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Home My WebLink About206-091• Image Projeet 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 by direct inspection of the file. ~.~ ~ - [~ Q ~ Well History File Identifier Urganizing (done> ^ Two-sided III II111111III II III ^ Rescan Needed RESCAN DIGITAL DATA OVERSIZED (Scannable) olor Items: ^ Diskettes, No. ^ Maps: [~Greyscale Items: ^ Other, No/Type: ^ Other Items Scannable by a Large Scanner ^ Poor Quality Originals: OVERSIZED (Non-Scannable) ^ Other: ^ Logs of various kinds: NOTES: ^ Other:: BY: Maria Date: ~O /s/ ~, Project Proofing III 111111 IIIII II III BY: Maria Date: I a D lsl Scanning Preparation _~ x 30 = ~(~ + ~, =TOTAL PAGES (Count does not i dude cover she t) ' ^ /~ BY: Maria Date: ~ O ~~ l ~ ~ j Production Scanning Stage 1 Page Count from Scanned File: (count does include cover sheet) Page Count Matches Number in Scanning Preparation: YES NO BY: Maria Date: r ~ / ;,,,~/ fJ ~ lsl Stage 1 If NO in stage 1, page(s) discrepancies///w"'e"'re]]]found: YES NO 111 BY: Maria Date: /s/ Scanning is complete at this point unless rescanning is required. II I II II II I II II I I III ReScanned III IIIIIIIIIII IIIII BY: Maria Date: /s/ Comments about this file: o „~~e~,e, iuuiimuuiuu P 10/6/2005 Well History File Cover Page.doc • • >- ~w ~" ~r h •~ ~. t_~' ~ ~ ~~~ h: ~ ~~ , ~ ~~ ~ MICROFILMED 6/30!2010. DO NOT PLACE. ANY NEW MATERIAL UNDER THIS PAGE C:\temp\Temporazy Internet Files\OLK9\Microfilm Mazker.doc ~~ DATA SUBMITTAL COMPLIANCE REPORT 8/4/2008 Permit to Drill 2060910 Well Name/No. NB 04 Operator TECK COMINCO ALASKA INCORPOR API No. 50-073-20005-00-00 MD 2413 TVD 2413 Completion Date 8/28/2006 Completion Status P&A Current Status P&A UIC N REQUIRED INFORMATION Mud Log No Samples No Directional Survey No DATA INFORMATION Types Electric or Other Logs Run: Well Log Information: Log/ Electr Data Digital Dataset Type Med/Frmt Number Name Well Cores/Samples Information: Name ADDITIONAL INFORMATION Well Cored? Y~N Daily History Received? UL'-"' Chips. Received? '1~?'id~- Formation Tops Analysis ~~ Received? (data taken from Logs Portion of Master Well Data Maint Log Log Run Interval OH / Scale Media No Start Stop CH Received Comments Sample Interval Set Start Stop Sent Received Number Comments Comments: 0 ~aY S Compliance Reviewed By: Date: ~ • • .~ E ~ P SERVICES, LLC January 25, 2007 Cathy P. Foerster Commissioner Alaska Oil and Gas Conservation Commission 333 West 7~' Avenue, Suite 100 Anchorage, AK 99501-3539 n,,, .., ... .:~ ~.;u. Re: Reporting Practices, Teck Cominco Alaska Incorporated, Red Dog Shale Gas Exploration Wells, Nos. NB-O1, (PTD 205-095); NB-02, (PTD 205-096); NB-03, (PTD 206-090); NB-04, (PTD 206-091); and NB-O5, PTD 206-09?). Dear Ms. Foerster: Thank you for your letter of January 8, 2007 concerning reporting issues involving the above referenced wells. Hopefully the following paragraphs will satisfactorily address your concerns, and the attachments hereto will fill in the data gaps in Commission files. Perhaps the best way for me to respond to your concerns is to address the points that you have raised in the same order, and using the same paragraph numbers that were used in your January 8~' letter. 1. Weekly status reports for wells Number NB-03 and NB-04 were mailed to the Commission while operations were underway on these wells, and I have attached copies for Commission files. In addition, detailed well histories in day-to-day format were included in the Completion Reports for both of these wells. I have attached copies of these histories, as well. As a point of clarification, please advise if we are to submit weekly status reports for the periods when there are no well site operations in progress. I have always assumed that these reports were only required when drilling, completion, or related operations were being done. If this is not the case, I owe you a lot of reports for periods when the wells were idle. In the case of wells Nos. NB-O1 and NB-02, the wells have been idle since 2005, with the exception of the minimal stimulation work discussed in Paragraph 4, below. 2. As previously reported to the Commission, the Completion Reports for NB-O1 and NB-02 were delayed due to the lack of as-built surveys being available from Red Dog. According to information conveyed from Mr. Dave Roby of your office in a recent telephone conversation, tive should have submitted the .components of the completion reports that we had, and taken our lumps over the missing surveys rather than waiting until we had the complete packages 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • (907) 279-5740 r • '^ 9 assembled. We have already received a letter from Commissioner Norman chastising us for the late reports, and I do get the message! No more delayed reports! In the case of NB-03 there was unclear communication with the Commission about what reports were required by the condition in which the well was left at the end of the 2006 season, and which was covered in my letter of January 18, 2007. 3. Wells Nos. NB-01 and NB-02 were not produced or de-watered during the 2006 season, and since the wells were idle, no production reports were filed. Water handling facilities were designed, and installation started during the 2006 season, but no attempts were made to produce or test the wells. De-watering requires a sustained effort, and anything less serves no purpose in evaluating the wells. The initial dewatering efforts in 2005 were for the most part inconclusive, albeit encouraging, as the wells could not be satisfactorily de-watered to develop meaningful production evaluation data. When the wells were freeze protected and shut-in at the end of the 2005 summer season, they quickly refilled with water, and the de-watering process will have to start again from scratch. During the 2005 season dewatering operations, production reports were submitted to the Commission. When the wells were shut-in, I asked Steve Davies of your office if we needed to continue to file these reports while the wells were idle, but show zero production. I was told that we did not need to file the reports during this period, but to be sure to recommence reporting when de-watering and testing resumed. At that time I believe we anticipated that this would be in 2006. Mr. Roby indicates that there is some information in the files to this effect, and that we should have informed the Commission of our change in plans. In hindsight, I believe that he is correct, but I frankly did not recall that we had anything on file committing us to a resumption of testing in 2006. Nevertheless, I think the main issue here is that we have no production to report for 2006. 4. The requested Form 10-404 is attached. In recent months the oil and gas media has published several articles on the Red Dog shale gas exploration effort. In my view, these articles have served to "over hype" the program in the eyes of those who are not intimately acquainted with it. The articles seem to be based on information taken from various technical presentations, and from attachments to a Unit Agreement which was negotiated with DNR covering some shallow gas State leases which adjoin the NANA lands on which the current project is located. There is really no way to counter some of these misconceptions, but they do have the potential for making people believe that the program is farther along than it is. In order to better inform the Commission about the current status of the program, and our plans for the 2007 summer season, Mr. Jerry Booth, Teck Cominco Project Manager, and I would welcome an opportunity to meet with the Commissions and any of your staff that you wish to involve, and basically tell you where we are on this project, and to re-affirm our pledge to improve our reporting practices. We are suggesting Thursday afternoon, February 8, 2007 for this meeting, as Mr. Booth will be in Anchorage on that date. U Teck Cominco Alaska Incorporated and Fairweather E & P Services, Inc. are committed to improving the communication between our companies and the AOGCC, and to eliminating any future shortfalls in proving your agency with the information you require in a timely manner. We believe that the suggested face-to-face meeting would be beneficial to these objectives, and to clearing up any misconceptions the Commission may have about progress that the Red Dog exploration program has made in evaluating this unconventional source of energy for the Red Dog Mine, and perhaps the surrounding area. Sincerely, ,; -~ R.C. Gardner For Teck Cominco Alaska Incorporated Attachments Cc: Dave Roby, AOGCC Jerry Booth, Teck Cominco Alaska Incorporated ~-' E ~Y E SE~iVICES, LLC August 9, 2006 Alaska Oil and Gas Conservation Commission 333 west 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Weekly Status Report Teck Cominco Alaska Incorporated Well No. NB-04, PTD 206-091 Gentlemen: FOR THE WEEK ENDING SATURDAY AUGUST 5, 2006: • ~~ V ~#~! JA,~~ `~ ~ L~u1 A~asic~l Oil Gas Cons. C~~ Y E~ : ;; , fi~~~ta~an Installed conductor, completed rig-up and installed diverter. Spudded well at 1700 hrs, August 3, 2006. Hammer drilled 12 '/a" surface hole to 705 ft. Ran 8 5/8" surface casing to 702 ft and cemented to surface with 435 sx Cold Set II. WOC. Drilled out FC and shoe and drilled 7 7/8' hole to 800 ft. Sincerely R. C. Gardner For Teck Cominco Alaska Incorporated 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • (907) 279-5740 • • y ~:z. August 30, 2006 Alaska Oil and Gas Conservation Commission 333 west 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Weekly Status Report Teck Cominco Alaska Incorporated Well No. NB-04, PTD 206-091 Gentlemen: FOR THE WEEK ENDING SATURDAY AUGUST 26, 2006: Continued to make several attempts to clean out dp. Finally able to get inside dp with tricone and "B" rod. Cleaned out dp to 1020 ft, where hit hard obstruction. Stripped out of "B" rod, but recovered "B" rod with spear. Re-ran tricone and drilled out primacord and junk inside dp to 1085 ft. Operator decided to sever dp at 1085 ft. RIH with shot, but would not go beyond 370 ft. Made another clean out run to 1070 ft. Re-ran shot and fired at 1070 ft. POOH with only 370 ft of dp. Unable to engage fish with overshot, tried spear. Engaged fish with spear and worked pipe. Stripped spear out of sub. Operator elected to P & A well. Developed P & A procedures and received AOGCC approval to implement. Rigged up cementers and established pump-in rate from surface. Mixed and pumped 337 sx Cold Set II plug from surface. Slurry volume sufficient to fi11700 ft of surface casing plus 150 ft 8" hole with 40% excess, and with no deductions for volume of fish. WOC. Did top job to bring cement to top of surface casing. Installed subsurface marker plate. Well officially P & A on 8/28/06. Sincerely, . ,~ .. R. C. Gardner For Teck Cominco Alaska Incorporated 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • (907) 279-5740 • <~y , -:;,: E & P SERVICES, LLC August 24, 2006 Alaska Oil and Gas Conservation Commission 333 west 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Weekly Status Report Teck Cominco Alaska Incorporated Well No. NB-04, PTD 206-091 Gentlemen: FOR THE WEEK ENDING SATURDAY AUGUST 19, 2006: Rig down 17 hrs on 8/13 to repair air fitting on swivel. RIH and found 30 ft fill. Drilled 7 7/8" hole to 2403 ft. Activated booster to handle increased water influx. POOH for repairs. Rig down another 7.5 hrs to repair cyclone. Staged back in hole. Hole very tight at 1500 ft. Washed to bottom and drilled to 2413 ft. Hole conditions deteriorating rapidly under large increase in water influx. Tried to POOH but became stuck 40 ft off bottom. Worked pipe, but dp separated 6 inches below diverter. Got on fish and tried to pump out of hole-no joy. Operator elected to shoot off drill string at top of BHA. Fired shot, but pipe not cut. Tried to work pipe, but pipe parted at 350 ft. Unconfined primacord shot apparently junked dp. RIH with overshot and engaged fish. Rigged up for second shot but could not get inside dp. Dressed top of fish with mill and re-engaged overshot. Still could not get shot inside dp. Tried to clean out dp with 2 15/16 tricone bit run on "B" rods, but dp so badly damaged that bit would not enter dp. Sincerely, ~~ R. C. Gardner For Teck Cominco Alaska Incorporated 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • (907) 279-5740 • ~<:.._ E & P SERVICES, LLC August 16, 2006 Alaska Oil and Gas Conservation Commission 333 west 7th Avenue, Suite 100 Anchorage, AK 99501 Re: Weekly Status Report Teck Cominco Alaska Incorporated Well No. NB-04, PTD 206-091 Gentlemen: FOR THE WEEK ENDING SATURDAY AUGUST 12, 2006: • Hammer drilled 7 7/8" hole to 1613 ft with difficulty. Formation severely fractured, and water influx to great to hammer drill with air and lift water. POOH and changed to tricone. RIH, c/o numerous bridges, and drilled to 1759 ft. Water influx up to 65 gpm. Set 200 sx Type I cement plug through problem zone, and WOC. Tagged TOC at 1400 ft and drilled out ratty cement to 1640 ft..Water influx at 60-70 gpm. Set second cement plug through problem zone with LCM this time. WOC and tagged plug at 1395 ft. Drilled ahead to 1845 ft. Water influx up to 80-85 gpm, which exceeded capacity to drill with air. Set third 200 sx plug mixed with gel and and cotton seed ahead. WOC and tagged plug at 1310 ft. Drilled cement and new formation to 2035 ft with reduced water influx. Sincerely, ,~ ~: . r ~~ _ - R. C. Gardner For Teck Cominco Alaska Incorporated 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • (907) 279-5740 • • Well History Teck Cominco Alaska Incorporated Well No. NB-04 PTD No. 206-091 API No. 50-073-20005-00 Date: Descri tion 8/02/06 Complete conductor installation. Conductor set @ 85 ft BGL, and cemented to surface through stab-in float shoe w/100 sx permafrost cement. 