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0 Image Project Well History File Cover age 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 Q - 0 - Well History File Identifier Organizing (done) ❑ Two -sided 111 11111111 11!11111 ❑ Rescan Needed (11 111111 11 111 III RE CAN DIGITAL DATA OVERSIZED (Scannable) Color Items: ❑ D' kettes, No. ❑ Maps: reyscale Items: Other, No/Type: 0 'No l- ❑ Other Items Scannable by a Large Scanner ❑ Poor Quality Originals: OVERSIZED (Non - Scannable) ❑ Other: ❑ Logs of various kinds: NOTES: ❑ Other:: BY: Maria Date: 31 t. /s/ f Project Proofing 111 IIIIIlIItII 11111 mi, BY: Maria Date: 4g2', /s/ 1 1 Scanning Preparation 4, x 30 = / c O + Q = TOTAL PAGES / (Count does not include cover shee BY: Date: 3 + 1 /s/ Production Scanning III 111111 'MIMI Stage 1 Page Count from Scanned File: / 50 (Count does include cove eet) Page Count Matches Number in Scanning Preparation: YES NO BY: Maria Date: 3 `rp 1 1 1 1 /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 111111111111 111 ReScanned 1111111111111 IIIU BY: Maria Date: /s/ Comments about this file: Quality Checked 11111111 111 10/6/2005 Well History File Cover Page.doc DATA SUBMITTAL COMPLIANCE REPORT 3/9/2011 Permit to Drill 2080480 Well Name /No. KENAI BELUGA UNIT 14 -8 Operator MARATHON OIL CO API No. 50- 133 - 20576 -00 -00 MD 8072 TVD 7746 Completion Date 6/6/2008 Completion Status 1 -GAS Current Status 1 -GAS UIC N REQUIRED INFORMATION Mud Log No Samples No Directional Survey Owes DATA INFORMATION Types Electric or Other Logs Run: (data taken from Logs Portion of Master Well Data Maint III Well Log Information: Log/ Electr g Data Digital Dataset Log Log Run Interval OH / Type Med /Frmt Number Name Scale Media No Start Stop CH Received Comments 'ED C Las 16647 nduction /Resistivity 5590 8077 Open OH logs, Mud Logs in LAS, graphics formats ?t Report: Final Well R 0 0 Open Final Well Report, Table of ll Con, Mudlog Equip and Crew, Well Details, Geo Data, Drill Data, Daily Reports y Mud Log 2 Col 173 8072 Open MD Gas Ratio yyy"' Mud Log 2 Col 173 8072 Open MD Formation Log ,-Cog Mud Log 2 Col 173 8072 Open TVD Formation Log og Mud Log 2 Col 173 8072 Open MD Drilling Dynamics Log Mud Log 2 Col 173 8072 Open TVD Drilling Dynamics III •Cog Cement Evaluation 5 Blu 4900 7934 Case Dual Radial CBL, GR, CCL og Caliper log 5 Blu 5736 8016 Open MD Hole Volume, Caliper og Sonic 25 Blu 5736 8048 Open MD Comp Sonic t. Log Induction /Resistivity OTH Blu 5736 8063 Open MD Compact Quad Combo 2" per 100' and 10" per 100' Log Induction /Resistivity 25 Blu 5736 8063 Open MD Array Induction, Vectar Processing ddLog Induction /Resistivity 25 Blu 5736 8063 Open MD Array Induction c log Induction /Resistivity 25 Blu 5421 7738 Open TVD Array Induction DATA SUBMITTAL COMPLIANCE REPORT 3/9/2011 Permit to Drill 2080480 Well Name /No. KENAI BELUGA UNIT 14 -8 Operator MARATHON OIL CO API No. 50- 133 - 20576 -00 -00 MD 8072 TVD 7746 Completion Date 6/6/2008 Completion Status 1 -GAS Current Status 1 -GAS UIC N Log Density 25 Blu 5736 8017 Open MD Photo Density, Dual Sapced Neutron i, Log Density 25 Col 2822 5770 Open MD Photo Density, Dual Sapced Neutron, c -thru processing Well Cores /Samples Information: • Sample Interval Set Name Start Stop Sent Received Number Comments II I ADDITIONAL INFORMATION �� Well Cored? Y N Daily History Received? ( I N Chips Received? . '"7 - 17 ---- '71 f Formation Tops v N Analysis - .Y..I -PI Received? Comments: Compliance Reviewed By: Date: 1 4C, 1 r ' 116 Marathon Oil Company Alaska Asset Team MARATHON Marathon P.O. Box 1949 Kenai, AK 99611 OII COmpany Telephone 907/283 -1371 Fax 907/283 -1350 July 17, 2008 Mr. Tom Maunder a Alaska Oil & Gas Conservation Commission 333 W 7 Ave dAlask Oil E Anchorage, Alaska 99501 Reference: 10 -421 Gas Well Open Flow Potential Test Report Field: Kenai Gas Field Well: Kenai Beluga Unit 14 -8 Dear Mr. Maunder: Enclosed for your records is the Gas Well Open Flow Potential Test Report for KBU 14 -8 well. This well was completed into the Beluga and Upper Tyonek formations utilizing 13 Excape modules. All modules were perforated and fractured stimulated. Please call me at (907) 283 -1371 if you have any questions or require additional information. Sincerely, 7<e/aZA 06 • kx a a Kevin J. Skiba Engineering Technician Enclosures: 10 -421 Open Flow Report cc: Houston Well File Operations Summary Kenai Well File KBU 41 -18x Attachment List KJS 0 KBU 14 -8 Kenai Gas Field Attachment List End of Well Report --* At. ` r l O '-'- -V 1 v N,C< " Well Schematic Directional Survey Logs • Array Induction MD • Array Induction TVD • Photo Density Dual Spaced Neutron MD • Photo Density Dual Spaced Neutron C -Thru MD • Array Induction Vector Processing MD • Compensated Sonic MD • Compact Quad -Combo QuikLook MD • Hole Volume Caliper MD • Dual Radial Cement Bond Gamma Ray /CCL Compact Disc • Directional Survey • Wireline Log Data • Mud Log Data • Cement Bond Log Data STATE OF ALASKA p �S ALASKA OIL. GAS CONSERVATION COMMISSION GAS WELL OPEN FLOW POTENTIAL TEST REPORT la. Test: U Initial U Annual U Special 1b. Type Test: U Stabilized U Non Stabilized ( j Multipoint ❑ Constant Time al Isochronal ❑ Other 2. Operator Name: 5. Date Completed: 11. Permit to Drill Number: Marathon Oil Company 6/5/2008 208 - 048 3. Address: P.O. Box 1949 6. Date TD Reached: 12. API Number: Kenai, Alaska 99611 - 1949 5/23/2008 50 - 133 - 20576 - 00 - 00 4a. Location of Well (Governmental Section): 7. KB Elevation (ft): 13. Well Name and Number: Surface: 443' FNL, 479' FEL, Sec 18, T4N, R11W, S. M. 88' (21' AGL) Kenai Beluga Unit 14 Top of Productive Horizon: 8. Plug Back Depth(MD +TVD): 14. Field /Pool(s): 755' FSL, 486' FWL, Sec 8, T4N, R11W, S. M. 8,022' MD 7,696' TVD Kenai Gas Field / Total Depth: 9. Total Depth (MD + TVD): Beluga & Upper Tyonek pools 768' FSL, 455' FWL, Sec 8, T4N, R11W, S. M. 8,072' MD 7,746' TVD 4b. Location of Well (State Base Plane Coordinates): 10. Land Use Permit: 15. Property Designation: Surface: x- 275,340.00 y- 2,356,284.90 Zone- 4 FED - 028142 TPI: x- 276,270.00 y- 2,357,506.00 Zone- 4 16. Type of Completion (Describe): Total Depth: x- 276,317.40 y- 2,357,600.00 Zone- 4 13 Module Excape 17. Casing Size Weight per foot, Ib. I.D. in inches Set at ft. 19. Perforations: (MD) From To Mod 13 6,578' 6,588' 9 - 5/8" 40 8.835" 5,738' Mod 12 6,620' 6,630' Mod 11 6,680' 6,690' Mod 10 7,046' 7,056' Mod 9 7,121' 7,131' Mod 8 7,164' 7,174' Mod 7 7,28W 7,299' Mod 6 7,375' 7,385' Mod 5 7,422' 7,432' Mod 4 7,598' 7,608' Mod 3 7,661' 7,671' 18. Tubing Size Weight per foot, Ib. I.D. in inches Set at ft. Mod 2 7,787' 7,79T 3 - 1/2" 9.3 2.992" 8,059' Mod 1 7,926' 7,936' 20. Packer set at ft: 21. GOR cf /bbl: 22. API Liquid Hydrocardbons: 23. Specific Gravity Flowing Fluid (G): NA - - 0.56 24a. Producing through: 24b. Reservoir Temp: 24c. Reservoir Pressure: 24d. Barometric Pressure (Pa): 0 Tubing ❑ Casing 119 F 1,005 psia @ Datum 7,608 TVDSS 14.73 psia 25. Length of Flow Channel (L): Vertical Depth (H): Gg: % CO % N2: % H Prover: Meter Run: Taps: 6,560' MD 6,235' TVD 0.56 0.298 0.144 0 Facility 26. FLOW DATA TUBING DATA CASING DATA Prover Choke Pressure Diff. Temp. Pressure Temp. Pressure Temp. Duration of Flow No Line X Orifice • psig Hw F psig F psig F Hr. Size (in.) Size (in.) IP 1. 3.826 X 1.000 1241 32.82 47.0 - - - - 3.33 2. 3.826 X 1.000 1243 32.82 46.8 - - - 0.87 al 3. 3.826 X 1.000 1246 32.82 46.9 - - - - 3.40 03 4. 3.826 X 1.000 1262 32.82 46.8 - - - - 7.12 r 5. 3.826 X 1.000 1312 32.82 45.8 - - - 4.87 -4 Basic Coefficient �- Flow Temp. Super Comp. No. (24 -Hour) y hwPm Pressure Factor Gravity Factor Factor Rate of Flow Fb or Fp Pm Ft Fg Fpv O Mcfd p 1. 96.1 39.2752 1255.73 1.00 1.336 1.159 3773 cztio 2. 124.3 39.1915 1257.73 1.00 1.336 1.159 4873 3. 143.0 39.2334 1260.73 1.00 1.336 1.159 5612 4. 112.6 39.1915 1276.73 1.00 1.336 1.166 4412 5. 141.2 38.7706 1326.73 1.00 1.336 1.174 5474 Temperature for Separator for Flowing No. Pr T Tr z Gas Fluid Gg G 1. 1.87 460 1.34 0.745 0.56 NA 2. 1.87 460 1.34 0.745 3. 1.87 460 1.34 0.745 Critical Pressure 673.1 y 4. 1.90 460 1.34 0.735 Critical Temperature 343.2 /�. ` � r 5. 1.97 460 1.34 0.725 f� I Form 10 -421 Revised 1/2004 CONTINUED ON REVERSE SIDE Submit in Duplicate Pc 1850 Pc 0 Pf No. Pt Pt Pc Pw Pw Pc Ps Ps Pf -Ps 1. 1333 1775664.192 2. 1167 1361495.223 3. 989 977870.8202 4. 1210 1463519.813 5. 1003 1006730.966 25. AOF (Mcfd) 7,833 n 0.999 Remarks: Excape well. Well not shut -in during test. SIWHP estimated at 1835 psig. I hereby certify t at the foregoing is true and cor ct to the best of my knowledge. Signed FPM,/ - Title Engineering Technician Date July 17, 2008 DEFINITIONS OF SYMBOLS AOF Absolute Open Flow Potential. Rate of Flow that would be obtained if the bottom hole pressure opposite the producing face were reduced to zero psia Fb Basic orifice factor Mcfd/ hwPm Fp Basic critical flow prover or positive choke factor Mcfd /psia Fg Specific gravity factor, dimensionless Fpv Super compressibility factor= /1 Z dimensionless Ft Flowing temperature factor, dimensionless G Specific gravity of flowing fluid (air= 1.000), dimensionless Gg Specific gravity of separator gas (air= 1.00), dimensionless GOR Gas -oil ratio, cu. ft. of gas (14.65 psia and 60 degrees F) per barrel oil (60 degrees F) hw Meter differential pressure, inches of water H Vertical depth corresponding to L, feet (TVD) L Length of flow channel, feet (MD) n Exponent (slope) of back - pressure equation, dimensionless Pa Field barometric pressure, psia Pc Shut -in wellhead pressure, psia Pf Shut -in pressure at vertical depth H, psia Pm Static pressure at point of gas measurement, psia Pr Reduced pressure, dimensionless Ps Flowing pressure at vertical depth H, psia Pt Flowing wellhead pressure, psia Pw Static column wellhead pressure corresponding to Pt, psia Q Rate of flow, Mcfd (14.65 psia and 60 degrees F) Tr Reduced temperature, dimensionless T Absolute temperature, degrees Rankin Z Compressibility factor, dimensionless Recommended procedures for tests and calculations may be found in the Manual of Back- Pressure Testing of Gas Wells, Interstate Oil Compact Commission, Oklahoma City, Oklahoma. Form 10 -421 Revised 1/2004 Side 2 , I II Permit #: 208 -0480 • KB U 14 -8 API #: 50- 133205760000 Property Des: A - 028142 Pad 41 -18 KB: 21' AGL (88' KB Elevation) 443' FNL, 479' FEL, x= 275,331.4 Sec. 18, T4N, R11W, S.M. MARATHON Y= 2,356,290.3 Lat: 60° 26' 35.866" N conductor Long: 151° 14' 47.413" W 20 K -55 133 ppf PE Spud: 5/11/2008 02:00 hrs T_s Bottom TD Reached: 5/23/2008 23:00 hrs MD Surf 15a' TVD Surf 154' Surface Casinq 13 -3/8" L -80 & J -55 68 ppf BTC Top Bottom Top of Cement (est.): MD 0' 1,500' - at 4,523' MD TVD 0' 1,500' 3,534' above 3.5" shoe 16" hole, Cmt w/ 383 sks (166 bbls), 12 ppg of Type 1 cmt. 100% returns, 61 sks (27 bbls) to surface. 9 - 5/8" Casing Shoe @ 5,746' MD Intermediate Casinq 9 -5/8" L -80 40 ppf BTC Top Bottom MD 0' 5,738' TVD 0' 5,422' 11 . 12 -1/4" hole, Cmt w/ 305 sks (180 bbls), 10.5 Excape System Details - Ceramic flapper valves below " x ppg of Class G cmt. 100% returns. each module as follows: Production Tubing Modules 12 & 13 connected I1 3 - 1/2" L - 80 9.3 ppf EUE w/ flapper below Module 12 A Top Bo P MD 0' 8,059' * Modules 9 & 10 connected ' �, TVD 0' 7,733' w/ flapper below Module 9 I 8 - 1/2" hole, Cmt w/ 987 sks (206 bbls), 15.8 ppg o Flappers MD (RKB): ) )1' �',' of Class G cmt. 8rd with 6.25" OD control line Module 13 - NA 1111 4' protectors to 8,059' RKB. Module 12 - 6,646' ) Excape System Details Module 11 - 6,707' Module 10 - NA +R 13 Excape modules system Module 9 - 7,075 Y - Red control line for modules 10 13 Module 8 - 7,192' - control line for modules 5 --0 9 Module 7 - 7,321' - - Green control line for bottom 4 modules - All modules w/ flappers above module 1 Module 6 - 7,406' CCC Module 5 - 7,452' ���{{{ .fit are disappearing flapper versions Module 4 - 7,630' Jt! `,' Perfs MD (RKB): Module 3 - 7,693' Module 13 - 6,578' - 6,588' Module 2 - 7,820' Module 12 - 6,620' - 6,630' Module 1 - NA Module 11 - 6,680' - 6,690' Module 10 - 7,046' - 7,056' Module 9 - 7,121' - 7,131' Module 8 - 7,164' - 7,174' Module 7 - 7,289' - 7,299' Module 6 - 7,375' - 7,385' Excape Float Shoe @ 8,059' MD , 1 NI Module 5 - 7,422' - 7,432' Module 4 - 7,598' - 7,608' Module 3 - 7,661' - 7,671' Module 2 - 7,787' - 7,797' PBTD TD Module 1 - 7,926' - 7,936' 8,022' MD 8,072' MD 7,696' TVD 7,746' TVD Well Name & Number: KBU14 -8 I Lease: Kenai Gas Field County or Parish: Kenai Peninsula Borough State /Prov: Alaska 1 Country:I USA Perforations (MD): Perf (TVD): Angle /Perfs: Max angle @ 1.15° Angle @ KOP and Depth: Build 1.5° / 100', starting @ 1,600• MD BHT: 131° Completion Fluid: 6% KCL Dated Completed: 6/5/2008 Ground Level (MSL): 67' above Sea Level Prepared By: Kevin Skiba Last Revison Date: 7/14/2008 7/17/2008 11:44 AM Planned Well • ath Geo • ra • hic Report Report Generated 16- Mar -08 at 10:16:25 Projection System NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Operator MARATHON Oil Company North Reference True Area Cook Inlet, Alaska (Kenai Penninsula) Scale 0.999958 Field Kenai Gas Field (NAD83) Horizontal Reference Point Slot Facility Pad #41 -18 Vertical Reference Point Glacier #1 (RKB) Slot slot #KBU14 -8 MD Reference Point Glacier #1 (RKB) Well KBU14 -8 • Field Vertical Reference Mean Sea Level Wellbore KBU14 -8 Glacier #1 (RKB) to Facility Vertical Datum 88.00 ft Wellpath KBU14 -8 Version #2 Glacier #1 (RKB) to Mean Sea Level 88.00 ft Wellbore Last Revised 10/09/2007 Facility Vertical Datum to Mud Line (Facility) 0.00 ft Sidetrack from (none) Section Origin X E 0.00 ft User Jonethoh Section Origin Y N 0.00 ft Calculation method Minimum curvature Section Azimuth 36.13 Local North Local East Grid East Grid North Latitude Longitude [ft] [k) [USft] [USft] Slot Location - 445.73 - 478.56 1415360.17 2356046.20 60 °26'35.866 "N 151 °14'46.414 "W Facility Reference Pt 1415847.04 2356482.79 60 °26'40.256 "N 151 °1436.875"W Field Reference Pt 1410937.15 2361824.52 6(72731.931 "N 151 °16'16.783"W *NAD 83 coordinates are converted to NAD 27 usin Corpscon 6.0.1 US Army Corps of Engineers) TVD from ;D Inclination Azimuth TVD Fld Ref North East Grid East Grid North Latitude Longitude DLS Toolface Build Rate Turn Rate Vert Sect Comments tft] (1 [°] [ft] • [ft] [ft] [ft] [ft] [ft] [ft] [ft] [0100ft] [°] [° /100ft] [° /100ft] [ft] 0.00 0.00 36.13 _ 0.00 -88.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2635.866 14 151"14'46.414"W 0.00 0.00 0.00 0.00 0.00 100.00 0.00 36.13 100.00 12.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 "2615.866 "N 151 °14'46.414 "W 0.00 0.00 0.00 0.00 0.00 200.00 0.00 36.13 200.00 112.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2635.866 "N 151 °14'46.414 "W 0.00 0.00 0.00 0.00 0.00 300.00 0.00 36.13 300.00 212.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2615.866"N 151'14'46.414 "W 0.00 0.00 0.00 0.00 0.00 400.00 0.00 36.13 400.00 312.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866 "N 151'14'46.414"W 0.00 0.00 0.00 0.00 0.00 500.00 0.00 36.13 500.00 412.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 6(72635.866 "N 15114'46.414W 0.00 0.00 0.00 0.00 0.00 600.00 0.00 36.13 _ 600.00 512.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'2635.866 "N 151'14'46.414'W 0.00 0.00 0.00 0.00 0.00 700.00 0.00 36.13 700.00 612.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866'N 151'14'46.414 "AT 0.00 0.00 0.00 0.00 0.00 800.00 0.00 36.13 800.00 712.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 _ 60'26'35.866'N 151'14'46.414"W 0.00 0.00 0.00 0.00 0.00 900.00 0.00 36.13 900.00 812.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866'N 151'14'46.414"W 0.00 0.00 0.00 0.00 0.00 1000.00 0.00 36.13 1000.00 912.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866 "N 151 °14'46.414"W 0.00 0.00 0.00 0.00 0.00 1100.00 0.00 36.13 1100.00 1012.00 0.00 0.00 1415360.17 2356046.20 _ 275339.987 2356284.87 60'26'35.866'N 151'14'46.414"W 0.00 0.00 0.00 0.00 0.00 1200.00 0.00 36.13 1200.00 1112.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866 "N 151 0.00 0.00 0.00 0.00 0.00 1300.00 0.00 36.1 1300.00 1212.00 0.00 0.00 1415360.17 2356046.20 275339.987 _ 2356284.87 60'26'35.866 "N 151'14'46.414"W 0.00 0.00 0.00 0.00 0.00 1400.00 0.00 36.13 1400.00 1312.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866 "N 15114'46.414'W 0.00 0.00 0.00 0.00 0.00_ 1500.00 0.00 36.13 1500.00 1412.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866'N 151'14'46.414"W 0.00 0.00 0.00 0.00 0.00 1600.00 0.00 36.13 1600.00 1512.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866'N 15114'46.414"W 0.00 0.00 0.00 0.00 0.00 1620.00 0.00 36.13 1620.00 1532.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60'26'35.866 "N 15114'46.414"W 0.00 36.13 0.00 _ 0.00 _0.00 1700.00 2.40 36.13 1699.98 1611.98 1.35 0.99 1415361.19 2356047.53 275341.007 2356286.2 60'2615.879"N 151 3.00 0.00 3.00 0.00 1.68 1800.00 5.40 36.13 1799.73 1711.73 6.85 5.00 _ 1415365.30 2356052.95 275345.117 2356291.62 60°2635.934 "N 151'14'46.314"W 3.00 0.00 3.00 0.00 8.48 1900.00 8.40 36.13 1899.00 1811.00 16.55 12.08 1415372.56 2356062.51 275352.377 2356301.179 60'2616.029"N 151 3.00 0.00 3.00 0.00 20.49 2000.00 11.40 36.13 1997.50 1909.50 30.43 22.22 1415382.96 2356076.20 275362.778 2356314.869 60'26'36.166 "N 15114'45.971"W 3.00 0.00 3.00 0.00 37.88 2100.00 14.40 36.13 2094.96 2006.96 48.46 35.38 1415396.46 2356093.98 275376.278 2356332.648 60 °2636.343"N 15114'45.708"W 3.00 0.00 3.00 0.00 60.00 2200.00 17.40 36.13 2191.13 2103.13 70.59 51.53 1415413.03 2356115.79 275392.849 2356354.457 60'26'36.561"N 15114'45.386'W 3.00 0.00 3.00 0.00 87.39 2300.00 20.40 36.13 2285.72 2197.72 96.74 70.63 1415432.61 2356141.58 275412.43 2356380.245 60'26'36.819"N 15114'45.006"W 3.00 0.00 3.00 0.00 119.78 400.00 23.40 36.13 2378.50 2290.50 126.87 92.62 1415455.17 2356171.28 275434.991 2356409.944 60'26'37.116"N 15114'44.567W 3.00 0.00 3.00 0.00 157.08 27 25.60 36.13 2445.17 2357.17 151.40 110.53 1415473.54 _ 2356195.48 275453.361 2356434.142 60'26'37.357"N 15114'44.210"/ 3.00 0.00 3.00 0.00 187.46 .00 25.60 36.13 2469.27 2381.27 160.73 117.34 1415480.53 2356204.67 275460.351 2356443.332 60•2617.449"N 15114'44.075"W 0.00 0.00 0.00 0.00 199.01 . ""Xo5.043 25.60 36.13 2559.46 2471.46 195.63 142.82 1415506.66 2356239.08 275486.482 2356477.74 60'26'37.793 "N 15114'43.567W 0.00 0.00 0.00 0.00 242.21 2700.00 25.60 36.13 2649.64 2561.64 230.52 168.29 1415532.79 2356273.49 275512.613 2356512.148 60'2618.136 "N 151•14'43.059"W 0.00 0.00 0.00 0.00 285.42 2800.00 25.60 36.13 2739.83 2651.83 265.42 193.77 1415558.92 2356307.89 275538.744 2356546.547 60'2618.480 "N 151'1412.551'W 0.00 0.00 0.00 0.00 328.62 2900.00 _ 25.60 36.13 2830.01 2742.01 300.32 219.25 1415585.05 2356342.30 275564.875 2356580.955 60'26'38.824"N 15114'42.043W 0.00 0.00 0.00 0.00 371.83 3000.00 25.60 ( 36.13 2920.20 2832.20 335.21 244.72 1415611.18 2356376.70 275591.006 2356615.353 60'2619.167"N 151°14'41.536"/ 0.00 0.00 0.00 0.00 415.04 3100.00 25.60 36.13 3010.38 2922.38 370.11 270.20 1415637.31 2356411.11 275617.137 2356649.761 60'2639.511"N 15114'41.028"W 0.00 0.00 0.00 0.00 458.24 3200.00 25.60 36.13 3100.56 3012.56 405.00 295.67 1415663.44 2356445.52 275643.268 2356684.169 60'2639.855 "N 15114'40.520"W 0.00 0.00 0.00 0.00 501.45 3300.00 25.60 36.13 3190.75 3102.75 439.90 321.15 1415689.57 2356479.92 275669.399 2356718.568 60'26'40.198 "N 151 0.00 0.00 0.00 0.00 544.65 3400.00 25.60 36.13 3280.93 3192.93 474.79 346.62 1415715.70 2356514.33 275695.53 2356752.976 60'26'40.542 "N 1511419.504"W 0.00 0.00 0.00 0.00 587.86 3500.00 25.60 36.13 3371.12 3283.12 509.69 372.10 1415741.83 2356548.73 275721.661 2356787.374 60 °26'40.886'N 151'1418.997"W 0.00 0.00 0.00 0.00 631.06 3600.00 25.60 36.13 3461.30 3373.30 544.59 397.57 1415767.96 2356583.14 275747.792 2356821.782 60•26'41.229"N 151'1438.489"W 0.00 0.00 0.00 0.00 674.27 3700.00 25.60 36.13 3551.49 3463.49 579.48 423.05 1415794.09 2356617.55 275773.923 2356856.191 60 °26'41.573 "N 151'1417.981"Y 0.00 0.00 0.00 0.00 717.48 3800.00 25.60 36.13 3641.67 3553.67 614.38 448.53 1415820.22 2356651.95 275800.054 2356890.589 _ 60'26'41.917N 15114"37.473W 0.00 0.00 0.00 0.00 760.68 3900.00 25.60 36.13 3731.86 3643.86 649.27 474.00 1415846.35 2356686.36 275826 .185 2356924.997 60'26'42.260"N 1511436.965"W 0.00 0.00 0.00 0.00 803.89 4000.00 25.60 36.13 3822.04 3734.04 684.17 499.48 1415872.48 2356720.76 275852 .316 2356959.395 60'26'42.604'N 151 0.00 0.00 0.00 0.00 847.09 4100.00 25.60 36.13 3912.23 3824.23 719.06 524.95 1415898.61 2356755.17 275878.447 2356993.804 60'26'42.947'N 1511415.950"1 0.00 0.00 0.00 0.00 890.30 4128.58 25.60 36.13 3938.00 3850.00 729.04 532.23 1415906.08 2356765.00 275885.917 2357003.633 60'26'43.046'N 1511435.804"W 0.00 0.00 0.00 0.00 902.65 Sterling A8 4200.00 25.60 36.13 4002.41 3914.41 753.96 550.43 1415924.74 2356789.58 275904 .578 2357028.212 60'26'43.291 "N 151 0.00 0.00 0.00 0.00 933.50 4300.00 25.60 36.13 4092.60 4004.60 788.86 575.90 1415950.87 2356823.98 275930.709 2357062.61 6(726'43.635 "N 1511414.934"W 0.00 0.00 0.00 0.00 976.71 4400.00 25.60 36.13 4182.78 4094.78 823.75 601.38 1415977.00 2356858.39 275956.84 2357097.018 60 °26'43.978"N 1511414.426'W 0.00 0.00 0.00 0.00 1019.91 4500.00 25.60 36.13 4272.97 4184.97 858.65 626.86 1416003.13 2356892.79 275982.971 2357131.417 60 °26'44.327N 15114'33.918W 0.00 0.00 0.00 0.00 1063.12 4600.00 25.60 36.13 4363.15 4275.15 893.54 652.33 1416029.26 2356927.20 276009.102 2357165.825 60'26'44.666 "N 1511413.410"W 0.00 0.00 0.00 0.00 1106.33 4700.00 25.60 36.13 4453.33 4365.33 928.44 677.81 1416055.39 2356961.61 276035.233 2357200.233 60'26'45.009 "N 151'14'32.903"W 0.00 0.00 0.00 0.00 1149.53 - 4800.00 25.60 36.13 4543.52 4455.52 963.34 703.28 1 1416081.52 2356996.01 276061.364 2357234.631 60'26'45.353'N 151 °1412.395"W 0.00 0.00 0.00 0.00 1192.74 4900.00 , 25.60 36.13 4633.70 4545.70 998.23 728.76 1416107.65 2357030.42 276087.495 2357269.04 60'26'45.697'N 151 °14'31.887"W 0.00 0.00 0.00 0.00 1235.94 5000.00 25.60 36.13 4723.89 4635.89 1033.13 754.23 i 1416133.78 2357064.82 276113.626 2357303. 438 60'26'46.040"N 151 °14'31.379"W 0.00 0.00 0.00 0.00 1279.15 Page 1 of 2 Planned Well • ath Geo • ra • hic Re • ort Report Generated 16- Mar -08 at 10:16:25 Projection System NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Operator MARATHON Oil Company North Reference True • rea Cook Inlet, Alaska (Kenai Penninsula) Scale 0.999958 Field Kenai Gas Field (NAD83) Horizontal Reference Point Slot acility Pad #41 -18 Vertical Reference Point Glacier #1 (RKB) •Iot slot #KBU14 -8 MD Reference Point Glacier #1 (RKB) ell KBU14 -8 Field Vertical Reference Mean Sea Level ellbore KBU14 -8 Glacier #1 (RKB) to Facility Vertical Datum 88.00 ft ellpath KBU14 -8 Version #2 Glacier #1 (RKB) to Mean Sea Level 88.00 ft ellbore Last Revised 10/09/2007 Facility Vertical Datum to Mud Line (Facility) 0.00 ft . idetrack from (none) Section Origin X E 0.00 ft User Jonethoh Section Origin Y N 0.00 ft Calculation method Minimum curvature Section Azimuth 36.13 Local North Local East Grid East Grid North Latitude Longitude [ft] [ft] [USft] [U Sft] Slot Location - 445.73 - 478.56 1415360.17 2356046.20 60 °26'35.866 "N 151 °14'46.414'W Facility Reference Pt 1415847.04 2356482.79 60 ° 26'40.256 "N 151 °14'36.875"1f/ Field Reference Pt 1410937.15 _ 2361824.52 60 °2731.931"N 151 °16'16.783"W NAD 83 coordinates are converted to NAD 27 using - con 6.0.1 US Army Corps of En a sneers "- TVD from ID Inclination Azimuth TVD Fid Ref North East Grid East Grid North Latitude Longitude DLS Toolface Build Rate Turn Rate Vert Sect Comments (ft] [°] [°] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ °/100ft] [1 [ ° /100ft] [ °1100ft] [ft] 5026.74 25.60 36.13 4748.00 4660.00 1042.46 761.05 1416140.77 2357074.02 276120.816 2357312.638 60 °26'46.132 "N 151 °14'31.243"W 0.00 0.00 0.00 0.00 1290.70 Beluga 5100.00 25.60 36.13 4814.07 4726.07 1068.02 779.71 1416159.91 2357099.23 278139.757 2357337.846 60 °26'46.384 "N 151°14'30.871"W 0.00 0.00 0.00 0.00 1322.35 5173.38 25.60 36.13 4880.25 4792.25 1093.63 798.40 1416179.09 2357124.48 276158.937 2357363.095 60 °26'46.636 "N 151 °14'30.498'W 0.00 180.00 0.00 0.00 1354.06 5200.00 25.07 36.13 4904.31 4816.31 1102.83 805.12 1416185.98 2357133.55 276165.827 2357372.165 60'26'46.727N 151 °14'30.365"W 2.00 180.00 -2.00 0.00 1365.45 5300.00 23.07 36.13 4995.61 4907.61 1135.76 829.16 1416210.64 2357166.02 276190.488 2357404.633 _ 60'26'47.051 "N 151 °14'29.885"W 2.00 180.00 -2.00 0.00 1406.22 5400.00 21.07 36.13 5088.29 5000.29 1166.10 851.31 1416233.36 2357195.93 _ 276213.209 2357434.541 60 °26'47.350 "N 151 °14'29.444'W 2.00 180.00 -2.00 0.00 1443.79 5500.00 19.07 36.13 5182.21 5094.21 1193.81 871.54 1416254.11 2357223.25 276233.96 2357461.86 60'26'47.623 "N 151'14'29.040"W 2.00 180.00 -2.00 0.00 1478.10 5600.00 17.07 36.13 5277.28 5189.28 1218.86 889.83 1416272.86 2357247.95 276252.711 2357486.559 60'26'47.869"N 1519428.676"W 2.00 180.00 -2.00 0.00 1509.11 5700.00 15.07 36.13 5373.37 5285.37 1241.21 906.14 1416289.60 2357269.98 276269.451 2357508.588 60 °26'48.089"N 151'1428.351"W 2.00 180.00 -2.00 0.00 1536.78 5766.73 13.73 36.13 5438.00 5350.00 1254.61 915.93 1416299.63 2357283.20 276279.482 2357521.807 60'26'48.221"N 151'1428.156'W 2.00 180.00 -2.00 0.00 1553.37 Middle Beluga 5800.00 13.07 36.13 5470.36 5382.36 1260.83 920.47 1416304.29 2357289.34 276284.142 2357527.947 60'26'48.283 "N 151•1428.065"W 2.00 - 180.00 -2.00 0.00 1561.08 5900.00 11.07 36.13 5568.15 5480.15 1277.72 932.80 1416316.93 2357305.98 _ 276296.782 2357544.588 60'26'48.449 "N 151'1427.8191W 2.00 180.00 -2.00 0.00 1581.98 6000.00 9.07 36.13 5666.60 5578.60 1291.83 943.10 1416327.50 2357319.90 278307.353 2357558.505 60'26'48.588 "N 151'1427.614'W 2.00 180.00 -2.00 0.00 1599.46 6100.00 7.07 36.13 5765.61 5677.61 1303.16 951.38 1416335.99 2357331.07 278315.843 2357569.875 60'2648.700 "N 151 1427.449'/ 2.00 180.00 -2.00 0.00 1613.49 6200.00 5.07 36.13 5865.04 5777.04 1311.70 957.61 1416342.38 2357339.49 278322.233 2357578.094 60'26'48.784 "N 1511427.325'W 2.00 180.00 -2.00 0.00 1624.06 6300.00 3.07 36.13 5964.79 5876.79 1317.42 961.79 1416346.67 2357345.13 276326 .523 2357583.734 60'26'48.840 "N 151 °1427.241"W 2.00 180.00 -2.00 0.00 1631.15 6400.00 1.07 36.13 6064.72 5976.72 1320.34 963.91 1416348.85 2357348.00 276328.703 2357586.604 60 °2618.869'N 151 °1427.199'W 2.00 180.00 -2.00 0.00 1634.75 6453.29 0.00 36.13 6118.00 6030.00 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873'N 151 °1427.193"W 2.00 0.00 -2.00 0.00 1635.25 6500.00 0.00 36.13 6164.71 6076.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587. ^. 60 °26'48.873"N 151 °1427.193"W 0.00 0.00 0.00 0.00 1635.25 6600.00 0.00 36.13 6264.71 6176.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873'N 151 °1427.193"W 0.00 0.00 0.00 0.00 1635.25 6700.00 0.00 36.13 6364.71 6276.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873'N 1511427.193"W 0.00 0.00 0.00 0.00 1635.25 6800.00 0.00 36.13 6464.71 6376.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873"N 151 °1427.193"W 0.00 0.00 0.00 0.00 1635.25 6900.00 0.00 _ 36.13 _ 6564.71 6476.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151'1427.193"W 0.00 0.00 0.00 0.00 1635.25 7000.00 0.00 36.13 6664.71 6576.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151'1427.193'W 0.00 0.00 0.00 0.00 1635.25 7100.00 0.00 36.13 6764.71 6676.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 0.00 0.00 0.00 0.00 1635.25 00.00 0.00 36.13 6864.71 6776.71 1320.74 964.20 1416349.15 2357348.40 278329.003 2357587.004 60 °26'48.873 "N 1519427.193"W 0.00 0.00 0.00 0.00 1635.25 14.00 0.00 _ 36.13 6964.71 6876.71 1320.74 964.20 1416349.15 2357348.40 _ 276329.003 2357587.004 60 °26'48.873"N 1519427.193"W 0.00 0.00 0.00 0.00 1635.25 �_ 44.00 0.00 36.13 7064.71 6976.71 1320.74 964.20 1416349.15 2357348.40 _ 278329.003 2357587.004 ' 60 °26'48.873'N 151'1427.193"W 0.00 0.00 0.00 0.00 1635.25 7500.00 0.00 36.13 7164.71 7076.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 15194'27.193'W 0.00 0.00 0.00 0.00 1635.25 7578.29 0.00 36.13 7243.00 7155.00 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873"N 151'1427.193'W 0.00 0.00 0.00 0.00 1635.25 _ 7600.00 0.00 36.13 7264.71 7176.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 . 60 °26'48.873'N 151'14'27.193'W 0.00 0.00 0.00 0.00 1635.25 7700.00 0.00 36.13 7364.71 7276.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60'26'48.873 "N 151°1427.193'W 0.00 0.00 0.00 0.00 1635.25 7800.00 0.00 36.13 7464.71 7376.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 1519427.193'1 0.00 0.00 0.00 0.00 1635.25 7900.00 0.00 36.13 7564.71 7476.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 9427.193"W 0.00 0.00 0.00 0.00 1635.25 8000.00 0.00 36.13 7664.71 7576.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873'N 151 0.00 0.00 0.00 0.00 1635.25 8073.29 0.00 36.13 7738.00 7650.00 1320.74 964.20 1416349.15 2357348.40 276329.003 2''SP' n14 60'2648.873 "N 15194'27.193'W 0.00 0.00 0.00 0.00 1635.25 Page 2 of 2 Permit #: 208 • KB U 14 -8 API #: 50- 133205760000 Property Des: A - 028142 Pad 41 -18 KB: 21' AGL (88' KB Elevation) 443' FNL, 479' FEL, X= 275,331.4 Sec. 18, T4N, R11W, S.M. MARATHON Y= 2,356,290.3 Lat: 60° 26' 35.866" N conductor Long: 151° 14' 47.413" W �' 1 20" K -5 133 ppf PE Spud: 5/11/2008 02:00 hrs :* 1 Top Bottom TD Reached: 5/23/2008 23:00 hrs MD Surf TVD Surf 154' 154' y mi Surface Casinq 13 -3/8" L -80 & J -55 68 ppf BTC . Top Bottom Top of Cement (est.): MD 0' 1,500' - at 4,523' MD i TVD 0' 1,500' - 3,534' above 3.5" shoe • ►, 16" hole, Cmt w1383 sks (166 bbls), 12 ppg of a'` Type 1 cmt. 100% returns, 61 sks (27 bbls) 0 V to surface. 9 - 518" Casing Shoe @ 5,746' MD Intermediate Casinq 9-5/8" L -80 40 ppf BTC Top Bottom Y MD 0' 5,738' TVD 0' 5,422' Excape System Details I j 12 -1/4" hole, Cmt wl305 sks (180 bbls), 10.5 - Ceramic flapper valves below ppg of Class G cmt. 100% returns. each module as follows: • �j Production Tubing Modules 12 & 13 connected 3 - 1/2" 1 9.3 ppf EUE w/ flapper below Module 12 I) Top Bottom It MD 0' 8,059' Modules 9 & 10 connected T w/ flapper below Module 9 t TVD 0' 7,733' �' 8 -1/2" hole, Cmt wl 987 sks (206 bbls), 15.8 ppg Flappers MD (RKB): j of Class G cmt. 8rd with 6.25" OD control line Module 13 - NA 111 protectors to 8,059' RKB. Module 12 - 6,646' j Excape System Details Module 11 - 6,707' - 13 Excape modules system Module 10 - NA DI j control line for modules 10 13 I Module 9 - 7,075' Module 8 - 7,192' !1 control line for modules 5 9 Module 7 - 7,321' j control line for bottom 4 modules Module 6 - 7,406' O� All modules w/ flappers above module 1 Module 5 - 7,452' }� are disappearing flapper versions Module 4 - 7,630' _ i!� Perfs MD (RKB): Module 3 - 7,693' ? CCC Module 13 - 6,578' - 6,588' Module 2 - 7,820' �� Module 12 - 6,620' - 6,630' Module 1 - NA L� Module 11 - 6,680' - 6,690' Module 10 - 7,046' - 7,056' j Module 9 - 7,121' - 7,131' Module 8 - 7,164' - 7,174' - Module 7 - 7,289' - 7,299' 1 Module 6 - 7,375' - 7,385' Excape Float Shoe @ 8,059' MD I! Module 5 - 7,422' - 7,432' j ;, �i Module 4 - 7,598' - 7,608' I Module 3 - 7,661' - 7,671' Module 2 - 7,787' - 7,797' PBTD TD Module 1 - 7,926' - 7,936' 8,022' MD 8,072' MD 7,696' TVD 7,746' TVD Well Name & Number: KBU14 -8 I Lease: Kenai Gas Field County or Parish: Kenai Peninsula Borough State /Prov: Alaska I Country:I USA Perforations (MD): Perf (TVD): Angle /Perfs: Max angle @ 1.15° Angle @ KOP and Depth: Build 1.5° 1100', starting @ 1,600' MD BHT: 131° Completion Fluid: 6% KCL Dated Completed: 6/5/2008 Ground Level (MSL): 67' above Sea Level Prepared By: Kevin Skiba Last Revison Date: 7/14/2008 7/16/2008 3:15 PM • • Marathon Oil Company Alaska Asset Team M Marathon P.O. Box 1949 Kenai, AK 99611 M ARATHON Oil Company Telephone 907/283 -1371 Fax 907/283 -1350 has � � B s f ^ � y : E n Y � July 17, 2008 JUL 2 .I 2008 Mr. Tom Maunder Alaska Oil & Gas Conservation Commissi 333 W 7th Ave Anchorage, Alaska 99501 Reference: 10 -407 Well Completion Report and Log Field: Kenai Gas Field Well: Kenai Beluga Unit 14 -8 Dear Mr. Maunder: Enclosed please find the 10 -407 Well Completion Report and Log for Kenai Gas Field well KBU 14 -8. This well was completed into the Beluga and Upper Tyonek formations utilizing 13 Excape modules. All of the modules were perforated and fracture stimulated. Please contact me at (907) 283 -1371 if you have any questions or require additional information. Sincerely, (9 Kevin J. Skiba Engineering Technician Enclosures: 10 -407 Well Completion Report cc: Houston Well File Well Schematic Kenai Well File Operations Summary KJS KBU 14- 8Attachment List • . KBU 14 -8 Kenai Gas Field Attachment List End of Well Report Well Schematic Directional Survey Logs • Array Induction MD • Array Induction TVD • Photo Density Dual Spaced Neutron MD • Photo Density Dual Spaced Neutron C -Thru MD • Array Induction Vector Processing MD • Compensated Sonic MD • Compact Quad -Combo QuikLook MD • Hole Volume Caliper MD • Dual Radial Cement Bond Gamma Ray /CCL Compact Disc • Directional Survey • Wireline Log Data • Mud Log Data • Cement Bond Log Data H L ,, :i 0� COMPLETION STATE OF ALASKA 7' - ALASKA OIL AND GAS CONSERVATION Cy [ DS li` �, ISS]O � WELL COMPLETION OR RECOM T PEPO AND LO E P, -' OiI ❑ Gas 0 - Plugged ❑ Abandoned ❑ Suspended ❑ 11i '1/Veil'i✓ls5sk 3 lt/r) 20AAC 25.105 20AAC 25.110 °` ' `°' ' > � opment Q . Exploratory III GINJ❑ WINJ ❑ WDSPL❑ WAG ❑ Other El No. of Completions: 1 Service ❑ Stratigraphic Test ❑ 2. Operator Name: 5. Date Comp., Susp., or 00. 12. Permit to Drill #: 208 - 048 Marathon Oil Company Aband.: 642008 Sundry #: 308 - 194 3. Address: PO Box 1949 6. Date Spudded: 6�' „ //�- 13. API Number: Kenai Alaska, 99611 - 1949 5/1J/2008 50 133 - 20576 - 00 - 00 4a. Location of Well (Governmental Section): 7. Date TD Reached: 4, 14. Well Name and Number: Surface: 443' FNL, 479' FEL, Sec 18, T4N, R11W, S. M. 5/2412008 Kenai Beluga Unit 14 - Top of Productive Horizon: 8. KB (ft above MSL): 88' 15. Field /Pool(s): 755' FSL, 486' FWL, Sec 8, T4N, R11W, S. M. Ground (ft MSL): 67' Kenai Gas Field / Total Depth: 9. Plug Back Depth(MD +TVD): Beluga & Upper Tyonek Pools 768' FSL, 455' FWL, Sec 8, T4N, R11W, S. M. 8,022' MD 7,696' TVD 4b. Location of Well (State Base Plane Coordinates, NAD 27): 10. Total Depth (MD + TVD): 16. Property Designation: ' ' Surface: x- 275,331.4 2,356,290.3 Zone- 4 8,072' MD 7,746' TVD FED/1028142 TPI: x- 276,339.5 2,357,588.0 Zone- 4 11. SSSV Depth (MD + TVD): 17. Land Use Permit: Total Depth: x- 276,317.4 2,357,600.0 Zone- 4 NA 18. Directional Survey: Yes 0 No ❑ 19. Water Depth, if Offshore: 20. Thickness of Permafrost (TVD): (Submit electronic and printed information per 20 AAC 25.050) NA (ft MSL) NA 21. Logs Obtained (List all logs here and submit electronic and printed information per 20 AAC 25.071): See KBU 14-8 Attachment List 22. CASING, LINER AND CEMENTING RECORD WT. PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASING GRADE TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD FT PULLED 20" 133 K -55 Surf 154' Surf 154' Driven 13 -3/8" 68 L -80 0' 871' 0' 87V 16" 13 -3/8" 68 J -55 871' 1,413' 871' 1,413' 16" 383 sks of Type 1 61 sks 13-3/8" 68 L -80 1,413' 1,500' 1,413' 1,500' 16" 9 -5/8" 40 L -80 0' 5,738' 0' 5,422' 12 -1/4" 305 sks of Class G NA 3 -1/2" 9.3 L -80 0' 8,059' 0' 7,733' 8 -1/2" 987 sks of Calss G NA 23. Open to production or injection? Yes 0 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) Module MD TVD 25. ACID, FRACTURE, CEMENT SQUEEZE, ETC. 13 & 12 6,578'- 6,630' 6,253'- 6,305' DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED 11 6,680'- 6,690' 6,355' - 6,365' 6,578'- 6,630' 24,930 Ib of 20/40 sand & 3,564 Ib of flex sand 10 & 9 7,046'- 7,131' 6,721'- 6,806' 6,680'- 6,690' 35,173 Ib of 20/40 sand 8 7,164'- 7,174' 6,839'- 6,849' 7,046'- 7,131' 29,247 Ib of 20/40 sand 7 7,289'- 7,299' 6,964' - 6,974' 7,164'- 7,174' 15,789 Ib of 20/40 sand 6 7,375'- 7,385' 7,050'- 7,060' 7,289'- 7,299' 21,506 Ib of 20/40 sand 5 7,422'- 7,432' 7,097'- 7,107' 7,375'- 7,385' 21,925 Ib of 20/40 sand 4 7,598'- 7,608' 7,273'- 7,283' 7,422'- 7,432' 28,270 Ib of 20/40 sand & 4,042 Ib of flex sand 3 7,661'- 7,671' 7,336'- 7,346' 7,598'- 7,608' 23,092 Ib of 20/40 sand & 3,302 Ib of flex sand 2 7,787'- 7,797' 7,461'- 7,471' 7,661'- 7,671' 14,425 Ib of 20/40 sand & 2,065 Ib of flex sand 1 7,926'- 7,936' 7,600'- 7,610' 7,787'- 7,797' 17,881 Ib of 20/40 sand & 2,509 Ib of flex sand 7,926' - 7,936' 14,613 Ib of 20/40 sand & 2,026 Ib of flex sand 26. PRODUCTION TEST Date First Production: 6/15/2008 Method of Operation (Flowing, gas lift, etc.): Flowing Date of Test: Hours Tested: Production for Oil -Bbl: Gas -MCF: Water -Bbl: Choke Size: Gas -Oil Ratio: 7/1/2008 24 Test Period . . 