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Home My WebLink About208-074 r Page Image Project Well History File Cover Pa g XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. Q - 07 Well History File Identifier g ( done ) Or anizin Two -sided III U I 11111 111111 ❑ Rescan Needed 111111110 II111111 Organizing RESC DIGITAL DATA OVERSIZED (Scannable) Color Items: ❑ Diskettes, No. ❑ Maps: ❑ Greyscale Items: ❑ Other, No/Type: ❑ Other Items Scannable by a Large Scanner ❑ Poor Quality Originals: OVERSIZED (Non - Scannable) ❑ Other: ❑ Logs of various kinds: NOTES: c� / ❑ Other:: n BY: Maria Date: .. pC d 13 /s/ 11( Project Proofing 111111111 11111 II ill iv I, g BY: (Maria Date: 4g0113 /s/ Scanning Preparation 3 x 30 = O + / 5 = TOTAL PAGES 1 OS 3 (Count does not include cover sheet) BY: Date: c C' � � a©' /s/ Production Scannin g 111111111 1111 II III Stage 1 Page Count from Scanned File: / O& (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: lYES NO BY: Maria) Date: t .- 0 /0 ! 3 /s/ f Stage 1 If NO in stage 1, page(s) discrepancies were found: YES NO BY: Maria Date: /s/ Scanning is complete at this point unless rescanning is required. III IlIlIlIlIlIlIlIl p ReScanned 111 111111111111111 BY: Maria Date: /s/ Comments about this file: Quality Checked III IlIlIlIlIlIlIlIl 12/22/2011 Well History File Cover Page.doc DATA SUBMITTAL COMPLIANCE REPORT 2/12/2013 Permit to Drill 2080740 Well Name /No. WAINWRIGHT 06 Operator U S DEPT OF INTERIOR API No. 50- 301 - 20008 -00 -00 A MD 1265 TVD 1265 Completion Date 6/23/2008 Completion Status SUSP Current Status P &A UIC N REQUIRED INFORMATION Mud Log No Samples No Directional Survey No DATA INFORMATION Types Electric or Other Logs Run: (data taken from Logs Portion of Master Well Data Maint Well Log Information: Log/ Electr Data Di • Dataset Log Log Run Interval OH / III Type d /Frmt Number Name Scale Media No Start Stop CH Received Comments ED C 19310 See Notes 0 0 Daily Recs, Sundry Rep in XLS, Timeline, Completion Diagram Well Cores /Samples Information: Sample Interval Set Name Start Stop Sent Received Number Comments ADDITIONAL INFORMATION Well Cored? Y e) Daily History Received? QN Chips Received? --)Fi-Pd— Formation Tops / Analysis Received? III Comments: A GC-0 ■ v"—N1 u 0 7. Noy Lois s g. %.►k. .-- Pr ^� f `� Compliance Reviewed By: )4:1" Date: 1 r.. Fe * �� USGS - BLM Wells Missing Required Information Well Name Permit to Drill Number Missing information Prior Requests D01 -04 -1A (Ft. Yukon) 2040830 Core analysis Requested 11/5/2009 2040830 Core chips Requested 11/5/2009 I 2040830 Cuttings samples Requested 11/5/2009 2040830 Mud log Requested 11/5/2009 logs - Paper Print Requested 11/5/2009 2040830 Open hole og p q 2040830 Open hole logs - Reproducible Requested 11/5/2009 Franklin Bluffs 1 2051050 As built survey plat Requested 11/5/2009 2051050 Core description and analysis Requested 11/5/2009 2051050 Mud log Requested 11/5/2009 2051050 Open hole logs - Digital Requested 11/5/2009 2051050 Open hole logs - Paper Print Requested 11/5/2009 2051050 Open hole logs - Reproducible Requested 11/5/2009 Wainwright 01 2070650 Core analysis Requested 11/5/2009 2070650 Core chips Requested 11/5/2009 2070650 Location information (coordinates as metes & bounds, Required on Completion Report form coordinates in AK State Plane NAD 27) 2070650 Location information (lat /long datum) Wainwright 02 2071060 Cuttings samples Requested 11/5/2009 2071060 Inclination survey Requested 11/5/2009 2071060 Lithology log Requested 11/5/2009 Location information (coordinates as metes & bounds, 2071060 Required on Completion Report form coordinates in AK State Plane NAD 27) 2071060 Location information (lat /long datum) Wainwright 09 2080770 Core chips Requested 11/5/2009 2080770 Core description and analysis Requested 11/5/2009 2080770 Lithology log - Paper Print Requested 11/5/2009 2080770 Location information (lat /long datum) Wainwright 10 2090350 Core chips Requested 11/5/2009 2090350 Core description and analysis Requested 11/5/2009 2090350 Cuttings samples Required on Completion Report form 2090350 Inclination survey Requested 11/5/2009 2090350 Location information (coordinates as metes & bounds, Required on Completion Report form coordinates in AK State Plane NAD 27) 2090350 Location information (lat /long datum) 2090350 Mud log (required by permit to drill; drilling history states "will Requested 11/5/2009 not collect mud -gas log at this site. ") Wainwright 03 2080710 In compliance Wainwright 04 2080720 In compliance Wainwright 05 2080730 In compliance Wainwright 06 2080740 In compliance Wainwright 07 2080750 Expired permit: never drilled Wainwright 08 2080760 In compliance Wainwright 11 2090360 Cancelled permti: never drilled AOGCC February 17, 2011 • • MEMORANDUM State of Alaska Alaska Oil and Gas Conservation Commission TO: Jim Regg, DATE: October 22, 2010 P. I. Supervisor FROM: Chuck Scheve, SUBJECT: Surface Abandonment Petroleum Inspector Wainwright #6 PTD# 2080740 - Friday, October 22, 2010: I traveled to the USGS Wainwright #6 exploration location to inspect the casing cut off and abandonment of this well. All casing strings were cut off at approximately 4' below original ground level. Cement was found at surface in all casing stings. A cap was welded to the conductor covering all strings. Due to the small diameter of the conductor casing a marker plate was welded to the cap vertically with the required information bead welded to it. SUMMARY: I inspected the casing cut off depth, and the P &A marker plate on the Wainwright #6 well and found all to be in order. Attachments: Photos (2) Surface Abandonment — Wainwright #6 10 -22 -10 • • Surface Abandonment — Wainwright #6 PTD 2080740 by AOGCC Inspector C. Scheve Photos 10/22/2010 . Y i4 #:. ' ' ' Casing cut-off: �� cement to surface t .. x. : ,�yt ,".`- +Mtn w $ fir x 14 ti Well marker .tern ille e $ Surface Abandonment Wainwright #6 10 -22 -10 • • La pet roleull ' i FREE �-- n e vv om> ' A 1., tt isn, S ubscriptions t Publications http://wwvv.petroleumnews.com/pnads/891782894.shtml Vol. 16, No. 13 Week of March 27, 2011 Providing coverage of Alaska and northern Canada's oil and gas industry BLM admits to drilling safety lapse Federal agency concedes diverter wasn't used on well drilled near Alaska village of Wainwright; AOGCC to �� S continue probe 3 o*\ _ ‘ o Wesley Loy 0 Qi, For Petroleum News _ The Bureau of Land Management has admitted responsibility for a failure to use a safety device called a diverter on a federal drilling project near the northwestern — VA \ Alaska village of Wainwright. Cr\ Co But the BLM also seemed to steer accountability for the lapse toward its designated operator on the project, the U.S. Geological Survey. i 0� The BLM stated its position in a March 15 letter to the Alaska Oil and Gas DOC\ — 0\ C Conservation Commission, which had been pushing the agency for months to show proof it had used the required diverter on the seven wells at issue. "BLM understands it is responsible for the actions of its operator," said the letter signed by Julia Dougan, the BLM's associate state director for Alaska. `BLM has no immediate plans for additional drilling but can assure the Commission if future drilling should be permitted, operations will be carried out in full compliance with state regulations." How conflict unfolded I I The letter is the latest twist in a long - running conflict between the BLM and the AOGCC. The Wainwright project, which began in 2007, was a joint effort involving the BLM, the USGS, the North Slope Borough and Arctic Slope Regional Corp. The goal was to test a local coalbed as a potential source of natural gas to meet energy needs in the remote village of about 550 people on the Chukchi Sea coast. The AOGCC has authority to regulate drilling statewide, whether on federal, state or private land. On June 22, 2010, the AOGCC hit the BLM with a "notice of violation" for possibly drilling wells without the required safety equipment. A diverter, which sits atop the well, is designed to direct any unexpected release of dangerous hydrocarbons safely away from the rig work area. Like blowout preventers, diverters are a last line of defense for drillers. The two agencies swapped letters over several months, with the AOGCC contending it was not seeing the verification it wanted on whether a diverter was used on the exploratory wells. On Dec. 9, the AOGCC threatened the BLM with a public hearing to get answers. Ultimately, Pat Pourchot, the U.S. Interior secretary's special assistant for Alaska affairs, was brought into the discussion. In its March 15 letter, the BLM said it was the applicant for the state permit to drill one of the wells, Wainwright No. 2, but that it had designated the USGS as operator. "Our documentation confirms no diverter was used on the Wainwright well #2," the letter said. But the BLM said the USGS was both the applicant and operator for the other wells, Wainwright Nos. 3, 4, 5, 6, 9 and 10, and it directed the AOGCC to send any correspondence about those wells to a USGS official. Investigation to continue Cathy Foerster, one of the three AOGCC commissioners, told Petroleum News the Alaska Department of Law had advised the agency it probably doesn't have the power to fine the BLM for failure to use a diverter on Wainwright No. 2. But Foerster said the BLM letter is significant, an indication "that the federal • • government is perfectly capable of self - correcting." The AOGCC now plans to make inquiries to the USGS regarding whether the safety gear was used on the other Wainwright wells. Foerster said the state's objective is plain. "When the federal government comes into our state to operate, we want their assurance that they will abide by our laws like any other operator," she said. The Wainwright matter isn't the only source of friction between the AOGCC and the BLM. The commission has pointedly questioned the federal agency's attention to dozens of derelict "legacy wells" located chiefly in the National Petroleum Reserve - Alaska. • • Alaska regulators continue pressing BLM Lack of clarity on whether Wainwright gas wells had proper blowout prevention equipment could lead to public hearing, AOGCC warns Wesley Loy MOW DEL: 3 0 MD For Petroleum News For months now, Alaska drilling regulators have been asking federal officials to prove they used the required blowout prevention equipment on a series of test wells near the remote village of Wainwright. Thus far the issue remains unresolved — and it might be intensifying. The latest twist: Commissioners with the Alaska Oil and Gas Conservation Commission are threatening to hold a public inquiry in the conflict with the U.S. Bureau of Land Management. �'`\ "In an effort to maintain a constructive relationship between State and Federal regulatory bodies, the AOGCC is extending the Bureau of Land Management one final opportunity to demonstrate that BLM's Wainwright wells number 2, 3, 4, 5, 6, 9 and 10 were drilled with appropriate blowout prevention equipment," said a Dec. 9 letter to BLM officials in Anchorage. "To date BLM has declined to provide the requested information. This correspondence marks AOGCC's final request prior to proceeding to convene a public hearing on the matter." The letter was copied to Alaska's congressional delegation, Gov. Sean Parnell and the U.S. Environmental Protection Agency. How it started Since the summer, the AOGCC has been trying to verify whether the BLM and its partners used a safety device known as a diverter on wells drilled to test for coalbed gas near the northwest Alaska village of Wainwright. The drilling project is a joint effort involving the BLM, the U.S. Geological Survey, the North Slope Borough and Arctic Slope Regional Corp. The Wainwright issue broke open on June 22 when the AOGCC hit the BLM with a "notice of violation," saying the federal agency appeared to be in violation of state regulations in drilling the wells without the required safety equipment, and improperly securing suspended wells. • • In response to letters from the AOGCC, officials with the BLM have attempted to supply proof that the diverter was used on at least some wells. On Nov. 16, the BLM supplied the AOGCC with drill site photos as evidence of the use of the diverter during the Wainwright project's 2007 and 2008 drilling seasons. "I hope this information is helpful and provides the clarification you are seeking," wrote Julia Dougan, the BLM's acting state director. Unsatisfactory response Commission Chairman Dan Seamount, in the AOGCC's Dec. 9 letter back to Dougan, said the photos were insufficient, as they were taken at Wainwright wells 1 and 8. Seamount wrote: "Neither of these wells was included in the AOGCC's notice of violation; the wells for which AOGCC requested documentation of diverter usage were the Wainwright No. 2, 3, 4, 5, 6, 9 and 10 wells." Seamount set a deadline of Jan. 31 for the BLM to show its wells were drilled with the proper blowout prevention gear. The AOGCC has authority to regulate drilling statewide, whether on federal, state or private land. Its relations with the BLM have been tenuous for some time, with the commission questioning the federal agency's handling not only of the Wainwright wells but also dozens of old "legacy wells" on Alaska's North Slope. • STATE OF ALASKA • ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOG 1a. Well Status: Oil❑ Gas F Plugged ❑ Abandoned Q Suspended ❑ 1b. Well Class: 20AAC 25.105 20 25. 110 Development ❑ Exploratory 2l GINJ❑ WINJ❑ WDSPL❑ WAG❑ Other[:] No. of Completions: Service ❑ Stratigraphic Test ❑ 2. Operator Name: 5. Da., Susp., or ! 12. Permit to Drill Number: U.S. Geological Survey �h . p "19/12(2010 208 -074 3. Address: 6. Date Spudded: 13. API Number: Box 25046 MS 939, DFC, Denver, CO 80225 6/18/2008 50- 301 - 20008 -00 4a. Location of Well (Governmental Section): 7. Date TD Reached: 14. Well Name and Number: Surface: N70,38',38.8" W160,1',22.4 (FNL =654', FEL= 1,746') 6/21/2008 Wainwright 6 (W- OC2 -08) Top of Productive Horizon: 8. KB (ft above MSL): 25 15. Field /Pool(s): Ground (ft MSL): 20 Total Depth: 9. Plug Back Depth(MD +TVD): 1265 4b. Location of Well (State Base Plane Coordinates, NAD 27): 10. Total Depth (MD + TVD): 16. Property Designation: Surface; x- 462,289.70 y- 7,837,906.48 Zone- 4 1265 TPI: x- y- Zone- 11. SSSV Depth (MD + TVD): 17. Land Use Permit: Total Depth: x- y- Zone- . 18. Directional Survey: Yes No ✓ 19. Water Depth, if Offshore: 20. Thickness of Permafrost (TVD): (Submit electronic and printed information per 20 AAC 25.050) (ft MSL) - 900 ft 21. Logs Obtained (List all logs here and submit electronic and printed information per 20 AAC 25.071): none 22. CASING, LINER AND CEMENTING RECORD WT. PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASING FT GRADE TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD PULLED 65/8 18.99 sch 40 0 49 0 49 9.875" cement from 49- surface 2.5 -in PVC sch 80 0 1260 0 1260 6.00" cement 1260 -1160 bentonite grout 1160 -100 cement 100 - surface ID plate welded 80" bls 23. Open to production or injection ?" - mss.❑ No❑ If Yes, list each 24. TUBING RECORD interval open (MD +TVD of Top & Bottom; Perforation Size and Number): SIZE DEPTH SET (MD) PACKER SET (MD) 25. ACID, FRACTURE, CEMENT SQUEEZE, ETC. WAA NOV yy °t�� DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED 26. PRODUCTION TEST Date First Production: Method of Operation (Flowing, gas lift, etc.): Date of Test: Hours Tested: Production for Oil -Bbl: Gas -MCF: Water -Bbl: Choke Size: Gas -Oil Ratio: Test Period Flow Tubing Casing Press: Calculated Oil -Bbl: Gas -MCF: Water -Bbl: Oil Gravity - API (corr): Press. 24 -Hour Rate -► 27. CORE DATA Conventional Core(s) Acquired? Yes ❑ No Q Sidewall Cores Acquired? Yes ❑ No Q If Yes to either question, list formations and intervals cored (MD +TVD of top and bottom of each), and summarize lithology and presence of oil, gas or water (submit separate sheets with this form, if needed). Submit detailed descriptions, core chips, photographs and laboratory analytical results per 20 AAC 25.071. no cuttings or samples collected from this well CE r 0V k 4 20 RBDAAS NOV 0 4 20 AlWa oil & 'Ga Cora. CLUnn'.6 Form 10-40 / Revised 212007 %IVNI IMUE-0 01 REVERSE G l/ /r: td 28. GEOLOGIC MARKERS (List all formations and markers encountered): 29. FORMATION TESTS NAME MD TVD Well tested? U Yes L21 No If yes, list intervals and formations tested, briefly summarizing test results. Attach separate sheets to this form, if needed, Permafrost - Top 0 0 and submit detailed test information per 20 AAC 25.071. Permafrost - Base —900 900 Drilling in Nanushuk Fm from top -bo Formation at total depth: Nanushuk 30. List of Attachments: 31. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Printed Name: Arthur Aark Title: Supervisory Geologist Signature: Phone: 303- 236 -5793 Date: 11/1/2010 INSTRUCTIONS General: This form is designed for submitting a complete and correct well completion report and log on all types of lands and leases in Alaska. Submit a well schematic diagram with each 10 -407 well completion report and 10-404 well sundry report when the downhole well design is changed. Item 1a: Classification of Service wells: Gas Injection, Water Injection, Water - Alternating -Gas Injection, Salt Water Disposal, Water Supply for / njection, Observation, or Other. Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI (Top of Producing Interval). Item 8: The Kelly Bushing and Ground Level elevations in feet above mean sea level. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits (ex: 50- 029 - 20123- 00 -00). Item 20: Report true vertical thickness of permafrost in Box 20. Provide MD and TVD for the top and base of permafrost in Box 28. Item 22: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 23: If this well is completed for separate production from more than one interval (multiple completion), so state in item 1, and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced, showing the data pertinent to such interval). Item 26: Method of Operation: Flowing, Gas Lift, Rod Pump, Hydraulic Pump, Submersible, Water Injection, Gas Injection, Shut -in, or Other (explain). Item 27: Provide a listing of intervals cored and the corresponding formations, and a brief description in this box. Submit detailed description and analytical laboratory information required by 20 AAC 25.071. Item 29: Provide a listing of intervals tested and the corresponding formation, and a brief summary in this box. Submit detailed test and analytical laboratory information required by 20 AAC 25.071. Form 10 -407 Revised 2/2007 Abandonment schematic Wainwright -6 ID late 80" bls Arctic blend cement Drilled 9 7 18 -in diamet I o 1 .