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206-080
07 j 1 d ; ' A 1 ' FRANK 14. MURKOWSK/, GOVERNOR �1 atTLA1m7KA DIL AND GAS f 333 W. rH AVENUE, SUME 100 CONSERVATION ATIOj` COMMSSION 1 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 Edward Jones FAX (907) 276-7542 Vice President, Engineering and Operations Aurora Gas, LLC 1400 W. Benson Blvd, Suite 410 Anchorage, AK 99503 Re: Nicolai Creek Unit, North Undefined Gas Pool, Nicolai Creek Unit # 10 Aurora Gas, LLC Permit No: 206-080 Surface Location: 1504' FWL, 1799' FNL, SEC. 20, T11N, R12W, SM Bottomhole Location: 308' FEL, 2099' FNL, SEC. 19, T11N, R12W, SM Dear Mr. Jones: 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. Since Nicolai Creek Unit #10 is a delineation well, a weekly status report is required from the time the well is spudded until it is suspended, plugged and abandoned, or completion and testing operations are finished. This 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 and produce is contingent upon issuance of a conservation order approving a spacing exception. Aurora Gas, LLC assumes the liability of any protest to the spacing exception that may occur. 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 willss any required test, contact the Commission's petroleum field inspector07) 9- 607 (pager). K. DATED this-16day of July, 2006 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. r • E & P SERVICES, INC. June 2b, 2006 Mr. John Norman, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Ave., Suite 100 Anchorage, Alaska 99501 JUN 2 +~ s'~~,:: ska Oil & Gas Oc~;. ;;:;,s,,r Anchura RE: Amended Application for Permit to Drill: Nicolai Creek Unit #10 Dear Mr. Norman, The surface location of the proposed NCU #10 has been changed to move it farther away ~ from the surface location of the existing NCU #3 gas producer on the same pad. Please find attached a new Form 10-401, executed by the Operator, with the new location. information and a wellsite diagram indicating the new location of NCU #10 and that of NCU #3. If you have any questions or require additional information, please contact me at (907) 258-3446. Sincerely, FAIRWEATHER E&P SERVICES, INC. Bill Penrose Vice President /Drilling Manager enclosures cc: J. Edward Jones -Aurora Gas ORIGINAL 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 ~~~'~ AL OIL AND GAS CONSERVATION COMI~ION PERMIT TO DRILL ~~ JUN 2 6 2006 20 AAC 25.005 1a. Type of Work: 1b. Current Well Class: Exploratory [] Development Oil ^ 1c. Specify if S Ofi". DriII ^ Redrill ^ Stratigraphic Test ^ Service ^ Development Gas ^ Coalbed Methane ^ An~~~girates ^ Reentry ^ Multiple Zone ^ Single Zone ^ Shale Gas ^ 2. Operator Name: 5. Bond: Blanket ~ Single Well ^ 11. Well Name and Number: Aurora Gas LLC Bond No. NZS 429815 Nicolai Creek Unit #10 3. Address: 6. Proposed Depth: 12. Field/Pool(s): 1400 W. Benson Blvd Suite 410 Anchora a AK 99503 MD: 4 242' TvD~ 3 539' 4a. Location of Well (Governmental Section): 7. Property Designation: NIC0181 Creek Unlt Surface: 1504' FWL, 1799' FNL, Sec 20, T11N, R12W, SM ADL-63279 su AA$5789 bhl Top of Producfrve Horizon: 8. Land Use Permit: 13. Approximate Spud Date: 525' FWL, 2021' FNL, Sec 20, T11N, R12W, SM Total Depth: ~ 9. Acres in Property: ~ 14. Distance to Nearest J 308' FEL, 2099 FNL, Sec 19, T11N, R12W, SM 320 Property: 308 at TD 4b. Location of Well (State Base Plane Coordinates): 10. KB Elevation 15. Distance to Nearest Welt Surface: x- 242983 y- 2571970 Zone- 4 (Height above GL): 16 feet Within Pool: N/A 16. Deviated wells: Kickoff depth: 820 feet 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) Maximum Hole Angle: 42 degrees Downhole: 1540 i Surface: 1 166 1 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) N/A 13-3/8" 72# K-55 BW 80' 16' 16' 96' 96' N/A 12.25" 9-6/8" 36# L$0 LTC 804' 16' 16' 820' 820' 525 cu. ft. 8.5" 5-1/2" 15.5# J-55 BTC 4 226' 16' 16' 4 242' ~ 3 539' . 1143 cu. ft, 19. PRESENT WELL CONDITION SUMMARY (To be competed 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 ~ BOP Sketch ^ Drilling Program ~ Time v. Depth Plot ^ Shallow Hazard Analysis ^ Property Plat ~ Diverter Sketch ^ Seabed Report ^ Drilling Fluid Program ~ 20 AAC 25.050 requirements ^ 21. Verbal Approval: Commission Representative: Date 22. 1 hereby certify that the foregoing is true and correct. Contact Printed Name J. Edwar es Title Vice President, En ineerin and O erations Signature Phone 713-977-5799 Oate [f~~L 2 ~ G (o Commission Use Only Permit to Drill API Num r: Permit App val See cover letter for other Number: ~~ ZQ~ - ZO~~ ~ dp Date: requirements. Conditions of approval : If box is checked, well may not b(e~used to explore for, test, or produce coalbed methane, gas hydrates, or gas contained in shales: Other: "~QQQ eg'~ 6QT~~2s~-GS 'Q~GnrCcl, Samples req'd: Yes^ No[v]a Mud log req'd: Yes^ No[v']~ ~OP ~~ ~ ^~~~~ ~ ~~0, ~ ~ ~ ~L HZS measures: Yes^ No Di ectional svy req'd: Yes[v]~ No^ CJ ~ ~ aS-.C~~sC~~l'iC~1 PPROVED BY THE COMMISSION DATE: ~ D ,COMMISSIONER ~ ~-?' ~~ Form 10-401 Revised 12/2005 Su tin li to ~'~'~. SECTION 20 T11 N R12W SM 1504' F W L K SCALE 1 inch = 400 ft. 0 600 60C B00 ~~ =~ ~ ~~ .. NORTH NOTES 1) BASIS OF COORDINATES IS ALASKA STATE PLANE NAD 27 ZONE 4 FROM A DIRECT TIE ~ TO ADL NO. 31270. 2) BASIS OF ELEVATION IS FROM TIDAL OBSERVATION ON 9-22-93. DATUM IS MLLW. ALL ELEVATIONS SHOWN HEREON WERE TAKEN ON GROUND. 3) SECTION LINES SHOWN HEREON ARE BASED ON PROTRACTED VALUES. LEGEND ® F~~ ~R,.~~HEa o ~~~o P«EE ® .RAHSFOH,~H a PH«~E~EOE:,~ - _ s~L1EE~E,~HST~~A=SHO~, DETAIL NICOLAI CREEK PAD IgRe ~/OUS P AO(/4T/TS 267.8' 469.3' ;- NICOLAI CREEK PAD WITH 1978 PHOTO (see detail) EX~G ROAD EXISTING PAD LIMl7g NICOLAI CREEK NO. 10 WELL / AS-STAKED PAD ELEV. 249.0' GRID N'.2571969 966 LINER GRID E'.242962.661 LATITUDE 61"01'54994"N L0 ~ Z~ ^ g~pG~ 4"PIPELE_NE ~d-.30 LONGITUDE: 151°26'58486'VJ y O 3. x Q w a " TANK TANK m : > ^ NICOLAI CREEK NO. 3 WELL LINER LINERD / \ GRID N'.2571810.830 /1 ~ GRID E:243095.873 / ~ ~ O l WELL (ABANDONED) LATITUDE: 61 °01'53 457'N ` J LONGITUDE'. 151 °26'55.711 "W 8' DIAM. CMP FLUSH p RF~ , SCALE / y e pLS„ 1 inch = 100 ft. ~p<7 0 100 ~~ ~-~~ 150 200 Mips a U g J J ~ a ~ "a ,Y O z Y m W 5 W O ~ Q z 3~~~ DIiAMN Br: MSM aEC.EO er: sAr Hoaz. scut: 1'-AOO' YLFT. SCALE: NA SHEET: i ~ Subject: New NCU #10 Directional From: Bill Penrose <bill@faiiweather.com> Date: Tue, 27 Jun 2006 13:26:23 -0800 To: steve_davies@admin.state.ak.us Steve, Per your phone message, here's the new NCU #10 directional plan. Because the surface location moved a little closer to the BHL, the measured depth at TD is a tiny bit different, though the BHL and TVD remain the same. Regards, Bill Penrose Vice President /Drilling Manager Fairweather E8~P Services, Inc. 2000 E. 88th Avenue, Suite 200 Anchorage, Alaska 99507 907-258-3446 __ _ _ __ Content-Description: NCU 10 Directional Plan.pdf NCU 10 Directional Plan.pdf Content-Type: applieationloctet-stream Content-Encoding: base64 ', __ • :: Aurora Gas, LLC • Plan: NCU#10 (wp03~ Sperry Drilling Services Proposal Report -Geographic 21 June, 2006 Aurora Gas, LLC Cook Inlet Nicolai Creek Unit Plan NCU#10 Plan NCU#10 Local Coordinate Origin: Centered on Well Plan NCU#10 Vewing Datum: WELL ~ 272.OOft (Original Well Elev) NDs to System: N North Referer~e: Grid Unit System: API - US Survey Feet HALLIBUF~TON Sperry Drilling Services Halliburton Com an • :=Aurora Gas, LLC P Y HALi.IBURTC?1\1 Planning Report -Geographic Sperry tiriiling Servta®s Database: . CPAI 2003.11 Local Co-0rdinate Reference: Well Plan NCU#10 Company: Aurora Gas, LLC TVD Reference: WELL ~ 272.OOft (Original Well Elev) Project: Cook Inlet MD Reference: WELL ~ 272.OOft (Original Well Elev) Site: Nicolai Creek Unit North Reference: Grid Well: Plan NCU#10 Survey Cakxrtation Method: Minimum Curvature Welibore: Plan NCU#10 Design: NCU#10 (wp03) Project Cook Inlet, USA Map System: US State Plane 1927 (Exact solution} System Datum: Mean Sea Level Geo Datum: NAD 1927 (NADCON CONUS) Map Zone: Alaska Zone 04 Using geodetic scale factor Well Plan NCU#10 Well Position +N/S 0.00 ft Northing: 2,571,969.97 ft Latitude: 61° 01' 54.994" N +E/-W 0.00 ft Easting: 242,962.66 it Longitude: 151° 26' 58.486" W Position Uncertainty 0.00 ft Wellhead Elevation: ft Ground Level: 272.OOft Weilbore ...Plan NCU#10 Magnetics Model Name Sample Date DeGi/(nation Dip //Angle Field /St77r~~ength l~) t°) In `/ BGGM2005 5/15/2006 19.65 73.77 55,548 Design NCU#10 (wp03)_ Audit Notes: Version: Phase: PLAN Tie On Depth: 0.00 Vertical Sectron: Depth f=rom C1vD) +Nf S +E/ W Direction (~) (~} (ft) (°) 0.00 0.00 0.00 260.60 Plan Summary Measured Vertical Dogleg Build Tum Depth Inclination Azimuth Depth +W-S +E/ W Rate Rate Rate ~O (ft) (°) (°) (ft) (ft} (ft) (°/100ft} (°t100ft) (°/100ft) (°) 0.00 0.00 260.74 0.00 0.00 0.00 0.00 0.00 0.00 0.00 820.00 0.00 260.74 820.00 0.00 0.00 0.00 0.00 0.00 260.74 1,662.00 42.10 260.60 1,588.25 -48.29 -291.70 5.00 5.00 0.00 260.60 3,349.00 42.10 260.60 2,839.97 -233.01 -1,407.53 0.00 0.00 0.00 0.00 3,985.06 23.00 260.60 3,373.64 -288.65 -1,743.59 3.00 -3.00 0.00 180.00 4,164.26 22.33 260.52 3,539.00 -299.97 -1,811.71 0.38 -0.38 -0.Q4 -177.46 &/21/2006 3:13~57PM Page 2 of 4 COMPASS 2003 11 Build 48 -~furora Gas, LLC Halliburton Company Planning Report -Geographic H~-L~iBt.~IRTOn~ Sperry Drffling Services Database: .CPA! 2003.11 Locat Co~ordtnate Reference: Well Plan NCU#10 Company: Aurora Gas, LLC ND Reference: WELL ~ 272.OOft (Original Well Elev) Project: Cook Inlet MD Reference: WELL @ 272.OOft (Original Well Elev) Site: Nicolai Creek Unit North Reference: Grid Well: Plan NCU#10 Survey Calculation Method: Mirrimum Curvature Wellbore: Plan NCU#10 Design: NCU#10 (wp03) Planned Survey NCU#10 (wp03} Map Map MD Inclination Azimuth TVD SSND +N/S +Ei~llt Northing Easting pLSEV Vert Section (ft) (°) (°) (ft) (ft) (ft) ~ (ft} (ft) (°/100ft) (ft) 0.00 0.00 260.74 0.00 -272.