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Image Project Well History File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. ~~ - ~ ~1 Well History File Identifier Two-sided III II'IIIII III II III ^ Rescan Needed III II'lII II II III III Organizing (done) ^ RE AN DIGITAL DATA for Items: ^ Diskettes, No. Greyscale Items: ^ Other, No/Type: ^ Poor Quality Originals: ^ Other: NOTES: BY: C Maria ~_ Date: ~ Project Proofing BY: Scanning Preparation BY: Maria OVERSIZED (Scannable) ^ Maps: ^ Other Items Scannable by a Large Scanner OVERSIZED (Non-Scannable) ^ Logs of various kinds: ^ Other:: / ~~ /s/ /s/ Date: x 30 = ~ + ~ =TOTAL PAGES j v r (Count does not include cover sheet) flata• In /Q l ~n lSl IIIIIIIIIIIIII IIIII Production Scanning Stage 1 Page Count from Scanned File: ~- (Count does include cover et) r aration: ~/ YES NO Page Count Matches Number in Scanning P ep BY: Maria Date: ~ S I v lsl '~ Stage 1 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Maria Date: /s/ IIIIIII Scanning is complete at this point unless rescanning is required. II I II II II I II ReScanned III IIIIIIII II IIIII BY: Maria Date: /s/ Comments about this file: Quality Checked 10/6/2005 Well History File Cover Page.doc ocl i ALASKA PARNELL, GOVERNOR ALASKA OIL AND GAS 333 W. 7th AVENUE, SUITE 100 CO NSERVATION COmMSSION ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 FAX (907) 276 -7542 December 7, 2010 CERTIFIED MAIL RECEIPT 7009 2250 0004 3911 4245 Mr. Robert Fowler Fowler Oil and Gas (Alaska) LLC 1106 2nd Street, #604 Encinitas CA 92024 Re: Exploratory Well, Kircher #1 $100,000 Bond DESK Dear Mr. Fowler: The Alaska Oil and Gas Conservation Commission (Commission) has received a request from CravensWarren to release Fowler Oil and Gas (Alaska) LLC bond. According to our records no wells have been drilled by Fowler Oil and Gas (Alaska) LLC and, therefore no bond is needed. The Commission will release bond 402 -069 on January 7, 2011, unless we are contacted by you. Sincerely, y J. olo� bie Specia Assistant Carol S. Nguyen Commercial Account Manager CravensWarren P.O. Box 41328 Houston, Texas 77241 Saltmarsh, Arthur C (DOA) From: Saltmarsh, Arthur C (DOA) Sent: Monday, October 12, 2009 8:02 AM To: jericsson97@gmail.com Subject: Kircher Permit. Page 1 of 1 Mr. Ericsson, I am sorry for the delay in returning your a-mail. My name is Art Saltmarsh ,Senior Petroleum Geologist for the AOGCC. Dan Seamount requested that I contact you concerning the Kircher Permit. As of now, the Kircher Permit to Drill will automatically expire on May 15, 2010. The Commission does not transfer permits to other Operators. You are correct that for a permit to be approved, an Operator must hold the leases. If the leases have expired the Permit cannot be used. The Commission would like to determine where you leases are located. If you have a map with there location or the legal description, please forward that to me so we can determine if your land is in the original proposed Unit. hope this helps with your inquiry, and please feel free to contact me if you have any additional questions. Art Art Saltmarsh, CPG Senior Petroleum Geologist Ak. Oil and Gas Conservation Commission 333 W. 7t" Avenue Anchorage, Alaska 99501 907-793-1230 5/25/2010 Saltmarsh, Arthur C (DOA) From: Seamount, Dan T (DOA) Sent: Tuesday, September 22, 2009 10:08 AM To: Saltmarsh, Arthur C (DOA) Subject: FW: Kircher Permit From: Johnny Ericsson [mailto:jericsson97@gmail.com] Sent: Thursday, August 13, 2009 2:35 PM To: Seamount, Dan T (DOA) Subject: Fwd: Kircher Permit This email was returned when sent to Ms Colombie J Ericsson ---------- Forwarded message ---------- From: Johnny Ericsson <~csson97 c~ mail.coin> Date: Sun, Aug 9, 2009 at 9:24 PM Subject: Kircher Permit To: j_od~.co_luiilbi_e~ alaska.~ov_ Ms Colombie Page 1 of 1 My partners and I signed a mineral lease with Bob Fowler and do not intend to re-sign with those New York guys. My lease had a two year term and then Fowler had to pay a renewal fee of $10 per acre for it to extend another 2 years. This was not paid so the lease expired. It is my understanding that quite of number of leases like mine have now expired since the two year renewal fee has not been paid and this includes the Kircher leases. Without leases in place there can be no permit so I would like you to investigate and revoke the permit if this is true. Without leases there is no land to drill on, right? These New York guys have to follow the rules just like everyone else. Johnny Ericsson 5/25/2010 Page 1 of 1 ~ ~ Seamount, Dan T (DOA) From: Johnny Ericsson [jericsson97@gmail.com] ~ ,~/ - Sent: Thursday, August 13, 2009 2:35 PM ~ W , To: Seamount, Dan T (DOA) ~ ~' - Subject: Fwd: Kircher Permit ~ (~ 0~'~- /A~ This email was returned when sent to Ms Colombie "f p ~ ~~ J Ericsson J~ ,~ ---------- Forwarded message ---------- ~ U ~,~' I From: Johnny Ericsson <jericsson97__~gmal.com> ~D Date: Sun, Aug 9, 2009 at 9:24 PM Subject: Kircher Permit To: jody.columbie_ccalaska.gov __ Ms Colombie My partners and I signed a mineral lease with Bob Fowler and do not intend to re-sign with those New York guys. My lease had a two year term and then Fowler had to pay a renewal fee of $10 per acre for it to extend another 2 years. This was not paid so the lease expired. It is my understanding that quite of number of leases like mine have now expired since the two year renewal fee has not been paid and this includes the Kircher leases. Without leases in place there can be no permit so I would like you to investigate and revoke the permit if this is true. Without leases there is no Land to drill on, right? These New York guys have to follow the rules just like everyone else. Johnny Ericsson ~` ~ ~--~- ~ 11 ~- ~~ ,- ~ ~ ~ G „~ CO 4 ~~ ~ ~ ~ ~- _? .b -~ ~ °~ ,~ ZbSL-9LZ~L06) 6£9£-1OS66Et~ISt/l`d 3JV~iOHONt/ DIS-7~iTi'~1~1~~ 1110~4a4~~4~~1~0~ -+~ OOL 311f1S'3f1N3Ab'U3L M££E Ql~~ ~0 ~~5~~ 2l3/IOJ `Nl~b'd HIY21 b'S O O a 0 a =~ 9/22/2009 ~. ;. ~'~°~° ~~.3t~i Sxt.s~5 Shy e-mail that Fowler was re:l~oved "for sole director, president, secretary until I get to ace both sides of what's royalty hoidens and creditors. ~° g cause" but declined to gi ~~ details to and treasurer of the Palmer cornea- happening,' ~°cher said. w ri? ~`iJ i 9} ~ jt°iY~, -~3?eS~'L~ a reporter. ?lis coar~pany specializes ny. State regulators said Friday they ~~~ {kll -a~, .., in minerals and reanewable energy Thy letter says 14'ative America?; had not received anything from Na- both Ec~vt-ler and the Nei ': `l~ `"'~~"~~`~``~ t oyects an Native land iza the Lower Energ;i~ trxep•ed with Fawiez•'s tom- tive American Energ•v about the company have gotten in ha !:= p"~ ,P,.~;Z~~3~~8~! ~'Ls,[~NIIf~~( 48 but like Fowler Oil ~ Gas, it hasn't pony ittl~te ~:0(?7, ot~~lls ail of the stack Fowler Oil ~ Gas shake-up. witlrfinancnal regulators in the ~ ~:..- ^-nkCa~ean.cor~, daneanydri_:tlhng~•eee_3ti3 andhasb°enpaying;~owleq°'s salap°~I, East year, for ~xarnple, ~. ~airnei° entrepreneur who "tTndeniably PIIr. Fowler will clis- rent, utilities and other costs. The let- ~t~lii~~M Seecuities & Exchange ~m i_ ,~-~~i~;a~ed a :ae~,~~ era of coo?-hed pule our authorit~~ to ~.ar:y out this tersays tl:o new name of yowler Oil Fowler has his ilwn slew ofalega- sion acctased Native ~,mer~~ :.~ ,~es~ deve~~p~xent irl the Mat-Su action,,, ll'Aa-r<go senate in the a-mail. & Gas is NAEG Alaska Carp., and it bons against Native American Ener- ergyof'`corporatehijae~rtg ~~~~~`~ ed ~n a vicious ksattle with his wants to move ahead with the coal- gy. I-le said the company violated fed- ing the Hanle of another ca r~ ~. ~~ ~. ;~. , ,partners, ,vho have made a AC~US~sTk~3 bed methane drilling nil Mat-Su "ante eral securities law and breached and avoid filing requited doeume~ u 1 l`° Native American Energy pras>id- we properly assess the outstanding defaulted agreements and funding SEC de-listed the corrrpany h °t t-l-E ~.; f~5 ::e illi:; out. ~-~a n".c~.+1 of the New York-based ed more detail aknout its accusations obligations and exposure he tFosvler) abliga"lions it inked with the Palmer avea•-the-counter "pink sheet ~: y ?Nabs-e American about Fowler in a letter this has left us with." company letin where its stoe~ was ttadec - , ,'1~IA y ;~~ Troup said this week ~ `-~~ 'week to seme people who The t almer company has fallen In an e-mail ~'ciday, he said he still company has said that it play _ :t, i ~ ~, ~,vie,~ Od ~ Gas Carp. had been involved with his behind on its awn schedule far drill- retains control of the PaLazer earn- plyforre-hstmg. - ~:h,:~Iders ~•ecently vat- ~ ~ °~ ~ " ~ Ntat-Su coal-bed metYZane ing.A coal-bed methane well off the pang, despite what Native ~eriean Six years ago,in a civil ca5~ =s ~- rerynove Bob Fowler, I exploration project. Tl-ie' let Trunk Road in Palmer was supposed Energy says. cityaf San la'rarlcisco accused ~ ;a - "~~u~lder of the Palmer- '~,> ~~ ~ ter accused Fowler of a slew. to be producing methane by now, Fowler said he hasn't decided defitnct computer firm that ~~ ~~~~x ,_-;~ di•=~lling eo~npani; Pram ~' ~2i-°- " , i of misdoings, including fal- though the company has not yet r~ul yet how to respond to Native Amen- ran of paying kickbacks to a ~ ,. ' ;,-1, as tlla co~r~pary's sole _ shying corporate records, out of time under its Alaska Oil and can Ener~~~'s actions to remove him cial and stealing mone~~ ra•on~ E ~ ~ t tar. breaching agreements anal Gas Conservation Commission and from the I'aL~:ner company. t3r.. Friday Fowler said he didnotllil~ag wrcn~ ,wafer disputes that he misrepresenting the neta- Mat-Su Borough drilling permits. morning, the i'aLmer compa~i~'s Q6'eb Ghat ho .was viet~Imiz~d ley a j ~~,~.~. . 'aee~a removed from the Fowler tionship between Fowler's Joe Kircher, who oversees the site worked, knot by afternoon, it was emglayee•" ~:te =aid he is the sale di- firm and ?Native ~.rraerican Trunk Road property slated for drill- "under construction." -- _ ~;or of the company and carL~~ot be Energy. ing, refused to discuss the regent Ia she P-r°-ail, Fowler said he has a ~imt ECirabefh Biuemink online a: adn.canz~ ! _ r,,. f~ . lraaant' +'i, ., .s~ti ~ ~~., ~, e:?t ,. .... ~... ...-... '~ .a <.... .. .., ..:. .,_ _ - t~..i ~ , sc.. - - ,:;.1s t i:;~: 't .e<.. 1t?ns&:I;t, ..... ~ .;-., r.... ..:. . , _ - - ~s~yln '~ ' r .. ~s'e ~., ~` 7 -.:-y,! t '~r ~, f?r} ~ilr e~`S^':i~ T' I ~rt~I~:. ~~~r~GE `'. 1:_, a, ri~ t!f ~'dc~r -ag r7f ~G~c'~~ ' `'_ _.r ro y ~~ ~ i e, re F t" ,L " `3R3 t, -~ . s>ne q y. r7 r, i 6?'" 3 '. ' ~:3`~ _ ~ " !-P."! ~{. F~:SI~~.l. ., uxti a ~w e. S;: Y_ ..~ '.~.`Z`.if,~ ..I~,<~ 'v ~ a +. .. - -.L~1 -._, ~ _c.,L .. ~ .,_ .._ .. - adn.com ~ Mat-Su coal-bed m e partners clash An~hora~e Daily 1'devv~ Mat-Su coal-bed methane partners clash (05/30/09 11:58: 07) • Page 1 of 2 Print Page Close Window Partners of a Palmer man who wants to develop coal-bed methane in the Matanuska-Susitna Borough are trying to force him out. Joe D'Arrigo, the head of New York-based Native American Energy Group, said that Fowler Oil & Gas Corp. shareholders recently voted to remove founder Bob Fowler. Fowler disputes that he has been removed from the job. He said he is the sole director of the company and cannot be removed without his consent. D'Arrigo told the Anchorage Daily News by a-mail that Fowler was removed "for cause." He declined to give details. "Undeniably Mr. Fowler will dispute our authority to carry out this action," D'Arrigo wrote. Native American Energy specializes in minerals and renewable energy projects on Native land in the Lower 48. It has not drilled recently. Native American Energy provided more detail about its accusations about Fowler in a letter to people who had been involved with his Mat-Su coal-bed methane exploration project. The letter accused Fowler of falsifying corporate records, breaching agreements and misrepresenting the relationship between Fowler's firm and Native American Energy. In the letter, the company said shareholders of Fowler Oil & Gas voted to install D'Arrigo as the sole director, president, secretary and treasurer of the Palmer company. The letter said Native American Energy merged with Fowler's company in late 2007, owns all of the stock and has been paying Fowler's salary, rent, utilities and other costs. The letter said the new name of Fowler Oil & Gas is NAEG Alaska Corp., and it wants to move ahead with the coal-bed methane drilling "once we properly assess the outstanding obligations and exposure he (Fowler) has left us with." The Palmer company has fallen behind on its schedule for drilling. Acoal-bed methane well in Palmer was supposed to be producing methane by now, though the company has not yet run out of time under its Alaska Oil and Gas Conservation Commission and Mat-Su Borough drilling permits. Joe Kircher, who oversees the drilling property, refused to discuss the recent events. "I really don't want to comment until I get to see both sides of what's happening," Kircher said. State regulators said Friday they had not received anything from Native American Energy about the Fowler Oil & Gas shake-up. http://www.adn.com/news/alaska/ap_alaska/v-printer/story/813480.htm1 6/1/2009 adn.com ~ Mat-Su coal-bed m ne partners clash Page 2 of 2 • Fowler has his own allegations against Native American Energy. He claims the company violated federal securities law and defaulted on agreements and funding obligations. In an a-mail Friday, he said he retains control of the Palmer company, despite what Native American Energy says. Print Page .Close Window Copyright ©Mon Jun 1 13:36:47 UTC-0800 20091900 The Anchorage Daily News (www.adn.com) http://www.adn.com/news/alaska/ap_alaska/v-printer/story/813480.html 6/1/2009 adn.com ~ Partners move to 0 owler from business Page 1 of 2 • adn.com ~n~o~~ Deily News Print PageClose Window Partners move to oust Fowler from business DISPUTE: Both sides say they control Palmer-based drilling company. By ELIZABETH BLUEMINK ebluemink@adn.com (05/30/09 01:08:56) The Palmer entrepreneur who championed a new era of coal-bed methane development in the Mat- Su is locked in a vicious battle with his business partners, who have made a bid to force him out. The head of the New York-based company Native American Energy Group said this week that Fowler Oil & Gas Corp. shareholders recently voted to remove Bob Fowler, the founder of the Palmer-based drilling company, from his job as the company's sole director. Fowler disputes that he has been removed from the job. He said he is the sole director of the company and cannot be removed without his own consent. Joe D'Arrigo, the head of Native American Energy, said Friday in an a-mail that Fowler was removed "for cause" but declined to give details to a reporter. His company specializes in minerals and renewable energy projects on Native land in the Lower 48 but like Fowler Oil & Gas, it hasn't done any drilling recently. "Undeniably Mr. Fowler will dispute our authority to carry out this action," D'Arrigo wrote in the e- mail. ACCUSATIONS Native American Energy provided more detail about its accusations about Fowler in a letter this week to some people who had been involved with his Mat-Su coal-bed methane exploration project. The letter accused Fowler of a slew of misdoings, including falsifying corporate records, breaching agreements and misrepresenting the relationship between Fowler's firm and Native American Energy. In the letter, the company says that the shareholders of Fowler Oil & Gas voted to install D'Arrigo as-the sole director, president, secretary and treasurer of the Palmer company. The letter says Native American Energy merged with Fowler's company in late 2007, owns all of the stock and has been paying Fowler's salary, rent, utilities and other costs. The letter says the new name of Fowler Oil & Gas is NAEG Alaska Corp., and it wants to move ahead with the coal-bed methane drilling in Mat-Su "once we properly assess the outstanding obligations and exposure he (Fowler) has left us with." The Palmer company has fallen behind on its own schedule for drilling. Acoal-bed methane well off the Trunk Road in Palmer was supposed to be producing methane by now, though the company has not yet run out of time under its Alaska Oil and Gas Conservation Commission and Mat-Su Borough drilling permits. Joe Kircher, who oversees the Trunk Road property slated for drilling, refused to discuss the recent http://www.adn.com/front/v-printer/story/813115.htm1 6/1 /2009 adn.com ~ Partners move to 0 owler from business Page 2 of 2 • events. "We're on afact-finding mission ourselves," he said. "I really don't want to comment until I get to see both sides of what's happening," Kircher said. State regulators said Friday they had not received anything from Native American Energy about the Fowler Oil & Gas shake-up. BACKLASH Fowler has his own slew of allegations against Native American Energy. He said the company violated federal securities law and breached and defaulted agreements and funding obligations it inked with the Palmer company. In an a-mail Friday, he said he still retains control of the Palmer company, despite what Native American Energy says. Fowler said he hasn't decided yet how to respond to Native American Energy's actions to remove him from the Palmer company. On Friday morning, the Palmer company's Web site worked, but by afternoon, it was "under construction." In the a-mail, Fowler said he has a number of options, legal and non-legal, to preserve the interest of Mat-Su landowners, and Fowler Oil & Gas royalty holders and creditors. BAD HISTORY Both Fowler and the New York company have gotten in hot water with financial regulators in the past. Last year, for example, the U.S. Securities & Exchange Commission accused Native American Energy of "corporate hijacking," assuming the name of another company to avoid filing required documents. The SEC de-listed the company from the over-the-counter "pink sheets" bulletin where its stock was traded. The company has said that it plans to apply for re-listing. Six years ago, in a civil case, the city of San Francisco accused snow-defunct computer firm that Fowler ran of paying kickbacks to a city official and stealing money from the city. Fowler said he did nothing wrong and that he was victimized by a "rogue employee." Find Elizabeth Bluemink online at adn.com co_ntacJebl_u_emink or call 257-4317. Print Page Close Window Copyright ©Mon )un 1 13:37:29 UTC-0800 20091900 The Anchorage Daily News (www.adn.com) http://www.adn.com/front/v-printer/story/813115.htm1 6/1 /2009 No progress at proposed gas well off Trunk Road COAL BED METHANE: It was supposed to start production this year. By ZAZ HOLLANDER zhollander@adn.com Published: May 5th, 2009 04:33 PM Last Modified: May 5th, 2009 10:01 PM PALMER -- A coal bed methane well in a Trunk Road hayfield was supposed to be producing the lucrative component of natural gas by now. E3ob Fowler Instead the field's only sign of industry is an unfinished gravel road next to a big Fowler Oil and Gas Alaska sign announcing "Kircher Well #1" -- but there's no well, just an empty gravel pad. Under a state permit, the company was supposed to pave the road's first 30 feet by the end of March to protect Trunk Road drivers from gravel coming off the site. The work was never done, however, and now Developer Bob Fowler's approval to construct the road has expired, state transportation officials say. They plan to conduct site visits this week and talk to Fowler about his intentions. Depending on his answers, the state could work with Fowler to grant an extension. Or, in a worst-case scenario, if the company makes it clear it doesn't plan to finish the road or drill the well, then the state could consider other options including removing the driveway, said Rick Feller, a state transportation spokesman. Generally the state tries to make operators fulfill their obligations before taking any draconian measures, Feller said. Joe Kircher, who oversees the property where Fowler has proposed drilling, isn't too concerned about the lack of progress. He figures the company's chief executive, Bob Fowler, just forgot about the road work. Kircher e-mails occasionally with Fowler and said the executive has bigger worries: Fowler has told Kircher he is having trouble finding investors in the current economic climate and now can't say when the well might be drilled. Fowler did not return requests for comment. Kircher and three other farm families stand to make royalties if the well ever produces commercial quantities of gas. "If it goes, it could be a good thing for us. I just don't want to be wishing on a star," Kircher said. "Me and (Fowler), we've gotten along well. He keeps me posted ... I understand the times and of course, oil prices have dropped. Any investor is looking at the big picture." The well, the first of many Fowler said he hoped to sink in the Mat-Su, was hailed in 2007 as a relatively environmentally friendly way to get cheap gas to Southcentral homes and businesses. But the company has been dogged by speculation about Fowler's finances. Most recently, in March, the U.S. Securities and Exchange Commission took action against a different company connected to Fowler called Chemfix Technologies Inc. In 2005 Fowler acquired the publicly traded shares of the defunct Louisiana waste-handling business, according to published reports at the time. In March the SEC revoked Chemfix's registration because the company had failed since the late 1990s to file required periodic financial reports. Locally Fowler Oil and Gas has yet to move into new offices taking up the entire top floor of the Downtown Palmer Plaza despite the company's name at the top of the building marquee. Beyond the road, Fowler Oil and Gas is under little deadline pressure. The company still has a year to drill a main bore at the Kircher field under atwo-year drilling permit from the Alaska Oil and Gas Conservation Commission issued in May 2008. The company has unti12010 to drill a well under aMat-Su Borough permit issued in October 2007. Borough planner Frankie Barker said this week she hasn't heard from any Fowler representatives in about a year. The Fowler Oil and Gas Web site still says drilling was supposed to start last fall, with production commencing early this year. Find Zaz Hollander online at adn.com/contact/zollander or call 352-6711. • • x~ Caick tv learn rr~ore.. v °,,, =~>vrime 81ag . ,i;i;i a fn C3.a~ls~~°.. - o ;:: adn.com ?- Web search powered by YAHOO! .~ „~. u. ~ . • , .:°: ; ~~ ~pair>~ tJutd~prs Fe~ture~ Monty ~~t~rt~iil~lt~terlF~ t~pirllit~n H~stta Alastea (Newsreader obituaries A,~irives TV Listings Movies Music Restaurants Submit Event ' ~~1~~5 !~~ s® rt~~~Ibts COPiEi,JSiQN: Some say data used by drilling firm'' f~~~~z~. l~r-r?sfaec#:~ ~~~s lie si~ar~ds by ~:s reat-ts. sy zAZ ~!o>_>-arNr~Fr~ ztio~iiande, ~adn.com Published: June i4th, 2008 12:59 AM Last Modified: June 14th, 2008 02:00 AM PALMER -- Helen Riley uses the word exciting to describe Fowler Oil and Gas Corp. The company, led by Bob Fowler, started moving dirt June 1 to prepare for a coal bed methane well in a lush hayfield along Trunk Road. Helen and Paul Riley, along with three other families, signed leases with Fowler Oil and Gas to allow drilling, in exchange for the possibility of earning at least $1,000 every year in royalties. r more :? t ~_iPaiiAa~- 12 ' r1n T~ ~aa:` - =,ady Ne`,v~~ ,,. ., , - ._. '~t~P.}` `nip 5 Z LV"1;?ii T{8f f8?riil~{ 'lii:Y~+,?~+, j0 ~. ivii{atT..sKa Valley tarn ~{ 16)? ~ Sne rx)w ,=ves ;)n ~i:? ac.r.'c `.i~rtl nPr }u.; ;b;:{;,:i. P3.' . t lri' son a;1,1 ,i;:i:;yr{t ~; a'u1 t;'itt•.:?~.d anci brea~~as1 th;~ts ..~;Yir ll~r~7 i7:?i;l'~i~i(} i)-`~[1F.:..rl}~ r;iK's3~i~~f'IY.nT-. . } +1,(1 a f _.l lie.` n j~,~ ~~ r {f,lt +}i? 7 .. ;1 `... y :.;: ~ ~.. .. _. f l 13oat tai:es on water near Yoonah c 7unea+~ worian reit~~d to ancient hunter ~ But government geologists say Ex-mayar, wife report to prism Fowler's estimate of the natural gas beneath the hayfield is inflated. The Energy tops serico~rritz's ~arior-ity fist f estimate -- which factored into the Uii majors pitch gas line to federal royalty calculation -- is based on re9'•~larors predictions of coal thickness and ~ gas content that are either wrong or exaggerated, they say. t Fowler, for his part, refuses to change anything until he sees what the http://www.adn.com/news/alaska/story/436177. html 6/ 17/2008 irrep.e°tiina ina~.c.nnuan~.. g:•nor~a-eve. ac.,uw®,~luvN..o.~9 ~..~+s-Y_•• • • well holds. His company is the most closely watched methane prospector in the Matanuska-Susitna Borough since Evergreen Resources left the state in Cvmmerits 2004. The Colorado company a year before had scooped up a swath of E~-mail a firiend mineral leases and kicked off a furor over drinking water and private p,;~t property rights. C~iyq this Seed (Vewsvine Riley, a 3-year-old when her family moved to a Matanuska Valley farm Syn:i l~n=: via Ahtil in 1935, now lives on 40 acres with her husband, Paul, their son and - daughter, and a little bed and breakfast that's scant help defraying ~ ,T,~}iuo~ Suzy. ~ property tax payments -- $10,000 a year, despite a farm deferment and senior deductions. a A It's exciting to think royalties could help pay those taxes, she said. Also exciting: the prospect of a whole new natural gas supply for Cook Inlet, practically in the backyard. "We're praying," Riley said. "We`re praying for his operation, that it will do something good for us and the Valley." Fowler Oil and Gas hopes to start producing gas at this first pilot well in the fall, Bob Fowler said. According to calculations posted on the company's Web site, the four families could earn from $1,000 to $6,000 an acre per year in royalties for 50 years if the well succeeds. A NUMBERS GAME But there's no guaranteeing it will. Fowler calculated its potential royalties based on faulty analysis of two geological studies, say the authors of those studies. They say Fowler overestimates the amount of coal below the Kircher field and the amount of gas that coal might hold. And even if commercial quantities of methane exist there, Fowler's predictions may be optimistic. Bob Fowler stands behind his predictions. The company might rely on published studies, but the only way to know how much coal lies under the hayfield is to drill and find out, Fowler said. "Royalty projections are based on the best available data," he wrote. "Once the Kircher well is in production, we will know exactly what the flow rates are and what the actual royalties will be." ~)~ Click Here io f3nd out more! According to the Fowler company Web site, the coal beneath the Kircher field holds 422 cubic feet of gas per ton, Fowler cites a state Oil and Gas Division report. But that number -- and the version of the report cited -- is wrong, said Tim Ryherd, a commercial analyst with the state Department of Natural Resources. The correct gas content figure is nearly half that, or 245 cubic feet per ton. http://wwdv,adn.com/nevus/alaska/story/436177.html 6/17/200 bvuun.'"..r r..e. aaaw a.ascr xa+,~ y~/a v~w.vu iu,n.s....r lavy ~., ~. "~.,~, ..., 1/ 11 u • Working as a state geologist in 1994, Ryherd was part of a team that tested gas levels in coal seams off church Road, about eight miles west of the Kircher well. Ryherd said the right information showed up in peer-reviewed reports. But a spreadsheet inadvertently spun accurate raw data into the wrong final results that appeared on the state Web site, he said. The state corrected the error two months ago, after state officials contacted Ryherd about Fowler's estimates. But it's not Ryherd's job to make sure Fowler corrects his numbers too, he said. Asked about the incorrect data, Fowler said his information comes directly from raw data gleaned during the state tests. "If necessary, we will amend the figures, either up or down, after our coring and testing is completed," he said. Ryherd, provided Fowler's response, said he's sticking to his guns: Fowler is not using the raw numbers. "The raw numbers would be much lower ... and the raw numbers are available on our Web site," he said. SIX HUNDRED FEET Fowler Oil and Gas describes a total 600-foot-thick bed of coal in various seams down to 3,000 feet beneath that hayfield. Bob Fowler said that figure comes from the U.S. Geological Survey. A company report provides a link to a map showing a broad overview of the Tyonek coal layer stretching north from the Kenai Peninsula to the Mat-Su. The map shows a cumulative 600-foot- thick coal "contour" over the site of Fowler's well. But using that map to predict coal layers at the Kircher field is like using a road map to find a hiking trail, according to Romeo Flores, a USGS researcher in Denver. He responded to questions by a-mail. "Such an approach would push the data beyond its intended use," wrote Flores. The map Fowler cites is actually based on a publication of the Geological Society of America that Fowler has not correctly acknowledged on its Web site, Flores said. That publication also shows that coal thickness varies significantly from well to well. A more site-specific report of existing wells around Houston estimates coal thickness would shrink to less than 50 feet near the Fowler well. That report was prepared by Unocal and Ocean Energy geologists. Fowler said the actual thickness of the coal bed wouldn't be known until his company drills a core test. He also pointed out that the industry report involved no wells near his. WAIT AND SEE This spring, Fowler told the group Friends of Mat-Su, advocates of planned growth, that he has leases with landowners on 30,000 to 40,000 acres around the borough, said Kathy Wells, the group's executive director. Fowler has worked fairly closely with the group, which helped write the borough's 2004 methane law in the wake of Evergreen's departure. http://w~vw.adm.com/news/alaskalstorry/43~ 177.html x/17/2008 .. ,gym.... v„_ ~..,.a. dsu.,....,~ L .,.y .,..,~ rwu~. _... ._.. _.~_ •_ "__' ___.. • Several Point MacKenzie landowners said a Fowler representative approached them to sign lease contracts. Friends of Mat-Su continues to get calls from landowners wondering whether they should sign leases with Fowler, Wells said. She gives them all the same advice: Wait and see what this pilot well does before signing any paperwork. Get with a lawyer if you eventually do. For her part, Helen Riley said she, too, will wait and see before passing judgment on the well near her place, and just how much gas it might hold. Riley said she doesn't feel like Fowler guaranteed anything. And any little bit would allow her family to make some money off their land. "How can you know unless you're underground and looking at it?" she said. "We're just looking for anything that'll help us." Zaz Hollander can be found online at adn.com1contactlzh~ilander or by calling her in Wasilta at 907-352-6711. $300,000 Mortgage for $150,000 Mortgage for Get matched with up only $965/month. $483/month. Compare to 5 colleges with 1 Save $1,000's - No up to 4 free quotes. form. by Yahoo! ~~~ ; ~~ _ ~ .. ••-•• -'ease ilog opt and ll~g i~ again. Subject Comment ~']~as ~ a cra~3~te ~z:~~~ This scam has zero chances of producing commercial quantities of gas.This scam will give honest developers a bad name. Fowler will probably never drill. Just take a few folk's money and fade http://wwv~.adn.com/neves/alas~a/story/436 77.htm1 6/17/2008 Save comment away, ~~Ui~~ ~u:~sit3ili~y every y~~~?=' Is this possibly a misprint: The possibility of receiving $1000 in royalties every year?? Yf they were to drill on my property, it'd be more like a couple hundred thousand or more each year! What is the real ripoff is the $10,000, a year property taxes Mrs. Riley is required to pay for the whats left of her family farm and small house she has had since childhood. Who are the real villains in this story? ~~.