+ 6 5 /8 -in steel casing, 49 ft BLS borehole to 49 ft I c 1 = I I U I 100 ft BLS 0 0 0 co 0 �— Drilled 6 -in diameter borehole m .r Bentonite abandonment 0 grout 100 -1235 ft 2.5 -in PVC casing m 0 m Silica sand 1235 -1260 ft cD N r+ C d E W coal bed, screened interval: 1242 -1252 ft U Bottom of hole & bottom of PVC casing: 1260 ft t y i � w � g >4 x lb �to, t r x • $ �f, R { R t 4 ! r TT a r Y t f t $ � t ` v 6 » f # �00 e 41h Zw g p a � � r a #r r ss � i t , 4 $ s R z . �► • •� �� ,` °�' � a il *..' lit IL lk * • ' ! I lk r - `. �.� � - r � # � � � ,� � Asa _ �., , .:� a'� � ,� Vi t �` ,� a r.+� r , ,i .r,a... ! w .. � l a r � r �.. � i I o * 4 � a ' } t x r � � � N .�* + �'C fi t "x t �� M. _ e { F ,�x�. �, � E° ,��.. � x .: °� ,' / rt �.. y, I y � t j4 � �# F s �` �� ' �' � ` r ��l e # ". �; 1 ,, `,� ,, " }r GMs a �Y + a� 4 r �� '�1�� ..9 S � '��r. w° i t- a1 t ` ,i � T� •, rr � � # ! t`m • ,i . a• 'r. wi Ilk —A Aft # %r� °y� ; } s ;.d:i ♦ 141 •t' DIR x. + . ,• � � ' . !� tip \v t �. � -,.�,� �,�� .. y t i t tiA ) dc�{ \, `# ♦.' ' .rMF.GA*r"; ti # 0 DATE ACTIVr1Y Tuesday, June 01, 2010 USGS crew arrives in Wainwright. Begin digging out equipment. Wednesday, June 02, 2010 Digging out equipment. Loading equipment for backhaul flight to Anchorage. Thursday, June 03, 2010 Plowing snow and digging out equipment. Tag monitor wells W4, W5, W6, W8 - W4 is plugged at 660 ft, W5 at 641 ft. Friday, June 04, 2010 Preparing equipment. Give 72 -hour P &A notice to AOGCC for well W6. Request permission to P&A wells W4&5 from plug to surface.. Still digging, starting, and moving equipment. Informed that AOGCC inspector will Saturday, June 05, 2010 arrive in Wainwright on Monday. Set rig over W4 and drop 11 /4-in pipe to 660 ft to confirm solid plug. Sunday, June 06, 2010 Set rig over WS and trip 11 /4-in pipe to 641 ft to confirm solid plug. C -130 arrives with 5 equipment from Deadhorse. Send equipment to Anchorage on backhaul. Monday, June 07, 2010 Informed that we can't P &A wells W4 or WS from plug. Move rig to W6 for P&A. Trip 11/4 -in pipe to 1260 ft in W6 and pump glycol to confirm open well. Receive new Tuesday, June 08, 2010 P &A procedures from AOGCC and told inspector must be present to tag top of W bentonite. Wednesday, June 09, 2010 Pump 100 ft cement across perfs, bentonite grout to within 100 ft of land surface. Inspector arrives. Thursday, June 10, 2010 Tag top of bentonite grout at 84 ft and cement from there to surface per Inspector. Receive permission to P&A wells 4&5 from plug to surface. Move rig from W6. We're Friday, June 11, 2010 informed that no further work can be done on any wells (including P&A) without the diverter assembly installed - diverter was backhauled to Anchorage. Inspector leaves Wainwright. Saturday, June 12, 2010 Waiting on diverter. Sunday, June 13, 2010 Waiting on diverter. Monday, June 14, 2010 Waiting on diverter. Y g Tuesday, June 15, 2010 Waiting on diverter. Wednesday, June 16, 2010 Diverter arrives at 14:00. Install on well W3, center rig, begin reaming to bottom. Thursday, June 17, 2010 Reaming well. Friday, June 18, 2010 Ream to bottom, circulate, and stablize. Saturday, June 19, 2010 Trip pipe, insert tremie, cement bottom of well. Sunday, June 20, 2010 Ream to bottom but cement didn't set properly. Recement w /heavier mix. Monday, June 21, 2010 Drill out cement with 6-in bit to 1260 ft and flush well. Underream to 12 -in diameter from 1241 -1249 ft. Tuesday, June 22, 2010 underream coal to 12 -in diameter. Standby for Wood Group Production Group to assemble needed stimulation equipment Wednesday, June 23, 2010 Stimulate well. Flush well and fill with glycol mix Thursday, June 24, 2010 Trip in submersible PC pump, drive rods, transducers, heat trace etc. \ l Friday, June 25, 2010 Begin testing �/ Y Saturday, June 26, 2010 Raise pump 8 ft in well. Continue test. Sunday, June 27, 2010 testing Monday, June 28, 2010 testing Tuesday, June 29, 2010 testing Wednesday, June 30, 2010 Raise pump 32 ft in well. Continue test. Thursday, July 01, 2010 testing Friday, July 02, 2010 testing Saturday, July 03, 2010 testing Sunday, July 04, 2010 Kill well with propylene glycol /water mix. Pull pump and all equipment from well. Monday, July 05, 2010 Secure wellhead and clean equipment. Test is on hold for now. Tuesday, July 06, 2010 Remaining drill crew return to Denver for break. Wednesday, July 07, 2010 no work Thursday, July 08, 2010 no work Friday, July 09, 2010 no work Saturday, July 30, 2010 no work Sunday, July 11, 2010 no work Monday, July 12, 2010 no work Tuesday, July 13, 2010 no work Wednesday, July 14, 2010 no work Thursday, July 15, 2010 no work Friday, July 16, 2010 no work Saturday, July 17, 2010 no work Sunday, July 18, 2010 no work Monday, July 19, 2010 no work Tuesday, July 20, 2010 no work Wednesday, July 21, 2010 no work Thursday, July 22, 2010 no work Friday, July 23, 2010 no work Saturday, July 24, 2010 no work Sunday, July 25, 2010 no work Monday, July 26, 2010 Crew returns to Wainwright. Move rig over well and equipment in place. Tuesday, July 27, 2010 Remove production head and install diverter. Clean hole to 1200 ft and circulate Wednesday, Julv 28, 2010 Finish circulating. Run caliper and gamma logs below 6-in casing. Cargo plane arrives. Thursday, July 29, 2010 Tremie 3 /8-in gravel in well from 1260 -1220 ft. Fill well with glycol /water. Pull diverter Friday, July 30, 2010 Set pump to 1216 ft and and wire in controls, heat traces, transducers. Saturday, July 31, 2010 Start production test. Sunday, August 01, 2010 testing Monday, August 02, 2010 testing. Move rig over Wainwright -1 and prepare for P &A. _ Tuesday, August 03, 2010 testing. AOGCC inspector arrives. Mix and pump cement into bottom of Wainwright -1, Wednesday, August 04, 2010 testing. Finish P &A of Wainwright -1. Move equipment off well. Thursday, August 05, 2010 testing. Set up over Wainwright -2, trip in tremie pipe and P &A well. �- w- Z- Friday, August 06, 2010 testing. Move rig over Wainwright -5 and trip tremie in well. AOGCC inspector leaves but we have OK to continue P &A activities o' Saturday, August 07, 2010 testing. P &A Wainwright -5. Move equipment and set up over Wainwright -8. Trip W tremie in well: V A / V Sunday, August 08, 2010 testing. P &A Wainwright -8. Move equipment and set up over Wainwright -4. Y v ^ Monday, August 09, 2010 testing. Set up over Wainwright -4, trip tremie in tremie pipe and P &A well. �^ Tuesday, August 10, 2010 testing Wednesday, August 11, 2010 testing Thursday, August 12, 2010 testing Friday, August 13, 2010 testing Saturday, August 14, 2010 testing Sunday, August 15, 2010 testing W 2 Monday, August 16, 2010 testing ,J Tuesday, August 17, 2010 testing. Notify AOGCC of intent to abandon well. Wednesday, August 18, 2010 testing Thursday, August 19, 2010 testing Friday, August 20, 2010 testing Saturday, August 21, 2010 testing Sunday, August 22, 2010 end test. Kill well, pull pump and equipment from well. Monday, August 23, 2010 AOGCC inspector can't make it to Wainwright. Circulate fluid in well and standby. Tuesday, August 24, 2010 Cement bottom of well from 1220 -1040 ft Wednesday, August 25 2010 tag cement and pump bentonite grout from 1040 -100 ft. Cement from 100 ft to 40 ft. Thursday, August 26, 2010 tag cement. Cement from 40 ft to land surface. Friday, August 27, 2010 pack equipment. Drill crew personnel leave Wainwright. Reg �aoclmfl �� ,�� N� �'4��``��`�� From: Joseph AdmmiDod�mi(�OLGOON|K.COM] � - _ � Sent: Tuesday, October 1S.2U181O:4GAM To: Reoo. James 8(OOA) ` Subject: UGG8Arhvo| inVVa Wainwright �� . �� ~ Importance: High , Mr.Qega This e-mail io to inform you that today, 10'19'10, two CDlJSGS personnel arrived in Wainwright with the intention of completing the abandonment of the Wainwright lJSGS wells. lJSGS sent one driller and o helper with no geologist or engineer. We have been informed by the driller that USGS intends to use NSB equipment and uoNS8 operator to assist them. T6eyunticipoLe the start of work some-time this afternoon. Yesterday, 1U-l8'10,l was contacted by your Pr66oeBuybaoedIuopectozvvborequeotedt6atlbx6orm �~ USGS personnel upon arrival that 24 hour notification would be required to him prior to placement of the well monuments. I have informed the DSGS personnel of this request. Additionally, uou representative of the surface landowner, I informed them of the requirement to remove the casings and conductors to -3' of the tundra surface below the pad, and that in the event that the excavation exceeded four (4') feet in depth, a 1.5:1 side slope would be required per 29 CFR 1926, Subpart P. The USGS driller acknowledged this requirement. I am on site in Wainwright and will remain here until the operations have been completed to document the work. Respectfully, 8R. }{8EC}CONSULTANT — {]E5. INC. 360 WEST BENSON BLVD, STE.2U2 ` ANCHORAGE, AK 99503 087-444-0745 ^..' l0/22/70{0 • 5~ MEMORANDUM State of Alaska Alaska Oil -and Gas Conservation Commission TO: Jim Regg ~ ~~ I~II~ DATE: June 9-11, 2010 P. I. Supervisor ~~ R, ;, ~ C~':'.~ ~4_ ~'~' FROM: John Crisp, SUBJECT: Wainwright #6 Petroleum Inspector PTD 2080740 Abandonment plugging USGS Dept. of Interior June 9th, 2010: I traveled to Wainwright Alaska to witness the abandonment plugging of Wainwright #6. Wainwright #6 is a well drilled to a depth of 1265' TVD. This well is drilled thru coal seam from 1242' to 1252'. The AOGCC required Arctic Grade cement be placed inside the 2.5" PVC monitoring string from 1257' to 1157'. Volclay bentonite grout with a weight of 9.4 ppg was placed in the PVC monitoring string from 1157' to 100 `below ground level. Arctic grade cement was required to be placed from 100' to surface. When I arrived on Location the Rig was prepared to RIH with W/L & sinker bar to determine the top of Volclay Grout. Top of grout was found at 100' & the sinker bar was continued to be RIH to a depth of 140'. USGS Rep. Jeff Eman & I agreed that to possibly swab the Volclay with the sinker bar could have adverse affects on the top of the grout. We decided to let the grout set up for a night & tag the top in the morning. June 10t", 2010: RIH with W/L & sinker bar to a depth of 84'. P/U 1 '/a" pipe & RIH to failure at 84'. Attempted to wash down to 100' with no success. Cemented inside of 2.5" PVC monitoring string W/ Arctic Grade 15 ppg class C cement from 84' to surface. POOH with 1 '/4" pipe & then PVC was topped off with cement. Cement samples were taken for evaluation of hardness. AOGCC Inspector Supervisor Jim Regg & AOGCC Petroleum Engineer Guy Swartz were contacted with cement plug information & information regarding inspection of all Wainwright wells to determine if USGS plan forward for other P & A's & cleanout of production test well Wainwright #3 was in compliance with AOGCC regulations & best Oilfield Engineering practices. Jim Regg determined that AOGCC Inspectors presence was no longer required on the Wainwright location. June 11t", 2010: My travel from Wainwright Alaska to Deadhorse Alaska could not be expedited from the scheduled flight @ 1315 hrs. I witnessed very hard Wainwright CBM P&As June 9-11, 2010 • • cement in the samples taken for Wainwright #6. The TOC in Wainwright #6 was tested with sinker bar & found to be hard inside of 2.5" monitoring string. USGS had Rig repair & maintenance scheduled & would continue with same until approval from AOGCC to either P & A or C/O & complete Wainwright #3 was obtained. USGS Supervisor Jeff Eman was made aware of the Sundry approvals & permits that had to be on Location to continue work. The only sundries I had at the time of Inspection were for Wainwright #3 & #4. Jeff was a very competent Representative for his agency & would talk with his USGS Supervisor Arthur Clark for clarification of what will be required for continued approval for Wainwright work. Summary: Witnessed permanent abandonment plug setting for USGS Wainwright #6 was performed. Well Inspections for other Wainwright wells were performed. Attachments: Photos Non-Confidential Wainwright CBM P&As June 9-11, 2010 Wainwright Coalbed Methane Exploration Wells P&A Wainwright #6 PTD 2080740 Photos by Inspector J. Crisp June 9- ll , 2010 Well not ID'd; improper well suspension; PVC monitoring string Location marker for well; non- sealing cap; no ID Wainwright CBM P&As June 9-11, 2010 • • Well not ID'd; cap over well; non-sealing Wainwright CBM P&As June 9-11, 2010 PVC monitor string (PVC) with plug Well ID does not match AOGCC naming; cap over well; non-sealing • • Well ID does not match AOGCC naming; cap over well: non-sealing Well left open to atmosphere; PVC monitor string Wainwright CBM P&As June 9-11, 2010 Improper suspension; non-sealing USGC rig and crew; working on Wainwright #6 P&A Wainwright CBM P&As Tune 9-ll, 2010 Wainwright #6 P&A ops; rig and pipe Wainwright CBM P&As June 9-l 1, 2010 Cementing equipment Mud handling equipment DATA SUBMITTAL COMPLIANCE REPORT 7/26/2010 Permit to Drill 2080740 Well Name/No. WAINWRIGHT 06 Operator U S DEPT OF INTERIOR API No. 50-301-20008-00-00 MD 1265 TVD 1265 Completion Date 6/23/2008 Completion Status SUSP Current Status SUSP UIC N REQUIRED INFORMATION Mud Log No Samples No Directional Survey No DATA INFORMATION Types Electric or Other Logs Run: (data taken from Logs Portion of Master Well Data Maint Well Log Information: Log/ Electr Data Digital Dataset Log Log Run Interval OH / T e Med/Frmt Number me Scale Media No Start Stop CH Received Comments ED C 19310 See Notes 0 0 Daily Revs, Sundry Rep in XLS, Timeline, Completion Diagram Well Cores/Samples Information: Sample Interval Set Name Start Stop Sent Received Number Comments ADDITIONAL INFORMATION ~ / N Well Cored? Y ~ Daily History Receive d? ~/ N Chips Received? Y~(N ~ Formation Tops Analysis X.1~ Received? Comments: Compliance Reviewed By: Date: ~ ~ dc.~ r u N SEAN PARNELL, GOVERNOR Arthur Clark Supervisory Geologist US Geological Survey P.O. Box 25046 Denver, CO 80225 Re: Exploratory Field, Wainwright Undefined Gas Pool, Wainwright-6 Sundry Number: 310-124 Dear Mr. Clark: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for rehearing. A request for rehearing is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. A person may not appeal a Commission decision to Superior Court unless rehearing has been requested. Sincerely, Daniel T. Seamount, Jr. Chair DATED this d da of A ril 2010. Y p Encl. -p'~ r~o ~~b ~ ~V~'°~ ~tEC~IVE~ STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS ~n nnc ~~ inn APR 1 4 2010 ~9 ca Oil & Cons • C~ion 1. Type of Request: Abandon Q Plug for Redrill ^ Perforate New Pool ^ Repair WeII ^ Change gram ^ Suspend ^ Plug Perforations ^ Perforate ^ Pull Tubing ^ Time Extension ^ Operations Shutdown ^ Re-enter Susp. Well ^ Stimulate ^ After Casing ^ Other: ^ 2. Operator Name: 4. Current Well Class: 5. Permifto Drill Number: US Geological Survey Development ^ Exploratory ^~ 208-074 3. Address: Stratigraphic ^ Service ^ 6. API Number: PO Box 25046 MS 911 DFC Denver, CO 80225 50-301-20008-00 7. If perforating, closest approach in pool(s) opened by this operation to nearest 8. Well Name and Number: property line where ownership or landownership changes: Spacing Exception Required? Yes ^ No ^ Wainwri ht-6 • 9. Property Designation (Lease Number): 10. Field/Pool(s): / 11. PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth TVD (ft): Plugs (measured): Junk (measured): 1265 ft 1265 ft ~ 1265 ft 1265 ft Casing Length Size MD TVD Burst Collapse Structural Conductor 49 ft 6 5/8-in Surface Intermediate Production Liner 1260 ft 2 1/2-in PVC Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): 1245-1255 ft Packers and SSSV Type: Packers and SSSV MD (ft) and TVD (ft): 12. Attachments: Description Summary of Proposal 0 13. Well Class after proposed work: Detailed Operations Program ^ BOP Sketch ^ Exploratory ~ Development ^ Service ^ 14. Estimated Date for 8/15/2010 15. WeII Status after proposed work: Commencing Operations: Oil ^ Gas ^ WDSPL ^ Suspended ^ 16. Verbal Approval: Date: WIND ^ GINJ ^ WAG ^ Abandoned Q Commission Representative: GSTOR ^ SPLUG ^ 17. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Printed Name Art Clark Title Supv Geologist Signature Phone 303-236-5793 Date ~ ^~~ / /~ 3/23/2010 COMMISSION USE ONLY Number: ~~ V ~' ~ Sund ti it "'1 diti f l N tif i i th t t C C ry a represen ve may w ness on ons o approva : o y omm ss on so a a p ~ BOP Test ^ Mechanical Integrity Test ^ Location Clearance Plug Integrity [[ Other: ~ r /'OUi~t P ~oTD ~OC~t. hLLrt~V~i ~ /o e -~oce t .:O-F',F.~r M/~~.Q....~ S ~-u-~ c~ p. aC ~af~ ~h ` ol~-h.i~tal~ ~ w(~'nG$S C.~M~e~.r- Y ~ E I c tOr. Subsequent Fonn Required: ~ ~ • y Q APPROVED BY COMMISSIONER THE COMMISSION A d b Date: ~' /6 /~ pprove y: Farm 10-403 R~~~O'f0 " "' ~ ~ ~ ~r-~`~° ° ~° F s ~ ~ ~" ~ • ~S ~~ 5u~b^'m/it~in Duplicate • Plug and Abandon procedures for Wainwright wells 1,2,4,5,6,8 • Drill rig will be positioned over well • 1 '/4-in steel pipe will be lowered into the 2 %2-in PVC pipe to bottom of well • High-solids bentonite grout will be mixed in ahigh-pressure grouter and pumped through the 1 '/4-in pipe to the bottom of well • Grout will be pumped from the bottom of the well upward towards land surface, displacing the water and propylene-glycol that are currently in the well. These fluids will be contained at surface and disposed of at the approved fluid disposal pit. • The 1 '/4-in will be removed from the well as mixing and pumping continue (the bottom of the pipe is always kept below grout level) until the grout and pipe are 100 ft below land surface (bls). • Arctic-blend cement will be mixed and pumped from 100 ft bls to land surface: All 1 '/4-in pipe is removed from well. • Conductor and liner casings are cut off 3 ft bls No~-~{~ ~~~i cc. ~ A steel plate, with pertinent well information welded to its surface, is welded to W. ~" ~ ss the top of the conductor casing • Hole is filled with native material and site is leveled to grade • Rig is removed from well Reflective marker to -8 ft ALS Current wellbore drawing Wainwright-6 ' 3 ft ALS -.i . 