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 100.00 0.00 260.74 100.00 -172.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 200.00 0.00 260.74 200.00 -72.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 300.00 0.00 260.74 300.00 28.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 400.00 0.00 260.74 400.00 128.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 500.00 0.00 260.74 500.00 228.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 600.00 0.00 260.74 600.00 328.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 700.00 0.00 260.74 700.00 428.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 800.00 0.00 260.74 800.00 528.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 820.00 0.00 260.74 820.00 548.00 0.00 0.00 2,571,969.97 242,962.66 0.00 0.00 9 5/8" 900.00 4.00 260.60 899.94 627.94 -0.46 -2.75 2,571,969.51 242,959.91 5.00 2.79 1,000.00 9.00 260.60 999.26 727.26 -2.30 -13.92 2,571,967.66 242,948.74 5.00 14.11 1,100.00 14.00 260.60 1,097.22 825.22 x.56 -33.58 2,571,964.41 242,929.08 5.00 34.04 1,200.00 19.00 260.60 1,193.07 921.07 -10.20 -01.59 2,571,95,9.77 242,901.07 5.00 62.43 1,300.00 24.00 260.60 1,286.09 1,014.09 -16.18 X7.74 2,571,953.79 242,864.92 5.00 99.07 1,400.00 29.00 260.60 1,375.55 1,103.55 -23.47 -141.75 2,571,946.50 242,820.92 5.00 143.68 1,500.00 34.00 260.60 1,460.79 1,188.79 -32.00 -193.28 2,571,937.97 242,769.39 5.00 195.91 1,600.00 39.00 260.60 1,541.15 1,269.15 X11.71 -251.94 2,571,928.26 242,710.72 5.00 255.37 1,662.00 42.10 260.60 1,588.25 1,316.25 -48.29 -291.70 2,571,921.6'8 242,670.96 5.00 295.67 1,700.00 42.10 260.60 1,616.45 1,344.45 -02.45 -316.84 2,571,917.52 242,645.83 0.00 321.15 1,800.00 42.10 260.60 1,690.64 1,418.65 ~i.40 -382.98 2,571,906.57 242,579.69 0.00 388.19 1,900.00 42.10 260.60 1,764.84 1,492.84 -74.35 -449.12 2,571,895.62 242,513.55 0.00 455.24 2,000.00 42.10 260.60 1,839.04 1,567.04 -85.30 -51527 2,571,884.67 242,447.41 0.00 522.28 2,100.00 42.10 260.60 1,913.24 1,641.24 -96.25 -581.41 2,571,873.72 242,38127 0.00 589.32 2,107.77 42.10 260.60 1,919.00 1,647.00 -97.10 -586.54 2,571,872.87 242,376.13 0.00 594.53 CARYA 2-1 ANOMALY (wp02) 2,200.00 42.10 260.60 1,987.44 1,715.44 -107.20 -647.55 2,571,862.77 242,315.13 0.00 656.36 2,300.00 42.10 260.60 2,061.63 1,789.63 -118.15 -713.69 2,571,851.82 242,248.99 0.00 723.41 2,400.00 42.10 260.60 2,135.83 1,86:1.83 -129.10 -779.83 2,571,840.87 242,182.85 0.00 790.45 2,500.00 42.10 260.60 2,210.03 1,938.03 -140.05 -845.98 2,571,829.92 242,116.70 0.00 857.49 2,600.00 42.10 260.60 2,284.23 2,012.23 -151.00 -912.12 2,571,818.97 242,050.56 0.00 924.53 2,700.00 42.10 260.60 2,358.42 2,086.42 -161.95 -978.26 2,571,808.02 241,984.42 0.00 991.58 2,800.00 42.10 260.60 2,432.62 2,160.62 -172.90 -1,044.40 2,571,797.07 241,918.28 0.00 1,058.62 2,900.00 42.10 260.60 2,506.82 2,234.82 -183.85 -1,110.56 2,571,786.12 241,852.14 0.00 1,125.66 2,975.62 42.10 260.60 2,562.93 2,290.93 -192.13 -1,160.57 2,571,777.84 241,802.12 0.00 1,176.36 CARYA 2-3 ANOMALY (wp02) 3,000.00 42.10 260.60 2,581.02 2,309.02 -194.80 -1,176.69 2,571,775.17 241,786.00 0.00 1,192.70 3,100.00 42.10 260.60 2,655.21 2,383.21 -205.75 -1,242.83 2,571,76422 241,719.86 0.00 1,259.75 3,200.00 42.10 260.60 2,729.41 2,457.41 -216.70 -1,308.97 2,571,753.27 241,653.72 0.00 1,326.79 3,279.15 42.10 260.60 2,788.14 2,516.14 -225.37 -1,361.33 2,571,744.61 241,601.37 0.00 1,379.86 CARYA 2~ ANOMALY (wp02) 3,300.00 42.10 260.60 2,803.61 2,531.61 -227.65 -1,375.12 2,571,742.32 241,587.58 0.00 1,393.83 3,349.00 42.10 260.60 2,839.97 2,567.97 -233.01 -1,407.53 2,571,736.96 241,555.17 0.00 1,426.68 3,400.00 40.57 260.60 2,878.26 2,606.26 -238.52 -1,440.76 2,571,731.46 241,521.94 3.00 1,460.37 3,500.00 37.57 260.60 2,955.89 2,683.89 -248.81 -1,502.93 2,571,721.16 241,459.77 3.00 1,523.38 6/21/2006 3:13:57PM Page 3 of 4 COMPASS 2003.11 Build 48 • Aurora Gas, LLC Halliburton Company Planning Report -Geographic HAL.iLtBURTC~IV Sperry Drilling Services Database: . CPAI 2003.11 Local Coordinate Reference: Well Plan NCU#10 Company: Aurora Gas, LLC TVD Reference: WELL ~ 272.OOft (C~iglnal Well Elev) Project: Cook Inlet MD Reference: WELL ~ 272.OOft (Original Well Elev} Site: Nicolai Creek Unit North Reference: Grid Well: Plan NCU#10 Survey Calculation Method: Minimum Curvature Wellbore: Plan NCU#10 Design: NCU#10 (wp03} Planned Survey NCU#10 (wp03) Map Map MD Inclination Azimuth TVD SS7VD +N/S +E/-W Northing Easting DLSEV Vert Section (ft) {°) (°) (ft) {ft) (ft) (ft) (ft) (~ (°7100ft) (ft) 3,600.00 34.56 260.60 3,036.72 2,764.72 -258.42 -1,561.00 2,571,711.55 241,401.70 3.00 1,582.24 3,700.00 31.56 260.60 3,120.52 2,848.52 -267.33 -1,614.81 2,571,702.64 241,347.89 3.00 1,636.79 3,800.00 28.56 260.60 3,207.06 2,935.06 -275.51 -1,664.22 2,571,694.46 241,298.48 3.00 1,686.87 3,900.00 25.55 260.60 3,296.10 3,024.10 -282.94 -1,709.09 2,571,687.03 241,253.61 3.00 1,732.35 3,985.06 23.00 260.60 3,373.64 3,101.64 -288.65 -1,743.59 2,571,681.32 241,219.11 3.00 1,767.32 3,995.23 22.96 260.60 3,383.00 3,111.00 -289.30 -1,747.51 2,571,680.67 241,215.19 0.38 1,771.30 CARYA 2-b ANOMALY (wp02) 4,000.00 22.94 260.59 3,387.39 3,115.39 -289.60 -1,749.35 2,571,680.37 241,213.36 0.38 1,773.15 4,100.00 22.57 260.55 3,479.61 3,207.61 -295.94 -1,787.50 2,571,674.03 241,175.20 0.38 1,811.84 4,164.26 22.33 260.52 3,539.00 3,267.00 -299.97 -1,811.71 2,571,670.00 241,151.00 0.38 1,836.37 NCU#10 TD (wp03j Geologic Ta rgets Plan NCU#10 TVD Target Name +N/S +E! W Northing Easting (ft) -Shape ft ft (ft) (ft} 2,562.93 CARYA2-3 ANOMALY (wp02) -221.97 -978.69 2,571,748.00 241,984.00 - Point 3,383.00 CARYA 2-5 ANOMALY {wp02) -293.97 -1,746.70 2,571,676.00 241,216.00 - Point 2,788.14 CARYA 2-4 ANOMALY (wp02) -242.97 -1,288.69 2,571,727.00 241,674.00 - Point 1,919.00 CARYA2-1 ANOMALY(wp02) -177.97 -372.67 2,571,792.00 242,590.00 - Point 3,539.00 NCU#10 TD {wp03) -299.97 -1,811,71 2,571,670.00 241,151.00 - Poirrt Prognosed Casing Points Measured Vertical Casing Hole Depth Depth Diameter Diameter 820.00 820.00 9a/8 12-1/4 4,242.30 7 7-1/2 6/21/2006 3:13:57PM Page 4 of 4 COMPASS 2003.118ui1d 48 ~Aurrora Gas, LLC www.aurorapower.com ~GVE' V GD JUN 0 7 2006 June 7, 2006 Mr. John Norman, Chair Alaska Oil and Gas Conservation Commission 333 West 7th Ave., Suite 100 Anchorage, Alaska 99501 , RE: Application for Permit to Drill: l~colai Creek Unit #10 Dear Mr. Norman: Alaska Oil & Gas Cons. C ~i~s~on .--- Anchorage,.~,o ._ V b~0 ~''~ ~ti r9 Aurora Gas, LLC hereby appli for a Permit to Drill an onshore gas exploration well in the Nicolai Creek Field so of the village of Tyonek. The well is planned as a directional well drilled fro the existing NCU #3 pad to the Upper Tyonek Formation to test for gas. A secondary get is the shallower Beluga Formation. The rig to be used i the AWS #l. The rig's well control systems are on file with the Commission. Please find a ched information as required by 20 AAC 25.005 (a) and (c) for your review. Pert ent information attached to this application includes the following: 1 y Form 10-401 Application for Permit to Drill. Fee of $100.00 payable to the State of Alaska. 3) A plat showing the surface location of the well. 4) A Time versus Depth plot. 5} Proposed casing program. 6) Proposed cementing program. 7) Proposed drilling fluid program. 8) Proposed summary drilling program. 9) Summary of Drilling Hazards. 10) Schematic of the proposed wellbore and completion. 11) Aurora Gas does not anticipate the presence of H2S in the formation to be encountered in this well. However, H2S monitoring equipment will be functioning on the rig at all times during drilling and completion operations. 12) The following are Aurora Gas' designated contacts for- reporting responsibilities to the Commission: 10333 Richmond Avenue, Suite 710 • Houston, Texas 77042 • (713) 977-5799 • Fax (713) 977-1347 1400 West Benson Blvd., Suite 410 • Anchorage, Alaska 99503 • (907) 277-1003 • Fax (907) 277-1006 • • Mr. John Norman Page 2 1) Completion Report (20 AAC 25.070) Bill Penrose, Drilling Manager (907) 258-3446 2) Geologic Data and Logs (20 AAC 25.071) Andy Clifford, VP -Exploration (713) 977-5799 If you -have any questions or require additional information, please contact me at (713) 977-5799 or Bill Penrose at (907) 258-3446. Sincerely, AURORA GAS, LLC J,iEdward Jones ice President (/ Engineering and Operations enclosures cc: Ranr~ Jones - AuroraaCsas STATE OF ALASKA ALA OIL AND GAS CONSERVATION COMION PERMIT TO DRILL ~n nnr ~~ nnti ~~~~~ V ~~ ,1UN 0 7 2006 fi11ac3ra nit st, f:~Q r,,.,e 1a. Type of Work: Drill Q Redrill ^ Re-entry ^ 1b. Current Well Class: Exploratory Stratigraphic Test ^ Service Multiple Zone ^ Development Oil ^ ^ Development Gas ^ Q Single Zone ^ yr a~uu vvuy 1c. Specify if well is proposed for: Qt1CI10 ~e Coalbed Methane ^ Gas ydrates ^ Shale Gas ^ 2. Operator Name: Aurora Gas LLC 5. Bond: Blanket Q Single Well ^ Bond No. NZS 429815 11. W Name and Number: icolai Creek Unit #10 3. Address: 1400 W. Benson Blvd Suite 410 Anchora a AK 99503 6. Proposed Depth: MD: ' 4 242' TvD: 3.5 2. Field/Pool(s): 4a. Location of Well (Governmental Section): Surface: 1629' FWL, 1914' FNL, Sec 20, T11N, R12W, SM 7. Property Designation: i ~ ~ -' p ADL-63279 su AA- bhl ~1icolai Creek Unit /L'bb Top of Productive Horizon: 1135' FWL, 1983' FNL, Sec 20, T11N, R12W, SM 8. Land Use Permit: 13. Approximate Spud Date: Total Depth: 304' FEL, 2135' FNL, Sec 19, T11N, R12W, SM 9. Acres in Property: 320 14. Distance to Nearest Property: 304' at TD 4b. Location of Well (State Base Plane Coordinates): Surface: x- 243093 y- 2571841 Zone- 4 10. KB Elevation (Height above GL): 18 feet 15. Distance to Nearest Well Within Pool: N/A 16. Deviated wells: Kickoff depth: $Z~ ~ feet . ft• Maximum Hole Angle: degrees .Maximum Ant' pated Pressures in psig (see 20 AAC 25.035) Downhole: 1 40 SI ~ Surface: 1 168 Si ' 18. Casing Program: Specifications To -Setting Depth -Bottom Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Length MD ND MD TVD (including stage data) N/A 13-3/8" 72# K-55 BW 80' 1 16' 96' 96' N/A 12.25" 9-518" 36# L-80 LTC 804' 8' 18' 820' 820' 525 cu. ft. 8.5" 5-1/2" 15.5# J-55 BTC 4 226' 18' 16' 4 242' 3 539' 1143 cu. ft. 19. PRESENT WELL CONDITION SUMMA o be completed for Redrill and Re-Entry Operations) Total Depth MD (ft): Total Depth ND (ft): Plugs (mead ed): Effect. Depth MD (ft): Effect. Depth ND (ft): Junk (measured): Casing Length S' a Cement Volume MD TVD Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD (ft): ~J Perforation Depth TVD (ft): 20. Attachments: Filing Fee Q BOP Sketch ^ Property Plat Q Diverter Sketch ^ Drilling Program Q Time v. Depth Plot ^ Shallow Hazard Analysis ^ Seabed Report ^ Drilling Fluid Program ^~ 20 AAC 25.050 requirements ^ 21. Verbal Approval: Commission Repre ntative: 22. 