, your correspondence also indicates your intention to drill "two 500ft gradient holes and two 2500ft confirmation holes ..." Any such holes would fit the Commission's regulatory definition of"well." Consequently, prior to drilling any such holes you will need to recontact the Commission to ascertain whether a permit will be required. If you have any questions, please feel free to contact Mr, Aubert. • " . ` Orman .m ' -loner Supplemental information: Request to AOGCC for approval to drill an additional 500 ft TG hole while awaiting final permit approval Plan for additional 500 ft TG hole at permitted Site 2 During the 2012 field season there have been 35 geoprobe holes installed at Pilgrim to maximum depths of a little more than 100 ft(see Figure 1 on following page). The northwestern quarter of the thermal anomaly remains unexplored due to an inability to economically access the swampy area but enough of the thermal anomaly has been defined that temperature contours can be reasonably extrapolated through this area. Combined with the 16 geoprobe holes installed in 2011 these low cost holes have credibly outlined the core of the thermal anomaly. The shallow anomaly has maximum measured temperatures near 195 °F in the area of the 1980s PS-1 and PS-2 holes. These deeper older holes conclusively showed shallow lateral flow toward the south and west away from PS-1 and that any upward flow of hot water from greater depth was not beneath the southern part of the shallow thermal anomaly. None of the more recent geoprobe holes have been deep enough to penetrate any meaningful distance below the shallow thermal aquifer so the extent or magnitude of any reversals in the eastern, northern, and western parts of the thermal anomaly are unknown. There is a very good chance that the shallow thermal aquifer also flows more directions than just south from its source. Before committing to drill a hole to 1000 ft or deeper which will require an AOGCC permit, it is logical to begin with a more conservative program mirroring the 500 ft temperature gradient holes completed in 2011.This can be justified because not enough is yet known about the thermal anomaly below the shallow aquifer to confidently site a hole that will encounter temperatures above 200°F. This risk can be mitigated at a modest cost by drilling one to three additional temperature gradient holes to an intermediate depth (a maximum depth of 500 ft). These holes can be drilled in a couple of days each and should convincingly narrow down the size of the deeper target for a 2500 ft hole. Gamma ray logs obtained during the past week in the 500 ft deep S-1 and S-9 holes have shown good character allowing multiple correlations(see Figure 2 on following page). Given the generally flat lying local geology there is good reason to expect that these correlations will extend to other holes in the area and give an improved understanding of the local shallow geology. The modest downside to the drilling of a few 500 ft deep holes is that most likely the deeper hole(s)will be drilled adjacent to a 500 ft hole resulting in some minor data overlap. However, the plus to this is that we will be better prepared to select the best available casing depths for the deeper hole(s). These 500 ft deep holes would be drilled on the permitted sites 1 through 6 with the number 2 site (near the PS-GEO-12-31 site) serving as the first target. Depending upon the results of this first hole, sites 1 or 6 would be the most likely locations for a second or third 500 foot deep hole, if deemed necessary. 50350C SO.. Subsurface temp(F)@ 60f F`'5" E =40-50 50-60 00-70 si 0 -S_r E�%.3 70-80 0 80-90 90-100 100-110 ° 110 120 120-130 PS-GEO-10C\ 130-140 0 140-150 6 ail150-160 X Mil 160-170 9 I:c • ° -170-180 8 11 x - F PS-GEO-8 c 180-190 P E0-12-32.' - ^- -- _190-200 1. .1• PS-GEO-12-30 pq►GE-6 X PS-GEO-12-31 •• 0 PS-GEO-12-7 PS-GEC-7 • 1 •PSGEO-12-8 1 PS-GEO-12-6 O OPS-GEO-12-10 'SGEO' X law • <EO-15-- 5 �/ PS- 012-4 /'PS-GEO-12-1 PS-G€O-12-19 c ) .,.. ^ EO-122 .. DPS-GEO-12-25 f - EO-12-13 PS-GEO-12-14 Tw' NSi g@i1 Hca �� MI-1 PS-GEO-19 0 f• r 0-0.3 PS-GEO-12-t 1; '''Ge,(KKAMO a ••,1 t";MI3.AGSZv u PS GEO 12 23 , r ,...P.S OE 0-12 22PS-5 0 PS-GEO-12-26 oPS-GEO-12-11 t� I Figure 1. Shallow aquifer map for the Pilgrim area. I AAAI I Uhk 01110 sk ITkttrt k. s i$,. k N 1Y. .� 20 sNoffset ..— .1":----".1,..- �.. ._�� 0n SO iis loo _ ' ,A _ ^ _. . 140 :, t>" — — — — T 3ll,t onSM .,°° 1 un , h 21111 ren __ .. t., Y Z U str — — — — nn— G _.. ' >„ _ I 40 ftxk 700 5:. ______ — ___ _ t• }� u0 m.' — '1 24 — — — . �� _.. __ 7001 dGec 700 _ I r400 U0 41,8 -_ v.— 1 i' p 4 40 Figure 2. Gamma Ray logs in S-1 and S-9 (drilled to a depth of 500 ft in 2011) Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Tuesday, July 03, 2012 12:40 PM To: Davies, Stephen F (DOA) Subject: RESEND: Coordinates for Pilgrim Hot Springs (NAD) Steve, Please find the coordinates for the requested locations below. Gwen Forwarded message From: Gwen Holdmann <gwen.holdmann@alaska.edu> Date: Tue, June 26, 2012 at 6:38 PM Subject: Coordinates for Pilgrim Hot Springs (NAD) To: "Davies, Stephen F (DOA)" <steve.davies@alaska.gov> Steve, The NAD27 coordinates (in meters) for the sites we wish to permit are listed below: Well Lat_NAD Lon NAD 1 1723480.572530 -511462.673448 2 1723662.535230 -511406.032956 3 1723386.289150 -511437.167737 4 1723291.218640 -511432.263466 5 1723409.922650 -511305.715634 6 1723902.022470 -511581.632946 In response to the query about accuracy of the coordinates we will be using a survey grade Leica RTK GPS system that will have centimeter accuracy. One of the field techs has setup the necessary base station for this over a National Geodetic Survey benchmark around 4 miles from Pilgrim. We will send a brief writeup on this separately. Gwen B. Cm en 1loldmann. Director Alaska Center for I ner ,\ and Power Ifni crsit:\ oI',Alaska Physical Address: S14 Alumni Drive 1T �ilinc Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ualiedu/acep i Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.uaf.edu/acep • 2 Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Monday, July 02, 2012 10:25 AM To: Davies, Stephen F (DOA) Cc: Schwartz, Guy L(DOA); Markus Mager; Brent Sheets Subject: Bond Update for UAF/Pilgrim Hot Springs Steve, To update you on the status of the bond, it was supposed to be fed-exed to UAF overnight, arriving last Friday afternoon. It did not arrive as promised, and after placing some calls this morning, it appears it will arrive around 2pm today. I will pick up the fully executed version in person, scan and e-mail you a copy, and Goldstreak it to you. It is unfortunate that this has taken so long,but it has really been outside of our control. - Also, after some discussion and review of shallow Geoprobe data from this year, we have settled on site 2 as our preferred drilling target for the first hole. Gwen Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.uaf.edu/acep 1 i w . t z Cl) * , i 1 h 1 5 gE g, 1 a J 'It, _1 ' a i . 1Ven' 1;.z U .0 \ — 1— j /—7/- ——1 , . I ,, ce i?.....,,,..: •=e,ii,, Q, CZy 0 < 4 — + — _ —f_ — '•. 8 ik (411•4°*.°—-—0) ' — 11 ff°.ti 1 „z ,, 0 •-_,:•:! LC I ''' '' " •° 1 I : ,,7 . II4IN a I . %,,•-,—, . 1 , , cc ir , / . ,., L... la ..._ .g____ + ____ _ _ f_)4._ _ — + -- - : ____ _ .,,,.. ,_ ; , . . P q• he Lif i 1 „,„•,-,•40,,,cf:2 ..,is _, . 1 1 v I • •..,„„. / 1 1 1k" a4.Til, - A 8:3 g 117) 1 ' -' •'.' ' i'‘,,,,' AL: 1 1 ce( I Id 1 1 , A___9„. -_ _ ___e__ H dip [3 5 1 , .. , w ; A 671:, ,s,,, 11_ ,i.t:i0.....q.c•;.- : t) ).,,,,,:,7,740:7,..0:,:,,,,,,4w ii • a ':•!..:1:' .,i',. (i„.,,,.., 1 ) \ \4, .:,,,J I I, , ' 0 ?..•;.:iisA,-.. Fii;i:w. 1 ; 4 0 .;," Z ci E 1 = I' 1.1.1 I ' ' - I 1 : 111 ‹ +I. 17' i 1 i ii . ,-• A I D .9 A . . - ' Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Thursday, June 28, 2012 2:51 PM To: Davies, Stephen F(DOA) Cc: Schwartz, Guy L (DOA) Subject: Supplemental information on survey, logging, and bond status Attachments: PHS_2012_Geospatial_Survey.docx; Pilgrim_sample_lithology_log.xlsx Steve, The bond has been put in place and is being fed-exed overnight to Fairbanks. I will scan and e-mail you the / executed copy before getting the original in the mail (probably fed-ex), hopefully to arrive on your doorstep Monday. I have attached some additional information related to our surveying plan, as well as a sample lithology log that will be filled out during operation. Thanks, Gwen Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ua£edu/acep 1 Pilgrim Hot Springs—2012 Geospatial Survey High resolution surveying and mapping of the Pilgrim Hot Springs (PHS) area will enhance modeling capabilities and products as well as provide a precise reference to all well and hole locations. Survey efforts will also include the creation of a digital elevation model for the geothermal area. The survey is conducted with a dual frequency Leica Geosystems GS50+sensor which is a 12-channel L1/L2 code and phase GPS receiver. With real time kinematic (RTK) ,« No TN's 1 measurements, coordinates can be calculated ^r e 4 ,p with one centimeter precision. WGS84 is the ' , 4 datum preferred by this device, but s 470ru C) 111/4, Ci4. transformation to NAD27 is practical using < , � =' J. #,j , the ESRI ArcMap software suite.All geospatial :1 ' ..• ,} information and products from the survey will Le' be added to the Pilgrim Hot Springs geodatabase. '7 -tom RTL corrections are broadcast from a National Picture 1 Golden Gate-National Geodetic Survey benchmark Geodetic Survey benchmark designated "Golden Gate" (permanent ID UW4079) located at N 65°03' 26.94475", W 164°48' 07.64292" (NAD83)as per the NGS online / database (see picture 1 and 2). Survey equipment is available and on site between June 15th 2012 and July 12th 2012, and is also available at the end of the 2012 field season to survey any late season developments. The existing wells (PS-1, PS-2, PS-3, PS-4, PS-5 and MI-1)from earlier exploration efforts at Picture 2 Base station set up at Golden Gate Pilgrim,the two 500ft temperature gradient (TG) holes drilled in 2011, as well as the shallower GeoProbe holes at Pilgrim Hot Springs are spatially registered using this survey grade GPS with RTK corrections.The TG holes (target depth 2500ft)we are planning to drill during the 2012 field season will be spatially registered utilizing this system as well. 0 0 a, C (o a a)co U dA �_ a 2 4- O (0 CU 0- 0.0 d0 M CO "d QJ C 4- c.) - U nj L aJ L Q (a bO C C C • 0 O 0 L L L a) O 0- O n. a) N _0 O� L C 0 W 0a) i C7 0 OA co C of Q CO 5) tea •- E CV cu ca Eo N C O N C C fB _C J OD E � 3 E o2S -o C 0 - CO v a v a E E L c% U t a) C_ E aJ .474 E C 0 1- Q E aJ 0 • u_ co0 Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Tuesday, June 26, 2012 1:36 PM To: Davies, Stephen F (DOA) Cc: bjsheets2@alaska.edu; Markus Mager; Schwartz, Guy L (DOA) Subject: Re: FW: Pilgrim Springs TG-1: Comments and Questions Regarding Permit to Drill Application Attachments: BSNC Exploration License Fully Executed.pdf; Unaatuq Exploration License Fully Executed.pdf; 2011.07.29 MINC LUP Fully Executed.pdf; 2012.06.15 MINC LUP Amendment Fully Executed.pdf Steve, 1) I am requesting another update on the status of the bond,but my latest communication from last Friday is that the application is in the hands of our bonding agent and UAF is now waiting for the actual bond. 2) Attached are the land use agreements with Unataaq, Mary's Igloo Native Corporation, and BSNC. 3) In terms of recording location coordinates, we have developed a fairly robust GIS mapping program and have obtained highly accurate geo-referenced and ground-truthed coordinates to support the remote sensing components of the program. I have asked for additional information regarding the precise resolution and equipment used, since I am not well versed on that aspect of the program. In addition, I don't see why ACEP can't provide these coordinates in AOGCC's standard format of Alaska State Plane,NAD27, Clarke 1866 spheroid, and am checking into that question. 4) We will have a geologist on site at all times when drilling is occurring. They will complywith requirements / of 20 AAC 25.071(b)(1) and (b)(2). 5) Per your recommendation, we will review regulations 20 AAC 25.070 and 20 AAC 25.071. Thanks, Gwen On Tue, Jun 26, 2012 at 12:05 PM, Davies, Stephen F (DOA) <steve.daviesgalaska.gov>wrote: Gwen and Brent, I'm forwarding this email to you as Markus is apparently out of the office. Thanks, Steve Davies AOGCC 907-793-1224 1 From: Davies, Stephen F (DOA) Sent: Tuesday, June 26, 2012 11:57 AM To: 'Markus Mager' Cc: Schwartz, Guy L (DOA) Subject: RE: Pilgrim Springs TG-1: Comments and Questions Regarding Permit to Drill Application Markus, Here is my current status list for the TG-1 permit application: Bonding: AOGCC doesn't yet have a bond on file for this exploration program. Ownership: Please provide a signed copy of the exploration license as soon as you can. Please describe ACEP's proposed method of recording location coordinates. Please demonstrate that the accuracy of those coordinates will be equally effective for accomplishing the requirement set out in the AOGCC's regulation. If the data collector is not a registered surveyor, how can the AOGCC verify the accuracy of the coordinates? Why can't ACEP provide these coordinates in AOGCC's standard format of Alaska State Plane, NAD27, Clarke 1866 spheroid, as required by regulation and as routinely provided by all other operators? Regulation 20 AAC 25.071(a)(1) requires original and reproducible copies of a complete mud log or lithology log consisting of a detailed description of the strata encountered. Will ACEP have a geologist onsite during drilling operations? Will that geologist be compiling a lithology log from the drill cuttings samples that describes the geology of the subsurface? If not,what does ACEP propose as an equally effective means of meeting the requirements of 20 AAC 25.071(b)(1) and (b)(2)? Please review regulations 20 AAC 25.070 and 20 AAC 25.071 for a complete listing of required records, reports,geologic data, and logs. 2 -1414e, . 466 rr r" �-.-.W —• 4-4-0-,4 - ;+:.aAn" irotyt t� ". e ••.�Ud6JP�, ilt' "I`'' ..-id" � 9 ' , ISI', tllrru � BERING STRAITS NATIVE CORPORATION PO Box 1008 • Nome, Alaska 99762 (907)443-5252 •fax(907)443-2985 June 13, 2012 Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska 814 Alumni Drive Fairbanks AK 99775-5910 RE: Temporary Authorization for Geothermal Research Ms. Holdman: On behalf of Unaatuq, LLC, the managing partner of which is Bering Straits Native Corporation, please accept this letter as temporary authorization for conducting geothermal research on the property known as Pilgrim Hot Springs (USS 565). This authorization is granted to the University of Alaska by Unaatuq, LLC with the understanding that an Exploration License will be executed with concurrence of both parties, and that said License will not differ significantly from the attached Exploration License, dated June 12, 2012. By accepting this temporary authorization, the University acknowledges the requirements set forth in the attached Exploration License and shall conduct work in accordance with those requirements. Ratification of the Exploration License shall immediately terminate this temporary authorization. i ri Matt G.n19. VP Resources and External Affairs Bering Straits Native Corporation, for: Unaatuq, LLC .,. . . • . I . ,. e, • . ,1,,,,,:, , .....4, .. . .,„„,,,- , _ • -.•,, . : . , , . . . . •, . , „...,... •_,,... _,,,t,I.# lir .....,_ ' c,, 0 0 -0 (c() ""13 11•4„,..-," 411111111*"44Ik IP X T T.-., ''1"T 111111rS'-' 147' X P4 „T:T - Malik ‘ 11 • 'T 4 CO airtaiii --\f'71 X aim" gallit*. c.- - . 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(\ ,\i,:.,\ 7\ IP? , , ' ,'; 'I , , Viitit `i. - - glir"42st • ,,.7 ' ,' ' rqr 3 -2 :0; -N--• ,---r •E•• 1 / ' . ' , -, . -., •i = ,T, 5 , ,, ..-->- c T o / r r g r, S_ _F3 — Q— - g i '2 to 2,.2 v.:E.. P_'6 ..,. = i 5,, 5,, 'LT., =:,-- o:t 2 .12 f_' 8 0 a ..• 4.', _,, i ' ... Cr) g'''-' ..---. 8 a ?„a, s, 8 g R 8 8 ,, 6,-, o "<? 0 -T3 rt' , r 1 , , o t '>'-5 (-) >> L)'5 . -2 - .,- 2 ,i., 1 I-- .,-. = . . 2 rT, ,,A, . 2 = p I, . E 1 ,1 CO %A 2.S' r7,z r„-S .2, 3 E, E g a, , , 0 zc,?., .4,..0 z.4 z,) 2 2 0 2 , , Z •1 2 B F 212 _ ,, / 1 / .... . .,- L.. 2,„ E., .t ,23 & ; ,.--i . + , pg FR .' 