8/03/06 Wait on conductor cement. R/V Cyclone, Washington diverter line. Spudded well at 1700 hrs 8/03/06. Drilled 121/4" hole to 680 ft MD. 8/04/06 Drilled 12/14" hole to 702 ft MD. Rigged up to run 8 5/8" surface casing. Started casing run, but shut down to repair rig. Down 4 hrs for repairs. Completed running casing. Shoe at 702 ft. Cemented casing to surface with 435 sxs Cold Set II. 8/05/06 WOC. RIH and tagged cement at 683 ft. Drilled 7'/8" hole to 800 ft. Working on mechanical problems with booster compressor. 8/06/06 Drilled 7 ~/8" hole from 800 ft to 1300 ft. Took surveys at 500 ft (2.1 °), and 1000 ft (3.1 °). 8/07/06 Drilled 7'18" hole from 1300 ft to 1610 ft. Took survey at 1500 ft (4.1°). Water influx increased substantially through this interval to estimated 40 gpm. Formation severely fractured 1340-1483 ft (driller). Air pressure: off-bottom 240 psi, on-bottom 400psi. 8/08/06 Picked up to 1290 ft to ream through fractured section but couldn't break circulation.. Worked pipe and got circulation back, reamed to 1610 ft. Drilled to 1613 ft but could no longer drill with hammer and lift water. POOH to change to tricone. RIH to 1300 ft, hit bridge. Reamed down to 1450 ft, but could not circulate. Stuck pipe, but worked free after 4 hrs. Pulled up to 1260 ft, Water influx up to 65 gpm. 8/09/06 Reamed back to 1613 ft and drilled new hole to 1759 ft but water , influx and unstable formation created high risk of getting stuck. Set 200sx Type I cement plug across problem zone through open- end dp. Pulled up to 650 ft and applied 4bb1 downsqueeze. No pressure build up. POOH and WOC. 8/10/06 RIH and tagged top of cement at 1400 ft. Drilled ahead through ratty cement and fractured formation to 1640 ft. Water influx at 60-70 gpm. Rigged up to set second plug through problem zone. Washed open-end dp to 1620 $ and set 150 sx Type I cement plug with 2% CaCl2 and LCM. WOC 4 hrs. RIH and tagged top of cement at 1395 ft. 8/11/06 Drilled ahead to 1845 ft. Water influx increased to 80-85 gpm. Can no longer drill with air unless water is controlled. POOH and rigged up to set third plug. With open-end dp at 1800 ft, pumped 12.4 bbl gel pill w/cotton seeds ahead, followed by 200 sx Type I cement plug. Displaced cement and pulled pipe dry. 8/12/06 WOC 6.5 hrs RIH and tagged top of cement at 1310 ft. Drilled cement and new formation to 2035 ft. Water influx reduced to 30 gpm. 8/13/06 Rig down 17 hrs due to break in main air line nipple on swivel. POOH to await repairs. RIH and found 30 ft fill on bottom. Drilled ahead to 2100 ft with water influx rate holding at 30 gpm 8/14/06 Drilled ahead 2100 ft to 2403 ft. Water influx 30-35 gpm. Hooked up booster. Broke circulation at TD. Increased pressure required to lift water from TD with static water level in hole blew top off cyclone. Down 6 hrs to repair cyclone. 8/15/06 Down 7.5 hrs to complete cyclone repairs. Staged TIH and drilled ahead 2403 ft to 2409 ft. Experiencing tight hole, increased water and cement in cuttings. TOH to change bit. Repaired washed out nipple on discharge line. TIH 8/16/06 Continued stage TIH. Tight hole at 1500 ft. Washed down 2283 ft to 2409 ft. Drilled ahead to 2413 ft, but hole conditions deteriorating rapidly. Large increase in water flow. Tried to POOH. Pulled 40 ft and became stuck..Tried to work pipe. Drill pipe separated 6 inched below the diverter. 8/17/06 Cut box off dp and welded onto dp stub below diverter. Tried to pump out of hole. Had circulation but DP would only move a few inches. Operator elected to sever dp at BHA with explosives. Waited on explosives crew from Red Dog mine. 8/18/06 RIH with primacord to sever dp at BHA. Detonated shot, but pipe not free. Tried to work pipe, but pipe separated at 350 ft. Unconfined primacord shot apparently junked dp. Waited on orders from operator and contractor. 8/19/06 RIH with overshot and engaged fish. Rigged up explosives for second shot, but could not get inside dp. Made up mill and dressed top offish. Re-engaged overshot. RIH with explosives to 900 ft. but could not get past obstruction. POOH. RIH with 2 15/16 tricone on B rods in attempt to clean out dp, but dp so badly damaged bit would not go inside pipe. 8/20/06 Continued with several attempts to clean out dp. Finally got necessary hardware to get inside of dp with tricone and B rods. Hit resttriction at 1020 ft. Tried to drill out restriction. Encounted high torque and stripped out of B rod sub. Started to POOH, but lost B rods through dog collar. B rods dropped 12 feet. a • 8121/06 Speared B rods and POOH. Re-dressed B rod string and RIH. Drilled on detonation cord and other junk. Tagged something very hard at 1085 ft (most likely junked dp). POOH with B rods. Decided to shoot off dp at 1085 ft. 8/22/06 RIH with explosive string, but could not get past 370 ft. POOH with explosives and tried cleanout run with B rods. Re-ran explosives to 1070 ft and fired shot. POOH with 370 ft of dp and overshot. Re-run overshot, but would not engage. RIH with spear and engaged fish. Pulled up to 23,00 lbs, and stripped spear out of sub. Lost spear. Waiting on orders. 8/23/06 Operator elected to P & A the well. Received AOGCC approval for P & A procedure to bullhead a permafrost cement plug- from the surface to produce a competent plug from the surface to 150 ft below the shoe of the surface casing. Rigged up cementers. Filled lines and established rate to confirm that hole would take fluid. Mixed and pumped 337 sx cold set II plug from surface. Slurry volume sufficient to fi11700 ft of surface casing, plus 150 ft of 8" hole with 40% excess, and with no deduction for volume offish. WOC. 8/24/06 Mixed and pumped 57 sx cold set II top job to fill surface casing. WOC. Start fabrication of subsurface marker plate. 8/25/06 Added 1.8 bbls of cement slurry to top of cement in surface casing and surface casing/conductor annulus. Start rig down and move out at NB-04. 8/28/06 Install subsurface marker plate as per AOGCC regulations. P & A of NB-04 complete. ~1 L~ January 8, 2007 Mr. Robert Gardner Sr. Technical Advisor for Teck Cominco Alaska Incorporated 3105 Lakeshore Dr., Bldg. A, Ste. 101 Anchorage, AK 99517 • SARAH PALIN, GOVERNOR 333 W. 7th AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907)276-7542 Subject: Shortfalls in Reporting Practices Related to Exploratory Shale Gas Wells NB-O1 (PTD 205-095) NB-02 (PTD 205-096) NB-03 (PTD 206-090) NB-04 (PTD 206-091) NB-OS (PTD 206-097) Dear Mr. Gardner: The Alaska Oil and Gas Conservation Commission ("Commission") wishes to bring to your attention that, to date, Teck Cominco Alaska Incorporated ("Teck Cominco") has either failed to comply with Commission reporting requirements or been seriously late in providing reports related to this exploratory shale gas program. 1) The Commission issued a drilling permit for each of the five wells in this project, and each of those permits requires a weekly status report for the well from spud until suspension or plugging and abandonment. These reports were submitted for wells NB-O1 and NB-02 during the 2005 drilling season, but no weekly status reports were submitted for activities during 2006. Please provide the missing weekly reports or a summary of that information to the Commission no later than close of business Friday, February 2, 2007. 2) Records indicate that wells NB-O1 and NB-02 were completed on September 10, 2005. Commission regulation 20 AAC 25.070(3) requires submittal of a completion report and logs within 30 days of the completion of a well, but Teck Cominco was over 5 months late submitting this information to the Commission. A similar but shorter delay was experienced with well NB-03. 3) It is presumed, but cannot be confirmed due to the lack of weekly status reports, that attempts to produce the NB-O1 and NB-02 wells resumed as planned this Mr. Robert Gardner January 8, 2007 Page 2 of 2 year. As required by 20 AAC 25.230 the Commission should have received monthly production reports, presuming an attempt was made to produce the well(s), but has not received reports since the September 2005 production was reported. A November 8, 2006, email from you to Mr. Tom Maunder with .the Commission indicated that the wells were currently shut-in but did not indicate the status of the wells over the summer months. If there was production from either of these wells, please provide the production reports to the Commission no later than close of business Friday, February 2, 2007. 4) On August 28, 2006, the Commission approved Sundry Application 306-292, allowing perforation and stimulation of additional zones within well NB-O1. The application indicated that operations were imminent, but the Commission has not received the required Form 10-404 or any other documents to indicate whether or not these operations have occurred. Please provide the Form 10-404 (or a status report if the workover operations were not completed) to the Commission no later than close of business Friday, February Z, 2007. Proper and timely reporting is required by Commission regulations. If reporting practices do not comply, the Commission will consider taking enforcement action in accordance with ZO AAC 25.535. If you have any questions on this matter please contact Mr. Dave Roby of the Commission's staff at (907) 793-1232. Sincerely, r Cathyr . Foerster Commissioner \~ ~ ~ ! ` ~ ~~ (~ (~ ~ ' (J' FRANK H. MURKOWSKI, GOVERNOR ~~' !J U ~J U ~.! ~ U '~ 55~ Cordova Street ' Anchorage, AK 99501 DEPT. OF ENVIRONMENTAL CONSERVATION ~ Pxo1vE: (907> 269-3072 DI'V'ISION OF SPILL PREVENTION AND RESPONSE FAX: (907) 269-7687 INDUSTRY PREPAREDNESS PROGRAM http:U«~ww.dec.state ak us „ _~ EXPL®RATION PRODUCTION & REFINERIES NIr. Robert Gardner 1~ ~~ ~~ `~ ~j ~~ ~~i~ November 17, 2006 ;~. ; File No: 305.05 Red Dog Shallow Gas ail Tv Cat her ~~".~.~ .~„_ ...,.,5, ii:C. 2000 East 88`h Avenue Anchorage, AK 99507 Subject: Exemption from Oil Discharge Prevention and Contingency Plan Requirement for Red Dog Shallow Gas Exploration Drilling Program, DeLong Mountains, Alaska Dear Mr. Gardner: The Alaska Department of Environmental Conservation (ADEC) has received a determination from the Alaska Oil and Gas Conservation Commission (AOGCC) regarding your request for an exemption from the Oii Discharge Prevention and Contingency Pian (ODPCP) and Financial Responsibility (FR) requirements. The exemption was requested for the Red Dog Shallow Gas Exploration Drilling Program ("Red Dog Program") conducted in the DeLong Mountains of northwestern Alaska. AOGCC made its determination based on geologic information submitted by Fairweather and a review Of AOGCC well files. The Red Dog Program i~ lp~ated in certinn.c 17 and 1 R of T31 N, ": _"~~', K__t;,.e':. Ri.-e. ";Ierdian, r. ±he PeLor:g Mo~.