0 5,280 64/64 100% Gas Flow Tubing Casing Press: Calculated Oil -Bbl: Gas -MCF: Water -Bbl: Oil Gravity - API (corr): Press. 871 0 24 -Hour Rate ---p 0 5,280 NA 27. CORE DATA Conventional Core(s) Acquired? Yes ❑ No 0 Sidewall Cores Acquired? Yes ❑ No IO 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, care chips, photographs and laboratory analytical results per 20 AAC 25.071. Form 10 -407 Revised 2/200 R IGINA O NTINUED ON REVERSE . ' 1 $ BFI-, JUL 3 0 20O8 .4Yt . m) 2EOLOGIC MARKERS (List all formations andeers encountered): 29. FORMATION TESTS NAME 1 1 TVD Well tested? Lives If yes, list intervals and formations tested, briefly summarizing test results. Attach separate sheets to this form, if needed, and submit Permafrost - Top detailed test information per 20 AAC 25.071. Permafrost - Base M. Beluga 5,743' 5,427' L. Beluga 6,478' 6,153' - Top Tyonek 7,554' 7,229' 72 -8 Sd 7,571' 7,246' 73 -1 Sd 7,635' 7,310' 75 -8 Sd 7,879' 7,553' _ Formation at total depth: 75 -8 Sd 8,072' 7,746' 30. List of Attachments: See KBU 14 Attachment List 31. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Kevin Skiba (907) 283 - 1371 Printed Name: K vin J. Skiba Title: Engineering Technician Signature: Q Phone: (907) 283 -1371 Date: July 17, 2008 INSTRUCTIONS General: This form is designed for submitting a complete and correct well completion report and log on all types of lands and leases in Alaska. Submit a well schematic diagram with each 10 -407 well completion report and 10-404 well sundry report when the downhole well design is changed. Item 1 a: Classification of Service wells: Gas Injection, Water Injection, Water- Altemating -Gas Injection, Salt Water Disposal, Water Supply for Injection, Observation, or Other. Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI (Top of Producing Interval). Item 8: The Kelly Bushing and Ground Level elevations in feet above mean sea level. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits (ex: 50- 029 - 20123- 00 -00). Item 20: Report true vertical thickness of permafrost in Box 20. Provide MD and TVD for the top and base of permafrost in Box 28. Item 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 foram 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 t 1 Permit #: 208 -0480 KB U 14-8 API #: 50- 133205760000 l Property Des: A - 028142 Ii Pad 41 -18 KB: 21' AGL (88' KB Elevation) 443' FNL 479' FEL, X= 275,331.4 € MARATHON Y= 2,356,290.3 1 Sec. 18, T4N, R11W, S.M. Lat: 60° 26' 35.866" N Conductor Long: 151° 14' 47.413" W �_. 20" K -55 133 ppf PE Spud: 5/11/2008 02:00 hrs ft Top Bottom TD Reached: 5/23/2008 23:00 hrs MD Surf 154' TVD Surf 154' Surface Casing 13 -318" L -80 & J -55 68 ppf BTC Top Bottom Top of Cement (est.): MD 0' 1,500' - at 4,523' MD TVD 0' 1,500' - 3,534' above 3.5" shoe 16" hole, Cmt w1383 sks (166 bbls), 12 ppg of Type 1 cmt. 100% returns, 61 sks (27 bbls) to surface. 9 - 5/8" Casing Shoe @ 5,746' MD Intermediate Casing 9 -5/8" L -80 40 ppf BTC Top Bottom MD 0' 5,738' TVD 0' 5,422' 12 -114" hole, Cmt wl 305 sks (180 bbls), 10.5 Excape System Details - Ceramic flapper valves below j ppg of Class G cmt. 100% returns. each module as follows: + �j Production Tubing * Modules 12 & 13 connected f �i 3 - 112" L - 80 9.3 ppf EUE w/ flapper below Module 12 ) Top Bottom e MD 0' 8,059' * Modules 9 & 10 connected p� TVD 0' 7,733' w/ flapper below Module 9 ) [ 111 8 -112" hole, Cmt w1987 sks (206 bbls), 15.8 ppg Flappers MD (RKB): ) of Class G cmt. 8rd with 6.25" OD control line Module 13 - NA 111 1' protectors to 8,059' RKB. Module 12 - 6,646' !! ? Excape System Details Module 11 - 6,707' DI f - 13 Excape modules system Module 10 - NA - Red control line for modules 10 -> 13 Module 9 - 7,075' 01 Module 8 - 7,192' } control line for modules 5 9 Module 7 - 7,321' j� - Green control line for bottom 4 modules Module 6 - 7,406' - ++� - All modules w/ flappers above module 1 Module 5 - 7,452' are disappearing flapper versions Module 4 - 7,630' 7, DI f Perfs MD (RKB): Module 3 - 7,693' n ) l r Module 13 - 6,578' - 6,588' Module 2 - 7,820' ill L . " Module 12 - 6,620' - 6,630' CC I Module 11 - 6,680' - 6,690' Module 1 - NA 11 f Module 10 - 7,046' - 7,056' Module 9 - 7,121' - 7,131' Module 8 - 7,164' - 7,174' Module 7 - 7,289' - 7,299' - �{{ Module 6 - 7,375' - 7,385' - Excape Float Shoe @ 8,059' MD J Module 5 - 7,422' - 7,432' - V Module 4 - 7,598' - 7,608' - Module 3 - 7,661' - 7,671' - Module 2 - 7,787' - 7,797' - PBTD TD Module 1 - 7,926' - 7,936' 8,022' MD 8,072' MD 7,696' TVD 7,746' TVD Well Name & Number: KBU14 -8 I Lease Kenai Gas Field County or Parish: Kenai Peninsula Borough State /Prov: Alaska I Country:1 USA Perforations (MD): Perf (TVD): Angle /Perfs: Max angle @ 1.15° Angle @ KOP and Depth: Build 1.5° /100', starting @ 1,600' MD BHT: 131° Completion Fluid: 6% KCL Dated Completed: 6/5/2008 Ground Level (MSL): 67' above Sea Level Prepared By: Kevin Skiba Last Revison Date:_ 7/14/2008 7/17/2008 11:41 AM • Operations Summary Repo. Well Name: KENAI BELUGA UNIT 14 -8 Qtr /Qtr, Block, Sec, Town, Range Field Name License No. State /Province Country 8N: 2356046.197 E: 1415360.172 NAD 83 KENAI ALASKA USA Daily Operations Report Date: 3/13/2008 Job Category: DRILLING 24 Hr Summary Set 20" conductor at 153.5 „ , - "' il ... • Trouble $ ,� Start Time a Dur' rs s Code. 1 = Acli : r • ' Pe vi tyCode Ste; . i C� e.. 08:30 09:00 0.50 SAFETY MTG AF Hole PJSM issue permits 09:00 09:30 0.50 PULD EQIP AF Spot crane PU jt #1 set in template 09:30 09:42 0.20 DRIVE CSG AF drive jt 1 f/ 10' to 36' BGL Hammer wt. % of power Time 10 5k 20% 0 20 5k 20% 1.5min 30 5k 20% 1min 36 5k 20% 1min 09:42 11:30 1.80 PULD EQIP AF Lay hammer down PU jt #2 Weld to jt #1 11:30 11:36 0.10 DRIVE CSG AF Drive jt #2 f/ 36' to 76' BGI Hammer wt. % of power Time 46' 10k 45% 1min 56' 10k 50% 1min 66' 15k 50% 1 min 76' 15k 50% 1.5min 11:36 13:15 1.65 PULD EQIP AF Lay hammer down P/U jt#3 Weld to jt. #2 13:15 13:33 0.30 DRIVE CSG AF Drive jt#3 F -76' - 116' BGL Hammer wt. % of power Time 86 20k 60% 1.5 min 96 20k 60% 1min 106 20k 60% 1min 116 20k 60% 1min 13:33 15:10 1.62 PULD EQIP AF Lay Hammer Down P/U jt 4 Weld to jt #3 15:10 16:10 1.00 DRIVE CSG AF Drive Jt #4 F- 116'- 153.5' BGL hammer wt % of power Time 126 22k 75% 1.5min 136 22k 75% 1.5min 146 22k 85% 2.5min 153.5 22k 100% 12min 16:10 16:45 0.59 RURD EQIP AF 20" Conductor Refusal, DEMOB crane complete permits. Report Date: 5/10/2008 Job Category: DRILLING 24 Hr Summary MIRU GD -1 µ Traubte v: Sta Time . End T jme Mallon) O «: " t Code, ,S taff Cale 4 pump, pits m ud boat, carrier, y • 18:00 06:00 12.00 MOB RIG AF PJSM: R/U Set um sub base, water house, Gen house, run eleciric lines.Set grey iron.PJSM; Crane work,set fuel tank, choke house and grey iron, stairs.R /U mud pits, flowline, gasbuster, dresser sleeves, pop -off lines. Report Date: 5/11/2008 Job Category: DRILLING 24 Hr Summary MIRU GD -1 Set starting head. Nipple up diverter. Ac Co S fartllme 4,„,,,y,,,,,,„, rs l . QPu "Mode a : e t" � d�Ttme ' ,.. ) 7 T Op Cod- � tl erode Status ,� * « � � Comment . ,., • �` r s s ... 06:00 03:00 21.00 RURD_ RIG_ AF Continue R/U GD -1. Crane up dog house, Landings, Stairs.Set camp and rig up. R/U electrical lines, water ,air and Mud lines. R/U pits and pumps. Set epoch unit. Set Shop and parts house. Scope up mast. Set rig berm.Set # 3 mud pump, cuttings tank and Mi van Begin filling pits with drillplex mud from hanson tank. Set cat walk and P/U beaver slide. Install torque tube.Pick up top drive, Close up boiler,Test run top drive, do rig inspection.Rig up of GD -1 Complete on KBU 14 -8 0300hrs 5 -11 -08 www.peloton.com Page 1/10 Report Printed: 7/17/2008 • Operations Summary Repo Well Name: KENAI BELUGA UNIT 14 -8 Casing Flange Elevation (ft) Ground Elevation (ft) KB- Casing Flange Distance (ft) KB- Ground Distance (ft) Spud Date Rig Release Date 0.00 67.00 88.00 21.00 2/19/2008 Ops Trouble s, Ste , - End Time . DUrj}( ®r • - ActMtyCode H Status Code : • av ,. =nt ,. s 03:00 05:00 2.00 NUND BOPE AF Rough cut conductor, weld nipple to conductor, dress conductor, set starting head, Test to 500psi 05:00 06:00 1.00 NUND BOPE AF Nipple up divertor. Daily Operations Report Date: 5/12/2008 Job Category: DRILLING 24 Hr Summary N/U Divertor, Prep to P/U BHA, Test Divertor, P/U 50 jts. 5 "" D /P, 21 jts. HWDP, M/U C/O Assy., RIH C/O t/173', P/U DrIg. Assy. RIH, Drill f/173' to 393' Ops Trouble v ` ` =" tart TI ,' diTlme Dur .z ;SW ,• • Ai e;„ ' . Status Code °E, 06:00 11:00 5.00 NUND BOPE AF Continue nipple up diverter system. Install riser, flow lines, trip tank and fill up lines. 11:00 12:30 1.50 RURD_ OTHR AF Set pipe racks and level. Load pipe racks with 5 "" drillpipe. Unload 8 "" Motors MWD and tools. Set up hanson tank 12:30 13:30 1.00 TEST_ BOPE AF Function test diverter system. .Test Gas alarms flow and pvt system. Witness waived by AOGCC gob Noble 5/10/2008 0930hrs. Called BLM Tim Lawlor 5/10/2008 10:00hrs. all tests good 13:30 17:00 3.50 PULD_ DP_ AF P/U drift and stand back 50jts 5 "" drillpipe 21jts 5 "" hwdp and jars. 17:00 21:30 4.50 CLNOUT CSG_ AF M/U 17 1/2 clean out assy .Clean out 20csg. f- 28' to 173.5'. POH UD 17 1/2 bit 21:30 00:00 2.50 PULD_ BHA_ AF PJSM;Pick up BHA #2 f/ drilling. 00:00 01:30 1.50 WAITON EQIP LOWE Wait on cross over. For Directional Drilling BHA. 01:30 02:00 0.50 PULD_ BHA_ Finish picking up BHA, RIH. 02:00 06:00 4.00 DRILL AF Drill survey f/174'- 393' Up wt. =40K Dn wt. =40K Rt wt. =40K Tq.= 1 -1.5K 5 -7K Bit Wt. Spud well @ 0200 hrs. Note unable to pump more than 444aom. due to losses over shakers. Re •ort Date: 5/13/2008 Job Cate • o : DRILLING 24 Hr Summary Drill f- 393'- 1188', Repair hyd. hose, Drill f- 1188'- 1510',CBU, POOH to 155', srv. rid, RIH t- 1510',CBU 2X, POOH,UD BHA, R/U to run 13 3/8 "" me rpm (hr • b Sta g, Coe n Canvnent 06:00 12:00 6.00 DRILL_ ROT_ AF Drill f/ 393'- 860' Up wt. 60k Dn wt. 60k. Rt Wt. 60k 315stks 600gpm 1350psi Tq 3000. wob 12 -15k. ART= 3.7 AST =.4. Initnal pump rate 440gpm due to mud loss over shaker. Increase flow rate to 505gpm at 425' Increase rate to 530gpm at 523'. At 630' Increase pump rate to 600gpm, shakers 12:00 15:35 3.58 DRILL_ ROT_ AF Drill f/ 860'- 1188'ART =2.0 AST =O 15:35 16:35 1.00 REPAIR RIG TA Repair Hydralic line on drillers control panel 16:35 20:00 3.42 DRILL_ ROT_ AF Drill f- 1188'- 1510' ART =2.80 AST =0 Up wt. =72K Dn wt. =70K Rt wt. =72K Tq. =3 -5k 20:00 21:00 1.00 CIRC_ MUD_ AF Circ. bottoms up.Fill trip tank. 21:00 22:30 1.50 TRIP_ DP_ AF PJSM; POOH f/1510' -155' No gains No Iosses.Hole slick. 22:30 23:30 1.00 SERVIC RIG_ AF PJSM; Serv. carrier, blocks, crown, top drive. 23:30 00:00 0.50 REPAIR RIG_ TA PJSM; Replace Compesator hose, pump up slide hose, purge mud from pressure sensor line on swaco unit. 00:00 01:00 1.00 TRIP_ DP_ AF PJSM;RIH f/155' -1510' Hole slick no fill on bottom, no gains no losses 01:00 02:00 1.00 CIRC_ MUD_ AF Circ. two bottms up, clean hole. 02:00 05:30 3.50 TRIP_ DP_ AF PJSM; POOH lay down shock sub, cross overs, MWD, pony collar, stab, mud motor. 05:30 06:00 0.50 RURD_ CSG_ AF Rig up to run 13 3/8" "csg. •ort Date: 5/1' 10: J• • . e• • i • 24 Hr Summary RU to run 13 3/8, PU shoe track, RIH w/ csg. Shoe at 1500' flot collar at 1454'. RU csg tools, RIH w/ 5" DP w/ stab in tool, Pump cmt in place at 20:15 hrs. WOC, Clear rig floor, ND divertor lines, PU diverter cut csg. Ops Trouble llurfhrs) � QPs �„ � �� �odet •� Status ,` Code ` <� -; � =;A Comment n , 06:00 07:30 1.50 RURD CSG AF Rig up to run 13 3/8 Casing. C/O bails elevators, Tongs Slips and bowl 07:30 13:45 6.25 RUN CSG AF PJSM : P/U shoe track Ck Floats. Run 36jts 13 3/8 J -55 and L -80 68# BTC casing to m 1490' Wash f -1490 to1500' due to fill. No gains lossses Correct displacement. 13:45 16:30 2.75 RURD CSG PJSM;Rig down casing tools, C/O bails and elevators. Set up false rotary table to run inner string cement job. 13 3/8 shoe at 1500'- 13 3/8 Float collar at 1454'. 16:30 18:00 1.50 TRIP DP RIH with stab in tool on 5" drillpipe, locate into landing collar. www.peloton.com Page 2/10 Report Printed: 7/17/2008 • Operations Summary Repo. Well Name: KENAI BELUGA UNIT 14 -8 Casing Flange Elevation (ft) Ground Elevation (ft) KB- Casing Flange Distance (ft) KB- Ground Distance (ft) Spud Date Rig Release Date 0.00 67.00 88.00 21.00 2/19/2008 . t' Ops Start lino nd?ime 4, i tkir( 1„.„„ ps Code „/" code Statue Code ': : " ,: *4 ^ " , s .<4 : qtr+ 18:30 0.50 CIRC MUD Criculate at 220gpm with tool stabbed into float collar at 1454' - PJSM; w/ BJ, pump 40 bbls. mud clean 2, with red dye,Pump 5 bbls. water, test lines, to 3000 psi, mix and pump 166 bbls. cmt =Type 1 + 22 % -LW -6, +20% MPA -1, +2% CaCI, +1 % -SMS, +0.3 %- CD- 32, +.05% static free, +1ghs- FP -6L, No losses 100% returns. With 36bbls returned to surface e AF Break down cmt hd. , pull 45' and pump dart to displace pipe. 21:30 22:30 1.00 TRIP DP AF PJSM; POOH w/ 5" D/P and stab in tool, from 1396'. • • PJSM;Flush stack, and mud lines, pull plate, clear floor, nipple down divertor lines and mud Iines,Clean pits 0 • BOPE AF Nipple down diverter. Pick up diverter cut 13 3/8 csg.Lay down csg. Remove diverter. Daily Operations Report Date: 5/15/2008 Job Category: DRILLING 24 Hr Summary Nipple up BOP , test, P/U 3000', 5" drillpipe BHA, P/U pipe RIH 2 te "" Ops Troubl e 1.";11°- . ..": }: x Ttme a 'ilia'."' ,, 0.:: a " Cale Statue Code et «: g ,..." • s NUND BOPE AF Continue nipple down diverter system. Starting head stuck on 20 ". Cut 20" and remove starting head with 20" stub. 09:00 , 1.00 NUND WLHD AF Make final cut on 9 5/8. Dress out and set multi- bowl wellhead Test to 1800psi/ 10 min. : _ NUND BOPE AF Set BOP stack and nipple up 18:00 23:00 . TEST BOPE AF Test BOPE and all related componants 250/3000. Test Gas, PVT and flow alarms. Preform accumlator drawn down test. Called BLM Tim Lawlor @ 1400hrs 5/13/08. Witnessed by Bob Noble AOGCC 23:00 00:00 1.00 TEST CSG AF Rig up test csg. t/1500 psi -30 min. test good 00:00 00:30 0.50 RUNPUL WBSH AF Set Wear bushing 00:30 06:00 5.50 PULD DP AF P/U 5" drillpipe Total of 3000' 97jts Report Date: 5/16/2008 Job Category: DRILLING 24 Hr Summary P/U 5" D /P, P/U 12 1/4" BHA, P/U 5" D /P, Tag CMT. @1446', drill shoe track to 1510',drill 0/H t/1530', Fit test t/13.2 #EMW, Drill f/1530' .. Code rf " K; c Trouble Start , End � � N 4 ° ; Cede Code � e °, "£ t i 0 • I ' 07:00 ' - e e ~' AF P/U drift 5" from pipe rack total of 3000' 97jts RIH and stand back in mast • PULD BHA AF P/U 12 1/4 directional bha rih. Pulse test MWD • DP AF RIH p/u drillpipe from pipe rack and RIH to 1360' 10:30 11:00 0.50 TRIP DP AF - Wash from 1360 -1446' 11:00 12:00 1.00 DRILL AF Tag cement at 1446 10' above float collar DRILL 12:00 12:30 0.50 ROT AF Clean out to 1510 Drill new hole to 1530 12:30 13:30 1.00 cm MUD AF Circ Clean up casing for displacement of 9.1 flow pro mud. Hvy return of cement . 13:30 14:00 0.50 CIRC MUD AF Displace hole with 9.1 flow pro mud 14:00 14:30 0.50 TEST LOT AF Preform Fit 9.1 mw 320psi 1500 tvd = 13.2 EMW 14:30 06:00 15.50 DRILL ROT AF e n - •- p wt. =: •', ' n. wt. =:7K, rt wt. =85K tq. =1.6K, No gains no losses,max. gas =15 units Report Date: 5/17/2008 Job Category: DRILLING 24 Hr Summary Drill ahead f- 2685 -3632 Wiper Trip. Service rig TIH Drill 3632 -3870 • 12:00 6.00 DRILL ROT AF Drill f/2685- 3060' Up wt. 101k S/0 88k. Rt wt 95k TQ 3 -4k .270 spm = 530gpm 1025psi Art= 3.4 Ast = 0 No gain /loss. l 5.50 DRILL ROT AF PJSM; Drill f/3060' -3569' Up wt. =107K Dn wt. =95K Rt wt. =100KTq. =3 -5K ART =2.9 AST =.3 , Start losing fluid at 3569' 4 bbls. hr. 17:30 • 1.00 CIRC MUD AF Circ. Lost 7 bbls. watch losses, static losses 4BPH DRILL 18:30 19:00 0.50 ROT Drill f/3569' to 3622' Up wt. =107K Dn wt. =95K Rt wt. =100K Tq. =3 -5K ART =.4 AST =.2 • e t 6 bbl CM pill on m.# er , a Sfe c, 10, 20, 40, 5# per Spo bb S -2L i 50 , 10# g -seal botto 10# Mix MI seal fine bbl and medium. arb.2 e 22:00 2.00 TRIP WIPR PJSM; Wiper trip f/3632' to 2987' No tight spots,lost 4 bbls on hole fill. 22:00 23:00 1.00 SERVIC RIG 21A PJSM; Service rig and top drive, change out elevators. e 0.50 TRIP DP PJSM; RIH f/1487' -2180' Monitor well no losses www.peloton.com Page 3/10 Report Printed: 7/17/2008 • Operations Summary Repo Well Name: KENAI BELUGA UNIT 14 -8 Casing Flange Elevation (ft) Ground Elevation (ft) KB- Casing Flange Distance (ft) KB- Ground Distance (ft) Spud Date Rig Release Date 0.00 67.00 88.00 21.00 2/19/2008 2/28/2008 Startllme End 1lme.: •< OpsCode llctiviryCode :Cbinrien# 23:30 00:00 s 1 TRIP DP TA MSHS POOH f/2180' to 1487', Having clutch problems on drawworks.Monitor well no losses 00:00 00:30 0.50 REPAIR RIG PJSM; Change out friction plate on clutch. 9 P 02:00 1.50 TRIP DP AF PJSM; RIH to 3576" wash down to 3632'. i 06:00 4.00 DRILL ROT AF PJSM; Drill f/3632' -3870 to Up wt. =115K Dn wt. =100K Rt wt. =110K tq. =4 -6K No gains no losses, Max. gas =20 units. Daily Operations Report Date: 5/18/2008 Job Cate • o : DRILLING 24 Hr Summary Drill f- 3870'- 4262' MWD Failure. Circ .POH Replace MWD and Drillcollar. RIH Cut drilling line. RIH Drill 4262' -4707 g s . Trouble start .A. 4a. ": Cede f' a z :, - �ur eta ' bps Cade ' de � � ,: =k • • r 6.50 DRILL ROT AF f- 3870'- 4231' Up Wt. 125k. Dn.wt. 115k Rt Wt. 117 TQ 46k. Rot. 60 -70 420gpm 985psi 231spm mud loss to hole 35bbls 12:30 13:30 1.00 CIRC MUD TA MDMW Lost •fuse from MWD. Circulate B/U for TIH to chan•e out MWD tool 16:00 2.50 TRIP DP TA MDMW Monitor well , Pull 5 stands, pump dry job. POH for MWD failure. 16:00 1 1.50 TRIP BHA TA MDMW PJSM; Stand back BHA, Change out MWD, X.O., and flex collar w/ bad face on pin end.Found cotton rag with duck tape on top of MWD in pulsator. 17:30 19:30 2.00 TRIP BHA TA MDMW PJSM; Pick up BHA, RIH to 801' test MWD good. • . 20:00 0.50 TRIP DP TA MDMW Run in hole with drill pipe f/801'- 1494'. 20:00 21:00 1.00 SLPCUT DLIN AF PJSM; Slip and cut drilling line. 21:00 00:00 3.00 TRIP DP TA MDMW Cont. run in hole f/1494' -4262' Wash f -4200 to 4262' Tag bottom no fill . Losing 1 -2 bbls. hr. 00:00 06:00 6.00 DRILL ROT AF Drill 4262' - 4710 Up wt. 130k Dn. wt. 115k Rt wt125k Tq 4 -6k 228spm 440gpm 1100psi Art= 4hr. Ast= 0. Fluid loss to hole 1 -2bbls per hr.. Report Date: 5/19/2008 Job Category: DRILLING 24 Hr Summary Drill f/ 4710' -5748' TD Intermediate hole section Circ. btms. up. Wiper trip 5748 -4262' -5748' ,W, rouble £ • s 12:00 6.00 DRILL ROT AF Drill 4710- 5088' Up wt. 140k Dn wt. 120k Rt. wt. 130k 220stks 1000psi 420gpm. Art= 4.7 Ast =0. Note Lost 4lbbls at 4980' Pump 50 bbl Icm pill Drill Head .Continue losses at 10- 15bbls per hr. Losses dropped to 5bbl per hr. at 5030' Total mud lost 75bbls. Lost 25 bbls over shakers as LCM hit r 02:30 14.50 DRILL ROT AF Drill f 5088'- 57481Up wt. 150k Dn130k Rt. wt 140k 220stks 1000psi 420gpm. Pump 26bb1 Icm pill at 5708' fluid loss to hole 2 -3bbl per hour. ART= 6.2, AST= 3.5 0 • 04:00 1.50 CIRC MUD AF Circulate B/U at 5748'. Continue Circ until shakers cleaned up. Fluid loss 1 bbl per hr. 04:00 05:30 1.50 TRIP WIPR AF Monitor well POH wiper trip f 5748'- 4262' Hole slick no tight spots. Fluid loss to hole 2 bbl per hr. 05:30 06:00 0.50 TRIP WIPR AF RIH f -4262' Re • ort Date: 5/20/2008 Job Category: DRILLING 24 Hr Summary TIH Wiper trip. Circ. Poh R/ /U Run 9 5/8 csg. ':: '.�` < Opt Trouble '% . -- ,. „v;. �u � "' Start t = , . En • Time OT rs Ops Code -1 ' , Activity Code Status < ;Code 06:00 07:30 1.50 TRIP WIPR AF Continue wiper trip to 5748' Wash and ream out tight spot at 5360' - 5605' and 5620- 5642' Precautionary wash F- 5642' -5748' Tag bottom 7' of fill t 1.50 CIRC MUD Circ B/U at 5748' Continue circ until shakers clean up Spot 20bbi G- seal /Mix 2 LCM pill on bottom • 5.50 TRIP Monitor well pull 5 stands, pump dry job. POH SLM to run casing Hole took 6bbls over caculated hole fill No correction SLM 14:30 17:00 2.50 TRIP BHA Stand back HWDP Lay down 12 1/4 Tools 17:00 19:00 2.00 TEST CSG Pull wear bushing. Change out 5" pipe rams to 9 5/8 casing rams, Set test plug test 9 5/8 Casing to 250 /3000psi • s 19:30 0.50 RUN CSG AF Make dummy run with csg. hanger and mark landing joint. 19:30 23:30 4.00 RURD CSG AF Rig up to run 9 5/8 casing. www.peloton.com Page 4/10 Report Printed: 7/17/2008 • Operations Summary Repo Well Name: KENAI BELUGA UNIT 14 -8 Casing Flange Elevation (ft) Ground Elevation (ft) KB- Casing Flange Distance (ft) KB- Ground Distance (ft) Spud Date Rig Release Date 0.00 67.00 88.00 21.00 2/19/2008 Start Time Status" Code `€ 1r. .� ° .n.. !nt : Time En � cl Der Ops Code �. Activity Code »� 23:30 00:00 0.50 SAFETY MTG AF Hold safety meeting with rig crews and Weaterford casing crew. 00:00 01:00 1.00 RUN CSG AF Pick up 9 5/8 shoe track. Pump shoe track volume to check floats. Run 9 5/8 L -80 40# BTC Casing,. 01:00 04:00 3.00 REPAIR RIG TA MSHS Shut down and repair stabbing board for running casing. 04:00 06:00 2.00 RUN CSG AF Cont. to run 9 5/8 casing from 84.47'. Hole still taking 1 bbls. hr. Daily Operations Report Date: 5/21/2008 Job Category: DRILLING 24 Hr Summary Run and Cement 9 5/8 Casing. Test BOPE. ,Mart The End thee, Our (hrs) Opts Code Aotivlty Code Statue . Code 06:00 16:00 10.00 RUN CSG AF Continue running 9 5/8 casing. At reduced rate to prevent hole surging Spot 32bb1 Icm pill in casing after 1066' ran, Cont . RIH Wash and work casing down from 5671' to 5734' Continue to circulate. No gain / Loss . Correct hole displacement Float collar at 5653.6 Shoe at 5737.5' 16:00 19:30 3.50 PUMP CMT AF PJSM; With BJ cementers, rig up cmt. lines, pump 2 bbls. water ahead, pressure test cmt lines to 3000 psi.,drop first plug, mix and pump 20 bbls. seal bond sweep, at 10#ppg., Batch mix pump 305 sx. Class "G" +47 %LW- 6 +15 %BA -90 +1 %CD- 32 +.5 %SMS +1 %FL- 52 +.05 %Static free +1ghsFP -6L +10.5 ppg, Yield =3.314 cu.ft. /sk.12.658 gal /sk, 5:26 thickening time, 180 bbls.slurry, 91.92 bbls.water to mix.,Drop second plug, pump out with 5 bbls. water. switch to rig pumps, displace with 428 bbls. Bump Plug with 1450 psi,/700 over displacement rate. Hold pressure for 5Min, bleed off, floats held 100% returns CIP at 1930hrs. 19:30 02:00 6.50 RURD CMT AF Blow down lines, rig down cmt. hd., Lay down csg. landing joint.install 9 5/8 pack off.Test seals to 5000 psi for 10 min. good.Rig up rig floor for drill pipe.Adjust top drive rail. 02:00 03:00 1.00 RURD CSG AF Change 9 5/8 rams to 2 7/8 -5 1/2 variable rams. 03:00 06:00 3.00 TEST BOPE AF PJSM; R/U test joint, set plug, fill stack, test BOP and components 250 low 10 min. 3500 psi high 10 min.Test annular 2500 psi 10 min. Report Date: 5/22/2008 Job Category: DRILLING 24 Hr Summary Con't test BOPE. M/U 8 -1/2" BHA & test MWD. RIH w/ p/u 96 jts 5" drill pipe. Repair top drive grabber. Readjust torque tube rail. Test 9 -5/8" csg to 1500 psi. Drill cmt, float equip & 20' new hole. CBU. F.I.T. Drill 8 -1/2" hole @ 6091'. . • T3rrle 9 k t t (I�P6� Trouble starts ® .. veh..= _ i ®�., i od s � Code ; . « " � � .. 06:00 07:00 1.00 TEST BOPE AF Continue Testing BOPE. Test gas, flow and pvt systems. Preform accumlator draw down test. Witness waved By Jim Regg AOGCC Called Tim Lawlor BLM and gave notice. 07:00 09:30 2.50 PULD BHA AF P/U and make up 8 1/2 Directional drilling BHA 09:30 11:00 1.50 INSPCT BHA TA MSTB Made up 6 1/2 Non mag drill collars and brake out Found gaulled threads on 2 connections Lay down and replace 11:00 12:00 1.00 TRIP BHA AF Continue RIH with HWDP. Pulse test MWD 12:00 17:30 5.50 TRIP DP AF P/U Drift and RIH w/ 5" drillpipe 96jts Total Continue RIH from mast to 5449'. Con't RIH w/ stds to 5270'. 17:30 19:30 2.00 WAITON CMT AF WOC. Readjust torque tube rail. 19:30 20:30 1.00 TEST CSG AF Rig up & test 9 -5/8" csg to 1500 psi f/ 30 min (OK . 20:30 21:00 0.50 TRIP DP AF RIH f/ 5270' - 5648'. Tag up 9 -5/8" float collar @ 5648'. 21:00 22:00 1.00 DRILL CMT AF Drill out cement & 9 -5/8" float equipment. Clean out 12 -1/4" rat hole to 5748'. Non - rotating wiper plugs were extremely effective. Took only 5 minutes to drill out both plugs. 22:00 22:30 0.50 DRILL ROT AF Drill 20' new 8 -1/2" hole f/ F.I.T. ART = 0.3 hrs. 22:30 23:00 0.50 CIRC MUD AF Circulate bottoms up & con't until mud balanced around. 23:00 23:30 0.50 TEST LOT AF Rig up & perform F.I.T. @ 5420' tvd (5736' md) w/ 9.4 ppg mud wt. & 1015, psi. EMW =_13.:0 ppg. 23:30 06:00 6.50 DRILL ROT AF Directional drill 8 -1/2" hole f/ 5748' - 6091' @ 500 gpm, 1350 psi, 15 klb WOB, 70 RPM's, 8 kft -Ibs TQ, P/U 170K, S/O 125K, Rot Wt 135K. ART = 2.0 hrs, AST = 2.2 hrs. Report Date: 5/23/2008 Job Category: DRILLING 24 Hr Summary Drill 8 -1/2" hole f/ 6091' - 7400'. www.peloton.com Page 5/10 Report Printed: 7/17/2008 • Operations Summary Repoli!) Well Name: KENAI BELUGA UNIT 14 -8 F 7a , : Ops ? 7 to ubls ;;. s 4TH Start Time " End Time Our (hrs) Ops Code Activity Code ' Status Co de" Comma ;, 06:00 12:00 6.00 DRILL ROT AF Drill Ahead f 6091'- 6344' Up Wt= 160k S/0 Wt. 130k Rt. Wt. 148k. Tq 6 -9k 258spm 500gpm 1450psi Art= 1.6 Ast= 1.6. No Gain /Loss. Having difficulty maintaining tool face . Taking up to 1 hr to slide 20'. 12:00 18:00 6.00 DRILL ROT AF Directional drill 8 -1/2" hole f/ 6344' - 6521' @ 500 gpm, 1800 psi, WOB 8 -15 klb, 70 RPM's, TQ 7 -9 kft-Ibs, P/U 168 klbs, S/0 130 klbs, Rot Wt 148 klbs. ART = 0.9 hrs, AST = 3.8 hrs. 18:00 00:00 6.00 DRILL ROT AF Drill 8 -1/2" vertical hole f/ 6521' - 6967' @ 500 gpm, 1950 psi, WOB 5 -15 klb, 70 RPM's, TQ 7 -10 kft -Ibs, P/U 172 klbs, S/0 130 klbs, Rot Wt 155 klbs, ART = 3.7 hrs, AST = 0 hrs. Max gas = 189 units. Avg bkgnd gas = 5 units. No gains or losses. 00:00 06:00 6.00 DRILL ROT AF Drill 8 -1/2" vertical hole f/ 6967' - 7400' @ 500 gpm, 1950 psi, WOB 5 -15 klb, 70 RPM's, TQ 7 -11 kft-Ibs, P/U 190 klbs, S/O 140 klbs, Rot Wt 155 klbs, ART = 3.7 hrs, AST = 0 hrs. Max gas = 585 units. Max connection gas = 320 units. Avg bkgnd gas = 30 units. Pumped 30 bbl hi -vis sweep w/ 200% cuttings increase over shakers. Shut down centrifuge van. Start weighting up mud f/ 9.3 ppg to 9.7 ppg. No gains or losses. Daily Operations Report Date: 5/24/2008 Job Category: DRILLING 24 Hr Summary Drill to 8047'. Circ w/ inc mud wt to 10.2 ppg. Make wiper trip to 5716'. Service rig. RIH. Drill 25' to a TD of 8072'. Circ out gas thru choke. Inc mud wt to 10.3 ppg. Make 10 std dummy trip. Pump sweep & CBU. POOH. corrunent StartTlme;, e • OpeCode Code. Code" r ", " ,.. 06:00 15:00 9.00 DRILL ROT AF Drill 8 -1/2" vertical hole f/ 7400' - 8047' @ 500 gpm, 2200 psi, WOB 5 -10 klb, 70 RPM's, TQ 8 -11 kft-Ibs, P/U 190 klbs, S/O 150 klbs, Rot Wt 170 klbs, ART = 5.9 hrs, AST = 0 hrs. Max gas = 433 units. No gains or losses. 15:00 16:30 1.50 CIRC MUD AF PJSM: Circ & condition mud. Increase mud wt to 10.0 + ppg. 16:30 20:00 3.50 TRIP WIPR AF PJSM: Check for flow. POOH f/ 8047' - 5716'. Work various tight spots w/o any backreaming or circulating. 20:00 21:30 1.50 SERVIC RIG AF PJSM: Service rig. C/O brake handle pin bushing. 21:30 23:00 1.50 TRIP WIPR AF PJSM: RIH f/ 5716' - 8047'. Wash last stand to bottom. No problems RIH. Hole took proper fluid. No fill on bottom. 23:00 23:30 0.50 DRILL ROT AF Drill 8 -1/2" vertical hole f/ 8047' - 8077.. ART = 0.2 hrs. 23:30 01:00 1.50 CIRC MUD AF Circulate bottoms up gas. Shut well in a 2035 units & circ thru choke. Gas reached 818 units after circ thru gas buster. Increased mud wt f/ 10.1 ma to 01:00 01:30 0.50 TRIP WIPR AF Make 10 stand dummy trip f/ 8072' - 7450'. No problems. Hole took proper fill. 01:30 02:00 0.50 TRIP WIPR AF RIH f/ 7450' - 8072'. No problems. 02:00 03:00 1.00 CIRC MUD AF Pump 30 bbl hi -vis sweep. Circ out trip gas. Max gas = 400 units. Con't circ until shakers clean & gas dropped off to 33 units. Monitor well (static). Pump dry job. 03:00 06:00 3.00 TRIP DP AF PJSM: POOH, SLM w/ 5" drill pipe. Current depth @ 06:00 hrs = 4520'. Report Date: 5/25/2008 Job Category: DRILLING 24 Hr Summary POOH. UD BHA. Clean rig floor. R/U & run a -logs on wireline. • t 0p ; Troubie . r 1 te • r OPe ' " Status " Cone; x ... 06:00 08:00 2.00 TRIP DP AF Continue POH SLM f/ 4520' - 792'. 08:00 10:00 2.00 TRIP BHA AF PJSM: Stand back HWDP & jars. Lay down Monels, Pony collar, X overs Non mag stablizer, Break out bit UD MWD. and motor. 10:00 10:30 0.50 CLEAN RIG AF Clean /clear rig floor 10:30 12:30 2.00 RURD ELEC AF PJSM : Rig up lubicator and Weatherford Wire Line logging tools 12:30 14:30 2.00 LOG OH AF Load RAS & RIH to 5650' w/ quad -combo logging tools. Turn tool on & RIH to locate loggers shoe depth. Tool would not track data when attempt to move down. 14:30 18:30 4.00 LOG OH TA MDLG Troubleshoot entire logging system. Found telemetry data tracking issues & resolved problems. 18:30 02:00 7.50 LOG OH AF RIH w/ wireline tool & tag up @ 8063' WLM. Log out of hole f/ 8063' - 3000' WLM. POOH. L/D wireline tools & R/D Weatllin61 - 0r . www.peloton.com Page 6/10 Report Printed: 7/17/2008 • Operations Summary Repo. Well Name: KENAI BELUGA UNIT 14 -8 Daily Operations Report Date: 5/25/2008 Job Category: DRILLING 24 Hr Summary Begin completion phase @ 02:00 hrs on 5/25/08. Rig repair. M/U cleanout assy. RIH. -.. Ops Trouble � , - , 0„:14„- k� k � ,� Start Time End Time Dur (hrs) Ops Code ' Activity C ode ; s .: Status; ; Code " _ • 02:00 04:00 2.00 REPAIR RIG TA MSPW PJSM: Troubleshoot & repair drawworks. Wire on neutral safety switch damaged on #2 motor. 04:00 06:00 2.00 TRIP DP AF PJSM: M/U 8 -1/2" cleanout assembly & RIH to 5736'. Report Date: 5/26/2008 Job Category: DRILLING 24 Hr Summary RIH w/ 8 -1/2" cleanout assy. Circ gas out. POOH w/ laying down 5" drill pipe. Clear rig floor. Pull wear ring. R/U & RIH w/ 3 -1/2" Excape. , � , Trouble x � � I mite e . End Time Dar hrs) Ops Code Activity Code '* Stittli ak , ;.Code 06:00 07:30 1.50 TRIP DP AF Continue RIH with clean out assy to 5731 07:30 08:30 1.00 CIRC MUD AF Stop at 9 5/8 shoe and circulate B/U for Gas at 5731' Max gas 90units 08:30 09:30 1.00 CUT WIRE AF PJSM: Slip 33' Drilling Line 09:30 10:30 1.00 TRIP DP AF RIH f- 5731' - 8010' Wash f -8010 to 8072' No gain loss hole slick 10:30 12:00 1.50 CIRC MUD AF Circulate 2x B/U at 8072' Max gas 2050units With 10.4MW in hole 12:00 21:30 9.50 PULD DP AF PJSM: Monitor well. Pump dry job. POH while laying down 260 jts 5" drillpipe f/ 8072' - 662'. Note : Add congor 404 to dry job. Flush each joint with water and dope thread protectors 21:30 22:30 1.00 PULD BHA AF Lay down 21 jts 5" HWDP, jars, bit sub & 8 -1/2" bit. 22:30 23:00 0.50 RUNPUL WBSH AF PJSM: Pull wear bushing. 23:00 00:00 1.00 CLEAN RIG AF PJSM: Clear rig floor. Rig down & lay out rotary tools. 00:00 01:30 1.50 RURD CSG AF PJSM: Rig up Weatherford to run 3 -1/2" casing. 01 :30 02:00 0.50 SAFETY MTG AF PJSM w/ Weatherford, Pollard, ASRC, Glacier & Marathon. Discuss & review procedures for running 3 -1/2" Excape prcedures. 02:00 02:45 0.75 RURD CSG AF Rig up & hang Expro control line sheaves w/ crane. 02:45 06:00 3.25 RUN CSG AF P /U, M/U & 3 1/2 casing Shoe track and check floats RIH w/ 3 -1/2" L -80, EUE 9.3 ppf casing w/ 13 Excape modules, 3 control lines & 1 sacrificial line. Report Date: 5/27/2008 Job Category: DRILLING 24 Hr Summary Run 3 -1/2" casing. Float shoe set @ 8058' & top of float collar set @ 8022'. Pump cement. Begin nipple down. Ops Trouble ki e F <:: Stag 4lme ' End ,Dui ) D� Code a : _.: A ; +� Code . Status Code < . r . , � .... 06:00 20:30 14.50 RUN CSG AF Con't RIH w/ 3 -1/2" 9.3 ppf, L -80, Mod EUE casing to 8048 ". Run total 236 jts w/ 13 Excape modules, 3 control lines & 1 sacrificial line. Preliminary shoe depth (ca 8048' & float collar a 8012'. No ,gains or loss during, ent ire e iob. Correct fluid displacement. 20:30 22:30 2.00 CIRC MUD AF PJSM: Circ. bottoms up for correlation logs. Flow @ 5 bpm (105 spm) w/ 880 psi w/ reciprocating pipe. Max gas = 230 units. 22:30 01:30 3.00 RUNPUL ELEC AF PJSM: Rig up Expro wireline & run correlation logs for Excape module depth correction. Rig down Expro. P/U 10' pup jt & space out. Float shoe set P_ 8058.59', top of float collar set (a7 8022.02'. Spot 90 bbls of mud with Congor 404 in 3 -1/2" X 9 -5/8" annulus. 01:30 05:00 3.50 PUMP CMT AF PJSM w/ BJ services. Rig up cement head. Switch to cmt line. Pump 5 bbls water ahead & test cmt lines to 4000 psi. Mix & pump 40 bbl Sealbond 11.0 ppg spacer followed by 987 sks of 15.8 ppg class "G" cmt w/ 1.2% BA -56, 0.5% EC -1, 0.3% CD -32, 0.2% SMS, 1% CaCl2, 0.05% Static Free, lghs FP -6L, 1.169 cu.ft. /sk yield, 4.915 gal water /sk, 3:55 hrs thickening time, 205.5 bbl slurry, 115.5 bbls mix water. Close valve to head, open wash up valve & pump 5 bbls water. Close wash up valve & open to head. Drop plug & kick out w/ 5 bbls water. Displace cement w/ 64.7 bbls KCL water from vac truck. Bump plug as calculated w/ 1000 psi over displacement pressure. Cmt in place @ 04:45 hrs. Bleed off & check floats. Turn over to rig. No mud lost. 100% returns. Reciprocated pipe throughout entire cmt iob.Note: 350 units of gas at last 1 Obbls of displacement. 05:00 06:00 1.00 NUND BOPE AF Preliminary nipple down. Remove flow line. Flush mud lines & pumps. Report Date: 5/28/2008 Job Category: DRILLING 24 Hr Summary WOC. N/D BOPE, Clean pits, N/U production tree & test same. www.peloton.com Page 7/10 Report Printed: 7/17/2008 i Operations Summary Repo Well Name: KENAI BELUGA UNIT 14 -8 And Ops Trouble or tart Time End Time r' . ..0 Co de Activity Code Status. ; - ,Code , t .,_:, te a., � ps vity � $C,orfiRl®n �s. 06:00 15:00 9.00 NUND BOPE AF Continue N/D BOPE. Remove flow nipple and lines to trip tank. Rig down MI van, cuttings tank ,Epoch unit and move out. Clean pits. Rig down #3 mud pump and load out. Blow down boiler.and Clean hanson tank while waiting on cement. 15:00 15:30 0.50 SAFETY MTG CS Hold safety standown to discuss Cell phone usage on Marathon pads / roads and spills 15:30 00:00 8.50 NUND BOPE AF PJSM: P/U BOP stack pull control lines from rig floor. P/U 93k on casing and set split slips/ pack off . Make cut on 3 1/2 casing. Remove bop stack from cellar. Test pack off to 5000psi f/ 10 min. Test void to 5000 psi f/ 10 min. Test tree to 10,000 psi f/ 10 min. Pull TWC & install BPV. 00:00 06:00 6.00 RURD RIG AF PJSM: Rig down top drive. Clean pits & hanson tank. Clean rig water tank found 1' -2' of sand in tank. Rig down mast board. C/O saver sub and stabbing guide. Pull service lines. Blow down boiler. Daily Operations Report Date: 5/28/2008 Job Category: DRILLING 24 Hr Summary Rig down GD -1 & release to GO #7. 3'. Ltilianms- .. End Time DurOn) . de Statue Cede '< • L. L .,. 06:00 12:00 6.00 DEMOB RIG AF PJSM: Rig down derrick house, #1 & #2 pumps, dresser sleaves, pop off valves, bleeders, mud pit house, water house, water & steam lines around rig. Pull wires from dog house & choke house. Rig down BOP connex. Rig down entire camp & prepare to move to GO #7 location. Released rig from KBU 14-8 12:00 hrs on 5/28/08.,_ Report Date: 5/31/2008 Job Category: COMPLETION 24 Hr Summary MIRU Vetco. Install SSV. Pull BPCV. MIRU Expro to run CBL. 7 .r Ops ": Trouble A, : ,,,Start Thae .;End lime Dur (hre7 x : ps Code . Activity Code Status Code ... '_ Corrvnen 07:30 08:18 0.80 AFETY MTG AF Hold PJSM w/ UOSS and Vetco Gray. Discuss specific job hazards associated w/ hanging SSV and pulling BPCV. Obtain Safe Work Permit. 08:18 09:03 0.75 - URD EQIP AF Install SSV. 09:03 09:18 0.25 - URD EQIP AF Pull Back Pressure Check Valve. 09:18 09:33 0.25 EST EQIP AF PTest SSV to Wing Valve connection to 5K psi. Test good. 09:33 10:03 0.50 - URD EQIP AF Vetco install annular pressure monitoring valves and related instrument tubing. 