1 hereby certify that the foregoing is tr a and correct. Printed Name J. Edwar ones Signature Date Contact Title Vice President, Engineerin and O erations Phone. 713-977-5799 Date ~ U~ Commission Use Only Permit to Drill Number: API Nu be . - 3 - ~ /9 • ~Q Permit Approval Date: See cover fetter for other requirements. Conditions of approval : If bo is checked, well may not be used to explore for, test, or produce coalbed methane, gas hydrates, or gas contained in shales: Other: Samples req'd: Yes^ No^v~ Mud log req'd: Yes^ No[~ HZS measures: Yes^ No[v~ Directional svy req'd: Yes[.YNo^ APPROVED BY THE COMMISSION DATE: ,COMMISSIONER orrlmission Form 10-401 Revised 12/2005 j 1 ~ ~ ~ ~ n ~ ~ ~ Submit in Duplicate ~ • SUMMARY DRILLING PROCEDURE NICOLAI CREEK UNIT NO. 10 1. Drive 80' of 13-3/8" conductor . 2. Move in and rig up AWS Rig #1. N/LT diverter on conductor 3. Drill a 7-5/8" vertical pilot hole to 820' 4. Open the 7-5/8" pilot hole to 12-1/4" to 820' 5. Set 9-5/8" surface casing at 820' and cement to surface 6. N/D diverter, N/U and test BOPE 7. Drill out with an 8-1/2" bit and kickoff directionally to the west 8. Directionally dri118-1/2" hole to 4,242' MD/3539' TVD 9. Run a suite of open-hole logs, including array induction, formation density, compensated neutron, dipole sonic, formation micro-imager, side-wall cores, and formation pressure tests (MDT) 10. If the logs indicate the well contains sufficient apparent pay, set 5-1/2" casing at TD 11. Perforate the well -most likely all Carya sands (2-5 to 2-3) 12. Isolate with packer and bridge plug, and test well from bottom up to determine Tyonek gas and water production rates. If a commercial well is attained at this point, the Beluga will likely be left for the future. 13. If the commerciality of the Tyonek sands is questionable, the shallow Beluga sands will also be tested and maybe set up as selective completions 14. Run a 2-7/8" completion with sand exclusion screens and packers to isolate individual productive intervals 15. N/D BOPE, N/U tree and test. Release rig and hook up well to production facilities • A[/RORA G~4S, LLC. Nico/ai Creek Unif #~O 12'/<" Hole to 2,500 ft Tubing: 2-7/8", 6.5 #, EUE 8rd Carya 2-3 Sands at ~2,500'- Carya 2-4 Sands at 2,800' - Carya 2-5 Sand at -3,400' - • 13-3/8", 72#, K-55, BFW ends Conductor driven to ~80' 9 5/8", 36#, K-55, LTC Surface Casing set at 820 ft MD. Cemented to surface. t-1 /2" Hole to 4,000 ft -1/2", 15.5#, J-55, BTC production Casing cemented at 4,242 ft MD / 3,539' TVD • • AURORA GAS, LLC NCU #10 0 -500 -1000 -1500 -2000 Y LL Y -2500 s .~ a d O -3000 -3500 -4000 -4500 -5000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Day NCU #10 Geo-mechanical Plot t a m .a ca d 0 500 1, 000 1, 500 2,000 2,500 3,000 3, 500 4,000 4, 500 i 3-3/8" '~ ~ i 9 5/~ " I ___ I I, Cary 2-4 Cary 2-5 5- /2" 8 10 12 14 16 18 Mud Wt. ppg NICOLAI CREEK UNIT #10 ADL- ~~rr J~ 389203 PROPOSED WELL r'"' ~~ h..' "r r„ 1 5 ,/~~ - -- --- - 1 ~ ~ y - --- ~- a ~ ~ ~ ~ t ~~ i • ~ ` ~ ~ ~ 1 ~ t i 1 ~ ~ t ~ •` 1 ~ f i a~ ~ ~ - •~ t ~ ~rr NCL~3 ~ NCU 0 r , / i _.._ J ti i AL+L' ,os~ /~, ' 63279 ~ i ~. z i NICOLAI CREEK UNIT #10 MD, FT TVD, FT NORTHING (Y) FASTING (X PERMIT TOWNSHIP RANGE SECTION FOOTAGE CALLS SURFACE 0.00: 0.00: 2571841 243093 's ADL-63279 € 11N 12W 20 € 1629' FWL, 1914' FNL BASE SURFACE CASING 820.00: 820.00: 2571841 243093 ~ ADL-63279 11N 12W 20 :1629' FWL, 1914' FNL CARYA2-1 ANOMALY 2029.47: 1919.00: 2571792 242590 ADL-63279 11N 12W 20 :1135' FWL, 1983' FNL CARYA 2-4 ANOMALY 3188.65: 2789.00' 2571697 241460 ADL-63279 11 N 12W 20 '• 6' FWL, 2104' FNL CARYA 2-5 ANOMALY 3831.15: 3383.00: 2571676 241216 AA-8426 11 N 12W 19 236' FEL, 2132' FNL PROPOSED TD 4000.00: 3539.00: 2571670 241151 AA-8426 11 N 12W 19 304' FEL, 2135' FNL PROPOSED NCU #10 WELL TRAJECTORY WEST EAST _ _ _ NCU#5 NCU - 10 NCU#3 1517N - ~-~ 1222ft ~ ~ ffsec i 1000 i 2000 i 3000 i 4000 i SOOU i ~ ~ - ~ ( ~' ~ ~ i (( < < ~ ~ ~ ('~ ~ l 0.1Of?- 1 ~ q--~ S ~ ~ ~ i1 ~~~1' C C ~ < S < r S < i ~ ` I/ I/ r r l l ~ ' ~ ~ ' ~ ~ { f t, ~ ~ ~ ~ I ~ ~ ~ ~ - C~,~ ( ` 1~'t lC<< 1 F ~ ~ / A ~~:~ t;-~~ ~~~~C~ c '~ S c ! ! ~ l C ~ ( f ~- ' ! <1c c ~>~, 4 ,~~ - ~ 1 l ( S ~ f ~ c~~ ,, l t, .~ >_~-~ ~ r~ i~~~Cc'~ i ~ r'~ } ~ ~'r ~` f( ~ .CC~(~(~~~'i t (C_L.Z-1 ~ ~5~~_f } ~ } 5 ~~5~ j ~ al 1~ ~~~ ~ ~ ~ ~{ ~~~,. ~ ~~/,~ ~ ~ ~F~ 1 ~f ~ _ ~ ~,~~ ~< '~_~~., s r~. ~ , tl~ ~a ~~1 i o~ ((J ? )J '~ J( (l , ~ ~ ~ '~ 0a _ ~ (( C~l ~ a >__ < c ) ~~~ ~ ~ ~ ~ ~ \ , f 0.3 ~ } r ;~- ,; ~ ~ ~ ~~ ~~ ~ ~ ~ I l ~ t~ 1 ! t ; c ~ >~ _ >>-~ N ...< ~ E~ } ; i ~ it, c1 ~ (( } OAOCti ~ ~ ~ ~ ~ -j ~ 1 ~ - < <>-'-~-1~~~r t__ _ 1 'ndrah ~ - ~ ~ 7 ~ 1 i ~ ~ S f i i~ ~ r-' f l t ~ ~.~4yt ~~- ~~~~ i l" ~4~~~- ' 1 ~ ~~ iiYL~ > > 1 i - f ~ ~ I I ) ~ ~ ~ ( S f t ~ ( ~ ~ ~ t (~ ~-, } , ' , , ` (~ {t }(S ~ < < j ( () 1 ~ S ~ t ` ~ (J `~-r ! C ; ~ ""_ ly..R ~ 1 ~ ~ r . . Y S . ,__ _r_~ i i f 1 l 1 f (( ~ S l C ~ ~ ~ ~' ~ ~, ~ l ~ ~ ~ ~ t J{ ((~(( ~ ti s~e f I S < < ~ t I ~ ~ ~~ i = 0.60 ~ ~ ~ - 1 _ _ ~'~:. - l-~ ~ t~ ~ ~~ ~ ~ ~~~~~ ~~ ~ (~11~ ( ~~~Cf~ff~~~~~~ ~ ' '~i~~ ~~~ ~~~~~1' ~i~ ~~ f ll 4 ) ~ ( 5 ~I}, ~ ~~ ~! ~I~s ~ ~~ll~,~~ , y S~tC {~ 1~~~ - ~ ,~ ~ ~ ~I . ~ ~ 1~ ~ ( ~~ _ 1 t I , ~ t C5 t ~ ~5 l( ~r~z< , ~~ I o. ~~ - ~ S~ i ( C ~ ~ ~ (1 ~,•~ CCC ~ ~ 1 ~ ( ~ ~ { ~ ~ t - ~_ { - L >, ~ ,_ t { rl. ) [( 1 r ,r ~-~~ .k. ' ~ . ( ~~ i ~ ~ • • • • Aurora Gas, LLC Pressure Calculations, Drilling Area Risks and Waste Disposal Nicolai Creek Unit #10 Maximum Anticipated Surface Pressure: 8-1/2" Hole Section The maximum anticipated surface pressure (MASP) while drilling the 8-1/2" hole section in this well will be the lesser of the formation pore pressure (less a full gas column to the surface) at the lowest anticipated productive sand at 3,400' TVD or the formation fracture pressure at the 9-5/8" casing shoe (less a full gas column to the surface). Offsetting well information indicates that the reservoir pore pressure will be approximately 1,540 psi (or ~ ~ ~~~.c~.~-- 0.453 psi/ft). The only formation strength data obtained in this area is a formation integrity test conducted in the nearby NCU #9. In that well, leakoff was not achieved ~~~ with a test of 14.5 ppg EMW at 620'. With no other data available, it is conservatively assumed that the formation at the shoe of the 9-5/8" in NCU #10 has a strength of 14.5 ppg EMW (or 0.754 psi/ft) 8-1/2" hole section MASP (pore pressure) _ (3,400 ft)(0.453 - 0.11) = 1,166 psi MASP (shoe breakdown) _ (820')(0.754 - 0.11) = 528 psi With MASP in the 8-1/2" open hole section expected to be 528 psi, the 3,000 psi BOPE system to be used will be adequate. After 5-1/2" Casing is set MASP (pore pressure) _ (3,400 ft)(0.453 - 0.11) = 1,166 psi Well Proximity Risk: The closest wellbore to this one is the NCU #3 producer located approximately 100' away on the same pad. See discussion below. Drilling Area Risks: There are three drilling risks anticipated in this area. The first to be encountered will be drilling the coal seams of the Lower Beluga Formation and the Tyonek Formation. These coals, if not handled correctly, can result in stuck drillpipe and sometimes loss of ability to circulate. The possibility of coal-stuck drillpipe will be mitigated via the use of PDC bits, which tend to slow down in coals and allow reaming them before they have a chance to plastically flow into the wellbore. • • The second risk is the drilling of gas-bearing sands in the Beluga and Upper Tyonek intervals of this well. These gas intervals can lighten the mud column while drilling. The mud properties, particularly the density and the amount of entrained gas, will be closely r monitored and kept in line with safe drilling practices. Finally, the top 850' of NCU #10 will be drilled approximately 100' away from the existing NCU #3 gas producer. Below 850', NCU #10 will be directionally drilled away from NCU #3. Until directional drilling tools with position-monitoring capability are run in the hole commencing at approximately 850', single-shot surveys will be run to ensure NCU #10 remains sufficiently vertical to maintain separation from NCU #3. Aurora Gas, LLC Nicolai Creek Unit #10 Casing Performance Properties Casing Properties and Design Verification Internal Collapse Tensile Strength Yield Resistance Joint Body TVD MD si si 1 OOO lbs (ft RKB~ (ft RKB~ Design Safety Factor* T B C Size Weight in. lb/ft Grade Cnxn 9-5/8 36 K-55 LTC 5-1/2 15.5 J-55 BTC 3,520 2,020 489 564 820 820 19.28 6.67 4.56 4,810 4,040 300 248 3,539 4,242 4.93 4.13 3.46 * Tensile design safety factors are calculated using pipe weight less buoyancy. Burst design safety factors are calculated at the surface using zero backup on the outside and MASP on the inside. Collapse design safety factors are calculated at the casing shoe using the maximum expected mud weight to be used at the shoe depth on the outside and the entire cased hole evacuated except for a gas gradient on the inside. Casing Setting Depth Rationale 9-5/8" 820'MD / 820'TVD Surface casing to stabilize shallow formations, provide an anchor for the BOP stack and provide