~_ntains. The program consists of 5 shallow wells (all less than 4,000' below ground level) on NANA Corporation lands approximately 1.5 miles north of the Red Dog iVtine. Sixty mineral exploration holes have been drilled into the Kung formation, the target of the Red Dog Program. Four shallow gas wells have been drilled within the project area. Fairweather has reported that no significant hydrocarbons other than methane were encountered in any of these mineral or gas exploration holes. AOGCC staff concurs that no liquid hydrocarbons or hydrocarbon gases other than methane were encountered based on a careful review of drilling records from the shallow gas exploration holes. On October 6, 2006, AOGCC determined that exploration wells drilled to less than 4,000' depth ~~ithin the Red Dog Shallow Gas Exploration Drilling Program area are highly unlikely to encounter formations bearing Liquid hydrocarbons or hydrocarbon oases other than methane. im a~;nie~ o, _~~_ ~~ ~ _ . Mr. Robert Gardner Fairweather November 17, 2006 Based upon A®GCC's evaluatLOn and deterrnLnatLOn, ADEC hereby finds that a well drilled within the glad Dog Shallow i~as Exploration Drilling Program to depths less than x,000' will not encounter liquid hydrocarbons and therefore meets the standards for exemption as a natural gas exploration facility under AS 46.04.Oj0(c) and is exeLnpt from ~I)PCP and Fgl requireLnents found in ~S X6.040.030 and ~S 46.00.040, Be advised that should Fairweather/Tack Cominco penetrate a formation capable of flowing oil to the ground surface during the drilling of this well, operations must immediately be suspended and ADEC must be immediately notified. You must obtain ODPCP and FR approval by ADEC prior to proceeding. This exemption does not relieve Fairweather/Tack Cominco of the responsibility for securing other federal, state or local approvals or permits. You are still required to comply with all other applicable laws. APPEAL: This is a final decision. Aggrieved persons with standing may appeal this decision to the Alaska Superior Court within 30 days as provided by the Alaska Rules of Appellate Procedure. If you have any questions, please contact me at 269-7680. Sincerely, ~~~d~ Ly is Miner Section Manager cc: Betty Schorr, IPP Manager, ADEC Daniel Seamount, AOGCC Chris Pace, ADEC, Juneau Falter Porter, Northwest Arctic Borough Planning Director • E & P SERVICES, INC. September 28, 2006 Alaska Oil and Gas Conservation Commission 333 7th Avenue, Suite 100 Anchorage, AK 99501 Attention: Mr. Tom Maunder, P.E. • ~~~ 0 C i t~ ~ Z006 A{aska Qi! ~ has ~~s~Cammi~son Anchor g Re: Well Completion Report (Form 10-407) for Teck Cominco Alaska Incorporated, Well Number NB-04, PTD No. 206-091 Dear Mr. Maunder: Please find enclosed the Completion Report and attachments for the above referenced well which was recently plugged and abandoned. No wire line logs were run on this well, due to hole problems and the premature junking of the well. If you have any questions concerning this completion report, please contact the undersigned at 907 258 3446, or by a-mail at bob~,fairweather.com. Sincerely `~ _ . C. Gardner For Teck Cominco Alaska Incorporated Enclosures Cc: Jerry Booth, Teck Cominco Alaska Incorporated 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • FAX (907) 279-5740 650 North Sam Houston Parkway East, Suite 505 • Houston, Texas 77060 • (281) 445-5711 • FAX (281) 445-3388 STATE OF ALASKA ~~~~~® ALAS AND GAS CONSERVATION COMMIS WELL COMPLETION OR RECOMPLETION REPORT ANDp~~O~G~ 206 1a. Well Status: Oil Gas Plugged Abandoned ~ Suspended WAG 1b. Well ISSIOn ~a Oil & Gas ons. zoaac2s.~os 2oanc2s.~~o Development A~~C~yyO GINJ~ WINJ~ WDSPL~ No. of Completions Other Service ~ StratigraphicTest[] 2. Operator Name: Teck Cominco Alaska Incorporated 5. Date Comp., Susp., or Aband.: August 28, 2006 12. Permit to Drill Number: 206-091 3. Address: 3105 Lakeshore Dr,Bldg A Ste 101 Anch,AK 99517 6. Date Spudded:. August 3, 2006 13. API Number: 50-073-20005-00 4a. Location of Well (Governmental Section): Surface: 1087.67ft FWL, 1506.22 ft SNL, Sec. 17 T.31N, R, 18 W, KRM 7. Date TD R~ached: 1jk August y8~'2006 <v~~.i~e' 14. Well Name and Number: NB-04 Top of Productive Horizon: N/A 8. KB Elevation (ft): 890 15. Field/Pool(s): Exploratory Total Depth: Same 9. Plug Back Depth(MD+TVD): Surface 4b. Location of Well (State Base Plane Coordinates): Surface: x- 584,438.606 y- 5,150,957.081 Zone- 7 10. Total Depth (MD +TVD): 2413 16. Property Designation: NANA Regional Corporation TPI: x- N/A y- Zone- Total Depth: x- 584,438.606 y-5,150,957,081 Zone- 7 11. Depth Where SSSV Set: N/A 17. Land Use Permit: NANA Agreement 18. Directional Survey: Yes No ~ 19. Water Depth, if Offshore: N/A feet MSL 20. Thickness of Permafrost: Est. 640 ft 21. logs Run: None . 22. CASING, LI NER AND CEMENTING RECORD CASING WT. PER GRADE SETTING DEPTH MD SETTING DEPTH TVD AMOUNT FT TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD PULLED 13 3/8 61 J-55 Surface 85' Surface 85' ~ 18" 25 sx permafrost None 8 5/8 24 J-55 Surface 702' Surface 702' 12 1/4" 435 sx permafrost None 23. Perforations open t o Produc tion (MD +TVD of Top and Bottom 24. TUBING RECORD Interval, Size and Number; if none, state "none"): SIZE DEPTH SET (MD) PACKER SET (MD) None None 25. ACID, FRACTURE, CEMENT SQUEEZE, ETC. DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED None 26. PRODUCTION TEST Date First Production: No Test Method of Operation (Flowing, gas lift, etc.): Date of Test: Hours Tested: Production for Test Period Oil-Bbl: Gas-MCF: Water-Bbl: Choke Size: Gas-Oil Ratio: Flow Tubing Press. Casing Press: Calculated 24-Hour Rate ~ Oil-Bbl: Gas-MCF: Water-Bbl: Oil Gravity -API (corr): 27. CORE DATA Brief description of lithology, porosity, fractures, apparent dips and presence of oil, gas or water (attach separate sheet, if necessary). Submit core chips; if none, state "none". Fractured shale with limestone stringers, Surface to TD ~~~. G ~'? ~ . 206 Form 10-407 Revised 12/2003' ; ~ ~ ~ ~ ~ (~r~NTINUED ON REVERSE d,~n'~-~ ~,-- ®'~'~ lit (v L +~ ,"' = l t~r~ __ __ GEOLOGIC MARKE 29. ORMATION TESTS NAME TVD Include and briefly su ize test results. List intervals tested, and attach Kivalina Unit of Kuna formation Surface to 2413 ft Surface to 2413 ft ~ detailed supporting data as necessary. If no tests were conducted, state "None". None 30. List of Attachments: Well History, cuttings descriptions, location plat, well bore diagram 31. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Printed Name: R.C. Gardner Title: Sr. Technical Advisor for Teck Cominco Alaska Incorporated Signature: Phone: 907-258-3446 Date: 9/27/2006 i 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 1a: 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 elevation in feet above mean low low water. 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: True vertical thickness. Item 22: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 23: 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 26: Method of Operation: Flowing, Gas Lift, Rod Pump, Hydraulic Pump, Submersible, Water Injection, Gas Injection, Shut-in, or Other (explain). Item 27: If no cores taken, indicate "none". Item 29: List all test information. If none, state "None". Form 10-407 Revised 12/2003 • • ~~ Red Dog Shallow Gas Exploration Project: ~flI~~1J~flT~-I~~ ~'i'ell No: NB - 04 PTD: 206-091 API No: 50-073-20005-00 POST-Abandonment Condition Subsurface marker August 25, 2006 plate as per 20 AAC ~ x « , ,-. 25.120 ~ . ... r,+~ ~'~ ~"~ _ ' "F . 13 3/8" 61# J-55 conductor installed @ 85' MD Top of fish @ ' ~¢~ ` `; ~~`: r y 370'1VID -Also ~."~,r,~.~,~ approximate static Speer ~. h, ,.; 9 ~ ;~~ , ~.~~: water level ,~ °,. c,~~`~* 121/4" Hole Base of Permafrost @ 640' MD 8 5/8" 24# J-55 Surface Casing @ 702' MD Cement slue to 860'MD Cement Junk Drill pipe filled with primacord, wireline, and debris below 1085' MD Bit and BHA 4'/i" Drill pipe ~- 7 7/8" Hole partially collapsed below 1300' z~/ 3 ~~ Fairweather E&P Services, Inc. Rev. 1.0 7/24/2006 Drawin Not To Scale adh • • a Well History Teck Cominco Alaska Incorporated Well No. NB-04 PTD No. 206-091 API No. 50-073-20005-00 Date: Description 8/02/06 Complete conductor installation. Conductor set @ 85 ft BGL, and • cemented to surface through stab-in float shoe w/100 sx permafrost cement. 8/03/06 Wait on conductor cement. R/V Cyclone, Washington diverter line. Spudded well at 1700 hrs .8/03/06. Drilled 12 1/4" hole to 680 ft MD. 8/04/06 Drilled 12/14" hole to 702 ft MD. Rigged up to run 8 5/8" surface casing. Started casing run, but shut down to repair rig. Down 4 hrs for repairs. Completed running casing. Shoe at 702 ft. Cemented casing to surface with 435 sxs Cold Set II. 8/05/06 WOC. RIH and tagged cement at 683 ft. Drilled 7 ~/g" hole to 800 ft. Working on mechanical problems with booster compressor. 8/06/06 Drilled 7 ~/g" hole from 800 ft to 1300 ft. Took surveys at 500 ft (2.1 °), and 1000 ft (3.1 °). 8/07/06 Drilled 7 ~/$" hole from 1300 ft to 1610 ft. Took survey at 1500 ft (4.1 °). Water influx increased substantially through this interval to ' estimated 40 gpm. Formation severely fractured 1340-1483 ft (driller). Air pressure: off-bottom 240 psi, on-bottom 400psi. 8/08/06 Picked up to 1290 ft to ream through fractured section but couldn't break circulation. Worked pipe and got circulation back, reamed to 1610 ft. Drilled to 1613 ft but could no longer drill with hammer and Lift water. POOH to change to tricone. RIH to 1300 ft, hit bridge. Reamed down to 1450 ft, but could not circulate. Stuck pipe, but worked free after 4 hrs. Pulled up to 1260 ft, .Water influx up to 65 gpm. 8/09/06 Reamed back to 1613 ft and drilled new hole to 1759 ft, but water influx and unstable formation created high risk of getting stuck. Set 200sx Type I cement plug across problem zone through open- end dp. Pulled up to 650 ft and applied 4bb1 downsqueeze. No pressure build up. POOH and WOC. 8/10/06 RIH and tagged top of cement at 1400 ft. Drilled ahead through ratty cement and fractured formation to 1640 ft. Water influx at ~ 60-70 gpm. Rigged up to set second plug through problem zone. • • Washed open-end dp to 1620 ft and set 150 sx Type I cement plug with 2% CaCl2 and LCM. WOC 4 hrs. RIH and tagged top of cement at 1395 ft. 8/11/06 Drilled ahead to 1845 ft. Water influx increased to 80-85 gpm. ~ Can no longer drill with air unless water is controlled. POOH and rigged up to set third plug. With open-end dp at 1800 ft, pumped 12.4 bbl gel pill w/cotton seeds ahead, followed by 200 sx Type I cement plug. Displaced cement and pulled pipe dry. 8/12/06 WOC 6.5 hrs RIH and tagged top of cement at 1310 ft. Drilled cement and new formation to 2035 ft. Water influx reduced to 30 gpm. 8/13/06 Rig down 17 hrs due to break in main air line nipple on swivel. POOH to await repairs. RIH and found 30 ft fill on bottom. Drilled ahead to 2100 ft with water influx rate holding at 30 gpm 8/14/06 Drilled ahead 2100 ft to 2403 ft. Water influx 30-35 gpm. Hooked up booster. Broke circulation at TD. Increased pressure required to lift water from TD with static water level in hole blew top off cyclone. Down 6 hrs to repair cyclone. 8/15/06 Down 7.5 hrs to complete cyclone repairs. Staged TIH and drilled ahead 2403 ft to 2409 ft. Experiencing tight hole, increased water and cement in cuttings. TOH to change bit. Repaired washed out nipple on discharge line. TIH 8/16/06 Continued stage TIH. Tight hole at 1500 ft. Washed down 2283 ft to 2409 ft. Drilled ahead to 2413 ft, but hole conditions deteriorating rapidly. Large increase in water flow. Tried to POOH. Pulled 40 ft and became stuck. Tried to work pipe. Drill pipe separated 6 inched below the diverter. 8/17/06 Cut box off dp and welded onto dp stub below diverter. Tried to pump out of hole. Had circulation but DP would only move a few inches. Operator elected to sever dp at BHA with explosives. Waited on explosives crew from Red Dog mine. 8/18/06 RIH with primacord to sever dp at BHA. Detonated shot, but pipe not free. Tried to work pipe, but pipe separated at 350 ft. Unconfined primacord shot apparently junked dp. Waited on orders from operator and contractor. 8/19/06 RIH with overshot and engaged fish. Rigged up explosives for second shot, but could not get inside dp. Made up mill and dressed top offish. Re-engaged overshot. RIH with explosives to 900 ft. but could not get past obstruction. POOH. RIH with 215/16 tricone on B rods in attempt to clean out dp, but dp so badly damaged bit would not go inside pipe. 8/20/06 Continued with several attempts to clean out dp. Finally got necessary hardware to get inside of dp with tricone and B rods. Hit resttriction at 1020 ft: Tried to drill out restriction. Encounted high torque and stripped out of B rod sub.. Started to POOH, but lost B rods through dog collar. B rods dropped 12 feet. • • 8/21/06 Speared B rods and POOH. Re-dressed B rod string and RIH. Drilled on detonation cord and other junk. Tagged something very hard at 1085 ft (most likely junked dp). POOH with B rods. Decided to shoot off dp at 1085 ft. 8/22/06 RIH with explosive string, but could not get past 370 ft. POOH with explosives and tried cleanout run with B rods. Re-ran explosives to 1070 ft and fired shot. POOH with 370 ft of dp and overshot. Re-run overshot, but would not engage. RIH with spear and engaged fish. Pulled up to 23,00 lbs, and stripped spear out of sub. Lost spear. Waiting on orders. 