2.K .' c 73- 2 "c ='= = ' .'S -...q. --P' i: 6 •1 V .rA' ',-• E = a,;, m a m. 0 6 o" - m CO / EXPLORATION LICENSE THIS EXPLORATION LICENSE(hereinafter referred to as "License") made and entered into as of this I% day of mime_ ,2012 ("Effective Date") by and between Unaatuq, LLC ("UNAATUQ"),an Alaskan corporation,the address of which is P.O. Box 1008,Nome,Alaska 99762 and the University of Alaska, a corporation created and existing under the Constitution and laws of the State of Alaska,whose address is Facilities and Land Management, 1815 Bragaw Street, Suite 101,Anchorage,Alaska 99508-3438 ("University"). WITNESSETH: WHEREAS,UNAATUQ owns the property contained within United States Survey 565, a description of which is attached hereto as Exhibit "A" (hereinafter referred to as the "Lands"); and WHEREAS,UNAATUQ desires to grant to the University the non-exclusive license to conduct exploration operations on the Lands, in accordance with the terms and provisions set forth below; NOW THEREFORE, in consideration of the mutual agreements and covenants contained herein and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged,UNAATUQ and the University hereby agree and covenant as follows: 1.Exploration License: UNAATUQ hereby grants to the University a non-exclusive exploration License to enter upon the Lands (more fully described in Exhibit A) for the sole purpose of exploring for subsurface geothermal resources. This License does not grant to the University any interest in the Lands or any rights to the resources located thereon. The right of the University to enter upon the Lands and conduct a geothermal exploration program shall include the right to conduct geologic mapping, geophysical mapping, the taking of fluid and rock samples, the drilling of Geoprobe holes to a depth not to exceed 175ft for the purpose of siting and drilling of up to six temperature gradient wells (TGW) to a depth not to exceed 2,500'.Such right of entry upon the Lands shall be limited to access by helicopter, All Terrain Vehicle(ATV), other four-wheel drive vehicle,drilling equipment, snowmobile and by foot.All trash resulting from the activities contemplated hereunder shall be removed from the Lands and deposited in the City of Nome municipal dump. Drilling fluids and drill cuttings will be disposed as required by DEC. 2. Surface and Subsurface Rights: To the extent UNAATUQ may lawfully do so,included in the rights granted herein is the right of the University to use the surface and subsurface estates of the Lands as reasonably necessary to conduct activities under this License. It is the position of UNAATUQ that it has full legal authority to grant the University all surface and subsurface rights reasonably necessary for the University's full enjoyment of the rights conveyed pursuant to this License. 3. Term of License: The non-exclusive exploration License described in paragraph 1 above shall remain in full force and effect until December 31, 2013. 4. Exploration and Development: No additional Exploration or development rights are implied or inferred through the execution of this License nor shall this License be deemed a preliminary document or agreement for future leasing of geothermal or geothermal development rights on the Lands. 5.Use Fee: Upon execution of this Agreement,the University shall pay to UNAATUQ the sum of $1000. 6. Exclusivity: Prior to January 1, 2013,UNAATUQ agrees to not convey any mineral exploration or development rights to the Lands to a third party. 7. Geologic Information: On or before December 31,2012 the University shall prepare and deliver to UNAATUQ a report relating to the Lands summarizing in detail the operations of the University during the 2012 season. Said reports shall include all geothermal, geological, geochemical, and geophysical sample data compiled or acquired by the University relating to the Lands. Additionally,the University shall deliver to UNAATUQ all data related to the Temperature Gradient Wells(TGWs)upon completion of the decommissioning of the these wells as required in Section 9.04 below. All data compiled shall be delivered in a format determined acceptable by UNAATUQ. Any data delivered in a non-proprietary format shall be accompanied with a full description of column and row headings, and the delimeters used in compiling the data. 8. Operations of University: EX LLC_UNNERSrrI_PHs_oo1812 2 (a)University shall conduct its operations in a workmanlike manner in accord with the provisions of this License. University shall comply with all Federal, State and local laws, regulations,and ordinances,and shall obtain all necessary governmental permits,and licenses in timely fashion, and provide copies to UNAATUQ. University shall maintain the land in a reasonably neat and clean condition and take steps to prevent erosion or destruction of land. University shall not commit waste, whether ameliorated or otherwise. (b)University shall take all necessary precautions for the prevention of fires and is responsible for the suppression, and must bear the suppression costs, of all destructive or uncontrolled fires occurring in or outside the licensed area resulting from any of the University's activities. University shall comply with all laws, regulations and ordinances promulgated by all governmental agencies responsible for fire protection. (c)University shall maintain adequate supervision at all times when operations are in progress to insure that the provisions of this License and all applicable federal, state and local laws,regulations and ordinances are adhered to. At all times when operations are in progress,the University, or a person authorized by it, is to assume the responsibilities imposed by this License and shall be present on the Lands. (d)The provisions of this License apply with equal force to an agent, employee, or contractor designated by the University to perform any of the operations relating to this License. University is liable for noncompliance of any such agent, employee or contractor. (e)UNAATUQ makes no representations that they will construct or maintain access to the License area. Access over any route not under the UNAATUQ's control is the responsibility of the University. (f)University shall,to the maximum extent allowable under the law, use its best efforts to hire, in connection with its operations under this License, Shareholders of Mary's Igloo and Bering Straits Native Corporations, in this order of preference,who are qualified. (g)University shall uses it best efforts to avoid damage to streams, lakes or other water areas and lands adjacent to them. Vegetation and materials should not be deposited into any stream or other water area. All improvements abandoned must be treated with measures necessary to prevent erosion in a manner acceptable to UNAATUQ during reclamation of the site. Any damage to land or water resulting from failure to satisfactorily adhere to these requirements must be repaired by University. UNAATUQ will, upon satisfactory completion of reclamation activities, issue a letter to the University stating it is satisfied with the University's reclamation efforts. (h)In connection with the University's reclamation of the Lands upon expiration of termination of this License, the University and UNAATUQ shall identify those wells that EX_LIC_UNIVERSITY_r'HS_061812 3 were drilled in 2011 and 2012 that shall be permanently capped,plugged and decommissioned, at the University's expense and in compliance with all applicable state and federal laws and regulations. No later than December 31, 2012,UNAATUQ and the University shall identify those wells drilled in 2011 and 2012, if any,that will be maintained for future study purposes or may serve UNAATUQ as production wells. The covenants contained in this Section 8(h) shall survive expiration or termination of this License. 8.01 Special Provisions under this License: (a) The University shall be bound by all relevant state and federal laws regarding the use, storage and disposal of hazardous substances. The University shall be expressly responsible and liable for any hazardous substances it brings onto the Lands, and for any environmental contamination that it causes as a result of its activities pursuant to this License. All hazardous substances, including solid and petroleum waste materials,including drill mud and drill cuttings of whatever nature placed on the Lands by or on behalf of the University shall be removed by the University from the Lands and disposed of according to law, at its cost and expense. (b)Any spillage of hazardous substances caused by the University shall be immediately reported to UNAATUQ and the appropriate governmental agencies and the University shall immediately clean the affected land. The term"hazardous substances"means any pollutants,hazardous waste,or hazardous substances as defined in or pursuant to the Resource Conservation Recovery Act(42 U.S.C. Section 6901 et seq.)(RCRA), as now or hereafter amended, the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) (CERCLA)as now or hereafter amended, or any other federal state or local environmental law, ordinance,rule or regulation, notwithstanding any exceptions in such laws, ordinances,rules or regulations applicable to the mining industry. (c) Protection of Archaeological and Historical Resources. The University shall not cause or permit interference with or removal of any artifacts which might be discovered during the course of the University's activities under this License, which discovery shall be immediately reported to UNAATUQ. Upon discovery, all activities in the vicinity of the discovery shall immediately cease until the site is investigated and mitigation measures are approved by UNAATUQ. (d)All solid and petroleum waste material placed on the Lands by the University shall be removed from UNAATUQ's land and disposed of according to law. 9. Specific Requirements:Temperature Gradient Wells(TGWs) EX LIC_UNIVERSITY PHS 061812 4 The following requirements apply to the placement,drilling,and decommissioning of the temperature gradient wells: 9.01 Temperature Gradient Wells: Placement This license permits the placement of and drilling of two temperature gradient wells on the lands described in Exhibit"A." The wells shall not exceed 2,500 feet in depth. University shall notify UNAATUQ of the exact location for the TGWs prior to initiating drilling. UNAATUQ reserves the right to deny the proposed location or locations if said location(s)poses a risk to the surrounding waters, lands, subsistence or archaeological resources. 9.02 Temperature Gradient Wells: Drilling The drilling, casing and capping of the TGWs shall be done in accordance with industry standards. All drilling mud,cuttings and trimmings shall be contained within the drill pad area. No mud, discharge, cuttings or hazardous materials shall be disposed of in nearby bodies of water. Should the University cause an accidental discharge of mud, cuttings, or hazardous materials,the University will cease all operations and proceed in accordance with Section 8.01(b) of this License. The University shall be responsible for any and all costs associated with the reporting, mitigation, and any expenses incurred as a result of its accidental spills and discharges of drilling mud, cuttings,or hazardous materials it caused and that are related to the work under this License 9.03 Temperature Gradient Wells: Research University shall have the right to enter the Lands to conduct research related to,and associated with, the TGWs during the term of this License. 9.04 Temperature Gradient Wells: Abandonment/Decommissioning University will decommission the identified wells [Section 8(h)] in accordance with the standards consistent with 20 AAC 25.112,and 20AAC 25.105. The TGWs will be decommissioned in such a manner that they will be plugged and cemented to a depth that will reduce future risk to the surface waters in the area. Such decommissioning shall occur no later than December 31,2013. If the University abandons the wells or fails to properly plug and decommission the TGWs by December 31, 2013,all associated and reasonable costs incurred by UNAATUQ for the required decommissioning of the TGWs shall be paid by the University. EX_LIC_UNIVERSITY PNS_061812 5 10.Restoration and Vacating the Lands. The University shall take, or cause to be taken, such actions as are necessary to vacate the Lands within thirty(30)days after expiration or earlier termination of this License, or such later time as shall reasonably be determined by the parties. The University shall remove its personal property, equipment, structures, improvements and hazardous substances it placed on or in the Lands. The University, at its expense, shall leave the Lands I a clean condition. In the event that the Lands are not properly vacated and cleaned,UNAATUQ, at its option,(i)may cause any or all personal property,equipment, structures or improvements remaining on the Lands to be removed, and the Lands cleaned up, at the University's expense; or(ii)may declare any or all personal property,equipment,structures or improvements remaining on the Lands as UNAATUQ's property, and upon such declaration, all rights, title and interest in and to the foregoing shall belong to UNAATUQ without any further action on the part of any party and without cost to UNAATUQ. 11. Right to Publish: All data acquired from use of state and federal funds will become publically available. The University is free to publish data, information and results from the exploration program defined in the SOPO. UNAATUQ will be provided with copies of all published work. 12. Assignment: This License, and the rights and obligations hereunder, may not be assigned in any way by the University without the prior written consent of UNAATUQ. Any assignment made without such consent shall be null and void. 13. Indemnification and Insurance: University agrees to defend, indemnify and hold UNAATUQ harmless from any and all claims and liabilities arising out of or otherwise resulting from operations of the University conducted on the Lands pursuant to this License,except to the extent such claims or liabilities arise from the negligent acts of UNAATUQ. More specifically: (a)University shall indemnify, defend and hold harmless UNAATUQ and its respective directors, officers,agents and employees,from and against any and all expense (including, without limitation,attorney's fees), liability and claims of whatsoever kind and nature for damage to property(including, without limitation,property of the University and UNAATUQ), or for injury to or death of any person(including,without limitation,the officers, agents, contractors and employees of the University) arising from the University's sole negligent acts or omissions. (b) University shall secure and maintain at its sole expense,during the term hereof, insurance in relation to the business operated by the University, the personal property used Ex_LIC_UNIVERSITY_PIJS_061812 6 by the University in connection with the performance of this License, and with respect to the License area the following policies of insurance: (1) Employees Liability Insurance of not less than$100,000 and full insurance under any workers' compensation laws covering all persons employed by and working for the University. (2) Comprehensive General Liability Insurance(Bodily Injury and Property Damage)of not less than$1,000,000 combined single limit per occurrence, such insurance to include explosion hazard,personal injury,premises operation,contractual liability coverage. (3) Business Auto Liability Insurance (Bodily Injury and Property Damage)of not less than $1,000,000 combined single limit per occurrence, on all owned, hired and non-owned vehicles. University shall immediately furnish certificates satisfactory to UNAATUQ as evidence of such insurance. Such insurance shall contain provisions that no cancellation or material changes in any policy shall become effective except upon thirty(30) days prior written notice to UNAATUQ. 14. Title: Except as set forth herein, UNAATUQ makes no representation or warranties of title to the Lands. The grant set forth in Paragraph 1 above is limited in that it is only intended to grant such rights to the extent UNAATUQ has the right to do so. 15. General Provisions: 15.01 Amendment of License: This License may only be amended or modified by a document in writing executed by the parties hereto. 