10:03 10:09 0.10 AFETY MTG CS Job shut down. Report Date: 6/2/2008 Job Category: COMPLETION 24 Hr Summary Run CBL / Gr tied into Weatherford Density Neutron Sonic dated 24 May 2008 �. C1ss ituble Start Time -, . [ „ our ors fpsCode = 9 ; Activity Code tam f CCode, C omrwent tJit 08:00 08:45 0.75 SAFETY MTG AF Obtain work permits, PJSM 08:45 09:45 1.00 RURD ELEC AF - Rig up crane, wireline, wellhead eq. 09:45 13:30 3.75 LOG CSG AF Run CBL /GR 13:30 14:15 0.75 RURD ELEC AF Rig Down Expro Wireline 14:15 14:30 0.25 SECURE WELL AF Secure wellhead, sign out, turn in workpermit, leave location Re •ort Date: 6/6 /2008 Job Cate . o : COMPLETION 24 Hr Summary Perforated Module 1 - firing head pressure 2950# Start Time .ldiEnd liras . i ) ', Code" - Activity Code Status - Code rit 10:00 10:30 0.50 SAFETY MTG AF safety meeting, topics active gas production pad, red lights, blue lights, siren, muster area change due to arctic terns, simultaneous operations, spotting equipment, high presssure lines etc. 10:30 11:00 0.50 RURD STIM AF rig up Expro perforating serv.for Excape 11:00 11:30 0.50 PEr CSG AF Perforate Module 1 - 2950# pressure activate - audio / visual verification. 11:30 12:00 0.50 WELL AF rig down for evening Re •ort Date: 6/14/2008 Job Category: COMPLETION 24 Hr Summary Fracture stimulate Modules 1 -13 www.peloton.com Page 8/10 Report Printed: 7/17/2008 . Operations Summary Repo. Well Name: KENAI BELUGA UNIT 14 -8 y $ ops Trouble' start 11m lu 1lme 7 'our Ors Cps Code {h x : < � Activity Code blots ', .Code ' � _ , . . . 'Gomment,. ...� " .. 07:00 07:30 0.50 SAFETY MTG AF PJSM Slips, trips, falls. Possible light rain. Iron will be getting slippery, Active gas production pad. red lights for fire, blue lights for gas release, sirens, buddy rule, three second rule, muster area. 2nd muster area, head count 31 less 2 GESI, 4 production 07:30 08:00 0.50 TEST BOPE AF Pressure test treating lines / wellhead Equipment to 9500# - test good 08:00 08:30 0.50 PUMP FRAC AF Mod 1 - oumo frac stimulation 2 #,4 #,4# flush - puimped 14,613# 20/40 sand, 2026# - flex, 310 BBL water 08:30 08:45 0.25 PERF CSG AF Mod 2 - Perforate 7790 -7800 feet firing head pressure -5208# 08:45 09:15 0.50 PUMP FRAC AF Module 2 - interval 7790 -7800 feet - fracture stimulate interval, pumped 2#,4#,6#, flushed 09:15 09:30 0.25 PERF CSG AF Perforate Module 3 - interval 7664 -7674 feet firing head pressure - 09:30 10:00 0.50 PUMP FRAC AF Module 3 - interval 7664 -7674 feet, pum 14,425# 20/40 sand, flex 2065, , water - 200 BBL 10:00 10:15 0.25 PERF CSG AF Perforate Module 4 - interval 7600 -7610 feet, FHP 7956# 10:15 10:45 0.50 PUMP FRAC AF Frac Module 4 - interval 7600 -7610 feet, pumped 2 #,4#,6#,8#, flush - sand 23,092, flex 3302 #, water - 253 BBL 10:45 11:00 0.25 PERF CSG AF FHP - 3356# 5 ' . -►Wk -I l '',v 11:00 11:30 0.50 PUMP FRAC AF Frac Module 5 - interval 7422 -7432 feet 11:30 11:45 0.25 PERF CSG AF Perf Module 6 - Interval 7376 -7386 feet FHP -5243# 11:45 12:15 0.50 PUMP FRAC AF Frac Module 6 - interval 7376 -7386 feet 12:15 12:30 0.25 PERF CSG AF Perf Module 7. Interval 7290 -7300 feet, FHP - 6047# 12:30 13:15 0.75 PUMP FRAC AF Frac Module 7, interval 7290 -7300 13:15 13:30 0.25 PERF CSG AF Perf Module 8, interval 7162 -7172 feet- FHP 6939# 13:30 14:00 0.50 PUMP FRAC AF Frac Module 8, pump 2 #,4 #,6#,8#, flush, pumped 15,789# 20/40 , flex -0. water - 184 BBL 14:00 14:15 0.25 PERF CSG AF Perflvlodule 9 / 10. intervals 7120-7130 feet and 7045 - 7055 feet, FHP - 7920# and 3602# 14:15 14:45 0.50 PUMP FRAC AF Frac Modules 9 / 10, pumped 2 #,4 #, 6#, 8,10#, flush. Pumped 29,247# 20/40 sand, flex - 0 and 189 BBL water. 14:45 15:00 0.25 PERF CSG AF Perf Modules 11. interval 6678 -6688. fo, FHP - 4331# 15:00 15:30 0.50 PUMP FRAC AF Frac Module 11, pumped 2 #,4#,6#,8 #,10# flush, pumped 35,173# 20/40 sand, flex -0, water 216 BBL 15:30 16:30 1.00 WAITON OTHR CS Moving sand for final intervals 16:30 16:45 0.25 PERF CSG AF Perf Modules 12 / 13, intervals 6616 -6626 feet and 6573 -6583 feet, FHP -5552# and 7201# , pumped 24,930# 20740 sand, 3564# flex and 225 BBL water 16:45 17:00 0.25 PERF CSG AF Flapper Removal Module - no indications of firing.. Module 12 flapper may still be deployed. 17:00 17:30 0.50 SAFETY MTG AF PJSM BJ Services CTU crew. safety topics - high pressure, active gas production pad, red lights for fire, blue lights for gas release , sirens, buddy rule, three second rule, Arctic terns, overhead loads, slips, trips falls, three second rule etc. 17:30 18:00 0.50 RURD COIL AF _ Rig up BJ Services CTIL 18:00 18:15 0.25 TEST EQIP AF Pressure test connections to 2500# - test good. 18:15 19:15 1.00 CLNOUT CSG AF Running in hole at 60 ft/min at 1 BPM and 21 WHP, cooling down N2 unit after Nitrogen transfer. 1150 Pump Pressure 19:15 20:03 0.80 CLNOUT CSG AF Start N2 down coil at 450 SCFM, 1BPM of fluid, Coil Volume =27 BBLs 20:03 20:21 0.30 CLNOUT CSG AF Pull Test at 6,000 feet, 10,000 lbs. N2 Turns corner after 21 minutes. (Appoximate volume factor = 440 SCF = .3BPM 20:21 20:27 0.10 CLNOUT CSG AF At 6500 feet, increase N2 to 750 SCFM, Continued RIH -25 ft/ min 20:27 20:42 0.25 CLNOUT CSG AF Run in to 7,100 ft. Increase sand in returns. Begin to POOH to 6,500 ft. N2 begins to show in returns 20:42 20:57 0.25 CLNOUT CSG AF T Pump pressure 2,525 psi. WH pressure 111 psi. N2 rate 750 scfm. Pump rate 1.03 BPM. Weight 10,500 Ib. POOH rate 17 ft/min. 20:57 21:12 0.25 CLNOUT CSG AF WH Pressure 305 psi 21:12 21:18 0.10 CLNOUT CSG AF Stop at 6,541 ft. WH pressure 250 psi 21:18 21:21 0.06 CLNOUT CSG AF Run in hole at 30 ft/min., decreasing to 15 feet per minute at 7100 feet. Wash to 7300 feet www.peloton.com Page 9/10 Report Printed: 7/17/2008 Operations Summary Repo Well Name: KENAI BELUGA UNIT 14 -8 Start 71ma ' n • fime Ops Trouble r Dun OpaCode,:.r Activity Code:€ " Stews Code: Comm ... 21:21 22:03 0.70 CLNOUT CSG AF Make 50 foot wiper trip from 7300 feet to 7250 feet; continue in hole washing 100 feet and picking up 50 feet. Tagged flapper at 7644' (module 4) 22:03 23:18 1.25 CLNOUT CSG AF Continue to make 50 foot wiper trips; continue in hole washing 100 feet and picking up 50 feet. Depth 7,800 feet WH pressure 265 psi 23:18 23:33 0.25 CLNOUT CSG AF Depth 7,950. WH pressure 304 psi 23:33 23:39 0.10 CLNOUT CSG AF Depth 8,000. Tag bottom. WH pressure 296 psi. Circulate. 23:39 23:42 0.05 CLNOUT CSG AF POOH at 10 ft/min. 23:42 23:57 0.25 CLNOUT CSG AF Increase POH speed to 45 feet per minute, 2500 psi pump pressure, 270 WHP, 1 BPM, 11K weight, 750 SCFM 23:57 00:12 0.25 CLNOUT CSG AF at 7150 ft, cut Liquid rate to .75 BPM, WHP 298, Pump Pressue 2243 and falling, 8,800 wt, Daily Operations Report Date: 6/15/2008 Job Category: COMPLETION 24 Hr Summary Jet In well and put on well test A Start a = Time : Dui re) y OPe Code . Code < %... * Code r, 23:45 23:51 0.10 JAR N2 AF Stop at 6500, WHP 278 with .75 BPM � 23:51 00:03 0.20 JAR N2 AF Stop fluid. Continue pumping 750 SCF N2 to jet well. 00:03 00:21 0.30 JAR N2 AF Pumping nitrogen at 750 scf /min. WH pressure 252 psi 00:21 00:51 0.50 JAR N2 AF POH to 5,500, WHP 307 and increasing, Shut down N2 at 5500, WHP 350 00:51 01:03 0.20 JAR N2 AF Continue to POH at 85 feet per minute, 01:03 02:09 1.10 JAR N2 AF Out of hole with coil, WHP -350 psi 02:09 02:24 0.25 SAFETY MTG AF Hold Safety Meeting with Coil and Test Crew, re -route flow to testers. 02:24 02:54 0.50 RURD COIL AF Rig Down Coil Injector head and Secure. 02:54 04:54 2.00 FLOW BACK AF Flow back well through Expro separator / flare stack, WHP -590, Rate -2.6 MMCFPD. Water -1841 BPD 04:54 05:00 0.10 FLOW BACK AF 6 AM - Transfer gas from flare stack to gas sales. 05:00 07:00 2.00 FLOW BACK AF Continue flowback 07:00 09:06 2.10 SECURE WELL CS Cut out in sand buster - shut in well, replumbed to 41 -18X sand buster, restarted well - 09:06 00:00 14.90 FLOW BACK AF Continue flowback Report Date: 6/16/2008 Job Category: COMPLETION 24 Hr Summary On well test k Trouble„# 43' w , End Time Out (hrs) : • pstCode r ` Activity . coae . S Code " 444;41 t & = t a e M • 23:45 11:45 12.00 FLOW BACK AF 11:45 17:45 6.00 RURD STIM AF Rig down coil, frac crew, well test www.peloton.com Page 10/10 Report Printed: 7/17/2008 d 1/1 "A\ SARAH PAWN, GOVERNOR ) F1 Li ['JP # ALASKA OIL AND GAS 333 W. 7th AVENUE, SUITE 100 CONSERVATION COM1IHSSIONT ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 FAX (907) 276 -7542 Craig Rang Senior Completions Engineer Marathon Oil Company PO Box 1949 Kenai, AK 99611 -1949 Re: Kenai Gas Field, Upper Tyonek /Beluga Gas Pool, Kenai Beluga 14 -8 Sundry Number: 308 -194 Dear Mr. Rang: 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, 4 Daniel T. Seamount, Jr. r Chair DATED this 3 day of June, 2008 Encl. 41, Marathon Oil Company M Marathon Alaska Asset Team P.O. Box 1949 M ARATHON OiI Company Kenai, AK 99611 Telephone 907/283 -1371 Fax 907/283 -1350 May 29, 2008 Mr. Tom Maunder Alaska Oil & Gas Conservation Commission 333 W 7 Ave Anchorage, Alaska 99501 MAY a Alaska Oil & Gas 4c,zzt, Reference: 10 -403 Application for Sundry Approvals Arlch age Field: Kenai Gas Field Well: Kenai Beluga Unit 14 -8 Dear Mr. Maunder: Enclosed please find the 10 -403 Application for Sundry Approvals for KBU 14 -8. Marathon proposes to perforate the thirteen KBU 14 -8 Excape modules and fracture stimulate the Upper Tyonek / Lower Beluga formations. Please contact me at (907) 283 -1371 if you have any questions or need additional information. Sincerely, Kevin J. Skiba Engineering Technician Enclosures: 10 -403 Application for Sundry Approvals cc: AOGCC Work Procedure Houston Well File Current Well Schematic Kenai Well File KJS CLR I,_ RECEIVED ' OR ? -0 STATE OF ALASKA 6 - gV (0 ALA OIL AND GAS CONSERVATION COMM ION � �Y 3 0 ' (),,• (0 J APPLICATION FOR SUNDRY APPROVALS Oil & Gas Co ("AAc 9 20 AAC 25.280 r I,, 1. Type of Request: Abandon ❑ Suspend ❑ Operational shutdown Ill ier' Perforate 0 Aid E Other 0 Alter casing ❑ Repair well ❑ Plug Perforations ❑ Stimulate 0 Time Extension ❑ Vent Gas Change approved program ❑ Pull Tubing ❑ Perforate New Pool ❑ Re -enter Suspended Well ❑ 2. Operator Name: Marathon Oil Company 4. Current Well Class: 5. Permit to Drill Number: p y Development 0 Exploratory ❑ 208 -0480 - 3. Address: PO Box 1949 Stratigraphic ❑ Service ❑ 6. API Number: - Kenai Alaska, 99611 -1949 50- 133 - 20576 -00 -00 7. If perforating, closest approach in pool(s) opened by this operation to nearest 8. Well Name and Number: property line where ownership or landownership changes: - Spacing Exception Required? Yes ❑ No 0 Kenai Beluga Unit 14 -8 9. Property Designation: 10. KB Elevation (ft): 11. Field / Pool(s): FED - 028142 88' Y Kenai Gas Field / Beluga & Tyonek Pools 12. PRESENT WELL CONDITION SUMMARY Total Depth MD (ft): Total Depth TVD (ft): Effective Depth MD (ft): Effective Depth TVD (ft): Plugs (measured): Junk (measured): 8,072' 7,746' 8,022' 7,696' NA NA Casing Length Size MD TVD Burst Collapse Conductor 154' 20" 154' 154' 3,060 psi 1,500 psi Surface 1,479' 13 -3/8" 871' 871' 5,020 psi 2,260 psi Surface n 1,413' 1,413' 3,450 psi 1,950 psi Surface 1,500' 1,500' 5,020 psi 2,260 psi Intermediate 5,717' 9 -5/8" 5,738' 5,422' 5,750 psi 3,090 psi Production 8,038' 3 -1/2" 8,059' 7,733' 10,160 psi 10,540 psi Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): NA NA NA NA NA Packers and SSSV Type: Packers and SSSV MD (ft): NA NA 13. Attachments: Description Summary of Proposal 0 14. Well Class after proposed work: Detailed Operations Program ❑ BOP Sketch ❑ Exploratory ❑ Development 0 Service ❑ 15. Estimated Date for 16. Well Status after proposed work: June 14, 2008 Commencing Operations: Oil ❑ Gas 0 Plugged ❑ Abandoned ❑ 17. Verbal Approval: Date: WAG ❑ GINJ ❑ WINJ ❑ WDSPL ❑ Commission Representative: 18. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Kevin Skiba (907) 283 -1371 Printed Name Craig L. Rang Title Senior Completions Engineer Signature 0 ' h one Date (907) 283 - 1372 May 29, 2008 71 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: �V f / / '9 Plug Integrity ❑ BOP Test ❑ Mechanical Integrity Test ❑ Location Clearance ❑ Other: Subsequent Form Required: L.‘vv."\ VT `l \0_L�� - ��� �C�`� CS o NV3��`� �J , \J N C Cfr APPROVED BY /, Approved by: COMMISSIONER THE COMMISSION Date: 0DIGINAL • RBDMS ,_S BR.: ,x 4 5 200B Form 10 -403 Revised 06/2006 KBU 14 -8 Fracture Stimulation Description Summary of Proposal Kenai Beluga Unit 14 -8 was drilled and cased as a 3.5" Monobore Excape completion containing thirteen Excape perforating modules. Each module will complete a different production interval with ten feet of perforations followed by fracture stimulations in each interval. Fracture stimulation operations will commence with the perforating and treatment of Module 1 followed by modules 2 through 13. All fracture stimulation operations are typically concluded in one day, unless screen -outs occur. After all treatments have been performed, coiled tubing will be utilized to cleanout the wellbore of module isolation flappers and frac proppant to PBTD. The well will then be jetted in with nitrogen via the coil tubing. Once the well is flowing on its own, coil tubing will be pulled from the well and rigged down. Well testing operations will then commence and continue until an acceptable gas rate is achieved and produced frac water load volumes are at manageable levels. Once well is adequately cleaned up, well testing equipment will be rigged down and the well will be turned over to production. Request for Approval to Vent Gas / Due to the nature of such fracture stimulations, large amounts of water are injected, along with the fracture proppant, which will have to be unloaded and cleaned up during the post fracture flow - back/testing period. This unloading, or cleaning up period, requires the well to be vented to atmosphere until enough gas volume is achieved to flow the well into the high pressure sales gas system. The duration of this venting operation can last as little as a few hours up to a number of days based upon reservoir pressures, permeability, well performance, tubing size, and fracture placement success. For Marathon's gas well operations in the Kenai Gas Field, typical vent times are less than 144 hours. However, due to the uncertainty of exactly how long KBU 14 -8 will be required to vent to atmosphere, this request is for a maximum vent period of 144 hours with a maximum vent volume during that period of 12 MMCF of methane gas. This volume is minimized due to the utilization of the Excape completion process which enables all intervals of interest to be fracture treated on the same day and unloaded together at one time, instead of multiple frac days with multiple flow -back periods each requiring the venting of gas. Permit #: 208-0480 0 KBU 14 -8 API #: 50- 133205760000 Property Des: A - 028142 Pad 41 -18 KB: 21' AGL (88' KB Elevation) 444' FNL, 479' FEL, X= 275,331.359 Sec. 18, T4N, R11 W, S.M. MARATHON Y= 235,6290.305 Lat: 60° 26' 35.866" N Long: 151° 14' 47.413" W at i Conductor Spud: 5/12/2008 02:00 hrs I _" • 20" K -55 133 ppf PE TD Reached: 5/23/2008 23:00 hrs Tor Bottom i � ~ MD Surf 154' TVD Surf 154' Surface Casing 13 -318" L -80 & J -55 68 ppf BTC Top of Cement (est.): lop at 4,523' MD ' MD 0' 1,500' - - 3,534' above 3.5" shoe i) TVD o' 1,500' -°" 16" hole, Cmt w1463 sks (166 bbls), 12 ppg of Type 1 cmt. 100% returns, 36 bbls to surface. 9 - 5/8" Casing Shoe @ 5,746' MD Intermediate Casing 9-5/8" L -80 40 ppf BTC �,. Top Bottom ,a 1 MD 0' 5,738' TVD 0' 5,422' II Excape System Details 12-1/4" hole, Cmt wl 305 sks (180 bbls), 10.5 - Ceramic flapper valves below I ppg of Class G cmt. 100% returns. each module as follows: Production Tubing Modules 12 & 13 connected r I 3 - 112" L 9.3 ppf EUE w/ flapper below Module 12 f" Tom Bottom * Modules 9 & 10 connected i MD 0' 8,059' w/ flapper below Module 9 II TVD 0' 7,733' F 11I 8 -1/2" hole, Cmt w1987 sks (206 bbls), 15.8 ppg Flappers MD (RKB): ) of Class G cmt. 8rd with 6.25" OD control line Module 13 - NA 1 5. 1)1 r protectors to 8,059' RKB. Module 12 - 6,646' 6 ) Excape System Details Module 11 - 6,707' ` �I - 13 Excape modules system Module 10 - NA t.' ) Module 9 - 7,075' ' - Red control line for modules 10 13 Module 8 - 7,192' BI - control line for modules 5 -. 9 Module 7 - 7,321' - Green control line for bottom 4 modules 1 Module 6 - 7,406' 11 - All modules w/ flappers above module 1 ) Module 5 - 7,452' are disappearing flapper versions - Module 4 - 7,630' DI f a* . Perfs MD (RKB): Module 3 - 7,693' t. 10 Module 13 - 6,578' - 6,588' Module 2 - 7,820' ) * Module 12 - 6,620' - 6,630' Module 1 - NA DI 1 - `1 Module 11 - 6,680' - 6,690' t. )1 - Module 10 - 7,046' - 7,056' 117 '1 Module 9 - 7,121' - 7,131' - ,164' - 7,' Module Module 7 8 - 7 - 7,299 Excape Float Shoe @ 8,059' MD Module 6 - 7,375' - 7,385' V. ,- Module 4 - 7,598' - 7,608' Module 3 - 7,661' - 7,671' Module 2 - 7,787' - 7,797' PBTD TD Module 1 - 7,926' - 7,936' 8,022' MD 8,072' MD 7,696' TVD 7,746' TVD Well Name & Number: KBU14 -8 I Lease: Kenai Gas Field County or Parish: Kenai Peninsula Borough State /Prov: Alaska I Country:I USA Perforations (MD): Perf (TVD): Angle /Perfs: Max angle @ 1.15° Angle @ KOP and Depth: Build 1.5° / 100', starting @ 1,600' MD BHT: 131° Completion Fluid: 6% KCL Dated Completed: 5/29/2008 Ground Level (MSL): 67' above Sea Level Prepared By: Kevin Skiba Last Revison Date: 5/28/2008 5/28/2008 3:01 PM • • MEMORANDUM State of Alaska Alaska Oil and Gas Conservation Commission TO: Jim Regg e:,r iii c�, DATE: May 12, 2008 P. I. Supervisor FROM: Lou Grimaldi SUBJECT: Non - Compliance repair Petroleum Inspector Superchoke Panel Gauge Marathon, Glacier Drilling #1 KBU 14 -8 PTD #208 -0480 May 12, 2008: I visited Marathon's Glacier Drilling rig #1 (GD -1) to check on repair /calibration status of the rig's Drilipipe and Casing gauges on the Swaco "Superchoke" panel. During a previous inspection Jeff Jones (A.O.G.C.C.) had noted that one or both gauges was not returning to zero after relieving pressure from the sensor(s). I arrived to find GD -1 drilling surface hole and approximately 4 -5 days from their initial BOP test. I spoke with Drilling Foreman, John Nicholson, who informed me that the gauges had been calibrated yesterday and produced the supporting certificates from I.I.S.C.O. I toured the rig and verified that the subject gauges had been calibrated and were indeed resting at zero. The rest of the rig and Diverter assembly all appeared to be in good shape. Attachments: I.I.S.C.O. calibration certificates (2). Swaco Superchoke panel. jpg 2008- 0512_Inlet_GD -1 _Superchoke panel_gauge_repairs _ lg.doc • may i i vv vc. a • • P1 ..r' m QUNDCO as AA c r1 ALASKA DIVISION: 6116 NIELSON WAY • ANCHORAGE, ALASKA 99518 • TEL: (907) 563 -8999 • FAX: (907) 563 -8985 CERTIFICATION OF CALIBRATION PART NUMBER: CUSTOMER: (<'- j RIG NO: C-kir:-.- ,� 1 DESCRIPTION: i ; E\ �; c,c_ is.::: 5., 1 i;_ GAUGE SERIAL NO: - Z - 7"150 0 N/A REMARKS: HANDLE LENGTH: 0 N/A SENSOR SERIAL NO: 0 N/A OTHER: - 0 N/A CALCULATED ACTUAL 1 SCALE PSI jSC.L..) = iSb=> ‘Sc...::, 1 SCALE PSI 3c»:..> = - sc.t : - c.;... , -J , 3 4 SCALE PSI - t.'5�;.:a = �L Vo � ' -1 c� F.S. PSI = � c_:c..t,; GO C.)2 This is to certify that this gauge has been inspected and tested to Martin /Decker TOTC0 reference NBS Test # 39569, 40093, 179355, 225713, Standards against: i FIELD 1 I SHOP MODEL NO. S. N. ® MODEL NO- S. N. 0 - ASHCROFT 0 -160 Q8634 0 M/D TOTCO GUAGE WA50- 0015 -1 8809 0 - ASHCROFT 0 -1,000 08631 0 MID TOTCO GUAGE WA50- 0100 -1 8810 0 - ASHCROFT 0 -2,000 Q8638 0 MID TOTCO GUAGE WA50- 0600 -1 8811 0 -MD TOTCO 0 -5,000 8870 0 MID TOTCO GUAGE WA50- 1500 -1 8285 0 - ASHCROFT 0- 10,000 Q8633 0 Other: Inspected by: !:%-- Technician Date Modified o8 /a2 • P. + iviay I I vo v‘.o id 411 m otoeDCD ii iii (1 w afF f1 �s.u:.0" ` ALASKA DIVISION: 6116 NIELSON WAY • ANCHORAGE, ALASKA 99518 • TEL: (907) 563 -8999 • FAX: (907) 563 -8985 CERTI OF CALIBRATION PART NUMBER: CUSTOMER: tV\w��t�..4v RIG NO: ( [ ttr : • e.... k DESCRIPTION: C ece�, -• Ce,. �1 GAUGE SERIAL NO: ' 1 3151 0 N/A REMARKS: HANDLE LENGTH: 0 N/A SENSOR SERIAL NO: 0 N/A OTHER: 0 N/A CALCULATED ACTUAL 1 /4 SCALE PSI ISOO = i 5oc., t 5•a %.: 1 '/z SCALE PSI -72.4--(---...,- _ ....30,-.0 - c;,,�. 3/4 SCALE PSI , -i.s� J = '„t.Sc;c, 1 - :.5tc. F.S. PSI .601--; is = Gcx.so i.,.,-.0 This is to certify that this gauge has been inspected and tested to Martin /Decker TOTCO reference NEES Test # 39569, 40093, 179355, 225713, Standards against: FIELD 1 SHOP MODEL NO. S. N. 0 MODEL NO. S. N. 0 - ASHCROFT 0 -160 Q8634 0 MID TOTCO GUAGE WA50- 0015 -1 8809 0 - ASHCROFT 0 - 1,000 08631 0 MID TOTCO GUAGE WA50- 0100 -1 8810 0 - ASHCROFT 0 -2,000 Q8638 0 M/D TOTCO GUAGE WA50- 0600 -1 8811 0 -MD TOTCO 0 -5,000 8870 0 MID TOTCO GUAGE WA50- 1500 -1 8285 0 - ASHCROFT 0- 10,000 Q8633 0 Other: Inspected by: i‘ t,A Technician Date modified a8 /o: J 0 ,, a s d a : ue _ '. , t b m k ' s #, as n �' 2 s `` ? y,(9::#2.401 € . € � �'r _ fi r s lea . -°' , Y ; : yt ,*b ' � A T+x k y ° } § b " 1 `* � te r ac ',t'r ,4' X . T om + m R t ' * ,-. 1:41 ; -.;---•,-, - ' '''iltt ' ,,, , --, / ( ,,,,,,,,,,,,,,,,,,,t,,,,...., y, k v 2008 - 0512_ Inlet_ GD- 1_Superchoke panel_gauge_repairs_lg.doc 40 • SARAH PALIN, GOVERNOR c�7 i ALASKA OIL AND GAS 333 W. 7th AVENUE, SUITE 100 CONSERVATION SS TI N C IO ANCHORAGE, ALASKA 99501 -3539 PHONE l� LO 907 2791433 FAX (907) 276 -7542 Willard Tank Advanced Senior Drilling Engineer Marathon Oil Company 3201 C. Street, Ste 800 Anchorage, AK 99503 Re: Kenai Gas Field, Beluga /Upper Tyonek Pool, KBU 14 -8 Marathon Oil Company Permit No: 208 -048 Surface Location: 443' FNL, 479' FEL, SEC. 18, T4N, R11W, S.M. Bottomhole Location: 878' FSL, 485' FWL, SEC. 8, T4N, R11W, S.M. Dear Mr. Tank: Enclosed is the approved application for permit to drill the above referenced development well. This permit to drill does not exempt you from obtaining additional permits or an approval required by law from other governmental agencies and does not authorize conducting drilling operations until all other required permits and approvals have been issued. In addition, the Commission reserves the right to withdraw the permit in the event it was erroneously issued. Operations must be conducted in accordance with AS 31.05 and Title 20, Chapter 25 of the Alaska Administrative Code unless the Commission specifically authorizes a variance. Failure to comply with an applicable provision of AS 31.05, Title 20, Chapter 25 of the Alaska Administrative Code, or a Commission order, or the terms and conditions of this permit may result in the revocation or suspension of the permit. 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, Daniel T. Seamount, Jr. Chair DATED this 7 day of April, 2008 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. STATE OF ALASKA .. rREppC CEI V �/ ED ALAI, OIL AND GAS CONSERVATION COMI'.ION PERMIT TO DRILL l MAR 2 0 2008 20 AAC 25.005 zska 9I & Gas Cons. Commissi0l1 1 a. Type of Work: 1 b. Current Well Class: Exploratory ❑ Development Oil ❑ 1 c. Specify if well is propose or: Drill 0 Redrill ❑ Stratigraphic Test ❑ Service ❑ Development Gas 0 Coalbed Methane ❑ MOM ❑ Re -entry ❑ Multiple Zone 0 Single Zone ❑ Shale Gas ❑ 2. Operator Name: 5. Bond: Blanket 0 Single Well ❑ 11. Well Name and Number: Marathon Oil Company Bond No. 5194234 KBU 14 -8 3. Address: 6. Proposed Depth: 12. Field /Pool(s): 3201 C. Street, Suite 800, Anchorage, AK 99503 MD: 8,798 TVD: 8,708 Kenai Gas Field 4a. Location of Well (Governmental Section): 7 go rty Designation: Beluga / Upper Tyonek Pool Surface: 443' FNL, 479' FEL, Sec. 18, T4N, R11W, S.M. A- 028142 Top of Productive Horizon: 8. Land Use Permit: 13. Approximate Spud Date: 878' FSL, 485' FWL, Sec. 8, T4N, R11 W, S.M. April 7, 2008 Total Depth: 9. Acres in Property: 14. Distance to Nearest 878' FSL, 485' FWL, Sec. 8, T4N, R11 W, S.M. 2,494.04 Property: 990 ft 4b. Location of Well (State Base Plane Coordinates): NAD 27 10. KB Elevation 15. Distance to Nearest Well Surface: x - 275,331.359 y - 2,356,290.305 Zone - 4 (Height above GL): (21' AGL) 88 feet Within Pool: 1,700 ft KBU 41 -18X 16. Deviated wells: Kickoff depth: 1,620 feet 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) Maximum Hole Angle: 25.6 degrees Downhole: 4,104 Surface: 2,283 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) Driven 20" 133 K -55 PE 154' 0' 0' 175' 175' 16" 13 3/8" 68 K -55 BTC 1,479' 0' 0' 1,500' 1,500' 463 sacks 12 1/4" 9 5/8" 40 L -80 BTC 5,725' 0' 0' 5,746' 5,418' 326 sacks 8 1/2" 3 1/2" 9.3 L -80 EUE 8,052' 0' 0' 8,073' 7,738' 1,082 sacks 19. PRESENT WELL CONDITION SUMMARY (To be completed for Redrill and Re -Entry Operations) Total Depth MD (ft): Total Depth ND (ft): Plugs (measured): Effect. Depth MD (ft): Effect. Depth TVD (ft): Junk (measured): Casing Length Size Cement Volume MD TVD Conductor /Structural Surface Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): 20. Attachments: Filing Fee 0 BOP Sketch 0 Drilling Program 0 Time v. Depth Plot ❑ Shallow Hazard Analysis ❑ Property Plat 0 Diverter Sketch 0 Seabed Report ❑ Drilling Fluid Program 0 20 AAC 25.050 requirements ❑ 21. Verbal Approval: Commission Representative: Date 22. I hereby certify that the foregoing is true and correct. Contact 1 Printed Name Willard J. Tank Title Advanced Senior Drilling Engineer Signature � �J r jelA4 2 Phone 713- 296 -3273 Date March 19, 2008 Commission Use Only Permit to Drill API Number: Permit Approval See cover letter for other Number: x0,7041 50 /3$ ?Os7g. 0000 Date: requirements. Conditions of approval : If box is checked, well may not be used to explore for, test, or produce coalbed methane, g s hydrates, or gas contained in shales: li Other: " COQ %O Samples req'd: Yes❑ No Mud log req'd: Yes No[� H measures: Yes ❑ Directional svy req'd: Yes No❑ E 4`CN‘ IN q P pg. m o.c_(_Qp\-0,\AQ ,, 90 AAsC. a S a � 7 S `,� \\), �- - - - APPROVED BY THE COMMISSION P DATE: /� , COMMISSIONER Form 10 -401 Revised 12/2005 oRIGINAL Submit in Duplicate • Worldwide Drilling North America 11% Marathon Oil C Box 3128 M ARATHON Houston, ston, TX 77253 -3128 Telephone 713 - 629 -6600 Fax 713 -499 -6737 March 19, 2008 RECEIVED John Norman MAR 2 0 2008 Commissioner State of Alaska Alaska Oil & Gas Cons. Commission Alaska Oil & Gas Conservation Commission - Anchorage 333 West 7 Ave, Suite 100 Anchorage, AK 99501 Reference: Drilling Permit Application Field: Kenai Gas Field Well: KBU 14 -8 Dear Mr. Norman Enclosed lease find the PERMIT TO DRILL application, along with the associated p pp g attachments. The intent is to drill a well in the Beluga / Upper Tyonek Pool in the Kenai Gas Field. No completion is desired in the Sterling pool. As we have noted in earlier correspondence, the BLM Onshore Order No. 1, dated March 7, 2007 requires data sent to them to be in North American Datum 1983 (NAD 83). We also acknowledge Mr. Maunder's e-mail concerning the requirement for the surface location and directional data sent to the AOGCC to be in NAD 27. On our previous applications for wells Grassim Oskolkoff #7 and KBU 41 -18X, we had the State Plane Coordinates specified on the 10 -401 in NAD 27 as required, and had a surface plat in NAD 27. For the directional data we utilized the National Geodetic Survey conversion in the program CORPSCON to calculate the State Plane Coordinates in NAD 27 for the planned and actual wellpaths from the NAD 83 data and presented both in our directional survey attachment for the 10 -401. We also provided the same data electronically, so that the AOGCC had this for data input into their database. We are providing the same information for KBU 14 -8 as well. If you require further information, I can be reached at 713 - 296 -3273 or by e-mail at wjtank @marathonoil.com. Sincerely, 14416.040r-d Willard J. Tank Advanced Senior Drilling Engineer Enclosures KBU 14 -8 Marathon Oil Company Drilling Program Alaska AOk MARATHON MARATHON OIL COMPANY DRILLING PROGRAM Kenai Gas Field KBU 14 -8 Originator: Will Tank ._% 1 March 19, 2008 Date Reviewed by: Pete Berga Date Brian Roy Date 3/19/2008 CONFIDENTIAL MATERIAL Page 1 of 19 KBU 14 -8 Marathon Oil Company Drilling Program Alaska TABLE OF CONTENTS 1. Emergency Response Information 4 1.1 Directions to Location 4 1.2 Rig Contact Numbers 4 1.3 Marathon Emergency Response Contacts 4 1.4 Outside Emergency Response 4 1.5 Marathon Contact List 5 2. Regulatory Agency Contacts 5 2.1.1. Internal Regulatory Contact 5 2.1.2. External Regulatory Contact 5 3. Regulatory Compliance 5 4. Drilling Program Summary 7 4.1 General Well Data 7 4.2 Working Interest Owners Information 7 4.3 Geologic Program Summary 7 4.4 Summary of Potential Drilling Hazards 8 4.5 Formation Evaluation Summary 8 4.6 Drilling Program Summary 9 4.7 Casing Program Summary 11 4.8 Casing Design 11 4.9 Calculation of Maximum Anticipated Pressures (MAWP and MASP) 11 4.10 Casing Test Pressure Calculations 13 4.11 Blowout Prevention Equipment, Testing and General Procedures 13 4.11.1. Function Testing 13 4.11.2. Pressure Testing 14 4.12 Wellhead Equipment Summary 14 4.13 Directional Program Summary 14 4.14 Directional Surveying Summary 15 4.15 Drilling Fluid Program Summary 16 4.16 Drilling Fluid Specifications 16 4.17 Solids Control Equipment 17 4.18 Cement Program Summary 18 4.19 Bit Summary 18 4.20 Hydraulics Summary 19 4.21 Formation Integrity Test Procedure 19 3/19/2008 CONFIDENTIAL MATERIAL Page 2 of 19 KBU 14 -8 1 Marathon Oil Company Drilling Program Alaska Attachments Group Attachment Attached Commercial Information AFE Days /Cost vs. Depth Curves X Project Objectives and Scorecard RSO Coding Information X Requisitions Vendor List Bonus Program Drilling Contract Regulatory / HES Information Emergency Evacuation Plan X H2S Contingency Plan n/a Regulatory Permits X Regulatory Rules and Regulations Risk Analysis Miscellaneous Programs (Vendors) Bit Proposal X Cement Proposal X Directional Plan X Fluids Program X Wellhead Equipment — Description /Drawings Drill String and BHA Summary Rig Mobilization /Mooring Procedure n/a Geological Information Location Map w/ offsets X Offset Data Proposed Formation Pore Pressure, Mud Wt & Fracture Gradient X Temperature Curves Geologic Structure Maps Geologic Cross Section Bathymetry Map n/a Analysis Riser Analysis n/a Station Keeping Analysis — Mooring /DP n/a Stress Check Casing Design File X Maximum Allowable Overpull Miscellaneous Information Wellbore Diagram n/a Rig Elevations X Well Location Diagram X BOP Schematic X BOP Well Control Bridging Document Detailed Casing Specifications X Detailed Drill Pipe Specifications 3/19/2008 CONFIDENTIAL MATERIAL Page 3 of 19 KBU 14 -8 Marathon Oil Company Drilling Program Alaska 1. Emergency Response Information 1.1 Directions to Location Method Directions Air Latitude - 60 °26'35.866 "N Longitude - 151 °14'46.413M NAD 83 From the Kenai airport, go 0.5 mile South on Willow Street. Turn East on Main Street Loop, go 0.3 miles. Continue East on Bridge Access Road 3.2 miles. Turn West on Kalifornsky Beach Road. Go West and then South, go approximately 5 miles, just Ground past the Kenai Gas Field office at Pad 34 -31. Turn East onto the next lease road South of the Kenai Gas Field office. Travel Southeast 1 mile to pad 14 -6. Go through pad and continue East 0.5 mile to pad 41 -7. Turn and go 1 mile South to Pad 41 -18. 1.2 Rig Contact Numbers Contact Office Cell Glacier Drilling Rig 1 Inlet Drilling Tool Pusher 907 - 283 -1314 907 - 394 -1321 Marathon Supervisor 907 - 283 -1312 907 - 394 -1317 1.3 Marathon Emergency Response Contacts Individual Postion Main Phone Alternative Kenai Gas Field Emergency Number 907 - 283 -6465 CERT 24 hrs Notification 1- 800- MOC -CERT CERT Crisis Center Houston 713- 296 -4230 713 - 296 -4237 1.4 Outside Emergency Response Location Contact Phone Fire Kenai / Soldotna, Alaska 907 - 262 -4792 Ambulance Hospital Kenai / Soldotna, Alaska Central Peninsula Hospital 907 - 262 -4404 Kenai Police 907 - 283 -7879 Police Kenai / Soldotna, Alaska Soldotna Police 907 - 262 -4455 State Police 907 -262 -4453 Coast Guard 800- 478 -5555 Spill and Contamination Alaska Alaska State Spill Reporting National Response Center Oil / Toxic Chemical Spills 800- 424 -8802 Best Practices: 1 Policy: Post emergency notification information on rig floor, company man's and tool pushers' office Comments: 3/19/2008 CONFIDENTIAL MATERIAL Page 4 of 19 KBU 14 -8 Marathon Oil Company Drilling Program Alaska 1.5 Marathon Contact List Contact Title Office Mobile Facsimile Home Will Tank Drilling Engineer 713 - 296 -3273 713 - 203 -8398 713 - 499 -6737 832 - 934 -2617 Pete Berga Drilling Superintendent 907 - 565 -3032 907 - 529 -0551 907 - 565 -3076 907 - 346 -3763 Bryan Roy Drilling Manager 713 - 296 -3256 832 - 444 -4772 713 -499 -6707 281 - 246 -4686 Jennifer Enos Geologist 713 - 296 -3319 713 - 408 -3583 Moksh Dani Reservoir Engineer 713 - 296 -3140 832 - 692 -4700 Craig Rang Completion Engineer 907 - 283 -1372 907 - 394 -1824 Ken Walsh Production Engineer 907 - 283 -1311 907 - 394 -3060 907 - 283 -3050 Rowland Lawson Drilling Supervisor 907 - 283 -1312 907 - 394 -0953 907 - 283 -1313 John Nicholson Drilling Supervisor 907 - 283 -1312 907 - 394 -2641 907 - 283 -1313 Dan Byrd Drilling Supervisor 907 - 283 -1312 907 - 394 -2641 907 - 283 -1313 Mitch Burns Drilling Supervisor 907 - 283 -1312 907 - 394 -2641 907 - 283 -1313 2. Regulatory Agency Contacts 2.1.1. Internal Regulatory Contact Contact Title Office Phone Cell Phone Home Phone Facsimile Chick Underwood Regulatory Compliance 713 - 296 -3254 979 - 830 -7927 _ 979 - 836 -9390 713 - 499 -6748 2.1.2. External Regulatory Contact Contact Title Office Phone Facsimile 24 hr Emergency Pager AOGCC 907 - 793 -1236 AOGCC North Slope Pager - 907 -659 -3607 BLM 907 - 267 -1442 3. Regulatory Compliance Regulation Requirement Prior to Rig Move Notify Alaska Department of Natural Resources 24 hours before moving the rig. BOP testing interval requirement is now 14 days (20 AAC 25.035 e 10 A). BOP Testing Requirement for a 24 hour notice to AOGCC and to the BPM prior to BOP tests. (20 AAC 25.035 e 10 F) Prior to Spud Requirement for a 24 hour notice to AOGCC and to the BPM prior to spud of the well. Water Sampling Test the rig camp water for the Class C drinking water permit. Surface Casing & Cementing Requirement for a 24 hour notice to the BPM prior to setting, cementing, and testing surface casing. Intermediate Casing & Requirement for a 24 hour notice to the BPM prior to setting, cementing, and testing intermediate casing. Cementing Cuttings Tank Take picture of cutting tank in use and after cleaning for the ADEC. 3/19/2008 CONFIDENTIAL MATERIAL Page 5 of 19 KBU 14 -8 Marathon Oil Company Drilling Program Alaska Logging Requirement for a 24 hour notice to the BPM prior to logging. Production Casing & Requirement for a 24 hour notice to the BPM prior to setting and cementing Production casing (EXCAPE string) Cementing the well. Prior to Rig Move Notify Alaska Department of Natural Resources 24 hours before moving the rig, if going to Ninilchik or Kasilof. Comments 3/19/2008 CONFIDENTIAL MATERIAL Page 6 of 19 KBU 14 -8 0 • Marathon Oil Company Drilling Program Alaska 4. Drilling Program Summary 4.1 General Well Data Well Name KBU 14 -8 Lease / License Surface Location 443' FNL, 479' FEL, Sec. 18, T4N, R11W, S.M. WBS Code DD.07.16239.CAP.DRL SIot/Pad KGF Pad 41 -18 Field Kenai Gas Field Spud Date 4/7/08 (est.) KB (above MSL) 88' County/Province Kenai Peninsula API No. GL (above MSL) 67' State / Country Alaska Permit No. Perm. Datum KB Total MD 8,073' Well Class Development Water Depth N/A Total TVD 7,738' Rig Contractor Glacier Drilling Water Protection Depth Rig Name Glacier Rig 1 Best Practices: 1 Comments: 4.2 Working Interest Owners Information Company Working Interest _ Address Phone Facsimile Marathon 100% P.O. Box 196168 907- 561 -5311 907 - 565 -3076 Anchorage, AK 99519 -6168 4.3 Geologic Program Summary Surface Location Coordinates — NAD 83 From Lease/Block Lines 443' FNL, 479' FEL, Sec. 18, T4N, R11W, S.M. Latitude 60° 26' 35.866" N Longitude 151° 14' 46.413" W UTM North (Y) 2,356,046.197' UTM East (x) 1,415,360.172' Tolerance Pore Pore MD - RKB TVD — RKB Pressure Pressure Possible Formation (ft) (ft) (psi) (ppg) Lithology Fluid Content Sterling A -8 (Not a Prod Target) 4,129 3,938 0.8 — 6.5 Sandstone Gas/Water Beluga (Not a Prod Target) 5,027 4,748 1.5 — 7.3 Sandstone Gas Middle Beluga (Primary Target) 5,767 5,438 5.8 — 8.5 Sandstone Gas Lower Beluga (Primary Target) 6,453 6,118 5.8 — 8.5 Sandstone Gas Tyonek (Primary Target) 7,578 7,243 5.8 —10.0 Sandstone Gas 3/19/2008 CONFIDENTIAL MATERIAL Page 7 of 19 KBU 14 -8 • 1 Marathon Oil Company Drilling Program Alaska Horizontal Depth (KB) Displacement (ft) MD TVD +N / -S +E/ -W Tolerance Target (ft) (ft) Location (Y) (X) (ft) Lower Beluga 6,453 6,118 878' FSL, 485' FWL, Sec. 8, T4N, R11W, S.M. 1,321 964 Circle 150' radius Tyonek 7,578 7,243 878' FSL, 485' FWL, Sec. 8, T4N, R11W, S.M. 1,321 964 Circle 150' radius TD 8,073 7,738 878' FSL, 485' FWL, Sec. 8, T4N, R11W, S.M. 1,321 964 Circle 150' radius 4.4 Summary of Potential Drilling Hazards Depth KB Hazard Event (TVD) Discussion Precautions Lost Circulation in Low Pressure Intermediate Control losses by using sufficiently sized LCM, Take care not to surge the hole during Sterling and Beluga sands Hole including fibrous and calcium carbonate types. tripping operations. Potential Hazards Statement To comply with state regulations the Potential Hazards section and the well shut -in procedures must be posted in the driller's dog house. The man on the brake (driller or relief driller) is responsible for shutting the well in (BOPE or diverter as applicable) as soon as warning signs of a kick are detected and an influx is suspected or confirmed. A copy of the approved permit to drill must be kept on location and be readily available to the AOGCC or BLM inspector. This well's primary objective is gas and no oil sands are expected to be encountered. No H is anticipated. Gas sands will be encountered from +1- 4,129' MD (3,938' TVD) to total depth of the well. These sands will run from highly depleted to above normal pressure. Lost circulation and differential sticking are potential hazards in some of the Sterling and Beluga sands. The Flo -Pro mud system that will be used to drill the well will help reduce these risks and lost circulation materials will be on location. Weighting material will available on location for proper well control. Best Practices: 1 Comments: 4.5 Formation Evaluation Summary Interval LWD Electric Logs Mud Logs Surface None None None 0' — 1,500' MD Intermediate None None Basic with GCA, shale density, temperature in and 1,500' — 5,746' MD out, sample collection (10' samples). Production None Reeves Quad Combo, MFT Pressures. Basic with GCA, shale density, temperature in and 5,746' — 8,073' MD Pull GR- Neutron to surface. out, sample collection (10' samples). Completion N/A GR, CCL, CBL N/A Comments: 3/19/2008 CONFIDENTIAL MATERIAL Page 8 of 19 KBU 14 -8 • Marathon Oil Company Drilling Program Alaska 4.6 Drilling Program Summary Drive Pipe: N/A Conductor: 20" set to approximately 120', prior to drilling rig move. MIRU drilling rig. NU diverter. 