8/23/06 Operator elected to P & A the well. Received AOGCC approval- ~' for P & A procedure to bullhead a permafrost cement plug from the surface to produce a competent plug from the surface to 150 ft below the shoe of the surface casing. Rigged up cementers. Filled lines and established rate to confirm that hole would take fluid. Mixed and pumped 337 sx cold set II plug from surface. Slurry volume sufficient to fill 700 ft of surface casing, plus 150 ft of 8" hole with 40% excess, and with no deduction for volume offish. WOC. 8/24/06 Mixed and pumped 57 sx cold set II top job to fill surface casing. WOC. Start fabrication of subsurface marker plate. 8/25/06 Added 1.8 bbls of cement slurry to top of cement in surface casing and surface casing/conductor annulus. Start rig down and move out at NB-04. 8/28/06 Install subsurface marker plate as per AOGCC regulations. P & A v of NB-04 complete. Gog sheet for Gas ~pCoration Program drilTcuttings North Basin Wells -Summer 2006 Orllling contractor: Major Drilling America, Inc. Well NO.: NB-O4 - Pepe of_ Sample Interval Lithology Color Particle Shape Mineralization White Constituents Comments (feet below surface) w ~ .SP ~ ~ g ~ a ~ - °' S r a r ~ ~ ~ -Oy ~ - _ ~ - = ° ,g' - ~ ~, 107-127 sHALE 50% 50% X X 1 X 127-147 SHALE 50% 50% X X t X 147-167 SHALE 100% X X t X 167-187 SHALE 100Yo X X 1 X 187-207 SHALE SO% 40% X X 1 X 207-227 SHALE 100% X X 1 X 227-247 SHALE 100% X X 1 X 247-267 sHALE 700% X X 3 X 267-287 SHALE 100% X X 3 X 287-307 SNALE SO % 40 % X X 1 X 307-327 SHALE 70% 30% X X 1 X 327-347 SHALE 80% 20°/. X X 2 X 347-367 SHALE 60% 20% X X 1 X 367-387 SHALE 50Ye 50Yo X X 3 X 387-407 SHALE 50% 50Y. X X 7 X 407-427 SHALE 80 % 20 % X X 1 X 427-447 SHALE 60% 20% X X t X 447-467 SHALE 50 % 50 % X X 3 X Gog sFieet for Gas ~ploration Program drill cuttings North Basin Wells -Summer 2006 Drilling eontrador: Major Drilling America, Inc. Well No.: NBA4 Papa of Sample Interval Lithology Color Particle Shape Mineralization White Constituents Comments (feet below surface) w ~ .~ $ ~ ~ ~ m _ ~ c ~ a ~ ~ - ~ ~, _ 3E .$' i4 { m ;u a 467-487 SHALE 80% 20% X X 1 X 487-507 SHALE 100% X X 1 X 507-527 SHALE BO•/. 20% X X 527-547 SHALE 100% X X 2 X 547-567 SHALE 100% X X 6 X 567-587 SHALE 60% 40% X X 1 X 587-607 SHALE 60% 40% X X 3 X 607-627 SHALE. Bo% 40% X X 3 X 627-647 SHALE 60% 40% X X 2 X 647-667 SHALE 80% 20% X X 2 X 667-687 SHALE 50% 50% X X 2 X 687-703 SHALE 80% 20 % X X 2 703-723 SHALE 100% X X One large iece of ve light gra Tuff 723-743 SHALE 80% 20% X X 1 X 743-763 SHALE 60% 40% X X 1 X 763-783 SHALE 80% 20% X X 3 X 783-803 SHALE 90% 10% X X 1 X 803-823 SHALE 60% 405 X X 2 X u Gog sheet for Gas ~pCoration Program Qriacuttlings North Basin Wells -Summer 2006 Drilling contrector: Major Drilling America, Ine. Well NO.: r46-o4 Page or_ Sample Interval Lithology Color Particle Sbape Mineralization White Constituents Comments (feet below surface) m ~ ~ ~ ~ i~ x ~ `v x s m ~ a ~ ~ i4 ~ ~ e, g S ~ r "~ ~ m 823-843 SHALE 50% 50% X X 2 X 843-863 SHALE 50% SoY. X X 863-883 SHALE 50% 50% X X S X 883-903 SILICEOUS SHALE 100% X X 20 X 903-923 40%SILCEOUS SHALE 100% X X 10 X BO%SHALE 100% X X 923-943 SHALE 100% X X 1 X 943-963 SHALE 100% X X X 1 X 963-983 SHALE 100% X X X 1 X 983-1003 SHALE 100% X X 5 X 1003-1023 SHALE 100% X X e X 1023-1043 LIMESTONE 100°/. X 8 X white specks give it a "salt 8 e r" ap arance 1043-1063 SHALE 50Y 50% X X 2 X 1063-1083 SHALE 100% X X X 1 X 1083-1103 SILICEOUS SHALE 100% X S X 1103-1123 SHALE 100% X X 1123-1143. ae%SILICEOUS SHALE 100% X 10 X 20%SHALE 100°h X X • • Gog skeet for C~as ~pCoration Program rfiill'cuttings North Basin Wells -Summer 2008 Drilling Contractor: Major Drilling Amerite, Int. Well NO.: NBA4 vae• of_ Sample Interval Lithology Color Particle Shape Mineralization White Constituents Comments (feet below surface) ~ ~ ~ ~ m '~` _ °1 r s ~ ~ ~ ~ ~ 1' ~ s ~ m ~ rv ~ 1143-1163 LIMESTONE 100% X 10 X White specks ive it a salt and ep r a pearance 1163-1183 SHALE 100% X X 1183-1203 sHALE 100% X X 7203-1223 40%LIMESTONE 100% X a X Salt and pepper a pearance 60x SHALE 100 % X X 1223-1243 50YoLIMESTONE 100% X a X Salt and epperappearance 5Dx SHALE 100% X X 1243-1263 SHALE 50% 50% X X 2 X 1263-1283 SHALE 50% 50% X X 1 X 1283-1303 SHALE 50% 50% X X 1303-1323 SHALE 70% SO% X X 2 X 1323-1343 SHALE 70% SO% X X 1 X 1343-1363 SHALE 60% 40% X X S X 1363-1383 SHALE 50% 40% X X 1 X 1383-1403 SHALE 50°k 40% X X 1403-1423 eoxsHALE 100^/ X X 1 X 20x LIMESTONE 100% X • Gog skeet for Gas ~ploration fFrogram drilCcuttings North Basin Wells -Summer 2006 Drilling contractor. Major Drilling America, Inc. Well No.: NB-04 0 Page of_ Sample Interval Lithology Color Particle Shape Mineralization White Constituents Comments (feet below surface) Ern ~ ~ ~ LL a m Y ~ ~ ~ Y a >, ~ ~ w ~ m >. ~ ~ ~ ~ ~ m 1423-43 w%LIMESTONE 100% X 20 X Salt and eppera pearance 50%SHALE 100% X X 1443-1463 80%LIMESTONE 100% X E X Salt and a era arance 40%SHALE 100% X X 1463-1483 sHALE 100% X X S X 1483-1503 SHALE 100% X X X 3 X 1503-1523 SHALE 50% 50% X X S X 1523-1543 SHALE 50% 50% X X 6 X 1543-1563 SHALE 50 % 50 % X X 6 X 1563-1583 SHALE 40% 60% X X X 6 X Cavings aslarge 50 mm 1583-1603 SHALE 40% 60% X X X 5 X 1603-1619 SHALE 50% 50% X X X 5 X 1619-1639 SHALE 50% 50% X X 5 X 1639-1659 SHALE 50Y. 50% X 5 X Cavin s as large as 20.30 mm 1659-1679 SHALE 100% x 5 x Cavin s aslarge as 20-30 mm 1679-1699 SHALE 50% 50% X X 5 X Cavings aslarge as 20-30 mm 1699-1719 SHALE 50% 50% X X 5 X Cavings aslarge as 20-30 mm 1719-1739 SHALE 50% 50% X S X Cavings as large as 20-30 mm Log skeet for Gas ~pCoration ~Piogram drill cuttings North Basin Welis -Summer 2006 Drilling coMroctor: MaJor Drilling America, Inc. Well No.: NB-04 Ppe of _ Sample Interval Lithology Color Particle Shape Mineralization White Constituents Comments (feet below surface) m a .~ ~ ~ ~ T w m _ v S ~ 4 _ ~ ~ ~ - g $ ~ ~q_ ~ 1739-1759 SHALE 50% 50% X X 5 X 1759-1763 MISSING fN7ERVAL 1763-1783 SHALE 50% 50% X X 5 X Cavings up to 20 mm 1783-1803 SHALE so% 70% X X X 6 X Cavin s up to 40 mm 1803-1823 SHALE SO% 70% X X 2 X Cavings up to 30 mm. 1823-1843 SHALE 50% 50% X X 2 X Cavin sup to 30 mm. 1843-1863 SHALE 40% 60% x x 1 x 1863-1883 SHALE SO% 70% x x 6 x 1883-1903 SHALE 50% 50% x x x 2 x 1903-1923 SHALE 50% 50% x x 5 x GAS IN SAMPLE BAG 1923-1943 SHALE 40% 60% X X 5 X GAS IN SAMPLE BAG 1943-1963 SHALE 60% 4D% X X 1 X GAS IN SAMPLE BAG 1963-1983 SHALE 100% X X X 2 X 1983-2003 SHALE 50% 5D% X X 2 X GAS IN SAMPLE BAG 2003-2023 SHALE 5D% 50% X X 7 X GAS IN SAMPLE BAG 2023-2043 SHALE 50% 50% X X 4 X 2043-2063 SHALE 50% 50% X 4 X GAS IN SAMPLE BAG 2063-2083 SHALE 50% 50% X X S X • Gog skeet for has ~aKpCoration Program Qrill cuttings North Basin Wells -Summer 2006 Drilling eontraMOr: Major Drilling America, Inc. Well No.: NB-04 07 Pepe or_ Sample Interval Lithology Color Particle Shape Mineralization White Constituents Comments (feet below surface) a p LT^ ~ ~ ~ m _ ~ 5 Y c ~' m m ~ ~ i$ ~ ~ _ ~ ~ _ ~ m 2083-2103 SHALE 100% X X 4 X GAS IN SAMPLE BAG 2103-2123 SHALE 30% 70% X X t X GAS IN SAMPLE BAG 2123-2143 SHALE 50% 50% X X 2143-2163 .SHALE 70Y. 30% X X 2163-2183 sHALE 5oY. 50% X X 4 X GAS IN SAMPLE BAG 2183-2203 SHALE 30% 70Y. X X 2 X GAS IN SAMPLE BAG 2203-2223 SHALE 100•h X X 1 X GAS IN SAMPLE BAG 2223-2243 SHALE 100% X X 1 X 2243-2263 SHALE 100% X 5 X 2263-2283 SHALE 100% X X 1 X 2283-2303 SHALE 70% 30% X X 1 X GAS IN SAMPLE BAG 2303-2323 sHALE 70% 30% X X 1 X 2323-2343 SHALE 50% 50% X X 2343-2363 SHALE 50% 50 % X X GAS IN SAMPLE BAG 2363-2383 SHALE 50% 50Ye X X GAS IN SAMPLE BAG 2383-2403 SHALE 70°~ 30% X X 1 X GAS IN SAMPLE BAG ~" FRANK H. MURKOWSKI, GOVERNOR 333 W. 7'" AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 R.C. Gardner Sr. Technical Advisor Teck Cominco Alaska Incorporated 3105 Lakeshore Dr Bldg A Ste 101 Anchorage, AK 99517 Re: Exploratory Wildcat, NB-04 Sundry Number: 306-291 Dear Mr. Gardner: 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. When providing notice for a representative of the Commission to witness any required test, contact the Commission's petroleum field inspector at (907) 659-3607 (pager) . 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 rehearing. A request for rehearing 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. A person may not appeal a Commission decision to Superior Court unless rehearing has been requested. Sincerely, Daniel T. Seamount, Jr. Commission DATED this Zb day of August, 2006 Encl. ~p~ - pal E & P SERVICES, LLC • :7 DECEIVED A,fJr ~ 4 ?006 August 23, 2006 Alaska Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 Attention: Tom Maunder, P.E. Alaska Oil & uas Cons. Commission Anchorage Re: Application for Sundry Approvals: P & A of Teck Cominco Alaska Incorporated, Well No. NB-04 (PTD 206-091) Dear Mr. Maunder: The above referenced Application for Sundry Approvals is attached in duplicate. I appreciate you and Steve Davies taking the time to discuss this matter with me earlier today. Thank you for your consideration of this application. Sincer _r~ __ .C. Gardner for Teck Cominco Alaska Incorporated cc: Jerry Booth, Teck Cominco Alaska Incorporated Attachments 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • (907) 279-5740 ~-7~ /~ REC~I~I~~ ~~/ - ~~ ~ STATE OF ALASKA `''-~ S ' Z ~'~~' ~y, ALA IL AND GAS CONSERVATION COM I ~~ r ON ~~ ~-l A!~-.~ 2 4 2006 APPLICATION FOR SUNDRY APPROVALS Ataska ii & Gas Cans. Commission 20 AAC 25.280 1. Type of Request: Abandon Q * Suspend ^ Operational shutdown ^ Perforate ^ Waiver ^ fIC OCB~B Other ^ Alter casing ^ Repair well ^ Plug Perforations ^ Stimulate ^ Time Extension ^ Change approved program ^ Pull Tubing ^ Perforate New Pool ^ Re-enter Suspended Well ^ 2. Operator Name: 4. Current Well Class: 5. Permit to Drill Number: Teck Cominco Alaska Incorporated Development ^ Exploratory ^ . 206-091 • 3. Address: Stratigraphic ^ Service ^ 6. API Number: 3105 Lakeshore Dr Bldg A Ste 101 Anch, AK 99517 50-073-20005-00 . 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 ^ N/A NB-04 9. Property Designation: 10. KB Elevation (ft): 11. Field/Pool(s): NANA Regional Corporation' 890 ft Explorato • 12. PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth TVD (ft): Plugs (measured): Junk (measured): 2409 2409 370 370 None 370-2409 Casing Length Size MD TVD Burst Collapse Structural Conductor 85 13 3/8 85 85 Surface 702 8 5/8 702 702 2950 1370 Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): None None None N/A N/A Packers and SSSV Type: None Packers and SSSV MD (ft): None 13. Attachments: Description Summary of Proposal ~ 14. Well Class after proposed work: Detailed Operations Program Q BOP Sketch ^ Exploratory Q Development ^ Service ^ 15. Estimated Date for 24-Aug-06 16. Well Status after proposed work: Commencing Operations: Oil ^ Gas ^ Plugged ^ Abandoned 17. Verbal Approval: Date: 23-Aug-06 WAG ^ GINJ ^ WINJ ^ WDSPL ^ Commission Representative: Tom Maunder, P.E. 18. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Printed Name R.C.Gardner Title Sr. Technical Advisor Signature Phone (907) 258-3446 Date 23-Aug-06 • COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: ~O ~ Plug Integrity ^ BOP Test ^ Mec hanical Integrity Test ^ Location Clearance '~ -` ~ ~ Other. W~c V~W~~~~ CC7'T C7C'r ~ 4~ ~ \~ Y,~ 'tt3-Y 4~. p~\O~ `~' ~~~~'~~ ~`~~~CJI ~~.~~- v~~S~ ~ ~ ~ `y~~ ~ G.~~~~5' ` 1 RS~41S ~F~, ~u~ ~ Zoos Subsequent Form Required: ~®~""~ APPROVED BY Approved by: .c';~A~?~SN1)NER THE COMMISSION Date: ~~ ..