15.02 Entire Agreement: This License embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof 15.03 Governing Law: This License shall be construed and interpreted in accordance with, and governed and enforced in all respects by, the laws of the State of Alaska. Any dispute between the parties arising out of this License shall be filed in the Superior or District Court for the State of Alaska in Fairbanks, Alaska. 15.04 Notice: Any notices payments or other required communications between the parties shall be in writing, and shall be addressed as follows: EX_LIC_UNIVERSITY_PHS_061812 7 To University: Copy To: UA Facilities and Land Management UAF Alaska Center for Energy&Power 1815 Bragaw Street, Suite 101 P.O. Box 755910 Anchorage, AK 99508-3438 Fairbanks,AK 99775-5910 To UNAATUQ: do Bering Straits Native Corporation, Matt Ganley, Resources and External Affairs P.O. Box 1008 Nome,Alaska 99762 IN WITNESS WHEREOF, the parties hereto have executed this License as of the date first hereinabove set forth. For the purpose of expediting execution of this Agreement it may be signed in separate counterparts. When all parties have so signed,the separate counterparts shall be deemed a single Agreement. Each of the persons signing below represents that he or she has legal authority to execute this Agreement on behalf of his or her respective agency or corporation. Bering traits Nat've Corporation (BSNC) for Unaatuq, LLC By: Matt L. G Its: VP Resou ces and External Affairs I SITY q i uke, Ass. ': - ice President acilities and Land Management IVERISTY OF ALASKA EX LIC UNIVERSITY PHS•061812 Exhibit A to Exploration License by and between UNAATUQ and University effective ,2012 "Lands" The subsurface estate to the Lands contained in this agreement for the purposes of exploration by the University are owned byUnaatuq,LLC. The legal description of the Lands is as follows: U.S. Survey 565 . Aggregating approximately 320 acres. ✓ Refer to the attached map for representation of Lands contained in this agreement. EX LIC_UNIVERSITY_PHS_O61812 9 Of zi8I90 SI1d UIS AIrn DI fX I g ti .3 � 1 " It 1* . K i 1111 ti 'i , 4 , 1iill. 11111:1ildi ilti 111111 i ill . 11 lit ; ii 411 1011 • .04644 • irft°' .... / '�M>K✓•/f�h91YX }C?Q�Li/+s' •� 4•,:Tek ..1••Frye ,lt!,';'ti=��c .i1{S�� ' ..w- .:*.: `:'f• "".:•:,.SC1 a .44',;• .r:%..� �.•u 1 •11 . 's. I 7 r • . ,fy ' .i �, .hs4. d1.Y .. v, moi,, �7IPt : }_ a. -1 . . si-ic ` . "(n108- ' , � g F yF 3:1 HC • q 1 glifil! . pp• 'iii ell 112g ilk 601-11 . glia 11621 q I i !t ig1 �r >>Uii;~y 4 ' •,,1 14. ' \ 1.l�,- w'"N-. l+' '. w.. ,i4 .X , ':' It y + y; / ,J , fiM,NCSmface d r•' -- tisk1,. • I • t { �! II p),- 1 * • �1'�.. yip .(\( ! •i y-..t • • �' 1 j ,% , , j , '(sY,,.\'• , �I IY .s j,, II • -1 'MINC S4Irface/ BSNC Suburfac 1 i'• " MINCSuwfaceandi ! ' - f tib, r ' r . ., • i •. .*` !i • \ ' ., 15Ub5UI(ac: I I ` `I ' �/ 1 Pilgrim Ho't • , �`�-.. .:: `.a'{• oo ;1 ••rte \lr Springs PropQrty MINCSurface/ CW \' , r r r I,. ! !. BSNC Subsurface } C } r C• Z = J lMyR, 1��I ( i `'7 EX_LIC_UNIVERSITY_PI IS_061812 I EXPLORATION LICENSE THIS EXPLORATION LICENSE(hereinafter referred to as "License")made and entered into as of this 1% day of 3 ,e , 2012 ("Effective Date")by and between Bering Straits Native Corporation("BSNC"),an Alaskan corporation,the address of which is P.O. Box 1008,Nome,Alaska 99762 and the University of Alaska,a corporation created and existing under the Constitution and laws of the State of Alaska, whose address is Facilities and Land Management, 1815 Bragaw Street, Suite 101, Anchorage, Alaska 99508-3438 ("University"). WITNESSETH: WHEREAS,BSNC received patented title to subsurface estate pursuant to the Alaska Native Claims Settlement Act, as amended ("ANCSA"), a description of the property which is attached hereto as Exhibit"A" (hereinafter referred to as the "Lands"); WHEREAS, BSNC desires to grant to the University the non-exclusive license to conduct exploration operations on the Lands, in accordance with the terms and provisions set forth below; NOW THEREFORE, in consideration of the mutual agreements and covenants contained herein and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, BSNC and the University hereby agree and covenant as follows: 1.Exploration License: BSNC hereby grants to the University a non-exclusive exploration License to enter upon the Lands (more fully described in Exhibit A)for the sole purpose of exploring for subsurface geothermal resources. This License does not grant to the University any interest in the Lands or any rights to the resources located thereon. The right of the University to enter upon the Lands and conduct a geothermal exploration program shall include the right to conduct geologic mapping,geophysical mapping,the taking of fluid and rock samples, the drilling of Geoprobe holes to a depth not to exceed 175ft for the purpose of siting and drilling of un to six temperature gradient wells (TGW) to a depth not to exceed 2,500'.Such right of entry upon the Lands shall be limited to access by helicopter, All Terrain Vehicle(ATV),other four- wheel drive vehicle, drilling equipment, snowmobile and by foot. All trash resulting from the activities contemplated hereunder shall be removed from the Lands and deposited in the City of Nome municipal dump. Drilling fluids and drill cuttings will be disposed as required by DEC. 2. Surface and Subsurface Rights: To the extent BSNC may lawfully do so, included in the rights granted herein is the right of the University to use the surface and subsurface estates of the Lands as reasonably necessary to conduct activities under this License. It is the position of BSNC that it has full legal authority to grant the University all surface and subsurface rights reasonably necessary for the University's full enjoyment of the rights conveyed pursuant to this License. 3.Term of License: The non-exclusive exploration License described in paragraph 1 above shall remain in full force and effect until December 31, 2013. 4.Exploration and Development: No additional Exploration or development rights are implied or inferred through the execution of this License nor shall this License be deemed a preliminary document or agreement for future leasing of geothermal or geothermal development rights on the Lands. 5.Use Fee: Upon execution of this Agreement,the University shall pay to BSNC the sum of$1000. 6. Exclusivity: Prior to January 1, 2013, BSNC agrees to not convey any mineral exploration or development rights to the Lands to a third party. 7.Geologic Information: On or before December 31, 2012 the University shall prepare and deliver to BSNC a report relating to the Lands summarizing in detail the operations of the University during the 2012 season. Said reports shall include all geothermal, geological, geochemical,and geophysical sample data compiled or acquired by the University relating to the Lands. Additionally, the University shall deliver to BSNC all data related to the Temperature Gradient Wells (TGWs)upon completion of the decommissioning of the these wells as required in Section 9.04 below. All data compiled shall be delivered in a format determined acceptable by BSNC. Any data delivered in a non-proprietary format shall be accompanied with a full description of column and row headings, and the delimeters used in compiling the data. 8. Operations of University: EX_LIC_UNIVERSITY_PHS_06I812 2 (a)University shall conduct its operations in a workmanlike manner in accord with the provisions of this License. University shall comply with all Federal, State and local laws,regulations,and ordinances, and shall obtain all necessary governmental permits, and licenses in timely fashion, and provide copies to BSNC. University shall maintain the land in a reasonably neat and clean condition and take steps to prevent erosion or destruction of land. University shall not commit waste,whether ameliorated or otherwise. (b) University shall take all necessary precautions for the prevention of fires and is responsible for the suppression, and must bear the suppression costs, of all destructive or uncontrolled fires occurring in or outside the licensed area resulting from any of the University's activities. University shall comply with all laws,regulations and ordinances promulgated by all governmental agencies responsible for fire protection. (c)University shall maintain adequate supervision at all times when operations are in progress to insure that the provisions of this License and all applicable federal, state and local laws,regulations and ordinances are adhered to. At all times when operations are in progress,the University, or a person authorized by it, is to assume the responsibilities imposed by this License and shall be present on the Lands. (d)The provisions of this License apply with equal force to an agent, employee, or contractor designated by the University to perform any of the operations relating to this License. University is liable for noncompliance of any such agent, employee or contractor. (e)BSNC makes no representations that they will construct or maintain access to the License area. Access over any route not under the BSNC's control is the responsibility of the University. (f)University shall,to the maximum extent allowable under the law,use its best efforts to hire, in connection with its operations under this License, Shareholders of Mary's Igloo and Bering Straits Native Corporations, in this order of preference,who are qualified. (g)University shall uses it best efforts to avoid damage to streams, lakes or other water areas and lands adjacent to them. Vegetation and materials should not be deposited into any stream or other water area. All improvements abandoned must be treated with measures necessary to prevent erosion in a manner acceptable to BSNC during reclamation of the site. Any damage to land or water resulting from failure to satisfactorily adhere to these requirements must be repaired by University. BSNC will, upon satisfactory completion of reclamation activities, issue a letter to the University stating it is satisfied with the University's reclamation efforts. (h) In connection with the University's reclamation of the Lands upon expiration of termination of this License, the University and BSNC shall identify those wells that were drilled in 2011 and 2012 that shall be permanently capped,plugged and decommissioned, at EX_LIC_UNIVERSI Y_PHS_o61812 3 the University's expense and in compliance with all applicable state and federal laws and regulations. No later than December 31, 2012, BSNC and the University shall identify those wells drilled in 2011 and 2012, if any,that will be maintained for future study purposes or may serve BSNC as production wells. The covenants contained in this Section 8(h)shall survive expiration or termination of this License. 8.01 Special Provisions under this License: (a) The University shall be bound by all relevant state and federal laws regarding the use, storage and disposal of hazardous substances. The University shall be expressly responsible and liable for any hazardous substances it brings onto the Lands, and for any environmental contamination that it causes as a result of its activities pursuant to this License. All hazardous substances, including solid and petroleum waste materials, including drill mud and drill cuttings of whatever nature placed on the Lands by or on behalf of the University shall be removed by the University from the Lands and disposed of according to law,at its cost and expense. (b)Any spillage of hazardous substances caused by the University shall be immediately reported to BSNC and the appropriate governmental agencies and the University shall immediately clean the affected land. The term"hazardous substances"means any pollutants,hazardous waste, or hazardous substances as defined in or pursuant to the Resource Conservation Recovery Act(42 U.S.C. Section 6901 et seq.) (RCRA), as now or hereafter amended, the Comprehensive Environmental Response Compensation and Liability Act(42 U.S.C. Section 9601 et seq.) (CERCLA)as now or hereafter amended, or any other federal state or local environmental law, ordinance, rule or regulation,notwithstanding any exceptions in such laws, ordinances,rules or regulations applicable to the mining industry. (c)Protection of Archaeological and Historical Resources. The University shall not cause or permit interference with or removal of any artifacts which might be discovered during the course of the University's activities under this License, which discovery shall be immediately reported to BSNC. Upon discovery,all activities in the vicinity of the discovery shall immediately cease until the site is investigated and mitigation measures are approved by BSNC. (d)All solid and petroleum waste material placed on the Lands by the University shall be removed from BSNC's land and disposed of according to law. 9. Specific Requirements: Temperature Gradient Wells(TGWs) The following requirements apply to the placement, drilling,and decommissioning of the temperature gradient wells: EX_LIC_UNIVERSLTY_PHS_061812 4 9.01 Temperature Gradient Wells: Placement This license permits the placement of and drilling of two temperature gradient wells on the lands described in Exhibit"A." The wells shall not exceed 2,500 feet in depth. University shall notify BSNC of the exact location for the TGWs prior to initiating drilling. BSNC reserves the right to deny the proposed location or locations if said location(s)poses a risk to the surrounding waters, lands, subsistence or archaeological resources. 9.02 Temperature Gradient Wells: Drilling The drilling,casing and capping of the TGWs shall be done in accordance with industry standards. All drilling mud, cuttings and trimmings shall be contained within the drill pad area. No mud, discharge, cuttings or hazardous materials shall be disposed of in nearby bodies of water. Should the University cause an accidental discharge of mud, cuttings,or hazardous materials,the University will cease all operations and proceed in accordance with Section 8.01(b) of this License. The University shall be responsible for any and all costs associated with the reporting,mitigation, and any expenses incurred as a result of its accidental spills and discharges of drilling mud, cuttings,or hazardous materials it caused and that are related to the work under this License. 9.03 Temperature Gradient Wells: Research University shall have the right to enter the Lands to conduct research related to, and associated with, the TGWs during the term of this License. 9.04 Temperature Gradient Wells; Abandonment/Decommissioning University will decommission the identified wells [Section 8(h)] in accordance with the standards consistent with 20 AAC 25.112,and 20AAC 25.105. The TGWs will be decommissioned in such a manner that they will be plugged and cemented to a depth that will reduce future risk to the surface waters in the area. Such decommissioning shall occur no later than December 31,2013. If the University abandons the wells or fails to properly plug and decommission the TGWs by December 31, 2013, all associated and reasonable costs incurred by BSNC for the required decommissioning of the TGWs shall be paid by the University. 