2.5-in PVC casing cut flush at land surface and extended to 1 ft ALS with coupler 1 I 1 Antifreeze: 1/3 propylene glycol, 213 water: -50 ft -1257 ft ~ 6 518-in steel well enclosure, rewelded at land surface 1 ~ Arctic blend cement I 6 5/8-in steel casing, 49 ft BLS I 1 I 1 i • 100 ft BLS ~- Drilled 6-in diameter borehole Bentonite abandonment grout 100-1235 ft 2.5-in PVC casing Emailed to Guy Schwartz 11/10/09 and again on 01 /08/10 • 1 Silica sand 1235-1265 ft 1250-ft deep coal bed, screened interval: 1242-1252 ft Bottom of casing: 1257 ft STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION REPORT OF SUNDRY WELL OPERATIONS RECEIVED FEB 0 4 `201p 1. Operations Abandon Repair Well ~ Plug Perforations Stimulate ~~ ~ (~~ ~p~$~IOfI 6 a Performed: Alter Casing ^ Pull Tubing ^ Perforate New Pool ^ Waiver ^ Time ension n n~~~r~~ Change Approved Program ^ Operat. Shutdown ^ Perforate ^ Re-enter Suspended Well 2. Operator USGS 4. Well Class Before Work: 5. Permit to Drill Number: Name: Development ^ Exploratory ^~ 208-074 3. Address: PO Box 25046 MS 939 DFC Denver, CO Stratigraphic^ Service 6. API Number. 80225 0- ~( O O ~ g Q~ Q roperty Designation (Lease Number): ~ ~ Well Name and Number: Wainwright ~ E' E .~ , ~ ~~ Wainwright-6 9Y~~ield/Pool(s): 10. Present Well Condition Summary: Total Depth measured 1265 feet Plugs (measured) na feet true vertical 1265 feet Junk (measured) na feet Effective Depth measured 1265 feet Packer (measured) na feet true vertical 1265 feet (true vertical) na feet Casing Length Size MD ND Burst Collapse Structural Conductor Surface 49 6 5/8 in Intermediate Production Liner 1257 2 1/2 inch PVC 1260 ft 1260 tt Perforation depth: Measured depth: 1242-1252 True Vertical depth: 1242-1252 Tubing (size, grade, measured and true vertical depth): 2 1/2 inch schedule 80 pvc TD=1265 ft. Packers and SSSV (type, measured and true vertical depth): ' 11. Stimulation or cement squeeze summary: Intervals treated (measured): NA Treatment descriptions including volumes used and final pressure: NA 12. Representative Daiy Average Production or Injection Data Oil-Bbl Gas-Mcf Water-Bbl Casing Pressure Tubing Pressure Prior to well operation: NA NA NA NA NA Subsequent to operation: NA NA NA NA NA 13. Attachments: .Well Class after work: Copies of Logs and Surveys Run NA Exploratory ^~ Development ^ Service ^ Daily Report of Well Operations X .Well Status after work: ~rt.S.D Oil Gas WDSPL GSTOR ^ WAG ^ 1 GINJ ^ WINJ ^ SPLUG ^ 16. I hereby certify that the foregoing is true and correct to the best of my knowledge. ~M . 7.,~ • 1d Sundry Number or N/A if C.O. Exempt: Contact Art Clark Printed Name Art Clark Title Geologist Signature Arthur Clark Phone 303-236-5793 Date 1/8/2010 Form 10-404 Revised 7/2009 RBD~IAS FEB 0 5 c~'~7 ~ s~s~~o Submit Original Only ~ ~/~ 3 ft ALS ~ . 2.5-in PVC casing cut flush at land surface and extended to 1 ft ALS with coupler I I 1 Antifreeze: 1/3 propylene glycol, 2/3 water: -50 ft -1257 ft Bentonite abandonment grout 100-1235 ft Reflective marker to ~8 ft ALS Current wellbore drawing Wainwright-6 ~ 6 5/8-in steel well enclosure, rewelded at land surface I Arctic blend cement I 6 5/8-in steel casing, 49 ft BLS Drilled 6-in diameter borehole 2.5-in PVC casing Emailed to Guy Schwartz 11/10/09 and again on 01 /08/10 1250-ft deep coal bed, screened interval: 1242-1252 ft Silica sand 1235-1265 ft ~ Bottom of casing: 1257 ft ~ ~ ~ ~ ~ ',. ~ ~'4 ~ ~ ~ ~, SEAN PARNELL, GOVERNOR ,~ ~ a-, ~.~ ~. ~ i ' ._ ~ p _~ ~~ ~ ~; ~. - _ ~ ., b ALASSA OIL AI~TD Vra--7 "J 333 W. 7th AVENUE, SUITE 100 COI~TSERQA'i`IOI~T COMDIIS51O1~T "~~ ANCHORAGE, ALASKA 99501-3539 ,r PHONE (907) 279-1433 FAX (907)276-7542 Art Clark Geologist US Geological Survey PO Box 25046 MS 911 DFC Denver, CO 80225 Re: Exploratory Field, Wainwright #6 Sundry Number: 309-375 Dear Mr. Clark: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. When providing notice for a representative of the Commission to witness any required test, contact the Commission's petroleum field inspector at (907) 659-3607 (pager). As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for rehearing. A request for rehearing is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. A person may not appeal a Commission decision to Superior Court unless rehearing has been requested. Sincerely, Daniel T. Seamount, Jr. a Chair DATED this 1 3 day of November, 2009 Encl. ,;f ;, O~ ~. ~~~` ~CE~V ~~ ~ STATE OF'q ~j~j``~~ ALASKA OIL AND GAS CONSl~~V'A ~ Za09 NaV ~ ~ Zaa~ ~~'~ APPLICATION FOR SUNDRY APPROVAL~ka Oil & Gas Cons. Commission 20 AAC 25.280 1. Type of Request: Abandon ^ Suspend ^ Operational shutdown ^ Perforate ^ Wai Other ^ Alter casing ^ Repair well ~ ~ Plug Perforations ^ Stimulate ^ Time Extension ^ Change approved program ^ Pull Tubing ^ Perforate New Pool ^ Re-enter Suspended Well ^ 2. Operator Name: 4. Current Well Class: 5. Permit to Drill Number: US Geological Survey Development ^ Exploratory ^ ~ 208-074 3. Address: Stratigraphic ^ Service ^ 6. API Number: C 80225 (?00$~ d ~ .- ~G _- 30 C ~ Z PO Box 25046 MS 911 DFC Denver, O . 7. If perforating, closest approach in pool(s) opened by this operation to nearest. 8. Well Name and Number: property line where ownership or landownership changes: Spacing Exception Required? Yes ^ No ^ Wainwright-6 9. Property Designation: 10. KB Elevation (ft): 11. Field/Pool(s): Wainwri ht ~ ~ - ~L-i~'~ ,/~°D/~.~"` r~ 25 12• PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth ND (ft): Plugs (measured): Junk (measured): 1265 Casing Length Size MD TVD Burst Collapse Structural Conductor 49 6 5/8 Surface Intermediate Production Liner 1260 2 7/8-in PVC Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): Packers and SSSV Type: Packers and SSSV MD (ft): 13. Attachments: Description Summary of Proposal Q 14. Well Class after proposed work: Detailed Operations Program ^ BOP Sketch ^ Exploratory Q ~ Development ^ Service ^ 15. Estimated Date for 7-Jun-09 16. Well Status after proposed work: Commencing Operations: Oil ^ Gas ^ Plugged ^ Abandoned ^ 17. Verbal Approval: Date: WAG ^ GINJ ^ WINJ ^ WDSPL ^ Commission Representative: -st: hi en: ~-or I~n/~l 18. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Art Clark Printed Name Art CI k Title Geologist Signature Phone 303-236-5793 Date 10/21/2009 COMMISSION USE ONLY resentative ma witness Sundry Number: 30 9~3~5 ` th t re l tif i i diti f N C C y p : y omm ss on so a a approva o on ons o Mechanical Integrity Test ^ Location Clearance ^ Plug Integrity ^ BOP Test ^ / /// Other: ~ ~~ t.,,~v6~w or ~C- o ti. '{'~.is /~ T(.~ ZGD ~' £ 2o0`'j /n v~S idL . ~ 2 . o~c.i. »„ I( ~, a ~ E ~ Subsequent Form Required: ~, t~/Q ~r /D•~'D j C•~~~ ~ 6' / O APPROVED BY ~ Approved by: COMMISSIONER THE COMMISSION Date: `r f fi' Form 10-403 Revised 06/2006 ~ !~/Z. o~ Submit in Dup'cate Explanation of repair work conducted on well Wainwright-6. . On June 6, 2009, it was discovered that, although clearly identified with an 8-ft tall reflective marker, the 6 5/8-in conductor casing and hole enclosure set on well Wainwright-6 had been hit by a snowplow at some point during the previous winter and had broken at ground surface. In addition, the 2 7/8-in PVC well casing set inside the conductor casing had been cracked at ground surface, allowing spring melt-water to enter the well and accumulate above the wellbore antifreeze (propylene glycol) from a depth of approximately 50 ft to land surface. Due to local permafrost conditions, water entering the well had turned to ice thereby preventing the removal of a downhole pressure transducer left in the well to collect over-winter data or the use of the well as a 2009 pump test monitor site. A steam jetting unit owned by the North Slope Borough (NSB) was brought to the site and used to jet through and remove the accumulated ice from the borehole on June 7. Once the ice was removed, the pressure transducer was pulled, the well was topped off with a propylene glycoUwater mixture, the cracked portion of the PVC was cut flush at ground surface with a coupler and 1-ft surface extension attached, the broken piece of 6 5/8-in casing was rewelded to the conductor string, and the pressure transducer was reprogrammed and reset in the well. At the conclusion of 2009 operations, the protective hole enclosure and marker were again attached to Wainwright-6 and all other wells. ~ ~z Schwartz, Guy L (DOA) From: Arthur C Clark [aclark@usgs.gov] Sent: Tuesday, November 10, 2009 12:58 PM To: Schwartz, Guy L (DOA) Cc: Greg Noble; William F Horak; Seamount, Dan T (DOA) Subject: Re: Confusion regarding well Wainwright-6 Guy, Page 1 of 2 During our phone conversation this morning, it became evident that there has been a major misunderstanding in regards to USGSBLM activities related to monitor well Wainwright-6 that took place on June 7-8, 2009. My daily report submitted to AOGCC for those dates state: June 7: Set up drill rig over production well. Repair monitor well Wainwright-6 (broken casing, frozen in at surface). June 8: Reaming ice from production well. Drill to 360 ft. The AOGCC interpreted this to mean that we had set the drill rig over well Wainwright-6 and starting major repair work on the well without proper AOGCC permits. In reality, the "production well" and "monitor well Wainwright-6" are two separate wells. While the drill crew was setting equipment over the production well to begin reaming the ice that had been allowed to form in the well over winter, other drill site personnel were reattaching a protective well enclosure to Wainwright-6 that had been clipped and cracked by a North Slope Borough (NSB) snowplow at some point during the winter. As a result of the crack, a few feet of melt water had seeped into the top of the well, subsequently freezing in the permafrost. Therefore, the NSB brought a portable steam unit (used to thaw sewer pipes) to the site to remove the ice from the top of the well -the entire operation took less than ten minutes. From there on, the reaming of over 1000 ft of ice, as documented in the daily reports, was done in the production well in preparation for production test activities - no further work was done on Wainwright-6. The "repair" work done to Wainwright-6 was so minor that I wasn't even going to include it in the daily report - it never occurred to me that it might be misconstrued in the manner it was. In retrospect, several items become evident. 1) If I had submitted the daily reports from Wainwright in a more timely manner (and as mandated) the confusion regarding this matter would likely have been resolved much earlier. Although email communication from Wainwright is often spotty at best, this was my mistake and I take full responsibility for the oversight. 2) I need to be sure that the daily reports are not only concise, but also clear. It's not hard to understand how a misinterpretation of events might have happened. 3) If there are concerns or confusion regarding events, especially one deemed to be a "serious" breach of regulations, an email or phone call from AOGCC to me would, by far, be the most effective means of resolving the issue in a timely manner. Although there are remaining items yet to be addressed, my impression is that the unpennitted "repairing of monitor well Wainwright-6" was the most serious of our listed non-compliance issues. I hope that between today's phone conversation and this email I've effectively cleared up the confusion that existed regarding this particular matter. If not, please contact me at any time for further details or explanation. I will continue addressing other items, as discussed, and look forward to meeting with you 11/10/2009 .n • ~ Page 2 of 2 in Anchorage as soon as possible to resolve any remaining issues. Art Art Clark Supervisory Geologist U.S. Geological Survey Box 25046 MS 939 Denver Federal Center Denver, CO 80225 phone: 303-236-5793 aclark@usgs.gov 11/10/2009 • i November 6, 2009 Greg Noble Section Chief -Energy Section Bureau of Land Management 4700 BLM Road Anchorage, Alaska 99507 Dear Mr. Noble: This letter responds to your November 9, 2009 email expressing displeasure with my November 5, 2009 letter. While the November 5 letter may not have been what you were expecting, the AOGCC is statutorily charged with assuring compliance with our drilling regulations. The AOGCC remains amenable to resolving this matter without the necessity of a public hearing. To that end, Guy Schwartz, an AOGCC petroleum engineer, will contact Art Clarke to discuss the situation with him. If you would care to participate in that dialogue, please contact Guy at 907-793-1226. Sincerely, Daniel T. Seamount, Jr. Chair w ~~~ G~F I ~~ ~ F r d c:~ ~ ~ ALA58A OIL AI1TD GA5 COI~TSLRQATIOI~T COM]rIISSIOIQ ~~ SEAN PARNELL, GOVERNOR 333 W. 7th AVENUE, SUITE 100 ~ ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 November 6, 2009 Greg Noble Section Chief -Energy Section Bureau of Land Management 4700 BLM Road Anchorage, Alaska 99507 Dear Mr. Noble: This letter is a follow-up to discussions regarding the USGS's ongoing violations of AOGCC regulations at the Wainwright, AK exploratory coal bed methane project. In those discussions you questioned the AOGCC's support for the coal bed methane project. AOGCC strongly supports the project. However, that support is predicated on compliance at Wainwright with AOGCC regulations. Wainwright well operations are continually conducted in violation of AOGCC regulations. Some of those violations, including well work undertaken without a permit, are very serious. The AOGCC's prior efforts to obtain regulatory compliance have essentially been ignored. The AOGCC remains amenable to resolving these issues informally. But as much as the AOGCC supports the project, we are rapidly approaching a point where other options need to be considered, including a public hearing regarding the violations. To the extent you may be able to obtain or encourage USGS compliance with AOGCC regulations, we welcome your support. In closing, let me again express the AOGCC's support for the program and the hope that once the compliance issues are resolved it is a resounding success. Sincerely, i~ Daniel T. Seamount, Jr. Chair Enclosure Art Clark, Supervisory Physical Scientist USGS CR RM WRD Box 25046, Denver Federal Center Mail Stop 939 Denver, CO 80225-0046 Gary Reimer, District Manager USGS, Anchorage District Office 4700 BLM Road Anchorage, AK 99507 Leslie Holland-Bartels, Regional Executive -Alaska Area USGS WR AA DO 4210 University Drive Anchorage, AK 99508-4626 Anne Kinsinger, Western Regional Director USGS WR -- DO 909 1st Avenue, Suite 704, 7th Floor Seattle, WA 98104-1055 Peter Lyttle, Acting Associate Director for Geology USGS HQ -- GD 12201 Sunrise Valley Drive, Mail Stop 911 Reston, VA 20192-0002 Thomas P. Lonnie, State Director Bureau of Land Management Alaska State Office 222 W 7th Avenue # 13 Anchorage, Alaska 99513 Bob Abbey, Director BLM Washington Office 1849 C Street NW, Rm. 5665 Washington DC 20240 • ~ ~ y§ y ~. p ~ ~ b _ ~ 6 t~ ~ ~ t ~ ~ ~ k ~~ p u ~ ~ d ~ ~ ~ r a F ¢ ~ ~€ r~ t, ~ ~ ~' ~~ ~, SEAN PARNELL, GOVERNOR a. ~~ r ALASSA OII, A1~TD CirA,S ,~ 333 W. 7th AVENUE, SUITE 100 CO1~T5ERQA'i'I011T COMDIISSIOIQ $~~ pHONERA 907) 279-14339501-3539 t4 FAX (907) 276-7542 November 5, 2009 Art Clark, Supervisory Physical Scientist Gary Reimer, District Manager USGS CR RM WRD USGS, Anchorage District Office Box 25046, Denver Federal Center Mail Stop 939 4700 BLM Road Denver, CO 80225-0046 Anchorage, AK 99507 Dear Mr. Messrs: On September 9, 2009 the Alaska Oil and Gas Conservation Commission (AOGCC) wrote to request compliance with AOGCC regulations at the Wainwright, AK exploratory coal bed methane project. The USGS provided no response. Because Wainwright well operations are being conducted in violation of AOGCC regulations, and because some of those violations, including well work undertaken without a permit, are very serious, the AOGCC is making a final attempt to resolve these issues informally. The following actions are required in order for the USGS to bring its Wainwright operations into compliance with AOGCC regulations: Wainwright #6 (PTD 208-074 ) - Submit AOGCC forml0-407 documenting 2009 activities in detail. (as per 20 AAC 25.070 (3)) - Submit a current wellbore drawing. (as per 20 AAC 25.300) - Submit hard and digital copies of all logs obtained drilling and completing the well. (as per 20 AAC 25.071 (6)) Wainwright #9 (PTD 208-077) - Submit AOGCC form 10-407 documenting all activities including the P & A. (as per 20 AAC 25.070 (3) ) - Submit a current wellbore drawing. (as per 20 AAC 25.300) - Submit hard and digital copies of all logs obtained drilling and completing the well. (as per 20 AAC 25.071 (6)) - Submit Core sample chips. (as per 20 AAC 25.071 (4) ) - Submit Core description and analysis (as per 20 AAC 25.071 (3)) - Submit Lithology log (as per 20 AAC 25.071(3)) ~~ Wainwright #10 (PTD 209-035) - Submit AOGCC form 10-407 documenting all activities including the P & A. (as per 20 AAC 25.070 (3) ) - Submit a current wellbore drawing. (as per 20 AAC 25.300) - Submit hard and digital copies of all logs obtained drilling and completing the well. (as per 20 AAC 25.071 (6)) - Submit Core sample chips. (as per 20 AAC 25.071 (4) ) - Submit Core description and analysis (as per 20 AAC 25.071 (3)) - Submit Lithology log (as per 20 AAC 25.071(3)) - Submit inclination log (as per 20 AAC 25.050 (2)) Additional wells out of compliance as referenced in Attachment # 1 -September 9, 2009 letter are: Wainwright # 1 (PTD 207-065) - No hardcopies of open hole logs were submitted (as per 20 AAC 25.071 (6)) - No core chip samples submitted(as per 20 AAC 25.071 (4) ) - No core description submitted(as per 20 AAC 25.071 (3)) - No core analysis submitted(as per 20 AAC 25.071 (3)) - No header information on the .pdf digital graphics files submitted on dataset number T14024. (as per 20 AAC 25.071 (7)) Wainwright #2 (PTD 207-106) - No washed and dried samples submitted (as per 20 AAC 25.071 (2)) - No Lithology /sample log submitted (as per 20 AAC 25.071 (1)) - No core chips submitted(as per 20 AAC 25.071 (4) ) - No core description submitted(as per 20 AAC 25.071 (3)) - No core analysis submitted(as per 20 AAC 25.071 (3)) - No header information on the .pdf digital graphics files submitted on dataset number T14024 (as per 20 AAC 25.071 (7)) - No directional survey submitted. (as per 20 AAC 25.050 (2)) Franklin Bluffs 1 (PT"'u-~-~6'I~DS ~ ~D 5~ - No mud logs submitted. (as per 20 AAC 25.071 (1)) - No dry samples submitted (as per 20 AAC 25.071 (2)) - No as-built submitted (as per 20 AAC 25.070(2)) - No core analysis submitted(as per 20 AAC 25.071 (3)) - No core description submitted(as per 20 AAC 25.071 (3)) - No open hole logs submitted (hardcopy nor digital) (as per 20 AAC 25.071 (6)) DOI-04 lA (PTD~86) o~ D y _Q 83 - No mud logs submitted. (as per 20 AAC 25.071 (1)) - No dry samples submitted (as per 20 AAC 25.071 (2)) - No OH logs submitted (hardcopy nor digital data) (as per 20 AAC 25.071 (6)) - No core chip samples submitted(as per 20 AAC 25.071 (4) ) - No core analysis submitted(as per 20 AAC 25.071 (3)) • - No core description submitted(as per 20 AAC 25.071 (3)) - Density and porosity data missing from submitted digital data. (407 states that those types of logs were run.) (as per 20 AAC 25.071 (6)) Within 40 days of the date of this letter, the AOGCC requests USGS provide written verification that the violations listed above have been rectified and that all Wainwright operations are being conducted in compliance with AOGCC regulations. Upon receipt of such verification, the AOGCC will consider this matter closed. Should the USGS fail to submit the required information the AOGCC will notice a public hearing on the Wainwright violations to determine, among other things, the reasons for noncompliance and whether non-compliance poses any threat to human health or the environment. If you have any questions regarding this request for information, please contact Guy Schwartz at 907-793-1226 or guy.schwartz@alaska.gov. Sincerely, Daniel T. Seamount, Jr. Chair Encl. cc: Greg Noble, BLM 11/03/2009 06:36 FAK 3032368;2 USGS CERT Explanation of repair work conducted on well Wainwright-6. On June 6, 2009, it was discovered that, although cleaxly identified with an 8-ft tall reflective marker, the 6 5/8-in conductor casing and hole enclosure set on well Wainwright-6 had been hit by a snowplow at some point during the previous winter and had broken at ground surface, In addition,. the 2 ?