1. RU crane and hammer. Drive 20" conductor to +/ -120 ft. RKB. RD crane and hammer. 2. Move in and rig up rotary drilling rig. 3. Install starting head 20" SLC x 21 1/4 ", 2M flanged. 4. Nipple up 21 1/4 ", 2M diverter, 16" diverter valve, and 16" diverter line. 5. Function test diverter and diverter valve. Best Practices: 1 Comments: Surface: Drill 16" hole to +/- 1,500' set 13 -3/8" casing. 1. Drill a 16" hole to 1,500' MD (1,500' TVD) per the directional plan. 2. RIH with 13 3/8" casing and hang off in the elevators. Make up stab -in sub and centralizer on 5" drill pipe. TIH with inner string and latch into stab -in float collar. Cement 13 3/8" casing. Sting out, shear out drill pipe wiper plug, and circulate drill pipe clean. TOOH with inner string. 3. Cut off 13 3/8" casing. ND diverter. 4. Install 13 3/8" slip lock connection X 13 5/8" 5M flanged multibowl well ead. 5. NU 13 5/8" 5M BOP'S. Test BOP'S and choke manifold to 250/ psi. 6. Set wear bushing. ' ^30 1, 7. Test surface casing to 1,500 psi. S Best Practices: 1 During cementing operations, take returns in the cellar, instead of into the pits. Eliminates the clean up of pits from cement that circulated to surface. Vac trucks will pull from cellar. Comments: Intermediate: Drill 12 -1/4" hole to +/- 5,746' set 9 5/8" casing. 1. PU 12 1/4" PDC bit and directional BHA. Drill out float equipment and 20' of new formation. CBU. 2. Test shoe to an FIT of 13 ppg. Estimated Leak Off EMW is 15 ppg. 3. Drill 12 1/4" directional hole to 5,746' MD (5,418' TVD) as per directional program, short tripping as required. 4. At TD circulate hole clean. Make wiper trip. TOOH and lay down BHA. Pull wear bushing. 5. Change out variable pipe rams with 9 5/8" casing rams. Run test plug and test casing rams to 2,500 psi. 01/44" 6. Run and cement 9 5/8" casing. Land hanger in multibowl wellhead. 7. Back out landing joint. Change out 9 5/8" casing rams with variable pipe rams. Run test plug and test rams to 250/2,0 psi. 8. Set wear bushing. Test casing to 1,500 psi.' 4 k= Best Practices: 1 Pre -heat mud mix water to help in early shaker screen blinding issues with the mud. 2 Put lubricant in prior to drill out of intermediate shoe. 3 -5% Lubetex is normally required, possibly more depending on solids in the mud. Maintain a minimum of 3% throughout the hole section. 3/19/2008 CONFIDENTIAL MATERIAL Page 9 of 19 KBU 14 -8 • Marathon Oil Company Drilling Program Alaska Comments: Due to anticipated losses in the Sterling and Upper Beluga, both calcium carbonate and fibrous material may be needed. Care must be taken on trips to minimize the possibility of surging the hole. Production: Drill 8 1/2" hole to +/- 8,073' set 3 -1/2" EXCAPE string. 1. PU 8 1/2" bit and directional BHA. Drill float equipment and 20' of new formation. CBU. 2. Test shoe to leak off. Given higher pressures anticipated in the Tyonek the shoe needs to be tested to leak off. Estimated EMW 13 ppg. 3. Drill 8 1/2" hole to an anticipated TD of 8,073' MD (7,738' TVD) as per the directional program, short tripping as required. 4. At TD circulate hole clean. Make wiper trip. TOOH. 5. RU Precision. Run open hole logs as per plan. RD logging company. 6. TIH w/ 8 1/2" bit to TD for wiper trip. TOOH to 9 5/8" shoe and circulate until log evaluation is complete for picking EXCAPE modules. After picks are made, trip to TD and circulate clean. TOOH and lay down BHA and drill pipe. Pull wear bushing. 7. RU and run 3 1/2" EXCAPE casing string. RU logging company to correlate EXCAPE modules to open hole logs. RD logging company. 8. Cement 3 1/2" casing while reciprocating. Bump plug with 500 psi over displacement pressure. WOC. 9. PU 3 1/2" casing. PU BOP stack. Make control line and electric line connections to tubing bonnet assembly. Set slips. Cut 3 1/2" casing. 10. LD BOP. Set 3 1/2" packoff. NU 13 5/8" 5M X 3 1/16" 10M tubing head adapter and 3 1/16" 10M tree. Test tree to 5,000 psi. 11. Rig down and move out drilling rig. Note: Drill all hole sections with 5" drillpipe. Perforating guns will be run on the outside of the 3 1/2" production casing with a flapper valve just below each perforating gun. Guns to be activated by control line to surface. Best Practices: 1 Drill all hole sections with 5" drillpipe to maximize hole cleaning hydraulics. 2 Do not circulate on bottom longer than 1 hour prior to moving pipe on a short trip to minimize hole washout. This is important when waiting on log analysis to give EXCAPE module placement points. 3 Put lubricant in prior to drill out of intermediate shoe. 5% Lubetex is normally required, possibly more depending on solids in the mud. Comments: Completion: Completion will be done without a rig. This will include activating the EXCAPE perforating modules via hydraulic pressure on the control lines and fracture stimulation of targeted zones. Wellbore clean out will likely include slickline and possibly nitrogen jetting. Best Practices: 1 Comments: 3/19/2008 CONFIDENTIAL MATERIAL Page 10 of 19 411 II KBU 14 -8 Marathon Oil Company Drilling Program Alaska 4.7 Casing Program Summary MD (ft) Connection API Ratings Casing Makeup Hole 3,) = o w Size Weight ID Drift O. D. Torque Size m g' v a (in Top Bottom (Ibs/ft) (in) (in) Grade Type (in) (ft -Ibs) (in) 13 3/8 0 1,500 68 12.415 12.259 K -55 BTC 14.375 N/A * 16 3,450 1,950 1,300 9 5/8 0 5,746 40 8.835 8.679 L -80 BTC 10.625 N/A * 12 1/4 5,750 3,090 979 31/2 0 8,073 9.3 2.992 2.867 L -80 8rd 4.5 3,200 81/2 10,160 10,530 207 Best Practices: 1 Have float equipment made up at Tubescope's yard prior to bringing casing to location. Buck on all equipment to the pin end and not make up to box below, due to rig height restrictions. 2 * - Make up buttress connection to proper mark, not to a torque value. Comments: i. ALL CASING WILL BE NEW CASING. ii. Overpull for the 3 1/2" string must be limited to 98,500 Ibs. 4.8 Casing Design Casing Shoe Safety Factors Setting Maximum Casing Depth Mud Wt Frac. Form Surface n o as Size Weight TVD When Set Grad Press Pressure m' Ti c (in ( Ib /ft) Grade (ft) (113/gal) (lb/gal) (113/gal) (psi) 13 3/8 68 K -55 1,500 9.4 15.0 8.4 0 2.18 2.66 4.45 9 5/8 40 L -80 5,418 9.5 13.0 1.5 2,283 1.85 1.16 3.12 31/2 9.3 L -80 7,738 10.6 15.0 10.2 2,283 1.17 2.47 1.30 4.9 Calculation of Maximum Anticipated Pressures (MAWP and MASP) Setting Casing Depth Size TVD MAWP * MASP ** Mud /Gas (in) (ft) (psi) (psi) Percentage 13 3/8 1,500 2,329 0 30/70 9 5/8 5,418 3,997 2,283 30/70 3 1/2 7,738 6,669 2,283 30/70 * MAWP = Maximum allowable working pressure *" MASP = Maximum anticipated surface pressure The calculation method for MASPBHP has been modified from the standard AOGCC use of a Bottom Hole Pressure — 0.1 psi /ft gas gradient to what Marathon considers a more accurate Bottom Hole Pressure — 30% Mud Column — 70% Gas Column. This method follows the MMS standard for any well with a TVD of 12,000' or less. Marathon believes that constant gas monitoring and proper rig supervisor well control training will prevent the possibility of a wellbore being completely evacuated with only a gas gradient remaining. 3/19/2008 CONFIDENTIAL MATERIAL Page 11 of 19 KBU 14 -8 1 • Marathon Oil Company Drilling Program Alaska Surface casing: 13 3/8" (1,500' MD, 1,500' TVD) MASPf = ((Fracture gradient at shoe) x .052 x TVDshoe) - Hydrostatic pressure of gas column at the shoe. MASPfrac = (15.0 ppg x .052 x 1,500') - (0.1 psi /ft x 1,500') MASPfrac = 1,170 psi - 150 psi MASPfrac = 1,020 psi. MASPbnP = BHP open hole td — Hydrostatic pressure of mud portion — Hydrostatic pressure of gas portion MASPbnP = (1.50 ppg x .052 x 5,418') — (0.3 x 9.5 ppg x .052 x 5,418') — (0.7 x 0.1 psi /ft x 5,418') MASPbnP = 420 psi — 799 psi — 377 psi MASPbnP = 0 psi MASP = MASPbh = 0 psi MAWP = (0.7 x Casing Burst) — (Mud Wt. — Backup Fluid Wt.) x .052 x TVD MAWP = (0.7 x 3,450) — (9.4 — 8.3) x .052 x 1,500' MAWP = 2,415 psi — 86 psi = 2,329 psi Intermediate casing: 9 5/8" (5,746' MD, 5,418' TVD) MASPf = ((Fracture gradient at shoe) x .052 x TVDshoe) - Hydrostatic pressure of gas column at the shoe. MASPfrac = (13.0 ppg x .052 x 5,418') - (0.1 psi /ft x 5,418') MASPfrac = 3,663 psi - 542 psi MASPfrac = 3,121 psi. MASPbh = BHP open hole td - Hydrostatic pressure of mud portion — Hydrostatic pressure of gas portion MASPbnP = (10.2 ppg x .052 x 7,738') — (0.3 x 10.6 ppg x .052 x 7,738') — (0.7 x 0.1 psi /ft x 7,738') MASPbh = 4,104 psi — 1,279 psi — 542 psi MASPbnP = 2,283 psi MASP = MASPbhp = 2,283 psi MAWP = (0.7 x Casing Burst) — (Mud Wt. — Backup Fluid Wt.) x .052 x TVD MAWP = (0.7 x 5,750) — (9.5 — 9.4) x .052 x 5,418' MAWP = 4,025 psi — 28 psi = 3,997 psi Production casing: 3 1/2" (8,073' MD, 7,738' TVD) MASPfrac = ((Fracture gradient at shoe) x .052 x TVDshoe) - Hydrostatic pressure of gas column at the shoe. MASPfrac = (15.0 ppg x .052 x 7,738') - (0.1 psi /ft x 7,738') MASPfrac = 6,036 psi - 774 psi MASPfrac = 5,262 psi. MASPbh = BHP open hole td - Hydrostatic pressure of mud portion — Hydrostatic pressure of gas portion MASPbh = (10.2 ppg x .052 x 7,738') — (0.3 x 10.6 ppg x .052 x 7,738') — (0.7 x 0.1 psi /ft x 7,738') MASPbnP = 4,104 psi — 1,279 psi — 542 psi MASPbhp = 2,283 psi MASP = MASPbnP = 2,283 psi MAWP = (0.7 x Casing Burst) — (Mud Wt. — Backup Fluid Wt.) x .052 x TVD MAWP = (0.7 x 10,160) — (10.6 — 9.5) x .052 x 7,738' MAWP = 7,112 psi — 443 psi = 6,669 psi 3/19/2008 CONFIDENTIAL MATERIAL Page 12 of 19 KBU 14 -8 • • Marathon Oil Company Drilling Program Alaska Best Practices: 1 Comments: 4.10 Casing Test Pressure Calculations Casing test pressure calculations are based on the lesser of (1) MASP, or (2) 70% of rated burst pressure of the casing adjusted for the mud weight used during the test less a 8.3 ppg back -up unless otherwise noted. AOGCC regulations state that casing pressures must be 50% of the BOP working pressure documented on the approved permit to drill. Best Practices: 1 Comments: 4.11 Blowout Prevention Equipment, Testing and General Procedures BOP PROGRAM Casing Test Test Casing Test Fluid Pressure Size MAWP MASP Press Density BOPS Low /High Casing (in) (psi) (Psi) (psi) (lb/gal) Size & Rating (psi) (1) 13 -5/8" 5M annular Surface 13 3/8 2,329 0 1,500 9.4 (1) 13 -5/8" 5M pipe ram 250/2,500 (1) 13 5/8" 5M blind ram (1) 13 -5/8" 5M drilling spool with 3 -1/8" 5M outlets (1) 13 -5/8" 5M annular (1) 13 -5/8" 5M pipe ram Intermediate 9 5/8 3,997 2,283 1,500 9.5 250/2,500 (1) 13 5/8" 5M blind ram (1) 13 -5/8" 5M drilling spool with 3 -1/8" 5M outlets (1) 13 -5/8" 5M annular (1) 13 -5/8" 5M pipe ram Production 31/2 6,669 2,283 1,800 10.6 250/2,500 (1) 13 5/8" 5M blind ram (1) 13 -5/8" 5M drilling spool with 3 -1/8" 5M outlets Blowout Preventers The blowout preventer stack will consist of a 13 -5/8" x 5000 psi annular preventer, a 13 -5/8" x 5000 psi double gate ram type preventer with blind rams in the bottom and pipe rams in the top and a 13 -5/8" x 5000 psi drilling spool (mud cross) with 3 -1/8" x 5000 psi outlets. The choke manifold will be rated 3 -1/8" x 5000 psi. It will include a remote hydraulic actuated choke and a hand adjustable choke. Also included is a poor -boy gas buster, and a vacuum -type degasser. A flow sensor will be installed in the flowline and the mud pits will contain sensors to measure the volume of fluid in the surface mud system. Both sensors will contain readouts convenient to the drillers console. 4.11.1. Function Testing Function Regularly. 3/19/2008 CONFIDENTIAL MATERIAL Page 13 of 19 KBU 14 -8 • Marathon Oil Company Drilling Program Alaska 4.11.2. Pressure Testing The Marathon Drilling Supervisor will verify all pressure tests of BOP's, surface lines, seals, casings and FIT or LOT tests. All tests are to be recorded on the IADC and daily drilling reports. Best Practices: 1 Comments: 4.12 Wellhead Equipment Summary Component Description Casing Hanger Type 13 5/8" x 9 5/8" Fluted Casing Head 13 -5/8" 3M X 13 -3/8" Slip Loc W/ 2, 2" LPO, Landing Base for 20" Conductor, U, AA, PSL1, PR1 Mandrel 13 -5/8" 3M Studded Bottom X 13 -5/8" 5M Flg Top, W/ 2, 2- 1/16" 5M Studded Outlets, 13 5/8" x 3 1/2" Manual Tubing Head U,AA,PSL1,PR1 Slip Adapter Flange 13 -5/8" 5M X 3- 1/16" 10M W/ Seal Pocket and 3" H BPV Threads Best Practices: 1 Comments: Control lines and electric cable for the EXCAPE system will be routed through the adapter flange ports. 4.13 Directional Program Summary Build Turn Coordinates Sec. MD TVD Rate Rate Dogleg Inclination Azimuth +N / -S +E/ -W VS No. Description (ft) (ft) (°/100') (°/100') ( °/100') (deg) (deg) (ft) (ft) (ft) 1 Tie On 0 0 0 0 0 0 36.131 0 0 0 2 KOP 1,620.00 1,620.00 0 0 0 0 36.131 0 0 0 3 Build up Section 3.00 0 3.00 36.131 4 End of Build 2,473.27 2,445.17 3.00 0 3.00 25.598 36.131 151.40 110.53 187.46 5 Hold Section 0 0 0 25.598 36.131 6 End of Hold 5,173.38 4,880.25 0 0 0 25.598 36.131 1,093.63 798.40 1,354.06 7 Drop Section -2.00 0 2.00 36.131 8 End of Drop 6,453.29 6,118.00 -2.00 0 2.00 0 36.131 1,320.74 964.20 1,635.25 9 TD 8,073.29 7,738.00 0 0 0 0 36.131 1,320.74 964.20 1,635.25 3/19/2008 CONFIDENTIAL MATERIAL Page 14 of 19 KBU 14 -8 • Marathon Oil Company Drilling Program Alaska 0 1000 13 3/8" KBU 14-8 Lower Beluga - ---` - 2000 KBU 148 Tyonek 0 3000 c � 1000 Lo KBU 14-8 TD t 4000 N t D TO 5000 9 5/8" Z KBU 14-8 Lower Beluga t ID 6000 - _ p N H = KBU 148 Tyonek 7000 -- = r KBU 148 TD -- -- -- 3 1/2" 8000 0 - 1 1111 1111 1111 1111 1111 1111 1111 1111 1 1 1 1 1 1 1 -3000 -2000 -1000 0 1000 2000 3000 4000 5000 0 1000 Vertical Section at 36.13° (2500 ft /in) West( -) /East( +) (500 ft/in) Comments: Vertical section calculated from a reference azimuth of 318.39° taken from surface location to bottom hole location. Potential Well Interference: Well Distance (ft) Depth (MD) KBU 41 -18X 60.03 Surface KBU 13 -8 99.96 1,670 KBU 24 -7X 119.35 Surface KU 11 -17 220.04 1,451 KBU 33 -7 320.19 1,117 KU 24 -7 389.57 Surface KU 41 -18 393.99 Surface No serious interference exists. See attached directional plan and anticollision analysis for more details. Best Practices: 1 Comments: 4.14 Directional Surveying Summary Interval MD (ft) MWD Survey Magnetic Multishot Gyro Multishot Other Survey Remarks Tool Surface 0 — 1,500' X Intermediate 1,500' — 5,746' X Production 5,746' — 8,073' X Best Practices: 1 3/19/2008 CONFIDENTIAL MATERIAL Page 15 of 19 KBU 14 -8 1 • Marathon Oil Company Drilling Program Alaska Comments: 4.15 Drilling Fluid Program Summary Interval — TVD Minimum Inventory From To Density Gel (ft) (ft) (lb/gal) Fluid Description Additives Viscosifier Barite 0 1,500 8.6 — 9.4 Gel / Gelex Spud Mud Gel, Gelex, Soda Ash, Caustic, Barite, Polypac Supreme UL, Sodium Meta Bisulfate Flo -Vis, PolyPac Supreme UL, KCI, SafeCarb 1,500 5,418 9.0 — 9.5 6% Flo -Pro NT w/ Safecarb 10,40,250, Mix II, Barite, Caustic, Congor 404, Sodium Meta Bisulfate, Lubetex Flo -Vis, PolyPac Supreme UL, KCI, SafeCarb, 5,418 7,738 9.4 — 10.5 6% Flo -Pro NT w/ Safecarb Barite, Caustic, Congor 404, Sodium Meta Bisulfate, SteelLube, Lubetex Best Practices: 1 Because the production zone will be fracture stimulated, the mud system from the intermediate section will be re -used for the production hole after cleanup through the on -site centrifuge. Comments: 4.16 Drilling Fluid Specifications Interval — TVD LSRV Drill From To Density Vis 1 min PV YP Fluid Loss Solids (ft) (ft) (lb/gal) (sedgt) (Ib. /100ft) (cP) (lb/100 ft) (cc) pH ( %) 0 . 1,500 8.6 -9.4 60 -100 N/A 25 -35 NC -12 +/ -9.5 <7.5 1,500 5,418 9.0 — 9.5 40,000 + 8 - 12 7 — 9 +/- 9.5 +/- 5 5,418 7,738 9.4 —10.5 30,000 + 10 - 18 4 — 7 +/- 9.5 +/- 5 Best Practices: 1 As a standard practice for long string completions, the drilling mud that will remain above the top of cement on the 3 production casing will be treated with corrosion inhibitor (Congor 303A) at a concentration of 1 drum per 100 barrels of drilling fluid. Comments: See mud prognosis for details. Sized CaCO3 (SafeCarb) will be used to control leakoff. 3/19/2008 CONFIDENTIAL MATERIAL Page 16 of 19 KBU 14 -8 • 411 Marathon Oil Company Drilling Program Alaska 4.17 Solids Control Equipment c o 2 rn as 0) C V N w C C y Y is o 1- c c 0 L d 01 3 N 7 Interval U v U N Comments 0 — 8,073' MD X X X X Closed Loop System, Full Containment, Run shakers with finest screens possible Equipment Specifications Item (quantity, design type, brand, model, flow capacity, etc) Shaker 2 — Swaco Mongoose PT Desander N/A Desilter 1 — Derrick Model 0522 Mud Cleaner N/A Centrifuge 2 — MI /Swaco units Cuttings Dryer N/A Cuttings Injection Marathon G &I Facility Zero Discharge N/A Best Practices: 1 Have vacuum trucks pull fluids from trough above slop pit to more efficiently pull fluids for disposal. This minimizes water added to the solids to suspend for pickup by the trucks, thus minimizing total volume to be disposed of. Comments: 3/19/2008 CONFIDENTIAL MATERIAL Page 17 of 19 KBU 14 -8 • Marathon Oil Company Drilling Program Alaska 4.18 Cement Program Summary Depth Gauge Top of Cement Gauge Ann Vol Slurry Casing Hole Ann Vol With OH Density Open Hole Thickening Size MD TVD Size MD TVD To TOC Excess Lead/Tail Excess Time (in) (ft) (ft) (in) (ft) (ft) (ft (ft) (ppg) ( %) (hrs) . 20 120 120 Driven N/A 13 3/8 1,500 1,500 16 0 0 693 1,162 12.0 75 8 9 5/8 5,746 5,418 12 1/4 3,600 3,461 672 975 10.5 40 8 31/2 8,073 7,738 81/2 5,200 4,904 957 1,266 15.8 40 N/A Mix Water Compressive Casing Slurry TOC Strength Size Density Qty Yield Vol MD Qty WL FW (psi) (in) Slurry Cement Description (Ib /gal) (sx) (ft /sx) (ft (ft) (gal /sx) Type (cc) ( %) 8 hr 24 hr 13 3/8 Tail Type I Cement 12.0 463 2.51 1,162 0 11.28 Fresh 812 0 196 818 9 5/8 Tail Class "G" 10.5 326 2.99 975 3,600 12.39 Fresh 24 0 145 1,441 3 1/2 Tail Class "G" 15.8 1,082 1.17 1,266 5,200 4.97 Fresh 24 0 226 2,632 Best Practices: 2 Pump several fluid calipers at TD to help with the hole volume determination from the open hole caliper log. Comments: See cement prognosis for details and spacer specifications. 4.19 Bit Summary Interval — MD Type Recommended Estimated Expected From To Size WOB Rotating Minimum ROP (ft) (ft) (in) Manufacturer Model No. IADC (kips) RPM Hours (ft/hr) 0 1,500 16 Christensen MX -1 115 1 - 4 80 — 350 1,500 5,746 12 1/4 Christensen HCM 506Z M323 Up to 52 Motor 5,746 8,073 8 1/2 Christensen HCM605 M323 Up to 25 Motor Best Practices: 1 Comments: See bit prognosis for additional information. If a second bit is necessary for the 12 %" hole a MX -C3 (IADC 137) should be used to finish this section. Back up bits for the 8'/" hole section will consist of mill tooth and TCI tricone bits. 3/19/2008 CONFIDENTIAL MATERIAL Page 18 of 19 KBU 14 -8 • 4110 Marathon Oil Company Drilling Program Alaska 4.20 Hydraulics Summary Max Press @ Displacement © Max Rate © Liner ID Stroke 90% WP 95% Vol. eff 95% Vol. eff Hole Sections Used Qty Make Model (in) (in) (psi) (gal /stroke) (spm /gpm) On 5 8 2,597 2.04 125 / 255 Surface 3 National Oil Well A600PT 5 8 2,597 2.04 125 / 255 Intermediate 5 8 2,597 2.04 125 / 255 Production Est. Hole Pump Standpipe Openhole Nozzle AP at Depth -MD Size Rate Pressure Min AV MW ECD Size bit (ft) (in) (gpm) (psi) (fpm) (ppg) (ppg) (32 "s) (psi) Remarks (Drill string configuration) 0 — 1,500 16 650+ 1,400 69 9.3 2 — 18 s Actual Data KBU 24 -7X (@ 1,636' MD) 1 -16 1,500 — 5,746 12 1/4 650 2,269 127 9.4 9.61 6 — 13's MI Virtual Hydraulics (@ 5,746' MD) 5,746 — 8,073 8 1/2 500 2,156 259 10.0 10.49 5 — 15's MI Virtual Hydraulics (@ 8,073' MD) Best Practices: 1 Drill all hole sections with 5" drillpipe to maximize hole cleaning hydraulics. Comments: See separate hydraulics calculations. Annular velocities in the 16 ", 12 %4', and 8'/2" holes were calculated using 5" drillpipe. 4.21 Formation Integrity Test Procedure Surface and Intermediate casing shoes will be tested to Leak -off. Prior to drilling out of casing strings, test BOPs and casing to the specified pressure listed in the BOP Program section. Plot test and record volume required on the drilling report. Leak -off tests (LOT) are to be conducted as described below: 1. Drill 20' to 25' of new formation below the casing shoe and condition the mud to the same properties in and out. 2. Pull drill string into the casing shoe and close ram preventer, and line up to the choke manifold with a closed choke. 3. Begin slowly pumping fluid down the drill string at 1/2 bpm while recording casing and drillpipe pressures at 1/2 bbl intervals. A running plot of pressure versus volume should be kept by the drilling foreman while the test is in progress. 4. Stop pumping when the pressure curve departs form a straight line sufficiently to indicate leakage into the formation. Record as ppg equivalent mud density in the IADC and morning reports. 5. Monitor and plot pressure drop and time after shut -in for 10 minutes or until the shut -in pressure stabilizes. Best Practices: 1 Comments: 3/19/2008 CONFIDENTIAL MATERIAL Page 19 of 19 Marathon Oil • Well KBU 14 -8 Diverter Flow Tine 21 1/4" 2M Diverter . 16" Automatic Knife Valve Diverter Spool 1 1 1 111 1 1 16" Diverter Line Marathon Oil Well KBU 14 -8 BOP Stack (Flow Nipple Flow Line 1 13 5/8" 5M Annular Preventer 5/8" Double Ram El Pipe Ram Ram m Preventer 2 1/16" 5M Blind Ram Check Valve 2 1/16" 5M Manually 3 1/8" 5M Manually Operated Valves Operated Valve W ii, ■1111■11MI �_-- X 4— X --_ 'I ® Choke IIII[©0II r X —`- 13 5/8" 5M Cross 3 1/8" 5M Hydraulically Operated Valve 13 5/8" 5M x 13 5/8" 5M Drilling Spool Bottom of mud cross must be 24 -45" from ground level for Glacier 1 rig placement. 13 5/8" 5M Tubing Head Flange Marathon Oil Well KBU 14 -8 Choke Manifold To Gas Buster To Blooey Line Bleed off Line to Shakers n n n V. VP glir I„I I I I I I i o O 8 OD Op - pV G G,6 0 000 - - I , I ,I I ,I I / I I f I I / I l I I I I 1 ■ - P� /� © I 1 I © u - n EL VIV X u ■ J I I� Il :0001 1 © 3" 5M Valves Tlir . mom I i1 2 9/16" 10M Swaco ' ' 3 1/8" 5M Manually Hydraulically Operated Adjustable Choke Choke Gauge Block Choke Hose to HCR r e (from BOP Stack) 0 - 6,000 psi Choke Control Pressure Gauge Pressure Sensor "NR Maakrlt, Regulator are nw M pa to 1t1(MGf iit . itl %iltrlr II +k r,umul � ' meow bMees+ move tt n Choc* teviwt ,<. 1 " .. 1 M a dank R te) operating g t v.,,„ Il h,deetx, prltetllNM b rah prnrarrterr. Annuhr Pressure Valve and MM valeta Alrriuetty dugs t> 1000 par r1 "KR" r4ydre dowdier. adtualabli +ruM 6100V from 0 1800 psi normally around 1000 Annular regulator * i ( :._ii' ' (� provider a, M M r M, M i. normally Prese�ure dl r•gulalron afeWee the rh 1 r ; murmurs 12maulrHx c3a, annular oper *rg . ,r „i at �, Valve Nunnehly in low - - pressure (eft) pocrirnn n normally pressure operations over nnrmally 7500pe4 , rrrove to hrati around 30tH) pressure(rght) position ,l .�, 1 Manifold Pressure normally -6000 normally 1500 1 j 1r Nitrogen IsaleNonYee• • 1 ii -, High Pressure ON. Pressure s laid laid 6.00 � 1 I ` Screen o Eocene Pressure SWIM- SWIM- * j , ` .:' 1 0 1 0 1000 Automat* slops amoseMlan duty leach ` a000 psi and Marla *tam m * _ .. _ . Ms premium drops to 5 [41 1 " Main Air I hw.pr.i tt- b t.. ..',Hip•. I� I.pknvin Proof Electric Motor Accumulator Relit - - - e7 ? i -, ; , mucReValve ! r r �" " , -„ Use SAE 10 set Pop Ott -set at 3200PSI ! -- - -ems ii Air lubricator - p at 6 drops f Accu III t 7 8Gl;n n ■ min Check " 700 ra n -.... 4 weekly. 1 • " Belt Guard- Triplex Galley lsolaborl Air Pressure Switch • Drain Valve Electric 1 Valve for Bypass- Normally closed. Motor Triplex Art Pumps ) 60 -1 Ratio NA open with pressures Triplex Pump- Switch- Pump- / above 3000 psi Check oil level KePP'n Normally 11 Suction Strainer {p u monthy Fill auto open, For Air Pumps u with l Ow 40 position ■ close for Suction Valve For Turn off I pressure Air operated when •; exceeding Pumps reamians servicing E { l ■ 3000 PSI open close during f7 serviceing u Suction strainer for Tiplex pump dean every 30 days Surface Use Plan for Kenai Beluga Unit, Well KBU 14 -8 Surface Location: 443' FNL, 479' FEL, Sec. 18, T4N, R11W, S.M. 1) Existing Roads Existing roads which will be used for access to KBU 14 -8 are shown on the attached map. Kenai, Alaska is the nearest town to the site. 2) Access Roads to be Constructed or Reconstructed No new roads will be required to access KBU 14 -8. 3) Location of existing wells Well KBU 14 -8 will be drilled on Kenai Gas Field (KGF) pad 41 -18. A pad drawing is enclosed that shows existing wells and the proposed location of KBU 14 -8. 4) Location of existing and/or proposed facilities The locations of existing production facilities on KGF pad 41 -18 are shown on the enclosed pad drawing. A flowline will be installed from the KBU 14 -8 wellhead and tied into the existing production facilities. 5) Location of Water Supply A water supply well exists on the pad that KBU 14 -8 will be drilled from. 6) Construction Materials No major construction is planned on the pad at this time. Leveling of the pad for this work will be done with minimal materials needed. No new dikes or ditches will be constructed. There are no topsoil or material stockpiles. 7) Methods of handling waste disposal; a) Mud and Cuttings Cuttings will be dewatered on location. The cuttings and excess mud will be hauled across Pad 41 -18 of the Kenai Gas Field for disposal into Well KU 24 -7RD, a Class II disposal well (AOGCC Disposal Injection Order No.9, Permit #81 -176). b) Garbage All household and approved industrial garbage will be hauled to the Kenai Peninsula Borough Soldotna Landfill. c) Completion Fluids Clear fluids will be hauled to Pad 34 -31 of the Kenai Gas field and injected in Well WD #1, an approved disposal well (AOGCC Permit #7 -194). d) Chemicals Unused chemicals will be returned to the vendors that provided them. Efforts will be made to minimize the use of all chemicals. e) Sewage Sewage will be hauled to the Kenai sanitation facility. 8) Ancillary Facilities A minimal camp will be established on the pad to house various supervisory and service company personnel. Approximately four trailer house type structures will be required for this purpose. Bottled water will be used for human consumption. Potable water will be obtained from the existing water well on the pad. S & R will collect and transport sanitary wastes to their ADEC approved disposal facility. No additional structures will be necessary. 9) Plans for reclamation of the surface KBU 14 -8 will be drilled from an existing pad. Reclamation of the pad will occur after the abandonment of KBU 14 -8 and the other existing wells on the pad. 10) Surface ownership The surface owner of this pad in the Kenai Beluga Unit is the CIRI Native Corporation. 0 Operator Certification Field: Kenai Gas Field Well: Kenai Beluga Unit, KBU 14 -8 Surface Location: 443' FNL, 479' FEL, Sec. 18, T4N, R11W, S.M. I hereby certify that I, or someone under my direct supervision, have inspected the drill site and access route proposed herein; that I am familiar with the conditions which currently exist; that I have full knowledge of state and Federal laws applicable to this operation; that the statements made in this APD package are, to the best of my knowledge, true and correct; and that the work associated with the operations proposed herein will be performed in conformity with this APD package and the terms and conditions under which it is approved. I also certify that I, or the company I represent, am responsible for the operations conducted under this application. These statements are subject to the provisions of 18 U.S.C. 1001 for the filing of false statements. Executed this 13 day of March , 20 08 4 1j-P.Ane it Name Willard J. Tank ... Position Title Advanced Senior Drilling Engineer Address P.O. Box 3128, Houston, TX 77253 -3128 Telephone 713 - 296 -3273 Field Representative Pete Berga (Drilling Superintendent) (if not above signature) Address 3201 C Street, Suite 800, Anchorage, Alaska 99503 (if different from above) Telephone 907- 565 -3032 (if different from above) E -mail wjtank @marathonoil.com (optional) • 0 , UMIIJUM CAP SECTION LINE NTS i il,-- \ � o 'CAUTION' q HIGH PRESSURE TUN RIi1r 9 s.. T1 LATERAL GAS - (11 1 .1 PIPELINE TO 41.7 Z .. lITIOi IL H KBU 14 -8 AS -BUILT ` t " Z ' NAD27 ASP ZONE 4 ,�, / v GRID N:2356290.305 GRID E:275331.359 \ o EXISTIN D RAINAGE LATITUDE: 60°26'37.991"N y m RETENTION BASIN LONGITUDE: 151 °14'38.587"W \ ELEV. 65.8' (MSL) 443' FNL 479' FEL KBU 24-7X 479' FEL \ 0. El B U 41 -18X (NTS) 111.- KENAI GAS FIELD TBMO4 -15-22 PAD 41 -18 ELEV: 66,66' 1D.2' X 10.7' 4 t ` SHUT DOWN BLDG \ 11.6' X 12.6' EDGE OF CONTROL BLDG. 1i / PAD --- ---, t'�1 O A DRILLFLU105& VV CUTTING HOLDING 0 0 10.4'X20.0'-" TANKSC -J BLDG. A0i J �_ } S 12.0'X40.5' W KBU 33.7 al J 11 6A' X 10.0' OFFICE Z _ BLDG. BLD J V a � ' < Z 1 ■ \ \ 0 � ��� -'1 B.2' BLDG. U V t4- 'X16.6' � WATER WELL V J/i 0 BLDG. KBU 24-7 30 r 12.3' X 123' it. K.U. 11 ION WELL ' AL K.U. 41.16 , 4 m id \ " � ' \ \/ �p K.U. 13 8 EO \,.. CONTRACTOR 1 /v 1q. BLD G. BLDG. 9.3' X 9.3' '‘'5.: , A ' PR ODU CT ION , 0 A BLDG DUMP TANKS -I.,, ° FACILITIES t METE �i1 ` p LOG. GEL w- 93' X ER UTILITY 2 STORY 13106 . HYDRATION Wt PRODUCTION TANK ucArco ``` %% 1 I • =- s � i� OFa �q ,�P I NOTES � !. s t � .i __. 1. BASIS OF HORIZONTAL COORDINATES ARE ALASKA STATE PLANE NAD27 '�.� �.. * : i ' ' * / ZONE 4 DETERMINED BY A DIRECT TIE TO USC&GS TM STA AUDRY HAVING A NORTH 0 PUBLISHED POSITION OF LAT. 60'30'50.559 N LONG. 15196'31.445V N:2332045.42 EMI/868.15 / •. AN A. MOLANE : .+ 2) BASIS OF VERTICAL DATUM IS MEAN SEA LEVEL --.6.-- • _ 3) SOUTHWEST CORNER SEC. 6 COORDINATES DETER/AWED FROM DIRECT A8 S SURVEY TIE TO THE TO EXISTING BIM SECTION CORNER WC. RECW SCALE ERED 0 100 200 ,4 q� k 1p AND NOT THE' PROTRACTED SECTION CORNER VALUES. I , . $ " "*F95,f7 .� / ' FEET 1 %1W%%% • MARATHON PROJECT REVISION : - M KBU 14-8 WELL ON KGF PAD 41 -18 , °" 3-7-00 O1, COMPANY AS -BUILT SURFACE LOCATION DIAGRAM GRAMSY: SON MLMA 1 ALASKA )E1 SCALE: 1'.100' • NAD27 FOR INFORMATIONAL PURPOSES ONLY - P 063015 BOOK NO. 01.24 ENGINEERING /MAPPING / SURVEYING /TESTING Consulting Inc P.O. Box 4H SOU1O1NA AK 90680 LOCATION SHEET VOICE: 7'2°34215 GO ' S18 T4N R11 W SEWARD MERIDIAN, ALASKA 1 1 • • N 3 2 2 KU KU 1 N W • N 1 4 -32 34 1l 4 i0 .111 11 h 34 .2 6 -44 . 1 14 44. KU A KBU 41 -6 6 -6 0 KDU KU 9 5 8 21 -6X I 43 7 (+411 C KBU 22 -6 7 6 5 5 • = U_42 -6 MI 1311 pep M 6 KTU _ 43 -6XR • . KBU 6 23X -g 9 5 KBU A 1 4 KU 6 33 KBLI 7 \• 43 -6A KTU 6 ■ -6X 6 13 -5 A 5 1 6 6 6 1` I 5 8 KTU 24 -6H K ; 24-6R • ( KU 3 4 2 -6RD 1mU 6 5 4 6 24 -5 • =U 24 -. • 5 • A KU S 24 -5RD 2 3 5 N �.. 1 ^ O d ' 3 ., 3 5 1 @ /� K BU f� 24 -6 3 I 3 0 rr x LI va.N. '3 2 N mJ KBU - • 6 1 -7 2 r /.f •�•aw- • c a ` di IF A v , i � A 6 KU 22 � W A in ^ ^ 2 4 6 1 -7RD a 11 -6 KTU 6 3 ( 32 -7H 1 4 5 ' 2 -7 S 5 41 6 3 1 6 4 7 1 32 7 6 4 7 ■ 5 KBU n 1 3 -8 33 -7 8 - 5 6 .c -7 6 / 9 4 -7 1 6 3 -7X 6 KBU 14 -8 Marathon Oil Company KBU 24- 3 KU 4 • 16 24-7 6 0 h A a 3 •n N ^� 3 $ 1 1 -1 7 D a N M 2 �¢ N A Beluga /Tyonek PA Kenai Gas Field, Alaska 0.25 mi 0 0 TOPO! map printed on 02/29/08 from "Marathon KBU 14 -8 Map.tpo" 151 °17.000' W 151 °15.000' W 151 °13.000' W 151 °11.000' W WGS84 151 °09.000' W ` _ ... .. .:. 42 ,22. Z ° ° v? s u s =�., gam= , M ci ct, o O i -xs s .%.... pipeline _ > .. =fig= rD Gig _ ~ "' q ° • - - ... > •26 30. — — �g �8 Ait. a. 127 .. • I Pad 33 -39 / -� 1 • —= =n s " .1 • • z _ �'__a *—T `_•• ti— • , .CORP z x#,;0 i • o ° o�' ° o _ I Kalifornaky Beach Road I Private Road • I o N 1 1 II N o ° ° • 1 1 i 32 33 X34 n 3 v , 5 ° R ■ I I Pad 34-31 (Marathon Office) I I Pad 43 - 32I ! ' , o' Landing . S trips `: �Rad•o forme / s _ _ Z ( h1.1 , ' z a • 1 ;1 I -EN_�I (;As FIELD I o o all Grove ° o i 1 5 Pit ° _ $ ' 1t 6 4 3 . • ,z � 1 r.. 0. o w� I 'x 1 1 W, o ' I 1 r e • o _ ,, 1 t .`1' 1 • f l \b Gas Well ' • • �, .. - - - ♦ -- � Li I Pad 1 -4 ve) I r ,• 1 Pad 14 -6 .�'= _ oo l I Prints Road i I Pad 41 -7 I > Lan • _ I d z �° z F o Y .. f 12 i 7 8 9 p I. l o o^_ . o f i r f 7 o 0 1y , 6 A I T, • l Pad 41 -18 (Project Location) I ' 13_ I 18 17 16:f r , it Z Z O I _. !I _ i sae w-. • �� • - ( p O o C ( I t "- N o ' . _.. t ' Gas Wel - 'g .. ' o - l !+ r - .74 o • I I Pad 44 -19 (Abmdoaaded) I '¢ — a . -)5 _ 1 1 I �, q T � • 1 Q � a 4 J f' Ltnding 1 Gi34W l ' a = � 9 . S�1p • .. H { 24 I 19 � Qt3 -'` 21 , 3P t „ , y I TO y i ) _O R l- - . - NI • - ,� ma - 1 _ O ° 1, _ j f `s ue • o * �.a3 , I i � _ 1 /i • 25 l 29 • 2&I�' , " � � 26 • I .x �' J� • • +• ; 1 i y .., I 1 , e �• , KenaiB -4 Quad � � 1 - , _ a e . Map created wit ©2006 National Geographic u T. _ _ { _ f . ■ . - ■ 151 °17.000' W 151 °15.000' W 151 °13.000' W 151 °11.000' W WGS84 151 °09.000' W TN" / M N NATIONAL 0.0 0.5 1.0 1.5 miles 19° GEOGRAPHIC I, r,yr ,y, i 0.0 0.5 1.0 1.5 2.0 2.5 km 02/29/08 • ._. ' • 0 14 11 ..:._. - ►; ,4 1(3 1103H 11AN1 1 et t A ! i i • µ ++, z 5 f2 12 to II law a W ____ 4 x • IQ 41 , _ Li 111 ale h M / In R 1 ! I L J li =p* CZ= aC._='.7aalr -.