~ p 2 fC.oG Form 10-403 Revised 06/2006 Submit in Dup alit t%~~~1~ n ~-~ A~ ~' • • Teck Cominco Alaska Incorporated Background and Summary of Proposed Work Well No. NB-04 (PTD 206-091) Back ound Well No. NB-04 was drilled as a shale gas exploration well. The well was drilled with air, as the geological prognosis predicted water influx rates well within air drilling parameters. Unfortunately the well encountered water influx rates up to seven (7) times the predicted levels. These water flows came from zones of brecciated rocks up to 200 ft in thickness. These zones are totally unconsolidated, and are associated with low angle thrust faults. These two conditions (unconsolidated formation and high water flows) resulted in the drill string becoming stuck at 2409 ft M.D. Efforts to free the stuck pipe failed, and the decision was made to sever the pipe above the BHA with explosives. This effort failed, resulting in a junked drill string. The drill pipe was ultimately recovered down to 370 ft, and junked primacord and wire line were cleaned out of the drill string to 1085 ft using "B" drill rod and a small tricone bit. A second attempt was then made to explosively sever the drill pipe at 1085 ft which again failed to separate the pipe, but did result in further damage to the pipe such that an overshot could no longer be engaged. Attempts to engage the pipe with a spear resulted in a failure of the threads on the spear and a loss of the tool. At this point it was clear that the hole was totally junked and would have to be abandoned. The pre- abandonment condition of the well is shown on the attached wellbore schematic. Summary of Proposed Work It is proposed to bullhead a permafrost cement plug from the surface to produce a competent plug extending from the surface to a minimum of 150 ft below the shoe of the surface casing, which is at 702 ft. It is recognized that due to unknown conditions below the shoe, it may take more than one attempt to place this plug. The proposed post- abandonment condition of the well is shown on the attached wellbore schematic. Fairweather E&P Services, Inc. Rev. 1.0 7/24/2006 Drawin Not To Scale adh • • Teck Cominco Alaska Incorporated Operations Program P & A of Well No. NB-04 (PTD 206-091) 1. Insta118 5/8" x 2" (5000 psi wp) circulating swedge and valve on surface pipe. Rig up cementers. Pump 2 bbls water to fill lines, and test lines to 3000 psi. Establish injection rate with water. Pump until pressure is seen, verifying that hole is full and formation will take fluid. 8 5/8" 24# casing burst at 80% is 2360 psi. Do not exceed 2000 psi max) 2. Mix and pump 337 sks Cold Set II cement. 14.95 ppg, .961 cuft/sk, 3.89 gal water/sk, Est 3:30 pumping time. Total slurry = 57.6387 bbls, Total water = 31.19 bbls (Volume of cement equals to 700 ft, of 8 5/8 24# casing, plus 150 ft 8" hole with 40% excess in open hole. Do not deduct volume offish) ~~~ ~~ ~ °~ hh~ S ~'~~ ~( ~~ 3. Bleed off any pressure, close valve on swedge and knock line loose. Wash up into cellar. Suck out cellar. Remove swedge and WOC. 6 hrs. 4. Check for top of cement with wireline, if necessary. Repeat above procedure, if required, or do a top job to bring cement to top of surface casing. 5. When plug has adequate integrity, cut off surface casing 4 feet below original ground surface and install subsurface marker plate as per 20 AAC 25.120. ~ ~~) t ri 3 ~ i ' ~ '~ ` f V _~ A ~! a -'~ ~ j , 4 ' ~ ~ ~ ,j ~ 1 ~~ h ~ g(~ ~ ~ ~ ~' `_. ' ~ "''~ ~ , „~ '~ ~ '"~ ~~ FRANK H. MURKOWSKI, pOVERNOR l /~ ~-~-t7r~~a~T ~~ ~ ~ ;:' 333 W. 7'" AVENUE, SUITE 100 C~~TSER~~il~l` C0~'IIssj~~ ~ ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 R.C. Gardner Sr. Technical Advisor Teck Cominco Alaska Incorporated 3105 Lakeshore Dr. Bldg A, Ste 101 Anchorage, AK 99517 Re: Exploratory Well NB-04 Teck Cominco Alaska Incorporated v ,dr Permit No: 206-091 ~j ~a'~' Surface Location: 1100' FWL, 3770' F , SFC. 17, T31 N, R 18W, KRM Bottomhole Location: 1100' FWL, 37 0' F ,SEC. 17, T31N, R18W, KRM .` hDs,of. Dear Mr. Gardner: Enclosed is the approved application for permit to drill the above referenced exploration 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. In the application, reference is made to the waiver of four Commission requirements granted for the NB-Ol and NB-02 wells drilled in 2005. The waivers are applicable for NB-04. A weekly status report is required from the time the well is spudded until it is suspended or plugged and abandoned. The report should be a generalized synopsis of the week's activities and is exclusively for the Commission's internal use. The permit is approved subject to full compliance with 20 AAC 25.055. Approval to perforate, test and produce is contingent upon issuance of a conservation order approving a spacing exception. Teck Cominco Alaska Inc. assumes the liability of any protest to the spacing exception that may occur. Please note the following special condition of this permit: production or production testing of coal bed methane is not allowed for NB-04. Teck Cominco NB-04 Permit No: 206-091 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. When providing notice for a representative of the Commission to witness any required test, contact the Commission's petroleum field inspector at (907} 659-3607 (pager). DATED this day of July, 2006 cc: Department of Fish 8v Game, Habitat Section w/ o encl. Department of Environmental Conservation w/ o encl. E& PSERV/CES, INC. ~~~~ June 14, 2006 JUN ~ 7 zaaa Alaska i~it & Gas Cans. ~nmmission Alaska Oil rand Gas Conservation Commission ,_ Anchorage 333 West 7 Avenue, Suite 200 Anchorage, AK 99501 Attention: John Norman, Chairman Re: Application for Permit to Drill: Teck Cominco Alaska Incorporated, Red Dog Shale Gas Exploration Well No. NB-04 Gentlemen: Teck Cominco Alaska Incorporated (Teck Cominco) submits herewith the above referenced Application for Permit to Drill (APD) in duplicate, and the requisite filing fee. Well No. NB-04 is the fourth well in a five-spot pattern of exploration wells which will test the potential of the Kivalina formation to produce natural gas. If commerciality can be demonstrated, the ultimate objective will be to develop this resource as fuel for power generation at the Red Dog mine. The first two wells in the five-spot pattern (wells No. NB-O1 and NB-02) were drilled in 2005 without incident. It is proposed that Well No. NB-04 adhere to the same basic drilling program that was used in the previous wells. Air will be used as the circulating medium, and a downhole hammer will be utilized. The attached drilling program requires the following waivers from the AOGCC: AAC 25.033(b) -requiring drilling fluid of sufficient density for over-balance AAC 25.035 -blowout prevention equipment requirements AAC 25.061(a) -Requiring seismic surveys of near surface strata. 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • FAX (907) 279-5740 650 North Sam Houston Parkway East, Suite 505 • Houston, Texas 77060 • (281) 445-5711 • FAX (281) 445-3388 r~ ~ • When APD's were submitted for well No. NB-O1 and NB-02 in 2005, AOGCC staff requested clarifications on a number of issues relating to our proposed drilling approach, and the waivers of certain regulations that were requested. Since Well NB-04 is identical to the previous wells in geometry and drilling procedures, it is hoped that our responses to the questions submitted by Commission staff last year will prove adequate to support the current APD. A copy of our responses (letter to Mr. Tom Maunder, P.E., dated July 5, 2005) is also attached. Well NB-04 will require a spacing exemption due to the proximity of wells No. NB-O1, NB-02 and NB-03 within the five-spot pattern. The rational for the requested exemption is enclosed with the submitted documents. Thank you for your consideration of this application. If you have questions, please contact the undersigned at (907) 258-3446, or by email at bob@fairweather.com. Sincer y, R ` . Gardner Sr. Technical Advisor for Teck Cominco Alaska Incorporated Enclosures ~ElVEL STATE OF ALASKA JUN 2 7 2006 ALA OIL AND GAS CONSERVATION COM N PERMIT TO DRILL Alask ' ~ 01! & Gas Cons. Corr>rnission 20 AAC 25.005 ~ x __L _ 1a. Type of Work:. Drill Q Redrill ^ Re-entry ^ 1 b. Current Well Class: Exploratory 0 Development Oil ^ Stratigraphic Test ^ Service ^ Development Gas ^ Multiple Zone ^ Single Zone ^ 1 c. Specify if well is proposed for: Coalbed Methane ^ Gas Hydrates ^ Shale Gas 2. Operator Name: Teck Cominco Alaska Incorporated 5. Bond: Blanket 0 Single Well ^ Bond No. 6218218 11. Well Name and Number: NB-04 3. Address: 3105 Lakeshore Dr,BIdgA,Ste101 Anch.,AK 99517 6. Proposed Depth: MD: 3000ft ~ TVD: 3000ft 12. Field/Pool(s): Exploratory 4a. Location of Well (Governmental Section): Surface: ~ 1100ft.EWL,3770ft.NSL.Sec17,T.31N;R.18W;KRM- 7. Property Designation: NANA Regional Corporation Top of Productive Horizon: As Above 8. Land Use Permit: NANA A reement 13. Approximate Spud Date: Total Depth: As Above 9. Acres in Property: 66000 14. Distance to Nearest Property: 6380ft 4b. Location of Well (State Base Plane Coordinates): Surface: x- 584455 y- 5,150,954 ~ Zoe 7 10. KB Elevation (Height above GL): 890 feet 15. Distance to Nearest Well Within Pool: 1199 ft 16. Deviated wells: Kickoff depth: N/A feet Maximum Hole Angle: N/A degrees 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) Downhole: 560 Surface: 1 10 18. Casing Program: Specifications Top -Setting Depth -Bottom Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Length MD TVD MD TVD (including stage data) 18" 13 3/8 61# J-55 ST&C 75' Surface Surface 75' 75' 25 sx Permafrost 12 1/4" 8 5/8 24# J-55 ST&C 700' Surface Surface 700' 700' 493 sx Permafrost 7 7/8" 5 1/2 15.5# K-55 LT&C 3000' Surface Surface 3000' 3000' 178 sx Permafrost plus 305 sx Type 1 19. PRESENT WELL CONDITION SUMMARY (To be completed for Redrill and Re-Entry Operations) Total Depth MD (ft): Total Depth TVD (ft): Plugs (measured): Effect. Depth MD (ft): Effect. Depth TVD (ft): Junk (measured): Casing Length Size Cement Volume MD TVD Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): 20. Attachments: Filing Fee 0 BOP Sketch ~ Drilling Program 0 Time v. Depth Plot ^ Shallow Hazard Analysis ^ Property Plat Q Diverter Sketch 0 Seabed Report ^ Drilling Fluid Program ^ 20 AAC 25.050 requirements ^ 21. Verbal Approval: Commission Representative: Date 20-Jun-06 22. I hereby certify that the foregoing is true and correct. Contact R. C. Gardner Printed Name R.C. Gardner Title Sr. Technical Advisor Signature - Phone (907) 258-3446 Date 12-Jun-06 Commission Use Only Permit to Drill T/ Number: ~~-r(o '~~ ~ API Number: 50- U7~ '" L~~S~rn Permit Approval Date: See cover letter for other requirements. Conditions of approval : If box is checked, wel/l may not be used toe lore fo1r test,/or produce coalbed methane, gas hydrates, or gas contained in shales: ^ Other: ~~tJ~ c~-~-y~, 7~~ •~~~r'~'~~~~ 7 ~¢T Samples req'd: Yes^ No[~ Mud log req'd: Yes^ No[~ ~~ °°~,~ ~~~~ ~~y.~~~ ~+ H2S measures: Yes^ No[d]' Directional svy req~d: Yes^ No APPROVED BY THE COMMISSION DATE: ~'~~~ O ,COMMISSIONER v ~---- Form 10-401 Revised 12/2005 Submit in Duplicate QRIGI~AL ~~Z~°6 ~i Red Dog Shallow Shale Gas Project Background and Operations Summary Teck Cominco Alaska Incorporated (Teck Cominco) plans to drill three (3) additional shallow shale gas exploration wells (wells No. NB-03, NB-04 and NB-OS) in the North Basin area, north of the Red Dog zinc mine in northwestern Alaska during the 2006 summer season. These wells will complete a five spot pattern of wells designed to evaluate the potential for natural gas production from the organic-rich shales of the Kivalina formation. The concept of de-sorbing natural gas from the formation was developed by Advanced Resources International, under contract to Teck Cominco, following extensive analyses of Kivalina cores taken from numerous mineral exploration borings across the North Basin area. If commercial gas production can be established, the environmental and economic benefits gained through the development of the resources would be significant, as Red Dog mine operations currently consume approximately 18,000,000 gallons of diesel fuel annually. The first phase of this exploration project was accomplished in 2005 with the drilling and completion of the first two (2) wells in the five-spot pattern (wells No. NB-O1 and NB- 02). These wells demonstrated encouraging, but inconsistent results, as dewatering operations were pre-maturely suspended due to the on-set of winter conditions. Teck Cominco had elected to complete the five-spot pattern in 2006, and provisions have been made to continuously dewater and flow test all five wells simultaneously through the winter 2006-2007 season. It is believed that this extended test period will adequately evaluate the feasibility of the desorbtion process. The attached map shows the locations of the wells in the five-spot pattern. ~~ Red Dog Mine Shallow Gas Testing Program 2005 North Basin Access Roads 2005 Proposed Gas Testing Well Sites 20051nitial Test Well Sites Follow-up Test Well Sites 2005 Proposed Access Road Alignments N2005 Proposed Alignment ~Follow•up Program Alignment /~~I2004 Proposed Road Alignment 300ft Creek Set-back Buffer 182005-Gas-Test-Plan. apr 9 November 2004 .~ .. 