shoe strength in the event of a kick. r: 5-1/2" 4,242'MD / 3,539'TVD Production casing to stabilize and isolate producing interval for production operations. • • Nicolai Creek Unit #10 Summary of Drilling Hazards POST THIS NOTICE IN THE DOGHOUSE ~ The 8-1/2" hole section will be drilled through the Beluga and " Upper Tyonek Formations which contain coal beds of varying thickness. Care must be exercised while drilling. them as they tend to swell into the wellbore and may stick the drill pipe and possibly pack off, eliminating the ability to circulate. ~ There is a producing gas well, the NCU #3, located 100' from the NCU #10. Directional control will be important while drilling the NCU #10 to avoid the possibility of intersecting the other wellbore. ~l The potential exists for penetrating multiple gas sands while drilling. Care must be taken to ensure that the mud weight remains sufficiently high and the amount of entrained gas sufficiently low to allow safe drilling. ~ There is no H2S risk anticipated for this well. CONSULT THE NCU #10 WELL PLAN FOR ADDITIONAL INFORMATION DRILLING FLUID PROPERTIES Nikolai Creek #10 Surface Hole Recommendations Mud Type: 6%KCI, EZ Mud Properties: • Density Viscosity Plastic Viscosity Yield Point API FL pH 0 - 820' 9.5-9.7 60 - 85 16 - 27 20 - 30 <5 8.5-9.0 System Formulation: 6%KCI, EZ Mud if no used mud is available Product Concentration Water 0.905 bbl KCI 19.8 ppb (30K chlorides) KOH 0.2 ppb (9 pH) BARAZAN D 1.25-1.5 ppb (as required 25 YP) EZ MUD DP 0.75 ppb (begin with .2 ppb) PAC-L or DEXTRID LT 1.5 to 2.0 ppb ALDACIDE G 0.1 ppb Barite As/if needed BARACOR 700 1 ppb BARASCV D 0.5 pb (add as the wells uds) Production Hole Recommendations Mud Type: 6%KCI, EZ Mud Properties: Density Viscosit Plastic Viscosity Yield Point API FL pH 820 - 1000' 9.5 - 10.0 40-50 6 - 15 13 - 20 <5 8.5-9.5 1000' - 4242' 12.5 50-65 18-32 16 - 26 <5 8.5-9.5 System Formulation: 6%KCI, EZ Mud Product Concentration Water 0.905 bbl KCI 19.8 ppb (30K chlorides) KOH 0.2 ppb (9 pH) Barazan D 1.25 ppb (as required 13-20 YP) Dextrid 2-3 ppb EZ Mud DP 0.75 ppb Aldacide G 0.1 ppb Baroid as/if needed Baracor 700 1 ppb Barascav D 0.5 b maintain er dilution rate ~~ Proposal No: 179551510A Aurora Gas, LLC Nicolai Creek No. 10 Nicolai Creek Unit Field Tyonek County, Alaska June 1, 2006 Well Recommendation Prepared for: Prepared by: Bill Penrose Dave Susko Fairweather E&P Region Engineer Bakersfield, California Bus Phone: 661-396-4446 Mobile: 661-201-0873 POWERVISION~ POWERPIta + I?oWERTnAx • Paws~L~Nx 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 Gr4105 Operator Name: Aurora Gas, LLC~ Well Name: Nicolai Creek No. 10 ~ Job Description: 9-5/8" Surface Casing @ 820 ft Date: June 1, 2006 Proposal No: 179551510A JOB AT A GLANCE Depth (ND) 820 ft Depth (MD) 820 ft Hole Size 12.25 in Casing Size/VVeight : 9 5/bin, 36 Ibs/ft Pump Via 9 5/8" O.D. (8.921" .I.D) 36 Total Mix Water Required 2,490 gals Spacer Fresh Water 20 bbls Density 8.3 ppg Cement Slurry Surface Blend 357 sacks Density 14.5 ppg Yield 1.47 cf/sack Displacement Drilling Mud 57 bbls Density 9.5 ppg Report Panted or: June t, 2006 3:44 PM Gr4109 STIMULATION o CEMENTING o COMPLETION SERVICES o SERVICE TOOLS a COILED TUBING PRODUCTION CHEMICALS o CASING AND TUBING RUNNING SERVICES a PIPELINE SERVICES a WELL CONTROL Operator Name: Aurora Gas, LLC~ Well Name: Nicolai Creek No. 10 ~ Job Description: 9-5/8" Surface Casing @ 820 ft Date: June 1, 2006 Proposal No: 179551510A WELL DATA ANNULAR GEOMETRY ANNULAR LD. DEPTH ft (in) MEASURED TRUE VERTICAL 12.615 CASING ~ 90 ~ 90 12.250 HOLE ~ 820 ~ 820 SUSPENDED PIPES Float Collar set @ Mud Density Est. Static Temp. Est. Circ. Temp. VOLUME CALCULATIONS 90 ft x 0.3627 cf/ft 730 ft x 0.3132 cf/ft 80 ft x 0.4341 cf/ft with 0 % excess with 100 % excess with 0 % excess TOTAL SLURRY VOLUME 740 ft 9.50 ppg 60°F 60°F = 32.6 cf = 457.3 cf = 34.7 cf {inside pipe) = 524.6 cf = 94 bbls Report Pr;nt=ti or: June 7, 2008 3:44 PN Gr4~ 15 STIMULATION a CEMENTING o COMPLETION SERVICES o SERVICE TOOLS o COILED TUBING PRODUCTION CHEMICALS a CASING AND TUBING RUNNING SERVICES o PIPELINE SERVICES o WELL CONTROL Operator Name: Aurora Gas, LLC ~ Well Name: Nicolai Creek No. 10 Job Description: 9-518" Surface Casing @ 820 ft Date: June 1, 2006 Proposal No: 179551510A FLUID SPECIFICATIONS Spacer 20.0 bbls Fresh Water @ 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) Amount of Mix Fluid (gps) 525 / 1.4 = 357 sacks Type I Cement + 7% bwoc BA-90 + 0.5% bwoc CD-32 + 0.4% bwoc BA-10A + 1 gals/100 sack FP-6L + 61.9% Fresh Water 57.2 bbls Drilling Mud @ 9.5 ppg SLURRY NO. 1 14.50 1.47 6.97 6.98 Report PrinteC on: June 1, 2U09 3:43 PM Gr4i23 STIMULATION o CEMENTING o COMPLETION SERVICES a SERVICE TOOLS a COILED TUBING PRODUCTION CHEMICALS o CASING AND TUBING RUNNING SERVICES o PIPELINE SERVICES o WELL CONTROL Operator Name: Aurora Gas, l_LC~ Well Name: Nicoiai Creek No. 10 , Job Description: 5-1/2" Production Casing @ 4000 ft Date: June 1, 2006 Proposal No: 179551510A JOB AT A GLANCE Depth (TVD) 3,539 ft Depth (MD) 4,000 ft Hole Size 8.5 in Casing Size/VVeight : 5 1/2 in, 17 Ibs/ft Pump Via 5 1/2" O.D. (4.892" .I.D) 17 Total Mix Water Required 5,290 gals Weighted Spacer MCS-4D 40 bbls Density 11.0 ppg Lead Slurry Production Lead 305 sacks Density 13.5 ppg Yield 1.83 cf/sack Tail Slurry Production Tail 500 sacks Density 15.8 ppg Yield 1.17 cf/sack Displacement Drilling Mud 91 bbls Density 9.5 ppg Report Pr;rt=d crc. June 1, 2096 3:44 PM ~~4ioy STIMULATION o CEMENTING o COMPLETION SERVICES o SERVICE TOOLS ~ COILED TUBING PRODUCTION CHEMICALS o CASING AND TUBING RUNNING SERVICES o PIPELINE SERVICES a WELL CONTROL Operator Name: Aurora Gas, LLC~ Well Name: Nicolai Creek No. 10 ~ Job Description: 5-1/2" Production Casing @ 4000 ft ,~ Date: June 1, 2006 Proposal No: 179551510A WELL DATA ANNULAR GEOMETRY ANNULAR L.D. DEPTH ft (in) MEASURED TRUE VERTICAL 8.921 CASING ~ 820 ~ 820 8.500 HOLE ~ 4,000 ~ 3,539 SUSPENDED PIPES Float Collar set @ 3,920 ft Mud Density 10.00 ppg Est. Static Temp. 94 ° F Est. Circ. Temp. 85 ° F VOLUME CALCULATIONS 820 ft x 0.2691 cf/ft 1,180 ft x 0.2291 cf/ft 2,000 ft x 0.2291 cf/ft 80 ft x 0.1305 cf/ft with 0 % excess = with 25 % excess = with 25 % excess = with 0 % excess = TOTAL SLURRY VOLUME _ 220.6 cf 337.9 cf 572.7 cf 10.4 cf (inside pipe) 1141.7 cf 204 bbls Report Prin!ed on: June 1, 2006 3;44 PM Gr4115 STIMULATION o CEMENTING o COMPLETION SERVICES e SERVICE TOOLS a COILED TUBING PRODUCTION CHEMICALS o CASING AND TUBING RUNNING SERVICES o PIPELINE SERVICES o WELL CONTROL Operator Name: Aurora Gas, LLC ~ Well Name: Nicolai Creek No. 10 Job Description: 5-112" Production Casing @ 4000 ft Date: June 1, 2006 Proposal No: 179551510A FLUID SPECIFICATIONS Weighted Spacer 40.0 bbls MCS-4D + 118 Ibs/bbl Barite -Sacked + 6 Ibs/bbl MCS-D + 22.13 Ibs/bbl Bentonite @ 11 ppg FLUID Lead Slurry Tail Slurry VOLUME VOLUME CU-FT FACTOR AMOUNT AND TYPE OF CEMENT Displacement CEMENT PROPERTIES Slurry Weight (ppg) Slurry Yield (cf/sack) Amount of Mix Water (gps) Amount of Mix Fluid (gps) 559 / 1.8 = 305 sacks Class G Cement + 10% bwoc BA-90 + 1 %bwoc Calcium Chloride + 2.5% bwoc FL-52 + 0.2%bwoc ASA-301 + 0.5% bwoc Sodium Metasilicate + 1 gals/100 sack FP-6L + 82.4% Fresh Water 583 / 1.1 = 500 sacks Class G Cement + 2% bwow Potassium Chloride + 1 %bwoc BA-10A + 0.6% bwoc CD-32 + 0.3% bwoc Sodium Metasilicate + 0.4% bwoc R-3 + 1 gals/100 sack FP-6L + 43.6% Fresh Water 91.1 bbls Drilling Mud @ 9.5 ppg SLURRY SLURRY NO. 1 NO. 2 13.50 15.80 1.83 1.17 9.29 4.91 9.30 4.92 Report Prir~,feC on: June t, 20QE 3:d.~ PM Gr4128 STIMULATION o CEMENTING o COMPLETION SERVICES a SERVICE TOOLS o COILED TUBING PRODUCTION CHEMICALS o CASING AND TUBING RUNNING SERVICES o PIPELINE SERVICES o WELL CONTROL • • Aurora +Gas, LLG Plan: NCU#10 (wp02) Sperry Drilling Services Proposal Report -Geographic 02 June, 2006 Aurora Gas, LLC Cook Inlet Nicolai Creek Unit s Plan NCU#10 Plan NCU#10 ~- n E +~ at Local Coordinate Origin: Viewing Datum: yt NDs to System: North Reference: ~~ Unit System: Centered on Well Plan NCU#10 WELL @ 272.OOft (Original Well Elev) N Grid ~~ API - US Survey Feet HA!_LIStJRTON Sperry Drilling Services HALLIBURTON Sperry Drilling Services 0 0 500 500 9 5/8" L 1000 1 1000 20° 1500 0 ~. o- p 2000 a~ F 2500 3000 3500 I J 95 CARYA 2-1 ANOMALY (wp02) DO ~G- NCU#31NCU#3 4000 ryh~ CARYA 23 ANOMALY (wp02) b1 p0 ZR"9 orT,~us pl.m xct ::lo Ground Leucl: 27200 ~N:-S ~L.-N Northing Fasting Latitmdc LonE~hidc Slot 000 O.OQ571841.00 243093.00 61°I'S3.753NI51°26'S5.783W COMPANY DETAILS: Aunxa Gas, LLC REFERENCE INFORMATION Dolling Co-ordinate (N/E) Reference, Well Plan NCU#10, Grid North Vertical (ND) Reference. WELL @ 272.OOf1 (Original Well Elev) Calculation Method: Minimum Curvature Measured Depth Reference. WELL @ 272.OOft (Original Well Elev) Error Sys[cm: ISCWSA Calculation Method: Minimum Curvature Scan Method: Trav. Cylinder North Error Surface: Elliptical Conic W'aming Method. Rules Based WELLBORE TARGET DETAILS CARY,42-I ANOMALY Iwplll) 1919.U11 164 /.INI -4Y.111/ JILf.UI r CARYA 2-3 ANOMALY Iwp02) 2562.93 2290.93 -43 00 -I 109.03 • C'ARY.A 2-4 ANOMALY IwpO'_1 2788.13 2516.14 -I I4.Ot1 -1419.04 CARYA 2-5 ANOMALY Iwp021 3383.00 31 I LfNI -IfiS.(Nl -1877.05 nir r i«m Tn n,.,,nT 9(40 fNl 16'1 00 -171 00 -Igd? OS ° ~~ CARYA 2-4 ANOMALY (wp02) ' ~~O 7" - Plan NCU#10/NCU#10 (wp02) CARYA 2-5 ANOMALY (wp02) Aooo NCU#10 TD (wp02) _ , LE(iENf7 -jE,- NCU#3, NCU#3, NCU#3 VO -~- NCU#10 (wp02) Aurora Gas, LLC 0 500 1000 1500 2000 2500 3000 Vertical Section at 264.97' (750 ftlin) CARYA ?