/8-in PVC well casing set inside the conductor casing had been cracked at ground surface, allowing spring melt-water to enter the well and accumulate above the wellbore antifreeze (propylene glycol) from a depth of approximately SO ft to land surface. Due to local permafrost conditions, water entering the well had turned to ice thereby preventing the removal of a downhole pressure transducer left in the well to collect over-winter data or the use of the well as a 2009 pump test monitor site, A steam jetting unit owned by the North Slope Borough (NSB) was brought to the site and used to jet through and remove the accumulated ice from the borehole on June 7.Once the ice was removed, the pressure transducer was pulled, the well was topped aff with a propylene glycoUwater mixture, the cracked portion of the PVC was cut flush at ground surface with a coupler and 1-ft surface extension attached, the broken piece of 6 5/8-in casing was rewelded to the conductor string, and the pressure transducer was reprogrammed and reset in the well. At the conclusion of 2009 operations, the protective hole enclosure and marker were again attached to Wainwright-d and all other wells. I~ 003/003 ~• • ALASSA OIL A1~TD GAS COI~TSERQATIOI~T COMi-IISSIOl~ September 9, 2009 ~~'d 8 D ~~ H SEAN PARNELL, GOVERNOR ~0 333 W. 7th AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 r FAX (907) 276-7542 Art Clark, Supervisory Physical Scientist Gary Reimer, District Manager USGS CR RM WRD USGS, Anchorage District Office Box 25046, Denver Federal Center Mail Stop 939 4700 BLM Road Denver, CO 80225-0046 Anchorage, AK 99507 Dear Mr. Messrs: The U.S. Geological Survey (USGS) has again failed to meet the Alaska Oil and Gas Conservation Commission's (Commission) regulatory requirements for exploratory coal bed methane wells drilled near Wainwright, Alaska. During the current drilling season, the USGS failed to file Sundry permit applications -required by 20 AAC 20.015, 20 AAC 25.280 and 20 AAC 25.110 -for the following operations: 1. repairing of monitor well Wainwright 6, 2. plugging and abandoning of well Wainwright 9, and 3. plugging and abandoning of well Wainwright 10. The USGS also failed to file, in a timely manner, weekly operations summaries for the current Wainwright exploratory drilling program. These summaries are authorized under 20 AAC 25.300. Alaska Statute 31.05.027 and Regulation 20 AAC 25.515 require Federal agencies to conform to the Commission's permitting and reporting requirements. Without permit applications in advance of well operations, it is not possible for the Commission to review proposed operations to ensure that they meet Alaska's statutory requirements to prevent waste, protect correlative rights, and improve ultimate recovery while protecting underground freshwater, health, safety and the environment. Without weekly operations summaries, the Commission cannot, in a timely manner, review actual well operations to ensure conformance with our requirements. The current failures reflect a continuing pattern of poor compliance by the USGS and the Bureau of Land Management (BLM) over the past five years. On May 23, 2008, the Commission issued Conservation Order No. 600 (CO 600), which found that the BLM had drilled the Wainwright No. 2 exploratory coal bed methane well before the Commission received or approved a Permit to Drill application for the well. This inaction drew the BLM and the USGS, the operator for the well, a rebuke from the Commission. CO 600 also concluded that the BLM and the USGS had not submitted all information required for the Wainwright No. 1 and No. 2 exploratory wells. CO 600 ordered BLM and the USGS to submit, by June 23, 2008, the reports and information required by 20 AAC 25.070 and 20 AAC 25.071. Attachment 1 presents the continued reporting deficiencies for Wainwright No. 1 and Wainwright No. 2 along with reporting deficiencies for the Franklin Bluffs No. 1 and DOI-04 No. lA exploratory wells that were drilled about five years ago. { ~ • U.S. Geological Survey September 9, 2009 Page 2 of 3 If the USGS and BLM continue to fail to meet Alaska's statutory and regulatory requirements, the Commission will issue notice and convene a public hearing to address these matters further. Daniel T. Seamount, Jr. Chair Leslie Holland-Bartels, Regional Executive -Alaska Area USGS WR AA DO 4210 University Drive Anchorage, AK 99508-4626 Anne Kinsinger, Western Regional Director USGS WR -- DO 909 1st Avenue, Suite 704, 7th Floor Seattle, WA 98104-1055 Peter Lyttle, Acting Associate Director for Geology USGS HQ -- GD 12201 Sunrise Valley Drive, Mail Stop 911 Reston, VA 20192-0002 Thomas P. Lonnie, State Director Bureau of Land Management Alaska State Office 222 W 7th Avenue # 13 Anchorage, Alaska 99513 Public Room: 907-271-5960 Bob Abbey, Director BLM Washington Office 1849 C Street NW, Rm. 5665 Washington DC 20240 ' U.S. Geological Survey September 9, 2009 Page 3 of 3 Attachment 1 Continued Reporting Deficiencies for BLM and USGS Wells Wainwright 1 No hardcopies of open hole logs were submitted (PTD 207-065) No core chip samples submitted No core description submitted No core analysis submitted No header information on the .pdf digital graphics tiles submitted on dataset number T14024. Wainwright 2 No washed and dried samples submitted (PTD 207-106) No lithology /sample log submitted (hard copy nor digital) No core chips submitted No core description submitted No core analysis submitted No header information on the .pdf digital graphics files submitted on dataset number T 14024 No directional survey submitted (hardcopy nor digital) Franklin Bluffs 1 No mud logs submitted (hardcopy nor digital data) (PTD 205-105) No dry samples submitted No as-built submitted Core cut and was apparently directly sent to Alaska Geological Materials Center No core analysis submitted No core description submitted No open hole logs submitted (hardcopy nor digital) DOI-04 lA No mud logs submitted (hardcopy nor digital data) (PTD 204-083) No dry samples submitted No open hole logs submitted (hardcopy nor digital data) No core chip samples submitted No core analysis submitted No core description submitted Density and porosity data missing from submitted digital data. (407 states that those types of logs were run.) ~ ~ AAaunder, 7hornSS E (D4A) From: Tom Mortensen [tom@mortensen.comJ rage ~ or ~ Sent; Mpnday, July 27, 200910:13 AM To: Maunder, Thomas E {DOA) Subject: USCS. Wainwright CBM Exploration. wily Drilling Record, June 5 -July 23, 2009. Attachmentas. WAI Daily Drilling Reccjrd June 5 -July 23, 2008.pdf; A'TT643231.txt Tom, Attached is the drilling record information that you requested far the LTSGS's CBM exploration project at Wainwright. Please contact me if you have any questions or require any additional information. Regards, Tom Mortensen 907.345-3400 tel 907-345-3575 fax ~'C'~_~ ~ r c ~ ~~S ~.~ vi~~~o~- 7/27/2009 • • Maunder, Thomas E ~~A From: Greg_Noble@ak.blm.gov Sent: Wednesday, July 15, 2009 10:34 AM To: Maunder, Thomas E (DOA) Subject: Wainwright Attachments: Wainwright update 07-15-09.doc Wainwright update 47-15-U9.~oc.,. Tom, Good talking with you. Here's what i know about Wainwright. Would like you to not consider this anything official as the USES is officially the operator. Just wanted to keep you in the loop. {See attached file: Wainwright update 07-15-09.doc) Greg J. Noble Energy Section Chief BLM Alaska State Office {907) 267-1429 work {907) 240-5240 cell 1 Coalbed Methane Exploration Activities Conducted by the U.S. Department of the Interior, Alaska Rural Energy Project in Wainwright, Alaska 2009 Prowess Update The initial test during the week of June 8~` was halted when the wellbore began freezing up. The submersible pump had been set below the coal this year because the indications from the 2008 test were that enough gas was coming through the pump to cause the pump to cavitate. This cavitation decreased the water flow and was believed to be the primary cause of freeze-up. After the freeze-up this summer the decision was made to run the pump with adown-hole separator and to place two heat-traces on the tubing string. While waiting for the heat-trace and down-hole separator, the crew drilled the delineation well 1.9 miles to the northeast near the Wainwright landfill (W 10-09). The coal in this delineation well was cored and desorption analysis conducted. Early indications are that the coal has the same methane saturation as the original well drilled in the Olgoonik yard. Well W 10-09 was plugged and abandoned. The well test was re-started on June 24~`. This test was interrupted by siltation in the pump and electronic problems with the downhole transducers. While waiting on new transducers, the crew drilled the second delineation well (WI 1-09) about 3000' to the south of the test well. This well confirmed the presence of the same coal seam and was cored. The cores were de-sorbed, and the well was plugged and abandoned. After the equipment arrived, the pump was re-set (above the coal and in the cased hole) and testing began again during the week of July 6a'. This third test was, again, interrupted by siltation in the pump. The crew set a gravel pack, flushed the pump, and re-started the test on July 12a`. This test is currently underway and the well is producing about 10 cubic feet per minute and .8 gallons per minute (14 MCFD and 27 BWPD) with the water level being held at ~ 950 ft. The test is planned to continue until August Sa`. The remaining seven wells will then be permanently plugged and abandoned. The timing of the end of the test and the plugging of the wells is dictated by the barge schedule. All wells must be plugged and abandoned and the equipment must be on the barge by the first of September. ~ ~ The summary of the nine wells drilled in Wainwright by the AREP is as follows; Wainwright 1 -Original well drilled to 1,613 ft in 2007. Core barrel became stuck and well was plugged back to 940 ft. Completed as a temperature monitoring well. The well is cased with no open perfs or open hole. Wainwright 2 -Drilled to replace Wainwright 1 in 2007. Drilled to a depth of 1,300 ft. Completed as a temperature monitoring well with a TD of 1,259 ft. The well is cased with no open perfs or open hole. W-OCP-08 -The production well drilled in the Olgoonik Corporation yard in 2008. Drilled to a depth of 1,260 ft and completed as an open hole producer with casing set at 1,235 ft. WOC-1-08 -Monitoring well drilled about 400 ft from the production well in 2008. Drilled to 2,450 ft. Completed with slotted liner open to the coal at 1,242 ft. WOC-2-08 -Monitoring well drilled 130 ft from the production well in 2008. Drilled to 1,260 ft. Completed with slotted liner open to the coal at 1,242 ft. WOC-3-08 -Monitoring well drilled 100 ft from the production well in 200$. Drilled to 1,260 ft. Completed with slotted liner open to the coal at 1,242 ft. WOC-4-08 -Monitoring well drilled 100 ft from the production well in 2008. Drilled to 1,260 ft. Completed with slotted liner open to the coal at 1,242 ft. W 10-09 -Delineation well drilled 1.9 miles ne of the production well in 2009. Drilled to 1,260 ft. Plugged and abandoned. W 11-09 -Delineation well drilled 3,000 ft south of the production well in 2009. Drilled to 1,260 ft. Plugged and abandoned. Maunder, Thomas E (DOA) Page 1 of 1 From: Maunder, Thomas E (DOA) Sent: Wednesday, June 24, 2009 3:47 PM To: 'Tom Mortensen' ~~ ~~~~~"~ Subject: RE: Wainwright CBM. 2008 Completion Reports (10-407) for Wells 3, 4, 5, 6 and 8. MTRS added. Thanks Tom. I can add that information to the originals we have here. Hope you continue on the mend. Tom Maunder, PE AOGCC From: Tom Mortensen [mailto:tom@mortensen.com] Sent: Wednesday, June 24, 2009 3:18 PM To: Maunder, Thomas E (DOA) Subject: Wainwright CBM. 2008 Completion Reports (10-407) for Wells 3, 4, 5, 6 and 8. MTRS added. Tom, The MTRS for Wainwright CBM Wells 3, 4, 5, 6 and 8 are all: T15N R32W Sec. 24, Umiat Meridian. Noted and initialed in Box 4a on the attached 10-407 forms for the wells. Best, Tom Mortensen 907-345-3400 907-345-3575 fax 7/6/2009 • Wainwright-2009 Daily Record ~~~~~~~ Wainwright #6, (208-074) Wainwright #9, (208-077) Wainwright #10, (209-035) DATE ACTIVITY June 5, 2009 Drill crew arrives in Wainwright June 6, 2009 unpacking equipment Wainwright #6. (208-074) • June 7, 2009 set up drill rig over production well. Repair monitor well Wainwright-6 (broken casing, frozen in at surface . June 8, 2009 Reaming ice from production well. Drill to 360~ft. June 9, 2009 Ream ice to 1260 ft, drill 6" hole to 1295 ft. June 10, 2009 Circulate well, mix water/propylene glycolmix and fill well. Trip pipe and prepare for production testing. June 11, 2009 Set pump on 2" drop pipe w/pressure transducers attached to 1265 ft. Program transducers for test. June 12, 2009 Begin production test. Having icing issues. June 13, 2009 Severe icing issues. Pull pump, order heat trace and gas/water separator, begin moving equipment to landfill site (Wainwright-9) June 14, 2009 Finish moving equipment to W-9. Coordinates N70 39' 58.6" W159 58' 13.0". Will collect mud-gas logs at this site. • i Wainwright #6, (208-074) 2 ? June 22, 2009 Move equipment back to production well. Set up and ream/flush to 1295 ft. Warm drill mud to increase borehole temp. June 23, 2009 Circulate fluid. Have 220V power dropped at site. Fill well with glycol from 1100 ft to surface. June 24, 2009 Set pump and drop pipe w/transducers, separator, and heat trace to 1255 ft. Turn on heat trace and let borehole fluid warm. June 25, 2009 Begin test. Having transducers problems (too much current in well). June 26, 2009 Continue test with limited transducers. Pump still cavitating and silting up. Terminate test and fill well w/glycol. June 27, 2009 Pull pump and order new transducers. Move equipment to delineation site Wainwright-10. Will not collect mud-gas logs at this site. Wainwright #6, (208-074) 1J ©y v ~~~ ~ July 5, 2009 Set production pipe to 1200 ft. Plug in heat trace to warm well and one shorts out. Can't run test with only one trace. July 6, 2009 Order new trace. July 7, 2009 Trace arrives late. Install and let it run overnight to warm well. July 8, 2009 Begin test but more transducers blow out. Running test w/reduced monitoring. Daily Drilling Record June 5 -July 23, 2009. Wainwright #6, (208-074), Wainwright #9, (208-077), Wainwright #10, (209-035}. July 27, 2009. Page 2 of 3 ~ ~ July 9, 2009 Continue test. July 10, 2009 Pump cavitating and silting. End test, fill well w/glycol, pull pump and clean. July 11, 2009 Reset pump and program transducers. Test pump and it's having problems. July 12, 2009 Another heat trace shorts. Pull trace, rehead, and reinsert. Begin test. July 13, 2009 Pump testing July 14, 2009 Pump testing. Lose communication in reservoir between production and monitor wells (gas plugging?) July 15, 2009 Fill production well w/glycol and slowly reestablish connection. Let reequitibrate overnight. July 16, 2009 Begin test with slow drawdown rate. July 17, 2009 Testing July 18, 2009 Testing July 19, 2009 Testing. Lose communication with deep transducer. Fill well w/glycol and order new high-pressure transducer July 20, 2009 Standby for transducers to arrive July 21, 2009 Pull old transducers, install new. Begin test. July 22, 2009 Testing July 23, 2009 Testing Daily Drilling Record June 5 -July 23, 2009. Wainwright #6, (208-074), Wainwright #9, (208-077), Wainwright #10, (209-035). July 27, 2009. Page 3 of 3 ~ .~ ' S STATE OF ALASKA • ' ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION ~~tEPORT AND LOG; 1a. Well Status: Oil^ Gas^ Plugged ^ Abandoned ^ Suspended Q ~ 1b. Well Class: 2oEwc zs.~os zoaa,c 2s.