- r 1 I I I I owns awa I `% i I 1 J . t .....,.L -, r r - 1 1 I • I% 1 � 1 , x / I I a XVI 4 C,? Q I . I II L_ MARATHON Oil Company B R A Location: Cook Inlet, Alaska ( Kenai Penninsula) Slot: slot #KBU14--8 HUGHES MARATHON Field: Kenai Gas Field (NAD83) Well: KBU14 -8 INTEQ Facility: Pad #41 -18 Wellbore: KBU14 -8 Measured depths are referenced to Glacier #1 (RKB) North Reference: True north Glacier #1 (RKB) to Mean Sea Level: 88 feet Scale: True distance Mean Sea Level to Mud line (Facility: Pad #41 -18): 0 feet Depths are in feet Coordinates are in feet referenced to Slot Created by: jonethoh on 16- Mar -08 Location Information Facility Name Grid East (USft) Grid North (USft) Latitude Longitude Pad #41 -18 1415847.040 2356482.790 60 °26'40.256 "N 151 0 14'36.875 "W410 Slot Local N (ft) Local E (ft) Grid East (USft) Grid North (USft) Latitude Longitude slot #KBU14 -8 - 445.73 - 478.56 1415360.172 2356046.197 60 °26'35.866 "N 151°14'46.414"W Glacier #1 (RKB) to Mud line (Facility: Pad #41 -18) 88ft Mean Sea Level to Mud line (Facility: Pad #41 -18) Oft Glacier #1 (RKB) to Mean Sea Level 88ft Targets Name MD (ft) TVD (ft) Local N (ft) Local E (ft) Grid East (USft) Grid North (USft) Latitude Longitude KBU14 -8 Lower Beluga Revised 14- Mar -08 6453.29 6118.00 1320.74 964.20 1416349.15 2357348.40 60 °26'48.873 "N 151 °1427.193 "W KBU14 -8 Tyonek Revised 14- Mar -08 7578.29 7243.00 1320.74 964.20 1416349.15 2357348.40 60 °26'48.873 "N 151 °14'27.193 "W KBU14 -8 TD Revised 14- Mar -08 8073.29 7738.00 1320.74 964.20 1416349.15 2357348.40 60 °26'48.873 "N 151 °14'27.193" Well Profile Data Design Comment MD (ft) Inc ( °) Az ( °) TVD (ft) Local N (ft) Local E (ft) DLS ( °/100ft) VS (ft) RKB 88' 0.00 0.000 36.131 0.00 0.00 0.00 0.00 0.00 KOP 1620.00 0.000 36.131 1620.00 0.00 0.00 0.00 0.00 End of Build 2473.27 25.598 36.131 2445.17 151.40 110.53 3.00 187.46 Begin Angle Drop 5173.38 25.598 36.131 4880.25 1093.63 798.40 0.00 1354.06 EOD / Lower Beluga 6453.29 0.000 36.131 6118.00 1320.74 964.20 2.00 1635.25 Tyonek 7578.29 0.000 36.131 7243.00 1320.74 964.20 0.00 1635.25 TD - 3 1/2" Casing Pt 8073.29 0.000 36.131 7738.00 1320.74 964.20 0.00 1635.25 PARATHON Oil Com BA KER p y Location: Cook Inlet, Alaska (Kenai Penninsula) Slot: slot #KBU14 -8 HUGHES MARATHON Feld: Kenai Gas Field (NAD83) Well: KBU14 -8 INTEQ Facility: Pad #41 -18 Wellbore: KBU14 -8 Plot reference wellpath is KBU14 -8 Version #2 True vertical depths are referenced to Glacier #1 (RKB) Grid System: NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Measured depths are referenced to Glacier #1 (RKB) North Reference: True north Glacier #1 (RKB) to Mean Sea Level: 88 feet Scale: True distance Mean Sea Level to Mud line (Facility: Pad #41 -18): 0 feet Depths are in feet Coordinates are in feet referenced to Slot Created by: jonethoh on 16- Mar -08 5 131a 11 300 3 Easting (ft) 0 150 300 450 800 750 900 1050 1200 1 1 1 1 1 1 1 1 Mil _1600 s OM KBU14 -8 TD Revised 14- Mar -08 0 ■ 7 " , RKB 8 8' KBU14 -8 Tyonek Revised 14- Mar -08 0- - L 20in o KBU14 -8 Lower Beluga Revised 14- Mar -08 3 1/2" Casing Production 800 _ Middle Beluga 95/8" Casing Intermediate 1200 — ii L 133/8" Casing Surface Beluga — 1050 0.60° " KOP 1800 7.20° " 3.00 ° /100ft 1320 — 900 19.20° " Z 2400 — o 25.60° „ End of Build o — 750 D Sterling A8 r° i 3000 — — 600 3600 — 52 8) —460 p Sterling A8 1 4 2 0 0 — - 3 0 0 a) 2 IL 4800 — Beluga 25.60° _. Begin Angle Drop 21.47 ° 17.47° " 5400 13.4 � Is. Middle 5/8" Casing Intermediate Middle Beluga 2.00 ° /100ft 9.47° — 5.07° ii slot #KBU14 - 8 6000 — KBU14 -8 Lower Beluga Revised 14- Mar -08 70 • EOD / Lower Beluga 6600 — 7200 — KBU14 -8 Tyonek Revised 14- Mar -08 Tyonek TD - 3 1/2" Casing Pt 7800 KBU14-8 TD Revised 14- Mar -08 - ° 3 1/2" Casing Production KBU14-8 8400 — 1 1 1 I 1 1 1 9000 -800 0 600 1200 1800 2400 3000 Vertical Section (ft) 5°. 1.1,1200 ft Azimuth 36.13° with reference 0.00 N, 0.00 E Planned Well • ath Geo • raphic Report Report Generated 16- Mar -08 at 10:16:25 Projection System NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Operator MARATHON Oil Company North Reference True Area Cook Inlet, Alaska (Kenai Penninsula) Scale 0.999958 Field Kenai Gas Field (NAD83) Horizontal Reference Point Slot Facility Pad #41 -18 Vertical Reference Point Glacier #1 (RKB) Slot slot #KBU14 -8 MD Reference Point Glacier #1 (RKB) Well KBU14 -8 Field Vertical Reference Mean Sea Level Wellbore KBU14 -8 Glacier #1 (RKB) to Facility Vertical Datum 88.00 ft Wellpath KBU14 -8 Version #2 Glacier #1 (RKB) to Mean Sea Level 88.00 ft Wellbore Last Revised 10/09/2007 Facility Vertical Datum to Mud Line (Facility) 0.00 ft Sidetrack from (none) Section Origin X E 0.00 ft User Jonethoh Section Origin Y N 0.00 ft Calculation method Minimum curvature Section Azimuth 36.13° Local North Local East Grid East Grid North Latitude Longitude [ft] [ft] [USft] [USft) Slot Location - 445.73 -478.56 1415360.17 2356046.20 60 °26'35.866"N 151 °14'46.414'W Facility Reference Pt 1415847.04 2356482.79 60 ° 26'40.256 "N 151 °14'36.875'W Field Reference Pt 1410937.15 2361824.52 60°27'31.931 "N 151 °16'16.783'W ' NAD 83 coordinates are converted to NAD 27 using Corpscon 6.0.1 (US Army Corps of Engineers) TVD from MD Inclination Azimuth TVD Fld Ref North East Grid East Grid North Latitude Longitude DLS Toolface Build Rate Turn Rate Vert Sect Comments r [ft] [°] [°] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [°!10011] [°] [°I100ft] [ °1100ft] [ft] 0.00 0.00 36.13 0.00 -88.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414"W 0.00 0.00 0.00 0.00 0.00 100.00 0.00 36.13 100.00 12.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 80 °2615.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 200.00 0.00 36.13 200.00 112.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2615.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 300.00 0.00 36.13 300.00 212.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °1446.414'W 0.00 0.00 0.00 0.00 0.00 400.00 0.00 36.13 400.00 312.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2615.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 500.00 0.00 36.13 500.00 412.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 600.00 0.00 36.13 600.00 512.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2615.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 700.00 0.00 36.13 700.00 612.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 800.00 0.00 36.13 800.00 712.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 900.00 0.00 36.13 900.00 812.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2615.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 1000.00 0.00 36.13 1000.00 912.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 1100.00 0.00 36.13 1100.00 1012.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414"W 0.00 0.00 0.00 0.00 0.00 1200.00 0.00 36.13 1200.00 1112.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414W 0.00 0.00 0.00 0.00 0.00 1300.00 0.00 36.13 1300.00 1212.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 1400.00 0.00 36.13 1400.00 1312.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 1500.00 0.00 36.13 1500.00 1412.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414"W 0.00 0.00 0.00 0.00 0.00 1600.00 0.00 36.13 1600.00 1512.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °26'35.866 "N 151 °14'46.414'W 0.00 0.00 0.00 0.00 0.00 1620.00 0.00 36.13 1620.00 1532.00 0.00 0.00 1415360.17 2356046.20 275339.987 2356284.87 60 °2615.866 "N 151 °14'46.414'W 0.00 36.13 0.00 0.00 0.00 1700.00 2.40 36.13 1699.98 1611.98 1.35 0.99 1415361.19 2356047.53 275341.007 2356286.2 60 °26'35.879 "N 151 °1446.394'W 3.00 0.00 3.00 0.00 1.68 1800.00 5.40 36.13 1799.73 1711.73 6.85 5.00 1415365.30 2356052.95 275345.117 2356291.62 60 °26'35.934 "N 151 °14'46.314'W 3.00 0.00 3.00 0.00 8.48 1900.00 8.40 36.13 1899.00 1811.00 16.55 12.08 1415372.56 2356062.51 275352.377 2356301.179 60 °26'36.029 "N 151 °14'46.173'W 3.00 0.00 3.00 0.00 20.49 2000.00 11.40 38.13 1997.50 1909.50 30.43 22.22 1415382.96 2356076.20 275362.778 2356314.869 60 °26'36.166 "N 151 °14'45.971'W ' 3.00 0.00 3.00 0.00 37.68 2100.00 14.40 36.13 2094.96 2006.98 48.46 35.38 1415396.46 2356093.98 275376.278 2356332.648 60 °26'36.343 "N 151 °14'45.708M 3.00 0.00 3.00 0.00 60.00 2200.00 17.40 36.13 2191.13 2103.13 70.59 51.53 1415413.03 2356115.79 275392.849 2356354.457 60 °26'36.561 "N 151 °14'45.386'W 3.00 0.00 3.00 0.00 87.39 2300.00 20.40 36.13 2285.72 2197.72 96.74 70.63 1415432.61 2356141.58 275412.43 2356380.245 60 °2616.819 "N 151 °14'45.006'W 3.00 0.00 3.00 0.00 119.78 2400.00 23.40 36.13 2378.50 2290.50 126.87 92.62 1415455.17 2356171.28 275434.991 2356409.944 60 °2617.116 "N 151 °14'44.567'W 3.00 0.00 3.00 0.00 157.08 2473.27 25.60 36.13 2445.17 2357.17 151.40 110.53 1415473.54 2356195.48 275453.361 2356434.142 60 °26'37.357 "N 151 °14'44.210'W 3.00 0.00 3.00 0.00 187.46 2500.00 25.60 36.13 2469.27 2381.27 180.73 117.34 1415480.53 2356204.67 275460.351 2356443.332 60 °26'37.449 "N 151 °14'44.075'W 0.00 0.00 0.00 0.00 199.01 2600.00 25.60 36.13 2559.46 2471.46 195.63 142.82 1415506.66 2356239.08 275486.482 2356477.74 60 °2617.793 "N 151 °14'43.567'W 0.00 0.00 0.00 0.00 242.21 2700.00 25.60 36.13 2649.64 2561.64 230.52 168.29 1415532.79 2356273.49 275512.613 2356512.148 60 °26'38.136 "N 151 °14'43.059'W 0.00 0.00 0.00 0.00 285.42 2800.00 25.60 36.13 2739.83 2651.83 265.42 193.77 1415558.92 2356307.89 275538.744 2356546.547 80 °26'38.480 "N 151 °14'42.551'W 0.00 0.00 0.00 0.00 328.62 2900.00 25.60 36.13 2830.01 2742.01 300.32 219.25 1415585.05 2356342.30 275564.875 2356580.955 60 °2618.824 "N 151 °14 0.00 0.00 0.00 0.00 371.83 3000.00 25.60 36.13 2920.20 2832.20 335.21 244.72 1415611.18 2356376.70 275591.006 2356615.353 60 °2619.167 "N 151 °14'41.536W 0.00 0.00 0.00 0.00 415.04 3100.00 25.60 36.13 3010.38 2922.38 370.11 270.20 1415637.31 2356411.11 275617.137 2356649.761 60 °26'39.511 "N 151 °14'41.028'W 0.00 0.00 0.00 0.00 458.24 3200.00 25.60 36.13 3100.56 3012.56 405.00 295.67 1415663.44 2356445.52 275643.268 2356684.169 60 °26'39.855 "N 151 °14'40.520'W 0.00 0.00 0.00 0.00 501.45 3300.00 25.60 36.13 3190.75 3102.75 439.90 321.15 1415689.57 2356479.92 275669.399 2356718.568 60 °26'40.198"N 151 °14'40.012"W 0.00 0.00 0.00 0.00 544.65 3400.00 25.60 36.13 3280.93 3192.93 474.79 346.62 1415715.70 2356514.33 275695.53 2356752.976 60 °26'40.542 "N 151 °14'39.504W 0.00 0.00 0.00 0.00 587.86 3500.00 25.60 36.13 3371.12 3283.12 509.69 372.10 1415741.83 2356548.73 275721.661 2356787.374 60 °26'40.886 "N 151 °1418.997'W 0.00 0.00 0.00 0.00 631.06 3600.00 25.60 36.13 3461.30 3373.30 544.59 397.57 1415767.96 2356583.14 275747.792 2356821.782 60 °26'41.229 "N 151 °14'38.489'W 0.00 0.00 0.00 0.00 674.27 3700.00 25.60 36.13 3551.49 3463.49 579.48 423.05 1415794.09 2356617.55 275773.923 2356856.191 60°26'41.573"N 151 °14'37.981'W 0.00 0.00 0.00 0.00 717.48 3800.00 25.60 36.13 3641.67 3553.67 614.38 448.53 1415820.22 2356651.95 275800.054 2356890.589 60 °26'41.917 "N 151 °1417.473'W 0.00 0.00 0.00 0.00 760.68 3900.00 25.60 36.13 3731.86 3643.86 649.27 474.00 1415846.35 2356686.36 275826.185 2356924.997 60 °26'42.260 "N 151 °14'36.965'W 0.00 0.00 0.00 0.00 803.89 4000.00 25.60 36.13 3822.04 3734.04 684.17 499.48 1415872.48 2356720.76 275852.316 2356959.395 60°26'42.604"N 151 °14'36.457'W 0.00 0.00 0.00 0.00 847.09 4100.00 25.60 36.13 3912.23 3824.23 719.06 524.95 1415898.61 2356755.17 275878.447 2356993.804 60 °26'42.947 "N 151 °14'35.950'W 0.00 0.00 0.00 0.00 890.30 4128.58 25.60 36.13 3938.00 3850.00 729.04 532.23 1415906.08 2356765.00 275885.917 2357003.633 60°28'43.046 "N 151 °14'35.804'W 0.00 0.00 0.00 0.00 902.65 Sterling A8 4200.00 25.60 36.13 4002.41 3914.41 753.96 550.43 1415924.74 2356789.58 275904.578 2357028.212 60 °26'43.291 "N 151 °1415.442'W 0.00 0.00 0.00 0.00 933.50 4300.00 25.60 36.13 4092.60 4004.60 788.86 575.90 1415950.87 2356823.98 275930.709 2357062.61 60 °26'43.635 "N 151 °14'34.934'W 0.00 0.00 0.00 0.00 976.71 4400.00 25.60 36.13 4182.78 4094.78 823.75 601.38 1415977.00 2356858.39 275956.84 2357097.018 60 °26'43.978 "N 151 °14•34.426'W 0.00 0.00 0.00 0.00 1019.91 4500.00 25.60 36.13 4272.97 4184.97 858.65 626.86 1416003.13 2356892.79 275982.971 2357131.417 60°26'44.322 "N 151 °14'33.918'W 0.00 0.00 0.00 0.00 1063.12 4600.00 25.60 36.13 4363.15 4275.15 893.54 652.33 1416029.26 2356927.20 276009.102 2357165.825 60 °26'44.666 "N 151 °14'33.410'W 0.00 0.00 0.00 0.00 1106.33 4700.00 25.60 38.13 4453.33 4365.33 928.44 677.81 1416055.39 2356961.61 276035.233 2357200.233 60 °26'45.009 "N 151 °14'32.903 0.00 0.00 0.00 0.00 1149.53 4800.00 25.60 36.13 4543.52 4455.52 963.34 703.28 1416081.52 2356996.01 276061.364 2357234.631 60 °26'45.353 "N 151 °14'32.395W 0.00 0.00 0.00 0.00 1192.74 4900.00 25.60 36.13 4633.70 4545.70 998.23 728.76 1416107.65 2357030.42 276087.495 2357269.04 60°26'45.697 "N 151 °14 0.00 0.00 0.00 0.00 1235.94 5000.00 25.60 36.13 4723.89 4635.89 1033.13 754.23 1416133.78 2357064.82 276113.626 2357303.438 60°26'46.040 "N 151 9411.379'W 0.00 0.00 0.00 0.00 1279.15 Page 1 012 Planned Wellpath Geo. raphic Report Report Generated 16 -Mar -08 at 10:16:25 Projection System NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Operator MARATHON Oil Company North Reference True Area Cook Inlet, Alaska (Kenai Penninsula) Scale 0.999958 Field Kenai Gas Field (NAD83) Horizontal Reference Point Slot Facility Pad #41 -18 Vertical Reference Point Glacier #1 (RKB) Slot slot #KBU14 -8 MD Reference Point Glacier #1 (RKB) Well KBU14 -8 Field Vertical Reference Mean Sea Level Wellbore KBU14 -8 Glacier #1 (RKB) to Facility Vertical Datum 88.00 ft Wellpath KBU14 -8 Version #2 Glacier #1 (RKB) to Mean Sea Level 88.00 5 Wellbore Last Revised 10/09/2007 Facility Vertical Datum to Mud Line (Facility) 0.00 ft Sidetrack from (none) Section Origin X E 0.00 ft User Jonethoh Section Origin Y N 0.00 ft Calculation method Minimum curvature Section Azimuth 36.13° Local North Local East Grid East Grid North Latitude Longitude [ft] [ft] [USft] [USft] Slot Location - 445.73 - 478.56 1415360.17 2356046.20 60 ° 26'35.866 "N 151 °14'46.414'W Facility Reference Pt 1415847.04 2356482.79 60 °26'40.256 "N 15114'36.875'W Field Reference Pt 1410937.15 2361824.52 60 °27'31.931 "N 151 °16'16.783'W * NAD 83 coordinates are converted to NAD 27 using Corpscon 6.0.1 (US Army Corps of Engineers) TVD from MD Inclination Azimuth TVD Fld Ref North East Grid East Grid North Latitude Longitude DLS Toolface Budd Rate Turn Rate Vert Sect Comments [ft] [°] [°] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [°1100ft] [°] [ °1100ft] [° /100ft] [ft] 5026.74 25.60 36.13 4748.00 4660.00 1042.46 761.05 1416140.77 2357074.02 276120.616 2357312.638 80°26'48.132 "N 151 °1411.243'W 0.00 0.00 0.00 0.00 1290.70 Beluga 5100.00 25.60 36.13 4814.07 4726.07 1068.02 779.71 1416159.91 2357099.23 276139.757 2357337.846 60°26'46.384 "N 15114'30.871'W 0.00 0.00 0.00 0.00 1322.35 5173.38 25.60 36.13 4880.25 4792.25 1093.63 798.40 1416179.09 2357124.48 276158.937 2357363.095 60 °26'46.636 "N 151 °14'30.498'W 0.00 180.00 0.00 0.00 1354.06 5200.00 25.07 36.13 4904.31 4816.31 1102.83 805.12 1416185.98 2357133.55 276165.827 2357372.165 60 °26'46.727 "N 151 °1410.365'W 2.00 180.00 -2.00 0.00 1365.45 5300.00 23.07 36.13 4995.61 4907.61 1135.76 829.16 1416210.64 2357166.02 276190.488 2357404.633 60 °26'47.051 "N 151 °1429.885'W 2.00 180.00 -2.00 0.00 1406.22 5400.00 21.07 36.13 5088.29 5000.29 1166.10 851.31 1416233.36 2357195.93 276213.209 2357434.541 60°26'47.350 "N 1511429.444'W 2.00 180.00 -2.00 0.00 1443.79 5500.00 19.07 36.13 5182.21 5094.21 1193.81 871.54 1416254.11 2357223.25 276233.96 2357461.86 60 °26'47.623 "N 15114'29.040'W 2.00 180.00 -2.00 0.00 1478.10 5600.00 17.07 36.13 5277.28 5189.28 1218.86 889.83 1416272.86 2357247.95 276252.711 2357486.559 60 °26'47.869 "N 151 1428.676'W 2.00 180.00 -2.00 0.00 1509.11 5700.00 15.07 36.13 5373.37 5285.37 1241.21 906.14 1416289.60 2357269.98 276269.451 2357508.588 60 °26'48.089 "N 151 1428.351'W 2.00 180.00 -2.00 0.00 1536.78 5766.73 13.73 36.13 5438.00 5350.00 1254.61 915.93 1416299.63 2357283.20 276279.482 2357521.807 60 °26'48.221 "N 15114'28.156'W 2.00 180.00 -2.00 0.00 1553.37 Middle Beluga 5800.00 13.07 36.13 5470.36 5382.36 1260.83 920.47 1416304.29 2357289.34 276284.142 2357527.947 60 °26'48.283 "N 151 °1428.065'W 2.00 - 180.00 -2.00 0.00 1561.08 5900.00 11.07 36.13 5568.15 5480.15 1277.72 932.80 1416316.93 2357305.98 276296.782 2357544.586 60 °26'48.449 "N 15114'27.819'W 2.00 180.00 -2.00 0.00 1581.98 6000.00 9.07 36.13 5666.60 5578.60 1291.83 943.10 1416327.50 2357319.90 276307.353 2357558.505 60 °26'48.588 "N 1511427.614'W 2.00 180.00 -2.00 0.00 1599.46 6100.00 7.07 36.13 5765.61 5677.61 1303.16 951.38 1416335.99 2357331.07 276315.843 2357569.675 60 °26'48.700 "N 151 1427.449'W 2.00 180.00 -2.00 0.00 1613.49 6200.00 5.07 36.13 5865.04 5777.04 1311.70 957.61 1416342.38 2357339.49 276322.233 2357578.094 60 °26'48.784 "N 151°14'27.325'W 2.00 180.00 -2.00 0.00 1624.06 6300.00 3.07 36.13 5964.79 5876.79 1317.42 961.79 1416346.67 2357345.13 276326.523 2357583.734 60 °26'48.840 "N 151 °14'27.241"W 2.00 180.00 -2.00 0.00 1631.15 6400.00 1.07 36.13 6064.72 5976.72 1320.34 963.91 1416348.85 2357348.00 276328.703 2357586.604 60 °26'48.869 "N 151 14'27.199'W 2.00 180.00 -2.00 0.00 1634.75 6453.29 0.00 36.13 6118.00 6030.00 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °1427.193'W 2.00 0.00 -2.00 0.00 1635.25 6500.00 0.00 36.13 6164.71 6076.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °1427.193"W 0.00 0.00 0.00 0.00 1635.25 6600.00 0.00 36.13 6264.71 6176.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 1427.193'W 0.00 0.00 0.00 0.00 1635.25 6700.00 0.00 36.13 6364.71 6276.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °14'27.193"W 0.00 0.00 0.00 0.00 1635.25 6800.00 0.00 36.13 6464.71 6376.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 14'27.193'W 0.00 0.00 0.00 0.00 1635.25 6900.00 0.00 36.13 6564.71 6476.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60°26'48.873 "N 15114'27.193'W 0.00 0.00 0.00 0.00 1635.25 7000.00 0.00 36.13 6664.71 6576.71 1320.74 984.20 1416349.15 2357348.40 276329.003 2357587.004 60°26'48.873 "N 15114'27.193W 0.00 0.00 0.00 0.00 1635.25 7100.00 0.00 36.13 6764.71 6678.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 80 °26'48.873 "N 151 °14'27.193'W 0.00 0.00 0.00 0.00 1635.25 7200.00 0.00 36.13 6864.71 6776.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 1427.193'W 0.00 0.00 0.00 0.00 1635.25 7300.00 0.00 36.13 6964.71 6876.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °2648.873 "N 151 °1427.193'W 0.00 0.00 0.00 0.00 1635.25 7400.00 0.00 36.13 7064.71 6976.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 1427.193'W 0.00 0.00 0.00 0.00 1635.25 7500.00 0.00 38.13 7164.71 7076.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °1477.193'W 0.00 0.00 0.00 0.00 1635.25 7578.29 0.00 36.13 7243.00 7155.00 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °14'27.193'W 0.00 0.00 0.00 0.00 1635.25 7600.00 0.00 36.13 7264.71 7176.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °1427.193'W 0.00 0.00 0.00 0.00 1635.25 7700.00 0.00 36.13 7364.71 7276.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151°14'27.193'W 0.00 0.00 0.00 0.00 1635.25 7800.00 0.00 36.13 7464.71 7376.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 15114'27.193'W 0.00 0.00 0.00 0.00 1635.25 7900.00 0.00 36.13 7584.71 7476.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °14'27.193'W 0.00 0.00 0.00 0.00 1635.25 8000.00 0.00 36.13 7664.71 7576.71 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °14'27.193'W 0.00 0.00 0.00 0.00 1635.25 8073.29 0.00 36.13 7738.00 7650.00 1320.74 964.20 1416349.15 2357348.40 276329.003 2357587.004 60 °26'48.873 "N 151 °14'27.193'W 0.00 0.00 0.00 0.00 1635.25 Page 2 of 2 Planned Well path Report BA, SI R p p BAKER KBU14 -8 Version #2 HUGHES MARATHON Page 1 of 5 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 REPORT SETUP INFORMATION Projection System NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Software System WellArchitect® 2.0 North Reference True User Jonethoh Scale 0.999958 Report Generated 16- Mar -08 at 10:01:47 Convergence at slot 1.08° West Database /Source file WA_Anchorage/KBU14 -8.xml WELLPATH LOCATION Local coordinates Grid coordinates Geographic coordinates North[ft] East[ft] Easting[USft] Northing[USft] Latitude Longitude Slot Location - 445.73 - 478.56 1415360.17 2356046.20 60 °26'35.866 "N 151 °14'46.414 "W Facility Reference Pt 1415847.04 2356482.79 60 °26'40.256'N 151 °14'36.875 "W Field Reference Pt 1410937.15 2361824.52 60 °27'31.931 "N 151 °16'16.783 "W WELLPATH DATUM 1 Calculation method Minimum curvature Glacier #1 (RKB) to Facility Vertical Datum 88.00ft Horizontal Reference Pt Slot Glacier #1 (RKB) to Mean Sea Level 88.00ft Vertical Reference Pt Glacier #1 (RKB) Facility Vertical Datum to Mud Line (Facility) 0.00ft I MD Reference Pt Glacier #1 (RKB) Section Origin N 0.00, E 0.00 ft Field Vertical Reference Mean Sea Level Section Azimuth 36.13° Planned Well path Report BAKER Fail. p p KE KBU14 -8 Version #2 HUGHES MARATHON Page 2 of 5 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 ELLPATH DATA (90 stations) t = interpolated/extrapolated station • NID Inclination Azimuth TVD Vert Sect North East Grid East Grid North DLS Comments [ft] [ °] [ [ft] [ft] [ft] [ft] [sry ft] [sry ft] [ °/100ft] 0.00 0.000 36.131 0.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 RKB 88' 100.001 0.000 36.131 100.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 200.001 0.000 36.131 200.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 300.001 0.000 36.131 300.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 Y w 400,3,. 0.000 36.131 400.00 0.00 0.00 0.00 1415360.17 ` 2356046.20 0.00 500.001 0.000 36.131 500.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 600.001 0.000 36.131 600.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 700.00t 0.000 36.131 700.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 800.001 0.000 36.131 800.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 900.00t 0.000 36.131 900.00 0.00 0.00 0.00 141536017 235. !.. r, 0.00 1000.00t 0.000 36.131 1000.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 1100.001 0.000 36.131 1100.00 0.00 0.00 0.001 1415360.17 2356046.20 0.00 1200.001 0.000 36.131 1200.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 1300.001 0.000 36.131 1300.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 � , a.00 0.00 0.00 0.00E 1415360.17 _ . ' 1404: � a „ m . 131 '° 2356046.20 ; 0.00.. 1500.001 0.000 36.131 1500.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 • 1600.001 0.000 36.131 1600.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 1620.00 0.000 36.131 1620.00 0.00 0.00 0.00 1415360.17 2356046.20 0.00 KOP 1700.001 2.400 36.131 1699.98 1.68 1.35 0.99 1415361.19 2356047.53 3.00 u 1800.00E ',�. `„ ' ~ 5.400 3 '~ 36.11 179'` 8.48 ; 5.00 ` ,.. ,r . 141536530 ' ,` 2 5 - ° ,, 3.00 ; `a , �w : r ,". � ` 3560, 1900.001 8.400 36.131 1899.00 20.49 16.55 12.08 1415372.56 2356062.51 3.00 2000.001 11.400 36.131 1997.50 37.68 30.43 22.22 1415382.96 2356076.20 3.00 2100.001 14.400 36.131 2094.96 60.00 48.46 35.38 1415396.46 2356093.98 3.00 2200.001 17.400 36.131 2191.13 87.39 70.59 51.53 1415413.03 2356115.79 3.00 2300.00t 20400 ~ -,:%...!:4t z : 6.131 2285; 11938 ,, z *10.63 3.00 2400.001 23.400 36.131 2378.50 157.08 126.87 92.62 1415455.17 2356171.28 3.00 2473.27 25.598 36.131 2445.17 187.46 151.40 110.53 1415473.54 2356195.48 3.00 End of Build 2500.001 25.598 36.131 2469.27 199.01 160.73 117.34 1415480.53 2356204.67 0.00 2600.001 25.598 36.131 2559.46 242.21 195.63 142.82 1415506 66 2356239.08 0.00 'A 2760. 2 . .'. 36.131 a -: 9.64 r: 285.421,'!:':„L;',: ? 30 °�° w ,„ 1415532;79 w ' 23 0 tug „ _ ;. , ath Report E RI Planned Well p p BAKER AI°I KBU14 -8 Version #2 HUGHES MARATHON Page 3 of 5 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 ELLPATH DATA (90 stations) t = interpolated/extrapolated station MD Inclination Azimuth TVD Vert Sect North East Grid East Grid North DLS Comments [ft] [°] [ [ft] [ft] [ft] [ft] [sry ft] [sry ft] [ ° /100ft] 2800.00t 25.598 36.131 2739.83 328.62 265.42 193.77 1415558.92 2356307.89 0.00 2900.00t 25.598 36.131 2830.01 371.83 300.32 219.25 1415585.05 2356342.30 0.00 3000.00t 25.598 36.131 2920.20 415.04 335.21 244.72 1415611.18 2356376.70 0.00 3100.00t 25.598 36.131 3010.38 458.24 370.11 270.20 1415637.31 2356411.11 0.00 3200.001 25.598 .,;��: 36.131 : 1.45 405.001 295.67 1415663.44 2356445.52 0.00 3300.001 25.598 36.131 3190.75 544.65 439.90 321.15 1415689.57 2356479.92 0.00 3400.00t 25.598 36.131 3280.93 587.86 474.79 346.62 1415715.70 2356514.33 0.00 3500.00t 25.598 36.131 3371.12 631.06 509.69 372.10 1415741.83 2356548.73 0.00 3600.001 25.598 36.131 3461.30 674.27 544.59 397.57 I 1415767.961 2356583.14 0.00 X00.00# 2 98 36131r 3551.49 ;� _ 717.48 579.48 423.05 1415794.09 2356617.55 0.00._ 3800.00t 25.598 36.131 3641.67 760.68 614.38 448.53 1415820.22 2356651.95 0.00 3900.001 25.598 36.131 3731.86 803.89 649.27 474.00 1415846.35 2356686.36 0.00 4000.00t 25.598 36.131 3822.04 847.09 684.17 499.48 1415872.48 2356720.76 0.00 4100.001 25.598 36.131 3912.23 890.30 719.06 524.95 1415898 61 2356755.17 0.00 ,, 28.58t' � _�, 3'• V 3938.11 : < $ 2.65 .04 532.2 1 ' � l • � 562 5.00 0.00w t'erling AB 4200.001 25.598 36.131 4002.41 933.50 753.96 550.43 1415924.74 2356789.58 0.00 4300.001 25.598 36.131 4092.60 976.71 788.86 575.90 1415950.87 2356823.98 0.00 4400.00t 25.598 36.131 4182.78 ! 1019.91 823.75 601.38 1415977.00 2356858.39 0.00 4500.001 25.598 36.131 4272.97 1063.12 858.65 626.86 1416003.13 2356892 79 0.00 l .,�" 25. ° 36;.131 x 4363,I 11 0 33 . 89/-44 652.x: 1416029. 7.20 4700.001 25.598 36.131 4453.33 1149.53 928.44 677.81 1416055.39 2356961.61 0.00 4800.001 25.598 36.131 4543.52 1192.74 963.34 703.28 1416081.52 2356996.01 0.00 4900.001 25.598 36.131 4633.70 1235.94 998.23 728.76 1416107.65 2357030.42 0.00 5000.001 25.598 36.131 4723.89 1279.15 1033.13 754.23 1416133.78 2357064 82 0.00 l n .74f r ux 25 ' 36.131' ;" 748.00 ; 4. ° �� a o 74 02 l t n X �.10� � n 761.05 �" =` �- 141b140.79'.. � _�_ ��- n��:a� 5100.001 25.598 36.131 4814.07 1322.35 1068.02 779.71 1416159.91 2357099.23 0.00 5173.38 25.598 36.131 4880.25 1354.06 1093.63 798.40 1416179.09 2357124.48 0.00 Begin Angle Drop 5200.001 25.066 36.131 4904.31 1365.45 1102.83 805.12 1416185.98 2357133.55 2.00 5300.001 23.066 36.131 4995.61 1406.22 1135.76 829.16 1416210.64 2357166 02 2.00 t�; ',(" 2 �� a , ,s° ; � � _. 1 1443 s� ;� 166.10 ,.8 1 l' , 235 ..,, °�� �� '41 � � FARO Planned Wellpath Report BAKER KBU14 -8 Version #2 HUGHES MARATHON Page 4 of 5 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 ELLPATH DATA (90 stations) t = interpolated/extrapolated station MD Inclination Azimuth TVD North Ea Grid o DS Comments [ft [ °] [1 [ft] [ft] [ft] st [ sry ft] East Grid [sry N ft] rth ° 011110:1 5500.001 19.066 36.131 5182.21 1478.10 1193.81 871.54 1416254.11 2357223.25 2.00 5600.001 17.066 36.131 5277.28 1509.11 1218.86 889.83 1416272.86 2357247.95 2.00 5700.001 15.066 36.131 5373.37 1536.78 1241.21 906.14 1416289.60 2357269.98 2.00 5766.731 13.731 36.131 5438.00 1553.37 1254.61 915.93 1416299.63 2357283.20 2.00 iddle Beluga 5800.001 13.066 36.131 5470.36 " 1561.08 1260.83 920.47 1416304.29 2357289.34 2.00 EMINEMNIMMEM 5900.001 11.066 36.131 5568.15 1581.98 1277.72 932.80 1416316.93 2357305.98 2.00 6000.001 9.066 36.131 5666.60 1599.46 1291.83 943.10 1416327.50 2357319.90 2.00 6100.001 7.066 36.131 5765.61 1613.49 1303.16 951.38 1416335.99 2357331.07 2.00 6200.001 5.066 36.131 5865.04 1624.06 1311.70 957.61 1416342.38 2357339.49 2.00 6300. ..�r ` 3.066 , '1,16.131 .7% 1631.15 ArtaX1E111 961.79 41 ,vw 1416346 67 247345.13 11111111Mar 6400.001 1.066 36.131 6064.72 1634.75 1320.34 963.91 1416348.85 2357348.00 2.00 6453.29 0.000 36.131 1635.25 I 2.00 EOD / Lower Beluga 6500.001 0.000 36.131 6164.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 6600.001 0.000 36.131 6264.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 ,1071 �l a , _: 0.000 . ' 3.131 .., y 1635.25 . 20.74 14163'• ' ,:t 3 - R7:77 . A 0.00 ..• 6800.001 0.000 36.131 6464.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 6900.001 0.000 36.131 6564.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 7000.001 0.000 36.131 6664.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 7100.001 0.000 36.131 6764.71 1635.25 1320.74 964.20 1416349 15 2357348.40 0.00 200.01 :; _ : 0 000 s : ' '; 1635.2' 4 964 °• +Es . :r ' 14163491 48.4, ` 0".11;',:', 7300.001 0.000 36.131 6964.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 7400.001 0.000 36.131 7064.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 7500.001 0.000 36.131 7164.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 7578.29 0.000 36.131 1635.25 ' 0.00 yonek ,7610.001' 4 ,s,,' 0.000 tr a' • 1 1635/5 ` 112414 T ; 40 03)41:. 7700.001 0.000 36.131 7364.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 7800.001 0.000 36.131 7464.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 7900.001 0.000 36.131 7564.71 1635.25 1320.74 964.20 1416349.15 2357348.40 0.00 8000.001 0.000 36.131 7664.71 I 1635.25 1320.74 964.20 1416349.15 I 2357348.40 > , 0.00 } 3 25 :v,. l z Wellpath Report r1R! Planned Well P p BAKER KBU14 -8 Version #2 HUGHES MARATHON Page 5 of 5 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 HOLE & CASING SECTIONS Ref Wellbore: KBU14 -8 Ref Wellpath: KBU14 -8 Version #2 String/Diameter Start MD End MD Interval Start TVD End TVD Start N/S Start ENV End N/S End E/W [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ft] 16in Open Hole 139.00 1500.00 1361.00 139.00 1500.00 0.00 0.00 0.00 0.00 12.25in Open Hole 1500.00 5746.13 4246.13 1500.00 5418.00 0.00 0.00 1250.60 913.00 8.5in Open Hole 5746.13 8073.29 2327.16 5418.00 7738.00 1250.60 913.00 1320.74 964.20 20in Conductor 0.00 139.00 139.00 0.00 139.00 0.00 0.00 0.00 0.00 13.375in Casing Surface 0.00 1500.00 1500.00 0.00 1500.00 0.00 0.00 0.00 0.00 9.625in Casing Intermediate 0.00 5746.13 5746.13 0.00 5418.00 0.00 0.00 1250.60 913.00 3.5in Casing Production 0.00 8073.28 8073.28 0.00 7738.00 0.00 0.00 1320.74 964.20 TARGETS Name MD TVD North East Grid East Grid North Latitude Longitude Shape [ft] [ft] [ft] [ft] [sry ft] [sry ft] 1) KBU14 -8 Lower Beluga Revised 14- 6453.29 I circle Mar -08 7578.29 ) ! I I circle 2) KBU14 -8 Tyonek Revised 14- Mar -08 8073.29 _ -- i! - J - - - I I circle 3) KBU14 -8 TD Revised 14- Mar -08 -� SURVEY PROGRAM Ref Wellbore: KBU14 -8 Ref Wellpath: KBU14 -8 Version #2 Start MD End MD Positional Uncertainty Model Log Name /Comment Wellbore [ft] [ft] 0.00 1500.00 aviTrak (Magcorrl) U14 -8 1500.00 5746.13 aviTrak (Magcorrl) U14 -8 5746.13 8073.29 aviTrak (Magcorrl) U14 -8 M M ATHON Oil Compan, BAKE FR l L ocation: Cook Inlet, Alaska (KenaiPenninsula) Slot: slot #KBU14 -8 HUGHES MARATHON Field: Kenai Gas Field (NAD83) Well: KBU14 -8 INTEQ Facility: Pad #41 -18 Wellbore: KBU14 -8 Plot reference wellpath is KBU14 -8 Version #2 True vertical depths are referenced to Glacier #1 (RKB) Grid System: NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Measured depths are referenced to Glacier #1 (RKB) North Reference: True north Glacier #1 (RKB) to Mean Sea Level: 88 feet Scale: True distance Mean Sea Level to Mud line (Facility: Pad #41 -18): 0 feet Depths are in feet Coordinates are in feet referenced to Slot Created by: jonethoh on 17- Mar -08 Easting (ft) - 200 - 150 - 100 - 0 50 100 150 200 250 300 350 400 450 1 1 I I 1 I I I I I I I I I 700 — Y — 700 J 650 — 2500 -t — 850 3700 600 — 1210.47 600 K '` 4 J 3500 550 — — 550 11900 500 — — 500 2300 3300 11700 450 — — 450 400 — 3100 / 11500 — 400 350 — 2100 — 350 z 11300 0 m 2900 1E _. o 300 - — 300 -- co Z 11100 250 — 2700 — 250 200 — 1900 10900 — 200 2500 150 — — 150 10700 100 — 2300 — 100 10500 o� — 50 50 -ke U 2./.. ? .. )( 1700 2100 'e I KBU41 -18X I 10300 1900 _ O� 0 0 . ( � 1500 1700 — 0 slot #KBU14 -8 2 -50 — 10100 ��� — -50 1 1 1500 1 1 1 1 1 1 I 1 1 1 1 -200 -150 -100 -50 0 50 100 150 200 250 300 350 400 450 Easting (ft) MfRATHON Oil Com an BAKE Location: Cook Inlet, Alaska (Kenai Penninsula) Slot: slo BU14 -8 HUGHES Field: Kenai Gas Field (NAD83) Well: KBU14 -8 INTEQ MARATHO Facility: Pad #41-18 Wellbore: KBU14 -8 True vertical depths are referenced to Glacier #1 (RKB) Grid System: NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Measured depths are referenced to Glacier #1 (RKB) North Reference: True north Glacier #1 (RKB) to Mean Sea Level: 88 feet Scale: True distance Mean Sea Level to Mud line (Facility: Pad #41 -18): 0 feet Depths are in feet Coordinates are in feet referenced to Slot Created by: jonethoh on 17- Mar -08 Scale 1 inch =2008 Easting (ft) -100 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1700 r t 1 1 t t t 1 t r 1 t 1 1700 Q J 1600 — 3700 — 1600 1500 — — 1500 3500 \ 1400 — \ — 1400 0 5900 :� 7 700 1300 — 3300 5700 — 1300 55()0 11 P 1200 — — 1200 5100 3100 1100 — 4900 — 1100 0 4700 14 0.1 1000 — 2900 14100 — 1000 13900 a 13700 Z o) 4500 13500 - c = -t 900 — 13300 —900 0 Z 4300 13100 2700 12900 800 4100 — 800 12700 3900 700 ■ 12500 — 700 2500 12300 3700 600 — 12100 — 600 3500 11900 500 — — 500 2300 3300 11700 400 ■ 11500 3100 — 400 2100 11300 0 2900 300 — dj WI 11100 00 11. -V.° . 2700 SO 3 200 — 1900 10900 3 0 0 — 200 o‘, X I I 10700 I I I I I I I I I I I -100 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 $ ° 1 incM1 =2008 Easting (ft) i • MARATHON Oil Company BA KER Location: Cook Inlet, Alaska (Kenai Penninsula) Slot: slot #KBU14 -8 HUGHES MARATHON Field: Kenai Gas Field (NAD83) Well KBU14 -8 INTEQ Facility: Pad #41 -18 Wellbore: KBU14 -8 Plot reference wellpath is KBU14 -8 Version #2 True vertical depths are referenced to Glacier #1 (RKB) Grid System: NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Measured depths are referenced to Glacier #1 (RKB) North Reference: True north Glacier #1 (RKB) to Mean Sea Level: 88 feet Scale: True distance Mean Sea Level to Mud line (Facility: Pad #41 -18): 0 feet Depths are in feet Coordinates are in feet referenced to Slot Created by: jonethoh on 17- Mar -08 Traveling Cylinder: Map North All dapins ara Measured oeptns on Rera renw W,iIpatn J k 0' 330' 30' 80ft 80ft 00' 60' 700 40ft 20ft ° o 11 8 �� 2713 ' 20ft _401 N �Sl�t #KBU41 -18X1 20ft 40ft 240 120' 60ft 80ft 210' 150' 180' Scale 1 inch = 30 ft Clearance Report VtI AM KBU14 -8 Version #2 BAKER Closest Approach HUGHES MARATHON Page 1 of 35 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 REPORT SETUP INFORMATION Projection System NAD83 / TM Alaska State Plane, Zone 4 (5004), US feet Software System WellArchitect® 2.0 North Reference True User Jonethoh Scale 0.999958 Report Generated 16- Mar -08 at 10:03:39 Convergence at slot 1.08° West Database /Source file WA_Anchorage/KBU14 -8.xml WELLPATH LOCATION Local coordinates Grid coordinates Geographic coordinates North[ft] East[ft] Easting[USft] Northing[USft] Latitude Longitude Slot Location - 445.73 - 478.56 1415360.17 2356046.20 60 °26'35.866 "N 151 0 14'46.414 "W Facility Reference Pt 1415847.04 2356482.79 60 °26'40.256 "N 151 °14'36.875 "W Field Reference Pt 1410937.15 2361824.52 60°27'31.931"N 151°16'16.783"W WELLPATH DATUM Calculation method Minimum Curvature Glacier #1 (RKB) to Facility Vertical Datum 88.00ft Horizontal Reference Pt Slot Glacier #1 (RKB) to Mean Sea Level 88.00ft Vertical Reference Pt Glacier #1 (RKB) Facility Vertical Datum to Mud Line (Facility) 0.00ft MD Reference Pt Glacier #1 (RKB) j Field Vertical Reference Mean Sea Level POSITIONAL UNCERTAINTY CALCULATION SETTINGS Ellipse Confidence Limit 3.00 Std Dev Ellipse Start Depth 0.00ft Surface Position Uncertainty included Declination 18.88° East of TN Dip Angle 73.37° Magnetic Field Strength 55408 nT Clearance Report V& ■ BA KBU14 -8 Version #2 BAKER Closest Approach HUGHES MARATHON Page 2 of 35 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 ANTI COLLISION RULE Rule Name E -type Closest Approach w/Hole &Csg Limit:0 StdDev:3.00 w /Surface Uncert Rule Based On Ellipsoid Separation Plane of Rule Closest Approach Threshold Value O.00ft Subtract Casing & Hole Size yes Apply Cone of Safety no HOLE & CASING SECTIONS Ref Wellbore: KBU14 - 8 Ref Wellpath: KBU14 - 8 Version #2 String/Diameter Start MD End MD Interval Start TVD End TVD Start N/S Start E/W End N/S End E/W [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ft] [ft] 16in Open Hole 139.00 1500.00 1361.00 139.00 1500.00 0.00 0.00 0.00 0.00 12.25in Open Hole 1500.00 5746.13 4246.13 1500.00 5418.00 0.00 0.00 1250.60 913.00 8.5in Open Hole 5746.13 8073.29 2327.16 5418.00 7738.00 1250.60 913.00 1320.74 964.20 20in Conductor 0.00 139.00 139.00 0.00 139.00 0.00 0.00 0.00 0.00' 13.375in Casing Surface 0.00 1500.00 1500.00 0.00 1500.00 0.00 0.00 0.00 0.00 9.625in Casing Intermediate 0.00 5746.13 5746.13 0.00 5418.00 0.00 0.00 1250.60 913.00 ,3.5in Casing Production 0.00 8073.28 8073.28 0.00 7738.00 0.00 0.00 1320.74 964.2 SURVEY PROGRAM Ref Wellbore: KBU14 - 8 Ref Wellpath: KBU14 - 8 Version #2 Start MD End MD Positional Uncertainty Model Log Name /Comment Wellbore [ft] [W] 0.00 1500.00 aviTrak (Magcorrl) U14 -8 1500.00 5746.13 aviTrak (Magcorrl) U14 -8 5746.13 8073.29 aviTrak (Magcorrl) U14 -8 Clearance Report rali" KBU14 -8 Version #2 BAKER Closest Approach HUGHES MARATHON Page 3 of 35 INTEQ REFERENCE WELLPATH IDENTIFICATION Operator MARATHON Oil Company Slot slot #KBU14 -8 Area Cook Inlet, Alaska (Kenai Penninsula) Well KBU14 -8 Field Kenai Gas Field (NAD83) Wellbore KBU14 -8 Facility Pad #41 -18 CALCULATION RANGE & CUTOFF From: O.00ft MD I To: 8073.29ft MD C - C Cutoff: (none) OFFSET WELL CLEARANCE SUMMARY (8 Offset Wellpaths selected) Offset Offset Offset Offset Offset Ref Min C -C Diverging Ref MD of Min C -C Min C -C ACR Facility Slot Well Wellbore Wellpath MD Clear Dist from MD Min C -C Ell Sep Ell Sep Status [ft] [ft] [ft] Ell Sep [ft] Dvrg from [ft] [ft] Pad #41 -18 Slot #KBU41 -18X KBU41 -18X KBU41 -18X NaviTrak MWD <139- 1440'> 0.00 60.03 1300.00 139.00 46.36 1500.00 PASS Pad #41 -18 slot #KBU13 -8 KBU13 -8 KBU13 -8 MSS <0 -8770> 1670.07 99.96 1670.07 1676.18 73.15 1676.18 PASS Pad #41 -18 Slot #KBU24 -7X KBU24 -7X KBU24 -7X NaviTrak <173 - 8303'> 0.00 119.35 10.32 10.32 105.68 10.32 PASS Pad #41 -18 slot #KU11 -17 KU11 -17 KU11 -17 GMS <0 -5400> 1450.67 2 20.04 1450.67 1465.25 197.29 1465.25 PASS :. r, >: , ... 