-J ANOMALY I«p0_1 CARYA'_-I ANOMALY Ir+'pll''1 250 NCL~!Ifl fU ncpU'_I 95,8„ ~ I CARYA 7-3 AVOMAI ti~ (~r3NL1 t ,ARY'A 2-5 ANOMALY hvp02) ~ ~ ~ T ~ T Azimuths to Grid North ~ r 0 True North: 1.27° MMagnetic North: 20.92° r U ,~ S ~ .. N O O % ..S. Magnetic Field 7 - r+- N ~ c o ° % t Strength:55548.2nT ~, ° -250 in Dip Angle: 73.77° Date: 5115/2006 o Model: BGGM2005 ~ ~ NCU#3/NCU#3 Plan NCU#1 Or7JCU#10 (wp021 ~. -500 -2500 -2250 -2000 -1750 -IS(Hl -1250 -1000 -750 -500 -250 0 250 West(-)Bast(+) (500 ft/in) • Aurora Gas, LLC Database: CPAI2003.11 Company: Aurora Gas, LLC Project: Cook Inlet Nicolai Creek Unit Site: Well: 'Plan NCU#10 Wellbore: 'Plan NCU#10 Design: 'NCU#10 (wp02) Halliburton Company Planning Report -Geographic TVD Reference: MD Reference: North Reference: Survey Calculation Method: ~~L.~.LI~iU~T Pal Sperry drilling Services Well Plan NCU#10 WELL @ 272.OOft (Original Well Elev) WELL @ 272.OOft (Original Well Elev) Grid Minimum Curvature h~~".~h - Cook Inlet, USA ~ ,,, ~ ~ ~ ~ ~ u,uummm~uuuiu m~uuummm~u `mug Map System: US State Plane 1927 (Exact solution) System Datum: Mean Sea Level Geo Datum: NAD 1927 (NADCON CONUS) Using Well Reference Point Map Zone: Alaska Zone 04 Using geodetic scale factor ~~ ,. ~~'~ ~ Plan NCU#10 ~. --_----__ Well Position +NI-S 0.00 ft Northing 2,571,841.00 ft ~ Latitude: 61 ° 01' 53.753" N +EI-W 0.00 ft Eastmg. 243,093.00 ft ~ Longitude: 151° 26' 55.783" W Position Uncertainty 0.00 ft Wellhead Elevation: ft Ground Level: 272.00 ft ~lba'~i~ y~~i Plan NCU#1~I~Nw~wumuuu~uunmo uuuomioummourc =.~ ~~: ~rir u~,i ,.: pp '„~ oR ~, y~ ll ~ I ~ ~ ~ > ~ ~` ill Declination j (°) Dip,Angle (q) Field Strer (rtT} i ! H ih1 p o, h!'ll I ,g~uP~u a ~~ _- d ~ ,e ~ ;, ~ ~ ... ~ ~ BGGM2005 _~a i ~, : ,H~ ~ '!!k,, r ~~. 5/15/2006 19.65 73.77 55,548 Audit Notes: Version: Phase: PLAN Tie On Depth: 0.00 Q00 0.00 0.00 264.97 - Plan Summary '' ~~ le D Build Turn Measured Vertical g og Depth (ftl i°~. Inclination (°) Azimuth (') Depth {ft) +Np.S ({t} +EI-W (g) Rate (°I100ft) Rate {°J100ff) Rate (°f100ft) TPp I`l 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 820.00 0.00 0.00 820.00 0.00 0.00 0.00 0.00 0.00 0.00 1,352.27 26.61 263.56 1,333.34 -13.61 -120.65 5.00 5.00 0.00 263.56 1,496.73 26.61 263.56 1,462.49 -20.87 -184.95 0.00 0.00 0.00 0.00 2,055.82 43.34 265.85 1,919.00 -49.00 -503.01 3.00 2.99 0.41 5.44 2,168.89 46.73 265.99 1,998.89 -54.69 -582.80 3.00 3.00 0.13 1.81 3,266.55 46.73 265.99 2,751.30 -110.52 -1,380.06 0.00 0.00 0.00 0.00 3,320.30 46.73 263.78 2,788.14 -114.00 -1,419.04 3.00 0.00 -4.12 -90.69 3,591.28 38.60 263.78 2,987.23 -133.88 -1,601.45 3.00 -3.00 0.00 180.00 4,242.31 25.00 263.78 3,539.00 -171.00 -1,942.05 2.10 -2.09 0.00 -180.00 6/2/2006 2:25:42PM Page 2 of 4 COMPASS 2003.11 Build 48 • Aurora Gas, LLC Halliburton Company ~ALLIBLJR'~'~~1 Planning Report -Geographic Sperry Grilling Services 1 Database: CPAI 2003.1 Local Co-ordinate Reference: Well Plan NCU#10 Company: Aurora Gas, LLC I Project: Cook Inlet TVD Reference: MD Reference: 'WELL @ 272.OOft (Original Well Elev) q~~i~l WELL @ 272.OOft (Original Well Elev) Site: Nicolai Creek Unit North Reference: Grid ' !Well: Plan NCU#10 Survey Calculation Method: 'Minimum Curvature _- Wellbore: Plan NCU#10 Design: NCU#10 (wp02) E Planned Survey NCU#10 (wp02) Map Map MD t nclination Azimuth ND SEND +NI-S +EI-W Northing Fasting DLSEV Vert Section (ft) (°) (°) (ftl (ft) (ft) (ft) (ft) (ft) (°i100ft) (ft) 0.00 0.00 0.00 0.00 -272.00 0.00 0.00 2,571,841.00 • 243,093.00 0.00 0.00 100.00 0.00 0.00 100.00 -172.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 200.00 0.00 0.00 200.00 -72.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 300.00 0.00 0.00 300.00 28.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 400.00 0.00 0.00 400.00 128.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 500.00 0.00 0.00 500.00 228.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 600.00 0.00 0.00 600.00 328.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 700.00 0.00 0.00 700.00 428.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 800.00 0.00 0.00 800.00 528.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 820.00 0.00 0.00 820.00 548.00 0.00 0.00 2,571,841.00 243,093.00 0.00 0.00 9 5/8" 900.00 4.00 263.56 899.94 627.94 -0.31 -2.77 2,571,840.69 243,090.23 5.00 2.79 1,000.00 9.00 263.56 999.26 727.26 -1.58 -14.02 2,571,839.42 243,078.98 5.00 14.10 1,100.00 14.00 263.56 1,097.22 825.22 -3.82 -33.82 2,571,837.18 243,059.18 5.00 34.03 1,200.00 19.00 263.56 1,193.07 921.07 -7.00 -62.04 2,571,834.00 243,030.96 5.00 62.41 1,300.00 24.00 263.56 1,286.09 1,014.09 -11.11 -98.45 2,571,829.89 242,994.56 5.00 99.04 1,352.27 26.61 263.56 1,333.34 1,061.34 -13.61 -120.65 2,571,827.39 242,972.36 5.00 121.38 1,400.00 26.61 263.56 1,376.01 1,104.01 -16.01 -141.89 2,571,824.99 242,951.11 0.00 142.75 1,496.73 26.61 263.56 1,462.49 1,190.49 -20.87 -184.95 2,571,820.13 242,908.05 0.00 186.07 1,500.00 26.71 263.58 1,465.41 1,193.41 -21.03 -186.41 2,571,819.97 242,906.59 2.99 187.54 1,600.00 29.70 264.16 1,553.53 1,281.53 -26.07 -233.40 2,571,814.93 242,859.61 3.00 234.78 1,700.00 32.69 264.63 1,639.06 1,367.06 -31.12 -284.94 2,571,809.88 242,808.07 3.00 286.57 1,800.00 35.68 265.04 1,721.77 1,449.77 -36.17 -340.89 2,571,804.83 242,752.12 3.00 342.75 1,900.00 38.67 265.38 1,801.44 1,529.44 -41.21 -401.10 2,571,799.79 242,691.91 3.00 403.17 2,000.00 41.67 265.69 1,877.85 1,605.85 -46.22 -465.40 2,571,794.78 242,627.61 3.00 467.66 2,055.82 43.34 265.85 1,919.00 1,647.00 -49.00 -503.01 2,571,792.00 242,590.00 3.00 505.37 CARYA 2-1 A NOMALY (wp02) 2,100.00 44.66 265.91 1,950.78 1,678.78 -51.21 -533.62 2,571,789.79 242,559.39 3.00 536.06 2,168.89 46.73 265.99 1,998.89 1,726.89 -54.69 -582.80 2,571,786.31 242,510.22 3.00 585.35 2,200.00 46.73 265.99 2,020.22 1,748.22 -56.27 -605.39 2,571,784.73 242,487.62 0.00 608.00 2,300.00 46.73 265.99 2,088.77 1,816.77 -61.36 -678.03 2,571,779.65 242,414.99 0.00 680.79 2,400.00 46.73 265.99 2,157.31 1,885.31 -66.44 -750.66 2,571,774.56 242,342.36 0.00 753.59 2,500.00 46.73 265.99 2,225.86 1,953.86 -71.53 -823.29 2,571,769.47 242,269.73 0.00 826.39 2,600.00 46.73 265.99 2,294.40 2,022.40 -76.61 -895.93 2,571,764.39 242,197.10 0.00 899.19 2,700.00 46.73 265.99 2,362.95 2,090.95 -81.70 -968.56 2,571,759.30 242,124.47 0.00 971.99 2,800.00 46.73 265.99 2,431.50 2,159.50 -86.79 -1,041.19 2,571,754.22 242,051.83 0.00 1,044.79 2,900.00 46.73 265.99 2,500.04 2,228.04 -91.87 -1,113.83 2,571,749.13 241,979.20 0.00 1,117.59 2,991.75 46.73 265.99 2,562.93 2,290.93 -96.54 -1,180.46 2,571,744.46 241,912.57 0.00 1,184.38 CARYA 2-3 ANOMALY (wp02) 3,000.00 46.73 265.99 2,568.59 2,296.59 -96.96 -1,186.46 2,571,744.04 241,906.57 0.00 1,190.39 3,100.00 46.73 265.99 2,637.13 2,365.13 -102.05 -1,259.09 2,571,738.96 241,833.94 0.00 1,263.19 3,200.00 46.73 265.99 2,705.68 2,433.68 -107.13 -1,331.72 2,571,733.87 241,761.31 0.00 1,335.99 3,266.55 46.73 265.99 2,751.30 2,479.30 -110.52 -1,380.06 2,571,730.49 241,712.97 0.00 1,384.44 3,300.00 46.72 264.62 2,774.23 2,502.23 -112.51 -1,404.33 2,571,728.49 241,688.70 3.00 1,408.79 3,320.30 46.73 263.78 2,788.14 2,516.14 -114.00 -1,419.04 2,571,727.00 241,674.00 3.00 1,423.57 CARYA 2-0 ANOMALY (wp02) 6/2/2006 2:25:42PM Page 3 of 4 COMPASS 2003.11 Build 48 • • =A urora Gas, LLC Halliburton Company ~-(I,hLLIBUR'~°' 1~! Planning Report -Geographic Sperry drilling Services Database: CPAI 2003.11 Loeal Co-ordinate Reference: Well Plan NCU#10 Company: Aurora Gas, LLC TVD Reference: WELL @ 272.OOft (Original Well Elev) Project: Cook Inlet MD Reference: WELL @ 272.OOft (Original Well Elev) Site: Nicolai Creek Unit North Reference: Grid WeiF Plan NCU#10 Survey Calculation Method: Minimum Curvature Wellbore: Plan NCU#10 Design: NCU#10 (wp02) Planned Survey NCU#10 (wp 02) Map Map MD Inclination Azimuth ND SSTVD +NI-S +EI-W Northing Easting DLSEV Vert Section (ft) (°) (°) (ftj {ft) (ft) (ft) (ft) (ft) (°f100ft) (ft) 3,400.00 44.34 263.78 2,843.97 2,571.97 -120.17 -1,475.58 2,571,720.84 241,617.46 3.00 1,480.43 3,500.00 41.34 263.78 2,917.29 2,645.29 -127.53 -1,543.16 2,571,713.47 241,549.87 3.00 1,548.40 3,591.28 38.60 263.78 2,987.23 2,715.23 -133.88 -1,601.45 2,571,707.12 241,491.59 3.00 1,607.02 3,600.00 38.42 263.78 2,994.06 2,722.06 -134.47 -1,606.85 2,571,706.53 241,486.19 2.10 1,612.45 3,700.00 36.32 263.78 3,073.53 2,801.53 -141.05 -1,667.18 2,571,699.96 241,425.86 2.10 1,673.13 3,800.00 34.22 263.78 3,155.17 2,883.17 -147.30 -1,724.57 2,571,693.70 241,368.47 2.10 1,730.85 3,900.00 32.12 263.78 3,238.88 2,966.88 -153.23 -1,778.95 2,571,687.77 241,314.09 2.10 1,785.54 4,000.00 30.01 263.78 3,324.53 3,052.53 -158.82 -1,830.25 2,571,682.18 241,262.80 2.10 1,837.13 4,067.05 28.61 263.78 3,383.00 3,111.00 -162.38 -1,862.88 2,571,678.63 241,230.17 2.10 1,869.94 CARYA 2-5 ANOMALY (wp02) 4,100.00 27.91 263.78 3,412.02 3,140.02 -164.07 -1,878.39 2,571,676.94 241,214.66 2.10 1,885.54 4,200.00 25.81 263.78 3,501.22 3,229.22 -168.96 -1,923.31 2,571,672.04 241,169.74 2.10 1,930.71 4,242.31 25.00 263.78 3,539.00 , 3,267.00 -171.00 -1,942.05 2,571,670.00 241,151.00 1.92 1,949.56 7" -NCU#10 TD (wp02) logic Targets .,. , Plan NCU#10 TVD +N/-S +E!