~ The one thing for sure about estimates, be they CBM, the economy (stupid), the weather (hey, what happpened to the sunny day we were supposed to have today that I read in yesterday's ADN weather forecast?) or whatever is that they are ALWAYS wrong. The only way to determine reserves is to drill. Why is it greenie antidevelopment types care about investment returns anyway? The answer is they do ... r~.a~ ~~~ ~-... ,~~ scam artist. he says he's going to directionally drill for CBM AND reinject the water. if he does he will be the first in the world. and his numbers do not add up. this guy is crooked and the people who have signed leases with him will soon learn that. +~3e~r~ ss~rrg w~a~' to get every one in the valley on board is to figure a way to convert it to CRYSTAL Methane !'~3°w~e'cY-I~nnf~cn~ ~tatemic~~l The willingness to promote and defend inflated numbers., in addition to past history, indicates that the intended audience is investors. I hope the landowners get sufficient legal representation so they remain protected regardless of what happens to investor cash. I doubt enough of it will be spent on actual drilling to affect water quality. That would be expensive. I'm certain landowners verified ... --r~di mcsr~~ ~a3 Ali f3 k'~93'YSr3~4317~':S l sib titti7"It°.5 w SSTs t:TID_'R ;i.`t]U;f_ ~~; Sg}:'f7 C'.i'i'_£:s°t. 13i3~t C~Y;~~ d3!i r+?BsS'3' i3~'d.'' }~~fS:~ 3 JLc3},~~}} i~V:7i7135} i";=`.liif2t; Ctii yY Cf}<3'y'.aY, 1Yil-r , 6'3t}.'"~" Yi+ ;J"J~iSI JL'.~t~~-?CYJ $ri}t1._tt ~F t'~i47.~fi:i tc3 f#~`tai ~:~~'nes} :} 3er1a49 y.~:3 a ±i ~~' e- , ._ i ~ ~;~; , vc;ecls, tv ttii, ss j rt7~~ da5u;~~s i:t) J;3 V '~E9i3'i ~?:t%f~~:R v4':5fr}3i1 f}°~3 i^c~l eY:l. i~?3F'.~ r:: £.:Gdti..lir',,. iif 3? s<1~h17figs r)r1~ t5}Y:9~r ~`i~?:54~ 3 ~~'£`~. http://v~ww.adn.corn/news/alaska/st®ry/436177.html 6/17/2008 Fowler Oil wins state permit tgdrill in Valley: Mat-Su ~ adn.com Page 1 of 4 .. -. pt'~C1.COR1 Alaska Statehood .. 4 ~ ~ Celebrate the 50th ,~ t[G7r '~ ~A+ ~ ~ ~-~iversary of our Anehora e Dail News ~.:~~~ ~~ !mission into the U.S. fo photos memories Daylight :5:00 A ~ (: adn.com (, Web search powered by ~°A.~t?O News Sports Outdoors Features Money Entertainment Opinion Home Alaska Newsreader Obituaries Archives N Listings Movies Music Restaurants Submit Event ' Fowler Oil wins state permit • - - to d ri I I i n Va I I ey wasilla pair pursue small claims to fame 1 Education included how to beat the odds , ]UST ONE WELL: Search for coal bed methane is Fowler Oil wins state permit to drill in '. limited by commission. Valley r By ZAZ HOLLANDER Y , ` Firm wins limited coal-bed drilling permit zhollander@adn.com ~~~ `~ 1 for Mat-Su Published: May 17th, 2008 10:56 PM Palmer girl is an author ~ Last Modified: May 17th, 2008 04:14 AM r WASILLA -- Fowler Oil and Gas Corp. has the state permit that allows it to drill its first coal bed ( methane well in the Matanuska-Susitna Borough. F Seven months after Fowler applied, the Alaska Oil and Gas Conservation F Commission approved a permit that only allows Fowler Oil and Gas to `- drill asingle, exploratory "mother well" in a hay field off Trunk Road between Palmer and Wasilla. It's part of a large parcel owned by four ~ farm families that stand to gain income if the well proves out. E It's unclear if Fowler needs additional permits from other agencies. Click h Story tools Comments E-mail a friend Print Digg this Seed Newsvine Send link via AIM © MY 't'ANO4?!, 1 Methane drilling in the Mat-Su got a black eye in 2003, when Colorado's Evergreen Resources scooped up a swath of underground state leases, some beneath homes, which triggered fears of industrialized backyards f and water pollution. Fowler has promised to use drilling techniques that protect groundwater and come with a minimal footprint -- just aColony-style barn and a small drilling pad. The three state commissioners signed off on Fowler's drilling permit Thursday. They did so despite calls from some to reject Fowler's plans over worries about his financial past and potential environmental downsides of the drilling. "We're limited in what we can do by what the statutes tell us is our charge," said commissioner Cathy Foerster, a former oil company engineer. "There's a good reason for that. We shouldn't be able to play http://www.adn.com/matsu/story/409651.html 5/20/2008 Fowler Oil wins state permit t~ 11 in Valley: Mat-Su ~ adn.com Page 2 of 4 A A A god. ~~ DELAYS ~ Fowler originally applied for state approval in October. A delay in approval resulted from a number of technical issues. For example, Fowler amended its application based on a change of drilling method it planned to employ, Foerster said. Fowler chief executive Bob Fowler did not return calls for comment Friday morning. He has said he hoped to drill the well this spring. Plans call for one main well on the surface with numerous sideways bores into underground coal seams in hopes of freeing trapped methane. Methane is the chief component in natural gas. Fowler would need state permission for each horizontal well, Foerster said. "If the mother bore is promising, he'll be back to see us." SOME CONCERNS The company and Fowler, who grew up in Palmer, waged a number of public-image battles after gaining permission to drill in October from the Mat- Su Borough. In February, company president Arlen Ehm, a longtime petroleum geologist in Alaska, resigned, saying he hadn't been paid. The Daily News in April reported that Fowler filed for personal bankruptcy in ]uly 2002 after he defaulted on a large loan and reported as well on his former company's involvement in a San Francisco corruption case. Fowler was never charged with a crime. The oil and gas commission heard from people worried about Fowler's past, Foerster said. Concerns also arose about the fact he has never drilled for methane before, as well as the potential risks to drinking-water wells in the area. "There was a lot of pressure from a lot of people looking to us to do things that were outside our authority," she said Friday. _1 Find Zaz Hollander online at adn.com/contact/zhollander or call her in Wasilla at 907-352-6711. http://www.adn.com/matsulstory/409651.htm1 5/20/2008 i 1 Maunder, Thomas E (DOA) From: Robert Fowler [rnfowler57@gmail.comj Sent: Friday, June 06, 2008 10:43 AM To: Maunder, Thomas E (DOA) Subject: Re: Permit #208-041 Kircher #1 Tom Thanks and will do Bob Page 1 of 2 ~v~s-C41 On Fri, Jun 6, 2008 at 10:37 AM, Maunder, Thomas E (DOA) <tom.maunder~alaska.gov_> wrote: Bob, If there is a change in rigs, at a minimum the specific rig information will need to be submitted. Also, any changes in the actual rig/well equipment (diverter, casing, etc) and in the procedure will need to be documented. The bottom-line is that the contemplated work change must be essentially equivalent to what has been authorized. Please keep us timely informed and allow sufficient time for review. Tom Maunder, PE AOGCC From: Robert Fowler [mailto:rnfowler57@gmail.com] Sent: Friday, June 06, 2008 9:53 AM To: Maunder, Thomas E (DOA); Saltmarsh, Arthur C (DOA) Subject: Permit #208-041 Kircher #1 Tom & Art I just wanted to give you a heads up that we are considering the following. We understand that we will need an approval for the coring rig from AOGCC should we decide to proceed along this path: 1. The coring would be conducted on the same wellsite coordinates as the vertical 2. Tester Drilling would provide the specialized coring rig. They have two rigs to choose from. 3. Core Labs would provide the testing and analysis 4. Mike Belowich, our coal geologist, will also analyse the test data to determine optimal drilling 6/20/2008 Page 2 of 2 patterns 4. This test data will facilitate the selection of 1) the initial seam for horizontal entry 2) the sandstone water disposal zone 5. We can then apply to AOGCC for the additional permits needed for these selections prior to bringing in themore expensive AWS#1 rig. Regards Bob Fowler 6/20/2008 ALASSA OIL Al~TD GA5 CO1~T5ERQA'TIO1~T CO~'II-'II55I01~ Mr. Robert Fowler Fowler Oil and Gas (Alaska) LLC 705 S. Bailey, Suite 204-206 Palmer, AK 99645 P.O. Box 2212 Anchorage, AK 99511 SARAH PAUN, GOVERNOR 333 W. 7th AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-t 433 FAX (907) 276-7542 Re: Exploratory Well, Kircher # 1 Fowler Oil and Gas (Alaska) LLC Permit No: 208-041 Surface Location: 965' FSL, 1299' FWl-, Sec. 26, T18N, T1E, SM Bottomhole Location: 965' FSL, 1299' FWL, Sec. 26, T18N, T1E, SM Dear Mr. Fowler: Enclosed is the approved application for permit to drill the above referenced exploratory 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 iri the event it was erroneously issued. A weekly status report is required from the time the well is spudded until it is suspended or plugged and abandoned. The report s e Commi sion'seinternal asepsis of the week's activities and is exclusively for th A mudlog and samples are required for this exploratory well. All dry ditch sample sets submitted to the Commissiod 10' sam_l e int rvals ethrough targot sample intervals below conductor pipe an P zones. Please note that in addition to the proposed logging program, an openhole gamma ray, resistivity and sonic or density porosity logs must be recorded in the surface hole to enable evaluation of water salinity iri shallow aquifers. Since the original application was received, you have notified the Commission that the well will be drilled conventionafle ~ g~ d ~~eWell ~ 'be° d~ d provided an updated application g t `` 208-041 Kircher #1 Fowler Oil and Gas (Alaska) LLC conventionally. In accord with the original plan to drill with air, the Commission issued Conservation Order 595 ("CO 595") on February 25, 2008. Since air drilling is now moot, several of the waivers or variances granted by CO 595 are no longer applicable. The following waivers or variances are no longer valid with the well being drilled using mud. 1. Exception to the primary well control requirements of 20 AAC 25.033; 2. Exception to the blowout prevention equipment requirements of 20 AAC 25.035(e); 3. Exception to the wellbore survey requirements of 20 AAC 25.050(a)(2); 4. Exception to the gas detection requirements of 20 AAC 25.065 and 25.066(a)(3). 5. Exception to the requirement to collect drill cuttings and mudlog, 20 AAC 25.071 (b)(2). 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) or during business hours contact the Commission's Inspection Supervisor at (907) 793- 1236. Sincerely, Daniel T ~Seamount, Jr. Chair ~~ DATED this ~ S day of May, 2008 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. • • Maunder, Thomas E (DOA) From: Robert Fowler [rnfowler57@gmail.com] Sent: Monday, May 12, 2008 5:33 PM To: Maunder, Thomas E (DOA) Subject: Re: Fowler Oil & Gas Kircher 1 Permit Tom My mistake. Drilling Program using Conventional Drilling Mud Step 4 should read: Run surface logs and then run 9 5/8" casing to TD Thanks Bob Fowler Page 1 of 2 On Mon, May 12, 2008 at 5:16 PM, Maunder, Thomas E (DOA) <tom.maunder a~alaskagov> wrote: Bob, I am finishing the final review and have 1 question regarding step 4 in your procedure. It appears that the instructions in the statement of step 4 are reversed. Would you please confirm that open hole logs will be run prior to the casing? Thanks in advance. Tom Maunder, PE AOGCC From: Robert Fowler [mailto:rn_fowler57@gmal.com] Sent; Monday, May 12, 2008 4:44 PM To: Maunder, Thomas E (DOA) Subject: Fowler Oil & Gas Kircher 1 Permit 5/13/2008 Page 2 of 2 • • Hi Tom I heard that the DOT and Borough highway load restrictions will probably be lifted on May 15, and of course we cannot start our site prep until we have all the permits in place. The AOGCC permit is the only one pending. I would like to kindly ask you if you could expedite the final review of our Revised Application and the signatures by the Commissioners by this date. Best Regards Bob Fowler 5/13/2008 Page 1 of 1 • • Maunder, Thomas E (DOA) From: Maunder, Thomas E (DOA) Sent: Thursday, May 01, 2008 3:37 PM To: 'Robert Fowler'; Robert Fowler (robert@fowleroilandgas.com) Cc: 'Arthur C Saltmarsh' Subject: 2008_0501_Kircher #1.pdf -Message 2 Attachments: 2008_0501_Kircher #1.pdf Here is the pdf of the documents and revisions submitted for Kircher #1 5/1/2008 Page 1 of 1 • • Maunder, Thomas E (DOAj From: Maunder, Thomas E (DOA) Sent: Thursday, May 01, 2008 3:33 PM To: 'Robert Fowler'; Robert Fowler (robert@fowleroilandgas.com) Cc: 'Arthur C Saltmarsh' Subject: Returned Document -Message 1 Bob, This is an advanced message. I wanted to send an initial note Regards, Tom Maunder, PE AOGCC I will be sending the scanned document in the next message. The pdf file is 2.8 meg. 5/1/200$ sib ~ ~` ~.-~ STATE OF ALASKA ~ AI.A.~IL AND GAS CONSERVATION COMN~N ~+%~ ~" PERMIT TO DRILL ~ s ~~(~ Alaska Oil a c~as Cc 20 AAC 25.005 1a. Type of Work: ~ Redriil ^ ntry ^ lb. Current Well Class: Exploratory ^ Development Oil ^ Stratigraphic Test ^ Service ^ Development Gas ^ Multiple Zone ^ Single Zone ^ 1c. Specify if well is proposed for. c orage Coalbed Methane ~ Gas Hydrates ^ Shale Gas ^ 2.Operator Name: Fowler Oil & Gas (Alaska) LLC 5. Bond: Blanket ^ Single Well ~ Bond No. 11. Well Name and Number. Kircher No. 1 3. Address: 705 S Bailey Street, Suite 2046, Palmer AK 99645 6. Proposed Depth: MD: 3,500 TW: 3,500 12. F~kl/Pooi(s): Wildcat 4a. Location of Weil (Governmental Section): Surface: 1,299' FWL &965' FSL, Sec 26-T18N-R1E, SM 7. Property Designation: Private Property Top of Productive Horizon: 8. Land Use Permit: Matsu Borou h CUP 2007-031 13. Approximate Spud Date: Ma -08 Total Depth: 1,299' FWL &965' FSL, Sec 26-T18N-R1 E, SM 9. Akxes in Property: 794 14. Distance to Nearest Property: 1,344' 4b. Location of Well (State Base Plane Coordinates): Surface: x-1774147.92 y-2783562.27 Zone- 4 10. KB Elevation (Height above GL): 367 feet 15. Distance to Nearest Well Within Pool: Ne 16. Deviated wells: Kidkofl depth: feet Maximum Hole Angle: degrees 17. Maximum Anticpated Pressures in psig (see 20 AAC 25.035) Downhote: 1,516 psi Surface: 1,166 psi 18. Casing Program: Specifications To p -Setting Depth -Bottom Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Length MD TVD MD TVD (incuding stage data) Na 13-3/8" 54.5# K-55 welded 88'~ surface surface 80' 80' driven 12-1/4" 9-5/8" 36.0# K-55 btc 500'- surface surface 500' 500' drUcmt to surface w/ 36 bbls 8-1/2" 7" 23.0# K-55 btc 3,500 surface surface 3,500' 3,500' drUcmt to surface w/ 114 bbis 19. PRESENT WELL CONDITION SUMMARY (To be completed f or Redriil and Re-Entry O perations) 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 0 Drilling Program ^ Time v. Depth Plot Q Shallow Hazard Analysis Q Property Plat ~ Diverter Sketch Q Seabed Report ~ Drilling Fluid Program 0 20 AAC 25.050 requirements 21. Verbal Approval: Commission Representative: Date 22. I hereby certify that the foregoing is true and correct. Contact Printed Name Robert owler Title CEO ~~ Signature Phone 907-745-398a .. Date 2-May-OS Commission Use Only ~,S Permit to Drill Number: aD~O~f/O API Number. 50- 009p70A~?~000 Permit Approval ~j Date: aj • - ~ 0 See cover letterforot~her/ requirements. ~/ Conditions of approval : If box is checked, well may not be used to explore for, test, or produce coalbed methane, gas hydrates, or gas contained in shads: ^ Other: ~ Sampk+s req'd: Yes No^ Mud log req'd: Yes o^ ~5~ S~~r ~dp -~-C~i~~~ ~'Cj ~~ HZS measures: Yes No^ Directional svy req'd: Yes No^ i c~ ~ - ~ . ~ +~S ~.~5 t~~.C~ R~~ C~. v~~ ~ n ~S<~ ~ ~ ~ G ~i ~i ~CC~~`~ `'r~. S~v~ C~~a~~~C:~Z~~ ~ j o ~~ _ 'c~SP~t~~~r 15 z / ~,.~ ~f APPROVED BY THE COMMISSION _1~6C_ C~JC DAT ,COMMISSIONER Form 10.401 Revised 12/2005 = R '~ n ~ Submit in Duplicate 5 STATE OF ALASKA ALAS. IL AND GAS CONSERVATION COM N DESIGNATION OF OPERATOR ~n aar ~~ non 1. Name and Address of Owner: Fowler Oi18~ Gas Corporation, 6370 W Flamingo Road Suite 12, Las Vegas NV 89103 2. Notice is hereby given of a designation of operatorship for the oil and gas property described below: Legal descriptron of property: Kircher No. 1 Leases These leases are detailed in the Piling Declaration that is on file wfth the AOGCC. Property Plat Attached: ^ 3. Name and Address of Designated Operator: Fowler Oil ~ Gas (Alaska) LLC,705 S Bailey Street Suite 204-6, Palmer AK 99645 4. Effective Date of Designation: July 1, 2007 5. Acceptance of operatorship for the above described property within all attendant responsibilities and obligations is hereby acknowledged: Signature ~ ~ Date 2-May-08 Printed Name Robert Fowler Title CEO 6. The Owner hereby certifies that the foregoing is true and correct (attach Power of Attorney or other evidence of authority of person signing): Signature G~%~~. Date 2-May-08 Printed Name Robert Fowler Title CEO 7. Approved: Commissioner Date Approved: Commissioner Date ~oved: Commissioner Date (Requires approval by two Commissioners) Form 10-411 Rev.12/2005 Submft in duplicate • r • ! ro.; FOWLER OIL & GAS (Alaska) LLC PERMIT TO DRILL APPLICATION Kircher No. 1 Revised May 1, 2008 • l~ECElVED MAY 0 6 2008 Submitted. by: Robert Fowler CEO Date: May 5, 2008 Alaska pil & Baas Cons. Commission Anchorage r ADDENDUM A Narrative & Calculations ~~~~ ~ c~v'~ S~ s~c~Zo ~ ~~s ~ ~~ ~. ~~~-i~~:~ ~p ~e~i~~< P ~~ ~ ~ /~ ~ ~~ Page 1 of 1 Maunder, Thomas E (DOA) From: Maunder, Thomas E (DOA) Sent: Wednesday, May 14, 2008 9:47 AM To: 'Robert Fowler' Cc: Saltmarsh, Arthur C (DOA} Subject: RE: FOG Revised Narrative & Calculations v3 Bob, I acknowledge receipt of revision 3. I will print off 2 copies and place them in the permit package superseding the documents we received May 6. Call or message with any questions. Tom Maunder, PE AOGCC From: Robert Fowler [mailto:rnfowler57@gmail.com] Sent: Tuesday, May 13, 2008 9:45 PM To: Maunder, Thomas E (DOA); Saltmarsh, Arthur C (DOA) Subject: FOG Revised Narrative & Calculations v3 Tom & Art Here is the latest revision Regards Bob w,.1 ~~~~- ~ R~~ 5~~~~~~~ ~~~ ~~ ~~ i,~;~~h~~ ~ ~~~~~~~(~~.~~~~~ ~~ ~~ (~~-~~ 5/14/2008 • ,,.,° • FOWLER OlL 8 GAS ~~ A~f.~ V ~ 3 1~.~ ,: S/ «-®~ • ~ INTRa[?i1CTt4N Fowler Oil anti Gas is preparing to tx~mmence an anshtxe caalbed methane ICBM} project near Palmer in the ltAat-Su Btugh Figures . 2; 3 a~ 4}. The wells are designed to explore for a^t; test the CBM zones of the up~r pant of the Kenai Groin of sedirner~ that have been tl~e target of CSM exploration aver the past several years- These CBI target zt~nes are stratigraphidalty and. structurally alx~ve the liquid l~y~rocar~n-bearing zo~tes that are present in the cl3ee~aer parts of the Conk inlet Basin. NEARBY WEi.LS There are four well`s that txwld be tx~nsitiereti t0 be nearby to the prt3 Ki'cher No. ~ in Sec. ~6-T18N-R E. They are: ~tELL DISTANCE PERMIT LEGAL QESCRIPTIOtV austral Ne~edhaan #i ~.3 S~tN ~~5-{} Sec. 7-T17N-RAE ~2Y FNL 63~' F~L Hill FishoQ 42 i N N~ 169-42~ Sec. 3-T'18~1-R'tE °i,~p' FSI.B~ 6t' ~L Evergreen: Caolf ~1 9.5 r~na ~~ 2Q2-1${! Sec. 34-T18N-Rii 99'#' FSL 8~ 888 FEIW Evergreen L`r#tle Su 5.3 m: ~ 20~-2t35 Sec. 35-Ti9N-R11r 1~f~?t' dL 8~ ft35' ~. Total depths are as ft3#lts~ Needham #1 6,{}E34` 1=ishht~t #1 2,384:' Ccx~k ~ 1 3.74' Little Stt #1 2,12' 1I1fELL .PLANS KiRCNER NO~ ~ This trunk well tx~re will be drilled t4 a maximum depth of 3,~4 feet in or~r to nbtain per#nent geolr~ic information regarding the presence. thinness and deptl-1 of the various tx~al seams and, if possible to obtain. coal samples that can ~ analyzed in the iabt~ratory. I-It3wever, -~s well may be terminated at a shallower depth if such a shallower to#al dearth is cletEtrr!nsd to be desirable while drilling: Arr earlier termination to the drilling could be due tra the ian cry significant coals c~#ec#ett b observing. the r.~ritings or by t~tl~er tactrn~s lead~r~g tc~ a sic by the t~perator to terminate dr~,=rx It any liquid hydrocarbtrns were to lie enctzuntereti throa~g some unrforeseen geolt~lca~ ciru~mstarce, drilling vrouki tae ierminatecf immediately,. The Kircher X3`0. l will he o-i t let€ using tl~e .A.urora Fell Serti-ic~,:, R i ~ ~ I tt I ~, «th the intent wing to create a trunk t'ellb~or~ from «hich to subuenti~' gill lateral ~vellbor in the coal lids at e~tarit~us horizons, titer ttr de[em~ined. This trunl~ welltxzr hay been designed to accomrnt>date the multiple laterals that ~~ilt be su~bsequentl}# drilled to tic-e~uter the coal betas and to produce the contained gas- The laterals will t~ u-ith siot:e~ lin:.rs so that de- t`=atering and has production can begin izncnediatelti~. Permit applications ~~€l made to brill the lateral ti ells and to convert the Kircher ti~ : to a Class ll injection u°ez 1. • • ;~ geologist will be on location at all times and ul3 be monitoring all h~-drocarban ~r~~s> Hoti~e~er, a request is being made to v-aive the requirement to create a lithologic iog and collect u-ell samples.. SI.iBSEflLTT OCHER u~LLS ~'ITHT'~ THiS ~9~-~,~R~ B,k :ill of the lands ~~ithin the l~ircher drilling tract are dedicated to ~~~hat Fau-ler ail Gas calls the ltircher Block. SulZSequent lateral u~zlls rill. bye drilled aid groduceci frnm the l~ireher':~o. 1 trunk v~elibc~re. Fouler flit ~: Gas enti°isons numerous discreet bottom hole locations for the lateral w ells assuming multiple coal beds each with see eral lateral z~elibores as gro~°ided the A.OCrCC regulations fQr drilling laterals specifically ~~ithin irtdi~~idual coal beds in the search for and Prcaduction cif CBM , E~CEPTIU~S BEL4G REQL'luSTD: • ~ exception is being requested to the ruirement for the size of the diverter line as given under 20 ~C 2~.Q~~ ~c} l) .~;_ Paragraph {~ Prescribes a dig°erter `o at least 16°' and ~~ "`at least as large as the hole being. drilled. A request for as exception tca this reclltzirernent is attached as prot°ided under ?0 :~A~ 2.035 c~ {i B~ and under'? ~.~#C 2>.{lJ5 ~ ~2. ~ exception is being aet}uested to the requirement for a ~ ~°ell and proda~u zones to be ng closer than 1,00` from a proper line unless the o~~~er and the lahda~~ers are the same tin bath sides of the Iine as gi~cn under ~{} A~1C . 8 {2 ~ resit for an exceptioa to this requirement is attached as proz-ided in 2Q ~~.~ 25,055 ~.}. ~n .exception is being requested to the requirement for a Drell site suruey as given. under ?p A~1C 25.Q~1 (a. That Paragraph requires the ident;f}ng of ~`.,, anoffialous ~-elocit}- variations indic~ti~;e of potential shallout gas sout~es~. west fc~r an exception to this requireme~at is attached as Provided under'?tl C ?a.061(c~. • ~ exception is bung reque~d for the requirement to live a minimum of t hydrogen sulfide suing paints as ~iti~er} finder 20 ABC ?5.0~ {~~ (3. The r~uirement for tlu~e metre gas detectors will be met, ~uever. request for an exception to the h~ drogen sulfide requirement is attached as discussed under 20 ~.~~ 25.(1€i5 {~ and ~c~. • tln exception is being requested for the requremeht of a ~;Plan has bin f led ~a°itt~ the DEC Air and t~ titer ~~ section and a cop is included here-ith. • ~}r~'I1~'n~Prn~m usu~ C~u~~ntir~nat Drailiu~ rid, 1. hilR Aurora Fell Service Rig» ASS 1. tse drive and drill hammer to drive the I ~ ~$". ~~.~ rift, K-» conductor iQ --8 fit r refusal. ins~ta l3 s18"'. x 1" Slip L~ok Head. ?. :ti'G diverter and function test. 3. L1riII I? ~~~~ hole to ~3~= ~. Run surface Ices and run 9 ~~8~ casing to TD ~. Cerrsent ~ $J8" .36.4 ~tft I{-a~, butte starf'ce Iasi ftort~ ~(}0' tc~ su~ac~. Cement mill be a single stage 1 ~.> ppg gas-I~tock ~Fe cement slurry°. Cunt 1•oiv~me uili iztelude a 3a°~~ excess. b. ?~ di~°erter and iztstall 1 I'` 3~1 t 9 ~='8" SO~tg casing head 7. ilk i l~' 3iVl BOP artd 2Y', 3~~ choke nnif4id 8. R,.~ accumulator unit 9. Itiotify AO~GCe it~:spector of opportunity- to witness BOP test 10. hest the BOP and surface equipment to ?,~44 psi and x~ord tit I I .Pressure test casing to 1.44 psi 1. P~~.° hit. can drib collars aril drib pipe. Drill. out cement earl drill 2(y-~fl' of rteu hole while drilling with water. Put hack: into shoe and. perform a f `on integrity lest to 11.5 ppg 1~.~4i w-tule r~rdint; test: on chart recorder. 13, ~tix rnud to sufficient weight to control the w~li which has ~ calculated to l Q.4 Ppg- l4. Continue drilling S '~~" hc~t~ t€~ 3_~4Q' la. POH and RfL~ lagging tools I6. Run GlZ SP, Res, Ian and gym tools l 7, R=q3 logging tools l 8, Run T' steel casing from stu~facc to Tl~ • • ' e~in~ fru~m st~ra~e tc~ a ~ ~.8 e st~t~ sI ~~ ~. d u-eli ~til pr~~am '€~r r~ x~~s ~ apgr~sed. E~'I~ ()F ~'~CXi ~ • Pressure Cc~~icfera#~s: -mart m~ we~t~ts i ~' ~d~~sr ~. 1 ~# 4. *es ~~ sc~~,r~s~, ~ ~#~_ a~ 2. . 3,' anc# ~~ Tie ~ ti~g~t# a# 4,210' ~ld~i ~fCu~ ~ t Lr..~ ,~`, aid 1Af8S "~,,~~ ;J.~~' },., ~# E`~+~:i ~'i~f~{? S~` ~4~~i'!~~'fi ~~.1 {Y~I ma,r`a~ ~' cx~~tr~. tt €~ keel ~ gas s~ ss tc~ tote ~~~~ ~:~~~ Fc~,*~er's eua€ation, #~ ~^i~'^.,a"ieCf aka ores v+rete ~ `y ra ~ ~. ~? ~~ _~ ~A.'~~ .,Fi _~ ~c}r~.~~:'~'~ave" ~g~c a~v.~ that tie ma~rm p ~ pciE e , . iv ~e ~"c~u~ A.e t~I ~ ~ _~~? ~ ~ ~ ;~, ' '~~ tla'ftg $Q a essU~ ~j~,44uorai CI` v>' .~ G5 e~. Ma~c~aurn A~ciRated Sum Pressure; T^e artarx~ma~rr~ ar:;c~aa.~ surface pr Ass+ESP2 `~~- eM~-~'2' R s.~ ~y,~~ir~~ ~.s s~;~s~r: ;~y'~ ~ a` t f` i^MYS'' ~1+~ ire {~ ~ r'Y ~+~3 i~~ai~//;~1li~.+i~ l.V~~y r7 ti! 1~ g, ! ~i~.'' T""E~i !~; ~ :.~ ~,Qy7 i~'c~~~~ ~#Si~~i j~,,~{ ~~~. at ~~ v~ ! L _ .~~Q€LCr ~~ ~.~f'r,~.5 ~ ~~: Qajs +~Yi;? 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Ht~ Y ' fa 3, Tonek a~ C~cic3ia~ ~? ~Qrr~a ~ttS~i} ~ ~.~ ~ ' t2it ~Q~: ~E:~S~ ~ S 5 P~ ~~" ~'P ~ _ Via, ; ;~~_~ Pt~3e' ^~~ S'SL£'t't'~ • • ~~i~t ~t? t~ ~ ~ fit` ~~ ~°s']~' ~I. i~S~~t[" !~iL~# I~t1~I~iG::~,n ~x ire ' mv~ r ,ems ibis w~~ is i~ -- -~ ;- i~ ~~i~ ~ ~ ~ PRt~~i~~+~: _ used A ;, s ibis ~~..~ ~ ~ Ate. ~ ~ ~ '_: ~ :.~: ffi „~ G PM be ~retf ` " ~ -- ~ ice, is ~. e ~" ~a sit ~' a X4.5 g ~ _ ~. ~~ ~~ ~ £'~ ~_~~ Iii }dam = x ~~~.,- `~3_#..s'ft .-=3 ~"ot~tt Y+t~l ~ star~~xt = 3~s ~~~ w • ~;~~ vc~cr~s be red ~~ ~ ~ ~ ~e r~~a=~~ ~~~: v ~ _ w ~~- -a°°-f^~e~ a*~~# sx i.C~ S'~ A~illLlt~B ~l+tt) ~ ~ PR '~~""'.~'`. ~ w '~ ~.e ,lit. 'il+@[l~ - ~'2£, d`~L.'°'t'~~' 1 ~X ~~t~f~ , ~~~ f:" #.;~_ T ~ = bb~s L's,v.,:+Q ~ ;a?a =^+'.i°~ C~~:~.3`~ ?-. _ ... .. ,... ,; ey ~.: -~' v`~ i ..t~+^.€c'3s v~e'?iBi~Ci": ~t*` G"i'..~`. jS.e:VY f'~` 4C.~:s -~`.cZ ~ ~~ ~ G~?~at:3i~~` ~rF..la~.:=~~f .~+.~ i's~ u_ ii: ={.i G~.t~ (i~l~ ~~ •1.M +, .. ~ ~tf ~~s ~4~ L. :., C'.?S[~3~ 43.6 t?'w il'C.r!x4.i i.'~iLtC~R..~''" [ to°t~~:: •lal ~4 ,~~-~~r~ 1,~ K x ~ 344 a ~ .,ice-. ~ C}~ ~~ ~~~ ~ . ~~ €~ ~~~ ! c~~..~a~~~.. iit,{r~hr h~r~. 1 ~~~,ir~.~.~?rCr ~t~t~, ~?:~'!i'; ~rl~iccatlt~n C",.i`~li'1 ~ 'i'f~t7~ri3n~f i'~rc~pt~riif~ra ifl~t~rrt~i (".r~il~t~i~~ ",rr~iit~ `lrt~r~,~#! ~irt~ Weight Y-~ici E~+~~t~ tin ,It~trtt E3Qdy ~i;~.} ~~~..! r~ri t~~~r~n. {I~k~i?. rte-c~ lt~ 1~µJ~ +~. ~-5~i 43~C_: ;~'~C! 1,131 1"t1~ 1,1~p 3wa18 3ti.0 K-!i5 ~1'G ~,~~Q "QfJ ~`~ 5.64 t""Vt~ hM~ ~ ~ 8 t38 5f?t~ 3,CIC1 ,5C1q MAE7ii1 { 4y ~fi~lt~/ { •i:~t'tClr` ~ "ti ~ „~ 31 ~.8 1~,1 ~. 1t~,g "t"r~r~~iie d~";irlrt ~,'tty t~rt~~r , ;,,.~ r~i~itated tl;~ir-g lama yNf~ght, i3t~rt ~r15,~c~r~ as,_~tr.ty C<ae;rarr9 ~a++a ~:~3ir~r.tta~t~d wing MASp :t~ii~pr:~ rt~~~tgn ~+f~ty t~~:tor~,, t.i~e t~r'mriti~n ~r~*i3~~~r~~ et th~r hae are the ~ut~ide end tr~rii gv~rtaetic~rt (axc,pt far +~~ gradient) irr~id+~. Cr~~ir~c~ `.a«~ttrrt~ C-r~ptt~ l~rXlrrn~l C)..~'~t~" ~" ~~~;:~, ~x~Vi~ ~uri"~- r:ti:~in~ td pr~awide en ~-nahar Car r~i~nt.ti~r i:~l3P~, tsufficient farm~tian ~trrarl~lth r'at ttte ~hr~e fc~r rant+ininSl ~i~ia d+~e~dr tarrr~ett~n ~r~r~~>~ur and tca aauer s~i~teilow farm,~ti~rn~, lir-wing ci~~<,nrir ~iriUing to the praduGin~ interveix ~~>;r~3,~+C1" i~iit3„ 11 t.,~t't~ string to pravldr~ Male ~teblllty far d~p~rture fir ~ub~aqu+~nt iet~aret w~ii+~ s~n~i ~ta~e~~~ent injectian aC eEvv~tering fluids i+ram tha i~terai vv+~lla, s c~ rn ~~~ -1 r.r ~.~ ~~ ~n, <; ~~ ~+ Y~~ ~/r :Y Fy !~ I {11 -'. •..~ v ~:.At r -.., ~.' ~k~ti ,~~ {< ,,.Ch'i'. ,..t<;i-.\. ~ •: ,ti7 a~ ., _.~ ~ ~" C) Q~, .. ~~ r, ~c.~ ~ e ~4 w c un ,.'a t~ ~ ~ to a . . ~.2 . ~~M ~,, y.~ 7~~ r t .. ~.`1~f~h:"-Flt .3C'. ~. .hl~h:+SS`.~~.ty ." •~ ~ :.~ .>...a. L ''~ '~ @ n ~n v>.,~ ~~~ .~y~~au~a~~~~~~9i ~ n M !~ ~ `-~ ~1-^' " ~ .~ hh F~ ~ .J. t.) g7g t ~, , .._ ~ • ~"~~~ ~Q. u~~~~ c~ ~Tin~ ~~~d ~~ .~_. ..~. d u :.~~ ~:,, ~_~~ . ~~; ~6d~ i~ $~~t 3 V~ ~ i::e~+~i-.iil ~ .i"@a7 T~~t.r 1. ~ '+J ~I~'~1' 1F ~i~i.+i + I S;rsa~i~?$ ~''~'`~~~. ~ "~~~°~' t~~.~"'~`J'83a s~3"~i '~.a~C~'U~~T~~ ~~ s'i ~~"'~_ 4`:~~~ ~~~°.