10. Restoration and Vacating the Lands. The University shall take, or cause to be taken, such actions as are necessary to vacate the Lands within thirty(30)days after expiration or earlier termination of this License, or such later time as shall reasonably be determined by the parties. The University shall remove its personal property, equipment, structures, rx_rac UNIVERsITY_rirs_06!812 5 improvements and hazardous substances it placed on or in the Lands. The University, at its expense, shall leave the Lands I a clean condition. In the event that the Lands are not properly vacated and cleaned, BSNC, at its option, (i)may cause any or all personal property,equipment, structures or improvements remaining on the Lands to be removed, and the Lands cleaned up,at the University's expense;or(ii) may declare any or all personal property,equipment,structures or improvements remaining on the Lands as BSNC's property,and upon such declaration, all rights,title and interest in and to the foregoing shall belong to BSNC without any further action on the part of any party and without cost to BSNC. 11. Right to Publish: All data acquired from use of state and federal funds will become publically available. The University is free to publish data, information and results from the exploration program defined in the SOPO. BSNC will be provided with copies of all published work. 12.Assignment: This License, and the rights and obligations hereunder, may not be assigned in any way by the University without the prior written consent of BSNC. Any assignment made without such consent shall be null and void. 13. Indemnification and Insurance: University agrees to defend, indemnify and hold BSNC harmless from any and all claims and liabilities arising out of or otherwise resulting from operations of the University conducted on the Lands pursuant to this License, except to the extent such claims or liabilities arise from the negligent acts of BSNC. More specifically: (a)University shall indemnify, defend and hold harmless BSNC and its respective directors, officers, agents and employees, from and against any and all expense(including, without limitation,attorney's fees), liability and claims of whatsoever kind and nature for damage to property(including, without limitation, property of the University and BSNC), or for injury to or death of any person(including, without limitation, the officers, agents, contractors and employees of the University)arising from the University's sole negligent acts or omissions. (b) University shall secure and maintain at its sole expense,during the term hereof, insurance in relation to the business operated by the University, the personal property used by the University in connection with the performance of this License, and with respect to the License area the following policies of insurance: EX_r.IC_UNIVERS ITl_PHS_061812 6 (1) Employees Liability Insurance of not less than$100,000 and full insurance under any workers' compensation laws covering all persons employed by and working for the University. (2) Comprehensive General Liability Insurance (Bodily Injury and Property Damage)of not less than$1,000,000 combined single limit per occurrence, such insurance to include explosion hazard,personal injury, premises operation, contractual liability coverage. (3) Business Auto Liability Insurance(Bodily Injury and Property Damage)of not less than$1,000,000 combined single limit per occurrence,on all owned, hired and non-owned vehicles. University shall immediately furnish certificates satisfactory to BSNC as evidence of such insurance. Such insurance shall contain provisions that no cancellation or material changes in any policy shall become effective except upon thirty(30)days prior written notice to BSNC. 14. Title: Except as set forth herein, BSNC makes no representation or warranties of title to the Lands. The grant set forth in Paragraph 1 above is limited in that it is only intended to grant such rights to the extent BSNC has the right to do so. 15. General Provisions: 15.01 Amendment of License: This License may only be amended or modified by a document in writing executed by the parties hereto. 15.02 Entire Agreement: This License embodies the entire agreement and understanding between the parties and supersedes all prior agreements and understandings relating to the subject matter hereof 15.03 Governing Law: This License shall be construed and interpreted in accordance with,and governed and enforced in all respects by, the laws of the State of Alaska. Any dispute between the parties arising out of this License shall be filed in the Superior or District Court for the State of Alaska in Fairbanks, Alaska. 15.04 Notice: Any notices payments or other required communications between the parties shall be in writing, and shall be addressed as follows: EX LIC_UNIVERSITY_PHS_06I812 7 To University: Copy To: UA Facilities and Land Management UAF Alaska Center for Energy &Power 1815 Bragaw Street, Suite 101 P.O. Box 755910 Anchorage,AK 99508-3438 Fairbanks,AK 99775-5910 To BSNC: Bering Straits Native Corporation, Matt Ganley, Resources and External Affairs P.O. Box 1008 Nome,Alaska 99762 IN WITNESS WHEREOF,the parties hereto have executed this License as of the date first hereinabove set forth. For the purpose of expediting execution of this Agreement it may be signed in separate counterparts. When all parties have so signed,the separate counterparts shall be deemed a single Agreement. Each of the persons signing below represents that he or she has legal authority to execute this Agreement on behalf of his or her respective agency or corporation. Bering Straits N:five Corporation(BSNC) • /41 le, ?tel By: Matt L. tan'. Its: VP Reso es and External Affairs 1di I 111 dr• . OWN e, o t esident Fai ilities and Land Management UNIVERISTY OF ALASKA F.X_I.IC_.UNIVERSITY PHS_061812 8 Exhibit A to Exploration License by and between BSNC and University effective ,2012 "Lands" The subsurface estate to the Lands contained in this agreement for the purposes of exploration by the University are owned by BSNC. The legal description of the Lands is as follows: Kateel River Meridian T. 4 S.,R. 30 W.-Sections 29, 30, 32 Aggregating approximately 1920 acres. Refer to the attached map for representation of Lands contained in this agreement. EX_LTC_UNIVERSITY_PI IS_061812 9 Fy v; N I .. ' ,))1_/1.1 \\ f// 4I" / / // , i I' (--. M E Y , . ll,, // ,t, 1 1 I stria��f _J y' j 1' ^�_.� r t i 1/4-4 - \\,./ ) :.),"/), ' ' ;,\?br. -'..1 .. . , .r. , 1 '� �J - �'J� r JA• a, 7 .` J i`Ia . >' 1 Alt y .. --/ • r ,••-. .k J t r S� t"f l :t' ii a; '••:-1`, • [a, Y 't 1..�, f ' t`' A. %.--L,',...-",,4, l' �� .' tits, .. 07/29/2011 13:55 9076422051 CITY OF TFIIFP PAGE 02 i - • _-. ., - x ..v.g--6,-. , - t)\ i •,„ . _. - . -,' j..a. 4-1---_ .. -...... • . . ..,.. .- ..�` / t. _......-. ,A_•, .,-,..,, ,• ._.• ,— _..: :.y-il TY . • - Mary's Igloo Native Corporation PO Box 650 Teller,Alaska 99778 Ph. II (907)642-2308 Fax tl(907}642-2309 Accepted: 7—tei-1/ Revised: -7-21--/1 Renewal Date: '7--Z_q— I f Land Use Permit This agreement is entered into at lail.69IC. ,on the date indicated below between the Mary's Igloo Native Corporation (MINC)an Alaskan Native Corporation,whose address is: P.O. Box 550 Teller,Alaska 99778, as the Land Owner,and University of Alaska whose address is:1815 Bragaw Street,Suite 101,Anchorage,Alaska 99508-3438. Process: 1. Mary's Igloo Native Corporation (MINC)has either received or made application to the United States Government,Bureau of Land Management for patent to the real property describe in this Land Use Permit. I 2. Mary's Igloo Native Corporation(MINC)received or expects to receive title from the United States Government pursuant to the Alaska Native Claims Settlement Act for the real property described in this Land Use Permit. 3.The permit holder desires to drill 9 TG holes and use of Geoprobe as many as twelve(12) additional shallow temp monitor wells for geothermal exploration research near Pilgrim Hot Springs on the real property described in this permit_ 4.The parties desire to execute a Land Use Permit for the property described herein,in the - . ' : .., - ..e esentll hove -• • - _ . - — described property,this Land Use Permit shall be construed as creating a right of entry which will become a Land Use Permit upon MINC's receipt of title.All of the terms and conditions of this agreement are binding on the permit holder irrespective of the statues on MINC's title. This agreement shall be void and of no force effect of Mary's Igloo Native Corporation (MINC) fails to obtain clear title to the property described in this Land Use Permit. In consideration to the mutual covenants contained herein,the parties agree as follows: 07/29/2011 13:55 907642cu51 CITY OF TELLER PAGE 03 • SECTION 1 Grant of Permit Mary's Igloo Native Corporation (MINC) hereby gives the permit holder permission to use the following described land and access to,subject to the provisions hereof: A tract of land in the Mary's Igloo Native Corporation selection area,also described more particularly as: Township 4 South, Range 30 West,Kateel River Meridian,Section 29,30,31,&32. Hereafter described as"the property". SECTION11 Term of Permit The Property described above shall be obtained by the permit holder for a period of 2 year(s). The term of the Land Use Permit begins on the date the application was approved by the Land Committee.This permit may be renewed for additional term(s) of 0 year(s)each of the following procedures:Sixty days prior to expiration of any permit term,the permit holder shall re-apply for an additional term,it is the responsibility of the applicant to sign and return to MINC the Land Use Permit form;on which the renewal date for a future term is written,If the permit holder does not re-apply for the Land Use Permit within 30 days after the renewal date, the land will be available to other applicants,The permit holder will then be required to remove all improvements within 30 days of the termination of the permit.Any improvements not removed within 30 days may,at the option of MINC, be either retained as the property of MINC or removed or destroyed by MINC at the expense of the permit holder. Prior to expiration the current permit term, MINC may notify the permit holder that it will not renew the permit or that it will renew the permit only upon a modification of the permit, a new Land Use Permit shall be executed prior to expiration of the current permit term to effect a renewal.A renewal will not be effective unless the renewal fee and the user fee are paid prior to the expiration of the current term. We the undersigned,certify that this is true and correct Land Use Permit by the governing body of this Corporation of MINC at a duly meeting held on this day of ,2011 at which a quorum was present with present, ,absent, abstain, and 1-vacant seat and that the vote was for,and against. ATTEST: President tarlsoing,.= r-MINC Treasurer/Ruby Topkok-MINC 2q-- �� . 7 4. A. Sherman, Associate Director Date Land Manacle/meet UNIVERSITY OF ALASKA 06/05/2012 15:00 90764-_29 MARVSIGLOONATIVECORP PAGE 03/03 'oct i. ACED March 12,2012 To: Dian Siegfried,UA Land Management From: Gwen Holdmann,Director gjr, , a "'oir"" ' dotirrvied ori"' Requestto amend the existing land use agreement between Mary's Igloo Native Corporation (MINC)and ACEP.The amended agreement should include: - Geothermal exploration work as described in SOPO,which includes but is not limited to: - Conducting ground based-surveys - Soil and water sampling - Conduct necessary borehole-and well tests(flow tests,interference tests,pressure tests etc.) - Potential drilling oftemperature gradient(TG)holes and/or confirmation holes Wastewater discharge in accordance to DEC permit requirements - Potential use of GedProbe system to collect additional shallow TG hole data - Conduct necessary trail maintenance work during 2012 field season - Potential road repair work that might be required on the MINC parcel the Pilgrim access road crosses - Potential use of drill cuttings for road improvements and existing trails maintenance if sample results are within DEC limits and if useis permitted by DEC;if drill sits Is only accessible via helicopter potential disposal of drill cuttings on site if sample results are within DEC limits and if permitted by DEC The end date of the land use agreement between MINC and ACEP is June 30th 2013. Cif A.th crD. -Karl a°I) 2— Alaska Center for Energy and Power•Univecaity of Alaska Fairbanks•814 Alumni Drive P.O.Box 755910 a Fairbanks,Auks 99775-5910•Tel(907)4744402•Fax:(907)474-5475 i Schwartz, Guy L (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Thursday, June 21, 2012 9:27 AM To: Schwartz, Guy L(DOA) Cc: Davies, Stephen F (DOA) Subject: Re: TG-1 ( PTD 212-077) Attachments: Drilling methodology TG-1 with bop.docx killing methodology TG-1 with... Hello Guy, Thank you for your email. With that email I want to clarify our drilling plan and address your comments. 1) We will start utilizing an annular preventer at approximately 1000' and if the project team decides to drill deeper to our target depth of 2500' and in TG-l. Attached is the amended procedure for drilling well TG-1 below a 1, 000 ft depth with BOPE. 2) & 3) The well sketches and P&A schematic will follow in a separate email. 4) The 10 3/4-in casing is only utilized to control surface fluid flow during the drilling of the 9 7/8 in hole to 150 ft. Once the 6 5/8-in casing is set and cemented, the 10 3/4- in casing has no further function and we are planning to pull it. As this casing is not cemented, pulling would be easy and we could then use it at future well sites. 5) The target depth of the two deep wells, TG-1 & TG-2 is 2500' . The other wells, if any, would be drilled to approx 1000'-1500' md. Thank you and let me know if you have any other questions. Best regards, Markus Mager On Fri, Jun 15, 2012 at 3:40 PM, Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov> wrote: > Marcus, > I have reviewed your drilling plan and have some recommendations and > comments: > 1) The biggest issue with the first well is that drilling below 100' > the only protection is a diverter stripper and vent line. The inline > gate valve is probably not very useful with pipe across it and should > not be counted on to shut the well in. Thus, there is no way to > effectively shut-in the well if unexpected high pressure or > temperatures are encountered. The AOGCC is going to require you to > set 4.5" casing at approximately 1000' and and utilize an annular > preventer to drill the remaining footage to 2500' and in this well ( > TG-1) . If once this well is drilled and it is deemed safe the > remaining wells can be drilled using your proposed method as outlined > in your PTD application ( ie 6 5/8" casing set at 100' and drilling the remainder of the well OH to depth and monitor mud temperature) . > > 1 > 2) Submit well sketches shuwing the both the proposed and 4 .., ' liner option. > Also submit an amended procedure to run 4.5" liner and any other > associated changes. > 3) Submit proposed P & A well schematic if you are planning on > abandoning this well. A separate sundry will be required to abandon > but I would like to see your proposed methods for securing the wells. > 4) Why are you pulling the 10 41" conductor pipe in step 6? > 5) Do you have an idea of the other wells depths? You mentioned > before that two wells would be drilled to 2500' and the others to approx 1500' md. > Guy Schwartz > Senior Petroleum Engineer > AOGCC > 793-1226 (office) > 444-3433 (cell) Markus Mager Energy Analyst Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Fax (907) 474-5475 http: //acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergynetwork.com/ 2 FORDIA® 4. DRILL RODS & CASING MADE IN CANADA* Fordia's Husky drill rods and casing are quality-crafted with superior materials. Proven in different drilling field tests across Canada, these rods and casing have also complied with rigorous governmental torsion and traction tests, delivering great results and reaching all quality norms. Husky rods are heat-treated for greater wear resistance and all Husky products are in compliance with the ISO 9001 : 2008 certification. 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O E Y Y il CT) OpM CD E a O Y p= cV VZMOp O — M !I: .a O CD p `— N 07 (NO n o r r mmca'MnOalIf) O - (C) O (`') LC) L .— M L (�• jUdwcm 01 Caa)a) d J �/ OU U C = OC7 - =-C Oy 'y y NLL U O LL U O) OO .c .0 .0 \ -� da1 [nLo, C Ct) 0 0 0 L2') CU O O p o O O00E mo o p o 0 0M CD O O ' co y r 0.02.0:::-- y H h- I H a 2 2 2 2 CU a Lo co a N M p, Z O O z O O CL 2 d 2 2 V) L 0 Q ' J I ; 11 ITT ft ' 11 ► 1 PART NUMBERS Dimension Length Part No. Funct.Length Unit Weight (inch) (m) (lb) (kg) BW 5' 13-B15-005 60 1.5 35.0 15.9 10' 13-B15-006 120 3.0 70.0 31.8 NW 5' 13-N15-005 60 1.5 42.9 19.5 10' 13-N15-006 120 3.0 86.0 39.1 HW 5' 13-H15-005 60 1.5 57.9 26.3 10' 13-H15-006 120 3.0 115.9 52.7 HWT 5' 13-H22-005 60 1.5 57.9 26.3 10' 13-H22-006 120 3.0 115.9 52.7 BW 1.5 m 13-B15-012 59 1.5 34.5 15.7 3 m 13-B15-013 118 3.0 68.9 31.3 NW 1.5 m 13-N15-012 59 1.5 42.2 19.2 3 m 13-N15-013 118 3.0 84.7 38.5 HW 1.5 m 13-H15-012 59 1.5 57.0 25.9 3 m 13-H15-013 118 3.0 114.0 51.8 HWT 1.5 m 13-H22-012 59 1.5 57.0 25.9 3 m 13-H22-013 118 3.0 114.0 51.8 DIMENSIONAL SPECIFICATIONS Description Imperial Metric BW Outside Diameter 2.875 in 73.0 mm Inside Diameter 2.375 in 60.3 mm Wall Thickness 0.250 in 6.4 mm Threads per Inch 4 N/A Volume 23.0 US gal/100 ft 285.8 L/100 m NW Outside Diameter 3.500 in 88.9 mm Inside Diameter 3.000 in 76.2 mm Wall Thickness 0.250 in 6.4 mm Threads per Inch 4 N/A Volume 36.7 US gal/100 ft 455.7 L/100 m OHW Outside Diameter 4.500 in 114.3 mm Inside Diameter 4.000 in 101.6 mm Wall Thickness 0.250 in 6.4 mm Threads per Inch 2.5 N/A Volume 65.2 US gal/100 ft 810.4 L/100 m HWT Outside Diameter 4.500 in 114.3 mm Inside Diameter 4.000 in 101.6 mm Wall Thickness 0.250 in 6.4 mm Threads per Inch 2.5 N/A Volume 65.2 US gal/100 ft 810.4 L/100 m A AAA • i 11 i • 11 T 514.336.9211 TF 1.800.768.7274 F 514.745.4125 info@fordia.com ©Fordia 2010.All Rights Reserved.A-10 4 10-03-192 , ThermaSource Cementing, Inc. t— 21.32%Cement tax sdic. 3.01%Silica O 10.53%Light Weight Project Number: 1206-190 i 10.26%Fluid Lows CO 0.10%Free Water WWI 57.09%Water Date: 1/14/2012 Job Type: Lead Ramp time: 17min Test BHCT: 180 F Test BHST: 275 F Initial Pressure: 302 psi Final Pressure: 1255 psi '�_:'_ Simulated Depth: 2100 ft Chemical Composition Calculations Chemical Concentration Units Function Surface Density . 