-W Northing Easting {ft) ft ft (ft) (ft) 2,562.93 Ar~YA2-3 ANOMALY{wpU2} -93.00 -1,109.03 2,571,748.00 241,984.00 - Point 3,383.00 CARYA 2-5 ANOMALY (wp02) -165.00 -1,877.05 2,571,676.00 241,216.00 - Point 2,788.14 CARYA 2-4 ANOMALY (wp02) -114.00 -1,419.04 2,571,727.00 241,674.00 - Point 1,919.00 CARYA 2.1 ANOMALY (wp02) -49.00 -503.01 2,571,792.00 242,590.00 - Point 3,539.00 NCU#10 TD (wp02) -171.00 -1,942.05 2,571,670.00 241,151.00 - Point ornosed Casing Points ~_ Measured Vertical Casing Ndie i~ Depth Depth Daatrre3:-r "' ,~, :,... ~ _ (ft) (ft) i 3 ~ 820.00 820.00 9-Si8 11-i 4 4,242.30 3,539.43 7 7-1l2 6/2/2006 2:25:42PM Page 4 of 4 COMPASS 2003.11 Build 48 • • Aurora Gas, L.LG Plan: NCU#10 (wp02) Sperry Drilling Services Anticollision Summary 02 June, 2006 Aurora Gas, LLC Cook Inlet Nicolai Creek Unit Plan NCU#10 Plan NCU#10 ', }3 y Local Coordinate Origin: Centered on Well Plan NCU#10 Viewing Datum: WELL @ 272.OOft (Original Well Elev) NDs to System: N North Reference: Grid Unit System: API - US Survey Feet F HAL.LIBUR ^ IL"~1V '3perry drilling Services SURVEY PROGRAM Date: 2006-OS-24700:00:00 Validated: Yes Version: Depth FromDepth To Survey/Plan Tool 0.00 820.00 vCU'#10(wpU2) WC 820.00 4242.31 NCU#10(wp02) MWD 0 z7o Sao Aurora Gas, LLC Drilling Calculation Method: Minimum Curvature Error System: ISCWSA Scan Method: Trav. Cylinder North Error Surface: Elliptical Conic Warning Method: Rules Based Travelling Cylinder Azimuth (TFO+AZi) ~°~ vs Centre to Centre Separation ~30U ft/ink NAD 27 ASP Zone 4 : WELL DETAILS: Plan NCU#10 Ground Level: 272.00 +NI-S+E/-W Northing Easting Latikude Longitude Slot 0.00 0.00 2571641.00 243093.00 61°t'S3.753N 151°26'S5.783W REFERENCE INFORMATION Coordinate (NIE) Reference: Well Plan NClHi10, Grid North Vertical (TVD) Reference: WELL @ 272.OOk (Original Well Elev) Section (VS) Reference: Slot - (O.OON, O.OOE) Measured Depth Reference: WELL @ 272.OOk (Original Well Elev) Calculation Method: Minimum Curvature From Colour To MD 0 250 250 500 500 750 750 1000 1000 1250 1250 1500 1500 1750 1750 2000 2000 2250 2250 2500 2500 -~- 2750 2750 3000 ANTI-COLLISION SETTINGS Interpolation Method: MD Interval: SOStations Depth Range From: 0.00 To 4242.31 Maximum Range:624.230938318123 Reference: Plan: NCU#10 (wp02) 0 180 :U#3 Travelling Cylinder Azimuth (TFO+ALp ~°( vs Centre to Centre Separafion )SU tt/ink LEGEND -~ NCU#3, NCU#3, NCU#3 VO -B- NCU#10 (wp02) SECTION DETAILS Sor MD Aa TVO •W-S •FJ-W DLeg TFaca VSx Target 0 00 0 00 0.00 0.00 z 6z0 00 0.00 0 0o a2o.oo 0.00 000 0 00 am a o0 0 00 J 1352.2] 26.61 2fi3.5fi 1JJJ.34 1496 ]3 2661 263.56 1462.09 138112065 500 Zfi3.56 10.8] 184 95 000 0.00 2055.82 43.34 265.85 191900 2168.89 46.]3 2fi599 1998.89 J900 -50301 300 544 CARVA 2~1 rViCMAALY Ixp021 5169 -58260 3.00 181 32fifi 55 46.]3 26599 2]51.30 3320.30 46.]3 Tfi1]8 2]88.11 11052 1JB0.06 000 000 14.Gp t ]00 -90 fig CARVA TJ ANOMALY I"9021 3591]8 38.fi0 263]8 298].2) 10 424231 2500 263]8 353900 133.88160945 3.00 18000 -1]100 194205 210 -18000 NCU410 ?01"9021 • Halliburton Company ~'-1AL.telBtJRTt71V Aurora Gas, LLC Anticollision Report Sperry Drilling Services Company: Aurora Gas, LLC Local Co-ordinate Reference: Well Plan NCU#10 Project: .Cook Inlet TVD Reference: WELL @ 272.OOft (Original Well Elev) Reference Site: Nicolai Creek Unit MCI Reference: 'WELL @ 272.OOft (Original Well Elev) Site Error O.OOft North Reference: Grid Referenee WeIL• 'Plan NCU#10 Survey Calculation Method: Minimum Curvature 4Veli Error: O,OOft Output errors are at 1.00 sigma Refetnce Wellbore Plan NCU#10 Database: GPAI 2003.11 ~ Referenee Design: NCU#10 (wp02) Offset TVD Reference: Offse~' Catum Filter type: GLOBAL FILTER APPLIED: All wellpaths within 200'+ 100/1000 of reference Interpolation Method: MD Interval 25.OOft Error Model: ISCWSA Depth Range: Unlimited Scan Method: Trav. Cylinder North Results Limited by: Maximum center-center distance of 624.23ft Error Surface: Elliptical Conic Warning Levels evaluated at: 0.00 Sigma Survey Tooi Program Date 5!24(2006 Prom To` {ff) (ft) Survey {Wellbore) Tool Name Description 0.00 820.00 NCU#10 (wp02) (Plan NCU#10) INC Inclinometer (Totco/Teledrift) i 820.00 4,242.31 NCU#10 (wp02) (Plan NCU#10) MWD MWD -Standard i Summary Reference Offset Centre to No-Go Allowable Measured Measured Centre Di tance Deviation Warning Name Depth Depth Distance (ft) from Plan Offset Well - Welibore -Design (ft) (ft) (ft) (ft) ;olai Creek Unit -> _, ..-r..',a YI',..,alll~ R%MSRRIII~HM~-~'f,..~ -:-- NCU#3 -NCU#3 -NCU#3 1,074.56 1,075.00 57.72 316.77 -259.05 FAIL -Major Risk CC -Min centre to center distance or covergent point, SF -min separation factor, ES -min ellipse separation 6/2/2006 1:41:53PM Page 2 of 2 COMPASS 2003.11 Build 48 • • HALLIBURTON Aurora Gas, LLC Cook Inlet Anticollision Report for Nicolai Creek Unit -Plan NCU#10 -Plan NCU#10 -NCU#10 Trav. Cylinder North Proximity Scan on Current Survey Data (Grid North Reference) Offset Design: Nicolai Creek Unit - NCU#3 -NCU#3 -NCU#3 Scan Radius is ft Reference Well Comparison Well Proximity Measured Vertical Measured Vertical Relative Relative H S Toolface Depth Depth Depth Depth +N/-S +E/-W Distance North offset Ref to (ft) (ft) (ft) (ft) (ft) (ft) (ft) Direction Comparison 10.00 10.00 0.00 0.00 13.00 26.00 29.07 0.00 -116.57 35.00 35.00 25.00 25.00 13.00 26.00 29.07 0.00 -116.57 60.00 60.00 50.00 50.00 13.00 26.00 29.07 0.00 -116.57 85.00 85.00 75.00 75.00 13.00 26.00 29.07 0.00 -116.57 110.00 110.00 100.00 100.00 13.00 26.00 29.07 0.00 -116.57 135.00 135.00 125.00 125.00 13.00 26.00 29.07 0.00 -116.57 160.00 160.00 150.00 150.00 13.00 26.00 29.07 0.00 -116.57 185.00 185.00 175.00 175.00 13.00 26.00 29.07 0.00 -116.57 210.00 210.00 200.00 200.00 13.00 26.00 29.07 0.00 -116.57 235.00 235.00 225.00 225.00 13.00 26.00 29.07 0.00 -116.57 260.00 260.00 250.00 250.00 13.00 26.00 29.07 0.00 -116.57 285.00 285.00 275.00 275.00 13.00 26.00 29.07 0.00 -116.57 310.00 310.00 300.00 300.00 13.00 26.00 29.07 0.00 -116.57 335.00 335.00 325.00 325.00 13.00 26.00 29.07 0.00 -116.57 360.00 360.00 350.00 350.00 13.00 26.00 29.07 0.00 -116.57 385.00 385.00 375.00 375.00 13.00 26.00 29.07 0.00 -116.57 410.00 410.00 400.00 400.00 13.00 26.00 29.07 0.00 -116.57 435.00 435.00 425.00 425.00 13.00 26.00 29.07 0.00 -116.57 460.00 460.00 450.00 450.00 13.00 26.00 29.07 0.00 -116.57 485.00 485.00 475.00 475.00 13.00 26.00 29.07 0.00 -116.57 510.00 510.00 500.00 500.00 13.00 26.00 29.07 0.00 -116.57 535.00 535.00 525.00 525.00 13.00 26.00 29.07 0.00 -116.57 560.00 560.00 550.00 550.00 13.00 26.00 29.07 0.00 -116.57 585.00 585.00 575.00 575.00 13.00 26.00 29.07 0.00 -116.57 610.00 610.00 600.00 600.00 13.00 26.00 29.07 0.00 -116.57 635.00 635.00 625.00 625.00 13.00 26.00 29.07 0.00 -116.57 660.00 660.00 650.00 650.00 13.00 26.00 29.07 0.00 -116.57 685.00 685.00 675.00 675.00 13.00 26.00 29.07 0.00 -116.57 ' 710.00 710.00 700.00 700.00 13.00 26.00 29.07 0.00 -116.57 735.00 735.00 725.00 725.00 13.00 26.00 29.07 0.00 -116.57 760.00 760.00 750.00 750.00 13.00 26.00 29.07 0.00 -116.57 785.00 785.00 775.00 775.00 13.00 26.00 29.07 0.00 -116.57 810.00 810.00 800.00 800.00 13.00 26.00 29.07 0.00 -116.57 834.65 834.65 825.00 825.00 13.00 26.00 29.16 0.00 -116.50 859.05 859.05 850.00 850.00 13.00 26.00 29.71 0.00 -116.12 883.42 883.39 875.00 875.00 13.00 26.00 30.77 0.00 -115.44 907.73 907.65 900.00 900.00 13.00 26.00 32.33 0.00 -114.51 931.97 931.79 925.00 925.00 13.00 26.00 34.40 0.00 -113.42 956.10 955.78 950.00 950.00 13.00 26.00 37.00 0.00 -112.23 980.11 979.59 975.00 975.00 13.00 26.00 40.11 0.00 -111.02 1,003.98 1,003.19 1,000.00 1,000.00 13.00 26.00 43.74 0.00 -109.82 1,027.69 1,026.56 1,025.00 1,025.00 13.00 26.00 47.89 0.00 -108.69 1,051.23 1,049.66 1,050.00 1,050.00 13.00 26.00 52.55 0.00 -107.63 1,074.56 1,072.47 1,075.00 1,075.00 13.00 26.00 57.72 0.00 -106.66 1,100.00 1,097.22 1,100.00 1,100.00 13.00 26.00 63.44 0.00 -105.70 02 June, 2006 - 13:43 Page 2 of 6 COMPASS • HALLIBURTON Aurora Gas, LLC Cook Inlet Anticollision Report for Nicolai Creek Unit -Plan NCU#10 -Plan NCU#10 -NCU#10 Trav. Cylinder North Proximity Scan on Current Survey Data (Grid North Reference) Offset Design: Nicolai Creek Unit - NCU#3 -NCU#3 -NCU#3 Scan Radius is ft Reference Well Comparison Well Proximity Measured Vertical Measured Vertical Relative Relative H S Toolface Depth Depth Depth Depth +N/-S +E/-W Distance North offset Ref to (ft) (ft) (ft) (ft) (ft) (ft) (ft) Direction Comparison 1,120.58 1,117.15 1,125.00 1,125.00 13.00 26.00 69.57 0.00 -104.99 1,143.23 1,138.97 1,150.00 1,150.00 13.00 26.00 76.23 0.00 -104.28 1,165.63 1,160.41 1,175.00 1,175.00 13.00 26.00 83.36 0.00 -103.65 1,187.76 1,181.48 1,200.00 1,200.00 13.00 26.00 90.97 0.00 -103.09 1,209.60 1,202.14 1,225.00 1,225.00 13.00 26.00 99.04 0.00 -102.58 1,231.16 1,222.39 1,250.00 1,250.00 13.00 26.00 107.56 0.00 -102.13 1,252.42 1,242.23 1,275.00 1,275.00 13.00 26.00 116.52 0.00 -101.73 1,273.36 1,261.63 1,300.00 1,300.00 13.00 26.00 125.91 0.00 -101.37 1,294.00 1,280.60 1,325.00 1,325.00 13.00 26.00 135.72 0.00 -101.05 1,314.31 1,299.12 1,350.00 1,350.00 13.00 26.00 145.95 0.00 -100.76 1,334.29 1,317.20 1,375.00 1,375.00 13.00 26.00 156.57 0.00 -100.50 1,354.20 1,335.06 1,400.00 1,400.00 13.00 26.00 167.59 0.00 -100.26 1,376.55 1,355.04 1,425.00 1,425.00 13.00 26.00 178.77 0.00 -100.02 1,398.90 1,375.02 1,450.00 1,450.00 13.00 26.00 189.96 0.00 -99.81 1,421.25 1,395.01 1,475.00 1,475.00 13.00 26.00 201.14 0.00 -99.63 1,443.60 1,414.99 1,500.00 1,500.00 13.00 26.00 212.33 0.00 -99.46 1,465.95 1,434.97 1,525.00 1,525.00 13.00 26.00 223.51 0.00 -99.31 1,488.30 1,454.96 1,550.00 1,550.00 13.00 26.00 234.70 0.00 -99.17 1,509.08 1,473.51 1,575.00 1,575.00 13.00 26.00 245.94 0.00 -99.05 1,528.73 1,490.98 1,600.00 1,600.00 13.00 26.00 257.38 0.00 -98.94 1,548.18 1,508.17 1,625.00 1,625.00 13.00 26.00 269.06 0.00 -98.84 1,567.42 1,525.09 1,650.00 1,650.00 13.00 26.00 280.95 0.00 -98.73 1,586.44 1,541.73 1,675.00 1,675.00 13.00 26.00 293.06 0.00 -98.63 1,599.99 1,553.52 1,700.00 1,700.00 13.00 26.00 305.45 0.00 -98.56 1,623.87 1,574.19 1,725.00 1,725.00 13.00 26.00 317.93 0.00 -98.44 1,642.27 1,590.01 1,750.00 1,750.00 13.00 26.00 330.68 0.00 -98.35 1,660.46 1,605.56 1,775.00 1,775.00 13.00 26.00 343.64 0.00 -98.26 1,678.44 1,620.85 1,800.00 1,800.00 13.00 26.00 356.79 0.00 -98.18 1,699.99 1,639.05 1,825.00 1,825.00 13.00 26.00 370.16 0.00 -98.08 1,713.77 1,650.63 1,850.00 1,850.00 13.00 26.00 383.69 0.00 -98.01 1,731.13 1,665.12 1,875.00 1,875.00 13.00 26.00 397.42 0.00 -97.93 1,748.28 1,679.36 1,900.00 1,900.00 13.00 26.00 411.35 0.00 -97.86 1,765.22 1,693.34 1,925.00 1,925.00 13.00 26.00 425.46 0.00 -97.78 1,781.96 1,707.07 1,950.00 1,950.00 13.00 26.00 439.75 0.00 -97.71 1,799.99 1,721.77 1,975.00 1,975.00 13.00 26.00 454.22 0.00 -97.63 1,814.83 1,733.79 2,000.00 2,000.00 13.00 26.00 468.86 0.00 -97.57 1,830.97 1,746.78 2,025.00 2,025.00 12.99 25.99 483.66 221.00 41.44 1,846.93 1,759.55 2,050.00 2,050.00 