~.' • w FOWLER O/L & GAS 'ER NO. 1 C NARRATIVE ACID CALCULATIONS r ~t~~~~~~~~n TO ACCO ANY S ~ ~ 3-~ ~ ~~ PERMIT TO DRILL APPIt,.ICATION Revised May 1, 2008 CJ • w T{ON M Fowler Oil d Gas is preparing to commence an onshore coalbed methane (CBM) project near Palmer in th at-Su Borough (Figures 1, 2, 3 8~ 4). The wells are designed to explore for and test the CBM nes of the upper part of the Kenai Group of sediments that have been the target of CBM explora n over the past several years. These CBM target zones are stratigraphically and structurally a ve the liquid hydrocarbon-bearing zones that are present in the deeper parts of the Cook Inlet B in. NEARBY WELl.3 There are four wells that c Id be considers 26-T18N-R1 E. They are: WELL DISTANC PERMIT Austral Needham #1 4.3 mi SW 66-006 Hill Fishhook #1 4.2 mi N NW -029 Evergreen Cook #1 9.5 mi W 20 180 Evergreen Little Su #1 5.3 mi N 203- 5 'd to be nearby to the proposed Kircher No. 1 in Sec. LEGAL DESCRIPTION Sec. 7-T17N-R1 E 529' FNL & 635' FEL Sec. 3-T18N-R1E 1,048' FSL S 681' FWL Sec. 30-T48N-R1W 991' FSL 8 888' FEL Sec. 35-T19N-R1 E 1,191' FNL 8~ 605' FWL Total depths are as follows: Needham #1 6,004' Fishhook #1 2,384' Cook #1 3,740' Little Su #1 2,125' ®s. WELL PLANS KIRCHER NO. 1 This trunk well bore will be drilled to a maximum depth of 3, , feet in order to obtain pertinent geologic information regarding the presence, thickness and de h of the various coal seams and, if possible, to obtain coal samples that can be analyzed in laboratory. However, the well may be terminated at a shallower depth if such a shallower t I depth is determined to be desirable while drilling. An earlier termination to the drilling could b ue to the lack of significant coals detected by observing the cuttings or by other facto eading to a decision by the operator to terminate drilling. If any liquid hydrocarbons were to b ncountered through some unforeseen geological circumstance, drilling would be terminated i mediately. The Kircher No. 1 will be drilled using the Aurora Well Service, Rig #1 (A S 1), with the intent being to create a trunk wellbore from which to subsequently drill latera ellbores in the coal beds at various horizons, yet to be determined. This trunk wellbore has n designed to accommodate the multiple laterals that will be subsequently drilled to de-ovate a coal beds and to produce the contained gas. The laterals will be cased with slotted liners o that de- watering and gas production can begin immediately. Permit applications will be m o drill the lateral wells and to convert the Kircher No 1 to a Class II injection well. • • • • Notes Regarding Exceptions Fowler Oil & s has decided to use the drilling program with conventional mud. Thus we have marked "N "next to the exceptions on pages 3-4 that no longer apply. ~~~ -- /~3 -_D ~ ~ • • • A geologist 'II be on location at all times and will be monitoring all hydrocarbon shows. However, a oast is being made to waive the requirement to cxeate a lithotogic log and collect well samples. All of the lands withi Kircher drilling trail are dedicated to what Fowler Oil and Gas calk the Kircher Block. Su M lateral wells will be drilled and produced from the Kircher No. 1 trunk wellbore. Fowler Oil an as envisions numerous discreet bottom hole locations for the lateral wells assuming multiple 1 beds each with several lateral wellbon:s as provided for in 20 AAC 25.005(e) and 20 AAC 25. (a)(1). However, thane is preserrtly no provision in the AOGCC regulations for drilling latera pedfically within individual coal beds in the search for and production of CBM gas. Fowler Oil and Gas is requesting. the AOGCC include the trunk well and all of the Kircher Block laterals within this application permit to drill. Before each lateral would be drilled an Application for Sundry Approvals, Fo 10-403, wouk! be filed giving the irrtended target for that lateral. Such a filing would be in lieu complete application for a Permit to Drill, Form 10-401, for each of the lateral wells. This would amline the processing of the permits for the laterals for the AOGCC as well as for Fowler Oil a Gas and any other subsequent operators. EXCEPTIONS BEING REQUESTED: • An exception is being requested to the nequi eni NA drilling fluid system as the means of primary we Paragraphs (a) through (h) define this requinem~ requirement is attad'>ect as provided under 20 AAC S(~-o ~ ~~^~( of drilling overbalanced and with a ntrol as given un~r 20 AAC 25.033. A request for an excerption to this 5.033 (i). • An exception is being requested to the requirement for a size of the diverter line as given uroder 20 AAC 25.035 (c) (1) (A). Paragraph (A) prescri a diverter "of at fast 16' and (B) "at least as large as the hole being drilled". A request for exception to this requirement is attached as provided under 20 AAC 25.035(c) (1) (B) and u 20 AAC 25.035(h) (2). • An exception is being requested to the requirement for a doub ate preventer in addition to NA the spherical preventer as given under 20 AAC 25.035 (e) (1) (A That paragraph requires that a double gate preventer be installed and operative in addition the spherical preventer. A request for an exception to this requirement is attached as under 20 AAC 25.035(h) (1). • An exception is being requested to the requirement for wellbore surveys given in 20 AAC NA 25.050 (a) (2). That paragraph requires that the well be "surveyed to del ire the inclination from vertical with surveys starting at 500 feet and no more than feet apart to total depth;" A request for an exception to this requirement is attached as pro ed under 20 AAC 25.050(h). • An exception is being requested to the requirement for a gas well and produdng zo to be no closer than 1,500 feet from a property line unless the owner and the landowners the same on both sides of the line as given under 20 AAC 25.055 (a) (2). A request for a exception to this requirement is attad~ed as provided in 20 AAC 25.055 (a). • 3 M • An exception being requested to the requirement for a well site survey as given under 20 AAC 25.061 a). That pazagraph requires the identifying of "... anomalous velocity variations indicat a of potential shallow gas sources". A request for an exception to this requirement is atta ed as provided under 20 AAC 25.061 (c). An exception is being quested for the requirement to have a minimum of three hydrogen sulfide serisin oints as given under 20 AAC 25.066 (A) (3). The requirement for three methane gas det tors will be met, however. A request for an exception to the hydrogen sulfide requirem t is attached as discussed under 20 AAC 25.065 (b) and (c). • An exception is being request for the requirement of submitting a complete mud or NA lithologic log and samples as gi n in 20 AAC 25.071 (b) (1) and (2). Four wells are near to this proposed well that w e drilled by both compressed air drilling and conventional mud drilling. A requ t for an exception to the requirement for a lithologic log and samples is being requested. • An exception is being requested for the\ DEC Air and Water Quality section and of a C-Plan has been filed with the is included herewith. SUP~~2SEDED ~~~~~~~~ 1. MIRU Aurora Well Service Rig# AWS 1. Use 've and drill hammer to drive the 13 3/8", 54.5 #/ft, K-55 conductor to ~88 feet or re al. Install 13 3/8", 3M x 11" Slip Lok Head. 2. N/U diverter and function test. 3. Drill 12 '/4" hole to 500' 4. Run 9 5/8" casing to TD and run surface logs 5. Cement 9 5/8", 36.0 #/ft, K-55, buttress surface casing from 5 ' to surface. Cement will be a single stage 14.5 ppg gas-block type cement slurry. C ent volume will include a 35% excess. 6. N/D diverter and install 11" 3M x 9 5/8" SOW casing head 7. N/LT 11" 3M BOP and 2", 3M choke manifold 8. R/U accumulator unit 9. Notify AOGCC inspector of opportunity to witness BOP test • • • i • 10. Test th OP and surface equipment to 2,500 psi and record test 11. Hole/casin already full. Pressure test casing to 1,500 psi 12. P/LT bit on dri ollars and drill pipe. Drill out cement and dri1120-50' of new hole while drilling water. Put back into shoe and perform a formation integrity test to 11.5 ppg EMW 'le recording test on chart recorder. 13. Mix mud to sufficien weight to control the well which has been calculated to be 10.0 ppg• 14. Continue drilling 81/z" ho to 3,500' 15. POH and R/U logging tools 16. Run GR, SP, Res, Den and gyro 1: 17. R/D logging tools 18. Run 7" steel casing from surface to TD 19. Cement 7" casing from surface to TD usin 20. Suspend well until program for lateral wells ~~~ ~ 1, 3--0 ~ ~'~~ ppg single status slurry approved. s • • Pressure onsiderations: Maximum mud weights in the Austral Needham No. 1 well, 4.3 mites to the outhwest, was 10.7 ppg at 2,900', 3,560' and 3,790'. The mud weight at 4,210' had dropped 10.0 ppg and was 10.5 ppg at 5,960'. This mud weight was sufficient to not only maintain well trot, but to keep trip gas suppressed to the point where, in Fowler's evaluation, the indicated a I pore pressures were probably in the range of 8.0 to 8.5 ppg EMW. Fowler's conservative appr ch assumes that the maximum possible pore pressure to be encountered will be 1,516 psi E at 3,500' TD equating to a pressure gradient of 0.433 psi/ft. Maximum Anticipate urface Pressure: The maximum anticipated surface pressure (MASP) for the 8-1/2" h section in this well will be the lesser of the formation pore pressure (less a full gas column to a surface) at the 7" casing point (TD) or the formation fracture pressure at the 10" surface sing shoe (less a full gas column to the surface). Based on offset well data, the highest formati pressure expected in this 8-1/2" hole section is 1,516 psi at the section TD of 3,500' TVD (or 0. 33 psi/ft). Documented fracture gradient data for this area indicates that the fracture gradie at 500' TVD (the 9-5/8" surface casing shoe) is 0.9 psi/ft. Complete evacuation of the wellb e, except fora 0.1 psi/ft gas gradient, is assumed. 8-1/2" hole section MASP (pore pressure) _ (3, 500 ft) (0.433- 0.1) = 1,166 psi MASP (fm breakdown) _ (500 ft) (0.9 - 0.1) = 400 psi r~ U • Therefore, MASP in the 8 '/z" hole section i ,166 psi and the 3,000 psi BOPE system to be used will be adequate. Drilling Fluids: The drilling fluids are being fu mud engineer on site at all times during drilling be maintained as follows: Hole Section from 8$'± to 500': Alluvium and Tyonek Formation Base Fluid Density PV YP API Filtrate Total Solids Gel 8< Polyrr Fresh Water 8.6 - 8.9 ppg 6-16 25 - 35 <12 4 -12 ier mud system Hole Section from 500' to 3.500': Tyonek and Chickaloon (?) Formations Base Fluid Density PV YP API Filtrate Total Solids Polymer mud system by Baroid Drilling Fluids. There will be a m with a mud system. Mud properties will ~~'~~ _~/~~~ 1 Fresh Water 9.0 - 9.5 ppg (based on pore pressure in offset wells) 6-15 15-25 <g 7-14% 6 r~ C Drilling So s Handling System: Shale Shaker, Desilter, PVT monitors Liquid Waste • Excess or spent drilling mud will be stored temporarily onsite for possible reuse on subsequent Its or it will be removed by Emerald Alaska. Application has been made with the DEC Solid to section for a temporary waste storage pem~it. Solid Wastes: Soli astes from air drilling will have any included liquids removed and the resultant solidifted ma rial will be tested and then delivered to a disposal site that is approved by the ADEC. Solid w es from mud drilling will be handled as above or removed from the site by Emerald Alaska. App tion has been made with the ADEC Solid Waste Section for a temporary waste storage rmit. WELLBORE SURVEYS: lbore surveys will be obtained at 500' intervals in accordance with the provisions 20 AAC 25.050 (a) (1) & (2). ~L~~~~~~~~ MUD LOGGING: Ate-exeeption to the anned mud logging requirements is being requested since this well is located very near to pr iously drilled wells where samples have already been collected. An exception to sections 20 25.071 (b) (1) and (2) is hereby requested as given in 20 AAC 25.071 (c). CASING /CEMENTING PROGRAM: All case is new or used casing in acceptable condition. Analysis (below) indicates the casing program designed provides adequate safety factors for this well. All casing strings, with the exception o e driven 13-3/8" conductor, will be cemented in place. 13-3/8" CONDUCTOR ANALYST AND CEMENTIN PROGRA .A drive shoe will be welded to the bottom joint and it will en be driven into the ground. The second joint will be welded and both joints driven to ~ 88' refusal to drive. No cementing is required. The 9-5/8" surface casing will be cemented in fully from the propo~ set depth of 500' to surface with a 14.5 ppg Gas-Block type cement system. Cement System Tvpe Cement Weight (ppa) Volume (aZ °!o E~ Primary Gas-Block enhanced 14.5 , 26 bbls G~ 3 OH Where: V~ = n/4 x ((12.25"/12")2 -19.625"/12")21(412')11.35) = 26 bbls 5.615 ft~ /bbl V~mt = f 1/4x((13.375"/12")2 - (9.625"/12")21(88') = 7 bbls 5.615 ft /bbl C7 Shoe jt. = 3 bbls 7 • • • 26 bbls + 7 bbls + 3 bbls = 36 bbls /+.,..+ .~ curf~r~o 0 3R hbls Actual volu s to be re-calculated at time of running casing due to potential variation in actual depth from pl ned. The surface cem nt system will utilize alias-Block type additive to minimize potential for gas entrainment and o channeling. The 7" long string will b cemented in fully from proposed set depth of 3,500' to surface. A 15.8 ppg "G" cement system 1 be used. This program is designed to ensure that all exits from the trunk well bore by lateral Is are isolated with 15.8 ppg "G`' cement. Cement System Primary Where: Vcmt = n/ Vcmt = n/ C ent Weight (ppg) "G' 15.8 x 18.50"/12")Z - 7. "/12"' 5.615 ft bbl x ((9.625"/12» z - 7.0" 5.615 ft' / bb Shoe jt. = 1.5 bbls 91 bbls + 21 bbts + 1.5 bbls X114 bbls Total Cmt Volume =..114 bbls Actual volumes to be re-calculated at time of running depth from planned. F Volume Ci)_ 35 % Excess 91 bbls @ 35% UH = 91 bbls = 21 bbls ~~~~~ ue to potential variation in actual The cement volumes will be continually recalculated as we drill and a able to determine the exact depth of each casing. At that time, we will ensure that our recalc tions incorporate the XS factor, and the OD instead of the ID on production casing calcula 'ons. C. 8 f Casins~ Properties and Design Verification Casing Performance Properties Internal Yield Collapse Resistance Tensile Strength Joint Body TVD MD ign Safety Factor Size Weight {b Grade Conn. ~ si 1 lb ft( RKB) ft T B C 13-318 54.5 K-55 BTC 2,730 1,130 1,038 1,130 755 564 88 00 500 216 -- -- 31 8.8 12.1 9-518 7 36.0 23.0 K-55 K-55 BTC BTC 3,520 4,360 2,020 3,270 522 3 3,500 3,500 4.5 10.9 2.8 '` Tensile design safety factors are calculated using pipe Burst design safety factors are calculated using MA Collapse design safety factors use formati ressur~ inside. Kircher No.1 at the shoe on the outside and full evacuation (except for a gas gradient) f~.l 9-5/8" 500' M D Surface casing to provide an anchor for annular BOPS, sufficient formation strength at the shoe for containing possible deeper formation pressures and to cover shallow formations, allowing deeper drilling to the producing interval 7° Sur-3,500' MD, TVD Long string to provide hole stability for departure for subsequent lateral wells and subsequent injection of dewatering fluids from the lateral wells. • v C] FOWLER O1L & GAS Kircher No. 1 Casing Detail Mat-Su Valley, Alaska LJ 13-3/8" 54.5 ppf, Conductor Casing Driven to 88±' 12-1/4" Hote Surface Casing 9-5/8" 36 ppf BTC Casing @ 500' to surface 8-1/2" Hole ote: Ali referenced depths are are MD / TVD ~fi ~~ W~~' ~ ~ ~ ~Q 7" 26 PPF {1l~~, ~, BTC Casing !~~o4Y ~ TD ~ 3,500' Cmtd to surface Bit • w Kircher No. 1 r Summary. of Drilling Hazards NOTICE TO BE POSTED IN DOGHOUSE • ~ There is a very lovepotential for abnormally pressured gas deeper in the well. ~ ~l There is potential for st k pipe in coals encountered while drilling from surface to TD. Be ra vigilant, keep pipe moving and maintain mud properties as specifie ~l There is little or no H2S risk a 'cipated for this well. ~1 Due to potential for an unexpecte as kick, PVT and gas detection systems must be fully operational d functioning at all times, visual flow checks and pit level monitoring are 'tical if drilling mud is being used. CONSULT THE "KIRCHER N0.1" ADDITIONAL INFORMATION. ~~~~ ~~ NG PROGRAM FOR • w • • • ADDENDUM B Well Site Documents • ~ etas ----=- ~----------------~ eo~mv~KPOStpn ~--------- ~,,y I I I I I ~~ ~~ ~ --- --------- -----``` ~ Y ~ ~ t~~, I ; ' ,` J~ I ~ 3w1/4 SBCSION 8d, 1'18N, RlS, S.Y.`AH. `~~ I I I ~ ~ ~ I I ; k~ ~ ~d~ ~ ~ ~I / i ~OSED IISI.L II ~ i2aa' ~sFi i `~ ~ PROP0.9SD PAD i l aeaPaem •nu i L ,ON6~ 1M'118.7dC ~ ~ I BRCAP I~ioNtluBR ~ t t z i T~iwtgy~~ Ax s ~ ~ Y 2.7l.1,a6227 ~ ~ EIEVA110U (~ Od NAVO!/) ~ ~ 96Y 1HS OADATA OFPfYED fRDAI A 4 H01/t ~ ~ ~ ~ STAAC 9M1EY 11916 9UR1kY DUALITY ~ g ~ `'~ 591 7D ~ T OOYPUTAIIdI. i YC `~~_ 4 ~0 71E 1iEALP.KTE1010R Ell1P9E B~D.O{.Tna ~ ~i' N60Db61m 2 t/Y aMiS GIP 0.0 Y6INIIEMT ~w _.~_..___..--- ~r ^ N PRDPD~ wni L DATA OE1tlY® FRd1 S1EET dE OF 71MfE EACE ESTATES 9iBgN9gN PLAT It7-70 Z 6MT m NkflBr a00t ApAED A'6pICtlEa GSf~ AEIIS~ /910 P1D1rLiR OIL /XD CdS ALASKA GIIJEERiNG, INC. 1~liCHjJt JMi~ 2 ENGII~ER3- -SURVEYORS PAOli0l8~9 i/lLtr ~'3 liOdD ! ><!LL PID rw ~ ~ riu~, wws ns-a~ rn D»rf er-aLr t ~ • ~ '~ Light Plant ti~ Acxess Road Mud Pump • • H E O Light Plarrt _w d c ~ 'O :~ ~ ~ - a ~ ~ Y ~ ~ Diverter Line ~ Pipe Trailer Dog House FOWLER 01L & GAS Kircher N4.1 Pad Layout Mat-3u Valley, Alaska Parking Pusher's Office Directional Drilling Company Office Light Plant' Asa • f . __ _._._.~ _ _ ._. ;r- ~ ~ ~'or~ze l i ~~cs :7 _~ //~//• • •.. .-~ ,~~oaa~2n ~1 } Q. ~ __. ~_ .~ ~•~~ ~ v ~ ~ ~ ~~ ~ `*~ _~--_ .~ `~i pP __ _ __ -~ , ,,-- __ ___, ._ 50 ___-~ N 4-!~~ '~ O ~~ ~~ 1500' SET BACK "~~~ o ~ ~ ~~'i ~~ ~ ~ ~ + 320' SET BAC~V~~ ,.~~ ~- ~ Access --°.~_ ~ i . „ ~ .,.1 ROAD may""",........... tw • O ~ 0,~ + PROPOSED +~ +..,___ °"~..'.. ~ . ~ • ~ 40y~ I FOWLER • NO.1 • •; i • ' f Q~ ~, PROPOSED ~~~ .-r/ ___ _..,J.~w-_ _-._ ~~ I GASLINE .1 ,.. ' ~ gavel Pit -. campground '(~.. '~\ ~ ~_ pp • 840 ACRE _--~=~ DaSe • ,BLOCK BOUNDARY • _.-'~ ~`~~ ~~r ~_- • • . ~ • ~ ~ Landing l,~~~, ~ ,~~ ~ ~ Strip. •. ''• ~ ~ ~ Pioneer P ~~ ~ /~ / ~ ~• Schr)ol >~ w~ .33 .__ M • ~ ; •308 Four . .. ..: .~+ ; Comers r-. ~ • ~ 1~ • •• • ) -~.~ . • s • I l~ = 1 w a • • ~~ l ~..., • • II ,, _. FIGURE 1. Topographic Map showing Kircher lease block, existing and proposed roads, proposed Trunk road realignment, proposed Kircher No. 1 well site and proposed gas pipeline `: '."_ % ~~ • • ADDENDUM ~ Drill Rig Documents • Page 2 of 1 ~, Thomas E (DOA) From: David Boelens [dboelens~aurorapower.com] ~ Thursday, April 03, 200810:17 AM To: Maunder, Thomas E (DOA); 'Robert Fowles' ~bJeCC FW: Rig .PDF -Adobe Acrobat Standard Attachmenffi: Rig .PDF Tom Ed Jones sent this fde that shows the drawing of the divert system. See the last drawing. The drawing also shows how we setup the ~inment, the choke skid and BOP stack that comes with the rig. The line size on the divert drawing has been changed to 12 inch th match the equipment that was purchased by Aurora Gas. Aurora Gas would rent this equipment to Fowler as it does rrot berg to Aurora Weti Service. Does this take care of your request? 12-Inch Dhrertat Systam 1- 30" 13-5/8" X 5M Diverter Cross w! 12" ANSI 150 outlet 1-1Z" hydraulic Knife Valve 100' 12" Dia X 0.375" wall Diverter Pipe w/ANSI 150 RF flanges • David Boelens VP Alaska Operations Aurora Power/GasMleil ServicelShirieyville Ent Phone 907-277-1003 Fax 907-277-1006 From: Ed Jones [mailbox .com] Senn Thursday, April 03, ?.008 6:52 AM Ta ,~121~roadrunneroom C.c 'David Boaters' Sub,]ec:C FW: Rig .PDF -Adobe Aa'ob~ St~dard John, As you requested yestierday, here are: 1) a sketch of the side view of containment for the rig, 2) BOP diagrams including: a) BOP stack, b) diverter stack. and c) choke manifold. Let me know if you have questions. Regards, Ed Jones From: Sheryt MkGnxier [ma~bo:smc9n~def'~aurorapawer.oom] Sent Tlwrsday, Apri103, 2008 9:43 AM To: 'Ed Jones' Subject Rig .PDF -Adobe Aa+obat Standard ~uested scar-ned documents: 4/21 /ZQ08 Aurora Well Service Rig No, l; Proposed Surface Diverter System • Bell Nipple Flow Line to Pits Fill Line 13-5/8", 5000 psi WP Annular Preventer ( ~~rrfal ~ .3.d ~ fy - NoT Aws~ C-_ rr (2 '~' Diverter Vent Line I Drilling Spool /Mud Cross 13 3/8" Conductor Pipe with 13-5/8", 5000 psi WP Flange welded on top ~, Aurora Well Service DNerter Fairweather E8P Services. Ine. `Rev. 3 OHV t0-Feb-2003 Drawing Not to Scale . v ~~ Hy-drautically Operated l` ~ 2 " ~' Knife Gate Valve - i Aurora Well Sv ice Rig No. 1: Pro sed 3M B~"' Configuration • Bef! Nipple with flouir line to pits Fitl Up Line Pipe Rams sized to work string. 3M Schaffer Annular Preventer 11" 3M Double Gate w/ 3/12" pipe rams installed. • ~ ~' 3M Mud cross Blind Rams 3" SM Manuai Valve (Kill Line) 3" 5M Hydraulic: Valve ~\ ~-~ (KiN Line) '~`_ ~ ti- ,,;~,, , Fluid flow direr,~tion while reverse c-irculating -i _3' SM Manual Valve (Choke Line). f/ - - 3" 5M Hydrau~c Valve ~~ of ~ {Choke line) 2' 3M Manuat Valves On Wellhead >>-x inn Braden Head 9 SB" Casing i 3 3/K" Conductor ~` Aurora web Service BOY Fairwe Cher E8P Services. Inc Rav. 3 OHV 14FeD-2003 _ Drawing Not to Scak • ~~.t~r~ra We!! Servi~ Qig No. 1 Proposed Choke / Kil Ianifold ('onfiguration A!I Calves are 3" rated at 5000 psi. • 6p~io.~ 1 Inlet from Output to Pits Power Swivel (Reverse Circulation Mode) ~3/~ /Ors/ /«'n~ ! } 2" 5M Rated / / Valves Hydraulic Remote Activated choke Inlet from t3C)6 Choke tine 3" 5M I Valves -' "' "'~' - '~' " -`''Bleed Flare Line to 3" 5M Rated Open Flare#~~7 Valves ~° 5l14 Rated Valves r! Manual Choke 2" 5M Rated Valves To Gas Buster "Atmospheric Degasser" • Aurora Well Senrice (:hoke Manifdd Fairweather EbP Serlices, Inc. Rev 3 DHV 10.FeD-2003 Tu~ Drawing Mot fo Seak4_ _ .. .I r ~< c • K ~/1?~-rrrs~a~L Ll~lPf ~"~.~./ j ~9~ ,~ .. ~~', ~ ~ ~~ ~,~ ~~ DJ ~1f/''~~,1 N°" Ir,~z p ,~ /~ ~ ~~ ho~,d ~ ,. ~©X t°~ ~ ~j ~- ~' ~~ ~il/ot ~a .Sc~-/e / Ge~y~x ,J/G Fe / f- • I L ADDENDUM D Pooling Declaration • • • POOLING DECLARATION State: Alaska Borough: Matanuska Susitua Lessee: Fowler Oil & Gas Corporation Lessors: Henry Kircher Tract 1 Lease 1 Bob & Jean Havemeister Tract 2 Lease 2.1 The Dorothy Huston Trust Tract 2 Lease 2.2 Rita Ashmore Tract 3 Lease 3 Paul & Helen Riley Tract 4 Lease 4 Bob & Jean Havemeister Tract 5 Lease 5 Effective Date: June 1, 2007 WHEREAS: Lessee, named above, is the owner of a CBM Natural Gas Lease ("Lease 1 ") dated 6/30/06, recording number 2007-007153-0 of the Borough and State named above, covering the lands ("Tract 1 ") in that borough, described as follows by Borough Tax id number: 18NO1E27D001 18NO1E260001 18N0 l E26B001 18N41 E35B001 Lessee is also the owner of a CBM Natural Gas Lease ("Lease 2.1") dated 8/14/06, recording number 2007-007154-0 of the same borough covering lands ("Tract 2") described as follows by Borough Tax id number 18N01 E27A002 Lessee is also the owner of a CBM Natural Gas Lease ("Lease 2.2") dated 1/31/07, recording number 2007-007154-0 of the same Borough covering lands ("Tract 2") described as follows by Borough Tax id number: t 8N0 i E27A002 Lessee is also the owner of a CBM Natural Gas Lease ("Lease 3 ") dated 8/ 14/06, recording number 2007-007402-0 of the same Borough covering lands ("Tract 3") described as follows by Borough Tax id number: 18N01 E34A001 • • • Lessee is also the owner of a CBM Natural Gas Lease ("Lease 4") dated 6/30/06, recording number 2007-007152-0 of the same Borough covering lands ("Tract 4") described as follows by Borough Tax id number: 18NO 1B27A001 Lessee is also the owner of a CBM Natural Gas Lease ("Lease 5") dated 8/14/06, recording number 2007-007154-0 of the same Borough covering lands ("Tract 5") described as follows by Borough Tax id number: 18N01 E27D002 Lessors are the owners of royalty and mineral interests (the "Interests") in Tracts 1-5, subject to the terms of Leases 1-5 sometimes referred to in this Declaration collectively as the "Leases." It is Lessee's intent to pool these Tracts for cbm natural gas operations. Under the terms of Leases 1-5, the consent of the Lessors is not required for the creation of said pool, and Lessee herewith elects to pool Leases 1-5 to be known as "The Kircher Pool." NOW THEREFORE: 1. For all purposes, Leases 1-5, insofar as they cover Tracts 1-5, are pooled and shall be treated, developed, and operated by Lessee as one property and all royalties and rentals accruing under Leases 1-5 shall be divided among and paid to the Lessors, in the proportion to their acreage in each of Tracts 1-5 (in which they own an interest) in relation to the total combined acreage in Tracts 1-5. Payment of royalties (and any other payments to the Lessors that may become due under the terms of the Leases), when made in the proportions provided in this paragraph, shall constitute full compliance by Lessee with its obligations to make any such payments pursuant to the terms of the Leases. For the purposes of this Declaration, Tract 1 contains 560 acres, Tract 2 contains 80 acres, Tract 3 contains 80 acres, Tract 4 contains 40 acres and Tract 5 contains 80 acres whether each Tract actually contains more or less acreage. In accounting to Lessors for their proportionate share of production: i. the royalty provisions of Lease I covering Tract 1 shall be used as the basis for calculating the total royalty and the amount due Lessors who own Interest in Tract 1, and determining the manner of and delivery of payments. • 2 • • • ii. The royalty provisions of Leases 2.1 and 2.2 covering Tract 2 shall be used as the basis of calculating the total royalty and the amount due Lessors who own Interest in Tract 2, and determining the manner and delivery of payments. iii. The royalty provisions of Lease 3 covering Tract 3 shall be used as the basis of calculating the total royalty and the amount due Lessors who own Interest in Tract 3, and determining the manner and delivery of payments. iv. The royalty provisions of Lease 4 covering Tract 4 shall be used as the basis of calculating the total royalty and the amount due Lessors who own Interest in Tract 4, and determining the manner and delivery of payments. v. The royalty provisions of Lease 5 covering Tract 5 shall be used as the basis of calculating the total royalty and the amount due Lessors who own Interest in Tract 5, and determining the manner and delivery of payments. 2. Lessee has no obligation to: i. Drill separate wells on each Tract ii. Drill an offset well on any Tract to any well drilled on the any other Tracts iii. To offset a well or wells on separate Tracts into which Tracts 1-5 • may now be divided or may later be divided by sale, devise, or otherwise Lessee will have no obligation to furnish separate measuring devices for Lessors or their successors for production of cbm natural gas produced from any portion of the lands in Tracts 1-S. Any person acquiring any interest from Lessors in Tracts 1-5 shall acquire such interest subject to the terms of this Declaration, so long as Leases 1-5 are in force and effect. 3. The drilling of a well on any part of Tracts 1-5 and the production of cbm natural gas from such well or any other drilling for the production of cbm natural gas under the terms of this Declaration, whether the drilling or production be by Lessee or Lessee's successors or assigns, shall be deemed drilling and production under the terms of Leases 1-5 so long as there is production on one of the Tracts. 4. This Declaration is applicable only to cbm natural gas that is produced from the lands comprising Tracts 1-5, from any formation, sand or horizon lying at any depth. 5. In the event the Leases cover lands in addition to those described as Tracts 1-5, those other lands shall not be affected by this Declaration and nothing in this Declaration shall be construed in any manner as changing or affecting the rights, privileges, obligations, or Declarations of the Lessors and Lessee as to those other lands. • • i • This Pooling Declaration is signed by the Lessee as of the date of the aclrnowledgment of his signature below, but is effective for all purposes as of the Effective Date stated above. Lessee Fowler Oi18c Gas Corporation ~/;ly,,.~L~. Robert Fowler, CEO Date: June 4, 2007 • 4 WELL PERld11T CHECKLIST Field & Pool Well Name: KIRCHER 1 Program EXP Well bore seg ^ PTD#:2080410 Company FOWLER OIL & GAS LLC Initial Classll'ype E XP ! PEND GeoArea 820 Unit D0000 OnlOff Shore Qn Annular Disposal ^ Administration 1 Permit_feeatkached---- - ------- --- --- -- - ~ - -- --- - - - ---- -- - - --- -- - 2 Lease number appropriate>---- ---- ----- --- - - - - Yes - - - ----- --- ----- -- -- - - -- ---------- 3 Un(gpeweli-nameaD~number------------------------------- ------Yes--- -----_--------- 4 Well located in,a-defined-pool_-_____________________________ ______ No____ -__-CBMExploratoryweil,poolundefined,___-----__-___----_______-__-------_---___ 5 WBiIIQCatedproperd(stanceftomdr(iling~nitboundary__________________ ______ Yes___ _______--_-__-__--_- 6 Well located praperdistancefromotherwel(s______----------- ------Yes--- --------------------------------------------------------------_ -- 7 Suffcientacreag®ayailable(n-drilling unit_________________________ ______Yes_- __----_---_----___- 8 Ifdevisted~is-wellboreplat_included ----- - -- --- -- - ~ - - - --- ------ -- ------- - --- -- - -- -- ---- 9 Operator only affected parq~- - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ No_ _ _ _ _ _ _ _ Surrounding_Lend owners_have leased theif property to Fowler Oil and Gas, t.l.Q. Desig. of Oper.-Required _ _ _ 10 Operatothas_appropriatebond(nforce-------------------------_ ----_ Yes--- _--SiD9le~veil_Bond#402-69.----------------------------------------------- 11 Permitcanbe(ssuedwithQUiconservatienprder____._______________ ______ No_-__ ____C0595fo[vanousvaiyer$„_---___-_______---_ ------------------------------- Appr Date 12 Pe[milcanbeissuedwiihouladministrative-app[oval------------------- ---__Yes___ _____-__-______--__-___ ------------------------------------------------- ACS 511412008 13 Canpermg:beappr4vedbeforel4-day~Yait------------------------ ------Yes--- --------------------------------------------------------------------- 14 Well located within area and strata auihor(zed by Injection Older# (put-IQ# in-comments)_(For_ No- - - - - - - - - - - - - - - - - _ 15 _Allwells_with(n1f4_mi(e_area_of[eyiewidentified(FOrservicewe(Ipnly)--------- ------ NA--- ---------------------------------------------------------------------- 16 Pre-produced injector; duration of pre production lessthan3months.(For_ecru(cewel(QnIY)--NA--- ------------------------------------------------------------------------ 11 Nonaonven,gas-conforms to AS31,05,030Q,1.A),4.2.A-D) - - - Yes - - - - - - - - - - - - - - - - - - - - - - - - - Engineering 18 Cortduciotstring_provided---- -------- - -- -- - -- - Yes- -- - --- -- - - -- ----------- --- - - - ------- - 19 SurfacecasingprQteetsalFirnpwnU&DWS________________________ ______Yes___ -___BOthsurtaceand-produciionstringswill-be cemented tosurface.__-_--_----_--__-___._____-_- 20 CMTvo(adeguake_toGrculakeon_cAnductor&surf-csg----------------- ------Yes--. ---------------------------------------.--------------_----------- 21 CMTvo(adequate_tQtie-(nlQng string to surf csg---------------------- ------Yes--- ------------------------------------------------------------------ 22 CMTwipCOVer_a(Iknownproductivehorizo4s________________________ ______Yes--- --------------------------------------------------------------.___._ 23 Casingdes~nsadequateforQ~? 6&_permafrost-- -- -- -- - Yes- - --- -- -- -- --------- - --- --- - --- --- -- --- 24 Adequate tankage_or reserve pit _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes Rig equipped with steel pits, Rig has drilled deeperwells on West side of Inlet _ _ _ _ _ _ _ - _ _ - - _ _ _ _ _ _ _ 25 If-a_re-d[ill,h@s-a10.403foraband4nmentbeenapproved---------------- ------ NA---- -------------------------------------------------------------------- 26 Adequate_wellporeseparationptoposed______________________ ____PtA___ ___NOwellsare_Proximate.------.-----------------------------------------_-_--- 27 IfdiverterrQ4u(red,dQesitmeetregulations------------------------ ------Yes--_ .---_---.------------------------------------ Appr Date '28 Drilling fluid-program schematic-& equip listadequate_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _Yes - _ - - - _ _ Maximum expected reservoirpressures-6.3 EMyU, MW planned up io-8.9 in surface hole $~ 9,6_ppg in 8-112" hole- TEM 5!1412008 29 BOPls,dotheymeetregulation___-____._--______.______ _____YeS__ ______________________________________-------------------------_-- ~/~ 30 BOPS-press rating appropriate;-test to_(put psig in_comments)_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ _ _ _ _ - MASP wfo f4rmation_breakdown 1166 psi. -2500 psi BQP test planned..- _ - _ - - - - _ - - _ _ _ 31 Cheke_manifoldcoroRlieswlAPI_RP-53(_May 84)-------- - -- Yes - - - - -- -- - - --------- -- -- ----- --- - 32 Work will occur withoutoperai(onshutdown- - - - - - - - - - - - - - - - - - - - Yes _ _ _ _ _ _ _ This well should be-drilled-wlo shutdown.- Additional permits needed for possible laterals. - - - - _ - - _ _ _ 33 Is presence of H2$ gas probable _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ No_ _ H2S has notbeen reported in QI-gas production, Rig has sensors and alarms. _ - - _ - - _ _ _ _ _ - _ _ _ - 34 Mechanicai_condA(onofv+ellsw(thinApRyerified(FOrservicewellcnly)-------- ------NA-_-- -_-_------_._______-__---_----____-__-_---__.__--_ --------------------- Geology 35 Permiteanbe (sued w/ohydrogen-sulfide measures _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ No_ - - _ _ _ _ - PersonalH2S detecto[s will_be-util¢ed.- - - _ _ _ _ _ _ _ _ _ _ 36 Data_pl'esented on potential ovelpressurezones_ _ _ _ _ - . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes ------------------------------------ ----------------------------- Appr Date 37 Seismic analysis of shallow gas-zones_ - . _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ No- - - _ _ _ _ -Shallow seismic survey waived-as-pe[ QQ 595. _ _ _ - - - _ - - _ _ _ _ - - - - - - - _ _ - _ _ _ _ - _ ACS 5/1412008 38 Seabedccnditionsunrex_(ifoft-shore)___________________________ ______ NA_--- ----- 39 Contaetnamelphoneforweekly.progressreports[explotatoryoniy]_____-__-__ _-___Yes___ ___BobFowier,745,6638---_-_____------------------------------------------ Geologic Engineering r Date Date: ' Date Require logs and directional survey. Commissioner: C mis r Commissioner: • ~~s~-~~~ ®~i ~~ COATSERQATI®1~T Ca SSI®1®T May 1, 2008 Mr. Robert Fowler Fowler Oil and Gas (Alaska) LLC 705 S. Bailey, Suite 204-206 Palmer, AK 99645 Re: Exploratory Well, Kircher # 1 Dear Mr. Fowler: S,4RAH P,4LIN, GOVERNOR 333 W 7th AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 On October 9, 2007, the Alaska Oil and Gas Conservation Commission (Commission) received the Fowler Oil and Gas (Alaska) LLC (Fowler) Application for Permit to Drill (Form 10-401) the Kircher #1 exploratory well. Since then, the Commission and Fowler. have had many conversations and exchanged numerous electronic messages in an effort to clarify, and regarding substantive changes to the content of, the application package. For example, Fowler submitted revised attachments to the application that twice changed the proposed drilling rig and that abandoned the use of air as the drilling fluid. These changes have been incorporated into the application package by Senior Commission Staff. However, while care has been exercised in making the revisions, the application package now little resembles what was originally submitted. Accordingly, to eliminate confusion and assure that the application truly reflects Fowler's current plans for drilling the Kircher # 1 exploratory well, please submit a revised application package. For your reference, enclosed is the originally submitted application incorporating the changes so far conveyed to the Commission. Please call Art Saltmarsh, at (907) 793-1230, or me, at (907) 793-1250, with any questions. We look forward to receiving the revised permit application package. Sincerely, ~V Thomas E. Maunder, PE Senior Petroleum Engineer ~ r +, .. FOWLER OIL & GAS CORPORATION Alaska Office April 22, 2008 Tom Maunder AOGCC 333 W 7`~ Ave Suite 100 Anchorage AK 99501 Dear Tom ~~~I~E~ APR 2 3 2008 a~s~,a Oil & Gas Cons. Comrx~~~, Anchorage Thank you for your email of April 21, 2008, regarding the small error in the calculation of the surface cement volumes. As you will note in our application, we will continually recalculate these volumes as we drill and are able to determine the exact depth of each casing. At that time, we will ensure that our recalculations incorporate the XS factor and the OD versus the 1D on production casing calculations as you have pointed out. Regar Bob Fowler CEO Wells Fargo Building 705 S Bailey Street, Suite 204 PO Box 2056 Palmer Alaska 99645 Tel: +1-907-745-6638 Fax: +1-707-313-2541 Email: Robert(a,Fowleroiland~as.com A Privately Owned Company Website: www.Fowleroilandgas.com STATE OF ALASKA ALAOIL AND GAS CONSERVATION COM~ON PERMIT TO DRILL ~n aac ~s nos R ~Pi=; `~ ~ Li~~ ~ Alaska (iii ~x Gas Cnr-s. C;ni~nr;issien 1 a. Type of Work: Drill ~ Redrill ^ Re-entry ^ 1 b. Cu nt Well Class: Exploratory Q Stratigra is Test ^ Service ^ Multiple Zone ^ Development Oil ^ Development Gas ^ Single Zone ^ 1 c. Specify if will is proposed nc ic~rage Coalbed Methane Q Gas Hydrates [] Shale Gas ^ 2. Operator Name: Fowler Oil & Gas (Alaska) LLC 5. Bond: Blanket ^ Single Well Q Bond No. 11. Well Name and Number: Kircher No. 1 3. Address: 705 S Bailey Street, Suite 204-6, Palmer AK 5 6. Proposed Depth: MD: 3,500 TVD: 3,500 12. Field/Pool(s): Wildcat 4a. Location of Well (Governmental Section): Surface: 1,299' FWL &965' FSL, Sec 26-718 R1 E, SM 7. Property Designation: Private Property Top of Productive Horizon: 8. Land Use Permit: Matsu Borou h CUP 2007-031 13. Approximate Spud Date: Ma -08 Total Depth: 1,299' FWL &965' FSL, Sec 26-T18N-R1E, 9. Acres in Property: 794 14. Distance to Nearest Property: 1,344' 4b. Location of Well (State Base Plane Coordinated: Surface: x-1774147.92 y-2783562.27 Z 4 10. KB Elevation (Height above GL): 367 feet 15. Distance to Nearest Well Within Pool: Il/8 16. Deviated wells: Kickoff depth: t Maximum Hole Angle: de es 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) ~' Downhole: 1,516 psi Surtace: psi ~ t b ~O ~~ 18. Casing Program: Specifications Top -Setting Depth -Bottom Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Len MD TVD MD TVD (including stage data) n/a 13-318" 54.5# K-55 welded 88'~ surface surface 80' 80' driven 12-114" 9-5/8" 36.0# K-55 btc 500' urface surface 500' 500' drUcmt to surface w/ 36 bbls 8-112" 7" 23.0# K-55 btc 3,500 ace Surface 3,500' 3,500' drUcmt to surface w/ 114 bbls 19. PRESENT WELL CONDITION SUMMARY (To be comple d for Redrill and Re-Entry O perations) Total Depth MD (tt): Total Depth TVD (ft): Plugs (measured) : E ct. Depth MD (tt): Effect. Depth TVD (tt): Junk (measured): Casing Length Size C t Volume MD TVD ConductoNStructural Surface Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): 20. Attachments: Filing Fee Q BOP Sketch Q Property Plat Q Diverter Sketch ^ Drilling Program Q Time v. pth Plot Q Shallow Hazard Analysis Q Seabed Report ^~ Drilling Fluid ogram ~ 20 AAC 25.050 requirements Q 21. Verbal Approval: Commission Representative: 22. 1 hereby certify that the foregoing is true and correct. Printed Name Robert Fowler Signature ~G~„ . Date Contact Title CEO Phone 907-745-3368 D 22-Apr-08 Commission Use Only Permit to Drill Number. -- -- ------ API Number: Permit Approval cover letter for other Date: irements. Conditions of approval : If box is checked, well may not be used to explore for, test, or produce coalbed methane, gas hydrates, or s contained in sh les: ^, Other: Samples req'd: Yes No[~ Mud I req'd: Yes No[ HZS measures: Yes No^ Directional svy 'd: Yes No^ APPROVED BY THE C MISSION DATE: , COMM TONER Form 10-401 Revised 12/20 ( , [~ ! ~ ~ ~~ Submit in Duplicate STATE OF ALASKA ALAS~OIL AND GAS CONSERVATION COMMON PERMIT TO DRILL ~n Aac ~s nos e ~.... ;' ~, ~~ ~ ~ 1 a. Type of Work: 1 b. Current Well Class: Exploratory ~ Development Oil ^ 1 c. Specify if well is r. ; Drill ^ Redrill Stratigraphic Test ^ Service ^ Development Gas ^ Coalbed Methane 0 L,as Hydrates ^ Re-entry ^ Multiple Zone ^ Single Zone ^ Shale Gas ^ 2. Operator Name: 5. Bond: Blanket Q Single Well ^ 11. Well Name and Number. Fowler Oil and Gas Bond No. TBD Kircher No. 1 3. Address: 6. Proposed Depth: 12. Field/Pool 705 S. Bailey, Suite 204-206, Palme laska 99645 MD: 3,500 TVD: 3,500 Wildcat 4a. Location of Well (Governmental Se n): 7. Property Designation: Surface: 1,299' FWL and 965' FSL, Se 26-T18N-R7 E, SM Private Property Top of Productive Horizon: 8. Land Use Permit: Matsu Land Use 13. roximate Spud Date: Permit CUP 2007-031 A 2008 Total Depth: 9. Acres in Property: .Distance to Nearest 1,299' FWL and 965' FSL, Sec. 26-T18 1E, SM 794 roperty: 1,344' 4b. Location of Well (State Base Plane Coordinates): 10. KB Elevation 15. Distance to Nearest Well Surface: x-1774147.92 y-2783562.27 Zone 4 (Height above GL): GL 367 feet Within Pool: N/A 16. Deviated wells: Kickoff depth: et 17. Maximum Anticipated Pressures in ps' (see 20 AAC 25.035) Maximum Hole Angle: roes Downhole: 1516 psi S ace: 350 psi 18. Casing Program: Specifications To p -Setting Depth - Bo Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Len MD TVD MD TVD (including stage data) N/A 13-318" 54.5# K-55 Welded 88't Surface Surface 80' 80' Driven 12-1/4" 9-5/8" 36.0# K-55 BTC 500't urface Surface 500' Drl/cmt to surf w/36 bbls 8-1/2" 7" 23.0# K-55 BTC 3,500't ce Surface ,500' 3,500' Drl/cmt to surf w/114 bbls 19. PRESENT WELL CONDITION SUMMARY (To be complet for Redrill Re-Entry O perations) Total Depth MD (ft}: Total Depth TVD (ft): Plugs (measured): Effe Dep D (ft): Effect. Depth TVD (ft): Junk (measured): Casing Length Size Cem olume MD TVD ConductodStructural Surface Intermediate Production Liner Perforation Depth MD (ft): oration Depth TVD (ft): 20. Attachments: Filing Fee ~ BOP Sketch Q ling Program 0 Time v. Depth PI ~ Shallow Hazard Analysis Property Plat Q Diverter Sketch ~ Seabed Report ^ Drilling Fluid Program 20 AAC 25.050 requirements Q 21. Verbal Approval: Commission Representative: D _ 22. I hereby certify that the foregoing is true and correct. Contac Printed Name Arlen Ehm Title President ~ 907-230-8144 C Signature i%2~ti'sli/ Phone 907-745-6638 O Date ~~ - - ~j~ Commission Use Only Permit to Drill API Number Permit Approval See cover letter r other Number:o7O O ~~ 50 ~ ~prp Date: requirements. Conditions of approval : If box is checked, we ay not be used to explore for, test, or produce Coalbed methane, gas hydrates, or gas contained in ales: ^ Other: S les req'd: Yes^ No[~ Mud log req'd: Yes^ o[~ ~~#~~~~ easures: Yes^ No[I~ Directional svy req'd: Yes N ~ APPROVED BY THE COMMISSION DATE: ,COMMISSIONER Form 10-401 Revised 12!2005 ~ ~ , ~ /f, ~ {~ Submit in Duplicate • FOWLER OIL & GAS K/RCHER NO. 1 NARRATIVE AND CALCULATIONS TO ACCOMPANY PERMIT TO DRILL APPLICATION OCTOBER 9, 2007 ~ ~ INTRODUCTION Fowler Oil and Gas is preparing to commence an onshore coalbed methane (CBM) project near Palmer in the Mat-Su Borough (Figures 1, 2, 3 & 4). The wells are designed to explore for and test the CBM zones of the upper part of the Kenai Group of sediments that have been the target of CBM exploration over the past several years. These CBM target zones are stratigraphically and structurally above the liquid hydrocarbon-bearing zones that are present in the deeper parts of the Cook Inlet Basin. NEARBY WELLS There are four wells that could be considered to be nearby to the proposed Kircher No. 1 in Sec. 26-T18N-R1 E. They are: WELL DISTANCE PERMIT LEGAL DESCRIPTION Austral Needham #1 4.3 mi SW 166-006 Sec. 7-T17N-R1 E 529' FNL & 635' FEL Hill Fishhook #1 4.2 mi N NW 169-029 Sec. 3-T18N-R1 E 1,048' FSL & 681' FWL Evergreen Cook #1 9.5 mi W 202-180 Sec. 30-T18N-R1W 991' FSL & 888' FEL Evergreen Little Su #1 5.3 mi N 203-205 Sec. 35-T19N-R1E 1,191' FNL 8 605' FWL Total depths are as follows: Needham #1 6,004' Fishhook #1 2,384' Cook #1 3,740' Little Su #1 2,125' WELL PLANS KIRCHER NO. 1 This trunk well bore will be drilled to a maximum depth of 3,500 feet in order to obtain pertinent geologic information regarding the presence, thickness and depth of the various coal seams and, if possible, to obtain coal samples that can be analyzed in the laboratory. However,. the well may be terminated at a shallower depth if such a shallower total depth is determined to be desirable while drilling. An earlier termination to the drilling could be due to the lack of significant coals detected by observing the cuttings or by other factors leading to a decision by the operator to terminate drilling. If any liquid hydrocarbons were to be encountered through some unforeseen geological circumstance, drilling would be terminated immediately. The Kircher No.1 will be drilled using the M-W Drilling, Rig # 20 (M-W 20), with the intent being to create a trunk wellbore from which to subsequently drill lateral wellbores in the coal beds at various horizons, yet to be determined. This trunk well bore has been designed to accommodate the multiple laterals that will be subsequently drilled to dewater the coal beds and to produce the contained gas. The laterals will be cased with slotted liners so that dewatering and gas production can begin immediately. Permit applications will be made to drill the lateral wells and to convert the Kircher No. 1 to a Class II Injection well. 2 A geologist will be on location at all times and will be monitoring all hydrocarbon shows. However, a request is being made to waive the requirement to create a lithologic log and collect well samples. SUBSEQUENT KIRCHER WELLS WITHIN THIS 794-ACRE BLOCK All of the lands within the Kircher drilling tract are dedicated to what Fowler Oil and Gas calls the Kircher Block. Subsequent lateral wells will be drilled and produced from the Kircher No. 1 trunk wellbore. Fowler Oil and Gas envisions numerous discreet bottom hole locations for the lateral wells assuming multiple coal beds each with several lateral wellbores as provided for in 20 AAC 25.005(e) and 20 AAC 25.015(a)(1). However, there is presently no provision in the AOGCC regulations for drilling laterals specifically within individual coal beds in the search for and production of CBM gas. Fowler Oil and Gas is requesting that the AOGCC include the trunk well and all of the Kircher Block laterals within this application for permit to drill. Before each lateral would be drilled an Application for Sundry Approvals, Form 10-403, would be filed giving the intended target for that lateral. Such a filing would be in lieu of a complete application for a Permit to Drill, Form 10-401, for each of the lateral wells. This would streamline the processing of the permits for the laterals for the AOGCC as well as for Fowler Oil and Gas and any other subsequent operators. EXCEPTIONS BEING REQUESTED: • An exception is being requested to the requirement of drilling overbalanced and with a drilling fluid system as the means of primary well control as given under 20 AAC 25.033. Paragraphs (a) through (h) define this requirement. A request for an exception to this requirement is attached as provided under 20 AAC 25.033 (i). • An exception is being requested to the requirement for the size of the diverter line as given under 20 AAC 25.035 (c) (1) (A). Paragraph (A) prescribes a diverter "of at least 16" and (B) "at least as large as the hole being drilled". A request for an exception to this requirement is attached as provided under 20 AAC 25.035(c) (1) (B) and under 20 AAC 25.035(h) (2). • An exception is being requested to the requirement for a double gate preventer in addition to the spherical preventer as given under 20 AAC 25.035 (e) (1) (A). That paragraph requires that a double gate preventer be installed and operative in addition to the spherical preventer. A request for an exception to this requirement is attached as provided under 20 AAC 25.035(h) (1). • An exception is being requested to the requirement for wellbore surveys as given in 20 AAC 25.050 (a) (2). That paragraph requires that the well be "surveyed to determine the inclination from vertical with surveys starting at 500 feet and no more than 500 feet apart to total depth;" A request for an exception to this requirement is attached as provided under 20 AAC 25.050(h). • An exception is being requested to the requirement for a gas well and producing zones to be no closer than 1,500 feet from a property line unless the owner and the landowners are the same on both sides of the line as given under 20 AAC 25.055 (a) (2). A request for an exception to this requirement is attached as provided in 20 AAC 25.055 (a). • An exception is being requested to the requirement for a well site survey as given under 20 AAC 25.061 (a). That paragraph requires the identifying of "...anomalous velocity variations indicative of potential shallow gas sources". A request for an exception to this requirement is attached as provided under 20 AAC 25.061 (c). • An exception is being requested for the requirement to have a minimum of three hydrogen sulfide sensing points as given under 20 AAC 25.066(A) (3). The requirement for three methane gas detectors will be met, however. A request for an exception to the hydrogen sulfide requirement is attached as discussed under 20 AAC 25.065 (b) and (c). • An exception is being requested for the requirement of submitting a complete mud or lithologic log and samples as given in 20 AAC 25.071 (b) (1) and (2). Four wells are near to this proposed well that were drilled by both compressed air drilling and conventional mud drilling. A request for an exception to the requirement for a lithologic log and samples is being requested. • An exception is being requested for the requirement of a C-Plan has been filed with the DEC Air and Water Quality section and a copy is included herewith. DRILLING PROGRAM USING COMPRESSED AIR: A rotary drill hammer will be used to drive the 13-3/8° conductor dry. ' bra ' will be utilized for the 12-1/4" diameter hole to be drilled from the bas e conductor to ~ 'ameter diverter line will be in placed rilling, casing and cementing the 10" surface casing. ~~~~~"~ j~~ `fl'`~~'~ Air drilling will be utilized - /2" diameter hole to be drilled from he surface casing at ~ ~ ,500'. A 10" diameter diverter line will be in place during the drilling, ementing the 7" production liner. Drilling mud in sacks, mud tanks, mud mixers, mud pumps and all mud handling equipment will be in place and ready to be utilized while drilling the trunk well. Therefore, a conversion to mud for the trunk well will cause little or no delay if primary well control becomes a problem. The casing will be filled with water in order to test the BOP equipment. A~ cv r~,.~ S \Z~ 5~.,. ~-1 C 3-O~ ,i~ 1. MIRU Use drive and drill hammer to drive 13-3/8", 54.5 #/ft, K-55 conductor to ~ 88 feet or refusal. Install 13-3/8", 3M x 11" Slip Lok head. 2. N/U diverter and function test. Exception for diverter size requirement is attached 3. Drill 12-1/4" hole to 500'. 4. Run 9-5/8" casing to TD. 5. Cement 9-5/8", 36.0 #ft, K-55, buttress surface casing from 500' to surface. Cement will be a single stage 14.5 ppg gas-block type cement slurry. Cement volume will include 35% excess. 4 6. N/D diverter and install 11" 3M x 9-5/8" SOW casing head. 7. N/U 11" 3M BOP and 2", 3M choke manifold. 8. R/U accumulator unit ~~~ ~C'~"~- ~ ec~` ~~oP~oc~ n' ~-~ late ~ wt~-r~ss ~O~ '~ ~- 9. Test the BOP and surface equipment to 2,500 psi and record test. ~~(~ f Est ~ ~.~c~c-~~ ~-.J\l .`YY~ 10 pressure test casing to 1500 psi. 11. P/U bit on drill collars and drill pipe. Drill out cement and drill 20'-50' of new hole while drilling with water. Pull back into shoe and perform a formation integrity test to 11.5 ppg EMW, recording test on chart recorder. Blow down casing and drill 8-1/2" hole to 13. POH'at9cLR/U logging tools. 14. Run GR, SP, Re ., en., & o tools. ~ ~ ~~~`~ \_ ~,~~C 1 uspend well until program for lateral wells has been approv 15. R/D logging tools. ~h ~\~~ ~ j d~v 16. Run 7" steel d composite liner from ace to TD. -~ 17. Cem 7" liner from surface to TD using 15.8 pp gle stage slurry. ALTERNATIVE DRILLING PROGRAM USING CONVENTIONAL DRILLING MUD If formation pressure becomes too great to continue drilling with air, the system will be converted to a conventional mud-based system. 1. Mix mud to sufficient weight to control the well which has been calculated to be 10.0 ppg. 2. Continue drilling 8-1/2" hole to 3,500'. 3. POH and R/U logging tools. 4. Run GR, SP, Res., Den., & gyro tools. 5. RID logging tools. C~sZ ~S 6. Run 7" steel rom surface to TD. cc~sZ~S 7. Cement 7" tiger from surface to TD using 15.8 ppg single stage slurry. 8. Suspend well until program for lateral wells has been approved. 5 ! • Pressure Considerations: Maximum mud weights in the Austral Needham No. 1 well, 4.3 miles to the southwest, was 10.7 ppg at 2,900', 3,560' and 3,790'. The mud weight at 4,210' had dropped to 10.0 ppg and was 10.5 ppg at 5,960'. This mud weight was sufficient to not only maintain well control, but to keep trip gas suppressed to the point where, in Fowler's evaluation, the indicated actual pore pressures were probably in the range of 8.0 to 8.5 ppg EMW. Fowler's conservative approach assumes that the maximum possible pore pressure to be encountered will be 1,516 psi EMW at 3,500' TD equating to a pressure gradient of 0.433 psilft. Maximum Anticipated Surface Pressure: The maximum anticipated surface pressure (HASP) for 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 7" casing point (TD) or the formation fracture pressure at the 10" surface casing shoe (less a full gas column to the surface). Based on offset well data, the highest formation pressure expected in this 8-1/2" hole section is 1,516 psi at the section TD of 3,500' TVD (or 0.433 psi/ft). Documented fracture gradient data for this area indicates that the fracture gradient at 500' TVD (the 9-518" surface casing shoe) is 0.9 psi/ft. Complete evacuation of the wellbore, except fora 0.1 psi/ft gas gradient, is assumed. 8-1 /2" hole section HASP (pore pressure) _ (3, 500 ft) (0.433- 0.1) = 1,166 psi HASP (fm breakdown) _ (500 ft) (0.9 - 0.1) = 400 psi Therefore, HASP in the 8-1/2" hole section is~si and the 3,000 psi BOPE system to be used will be adequate. ~ ~ ~ (~ ,~'~'Y/~ Drilling Fluids: The drilling fluids are being furnished by Baroid Drilling Fluids. There will be a mud engineer on site at all times during drilling operation with a mud system. Mud properties will be maintained as follows: Hole Section from 88'± to 500': Alluvium and Tyonek Formation Base Fluid Density PV YP API Filtrate Total Solids Gel & Polyrr Fresh Water 8.6 - 8.9 ppg 6-16 25-35 <12 4 -12 ier mud system Hole Section from 500' to 3,500': Tyonek and Chickaloon (?) Formations Base Fluid Fresh Water Density 9.0 - 9.5 ppg (based on pore pressure in offset wells) PV 6-15 YP 15 - 25 API Filtrate < 8 Total Solids 7 - 14 Polymer mud system 6 • Drilling Solids Handling System: Shale Shaker, Desilter, PVT monitors Liquid Wastes: Excess or spent drilling mud will be stored temporarily onsite for possible reuse on subsequent wells or it will be removed by Emerald Alaska. Application has been made with the DEC Solid Waste section for a temporary waste storage permit. Solid Wastes: Solid wastes from air drilling will have any included liquids removed and the resultant solid~ed material will be tested and then delivered to a disposal site that is approved by the ADEC. Solid wastes from mud drilling will be handled as above or removed from the site by Emerald Alaska. Application has been made with the ADEC Solid Waste Section for a temporary waste storage permit. WELLBORE SURVEYS: Since compressed air drilling is used, the well will be surveyed by a complete continuous directional survey after the well is drilled. An exception to this requirement for wellbore surveys while drilling with compressed air is attached. If a conventional mud drilling ` aystem is used wellbore surveys will be obtained at 500' intervals in accordance with the ,~" provisions of 20 AAC 25.050 (a) (1) 8~ (2). MUD LOGGING: An exception to the manned mud logging requirements is being requested since this well is located very near to previously drilled wells where samples have already been collected. An exception to sections 20 AAC 25.071 (b) (1) and (2) is hereby requested as given in 20 AAC 25.071 (c). CASING /CEMENTING PROGRAM: All casing is new or used casing in acceptable condition. Analysis (below) indicates the casing program as designed provides adequate safety factors for this well. All casing strings, with the exception of the driven 13-3/8" conductor, will be cemented in place. 13-3/8" CONDUCTOR ANALYSIS AND CEMENTING PROGRAM .A drive shoe will be welded to the bottom joint and it will then be driven into the ground. The second joint will be welded and both joints driven to ~ 88' or refusal to drive. No cementing is required. 9-5/8" SURFACE CASING ANALYSIS AND CEMENTING PROGRAM The 9-5/8" surface casing will be cemented in fully from the proposed set depth of 500' to surface with a 14.5. ppg Gas-Block type cement system. Cement Svstem Type Cement Weight (ppQ) Volume Ca)_ 35 % Excess Primary Gas-Block enhanced 14.5 26 bbls @ 35% OH Where: ucmt = X1/4 x ((12.25"/12")2 - (9.625"/12")21 (412') (1.35) = 26 bblS 5.615 ft3 /bbl vcmt = fl/4 x ((13.375"/12")2 - (9.625"/12")21(88') = 7 bblS 5.615 ft3/bbl Shoe jt. = 3 bbls 7 • 26 bbls + 7 bbls + 3 bbls = 36 bbls Total Volume Cmt (cd surface = 36 bbls Actual volumes to be re-calculated at time of running casing due to l~ variation The surface cement system will utilize alias-Block type additive to minimize potential for gas entrainment and or channeling. 7" LONG STRING ANALYSIS AND CEMENTING PROGRAM -~ The 7" long string will be cemented in fully from proposed set depth of 3,500' to surface. A 15.8 ppg "G" cement system will be used. This program is designed to ensure that all exits from the trunk well bore by lateral wells are isolated with 15.8 ppg "G" cement. Cement Svstem Type Cement Weight (ppQ) Volume ~ 35 % Excess Primary "G" 15.8 91 bbls @ 35% OH Where: V~,,,t = n/4 x f 8 50"/12")2 - (7.0"/12")21 (3,000') (1.35) = 91 bbls 5.615ft3/bbl Vcmt = fl/4 x ((9.625"/12")2 - (7.0"/12")21(500') = 21 bbls 5.615 ft3 /bbl Shoe jt. = 1.5 bbls 91 bbls + 21 bbls + 1.5 bbls = 114 bbls Total Cmt Volume =114 bbls Actual volumes to be re-calculated at time of running liner due to potential variation in actual depth from planned. 8 • Kircher No. 1 Summary of Drilling Hazards THIS NOTICE TO BE POSTED IN DOGHOUSE ~l There is a very low potential for abnormally pressured gas deeper in the well. ~l There is potential for stuck pipe in coals encountered while drilling from surface to TD. Be extra vigilant, keep pipe moving and maintain mud properties as specified. ~! There is little ~r no H2S risk anticipated for this well. ~l Due to potential for an unexpected gas kick, PVT and gas detection systems must be fully operational and functioning at all times, visual flow checks and pit level monitoring are critical if drilling mud is being used. CONSULT THE "KIRCHER N0.1" DRILLING PROGRAM FOR ADDITIONAL INFORMATION. 9 Kircher No. 1 Casinst Properties and Design Verification Casing Performance Properties Internal Collapse Tensile Strength Size Weight Yield Resistance Joint Body TVD MD Design Safety Factor* in. Ir' b/ft) Grade Conn. si si 1 000 Ibs ft( RKB) ft( RKB) T B C 13-3/8 54.5 K-55 BTC 2,730 1,130 1,038 1,130 88 88 216 -- -- 9-5/8 36.0 K-55 BTC 3,520 2,020 755 564 500 500 31 8.8 12.1 7 23.0 K-55 BTC 4,360 3,270 522 366 3,500 3,500 4.5 10.9 2.8 '' Tensile design safety factors are calculated using pipe weight. Burst design safety factors are calculated using MASP. Collapse design safety factors use formation pressure at the shoe on the outside and full evacuation (except for a gas gradient) inside. Casing Setting Depth Rationale 9-5l8" 500' MD, TVD 7" Sur-3,500' MD, TVD Surface casing to provide an anchor for annular BOPE, sufficient formation strength at the shoe for containing possible deeper formation pressures and to cover shallow formations, allowing deeper drilling to the producing interval. Long string to provide hole stability for departure for subsequent lateral wells and subsequent injection of dewatering fluids from the lateral wells. • GRAPEBC SCALE _~ ~ 58952'SYE 2639.47 SWl/4 SECTION 26, TiBN, R1E, S.M. AK. T.P. C-1 4~~ 1 '~ OF G~ ~/ '~ O 4.P ~ / ~ ~~ i ~ a i ~Z ~ j Fti~ ~, ~ 1320' ~ I ~~ ~~ 1 1\ z ~ I ~ ~ I 299' '9L' `rRp Ap PROPOSED WELL 1344' 1 I ~ ~ ~ .I ~ I ~ 1 , ~ J I PROPOSED PAD {/ I ~ i~ N " PROPOSED WELL T 61'36'59 37' 1 y 1 ~^ 'y^ ~^ l OUTCROP . . tA LONG. -14913'53.89" ~ / 1 r r r STALE PLANE 20NE AK 4 ' / 1 ~ X 1,774,147.92 Y 2,783,562.27 I ~ ~ ~ <a~V ELEVATION (GEOID O6 NAVD88) / ~ ~ p~ ~i 96 y ~ 5' 366.6' / ~ ` GQ THIS DATA DERIVED FROM A 4 HOUR / '. ~ wy STAIIC SURVEY USING SURVEY OUAIJTY / m i ~~ y CJ TRIMBLE 5800 GPS EQUIPMENT. THE DATA WAS / ~ ~ p 4 p SPRING THEN SUBMITTED TO OPUS FOR COMPUTATION. / / i, ~ \ 44 g/ W \ AL ERROR EWPSE 5 0.043meters. THE VERTIC i CENTER 1/4 POSITION RED 2" CAP MONUMENT RECOVERED 2 1/2" BRASS CAP GLO MONUMENT `/` `` \` 2845.30' !//// n a ----------------" LEGEND: cOj,O - - - LINES RECORD ~1I' DR LINES SURVEYED ® PROPOSED WELL NOTES\: RECORD DATA DERIVED FROM SHEET ONE OF THREE EAGLE ESTATES SUBDIVISION PLAT g73-70 ? 9/13/07 REA/OVED CONTdJAS AND LYJL 4£R1$ pYANCEO K/RCHEA UN/T TO MRCNLX BLOCK, ADDED PRDP03t'D GA.SLM/E RENSEO PAD ANO PAD OIP/£NTARDN. MLN 7 7 ElN .R SCALE: AS NOTED FlLE: moosasPRDP FOULER OIL AND GAS DRAXN BV: CES oA~: e'~Ta7 ALASKA RIM ENGINEERING, INC. KlRCXER NO.1 CHECKED er eF oATe PROPOSED WELL, SURVEY DATE: 8 8 07-9 04 07 ENGINEERS-P ERS-SURVEYORS CuJ. B~ox6 mu nic! ACCESS ROAD A• WELL PAD ,oua r~ mnae -ew-iisaa P.O. BOX 2448 PAI]~R. 98645 (BU7) i45-0922 FAX (BO'!) v4s-oztz SIIEEi t OF i Maunder, Thomas E (DOA) Page 1 of 1 From: Robert Fowler [rn#owier57@gmail.com] ao~`~~- Sent: Wednesday, April 09, 2008 10:49 AM To: Maunder, Thomas E (DOA) Subject: Fowler Oil & Gas Clarification Hi Tom I just wanted to clarify an issue that may come up due to some inquiries that we have put out to several coring drillers. AS AN OPTION, we have asked several companies to submit coring and desorption test bids using their own rigs. I want to emphasize to you that this is only an option that we are exploring and we are fully aware that the use of such an option would require approval from AOGCC. However, our clan is still to drill in accordance with our permit application using the Aurora AWS#1 rig with water-based mud. Thanks Bob Fowler 4/9/2008 Maunder, Thomas E (DOA) Page 1 of 1 From: David Boelens [dboelens@aurorapower.com] Sent: Thursday, April 03, 2008 10:17 AM To: Maunder, Thomas E (DOA); 'Robert Fowler' Subject: FW: Rig .PDF -Adobe Acrobat Standard Attachments: Rig .PDF Tom Ed Jones sent this file that shows the drawing of the divert system. See the last drawing. The drawing also shows how we set up the containment, the choke skid and BOP stack that comes with the rig. The line size on the divert drawing has been changed to 12 inch to match the equipment that was purchased by Aurora Gas. Aurora Gas would rent this equipment to Fowler as it does not belong to Aurora Well Service. Does this take care of your request? 12-inch Diverter System 1- 30" 13-5/8" X 5M Diverter Cross w/ 12" ANSI 150 outlet 1-12" hydraulic Knife Valve 100' 12" Dia X 0.375" wall Diverter Pipe wl ANSI 150 RF flanges David Boelens VP Alaska Operations Aurora Power/Gas/Well Service/Shirleyville Ent Phone 907-277-1003 Fax 907-277-1006 From: Ed ]ones [mailto:jejones@aurorapower.com] Sent: Thursday, April 03, 2008 6:52 AM To: jh121@roadrunner.com Cc: 'David Boelens' Subject: FW: Rig .PDF -Adobe Acrobat Standard John, As you requested yesterday, here are: 1) a sketch of the side view of containment far the rig, 2) BOP diagrams including: a) BOP stack, b) diverter stack. and c) choke manifold. Let me know if you have questions. Regards, Ed Jones From: Sheryl McGruder [maitto:smcgruder@aurorapower.com] Sent: Thursday, Apri103, 2008 9:43 AM To: 'Ed Jones' Subject: Rig .PDF -Adobe Acrobat Standard Requested scanned documents: 4/21 /2008 Aurora Well Service Riig No, l; Proposed Surface Diverter System Bell Nipple Flow Line to Pits Fill Line 13-518", 5000 psi WP Annular Preventer (,Q~,,-t~l ~,,,, 3,d ~ fy- /V o T ~ wS L_ (Z~~~' Diverter Vent Line I Drilling Spool /Mud Cross 13 3/8" Conductor Pipe with 13-5/8", 5000 psi WP Flange welded on top Aurora Wefl Service Diverter Fairweather E8P Services, Inc. Rev. 3 DNV 10-Feb-2003 Drawing Not to Scale ~ _ ~__ --~-- _S _-._.._._~ Hy~drauiically Operated ~` ~ 2 " ~' Knife Gate Valve - Aurora Well ice Rig No. 1: Proposed 3M B('~on~iguration Bell Nipple with flow line to pits Fill Up Line Pipe Rams sized to work string. 3M Schaffer Annular Preven#er 11" 3M Double Gate w/ 3112" pipe rams installed. ~ t" 3M Mud Cross ~ Blind Rams 3" 5M Manual Valve (Kill Line) 3" 3M Hydraulic Valve ~~ (Kill Line} \ _ ~ Fluid flow direction -'"~~ while reverse r-irculating tt°x~ Braden Head 9 518" Casing 33 3/8" Conductor ~3" 5M Manual Valve (choke Line} -- - 3" 5M Hydraulic Valve ! ~,_ J (Choke Line) 2" 3M Manual Valves On Wellhead Aurora Wetl Service BOP Fairweather E&P Services, Inc. Rev. 3 DHV t0.Feb-20Q~__ Drawing Nat to Scale_+~~_~ s~_I.I<rora Weil Servi~~ig No. 1 Proposed Choke / KiI ~nifoid ~'on#ignratlon X11 vahres are 3" rated at 5000 psi. Inlet from BCP Choke i_ine 6~~io•~ Inlet from Power Swivel (Reverse Circulation Mode) output to Pits Bleed Flare Line to Open Flare Pt't To Gas Buster "Atmospheric Degasser" Aurora Well Service Choke Manitold Fairweather E8P Services, Ina Rev. 3 OHV tt)-Fes}2003 ~ _ Drawing Nct to Scale___ _' f~ I G ~ !~lLL.._ Goit/T~ //V/lil~iv ~S'/I~~ V/~W ~~ a~i ~` ~ Ito ~~~ ~~ ~m~rmGa~alG ~'Gn P i Npr ~ ,~ ~ " GOr~ ~i~/~~J'~" ~ 11 ~ you Y y_ y - - /` i i ~/l/~ ~a -~~q/e ~ ~ ~ FOWLER OIL & GAS ~ ~_ Kircher No. 1 Pad Layout Mat-Su Valley, Alaska Rig: M-W Drilling No. 20 ELEV 367 GL Sec 26 T18N R1 E, SM Spud: April, 2008 RT ti Access Road Light Plant Mud Pump i 1 a~ i c ' Y i ~ ~ a~ ~ ~ ~ i ~ ~ ~ ~ Y; ~ # ~s .~ ` " ~ ~~ Q ~ ..._.~__,~.