13.32 Lb/Gal TC GeoLite 180 142.26 lb/sk TCI Blend Downhole Density 13.52 Lb/Gal Sack Weight 94.00 Lb/Sk Dry Weight 142.26 Lb/Sk Dry Yield 2.33 Ft3/Sk Water 9.48 Gal/Sk Total Fluids 9.48 Gal/Sk Surface Yield 2.22 Ft3/Sk Downhole Yield 2.19 Ft3/Sk Thickening Time Compressive Strength Free Fluids BC Time _ PSI Time Surface (70 F) 16 be 0:00 50 PSI 6:03:00 Down Hole (180 F) 40 bc 2:09:17 500 PSI 7:27:30 50 bc 2:09:48 842 PSI 12:00:00 60 bc 2:12:28 982 PSI 24:00:00 70 be 2:14:35 986 PSI 24:01:30 111 bc 2:18:40 Surface Rheology Down Hole Rheology 70F 180F RPM Dial Reading_ RPM Dial Reading 600 180.923 _ 600 126.728 300 115.381 300 77.498 200 87.836 200 59.007 100 54.122 100 37.167 60 42.045 60 27.834 30 32.195 30 20.78 6 25.307 6 15.005 3 26.518 3 13.154 PV 79.9 PV 57.2 YP 29.1 YP 17.3 8 N • 0 8 0 . _ 0 C 0 O0 -. ......... _..... . ._N 9 8 __...._M C 0 a O • a 0 0 C s n n 0 0 o 10, 73 0 o0 0 _o " N .cI O. >+ - o m W _ Q 0 Oa I- .. ..,. 8 N 8 4 N Y N O co 0 lCYa oaf{I14%WS Ana` C E • . C _ a 00 • • 8 00 r It o w o 0 0 0C a CD 8 C ' U u m IC0 06 o i o `a Cio � { �, o N 1 11111111111 { ) ) 1411 41 ILQ ..= o O O O O OO V g g g g o N V V M N 0 E W (j)dwal (isd)wISuam.lssaidwoo Q i i{i i i I i,I{I t i{i 4 i{I i i{i t.{iii{ {nn{nu{ii osiiiIniiIiin�nul$iniini{ino iI i 4:, ; a V N 0 0) V N 0 0) CO N CO N V N O 0) N (MO(pd)amssa,d o O o 8 o o O O o O awl sued O 0 0 0 0 0 O 0000 N r 0 CO N N 0 0 Cp 0 0 0 V N (3q)i3uagssuo3 (j)dwal k.uo0Aiwswig min Page 1 of 1 Schwartz, Guy L (DOA) From: Schwartz, Guy L (DOA) Sent: Friday, June 15, 2012 3:40 PM To: 'Markus Mager' Cc: Davies, Stephen F (DOA) Subject: TG-1 ( PTD 212-077) Marcus, I have reviewed your drilling plan and have some recommendations and comments: 1)The biggest issue with the first well is that drilling below 100'the only protection is a diverter stripper and vent line. The inline gate valve is probably not very useful with pipe across it and should not be counted on to shut the well in. Thus, there is no way to effectively shut-in the well if unexpected high pressure or temperatures are encountered. The AOGCC is going to require you to set 4.5" casing at approximately 1000' and and utilize an annular preventer to drill the remaining footage to 2500' and in this well(TG-1). If once this well is drilled and it is deemed safe the remaining wells can be drilled using your proposed method as outlined in your PTD application ( ie 6 5/8"casing set at 100' and drilling the remainder of the well OH to depth and monitor mud temperature). 2) Submit well sketches showing the both the proposed and 4.5" liner option. Also submit an amended procedure to run 4.5" liner and any other associated changes. 3) Submit proposed P &A well schematic if you are planning on abandoning this well. A separate sundry will be required to abandon but I would like to see your proposed methods for securing the wells. 4)Why are you pulling the 10 3/4" conductor pipe in step 6? 5) Do you have an idea of the other wells depths? You mentioned before that two wells would be drilled to 2500' and the others to approx 1500' md. Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) 6/18/2012 Davies, Stephen F (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Thursday, June 14, 2012 11:30 AM To: Davies, Stephen F (DOA) Cc: gwen.holdmann@alaska.edu; Schwartz, Guy L (DOA); Roby, David S (DOA); Brent Sheets Subject: Re: Pilgrim Springs TG-1: Comments and Questions Regarding Permit to Drill Application Attachments: DRAFT for UNAATUQ Exploration_061212.docx; LTR_ACEP_Temporary Authorization_ 061312.pdf; new_wells_2012_with_ownership.pdf; Pilgrim_Land Status.pdf Hello Steve, Thank you for your email regarding our drilling application. Please find our responses to your questions and comments below. Bonding: Our legal department is reviewing the indemnity agreement for the bond and will let us know if it is okay to proceed with the placement of the bond. Once we get their OK the University's Risk Management will proceed / with the placement of the bond. Ownership: Unaatuq LLC is the owner and landowner of the property. As outlined in our application package, the developed land use agreement between the University and Unaatuq LLC is in signature stage. Please find a draft exploration license and a temporary authorization in the attachment. We will provide AOGCC with a copy of the exploration license once it is signed by both parties. The exploration license includes a map of the property as well. A close-up map showing the PHS property with the proposed potential well locations and a map outlining land ownership of the area is attached as well. Mary's Igloo Native Corporation (MINC) is the owner and landowner of the surrounding property. The distances between each potential drill site and the neighboring property are listed below. site 1 = 366m site 2 = 242m site 3 = 396m site 4 = 377m site 5 = 270m site 6 = 41m J We will provide the final surface locations to AOGCC as soon as the project team has decided on them. Results of the 2012 Geoprobe survey (first 2 weeks of 2012 field work) will partially guide these decision. Regarding regulation 20 AAC 25.070(2)that requires a survey plat certified by a registered land surveyor showing the precise surface location of the well before completion or abandonment and regulation 20 AAC 25.050 that requires vertical wells to be surveyed to determine the inclination from vertical. We would like to request from the commission to approve a variance from the commission's regulations based on 20 AAC 25.715. Our project is a pure research project and we are not planning to develop the geothermal resource or extract any kind of resources. We ask the commission to consider these variances and 1. to allow the project to provide coordinates expressed in terms of latitude and longitude and to consider them as an at least equally effective means of accomplishing the requirement set out in the commission's regulation. 1 2. to waive the requirement to run a wellbore survey due to the fact that it is irrelevant to the project if the drill ✓ hole is perfectly vertical or several degrees off vertical as we have no particular geologic horizon targeted and there are no subsurface leases in question. hydrogen sulfide (H2S) and methane We will monitor for H2S gas and, if encountered, will vent and plug and abandon the well. The H2S meter will be deployed at the driller's station full-time and will be set to alarm if H2S gas is encountered. The methane detector is a hand-held unit. We will scan the drill rig area for methane gas on an occasional basis and at any time we see any indication of gas bubbles emanating from the drill mud. No methane gas was encountered during the 1979, 1982, or 2011 drilling. Methane detectors and a diverter system will be deployed on-site if a methane pocket is encountered. If encountered, the gas will be allowed to vent and the well will be plugged and abandoned. Mud logging or onsite geological services Mud-gas logs will not be taken during drilling operations. Cuttings samples will be collected at 10-ft intervals and described. Geophysical logs (gamma, resistivity, caliper, conductivity) will be run from well bottom to land surface. point-of-contact Throughout the summer there will always be a UAF project representative on site that can be contacted directly. UAF project representatives on site Anupma Prakash June 9th - June 20th 907-750-7354 prakash@gi.alaska.edu Markus Mager June 20th - July 4th 907-590-7278 markus.mager@alaska.edu Christian Haselwimmer July 4th - July 17th 801-425-5079 chha@gi.alaska.edu Ronnie Daanen July 17th - July 25th 907-474-2775 rdaanen@alaska.edu Markus Mager July 25th - August 8th 907-590-7278 TBD markus.mager@alaska.edu August 8th - August 19th Frank Williams August 19th - August 28th 907-388-0468 Markus Mager flwilliams@alaska.edu August 28th— September 907-590-7278 15th markus.mager@alaska.edu Gwen Holdmann,the project PI, and myself are the general point of contacts for the project.Our contact information are: Gwen Holdmann Phone: 907-590-4577 gwen.holdmann(aalaska.edu Markus Mager Phone: 907-590-7278 markus.magerc2i alaska.edu 2 Please let us know if you have any other question or need more information. Thank you and best regards, Markus Mager On Mon, Jun 11, 2012 at 1:16 PM, Davies, Stephen F (DOA) <steve.davies@alaska.gov> wrote: > Markus and Gwen: > > > > After reviewing the Permit to Drill Application for the Pilgrim Springs TG-1 > exploratory geothermal well, I have several comments and questions. > > > > Until a bond is in place with the AOGCC, this application cannot be > approved. > > > > Is Unaatuq LLC owner and landowner of the property that will be affected by > ACEP's drilling activities in the Pilgrim Springs area? If not, could you > please identify the owner and landowner of the affected property? > > > > Per AS 31.05.170(10), "Owner" means the person who has the right to drill > into and produce from a pool and to appropriate the oil and gas the person >produces from a pool for that person and others. > > > > Per AS 31.05.170(7), "landowner" means the owner of the subsurface estate of > the tract affected. > > > > Does ACEP have a formal lease agreement and a lease number or an agreement > number for the affected property? Please provide that lease or agreement > number. Please provide AOGCC with a lease map for the area as required by > regulation 20 AAC 25.005(c)(2). > > > > How far will the well be from the nearest property boundary where ownership > or landownership changes? 3 > As soon as the final surface location has been decided, please provide the > AOGCC with the coordinates of the well in metes and bounds coordinates > (footages from the nearest governmental section lines along with the >township, range information) and in Alaska State Plane referenced to NAD27, > as required by regulation 20 AAC 25.005(c)(2). (All of the AOGCC's location > information is referenced to NAD27.) Note that regulation 20 AAC 25.070(2) > requires a survey plat certified by a registered land surveyor showing the > precise surface location of the well before completion or abandonment. > Coordinates expressed only in terms of latitude and longitude are not > sufficient. >Regulation 20 AAC 25.050 requires vertical wells to be surveyed to determine >the inclination from vertical with surveys starting at 500' and no more than > 500' apart to total depth. What are your plans regarding wellbore surveys? > Has hydrogen sulfide (H2S) been identified in any of the surrounding wells > or in any water samples from the area? Is there any chance of encountering > it while drilling to the proposed total depth? If so, what mitigation >measures are planned? > Please review regulation 20 AAC 25.061 and supply an assessment of shallow > gas or other potential drilling hazards along with planned mitigation > measures. > Regulation 20 AAC 25.071(a)(1) requires original and reproducible copies of > a complete mud log or lithology log consisting of a detailed record and > description of the sequence of strata encountered. Mud logging or onsite > geological services are not mentioned in the permit to drill application. > How will ACEP conform with this regulation? > Please review regulations 20 AAC 25.070 and 20 AAC 25.071 for a complete > list of records, reports, geologic data and logs required for all wells > drilled. > Will William Schnabel be the point-of-contact for this project once drilling > operations begin? If not, please provide a contact name, phone number and 4 > email address for the drilling point-of-contact. > Thank you, > Steve Davies > AOGCC Markus Mager Energy Analyst Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergynetwork.com/ Markus Mager Energy Analyst Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 5 Phone (907) 474-1143 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergynetwork.com/ 6 . , • • Lf) (Ni ** lice) „immoul, 1114111111s, C/) Cl) •- "C3 :_ ,. , . , ____ssy_T___,,,,_,_ . ,.._1_3.4_ „..,,, i , ,,, ,11 : \l\kl ,„‘‘\,-_-_,•‘;'4,,,-•2--1-----.i .___7,- ri- 1-11`,);;;41/7"-/:": ' 1 - ' (1-"I i '' ��F sI f r �.7C \�' \\ y ,.(( 0 -_�°L" \\ V��.\ k A 'R - K 1.' t. i 1( , l' 'xrl,�%,1 / ilG` fie 1` _ fy> # H- -- w t ‘ t 1 --� I t a , s _ _____r— }, • 1, ._+, ; , _1 _.._-- a_ --- a c. . 7 K r/ f a t--- e-°�'- ,J '.„ i - __-- I 'I ° I. 't'o'rt". { t - :-s- a ( I { ' ,s J r--' t,� ' r - c i • . l•3---' %' '� SI , w , • _ D a 0 i (-15 53 } RS ':. > N t E O 3 v,/ - , U C 0 U`Q _ a, In ', 9.2 i ,..if- " i �'i r — ani f y f j / gi I f, m > n • t \ \ a�� ` r`��14Fi � c ami °' ? � } 1::, 1 ;I ,ti �f o VAS i,. • . j(. .. `o 0 > 4 P s�� a C -, / 1 t ? i is( � � �� `� �� c a i -le F •v • ' i p Co m a C o a) v H co a e t r t ' 4- =- 3 F' a>.,., Davies, Stephen F (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Friday, April 27, 2012 9:18 AM To: Davies, Stephen F (DOA) Cc: Schwartz, Guy L(DOA); Markus Mager Subject: Re: Pilgrim Hot Springs Drilling Program Attachments: drilling_locations revised 4-27-12.pdf Steve, Good catch - I did not notice that. Attached version has PS-Geo-14 included. Gwen On Thu, Apr 26, 2012 at 11:43 AM, Davies, Stephen F (DOA) <steve.davies a,alaska.gov> wrote: Gwen, One more: I don't see PS-Geo-14 on the air photo map. Thanks, Steve Davies AOGCC From: Gwen Holdmann [mailto:gwen.holdmann@alaska.edu] Sent: Thursday, April 26, 2012 11:04 AM To: Davies, Stephen F (DOA) Cc: Schwartz, Guy L (DOA); Markus Mager Subject: Re: Pilgrim Hot Springs Drilling Program Steve, The red outlines represent the areas we believe we can reasonably access for the drilling program, based on the location of trails and the type of ground in the area that could support the weight of the rig. Gwen 1 AWillie: ,' ,,,,,.t,5-- - .- -'- . Pr 44 ; „,,,i4 I 0.4'.0i ''' c•i x' d :,, `' {R c x d�^ a* t'.r PS GEO 5 • to°4r'� • , n .d, rS1 *., '' Y'� fe PS GEO-3,i ` , :'• PS GEO-4 �' 10v. is ay ist ,? ' 4 �� q S i ` -k Tf� Y'' a a r{ iy - + P GEO 9 ri ' --' ...:1'...,—.1,4'.:.wY%. ♦.kS#G; ;: a ,<, • D• • -�eLXi t 4 yF x PSGEO-2: , , r G� PS-GEO-6 • © e M 11-01<In a .-” ,,§,F•. air L. r el', 1 .4 i't,, .;.....- .:.'.''s!!!',.4i, ,e'. ♦ t''',.-.,:. • 4.� : • . - On Thu, Apr 26, 2012 at 9:56 AM, Davies, Stephen F (DOA) <steve.davies@alaska.gov> wrote: Gwen, On the air photo map, what do the three red outlines represent? They're not mentioned in the legend. Thanks, Steve Davies Sr. Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) 333 West 7th Avenue, Suite 100 Anchorage, Alaska 99501 Steve's phone: 907-793-1224 AOGCC's receptionist: 907-793-1223 AOGCC's fax: 907-276-7542 AOGCC's website: http://doa.alaska.gov/ogc From: Gwen Holdmann [mailto:dwen.holdmann@ alaska.edu] Sent: Thursday, April 26, 2012 9:47 AM To: Schwartz, Guy L (DOA) Cc: Markus Mager; Davies, Stephen F (DOA) Subject: Re: Pilgrim Hot Springs Drilling Program 2 Guy, Attached is a map of our proposed drilling locations along with existing wells and shallow holes. All of the PS- Geo holes are less than 100 ft deep. I have also attached a diagram of our proposed wellhead assembly. It is still our hope to drill at least one hole to 2500 ft this summer, however this may be optimistic based on the capabilities of the rig. This would also be conditional on the temperatures we record during the drilling program. Please let me know if you have any questions. Gwen Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.uafedu/acep On Tue, Apr 24, 2012 at 10:31 AM, Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov>wrote: Marcus, Please provide us with a map showing your proposed locations, planned drilling depths and existing wells. Thanks, Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) Original Message From: Schwartz, Guy L (DOA) Sent: Monday, April 23, 2012 9:30 AM To: 'Markus Mager'; Gwen Holdmann Cc: Davies, Stephen F (DOA) Subject: RE: Pilgrim Hot Springs Drilling Program 3 M(Elri) T ., a :%.""