12.93 25.94 498.59 221.00 41.44 1,862.71 1,772.11 2,075.00 2,075.00 12.82 25.84 513.65 221.00 41.43 1,878.33 1,784.45 2,100.00 2,100.00 12.65 25.70 528.83 221.00 41.43 1,899.99 1,801.44 2,125.00 2,125.00 12.45 25.53 544.19 219.36 43.14 1,899.99 1,801.44 2,150.00 2,150.00 12.23 25.36 559.71 217.54 44.94 1,924.05 1,820.13 2,175.00 2,174.99 12.00 25.18 575.25 215.86 46.71 1,938.92 1,831.58 2,200.00 2,199.99 11.76 25.01 591.02 214.30 48.32 1,953.59 1,842.81 2,225.00 2,224.99 11.52 24.85 606.96 213.38 49.35 1,968.06 1,853.81 2,250.00 2,249.99 11.30 24.71 623.05 212.41 50.42 02 June, 2006 - 13:43 Page 3 of 6 COMPASS • HALLIBURTON • Aurora Gas, LLC Cook Inlet Anticollision Report for Nicolai Creek Unit -Plan NCU#10 -Plan NCU#10 -NCU#10 Trav. Cylinder North Proximity Scan on Current Survey Data (Grid North Reference) Offset Design: Nicolai Creek Unit - NCU#3 -NCU#3 -NCU#3 Scan Radius is ft Reference Well Comparison Well Proximity Measured Vertical Measured Vertical Relative Relative HS 7oolface Depth Depth Depth Depth +N/-S +E/-W Distance North offset Ref to (ft) (ft) (ft) (ft) (ft) (ft) (ft) Direction Comparison 1,982.34 1,864.60 2,275.00 2,274.99 11.10 24.59 211.14 1,999.99 1,877.84 2,300.00 2,299.99 10.93 24.49 209.42 2,010.33 1,885.55 2,325.00 2,324.99 10.78 24.40 209.00 2,024.05 1,895.71 2,350.00 2,349.99 10.62 24.32 208.56 2,037.59 1,905.68 2,375.00 2,374.99 10.47 24.23 208.31 2,055.82 1,919.00 2,400.00 2,399.98 10.32 24.15 208.07 2,064.15 1,925.05 2,425.00 2,424.98 10.17 24.08 203.93 2,077.16 1,934.44 2,450.00 2,449.98 10.03 24.03 196.22 2,089.98 1,943.63 2,475.00 2,474.98 9.92 24.00 184.87 2,099.99 1,950.77 2,500.00 2,499.98 9.82 24.01 168.36 2,115.08 1,961.46 2,525.00 2,524.98 9.74 24.04 145.20 2,127.36 1,970.10 2,550.00 2,549.98 9.67 24.12 126.74 2,139.47 1,978.56 2,575.00 2,574.98 9.61 24.22 114.40 2,151.39 1,986.84 2,600.00 2,599.98 9.56 24.37 106.28 2,168.89 1,998.89 2,625.00 2,624.98 9.52 24.53 101.39 2,177.53 2,004.81 2,650.00 2,649.98 9.49 24.70 9682 2,194.54 2,016.48 2,675.00 2,674.98 9.48 24.88 92.25 2,211.55 2,028.14 2,700.00 2,699.98 9.48 25.05 87.72 2,228.56 2,039.79 2,725.00 2,724.98 9.49 25.22 86.38 2,245.57 2,051.45 2,750.00 2,749.98 9.50 25.40 85.65 2,262.58 2,063.11 2,775.00 2,774.98 9.51 25.57 84.91 2,279.58 2,074.77 2,800.00 2,799.98 9.53 25.75 84.18 2,296.60 2,086.44 2,825.00 2,824.98 9.55 25.91 84.11 2,313.64 2,098.12 2,850.00 2,849.98 9.56 26.04 84.34 2,330.71 2,109.81 2,875.00 2,874.98 9.57 26.14 84.75 2,347.79 2,121.53 2,900.00 2,899.98 9.58 26.21 85.71 2,364.90 2,133.25 2,925.00 2,924.98 9.58 26.25 76.07 2,382.01 2,144.98 2,950.00 2,949.98 9.59 26.28 62.50 2,399.12 2,156.71 2,975.00 2,974.98 9.62 26.32 48.24 2,416.24 2,168.44 3,000.00 2,999.98 9.65 26.34 34.92 2,433.36 2,180.18 3,025.00 3,024.98 9.68 26.36 32.95 2,450.47 2,191.91 3,050.00 3,049.98 9.71 26.39 61.83 2,467.59 2,203.64 3,075.00 3,074.98 9.71 26.41 9962 2,484.70 2,215.37 3,100.00 3,099.98 9.69 26.45 124.63 2,501.82 2,227.11 3,125.00 3,124.98 9.66 26.48 156.88 2,518.95 2,238.85 3,150.00 3,149.98 9.60 26.49 176.81 2,536.10 2,250.60 3,175.00 3,174.98 9.52 26.48 187.40 2,553.25 2,262.36 3,200.00 3,199.98 9.41 26.46 193.56 2,570.42 2,274.13 3,225.00 3,224.98 9.29 26.43 196.07 2,587.58 2,285.89 3,250.00 3,249.97 9.19 26.40 198.32 2,604.74 2,297.65 3,275.00 3,274.97 9.12 26.37 202.09 2,621.90 2,309.41 3,300.00 3,299.97 9.06 26.35 209.59 2,639.05 2,321.17 3,325.00 3,324.97 9.03 26.33 224.57 2,656.20 2,332.93 3,350.00 3,349.97 9.02 26.31 267.78 2,673.35 2,344.68 3,375.00 3,374.97 9.03 26.29 323.33 2,690.49 2,356.43 3,400.00 3,399.97 .9.06 26.28 343.83 02 June, 2006 - 13:43 Page 4 of 6 COMPASS Aurora Gas, LLC HALLIBURTON Cook Inlet Anticollision Report for Nicolai Creek Unit -Plan NCU#10 -Plan NCU#10 -NCU#10 Trav. Cylinder North Proximity Scan on Current Survey Data (Grid North Reference) Offset Design: Nicolai Creek Unit - NCU#3 -NCU#3 - NCU/R3 Scan Radius is ft Reference Well Comparison Well Proximity Measured Vertical Measured Vertical Relative Relative HS Toolface Depth Depth Depth Depth +N/-S +E/-W Distance North offset Ref to (ft) (ft) (ft) (ft) (ft) (ft) (ft) Direction Comparison 2,707.64 2,368.19 3,425.00 3,424.97 9.11 26.26 325.27 2,724.82 2,379.96 3,450.00 3,449.97 9.17 26.21 313.73 2,742.01 2,391.75 3,475.00 3,474.97 9.24 26.12 308.03 2,759.23 2,403.55 3,500.00 3,499.97 9.33 26.00 304.70 2,776.46 2,415.36 3,525.00 3,524.97 9.42 25.86 301.69 2,793.70 2,427.18 3,550.00 3,549.97 9.50 25.72 298.13 2,810.93 2,438.99 3,575.00 3,574.97 9.57 25.58 294.10 2,828.16 2,450.80 3,600.00 3,599.97 9.62 25.45 289.54 2,845.39 2,462.61 3,625.00 3,624.97 9.66 25.32 284.43 2,862.62 2,474.42 3,650.00 3,649.97 9.69 25.19 277.65 2,879.86 2,486.24 3,675.00 3,674.97 9.70 25.04 271.85 2,897.12 2,498.07 3,700.00 3,699.97 9.70 24.87 267.03 2,914.38 2,509.90 3,725.00 3,724.97 9.69 24.70 265.04 2,931.64 2,521.73 3,750.00 3,749.97 9.67 24.53 263.78 2,948.91 2,533.57 3,775.00 3,774.97 9.65 24.35 262.51 2,966.17 2,545.40 3,800.00 3,799.97 9.62 24.18 261.25 2,983.45 2,557.25 3,825.00 3,824.97 9.58 23.98 254.64 3,000.80 2,569.14 3,850.00 3,849.96 9.49 23.69 250.71 3,018.22 2,581.08 3,875.00 3,874.96 9.35 23.32 248.52 3,035.70 2,593.06 3,900.00 3,899.96 9.16 22.85 247.13 3,053.25 2,605.09 3,925.00 3,924.95 8.92 22.29 246.69 3,070.86 2,617.16 3,950.00 3,949.94 8.64 21.65 246.42 3,088.53 2,629.27 3,975.00 3,974.93 8.32 20.93 246.21 3,106.26 2,641.42 4,000.00 3,999.91 7.96 20.12 246.04 3,124.04 2,653.61 4,025.00 4,024.89 7.57 19.24 246.00 3,141.83 2,665.81 4,050.00 4,049.87 7.18 18.35 246.00 3,159.64 2,678.01 4,075.00 4,074.85 6.77 17.44 246.00 3,177.45 2,690.22 4,100.00 4,099.83 6.36 16.52 246.00 3,195.27 2,702.44 4,125.00 4,124.81 5.94 15.58 246.00 3,213.11 2,714.66 4,150.00 4,149.79 5.52 14.63 245.08 3,230.90 2,726.86 4,175.00 4,174.77 5.05 13.74 238.87 3,248.61 2,739.00 4,200.00 4,199.75 4.51 12.96 231.89 3,266.29 2,751.12 4,225.00 4,224.74 3.94 12.24 232.15 3,284.07 2,763.31 4,250.00 4,249.72 3.37 11.49 233.39 3,301.88 2,775.52 4,275.00 4,274.70 2.80 10.71 234.59 3,697.63 3,071.62 4,300.00 4,299.68 2.24 9.90 235.73 3,787,62 3,144.95 4,325.00 4,324.66 1.68 9.07 236.34 3,881.53 3,223.27 4,350.00 4,349.64 1,13 8.24 236.79 3,979.40 3,306.73 4,375.00 4,374.62 0.60 7.42 237.26 4,081.21 3,395.45 4,400.00 4,399.60 0.08 6.60 237.73 4,186.92 3,489.46 4,425.00 4,424.58 -0.43 5.78 238.98 4,199.98 3,501.21 4,450.00 4,449.57 -0.91 4.95 241.20 4,202.67 3,503.60 4,475.00 4,474.55 -1.35 4.11 243.42 02 June, 2006 - 13:43 Page 5 of 6 COMPASS HALLIBURTON Cook Inlet Anticollision Report for Nicolai Creek Unit -Plan NCU#10 -Plan NCU#10 -NCU#10 Vertical Depths are relative to WELL @ 272.OOft (Original Well Elev. Northing and Easting are relative to Plan NCU#10 Coordinate System is US State Plane 1927 (Exact solution), Alaska Zone 04 Central Meidian is -150.00°, Grid Convergence at Surface is: -1.27 ° Ladder Plot soo I I i I _ ~ I _. _ _ _ _I_ _ _ _ I I _ _ _ J _ _ _ _ I I _ _ _ J _ _ _ _ _ I _ - _ _I_ _ _ _ _ I I _ _ _ _ _I_ ~ I I I I I I I I I I I I I I I I I 0 600 I I I N I I I I ~ I I I I I I I O ~, i _ _ _ _: _ _ _ _ I _ _ _ _ _I_ _ _ _ I _ _ _ _ J _ _ _ _ _ I _ _ _ _ J _ _ _ _ _ _ _ _ J _ _ _ _ _ _ _ _I_ _ _ _ (Q I I I I I L Q I I I I I I I I I I I I I I in 400 I I I I I I I I I L I I I I I ~ ~ I I I U _ _ _ _ _ _ _ _ _ _ _ _ J _ _ _ _ I _ _ _ _ J _ _ _ _ I _ _ _ _ ~ _ _ _ _ I _ _ _ _ _I _ _ _ _ _ _ _ J _ _ _ I O +--~ I I I I I I I I I I I I I I I I 200 I I i I I I I I I I I U I I I I I I I I I ._ _ _ _ _ _ _ _,_ _ _ _ _ _ _ J _ _ _ _ I I _ _ _ _ I I _ _ _ J _ _ _ _ _ _ _ _ _ _I_ _ _ _ ' 0 0 3 50 7 00 10 50 14 00 17 50 21 00 Measured D epth (350 ft/in ) LEGEND $- NCU#3, NCU#3, NCU#3 b~ NCU#10 (wp02) Aurora Gas, LLC 02 June, 2006 - 13:43 Page 6 of 6 COMPASS 1 ~ ~~-o~ CHECKLIST -SPACING EXCEPTION APPLICATION OPERATOR Aurora Gas, LLC. PROPERTY ID/ LEASE S: ADL 63279 FIELD/POOL Nicolai Creek Unit N. Undef. Gas PI/BH: AA8426 WELL NAME Nicolai Creek Unit 10 VERTICAL EXPLORATORY GAS X DEVIATED X DELINEATION X OIL DEVELOPMENT SURFACE LOCATION PRODUCTIVE INTERVALS (Top and Bottom} BOTTOM HOLE 1504' FWL and 1799' FNL, S. 20, T11 N, R12 W, SM 525' FWL and 2021' FNL, S.20, T11 N, R12W, SM 308' FEL and 2099' FNL, S.19, T11 N, R12W, SM Check applicable reason(s) for spacing exception per 20 AAC 25.055(a): (1) to drill a well for oil within 500 feet of a property line where ownership or landownership Chan es, X (2) to drill a well for gas within 1500 feet of a property line where ownership or landownershi chan es, (3) to drill and complete mare than one oil well in a govemmental quarter section; or to drill and complete an oil well closer than 1000' to any well drilling to or capable of roducin from the same ool, X (4 to drill and complete more than one gas well in a govemmental section; or X or to drill and complete a gas well closer than 3000' to any well drilling to or capable of producing from the same pool. Does the application contain: X A brief a lanation for wh the o erator has chosen to drill the s ecified location. A plat drawn to a scale of one inch equaling 2,640 feet or larger, showing the location of the well or portion of the well for which the exception is sought, all other X completed and drilling wells on the property, and all adjoining properties and wells within 1,000 feet of a well or portion of the well requiring the spacing exception that is drilling for oil or within 3,000 feet of a well or portion of the well requiring the spacin exception that is drillin for as. The names of all owners, landowners, and operators of all properties within 1,000 X feet of a well or portion of the well requiring the spacing exception that is drilling for oil or within 3,000 feet of a well or portion of the well requiring the spacing exception that is drillin for gas. A copy of the notice sent by certified mail to the owners, landowners and operators X described above, the date of mailing, and the addresses to which the notice was sent. X An affidavit by a person acquainted with the facts verifying that all facts are true and that the lat correct) ortra s ertinent and re uired data. If the operator requests a variance from the notice requirements of 20AAC25.