5. 30286 1 =' <#41 - 18 < #KBU3 - 7' °� KB '�. KB 1.8 ,_.x � • �, 6: 88 a � : ° , . .. ; Pad #41 - slot #KU41 -18 KU41 -18 KU41 - MSS <0- 14721> 0.00 393.99 8073.29 1632.36 369.63 8073.29 PASS Pad #41 -18 slot #KU24 -7 KU24 -7 KU24 -7 GMS <0- 5820'> 0.00 389.57 0.00 107.73 375.90 300.00 PASS Pad #41 -18 slot #KU24 -7 KU24 -7 KU24 -7RD MWD <3777 -4800> 0.00 389.57 0.00 107.73 375.90 300.00 PASS • • w t Marathon Oil Company 'FE Well Name: KBU 14 -8 Location: Kenai, Alaska. INTEGRATED FLUIDS ENGINEERING PROJECT PLAN M WA Prepared For: MARATHON OIL COMPANY Well KBU 14 -8 Kenai Peninsula, Alaska Of I i i.x f • {{ Prepared by: Jim Dwyer Reviewed by: Hal Martens Presented to: Will Tank March 17, 2008 Mi SWAC • • adft. Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Marathon Oil Company PO Box 190168 Anchorage, Alaska 99519 ATTN: Will Tank Will: Enclosed is the recommended drilling fluid program for the KBU 14 -8 Well to be drilled this year. The following is a brief synopsis of the program. Overview: KBU 14 -8 is a development well targeting the Tyonek formation at the Kenai Gas Field. Flo -Pro fluid will be used for the intermediate and production intervals. After logging the production interval, the well will be completed with a 3 -1/2" excape system cemented in place. Surface Interval: The surface interval will be drilled with the standard Gel /Gelex spud mud. No problems were noted in this interval while drilling the offset wells. Intermediate Interval: This interval will be drilled with a FloPro NT fluid. After drilling out the surface cement, the well will be displaced to a standard FloPro KCl fluid. SafeCarb bridging material will be maintained according to the mud program to minimize losses to the formation. Fluid loss should be maintained @ 7 - 9 cc's API. NOTE: Both the sterling A8 and Upper Beluga sands are depleted and loss of whole mud anticipated. Production Interval: This interval will be drilled with the same fluid that was used to drill the intermediate interval. Fluid reconditioning will be done in order to keep the mud properties at the recommended specifications. Fluid loss should be maintained @ 6 - 8 cc's API for this interval. NOTE: Mud weights as high as 10.5 PPG may be needed to control gas at the bottom of this interval. Completion: The cement will be displaced with 6% KCl brine for the completion phase of the program. Conqor 303A and Sodium Meta Bisulfate will be added to the drilling fluid that will be left between the 3 -1/2" completion string and the 9 -5/8" casing on the final circulation prior to cementing. Jim Dwyer Sr. Project Engineer Reference Wells: KBU 22-6, 11-88Y, 41 -6, 11 -7 NOTE: This program is provided as a guide only. Well conditions will always dictate fluid properties required. Mi SWAC • • ,FE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. EXECUTIVE SUMMARY r> Our goal is zero spills and zero incidents and 100% compliance while providing fluids and solids control services to Marathon Oil r Company. "ON Mti The solids van will continue to assist in removal of LGS for S minimizing mud weight with estimated cost of $0.34 per lb of solids removed. M' SWA____Pg■ With the revised fluid formulation (utilizing the intermediate interval fluid for the production interval), we expect to drill this well for a product cost of less than $27.34 per foot. IFE We estimate the use of less than 5500 barrels to drill this well, not withstanding any losses to the formation. Mi SWAB • Marathon Oil Company IFE Well Name: KBU 14 -8 Location: Kenai, Alaska. Interval Benchmarks and Targets Drilling Intervals Depth Benchmark 1 Benchmark 2 Benchmark 3 Benchmark 4 Interval (ft) Fluid cost per Volume Usage Solids Removal QHSE foot 0 — 1500' < $10.68ft < 1850 bbls No incidents, accidents, spills 1500 — 5746' < $30.58 ft < 2650 bbls No incidents, accidents, spills 5746 — 8073' < $32.16ft <1050 bbls No incidents, accidents, spills Total Project Avg. Max. No incidents, Targets for < $27.34ft < 5500 bbls < $0.34 lb accidents, spills Drilling Interval Mi SWAC • • Al Pk ' Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Project Summary Casing Hole Casing Depth TVD Mud Mud Sum Interval Size Size Program System Weight Days Mud Cost (in) (in) (ft) (ft) Solids Control (ppg) 13 -3/8" 16" 1500' 1500' Gel /Gelex Spud Mud 8.6 — 9.4 4 $20,336 Screens 165/175 mesh Desilter Centrifuge Van 9 -5/8" 12 -1/4" 5746' 5418' Flo -Pro w /SafeCarb 7 $137,419 Screens 200 mesh < 9.5 Desilter Centrifuge Van 3 -1/2" 8 -1/2" 8073' 7738' Flo -Pro w /SafeCarb 9.4 — 10.0 5 $80,245 Screens 200 - 230 mesh Desilter Centrifuge Van 3 1/2" 8 -1/2" Completion 8073' 7738' 6% KC1 8.55 3 $13,691 ➢ Utilize all solids control equipment to minimize the build up of drill solids in the system (if possible, centrifuge the surface mud during trips to reduce drill solids). ➢ Condition the mud prior to running casing for all intervals. ➢ Cost includes provision for whole mud losses in the intermediate interval (290 barrels) ➢ Cost includes daily engineering. ➢ Lubetex included in cost only for production hole Mi SWAC 0 • �� Marathon Oil Company IFE Well Name: KBU 14 -8 Location: Kenai, Alaska. Estimated Product Usage Summary PRODUCT Surface Intermediate Production Completion Total Usage 16" 12 -1/4" 8 -1/2" 3 -1/2" Asphasol Supreme 0 0 63 0 63 Bicarb 0 14 10 0 24 Caustic Soda 9 28 10 0 47 Conqor 303 0 0 0 5 5 Conqor 404 0 8 5 0 13 Defoam X 0 15 6 0 21 Desco CF 8 0 0 0 8 Engineer Service 4 7 5 3 19 FloVis 0 167 42 0 209 Gelex 24 0 0 0 29 KC1 0 1172 440 210 1822 Lubetex 0 0 14 0 14 M -I Gel 757 0 0 0 757 M -I WATE 0 558 1257 0 1815 Mix II 0 223 0 0 223 Polypac UL 9 97 45 0 142 Resinex 0 0 52 0 52 Safecarb 0 1116 419 0 1535 Soda Ash 9 14 10 0 33 Sodium Meta 19 28 21 5 73 Bisulfate MiSWAC • Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Offset Well Information Well Hole Size Depth PPG PV YP FL Comments KBU 22 -6 16 182 8.7 14 35 14.6 Spud in, drill ahead 1550 9.2 14 22 6.4 Drlg ahead 1680 9.2 14 20 7.8 DrIg to casing point, run surface casing 12.25 3453 9.3 8 11 9.2 DrIg out, displace to FloPro, Run LOT, drlg ahead 4649 9.4 12 14 8.8 Drlg ahead 5338 9.2 14 18 5.8 Lost partial returns @ 4929' spot 50 bbl LCM pill, regain returns 6032 9.3 14 16 5.4 Lost partial returns @ 5840', add LCM to mud 6535 9.6 17 19 5.2 Reduce ppg, pump LCM pills, run casing, cement same 8.5 7095 9.85 17 21 5.8 DrIg out cmt, LOT, drlg ahead 8136 9.85 17 23 5 Drlg ahead, short trip OK, drlg ahead 8855 10.3 19 21 5.2 Drlg to csg point, short trip, some tight spots, POH for logs 8855 10.45 19 22 5.8 Logging well 8855 10.65 19 20 5.2 RIH, weight up to 10.6 PPG, condition mud, POH 8855 10.65 19 19 5.8 Run excape string, cement same, no losses, disp to brine KBU 11 -8Y 16 498 8.65 11 16 17 Spud in, drill ahead 1550 9 9 16 8.8 DrIg to csg point, short trip OK, POH 1550 9.1 9 19 10.6 Run & cement surface casing 12.25 3774 9.1 9 17 7 Drlg out, disp to FloPro, drlg ahead 5033 9.3 13 15 7.8 DrIg to 3884', short trip OK, drlg ahead 5820 9.45 17 23 5.8 Drlg to csg point, add 3% Lubetex (torque), POH 5820 9.55 19 22 5.8 Log well, wiper trip, 5820 9.7 20 26 5.4 Run csg, cement same, lost partial returns 8.5 5840 9.3 14 18 6.2 Drlg out, LOT, drlg ahead, add EMI -920 and Lubetex for torque 7574 9.75 17 27 5 Drlg ahead 8220 10 16 27 5.4 DrIg to TD, increase PPG to 10.0 for gas 8220 10.5 17 28 5.8 POH, wireline well, increase PPG to 10.5 for gas 8220 10.8 17 26 5.2 Run and cement excape string, disp to brine Mi SWAC • • A' Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Offset Well Information Well Hole Size Depth PPG PV YP FL Comments KBU 41 -6 16 1616 9.05 18 24 9.6 Spud in, drill ahead 1862 9.3 16 17 7.8 Drlg to casing point, run surface casing 1862 9.3 12 14 7.2 Cement surface casing 12.25 3431 9.3 12 16 8 DrIg out, displace to FloPro, Run LOT, drlg ahead 5044 9.2 13 17 8.4 DrIg to 4206', wiper trip OK, drlg ahead, pump sweeps every 500 ft 6289 9.2 13 19 7.4 Drlg to 5278' lost returns, stopped with LCM, drlg ahead 7105 9.3 14 23 7.6 DrIg to 6897', wiper trip OK, drlg ahead 7220 9.3 11 23 8.6 Drlg to casing point, wiper trip Ok, POH to run casing 7220 9.8 12 18 8.4 Run 9 -5/8" csg, cement same, bump plug 8.5 7374 9 12 17 6.4 DrIg out, disp to new fluid, LOT = 16.0 PPG, drlg ahead 7735 9.2 10 16 5.3 Trip for core #1 7776 9.3 12 13 5.1 Core #1 7835 9.5 14 14 5.2 Core #2 8445 9.7 14 16 5 Drlg to core point 8535 9.95 14 19 5 Core #3 8807 10.1 16 20 4.6 Drlg ahead, increase Lubetex to 4% 9733 10.3 16 19 4.6 TD well, 9733 10.6 15 18 4.4 Wiper trip, inc PPG to 10.6 for gas, POH for logs 9733 10.8 15 20 5.2 Log well, wiper trip, treat for running coals, POH 9733 10.8 14 21 5.6 Run and cement excape string, disp to brine KBU 11 -7 16 187 8.7 7 28 16 Clean out conductor, spud in 1477 9 8 23 9.2 Drlg ahead 1725 9.2 9 20 6.2 DrIg to casing point, run surface casing 1725 9.3 8 22 7.4 Cement casing, no losses, BOP's 12.25 2822 9.4 8 18 7.2 Drlg out, displace to FloPro, Run LOT = 15.2 PPG, drlg ahead 4460 9.1 11 18 7.8 Drlg ahead with miminal losses 5080 9.3 11 15 8.6 Short trip, OK, drlg to core point @ 5080' 5160 9.4 12 20 7.5 Core #1 5249 9.3 15 20 6.7 Core #2 5449 9.4 15 12 7 Open core runs to 12 -1/4 ", drlg ahead 5585 9.6 17 23 7.3 Logging 5585 9.5 16 24 7 Fish for RFT tool parts 5585 9.5 17 21 7.4 Recover fish, log with RFT tools 5585 9.5 17 22 8.2 Run & cmt 9 -5/8" casing 8.5 5869 9.5 22 26 6.8 Dig out, LOT = 15.2 PPG, drlg ahead 6940 9.9 21 23 5.8 Drlg ahead, weight up for gas, wiper trip, backreaming needed 7770 10.3 26 27 6 RIH, drlg ahead, weight up for stability, add asphasol for coals 7900 10.5 27 29 5.8 TD well, wiper trip, extensive backreaming, POH for logs 7900 10.5 23 23 5.8 Log well on drlg pipe 7900 10.6 26 30 5.1 Cleanout run prior to compleiton. 7900 10.65 26 28 5.2 Run and cement excape string, disp to brine MiSWAG • A I Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Plans & Procedures COMMUNICATION — The Field Mud Engineer will communicate daily with the In -Town Project Engineer. The Project Engineer will then communicate daily with the rig Drilling Engineer. Communications should be about, but not limited to, fluid properties, hole difficulties, possible changes to the mud program, and proposals to use products not included in the mud program. Whole Mud Losses to the Stering A8 (3938' TVD) and Lower (6118' TVD) & Middle ((5438' TVD) Beluga Sands — Maintain proper bridging material concentration in the mud system while drilling the intermediate and production intervals. FLUID LOSS CONTROL — In the intermediate interval the API fluid loss will be maintained in the 7 — 9 cc's range. In the production interval the API fluid will be maintained between 4- 6 cc's at all times. In addition to sufficient fluid loss agent additions, this may require adequate dilution of the mud system in order to keep reactive drill solids to a minimum . INTERMEDIATE INTERVAL - FloVis concentration of the initial mix should be no more than 1.25 PPB. Also, whenever possible, the makeup water for the mud should be heated with steam hoses to as high a temperature as possible. Finally, the pH of the make up water should be lowered to 5 +1- 6 with Citric Acid prior to adding FloVis. After all the FloVis is added, the pH should be increased to +1- 9.5 to yield the polymer. This will reduce the tendency for the polymer to form fish- eyes. As the drilling fluid heats up, FloVis concentration should be brought up to 2 PPB. DRILL SOLIDS — MBT — The MBT should be kept at less than 7.5 ppb in the intermediate and production intervals through aggressive use of solids equipment and dilution as needed. MIXING CONDITIONS — Whenever possible all treatments to the mud system should be made as pre -mix additions. With regard to Asphasol Supreme and Resinex, the premix tank should have hot water for mixing to help solubilize the products and reduce loss over fine shaker screens. Polymers and KCI should first be mixed in fresh water in that order and then blended into the active system over one or two circulations as needed. CORROSION — Conqor 404 additions should be made daily when drilling with FloPro fluid in order to maintain a Conqor 404 concentration of +1- 2000 PPM. CORRISION - Sodium Meta Bisulfate additions should be made daily as needed with any fluid in the hole. Maintain a DO reading of less than 3 ppm SOLIDS VAN USAGE — The Solids Van should be used whenever drill solids become un- acceptably high and reduction of drill solids in the mud can be more economically done with centrifuging and dilution then just with dumping and diluting. The weight of the drilling fluid alone should not be the determining condition for when to use the Solids Van. WEIGHTING UP — All increases in mud weight should be accomplished with barite additions. In the production interval, insure chloride concentration is maintained at 30,000 to minimize the need for barite additions. Mi SWAC • IFE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Interval Summary — 16" hole 0 - 1500' Drilling Fluid System Gel/Gelex Spud Mud Key Products MI Gel / Gelex / Soda Ash / Caustic Soda / MI Bar / PolyPac Supreme UL / Sodium Meta Bisulfate Solids Control Shale Shakers / Desilter / Centrifuge Van Recommended shaker screens — 165 mesh Potential Problems Lost circulation, drill solids build -up, hole cleaning. Interval Drilling Fluid Properties Depth Mud Funnel Yield API Drill Interval Weight Viscosity Point Fluid Loss pH Solids (ft) (ppg) (sec. /qt) (lb. /100ft (m1/30min) ( %) 0 - 1500' 8.6 — 9.0 60 - 100 25 - 35 NC - 12 +/- 9.5 < 7.5% > Treat drill water with Soda Ash to reduce hardness. > Build spud mud with 20 — 25 PPB M -I Gel to +/- 100 seconds /quart funnel viscosity. > Lower funnel viscosity to +/- 75 after gravel zone has been drilled. > Add Gelex as needed to maintain sufficient viscosity for hole cleaning. > Increase funnel viscosity if fill on connections begins to occur. > Reduce fluid loss with additions of Polypac Supreme UL prior to running surface casing. > Add Sodium Meta Bisulfate to maintain a DO of < 3 PPM. > Condition mud prior to cementing casing to reduce yield point and gel strengths. > Estimated volume usage for interval — 1892 barrels. > Estimated haul off volume — 2984 barrels. MiSWAC • Marathon Oil Company I FE Well Name: KBU 14 -8 Location: Kenai, Alaska. Interval Summary — 12-1/4" hole 1500 — 5746' Drilling Fluid System Flo -Pro Fluid Key Products Flo -Vis / PolyPac Supreme UL / KCl / SafeCarb 10, 40 / Mix II / MI WATE / Caustic Soda / Conqor 404 / Sodium Meta Bisulfate / KlaGard Solids Control Shale Shakers / Desilter / Centrifuge Van Recommended shaker screens — 200 mesh Potential Problems Lost circulation, coal sloughing, drill solids build -up, tight hole conditions Interval Drilling Fluid Properties Depth Mud Plastic LSRV API Drill Interval Weight Viscosity 1 min Fluid Loss MBT Solids (ft) (ppg) (cp.) (cps) (m1/30min) ( %) 1500 - 5746' 9.0 — 9.2 8 — 12 40,000+ 7 - 9 < 7.5 +/- 5% ➢ Use one rig pit to drill out surface casing. In other rig pits, build new Flo -Pro fluid using the enclosed fluid formula. Pre -heat makeup water with steam hoses as much as possible. ➢ After drilling out surface casing, displace hole to Flo -Pro fluid prior to running leak off test ➢ As mud heats up, increase FloVis concentration to 2 PPB as needed. ➢ NOTE: Be prepared for whole mud losses in the Sterling A8 sands ( +/- 4129' MD). ➢ If torque or sliding problems occur, add 1 — 3% Lubetex. Should not be an issue with nearly vertical hole but should be available on location if needed. ➢ NOTE: This fluid will be reconditioned for the production interval. It is imperative to maintain optimal fluid properties for that purpose. ➢ Estimated volume usage for interval — 2790 barrels. ➢ Estimated haul off volume — 3713 barrels. ➢ Condition mud prior to running 9 -5/8" casing. Mi SWAC • . 4\ 'FE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Virtual Hydraulics SnapShot 12 1 /4" Hole Mi C . ©1995-20136 M4 LLC. 660 GPM MD: 6746 It Operator: Marathon 14.n of M C. 1VD: 6418 ft Well Name: KBU 14-8 VIRTUAL RYDRAULICS'SnapShot* 1226 In. Hd. Bit S ize: 12.26 Date: 711712006 in Location: Kenai Peninsula Country: Alaska DSO Gamely AN. Derek Va Hde Man Presage Distritaim 09 WIND CsNODL9D (1 Mt#Q p6mir$ Wax PA) (a) (in; 0 45 90 9.4 9.8 9.8 10.0 0 140 280 VG G F P Bite 30.4 Ann =3.1 DS =66.6 I° - 100 Drilling Rid 150 1500 , 12.71- FLOP RONT Mud Weight 9.4 IMgal • - 200• Teat Temp 90 °F SYstm3 Data - Flow Rate 660 gallm in - 250 Penetration Rate 100 Poly - 5 . Rotary Speed 80 rpm Weight on Bit 10 10001b Bit Nozzles 0.902 if1' 3500 Pressure Lasses Modified P ower Law 4000 Drill String 988 psi MWD 360 psi 450 - Motor 260 psi Bit 451 psi Bit 01Y011 100 psi - 500 . Annulus 46 psi Surface Equip 30 psi U•7Ube Effect 63 psi • s / Total System 2269 psi 5748 1225. ESD ECD +Cut 5418 L CagSha 9.44 9.69 9.78 - 8 1D 9.46 9.61 9.80 . - ESD a E ° 00 I VKDK- Version 3.1 F.nn 35 . EDO 1- m .2 _ a.e ¢ 650 F�>wn J File - KBU 1441.M De Mi SWAC • 0 Marathon Oil Company ' Well Name: KBU 14 -8 Location: Kenai, Alaska. Hole Cleaning Index 12 'A" Hole 01995-2008 M4 LLC. 650 GPM IV: 5748 ft Operator: Mardi= . _ ' M a of M.l LL C ND: 6418 ft Well Name: KBU 148 VIRTUAL NYDRAULICS'VRDH* 1226 in Hots Bit 3117H008 S 1226 Daly. in Laaa6an KenaiPerireWa Cowry: Alaska Hole Cleaning Marathon KBU 14-8 1.00 1 � 1.111..11 - ROP25 M r — ROP50fthr . ....�. — R0P75Shr _` f . _..... . — ROP100Mir '-.....-...�. — — R0P 125 Nhr -.--.-..-- . 0.75 — ROP150M1r _ — R O P 175 M r __.-.-..---. C FairHole •kanin- E��.� I. �.ari C 050 �.� .. U — — ti -. _ N Good Hole Cleaning - 11111 - 2 - 0.25 — = __ Very G ood Hole lea nin. �_---- nunu 440 460 480 500 520 540 560 580 600 620 640 660 Flow Rate (aal /min) Mi SWAC • • Marathon Oil Company IFE Well Name: KBU 14 -8 Location: Kenai, Alaska. Fluid Formula - 12-1/4" Interval Mi -.Q Intermediate Hole 1500 - 5746' M -I L.L.C. Input Description KBU 14 -8 Mud Weight 9.5 Prehydrated Gel No Weight Material Code MI WATE Prehydrated Gel Conc. Weight Material SG 4.15 KCI Chloride 30000 Weight Material Price KCI Wt% 6 Output -1 bbl # Products Concentration Volume Product Field, It) Lab, gm Field, bbl Lab, Mi Usage 1 Water 307.57 307.57 0.879 307.57 2 KCL 19.63 19.63 0.023 8.21 Inhibition 3 Soda Ash 0.50 0.50 0.001 0.20 Reduce Hardness 4 Caustic Soda 0.50 0.50 0.001 0.23 pH Control 5 POLYPAC UL 1.50 1.50 0.003 0.94 Fluid Loss Control 6 FLOVIS 1.50 1.50 0.003 1.00 Viscosity 7 Defoam -X 0.25 0.25 0.001 0.27 Inhibition 8 CONQOR 404 1.25 1.25 0.003 0.89 Bridging Agent 9 Sodium Metabisulfite 0.50 0.50 0.001 0.44 Corrosion 10 SafeCarb 10 4.00 4.00 0.004 1.54 Bridging Agent 11 SafeCarb 40 12.00 12.00 0.013 4.62 Bridging Agent 12 MI WATE 13.79 13.79 0.009 3.28 Weighting 13 KLA -GARD 6.00 6.00 0.016 5.45 Inhibition If sloughing coals are a oroblem, premix black products prior to adding to mud s stem: 14 ASPHASOL SUPREME 2.00 2.00 0.005 1.67 Sloughing coal 15 RESINEX 2.00 2.00 0.004 1.25 Sloughing coal Plan on adding 2.5 - 5 PPB Mix II to the mud system prior to drilling into the Sterling A8 sand ( +/- 412W MD) 16 MIX II 5.00 5.00 0.005 1.92 LCM Total I 378 378 1.0001 350 Calculated. Mud Weight 9.500 Estimated volume usage 2790 bbls Total Chloride 29600 Mi SWACg, IFE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Interval Summary al Summar — 8 -1/2" hole 5746 - 8073' Drilling Fluid System Flo -Pro Fluid (reconditioned) Key Products Flo -Vis / Polypac Supreme UL / KC1 / KlaGard / MI Bar / Caustic Soda / Lubetex / Conqor 404 / Sodium Meta Bisulfate Solids Control Shale Shakers / Desilter / Centrifuge Van Recommended shaker screens — 230 - 275 mesh Potential Problems Lost circulation, coal sloughing, drill solids build -up, tight hole conditions Interval Drilling Fluid Properties Depth Mud Plastic LSRV API Drill Interval Weight Viscosity 1 min Fluid Loss MBT Solids (ft) (ppg) (cp.) (cps) (mU3Omin) ( %) 5746 — 7578' 9.4 +/- 10 —14 30,000+ 5 - 7 < 7.5 +/- 5% 7578' — TD' 10.0 - 10.5 14 - 18 30,000+ 4 - 6 <7.5 +1 - 5% ➢ Pre -treat drilling fluid with Bicarb and/or citric acid prior to drilling cement. Aggressively treat out cement contamination as soon as feasible. Build additional dilution volume as needed. ➢ NOTE: Plan on increasing the mud weights to 10.0PPG to control pressures in the Tyonek formation ( +/- 7578' MD). However, mud weight increases should not be needed while drilling the lower Beluga formation. ➢ If running coals become a problem, treat with a 2 PPB of Asphasol Supreme and 2 PPB Resinex preferably premixed and heated in separate tank. ➢ Estimated additional volume for interval — 1047 barrels. ➢ Estimated haul off volume — 1379 barrels. ➢ Condition mud prior to running 3 -1/2" casing. Mi SWAC I • I IFE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Virtual Hydraulics SnapShot 8 1/2" Hole Mi ©1995-2006 MI L.LC. MO GPM 1D on : 8073 ft Operator: Maran % in..S of M•IL.rC IVO:7738 ft Well Name: KBU148 VIRTUAL HYDRAULICS'SnapShot8 Mize in Kenai Pe ineW Date 31712008 Cwrty: Alaska Dep9r Gandy Arye Density Va HdeClean PressereDistrSalim MD/ND Csg ODAD r) PIA (Nmit$ ado( (%) 011 7n) 9 4 5 90 10.0 10.4 108 0 200 400 VG G F P Bit =26.3 Am =11.2 DS =63A 50 loon 1500 zoo Drillirg \ RAPRO0T 10 I 250 \ MudW eigk 1141 ' Test Temp 93 °F System Data 300 Roe Rate 600 gallmIn 350 - Penetration Rate 60 M7 Rotary Speed 100 rpm ' 400 Weight on Bit 10 100019 Bit Ncezies 0.778 in' 450 . Pronto losses 500 c Moiled Power Law Drill String 966 psi 550 MWD 309 pi . 5748 4_ \ 9.820 Motor 186 psi 600 5418 8.881 - Bit 382 psi Bit 0rrOff 100 psi 850. - Arnalus 169 psi Sw face E44p 28 psi 700, UTute Effect 28 psi Taal System 2166 psi 750 ESD ECD 4C it CsgSh0s 0.64 ro 10.07 10.08 10.49 10.48 1 8� � 8073 ® 8.50C 1 BD E Oe bn Ha Va-Von 7.1 Fenn S6 . 7738 _ • ECD u ; 1 4 x Fib •IOIU 144.1408 850 Frmn4 BIM Mi SWAC • • IFE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Hole Cleaning Index 8 1/2" Hole ' 01995200SMILLC. 600 GPM MD: 8073 ft Operator: Marathon _ 'Mark afMILLC ND: 1738 ft Wall Nam e: K8U148 VIRTUAL NYDRAULICSYRDN' DKS In: a6 in Leeatierr Ke alPerinsula Dab: 311712D08 Cou*y: Alaska Hole Cleaning Marathon KBU 148 1.00 t t t _ — ROP25Nhr — ROP50 — ROP75Pohr Poor Hole ::leaning — ROP10011/hr — — ROP1251thr 0.75— — ROP150Nhr ._ . X 0 -a c Fair Hole Cleaning CD C = 0.50 ; — err 0 Mg -■ --_ oleCleaning Milli 025 -- �ary rnndH a ■■ 400 420 440 460 480 500 520 540 560 580 600 Flow Rate (aallmin) MiSWAC • • I Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Dilution Formula - 8 -1/2" Interval 8 -/12" Interval from 5746 - 8073' Input Description KBU 14 -8 Mud Weight 9.4 -10.0 Prehydrated Gel No Weight Material Code MI WATE Prehydrated Gel Conc. Weight Material SG 4.15 KCI Wt% 6 Output -1 bbl Order of Products Concentration Volume Product Addition Field, lb Lab, gm Field, bbl Lab, ml Usage 1 Water 325.19 325.19 0.929 325.19 2 Soda Ash 0.25 0.25 0.000 0.10 Reduce Hardness 3 FloVis Pius 2.00 2.00 0.005 1.34 Viscosity 4 Polypac Supreme UL 2.00 2.00 _ 0.004 1.33 Fluid Loss Control 5a SafeCarb 10 15.00 22.50 0.017 5.67 Bridging Agent 5b SafeCarb 40 5.00 7.50 0.006 1.89 Bridging Agent 6 Potassium Chloride 20.76 20.76 0.025 8.68 Inhibition 7 CONQOR 404 2.00 2.00 0.004 1.43 Corrosion Control 8 Caustic Soda 0.50 0.50 0.001 0.23 pH Control 9 Sodium Meta Bisulfate 0.50 0.25 0.001 0.25 Oxygen Scavenger 10 KlaGard 2.00 2.00 0.004 1.43 Inhibition If sliding or high torque becomes a problem add 1 - 3% of the following 11 Lubetex 1 7.00 1 7.00 1 0.021 1 7.00 Lubricity If sloughing coals become a problem add 2 - 4 ppb of the followin_ 12 Asphasol Supreme 2.00 2.00 0.004 1.33 Wellbore Stability 13 Resinex 2.00 2.00 0.004 1.33 Wellbore Stability Mix fluid in the order listed above. Total 1 380.1 380.1 Estimated Volume Usage] 1047.00 Calculated Mud Weight 9.050 Total Chloride 29600 Mi SWAC_� 1 • • m. Mar athon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Interval Summary — Completion Procedures Corrosion Control Additive in Casing x Tubing Annulus Well KBU 14 -8 - r i Volumes: Tubing Volume 3 -1/2" Tubing 70.23 barrels Annular Volume Casing x Tubing 352.41 barrels Tbg 3.50 x 2.992 x 8073 ft Fw. Open Hole x Tbg 120.23 barrels Total Annular Volume 472.64 Tubing Volume 70.23 Total Hole Volume 542.88 < .. . ■ 9.625 x 8.681 @ 5746 ft MD F T 8.500 x 3.50 @ 8073 ft MD Treatment Procedures. 1. After the 3 -1/2" tubing is run and the drilling fluid is circulated and conditioned for the cement job, circulate an additional 350 barrels of drilling fluid. 2. Add 1 drum of Conqor 303A and 1 sack of Sodium Meta Bisulfate for each 95 barrels of drilling fluid pumped (4 drums & 4 sacks total) 3. After the 350 barrels of drilling fluid with corrosion inhibitors have been pumped downhole, begin the cement job. 4. This procedure will place corrosion control in the 3 -1/2" x 9 -5/8" annulus. MiSWAC 1 • Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. HSE Issues HANDLING OF DRILLING FLUID PRODUCTS HEALTH AND SAFETY 1. Drilling crews should be instructed in the proper procedures for handling fluid products. 2. Personal Protective Equipment (PPE) charts should be posted in the pit room, the mud lab, and the office of the Drilling Forman. 3. PPE must be in good working order and be utilized as recommended by the PPE charts. 4. Product additions should be made with the intent to use complete unit amounts of products (sacks, drums, cans) as much as possible in order to minimize inventory of partial units. 5. Insure all MSDS sheets are up to date and readily available for workers to access for information. Mi SWAC • • IFE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. ENVIRONMENTAL 1. Insure that all product stored outside is protected from the weather. 2. Do not store partial units (sacks, etc) outside if possible. 3. Properly secure all products for shipment between job sites. 4. When transferring fluid and or cuttings from the rig to trucks, insure all hoses are properly secured. 5. When utilizing the centrifuge solids van, insure all hoses and connections between the van and the rig are secure. Mi SWAC 1 1 IFE Marathon Oil Company Well Name: KBU 14 -8 Location: Kenai, Alaska. Product Health and Safety Reference HMIS HAZARD RATINGS Product Function Health Flammabilit Reactiv ` PPE M - BAR Weighting Agent *1 0 0 E M - GEL Viscosity control *1 1 0 ,* E GELEX Bentonite Extender 1 1 0 E FLOVIS Viscosifier MIII 1 0 : E DUAL - FLO Modified Starch 1 1 0 ; j E POLYPAC Fluid Loss Reducer 1"1"11.191111111111111V E HEC Loss Circulation Material E Safe - Carb 10,40,250 Bridging and weighting agent *1 0 E Nut Plug Loss Circulation Material *1 1 E M - Seal F, M, C Loss circulation Material *1 1 0 E Mix II F,M,C Loss circulation Material iromil 1 0 E DESCO CF Dispersant Aid 1 0 E SALT (Solar) Densifier 1 0 0 E POTASSIUM CHLORIDE Shale Inhibitor 0 0 E CAUSTIC SODA Alkalinity control 0 1 X BORAX Inorganic Borate ;` 1 0 0 E SAPP Sodium Pyrophosphate *1 0 0 E SODA ASH Alkalinity control 1 1 0 E SODIUM BICARBONATE Alkalinity control 1 0 0 E CITRIC ACID pH Adjuster 1 0 0 E BIOBAN BP -PLUS Biocide *2 0 0 J GREEN CIDE 25G - Biocide 441 EMI 0 0 J DEFOAM X - Defoamer 1 1 0 J G -SEAL Sized graphite LCM MI 1 0 E SteelLube Lubricant 1 1 0 J LUBE TEX Lubricant 1 1 0 J D -D CWT Detergent 2 1 0 J Concor 404 Corrosion Inhibitor 1 1 0 J SAFEKLEEN Drilling fluid additive 1 1 0 J Asphasol Supreme Shale Inhibitor 1 1 0 J Sodium Meta Bisulfate Oxygen Scavenger 1 1 0 J Product Health and Safety Reference MiSWAC • • Marathon Oil Company 'FE Well Name: KBU 14 -8 Location: Kenai, Alaska. HMIS HAZARD RATINGS HAZARDOUS MATERIALS IDENTIFICATION SYSTEM (HMIS) HAZARD RATINGS 4 - Severe hazard 3 - Serious hazard 2 - Moderate hazard 1 - Slight hazard 0 - Minimal hazard * An asterisk next to the health rating indicates that a chronic hazard is associated with the material. HMIS PERSONAL PROTECTIVE EQUIPMENT INDEX A - Safety Glasses B - Safety Glasses, Gloves C - Safety Glasses, Gloves, Synthetic Apron D - Face Shield, Gloves, Synthetic Apron E - Safety Glasses, Gloves, Dust Respirator F - Safety Glasses, Gloves, Synthetic Apron, Dust Respirator G - Safety Glasses, Gloves, Vapor Respirator H - Splash Goggles, Gloves, Synthetic Apron, Vapor Respirator I - Safety Glasses, Gloves, Dust and Vapor Respirator J - Splash Goggles, Gloves, Synthetic Apron, Dust and Vapor Respirator K - Air Line Hood or Mask, Gloves, Full Suit, Boots X - Consult your supervisor for special handling directions MiSWAC • • Ak Marathon Oil Company IFE Well Name: KBU 14 -8 Location: Kenai, Alaska. Contacts Contact Title e-mail Work Cellular Pete Berga Drilling pkberga @marathonoil.com 907 565 -3032 907 231 -0663 Marathon Superintendent Will Tank Drilling Engineer wjtank @marathonoil.com 713 296 -3273 713 203 -8398 Marathon Jim Dwyer Project Engineer jdwyer @miswaco.com 907 646 -3233 907 317 -4556 MI SWACO Bob Myles Warehouse Manager rmyles @miswaco.com 907 776 -8722 907 252 -4218 MI SWACO Oliver Amend Field Engineer oamend @miswaco.com 907 283 -0895 907 398 -9474 MI SWACO (home) Jim Brown Field Engineer Miswacogdrl @hotmail.com 907 398 -8500 MI SWACO John Nicholson / Drilling Foremen alaska_drilling @marathonoil 907 283 -1312 Roland Lawson .com Marathon Responsibilities ➢ MI Project Engineer and will coordinate daily between the Marathon office, rig, warehouse, and the M -I field engineers. ➢ Well progress will be monitored to look for any changes, which will improve the efficiency of the operation and / or avert trouble. ➢ Field Engineers will monitor and supervise product inventory to include re- palletizing any products for shipment to other locations at the end of the well. ➢ Field Engineers will communicate with office personnel (Marathon & MI SWACO) for approval of any changes in the mud program (including introduction of new products). ➢ Field Engineers will produce a recap at the end of the well based on daily activities. Recap should include any lessons learned that may be used to provide better service on future wells. Lessons learned can include changes in procedures, product additions, equipment usage, and/or utilization of any third party service. Mi SWAC i ! TRANSMITTAL LETTER CHECKLIST WELL NAME /<//- PTD# /Development Service Exploratory Stratigraphic Test Non - Conventional Well FIELD: EJ1//A / / POOL: /SFLi,/6A //• A/dr 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(0, all records, data and logs acquired for the pilot hole must be clearly differentiated in both well name ( PH) and API number (50- - - ) from records, data and logs acquired for well SPACING The permit is approved subject to full compliance with 20 AAC EXCEPTION 25.055. Approval to perforate and produce / inject is contingent upon issuance of a conservation order approving a spacing exception. assumes the liability of any protest to the spacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. 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 (Company Name) has designed and implemented a water well testing program to provide baseline data on water quality and quantity. (Company Name) must contact the Commission to obtain advance approval of such wate we ll testing 1 program. Rev: 1/11/2008 WELL PERMIT CHECKLIST Field & Pool KENAI, UP TYONEK BELUGA GAS - 448571 Well Name: KENAI BELUGA UNIT 14-8 Program DEV Well bore seg ❑ PTD#: 2080480 Company r ' - , . • 1 _ • I nitial Class/Type DEV / PEND GeoArea 820 Unit 51120 — On/Off Shore On Annular Disposal ❑ Administration 1 Permit fee attached NA 2 Lease _number _appropriate Yes 3 Unique well name and number Yes 4 Well located in a defined_pooi Yes Beluga J Upper Tyonek 5 Well located proper distance from drilling unit boundary Yes 6 _Well located proper distance_ from other wells Yes 7 Sufficient acreage_avaiiable in_drilling unit Yes 2494.04 acres 8 _If deviated, Js weilbore plat included Yes 9 Operator only affected party Yes 10 Operator has_appropriate bond in force Yes Blanket Bond # 5194234 11 Permit can be issued without conservation order Yes Appr Date 12 Permitcan be issued without administrative_approvai Yes ACS 4/2/2008 13 Can permit be approved before X15- day_ wait Yes 14 Welllocated within area and_strata authorized by Injection Order # (put IO# in_comments) (For NA • 15 AJI weOs_within 1 /4_mi[e_area of review identified (For service well only) NA 16 Pre - produced injector; durations! preproduction less than 3 months_ (For service welt only) _ _ _NA 1 17 _Nonconven, gas_conforms to AS31 05 030(i.1.A),(j,2.A -D) NA Engineering 18 Conductor stdng_provided Yes 19 _S_urface_casingprotects_ all known USDWs Yes Aquifers ? 1300' tvd exempted, 40 OFR 147.102 (b)(1)(iii). 20 CMT v_ot adequate to circuiate_ on_conductor & surf csg Yes 21 CMT_vol adequate to tie -in long string to surf sag No 3 -1/2" long string will be cemented into intermediate casing 22 _CMT_will coverall known_productive horizons Yes 23 Casing designs adequate for C,_T, B & permafrost Yes 24 Adequate tankage_or reserve pit Yes Rig equipped with steel pits. No reserve pit planned. Ali waste_ to approved dispsoal well(s), 25 lf_a_ re- drill, has a 10-403 for abandonment been approved NA 26 Adequate_weflbore separatJonproposed Yes Proximity analysis performed,. Traveling cylinder path and spider plot provided. 1 2 7 Jf diverter_required, does it meet regulations Yes Appr Date 28 Drilling fluid program schematic_& eq_uipiist adequate Yes Maximum expected formation pressure 19.2 EMW._ Planned MW 10.2 ppy. TEM 4/4/2008 29 BOPI=s,_do they meet regulation Yes Marathon requests to employ only_1_pipe_ram due height restrictions and clearance needed to run completion. _ _ _ if 30 BOPE_press rating appropriate; test to_(put psig in comments) Yes MASP calculated at 2283 psi w130% mud -70% water. MASP w! .1_ psi/ft 3331 psi. 3000_psiBOP_ test appropriate, 4111k , 31 Choke manifold complies WAR RP -53 (May 8 4) Yes 32 Work will occur without operation shutdown Yes Completion to be _performed without rig per usual prac tice. 33 is presence of H2S gas probable No H2S is not known in Ci gas wells. Rig has sensors and alarms. 34 _Mechanical_cpnditton of wells within AOR verified (For service well only) NA Geology 35 Permit can be issued w/o hydrogen_ sulfide mea sures Yes 36 Data_presented on potential overpressure zones Yes Appr Date 37 Seismic analysis of shallow gas zones NA ACS 4/2/2008 38 Seabed condition survey_(if off - shore) NA , 39 Contact name /phone for weekiy_progress reports [exploratory only) Yes Witlard_Tank -713- 298 -3273 Geologic Public Date: Engineering Date Date Commissioner: Commissioner: Commissioner • Well History File APPENDIX Information of detailed nature that is not particularly germane to the Well Permitting Process • but is part of the history file. To improve the readability of the Well History file and to simplify finding information, information of this nature is accumulated at the end of the file under APPENDIX. No special effort has been made to chronologically • organize this category of information. • MA RATH N KBU 14 -8 SEC 18 T4N R11W SM May 12, 2008 — May 23, 2008 IS 1 w e 777 j I Craig Silva: Senior Logging Geologist Ralph Winkelman: Senior Logging Geologist • 1E1 EPOCH MARATHON OIL COMPANY KBU 14 -8 TABLE OF CONTENTS 1 MUDLOGGING EQUIPMENT AND CREW 2 1.1. EQUIPMENT SUMMARY 2 1.2. PERSONNEL 2 2. GENERAL WELL DETAILS 3 2.1. OBJECTIVES 3 2.2. WELL RESUME 3 2.3. HOLE DATA 3 3. GEOLOGICAL DATA 4 3.1. SAMPLING PROGRAM AND DISTRIBUTION 7 4. DRILLING DATA 8 4.1. DAILY ACTIVITY SUMMARY 8 4.2. SURVEY RECORD 16 4.3. MUD RECORD 20 4.4. BIT RECORD 21 4.5. DRILLING PROGRESS CHART 22 DAILY REPORTS APPENDIX I • FORMATION LOGS APPENDIX II DRILLING DYNAMICS LOGS APPENDIX III LI EPOCH "' MARATHON OIL COMPANY KBU 14 -8 • 1 MUDLOGGING EQUIPMENT AND CREW 1.1. EQUIPMENT SUMMARY Parameter Equipment Type And Position Total Comments Downtime Low gas readings are a persistent concern due to the immediate pre- shearing Standard Air Drive Trap Mounted In of return mud, that falls 14" Ditch Gas Possum Belly; FID Total Hydrocarbon 0 straight down through an air Y Y gap as it exits the flowline Analyzer And Chromatograph and impacts the fluid of a tiny possum belly in a wide splash, before reaching the gas trap. Rate of Penetration (ROP) Primary Drawworks Shaft Encoder On 0 Drum Shaft Pump stroke counters Externally Mounted Magnetic Proximity 0 Sensor Hookload / Weight on bit (WOB) Hydraulic Pressure Cell 0 Drill string torque Hydraulic Pressure Cell 0 Top drive rotary (RPM) Externally Mounted Magnetic Proximity 0 Sensor Standpipe Pressure Hydraulic Pressure Cell 0 Mud flow in / out (MFI / MFO) MFI Derived From SPM / MFO From 0 Flow Paddle • Pit volumes Drill Ball and probe sensor 0 er's work station Explosion Proof Touch Screen 0 Casing Pressure Hydraulic Pressure Cell 0 Company man's work station HP COMPAQ 0 Mud Engineer's work station HP COMPAQ 0 Living quarter's work station HP COMPAQ 0 Pit's work station Explosion Proof Touch Screen 0 1.2. PERSONNEL Unit Number: ML006 KBU 14 -8 Years Days Sample Catchers/ Days Days Mudloggers Experience at Trainees at Technician at well well well Craig Silva 30 17 Rick Frederick 3 Steve Forrest 1 Ralph Winkelman 19 10 Tollof Winslow 4 Harry Bleys 8 7 • LII EPOCH 2 "" MARATHON OIL COMPANY KBU 14 -8 2. GENERAL WELL DETAILS • 2.1. OBJECTIVES The objective of KBU 14 -8 is to successfully drill and log a Multiple Zone Development Gas well in the Kenai Gas Field, with a minimum of hole problems or other concerns. An EXCAPE completion will be performed. 