-,- ,..'"'", ,goy y%^. pp{-„• (2211a° a w, • k 0 1 '1.,'''.... twy +5�..y.- - * t PS-GEO bb n: m 1 k % , , +n ..e., .. ,...._ PS-GEO-2 • m Y Q" ' ak }' i F It x#s a '' ..° , " "" ,;.�ri '�j+ r t *rai ea. , • ''" C f � } M x 0 MN GP{XJ£1C' . ' ,� .r F ' I �TY N,..',,:'.'k 441N i.''.. t Y k 1;124{10:00/0 x 54" \ �', 5 fir' `' 4t pg a> s O a o as a)En a +' III III>iiV \I W • o MM' 1 t---= o m o g E _ N N n U N CD MS t ° a, dmN a) c = tM D -0 _ c t. d to (U as Et c = g° C _C U — ea J CD N (A - + t 'bin R^A" . . > 2 L 2C CZ N 'c Q 5 E CL.— LL cn 4=4— IL C IA O L L N m !iv > rt C CS MOI1 prig Lo 111 0 O O OG iiii . .C y A � .Q U 18 i ii O i O C Q > QaQ . p 0 V 'O C) a CI O O O in R 0 to C mad O t[1 QJ co 0 SI Marcus/Gwen, We received your email last week and are evaluating your proposal. It would be very helpful to have a detailed drawing of the surface gate valve/diverter setup so we can more fully understand what you are proposing. Regards, Guy Schwartz Senior Petroleum Engineer AOGCC 793-1226 (office) 444-3433 (cell) Original Message From: Markus Mager [mailto:markus.mager a alaska.edu] Sent: Monday, April 23, 2012 8:23 AM To: Gwen Holdmann Cc: Schwartz, Guy L (DOA); Davies, Stephen F (DOA) Subject: Re: Pilgrim Hot Springs Drilling Program Hello Guy and Stephen, Attached you can find the detailed plan that outlines the mid-depth well drilling methodology we are planning to use. Please have a look and let us know what you think since the project team would like to submit the drill permit application to AOGCC soon. Please don't hesitate to contact Gwen or me if you have any questions. Best regards, Markus On Wed, Apr 18, 2012 at 12:23 PM, Gwen Holdmann <gwen.holdmannga,alaska.edu> wrote: > Guy, > > As you know, we are in the process of developing a drilling plan for our > seep holes at Pilgrim. You have received a copy of a preliminary drill plan > from GRG; however we would like to know if you would favorably consider a > modification to that plan, which would involve using a gate valve rather > than an annular valve during the drilling program. > > Commonly, the geothermal industry utilizes an annular BOP for this purpose >which can close around the drillpipe but in this case the only available rig > is not designed to accommodate an annular preventer. To install an annular >preventer it will be necessary to move the rig off the site, install the > annular preventer, and move the rig back over the site, which will take up >to a week to complete per hole at a rate of$15,000/day. We instead would > like to propose utilizing a gate valve on top of casing set at a depth of > 150 to 200 ft. The gate valve can not close around the drillpipe so the 4 > drillpipe either needs to be removed from the hole or stood on the bottom > and unscrewed below the gate valve for the valve to be fully closed. > However, the rig would not need to be moved to install the valve which >results in a major cost saving. We would also propose attaching a 2 inch >kill line to the casing below the gate valve so that it will be possible to >pump water or mud into the well with the valve either opened or closed. > Specific factors leading us to propose this option include: > The existing wells at Pilgrim are up to 1000 ft deep and have encountered > temperatures as high as 195 F at shallow depths (near 100 ft). All four >holes drilled below a depth of 100 ft at Pilgrim have encountered major > temperature reversals and at 900 ft,measured temperatures are in the range > of 120 to 150 F. We plan to drill in the near vicinity of the existing > holes. > The Pilgrim geothermometry suggests that reservoir temperatures are > somewhere between 232 F, based on the chalcedony geothermometer and 298 F >based on the Na/K-1/3Ca geothermometer. We do not know how close to the > surface these reservoir temperatures might reach if they are due to hot >water rising up a narrow fault zone, but we do know that the distance to >bedrock is deeper than 1000 ft (the deepest hole drilled on site to date). > The low to moderate temperatures at Pilgrim mean that only a small fraction > of any geothermal water can flash to steam, even under the most optimal > flashing conditions. As this hole will be drilled with mud the weight of > the mud will inhibit any flashing, by monitoring the mud temperature and > regular running digital Kuster temperature logs, we should be able to >prevent any unexpected surprises in terms of high temperatures. > The past wells at Pilgrim encountered low pressure artesian flows of thermal > water which were easily addressed by the drilling contractor at the time and > ACEP dealt with these low artesian pressures 2 years ago when it recompleted > the wellheads that had been leaking for many years. > We have hired a drilling/program consultant, Dick Benoit, who will help > direct the drilling on site and has worked on projects throughout the world. > His resume is attached, and he feels confident in this approach. > In summary, we believe the past drilling experience and moderate expected > subsurface temperatures at Pilgrim indicate that utilizing an annular >preventer is an unnecessary expense for a hole that is not intended to be > flowed, especially since the drilling program is specifically designed to > keep it from flowing. The well will be drilled with mud and if the mud > temperature reaches above 150 F, the drilling would cease and the hole > completed. In addition, a digital Kuster temperature logging tool will be on > site to be able to run downhole temperature logs to verify either high > temperatures or cold temperatures which could result in a decision to > terminate the drilling. Many dozens of these geothermal temperature gradient >holes have been drilled in Nevada and have encountered temperatures as high > as 370 to 390 F without ever needing to utilize BOP equipment that was > installed and that is at locations obviously where temperatures exceed 350 >to 400 F. > We look forward to hearing your thoughts regarding this proposal. 5 > > Sincerely, > > Gwen Holdmann > > > > -- > Gwen Holdmann, Director > Alaska Center for Energy and Power > University of Alaska > Physical Address: 814 Alumni Drive > Mailing Address: PO Box 755910 > Fairbanks AK 99775-5910 > Cell.(907) 590-4577 > www.uaf.edu/acep > > > Markus Mager Energy Analyst Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Phone (907) 474-1143 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergynetwork.com/ Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive 6 Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ua£edu/acep Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ua£edu/acep Page 1 of 2 Schwartz, Guy L (DOA) From: Gwen Holdmann [gwen.holdmann@alaska.edu] Sent: Wednesday, April 18, 2012 12:24 PM To: Schwartz, Guy L (DOA); Davies, Stephen F (DOA) //0 r'`) Cc: Markus MagerOv Subject: Pilgrim Hot Springs Drilling Program Attachments: Benoit Long Resume 6-2010.doc t Guy, As you know, we are in the process of developing a drilling plan for our seep holes at Pilgrim. You have received a copy of a preliminary drill plan from GRG; however we would like to know if you would favorably consider a modification to that plan, which would involve using a gate valve rather than an annular valve during the drilling program. Commonly, the geothermal industry utilizes an annular BOP for this purpose which can close around the drillpipe but in this case the only available rig is not designed to accommodate an annular preventer. To install an annular preventer it will be necessary to move the rig off the site, install the annular preventer, and move the rig back over the site, which will take up to a week to complete per hole at a rate of$15,000/day. We instead would like to propose utilizing a gate valve on top of casing set at a depth of 150 to 200 ft. The gate valve can not close around the drillpipe so the drillpipe either needs to be removed from the hole or stood on the bottom and unscrewed below the gate valve for the valve to be fully closed. However,the rig would not need to be moved to install the valve which results in a major cost saving. We would also propose attaching a 2 inch kill line to the casing below the gate valve so that it will be possible to pump water or mud into the well with the valve either opened or closed. Specific factors leading us to propose this option include: • The existing wells at Pilgrim are up to 1000 ft deep and have encountered temperatures as high as 195 F at shallow depths (near 100 ft). All four holes drilled below a depth of 100 ft at Pilgrim have encountered major temperature reversals and at 900 ft, measured temperatures are in the range of 120 to 150 F. We plan to drill in the near vicinity of the existing holes. • The Pilgrim geothermometry suggests that reservoir temperatures are somewhere between 232 F, based on the chalcedony geothermometer and 298 F based on the Na/K-1/3Ca geothermometer. We do not know how close to the surface these reservoir temperatures might reach if they are due to hot water rising up a narrow fault zone,but we do know that the distance to bedrock is deeper than 1000 ft(the deepest hole drilled on site to date). • The low to moderate temperatures at Pilgrim mean that only a small fraction of any geothermal water can flash to steam, even under the most optimal flashing conditions. As this hole will be drilled with mud the weight of the mud will inhibit any flashing, by monitoring the mud temperature and regular running digital Kuster temperature logs, we should be able to prevent any unexpected surprises in terms of high temperatures. • The past wells at Pilgrim encountered low pressure artesian flows of thermal water which were easily addressed by the drilling contractor at the time and ACEP dealt with these low artesian pressures,2 years ago when it recompleted the wellheads that had been leaking for many years. • We have hired a drilling/program consultant, Dick Benoit, who will help direct the drilling 4/18/2012 Page 2 of 2 on site and has worked on projects throughout the world. His resume is attached, and he feels confident in this approach. In summary, we believe the past drilling experience and moderate expected subsurface temperatures at Pilgrim indicate that utilizing an annular preventer is an unnecessary expense for a hole that is not intended to be flowed, especially since the drilling program is specifically designed to keep it from flowing. The well will be drilled with mud and if the mud temperature reaches above 150 F, the drilling would cease and the hole completed. In addition, a digital Kuster temperature logging tool will be on site to be able to run downhole temperature logs to verify either high temperatures or cold temperatures which could result in a decision to terminate the drilling. Many dozens of these geothermal temperature gradient holes have been drilled in Nevada and have encountered temperatures as high as 370 to 390 F without ever needing to utilize BOP equipment that was installed and that is at locations obviously where temperatures exceed 350 to 400 F. We look forward to hearing your thoughts regarding this proposal. Sincerely, Gwen Holdmann Gwen Holdmann, Director Alaska Center for Energy and Power University of Alaska Physical Address: 814 Alumni Drive Mailing Address: PO Box 755910 Fairbanks AK 99775-5910 Cell.(907) 590-4577 www.ual:edu/acep 4/18/2012 RESUME WALTER R. (DICK) BENOIT 760 Brookfield Drive, Reno,Nevada 775-323-3078 Title : Geothermal Resource Consultant, President of Sustainable Solutions Expertise : 35 years of experience in the geothermal industry, with specific expertise in all aspects of exploration, field development, production and injection operations, and resource management,both domestic and international experience, speak some Spanish Education : M.S., Geology, 1972 University of Montana B.S., Geology, 1970 Western Washington University Publications : Published over 50 technical papers on a wide variety of geothermal topics and reservoirs (list of publications attached) Employment History June 2000 to May 2009 President of Sustainable Solutions, a consulting company focused on geothermal resource issues. Clients include a wide variety of private companies and governmental agencies, both large and small, and domestic and international. Completed and ongoing projects have included evaluations of prospect areas, exploration for geothermal resources using all available techniques, advising on development of carbonate scale inhibition programs, evaluating geothermal literature, developing and/or refurbishing geothermal resources, and hot fractured rock research. These projects have been located in California, Nevada, Utah, Alaska, Ethiopia, Italy, Iceland, Nicaragua, El Salvador, and Chile. February 1986 to April 2000 Resource Manager for Oxbow Geothermal Corp and Oxbow Power Services Inc. I was responsible for all underground aspects of development of the 62 MW (net) Dixie Valley geothermal project that for a number of years was the largest dual flash geothermal power plant in the world. Duties included; siting and permitting production and injection wells, well testing and evaluation, managing drilling operations for other Unit members, performing the largest reservoir flow test ever undertaken in the United States at Dixie • Valley, preparing Federal Unit and Participating Area documents, developing the field layout, preparation of resource confirmation documents for a lending consortium, development of a carbonate scale inhibition program,managing well workovers, power plant outage planning; wellfield temperature, pressure, and chemical monitoring, budgeting,management of outside numerical modeling efforts, and development of the first injection augmentation program in a liquid dominated geothermal reservoir anywhere in the world. I also managed a major research effort at Dixie Valley utilizing Dept. of Energy funded researchers from the U. S. Geological Survey, the Energy and Geoscience Institute, and several national laboratories involving studies of in-situ stresses, high-temperature polyaromatic sulfonates tracers, distributed temperature sensing systems and; geologic, geochemical, and geophysical studies. At the Beowawe geothermal field, in addition to the routine operational duties, I completely modified the injection program to return spent brine to the reservoir. This stopped a serious ongoing temperature decline and restored the field to full output. Internationally I evaluated resources for potential purchase or development in St. Lucia, Costa Rica, Kenya, the Philippines, and Indonesia. January 1974 to February 1986 Exploration Geologist with Phillips Petroleum. My principal areas of exploration were Nevada, Oregon, and eastern California. During this time I was involved in drilling the first"slim holes" in Nevada in 1976 and managed numerous temperature gradient hole drilling programs. The primary accomplishment at Phillips was the discovery and development of the Desert Peak geothermal field, a field in western Nevada with no surface manifestations. This field operated for 20 years on the original two production wells and one injection well. A secondary accomplishment was working jointly with Chevron to drill and test the first production and injection wells at the Soda Lake geothermal field. In addition to Soda Lake and Desert Peak I have worked on nearly all of the producing geothermal fields in the Basin and Range province. Other Activities Past President of the Geothermal Resources Council and Director for 10 years Special Achievement Award from the Geothermal Resources Council for Outstanding Contribution to the Development of Geothermal Resources Recipient of the Geothermal Resources Council Pioneer Award in 2008 Organizer and instructor of Geothermal Resources Council short courses on geothermal exploration, scale inhibition, conceptual modeling, and reservoir engineering. LIST OF PUBLICATIONS For Walter R. (Dick) Benoit (June 2010) Melosh, G., Cuming, W., Sussman, D., Benoit, D., Soto, E., Colvin, A., Wilmarth, M., Winick, J., and Fredes., L., 2009, Rapid exploration of the Tolhuaca prospect, Southern Chile, Geothermal Resources Council Transactions, Vol. 33, p. 505 —508. Erkan, K., Holdmann, G., Benoit, W., and Blackwell, D., 2008, Understanding the Chena Hot Springs, Alaska geothermal system using