©55(d), sufficient information to demonstrate that it is not feasible to comply with the notice requirements because of the complexity of ownership within the notice area. RE: NCU #10 • • Subject: RE: NCU #10 From: Bill Penrose <bill ce,fairweather:com> Date: Mon, 03 Jul 2006 07:36:44 -0800 "~~o: ~fh~~ma~ Ma~En6er---lom ~autld.err-<idmin.tatc.<~k.u>> Tom, The weighting up to 12.5 ppg was a precautionary part of the well plan for NCU #9 that seems worth keeping in the plan for NCU #10. We'll be drilling highly permeable gas sands and the risk of swabbing the well in during trips is historically real at NCU. We'll probably find, as we did at NCU #9, that 12.5 ppg is too heavy and we'll have to cut the mud weight back. That's preferable, though, to taking a kick and having to kill the well. Regards, Bill Penrose Vice President / Drilling Manager Fairweather E&P Services, Inc. 2000 E. 88th Avenue, Suite 200 Anchorage, Alaska 99507 907-258-3446 -----Original Message----- From: Thomas Maunder [mailtc:tom maunder@admin.state.ak.us] Sent: Monday, June 19, 2006 9:55 AM To: Bill Penrose Cc: Steve Davies Subject: NCU #10 Bill, Further to our discussions on this well. In the permit application, the anticipated pressure gradient (based on offsets) is .453 psi/ft or 8.7 EMw. But the planned mud weight for the production hole below 1000' is 12.5 ppg. Could you reconcile the difference between pressure gradient and Mw? Thanks, Tom Maunder, PE AOGCC 1 of 1 7/3/2006 7:38 AM Q Y N ~° Q ~ Ym Q Q ~ m LL N Q C7 cii Z~ rn ~ O ~ F = Q U Z z N Q LL { Q J { J i 0 o p O C ~ N ~ r _~ ~ .~ + ~ t it ,t x 3t ~ i .""-. ~ ~~~; t it t ~r U a -1F -% O W H ~ N o~o w~~ ~Q~ Zzm ~<~ ~ Up O ~_ C7 C') O r -* _ -~ ~ 4 ~ iF. ~' i ~.}~ yt iii -1Y7 * IL r r ~. ~ ~_~ ~ O i cD 0 0 f7J * ~ ^. ~ . f7J jt ~ .~ * ^• rJ U * J C7 ~,* U ~ O * U Q ~ ~ ru O ~ * Q Y N ~ ~ O cd OO Y ~ ~--~ <n 4.. O C Q O ,_, N ° U r z -~ ~ Q ~ W LL F- O ~ ~, O~ W a0 ~ • ~ • • TRANSMITTAL/~L~E~TTER CHECKLIST WELL NAME _ j~C,riC.. ~~ PTD# ~~~ " ~~V Development Service ~ Exploratory Stratigraphic Test Non-Conventional Well Circle Appropriate Letter /Paragraphs to be Included in Transmittal Letter CHECK ADD-ONS TEXT FOR APPROVAL LETTER WHAT (OPTIONS) APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well , (If Last two digits in permit No. API No. 50- - - API number are , between 60-69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(f), all records, data and logs acquired for the pilot hole must be clearly differentiated in both well name ( PH) and API number (50- - -) from records, data and logs acquired for well SPACING EXCEPTION The permit is approved subject to full pIiance with 20 AAC 25.055. Approval to perforate a roduc / in~ect is contingent upon issuance f a conservation er approving a spacing exception. ~KV6'YsL. C ~s ~ L,L-.~' . assumes the liability of any protest to the spacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. Please note the following special condition of this permit: Non-Conventional production or production testing of coal bed methane is not allowed Well for (name of welly until after (Compan~Zhas designed and implemented a water well testing program to provide baseline data on water quality and quantity. SCompany NameZmust contact the Commission to obtain advance approval of such water well testing ro ram. Rev: I/25/06 C: \j ody\transmittal_checkl i st WELL PERMIT CHECKLIST Field & Pool NICOLAI CREEK, NORTH UND GAS - 560500 i Well Name: NICOLAI CK UNIT 10 Program EXP Well bore seg ^ PTD~:2060800 Company AURORA GAS LLC Initial Class/Type EXP / PEND GeoArea 820 Unit 51430 OnlOff Shore On Annular Disposal ^ Administration 1 Permit_feeattached______________________--_ Yes____ ___ - - 2 Lease number appropriate- _ , Yes Surface and top. of productive interval located on state lease ADL 063279_. TD_o_f well located on newly 3 Unique well-name and number _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes - - - - - - -segregated Federal Lease AA-85789, which is nqt subject to the unit agreement.- - - - _ _ _ - _ _ _ _ _ - _ - . _ _ 4 Well located in-a.defined_pool ------------------- --------- ___,__ _ No.___. -_-NICOLALCREEK,NORTHUNDGA_S_-560500________________-,-_--------__-__-- 5 Well located proper distance from drilling unit_boundary_ - - No_ Potentiall_y.productive interval_lies within 1500' of a property lirte where landownership changes.- 6 Well located proper distance_from other wells_ _ _ _ _ _ _ _ _ _ _ _ _ No_ _ Second producer in $. 20,1-1 N, R12W, SM. _Ta[get intervals lie in Tyonek Fm, buf ar_e separate sand intervals. _ _ 7 Sufficient acreage-ayail_abie in_drilling unit. Yes - - - - . ,Second well within Section 20, but_target sands are_not present or are_water-wet in nea_rby_wells.. _ _ 8 ifdeviated,is-wellboreplatincluded__________________________ _________ Yes___ -. - - - - - - - 9 Operator only affected party - - Yes - .. - .. -------------------- 10 Ope[atorhas-appropriate-bond infgrce------------------------ --------- Yes--__ -..Letter_ofC[editNZS 429815_______,____-__-__-__-______--____________-_,_--._ 11 Permit-can be issued without ccnserYation order. _ _ - _ - . _ _ _ _ _ 1Jo_ - - _ _ - . - - -- - Appr Date 12 Permit-can be issued without administrative_approval Yes SFD 6127/2006 13 Can permit be approved before 15-day wait Yes 14 Well located within area and strata authorized by_Injection Order# (putlO# in_comments).(Fpr- NA_ - _ . _ . - - ', 15 All wells within114_mileareaofreyiewidentified(Forservicewellonly)______ _________ NA_____ _-_--__-_ -------_------_---_-----_-__---, ----------------------- 16 Pre-produced injector: duration-ofpre-production Less than 3 mgnths-(For service well only) _ - NA_ - . - _ - . - - - . _ .. - _ _ _ - - _ _ _ -- - - -- 17 Nonconyen, gas conforms to AS31,05,030O.1.A),(~.2.A-D) NA_ --------------------------------------------- ------------------------ Engineering 18 Conductor string-provided________________________________ _________ Yes____ _-_13-318"_@80',_________________,__________--__-----_--_- ---------- 19 Surface casing_protectsall-kD4Wn_ USOWs - . _ _ _ _ - - Yes Surface and_production casing will be cemented. back to surface,_protecting any freshwater sands. - _ - . - - - - - 20 CMT_vol_adequ_ate_tocirculate-onconducto[&surf_csg_______________ ______._ Yes__-. ______._-__.__--_---_-.....-_--_--_-.__-_____-.-----.---____----____ 21 _C_MT_vol_adeguate.totie-in long string to surfcsg___________________ _________ Yes__ ____-_____________ 22 CMT_willcoyer_allknownproductiyehorizon_s_____________________ _________ Yes____ __--_-._ 23 Casing designs adequatefo[C,T,B&_permafr_ost__________________ _____-__ Yes_..- ----_-_...__-_--__--__-_____._._ 24 Adequate tankage_o_rre_seryepit________________ ____________ ________ Yes_. ___AWS1hasbeenused-by Au-rorafor5years,__-.__--_,___--__.___--_________-.___-- 25 Ifa.re-d[ili,has-a10-403forabandonmentbeen approved_____________ _________ NA_____ _________-______-__--_---______-__-__-__--__--_ ------------------ 26 Adequate wellbore separation-proposed_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes - _ - - - - - Original surface_location-in error.. Planned surface X170' from NCU #3. _ _ _ _ _ _ _ _ - _ . - _ _ _ _ _ _ _ _ . 27 If diverter required, does it meet regu_lations_ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes . _ - _ _ Pilot hole planned. - Appr Date 28 Drilling fluid_program schematic & equip list adequate- - --- - - ----- - - - - - - - - - - - - - Yes .... . - -Maximum expected f_o[maSion pressure 8,7_EMW.- MW planned initially at 12.5 due to potential shallow gas zones. TEM 71312006 1 29 BOPEs, do they meetregulation , _ _ - _ _ _ _ _ _ , _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ _ _ _ _ _ _ MW_likely to beleduced as initial sections penetrated. _ . _ _ _ _ _ _ _ _ _ _ /~`' ~(~ `~ 30 B_OPE,press rating appropriate; test to-(pu_t psig in comments)- - - - - - - - - - - - - - - - - - - - Yes .. _ - . _ . . _ _ - MASP calculated at 1166psi, 3000_psi_BOP testplanned. - . - - , _ _ , _ - -- 31 Choke-manifcldcomplieswlAPI_RP-53(May84)________-,________ _________ Yes___. ___ -------------------------------------------------------------- 32 Work willcccu[withoutoperationshutdown____________ _________ ________ Yes__ ______ ---------------- ------------------------- 33 Is presence-ofH2S gasprob_able___________________________ _______-_ No___._ ___H2Shasnot_been[eportedin_offset_production._________________________,________.-___ 34 Mechanical_candition of wells within AOR verified (Forservice well only) _ _ . _ . _ _ _ _ , . _ NA- - - - - - - - - - - - - - - - Geology 35 Permit_can be issued w/o hydrogen sulfide measures - - - - - - - - - - - - - - - - - - - - - - - - Yes . _ _ . - .. H2$ not expected, but_monitoring equipment will be Operational at all times. - .. _ _ - - - - _ _ - _ _ - _ . 36 Data_presented on potential oye_rpressure zones Yes - - Offset vrell_info indicates normal pressure gradient (0.45_psilft)._ Appr Date 37 Seismic analysis ofshallgwgas-zones---_-__-______ _________ _________ NA.____ __-- - - SFD 6127/2006 38 Seabed condition suruey_(ifoff.-shore) NA - 39 Contactnamelphonefo_rweekly-progress reports[exploratoryonly]-------- --------- Yes--_- _--Ed Jones, 713-977-5799__,__-,___._,-__.-__--_-__---_--__-_-,_ Geologic Engineering P ~ Date: Date Date SPACING EXCEPTION REQUIRED: Second as well in Section 20, drilled to same undefined ool, but tar et sands are not 9 p 9 Commissioner: D j r r Co issioner: iss ner / , C~%+~~~,~/ z3~ ~j / open in nearby well NCU 3. Spacing exception also required because well crosses a property boundary from a state lease onto federal IeaseAA-85789. SFD l v !! J ~,~ r Q ^Q ,6 ~~