1, u Section 18 T 31N R18 W NB-04 NB-01 2005 Existing GasEx Roads Dog _ Roads 500 0 500 1000 1500 2000 Feet NB-05 -02 2006 Planned GasEx Roads Section 17 T 31N R 18 W NB-03 ~r a 1i ~. ~,~ ~~~ NB-03 NB-04 NB-05 Alaska State Plane Eacting 584,985 584,455 583,287 NAD27,AkZone7 Northing 5,149,029 5,150,954 5,148,312 Lat/Long W Longitude 162.84135 162,84543 162.85370 Decimal Degrees N Latitude 68.08378 68.08902 68.08176 UTM Easting 589,904 588,714 589,388 1927 UTM Zone 3 Northing 7,553,594 7,554,172 7,553,351 NB-03 1,655 feet East of West Line Sect 17 1,855 feet North of South Line NB-04 1,100 feet East of West Line Sect 17 3,770 feet North of South Line NB-05 35 feet West of East Line Sect 18 1,110 feet North of South Line TeckCominco Red Dog Mine Shale Gas Project Planned 2006 Well Locations Date: 14Apr112008 By: KTurner • • Red Dog Shallow Gas Exploration Project: Hole Geometry j~l~l I II~T~~~ Well No: NB - 04 13 3/8" 61# K-55 conductor installed @ 75' MD 12 1/4" Hole Base of Permafrost @ 640' MD 8 5/8" 24# K-55 Surface Casing @ 700' MD Cement ~ 7 7/8" Hole Perforated Intervals to be determined from open-hole logs. NOTE: Exact depths and set w~, rP points to be determined when ~ ,~; • ~; ~ 5 %z", 15.5# J-55 Production Casing @ drilled and casing tallied ~~ :;~ ~ 3000' MD & TVD ' Fairweather E&P Services, Inc. Rev. 1.0 6/19/2006 Drawing Not To Scale bjb a~ o~ o~ 0 N 1 _ 1 _ W O t~ ~ ~ ~ O ~ O O v Z ~~ O !) j z ~ :_ ~ ~ ~ o~rv~~~ o ~ F-- a~ d- ~ ao O~N~~oO ~ ~ ~ ~ ~ ~ II C O r z I I ~~ ~ ~ ~~ X ~ w J J Q M O i 2 ~ o m Z ~~ o«E o o o O 2 t Z ~ ~ ~ ~ V ~ = 1 Q w C ~ ° ~ = ~ a ~ oZ N z D O S J C Cn M ~ O C~ ~Z ~ ~ ~ ~ ~ ~ ~ ~ ~ v ~ a • • Teck Cominco Alaska Incorporated Summary Drilling Program Exploration Well No. NB-04 Surface Location: 1100ft. EWL, 3770ft. NSL, Sec. 17, T.31N., R. 18W., KRM x = 584,455ft., y = 5,150,954ft ASPC Zone 7 Synopsis: This well will be drilled to a total measured depth of 3000ft. to test selected zones in the Kivalina formation for natural gas. The well is programmed as straight hole. The drilling contractor is Major Drilling America, Inc, of Salt Lake City, Utah. A Schramm T130XD rig will be used on this well. Drilling Fluid: This well will be drilled with air using a downhole hammer. Drilling Hazards: No abnormal pressures or other drilling hazards are anticipated. Wells No. NB-O1 and NB-02, drilled in 2005, and located 2204ft northwest, and 1199ft southwest respectively, penetrated the same Kivalina formation interval that will be encountered in the NB-04 well. The wells were drilled without incident, and the same drilling procedures as are proposed for the NB-04 well were employed. Completion reports and logs for the NB-O1 and NB-02 wells are on file with AOGCC. Casing Program: Conductor: A 13 3/8" conductor will bepre-set at 75' in an 18" hole before the start of drilling. The conductor will be cemented to the surface. Surface Casing: Hole size -12 1/4"; Casing - 8 5/8" 24# J-55, ST+C; Depth - 700' (Base of permafrost @ ~ 640' MD); Collapse: 1370psi; Burst: 2950psi Cement: 493sx Coldset II Production Casing: Hole size - 7 7/8"; Casing 5 %2", 15.5#, K-55, LT+C; Depth 3000' to surface; Collapse: 4040psi; Burst 4810psi; Cement: Lead - 178sx Coldset III, Tail - 305sx Type I Cementing Program: See Attached • • Well Control: Since this well is being drilled with air, a Washington Series 2000 Rotating Control Head (Diverter) will be used from surface to TD. See attached data sheet. Shallow Gas: Shallow gas as considered in 20AAC 25.061 (a) is not a factor in this well, as evidenced by numerous core hole penetrations in the North Basin drilled as part of an extensive mineral exploration program in the area, and by the drilling of Wells No. NB-O1 and NB-02. The North Basin is not a typical petroleum province, in that the Kivalina formation overlies a mineralized zone. The gas that is the target of the well is absorbed within a dense shale body of extremely low porosity and permeability and will at a minimum require extensive hydraulic fracturing to liberate. Drill Cuttings and Water Disposal: Waste water from drilling operations, fracturing, and production testing will be disposed of in the Red Dog Mine tailings pond. Approval for this disposal was granted by the EPA by letter dated October 27, 2004. Since this well will be drilled with air, and no drilling mud is involved, drill cuttings are basically uncontaminated rock fragments. This material will be trucked to the Red Dog solid waste disposal site. genes wv - xotating control treads (lop llrrve Kigs) ~>`I'IR ID~~ I . 1, ~..~ '~ -t1~"w 9.tl~r~ra ~r Rutrt+ ; yeas , 3~~ JS.y~rtrs SACK T® PRODUCTS Page 1 of 1 SERIES 2000 ROTATING CONTROL HEADS (Top Drive Rigs) The Washington Series 2000 is a low profile rotating control head designed for "top-drive rigs" or "work-over rigs." ( The frictional engagement betweer the drill string and stripper rubber rotates the control head with the drill string, sealing off the well bore tr.. continuously, while diverting all cuttings and debris. This unit is designed to be used with our Part #2010 Stripper Rubbers, and can seal off from 2" to 5" drill steel. Whether you are drilling gas, oil, o geothermal wells, Washington Rotating can accommodate all you diverter needs. Call or send us your inquiry for pricing. NON-ROTATING CONTROL HEADS ROTATING CONTROL HEADS BOWL SIZE FLANGE HEIGHT BODY BORE 3IZEL FLANGE HEIGHT BORE B E 7-1/16" 6"- 900 17-3/4" 7-1/16" 7-1/16" 6" - 900 26" 7-1/16" ORE 5-5/8" x- 8" 8"- 400 17-1/2" 8" 8" 8" - 400 25-3 4" C~ 5-5/8" 11" 10"- 400 17-1/2" 11-1/8" 11" 10" - 400 23-1/2" 11-1/8" 5-5/8" 11" 10" - 900 15-1/2" 11-1/8" il" 10" - 900 23/3/4" 11-1/8" 5-5/8" ----- ----- ~~~ 14.. 1Z" - 900 22" 14" 5-5/8.. WE CAN MANUFACTURE ANY SIZE BOWL TO MEET YOUR SPECIFIC NEEDS [HOME] [ABOUT US] [OUR PRODUCTS] [CONTACTIN US] [SEND US YOUR IN UIRY] [ V NTS] http://www.washingtonrotating. com/2000.htm1 4/25/2005 f• r3 I~7 .~ • ~ ~~ Proposal No:179551206C Teck Cominco Alaska Incorporat North Basin No. 4 Red Dog Mine Field De Long Mts County, Alaska March 15, 2006 Well Recommendation Prepared for: Bob Gardner Project Manager Fairweather E & P Services, Inc. Prepared by: Dave Susko Region Engineer Bakersfield, California Bus Phone: 661-396-4446 Mobile: 661-201-0873 POWERVISION~ P41VE:RPRO • I~QW~R~I'R:1X • POi~`RRLI;VK Service Point: Service Representatives: Kenai, AK Rod Edwards Bus Phone: (907) 776-4084 Account Manager {907) 659-2329 Kenai, Alaska Fax: (907) 776-4087 Bus Phone: 907-349-6518 Mobile: 907-229-6536 ~,~ • Operator Name: Teck Cominco'~a Incorporat =~ ~ Well Name: North Basin No. Job Description: Surface Casing Date: March 15, 2006 Proposal No: 1795512060 JOB AT A GLANCE Depth (TVD) 700 ft Deplih (MD) 700 ft Hole Size 12.25 in Casing SizeMleight : 8 5/8 in, 24 Ibs/ft Pump ~a 8 5/8" O.D. (8.097" .I.D) 24 Total Mix Water Required 2,035 gals Spacer Fresh Water Spacer 15 bbls Density 8.3 ppg Cement Slurry CS II 493 sacks Density 15.0 ppg `Meld 1.02 cf/sack Displacement Displacement 39 bbls Density 8.6 ppg Report Printed ort: March 15, 2006 7:19 PM Page 1 Gr4109 Operator Name: Teck Cominco ~a Incorporat Well Name: North Basin No. -. ~ Job Descrrptron: Surface Casrng ,~ Date: March 15, 2006 Proposal No: 1795512060 WELL DATA ANNULAR GEOMETRY SUSPENDED PIPES Float Collar set @ 620 ft Mud Density 8.60 ppg Mud Type Water Based Est. Static Temp. 32 ° F Est. Circ. T VOLUME CALCULATIONS 75 ft x 0.4622 cf/ft 625 ft x 0.4127 cf/ft 80 ft x 0.3576 cf/ft emp. with with with IOTA 40°F 0 % excess 34.7 cf 70 % excess = 438.5 cf 0 % excess = 28.6 cf (inside pipe) ,L SLURRY VOLUME = 501.8 cf = 89 bbls Report Printed on: March 15, 2006 t:i9 PM Page 2 a4„6 Operator Name: Teck Cominco t~a Incorporat ~~ . Well Name: North Basin No. 4 Job Description: Surface Casing Date: March 15, 2006 Proposal No: 1795512060 ~~~ FLUID SPECIFICATIONS Spacer 15.0 bbls Fresh Water Spacer cLD 8.34 ppg VOLUME VOLUME FLUID CU-FT FACTOR AMOUNT AND TYPE OF CEMENT Cement Slurry Displacement CEMENT PROPERTIES Slurry Weight (ppg) Slurry Yield (cf/sack) Amount of Mix Water (gps) 502 / 1.0 = 493 sacks Cold Set II 39.5 bbls Displacement @ 8.6 ppg SLURRY N0.1 14.95 1.02 4.13 1. Slurry performance to be confirmed through pilot blend testing at PRTC. Slight additive adjustments may be necessary. R~~ P~,~ed ~: anar~e ,s. zoos,:,s PM Page 3 ~`41`~ ' Operator Name: Teck Cominco ~ Incorporat ~ ~ Well Name: North Basin No. 4 Job Description: Production Casing Date: March 15, 2006 Proposal No: 1795512060 JOB AT A GLANCE Depth (TVD) 3,000 ft Deptl~ (MD) 3,000 ft Hole Size 7.875 in Casing SizeMleight : 5 1/2 in, 15.5 Ibs/ft Pump ~a 5 1/2" O.D. (4.950" .I.D) 15.5 Total Mix Water Required 3,701 gals Spacer MCS~D Spacer 30 bbls Density 9.5 PP9 1st Lead Slurry lead Cement 178 sacks Density 12.2 pP9 Yield 1.64 cf/sack 1st Tail Slurry ~', ~~ /' Tail Cement 305 sacks' ~ Density 14.5 g Yield .48 cf/sack Displacement Displacement 70 bbls Report Ported on: March 75.20061:79 PM Page 6 0x4109 Operator Name: Teck Cominco;~a Incorporat ;~ Well Name: North Basin No. Y ~ Job Description: Rroducfion Casing Date: March 15, 2006 Proposal No: 1795512060 WELL DATA ANNULAR GEOMETRY ANNULAR I.D. DEP (in) MEASURED TRUE VERTICAL 8.097 CASING ~ 700 ~ 700 7.875 HOLE 3,000 3,000 SUSPENDED PIPES Float Collar set ~ 2,920 ft Mud Densiiy 9.00 ppg Mud Type Water Based Est. Static Temp. 63 ° F Est. Circ. Temp. 50 ° F VOLUME CALCULATIONS 700 ft x 0.1926 cf/ft 600 ft x 0.1733 cf/ft 1,700 ft x 0.1733 cfJft 80 ft x 0.1336 cf/ft with 0 % excess = with 50 % excess = with 50 % excess = with 0 % excess = TOTAL SLURRY VOLUME _ 134.8 cf 155.9 cf 441.8 cf 10.7 cf (inside pipe) 743.2 cf 132 bbls Repot Prhited on: March 75, 2005 7:79 PM Page 7 ~41~ Operator Name: Teck Cominco .~a Incorporat '~ ! Well Name: North Basin No. 4 Job Description: Production Casing Date: March 15, 2006 Proposal No: 1795512060 ~~~~~ FLUID SPECIFICATIONS Spacer 30.0 bbls MCS-4D Spacer + 7 Ibs/bbl MCS-D + 31 Ibs/bbl Bentonite + 34 Ibs/bbl Barite -Sacked @ 9.5 ppg VOLUME VOLUME FLUID CU-FT FACTOR AMOUNT AND TYPE OF CEMENT 1st Lead Slurry 291 / 1.6 = 178 sacks Cold Set III 1st Tail Slurry 452 / 1.4 = 305 sacks Type 1 Cement + 8%bwoc BA-90 + 0.05% bwoc Static Free + 0.4%bwoc BA-10 + 0.5% bwoc CD-32 + 1 gals/100 sack FP-6L + 62.1 % Fresh Water Displacement 69.5 bbls Displacement CEMENT PROPERTIES SLURRY SLURRY N0.1 N0.2 Slurry Weight (ppg) 12.20 14.50 Slurry Yield (cf/sack) 1.64 1.48 Amount of Mix Water (gps) 8.80 7.00 Amount of Mix Fluid (gps) 8.80 7.01 1. Slurry performance to be confirmed through pilot blend testing at PRTC. Slight additive adjustments may be necessary. Report Printed on: March 15, 29061:19 PM Page 8 a<729 ~~ • • Well Number NB-04 Procedure 1. Hold pre-operations safety meeting, as per established Fairweather Procedures 2. Move-in and rig-up Major Drilling America Schramm T130XD rig and ancillary equipment. 3. Nipple up diverter on 13 3/g" 3M x 13 3/g" S.O.W. diverter head. Function test diverter on single joint of drill pipe. 4. RIH with hammer and drilling assembly to bottom of conductor. Function test diverter. 5. Hammer drill 12 1/a" hole to 700' M.D. Sample cuttings as directed by ARI geologist. At 700ft M.D. blow hole clean and P.O.O.H. for surface casing. 6. Make up float shoe and float collar on 8 s/8" surface casing shoe joint. Run surface casing as directed. Rig up BJ cementers and cement surface casing as per cementing program. If cement does not circulate to surface, do top job as directed. Drain cement out of conductor/surface casing annulus to bottom of cellar. W.O.C. as directed. 7. Cut off conductor at base of cellar install 11" 3M x 8 s/g" S.O.W. diverter head on surface casing. Function test diverter on single joint of drill pipe. 8. RIH with hammer and drilling assembly to float collar. Close diverter and pressure test casing to SOOpsi for 15 minutes. Drill out float collar, shoe joint and float shoe, and dri117 ~/g" hole to 3000ft. M.D. Sample drill cuttings as directed by ARI geologist. At 3000' M.D., blow hole clean and P.O.O.H. for logs. 9. Rig up Weatherford Precision Energy Services wire line unit and run array induction, compensated sonic, compensated neutron, photo density, sonic waveform, gamma ray, caliper and directional survey as directed. 10. Make up float shoe and float collar on 5 %" production casing shoe joint. Run production casing as directed. Rig up BJ cementers and cement production casing to surface as per cementing program. Drain cement slurry out of 8 s/8" x 5 1/2" annulus to base of cellar. W.O.C. as directed. • ~ 11. Cut off surface casing at base of cellar and recover 8 s/8" diverter head and cut off casing. Insta1171/16" 3M w. lock screws x 5 %" S.O.W. tubing head and 71/16" 3M x 7 1/16" bore drilling valve. 