temperature and pressure data from exploration boreholes, Geothermics (2008), doi:10.1016/j.geothermics.2008.09.001. Benoit, D., Tassew, M, and Assaye, M., 2007, A review of the Aluto Langano geothermal project and recent temperature and pressure logging, Geothermal Resources Council Transactions, Vol. 31,p. 47-52. Benoit, D., Holdmann, G., and Blackwell, D., 2007, Low cost exploration, testing, and development of the Chena geothermal resource, Geothermal Resources Council Transactions, Vol. 31, p. 147-152. Erkan, K., Holdmann, G., Blackwell, D., and Benoit, W., 2007, Thermal characteristics of the Chena Hot Springs Alaska geothermal system,Proceedings, Thirty-Second Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 22-24, 2007, pp. 117 — 124. Benoit, D., 2006, Recent work on the Aluto Langano wells, abstract for the The First International East African Rift Geothermal Conference held in Addis Abbaba,Nov. 27- 29, 2006. Benoit, D., and Blackwell, D. D., 2006, Exploration of the Upper Hot Creek Ranch, Nye County,Nevada geothermal system, Geothermal Resources Council Transactions, Vol. 30. Benoit, D., Blackwell, DD., Moore, J., and Goranson, C., 2005, Results of slim hole drilling at the Lake City geothermal field, Geothermal Resources Council Transactions, Vol. 29. Benoit, D., Blackwell, D. D., Goranson, C., and Wesnousky, S., 2004, An overview of the Lake City geothermal field, Geothermal Resources Council Transactions Vol. 28. Benoit, D., (2002) How well does Dixie Valley serve as a model for future exploration in the Basin and Range Province?, The Department of Energy's Workshop-Dixie Valley Geothermal Research, Great Basin Center for Geothermal Energy 4 p. Butler, S . J., Sanyal, S. K., Robertson-Tait, A., Lovekin, J. W., and Benoit, D., (2001) A case history of numerical modeling of a fault-controlled geothermal system at Beowawe, Proceedings, Twenty-Sixth Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California Rose, P. E., Benoit, W. R., and Kilbourn, P. M., (2001) The application of the polyaromatic sulfonates as tracers in geothermal reservoirs, Geothermics, in press. Benoit, D., Johnson, S., and Kumataka, M., (2000) Development of an injection augmentation program at the Dixie Valley, Nevada geothermal field,Proceedings World Geothermal Congress 2000, Kyushu- Tohoku, Japan, May 28-June 10, 2000,pp. 819— 824. Blackwell, D. D., Golan, B., and Benoit, D., (2000) Thermal regime in the Dixie Valley geothermal system,Proceedings World Geothermal Congress 2000, Kyushu- Tohoku, Japan, May 28-June 10, 2000 Hickman, S. H., Zoback, M. D., Barton, C. A., Benoit, R., Svitek, J., and Summers, R., (2000) Stress and permeability heterogeneity within the Dixie Valley geothermal reservoir: recent results from well 82-5,Proceedings, Twenty-Fifth Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 24-26, pp. 256—265. Benoit, D., (1999) Recent developments in carbonate scale inhibition and reservoir monitoring hardware at the Dixie Valley, Nevada geothermal field,Proceedings 20th Annual PNOC-EDC Geothermal Conference March 4 &5, 1999, pp. 99— 106. Benoit, D., (1999) Conceptual models of the Dixie Valley, Nevada geothermal system, Geothermal Resources Council Transactions, Vol. 23, pp. 505 — 511. Benoit, D.,Norman, R., Smithpeter, C., Thompson, S., Blackwell, D., (1999) Design, fabrication, installation, and testing of an advanced wellbore/reservoir monitoring system at the Dixie Valley, Nevada geothermal field,Proceedings, Twenty-Fourth Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 25-27 SGP-TR-162. Blackwell, D. D., Wisian, K. W., Benoit, W. R., and Gollan, B. (1999) Structure of the Dixie Valley geothermal system, a "typical" Basin and Range geothermal system, from thermal and gravity data. Geothermal Resources Council Transactions, Vol. 23,pp. 525 —531. Kenndy, B. M., Janik, C., Benoit, D., and Shuster, D. L., (1999),Natural geochemical tracers for injectate fluids at Dixie Valley, Proceedings, Twenty-Fourth Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 25-27. Smithpeter, C., Norman, R., Benoit, D., and Thompson, S., (1999) Evaluation of a distributed fiber-optic temperature sensor for logging flowing wellbore temperatures at the Beowawe and Dixie Valley geothermal fields, Proceedings, Twenty-Third Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 26—28. Barton, C. A., Hickman, S. H, Morin, R., Zoback, M. D., and Benoit, W. R., (1998) Reservoir-scale fracture permeability in the Dixie Valley, Nevada geothermal field, Proceedings, Twenty-Third Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 26—28, SGP-TR-158. Benoit, D., and Thompson, S., (1998) Development and testing of a single-ended distributed temperature sensing system at the Beowawe, Nevada geothermal reservoir, Geothermal Resources Council Transactions, Vol. 22, pp. 575 —581. Lutz, S. J., Moore, J. N. and Benoit, D., (1998) Integrated alteration mineralogy and fluid inclusion study at the Dixie Valley geothermal field,Nevada,Proceedings, Twenty-Third Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 26—28, SGP-TR-158. Morin, R. H., Hickman, S. H., Barton, C. A., Shapiro, A. M., Benoit, W. R., and Sass, J. H., (1998) Hydrologic properties of the Dixie Valley, Nevada geothermal reservoir from well-test analyses,Proceedings, Twenty-Third Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 26—28, SGP-TR-158. Rose, P. E., Benoit, W. R., and Adams, M. C., (1998), Tracer testing at Dixie Valley, Nevada, using pyrene tetrasulfonate, amino-g, and fluorescein, Geothermal Resources Council Transactions, Vol 22,pp. 583-587. Wisian, K., Blackwell, D. D., and Benoit, D., (1998) Thermal conditions in Beowawe well Ginn 2-13, Geothermal Resources Council Transactions, Vol. 22, pp. 561 —565. Benoit, D., (1997) Dixie Valley research introductory comments and overview, Proceedings, Twenty-Second Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 27—29, pp. 121 — 122. Benoit, D., (1997) Injection-driven restoration of the Beowawe geothermal field, Geothermal Resources Council Transactions, Vol. 21, pp. 569—575. Faulder, D. D., Johnson, S. D., and Benoit, D., (1997) Flow and permeability structure of the Beowawe, Nevada hydrothermal system,Proceedings, Twenty-Second Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 27 —29, pp. 63 —71. Hickman, S., Barton, C., Zoback, M., Morin, R., Sass, J., and Benoit, R., (1997) In-situ stress and fracture permeability in a fault-hosted geothermal reservoir at Dixie Valley, Nevada, Geothermal Resources Council Transactions, Vol. 21, pp. 181 — 189. Lutz, S. J., Moore, J. N., and Benoit, D., (1997), Geologic framework of Jurassic reservoir rocks in the Dixie Valley geothermal field, Nevada: implications from hydrothermal alteration and stratigraphy: Proceedings, Twenty-Second Workshop on Geothermal Reservoir Engineering Stanford University, Stanford, California, January 27 —29,pp. 131 — 139. Benoit, W. R., (1996) Injection of geothermal fluid in Nevada as typified by the Dixie Valley project, in Deep Injection Disposal of Hazardous and Industrial Wastes, J. Apps and C. F. Tsang (eds), Academic Press, San Diego, pp. 449—464. Kennedy, B. M., Benoit, D., and Truesdell, A. H., (1996), A preliminary survey of noble gases at Dixie Valley,Nevada, Geothermal Resources Council Transactions, Vol. 20, pp. 815 — 819. Lutz, S. J., Moore, J. N., and Benoit, D., (1996) Alteration mineralogy of the Dixie Valley geothermal system,Nevada, Geothermal Resources Council Transactions, Vol. 20, pp. 353 — 362. Ross, H., Benoit, D., and Desormier, B., 1996, Geophysical characterization of the Carson Lake, Nevada geothermal resource, Geothermal Resources Council Transactions, Vol. 20, pp. 393 —400. Benoit, D., (1995) A review of geothermal power generation projects in the Basin and Range province in 1994, Geothermal Resources Council Bulletin, Vol. 24,No. 5, pp. 153 — 156. Benoit, D., (1995) Forced folding and Basin and Range geothermal systems, Geothermal Resources Council Transactions, Vol. 19, pp. 155 — 163. Rose, P. E., Adams, M. C., and Benoit, D., (1995) A tracer test at the Beowawe geothermal field,Nevada using fluorescein and tinopal CBS, Geothermal Resources Council Transactions, Vol. 19,pp. 217—221. Benoit, D., (1994) Review of geothermal power generation projects in the Basin and Range province, 1993, Geothermal Resources Council Bulletin, Vol. 23, No. 5, pp. 173 — 178. Benoit, D., and Hirtz, P., (1994)Noncondensible gas trends and emissions at Dixie Valley,Nevada, Geothermal Resources Council Transactions, Vol. 18, pp. 113 — 119. Benoit, D., and Stock, D., (1993) A case history of injection at the Beowawe, Nevada geothermal reservoir, Geothermal Resources Council Transactions, Vol. 17, pp. 473 — 480. Benoit, D., (1992) A case history of injection through 1991 at Dixie Valley,Nevada, Geothermal Resources Council Transactions, Vol. 16, pp. 611 - 620. Benoit, W. R., (1990) Development of a carbonate scale inhibition program at Dixie Valley,Nevada, Geothermal Resources Council Transactions, Vol. 14, Part II,pp. 1567 — 1573. Adams, M. C., Benoit, W. R., Doughty, C., Bodvarsson, G. S. and Moore, J. N., (1989) The Dixie Valley, Nevada tracer test, Geothermal Resources Council Transactions, Vol. 13,pp. 215 - 220. Benoit, W. R., (1989) Carbonate scaling characteristics in Dixie Valley, Nevada geothermal wellbores, Geothermics, Vol. 18, No. 1/2,pp. 41 —48. Benoit, W. R., (1987) Early stage carbonate scaling characteristics in Dixie Valley wellbores, Geothermal Resources Council Transactions, Vol. 11, pp. 495 - 502. Benoit, W. R., (1984) Initial results from drillholes PLV-1 and PLV-2 in the western moat of the Long Valley Caldera, Geothermal Resources Council Transactions, Vol. 8, pp. 397 - 402. Edmiston, R. C., and Benoit, W. R., (1984) Characteristics of Basin and Range geothermal systems with fluid temperatures of 150 °C to 200 °C, Geothermal Resources Council Transactions, Vol. 8,pp. 417 - 424. Benoit, W. R., and Butler, R. W., (1983) A review of high-temperature geothermal developments in the northern Basin and Range province, in The Role of Heat in the Development of Energy and Mineral Resources in the Northern Basin and Range Province, Geothermal Resources Council Special Report No. 13, pp. 57— 80. Benoit, W. R., (1983) An explorationist viewpoint of the high-temperature geothermal potential of the Cascade Range in Oregon, Geothermal Resources Council Transactions, Vol. 7,pp. 227 - 232. Benoit, W. R., Hiner, J. E., and Forest, R. T., (1982) Discovery and geology of the Desert Peak geothermal field: a case history,Nevada Bureau of Mines and Geology Bulletin 97, 82 p. Hyndman, D. W., Silverman, A. J., Ehinger, R., Benoit, W. R., and Wold, R., 1982, The Phillipsburg Batholith, western Montana,Montana Bureau or Mines and Geology, Memoir 49, 37 p. Benoit, W. R., Sethi, D. K., Fertl, W. H., and Matthews, M. (1980) Society of Professional Well Log Analysts 21 st Annual Logging Symposium Transactions, Paper AA. Benoit, W. R., (1978) The use of shallow and deep temperature gradients in geothermal exploration in northwestern Nevada using the Desert Peak thermal anomaly as a model, Geothermal Resources Council Transactions, Vol. 2, Sec. 1, pp. 45 - 47. 24.7-0 Li-1 7 qt-----' Geolhernial ResoutCiGiOuF Geothermal Resource Group,Inc. IT75-145 St.Charles Place,Suite B 0TAPPING THE EARTH'S ENERGY Palm Desert, CA 92211 Phone: 760-341-0186 Pilgrim Hot Springs Exploration Wells Planned well configuration: • 10-3/4" Drive Pipe as Conductor to 10'. • 6-5/8" PE Casing(0.188 WT), cemented in place to 100'. • 4.5" TFJ-HW Casing(4.0" ID), to 1,000'. • 2.19" BQ Casing (1.81" ID), to 2,500'. Drilling Program 1. Notify AOGCC representative 48 hours prior to beginning mobilization.—Determine from AOGCC representative whether he wants to be present at spud. 2. Move in and Rig up 2.1. One (1) Channel H2S alarm system with horn and light, and wind indicator—windsock or streamers. 2.2. String drum for double lines. 2.3. Install temperature transducers on suction and return line. 2.4. Obtain(2 each) '/2 gallon samples of cement mix water and FedEx to ThermaSourceTM Cementing. 3. Hold pre-operational meeting with all personnel. 3.1. Review drilling program and permit. Post permit. 3.2. Establish reporting requirements. 3.3. Review safety program and PPE requirements. 3.4. Review protocol for spills and other potential environmental issues. 3.5. Establish safe assembly are . 3.6. Inspect rig and associated uipment. 4. Mix spud mud. 5. Drill 9-7/8"hole while driving 10-3/4"drive pipe to 10'. 6. Drill ahead with 9-7/8"bit to 100'. —Moving the 6-5/8"shoe from 50'to 100'will increase mechanical integrity of the wellbore during an unplanned flow event. 7. Perform wiper trip. 8. POH and L/D 9-7/8"bit. 9. Pull drive pipe. 10. Round trip and L/D 9-7/8"bit. 11. Run 100' of 6-5/8" PE casing, set on bottom. 12. Run tremie pipe (either strapped to casing or run afterward). 13. Cement casing using neat cement. 13.1. WOC for 6-5/8" casing 14. Prepare 6-5/8" casing. 14.1. Dress 6-5/8" casing stub, measuring to ensure that the flow line from the diverter will remain level after installing BOP on the 4-1/2" wellhead. 14.2. Install diverter with flow line to shakers. 15. Make up 5-1/8"rotary bit and drill 5-1/8"hole to 1000'as directed. —Ifflow line temperature exceeds 75°C, stop drilling and set casing. 15.1. Drill using low solids, non-dispersed gel baseddrilling fluids. Maintain an 8.8 — 9.2 ppg density. Maintain sufficient barite on location to increase two full wellbores by 1.0 ppg. 15.2. Catch samples of cuttings every 10'. 15.3. Drill using controlled ROP while maintaining low AV's. - This is in order to prevent excess hole enlargement below the casing shoe. 15.4. Wipe hole at regular intervals. 15.5. Circulate and condition hole for casing. Break back gel strengths. 15.6. Run a wiper trip. 16. POH and L/D 5-1/8"bit and 2-3/4" DP 17. Run open hole caliper log to verify hole volume. 18. Run 4.5"HW casing to 1000' 18.1. Make up float collar and guide shoefor a 40' shoe track. 18.2. Make up swab cup-type formation packer on casing joint to be set at 300' 18.3. Run 4-1/2" HW casing in hole leaving a minimum of 2'clear ofthe bottom of the hole. Space out casing in order to leave the box end of thetop joint of casing located 6" above the planned floor of the cellar. Strap carefully while RIH and use a landing joint to position the casing. 19. Cement HW casing in place. 19.1. Load plug and make up plug dropping head. 19.2. Using open hole caliper volume, pump 1.0 bbl fresh water ahead of the calculated volume of 13.5 ppg TC GeoLite premium cement containing30% silica flour by dry weight in order to place 300 linear feet of cement to surface following final displacement. — Calculate cement volume equal to 50%excess open hole volume, 15% excess between casing annuluses. 19.3. Pump a calculated volume of 9.2 ppg, 50 vis. mud to act as a spacer between surface cement and shoe cement. Base volume on the caliper log. Do not use any excess mud. 19.4. Pump77 gallons/ 10.29 cu. ft. of 13.5 ppg TC GeoLite premium cement containing 30% silica flour by dry weight in order to place 100 linear feet of cement around the shoe and to fill the shoe track. 19.5. Drop and bump displacement plug. 19.6. Pump cement and displace with mud until good cement returns come to surface. 19.7. Wait on cement. 20. Nipple down diverter and rough cut 6-5/8" casing. 21. Construct cellar to accommodate wellhead and annular preventer. 22. Split and cut off 6-5/8" casing to bottom of cellar. Hammer and chip cement to the connection between the top casing joint and the landing joint. Back out landing joint. 23. Thread on 4-1/2" wellhead assembly—Refer to figure 3. 23.1. Thoroughly clean threads on pin-end of casing. 23.2. Dope threads and manually thread on wellhead (not to full torque). 23.3. Remove wellhead and thoroughly clean all threads. 23.4. BakerLock threads, and thread on wellhead to full torque. 24. Notify AOGCC representative a minimum of 48 hours before testing BOPE 25. Make up the following BOPE—Refer to figure 4. 25.1. Install 2" check valve on surface with high pressure line to manual ball valve on fill-up side of wellhead assembly. Install high pressure line from mud pump to check valve to act as kill line. 25.2. Install manual ball valve on blowdown side of wellhead assembly with high pressure line to pneumatic HCR valve(located on surface). HCR valve is actuated by Nitrogen and is close-on-fail. Install 20' of 2" hard line from HCR valve in a direction away from rig operators to act as a blow down line. Anchor 2" hard line to prevent it from moving in use. 25.3. Install 3M annular preventer(type: Regan Torus) 25.4. Install top flange with pipe stub on top of annular preventer.