2.2. WELL RESUME Operator: MARATHON OIL COMPANY Well Name: KBU 14 -8 Field: Kenai Gas Field County: Kenai Peninsula Borough State: Alaska Company Representatives: John Nicholson Dan Byrd Mitch Burns Location: 443' FNL 479' FEL, Sec 18 T4N R11W SM, X= 275,331.359' Y= 2,356,290.305' Classification: Multiple Zone Development Gas API #: 50 — 133 — 20576 — 00 — 00 Permit #: 208 -0480 Activity Code: (WBS #s) DD.07.16239.CAP.DRL Rig Name / Type: Glacier #1 / Land / Double Elevation: Ground, RKB 66.50'GL, 88.29' RT Primary Targets: / Target Depths: Middle Beluga 6531'MD, 6206'TVD, Lower Beluga 7118' MD, 6793'TVD nary Targets: / Target Depths Tyonek 7551' MD, 7226'TVD Spud Date: May 12, 2008 Total Depth 8072' Total Depth Formation: Tyonek Total Depth Date: May 23, 2008 MWD Company: / Tools Run: Baker Hughes Inteq / Directional MWD Directional Drilling: Baker Hughes Inteq Drilling Fluids Company: M -I Drilling Fluids Logging Companies: Weatherford Wireline Services: Quad -Combo on wireline. 2.3. HOLE DATA KBU 14 -8 Hole Maximum Depth T.D. Mud Deviation Shoe Depth F.I.T. Section MD SSTVD Formation Wei ( °inc) Casing MD SSTVD EMW (PP9) 16" 1510' 1421.66' Sterling 9.6 0.48 13 3/8" 1500' 1411.66' 13.0 12 1 /4" 5748' 5343.63' Beluga 9.2 14.40 9 5/8" 5736' 5332.24' 13.0 8 8072' 7658.12' Tyonek 10.3 1.22 3 8058' 7677.41' EXCAPE Completion • El EPOCH 3 MM MARATHON OIL COMPANY KBU 14 -8 3. GEOLOGICAL DATA • All Sediments (5748'- 6000') = note wide variation of lithology characteristics in this interval; it appears, with the exception of a few massive sands, that nearly all rocks are thinly bedded and interbedded; sands are mostly medium gray to medium dark gray with strong olive gray and faint light brownish gray secondary hues, range from very fine and silty to coarse and conglomeratic, disaggregated to well consolidated, friable to marginally hard, angular (dominant) to well rounded (conglomerate clasts), and supported by roughly equal fractions of soft, soluble tuffaceous clay -silt, and a complex inter -grain mix of cementing minerals (calcite), clay - silt -ash, devitrified ash and local carbonaceous material; tuffaceous claystone - siltstone is soft to slightly brittle -firm to moderately brittle to hard; all local rocks are derived (to varying degree) from volcanic ash and have many shared characteristics; mixed and mottled textures are abundantly displayed; many cuttings pieces have discernible micro -thin alternating beds of the various lithologies, and many soft rocks have slightly firmer rock particles of other closely associated sedimentary rocks; note high abundance carbonaceous material in tuffaceous rocks when adjacent to coals; carbonate mineral content ranges from non - calcareous to localized calcareous tuffs that are very calcareous. Sand /Sandstone (5750'- 6200') = note trace to minor fractions of co- bedded very silty sandstone, conglomeratic sand, conglomerate, tuffaceous sandstone and occasional carbonaceous tuffaceous sandstone; also note many subtle changes in sand characteristics from sample to sample, but overall medium gray with slight shifts in lightness value to either medium light gray or medium dark gray; common very faint light olive gray and spotty very faint light brownish gray secondary hues; very fine lower to rare pebble fragment; wide range in sorting as discussed above, but most disaggregated loose sand grains are moderately sorted in fine upper to medium upper range, local poor sorting if conglomeratic; consolidated sandstone is generally finer, in fine lower to medium upper range and moderate to moderately well sorted; angular to subangular and discoidal to subdiscoidal grains are pervasive in finer sands, but spotty conglomeratic sections have increased rounded grains; wide range of • support and cementation as indicated above; disaggregated sand apparently supported by soluble tuffaceous clays; fine, consolidated sandstone is a mix of grain and matrix support by calcite cementation, inter -grain ash - clay -silt particles, devitrified ash, and replacement mineralization; composition range from sublithic arenite to dominant compositional graywacke ( >35% lithics); estimated at 40 -70% quartz and volcanic glass, trace feldspar, 5 -15% cryptosilica (chert, chalcedony), 25 -55% lithics and mafic minerals. Tuffaceous Claystone (6160'- 6220') = medium gray color to a deeper dark medium gray; hues of olive and slight brownish to a solid dark brown color; good cohesiveness and moderate to good adhesiveness; hydration ranges from slow to rapid; note common to abundant floating sand grains and tiny floating carbonaceous particles are common in the claystones; sands fine upper to medium lower grains of dominantly quartz in a angular to sub rounded well sorted grains size; tuffaceous claystone and associated clay- matrix supported sandstone both increasing; soft crumbly tenacity; irregular fracture with rounded cuttings habit; dull to waxy luster; structure is small to increasing layers of tuffaceous claystones with some small layers of tuffaceous siltstone; locally displays abundant shards. Sand (6200'- 6340') = dominantly quartz grains with small carbonaceous shales, coal, tuffaceous siltstone, tuffaceous claystones with some shales; angular to sub rounded upper fine to lower medium grains; well sorted to somewhat poorly sorted with a few larger grain sizes of lower coarse grains; low to fair sphericity; light gray to medium gray with black hues from carbonaceous materials in loose unconsolidated sands; numerous small carbonaceous shales and coal cuttings; dominantly clay matrix supported; a significant fraction of the supporting matrix is pale brown carbonaceous tuffaceous clay. • EPOCH 4 MM MARATHON OIL COMPANY KBU 14 -8 Tuffaceous Claystone/Tuffaceous Siltstone ( 6390'- 6420') = light gray to medium light gray with olive • green hues to medium gray to dark gray with light brownish hues: some blackish hues in dark grays; soft crumbly to crunchy tenacity; irregular fracture with slightly rounded blocky cuttings habit; unconsolidated sands including sand size cuttings of tuffaceous siltstone, tuffaceous claystone, calcite, shale and some green stone; tuffaceous claystone increasing until 6420'; tuffaceous claystone moderately cohesive and fair adhesive; hydrates quickly; gas background has steady dropping as claystone and siltstones increase. Carbonaceous Shales /Coal (6440'- 6460') = dark gray to dark brown to matte black to a vitreous shiny black color; sharp wedge -like to blocky cuttings with obvious edged laminations; irregular to planar fractures; dull to shiny luster. Sand /Sandstone /Tuffaceous Sandstone (6500'- 6680') = light gray to medium gray to dark gray with dark green and dark brown hues; grain supported to very fine matrix supported sandstone cuttings; slightly calcareous to none; poor to very fair visual porosity; grains angular to sub angular from upper fine to lower medium grains size; numerous dark carbonaceous inclusions; along with calcite, siltstone, and possible lithic fragments; carbonaceous shales, and coal; loose unconsolidated grains range from upper coarse to upper fine, are subangular to subrounded with moderate sphericity and poorly sorted; consolidated sandstones are better sorted and have grains with low to fair sphericity; tuffaceous sandstones are grain and matrix supported by volcanic ash and devitrified volcanic ash, are subrounded and dominantly well sorted; note localized sandstones with abundant black carbonaceous lithic grains have a distinctive salt and pepper appearance. Tuffaceous Claystone (6420'- 6660') = light medium gray to medium gray with olive gray and brown hues; soft to crumbly; contains abundant "floating" sand and lithic coal grains; note abundant closely associated carbonaceous shales with prominent light brown to dark brown to black color; interbedded sandstones in the same interval have a salt and pepper appearance due to the carbonaceous material; • moderate to good cohesiveness and adhesiveness. Calcareous Sandstone /Calcareous Tuff (6680'- 6900') = note apparent close association of very fine to fine calcareous sandstone, calcareous silty sandstone, calcareous tuffaceous siltstone and calcareous tuff in this interval; all these lithologies produce a strong effervescence with hydro choleric ; note that the medium light gray to medium gray color is a shared characteristic, and there are many cuttings pieces that display micro -thin interbedding and cross - bedding of two or more of these lithologies; overall can be considered as a single lithology, a calcareous very sandy, silty tuffaceous mudstone, that has many thin localized variations based on grain distribution; medium light gray to medium gray without significant secondary coloration; some of the very fine sandstone has "dirty" salt and pepper contrast of light and dark grains; clay - silt -sand groups with primary and some secondary calcite mineralization; note that inter -grain ash is often devitrified, and a significant fraction of the ash has been replaced by calcite; trace to locally common discernible glass shards; sandstone size ranges from very fine lower to fine upper, most is well sorted in very fine upper to fine lower; estimate equal fractions of grain and matrix supported; angular to subangular, but some very fine quartz is rounded; sublithic arenite to compositional graywacke; note that lithics dominated by medium dark gray phyllite - argillite rock fragments, with trace to spotty greenstone meta- lithics; most sandstone is brittle and tough to moderately hard, and the calcareous tuff is dominantly hard. • E 1 EPOCH 5 MM MARATHON OIL COMPANY KBU 14 -8 Sand / Sandstone/Tuffaceous Sandstone (6900'- 7300') = note that sands appear increasingly • homogeneous; prominent light medium gray to medium gray color often appears devoid of secondary hues; some local variations have very faint light olive gray secondary or light brownish gray secondary hues; very fine lower to medium upper range, but most is moderately well sorted in fine lower to medium lower; note very abundant size group is fine upper, close to the fine - medium cutoff; fining upward is is only occasionally discernible; the tuffaceous clay - volcanic ash supporting matrix is generally very abundant and masks the grain distribution; also there is a relative increase of nearly white colored air fall ash, mixed in with grayer colored tuffaceous clay, that coats quartz grains and glass shards; note after 6870' that occurrence of pieces of sandstone supported by devitrified ash progressively increase, and very common sandstone has abundant lithic clasts of both gray and dark yellowish orange calcareous tuff; also note common soft sandstone with encapsulated blebs of soft white volcanic ash; dominant angular to subangular, discoidal to subdiscoidal; very minor subrounded to rounded siliceous grains, but locally common weathered phyllite lithics that are rounded; soft tuffaceous clay - volcanic ash matrix support and calcareous grain- supported sandstone described immediately above are alternately dominant; less common but very distinctive sandstone with mixed grain and matrix support and complex inter -grain composition that includes volcanic ash -tuff, devitrified ash, primary and secondary calcite and silica mineralization, carbonaceous particles and partial to complete replacement mineralization. Sand /Sandstone/Tuffaceous Sandstone (6900'- 7300') = overall composition in this interval ranges from sublithic arenite in some of very calcareous fine sandstone to dominant compositional graywacke for all other sands; estimate 50 -75% quartz and volcanic glass, trace feldspar, 5 -15% various cryptosilica (chalcedony, chert) and other undifferentiated silica, 20 -50% lithics and mafic minerals; lithics fraction is pervasively dominated (80 -90 %) by medium dark gray to medium gray phyllite rock fragments; phyllites are schistose and very often weathered and rounded; phyllites are followed by very dark gray to grayish black to black medium grade metamorphic argillite rock fragments from same general source area as the phyllite; all other lithics are from diverse sources and slightly dominated by light green to grayish green to variegated green low grade meta greenstone rock fragments (as well as minerals associated with • greenstone); 70 -80% of quartz grains are colorless to very pale gray to very pale brown and translucent, 20 -30% of quartz and nearly all of the grains of volcanic glass are colorless and transparent. Tuffaceous Claystone/Tuffaceous Siltstone/Volcanic Ash (6660'- 7600') = all three lithologies are reworked and redeposited sediments derived from air fall volcanic ash deposits and share many characteristics; all tuffaceous lithologies are often very thinly bedded and interbedded, closely gradational to each other and often contain micro - fragments of the other lithologies; many cuttings pieces with display laminations that show a progression as one tuffaceous lithology is transitioning to another; overall these rocks can represent a clayey- silty -sandy tuffaceous mudstone; dominant color group is medium gray to light grayish brown, but many other subtle variations of gray and brown primary colors and secondary hues; texture variations range from clayey to silty to ashy to various soft matte and mixed or mottled appearances; note that the rocks that are designated as tuffaceous clay on the mudlog, and those designated as volcanic ash are often very closely associated; the volcanic ash has not been affected by transport to the same degree as the tuff claystones, and the lack of reworking is usually evident by the obvious lack of mixing with other sediment, and occasionally by presence of "shadowy" pseudo- textures in the ash that are remnants of the original vitriclastic texture; clay -silt characteristics usually define these rocks but often there is mixing with sand grains and also locally common to very abundant carbonaceous types; brown carbonaceous tuffaceous claystone often where coal is anticipated. Sand /Sandstone (7580- 7620') = note significant change in sand at 7580'; first "very clean looking" sands and sandstone of its type; disaggregated grains were clearly supported by much more soluble clay; there is no residual clay on grains, and disaggregated grains looking "whiter" in bulk, and more contrast against the black - gray -green lithics and mafics. [I EPOCH 6 MM MARATHON OIL COMPANY KBU 14 -8 Carbonaceous Tuffaceous Claystone/Tuffaceous Claystone /Tuffaceous - Siltstone (7620'- 7740') = light gray and greenish blue hues, medium gray and medium dark gray with green olive hues; light brown to dark brown to almost dark brown black with dark carbonaceous seams almost coal like; soft to crumbly to tough in some claystone and siltstone; a major portion of the rocks in this interval are light brown to dark brown to even black appearing carbonaceous tuffaceous claystones, formed after the apparent co- deposition and mixing of volcanic ash - derived clays and micro -sized "coaly" carbonaceous material; carbonaceous tuffaceous claystone and tuffaceous claystone dominantly have an irregular fracture habit; note that many cuttings pieces have rounded out edges that result from the hydration and thin surface erosion during transport in the annulus; tuffaceous siltstones often have a rougher gritty texture; carbonaceous tuffaceous claystones and tuffaceous claystones are much smoother almost shaly or clayey with a waxy luster; tuffaceous claystone and siltstone is non calcareous, and tuffaceous carbonaceous claystone slightly calcareous. Sand /Sandstone/Tuffaceous Sandstone (7740'- 7820') = light gray to medium light gray with mild green to olive green hues; sub angular to sub rounded and very fine to lower medium; tuffaceous sandstones grain supported by argillaceous cement and tuffaceous inter -grain material; tuffaceous sandstones are moderately calcareous; dominantly good visual porosity in grain supported sandstones; some white ash matrix material is calcareous; overall moderately to well sorted; quartz is dominant at 60 -70 %; displays greenstone, siltstone lithics, black carbonaceous materials, loose crystalline calcite and various mafics; poor to fair sphericity. Sand /Sandstone /Tuffaceous Sandstone /Conglomeratic Sand (7820'- 8072') = light medium gray to medium gray with strong light olive and faint light brownish gray secondary hues; very fine lower to trace granule; changing moderately to moderately well sorted in fine lower to medium lower range; poorly sorted where conglomeratic; largest fraction close to fn- medium boundary; angular to subangular; low sphericity; equal matrix, grain support; dominant matrix is reworked and later devitrified- altered- replaced- mineralized volcanic ash and tuffaceous clay -silt; roughly equal fractions of disaggregated and • consolidated; continued abundant grain supported calcite cemented sandstone, but most sandstone has complex inter -grain mix of ash products and mineralization; fair to good visual porosity; individual pieces have obvious good permeability; lithic arenite to compositional graywacke; estimated 45 -75% quartz and glass, trace feldspar, 10 -15% cryptosilica (chalcedony, chert) and minor undifferentiated silica,25 -50% lithics and mafic minerals; cont v abundant argillite phyllite lithics, followed by common to locally abundant greenstone rock fragments then all other diverse lithics; note spotty darker brown sandstone with salt and pepper appearance has very abundant clastic carbonaceous fragments and contrasting dark yellowish orange calcareous tuffaceous lithics. 3.1. SAMPLING PROGRAM AND DISTRIBUTION KBU 14 -8 Set Type and Purpose Interval Frequency Distribution Marathon Oil Company c/o C & M Storage, Inc. Washed and Dried 20' 3311 S U.S. Highway 77 A 5748' — 8072' Intervals Schulenburg, TX 78956 Attn: Dave Martens (713) 296 3302 BOX INTERVAL : 5748'- 6600', 6600' — 7300', 7300' — 8072' TD • El EPOCH 7 M MARATHON OIL COMPANY KBU 14 -8 4. DRILLING DATA 4.1. DAILY ACTIVITY SUMMARY 5/11/2008: Continued Glacier No.1 rig up operations. Rig up Topdrive slide, service loop and kelly hose. Adjust compensator and grabber box. Install bails and elevators. Rig up tongs and spanners. Prep conductor. Install starter head and test to 500psi. Rig up mud manifold. Install kill, bleeder and fill -up hoses. Pick up safety valve and handling tool. Rig up kill line to conductor. Install 4" valves on starter head. Nipple up diverter stack. Rig up accumulator lines, bell nipple, flowline extension and knife valve. Nipple up and chain down diverter line. Install and adjust turnbuckles. Pick up and set mousehole. Install back -up bleeder, fill -up and trip tank lines. Rig up manual trip tank gauge. Bolt flow plate. Set pipe racks. Spot and berm Hansen tank. Unload trailers. Test run Topdrive. Test run all mud pumps. Hook up geolograph line. Test diverter. Perform accumulator drawdown test. Test gas alarms, PVT and flow line sensor. Pick up, drift, make up and stand back 25 stands (1576') of 5" drill pipe. Pick up, drift, make up and stand back 11 stands of 5" HWDP plus jars. Make up short clean out assembly with 17.5" bit. Run in conductor and tag top of fill at 28'. Break circulation. Clean out conductor fill from 28' to 170'. Continue to circulate and wash clean. Pull out of hole from 170'. Pick up and make up directional bottom hole assembly with 16.0" bit. Ralph Winkelman, Craig Silva and Steve Forrest rig up EPOCH's Rigwatch 8.7 system, gas system, Unit #6 computers and equipment, all external workstations, wireless network to camp, Starband Satellite system, rig site communications and unit power. Unit #6 is organized and prepared for spudding KBU 14- 8. Craig Silva flows and calibrates the gas system. 5/12/2008: Wait on cross -over before final make up of directional assembly. Pick up, make up and run in hole directional assembly (crossover, shock sub, flex collars, MWD, pony collar, stabilizer, motor, bit). Drill out last 3' of fill in conductor to 173'. SPUD WELL and drill from 173' to 1189'. Replace hose on auxiliary hydraulics. Drill from 1189' to 1510'. Circulate bottoms up. Check for flow. Fill trip tank. Pull out of hole from 1510' to 155' on wiper trip. (Pull SLM with no corrections). Service rig (crown, blocks, carrier, drivelines). Change out and pump up compensator hose. Purge mud manifold sensor line. • El EPOCH 8 MM MARATHON OIL COMPANY KBU 14 -8 5/13/2008: Finish various rig service and maintenance. Run back in hole from 155' (inside conductor) to 1442'. Wash down from 1442' to bottom at 1510'. Circulate bottoms up. Record 4 units of wiper gas. Continue to circulate, clean and condition hole (for 2 bottoms up total). Check for flow. Pull out of hole with 5" drill pipe and 5" HWDP to top of directional tools at 155'. Pull, break and lay down directional tools (crossovers, shock sub, flex collars, MWD, pony collar, stabilizer, motor, bit). Lay down bit handling tools. Clear and clean rig floor. Change out from short to long bails. Lay down pipe elevators. Install pick -up line. Move breakout tongs to drillers side and install correct tong head. Install fill -up line. Install casing elevators. Rig up casing tongs and tall snub post. Remove rotary bushings and rig up casing spider slips. Tie one tugger line back in derrick for pipe pick -up and second tugger line back to hang casing tongs. Rig up Weatherford power tongs. Make up EZ -turn valve onto casing swage for safety valve and function check. Stage centralizers and lock rings on rig floor. Clean casing threads of each shoe track joint before make up. Hold pre -job meeting with Weatherford hands on procedures and safety for running surface casing. Pick up, Bakerlok, make up and run in hole 13 3/8" shoe track (shoe joint, spacer joint, sting -in float collar) and run in hole. Check floats. Continue running in hole with 13 3/8" casing as per Marathon to 1490'. Wash down from 1490' and set shoe at 1500'. Rig down and load off all Weatherford casing running equipment. Rig down fill up line. Clear rig floor. Change out bails, elevators, tongs and snubbing post to handle and run 5" drill pipe. Prep pipe spinner. Make up inner string tools (stab -in sub, 5' pup and centralizer) on 5" drill pipe. Rig up false rotary for running 5" drill pipe inside 13 3/8" casing. Run in hole with 5" drill pipe and stab -in sub to top of float collar at 1456'. Rig up cementing line. Tag and sting into float collar and space out. Circulate and condition hole. Record 2 units of trip gas. Rig up to cementing lines. Hold pre job meeting with BJ cementers on safety and procedures for cement job. Pump 40 bbls of 8.4ppg Mud Clean II (with 1 gallon red dye added) using rig pumps. Switch over to BJ pumping unit. Pump 5.4 bbls of water and pressure test cement lines to 2972psi. Bleed off pressure. Batch cement to 12.0ppg. Original plan to mix and pump 208.23 bbls of 12.0ppg cement slurry (471 sacks Type 1 LW -6 cement and accelerator additives to 115.79 bbls of mix water for yield of 2.483 cu ft per sack). Pump 164 bbls of slurry and observe cement at surface. Shut down cement delivery and mix what is left of cement in surge tank. Pump 169.0 total bbls of 12.0ppg cement slurry and then follow with • 23.2 bbls of 9.6ppg mud to displace. Check floats. Cement in place. No losses during pumping with good excess cement returns to surface. Note 27 bbls of cement returns pumped into cellar. Cement returns treated with citric acid retarder. Rig down and flush cementing head and lines and continue rigging down BJ. Unsting from float collar. Float holding. Pull one stand to 1396' and rig up to pump ball down pipe. Pump wiper ball down to clear drill pipe of any residual cement. Treat all mud returns for traces of cement product. Dump 70 bbls of returns during and after pumping ball. Finish pumping. Rig up false rotary table and pull out of hole from 1396'. Break and lay down stab -in assembly (pup, stab -in tool, centralizer). Rig down false rotary. Flush, re -flush and drain 20" by 13 3/8" annulus, flowline and mud lines. Pull plate. Clear and clean rig floor and cellar. • [I EPOCH 9 MM MARATHON OIL COMPANY KBU 14 -8 5/14/2008: Pump out and haul off spud mud and begin cleaning pits. Nipple down and remove diverter • line and knife valve. Disconnect turnbuckles to stack and secure out of the way. Nipple down and rig down fill -up line, bleeder line, trip tank line, flow line, kill line, 2" valve, actuator and scaffolding. Remove and lay down mousehole. Change out HCR valve on stack. Make rough cut on 13 3/8" casing and lay down 10' section. Nipple down bell nipple. Nipple down and move flowline extension aside. Nipple down, set in rack and load off diverter stack. Continue cleaning pits. Begin loading 5" drill pipe for next hole section on pipe racks. Prepare to lift off starter head. Change bails. Secure to bridge crane. Attempt to remove starter head, but unable to pull free. Make cut on 20" conductor and lay down section with starter head attached. Make final dressed cut on 13 3/8" casing and lay down (7.10') section. Install 13 3/8" slip -lock connection by 13 5/8" 5M flanged multi -bowl wellhead and test to 1800psi for 10 minutes. Finish cleaning pits and begin building Flo -Pro mud system. Install flowline extension and DSA spacer spool. Install BOP stack. Pick up annular with bridge crane. Put doublegate on rack, spot under annular and nipple up. Rack, stack, bolt up and hammer up mud cross and single gate to the double gate and annular preventer. Install choke hardline and adaptor spool. Install check valve and kill line. Install quick connects on annular. Make up connects to blind rams. Nipple up pitcher nipple and flow line adaptor. Install bleeder lines. Install trip tank hose. Install trip tank valve and actuator. Chain up turnbuckles to stack and level out. Rig up panic line. Prepare to test BOPE. Pull wear ring. Set test plug. Rig up testing equipment. Test all gas alarms. Test all BOPE to 250psi Low / 3000psi High for 12 minutes (( #1: upper topdrive, check valve, annular, dart valve, CMVs 1,10,11,12) (Function pipe rams) ( #2: pipe rams, safety valve, lower topdrive, outside kill, CMVs 6,8,9) ( #3: inside kill, CMVs 2,5,7) (#4: HCR) ( #5: manual choke) (Perform accumulator drawdown test) (Function blinds) ( #6: blind rams, CMVs 3,4)). Continue building Flo -Pro mud system. Test PVT alarms. Test casing to 1500psi for 40 minutes. Rig down testing equipment. Pull test plug. Set in wear ring. 5/15/2008: Install elevators. Pick up and prepare pipe handling tools on rig floor. Pick up, drift, make up, run in hole, pull out standing back in the derrick and strap two 42 joint batches (84 joints total) of pre - staged 5" drill pipe off the pipe racks. Pick up, make up and run in hole new directional bottom hole • assembly (bit, motor, stabilizer, short NMDC, MWD collar). Orient MWD tools. Make up and run in hole remaining directional tools (2 NMCSDP flex joints, crossover). Make up crossover to first stand of HWDP from derrick and run in hole with HWDP and jars to 794'. Strap, pick up, drift, make up, run in hole 18 more joints (9 stands) of pre- staged and prepared 5" drill pipe off the pipe racks to 1361'. Wash down with pipe out of derrick from 1361' and tag cement at 1446'. Drill cement from 1446' and tag float collar at 1456'. Drill out float equipment, remaining shoe tract (cement, shoe at 1500', rathole to 1510') and 20' of new hole from 1510' to 1530'. Circulate bottoms up. Displace spud mud with a 43 bbl Hi -Vis sweep followed by new 9.1 ppg Flo -Pro mud. Perform Formation Integrity Test to 13.0ppg EMW. Drill ahead (sliding and rotating) from 1530' to 2305'. 5/16/2008: Drill ahead (sliding and rotating) from 2305' to 3569'. Circulate bottoms up in preparation for wiper trip. Observe minor lost circulation (7 bbls). Drill from 3569' to 3632'. Check for flow and monitor well. Observe slow loss (4 bbls per hour). Pump and spot 46 bbl LCM pill outside lower string. Monitor well. Observe well is static. Pull out of hole wet from 3632' to 2987'. (Note cuttings returns from 3592' to 3632' not lagged up before pulling out of hole). Pump dry job. Continue pulling out of hole from 2987' to 1487' on wiper trip to 13 3/8" shoe. Lube and service rig (Topdrive, carrier, crown and blocks). Change out elevators. Run back in hole from 1487' to 2180'. Hear odd noise from clutch while running in. Pull back out of hole from 2180' to 1487' to troubleshoot clutch problem. Begin replacing clutch plates. 5/17/2008: Finish changing out friction plate on clutch. Run back in hole from 1487' to 3569'. Wash down from 3569' to 3632' (with no fill). Drill from 3632' to 4262'. Report failure of MWD tool. Circulate bottoms up. Check for flow. Pull out of hole wet from 4262' to 3947'. Pump dry job. Pull out of hole from 3947' to top of bottom hole assembly at 794'. Pull and stand back HWDP and jars. Pull to 34' handling directional tools. Change out the crossover sub, 1 flex collar and MWD collar. (Note bit is not pulled through rotary table). Run back in hole with new bottom hole assembly from 34' to 801'. Test MWD tools. Continue running in hole on 5" drill pipe from 801' to 1494'. Slip 33' of drill line. Check crown -o- matic. Continue running in hole from 1494' to 4142'. Wash down from 4142' to 4262' (with no fill). Record 33 • units of wiper gas. Drill ahead from 4262' to 4283'. El EPOCH 10 C " M "/ MARATHON OIL COMPANY KBU 14 -8 5/18/2008: Drill ahead (sliding and rotating) from 4283' to 4986'. Begin losing circulation after 4986'. • Lose 24 bbls while circulating. Pick up and stop circulating. Lose another 17 bbls with pumps off before static losses are reduced to near zero and well is stabilized . Pump 50 bbl LCM pill with Mix II added. Resume drilling. (Continue to lose circulation during initial pumping after the pill, but continue to add small spot amounts of LCM, and observe rate of loss decrease from 13 bbls /hr to zero over the succeeding 6 hours. Note net loss of 130 bbls in 24 hour report period). Drill ahead (sliding and rotating) from 4986' to 5671'. 5/19/2008: Drill (sliding) from 5671' to 5680'. Pick up and ream before drilling ahead (rotating) to 5705'. Begin losing mud after 5680' (from zero losses to 16 bbls /hour). Pick up and briefly monitor mud loss. Pump half of a pre -made pill (23 bbls) of LCM pill with Mix II into the annulus and stop mud losses. Continue drilling ahead (rotating) from 5705' to 5748'. Circulate bottoms up. Fill trip tank. Pull out of hole from 5748' to 4205' on wiper trip. Monitor well. Run back in hole from 4205' and tag tight spot at 5368'. Kelly up and ream and wash from 5368' to 5388'. Continue running in hole from 5388' to 5622' (working through 2 minor tight spots). Wash down from 5622' (and ream through very minor tight spots) to 5748' (with no fill). Circulate bottoms up. Record 29 units of wiper gas. Circulate, clean and condition hole. (Observe mud loss of 21 bbls per hour while circulating). Monitor well. Pump and spot on bottom a 50 bbl LCM pill (made with 50ppb 10 -20 -250 grade Safecarb, 20ppb G -Seal, 6ppb fine and medium Mix II). Pull out of hole wet (SLM) from 5748' to 5377', working through 6 minor tight spots along the way. Pump dry job. Fill trip tank. Pull out of hole from 5377' to 1480' (inside shoe). Fill trip tank and monitor well. Lose approximately 1 bbl /hour of mud while pulling out. Continue to pull out hole from 1480' to top of bottom hole assembly at 801'. Pull and stand back HWDP and jars to 141'. Pull, break and lay down directional assembly (crossover sub, NM flex joints, NM crossover, MWD collar, short NMDC, string stabilizer, mudmotor and bit). Rig down, lay down and organize handling tools. Clean rig floor and cellar. Pull wear bushing. Hold pre job meeting on changing rams. Close blind rams. Change out upper 2 7/8" by 5 1/2" variable pipe rams to 9 5/8" casing rams. Run test plug. Pick up, make up and install test joint. Rig up test equipment. Test casing rams to 250psi Low / 3000psi High. Rig down test equipment. Pull • test plug. Close annulus valve. Using single joint elevators, drift BOPs with landing joint and hanger. Mark elevation on landing joint. Move breakout tongs to driller's side and install correct tong head. Remove elevators and short bails. Install Lafleur fill -up tool. Install long bails and pick -up sling -line. Install casing elevators. Move torque tube back in derrick for clearance. Rig up and function stabbing board. Rig up Weatherford casing tongs and tall snub post. Remove rotary bushings. Rig up casing spider slips. Make up EZ -turn valve onto casing swage (to act as a safety valve), function test and record in IADC. Pick up centralizers and lock rings and stage on rig floor. Tie one (red) tugger line back in derrick for picking up pipe, and the second (blue) tugger line back for hanging casing tongs. Hold pre job meeting with all hands on procedures and safety for running intermediate casing string. • El EPOCH 11 MM MARATHON OIL COMPANY KBU 14 -8 5/20/2008: Finish pre -job meeting with Weatherford. Inspect rig -up. Run in hole with 9 5/8" casing as • per Marathon program. Clean and Bakerlok casing threads on successive shoe track joints during make up. Pick up and make up shoe track (shoe joint, spacer joint, float collar) and run in hole to 84'. Circulate casing volume through shoe track and check float equipment. Shut down running in casing to work on stabbing board. Troubleshoot and repair stabbing board. Resume running 9 5/8" casing in hole. Attach centralizers as per tally and fill every joint on way in. Run casing from 84' to 1490' (inside shoe). Fill pipe and place 32 bbl LCM pill in casing from 973' to 1490'. Continue running 9 5/8" casing in hole at slow rate from 1490' and tag tight spot at 5664'. Position fill -up tool so joint can be circulated down. Open and remove spider slips. Break circulation and wash down from 5664' to landing depth of 5736'. Record 11 units maximum gas while washing down. Land hanger on load shoulder in multi -bowl wellhead. Drain stack and verify landing. Make up cementing head with top and bottom plugs pre - installed. Continue circulating and conditioning. Hold pre -job meeting with BJ on procedures and safety for cement job. Continue circulating through cementing head while BJ batches up cement. Finish circulating with rig pumps. Blow air through cement valves and lines to clear. Switch to BJ pumping unit. Pump 2 bbls of water and pressure test lines to 3528psi. Drop first (bottom) plug. Mix and pump 22.5 bbls of 10.0ppg Seal Bond sweep (using 21.48 bbls of mix water and adding 225 Ibs of Ultra Seal Plus LCM material before pumping), and follow with 184.0 bbls of batched up 10.5ppg cement slurry (294 sacks of Class G cement plus accelerator chemicals mixed with 88.56 bbls water to yield 12.658 gal /sk and 3.314 cu- ft/sk). Drop second (top) plug. Pump 4.8 bbls of water to kick out the top plug. Switch over to rig pumps. Displace with 429.16 bbls (9108 strokes) of mud (and 433.96 bbls total displacement). Bump plug at close to calculated strokes with 758psi over - pressure (and 1419psi total pressure). Bleed off. Check floats. Cement in place. Begin 24 hour wait on cement. (Note cementing lines flushed with 3.6 bbls of water by BJ after last plug kick out). Blow down and rig down BJ cementing head and cement lines. Blow down Topdrive, mud lines and mud pumps. Back out and lay down casing hanger landing joint. Make up 9 5/8" pack -off and run in on 1 joint of HWDP. Energize seals and test pack -off to 5000psi for 10 minutes. Remove sling line. Rig down, lay down and load off the casing spider slips, casing elevators, long bails and Lafleur fill -up tool. Rig up short bails and drill pipe elevators. Move tong hanging sheave and hang rig tongs. Offload remaining Weatherford equipment. Rig down and fold up stabbing board. Reset and realign torque tube. 5/21/2008: Rig up Topdrive rail. Install bails and elevators. Change out upper 9 5/8" casing rams to 2 3/8" X 5 1/2" variable pipe rams. Clean rig floor. Run in test plug. Rig up testing equipment. Test all BOPE to 250psi Low /3500psi High for 5 minutes (annular preventer, upper pipe rams, check valve, dart valve, upper Topdrive IBOP, CMVs 1- 10- 11 -12, floor valve, lower Topdrive IBOP, outside kill valve, CMVs 6 -8 -9, inside kill valve, CMVs 2 -5 -7, HCR, manual choke CMVs 3 -4, blind rams). Do accumulator drawdown test. Inspect mud pumps and service carrier while testing. Blow down mud lines. Rig down testing equipment. Pull test plug. Install wear bushing. Prepare rig floor for picking up directional bottom hole assembly. Prepare drill pipe on the pipe rack. Pick up, make up and run in hole directional assembly (8 1/2" bit, mudmotor, NM string stabilizer, short NMDC, MWD, NM crossover , 2 NMCSDPs, NM crossover, 21 joints 5" HWDP plus jars) to 789'. Surface test MWD tool. Pick up off pipe rack, drift, make up and run in joints of 5" drill pipe to 3892'. Continue running in hole with stands of 5" drill pipe from derrick to 5270'. Adjust torque tube rail. Test 9 5/8" casing to 1500psi for 30 minutes. Run in hole from 5270' and tag float collar at 5648'. Drill out float collar and remaining shoe tract (cement, shoe, rathole) to bottom at 5748'. Drill 20' of new hole to 5768'. Circulate bottoms up. Rig up and perform Formation Integrity Test to 13.0 EMW (9.4ppg, 5451tvd, 1023psi). Offload 120 bbls of old Flo -Pro mud. Drill (rotating) from 5768' to 5777'. 