12. Rig up Weatherford Precision Energy Services wire line unit and run cement bond log from T.D. to 700" M.D. If necessary to achieve zonal isolation, squeeze production casing as per supplementary program to be prepared after analysis of bond log. 13. Zones to be perforated and fraced will be selected by ARI geologists after analysis of open hole logs. Perforate selected zones and frac as per supplemental program to be prepared after analysis of open hole logs. Form 10-403 will be submitted in advance of this work. 14. Completion and testing program will be prepared following analysis of open hole logs. i • Subject: Notice of Recusal From: John Norman <john_norman@admin.state.ak.us> Date: Wed, 27 Jut 2005 15:38:43 -0800 To: Cathy P Foerster <cathy_foerster@admin.state.ak.us>, Dan T Seamount <dan_seamount@admin.state.ak.us>, Kevin A Brooks <kevin_brooks@admin.state.ak.us> CC: Jody J Colombie <Jody_colombie@admin.state.ak.us>, Winton G Aubert <Winton_aubert@admin.state.ak.us>, Thomas E Maunder <tom_maunder@admin.state.ak.us>, Stephen F Davies <Steve_davies@admin.state.ak.us>, Robert P Crandall <bob_crandall@admin.state.ak.us>, Mary J Williamson <Jane_williamson@admin.state.ak.us>, Dan T Seamount <dan_seamount@admin.state.ak.us>, John D Hartz <jack_hartz@admin.state.ak.us>, James B Regg <jim_regg@admin.state.ak.us>, Kari J Wheeler <kari wheeler@admin.state.ak.us> I am hereby recusing myself from participation in any matters coming before the Commission involving the shallow gas exploration program currently being conducted by Teck Cominco Alaska Incorporated, in Northwest Alaska, in the area around the Red Dog lead and zinc Mine. The reason for this recusal is that prior to joining the Commission I worked on this specific project for the operator, Teck Cominco Alaska; and, therefore, it will be inappropriate for me to participate in decisions of the Commission relative to this project. All applications, spacing hearings and other issues which may come before the Commission related to this project, including but not limited to We11 Nos. NB-O1 and NB-02, are to be handled exclusively by Commissioners Seamont and Foerster without any involvement by me. Copies of this notice shall be placed in all relevant files. John K. Norman Chairman L of 1 7/28/2005 8:17 AM 246-6~j E & P SERVICES, INC. July, 5, 2005 Mr. Tom Maunder, P. E. Petroleum Engineer Alaska Oil and Gas Conservation Commission 333 7~' Avenue, Suite 100 Anchorage, AK 99501 •~ ~,a-~. `~...-"~l ._1~y , ~!'~. Re: Teck Cominco Alaska Incorporated, Wells Nos. NB-O1 and NB-02 Dear Mr. Maunder: Thank you for your a-mail of June 28, 2005 which lists several questions and comments regarding the procedures for drilling the above referenced wells, as well as the authority by which Teck Cominco Alaska Incorporated will operate these wells. I believe we satisfactorily addressed these issues during our meeting on July 1, 2005, subject to the written responses to your questions presented herein. The points listed below follow the same numbering system used in your original a-mail: 1. Need bond or letter of credit in place before permit applications can be approved (20 AAC 25.025): The blanket bond was electronically transmitted to your office this date, with the hard copy following by overnight mail. 2. Need a lease map showing affected lease and those immediately surrounding it. Need ownership/land ownership information for the affected lease and adl adjoining leases: The requested map is attached. The NANA lands axe not subject to a traditional oil and gas lease, but rather to a confidential exploration agreement between NANA and Teck Cominco, and also to a specific Letter of Intent between the parties referencing the subject gas exploration project, which is also confidential. 3. Need Designation of Operator Form (20 AAC 25.020)------: The completed Designation of Operator form (10-411) is attached. 4. Need Notice of Change of Ownership-------: It was determined during our aforementioned meeting that this form is not required. 5. 20 AAC 25.033 (i) allows the Commission to approve under balanced drilling. The request for under balanced drilling must include--------: The subject wells will be drilled with air using a Washington Control Head as described in the APD's. The Washington Control Head is basically a rotating head, with all 2000 East 88th Avenue • Anchorage, Alaska 99507 • (907) 258-3446 • FAX (907) 279-5740 650 North Sam Houston Parkway East, Suite 505 • Houston, Texas 77060 • (281) 445-5711 • FAX (281) 445-3388 4. `: J cuttings and return air diverted through a "blooie" line to a cuttings bin and sampling cyclone located a minimum of 30 ft away from the wellbore. 1500 bbls of water will be stored on location during drilling and will be available to fill the wellbore as a well control contingency. The extremely low porosity and permeability of the shales being penetrated limit gas flows during drilling to what gas is absorbed within the shale that is pulverized during drilling. Air flows during drilling (1000 cfm or more) will keep any gas in the wellbore below the LEL. The Commission has approved an almost identical drilling procedure during the Evergreen CBM program (PTD's Nos: 202-178 and 202-179). 6. 20 AAC 25.035 (h) (1) allows the Commission to approve a variance from the BOP requirements----------: See No. 5, above. 7. 20 AAC 25.035 (h) (2) allows the Commission to approve a variance from the diverter requirements if an equally effective means is provided to divert flow away from the rig ---: The Washington Control Head accomplished this function. A separate diverter, as used in conventional mud/rotary drilling operations is not planned for this drilling program. In the subject case, the "diverter" is the Washington Control Head. 8. A diagram of the diverter and rotating head arrangements should be provided. A plan of the rig and support equipment should be provided. These diagrams are attached. 9. 20 AAC 25.061 (c) allows the Commission to waive the shallow site survey if other effective means can identify the likelihood of encountering shallow gas: We submit that the density of mineral exploration core holes in the area adequately addresses this issue. None of these core holes (all of which were drilled without any means of well control under mineral exploration regulations) encountered any shallow gas. 10. 20 AAC 25.066 covers gas detection requirements. There is no waiver clause for gas detection equipment absent a hearing, etc. --------: Teck Cominco will provide gas detection equipment during the drilling of NB-O1 and NB-02. If the results of this pilot shale gas project are encouraging, and subsequent wells are proposed, we reserve the right to make a formal waiver request for all subsequent wells, recognizing that a hearing will be required. 11. Inclination survey--------: Surveys will be run every 500 ft. 12. Mud log or lithologic log---------: A geologist will be on site to construct a continuous lithologic log as the wells are drilled. A conventional mud log will not be possible, as the wells are being drilled with air. Your a-mail addressed the need for a spacing exemption for Well No. NB-02. This application is being submitted under separate cover. Your a-mail also listed 14 "Questions and Comments", which are addressed in the same format below: We presume that gas detection will be part of the mud logging equipment: See Nos. 10 and 12 above. . ~- ~ _ ~ ~ , c~~ ~` ~ • 2. We presume there is not any seismic data in the area--------: There is no seismic data in the area, neither is there any velocity information available. We submit that the extensive mineral core hole data that has been accumulated in the area adequately addresses shallow gas concerns that would otherwise be addressed by the seismic data. 3 . Have there been any observed over pressured gas or fluids in arty boring or core holes within the area?: No 4. Can you provide more detail on previous drilling operations in the area? How many core or test holes have been drilled in the area, etc. ---: One hundred twenty three mineral exploration holes have been drilled in the area. A map is attached that shows the locations of these core holes. 5. Is Core Hode 1107 plugged?: The hole is plugged by ice through the permafrost zone. Mineral exploration regulations do not require the plugging (in the conventional oil field sense) of core holes. See No. 4, above. 6. Has significant shallow gas ever been encountered in the area?: No 7. Has and H2S ever been demonstrated in this area? A stronger case must be made before the Commission can waiveH2S requirements in 20 AAC 25, 065: There has never been H2S encountered in any of the core holes in the area, ar in any of the extensive mining operations at Red Dog. I don't know how to make a "stronger case". 8. What is the basis for calculating the BHP and surface pressure listed in Block 17 on Form 401 ?: The pressures shown on Forms 401 are not locally based, but rather are based on Barnett Shale experience in Texas. We used the Barnett shale case, a lithologically it represents some similarity to the Kivalina formation at Red Dog, is organic-rich, and when fractured and de-watered, produces gas in commercial quanties. 9. When the various hole sections are completed will logging be accomplished with fluid in the hole?: It will be necessary to fill the hole with water to achieve the logging products desired. 10. Will casing be run and cemented with fluid in the hole?: The production string will be run and cemented with fluid in the hole, since the hole will be filled with water in order to obtain the desired logs (See No. 9, above). Surface casing will be run through the permafrost zone without fluid in the hole, except that which occurs from natural seepage. 11. Basis for not requiring BOP equipment and request for additional porosity/permeability data-----: During our aforementioned meeting we have provided you with a Scoping Study developed by Advanced Resources International, and P&P report from the University of Alaska which addresses this request. 12. The request to be under balanced will also be supported by the "answers" to the questions above: Understood 13. Elimination of gas detection equipment: Previously addressed. Gas detection equipment will be provided. 14. Are there arty drinking or industrial water wells within the area--------?: No. ,.e- ~I -- I hope this information adequately addresses your concerns. Please call or a-mail at any time should you have further questions or comments. Sincerely, a R. C. Gardner Sr. Technical Advisor For Teck Cominco Alaska Incorporated Enclosures ~~ s.~ ~' ~~o~ `~ ~ ~~~ ~~ ~~ • • Waiver Requested Regulation Recommendation and Discussion 1-Underbalanced 25.033(b) and Approval of this waiver is recommended. This drilling 25.033(1) ~ well is planned to be drilled using air. A similar air- drilling program has been previously employed ~ drilling shallow wells for coalbed methane (CBM). .rte' ~ ~~' ~ ~ Teck Cominco (TC) provided a core study performed at UAF designed to determine the porosity and ~ ~~ ~, ~\ permeability of cores obtained in nearby mineral ined that the r t d t d Th l X e m e u y e s s. exploration wel ~~ ~~ ~~ ~ "best" permeability in the samples examined was ~ _~y p\~ ~ about 0.2 md. With such low permeability, it is i most unlikely that natural flow would occur while ,., Q \~ ~ rovided a description of TC has i ith illi d c>- ~ ~~ ~ ~ C p a r. ng w r the equipment to be employed. In the unlikely ~ ~~~ ~~ `~\`~~ ~ ~ event of a flow, TC plans to have 1500 bbls of water ~ Q ~,~. ~I ' ~ ~ ~ in tanks on site to allow the well to be killed. ~ ~ Based on the submitted information, it is determined that the proposed underbalanced drilling operations can be conducted without loss of i well control. Underbalanced operations are ~ ~ a roved er 20 AAC 25.033 i . ' 2-Employing a 20.035(c) and Approval of this waiver is recommended. In air "rotating head" rather 25.035 (h) (2) drilling operations, a rotating head is employed to than a diverter. direct return flow from the well away from the rig floor. A rotating head is a diverter whose design allows the annulus to be continuously sealed while ~ drilling operations are being conducted. Based on the submitted information, it is determined that use of the proposed rotating head will provide an equally effective means of diverting flow away from the rig floor per 20 AAC 25.035 (h) 2. 3-Not to employ a 25.035 (e) and Approval of this waiver is recommended. A BOP gpp 25.035 (h) (1) is employed to provide additional control ability if the hydrostatic pressure of the drilling fluid were insufficient to contain any formation pressure. The porosity and permeability studies provided by TC have shown that the rock is very "tight". Given the ~ low permeabilities determined, conventional flow is essentially impossible. Based on the submitted information, it is determined that equipment planned to be used by TC is appropriate for the anticipated subsurface environment and that this equipment will provide an equally effective means of well control per 20 AAC 25.035 h 1 . 