>>o Development ^ Exploratory^~ GINJ^ WINJ^ WDSPL^ WAG^ Other^ No. of Completions: Service ^ StratigraphicTest^ 2. Operator Name: 5. Date Comp., Susp~ C~3.r,v3 12. Permit to Drill Number: U.S. Geological Survey ~ Aband.: 8~998'~i~, ~`~ 208-074 3. Address: 6. Date Spudded: o = ~''" i~'` 8 f / ~ 3. API Number: Q Sv' ~ ~ Z~~DU Box 25046 MS 939, DFC, Denver, CO 80225 ig 6 0 4a. Location of Well (Governmental Section): 7. Date TD Reached: 14. Well Name and Number: Surface: N70, 38', 38.8" W160, 1', 22.4" (FNL=654', FEL=1,746') 6/21/2008 Wainwright 6 (W-OC2-08) ' Top of Productive Horizon: 8. KB (ft above MSL): 25 15. Field/Pool(s): Ground (ft MSL): 20 Total Depth: 9. Plug Back Depth(MD+TVD): 1265 f ~.I~ ~fi 4b. Location of Well (State Base Plane Coordinates, NAD 27): •-~ 10. Total Depth (MD +TVD): 16. Property Designation: Surface: x- 462,2i~9-~9' _ y- 7,8 8 Zone-~ 1265 TPI: x- ~ `~~ ~~~'` 5 y- ~ of=~ ~~ Zone- 11. SSSV Depth (MD +TVD): 17. Land Use Permit: Total Depth: x- ~~ ~, ~,~ y- /y 3; Zone- 18. Directional Survey: Yes No ~ 19. Water Depth, if Offshore: 20. Thickness of Permafrost (TVD): (Submit electronic and printed information per 20 AAC 25.050) (ft MSL) - 900 ft 21. Logs Obtained (List all logs here and submit electronic and printed information per 20 AAC 25.071): none 22. CASING, LINER AND CEMENTING RECORD WT. PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASING FT GRADE TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD PULLED -- -- __ 6 5/8 18.99 sch 40 0 49 0 49 9.875" cement from 49-su ace 2 7/8 PVC sch 80 0 1260 0 1260 6.00" silica sand 1265-1224 bentonite grout 1224-100 cement 100-surface 23. Open to production or injection? Yes No^ If Yes, list eac interval open (MD+TVD of Top & Bottom; Perforation Size and Number): Yes. Screened interval from 1245'-1255'. PVC slotted pipe, .020" slots TUBING RE( DEPTH SET (MD) 25. ACID, FRACTURE, CEMENT SQUEEZE, ETC. DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED I26, PRODUCTION TEST ~ Date First Production: Method of Operation (Flowing, gas lift, etc.): Date of Test: Hours Tested: Production for Oil-Bbl: Gas-MCF: Water-Bbl: ChoKe Size: vas-un nano: Test Period Flow Tubing Casing Press: Calculated Oil-Bbl: Gas-MCF: Water-Bbl: Oil Gravity -API (corr): Press. 24-Hour Rate ~ 27. CORE DATA Conventional Core(s) Acquired? Yes ^ No Q ~ Sidewall Cores Acquired? Yes ^ No ^~ If Yes to either question, list formations and intervals cored (MD+TVD of top and bottom of each), and summarize lithology and presence of oil, gas or water (submit separate sheets with this form, if needed). Submit detailed descriptions, core chips, photographs and laboratory analytical results per 20 AAC 25.071 no cuttings or samples collected from this well ~~~ ~ ~ ~~~ ~. 23,c' 11 {f 6~~ a°t` ~;S _-_ _...>. r.,.~.--.__. V ~~'Of ~n 3~/v•c~j 28. GEOLOGIC MARKERS (List all formations and markers encountered): 29. FORMATION TESTS NAME MD TVD Well tested? Yes ~ No If yes, list intervals and formations tested, briefly summarizing test results. Attach separate sheets to this form, if needed, Permafrost -Top 0 0 and submit detailed test information per 20 AAC 25.071. Permafrost -Base -900 900 Drilling in Nanushuk Fm from top-bo Formation at total depth: Nanushuk 30. List of Attachments: 31. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Printed Name: Art Clark Title: Supervisory Geologist Signature: -~ Phone:303-236-5793 Date: 8/22/2008 Form 10-407 Revised 2/2007 TOM MORTENSEN ASSOCIATES, L,LC ENVII2ONN~NTAL PERNIITI'ING ~ MANAGEMENT P.O. Box 113192 ANCHORAGE, ALASKA 99511.-3192 • TEL (907) 345-5789 • Fax (907) 345-3575 October 6, 2008 Alaska Oil & Gas Conservation Commission 333 W. 7th Ave., Ste. 100 Anchorage, Alaska 99501 Attn.: Mr. Dan Seamount, Chairman Re: USGS Coal Bed Methane Exploration Program, 2008 Season, Wainwright, AK. Well Completion Reports (Form 10-407) for Drill Permits 208-071 through 074, and 208-076. AKA Wainwright #'s 3-6, 8. Attached are five signed original Well Completion Reports for the 2008 coal bed methane exploration done by the USGS at Wainwrigh#, Alaska. The five completion reports are for wells that were drilled in Wainwright for CBM production testing and monitoring. Two of the permitted wells (208-075, 208-077) were not drilled. A location map of the well locations in the village of Wainwright is included. LOQS Logs were run for wells Wainwright #'s 3 and 8 (208-071, 208-076). Paper copies of the gammalcaliper logs for Wainwright #3, and the gamma, resistivity, sonic and. mud gas logs for Wainwright #8 are attached. Digital copies of the logs are included on the enclosed CD in PDF, LAS, and excel format. Cuttin s Cuttings were taken from Wainwright #8 at 20' intervals from 1,600' to 2,450'. The required representative cuttings will be submitted at a later time under separate cover. Please contact me at 907-345-5789 or via email at tom@mortensen.com if you have any questions, or require any additional information. Sincerely, Thomas W. Mortensen attachments: as stated. cc: Arthur C. Clark, USGS, Denver. Bob Fisk, BLM, Anchorage. Teresa Imm, ASRC, Anchorage. Wainwright-2008 Daily Record DATE ACTIVITY May 31, 2008 June 1, 2008 June 2, 2008 June 3, 2008 June 4, 2008 June 5, 2008 June 6, 2008 June 7, 2008 June 8, 2008 June 9, 2008 June 10, 2008 June 11, 2008 June 12, 2008 June 13, 2008 June 14, 2008 June 15, 2008 June 16, 2008 June 17, 2008 Drill crew personnel arrive in Wainwright. Three cargo flights deliver drilling equipment from Deadhorse. Unload equipment. Three cargo flights deliver drilling equipment from Deadhorse. Unload equipment. Organize, assemble, and prepare equipment. Organize, assemble, and prepare equipment. Set up drill rig and equipment on W-OC1-08 (Wainwright-8). Drill to 20 ft. Drill to 46 ft. Set and cement conductor casing. Receive AOGCC Permit to Drill at 16:30 Install diverter system, mud-gas detector etc. Drill to 260 ft. Begin 24-hour. operations. Drill to 580 ft: Drill to 1080 ft. Drill to 1600 ft. Drill to 1785 ft. Trip steel and ream hole. Drill to 2080 ft. ' Drill to 2340 ft. Drill to 2450 ft. Circulate and trip steel. Run geophysical logs. Abandon bottom 1200 ft of well. Begin set monitor well to 1260 ft in "W" coal bed. Finish setting monitor well. Begin air development of well. Finish air development. Fill well with antifreeze and begin moving equipment to W-OC2-08 (Wainwright 6). Finish moving equipment. Drill, set and cement conductor casing to 49 ft. June 18, 2008 June 19, 2008 Standby for cement to cure. Drill to 500 ft. June 20, 2008 Drill to 1040 ft. ` June 21, 2008 Drill to 1265 ft. Trip steel and ream hole. June 22, 2008 Finish reaming. Begin setting monitor well. June 23, 2008 Finish setting well. Begin air development. Finish developing well. Fill well with antifreeze. Pack and move epuipmer June 24, 2008 W-OC3-08 (Wainwright 4). ~` ~ _ ~~~, „~ ~,~ ;; ffi ~~ 1 i• ~a ~~,- ~ ~. w.j ~.l ~' ~ # \_ 3r ~ ~~ t 'b ~^-~~F- ,Clcz:' • SARAH PALIN, GOVERNOR Arthur Clark Supervising Geologist U.S. Geological Survey - DOI P.O. Box 25046 MS 406 Denver Federal Center Denver, CO 80225 333 W. 7th AVENUE, SUITE 100 ANCHORAGE, ALASKA 99501-3539 PHONE (907) 279-1433 FAX (907) 276-7542 Re: Exploratory Well Wainwright No. 6 U.S. Geological Survey - DOI Permit No: 208-074 Surface Location: 660' FNL, 1780' FEL, SEC. 24, T15N, R32W, UM Bottomhole Location: 660' FNL, 1780' FEL, SEC. 24, T15N, R32W, UM Dear Mr. Clark: Enclosed is the approved application for a permit to drill the above-referenced exploration well. This permit to drill does not exempt you from obtaining additional permits and approvals required by law from the Commission and other governmental agencies and does not authorize conducting drilling operations until all other required permits and approvals have been issued. In addition, the Commission reserves the right to withdraw the permit in the event it was erroneously issued. A weekly status report is required from the time the well is spudded until it is suspended or plugged and abandoned. The report should be a generalized synopsis of the week's activities and is exclusively for the Commission's internal use. Conservation Order No. 604 (attached) grants a spacing exception to allow the drilling of this well as well as equipment exemptions requested by the U.S. Geological Survey - DOI associated with the drilling of this well. Please note that production testing and hydraulic fracturing must be approved by separate Commission action. Except as provided in this permit, operations must be conducted in accordance with AS 31.05; Title 20, Chapter 25 of the Alaska Administrative Code (e.g., 20 AAC 25.055); and any applicable orders or permits of the Commission. Failure to so comply may result in the revocation or suspension of the permit, other enforcement actions, and penalties. Permit No: 208-074 June 11, 2008 Page 2 of 2 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). Sincerely, ~ ~~ / ~~t ~~t~~, , ;~ ~ , , ,=; ~,~ Cathy •~. Foerster Commissioner DATED this day of June, 2008 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. .° t • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage Alaska 99501 Re: THE APPLICATION OF THE U.S. DEPARTMENT ) OF THE INTERIOR, U.S. GEOLOGICAL SURVEY ) for waivers of the bonding requirements of 20 AAC ) 25.025, blowout prevention equipment requirements ) of 20 AAC 25.035, wellbore survey requirements of ) 20 AAC 25.050(x)(2), well site seismic survey } requirements of 20 AAC 25.061(a), and gas detection ) requirements of 20 AAC 25.066, and for exceptions to the spacing requirements of 20 AAC 25.055(a)(2) ) or 20 AAC 25.055(a)(4) or both to allow for drilling, ) completing, and testing the following proposed U.S. ) Department of the interior Coalbed Methane } exploratory wells: Wainwright Nos. 3, 4, 5, 6, 7, 8 ) and 9. IT APPEARING THAT: Conservation Order No. 604 Docket No. CO-08-28 Department of the Interior Coalbed Methane exploratory wells: Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9. Wainwright, Alaska June 6, 2008 By letter dated and received on April 23, 2008, and as amended on April 2S, 2008, and May 1, 2008, the U.S. Department of the Interior (USDOI), U.S. Geological Survey (USGS) applied to the Alaska Oil and Gas Conservation Commission {AOGCC or Commission) for permits to drill the Wainwright No. 3, 4, 5, 6, 7, 8 and 9 Coalbed methane exploratory wells. In conjunction with the permit to drill applications the USGS applied for waivers of the following requirements: the bonding requirements of ZO AAC 25.025, blowout prevention equipment requirements of 20 AAC 25.035, wellbore survey requirements of 20 AAC Z5.050(ax2), well site seismic survey requirements of 20 AAC 25.061(a), and gas detection requirements of 20 AAC 25.066 as well as for exceptions to the spacing requirements of 20 AAC 25.055(a}(2) and 20 AAC 25.005(a)(4) for the proposed Wainwright wells No. 3, 4, 5, 6, 7 and 8 wells, and for an exception to the spacing requirement of 20 AAC 25.055(a)(2) for the proposed Wainwright No. 9 well. 1. ~ The Commission published notice of opportunity to comment and request a public hearing in the ANCHORAGE DAILY NEWS on May 6, 2008, pursuant to 20 AAC 25.540. 2. One notice of objection was filed. No written comments or requests for a hearing were received. 3. The public hearing was vacated on June 3, 2008. FINDINGS: 1. The proposed Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will be onshore, vertical, Coalbed methane exploration wells drilled in and near Wainwright, Alaska. The location of each proposed well is as follows: a. Wainwright No. 3: 1720' FEL, 640' FNL, Sac. 24, T15N, R32W, Umiat Meridian (UM) b. Wainwright No. 4: 1780' FEL, 540' FNL, Sec. 24, TlSN, R32W, UM c. Wainwright No. 5: 1650' FEL, 630' FNL, Sec. 24, Tl SN, R32W, UM ~ ~ Conservation Order 604 June b, 2008 Page 2 of 4 d. Wainwright No. 6: 1780' FEL, 660' FNL, Sec. 24, T15N, R32W, UM e. Wainwright No. 7: 1890' FEL, 7b0' FNL, Sec. 24, T15N, R32W, UM f. Wainwright No. 8: 2040' FEL, 970' FNL, Sec. 24, T1 SN, R32W, UM g. Wainwright No. 9: 5040' FEL, 3720' FNL, Sec. 8, T15N, R31 W, UM 2. The United States is the landowner, as that term is defined in AS 31.OS. i 70(7}, of Section 24, T1SN, R32W, UM. The USDOI, Bureau of Land Management (BLM) administers Section 24. The Arctic Slope Regional Corporation (ASRC) is the landowner of Sec. 8, T1SN, R3IW, UM. The State of Alaska is the landowner of the offshore acreage adjacent to both sections. The USGS has been designated as the operator of the lands that Wainwright wells No. 3, 4, S, 6, 7, 8 and 9 are located on. 3. Under AS 31.05.027, the Commission's authority extends to all Land within the state, including federal land and native corporation land affected by the proposed activities, that are lawfully subject to the state's police powers. 4. Wainwright wells No. 3, 4, S, 6, 7, 8 and 9 will be within 1500' of a shoreline separating onshore federal lands from offshore State of Alaska lands. Wainwright wells No, 3, 4, 5, 6, 7 and 8 will be within the same governmental section as, and within 3000' of, one another and existing Wainwright wells No. 1 and 2. S. Wainwright, Alaska, obtains drinking water from surface water sources according to the Alaska Department of Environmental Conservation, Division of Environmental Health, Drinking Water Program and the Alaska Department of Natural Resources, Land Administration System. These sources are in the northwest quarter of the southwest quarter of Section 9, T31N, R31 W, UM: over 1 mile from the proposed wells. 6. The expected depth of the base of the permafrost in Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is about 1,000 feet. (Because the USGS has yet to file completion reports for Wainwright wells No. 1 and 2, the actual depth is unknown.) If this is the case, subsurface aquifers will not likely be utilized for drinking water. 7. USGS is an agency of the United States. The credit of the United States renders a bond unnecessary for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9. 8. The proposed wells will be constructed by setting 6-S/8" conductor in a 9-7/8" hole drilled to approximately 80'. A 6" hole will be drilled below the conductor to a total depth between 2500' and 3000' for Wainwright No. 9 and about 1300' for the other wells. USGS plans to use a rotating drill head, which seals around the drill stem and directs the annular mudflow to the pits. If gas is encountered, the rotating drill head functions as a diverter. A similar rotating drill head was used successfully at the Franklin Bluffs No. 1, Wainwright No. 1, and Wainwright No. 2 exploratory gas wells (AOGCC Permits to Drill No. 205-105, 207-065, and 207-106, respectively). 9. Seismic information obtained near Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 does not indicate shallow gas. In addition, drilling records and mud log information from the nearest exploration wells-i.e., Peard Test Well No. 1, which is 2S miles east; Kugrus No. 1, which is 30 miles east- southeast; and Tunalik No. 1, which is 37 miles southwest--do not indicate abnormal pressure. Because the USGS has not provided completion reports for Wainwright wells No. 1 and 2, drilling records and mud log information are not available to the AOGCC on these wells. _~ P Conservation Order 604 June 6, 2008 Page 3 of 4 10. Wainwright wells No. 3, 4, S, b, 7, 8 and 9 will be drilled with attack-mounted drilling rig. This equipment has no enclosures where sufficient quantities of methane can accumulate to pose a risk of explosion or fve, or where a methane detector can be placed. 11. The proposed wells are designed to test the lateral extent, deliverability, and water chemistry of coalbeds underlying the Wainwright area. CONCLUSIONS: l , Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9-drilled near Wainwright, Alaska, to explore for coalbed methane--are subject to the Alaska Oil and Gas Conservation Act, 31.05, and the Commission's regulations, 20 AAC 25. 2. Exceptions to the well spacing requirements of 20 AAC 25.455 are necessary to allow for drilling, completing, and testing Wainwright wells No. 3, 4, 5, 6, ?, 8 and 9. 3. A spacing exception to allow for drilling, completing, and testing Wainwright wells No. 3, 4, S, 6, 7, 8 and 9 will not result in waste or jeopardize correlative rights. 4. Exceptions to the gas detection requirements of 20 AAC 25.Ob6 are necessary to allow for drilling, completing, and testing Wainwright wells No. 3, 4, S, b, 7, 8 and 9. S. Granting exceptions to the bonding requirements of 20 AAC 25.025, blowout prevention equipment requirements of 20 AAC 25.035, wellbore survey requirements of 20 AAC 25.050(ax2), well site seismic survey requirements of 20 AAC 25.061(a}, and gas detection requirements of 20 AAC 25.066 to allow for drilling, completing, and testing Wainwright wells No. 3, 4, S, 6, 7, $ and 9 will not likely result in a waste of hydrocarbons, risk harm to human safety or the environment (e.g., from an explosion or fire), prevent the subject wells from being properly abandoned, or interfere with the correlative rights of persons owning interests in adjoining or nearby tracts of land. 6. The requirements of AS 31.05.030(j)(1}(A) do not apply because Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will not be used to produce gas from an aquifer that is a source of water for human consumption or agricultural purposes. 7. The requirements of AS 31.OS.030(j)(2)(C) do not apply because Vflainwright wells No. 3, 4, S, 6, 7, 8 and 9 will not be used for regular production, only limited duration testing is proposed at this time, of coal bed methane nor are there any known water wells in the area. 8. Approval of the operator's requested exemptions conforms with AS 31.05.060(c)(l~i.e., because granting the exemptions is more appropriate than- compliance with the subject requirements to the operation of the proposed wells-,and AS 31.OS.060(c)(2~-i.e., because the subject requirements are not necessary or suited to the proposed wells takvng into consideration the nature of the operation, the characteristics of the wells, and the reasonably anticipated risks (from granting the exemptions) to human safety and the environment. NOW, THEREFORE, I[T IS ORDERED: l . The USGS's application for an exception to the spacing requirements of 20 AAC 25.055 to allow for drilling, completing, and testing Wainwright wells No. 3, 4, S, 6, 7, 8 and 9 is granted. 2. USGS's application for waivers of the bonding requirements of 20 AAC 25.025 for Wainwright wells No. 3, 4, S, 6, 7, 8 and 9 is granted. • Conservation Order 604 June 6, 2008 Page 4 of 4 3. USGS's application for waivers of the blowout prevention equipment requirements of 20 AAC 25.035 for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 4. USGS's application for waivers of the wellbore survey requirements of 20 AAC 25.450(a)(2) for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 5. USGS's application for waivers, of the well site seismic survey requirements of 20 AAC 25.06I(a) far Wainwright wells No. 3, 4, S, 6, 7, 8 and 9 is granted. 