—Refer to figure S. 25.5. Install diverter with flow line to return tank. 25.6. Connect annular preventer to accumulator. 26. Function test HCR valve and annular preventer, checking for leaks. 27. Inspect hydraulic accumulator(performed by AOGCC representative). 28. Install test plug in wellhead. Test HCR valve, fill-up and blowdown line valves to 500 psi. 29. Test annular preventer to 500 psi. Chain down drill pipe and top drive before testing. 30. Prior to drilling ahead, ensure AOGCC has signed off on inspection. 31. Make up BHA with 3-7/8"rock bit, and 2-3/4"drill pipe and RIH. 32. Drill to +/-2500' (TD). 32.1. Maintain optimum hydraulics for ROP and hole cleaning. 32.2. Catch samples of cuttings at 10' intervals.Wipe hole as needed 33. Circulate and spot 10 ppg weighted mud or brine in hole. 34. POH L/D 3-7/8"rock bit and 2-3/4" drill pipe. Keep hole full at all times and monitor for indications of flow. 35. Run open hole caliper. 36. Run 2.19" BQ casing to 2500' 36.1. Make up guide shoe and float collar for a 20' shoe track. 36.2. Make up swab cup-type formation packer on casing joint to be set at 300' 36.3. Run 2.19" BQ casing in hole leaving a minimum of 2'clear of the bottom of the hole. Space out casing so that the top joint of casing is located slightly above the 2" side outlets on the 4-1/2" casing. Strap carefully while RIH and use a landing joint to position the casing. 37. Cement BQ casing in place. 37.1. Remove high pressure lines from the 2" side outlet valves, and take returns to cellar while cementing. 37.2. Load plug and make up plug dropping head. 37.3. Using open hole caliper volume, pump 1.0 bbl fresh water ahead of the calculated volume of 13.5 ppg TC GeoLite premium cement containing30% silica flour by dry weight in order to place 300 linear feet of cement to surface following final displacement. — Calculate cement volume equal to 50%excess open hole volume, 15% excess between casing annuluses. 37.4. Pump a calculated volume of 9.2ppg, 50 vis. mudto act as a spacer between surface cement and shoe cement. Base volumes on the caliper log. Do not use any excess mud. 37.5. Pump63 gallons/ 8.42 cu. ft. of 13.5 ppg TC GeoLite premium cement containing 30% silica flour by dry weight, in order to place 100 linear feet of cement around the shoe and fill the shoe track. 37.6. Drop plug and displace with fresh water. Bump plug. 37.7. Allow cement to drain into bottom of the cellar. 37.8. Wait on cement. 37.9. Keep all water out of annulus after cementing. If cement falls after cement job, top off annulus with cement from surface. 38. Rough cut BQ. Nipple down BOPE and lift over landing joint. 39. Dress BQ casing stub. Install 7-1/16" 3M center bore flange on 7-1/16" 3M wellhead. Install 2.19" x 3"bushing on BQ stub using epoxy and set screws. Install 3" locking ball valve on top. Bull plug and lock.—Refer to figure 6. 40. Run a sinker bar and tag top of float collar to ensure that casing is clear. 41. Leave one valve in place on one of the two side outlets and bull plug everything else. 42. Rig down and move off. Perform site remediation as required. Drilling Fluids Program—Pilgrim Hot Springs Exploration Wells The hole will be drilled using standard fresh water bentonite drilling fluids. Additives to be used include (all listed products are NL Baroid trade names): • Quick-Gel high yield bentonite (hole stability, circulation control, clay-shale control) • Pac-L and Pac-R powdered cellulose polymer(clay-shale control, water loss, viscosity control) • Baroid 41 barite weighting material (mud density control) • 2-3%micronized cellulose (water loss, lost circulation control) Maintain a density of 8.8-9.0 ppg unless concerns of formation pressure dictate changing the density. Drill fluids will be monitored for viscosity, weight, and temperature on a continuous basis. Drilling fluids will have cuttings removed and will be recirculated via a 600 gallon trailer- mounted shaker system incorporating shaker screens and centrifugal desilting cones. Cuttings and used drill mud will be contained in above-ground tanks. At project's end, cuttings/mud will be disposed of per Alaska DNR requirements. Rotary drilling and reaming operations will be conducted using a skid-mounted Gardner-Denver 5" x 6", 200 gpm, duplex mud pump. If returns are lost, drilling maybe continued using fresh water with polymer sweeps prior to connections. Maintain sufficient barite on location to raise the weight of 2 (two) hole volumes a total of 1 ppg if needed while drilling with mud. Figure 1: Wellbore Schematic— Pilgrim Hot Springs Confirmation Wells rXi 1I I1 II ill II ii / 10%" Drive Pipe set in97/8" Hole to 10' \ \ Rotary Drill 9-7/8" Hole to 100' 1 6-5/8" Casing Cemented in place from shoe to surface Cement set at 300'to surface for: 1 1 "� ii -HW casing 64 rod i *,. Rotary Drill 5-1/8" Hole to 1,000' 4.5"TFJ-HW Casing Cement set 100'(linear)around shoe Rotary Drill 3-7/8" Hole to 2,500' 1 2.19" BQ rod Cement set 100' (linear)around shoe Figure 2: Wellhead for 6-5/8" Casing—Pilgrim Hot Springs Confirmation Wells \ i Type: //• \\ Divertechrtech'"^3022 10. Compression Lock on 6-5/8" Pipe 4 GROUND LEVEL Figure 3: Wellhead for 4-1/2" Casing—Pilgrim Hot Springs Confirmation Wells 12 7-1/16"3M RTJ FLANGE 10 A 8 -6 4-W'OD u 4" ID o HW CASING 4 2"XXH FNPT 2"XXH FNPT 2 t' —_0 II 11 I I I I I I I 4.5" WELLHEAD (TWO EACH) Figure 4: ROPE recommendation for 4-1/2" wellhead—Pilgrim Hot Springs Confirmation Wells Diverter Type: 011 Divertechr"3022 7-1/16"Companion Flange with 6-5/8"Pipe Stub for Compression Lock on Diverter I—Irer 7-1/16"3M Annular Preventer Type:Regan Torus e e ' 4.5"x 7-1/16"3M Wellhead (two)2"Ball Valve WOG 1,500 psi At surface: At surface: Check valve C( Pneumatic HCR J i 1 High Pressure Hose Valve(1000 psi Low Pressure Hose 1500 psi minimum) —Fill up lines • —Blow down line CELLAR FLOOR Figure 5: Top flange with 6-5/8" casing stub for diverter—Pilgrim Hot Springs Confirmation Wells -- ,Z-- 12 10 6-5/8" OD 8 Plain End Casing 0.188 WT 6.249" ID 6 4 6.625" ► 4 2 7-1/16" 3M RTJ FLANGE 0 TOP FLANGE W/ PIPE STUB FOR DIVERTER (ONE EACH) Figure 6: BQ Rod x 3" Valve Bushing—Pilgrim Hot Springs Confirmation Wells -r r_ -r 3 FP-T r -r r J 4 1.91" ► 2.21" 1 (OF 4) Set Screws O 2.19" BQ Rod f (1.81" ID) BQ ROD X 3" VALVE BUSHING (TWO EACH) Figure 7: Composite Temperature Logs— Pilgrim Hot Springs Confirmation Wells -•,..;., -,077:,..11...,..„, /47///7/4t/rrnal A/caer(hit � f : 1 ://7/ 100 T' �.�� e f�J 'fy• Jr r . - - I li s 400 i it 1 .2 t 3 E fl 1 930 r a A 800 EXPLANATION ---- PS-1 P5-2 PS-3 ?00 -—---- PS-4 P5-5 NI-1 t.\ 900 I I I t 20 30 40 SQ 60 70 80 90 Tcmature,in oC Woodward-Clyde Consultants-Figure 19; Results of Drilling, Testing and Resource Confirmation, Geothermal Energy Development at Pilgrim Springs, Alaska, 1983. Figure 8: Wellhead Locations-Pilgrim Hot Springs Confirmation Wells 400W 300W 200W 100W 1005 • • T45 R31W Sec.36 © T5S.R31 W,Sec.3 2005 - - .. + • PS-1 • PS-2 X53fl+ tt �(605v`` ti 3005- MI-1 . 1 f PS-3 o N •• PS-4 C. � C oN J 4005 In + a ao N v J 41♦ ai e4 5005 -4- • PS-5 200 • 400 feet EXPLANATION O Geothermal well and number ® B.L.M,survey corner -4- 100-meter grid coordinate S t� Schwartz, Guy L (DOA) From: Markus Mager[markus.mager@alaska.edu] Sent: Tuesday, March 27, 2012 11:55 AM To: Davies, Stephen F (DOA) Cc: Schwartz, Guy L(DOA) Subject: Re: Pilgrim: bonding requirements Hello Steve and Guy, When would be a good time to touch base with you regarding the 2012 drilling at Pilgrim? I would like to discuss the following things: 1. Bonding requirements vs. UA waiver Is the waiver sufficient? 2. Exact location of the two 2, 500ft holes Are drilling areas sufficient and we would amend the application once we have the exact coordinatesViprobably in May) ? Or should we give you coordinates and we amend the application if we want to move to another site? I basically want to keep it as flexible as possible. 3. How deep can we go w/o BOP etc. (basically same hole design and drilling as in 2011 where we had a waiver from AOGCC) ? I can imagine the following situation: We drill to, let's say, 1000ft or 1500ft but don't find what we are looking for in terms of temperatures and the project team would decide to move to the next site. Would we need a BOP etc. up to 1000ft or 1500ft?DWhat would be the maximum depth we could drill like we did in 2011? /00'c .: //14._ • We are planning to drill two 2, 500ft holes, expected temperature: 150C. We will permit these two holes with AOGCC in cooperation with GRG. But would it be possible to have the flexibility to permit (waiver) 3 or 4 additional sites/areas where the 2, 500ft could potentially be if 3. happens? Thank you, I would really appreciate your response since so many items of the 2012 field season depend on these questions. Best regards, Markus b---- On On Thu, Mar 15, 2012 at 8:06 AM, Davies, Stephen F (DOA) <steve.davies@alaska.gov> wrote: > Markus, > Please accept my apologies for the delay. We've been a bit overloaded here lately. I'm booked up for the remainder of this week, but hope to get to this early next week. I'll keep you informed. > Thanks, > Steve Davies > Sr. Petroleum Geologist > Alaska Oil and Gas Conservation Commission (AOGCC) > 333 West 7th Avenue, Suite 100 > Anchorage, Alaska 99501 > Steve's phone: 907-793-1224 > AOGCC's receptionist: 907-793-1223 > AOGCC's fax: 907-276-7542 > AOGCC's website: http://doa.alaska.gov/ogc > > Original Message > From: Markus Mager [mailto:markus.mager@alaska.edu] > Sent: Wednesday, March 14, 2012 3:46 PM > To: Schwartz, Guy L (DOA) ; Davies, Stephen F (DOA) > Subject: Re: Pilgrim: bonding requirements 1 t - > > Hello Guy and Stephen, > did you have a chance to review the letter and to find out if ACEP is eligible for a waiver for our 2, 500ft holes? > We will max. drill two 2, 500ft holes. GRG is working on the drill application for these holes. However, there is a good chance of us drilling one 2, 500ft hole and two or three shallower holes. My idea is to permit two holes to 2, 500ft and 5 additional sites (potential shallower holes up to 1, 500ft) . Would we get a waiver from AOGCC for the shallower sites as well? These holes will be drilled and finished just like the once we had last year. How does that sound? Do you have any concerns? > How precise do we have to be in terms of hole locations? Are areas sufficient? > Thanks, best regards, Markus > On Tue, Feb 28, 2012 at 10:42 AM, Markus Mager <markus.mager@alaska.edu> wrote: >> Hello Guy and Stephen, >> As discussed on the phone today, would AOGCC accept the attached >> letter and waive the bond for the 2012 drilling? >> Thanks, Markus >> -- >> Markus Mager >> Energy Analyst >> Alaska Center for Energy and Power >> University of Alaska >> Physical Address: 407 Bunnell Bldg >> Mailing Address: PO Box 755910 » Fairbanks AK 99775-5880 >> Phone (907) 474-1143 » Fax (907) 474-5475 >> http://acep.alaska.edu/ >> http://energy-alaska.wikidot.com/ >> http://www.akenergynetwork.com/ > -- > Markus Mager > Energy Analyst > Alaska Center for Energy and Power > University of Alaska > Physical Address: 407 Bunnell Bldg > Mailing Address: PO Box 755910 > Fairbanks AK 99775-5880 > Phone (907) 474-1143 > Fax (907) 474-5475 > http://acep.alaska.edu/ > http://energy-alaska.wikidot.com/ > http://www.akenergynetwork.com/ Markus Mager 2 Energy Analyst Alaska Center for Energy and Power University of Alaska Physical Address: 407 Bunnell Bldg Mailing Address: PO Box 755910 Fairbanks AK 99775-5880 Phone (907) 474-1143 Fax (907) 474-5475 http://acep.alaska.edu/ http://energy-alaska.wikidot.com/ http://www.akenergynetwork.com/ 3 Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Monday, June 11, 2012 1:17 PM To: 'markus.mager@alaska.edu'; 'gwen.holdmann@alaska.edu' Cc: Schwartz, Guy L (DOA); Roby, David S (DOA) Subject: Pilgrim Springs TG-1: Comments and Questions Regarding Permit to Drill Application Markus and Gwen: After reviewing the Permit to Drill Application for the Pilgrim Springs TG-1 exploratory geothermal well, I have several comments and questions. Until a bond is in place with the AOGCC, this application cannot be approved. Is Unaatuq LLC owner and landowner of the property that will be affected by ACEP's drilling activities in the Pilgrim Springs area? If not, could you please identify the owner and landowner of the affected property? Per AS 31.05.170(10), "Owner" means the person who has the right to drill into and produce from a pool and to appropriate the oil and gas the person produces from a pool for that person and others. Per AS 31.05.170(7), "landowner" means the owner of the subsurface estate of the tract affected. Does ACEP have a formal lease agreement and a lease number or an agreement number for the affected property? Please provide that lease or agreement number. Please provide AOGCC with a lease map for the area as required by regulation 20 AAC 25.005(c)(2). How far will the well be from the nearest property boundary where ownership or landownership changes? As soon as the final surface location has been decided, please provide the AOGCC with the coordinates of the well in metes and bounds coordinates (footages from the nearest governmental section lines along with the township, range information)and in Alaska State Plane referenced to NAD27, as required by regulation 20 AAC 25.005(c)(2). (All of the AOGCC's location information is referenced to NAD27.) Note that regulation 20 AAC 25.070(2) requires a survey plat certified by a registered land surveyor showing the precise surface location of the well before completion or abandonment. Coordinates expressed only in terms of latitude and longitude are not sufficient. Regulation 20 AAC 25.050 requires vertical wells to be surveyed to determine the inclination from vertical with surveys starting at 500' and no more than 500' apart to total depth. What are your plans regarding wellbore surveys? Has hydrogen sulfide (H2S) been identified in any of the surrounding wells or in any water samples from the area? Is there any chance of encountering it while drilling to the proposed total depth? If so,what mitigation measures are planned? Please review regulation 20 AAC 25.061 and supply an assessment of shallow gas or other potential drilling hazards along with planned mitigation measures. Regulation 20 AAC 25.071(a)(1) requires original and reproducible copies of a complete mud log or lithology log consisting of a detailed record and description of the sequence of strata encountered. Mud logging or onsite geological services are not mentioned in the permit to drill application. How will ACEP conform with this regulation? Please review regulations 20 AAC 25.070 and 20 AAC 25.071 for a complete list of records, reports,geologic data and logs required for all wells drilled. 1 Will William Schnabel be the point-of-contact for this project once drilling operations begin? If not, please provide a contact name, phone number and email address for the drilling point-of-contact. Thank you, Steve Davies AOGCC 2 OVERSIZED DOCUMENT INSERT This file contains one or more oversized documents. These materials may be found in the original hard file or check the parent folder to view it in digital format. TRANSMITTAL LETTER CHECKLIST WELL NAME PTD# 2 - 2-7 7 7 Development Service / Exploratory Stratigraphic Test Non-Conventional. POOL:Well FIELD: �7 / Yr'u, I l � Circle Appropriate Letter/Paragraphs to be Included in Transmittal Letter CHECK ADD-ONS WHAT (OPTIONS) TEXT FOR APPROVAL LETTER APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well (If last two digits in Permit No. ,API No. 50- - - API number are between 60-69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(f), all records, data and logs acquired for the pilot hole must be clearly differentiated in both well name ( PH) and API number (50- - - ) from records, data and logs acquired for well SPACING The permit is approved subject to full compliance with 20 AAC EXCEPTION 25.055. Approval to produce I inject is contingent upon issuance of a conservation order approving a spacing exception. assumes the liability of any protest to the spacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. 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