~. ._ • Light ~ - Diverter Line Plant O c Pipe Trailer Dog House w ~~ Light Parking Plant Pus rh se Office Directional Drilling Company Office 150' ~~'f ~~~. ~~ ~ ~~ ;r~,~ . ~:~; is M-W Drilling No. 20 Spud: April, 2008 13-3/8" 54.5 ppf, Conductor Casing Driven to 88±' Surface Casing 9-5/8" 36 ppf BTC Casing @ 500' to surface Note: All referenced depths are are MD / TVD RT FOWLER OIL & GAS ~ Kircher No. 1 Casing Detail Mat-Su Valley, Alaska ELEV 367 GL Sec 26 RT I 1 T18N ~ R1 E, SM 12-1 /4" Hole 8-1/2" Hole 7" 26 PPF BTC Casing TD @ 3,500' TVD/MD Cmtd to surface FOWLER OIL & GAS ~~"" Kircher No. 1 Casing Detail Mat-Su Valley, Alaska Rig: W Drilling No. 20 ELEV 367 GL Sec 26 T18N R1 E, SM Sou ~ April, 2008 RT 13-3/8" 54.5 ppf, Conductor Casing Driven to 88±' Surface Casing 9-5/8" 36 ppf BTC Casing @ 500' to surface Note: All referenced depths are are MD / TVD RT r 12-1 /4" Hole J ~ ~~~ ~ ~ 8-1/2" Hole 7" 26 PPF ~ ~ BTC Casing ~~ TD @ 3,500' TVD/MD Cmtd to surface Bit i i _, . ~ FOWLER OIL ~ GAS ~ .~_ Kircher No. 1 Diverter Drawing Mat-Su Valley, Alaska M-W Drilling No. 20 ELEV 367 GL Sec 26 T18N R1 E, SM ud: April, 2008 RT RT Bell Nipple _ \ ( Flow Line 11" 3M Annular BOP ~~r ~ 10" Full-Opening Knife ®~ Valve ~~~y 75' of 10" Dia Diverter Line 11"~x 11" 3M x 10" ANSI Series150 Dive r Spool 13-318" 3M x~1" LOC Casing Head FOWLER OIL & GAS teat; Kircher No. 1 Annular BOP Drawing Mat-Su Valley, Alaska M-W Drilling No. 20 ELEV 367 GL Sec 26 T18N R1 E, SM pud: April, 2008 RT RT Bell Nipple 11" 3M Spherical BOP 2-1/16" 3M Manually Operated Gate Valves 11" 3M Mud Cross c/vv 2-1/16" 3M Outlets Flow Line ~~~~ . , ~~ ~ ~® ~;, ~, ~ ~~ iL'.L.. ~~~ 2-1/16" 3M Hydraulically Operated Gate Valve X X '~ 2-1/16" 3M Manually Operated Gate Valve Lock Down Pins 1" 3M x 9-5/8" 3M DS X ~ ~ SPECS FOR SCHRAMM T555C RIG ~~~. -y ~qu~~~eci ~vi'~h 1050 cf~a @ 35~ psi a ~~x~~ress®r with eT~tch ,`>> I~€~,el effic~e~t 100 r~x~. ~e~k e~gi~e ewers c®r~press~r ~ hycirat~Iic s~s~e ,~ ~,®ad ser~si~~ ~per~ l©®p h~r~raa~l~e ~;; `` systerr~. f®r ease ®f ®~perati®re arf~ f~e1 savir~.gs ~vai~afsle with ~® i~sisYe a~cl ®utsi.~e Iaz~ sa~sara car®~nsels aid a si€~.e ~.~axrate~ pike st®rage rack M®W I)ra.llin P.O. Box uo37s, Anch®rage, Alaska g951a COMPLETE WATER SYSTEMS r ~ ~, 3~ r OA length, transport - 39' 3" (11.05 m) OA width - 8' (2.43 m) OA height, transport -12' 1" (3.68 m) OA height, transport w/Lazy Susan -13' 4" (4.06 m) Weight std. rig, less drill pipe - 58,000 lb (26,300 kg) Weight less truck - 39,000 lb (17,700 kg) 'F'reaclc Separate drill rig subframe design allows mounting on various trucks or special purpose vehicles other than Schramm specified tandem axle truck. h iternational or Sterling, 8x4 or 6x4 20,000 lb (9,072 kg) front axle 20,000 lb (9,072 kg) pusher axle 46,000 Ib (20,866 kg) full locking rear axle 86,000 lb (39,000 kg) GVWR 'l'op 1Eiead lZ®tation Ductile iron, single reduction oil bath gearbox with two disc valve type hydraulic motors. Infinitely variable rotation speed. 2-11 / 16" diameter (68.3 mm) spindle thru hole 0-172 -rpm, infinitely variable 75,348 in-lb (8,514 N•m) torque Floating sub ~atriggers Front - (2) 4" bore x 36" stroke (102 mm x .914 m) Rear - (Z) 5" bore x 36" stroke (127 mm x .914 m) Feed System Top head driven by hydraulic cylinders through heavy roller chain. 28.5' (8.7 m) head travel 40,000 Ib (18,144 kg) pullup 192 fpm (58.5 mpm) pullup speed 30,000 lb (13,608 kg) pulldown 134 fpm (40.8 mpm) pulldown speed These specifications are based on theoretical calculations and industry standards. Performance will vary according to actual drilling conditions. Schramm, Inc continuously improves its prod- ucts and reserves the right to change specifications, design, prices and terms at any time without notification or obligation These spedfications do not extend any warranty, expressed or implied, nor do they or Schramm, Inc. make or imply any representation of the machine's merchantability or fitness for a particulaz purpose. ,:_ -. Faagine Caterpillar C-15 DIT ATAAC 565 bhp (363 kw) @ 1800 rpm 225 gallons (8521) fuel tank capacity Standard Compressor Two-stage, oil flooded rotary screw 1,050 cfm @ 350 psi (27.0 cu. m/min.@ 25.2 bar) Cooling Three core, side by side type 130°F (54.4°C) ambient design temp. Dimensions bast Tubular steel, all welded, lattice type structure 35' 4" (10.8 m) OA length 13ri11 Pipe ~ Casing 20' (6 m) or 25' (7.6 m) drill pipe leng~ 25' (7.6 m) casing max. length 18" (457 mm) max. diameter through slipbox Winch Planetary with spring applied hydraulic release brake. 7,600 lb (3,447 kg) bare drum line pull 199 fpm (60.6 mpm) bare drum line speed Flydraulac Systesaa Open loop load sensing system 7 micron filtration 140 gallon (5301} system capacity Dater Inyectioae Systean 18 gym (68.1 lpm) water pump Electric foam pump Tool l.aalsricator Positive displacement, air pump operated piston type pump variable to 5.0 gph (18.9 lph) bighting ~ Electrical System - 24 Volt Mast - (3) 60 watt floodlights Control Panel - (2) gauge floodlights Work - (3) 70 watt halogen Accessories Side pipe rack, tool box, pipe handling sling, breakout wrench and 50 hour maintenance kit ®pti®na1 1611YipYneY1$ Many modifications are available including: Radio remote controlled rod handling jib boom Floating sub 4 and 5 pipe inside lazy Susan carousels 7 and 9 pipe outside lazy susan carousels Mud pumps S~ia€3AIi~I1(i, iP~4C° 800 E. Virginia Avenue West Chester, PA 19380 USA Phone: 610-696-2500 Pax: 610-696-6950 P-i•rlaii: schramm@Schramminc.corrl T555.Printed 7/04 r.sch rarrlrrlirlc.c®~ 1 0.~'\+ 1 Vl 1 Maunder, Thomas E (DOA) From: Maunder, Thomas E (DOA) Sent: Tuesday, February 19, 2008 8:21 AM To: 'robert@fowleroilandgas.com' Subject: RE: Kircher #1 Thanks Bob_ It appears that the "Hewn rig has the capacity to handle the casing load. 1 look forward to the replies to the other questions. Tom Maunder, PE AOGCC From: Robert Fowler [mailto:robert@fowleroilandgas.com] Sent: Tuesday, February 19, 2008 7:24 AM To: Maunder, Thomas E (DOA) Subject: Re: Kircher #i Hi Tom While our drilling engineers are reviewing questions 2&3 (one is on a remote rig in Oklahoma), I will forward you the spec sheet on the new rig we just purchased. MW Drilling will provide the crews for us. This rig should be more than adequate for what we want to do. Enclosed is the spec sheet for the Gefco Speedstar 185. Bob "Maunder, Thomas E (DOA)" <tom,maunder~aalaskagov> wrote: Bob, 1. Regarding the proposed T555 rig from M-W Drilling. The air weight of the planned 7", 23# casing (3500') is 80,500# (70,200# in fresh water). Does the rig have the ability to lower this weight of casing? 2. Is a rotating head employed above the proposed diverter while drilling? If so, an updated drawing would be appreciated. 3. When cementing the 7" casing to surface as planned, the hydrostatic difference with cement outside and fresh water inside assuming the casing is set at 3500' could be 1360 psi prior to bumping the plug. The nominal burst rating of the fiberglass joints proposed near the coal seams is 1000 psi (1250 psi mill test). While cementing, is there a risk of bursting these joints? If so, what procedure will be employed to avoid damaging the fiberglass joints. I look forward to your reply. Tom Maunder, PE AOGCC 2/ 19/2008 -_~ ~~i; ,~ ~ , ~~ FAtL/NG SPEE©STAR - K/NG O/L TOOLS ~~ ;~~ ~ !~ ~ ~ ~ ~ 1~~ ~_ d - ~~ } Manu#acturer of ~e most durable and ~ ~~~-~~__ ,- com late d~l~n ri s in the indu ~ ~ P 9 +~ r ~~ ,~ ~ ~j ~ v~ ~3 ,~ , :~ ~, ,, F r ~ro ~ ,._. _ . ~ . MdUNTING Heavy-duty 5-axle carrier powered by 5T5 HP (384 kw} turbo-charged diesel erigine. TRANSM(SSiQN Fuller T8-speed transmission and drop box, four445/65822 highway tread fronttires, Twelve ] 1 x 22.5 onlaff highway tread reartires, power steering, air brakes, one manful! vision off-set cab and dual T25 gallon (943 L} fuettanks. MAST 51 ft (15.5 m} vertical'vvorking space above breakouttable. Maximum working capacity: 185,000 Ibs. (83,9T6 kg}. TOPHEAD 140,000 in-Ibs. (15,81:8 Nm} of drilling torque. Rotation speeds of 0 - TOORPM. 3" (76 mm}diameter fluid course. PULL(3QWiV Maximum pulldown capacity of 30,000 Ibs.113,608 kg}. Cylinder cable feed rate of 0 - 20S FPM (84 mpm}. NQ(ST CAPABtLtTfES & SPEEQS Hoist capacity to 185,000 (bs. (83,9T6 kg}. Hoist speed to T40 FPM (42.7 mpm}. HYORAULtC EEVEL(NG JACKS Fnuf 60" (1,524 mm} stroke leveling jacks, tvva at rear on centerline of borehole and two behind carrier cab, all independently controlled. AUXELIARY W(NCH 8,000 lbs. (3,628 kg}capacity, hydrauCically driven w[th jib boom. 200 ft (61 m} of 5!8" (15.8 mrn} wirelne. Line. speed 70 FPM (21.3 mpm-.. WATER ENJECTiQN 40 GPM (152 LPM- triplex pump:.. LUBRICATOR TI gallon (64.T L) reservoir capacity. PIPE LOADER Hydraulically actuated for loading drill pipe and'. collars.. (3REA(tOUT TONGS Cylinder actuated. 2-3/8"(60 mm) to TO'-314".(273 mm} diameter capacity. PIPE RACKING (3QARD Capacity of 7,000 ft (1,525 m}, 30 ft. (9.T m}drill pipe and corresponding drill collars (Guide Lines}. ,a,,~ ~; o.~ uFFCft re:;erves rho:igi;r:a amend;hese ;yec:~cs'v~ins Many cme wa.:em mince. GeN:O maaes~o warcanIIes, erpressed.r %2arad cC:e; ;han our randart ,marn:vamenry ~'~ F 2215 S. Van Buren ~ Enid, Oklahoma 73703 E USA '~ ~Q USA:S(30-234-444 (FAX:580-233-6807 FA[F(RG ~ SPEEDSTAR ~ KtgG Ott TOOtS E-Mail: intsales@gefco.com (www.gefco.com Page 1 of 4 Maunder, Thomas E (DOAj From: David Boelens [dboelens@aurorapower.com] Sent: Thursday, April 03, 2008 9:20 AM To: Maunder, Thomas E (DOA); 'Robert Fowler ; jhi 21 @roadrunner.com Subject: RE: Kircher #1 Tom/Robert In my conversations with John Heck I told him AWS 1 has only drilled wells with fluid and we have not looked at drilling any wells in Alaska with air. David Boelens VP Alaska Operations Aurora Power/Gas/Well Service/Shirleyville Ent Phone 907-277-1003 Fax 907-277-1006 Prom: Maunder, Thomas E (DOA) [mailto:tom.maunder@alaska.gov] Sent: Thursday, April 03, 2008 9:17 AM To: Robert Fowler Cc: David Boelens Subject: RE: Kircher #1 ~; ~ i a`~O~~rtic~~~Oc~ ~ r~~~ Bob, ~~'`~-~ p ~y'C-~'c.a~F` ~" '_-~ l Yes, the Aurora rig has been used on other conventional drilling projects. This would be the first air drilling application for the rig in Alaska. I have copied this message to Dave. Dave, could you in particular provide drawings of the air drilling "stack" and vent/blooie line? In order to allow this file to be complete, could you also include the diverter and rig/location layout diagram for air drilling? As I remember, the rig is equipped with a 12" diverter line and we have allowed Aurora to drill 12-1/4" hole with that size line. If I have remembered the line size correctly, such approval would also apply here. Please correct me if I am wrong. 1 look forward to Dave's reply. Call or message with any questions. Tom Maunder, PE AOGCC Prom: Robert Fowler [mailto:rnfowler57@gmail.com] Sent: Thursday, April 03, 2008 8:31 AM To: Maunder, Thomas E (DOA) Subject: Re: Kircher #1 Tom Well I found out this morning over my morning coffee that our Speedstar 18S will not be delivered in time for the Kircher drilling so we have fallen back to Plan B which is to use the Aurora Franks rig that is now in Kenai. It is the AWS #1 and has been permitted before by the AOGCC. It is a bit of an overkill for what we are doing but it will certainly get the job done on time. 4/21 /2008 Page 2 of 4 Since it has been permitted several times before, do you need any additional information to what you have on file? If so, Dave Boelens at Aurora will provide it via email today. Thanks Bob On Wed, Apr 2, 2008 at 4:46 PM, Maunder, Thomas E (DOA) <tom._m__aunder~alaska.goy> wrote: Bob, I am working to finalize my review of the permit application. As I look at my checklist and the BOP waivers granted to drill the well by CO 595, I find 1 really do need to have the updated drawing of the rotating head, etc. Based on the earlier technical replies that you have forwarded from your engineer(s), I don't believe it will be too difficult for them to provide you an accurate drawing. Thanks in advance. Call or message with any questions. Tom Maunder, PE AOGCC From: Robert Fowler [mailto:rnfowler57@gmailcom] Sent: Wednesday, March 26, 2008 10:17 AM To: Maunder, Thomas E (DOA) Subject: Re: Kircher #1 Tom Yes he still is as soon as he comes in off the job in Oklahoma. I believe you said that it was acceptable for him to submit the drawing later and not hold up the issuance of the permit? Thanks Bob On Wed, Mar 26, 2008 at 9:27 AM, Maunder, Thomas E (DOA} <tom.maunder~alaskagw> wrote: Bob, Art mentioned that you called. One issue stiN out there is #2 in my message of a while back. 4/21/2008 Page 3 of 4 • Last 1 remember, your engineer was going to provide a new drawing. Thanks in advance. Tom Maunder, PE AOGCC From: Maunder, Thomas E (DOA) Sent: Tuesday, February 19, 2008 8:21 AM To: robert@fowleroil_andga_scom Subject: RE: Kircher # 1 Thanks Bob. It appears that the "new" rig has the capacity to handle the casing load. I look forward to the replies to the other questions. Tom Maunder, PE AOGCC From: Robert Fowler [mailto:robert@fovvleroilandgas.com] Sent: Tuesday, February 19, 2008 7:24 AM To: Maunder, Thomas E (DOA) Subject: Re: Kircher #1 Hi Tom While our drilling engineers are reviewing questions 2&3 (one is on a remote rig in Oklahoma.), I will forward you the spec sheet on the new rig we just purchased. MW Drilling will provide the crews for us. This rig should be more than adequate for what we want to do. Enclosed is the spec sheet for the Gefco Speedstar 185. Bob "Maunder, Thomas E (DOA)" <tom.maunder@cihrskagov> wrote: Bob, 4/21/2008 Page 4 of 4 1. Regarding the promised T555 rig from M-W Drilling. The air weight of the planned T', 23# casing (3500') is 80,500# (70,200# in fresh water). Does the rig have the ability to lower this weight of casing? Z. Is a rotating head employed above the proposed diverter while drilling? tf so, an updated drawing would be appreciated. 3. When cementing the 7" casing to surface as planned, the hydrostatic difference with cement outside and fresh water inside assuming the casing is set at 3500' could be 1360 psi prior to bumping the plug. The nominal burst rating of the fiberglass joints proposed near the cxial seams is 1000 psi (1250 psi miff test). White cementing, is there a risk of bursting these joints? If so, what procedure wilt be employed to avoid damaging the fiberglass joints. I look forward to your reply. Tom Maunder, PE AOGCC 4/21/2008 1 Investors Hub - Page 1 of 3 CD &DVD Duplication. Disc. Duplication Systems CDLDVD Dup Free Quotes from Multiple CD/DVD Duplicators, Disc Printers, Great prices. I • Providers Compare Prices & Disc Wrappers, Supplies & Advice! Manual and a~ Services and Save! www.SummationTechnology.com www.duplicatc www.BuyerZone.com Watchlist Portfolio to lists NVMG: Quote -Charts -News - P Forex Commodities Financials Search: ~ Quote/Chart/Ticker ~ Go; ~~~// ~~~ ~~~ OTC BB (Oil/Gas/Natural_Enecgy_Production (Native American Energy NVMG_Quote/Level II -News -Quote Group,~lnc. (NVMGI -Chart Public Reply ~ Private_Reply ~ Keep ~ Last Read Next_10 ~ Previous ~ Next Posted by: Arrow335 Date:3/27/2008 12:58:48 AM In reply to: Rhubarb_ who wrote msg# 251..90 Post 25192 of 25207 Rhubarb...What's this?...Who...? This 9uY? Herrera Names Top DBI Official in Corruption Suit HERRERA NAMES TOP BUILDING DEPARTMENT OFFICIAL, TECHNOLOGY VENDORS IN MAJOR PUBLIC CORRUPTION SUIT Investigation by City Attorney's Public Integrity Task Force and City Controller Uncovers Elaborate Wrongdoing; Criminal Investigation Referred to U.S. Attorney CD &DVD Duplication Free Quotes from Multiple Providers Compare Prices & Services and Save! www.euyerZone.com Disc Duplication. Systems CD/DVD Duplicators, Disc Printers, Disc Wrappers, Supplies & Advice! www.SummationTechnology.com CD/DVD_ Duplicators. Great prices. Helpful buying guide. Manual and automated units. www.duplicators4less.com Short Run_Duplicatio 1000 CD Duplication for $280 1000 DVD Duplication for $500 www.DoADisc.com SAN FRANCISCO (Feb. 10, 2003-City Attorney Dennis Herrera filed a major public corruption lawsuit today charging Marcus O. Armstrong, the San Francisco Department of Building Inspection's top technology official, with an elaborate kickback and illegal payment scheme that defrauded City taxpayers of more than- one-half million dollars over the last two years. Also named as defendants irr the suit are now- defunct technology vendor Government Comau~r Sales, Inc.; the company's former chief executive_officersnd owner. Robert Fowler and Foster City, Galif.- based technology consultant Raman Kumar. "In masterminding an elaborate scheme intended for their own self-enrichment, Mr http://investorshub.advfn.com/boards/read msg.asp?message_id=27955984 3/28/2008 Investors Hub -Native American Energy Group, Inc. (NVMG) Post #25192 Page 2 of 3 Armstrong and his cronies have betrayed a public trust and cost our City something more than the money it sorely lacks," Herrera said. "Public corruption diminishes the confidence of our citizens in their government and dishonors the hard work provided by honest public servants every day. It's a slap in the face not just to taxpayers, but to firefighters and cops, nurses and teachers. They all deserve better--and wrongs such as these deserve the most aggressive civil remedies and damages our office. can obtain." Herrera's civil lawsuit results from a yearlong investigation by the City Attorney's Public Integrity Task Force-a specialized unit he created after taking office in January 2001- working in tandem with auditors from the office of City Controller Edward Harrington. Seeking substantial penalties and punitive damages in addition to the recovery of stolen funds, the sui# alleges a complex web of wrongdoing that includes fraud, conversion, unfair business practices, false claims, breach of contract and violate no s of both state and local conflict of-interest laws. A parallel criminal investigation which is likely to involve interstate activities-has been referred to U.S. Attorney Kevin Ryan and the FBI, with whom Herrera has pledged his office's full cooperation. According to the suit filed in San Francisco Superior Court today, the illicit kickback scheme began more than two years .ago when Armstrong, inform_ ation technology director for the Department of Building Inspection, pushed for Government omputer Sales, Inc. to be selected as the technology vendor on three major projects to improve the department's services to members of the general public. Hidden from City officials at the time, however, was the company's virtual insolvency: in the process of defaulting to creditors for more than $16 million, Government Computer Sales' CEO, Robert Fowler, began illegally transferring company assets offshore-to a Caribbean bank Fowler himself controlled-even. as the company was assuring City officials of its intention to fulfill its contract with the department. It never did. Instead, Armstrong intentionally misled superiors and lied to city auditors to gain approval for what were, in fact, illegal advance payments to Government Commuter Sales that would eventually total more than $500,000.. The company's work on the projects, which was incomplete at the time, would never be completed. And though most of Government Computer Sales' subcontractors would go unpaid for the projects, one subcontractor who did receive significant payments from the hemorrhaging company was Raman Kurnar. It was no lucky coincidence: according to the City Attorney's complaint, Kumar would kick back more than $21,000 of his payments from Government Commuter Sales-usually within days of receiving them-in business checks written to "Mindstorm Technologies" and "Monarch Enterprises," both phantom front companies set-up and controlled by Marcus Armstrong. Among Armstrong's ill-gotten gains from the kickback scheme, `: according to the complaint, is a 2002 Mercedes-Benz automobile. "When 1 set up the Public Integrity Task Force less than a year ago, I envisioned it as an innovative, multidisciplinary vehicle for civil law enforcement enabling us to aggressively pursue those who would violate the public trust," Herrera said. "Today's lawsuit furthers that vision, and I'm enormously grateful to Chief of Public Integrity Lori Giorgi and Chief of Investigations Timothy Armistead for their dedication and professionalism-not merely on this case, but on all the cases that will continue to strengthen public integrity in our City." http:/linvestorshub.advfn.com/boardslread msg.asp?message_id=27955984 3/28/2008 • • ROBERT FOWLER Chairman & CEO Palmer Alaska PROFILE Current: Chairman & CEO of Fowler Oil & Gas Corporation Past: Retired ~~'~~~'"` ~~~"~~ ~~`~g ~C CEO at GCS Inc VP of Sales at The Computer Center Inc Wholesale Sales Manager at The Seattle Times Auditor at Gulf Oil Ltd Education: MBA University of Stockholm, Sweden Industry: Oil & Gas SUMMARY Executive Management ability to assemble and manage a team of C-level executives in order to achieve growth and profit goals. EXPERIENCE Chairman & CEO Fowler Oil & Gas Corporation Public Company; I-10 employees; Oit & Gas Industry February 2002 -Present Responsibility for raising the capital to fund the first. coalbed methane natural gas well in Alaska, and then implementing a program to drill an additional 45 wells by the end of 2010. Retired October 2001-January 2002 z~ I retired when GCS Inc was sold to outside investors. • • CEO Gcs Inc Private Company; 50-200 employees; Information Technology Industry March 1989 -September 2001 Led a team of Vice Presidents who grew company sales from $2.5 million to $100 million in 5 years in the Information Technology Industry servicing the State, Local and Education (SLE) government marketplace nationwide. • Astronomical growth via huge government multi-year contracts • Customized financial relationships with lending institutions • State of the Art processing and control procedures • State of the Art web-based accounting system VP of Sales The Computer Center Inc Private Company; 11-50 employees; Information Technology Industry April 1982 -February 1989 Led the sales department team of 5 associates in achieving sales of approximately $1 million per year. Page 1 of 2 Maunder, Thomas E (DOA) From: Maunder, Thomas E (DOA) Sent: Wednesday, February 27, 2008 6:15 PM To: 'robert@fowleroilandgas.com' Subject: RE: Kircher #1 Questions 2 8~ 3 Bob, Submitting the revised drawing once he is able is acceptable. I agree on having all steel casing. Regards, Tom Maunder, PE AOGCC From: Robert Fowler [mailto:robert@fowleroilandgas.mm] Sent: Friday, February 22, 2008 5:26 PM To: Maunder, Thomas E (DOA) Subject: RE: Kircher # 1 Questions 2 & 3 Tom Just received the call from our drilling engineer. Question 2 Yes a rotating head is employed above the diverter. He asks if he can submit the revised schematic once he is back from the remote rig while not delaying your permitting process. uestion 3 Our drilling engineer disagrees with Arlen Ehm's recommendation that we use a composite pipe next to the coal seams. He says that the benefit of an easier kick-off into the coal seams is out-weighed by the potential problems. Thus, we will use only the T' steel casing. Best Regards Bob _. --Maundtr T'knmas.E(DOA)"<tom . . . . . .. . .. . . . . . . . . . . . . Thanks Bob. It appears that'ttre "t3ew'~, I look forward to the replies to the other Tom Maunder, PE //' AOGCC ~ka.gov> wrote: capacity to handle the casing load. /2008 Maunder, Thomas E (DOA) Page 1 of 1 From: Maunder, Thomas E (DOA) Sent: Thursday, February 07, 2008 4:05 PM To: 'Robert Fowler (robert@fowieroilandgas.com)' Subject: eddress Contacts: Robert Fowler Bob, Thanks much for you eddress. Here is mine. I will be sending some technical questions regarding the permit application. I hope today, but maybe tomorrow. Regards, Tom Maunder, PE AOGCC ti's - ~~3~ 2/7/2008 • '~ FOWLER OIL 8c GAS December 29, 2007 Mr. John Norman, Chairman Alaska Oil & Gas Conservation Commission 333 West 7"' Ave., Suite 100 Anchorage, AK. 99501 Re: Hearing on Application for Permit to Drill Fowler Oil and Gas Kircher No. 1 Dear Commissioner Norman: • ;~~- RECEIVED DEC ~ ~ 2007 Alaska pit & Gas Cans, Commission Anchorage On October 9, Fowler Oil and Gas filed an Application for a Permit to Drill the captioned well. That application asked for nine exceptions to the existing regulations. The cover letter to that application contained this statement: "It should be noted that numerous exceptions are being requested. This is primarily because the existing AOGCC regulations contain no references strictly applicable to CBM exploration and production. The existing regulations were developed and promulgated long before CBM came into existence and are designed solely for exploration and production of conventional gas resources." We still believe that statement to be true. Of the nine exceptions that were requested, eight can be acted upon by the commission without conducting a hearing according the existing regulations. The request for a spacing exception for a gas well, however, requires a hearing. I am preparing material to show that we will not be draining methane gas from adjacent subsurface property owners with this well. On December 9, 2007, the Alaska Oil and Gas Conversation Commission posted a "Notice of Public Hearing" IN THE Anchorage Daily news that contained the following statement: Application by Fowler Oil 8~ Gas for waiver of the primary well control requirements of 20 AAC 25.033, divert(er) line size requirements of 20 AAC 25.035(c), blowout prevention equipment requirements of 20 AAC 25.035(e), wellbore survey requirements of 20 AAC 25.050, gas well spacing requirements of 20 AAC 25.055, well site survey requirements of 20 AAC 25.06(a), gas detection requirements of 20 AAC 25.065 and 20 AAC 25.066(a)(3), and collection of drill cuttings requirements of 20 AAC 25.071(b)(2) for drilling of the Kircher No. 1. 2420 Foahall Drive Anchorage, AK 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arlenehm@gci.net 'a • • Mr. John Norman December 29 Page Two Additionally, a resident of Chickaloon, some 12 miles from the proposed well, has requested a hearing on the "Fowler CBM Permit". His statement is as follows, in part: "It is my understanding that the type of well planned is unconventional and will require many horizontal off shoots, each of which will be used to dewater significant areas adjacent to private residences in order to allow methane to percolate to the surface." I am preparing material that will, among other things, show that the dewatering of the coal beds by subsequent lateral wells will not remove water from the aquifer used by the nearby residents. However, I am at a loss to determine how to prepare for the other eight requested exceptions. We have no new data to present nor do we have any new interpretations to propose. The proposed activities were the subject of a Matanuska-Susitna Borough application and a hearing before the Matanuska-Susitna Borough Planning Commission on October 1, 2007. At that time the permit was approved unanimously. Since that time we have received no requests for information regarding our proposal from nearby residents or nearby concerned parties. Nor have we received any communication from the Alaska Oil and Gas Conversation Commission regarding our proposed plans. I would appreciate guidance from the AOGCC as to how to prepare for this hearing. If you have any questions or require additional information, please contact me on my cell phone at 230-8144 or by email at arlenehmCa~gci.net. Sincerely, Arlen Ehm President Fowler Oil and Gas 2420 Foxhall Drive Anchorage, AK 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arlenehm@gci.net '~ FOWLER Oll & GAS December 13, 2007 Mr. John Norman, Chairman Alaska Oil & Gas Conservation Commission 333 West 7"' Ave., Suite 100 Anchorage, AK. 99501 Re: Application for Exception 20 AAC 25.055(a) (2) & (4) Gas Wetl Spacing Fowler Oil and Gas Kircher No. 1 Dear Mr. Norman: RECEIVED DEC 1 4 ~Oq7 Alaska Qi1 & Gas Cans, C~amrttiasiAn Anchora~s Pursuant to the Fowler Oil and Gas request for a spacing exception, a mail out was made to the four involved subsurface mineral estate owners on November 21, 2007. Those letters were certified and included a °Retum Receipt Requested" form. All of those receipts have been returned and are attached hereto. The names of the property owners are as follows: Lohmann-Olson LLLP C/o Mr. Bob Cribbs 1622 W. Mt. Vernon Road Mt. Vemon, IA 52314 Mr. Dale R. Mizer P.O. Box 230270 Anchorage, AK 99523 Mr. Harry Owens P.O. Box 7107 Bend, OR 97708 Mr. Leonard B. Reid 20207 Paul Revere Circle Eagle River, AK 99577 Mr. John Norman November 21, 2007 Page Three 2420 Fozhall Drive Anchorage, AK 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arlenehm@gci.net Mr. John Norman December 13, 2007 Page Two If you have any questions or require additional information, please contact me on my cell phone at 230-8144 or by email at arlenehmCa~gci.net. Sincerely, Arlen Ehm President Fowler Oil and Gas 2420 FoahaU Drive Anchorage, AK 99504 907-333-8880 T 907-333-3454 F 907-230-$144 C arlenehm@gci.net ^ Complete sterns 1, 2, and 3. Also complete item 4 ff Restricted Celivery is desired. ^ Print your name and address on the reverse so that w~can retWm the card to you. ^ Attach this ~d to the back of the mailpiece, or on the front if space permits. 1. Article Addressed to: Mr. Bob Cribbs Lohmann-0Ison LLLP 1622 W. Mt. Vernon Road Mt. Vemon, IA 52314 2 Articl CJ A. Signatu _ -- X .~ ^ Agent Addressee Reoeived by (Primed Name) C. ~ of ive~ry tiB~ 12'f P.tS l/l~9~0/ D. Is delivery address different from item 1? ^ Yes If YES, enter delivery address below: ^ No 3. ce Type Certified Mail ^ Express Mail ^ egistered ^ Return Receipt for Merchandise ^ Insured Mail ^ C.O.D. 4. Restricted Delivery? (Extra Fee) ^ Yeq eNumber j ~ }7 D7 49,D D D 9477, ~~41 __~~ j (-Pans/er vice jabe~ ~ i 1 i i ~ i i F ~ t i f? i e ~ 1 i f S( r R j t~ t PS Form 3811, February 2004 Domestic Return Reoeipt io2sss-o2.na.igao ..._ t ^ Complete Rams 1, 2, and 3. Also complete Rem 4 ff Restricted Delivery is desired. ^ Print your name and address on the reverse so that we can return the card to you. ^ Attach this card to the backof the mailpiece, or on the front ff space permits. 1. Article gsldn3ssed to: Mr. Dale R. Mizer P.O. Box 230270 Anchorage, AK 99523 A. Sign. f , X ^ ~~ ^ Addressee 13. eceNed by (Prfnted Nar C. Date of Delivery D. Is delivery address different from item 17 ^ Yes If YES, enter delivery address bebw: ^ No 3. S®rvioe Type ~CerHfled Mail ^ Express Mail Registered ^ Return Receipt for Menchandise ^ Insured Malt ^ C.O.D. 4. Restricted Delivery? (E~ctra Fee) ^ Yes 2. Artble Nufnber - - - - _._ ----- r~sa~aaeil '70D7 i149D' Dpd~ 9477 X9`58 , PS Form 3811, February 2004 Domestic Return Receipt io2sss~az-rn.~yw. ^ Complete items 1, 2, and 3. Also complete. item 4 if Restricted Delivery is desired. °^ Print your f~itme and address on the reverse so that we carkretum the card to you. ^ Attach this card to the back of the mailpiece, or on the front ff space permits. 1. Article Addressed to: • a s re f~v6'fL~/ ~ X ~ Addressee B. ~ Printeli p~lame) C. Dat of Delivery . D. Is delivery address different from kern 1 ~ ^ Yep ff YES, enter delivery address below: ^ No Mr. Harry Owens ,~~ `~~ `r ": P.O. Box 7107 0 Bend, OR 97708 ~ ~~,'" ./ '~ ified Mail O Express Mail D Registered ^ Return Receipt for Merchandise °~~ O Insured Mail ^ C.O.D. 4. Restricted Deliv-_ _ ery? (Extra Fee__1___.------.-17 Yes 2. Article Number --- 7 0 0 7 ~r 4 9~iJ ~ O Q 1. 9 4 7 7 .~ 9 7 k ( i ~ 1 (fn~r-sfer rnxrr ' ,PS Form 3811, February 2004 Domestic Return Receipt to2585.02-M-1540 ^ Complete ftems 1, 2, and 3. Aiso complete item 4 if Restricted Delivery is desired. ^ -Print your name and address on the reverse So that we Ciro return the Card t0 yott. ^ Attach this Card to the bank of the mailpieGe,' or on the front.if space parrnits. 