4-Requiring near 25.061(a) and Approval of this waiver is recommended. The surface seismic 25.061 (c) general area is a "hard rock" mineral province. TC surveys has conducted an extensive mineral core exploration effort in the area resulting in over 100 core holes. No shallow gas or abnormal pressure hazards were encountered during this drilling ro ram. • • Based on the submitted information, it is determined that the mineral exploration drilling program conducted by TC is an equally effective means of determining the likelihood of potential shallow gas per 20 AAC 25.061 (c). TEM with SFD 7/12/2005 .. ~, • • NB-04 Conformance to AS 31.05.030 (j) (j) For exploration and development operations involving nonconventional gas, the commission NB-04 is a shale-gas tnonconventional gas) exploration well. (1) may not (A) issue a permit to drill under this chapter if the well would be used to produce gas from an aquifer that serves as a source of water for human consumption or agricultural purposes unless the commission determines that the well will not adversely affect the aquifer as a source of water for human consumption or agricultural purposes; or The NB-04 well is located on private property (NANA Corporation lands) on the side of a hi71, about 1-1/2 miles noxth of the .Red Dog Mine. This area has bees extensively drilled for mineral exploration purposes to similar depths. The Red Dog Miae obtains water for industrial and domestic use frame the Bons Creek Reservoir, which is located in a separate drainage basin about 5 miles away. The nearest native villages are Noatak, located over 40 miles away, and ICivalina, located about 60 miles away. NB-04 is located oa a 4 percent grade hillside, about 60 feet above and 1,700 feet away from a 50-foot wide creek that meanders through a 400-foot-wide valley. The location of this well and the Tnria*+t surface water nearby make it highly unlikely that nay potential aquifers affected by the well will ever be used to provide water for human consumption or agricultural purposes. (B) allow injection of produced water except at depths below known sources of water for human consumption or agricultural purposes; Wastewater is not injected. Any wastewater from drilling operations, fracturing and production testing is disposed in the Red Dog Mine tailings pond. The operator reports that EPA granted approval for this disposal by letter dated October 27, 2004. (2) shall {A) regulate hydraulic fracturing in nonconventional gas wells to assure protection of drinking water quality; 8-5/8" surface casing will be set about 700 feet below the surface and cemented to surface. The well will they .be drilled to a total depth of 3,000feet, 5-1/2" casing will be run to total depth, and the casing will be cemented to surface. Later, a cement bond log will be run. to indicate good cement bond through and above all zones of interest. Zones to be perforated and fractured will be selected after analysis of open hole logs. Applications for Sundry Approvals will be submitted for Commission approval prior to perforating and fracturing operations. ~ • These operations will not affect drinking water quality because: the site is remotely located; the shallowest perforation will lie at least 700 feet below the ground surface; the well will be cased and adegaa.tely cemented from TD to surface; and the well will be located at least 1,700 feet from the nearest stream. (B) regulate the disposal of wastes produced from the operations unless the disposal is otherwise subject to regulation by the Department of Environmental Conservation or the United States Environmental Protection Agency; TiTastewater from drilling operations, fracturing and production testing was disposed in the Red Dog Mine tailings pond. The EPA reportedly granted approval for this disposal by letter dated October 27, 2004. (C) [Repealed, Sec. 6 ch 79 SLA 2005]. (D} as a condition of approval of a permit to drill a well for production or production testing of coal bed methane, require the operator to design and implement a water well testing program to provide baseline data on water quality and quantity; the commission shall make the results of the water well testing program available to the public. Not applicable to this remotely Located, shale-gas exploration well. ~. ~Q ~C V Steve Davies ~~ AOGCC (S ~ ~ June 28, 2006 15853 FAIRWEATHER EXPLO ION FIRST NATION~NK A L A S K A & PRO®l3CTION SERVIC 'INC. s 52 GENERAL ACCOUNT 2000 EAST 88TH AVENUE, SUITE 200 DATE ANCHORAGE, AK 99507-3804 PH. (907) 258-3446 6~27~1006 ~ PAY One Hundred Dollars and 00 Cents TO THE ORDER STATE OF ALASKA - AOC~(;C ' p~ 333 WEST 7TH AVE SUITE 100 AMOUNT $100.00 ANCHORAGE AK -99501 USA ---___~_~~__m~~ ------ --___ _--- -- -------"r 11'0 L 58 5 311^ ~: X 2 5 2000 60~ 0 L L 2 $ 2 3 011' FAIRWEATHER EXPLORATION & PRODUCTION SERVICES INC. -GENERAL ACCOUNT 15 8 5 3 V N D ~ NAME PAYMENT NUMBER CHECK DATE STAK.AOGCC STATE OF ALASKA - AOGCC 00017529 6/27 2006 OUR VOUCHER NUMBER YOUR VOUCHER NUMBER DATE AMOUNT AMOUNT PAID DISCOUNT WRITE-OFF NET 00021324 060626*CKREQ*NB-04 6/26/2006 $100.00 $100.00 $0.00 $0.00 $100.00 $100.00 $100.00 $0.00 $0.00 $100.00 COMMENT APPLICATION FOR PERMIT TO DRILL WELL # NB-04 • ~ TRANSMITTAL,~L/ETTER CHECKLIST WELL NAME / ~.~ ' ~~ PTD# ~ ~ '' ~ _ Development Service '/ Exploratory Stratigraphic Test ~ Non-Conventional Well Circle Appropriate Letter /Paragraphs to be Included in Transmittal Letter ~ CHECK ADD-ONS I TEXT FOR APPROVAL LETTER WHAT (OPTIONS) APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing wel l (If last two digits in API number r permit No. , API No. 50- - - a e between 60-69) ~ i Production should continue to be reported as a function of the I 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 l (50- - -) from records, data and logs acquired for well SPACING The permit is approved subject fu pliance with 20 AAC / / EXCEPTION 25.05. Approval to perforate~~n roduce / in'ect is contingent upon issuance of co ervation ore ap rovin a spacing VVV i ' ~ ~ '1 'r ~ ! ~f I except on. / ¢c,. s k5 1J~ (/ sumes the ?c~ ~ 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. Please note the following special condition of this permit: Non-Conventional production or production testing of coal bed methane is not allowed Well for nam of well A ]~ _ Rev: 1 /25/06 C aj odyltransmittal_checkf ist / ~~ --y~~ ~8 ,o'~. WELL PERMIT CHECKLIST Field & Pool Well Name: NB 04 Program EXP Well bore seg ^ PTD#:2060910 Company TECK CQMINCO ALASKA INCORPORATED Initial Classlfype EXP ! PEND GeoArea 890 Unit On/off Shore On Annular Disposal ^ Administration 1 Permit_fee attached, _ _ Yes - - - _ . - _ _ - , 2 Lease number appropriate_ _ _ . - - _ - - . _ _ . - - _ , _ -Yes _ Well will be on NANA Land governed by-a_confdentialexp1oration-agreement between NANA and-Teck.. 3 Uniquewell.nameandnumber______.__________________ ____________ Yes.. ...._-_____-___- -------------------------------------------------------- 4 Well located in a_d_efnedpool- - - - - No_ Exploration well- 5 Well located proper distance.from drilling unit_boundary_ No_ -- 6 Well located proper distance_from other wells. _ _ - - - _ - - _ _ . No. _ - -Will be located 2000' from N&01, also in Sec. 18, & 1600' from_ NB-02. 7 Sufficient acreage available in-drilling unit_ _ _ - _ - - . - _ _ No_ _ _ SPACING EXCEPTION REQUIRED: _3rd well_in Sec. 17, and will be within 3,000'- of other gas wells. - _ _ .. _ _ 8 Ifdeyiated,is_wellboreplat-included_______________________ ____-___ NA__ __Vertical_well,_-__-_------__-_____-.,_--______--__-_-._--__---------._ 9 Operator only affected party - - - - - - Yes - - - - - - - - - - - - - 10 Operator has.appropriate_bondin force_____________________ ____________Yes__ ___..Cond6218218,effective7112/2005..----_--_---_..-_---_----.--.----_-----------_. 11 Permit_canbeissuedwithoutconservationorder________________ ___________ No__ _____SPACINGEXCEPTIONREQUIRED__.______ ------_--__-__--_,._--_. Appr Date 12 Pe[mitcanbeissuedwithoutad_ministrative-approval_____________ ____________Yes-_ _-___.,--_____,._______.__ ----------------------------------------------- SFD 6128/2006 13 Can permit be approved before 15-day wait Yes 14 Well located within area and strata authorizedbylnjectionOrder#(put_1O# in_comments).(For. NA___ _--______________________ ________-__-.-__-.__-__--_.-_-_,___-_-__--_- 15 All wells-within 1/4_mile area-of review identified (For service well only)_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ NA.. _ _ . _ _ _ - _ _ _ _ - 16 Pre-produced injector; duration ofpre-production Less than_ 3 months_ (For service well only) - _ NA_ _ _ ----------------------------------------------------- 17 Nonconven, gas conformslo A$31,05,030O.1.A),(~.2.A-D) _ . - _ . , Yes See_attached doc-: "NB-04 Conformance to-AS 31,05,030Q)" _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Engineering 18 Conductorstring_provided________ .................._ _-___-___Yes__ __--_--_--_---_- 19 Surface-rasing-protect& all known U$DWS . . . . .. . ... . . .. . . . Yes Surface $~ production casing will be cemented to surface, protecting any shallow-water.- See 17, above, SFD - - _ 20 C_MT_voladequate_toci[culate-onconductor_&surf_csg___ ________ ____________Yes__ __________________________._______.-__..-_--___------_--__--__-,-_ -_ 21 _C_MT-voladequate_totie-in long string tosurfcsg________________ ____________Yes__ _________ 22 CMT_willcoyerallkno_wn_productiyehorizons_______ ___-,-,----Yes__ ________________________ ------------------------------------------------- 23 Casingdesynsadequatef_orC,TB&-permafrost--------------- ----- -Yes-- ---.--------------------.----------------------------------------- - 24 Adequate tankage_or reserve pit - - - - _ _ - - - - - - - - - - - - - Yes _ _ _ _ - - Hydrocyclone and cuttings bin will capture re_tums. _S_olid waste_to Red Dag solid waste she._ Water to_ 1 25 If a_re-dill, has-a 10-403 for abandonment been approved _ _ _ _ _ _ _ _ _ _ _ _ _ _ NA_ tailings pond_ per EPA approval, 1500_bbls_water planned on location to 'kill"well rf necessary. - _ - _ - - _ - . 26 Adequatewellboreseparation_proposed_____________________ ___________Yes__ ______-_ 27 Ifdiverterrequired,doesitmeetregulations___________________ ____________ NA___ ___-_ROtatinghead,inusetodiyerteirculatedair___..__.___.______________________._ Appr Date 28 Drilling fluid_program schematic & equip listadequate- - _ _ ... Yes Drilling fluid is air, I'ermiabilitystudies fy_UAF_show targe# formation to have_very low perm ~<0,2 md), - - . - _ - - TEM 71512006 29 BOPEs,.do they meet regulation - _ _ _ - . - _ - . - _ NA_ _ . - _ _ _ _ - No issues drilling last year or in 1.23 mineral core holes. Underbalance is acceptable._ ~, /~ 'r + 30 BOPE_press rating appropriate; test to_(put prig in comments)- - - . - NA_ BOP will not_be employed, See comments above .. . .. . . . .......... . ~~j } ~, ~' 31 Choke_manifoldcomp_IieswlAPI_RP-53(M_ay84)________________ ____________NA___ _____AChokemanifold will not be employed._________--__-.-_--_____.___-______-..__,- ~+ 32 Work willoccurwithoutoperationshutdown______-__________ __________,Yes__ ______________________.__-_______-.__-___-_-_--_____-____--___- 33 Is presence-of H2S gas p-robable - - - - NO - - - 34 Mechanicalcontl_itionofwellswithinAORyerifed(Fgrservicewellonly)__ ____________NA___ ___,_____-__--__--_--.-----_-__-___-__--__- Geology 35 Permit_can be issued w1o hydrogen_ sulfide measures . . ... . . .. . . . . .. . Yes I_n 2005, Teck drilled N6-01-& NB-02 nearby without incident, using same_drillingprocedures. - _ _ - _ , - - _ - _ - _ 36 Data-presented on potential overpressure zones _ - - _ - - . - _ -Yes _ No abnormal pressure or shallow gas expected based on drilling of NB-Oi_ & NB-02and _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Appr Date 37 Seismic analysis ofshallow gas_zones- - - - - - - - - - - - - - - - NA_ . . _ - . -numerous mineral ex location boreholes in_area, . - . . p - - - - SFD 6128/2006 38 Seabed condition survey_(if off-shore) -- NA -- - 39 Contactnamelphoneforweekly_progress reports [exploratory only]. _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ _ _ Bob_Gardner _907-258-3446_ _ _ _ _ _ _ _ - _ _ _ . _ - _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Geologic Engineering Public Date: Date ' Date Fourth well in a 5-s of attern bein drilled and de-watered to test feasibilit of roducin as from shale as an aRernative p p g y p g g Commissioner: ~~ ~ Co ssioner: Commi / 7 / ~ ~ ~ ~_~ / er `~ ~ D 1r~•• ., ~ source of fuel for the Red Dog Mine. Welt will be drilled using air and a downhole hammer. SPACING EXCEPTION REQUIRED: 3rd well within Sec. 17 & well will be located within 3,000 of other shale•gas test wells. June 9, 2003: ACMP determination found project to be consistent with regulatory requirements. Lithology log and samples were obtained in NB- 01. SFD