6. USGS's application for waivers of the gas detection requirements of 20 AAC 25.066 for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 7. These wells may not be hydraulically fractured without the Commission's separate approval. ENTERED at Anchorage, Alaska, and dated Conservation Commission Ca y P. crater, ommissioner Alaska. it and Gas Conservation Commission As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Cmnmission an application for reconsideration of the matter detemuned by it If the notice was mailed, then the period of time shah be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be en»neous. The Commission shall grant or refuse the application for reconsideration in whole ar in part within 10 days after it is filed. Failure to act on it within i0-days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of re- consideration are FINAL and may be appealed to superior court The appeal MUST be filed within 33 days after the date on which the Com- mission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying rceonsideraHon, UNLESS the denial is by in- action, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Commission grants as application for reconsideration, this order or decision does not become final. ]father, the order or decision on re- consideration will be the FINAL order or decision of i~ Commission, and it may be appealed to superior ceurt. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on ro- consideration. As provided in AS 31.05.080(6), "[t]he questions reviewed on appeal are limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the everrt or default after which the designated period begins to run is not included in the pe- riod; the last day of the period is included, unless it falls on a weekend or state holiday, in which evem the period ruos until 5:00 p.ro. on the next day that dots not fall on a weekend or stela holidwv_ t! STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION PERMIT TO DRILL 20 AAC 25.005 1 a. Type of Work: 1 b. Current Well Class: Exploratory ® Development Oil ^ 1 c. Specify if well is propos, d o Orn ~ ~ ~ s Cons. Drill ® Redrill ^ Stratigraphic Test ^ Service ^ Development Gas ^ Coalbed Mq~{~(~ ~a Hy r s ^ ~ Re-entry ^ Multiple Zone ^ Single Zone ^ ~l Shale Gas ^{~(lC 2. Operator Name: US Geological Survey - DOI 5. Bond: Blanket Single Well ^ ~ 11. Well Name and Number: PO Box 25046, MS 406, ~ ~ Bond No. p©~ - ~ Wainwright 6 3. Address: Denver Federal Center 6. Proposed Depth: 12. Field/Pool(s): Denver, CO 80225 MD: 13 0 0 ' TvD: 13 0 0 ' 4a. Location of Well (Governmental Section): 7. Property Designation: surface: MTRS: Umiat T15N R32W, Sec. 24. City of Wainwright Top of Productive FNL.:660', FEL: 1,780' $. Land Use Permit: 13. Approximate Spud Date: June 1, 2008 Total Depth: 9. Acres in Property: 14. Distance to Nearest Vertical Well: 1300' Property: y~D~ 4b. Location of Well (State Base Plane Coordinates): 4 10. KB Elevation ~ 3 0 MSL f H i ht GL t b 15. Distance to Nearest Well Within Pool: '/ Surface: x-y~p Z-Z~ () Y ~ 3 ~~ 6 Zone- g ove ): ee e a ( ~ S 16. Deviated wells: Kickoff depth: feet 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) Maximum Hole Angle: degrees Downhole: S 3 9 Surface: 18. Casing Program: Specifications Top -Setting Depth -Bottom Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Length MD TVD MD TVD (including stage data) 9 7/8 6 5/8 7 20 30 cu. ft. PP rIN cFiti- v 4t 19. PRESENT WELL CONDITION SUMMARY (To be completed for Redrill and Re-Entry Operations) Total Depth MD (ft): Total Depth TVD (ft): Plugs (measured): Effect. Depth MD (ft): Effect. Depth TVD (ft): Junk (measured): Casing Length Size Cement Volume MD TVD Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): 20. Attachments: Filing Fee ^ BOP Sketch ^ Drilling Program ^X Time v. Depth Plot ® Shallow Hazard Analysis ^X Property Plat ® Diverter Sketch X^ S eabed Report ^ Drilling Fluid Program ® 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 y'~~U,r ~ r.,~ ~ Title ~ O Signature Phone ~©~°° Z~j~ ^ ~~~3 Date ~~ Commission Use Only Permit to Drill ~,(,`~ / ~t %7~ ~ API Number: , ~. .., ~``-~~ ~..~~~ - ~% Permit Approval See cover letter for other (~ - Number: -t=- 50- ~--% Date: `(, g 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 shales: ^ Other: Samples req'd: Yes^ No [/]~ Mud log req'd: Yes^ No[/r HZ measures: Yes^ No [~ Directional svy req'd: Yes^ No0 ~": . ` ` ~ ~ . ~ ~ ©~ ~~` ~~ ~~ ^ ~ ~ T .: APPROVED BY T COMMI^SSIONOER ~"1 j; f, ~~ DA E: ~ ~ Form 10-401 Revised 12/2005 ~~~iGi(~AI 0 Submit in Duplicatef/ r, ~ ~ ~~ b./o.nR RECE~~/E®~~,s~el APR 2 3 2008 ~~ s 'n • ~~~~~~~ MAY 0 2 2008 Application for Permit to Drill. State of Alaska, Alaska Oil ~ Gas Conservation Commissia Oil ~ Gas Cons. Commission Anchorage Permit to Drill. Application Summary. Well Name and Number: Wainwright #6, (Exploration, Production Test Monitor) Well Location Area Well Location Legal: Purpose of Well: Waivers. Requested: Village of Wainwright. MTRS: Umiat T15N R32W, Sec. 24. FNL.:660' FEL: 1,780' NAD83 Lat.: 70°38'39.31 "N Long.: 160° 1'21.84"W Coal Bed Methane, production test pressure monitoring Bonding requirements of 20 AAC 25.025, • Blowout prevention equipment requirements of 20 AAC 25.035. • Well bore survey requirements of 20 AAC 25.050(a)(2). • Well site seismic survey requirements of 20 AAC 25.061(a). • Gas detection requirements of 20 AAC 25.066. Well Saacing Exemption Requested: • Requested exception for the well spacing requirements of 20 AAC 25.055(a) for proposed wells Wainwright #3 through #9. Proposed Degth: Monitorinci Well Interval: Property Ownership: Applicant /Operator: MD: 1,300' TVD: 1,300' 8' coal seam at depth of 1242 to 1250 ft Surface: Olgoonik Corp. Sub-surface: BLM USGS. AOGCC Permit to Drill. Wainwright # 6 Apri122, 2008, Page 1 of 30 ~,~~~~~ Application for Permit to Drill. State of Alaska, Alaska Oil ~ Gas Conservation Commission -=_n,_ ,~_~ . Permit to Drill. Application Summary. Well Name and Number: Wainwright #6, (Exploration, Prody~ion Test Monitor) Well Location Area: Well Location Legal: Purpose of Well: Waivers Reauested: Village of Wainwright. MTRS: Umiat T15N R32 ,Sec. 24. FNL.:660' FEL: 1,780' NAD83 Lat.: 70°38'39. 1 "N Long.: 160° 1.84"W Coal BecyNlethane, production test pressure • Blowout preve tion equipment requirements of 20 AAC 25.035. • Well bore su ey requirements of 20 AAC 25.050(a)(2). • Well site se~ mic survey requirements of 20 AAC 25.061(a). • Gas dete on requirements of 20 AAC 25.066. • Req sted exception for the well spacing requirements of 20 C 25.055(a) for proposed wells Wainwright #3 through #8. MD: 1, 300' TVD: 1,300' Applicant /Operator: 8' coal seam at depth of 1242 to 1250 ft Surface: Olgoonik Corp. Sub-surface: BLM USGS. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 1 of 30 Application for Permit to Drill. Contents of Application Application Summary. Contents of Application. Project Description and Overview. Permit to Drill, Form 10-401. Designation of Operator, Form 10-411. Figure #1. Wainwright Townsite. Plat T15N R32W UM. Figure #2. Location of Proposed Production Test and Monitoring Wells. Wells #3-8. Wainwright Townsite. Plat T15N R32W, Sec 24, UM. Figure #3. Lora#ion of Proposed Production Test and Monitoring Wells. Wells #3-8. Wainwright, Aerial Photo. Figure #4. Location of Proposed Offset Well at the NSB Landfill. Well #9. Plat T15N R31 W, UM Figure #5. Location of Proposed Offset Well at the NSB Landfill. Detail View. Well #9. Plat T15N R31W,UM Figure #6. Location of Proposed Offset Well at the NSB Landfill. Aerial Photo. Well #9. Explanation of land Ownership shown on Figures #1 and #2. Plat T15N R32W. Wells #3-8. Explanation of land Ownership shown on Figures #4 and #5. Plat T15N R31 W. Well #9. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 2 of 30 • Permission to Enter Lands and Drill from the Surface Land Owner.RE~'~'~~ Requested Waivers and Drill Spacing Exemptions. Bonding requirements of 20 AAC 25.025, MAY d 2 200 Arks Oil & Gas Cons. Commission Ancharage • Blowout prevention equipment requirements of 20 AAC 25.035. • Well bore survey requirements of 20 AAC 25.050(x)(2). • Well site seismic survey requirements of 20 AAC 25.061(x). • Gas detection requirements of 20 AAC 25.066. Well Spacing Exemption Requested: • Requested exception for the well spacing requirements of 20 AAC 25.055(x) for proposed wells Wainwright #3 through #9. Figure #7. Diverter Diagram. Figure #8. Well Spacing Exemption Checklist. Figure #9. Letter from the President of Olgoonik Corp. regarding the public involvement and knowledge of the drilling program in Wainwright. Drilling Plan • Landfill Offset Well. • Production Test Monitoring Wells. • Durability of Pressure Monitoring Downhole Components: • Production Test Well. • Production Test. • Decommission wells in 2008 • Decommission wells in 2009, alternative. Drilling Fluid Plan Figure #10. Depth v Time Graph, Offset Well at the NSB Landfill. Borehole Sampling. Well Closure Procedures. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 3 of 30 Permission to Enter Lands and Drill from the Surface Land Owner Requested Waivers and Drill Spacing Exemptions. ~ a .~ Bonding requirements of 20 AAC 25.025, • Blowout prevention equipment requireme s of 20 AAC 25.035. • Well bore survey requirements of 20 25.050(a)(2). • Well site seismic survey requirement of 20 AAC 25.061(a). • Gas detection requirements of 20 C 25.066. Well Spacing Exemption Requested: • Requested exception for the 20 AAC 25.055(a) for propo: Figure #7. Diverter Di Figure #8. Well Spacing Figure #9. Letter from public invo Wainwriclh; Drilling Plan • Landfill Offset Well. • Production Test Mo • Durability of Press • Production Test W • Production Test. • Decommission w II. • Decommission w II Drilling Fluid Plan Figure #10. Borehole Sampling. Well Closure Procedures. II spacing requirements of wells Wainwright #3 through #8. Checklist. President of Olgoonik Corp. regarding the gent and knowledge of the drilling program in itoring Wells. Monitoring Downhole Components: in 2008 in 2009, alternative. v Time Graph, Offset Well at the NSB Landfill. AOGCG Permit to Drill. Wainwright # 6 April 22, 2008, Page 3 of 30 Other Permits • • DNR Temporary Water Use Authorization for 4,000gpd, 150,000 gal total. ACMP B-List GCD-8, and No Review Required decision. • ADEC ODPCP Exemption. • ADEC Solid Waste Disposal for cuttings, Plan Review • ADEC Drill Fluids and Produced Water Disposal. • NSB Development Permit, Planning Department. • NSB Dept. of Civil Works, approval to use of landfill for cuttings disposal. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 4 of 30 Project Description and Overview Alaska Rural Energy Project Wainwright, Alaska, 2008 The Alaska Rural Energy Project will be conducting amulti-well production test in Wainwright at the same location (Olgoonik Wareyard) as where exploration and testing activities occurred in June-July 2007. All wells will be completed in an 8 ft coal seam encountered at a depth of 1242 to 1250 ft. The test array will consist of one central production well (10" hole with 6" steel casing cemented to 1240 ft, 6" open-hole completion through the coal zone) and 5 monitor wells (6" hole with 2.5" PVC casing, 10 ft of slotted PVC screen in the coal, sand packed around screen, annular area grouted (abandonment bentonite) to land surface). See Figures 2 and 3 for diagram of well placement and spacing of wells #3- #9. Additionally, a separate well will be drilled at the Wainwright landfill. 6 inch steel surface casing will be set and cemented to a depth of ~50 ft and a 6 inch open hole drilled to a depth of 2500-3000 ft. Geophysical logs (caliper, resistivity, gamma, density, sonic) will be run in the well which will then be plugged and abandoned with bentonite grout and cement. The following information will be gathered from these wells: • Lateral extent and continuity of individual coal seams between original site and landfill site (~ 2 miles) • Accurate determination of hydraulic conductivity and transmissivity • Hydraulic conditions bounding 1250' coal seam o Vertical and lateral leakage • Storage coefficient (amount of water to be produced) • Detailed produced water chemistry • Shape and orientation of permeability ellipse Drilling is scheduled to begin on or about June 1, 2008 and completed on or about August 10, 2008. The first well drilled will likely be the landfill well with the production test array to follow. Exact start and finish dates for each well cannot be accurately predicted at this time. It is anticipated that all drilling will be completed and wells installed by July 15-20 with the production test occurring the week of July 21. Upon completion of the test, all wells will be reentered in 2008 and abandoned using abandonment grout and cement. Alternative Well Abandonment, 2009. An alternative to well abandonment in the summer of 2008 would be to leave the 2" PVC pressure monitor wells open for pressure-monitoring purposes over the winter, rather than plugging/abandoning at the end of a one-week test. The wells AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 5 of 30 • would be completed/isolated in the coal bed and hydraulically connected via slotted pipe at the bottom of the well as described in the Drilling Plan. Wetl abandonment would be done in late-spring or early-summer of 2009 rather than the summer of 2008. This alternative would leave the production well in an operational manner rather than plugging-abandoning at the end of the 2008 work as described. The offset well would be abandoned in 2008. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 6 of 30 i i STATE OF ALASKA ALASKA 01L AND t3A5 CONSERVATION COMMISSION PERMIT T(? DRILL ~n oor ~s rtns ia. 7ype of Work: Drill ~ Redr111 ~ t7e-erthy ~ 1b. Current Wei tom; Er~loratory ® Soatigraptric Test ^ Service ~ MWtiplO Zone Devebpm~t (N ~ Devebpment Gas ~ Sagle Zons ~ is pacify iFwe1 is proposed tar. Combed Methane ® Gas Hydrates Shah Gee 2, Dpenttor Name: 5. Band: 81~ket ~ Single Walt ~ g~,d~_ 7 i. Wed NarraEt and Number. ihlainwright 6 3. Address: B. reposed Depth: ~; 1300' TVD; 1340' 12 Fla l(6); 4a. Latatiat of YVei (C~verrrrtenMl Sertron): $ 7. Praperiy Des~na6orc City of Y~Iainvaright Top of Produdlve NorGrnn: & Land Use Perrntk • i3. ate Spud Bete: ~7u %ml, 200$ Total Depth: Vertical Well: 1300' 9. Apes to Property: 14. Distance to Newt Property: ab. Location ~ Wei (ware a~ lSterle Cocrrdinates): surface: x y zone- 70• tc6 Elevatkrn 3 0 ~ MSL (tbigtrtabove GLj: feet 15.Oistance to Nearest Wei Wihin Pool: 1 ti. Deviated welts. KrckofF deplfi: fact P~rdrntrrn Hula Argla: degtaes 17. Ma>orntan MtElpated Pre65ures in psig (ssa alt AAG 25.x35) Downhole: Surface: 18. Casing P ram: SPetdfications 7 -Setting Depth - Hdtom Cement quantity. cf, w sacks Hole Casing Weight Grade Coupling Length MD '[YD MO TVD Cm~-ns ~!~ data 7/8 6 5/8 3 eu. t, ~A ig. PRESFM Wt1L cOtmintNf suNttieam (ro be rwmpleted for Redral and Re-Entry opard~ra} Tpfal De~h MD (fry: eta apth (R}: Plugs (rrleeartr~): C-ifect. Depth MD (tt): t'feCt. Depth NO (ft): Junk (measured}: Casing Lsnptlt Sits Camenk Volume AHr 7VD Condtrt~arlStructurat Surface Inmrmediate PrcKluc6on liner Pe raliOfn Depth MD (tt): Perforation Depth -rw (n): 20. Attachman~ Fling Fee ^ l3pP Sketch Dd~g Progran Tone v. Depth ~ Sttaiow liaxard Mal Property Plat ® Diverier Sks~h © Seabed Report Dr~[rrg Fluid Program ® 20 AAC 26.b50 ~umnrttents at. verbal Approval: Commission Representative: 22. I heregy oerbTy that the foregoing is true and correct. Printed name P~ sr ~ signature • Date Contract Tide O i ~ Phase ~o~- Z3(s ~ ~~ Date ~{ CommissWn iho Ortly Permit m rill Number. API Number. 5t)- Permit Approval Des: See cover @er for omer r~rremertts. Conditions ~ approval : It bmc to ohedted, vrei may not be usns~ to e><pore for. Desk or produce r~it>ed methane, gas hydrates, w gas corMsinsd in shales: ^ Other. Samples req'd: Yes No^ Mud log rsq'd: Yes[] No~ - HAS rot: Y~^ No ^ greetiatal svy req'd: YesO No~ APPRQVED BY THE COMMISSION DAtE: , GQMMISSIDNER Farm 1007 Rsvised 72/2065 Submit n Duplicate AOGGC Permit to Drill. Wainwright # 6 April 22, 2008, Page 7 of 30 • SURVEYED TOWNSHIP 15 NORTH,RANGE 32 WEST OF THE UMIAT MERIDIAN, ALASKAN STATUS OF PUBLIC DOMAIN LAND AND MINERAL TITLES / as vzx a tea. z9 M'~ E •1 .aa n ~ (3BBt) ~ 25 SUPPI Ssc 24 ~ ~ :so9¢otim Wl ,, ~~... ~~ ~aE ~ •.~~ B6~miYgil.9 M11 i,mEx ro sEn~rm m~as BEd BB6 O.Sq % O Cary. eEd 886 Qoly p / (' ~6 ~ f "„r i ~ @ a a B aye, r: ~s~.. aspau[~.w~fLg svv mEaexs caFecnx9 ,. wra.m w ~ ~ ~ 29 ~n . _ _ __ a ^a~ ~P?CpA/OP pCI1~Y~MY6Btt ~E 2 t4 ~ l9.fvrs9be ,,,, =. __ _ AdGd vrmmE9. xEx~v ro ices ov. JJ xow ~ sc.~ ~~E a dxeu99eous noaevcxss C s rre rco ssE Brae m w a n watr tmnm... / ronnmd % d FL Ba-PSa Nd NMA SY'+P9 t P3 a ~Pq je$ $' 'B i ~~ O P' ~ o.n s y.d sc _ ~® 1°':9 - ..- i ~'' ___~ ~-~a / -__._ - -- -- r9m..~yia _ j arm -- - - zs ~~ a,.~:,.~,. / / -- i L- -~ ~, ~_~ ~ aE G T i< N SCALE ~-~ '~-[9-1989 N~ .~i.~r/narw'nb.r ~r .e a gsMeE•a.w w~ .w..~~n ~~.w ~.t°°m.s we tr~s~ W.~ wMin. ~y w~ v wial~~~Ma~ Figure #1. Wainwright Townsite. Plat T15N R32W UM. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 8 of 30 • T15N R329P IIM Sac. 24 Waia~oright #1 and #2 (2007} PL 9S-4B7 ~r~ Aa- ~ nnrfr ~ Clwkdx Seo !/ru7 .1 ~G ~J V ~% Production Pell {Total 1) ~~ ~,~ t-85 ..~--_ Monitoriag V~1e11 {Total 53 BLM SSB Oaly Olgooaik Cor -~36Q ~~ BL1S SS8 Oaly \ Q. ~~ uss 2107 `~/ /~ FB7.~2 OCD Sam US 7 D!C Ad Arn ~~ ~ a wd c 4 \ o` e'` ew y2 ~ r 0~ ~ '~ ~ ~~ Public Zrrtereaf \ ~ j ~yE /i IISS 441 8, Tr A \ muss 44~e ~ 24 Tr E T eT (iQaiaxright TowaSitfl) uss +ae ~Tr C 2.09 30-e3-0526 SSE Figure #2. Location of Proposed Production Test and Monitoring Wells. Wells #3-8. Wainwright Townsite. Plat T15N R32W, Sec 24, UM. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 9 of 30 ~J per- Hainwright #1 and #2 12407) ~ #4 {Monitor Nell) R3 {Praductian Test Hell) #5 (Manltor Hell} °~ #6 IMCQiitor Nell) Proposed 20eaS PRODUCPIQN WELL #7 trtanitar Nell) p1?NITOR WELL ,~ T15N R32W, Seo, 24 UM tMCmitor Nel"° (Location under leas'. olgaca~ik carp, to olgoanik ~:,.~rp.) 50-31-0562 sSE ~;. > HLM SSE Only U55 4418' - City of HainW P1C111t SSE aLM ssE only 1-,000' Figure #3. Location of Proposed Production Test and Monitoring Wells. Wells #3-8. Wainwright, Aerial Photo. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 10 of 30 i • SURVEYED TONMSHIP 15 NORTH RANGE 31 VMEST OF THE UMIAT AiERIDIAN, ALASK9 STEM Of PUBLIC OOMNN Wil OAID MNERK PILES MTP ,xr ~rs~.p a 7 q i__ 1 to ~ x _ U uw , li x ~ __._~ R 51 N' ~ Figure #4. Location of Proposed Offset Well at the NSB Landfill. Well #9. PIatT15N R31W,UM AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 11 of 30 • • NA L"e/t D/C F92373 QCD to US A// Min Except Coa/ OC SSE On/y /C 7456 50-98-0036 NA Cent D/C F92313 OCD to US A// Mm Except Coo/ OG SSE On/y /C 7637 _ PL 96-487 Wd/ Afosko Maritime NWR (Chukchi Sea Unit) Figure #3. Location of Proposed Offset Well at the NSB Landfill. Detail View. Well #9. Plat T15N R31W,UM AOGCC Permit to Drill. Wainwright # 6 Apri122, 2008, Page 12 of 30 C~ Sec, S T15N R31W UM olgoo¢iiY Corg. SSE 54-41-0562 AS RC SSE Only IC 1456 ~.. ,~ i X008 offset Well at NSB Landfill 70°34~53.02~~N 153°57 57,18°W NAD83 1 t ~,aoo~ Figure #6. Location of Proposed Offset Well at the NSB Landfill. Aerial Photo. Well #9. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 13 of 30 • • Explanation of Land Ownership. Plat of T15N R32W. UM Section 24. Section 24, TISN, R32W contains the boundaries of the village of Wainwright. Six of the proposed 2008 drill sites will be located near the northeast portion of Section 24. Patent Number 50-91-0562 conveyed surface estate to Olgoonik Corporation on the following parcels of land (refer to plat): The northern part of Section 24 Southwest comer of Section 24 Southeast comer of Section 24 The subsurface estate was reserved to the Federal Government. Patent Number 50-85-0526 conveyed the surface estate to Olgoonik Corporation on the following parcels of land (refer to plat): Blk 22, Lot I, located in the northeastern part of Section 24. USS 4418, Tr E, located adjacted to Blk 22 in Section 24 USS 4418 Tr C, located southwest of Blk 22 in Section 24 USS 4418 Tr F, located southwest ofTr C in Section 24 USS 4418, Tr G, located southwest ofTr F in Section 24 The subsurface estate was reserved to the Federal Government. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 14 of 30 • Explanation of Land Ownership. Plat of T15N R31W. UM Section 8. Section 8, TISN, R31 W contains the eastern portion of the NSB landfill. The offset well will be drilled at the landfill within Section 8. Patent Number 50-91-0568 conveyed surface estate to Olgoonik Corporation to Section 8. Interim Conveyance (IC)1460 conveyed the subsurface ownership, including coal, to the Arctic Slope Regional Corporation. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 15 of 30 • CJ Permission to Enter Lands and Drill from the Surface Land Owner Surface Estate: Olgoonik Corp Ms. Beth Maclean Bureau ofLand Maaagcmeat 7.22 West Seventh Avenue, #13 Aachorrge, AK 99513 Dear Ms. Maclean: June 7.2007 Olgoonik Corporad~ (OC) is aupportire of your efforts to evahr~e coalbed natural gas potential of Wainwright as autliaad is the town meetings You have held in Wainwright We appreciate the effort that you have put Earth oa this project on behalf of our community. ~ has land entitiexne~ts within the city limits of Wainwright and also outside of tl~e boundaries. OC reoogrnzes the benefits that could occur from having a locat, energy source available for toes caannunity. We recognize the cooperative work planned between Federal, State, and the private sector and are pleased to be a part of this effort in conjunction with Arctic Slope Regional Corporation. We appreciate the fact that the Bureau of Land Managerrtent and US Geological Survey ere making a good Faith effort to involve local communities in locating local sources of energy in rural Alaska. Sincerely, ~l ~~~. ~~'~ Lucille Mayer President, OIgoonik Corporation Cc; Teresa Imm, Arctic Slope Regional Corporation AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 16 of 30 Waivers and Drill Spacing Exceptions Alaska Rural Energy Project Wainwright, Alaska, 2008 The Permit to Drill application includes requests for waivers for proposed wells Wainwright #3 through #9 for the following: • The bonding requirements of 20 AAC 25.025, • The blowout prevention equipment requirements of 20 AAC 25.035 • The well bore surveys requirements of 20 AAC 25.050(a)(2), • The well site seismic survey requirements of 20 AAC 25.061(a), • The gas detection requirements of 20 AAC 25.066. The Permit to Drill application includes a requested exception for the well spacing requirements of 20 AAC 25.055(a) for proposed wells Wainwright #3 through #8. Information in Support of Requested Waivers and Well Spacing Exemptions Bonding Waiver Request The operator is the US Department of the Interior, Bureau of Land Management. The Department is self-insured under the Federal Tort Claims Act, 28 USC Sec. 26.71. BOP Waiver Request. For the previous permit to drill at this location at the Village of Wainwright (207- 065, Wainwright #1) the operator (DOI) examined all well logs for the wells within the general vicinity of the Wainwright #1 well. They included Tunalik, Kugrua, and Peard Bay. In the upper 3,500 feet of each of these wells, measurable gas readings were associated with coal seams only. Mud weights were kept between 9-10 pounds per gallon (ppg) above 3,500 feet in each well indicating that no overpressured conditions were expected or encountered. Seismic information shows no indication of the presence of shallow gas. In addition, drilling records and mud log information from the nearest exploration wells show no indication of abnormal pressure. Additionally, the Wainwright #1 and #2 wells that were drilled to a depth of 1,613' in 2007 encountered no gas kicks. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 17 of 30 -~~o~ =7 ~'( N~C>1 g?~I 003 ~~ ~ o ~ o eo 0 c V v m m v N~ tQ N Drillin Rig DQI Drilling Operation Diverter Head Mfg. Washington Rotating Head .--- 3.5" core rod vel~e 100 psi rubber seal T-fitting head Threaded coupler== 6 5/$" O D Conductor casing ' Vh. ~sY~e:. ~-i4 ~~ VaI.V 3 .~ ~_ LL' Fluid discharge to reciraalation pit To holding pit 40'-80' bls ---- ~ RECEIVED MAY 0 2 2008 Alaska Oil & Gas Cons. Commission The proposed 2008 drilling of Wainwright #' 3 through 9 will use a weighted i,~iorage system typically ranging from 9.0 ppg -9.8 ppg. If over-pressured gas is encountered, a 10.5+ ppg mud will be circulated down the well to stop the gas from venting. Optionally, a cement slurry weighing from 13 ppg -15 ppg could be mixed and pumped through the drill steel from the bottom to the surface to kill the well. In this situation, the well would be considered abandoned. If a gas kick were to be encountered, the amount of gas that can safely be vented during drilling is considerable. The operator is proposing to utilize a Washington stripping head sealing 3'h" drill pipe on 6 5!8" casing, and a 40 foot by 4" ID blooey line. Well Site Seismic Survey Waiver Request. DOI, the operator, has examined two seismic surveys in the Wainwright area. The first is an E-W line that runs from the S. Meade well to the Arctic coast approximately 5-10 miles SW of Wainwright. The second is a NE-SW line that parallels the coastline from north of the Peard Bay well to north of the Tunalik well and runs directly through Wainwright. These surveys, while shot far deeper targets, do not show any shallow hazards in the vicinity of the proposed drill site. Gas Detection Requirements H2S and Methane Waiver Reauest For the previous permit to drill at this location at the Village of Wainwright (207- 065, Wainwright #1) the operator (DOI) examined all wel! logs for the wells within the general vicinity of the Wainwright #1 well. They included Tunalik, Kugrua, and Peard Bay. In the upper 3,500 feet of each of these wells, measurable gas readings were associated with coal seams only. Mud weights were kept between 9-10 pounds per gallon (ppg) above 3,500 feet in each well indicating that no overpressured conditions were expected or encountered. The drilling will be done with a portable truck-mounted drilling rig. This equipment has no enclosures where methane could accumulate sufficiently to pose a risk of explosion or fire, or where a methane detector could practicably be located. Additionally, the Wainwright #1 and #2 wells that were drilled in 2007 encountered no gas kicks. Requested exception for the well spacing requirements of 20 AAC 25.055(a) for proposed wells Wainwright #3 through #9. AOGCC Permit to Drill. Wainwright # 6 Apri122, 2008, Page 18 of 30 ~ ! The proposed 2008 drilling of Wainwright #' 3 through 9 will use a wei hted mud system typically ranging from 9.0 ppg -9.8 ppg. If over-pressured gas 's encountered, a 10.5+ ppg mud will be circulated down the well to p the gas from venting. Optionally, a cement slurry weighing from 13 ppg ppg could be mixed and pumped through the drill steel from the bottom tot surface to kill the well. In this situation, the well would be considered abando d. If a gas kick were to be encountered, the amount of vented during drilling is considerable. The operator Washington stripping head sealing 3'/" drill pipe o~ by 4" 1D blooey line. ~" Well Site Seismic Survey Waiver Request. a hat can safely be proposing to utilize a 6 5/8" casing, and a 40 foot ,i E~~j~~~~~~ . ~.~ .~.r~,~®- DOI, the operator, has examined two sei is surveys in the Wainwright area. The first is an E-W line that runs from t S. Meade well to the Arctic coast approximately 5-10 miles SW of Wain right. The second is a NE-SW line that parallels the coastline from north oft a Peard Bay well to north of the Tunalik well and runs directly through Wai right. These surveys, while shot for deeper targets, do not show any shallow zards in the vicinity of the proposed drill site. For the previous permit to d II at this location at the Village of Wainwright (207- 065, Wainwright #1) the o , rator (DOI) examined all well logs for the wells within the general vicinity of the ainwright #1 well. They included Tunalik, Kugrua, and Peard Bay. !n the u per 3,500 feet of each of these wells, measurable gas readings were associat d with coal seams only. Mud weights were kept between 9-10 pounds per gallo (ppg) above 3,500 feet in each well indicating that no overpressured condit~ ns were expected or encountered. The drilling wi11 be ne with a portable truck-mounted drilling rig. This equipment has no enclosures here methane could accumulate sufficiently to pose a risk of explosion or fire, where a methane detector could practicably be located. Additionally, the ainwright #1 and #2 wells that were drilled in 2007 encountered n clas kicks. AOGCC Pe i1 Wainwrig # 6 Apri122, 008, to Drill. Page 19 of 30 • • The pressure monitoring wells (#4- #8) will need to be located horizontally between 75' and 400'from the production test well (#3). The proposed location of the production test well is about 100' from the exploration wells #1 and #2 drilled in Wainwright in 2007. The 2008 proposed wells must be drilled in this location, and in the proposed configuration and spacing, in order to assess the coal bed gas resource. An exception to the well spacing requirements in 20 AAC 25.055(a) is required in order to proceed with the purpose of the 2008 drilling program. Well #9 requires a spacing exception because it is closer that 3,000' to state submerged lands, Chukchi Sea. ~ T4 M ~/c' ~raska qY ~ o,,~ ~ zoo Gas 8 eon ~chora9e Cofi~/ss. ~c~ AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 20 of 30 CJ The pressure monitoring wells (#4- #8) will n ed to be located horizontally between 75' and 4O0'from the production t t well (#3). The proposed location of the production test well is about 100' from he exploration wells #1 and #2 drilled in Wainwright in 2007. The 2008 propos dwells must be drilled in this location, and in the proposed configuration and acing, in order to assess the coal bed gas resource. An exception to the wel spacing requirements in 20 AAC 25.O55(a) is required in order to pro ed with the purpose of the 2008 drilling program. o~ AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 20 of 30 MAY 0 2 2008 CHECKLIST -SPACING EXCEPTION APPLICATION OPERATOR UsGS PROPERTY ID/ LEASE S: N,~iaska Oil & Gas Cons. Commission Anchorage FIELDIPOOL Wainwright, Coal Bed Methane PIlBH: WELL NAME Wainwright #3-#9. VERTICAL x EXPLORATORY x GAS x DEVIATED DELINEATION OIL DEVELOPMENT SURFACE LOCATION ' F Land ' F L, S. , T R M PRODUCTIVE INTERVALS ' F Land ' F L, S. , T R M (top and Bottom) See BOTTOM HOLE ' F Land ' F L, S. , T R M Applications rhe..r~ s.,.,u~ahre rea~annlfc- for goacina e~ccention nor 211 AAC 25.055(a): (1) to drill a well far oil within 500 feet of a property line where ownership or landownershi cha (2) to drill a well for gas within 1500 feet of a property line where ownership or R landownershi d,a (3} to drill and complete more than one oil well in a governmental quarter section• or to drill and complete an oil weft doser than 1000' to any weN driAing to or ca able of roducin from the same x 4 to drill and c~rrr lets more than one as well in a ovemmental section; or or to drill and oarrplete a gas weB closer than 3000' to any well drilling to x or ca able of dudn from the same I. flncc thn annlicatinn r_nntaiht x A brief ex lanation for wh the o orator has chosen to drill the s fled locat~n. A plat drawn to a scale of one inch equaling 2,640 feet or larger, showing the location of the well or portion of the well for which the exception is sought, all other x completed and drilling wells on the property, and all adjoining properties and walls within 1,000 feet of a well or portion of the well requiring the spacing exception that is drilling for oil or within 3,000 feet of a well or portion of the well requiring the s do ex 'on that is drillin for as. The names of all owners, landowners, and operators of aN properties within 1,000 feet of a weN or portion of the well requiring the spadng exception that is drilling for x oil or within 3,000 feet of a wall or portion of the well requiring the spacing exception that is drilli for as. A copy of the notice sent by certified mail to the owners, landowners and operators x described above, the date of mailing, and the addresses to which the notice was sent. x An affidavit by a person acquainted with the fads verifying that all fads are true and that the let correct rtr rtineM and r uired data. If the operator requests a variance from the notice requirernen~ of x 20AAC25.055(dj, sufficient information to demonstrate that it is not feasible to comply with the notice requirements because of the complexity of ownership within the notice area. Figure #8. Well Spacing Exemption Checklist. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 21 of 30 CHECKLIST -SPACING EXC OPERATOR BLM ~ usGS pROpE FIELD/POOL Wainwright, Coal Bed M WELL NAME Wainwright #3-#8. PI/BH: VERTICAL x EXPL ORY x GAS x DEVU4TED DELI TION OIL DE OPMENT SURFACE LOCATION PRODUCTIVE INTERVALS (Top and Bottom} see BOTTOM HOLE Applications /[ C_hnrlc ~nnlieahla ra~aron(!Cl 'F Land 'F 'F Land 'F, F L an4i~'~` ;3'S fer soacina exceation M ~fi R M 25.055(a}: . (1) to drill a well roil within 500 feet of a property line where ownership or landownershi an es, (2) to drill a we for gas within 1500 feet°of a property line where ownership or % landownershi than s, (3) to drill an complete mare than one oil well in a governmental quarter section; to drill a complete an oil weft doser than 1000' to any weN drifting to or ca le of uc' from the same of x 4 to dril and corn to more than one as well in a vemmental section; or or to rill and complete a gas well closer than 3000' to any well drifting to x or ble of roducin from the same ol. Does the appiic -on contain: x A b ' ex lanation for w the rator has chosen to drift the s coed location. A pia drawn to a scale of one inch equaling 2,640 feet or larger, showing the loca n of the well or portion of the well for which the exception is sought, all other co leted and drilling wells on the property, and all adjoining properties and wells x wit n 1,000 feet of a well or portion of the well requiring the sparing exception that is 'lung for oil or within 3.000 feet of a well or portion of the well requiring the s ci exce tion that is drifli for as. T e names of all owners, landowners, and operators of all properties within 1,000 f ~ t of a weN or portion of the well requiring the sparing exception that is drilling for x 1 or within 3,000 feet of a well or portion of the well requiring the sparing exception at is drillin for as. copy of the notice sent by certified mail to the owners, landowners and operators ascribed above, the date of mailing, and the addresses to which the notice was sent. x An affidavit by a person acquainted with the facts verifying that all facts are true and that the let ce rtr 'Went and re wired data. if the operator requests a variance from the notice requirements of x 20AAC25.055(d), sufficient infarmatan to demonstrate that it is not feasible to comply with the notice requirements because of the complexity of ownership within the notice area. Figure 8. Well Spacing Exemption Checklist. AOGCC Permit Drill. Wainwright # 6 April 22, 2008, Page 21 of 30 u ~N APPLICATION ID/ LEASE S: N/A Ivls. Beth Maclean Bureau of Land Maaagcment 222 West Sevetrtlt Avenue, #13 Anchorage, AK 99513 Dear Ms. Maclean: C~ June 7, 2007 Olgoonik CorPorati~ (OC} is anpportive of your efforts to evahrste caalbed aauiral gee potential of Wainwright ss outlined in the town meetings you have held in Wainwright. We appreciate the effort that You have put forth oa this project on behalf of our community. OC has land entitlemems within the city limits of Wainwright and also outside of these boundaries. OC mcogni~s the benefits that could occur from having a local, tnergy source available for t]m community. We recognize the cooperative work planned between Federal. State, and the private sector and are pleased m be a part of this effort in conjunction with Arctic Slope Regional Corporation. We appreciate the fact that the Bureau of Land Management and US t3eological Survey aro making a good faith effort to involve local communities in locating local sources of energy in rural Alaska. Sincerely, ~~~- ~~~~ ~~ Lucille Mayer President, Otgoonik Corporation Cc: Teresa Imm, Arctic Slope Regional Corporation Figure #9. Letter from the President of Olgoonik Corp. regarding the public involvement and knowledge of the drilling program in Wainwright. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 22 of 30 i Drilling Plan. Alaska Rural Energy Project Wainwright, Alaska, 2008 Landfill Offset Well 1. Transport rotary rig and other equipment from Deadhorse to Wainwright . 2. Move equipment to landfill site. Drill 9 7/8" hole through surficial deposits to depth of ~50'. Set and cement 6 5/8" schedule 40 steel surface casing. 3. Mud rotary 6" open hole (no core) to between 2500 and 3000 ft. 4. Conduct geophysical logs (caliper, gamma, resistivity, density, sonic) 5. Abandon well with abandonment bentonite grout and cement. Production Test Monitor Wells 1. Move equipment to Olgoonik wareyard to begin installing wells for production test. 2. Drill 9 7/8" hole through surficial deposits to depth of ~50'. Set and cement 6 5/8" schedule 40 steel surface casing. 3. Mud rotary 6" open hole (no core) to 1260 ft. 4. Run geophysical logs (density, gamma, resistivity) to confirm coal bed depth. 5. Install 2.5" schedule 80 PVC monitor well with 10' PVC 10-slot screen at bottom. Sand-pack around screen, install bentonite pellet seal above sand, grout to surface using abandonment bentonite grout and cement. 6. Develop well using bailer and air lift methods. 7. Fill PVC well with 67/33% mixture of water/propylene glycol from 1100 ft to land surface. 8. Install pressure transducer. 9. Repeat steps 7 through 11 at four other locations (see attached diagram) Durability of Pressure Monitoring Downhole Components: The tensile strength of 2.5" schedule 80 PVC is 2,125 ft vertical suspension in a dry hole. In afluid-filled hole, it is considerably higher. The operator (USGS) has used this exact pipe as monitor well casing to depths in excess of 2500 ft in New Mexico. The maximum external pressure differential is 340 psi, maximum internal pressure differential is 670 psi. Wall thickness is .276", weight is 1.46 Ibslft. The bentonite grout never sets up as a true solid. Rather, it sets up to a jelly-like consistency that retains its low-perm characteristics even when frozen. The cement used is Arctic cement blended in Fairbanks, AK for north slope conditions by Haliburton. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 23 of 30 Production Test Well 1. Drill 14 3/4" hole through surficial deposits to depth of ~50'. Set and cement 10 3/4" schedule 40 steel surface casing. 2. Mud rotary 9 7/8~ open hole (no core) to 1240 ft. 3. Set and cement 6 5/8" schedule 40 steel surface casing to 1240 ft. 4. Mud rotary 6" hole to 1260 ft. 5. Develop well using bailer and air lift methods 6. Fill well with 75/25% mixture of water/propylene glycol from 1100 ft to land surface. 7. Install submersible pump, cable, pressure transducers etc. 8. Make surface connections, prepare equipment for pump test Production Test Conduct 7-day production test. (see alternative testing and well abandonment described in the section: Decommission Wells in 2009, Alternative, below.) Decommission Wells 1. Remove pump and cable from production well. 2. Remove glycol from well. 3. Abandon well with abandonment bentonite grout and cement. 4. Reposition rig over observation well. 5. Remove glycol from well. 6. Abandon well with abandonment bentonite grout and cement. 7. Repeat steps 4 through 6 for remaining four monitor wells. Clean and Pack equipment. Transport equipment from Wainwright via barge. Decommission Wells in 2009, Alternative An alternative to well abandonment in the summer of 2008 would be to leave the 2'" PVC pressure monitor wells open for pressure-monitoring purposes over the winter, rather than plugging/abandoning at the end of a one-week test. The wells would be completed/isolated in the coal bed and hydraulically connected via slotted pipe at the bottom of the well as described in the Drilling Plan. Well abandonment would be done in late-spring or early-summer of 2009 rather than the summer of 2008. This alternative would leave the production well in an operational manner rather than plugging-abandoning at the end of the 2008 work as described. The offset well would be abandoned in 2008. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 24 of 30 Borehole Sampling. Alaska Rural Energy Project Wainwright, Alaska, 2008 Landfill Offset Well During the drilling of the landfill offset well, mud-gas will be continuously monitored to detect the presence of hydrocarbons in the drill mud. Borehole cuttings will be collected, described, washed, and bagged at 10-ft intervals. Production Test Wells As continuous core was collected from the production test site during 2007 drilling operations, no samples will be taken during the drilling of the production test wells. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 25 of 30 • Wainwright 2008 Offset Well: Depth vs Time Days 0 1 2 3 4 5 6 7 -500 Setandoernerd ~,~~~ -10(10 well abandonment ~ -1500 ° -2000 -2500 -3000 ~~ -3500 _. __._,_ _e _ _ ._ ____ ._ _ _ _ _ _ __ _ _ _._ Figure #10. Depth v Time Graph, Offset Well at the Wainwright NSB Landfill. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 26 of 30 Drilling Fluid Plan Alaska Rural Energy Project Wainwright, Alaska, Summer 2008 The hole will be drilled using standard fresh water bentonite drilling fluids. Additives to be used include (all listed products are NL Baroid trade names}: • Quick-Gel high yield bentonite (hole stability; circulation control, clay-shale control) • Aqua-Gel bentonite (hole stability, circulation control, mud-density control) • Pac-L and Pac-R powdered cellulose polymer (clay-shale control, water loss, viscosity control) • EZ mud liquid polymer (clay-shale control, water loss, viscosity control) • Pennetrol liquid detergent (bit cleaning, control clay build up around bit face and teeth) Drill fluids will be monitored for viscosity, weight, and temperature on a full-time basis. Drilling fluids will have cuttings removed and will be recirculated via a 1000 gallon trailer-mounted shaker system incorporating shaker screens and centrifugal desilting cones. Cuttings and used drill mud will be contained in above-ground tanks. At project's end, cuttings/mud will be disposed of at the Wainwright wastewater disposal pond. Rotary drilling and reaming operations will be conducted using arig-mounted 5 '/Z" X 8" 350 gpm, duplex mudpump and aGardner-Denver 5" x 6", 200 gpm, duplex mudpump. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 27 of 30 ~ ~ Well Closure Procedures Alaska Rural Energy Project Wainwright, Alaska, Summer 2008, or 2009 During drilling and coring operations, aquifers will be protected by mixing bentonite and polymer additives in the drill mud specifically designed to seal and protect water-bearing strata. Encountering water bearing strata that could contain a useable aquifer is not expected since the drilling will be within the permafrost. Landfill offset well Upon completion of the landfill offset well, the well will be plugged from total depth to 100 ft below land surface (bls) with an abandonment bentonite grout mixture mixed at land surface with a grout plant and pumped from the bottom up. The top 100 ft of the well will be filled with Arctic-blend cement. Production test monitor wells After drilling is completed, 2.5" schedule 80 flush joint PVC casing and screen will be set in the well. The annular area between the well screen and the borehole wall will be filled with 8-12 silica sand using tremie placement methods to 20 ft above the top of the screen. A 10 ft layer of/4" bentonite pellets will then be placed on top of the sand using tremie methods. The annular area from the top of the pellets to 100 bls will be filled with abandonment bentonite grout, mixed at land surface with a grout plant and pumped through tremie pipe from the bottom up. The top 100 ft of the annular area will be filled with Arctic-blend cement. After well development, the PVC pipe will be filled with a 67/33°~ mixture of water and propylene glycol from a depth of 1100 ft to land surface to prevent freezing during testing procedures. Upon completion of testing procedures, the PVC well will be filled with abandonment bentonite grout, mixed at land surface with a grout plant and pumped through tremie pipe from the bottom up, to a depth of 100 ft bls. The top 100 ft of the well will be filled with Arctic-blend cement. Production test well After drilling is completed to 1240 ft, 6 5/8" schedule 40 steel casing will be welded and set. Arctic-blend cement will then be mixed in a grout plant and pumped through tremie pipe into the annular area from 1240-1000 ft bls. Abandonment bentonite grout will then be mixed and pumped from 1000 to 100 ft bls, and Arctic-blend cement mixed and pumped from 100 ft to land surface. After drilling a 6" hole below the casing to a depth of 1260 ft, the well will be AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 28 of 30 • i-J developed, a submersible pump set, and the inside of the casing filled with a water/propylene glycol mixture to prevent freezing. After the pump test is completed, the pump will be pulled and the glycol removed from the well by pumping abandonment bentonite grout through 2" pipe from the bottom of the well to 100 bls. The top 100 ft of the well will be filled with Arctic-blend cement. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 29 of 30 • • Other Permits Alaska Rural Energy Project Wainwright, Alaska, Summer 2008 DNR Temporary Water Use Authorization for 4,000gpd, 150,000 gal total. RCMP B-List GGD-8, and No Review Required decision. ADEC ODPCP Exemption. ADEC Solid Waste Disposal for cuttings, Plan Review ADEC Drill Fluids and Produced Water Disposal. NSB Development Permit, Planning Department. NSB Dept. of Public Works, approval to use of landfill for cuttings disposal. AOGCC Permit to Drill. Wainwright # 6 April 22, 2008, Page 30 of 30 ~ • TRANSMITTAL LETTER CHECKLIST r WELL NAME / Development Service Non-Conventional Well ~~~ FIELD: ~~ 1/ Exploratory POOL: Stratigraphic Test Circle Appropriate Letter /Paragraphs to be Included in Transmittal Letter CHECK ADD-ONS WHAT (OPTIONS) TEXT FOR APPROVAL LETTER APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well (If last two digits in permit No. , API No. 50- - - API number are between 60-69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(f), all records, data and togs 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 liance with 20 AAC / EXCEPTION 25.055. Approval to perforat a roduce inject is contingent / upon issuan of conserv do proving a ~~~~ i VVV exception. ~ ~'" ~st1*it~ liability of any protest t the spacing a ption 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 throu h tar et zones. Non-Conventional please note the following special condition of this permit: Well production or production testing of coal bed methane is not allowed for (name of well) until after (Comaany 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 appr ro ram. ,` Cam` Rev: 1!1(/2008 pval f uch titer we ! +esting u ~ n~ w~ ~ s X05 ~Zd ~~'~ ~ WELL PERMtT CHECKLIST Field 8 Pool Weli Name: WAINWRIGHT 6 Program EXP Weil bore seg ^ PTD#:2080740 Company u S DEPT OF INTERIOR Initial ClasslType EXP I PEND GeoArea 890 Unit OnlOff Shore ~__ Annular Disposal ^ Administration 1 Permitfeeetkached ---- ----- ---- -- - -- - -- -- NA ---- - --- ---- -- -- --- - ------ - -- --- ---- ----- 2 Lease number appropriate_ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ - _ - - _ - - _ _ _ _ _ - _ _ No_ - _ _ _ - _ N° lease-ipvolved: _BLM land. SPADING_EXCEPTIONREQUIREDbecause of nearby coastline (state-federal bou 3 Uniquewell_nameandnumber -------- -- - --- -- --- Yes- --- ----- -- -- ---- --- ----- --- -- - ----- 4 WeIIIQCatedinade_fined-p_opl------------------------------------- NO-- ------Exploratory~oalbedmethan_e-well.--------------------------------------------- 5 Well located proper distance from drilling unitbos~ndary_ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ No_ - _ _ _ _ - _SPACING EXQEPTIQN REQUREDdue ko-coastline,-which is ~50Q'to NW, - _ _ _ _ . - _ _ _ _ - . _ _ - _ _ - _ - 6 -W@II located proper distance from other wells_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ No_ _ _ _ _ _ _ Wainwright 1 and-2 are lor~ted about 75' t4 NE._ Production and monitor wells will be drilled within 75'._ _ _ _ _ _ 7 Su-fficient acreage available in-drifting unit_ _ _ _ _ _ _ _ _ __ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ No_ _ _ _ _ - _ SPACING EXCEPTIQN REQUIRED because of closep[oximity of-planned-productien and monitorwells._ . _ _ - _ B If deviated, iswellboreDlatinciuded_____----------------------------- NO-- -----_Verti°aiwell---------------------------------------------- -------------- 9 Operatof 9nly effected p8riy- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -No_ - - _ _ _ _ _ Land°wner is l3LM~ state acreage lies_aboui ~5Q0' away-(coastline) - - - - - - - - - - - - - - - - - - - _ - .. - - 10 Ope[atofhes_appropriatebondlnfQrce_______________________-____---_ No-- _____-NIAIVER-REQUESTEDfr9mbonding_requirements.--_--_--__-___.-____-____-_--.-_____ 11 Permitcanbeissuedwfihoufconservation4rder-- - --~ -- -- -- ---- -~0 - --- - -- ----- - ---- -- -- - ---- ----- ----- -------------- Appr Date 12 PermitcanbeissuedwllhQUtadministrative_approval------------------------- Yes- ------------------------------------------------------ ~-- -- -- -- 13 CanPermHbeaPprovedbefore15-daywait----- -- -- ---- --- - Yes- -- --- -- -- -- -- ------------ ----- - --- -- -- -------- SFD 6!10/2008 14 Well located within area and-slrataauthcrizedby_InjectianOrder#(putlQ#in_commenis)_(For_ NA__ _______________________________-__________--____---_____-.___-___-_-__ 15 AIIweUs.within114_mileareaofreyiewidentifled(Forservieewellonly)--------------- NA_ ______------._-------------~------------.. ---------- - -- -- ----- 16 Ple•produced injector; duration ofpre-production less than 3 m°nihs (For service well °nly) - _ NA_ _ - - _ _ _ _ Monitor well fQr C9Mtest.- Per.CQ 562,1_Nainwrighk Vlllagewater supply is surface source_and _ _ _ - _ _ - . - - _ _ 17 Nonconven,gas-conforms to AS31,05:03Q(}.1.A),(G.2.A-Q) - - - - - - - - - - - - - - - - - - - - - Yes - _ _ _ _ _ _ permafrosk is X10-OQ' thick, N4 freshwateraquifers serve or will serge as-sources r!f drinking waker. _ _ . - - _ _ _ _ _ Engineering 18 Condu-cto[string_provi~d_____________-------------------- --- Yes- ------&•51B"X80'1------------------------------_------------------ 19 Surface_casingRrotectsallknownU$DWS------------------------------- -NA-- -----N4knowDU$DWs,------------------------------------------------------- 20 CMTVOIadequaietgcireulateorconductor8,surfcsg-----__________________ Yes. -___--Adequate excess for c9nductor_________-__________--__---____-______---_.___-_ 21 CMT vol adequate_ torte-in long string to surf csg _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ _ _ _ - _ Plan is to use bentonite grout-to seal in PVC casing to festcoal qas,- _ _ - _ _ _ _ _ - _ - _ _ _ - _ - _ _ _ _ _ _ _ _ _ - 22 CMTwiilcoyerahJcnown_productivehQdzons--- --- --- - --- ---- Yes- -------- - -- -- --- - ------------- ------ - -- --- ---- 23 Casing designs adequate for C, T l3 8_permafrost_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - Yes _ _ . _ . _ _ Low pressure operation pianrled._ InteriorfreezeprotectQd.wiihpropylene-glycol, - _ - _ _ _ _ _ _ . _ _ _ _ _ _ _ - - . 24 Adequatetankage_orteserveplt_--------------------------------- -- Yes- --_-__Planstatesrigequipped_withtanks.--.---------------------------------------- 25 Ifs-re-drill,has_a10.40$forabandonment been aPRroved-------------------- NA- --------------------------------- ---- - -- -- -- --- ---- 26 gdequake welibore separationp[oposed_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ - _ _ _ This well located -63' from Wainwright #3. Calission-chance unlikely._ - - - - - - _ - - - _ _ _ _ _ _ 27 It diver_ter-required, does it meet regulatigrls_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ - _ _ _ _ Will employ rotating head.- Rotating head will protect dntler's area and divert flow.- - - _ _ _ - - - - _ _ _ _ _ _ . _ _ Appr Date 28 Drilling fluid program schematic-& equip list adequate_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ _ - _ Expected formation pressure 9,0-- 9.8 EMW. Provision ka weighk up-to 1Q.5 pPg 4 needed: _ _ - _ _ _ _ - _ _ _ _ TEM 6110I2D08 29 BOPEs,_dotheymestregulation__________________________________-_ _NA__ _.____BOPexceptionrequested,G~antedbyCO-604.___________----____-__-__-__-__-_-- 30 BOPS-Press rating appropriate. testto_(putpsigincomments)-------------------- NA-- _---____-_____--_____--_---_---__---_----------------------- ----- 31 Choke_manif4ldcomRlieswlAPl_RP-53(May84) - - -- ------ ---- NA-- ----- -- ~- -- - ---- ---- - --- --- - - -- -- ---- 32 Work will occurwikhoutoperationshutdown_-______-_--____--_-. ---- Yes- -------------------------------------------------------- ---- ------ 33 IgpresenceofH2S9asRrobable ------ - -- -- - -- - -- NO-- -- ----- ----- -- -- ------ ----- - --- --- - 34 Mechanical condition of wellswlthiriAORyen_fled(Forsenricewellonlya-------------- NA-- ----------------------------------------------------------------------- Geology 35 Permitcan be issued w!o hydrogen_ sulfide meass,res _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ _ _ _ -None encountered in-Wainwright 1_ or 2, which were drilled thru same section about-20Q' away. _ - - _ _ _ - - _ _ _ 36 Data.p~esented on potential overpnssurazones_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Yes _ _ _ . _ _ _ None anticipated based on Wainwright 1,Wainwrght2, Tunalik 1, Kugrua 1,-Peard-Bay 1, and seismic data.- - - - Appr Date 37 Seismic-analysis 4f shallow gas zones_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ Yes _ _ _ _ Wainwright 1 and-2 and offset seismic dais do not indicate the p[esence of shalow-gas. _ _ - _ - _ _ _ _ _ _ _ _ _ - SFD 412912008 38 Seabed conditionsuroey_(ifoft-shore)_________________________________ NA-_ ---------------- ---------------------------------------------------------- 39 ContactnamelphoneforvrQekfy_progressreporls-[exploratory9r?iy]---------------- Yes- ------------------------------------------------------ --- - -- --- Geologic Engineering Date: Date Date Commissioner. Commissioner: , Co issi