1. Article Addressed to: Mr. Leonard B. Reid 20207 Paul Revere Circle Ea le River AK 99577 a O Agent ^ Addre; D. Is delivery. address different from item 1? D Yes If°YES, enter delivery address below: ^ No 9 ' 3 Sertrice 2: Article Number ~~~~ r P$ Fomt 3811, February 2004 Certified Mail D ErlpressbfaN Reg{sten3d ^ Return ;Receipt for Merchandise ' ^ Insured Mail,:. O G,O.D: 4. Restricted Delivery? (Extra Fee) p Yes ~.---. Domestic Return Receipt ~ ;tgz5sso2-M-1 ll1v151U1V Ur ~YlLL YKL,vL'iv 11Viv aivL xr~rvi~~r INDUSTRY PREPAREDNESS PROGRAM Exploration Production & Refineries ~ , ' ' ~t, ~ i ~:~'i s October 17, 2007 _ i `2 ~ r> File No. 305.05 (Fowler) ~- ,. ~'a .,: ~ ~ !~ , :. Mr. John Norman ~ ' ° ' ~' Alaska Oil and Gas Conservation Commission 333 West 7`h Avenue, Suite 100 Anchorage, AK 99501-3539 Subject: Fowler Oil & Gas -Kircher Slock CBM Wells, Palmer, AK. Request for C- Plan Exemption Dear Mr. Norman: The Alaska Department of Environmental Conservation (ADEC) has received a request for an exemption from Oil Discharge Prevention and Contingency Plan (C-Plan) requirements from Fowler Oil & Gas. Fowler is requesting an exemption for a coal bed methane gas (CBM) project in the Cook Inlet Basin near Palmer. Your name is included on Fowler's letter dated September 28, 2007, and you should have received information regarding the proposed project attached to the letter. As you know, AS 46.04.050 includes an exemption from the C-Plan and financial responsibility (FR) requirements for a natural gas production facility. We are requesting a formal determination from AOGCC as to whether Fowler's CBM project should be eligible for exemption from C-plan and FR requirements under AS 46.04.050. Please provide your determination on whether or not Fowler's CBM program will encounter liquid hydrocarbons. If you need any additional information in order to complete this determination, please contact Arlen Ehm at Fowler Oil & Gas. Thank you for your assistance. Please call me at 269-7540 if you have any questions. Sincerely, ;~`CL~~U. J .~~,~•. Laurie Silfven Acting Section Manager cc: Arlen Ehm, Fowler Oil & Gas Betty Schorr, ADEC Anchorage Chris Pace, ADEC Juneau :.. Page 1 of 2 Maunder, Thomas E (DOA) From: Arlen Ehm [arlenehm@gci.netj Sent: Monday, October 15, 2007 9:43 PM To: Regg, James B (DOA) Cc: Saltmarsh, Arthur C (DOA); Maunder, Thomas E (DOA); Roby, David S (DOA) Subject: RE: Kirchner #1 Jim: I am attending the Artic Energy Summit of the Arctic Technology Conference and do not have the time at present to delve into detail concerning your email. However, it contained no attachment concerning "disposal injection order (DIO) application requirements". In short, these are our present plans: TD of the trunk well will be reached and the trunk well will be logged. Zones for possible injection will be identified by using the log. Potential coal beds for lateral drilling will be identified by using the log. We are aware of the necessary time for approval and believe that we have sufficient time for that I will check into the DIO 14 (GRI; Houston Gas Field Well #3) after this conference is over. Thanks /E From: Regg, James B (DOA} [mailto:jim.regg@alaska.gov} Sent: Monday, October 15, 2007 10:55 AM To: arlenehm@gci.net Cc: Saltmarsh, Arthur C (DOA); Maunder, Thomas E (DOA); Roby, David S (DOA) Subject: RE: Kirchner #1 I'll try again, this time with the correct email address. Jim Regg AOGCC 333 W.7th Avenue, Suite 100 Anchorage, AK 99501 phone: 907-793-1236 fax: 907-276-7542 From: Regg, James B (DOA) Sent: Monday, October 15, 2007 10:51 AM To: 'artenhm@gci.net' Cc: Saltmarsh, Arthur C (DOA); Maunder, Thomas E (DOA); Roby, David S (DOA) Subject: Kirchner #1 Thank you for the overview and information about the Fowler O&G proposed project at Kirchner #1. A follow up question for you... Does Fowler plan to begin production of Kirchner #1 upon reaching TD or will the laterals be drilled first? The timing of an injection order application (water disposa{} should be factored+nto the project timing to avoid a start- 10/19/2007 Page 2 of 2 up delay. One of the chat4enges wiN be getting the information needed to show ftuid confinement. An aquifer exemption, if needed, is another factor that coutd impact timing.. Attached is an excerpt from our regulations addressing disposal injection order (DIO) appticaation requirements. Atypical injection order will take 45-80 days to complete (assuming we have a!t information needed). An aquifer exemption, if required, may add some time if EPA concurrence is needed. A starting place for guiding the dispasat injection at the Kirchner projec# would ~ DIO 14 (GRt; Houston Gas Field Well #3}. That Df0 was approved in June 1998 allowing the pumping of fomratrcxt water recovered from coal seams into a deeper formation in lieu of bringing the water to surface. D(O 14 is on our web page under "Orders and Decisions". Jim Regg AOGCC 333 W.7th Avenue, Suite 100 Anchorage, AK 99501 phone: 907-793-1236 fax: 907-276-7542 10/19/2007 Page 1 of 1 Maunder, Thomas E (DOA) From: Arlen Ehm [arlenehm@gci.net] Sent: Wednesday, October 10, 2007 2:39 PM To: Maunder, Thomas E (DOA) Subject: Correction Attachments: Casing Detai(.xls \\ ~hC~vJrc~`~r 1p~T'+~~~ Q4C.~C.-C~.C CG Tom: J Thanks for the upbraiding. That had slipped right past me. Here we are 3 years later and PHOG is still haunting my every move. There is no justice. f~ 10/10/2007 Page 1 of I Maunder, Thomas E (DOA) From: Arlen Ehm [arlenehm@gci.net] Sent: Wednesday, October 10, 2007 1:31 PM To: Maunder, Thomas E (DOA); Saitmarsh, Arthur C (DOA); Jane Wdiiamson; Roby, David S (DOA); Regg, James B (DOA); Alan Birnbaum Subject: Today's Meeting Attachments: Drilling Permit Borough Approved (Kircher).pdf All: I would like to thank you for taking the time to meet with me today. Appreciate your efforts toward simplifying what lies down the road for Fowler Oil and Gas as well as the AOGCC. I will stay in touch and am prepared to reissue any documents that need to be changed. I am enclosing a copy of the approved CUP from the MSB for the Kircher No. 1. If I am supposed to provide something else at this time, please advise. Cheers. 10/10/2007 Page I of I Maunder, Thomas E (DOA) From: Sattmarsh, Arthur C (DOA) Sent: Tuesday, October 09, 2007 7:13 AM To: Maunder, Thomas E (DOA); Raby, David S (DOA); Regg, James B (DOA); Williamson, Mary J (DOA) Cc: Colombte, Jody J (DOA) Subject: Fowler O 8~ G All, Arlen Ehm will be in on Wednesday at 9:OOam to go over Fowlers plans for CBM in the Valley. We had to move the meeting forward as there is a hearing scheduled for today at 9:OOam. Thanks, Art Edmund Burke Art Saltmarsh Sr. Petroleum Geologist Ak. Oil & Gas Conservation Commission (907)793-1230 10/10/2007 "The only thing necessary for the triumph of evil is for good men to do nothing"' 4` ~~~-~-~'•~,~:~~ ~ ~'E~~~Inin~ ~fr~c~ ~_~~~ti ~~sc~ ~}~~art~nerit ari~~~, ~~~. ~,; j'~~~t)F7111a ~)1~15lUt; ~ ~ ~~ ~~ ' ~ ~~ ' ~~~~~ C L~ ~~ Vii! • ~'cl_~~1L I .~\~ ~1~)(~ ~~ ,..~- }~~llrl,~ ~'~~_~ ~ r _ - 'V ~;; • f ~~~ ~ iii I i ~ ~'-~)~~~'{'~ ~~~ _ I ~Il ii' ~~ i.~~< < 1L 't 1',,_ _ . . i;_:I~~f~; t~ ~. ._.;f i - - ~> _ ~ ~~' ~:_; is :=l~~E~i-r~i~.~f r~# f ~t~nc~i#ional I>^~e ~'~~rmi[ fr~3- ('«:~l licr_~ ~I~~tttanc 13er~~~€r~?Lll~il~ ,try ta~~ ~tiF ~~~~~e ~~~i~ \ i? .L_ . /~ t ~t ;. - -- - ~ ~~''~ .,._ _;~'1"~~l$+?~I ~~~TL~i2Tt 4? ~, ~€?I .!. ..' 1 .;)°. _. _, ~. ~ :i.}'"t. l-iti[?::' 1: ~,, r~~tTl i~~ It~l' ~~~. i:~~_. ~_}~.~;~~~ ~1~~~, 1;~ _:~u _ _t~ __ i.1,_~~_ Lait. _:~~~ r, ,, ~1; ~_i~~~_,~~i '.~~ ._~~i>i~>i sc- ,.1 1'1 ~~'~_:i I t~__ .1. ~`.l ~ ~:C_~~''!ilt~i[1 ~~.~~. ~ - ~ ~~';~~, ~~; rl i. ~~~', li ~1C!'. ~'~~a.a~ ~<l ?.'t~.. !', l l l C'~, ! ~ '. t f~ ~'~. t~` .. , __ t~;_!E la ~.~~ I..._ ~ I~.II .~~~}> ~ '~~ ii~' 'i .~1 ~i';ll~[?iiCiYi `_l~l._ _1'.~ ~ ~t'i; , ,lil ,;I~ 'I~ ~~~ .. ,. ~~.. 1!~1 ~ ._ii~_~1' ~._ ~~,T~ ;I ~'i't't J~lc ..__ _Il'l_=.~.'I. ~ .1~ ~_l1Ci..j. I .~ .L _, ~ _ _C_1'. _.'t' ~_ ~. ;L~ ..~;~~tii~~i~~ll 1_.!I'lil_._!i It .~.,_ ~'~_ I:1~ ~:i~ ~ !~.:lilr,l~ i~~.._._~ !~ "? i~_, lal "'-' .._1_Il,_ it i=_ _ ~~. i'~I? C)C1'~!I. _ ~~~~,~. I~.~I'._.~i' ., `.7 I 1 i ~{ ~.~ i, i i ,,' .. - i I 1' > FJ L~) ,,; i~ j ~ .. i 3°f ~ ~ {~ ~ - ~'~ ~ i ~~] 1 l+ - ,- ~ ,. ~" ',.S '. 'p t1) ! t ~ -~ i l i ~, ," _, p~ 1 i~ ~ ~ 1 [ , ;' ,. -. - ~- ._ ~. 4 t ~ ~- ~ (,~ i ., ~. - i ~ i t G tu t~? tom. ~~Y ~~ ~ - I ~1 _~~l L~J t~J L~_ - t t- L~~'~ ~ -, ~; ~~. ri s ~ i ~ ~a, :~ ~ _, i ~ ,, ~ ~~ ~ i ~ ; , ~~ I~~ l L~ t~ ~, i ~ J ~ ~ I~ ~ i ~, r L ~ ~ -. ~ 'r~ i _ ' ~ `~ ~ i . 1 n 'r, ~ ~ ~. . _, ~ , , !~~ I 1 '.U 1 ~, 1- ~'~I _ ~. ~' ;I .. ~. F i I ~-i ~ - I r, i -~ ',-~ t ! ~ ~ -i t-; r- ~ ~ . - _. ~~~ .. ~. "~ .. • ~ ~, _ _. , --- f I~ i September 5, 2007 Mr. John Norman, Chairman Alaska Oil i~ Gas Conservation Commission 333 West 7th Ave., Suite 100 Anchorage, AK. 99501 Re: A Viable Alaskan CBM Industry ®ear Mr. Norman: As i am sure you are aware, Fowler Oil and Gas is preparing to commence an onshore coalbed methane (CBM) project near Palmer in the Mat-Su Borough (Figures 1, 2, 3 & ~4). The wells are designed to explore for and test the CBM dry gas zones of the upper part of the Kenai Group of sediments that have been the target of previous CBM exploration over the past several years. These CBM target zones are stratigraphically and structurally above the liquid hydrocarbon-bearing zones that are present in the deeper portions of the Cook Inlet Basin. CBM reserves in the accessible onshore area of the Cook In{et Basin are of considerable size. It is probable that a viable CBM industry in the South Central area of Alaska could contribute a great deal to the natural gas shortage more commonly known as "the wedge" It should be noted that Fowler Oil and Gas is working and intends to continue to work with the various interested parties in the Mat-Su Valley area including the Mat-Su Borough, its residents, the State of Alaska regulatory agencies, subsurface mineral estate owners, environmental groups, etc., and others whom are interested in CBM operations. We are conducting all operations in the open and have been providing information and have nothing to hide. We wish to be good neighbors. It should be noted that the Mat-Su Borough has developed their own set of drilling regulations. In doing so, however, their regulations are sometimes at crossed purposes with State and Federal agencies. A viable economic CBM project cannot exist in Alaska under current Alaska Oil and Gas Conservation Commission regulations. In fact, Coalbed Methane is not even mentioned in the current AOGCC regulations. Additionally, most of the current regulations are not amenable to the exploration for and production of CBM as the regulations are currently written. It is clear that all of the current AOGCC regulations pertain solely to the exploration of and production of conventional gas as CBM operations were not considered at the time of the creation and promulgation of these AOGCC regulations. 2420 Fozhall Drive Anchorage, AK 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arlenehm@gci.net ~i ~` %c- c c ~~ ,~~~;' ~, • fUir. John Norman September 5, 2007 Page Two Fowler Oi6 and Gas proposes that the AOGCC review the multiple lateral drilling technologies that are being used in the lower-4~8 and that these technologies be incorporated into a section of the AOGCC regulations that deal specifically with CBM operations. Fowler Oil and Gas desires to utilize, these same technologies but current AOGCC regulations prohibit such usage. I-towever, for Fowler Oil and Gas or any other subsequent CBM operator to obtain any monetary benefits from its efforts, changes must be made in the AOGCC regulations and all regulations should be standardized. It seems to us that the AOGCC should play the lead agency in a cooperative multiple agency group that would examine all of the regulations that are extant and prepare a standardized program for the exploration and production of CBM reserves, at least within South Central Alaska. This would provide standardized regulations and remove the overlapping and often contradictory regulations that Fowler Oil and Gas finds itself caught up in at the present time. Certainly there is a common solution for the differing regulations. Such an effort should include, at a minimum, all of the pertinent State agencies, the Mat- Su Borough, pertinent Federal agencies, 6Vative Corporations owning subsurface mineral estates and environmental groups. With this assemblage of interested and involved agencies, a common set of regulations could be formulated which would provide direction to all CBM operators and allow for them to adhere to the same set of regulations. It is probable that the Mat-Su Borough would participate in such a multiple agency revision of the drilling regulations even though they now have their own regulations. Standardized regulations would require every CBM operator to be held to the same set of regulations and these would be known by the CBM operator before the operator commenced the project. We anticipate that all of the exceptions that will be asked for in our Permit to Drill application would be addressed by such a proposed cooperative body. Additionally, all of the operations and procedures that are currently being used in CBM operations would be subject to attention, review and revision or implementation. Furthermore, Fowler Oil and Gas would like to be involved in that collective effort to some degree as it is in the forefront of bringing the technology of lateral drilling of coalbed measures to Alaska. I will identify and discuss some of the obstacles that exist in the present scheme of the AOGCC regulations: 2420 Foghall iDrive Anchorage, AIC 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arleaehm@gci.net • • ~~ ~9,~ Mr. John Norman September 5, 2007 Page Three WELL SPACING: Where CBM fields were being drilled and produced in the Lower-48 in the past, the well spacing at the surface was often one well per ten to twenty acres. This obviously produced a veritable wasteland of +n~ell locations, wellheads, treatment facilities and pipelines. With the introduction of multiple lateral drilling technology in coal seams, viable economic CBM operations are now underway in the lower-48 without the extremely close well spacing that was previously required. One of the greatest objections to CBM projects in residential and semi-residential areas ~~~~=~s--~ ~~ ~~, ,, has been the activities that such close spacing requires. To be commercially viable, ~,~~~~~®;~~ ~~.~:- single individual CBM wells would need to be very closely spaced. Current AOGCC gas ~~ ~~~ spacing regulations prohibit economically viable CBM activities by requiring inordinate ~~°~~~~~~ setbacks from property lines and allowing only one well per governmental section. Spacing regulations and setbacks, for example, have an extremely wide range from agency to agency in South Central Alaska. For example, the Mat-Su Borough has a ~.~ V-:?z-. setback of 1,320 feet from all water bodies whereas the Alaska Department of Fish and Game has a 300 foot setback for streams as large as Wasilla Creek and other water bodies. According to the regulations, the present spacing requirements for setbacks from adjacent property owners exist as an attempt to "prevent drainage from nearby properties and to conserve natural resources". With an effective drainage limit of approximately 300' for CBM migration, it is not possible to drain the CBM reserves from an adjoining property that is nearly 1500' away. Nor is it possible to drain an entire 640 acre gas spacing unit from a single well that will drain a radius of only 300' (Figures 1, 2, 3, & 4). That drainage is only 0.25 % of the entire AOGCC governmental square mile gas well spacing unit. The owner of the subsurface mineral estate is, therefore, being deprived of the revenue from 99.75 % of his resource. Therefore, the present regulations are ineffective for CBM exploration and they, in fact, ~~~z~~ ~~~`~'~~' serve to actually prohibit "the conservation of natural resources". As long as the setbacks ~ ~ ~~; -~ ~~~~v are either 1,320 feet or 1,500 feet for CBM operations, the subsurface mineral estate owners are being deprived of the exploration, production and marketing of their resources. ~''~'^ ~~'~'~~~~~ a LATERAL WELLBORES: The present program being proposed by Fowler Oil and Gas has the backing of the Mat- Su Borough and the local surface and mineral estate owners as well as the Friends of the Mat-Su. This proposed program should alleviate many, if not all, of the previous problems associated with CBM operations in the area and allow for CBM revenue to be achieved by 2420 Foghalt Drive fLnchorage, AIC 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arlenebne@gci.net ~ 1 ~ ~ ®~ Mr. John Norman September 5, ?007 Page Four the owners of the subsurface mineral estate and the Mat-Su Borough. However, nve cannot carry it out without changes in the current AOGCC regulations. Fowler Oil and gas is requesting that special attention be given to the methodology that Fowler Oil and Gas is attempting to employ in the spacing of its CBM production wells. It is the only methodology that will ever be allowed to come into existence in the Mat-Su area because of previous conflicts due to the shallow leasing program of the Alaska ®epartment of Natural Resources. However, a change in the AOGCC regulations is needed. The drilling of multiple lateral CBM wells, while new to Alaska, is not new to the CBM exploration industry in the lower- 48. Thousands of wells with lateral well courses have been drilled there and will continue to be drilled. It should be noted that the four previous entities who attempted CBM exploration in the Mat-Su Borough were unable to establish commercial CBM operations. With the AOGCC spacing limitation of one well per 640 acres, the well bore passes through each individual coal seam one time. Fora 10-foot coal seam, that provides 10 feet of coal exposure to the wellbore. Alternately, if four lateral wells are drilled from that coal seam each 2,500 feet in length, the amount of coal beds exposed to the wellbore will be 10,000 feet. This 1,000 fold in exposed coal maximizes the efficiency of the CBM operations and provides for much quicker dewatering and much higher flow rates for the produced CBM. According to the current AOGCC regulations, Fowler Oil and Gas will be required to file a Permit to Drill, Form 10-401, for each of its lateral wellbores. It is difficult to understand the necessity for that redundancy since no new meaningful information will have been generated by the drilling of the previous wells. Therefore, the CBM operator is required to repeat the filing of mostly identical information. Fowler Oil and Gas believes that, for multiple lateral CBM wellbores, the filing of an Application for Sundry Approvals Form 10- 403, along with the new well name, bottom hole location and any other minor but pertinent information should suffice. ® PRIMARY WELL CONTROL: The regulations regarding primary well control requires the use of a drilling mud that will result in drilling in an overbalanced condition although an exception can be requested to this requirement. Where CBM activities have been underway for a significant period of time without loss of the hole to excessive formation pressures, the regulations should allow for drilling with compressed air without seeking an exception. This should be at the discretion of the operator. 2420 Foxhalt I9reve Anchorage, Al{ 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arlenehm@gci.net q~~pqa,, ~,..~ ~~,- as gy `C.n ~ N Y `~a ,, ~.. ~~ CJ Mr. John Norman September 5, 2007 Page Five C~ Therefore, Fowler Oil and Gas believes that an annular BOP is sufficient to control the well as long as a complete mud system is in place and ready to become operative immediately should it be needed. In that case, the well would be killed with water while a mud of sufficient weight is being made up to control the well. If conditions warrant, a double gate system could then be put into place. ® SECONDARY WELL CONTROL: Current AOGCC regulations prescribe secondary well control measures that were designed for conventional gas exploration and production and are not effective for CBM ~ wells. These regulations require not only an annular BOP, but a double gate system, as well. High pressures have never been recorded by the CBM activities in South Central Alaska in recent years. The precautionary measures given immediately above should provide the necessary safety factor. _ _ ''~ ;~ ~ _ ~~ "' ~ ® COMPRESSED AIR DRILLING: ~°°~'" ~'~'-ri--~- ~' =~' ~°' It is well known that drilling with compressed air rather than conventional drilling mud is advantageous for the dewatering and ultimate production of CBM gas. However, current AOGCC regulations do not provide for such. Fowler Oil and Gas would propose that CBM drilling by compressed air be allowed at the discretion of the operator. ® DIVERTER LINE SIZE: This requirement was obviously established for drilling the deeper high pressure formations and not for CBM exploration. The line size should be lowered to a meaningful size such that every CBM operator does not need to request an exception to this requirement. ® FIELD AND POOL RULES: Again, these are rules that pertain solely to the exploration and production of oil and conventional gas. They have no bearing on CBM production since there are no "pools" or "fields" and migration into the wellbore is limited to 300 feet due to the nature of the producing coal seams. Fowler Oil and Gas believes that this regulation should be dropped entirely from CBM regulations as it plays no part 9n CBM production. 2420 Foxhall Drive Aetchorage, AK 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arleoehm@gei.uet ~~ Mr. ~lohn Norman September 5, 2007 Page Six C-PLAN EXCEPTION: • At the discretion of the AOGCC, the requirement for a C-Plan or a C-Plan exception should be dropped for geographic and geologic areas where CBM operations have been underway without encountering any liquid hydrocarbons. According to the current ~~ AOGCC regulations, Fowler Oil and Gas will be required to file a Permit to Drill, Form 10- ~, y~ 201, for each of its lateral wells and request all of the exceptions, including this one. ~ In summary, Fowler Oil and Gas believes that all of the regulations covering all of the various aspects of CBM operations should be simplified without losing sight of the purpose for which the regulations were originally conceived. Clearly, CBM operations are being overlooked by most of the large oil and gas companies as being too small for their return on investment. However, that is not true for the small operators since they can often turn a profit due to their lower overhead. Fowler Oil and Gas believes that this program of CBM exploration and production will initiate a new generation of CBM exploration in the Mat-Su Valley area under conditions that all parties will agree to. Thank you for your consideration. Sincerely, ' ,_ ~~~i;'~~y~ ~ 2~ Arlen Ehm President 2420 Foxhall Drive Anchorage, AIC 99504 907-333-8880 T 907-333-3454 F 907-230-8144 C arlenehm@gse.net SOME NOTES ON REGULATIONS IN OTHER STATES SPACING: Rocky Mountain West: Powder River Basin 80 acres San Juan Basin 320 acres Colorado: 112-60 Page 6 990' from outer boundary lease line I nacio Blanco Field 660' " g (change allowed) Colo. Oil & Gas Rules 318 <2,500' deep: >2,000' from lease line, 1 well per sec. " 3186 >300' from outer boundary of %4 sec tract Williams Fork actually a sandstone report w /coal references Montana: Montana DNR for more than 1 per sec. > file POD Alberta: CAPP 4.1.6 expect between 2 & 8 per sec. > for more: apply for "Special Drilling Spacing Unit" Macleod Dixon Page 14 2 to 8 per sec. > higher through OGC Regulations West Virginia: WV DEC Leg. Rule 4.7.c > 100' from outermost boundary & 1,600' from existing CBM well. COMMINGLING: Alberta: CAPP 4.1.8 Commingling of multiple zones should be considered INJECTION: Alberta: Macleod Dixon Page Re-injection of oilfield wastewaters are considered safe by the Alberta Government ~~ / f ~~^'.~ • ~ ~ R ~ ~ ~.. fir- ~a~e- ~oodzn~ ~,~ ~~° f~! ; ;~ ~} ~~7 ~~ ~ - pF -- .~~ .~ .~o 794 ACRE ~~ BLOCK BOUNDARY ,'~ ~~ ~~. ~ ~~ {~. ""'~ ~~ N ~ :: ~~ ~ access ` 1J ~ 0 rta-° ,ti a t ~ ~ s PROPOSED .t ~, } b- ~ ~ ~ KIRCHER N0.1 4 WELL ~ ~ ~ a,' PROPOSED OASLINE ~~ ~ ~ S . ~ .. . ~~ ~~~ s ~ ~ ..- .. ~.. ,.~ -~ ~~ ~ gavel Pit s ~ f~~ ` ~ -- a ~, ' 1 --, ~ ,.~ f ~ ~ , ~, - ~- ., ~~ a ±~ ~ ~, •~ ~ ~ ~,~ ,, 308 ~+ p ~ .. _.. .. ~~~..~, ~. ,,, FIGURE 1. Topographic Map showing Kircher lease block, existing and proposed roads, proposed Trunk road realignment, proposed Kircher No. 1 well site and proposed gas pipeline FIGURE 2. Aerial Photo showing Kircher lease block, existing and proposed roads, proposed Kircher No. 1 well site, proposed gas pipeline and vegetation FIGURE 3. Aerial Photo showing Kircher lease lock, existing and proposed roads, proposed Kircher No. 1 well site, proposed gas pipeline and State Historical Sites • B.Lmli~ Private I DNR f DNR Private DNR Private Private B.L.M Proposed ~~~ Fowler Kircher No.1 s~~ Well Location Private KIRCHER BL®CK Private Private B.L.M Private Private <' c~ FIGURE 4. Map showing adjacent subsurface mineral estate ownership MATANUSKA-SUSITNA BOROUGH Planaing and Land Use Department Planning Division 350 East Dahlia Avenue • Palmer, AK 99645 Phone (907) 745-9833 • Fax (907) 745-9876 Email: planningC?matsugov.us MEMORANDUM DATE: June 18, 2007 TO: Distribution FROM: Frankie Barker, Environmental Planner SUBJECT: REQUEST FOR REVIEW AND COMMENTS ._ ;r ` --- ~~;~ , t - . ~~ ~~~ ~~ ~ JUN 2 ~ 207 ~~ ~} PROJECT: Fowler Oil & Gas Alaska LLC has applied for a conditional use permit for a coal bed methane development on the Kircher property near Trunk Road, Bogard Road and Colony Schools Drive (see map on back page). RESPONSE DUE DATE: July 30, 2007 Fowler Oil & Gas Alaska LLC has applied for a permit to develop a coal bed methane production well on an 840 acre unit to include a 10"x 20"x 10" structure to house the pump and electronic monitoring equipment. Coal bed methane will be accessed through a vertical 3500' well and four lateral wells of 2500'each. No fracturing agents will be used. A conventional extraction water well will be drilled to provide water for the drilling program. Produced water will be reinjected into deep (>3000') sandstone formations. There will not be any surface discharge or disposal; drilling fluids and cuttings will be disposed of in onsite containers and hauled away. There will be a buried pipeline from the production site to the Enstar gas pipeline on Bogard Road. Access to the site will be via a gated gravel road from Trunk Road to the site. This is the first conditional use permit application submitted under MSB Code Chapter 17.62: Conditional Use Permit for Coal Bed Methane Exploration and Development (littp://wwtiv.matsu,~ov.us/Assembdti/msbcode.cfm ). The MSB Planndng Commission. will hold. a public hearing on this application. on August 20, 2007. For more information contact Frankie Barker at (907)746 -7439 or fbarker~ajnatsugouus. \JO.~~ ~'~Cc~tc ~~ ~ ~C~~C`1 ~~~ .~. ~~J~ e4~~~ ~~~L~ v~S~ ~~Cjc ~~ c~ ~ ~ Ong ~ ~~ ~ ~-~~~ ;~ ~ ~e O~ t~ ! ~ n ~ )13 ) H D na e m ,9 .. w~+n 9611) ' no __________________s N SITE BOUNDARY 3 ~.~35~ 1/4 MILE SETBACK PROPOSED WELL LOCATION f~~ 6B u ~a vA 3 ~ ' m a a ~" ~~ 9 ~~y.. ~k 9 mnCS ~ Wasl ~~ , 9N Eye " '~ 4 Fowler Oil and Gas -Kircher Unit .,96 CBM Proposed Site 0 500 1,000 2,000 Feet FOUR CO NER a R6~) m --- MSB Information Technology Dept./GIS May 22,2007 18 PETROLEUM NEWS • U+t~.KCFF l~JNE 24, 2007 continued from page 1 Red-faced representatives of GO-Expo the company's Alaska subsidiary, which Fowler OiI and Gas is preparing to INSIDER organizers DMG World Media issued a is based in Palmer and gearing up for drill a vertical trunk well and then lateral profuse apology, saying they made "every coalbed methane exploration. wellbores off the trunk. The well will be They landed a spot on the GO-Expo attempt [o verify the legitimacy and cred- " A petroleum geologist with bachelor`s ' drilled this summer in the Kircher block, program to make a presentation to an tbility of (conference) speakers ... and master s ~-- which consists of 840 acres of forest and audience of about 250 who had paid C$45 Servin said the Yes Men were invited to degrees from ', ¢j _ farmland a[ the corner of Bogard Road each in expectation of hearing major poi- ~-Expo after organizers checked out a r Wichita State ,y~y,rj and Trunk Road between Wasilla and icy announcements from representatives Web site (h[tp://www.vivoleum.com/eventQ University, Ehm Palmer. The land at that intersection is of ExxonMobil and the U National S the pair had developed, including a began his career in _ p ~~, owned by four families who have agreed . . Petroleum Council on oil sands develop- PowerPoint presentation by Servin outlining the oil and gas to Fowler's plan. The pilot drill will be in ment and biofuels how the remains of human beings who died industry when he ._' ' the 580.acre Kircher farm. . As the Yes Men, the pair has previous- as a result of climate-change disasters could got out of [he U. S. ~ ,.:~ The production well will have no sur- ly pulled stunts on the World Trade be convened into an alternative fuel called Army, working as a ~ face im act, no noise and no water to the P Organization, the British Broadcasting `bivoleum" that would eventually replace il roughneck on s in [he ARIEN EHM drillin ri surface makin it corn letel environ- g P Y Corp. and vazious conferences, ridiculing o Using volunteers, they distributed can- g g Mid-Continent. mentally friendly and in conformance with all [he regulations of [he dies supposedly made of vivoleum to the "1 didn't want to go to school right Matanuska-Susitna Borough, the compa- As the Yes Men, the pair has audience, away, but after seeing how good [he geol- ny said. previously pulled stunts on the They encouraged those attending to ogists had it -sitting in the dog house Fowler's development plan will be World Trade Organization, [he light the candles, affirming they were and getting paid more, while 1 was out on introduced at [he borough's planning British Broadcasting Corp. and made from the remains of ExxonMobil the rig floor getting cold and wet 1 commission meeting on Aug. 6, and a various conferences, ridiculing [he maintenance worker "Reggie Watts," who wen[ to school. By the time I went to public hearing will be held on Aug. 20. actions of corporations and was said to have bequeathed his body to work as a geologist, the roughnecks were making more than the geologists " Ehm Fowler, a raduate of Palmer Hi h g g overnments. g be used b the corn an for fuel. Y P Y In case there were any lingering , said in a June 20 interview with School and a longtime Alaskan, told Petroleum News May 2 [hat he fully doubts, DMG said in a statement [ha[ the Petroleum News. understands the concerns of the residents the actions of corporations and govern- "environmental and co orate ethics ~ " Ehm's career in Alaska began in 1965 when he wen[ to work for Shell and was of the Mat-Su area regarding coalbed ments. activists were not representatives of on the first well drilled from the firs[ methane development. (See original GO-Expo "was a great opportunity for either ExxonMobil or the NPC. platform in Cook Inlet. Since then he has story on this company in the May 6 issue us, Tike [he holy grail really," said Servin. -GARY PARK been on wells in various pans of the of Petroleum News at http://www.petro- "We've never had an audience like this. " state, conducted geological field parties leumnews.com/pnads/611801213shtml.) These people are wrecking the Earth d th it ' i f it " h id ~ ~~' and created numerous proprietary reports "Our family has been in the valley for ' an ey re qu e consc ous o , e sa , alone and with partners. One of these is a over 50 ears and so I m v familiar Y erY after he and his sidekick were bundled off - ~• 01) & study of the surface geology of the 1002 with the issues up in the valley and how the stage by security guards once GO- , ~~~~ ~ area of the Arctic National Wildlife People would like to see economic devel- Expo organizers realized they'd been ~ Refuge. opment but also coupled with environ- duped. 11101 /~~ W~l~1 Ehm was recently vice president, mental rotec[ion," Fowler said Ma 2. P Y The lice were called and, althou h ~ g ~~ 111e~~t811e We~~ Alaska for Pelican Hill Oil and Gas, a Fowler Oil & Gas (Alaska) LLC is a no charges were laid, the Yes Men were l Z ~ California company that drilled two wholly owned subsidiary of Fowler Oil ordered [o pay a C$287 fine for trespass- i - - - wells in [he Cook Inlet basin in search for & Gas Corp., headquartered in Las tng' BOB FOWLER, CEO AND natural gas. When the company left the Vegas, Nev. The parent company is Later they promoted their book and CHAIRMAN of Fowler Oil and Gas state, Ehm went back to consulting, majority-controlled by Fowler Family showed a documentary of their hoaxes at Corp., has appointed longtime Alaska which he has been doing in Alaska for 31 Trusts. a theater in downtown Calgary. explora[ionis[ Arlen Ehm as president of yeazs. -KAY CASHMAN ~.~;,~ Haut ~d~''' CONSULTANTS LLC I'rucidiu~~ Prt'Jrct nlanagementpmfe~sionalsfor major prujects lhrnut~hout :1Jacl:a ;JtTd the Fiorld r . a'.>3 IIIFi L1Q1.11 DE ~~ 1NELDtNG SUPPLIES Lincoln Mi/lei Milwaukee Stoody Tweco Thermal Matfrey ESAB Norton & Vcfor Gas Equipment CYLINDER GASES Indusr!ial, Bl;teshieitl Productivity Mires, Medical arxi Specialty Cylinders for rent, fease, and purchase BULK LIQUID GASES Oxy3+'n, Nlhogen. ,4rgar, Carbon Dioxide. antl Dry ire Toll Free 800 4731520 ~ Mchprage-Fg7FA CpcI t" `+~ F neanks - 2n89 Vae No- zanier 7~d4h-.earn I ~ 7 --~-e-- ,.~'.C.~,.~;". ~ Kenai - Mi. 15.7 Sp H nena Junctlpn 1%'a5 as ~ y ~ !" i ~ I I ~ ~ ` ^i~ I ' ~€ ~ { ~ a , q ,• ., ~.. LAND & LEASING Alaska Peninsula, Foothills info wanted The Alaska Division of Oil and Gas issued a call on June 20 for new infomta- tion for the 2008 Alaska Peninsula areawide and North Slope Foothills azeawide oil and gas lease sales. (Those regions of [he state are also referred to as the Bristol Bay and Brooks Range Foothills, respectively.) The proposed date for both [he sales is Feb: 27. The call for new information closes Aug. 31, and a supplement to the best interest findings or a decision of no substantial new information will be issued in November. The final finding for the Foothills sale was issued in 2001 and supplemented in 2002; the final finding for [he Alaska Peninsula areawide was issued in 2005. Both documents are available on the division's Web site: www. dog. dnr. state. ak. us. -PETROLEUM NEWS j~;~~' ~ 1Vocthwest I :~ ' Technical Services EOE •1407 Business Park BNd, Bltlg N, 9le 26 Mchara9F AK 99503 www.pdstech.cpm Phone: 907.582-76331Faa: 562 5975 Mminlstrative • Rofassienal • Techniczl • Crag Direct Hire • Temp to Direct EQIl4P.U.f_EB..&.O.EI!NARE TRPtNIMO Group Classes • Individual, sNf-paced Courses EMPLOYABNRY COAg11N6 Interne) job searches • Resume 6u1W4i9 & cover letters Ieterview sfdlls • Warkplzce culture SKILL ASSESSMENT Cetifetl Pesyny for Keyboardiny, Data Ftray, Microsoft DKice Specialist '` ' ..• ill ti)`,LI ' IfJD.<-Pil b i. tstr;!tn i~~ ._ ~;I , ,~..: , _. ~..,. ,r , k ~` .rJ~N vw~ I :,~; . 3 to ~ ~ rr-rxoLn;MVt~xs w¢t<t(vFlut~r'a,!' ~~ • X A T U 8 A t 6 A 3 hT+e app~aach to Mgt-~u ~lle~ Fowler Oif ~N Gas plans horizontclf driffin~ and patented separation technology to avoid environmerltai problems By AIAN BAILEY Pe[rcleum News s~~~ Schematic diagram of the technique that Fowler Oil & Gas proposes to use for coalbed methane production in Southcentral Alaska. Patented technology will separate water from gas downhole, thus enabling the water to be disposed into a deep sandstone formation. • Products and Services: 1 DMLtry' !Digital Mudioggingl Services 1 RIGUJLI7CH""' Digital Drilling Instrumentation 1 myWells.com - Wellsite Data, Anytime, Anywhere • Local Expertise • Nationwide Support 301 East 92nd Avenue, Suite 2, Anchorage Alaska 99515 1907) 561-2465 FAX (9071 561-2474 www.epochwellservices.com ! www.mywells.com L WELL SERVICES, INC. 't's been three years since an attempt fo develop coalbed methane resources in Alaska's Matanuska-Susitna Borough collapsed amid an acrimonious argu- ment involving the would-he developer, the focal residents, the borough and tha state. But a new company, 2~'owler Oil & Cias C,orp., believes that it has the answer to developing coalbed methane without the concerns about land access and possi- ble pollution that plagued the previous effort. Fowler Oil and Gas CEO Bob Fowler, a graduate of Palmer }figh School and longtime Alaskan, fold Petroleum News May 2 that he fully undarstattds the con- cerns of the residents of the Matanuska and Susitna valleys. "Our family has been in the Valley i'nr over 50 years and so 1'xn very familiar with the issues up In the Valley and how people would like to see economic devel- opment but also coupled with environ- mental protection," F'nwler said. Fowler Oil & Gas is a publicly traded company founded in 2005 to pursue oil a[id gas opportunities in Alaska. Sister company, Native Amacican lnergy Group, is engaged in. the development of oil and other minerals in Montana. Fowler Oil ~ Gas shares technical staff; including geologists and operations man- agers, with Native American Energy Group. On private Mod Fowler Oil ~& Gas is pursuing 11 sep- arate coalbed methane sites, all on pri- vate land, in Southcentral.Alaska, Fowler said. "We're working wi[h private landowners who own [heir own mineral rights," Powder said (par[ of the'_(103-04 con[roversy stemmed from required access to privately owned surface land to drill into state-owned subsurface!. The first of these sites, tha Kircher unit in 840 acres of forest and farmland at the corner of Bogard Road and Trunk Road between Wasilla and Falmer, has reached the permitting sage. Negotiations with landowners are still in "«'ith thnt ane vertical wet] bore we night 1[nve eventually 100,000 feet of performed pipe in the coal.': -fowler OB and Gas CEO Bob Fowler progress at the other sites. Fowler Oil & leas has applied for permits from both tlxe Matanuska Borough and the Alaska Oil and Gas Conseroatiov Commission fur drilling and development at Kircher. "bve'd like to be drilling in mid-sunt- mer mlate summer," F'nwler said. Producfiun ftnm liircher would lta~k into an Enstar Natural Gas Cu. pipeline, E'ow'1er said. Horizontal drilling One key element in Fowler Oil mtd Gas's approach to coalbed methane development is the use of horizontal drilling technology. The drilling contrac- tor will drift a single vertical well to a depth of about 4,00(1 feet from a ceatml location in a coalbed methane unit. Perforated horizontal wells sidetracked from that central well will then thread nut perhaps 2,500 feet through each con! seam penetrated by the v vocal well. "With that one vertical well bore we might have eventually lOQ,000 feet of pedotated pipe in tbe coal," Fowler said. And the huge length of perforated pipe wilt eliminate the need to frac the coal to sustain adequate gas flows, he said. The drilling technique effectively eliminates the need for a profusion of surface wellheads. It will also eliminate the need to drill additional wells from tha surface whin earlier wells run short of gas. "We're draining 600 to 1,000 acres ofT of one well bore;' Fowler said. Not only tha[. The specially designed coalbed methane drill rig has a mast just 60 fee[ high., but a capability of drilling laterally out to about a mile, Fowler said. And once a coalbed methane site goes into production, the wellhead produc[ion facilities will be hidden inside a single 20-font barn-like enclosure. "'They won't even see that it's a well," see CBM page 25 Pi''T1:OLCiL`R', D<'fi:WS WEEK OF MAY 6, 2407 • ~ t5 • G O V E R N M E N T Governor asks for 4G assessment Asks Alaska Legislah,Ire for SSM, it frastlucture assessment for DNR's nets Petroleum Sitstems Integrity Office would be done by DEC By KBlSTEN NELSON Pctrointln News Lucke Got Sarah Palin is asking the L.egistamr for SS million to fund a comprehensive assessment of the condition of rlaska's oil and gas infrastmcturc. "For our new Petroleum Systems Integrity Office to do art eSactive job, it must have access to comprehensive, dtor- ough and objective assessment data to tell us the status of the inliastrnchue and what it should be," [he governor said in a May I statement. "Nu such system-wide risk assessment has ever been conducted of this complex system." Palin established PS70 April lA by administrative order. It is an independent office inside dre Department of Natual Resources' Division of Oil and Gas and will coordinate the state's permitting, oversight and com- pliance functions with other agencies. PS10 requires industry to establish and mamtam quality ~%» assurance programs R 'h.~''. and requires the --~" state to inspect facil-' ; .. hies W ensure opera- ~y SARAH PALIN tors comply with those programs. The infrastructure assessment the gov- ernor announced tvlay 1 will be done by the Department of Environmental Conservation. "Good management requites that we understand the curzent state of the infra- strucutre," said DEC Comtissioner Larry E lartig. "We need to know what's in good shape, what's not and where and how serious dre risks are, A risk assess- moot is a shuctured process designed to 4 answer those sorts of questions." Department of Natural Resources '- Commissioner Tom Irwin said: "The assessment will provrde a firm foundation for PS10's work. This x a criticat step in facilitating the protection not Daly of our environment but of our economy:" Assessment woeid take 2-3 yeors The assessment is expected to take two to three years to wmpleui and would be funded by aone-time capital budget request oT SS million. Lam Dietrick, Director of the Division of Spill Prevention and Response at DEC:, told Peimletun News that the first step `1vi11 be a scoping process to dettnnine specifi- cally what will be included in the assess- ment." LtiV'here die assessment will start ---- ut a particular loe;ation or with a specific type offacility ---wilt also be determined in the scoping step, Dietrick said. After the scoping step, the risk assess- mcttt `will be independentty conductrxl by a nationally recognized contractor," he said. Dietrick said that if the assessment is approvcxl by dre Legislature the funding would bc: atailable July 1 and the initial work would begin shortly thereafter. In describing the reason for the assess- me'tri the governor's office said Alaska's oil and gas infiastractttre comprises a complex, inu;gratcxt system and over the years new pans have bten added and okicr parts mod- ernized. Changes have been made to incrwse efficiency and production, to improve integrity and tv adapt to changes in field chatar-tedstros. At the same time dtere have been advancements in oil and gas sci- ence and lechnoloyry. The current state of the infmstmeture is a result of the com- bined effects of age, change, industry operations and government oversight. • • LAND 8 [ E A S I N G Pioneer Natural Resources drops Cronus unit Disappointing results from 2005-06 exploration well behind decision to relinquish former ConocoPhillips North Slope prospect BT NAY CASHMAN Prtruieum News roneer Natural Resources is planning P Co terminate the North Slope Cronus tutu where it drilled the Cronus I exploration well in dre winter 2005-06 drilling season.. •`While the well penetrated oil bearing sands, further analysis did not suppon eeo- nomie viability of the prospect. The well was da;med unsuccessful as discloxd in the second quaver 20(Ki," Sam I licks, man- ager of cmpomte communications and pub- lic affaus for Pioneer, told Petroleum News April 26. Under the three-year plan of exploration trnttinued frrom page 14 tBM fowler said. "... We're in and out on the drilling in about one month." fowler Oil & Gas plans to deliver gas to the Enstar transmission pipeline widt- out any compression, thus eliminating any possible compressor noise, No cur#GTe water Patented technology will eliminate the water disposal problems that have otters plagued coalbed medtatte production in the past, fowler said. This techmology wilt entail using the bottom part of the vertical welt, below the level of the coat seams, to dispose the water into relative- ly deep sandstone formations. 'Chun, no produced water will reach the stuface or enter the water table. "We have a downhole separator which separates the gas from the water," Fowler said. "The gas flows up (Yhe well). The water Sows down into some special pumps [hat pump it into lower saddsmne formations beltnv the coal:' Downhole monitoring equipment will encore that the disposed water meets state standards, Fowler said. To prevent contamination of any water wells in the region around the production site, ne coal beds less than 1,000 feet below the surlace will be tapped. That the company has with the slate's Division of Oil and Gas, the working interest owners cazt vohmtarily retntinate the unit and sur- render the leases before the end of dre sec- ond year without further obligation to the slate. The second year cvtds Oct. 23. Cronus is southwest of the ConocoPhillips-operated Kupamk RivcT [aril aztd west of tits company's Meltwater field. Conoco was the operator of Cronus when the unit was approved in October 2005, but transferred its interest to Pioneer, which was in dre process of farming into the unit. (The leases were origaratly part of the la Der Southeast [)zlta exploration unit, dis- solved in 2003 when ConocoPhillips elect- will ensure that all production occurs below the depth of the water table, Fowler said. And sealed well casing, cemented to prevent water migration around the pipe, wiH also protect the water table. EPA approved Fowler said that the U. S. Environmental Protection Agency has approved the downhole separation of gas and water and that dre technique has aheady been permitted in Texas and Kansas. And he said dre drilling contractor, Scientific Drilling, has experience of drilling more than 3,000 cualbed methane welts, including horizontal wells. Great Nonhem Engineering is design- ing the production facility, fowler said. But what are the chances of finding economic quantities of coalbed methane in the Kircher trait'.' "The Cook Inlet basin is a me'r of coal that comes all the way down from lalkeema and np around Chickaloon, all the way down to I{omer, onshore and off- shore;'Fowler said. The coal is very thick; the seams era abundant and continuous thmugltout the area; and the coal contains Iarae yuantities of gas, he said. And who might purchase the gas? "We're talking to a number of buyers;' Fowler said, adding that he would prefer tit see use of the gas in the Cook Inlet area rather than supplying the gas for export. • ed not m dill I the Cronus well.) Too tight to prolkrce In May 2006, Pionwr announced the discovery of oil in Cronus L. "A thick, oil-bearivg sand secdrnt in the Tontk and a Ihin, oil-bearing sand in the Jurassic-aged 1Cuparuk C were pcrtetmted by the well;' the tympany said "W`ireiine and core data arc ctmcmly bc;ing analyzed and integrated with 3-D seismic to deu'r- mine if appraisal activities are warranted during the 2(M1C>-2007 wintcr drilling sea- son." But in Augt[st the company said the PANALP ~.~~x on 8 continents u,t..l;:,u,,: s,N,:t ;:, _.: soaP!r :,xc, ms„n;;,;n:~., , iaomesiJa and -nrerasrlon,ut Frefgbr Forwsrdearg Air • Ocean Gratand Na::+.=£!.b:::nk~:Ji;,isls~:i •~.`:zsa .~t:NK a TzF^s .305'IJ Irterrati^r:at Airuort Rd r1n c?ICraa a.:aK. 595; An[hn.aae' Atil."tS.';.2'IJT C99A.44Y: =1~.1`s`.ii.. nnanxarc. ze: nas::i,c;; .- rrrtj;,~ ~ , American Marine Services Group saro ti saaet, .an: ncrage, nK :,esls r nww.a xaµccm aww.;_ ~co.c.9 - miyl3:kd®3n:3finP:.~t~'()r^nr I MAINENANCE, MANA . ... .~ _ . hydrocattxtn bearing zones were too tight to produce. `_Attt~r analysing data from the well and 3,D seicmiq it was detemtived drat the hydrocarbon bearhtg zones were too tight to produce. Therefore, the well was cieclartxl a dry hole and expensed in (72," Susan Spmdett, Pioneer's vice president, cutpu- rate wnununicationsand public attain, told Petmleurn News Aug. 15. Cunently, Pioneer has a 90 percent working interest in the two-lease I1,343- acre unit near Meltwater, Alaska ~enmre Capital Cmrup has dre remaining !0 per- cent. • „i ~~~ "~!""• r 4 k V O R A i l O N • C:MIMERCIAt DIVING • MARI:`tF. (',DNSIRUCTION SERViCrS • Pi.A1TGRM iN5fALr.1T!nN, MAINTENANCE AND REP.LR • PIPELINE INSTA.LA?ION, MAINTENANCE AND REPAIF • UNCERWAT`eF CER°IFIED WELDING • NDT SER'i1Cf5 • SA:.VAGF OFF.'RATK':V$ • V~'<sF.'L $I;PPOFT AND nxapr:.vuv ~~ENiC~Q ... PAC;Fti. EhAJIKGh1M EPltAL • Ei,.....:N',:_V:AS ~ERJiCES • Oil-SPIEL RESPONSE, 4'ONTAINMENT AND GfnN-i)P • HAZARiIOUS WAStES AND CONTAMiNA.rEO 51?E C1EAN~ UP AND REMEDlATION • PETaDI.EL'M VESSEL SERVICES, F..G. FUEL. TRANS=F.R • BULX FDEL DI!. FACILiT" AND STORAGE TANK cEMENr. AND CFERA?lows • a PFTR•t NEWS • WEEK OE AUGUST 26 2007 • NATURAL oAi g— Ot--�,\ Permitting for Mat -S CBM in progress Public hearing scheduled for borough permit for Fowler Oil and Gas coalbed methane prospect; drilling planned for the spring By ALAN BALLET "We' not the Fast ones t0 use these ; der.. coalbed methane developments, while enabling ade PrlrolrumNews quote from a single well. we lls. These are thousands ousands of (coa r Patented technolog rates y will eliminate the water disposal T he old adage of the devil being in the details seems methan well h Lowet 4& s ,, pduroblems tioin ethane pro - applicable to any oil and gas development project. — am p res in kl eat , Fowler GA and [hat Gas (.Al aska them. ) cn the have often plagued coalbed past, Bob Fowler, CEO of F Oil and And Fowler Oil and Gas (Alaska) 's proposal to drill -- — Gas, told Petroleum News in May. A downhole electric for coalbed methane in farmland between Palmer cations with the Alaska Department of Environmental submersible pump will draw water drained from the coal that and R'asilta in Alaska's Matanuska- Susitna Borough is Conservation, the Alaska Department of Natural into the bottom part of the vertical well, to dispose of the no exception to that rule. Resources and the U.S. Army Corps of Engineers. And water into relatively deep sandstone formations, below The company has been identifying all of the issues as an essential prelude to some of the permitting the the level of the coal. Thus, no produced water will reach relating to its planned well a the company is conducting a land survey at the proposed the surface or enter the water table. QM Kircher unit at the comer of Bogard drilling site. During drilling operations, Fowler Oil and Gas plans CV Road and Trunk Road, Arlen Ehm, Given the permitting timeframe, it is unlikely that to use hospital mufflers to reduce noise from the drill rig, president of fowler Oil and Gas drilling could start before November. And, because the E hm said. And once the well goes into pro duction the (Alaska), told Petroleum News , „. company does not wish to incur the complications of wellhead equipment will be hidden inside a sma ban s - Aug. 22. starting a new well in the middle of the winter, drilling like enclosure. Gas pro duction will not require the use of "1 want to avoid future prob will nut now begin until the spring. compressors, so that there will be no compressor noise. lens.” Ehm said. E "I didn't want to go out there and rig up, spud in the The company is particularly coldest and darkest months of the year," Ehm said. "You No state CBM regulations anxious to communicate with Mat- pay at least 150 percent when you try to push something One issue that Fowler Oil and Gas has encountered Su Borough residents, to resolve ARLEN EHM through in the middle of the winter." with its proposed drilling scheme is the tack of state reg- any local concerns - -- a previous barn at the site during the winBut the company does er plan to move equipment into a ulations for coalbed methane development. For example, attempt to develop coalbed methane in the borough col- b t. will avoid having current regulations for natural gas wells assume the lapsed amid acrimonious arguments between the would- to try to truck in heavy equipment during spring break- development of conventional gas, with one well in a be developer, the Local residents, the borough and the up, when road load limits are reduced, Ehm said. 640 -acre area, Ehm said. But a single coalbed methane state about land awes and potential pollution. well will only drain a radius of 300 feet, he said. Horizontal drilling Another regulatory issue is an Alaska Oil and Gas Borough permit One key element in Fowler Oil and Gas' approach to Conservation Commission reyuirc to measure the Following that previous debacle, the borough intro- coalbed methane development is the use of horizontal amount of water that injected underground. Making duced regulations for coalbed methane development. drilling technology. The drilling contractor will drill a that type of measurement would require produced water Fowler Oil and Gas has applied for a conditional use single vertical well to a depth of about 3,500 feet. to be brought to the surface, thus defeating the under - permit under those regulations - -- the borough has Perforated horizontal wells sidetracked from that central ground water disposal arrangement in the well and intro- scheduled apublic hearing on Oct. 1 for the permit well will then thread out through each coal seam perm_ ducing risks of water spillage. application, with a possible carry -over hearing on Oct. h by the vertical well "We don't want to bring it to the surface," Ehm said. 15. The horizontal drilling technique will enable access "We want to {cave it down there." "ll'e've met all the (regulatory) requirements of the to thousands of horizontal feet of coat seam from assn- Ehm thinks that Alaska could adopt existing coalbed " Ehm said. gte surface wellhead, borough but people are asking questions, thus eliminating the need for the The company is also moving ahead with permit appli- pro of su r f ace wellheads that has blighted some ace CBM page 9 Alaskan Owned. cheken$ Alaskan Operated. Great people providing quality services. a f s . A y .gyp �/ . ; r , i � � Vi c.:, . ti ' 'fit p ,N '"a . 51.. reprocessing nm.< -� - .5151 � � � WesternGeco has completed reprocessing 30,000 miles of Alaska 2D seismic, \ \ \ including 20,000 miles in the Chukc`t Sea and 10.(X10 in the Beaufort Sea. Gala pro -' cussing technology has advance. significantly and is enhancing this valuable legacy r /iii data. This new reprocessing incorporates advanced true amplitude and prestack limo migration processing flows to generate a far superior image compared to existing data. 1..514 a% .„ 51.51_. ■ Phase and amplitude match by survey vintage { j. • Improved noise attenuation ■ Improved signal pro processing l L o - III as been • Full isotropic curved ray Kirchhoff prestac l migration o a a as services I n ■ True amplitude IAVO compatible) Beaufort Sea and Chukchi Sea data available now. asap e 0 years. wew.waaumaccrs cwn Regu:a 'y T,ruLq f 2 Explor ' l „: """�' For more information contact 713 - 689 -l000 - ex i on S1 Pta � A Pro, anOeC S"• E y S ervies .. WestemGecv o � � , ...�..,..�c..,.�„ � vAUw.aer g �a rp'rtiA ihl " i '.. e h f , .fi =i:. Page 1 of 1 • Maunder, Thomas E (DOA) From: Maunder, Thomas E (DOA) Sent: Wednesday, August 22, 2007 2:53 PM To: 'arlenehm @gci.net Cc: Seamount, Dan T (DOA) Subject: RE: CBM Project Arlen, Thanks for giving us the situation report. As noted in our call, there are a lot of stories /rumors on the street. It is good to get the straight scoop from the man in charge. Call or message with any questions. Tom Maunder, PE AOGCC From: Arlen Ehm [mailto:arienehm @gci.net] Sent: Wednesday, August 22, 2007 11:45 AM To: Seamount, Dan T (DOA); Maunder, Thomas E (DOA) Subject: CBM Project Gentlemen: It is nice to know that my friends are keeping tabs on me. However, there is a very good reason why you have not seen my smiling face with donuts in hand. I do not have all of my ducks in a row yet. Here is why. The Mat -Su Borough found that they needed to publish the notice of a hearing for our Conditional Use Permit. Therefore, the hearing was delayed until October 1 with a second possible continuance scheduled for October 15. If they were to come back for additional response from us, that could take a week or 10 days and the same time period for us to respond. Therefore, it could easily be mid to late Novembe r before we received the p ermit from the MSB. The MSB permit is the one that will require the most scrutiny as I do not expect the other permits to cause any major problems. Although the other permits would have been filed for and most likely received by that time that would mean that I would be rigging up in the winter again. As you know, I did that once due to no fault of my own and, at my advanced age, I do not need to repeat that scenario. I talked Bob Fowler into a spring spud date. After the MSB permit is issued I will begin to purchase the necessary materials and supplies and have them delivered to the job site before breakup when the MSB enforces a 50% road Toad restriction. I have taken this one step further and rented a heated potato barn on the leaseholder's property where we can fabricate and mesh the various materials while it is cold out. Please, no remarks about spudding. In short, I am awaiting the results of the land survey. I am having trouble getting this sucker located due to the overlapping restrictions of the State and the MSB. You can expect to see me within a couple of weeks. If you get a craving for donuts before then, let me know. Cheers. 8/27/2007 Maunder, Thomas E (DOA) From: Woottey, Oran L (DEC) Sent: Tuesday, July 24, 2007 11:37 AM To: planning@matsugov.us; fbarker@matsugov.us Cc: Stambaugh, Sham~on M (DEC); Maunder, Thomas E (DOA); t_owman, t_ynn M (DEC); Blankenburg, Robert J (DEC) Subject: Fowler Oil 8~ Gas conditional use permit; Coat Bed Methane developmen# and production on the Kircher property The Matsu Borough has requested comments from the Alaska Department of Environmental Conservation on the above referenced activity. Alaska Department of Environmental Conservation will require plans, signed and sealed by a registered professional civil engineer licensed in the State of Alaska, to be submitted for review prior to any development of this site. Apre-application meefing with the Department is recommended to heap identify what approvals and permits might be required. All plan approvals and permits required by the Department must be done before the commencement of work on the project. If there are any questions, feel free to call. Oran Woolley, ADEC 1700 E. Bogard, Bldg B, Ste 103 Wasilla, AK 99654 (907J 376-1852 Maunder, Thomas E (DOA From: Woolley, Oran L (DEC) [oran.woolley@alaska.gov] Sent: Tuesday, June 26, 2007 10:47 AM To: Thomas Maunder Subject: RE: FW: UIC~uidance_82.pdf Thanks Tom. That helps me and you are up to speed as well. Later. Page 1 of 2 From: Thomas Maunder [mailto:tom_maunder@admin.state.ak.us] Sent: Tuesday, June 26, 2007 10:45 AM To: Woolley, Oran L (DEC) Subject: Re: FW: UIC_guidance_82.pdf Thanks. I just briefly scanned the first part of the first document. It appears he is aware of EPA guidance #$2 since he does list it and notes "compliance". Your initial note was correct that he does claim that the project is "exempt" from a number of items/permits. He asserts that this is due to being on private land. Our regulations apply "wherever the state has police power". This likely will be interesting (OH NO!). Due to the Laws passed by the legislature after the Evergreen mess, there are some specific requirements now in AS 31.05 pertaining to CBM development and protection of fresh water. I would hope the Fowler folks are familiar with those requirements. I appreciate your forwarding the documents. As I said previously, we have not received any formal application and we can do no work until then. Later, Tom Woolley, Oran L (DEC) wrote, On 6/26/2007 10:35 AM: Correct. I did not see the need since they were so small. Now you have everything I do. The one called Matsu Application_Binder.pdf is the main one. Thanks. -----Original Message----- From: Thomas Maunder [mailto:tom maunder@admin.state.ak. us] -- _ __ - Sent: Tuesday, June 26, 2007 10:22 AM To: Woolley, Oran L (DEC) Subject: Re: FW: UIC_guidance_82.pdf Thanks Oran. Got both messages. Does this mean you won`t be sending a CD? Tom Woolley, Oran L (DEC) wrote, On 6/26/2007 9:51 AM: And again. This is the rest of it. 8/3/2007 • Page 2 of 2 -~---Original Message----- From: Woolley, Oran L (DEC) Sent: Tuesday, June 26, 2007 9:35 AM To: 'Thomas Maunder' Subject: RE: UIC_guidance_82.pdf Tom, the files were small enough I think I can just e-mail them. If they don't go through I will snail mail. -----Original Message----- From: Thomas Maunder [mailto:tom maunder@admin.state.ak.us] Sent: Tuesday, June 26, 2007 8:36 AM To: Woolley, Oran L (DEC) Subject: UIC_guidance_82.pdf Oran, FYI. Here is that guidance document I mentioned. The EPA view is that the technology enhances production and hence Class II applies. Tom 8/3/2007 J~~.~,t) ~,rFs ="A~ W ~~'~( PRtn~G ~. - UNITED STATES ENVIRONMENTAL pKOTECTION AGENCY WASHINGTON, D.C. 20460 JAN 5 2000 OFFICE OF WATER 1VIE11~ID12Al~TDI~IVI SUBJECT: Well Classification Guidance for Downhole Hydrocazbon/Water Separators; C Pro Guidance #82 L FROM: y a ou a ,Director O of Ground Water and D ' ater (4 1) TO: Water Management Division Directors EPA Regions I-X What is the nature of this action? Underground Injection Control (UIC) program offices in several Regions have requested clarification pertaining to a certain family of "new technology devices'' which are used to: 1) enhance oil and/or natural gas production and 2) decrease entrained salt water volumes brought to the surface in connection with this hydrocarbon production. These "new technology devices" have been termed dolti~nhole separators, deriving their name from their function of physically separating water and hydrocarbons from each other near the production interval in oil and/or gas producing wells (i.e. "downhole"). The water separated from the production stream is, in turn, introduced into a different interval in the well without being brought to the surface with the produced hydrocarbons. There initially existed some confusion about how to classify wells utilizing these downhole separator devices, since. the technology post-dates the existing UIC regulations and the Safe Drinking Water Act (SDWA). This memorandum serves as a guidance for classifying these t<~pe of underground injection operations as Class II enhanced recovery wells (II-R). What is "Do~vnhole Separation"? Known informally in oil-producing states and within the industry as "downhole separation," this new technology uses pumps which aze placed inside wells which also produce oiI and/or gas. The more conventional injection technology uses injection pumps at the land surface outside of the well. For years, hydrocarbon production operations have relied on do~nhole pumps to produce oil; natural gas, and water from wells that will not flow to surface ;under natural pressures. Recently, .pumps have been developed to allow. fluids which have been •:separated from the inflowing stream of produced fuids by centrifugal or gravitational methods to Intcmct Address (URL) • http:/lwww.epagov v°rvrirrl(R~rvtlable • Printed with vegetable Oil Based Inks on Recycled Paper (Minimum 20% Postconsumer) be pumped through an additional tubing in the wellbore, into a different formation. In the same well, a separate part of the pump lifts the remaining fraction of fluids containing hydrocarbons and, usually, a very small amount of formation brine to the surface. The reversal in pump direction allows these pumps to be used for injection operations. The oil and gas production industry has identified one particular use of this technology which promises benefits to the environment and reduces endangerment to underground sources of drinking water (USDW). It also eliminates the need far significant above-ground water handling facilities associated with the wells in question and the potential for surface spills associated with handling~the waste water. Natural gravity separation will occur as oil, gas, and water are produced into the well. Water will separate and fall to the lowest point in the well, while oil and gas may be produced to the surface. This separation allows the oil and Qas to be produced to the surface, with water remaining in the well. Proper placement of a downhole pump (or hydrocyclone system) in a well allows injection of this remaining water into geologic formations without the need to first produce the water to the surface. The benefits to the environment are readily apparent. The water, in most cases brines having high concentrations of total dissolved solids (TDS), is not produced to the surface (through intervals containing USDWs), and the water does not require injection from the surface (again through intervals containing USDWs). Therefore, the risks posed by large volumes of these fluids passing USDWs both exiting and re-entering the well upon injection are minimized. In addition, surface brine disposal operations, which-may be comprised of pumps, pipes, tank batteries, and other storage facilities may also be reduced in size and extent if not altogether eliminated. The potential for leaks and hence exposure to these fluids via fluid runoff to surface water and percolation and contamination of shallow ground water is also greatly reduced. How does EPA determine the Classification of iniection wells? The Federal UIC regulations at 40 CFR §5144.6 and 146.5 describe the five classes of injection wells regulated by the UIC program. Pertaining to the issue at hand, 40 CFR §~1-14.6(b)(_) and 146.5(b)(2) both contain the same description of enhanced recoven~ Class II wells. These regulations define "Class II Wells to include wells which inject fluids...for enhanced recovery of oil or natural gas." The plain reading of this regulation suggests that two thresholds have been established (or need to be passed) for a well to meet this definition. First, does such a well inject fluid? Second, is the injection undertaken for the enhanced recovery of oil or natural Qas? EP?-'s analysis of these points are as follows: Do these wells inject a fluid?: The wells utilize devices which separate oil and water downhole before either reaches the surface. The water fraction either flows by gravity or is pumped under pressure into a subsurface geological formation. The regulations also define "well injection" as the subsurface emplacement of `'fluids" through a bored, drilled or driven "well;" or through a dug well where the depth of the dug well is greater than the largest surface dimension (40 CFR § 144.3). The regulations also define an "injection well"as a well into which fluids are injected and an "injection zone'' as a geological formation, group of formations or part of a formation receiving lntemei Address (URL) • hnp:!lwtvw.epa.gov Recycled/Recyclable • Printed with Vegetable Oil Based Inks on Recycled Paper (`tinimum ZO°.'o Posteonsumer) • fluids through a well." Thus injection is tied to use of a well and emplacement of a fluid into a subsurface geological formation. Because the fluids in these wells are emplaced into an injection zone after removal from the production fluid stream by the downhote separators, these wells meet the first test of an enhanced recovery well. Is the injection for enhanced recovery?: The regulations and the preambles do not define "enhanced recovery" beyond the definitions cited above. The Bureau of Land Management (BL~1) does; However have a definition of enhanced recovery in their rules for oil and gas and sulphur operations in the outer continental shelf, Section ?50.2 Definitions: "Enhanced recovery operations means pressure maintenance operations, secondary and tertiary recovery, cycling, and similiar operations which alter the natural. forces in a reservoir to increase the ultimate recovery of oil or gas. " One methodology to determine whether or not hydrocazbon production is "enhanced" is to look at data derived from the e:cperimental use of downhote separators and consider whether or not these devices truly enhance the production of hydrocazbons. As of the date of this memorandum, data from a1138 known wells utilizing these devices indicate that the average increase in oil production rate was 48% and the average decrease in water production rate was 85%. (Note: These existing wells tivere located in Canada and in primacy states tivhich have already approved using the technology). The raw numbers to derive these percentages are taken from the total of all 38 wells which installed a downhote separator. These raw numbers are shown in Table 1. Table 1 Prior to downhote separator barrels roduced er day After downhote separator (barrels roduced er daV) Percent Change Oii 1.194 1,766 +48°,~0 Water 3 l ,3.38 4.61 ~ -85% Further, the same data can be used to calculate how many of these wells experienced an increased hydrocarbon production rate or efficiency. Of these test wells having data from both before and after installation of downhote separators, 63% of the wells experienced an increase in hydrocarbon rate, while ~ irtually every well experienced a decrease in ~r,~ater production rate. Table 2 shows the raw numbers used to derive these figures. Table ? # Wells with Before and After Data # Wells with Increased Production Percent Change Oil 30 19 +63% Water 39 0 -100% lntemet Address (URL) • htip://ww~v.epa.gov .+__.._~_~io_..,,,.~.,tii.. v,;,,r..i w;rh Vesetable Oi] Based Inks on Recvcted Paper ttitinimum ZO°.'o Postconsumer) 4 Thus, two conceptual standards for enhanced oil recovery, as outlined in the definition of "enhanced oil recovery'' given in the BLM's Onshore Regulations for OiI and Gas Production, are met: (1) more hydrocarbons are produced after installation of a downhole separator, and {2) with a marked decrease in water production, the efficiency of hydrocarbon production is increased, contributing toward a more efficient, cost effective recovery of oil or gas. Use of downhole separators both increases total hydrocazbon production and increases efficiency in hydrocarbon production by the result of less water produced at the surface which greatly reduces the pumping costs because only the oil and a small amount of water must be brought to the surface. This results in a decrease in the normal associated water handling and disposal costs. Also, these wells will produce hydrocarbons for a longer period of time, resulting in greater total hydrocazbon recovery. The lower production and above ground treatment costs will increase well life because the well can produce less oiI per day with profits exceeding production and/or separation costs. Thus, the second test for a Class II enhanced recovery well is met: these wells do lead to enhanced recovery of hydrocarbons. Although the above data set is representative for an oil production scenario, it is the Agency's understanding, based on the similarity in the cost reduction due to lower production costs that similar enhanced production may be realized for natural gas production wells using downhole sepazators. Water removal in a wellbore increases the gas migration to surface. How are wells using "Downhole Separation" classified? Based on information provided EPA, and on the above well data, EPA believes the use of downhole separators in a well under the circumstances described in this guidance allows the well to meet the regulatory criteria for a Class II enhanced recovery well. Therefore, the Federal regulations applicable to Class II wells apply to wells using downhole separators under direct implementation Class II UIC programs. Directors of State §142 UIC programs should determine whether or not a particular well belongs ~~'ithin this classification for the purposes of the state programs they administer. The Director ma~• make such a determination on a case-by- case basis or generically for a specific type of well construction that differs from this guidance where appropriate. EPA requests that any such determinations be reported to the appropriate Regional Office. Were there anv cuestions raised during the development of this guidance? During the development of this guidance, EP A pro~~ided copies of the draft document to the states, members of the regulated community, the public. and the environmental community. Several questions and concerns were raised by the environmental community. The concerns are summarized below in bold, followed by responses to the question or concern. The downhole separation technology does not allow for the performance of normal mechanical integrity testing. The lack of ability to perform regular mechanical integrity testing is a concern. Under ~0 CFR 144.28(f)(4) or 144.51(q)(3), injection wells are allowed to operate without demonstrations of mechanical integrity if an alternative demonstration can be made to Intemet.4ddress (URL) • http:,'/www.cp3gov Rec~•clediRetyclable • Printed with Vegetable Oil Based Inks on Recycled Paper (ivtinimum 20°'o Postconsumer) show that there is no movement of fluids into or between USDWs. The demonstration which can be made for these wells is that the conditions which normally prevent production wells from allowing movement of fluids into or between USDWs also exist when downhole separation allows production wells to be simultaneously used as disposal wells. We believe that such a demonstration can be made in every case. Why production wells do not normally pose risks of contamination to USDWs is described below. If such technology is to be utilized, how will EPA establish a regulatory program that will specifically require testing in place of the mechanical integrity testing? EPA does not believe that a new regulatory scheme is needed for mechanical integrity testing of downhole separation wells. Defining wells using downhole separation as enhanced oil recovery (EOR) wells brings them within the existing regulatory scheme. Because it is necessary to use an alternative demonstration {40 CFR 144.28 (f)(4) and 40 CFR 144.51(q)(3)) for wells which cannot demonstrate mechanical integgrity, the existing regulations can ensure that wells using downhole separation do not threaten USDWs. For instance, EPA expects that the Director will require an initial testing of the well's casing for leaks and the absence of fluid movement adjacent to the casing prior to the installation of the separator. The Director may also require that the casing be pressure tested following any workover that results in the removal of the separator. In addition, the Director may require that the fluid level depth in the well's open annulus be measured at an appropriate frequency to ensure that the basis for the decision remains valid. In some cases, it appears that the annular space is utilized as part of the process in the downhole area. This results in the loss of one layer of protection. What requirements will be implemented to replace the Loss of one layer of protection? A key element of the downhole separation technology is that during operation of the oiUwater separator, fluids in the wellbore are drawn downward away from USDWs . In order to maintain a constant flow of oil and water into the casing, it is necessary to operate the pump which lifts the oil to the surface and simultaneously injects the produced water into the injection zone; thereby drawing down the fluids in the annular space. This draw•dow-n of the wellbore fluids results in precisely the same protection that a tubing and packer provide: namely, separation of the annular fluids from USDWs. Because of this operational phenomenon, EPA believes that the downhole separator will result in the same level of protection provided by tubing and packer. During temporary times in which the downhole separator is not active, the regulations at 40 CFR 144.28(f)(4) or 144.51(q)(3) still apply. These regulations require that an alternate demonstration must be made in lieu of the normal mechanical integrity testing requirements. As explained above, EPA expects that testing, such as periodic pressure testing of the casing and fluid level monitoring in the annulus, will occur. These types of assurances also result in the equivalent protection provided by a tubing and packer: wellbore fluids are demonstrated to be separated from USDWs. Internet Address (URL) • http://www.epa.;ov v.,.,,,-iP,~m.~vctahle • Printed with vegetable Oil Based (nks on Recycled Paper (I~tinimum 20%'o Postconsumer) 6 Why does-the guidance focus only on enhanced recovery Class II rather than injection or enhanced recovery as appropriate? In some cases, it appears that the technology maybe used for enhanced recovery, but in other cases it may be used strictly as injection for disposal. Shouldn't the guidance segarate the two uses of the technology? After reviewing the regulations pertaining to the classification of wells, EPA determined that the fluids generated by this technology do not meet the strict definition of fluids that are injected into a Class II disposal injection well. The regulations define disposal as the re-injection of fluids brought to the surface in the course of oiI and/or gas production. Because waste fluids separated down hole and injected are not brought to the surface, wells using downhole oil-water separation can not be regulated as Class R disposal wells. However, EPA decided that such wells meet the classification of enhanced oil recovery wells and can be regulated as Class II because the use of downhole separation allows more oil to be produced to the surface given the other elements of the production system, improves economics, and thereby allows the production of more- oil on both a daily and cumulative basis. These increases in ultimate production constitute enhanced oil recovery. Does the use of the technology increase the potential for pressuring up the injection formation and allowing for the migration of waste up the outside of the well casing? This is the case with alI injection for disposal and is the principal reason why we decided that this type of injection must be regulated. EPA determined that the existing UIC regulations were appropriate to address any potential problems. Application of the program elements which address the issue of pressure increase in conventional injection wells will be used to prevent problems in wells using downhole separation. In most cases, the injection reservoir will be below the producing reservoir. In such a case, the producing zone will serve as a sink for upward moving water. The water will probably be produced, along with other formation water,- into the well. It is very rare that pressure in a producing reservoir is not reduced due to the removal of hydrocarbons and water. Therefore, it is unlikely that the reservoir will support a column of water which will reach a height sufficient to endanger underground sources of drinking water. In such a well it is impossible for the increased pressure in the injection zone to threaten USDWs. Once again, wells using downhole separation should be regulated under the UIC program, because there-will also be some wells in which the injection zone is above the producing zone, simply because of the absence of good disposal zones below the producing zone, inability to drill completely through producing zones without allowing high water production from water-filled zones immediately below the producing zone, and/or other causes. The L`IC regulations allow the imposition of requirements which will protect USDWs on a case-by-case basis. Who do I contact for more information? For further information, or questions relating to this guidance, please contact Chuck Tinsley, EP:~ Region VIII, at 303-312-6260, or Bruce Kobelski, EP A HQ-OGVdDW, at 202-260- 727~. Internet Address (URL) • http://www.epa.~ov_ Recycled/Recyclable • Printed with Vegetable Oil Based Inks on Recycled Paper (Minimum ?o;'o Postconsumer) ~ ~ ~ Disclaimer This document provides guidance to EPA Regions and States exercising responsibility under the SDWA concerning UIC well classification~determination for wells with downhole hydrocazbon separators. It also provides guidance to the public and the regulated community on how EPA intends to exercise its discretion in implementing the statute and regulations regarding such classification. The guidance is designed to implement national policy on these issues. The document does not, however, substitute for the SDWA or EPA's regulation; nor is it a regulation itself. Thus, it cannot impose legally-binding requirements on EPA, States, or the regulated community, and may not apply to a particular situation based upon the circumstances. EPA may change this guidance in the future. Internet Address (URL) • http://www.epa.gov Recveled/Recyciable • Printed with Vegetable Oi1$ased Inks on Rerycled Paper (Minimum 20°~ Posiconsumer) Page 1 of 2 Maunder, Thomas E (DOA) From: Woolley, Oran L (DEC) [oran.woolley@alaska.gov] Sent: Monday, June 25, 2007 4:52 PM To: Thomas Maunder Subject: RE: Fowler Oil CBM Yes it is the Boro permit application. It came to me from the Boro distribution list. I have not seen any Coastal Zone paperwork. I think they are closer than 1500 feet. Just take a look when you get the GD. You too. Maybe we will get to actually sit down after hours sometime. Oran From: Thomas Maunder {mailto:tom_maunder@admin.state.ak.us] Sent: Monday, June 25, 2007 4:36 PM To: Woolley, Oran L (DEC) Subject: Re: Fowler Oil CBM Thanks Oran. Is this CD what will be the subject of the presentation to the borough August 6? Have they turned in any documents with regard to Coastal Zone? Having the operation on private land should help some, however it doesn't relieve them of the need for our permits. Off the record, based on what I have unofficially seen of the "acreage shape", they will likely need a spacing exception for the well. Gas well rules state no closer than 1 S00' to a property line. The outline I have seen is not square. Look forward to catching up with you. Tom Snail mail: 333 W. 7th Ave, Suite 100, Anchorage, AK 99501. Catch you later. Tom Woolley, Oran L (DEC) wrote, On 6/2S/2007 4:28 PM: If you want I will mail a copy of this CD to you. Shoot me your address. They say several times in it that they will not have or need a class II well. I will burn a copy for you. From: Thomas Maunder [mailtoaom maunder@adminatate.ak.us] Sent: Monday, June 25, 2007 4:22 PM To: Woolley, Oran L (DEC) Subject: Re: Fowler Oil CBM Hi Oran, Nice to hear from you. According to the document I have regarding downhole separation, it is Class II. According to the EPA, the key is that the fluid is being injected. Doesn't matter that it doesn't come to surface. I will try to get a copy of the document to you. It is listed as UIC Program Guidance #82, dated 3anuary S, 2000. With regard to drinking water wells, the burden is on Fowler to prove that their activity 8/3/2007 • ~ Page 2 of 2 should nat and then demonstrate that it does not affect water wells. I have only heard about their plans in passing. Nothing has been. submitted to us. Informally, I have met Mr. Fowler. I mentioned that he will need permits from us and that that likely includes a Class II disposal permit. I can agree with you about not getting caught on the tracks. I'll be involved this time since Winton left in January to be on a rig for BP. Catch you later. Drop a line if you are in town. Tom Woolley, Oran L (DEC) wrote, On 6/25/2007 4:00 PM: Hey Tom, How are you. Looks like the hydra has grown some more heads. Have you seen their CD on how they intend to do this and reinject the water? They daim it is not a Class 11 weN, but it sure Looks like it to rr~. They are going to dewater the gas somehow downhoie and reinject the water below the coat seams. The attached drawing is from their CD. «CBM.pdf» You have probably seen all this. Should I be concerned about all the drinking water welts around here. Many of them are drilled 200-5(30 feet deep into coal seams. Seems like this might have an affect on them. Hopefully, we will be in front of it this time around. I don't want it to run over me like it did last time. Talk to you later. Oran Oran Woolley, ADEC 1700 E. Bogard, Bldg B, Ste 103 Wasilla, AK 99654 (907) 376-1852 8/3/2007 Ground Water Coal Seam Coal Seam Coal Seam Sandstone Formation • f TRANSMITTAL LETTER CHECKLIST WELL NAME ~,~~,~~~ ~~ PTD# ~LJ~~'~ ~ ~~i5°O 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 The permit is approved subject to full compliance with 20 AAC EXCEPTION 25.055. Approval to perforate and produce /inject is contingent upon issuance of a conservation order approving a spacing exception. , assumes the liability of any protest to the spacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. 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 well) until after ~Compan~Name) has designed and implemented a water well testing program to provide baseline data on water quality and quantity. ,Company Name) must contact the Commission to obtain advance approval of such water well testing ro ram. Rev: 7/13/2007 WELL PERMIT CHECKLfST Field & Pool _ _ _ ...Well Name: KIRCHER 1 __ .........Program EXP__________ Well bore seg PTD#:2080410 Company FOWLER OIL & GAS LLC _ Initial Classffype EXP! PEND _GeoArea 820 _.____ Unit OO~QQ_ OnlOff Shore On._.______ Annular Disposal ^ Administration 1 Permit fee attached NA 2 Lease number appropriate _ _ _ - Yes _ _ _ _ 3 Unique well_name and number - - _ - - - - - - - - - - Yes _ 4 Well located in-a_defnedpool- _ - - - No_ ~5 Well located proper distance_from drilling unit_boundary Yes 6 Well located proper distance-from other wells- - Yes - - - - 7 Sufficient acreage aya' le in-drilling unit- Yes 8 If_deviated, is_wellbore plat_i - - ded - NA- ~~9 Operator only affected party- ... .. .. No. - - - Surrounding-Land owners-have leased their property to Fowler Oil and. Gas, LLC. Desig. of Oper Re-quire_d, 10 Operator has_appropriate_ bond in force Yes Single well Bond # 4Q2-69. - 1,11 Permit can be issued without conservation or No - GO 595 for variousyaivers applied for. 12 Permh can be issued without administrative approva_ Yes - - pp A r ate X13 Can permit be approved before 15-day wait... Yes .. . ACS 5/7/2008 ~i14 Well located within area and strata authorized by Injection Orde_ put 10# 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 of pre-production less than 3 months-(For_s- ce well only) . , NA . - 17 Nonconven, gas conforms to A$31,05,030O.1.A),(j 2.A-D) - Yes - _ _ - - .. . _ ~ 18 Conductor string.provided . . Yes . _ ~ !Engineering X119 Surface casing-protects all known USOWs s Both surface andproduction strings will be cemented_to surface.. I ~~i20 C_MT-vol. adequate-to circulate on conductor & surf-csg Yes x',21 CMT-v_ol_ adequate-to tie-i_n long string to surf csg Yes ------- 122 CMT will cover all known productive horizons. 1, Yes 23 Casing desgns adequate for C, T, B & permafrost ~ Yes I I,24 Adequate tankage_or reserve pit ~~ , . - Yes Rig equippe_ h steel pits- Rig has drilled deeper wells on West side of Inlet 25 If a re-drill, has a 10-403 for abandonment been approved ~ NA_ - ~ I26 Adequate wellbore separation proposed ~ NA_ - . . - No wells are. proximate. 127 If_diverter required, does it meet regulations ~ Yes 28 Drilling fluid. program schematic & equip list adequate.. Yes Maximum expected reservoir pressur _ 3 EMW, MW planned up to 8.9 in surface hole & -9:6-ppg in 8-1_!2"hole. Appr Date '29 BOPES,_do they meet regulation Yes - TEM 4127/2008 '130 _B_OPE_press rating appropriate; test to-(put psig in comm. s). Yes MASP w!o formation breakdown 1166_ psi -2500 g OP test planned.. 31 Choke_manifold complies wIAPI RP-53 (.May 84) - - - - - Yes _ _ _ _ . - - - - _ - - _ _ ',32 Work will occur without operation shutdown- - - - - Yes - - - This well should. be_drilled-w!o shutdown.- Additional permits n ed for possible laterals. ',33 Is presence-of H2S gas_probable- - No- _ - - H2S has not been repgrted in CI-gas production, .Rig has sensors a_ _ /arms.. - ~34 Mechanical-condition of wells within AOR verified (For service well only) NA- ~35 Permit can be issued wlo hydrogen sulfide measures N_o- Personal H2S detectors will be utilized.- - - - . - Geology ~~ Data_presented on_ pote_ntial ove_rpressur_e zones - .. - ... Yes _ _ - _ ...... - .. - . . - - - - - ',37 Seismic analysis of shallow gaszones No- - Shallow seismic survey waived a_s per CO 595.... Appr Date .338 Seabed condition survey (if off-shore) NA ACS 5/7/2008 39 Contact namelpho_ne fo_r weekly-progress reports (exploratory only] Yes Bob Fowler - 745-6638 Geologic Date: Engineering Date Public Date Require logs and directional survey. Commissioner: Commissioner: Commissioner • WELL PERMIT CHECKLIST Field 8 Pool Well Name: KIRCHER 1 Program EXP Well bore seg ^ PTD#:2080410 Company FOWLER OIL & GAS LLC Initial ClasslType EXP I PEND GeoArea 820 Unit 00000 On10ff Shore ~ Annular Disposal C~ Administration 1 Permitfeeaitached____________-_________-_____-_---_--_ -- NA-- --------- ----- -- 2 Lease number appropriate -- -- -- -- -- - - - ----- Yes - -- -- - -- --- - --- - --- -- - 3 U.niquewellnameandnumber- - - -- - - -- -- - Yes- - --- -- -- - - - -- ---------- --- 4 -WalllQCatedina_defirredpool--------------------------------------- N°-- ----------------------------- ------------------------------------------- 5 WelUocatedproperdiskancefromdri)linguniiboundary----------------------- Yes- ---------------------------------------------------------------------- 6 Welll4catedp[operdistanGefrorttoi6erwells----------------------------- Yes- ----------------------- --------------------- 7 Suffiorentaorsageayailablgindtittingunii_`''~4:q_-------------------------- Yes- ------------_---- B Ifdeviaied,)swellbQrePlatincluded-------- -------------------------- NA__ _______-------_---- -------------------------------------------------- 9 Operator only affected party . _ _ _ _ _ _ . _ - - - - - - - - - - - - - - - - - - - - - - JJo_ _ _ - _ _ . -Surrounding-land owne[s_ ve leased theU p[opertyylo Fowler 0)I and Gas, LLB. pesig. of Oper._ Requi[ed, 10 Operakorhes-appropriate-bond in force - - - - - - - - - - - - - - Yes - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ 11 Pe[mitoanbeisauedwithouiconservationorder________~----------------- -K°-- ------0959@fo[valiaus_ ivarsa~RPliedfo[.------------------------------------------- Appr Date X 12 Petmitcanbe~suedw)thoutadministrakive_approval------------------------ Yes- ---.----------- -------------------------------------------------.----- ACS 3126!20081 13 Canpermitbeapprovedbefore15•daywali-______-__--______--__ _---- Yes- ------------- ---------------------------------------------------_----- 14 lNelllocakedwlthinareaand_strataauthorizedby_InjectionDrde[#(put_IQ#in---menu)-(FOr_ NA-- ------------ --------------------------------------------------------- ~~ 15 _AIIweUewithin114_mftearaaof[eviQwfdentified(Fo[servicewellonly)__________ ____ _KA_ ________-_ _--__--_____--_________________________.__.-_____--__--______ 18 Pre-produced injector. duration of pre p[oduction ass than 3 months (For service well on NA- - - - - - - - - - - - - - - - - - - - - - - - -------------------------------------------------- ~ 17 Nonconven, gas conformaioAS31.D6,03D(j•t.A)a(t•2.A-D) - - - - - - - - s - - - - - - - - - - - - - - - - - - - - - - - - - - - - Engineering 1B Conductor string.Provided - - - - - - - - - - - - - - - - s - - - - - - - - - - - - - - - - - - 19 Surface casingprotects ali knownUSDWS - - - - - - - - - - - - - - - - - -- Yes - - - _ -Both surface andproduction strings will_be cementedtosurface.- - - - - - _ - - ---- -------- ~ 20 CMTvoladequate_toCircutat®on_conductor8,surf-csg__ _ r~_ ~ Yes- - - --- --------------------------------------- - _-- ---_---- ~ 21 CMT_vol adequate_to fie-irrlong string to surf osg_ - _ _ - J ~- ~~-~- - - ,~~~~- _ _ - "`~ -Yes Y 22 CMTwill covar_ahknown-productive horizons_ _ - - _ .~y - -- ~ - -- ----- - - - - - - - - -- -------- ~ 23 j Casing designs adequatef9rC,_T,B&_pe[mafrost-__--__----~~_ ---- - es- --_---______-------------------------------------------------__ 24 Adequate tankage_or Ieservepit - - - - - - - - - - - - - - - - - - - _ - - - _ - - _ _ Yes - - Rig equipped with st -its. Righas drilled deeperwells on West side of Inlet _ - - - _ - 25 Ifa_re~d[ill,bas-atQ403folabandonmenkbeenapRroved_____----------- ---- -NA_ _-_------_-----__-__________________.________---_------_----- ' 26 Adequate wellpore separationproposed- - _ _ _ - - - - - - - - - - - - - - - - - - - - - NA- - - _ - _ . No wells are_proximaie. - - - - - - ,27 If d)verter~equUed,does)tmeetregulations______--_____--- ----- ------- Yes- ----------------------------- -------------------------------------------- Appr Date X28 DYilling fau)d. program SFhgmatlc_& Equip listadequate- - - - - - - - - - - - - - - Yes - - _ - - - _ Maximum Qxpeoted reservoirpressures 8, - MW, MW planned up to_8.9 in surface hole $~ 9,6-ppg in-8.112" hole_ TEM 4127!2008 29 9OPls~do they meet regulation - - - - - - - - - - - - - - - - - - - Yes - - - - - - - - - - - - - - - - - - - ~h (/~ X30 _ _ BOPE_press rating eppropriat8; leaf to_(put prig in commants)_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes - _ - - - _ - MASP wlo fonnakion-breakdown 1166 psi, _25DD psi P test Rlanned. _ _ _ _ _ _ _ _ . _ _ _ _ _ - _ _ - - - _ _ - _ - - tV ` X31 _ _ Choke_rnani#oldcompliaswlAPl_RP•53(_May84)------------ -- - Yes- ---------------------------------------- -- ~32 Work will occu[ withoui operationshutdown- . - - - - - - - - - - - - - - - - - - - - Yes - _ - - _ _ _ This well should be_drilled_wlo shutdown._ Add)tional permhs n _ ed for possible laterals. - - - - - - - - - _ - I33 Is presence of H2S gas probable - - - - - - - - - - - - - - - - - - - - - _ - - - _ - - _ No_ _ H2$ has ngkbeen reported)n CI-gas produckion, Rig has sensots a- alarms, _ _ _ !34 Mechanicalcondilionofv~IlswithinAQRverified(FOrserv: _Ilonly)-__--__-__-- NA- ----------------___.________________________-_---_------_--_-- Geology 35 Pe[mitcanbaissuedwlohydrogen_aulfldemsasu[es__ ______-__--_________ No_. ---_-_Personal_H2Sdetectorswill-be_utilized._,___________________________--__-________ 36 Data-pleseniedonpotentielovelpressurezones-- ------------------_---- Yes- ------------------------------------------------------------------_--- -- Appr Date 137 Seismic analysis ofshallow gas zones_ _ - _ - - - - - - - - - - - - - - - - - - - - - - - - - - - tdo- _ Shallow seismic surrey waived_es_per ~Q 595.. - - - - _ - - - - - - - - - - - - - - - - - - - _ ------- ACS 312612008 38 Seabedcond)tionsunrey_(8offshorel-------------------------------- -NA-_ --------------___ 39 ConiaoUamelPfb~forweek>y_plogress[e risjexploratoryonly]----------------- Yes- ------Bob.Fow)er~745-6638------------------------------------------------------ Geologic Date: Engineering Data Public pate Require logs and directional survey. Commissioner; Commissioner: Commissioner