5/22/2008: Drill (sliding and rotating) from 5777' to 6967'. • Ell EPOCH 12 "A°' MARATHON OIL COMPANY KBU 14 -8 5/23/2008: Drill from 6967' to 8047'. Record consistently high formation gas during this interval. Build • mud weight up from 9.3ppg to 10.0ppg. (Rack, pull protectors, drift and strap 3 1./2" production casing while drilling progresses). Circulate bottoms up at 8047'. Weight up from 10.0ppg to 10.2ppg and continue to circulate and condition mud. Stop circulating and check for flow. Pull out of hole from 8047' to 5716' on wiper trip to shoe. Service rig. Change out brake handle pin bushing. Run back in hole from 5716' to 7920'. Wash down from 7920' to 8047'. Drill from 8047' to 8072'. Begin circulating bottoms up. Observe high coming up rapidly while drilling the last 10' of hole. Record 2035 units of gas (2220 strokes before anticipated trip gas). Shut in well, and continue circulating through open choke and through degasser. Gas immediately decreases to 396 units when first on choke, then gradually increases to 818 units at anticipated wiper gas. (Note that speculative normalized gas if NOT put on the choke projected to 4151 units). Circulate gas through choke down to 129 units. Open choke, bypass degasser and begin circulating up returns from drilled interval. Record 659 units maximum gas (from 8052'). Continue circulating up cuttings form 8047' to 8072'. 5/24/2008: Finish circulating up cuttings from 8047' to 8072'. Circulate and condition hole and build mud weight up from 10.2ppg to 10.3ppg. Circulate gas down from 398 units to 28 units. Shut down pumps and check for flow. Pull out of hole on 10 stand wiper trip from 8072' to 7445'. Run back in hole from 7445' to 8047'. Wash down from 8047' to 8072'. Start pumping sweep. Circulate bottoms up and record 400 units of wiper gas. Circulate sweep around. Observe successive slight surge and drop off of returns, and a gas decrease from 135 units to 33 units. Continue to circulate and condition (for equivalent of 2 bottoms up) Make up (94 sack) heavy dry job for extra hydrostatic during wireline operations. Circulate gas down to 18 units. Shut down pumps and check for flow. Pump heavy dry job. Pull out of hole (SLM) from 8072'. Pull cleanly to top of HWDP at 789'. Pull out of hole to 130' standing back HWDP and jars. Pull out of hole breaking and laying down directional assembly (crossover sub, 2 NM flex joints, MWD collar, short NMDC, string stabilizer, motor and bit). Dump MWD memory before laying down. Lay down and load off handling tools. Service Topdrive. Clear and clean rig floor. Pick up wireline handling tools. Hold 2 successive pre job meetings with Weatherford Wireline Services' loggers on procedures and IP safety for wireline logging operations. Hang sheaves and rig up Weatherford's wireline running equipment. Pick up, make up and run in hole with Quad -Combo logging assembly. Load sources for neutron tools. Run in hole to 5650' inside casing. Open calipers and attempt to log down find logger's shoe depth. A continuous log would be created for only 2 to 10 seconds before shutting off and signaling a "terminate logging" message. Telemetered data transmission was being interrupted for unknown reasons. (WWS was using new software and also required a new telemetry default due a recently shortened and re- headed logging cable). Begin troubleshooting problem. Monitor well with trip tank. Telemetry problem solved after many repeated attempts. Regain full function of surface logging system. Run Quad -Combo logging assembly down and find intermediate shoe at 5730' (logger's depth). Continue running in with logging assembly and tag bottom at 8063' (logger's depth). Log up from with Quad - Combo assembly from 8063' to 3000'. EPOCH 13 M MARATHON OIL COMPANY KBU 14 -8 5/25/2008: Finish logging up (in cased hole section) with Quad -Combo assembly on run from 8063' to • 3000'. Pull logging assembly rest of the way to the surface. Hold pre job meeting on safety and procedures for handling logging assembly. Unload sources in neutron tools. Pull, handle, break and lay down Quad -Combo logging assembly. Load off tools onto catwalk. Rig down and load off sheaves and wireline surface running equipment. Finish drilling phase of well, and start production phase. Troubleshoot problems with rig electrical system. Repair broken wire under #2 carrier motor between the bell housing and the motor mount. Make up bit and bit sub to first stand of HWDP. Run in hole to 3119' and fill pipe. Record 2 units of gas. Continue running in hole from 3119' to 5710' (just inside shoe). Circulate bottoms up from 5710'. Record 90 units maximum gas. Slip 33' of drill line. Continue running in hole from 5710' to 8043'. Fill pipe and wash down from 8043' to bottom at 8072' with no fill. Circulate bottoms up. Record initial high peak of 1732 units at 7412 strokes (more 1700 strokes before expected trip gas) and maximum peak of 2012 units at 9438 strokes (260 strokes after expected trip gas). Circulate out high gas and continue circulate and condition mud. Mud weight in and out at 10.4ppg. Mix up 100 sack dry job with 1 drum of Conqor 404 added. Circulate gas down to 14 units. Shut down pumps and check for flow. Pump heavy dry job. Pull out of hole laying down 5" drill pipe from 8072' to 662'. Run in hole with extra 12 stands of 5" drill pipe in derrick. Pull out of hole laying down last 24 joints of 5" drill pipe. Pull corrosion ring. Pull out of hole laying down 5" HWDP and jars. Break and lay down bit and bit sub. Blow down mud lines and flush mud pumps. Lay down make up tongs. Rig down and load off all rig floor bit subs, drill pipe tools, spinners, and tongs. Pull wear bushing. Load off remaining rotary tools. Clear and clean rig floor. Prepare for highline operations running in EXCAPE production modules and tubing. Pull wear ring. Change out bails and elevators. Pick up, install and rig up Weatherford tongs, casing running tools, handling tools and accessory equipment. Install fill -up tool. Hold pre -job meeting with all hands on procedures and safety for running 3 1/2" EXCAPE completion string. 5/26/2008: Conclude pre -job meeting on procedures and safety for running 3 1/2" EXCAPE completion string. Rig up Weatherford fill -up line, circulating line, and floor valves. Use crane to position sheave with • control lines previously fed through and aligned. Pull down to floor and tie off the 3 control lines and a protector dummy line. Rig up Pollard Wireline Service to perform banding of control lines. Inspect and insure that previously staged out modules are in correct order on short pipe rack. Begin running in hole with 3 1/2" EXCAPE completion string as per Marathon program. Pick up, make up and run in shoe tract with Davis Lynch Float Shoe and Float Collar. Check floats. Carefully pick up, make up and run in hole 3 1/2" completion section with 13 EXCAPE modules (plus 38 pups and recloser assembly) to 1572'. Circulate and fill pipe. Continue running 3 1/2" EXCAPE completion string in hole from 1572' to 8042'. Rig up circulating head and line. Begin circulating, bringing pumps up slowly. Terminate control lines and cable. Lower down sheave with crane and then rig down and load off. Continue circulating (at 880psi, 105spm) while reciprocating pipe (from 8039' to 8048'). Circulate bottoms up and record 230 units of trip gas (with 10.5 mud all around). Continue to circulate and condition mud (for 12016 strokes total). Stop pumping and monitor well. Rig up Expro Wireline Service equipment and hold brief pre -job meeting on wireline operations. Run in hole with gamma correlation log to determine perforating positions of EXCAPE modules. EPOCH 14 " MARATHON OIL COMPANY KBU 14 -8 5/27/2008: Continue loading up trailers and hauling non - essential equipment off to next location. Log up and pull out of hole with wireline gamma tool assembly. Do correlation determination with gamma log. Note that the the shoe will be adjusted down 10.00' to 8058.59'. Rig down Expro WLS. Rig up circulating line and head. Resume circulating and conditioning well while mixing inhibited mud. Pump 90 bbls (1883 strokes at 100spm, 198gpm, 685psi) of mud treated with Conqor 404 to be spotted as a corrosion inhibitor in the annulus and record 6 units maximum gas. Finish pumping inhibitor. Rig down circulating head. Rig up cementing head and line up to BJ cementers. Head will have plug installed and a wash -up tee. Hold pre -job safety meeting with BJ on cementing procedures and safety for cement job. Pump 5.2 bbls of water to fill lines. Pressure test cementing lines to 4048psi. Mix and pump 47.8 bbls of 11.0ppg Sealbond Sweep, using 42.34 bbls of water. After sweep, pump 212 bbls of batched 15.8ppg cement slurry (1018 sacks of Class G cement plus accelerator chemicals mixed with 119.24 bbls water to yield 4.919 gal /sk and 1.169 cuft/sk). Close valve to head and open wash -up valve. Pump 20 bbls water to wash lines from floor out to slop tank until returns are clean. Close wash up valve and open to head. Drop plug and pump out with 5.7 bbs of KCL brine. Displace cement with 64.7 bbls of 6% KCI brine. (Total displacement is 70.4. bbls). Record maximum 354 units of gas while displacing. Bump plug with 1095psi over displacement pressure (2722psi total). No losses during cement job. Bleed off. Check floats. Cement in place at 04:45 hours. Begin waiting on cement and monitoring well. Flush, blow down and rig down cementing head and lines. Lay down cementing head. Clear and clean rig floor. Flush and blow down all mud pumps and pump lines, choke and choke lines, mud manifold and all mud lines, and fill and trip lines. Flush and washout stack. Pump out and clean trip tank. Start pumping mud and other fluids out to vac trucks for haul -off. Begin cleaning pits. Lay down mousehole. Remove and load off drip pan. Fuel camp generator. Fill camp water. Continue partial rig -down procedures and loading off and transporting of non - critical rig and third party equipment and facilities. Clean up location as transport loads are hauled away. Rig down flow nipple, riser, choke line, kill line, fill -up line and turnbuckles. Rig down accumulator lines and panic line. Rig up bridge cranes to BOP stack. Rig down standpipe manifold. Pick up BOP stack. Finish cleaning all pits and hauling off remaining fluids. Run control and electric lines out tubing head outlet. Set weight on slips. Rough cut 3 1/2" casing above slips and lay • down landing joints. Set stack on rack. Nipple down and remove BOP stack and spools. Rig down #3 mud pump. Make final clean cut on 3 1/2" casing. Run control lines through 3 1/2" packoff and terminate. Set and install packoff. Install Swagelok fittings around control lines. Run in lock -down pins. Test packoff to 5000psi. Nipple up 13 5/8" by 3 1/8" 5M tubing head adaptor to the 3 1/8" 5M tree, terminating control lines through the bottom flange. Set 2 -way check valve in tubing hanger. Fill tree with methanol and test to 5000psi. Install BPV. Install EXCAPE control line warning sign. Completion is to be done without a rig. Begin rig down and move of all Glacier No.1 rig modules, rig equipment, support trailers,/ communication equipment, camp trailers and camp accessory equipment to the GO7 location. Craig Silva and Harry Bleys rig down EPOCH's Rigwatch 8.7 system, gas system, Unit #6 computers and equipment, all external workstations, wireless network to camp, Starband Satellite system, rig site communications and unit power. Unit #6 is organized and prepared for moving to G07. • El EPOCH 15 1 6 • • (M') MARATHON OIL COMPANY KBU 14 -8 1 4.2. SURVEY RECORD Measured Vertical Rectangular Rectangular Closure Depth Inclination Azimuth TVD Section Coordinate Coordinate Closure Azimuth DLS ( +) N/S ( -) ( +) E/W ( -) Tie in 173 0.00 0.00 173.00 0.00 0.00 0.00 219 0.23 343.51 219.00 0.06 0.09 -0.03 0.09 343.51 0.80 339 0.53 328.92 339.00 0.42 0.79 -0.38 0.88 334.38 0.26 458 0.80 327.21 457.99 0.93 1.96 -1.12 2.26 330.42 0.23 578 0.90 314.78 577.98 1.37 3.33 -2.24 4.01 326.12 0.17 696 0.32 9.98 695.97 1.81 4.31 -2.84 5.16 326.63 0.65 820 0.35 314.48 819.97 2.17 4.92 -3.05 5.78 328.20 0.25 946 0.44 357.04 945.96 2.60 5.67 -3.35 6.58 329.43 0.24 1073 0.43 8.68 1072.96 3.41 6.63 -3.30 7.40 333.52 0.07 1197 0.47 347.83 1196.96 4.16 7.58 -3.34 8.29 336.24 0.14 1324 0.40 329.93 1323.95 4.68 8.48 -3.67 9.24 336.59 0.12 1452 0.48 334.36 1451.95 5.12 9.35 -4.13 10.22 336.18 0.07 1559 0.47 354.27 1558.95 5.66 10.19 -4.36 11.08 336.81 0.15 1622 1.37 21.30 1621.94 6.58 11.15 -4.12 11.88 339.73 1.55 1685 3.19 33.47 1684.89 9.06 13.31 -2.88 13.62 347.81 2.97 1749 4.93 36.72 1748.72 13.58 17.00 -0.25 17.00 359.16 2.74 1812 7.06 37.18 1811.37 20.16 22.26 3.71 22.56 9.46 3.38 1875 9.27 37.45 1873.73 29.11 29.37 9.14 30.76 17.28 3.51 1937 10.82 37.36 1934.78 39.92 37.96 15.70 41.08 22.47 2.50 2000 12.59 37.90 1996.47 52.69 48.08 23.51 53.52 26.06 2.81 2063 14.62 38.29 2057.70 67.50 59.74 32.66 68.08 28.66 3.23 2125 16.93 38.71 2117.36 84.34 72.93 43.15 84.74 30.61 3.73 2187 18.26 38.45 2176.45 103.07 87.58 54.84 103.33 32.05 2.15 2251 19.72 37.71 2236.97 123.88 103.97 67.68 124.06 33.06 2.31 2314 21.68 37.69 2295.90 146.14 121.59 81.29 146.27 33.77 3.11 2377 21.67 37.60 2354.45 169.40 140.02 95.51 169.49 34.30 0.06 2440 21.86 36.87 2412.95 192.76 158.62 109.64 192.82 34.65 0.52 EPOCH 16 M � • II ( ARM'°"` MARATHON OIL COMPANY KBU 14 -8 Vertical Rectangular Rectangular Closure Measured Inclination Azimuth TVD Coordinate Coordinate Closure DLS Section Azimuth Depth ( +) N/S ( -) ( +) ENV ( -) (ft) (deg) (deg) (ft) (ft) (ft) (ft) (ft ) (deg) ( deg /100 ft) 2504 23.18 34.88 2472.07 217.26 178.48 123.99 217.32 34.79 2.38 2567 23.86 34.37 2529.84 242.40 199.17 138.28 242.47 34.77 1.13 2631 23.84 35.98 2588.38 268.27 220.32 153.18 268.34 34.81 1.02 2694 23.97 36.59 2645.97 293.80 240.90 168.29 293.86 34.94 0.44 2757 23.85 36.19 2703.56 319.33 261.45 183.44 319.39 35.05 0.32 2820 23.92 35.42 2761.17 344.84 282.14 198.36 344.85 35.11 0.51 2883 24.10 36.49 2818.72 370.47 302.89 213.41 370.52 35.17 0.75 2945 24.17 36.37 2875.30 395.82 323.29 228.47 395.87 35.25 0.14 3008 24.88 35.55 2932.61 421.97 344.46 243.82 422.02 35.29 1.25 3071 24.79 36.01 2989.79 448.43 365.92 259.29 448.48 35.32 0.34 3134 25.38 35.28 3046.85 475.14 387.63 274.86 475.19 35.34 1.06 3198 25.47 35.32 3104.65 502.62 410.05 290.73 502.66 35.34 0.14 3261 25.29 35.40 3161.57 529.62 432.08 306.36 529.67 35.34 0.29 3324 25.20 36.49 3218.55 556.48 453.83 322.13 556.53 35.37 0.75 3387 25.36 36.98 3275.52 583.39 475.39 338.22 583.43 35.43 0.42 3451 25.19 37.13 3333.39 610.71 497.20 354.69 610.74 35.50 0.28 3514 24.68 37.25 3390.52 637.26 518.34 370.76 637.29 35.58 0.82 3577 25.16 37.28 3447.65 663.80 539.45 386.85 663.83 35.65 0.76 3640 26.21 35.90 3504.43 691.10 561.38 403.12 691.13 35.68 1.92 3704 26.40 35.83 3561.80 719.47 584.36 419.74 719.49 35.69 0.30 3766 26.02 36.00 3617.42 746.85 606.54 435.80 746.87 35.70 0.62 3830 26.11 35.70 3674.92 774.97 629.33 452.27 774.99 35.70 0.25 3893 25.83 35.92 3731.55 802.56 651.71 438.41 802.58 35.71 0.47 3956 25.59 35.88 3788.32 829.89 673.84 484.44 829.91 35.71 0.38 4017 25.29 36.32 3843.40 856.09 695.02 499.88 856.11 35.72 0.58 4081 25.59 35.98 3901.20 883.58 717.22 516.09 883.60 35.74 0.52 4146 25.67 35.85 3959.80 911.70 739.99 532.59 911.72 35.74 0.15 4209 25.46 36.47 4016.63 938.88 761.94 548.63 938.90 35.76 0.54 4272 25.66 36.62 4073.47 966.07 783.77 564.81 966.08 35.78 0.33 El EPOCH 17 • . • M MARATHON OIL COMPANY KBU 14 -8 Rectangular Rectangular Measured Inclination Azimuth TVD Vertical Coordinate Coordinate Closure Closure DLS Depth Section ( +) N/S ( -) ( +) E/W ( -) Azimuth (ft ) (deg) (deg) (ft) (ft ) (ft ) (ft ) (ft ) (deg) ( deg /100 ft) 4336 25.70 36.03 4131.15 993.80 806.12 581.24 993.82 35.79 0.40 4398 25.65 36.37 4187.02 1020.66 827.80 597.11 1020.68 35.80 0.25 4462 25.47 35.81 4244.76 1048.27 850.11 613.37 1048.29 35.81 0.47 4525 25.36 36.58 4301.66 1075.31 871.93 629.34 1075.33 35.82 0.55 4587 25.41 36.66 4357.68 1101.89 893.26 645.19 1101.90 35.84 0.10 4651 25.41 36.81 4415.49 1129.35 915.27 661.62 1129.36 35.86 0.10 4713 25.24 36.79 4471.53 1155.87 936.51 677.51 1155.88 35.88 0.27 4775 25.17 36.72 4527.63 1182.27 957.66 693.31 1182.28 35.90 0.12 4839 24.66 36.46 4585.67 1209.23 979.31 709.38 1209.24 35.92 0.82 4902 24.71 36.68 4642.91 1235.54 1000.44 725.05 1235.55 35.93 0.17 4966 24.46 37.09 4701.11 1262.16 1021.74 741.03 1262.17 35.95 0.47 5028 24.24 36.84 4757.59 1287.73 1042.16 756.41 1287.73 35.97 0.39 5092 24.13 37.13 4815.98 1313.94 1063.10 772.18 1313.95 35.99 0.25 5156 23.64 37.53 4874.50 1339.85 1083.71 787.89 1339.85 36.02 0.81 5220 23.45 38.09 4933.17 1365.40 1103.91 803.57 1365.41 36.05 0.46 5283 22.93 38.59 4991.08 1390.19 1123.37 818.95 1390.19 36.09 0.88 5345 21.91 38.76 5048.39 1413.82 1141.83 833.73 1413.82 36.14 1.65 5409 20.47 37.33 5108.06 1436.93 1160.04 847.99 1436.94 36.17 2.39 5472 19.15 36.42 5167.33 1458.28 1177.11 860.81 1458.28 36.18 2.15 5534 18.07 35.45 5226.09 1478.07 1193.13 872.42 1478.07 36.17 1.81 5598 16.77 36.38 5287.15 1497.23 1208.65 883.65 1497.23 36.17 2.08 5661 15.27 36.56 5347.70 1514.61 1222.64 893.98 1514.61 36.17 2.38 5792 13.76 37.10 5474.52 1547.44 1248.92 913.66 1547.44 36.19 1.16 5855 13.50 39.20 5535.75 1562.28 1260.60 922.83 1562.28 36.21 0.89 5917 12.06 41.14 5596.21 1575.95 1271.08 931.66 1575.96 36.24 2.42 5980 9.89 40.63 5658.05 1587.91 1280.15 939.52 1587.91 36.28 3.45 6043 9.26 38.55 5720.18 1598.36 1288.22 946.20 1598.37 36.30 1.14 Ell EPOCH 18 0 • 0 MRM MARATHON OIL COMPANY KBU 14 -8 Rectangular Rectangular Measured inclination Azimuth TVD Vertical Coordinate Coordinate Closure Closure DLS Depth Section Azimuth ( +) N/S ( -) ( +) ENV ( -) (ft) (deg) (deg) (ft) (ft) (ft ) (ft) (ft) (deg) ( deg /100 ft) 6106 7.90 39.16 5782.47 1607.75 1295.54 952.09 1607.76 36.31 2.16 6169 7.02 41.97 5844.94 1615.91 1301.76 957.40 1615.92 36.33 1.51 6232 6.51 41.60 5907.50 1623.29 1307.29 962.35 1623.30 36.36 0.81 6296 6.26 41.20 5971.10 1630.38 1312.63 967.05 1630.39 36.38 0.40 6359 4.88 40.83 6033.80 1636.47 1317.24 971.07 1636.49 36.40 2.19 6422 2.75 37.69 6096.66 1640.65 1320.46 973.74 1640.67 36.41 3.40 6485 0.74 4.18 6159.63 1642.51 1322.07 974.70 1642.53 36.40 3.45 6549 0.41 295.49 6223.62 1642.82 1322.58 974.52 1642.83 36.38 1.10 6612 0.58 308.34 6286.62 1642.79 1322.87 974.07 1642.80 36.37 0.32 6738 0.61 296.49 6412.61 1642.70 1323.57 972.97 1642.71 36.32 0.10 6864 0.73 292.31 6538.61 1642.40 1324.17 971.62 1642.40 36.27 0.10 6990 0.70 292.98 6664.60 1642.03 1324.78 970.17 1642.03 36.22 0.02 7115 0.76 293.89 6789.59 1641.68 1325.41 968.71 1641.68 36.16 0.05 7242 1.00 296.87 6916.57 1641.32 1326.25 966.95 1641.32 36.10 0.19 7368 0.95 285.31 7042.55 1640.77 1327.02 964.96 1640.78 36.02 0.16 7495 1.04 297.94 7169.53 1640.24 1327.84 962.93 1640.24 35.95 0.19 7620 1.13 297.47 7294.51 1639.89 1328.94 960.84 1639.91 35.87 0.07 7745 1.38 300.22 7419.48 1639.55 1330.27 958.44 1639.58 35.77 0.21 7872 1.17 299.39 7546.45 1639.24 1331.67 955.99 1639.29 35.67 0.17 7998 1.15 296.90 7672.42 1638.89 1332.88 953.74 1638.96 35.59 0.04 8023 1.22 295.58 7697.42 1638.80 1333.11 953.28 1638.87 35.57 0.30 * *8072 1.22 295.58 7746.41 1638.61 1333.56 952.34 1638.69 35.53 0.00 * *Projected El EPOCH 19 • • • (M MARATHON OIL COMPANY KBU 14 -8 4.3. MUD RECORD Contractor: MI Drilling Fluids Mud Types: Gel Spud Mud 173' - 1510'; 6% KCI Flo -Pro NT 1510' - 8072' DATE MD / TVD MW VIS PV YP GELS FL FC SOL OIL /H20 SD MBT pH AIk CI- Ca+ 5/11/08 173 / 173 9.0 85 17 13 8/15/17 11 5 4.0 0/96 0.4 13.0 11.0 0.75 2000 240 5/12/08 1000 / 1000 9.6 56 14 15 8/19/21 17.5 2 9.0 0/91 0.5 17.5 9.3 0.15 1100 80 5/12/08 1510 / 1510 9.6 57 14 18 10/20/21 10.2 2 8.5 0/92 0.5 17.5 10.0 0.45 1000 60 5/13/08 1510 / 1510 9.6 55 14 17 8/18/19 10 <2 9.0 0/91 0.33 17.5 9.5 0.35 900 40 5/14/08 1510 / 1510 9.1 52 7 21 6/10/11 7.6 <1 3.6 0/96.4 0.0 0.0 9.5 0.40 32000 60 5/15/08 1700 / 1700 9.1 52 12 18 7/10/ 7.4 1 6.0 0/94 Tr 1.0 9.2 0.30 33000 80 5/15/08 2100 / 2093 9.1 51 13 17 8/11/11 7 1 6.0 0/94 0.33 1.5 9.1 0.33 32000 80 5/16/08 2936 / 2863 9.1 46 13 18 8/12/13 6.8 1 6.0 Tr /94 0.33 2.0 9.2 0.30 30000 80 5/16/08 3632 / 3497 9.1 50 12 21 11/14/15 7 1 6.0 1/94 0.33 2.0 8.8 0.20 28000 80 5/17/08 4262 / 4064 9.2 49 13 18 10/14/14 6.8 1 6.5 1/93 0.33 3.0 9.0 0.25 30000 80 5/17/08 4262 / 4064 9.2 50 14 17 10/13/14 6.8 1 6.5 1/93 0.25 3.0 8.8 0.20 30000 80 5/18/08 5215 / 4929 9.2 49 13 19 10/14/15 7.8 1 6.5 2/92 0.25 3.5 8.9 0.25 27000 240 5/18/08 5500 / 5194 9.2 52 13 24 11/14/15 6.8 1 6.5 3/91 0.25 4.0 9.7 0.40 27000 80 5/19/08 5748 / 5432 9.3 51 14 23 10/14/15 7.0 1 6.5 3/91 0.25 6.0 9.2 0.40 25000 150 5/19/08 5748 / 5432 9.3 52 14 23 10/14/15 7.0 1 6.5 3/91 0.25 6.0 9.1 0.35 25000 140 5/20/08 5748 / 5432 9.4 52 15 22 10/15/16 7.0 1 7.6 3/90 0.25 8.0 8.9 0.25 25000 160 5/21/08 5776 / 5460 9.4 51 14 22 9/14/16 7.0 1 7.0 2/91 0.25 7.0 9.6 0.40 25000 120 5/22/08 6250 / 5925 9.4 50 13 19 7/11/12 6.2 1 7.0 3/90 Tr 7.0 9.5 0.50 27000 80 5/22/08 6975 / 6650 9.3 51 15 22 8/13/14 5.4 1 6.5 3/91 Tr 6.0 9.7 0.50 29000 100 5/23/08 7800 / 7474 10.1 51 17 23 9/14/16 6.0 1 10.0 4/87 Tr 7.0 9.6 0.45 30000 80 5/23/08 8072 / 7746 10.1 50 16 23 9/14/15 5.4 1 11.0 4/85 Tr 7.0 9.7 0.50 29000 80 5/24/08 8072 / 7746 10.3 53 15 25 10/15/16 5.8 1 10.5 4/86 Tr 8.0 9.3 0.40 29000 80 5/25/08 8072 / 7746 10.4 60 18 28 9/14/15 5.4 1 11.5 4/85 Tr 9.0 9.7 0.45 27000 60 5/26/08 8072 / 7746 10.5 70 21 27 11/17/ 5.4 1 12.0 3/85 0.65 7.5 9.6 0.25 23500 160 5/27/08 Surface 8.65 28 1 1 KCL Brine 8.5 30000 El EPOCH 20 0 • 0 ("`"m °) MARATHON OIL COMPANY KBU 14 -8 4.4. BIT RECORD BIT SIZE JETS/ AVE WOB PP NO. TYPE S/N TFA IN OUT FT HRS ROP Lo —Avg — Hi RPM Lo — Avg CONDITION — Hi 1 17 5 HCC 6025019 3x18 173 173 0 1.90 n/a n/a n/a n/a 1 -1 -NO A E 1 NO BHA (Old) CR -1 1x16cj Clean out conductor only 2 HCC 3x18 0.3 -8.7— 501 —1131 — RR 16.0 MX -1 6057166 1x16cj 173 1510 1337 11.63 140.7 20.7 58 1700 1- 1- WT- A- E- 1 -NO -TD 3 12.25 HCC 7013741 6x13 1510 5748 4238 40.51 126.3 0.4 — 9.4 — 65 190 —1020 — 1- 1- LT- N- X- 1 -WT -TD H C R506Z 29.5 1387 4 8.5 HCC 7110657 5x13 5748 8072 2324 25.90 120.3 0.9 — 12.7— 63 221 — 1703 — 0- 0- NO- A- X- 1 -NO -TD HCM605 45.1 2283 5 8.5 HCC 6005345 Open 8702 8702 0 0 n/a n/a n/a n/a NG MX -09DX Clean out run only I 1 €l EPOCH 21 DEPTH (FT) 0 0 0 0 0 0) 0 CJ1 0 CO N) 0 O 0 0 0 0 0 0 • O O O O 0 0 0 0 0 O O O O O O O O O O 5/9/2008 ♦ - 5/10/2008 - • C3 r- 5/11/2008 - 5/12/2008 - ZI m 5/13/2008 - • (/) n 1. :\ 5/14/2008 - I y °3 5/15/2008 - D 2 tit 5/16/2008 - Z 0 5/17/2008 - r • co) 0 K %/18/2008 - a D m x y Z co C m 5/19/2008 - • A 2 O. C' CO 0 C m 1 5/20/2008 - • - x aD 5/21/2008 - 5/22/2008 - 5/23/2008 - 5/24/2008 - • f f w N CT) N A o 5/25/2008 - • o m ( T, o m 0 N 5/26/2008 - • N 5/27/2008 - • Marathon Oil Field y EPOCH Kenai Gas Field DAILY WELLSITE REPORT • KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd DATE May 11, 2008 DEPTH 173 PRESENT OPERATION Making up directional bottom hole assembly TIME 24:00 YESTERDAY 173 24 HOUR FOOTAGE 0 CASING INFORMATION 20" @ 173' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 1 (Old) 17.5 HCC MX -1 6025019 3x18 1x16cj 173 173 0 1.90 1- 1- NO- A- E -1 -NO -BHA Conductor clean out only DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 173 / 173 TVD MW 9.0 VIS 85 PV 17 YP 13 FL 11.0 Gels 8/15/17 CL- 2000 FC 5 SOL 4.0 SD 0.4 OIL 0/96 MBL 13.0 pH 11.0 Ca+ 240 CCI MWD SUMMARY INTERVAL TO TOOLS fa GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 0 @ 0 @ 0 TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) @ @ CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG 0 / 0 PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Continued Glacier No.1 rig up operations. Rig up Topdrive slide, service loop and kelly hose. Adjust compensator and grabber box. Install bails and elevators. Rig up tongs and spanners. Prep conductor. Install starter head and test to 500psi. Rig up mud manifold. Install kill, bleeder and fill - up hoses. Pick up safety valve and handling tool. Rig up kill line to conductor. Install 4" valves on starter head. Nipple up diverter stack. Rig up DAILY accumulator lines, bell nipple, flowline extension and knife valve. Nipple up and chain down diverter line. Install and adjust tumbuckles. Pick up ACTIVITY and set mousehole. Install back -up bleeder, fill -up and trip tank lines. Rig up manual trip tank gauge. Bolt flow plate. Set pipe racks. Spot and SUMMARY berm Hansen tank. Unload trailers. Test run Topdrive. Test run all mud pumps. Hook up geolograph line. Test diverter. Perform accumulator drawdown test. Test gas alarms, PVT and flow line sensor. Pick up, drift, make up and stand back 25 stands (1576') of 5" drill pipe. Pick up, drift, make up and stand back 11 stands of 5" HWDP plus jars. Make up short clean out assembly with 17.5" bit. Run in conductor and tag top of fill at 28'. Break circulation. Clean out conductor fill from 28' to 170'. Continue to circulate and wash clean. Pull out of hole from 170'. Pick up and make up directional bottom hole assembly with 16.0" bit. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW: 585 REPORT BY Craig Silva • Marathon Oil Company Kenai Gas Field DAILY WELLSITE REPORT EPOCIE[ • KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd DATE May 12, 2008 DEPTH 1510 PRESENT OPERATION Service rig at shoe on wiper trip TIME 24:00 YESTERDAY 173 24 HOUR FOOTAGE 1337 CASING INFORMATION 20" @ 173' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA 339 0.53 329.92 339.00 1452 0.48 334.36 1451.95 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 2RR 16.0 HCC MX -1 6057166 3x18 1x16cj 173 1510 1337 11.63 In Hole DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 435.6 @ 196 9.7 @ 203 140.7 93.9 FT /HR SURFACE TORQUE 8826 @ 1021 787 @ 647 3172.4 2761.8 AMPS WEIGHT ON BIT 20 @ 1376 0 @ 1448 8.7 10.0 KLBS ROTARY RPM 66 @ 1231 42 @ 1002 53.8 58.3 RPM PUMP PRESSURE 1700 @ 1506 501 @ 332 1130.6 1448.0 PSI DRILLING MUD REPORT DEPTH 1510 / 1510 TVD MW 9.6 VIS 57 PV 14 YP 18 FL 10.2 Gels 10/20/21 CL- 1000 FC 1 SOL 8.5 SD 0.5 OIL 0/92 MBL 17.5 pH 10.0 Ca+ 60 CCI MWD SUMMARY INTERVAL TO 0 TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 11 @ 1340 0 @ 203 3.5 TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 2257 @ 1340 7 @ 203 689.6 CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY DAILY Wiat on cross -over before final make up of directional assembly. Pick up, make up and run in hole directional assembly (crossover, shock sub, ACTIVITY flex collars, MWD, pony collar, stabilizer, motor, bit). Drill from 173' to 1189'. Replace hose on auxiliary hydraulics. Drill from 1189' to 1510'. SUMMARY Circulate bottoms up. Check for flow. Fill trip tank. Pull out of hole from 1510' to 155' on wiper trip. (Pull SLM with no corrections). Service rig (crown, blocks, carrier, drivelines). Change out and pump up compensator hose. Purge mud manifold sensor line. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2025 RW: 585 REPORT BY Craig Silva • I 1 Marathon Oil Company Kenai Gas Field DAILY WELLSITE REPORT EPOCF[ KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd • DATE May 13, 2008 DEPTH 1510 PRESENT OPERATION Preparing to nipple down after cementing surface casing TIME 24:00 YESTERDAY 1510 24 HOUR FOOTAGE 0 CASING INFORMATION 13 3/8" @ 1500' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA 1510 ) Projection 0.48 334.36 1509.95 1510 ( Projection) BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 2RR 16.0 HCC MX -1 6057166 3x18 1x16cj 173 1510 1337 11.63 1- 1- WT- A- E- 1 -NO -TD Surface Csg Pt DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 1510 / 1510 TVD MW 9.6 VIS 55 PV 14 YP 17 FL 10.0 Gels 8/18/19 CL- 900 FC 2 SOL 9.0 SD 0.33 OIL 0/91 MBL 17.5 pH 9.5 Ca+ 40 CCI MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 4 @ WG at 1510 0 @ circ out after pump cement 1 circ and cond TRIP GAS 2 CUTTING GAS @ @ WIPER GAS 4 • CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) @ @ CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Finish various rig service and maintenance. Run back in hole from 155' (inside conductor) to 1442'. Wash down from 1442' to bottom at 1510'. Circulate bottoms up. Record 4 units of wiper gas. Continue to circulate, clean and condition hole (for 2 bottoms up total). Check for flow. Pull out of hole with 5" drill pipe and 5" HWDP to top of directional tools at 155'. Pull, break and lay down directional tools (crossovers, shock sub, flex collars, MWD, pony collar, stabilizer, motor, bit). Lay down bit handling tools. Clear and clean rig floor. Change out from short to long bails. Lay down pipe elevators. Install pick -up line. Move breakout tongs to drillers side and install correct tong head. Install fill -up line. Install casing elevators. Rig up casing tongs and tall snub post. Remove rotary bushings and rig up casing spider slips. Tie one tugger line back in derrick for pipe pick -up and second tugger line back to hang casing tongs. Rig up Weatherford power tongs. Make up EZ -turn valve onto casing swage for safety valve and function check. Stage centralizers and lock rings on rig floor. Clean casing threads of each shoe track joint before make up. Hold pre -job meeting with Weatherford hands on procedures and safety for running surface casing. Pick up, Bakerlok, make up and run in hole 13 3/8" shoe track (shoe joint, spacer joint, sting -in float collar) and run in hole. Check floats. Continue running in hole with 13 3/8" casing as per Marathon to 1490'. Wash down from 1490' and set shoe at 1500'. Rig down and load off all Weatherford casing running equipment. Rig down fill up line. Clear rig floor. DAILY Change out bails, elevators, tongs and snubbing post to handle and run 5" drill pipe. Prep pipe spinner. Make up inner string tools (stab -in sub, 5' ACTIVITY pup and centralizer) on 5" drill pipe. Rig up false rotary for running 5" drill pipe inside 13 3/8" casing. Run in hole with 5" drill pipe and stab -in sub to SUMMARY top of float collar at 1456'. Rig up cementing line. Tag and sting into float collar and space out. Circulate and condition hole. Record 2 units of trip gas. Rig up to cementing lines. Hold pre -job meeting with BJ cementers on safety and procedures for cement job. Pump 40 bbls of 8.4ppg Mud Clean II (with 1 gallon red dye added) using rig pumps. Switch over to BJ pumping unit. Pump 5.4 bbls of water and pressure test cement lines to 2972psi. Bleed off pressure. Batch cement to 12.0ppg. Original plan to mix and pump 208.23 bbls of 12.0ppg cement slurry (471 sacks Type I LW -6 cement and accelerator additives to 115.79 bbls of mix water for yield of 2.483 cu ft per sack). Pump 164 bbls of slurry and observe cement at surface. Shut down cement delivery and mix what is left of cement in surge tank. Pump 169.0 total bbls of 12.0ppg cement slurry and then follow with 23.2 bbls of 9.6ppg mud to displace. Check floats. Cement in place. No losses during pumping with good excess cement retums to surface. Note 27 bbls of cement returns pumped into cellar. Cement returns treated with citric acid retarder. Rig down and flush cementing head and lines and continue rigging down BJ. Unsting from float collar. Float holding. Pull one stand to 1396' and rig up to pump ball down pipe. Pump wiper ball down to clear drill pipe of any residual cement. Treat all mud returns for traces of cement product. Dump 70 bbls of returns during and after • pumping ball. Finish pumping. Rig up false rotary table and pull out of hole from 1396'. Break and lay down stab -in assembly (pup, stab -in tool, centralizer). Rig down false rotary. Flush, re -flush and drain 20" by 13 3/8" annulus, flowline and mud lines. Pull plate. Clear and clean rig floor and cellar. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW:585 REPORT BY Craig Silva Marathon Oil Company Kenai Gas Field DAILY WELLSITE REPORT E • KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd DATE May 14, 2008 DEPTH 1510 PRESENT OPERATION Finish testing BOPE TIME 24:00 YESTERDAY 1510 24 HOUR FOOTAGE 0 CASING INFORMATION 13 3/8" @ 1500' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 1510 / 1510 TVD MW 9.1 VIS 52 PV 7 YP 21 FL 7.6 Gels 6/10/11 CL- 32000 FC 1 SOL 3.6 SD 0.0 OIL 0/96 MBL 0.0 pH 9.5 Ca+ 60 CCI MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE ID DITCH GAS @ @ TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) @ @ CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG PENTANE (C -5) @ @ HYDROCARBON SHOWS . INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Pump out and haul off spud mud and begin cleaning pits. Nipple down and remove diverter line and knife valve. Disconnect turnbuckles to stack and secure out of the way. Nipple down and rig down fill -up line, bleeder line, trip tank line, flow line, kill line, 2" valve, actuator and scaffolding. Remove and lay down mousehole. Change out HCR valve on stack. Make rough cut on 13 3/8" casing and lay down 10' section. Nipple down bell nipple. Nipple down and move flowline extension aside. Nipple down, set in rack and load off diverter stack. Continue cleaning pits. Begin loading 5" drill pipe for next hole section on pipe racks. Prepare to lift off starter head. Change bails. Secure to bridge crane. Attempt to remove starter head, but unable to pull free. Make cut on 20" conductor and lay down section with starter head attached. Make final dressed cut on 13 3/8" casing DAILY and lay down (7.10') section. Install 13 3/8" slip -lock connection by 13 5/8" 5M flanged multi -bowl wellhead and test to 1800psi for 10 minutes. ACTIVITY Finish cleaning pits and begin building Flo -Pro mud system. Install flowline extension and DSA spacer spool. Install BOP stack. Pick up annular SUMMARY with bridge crane. Put doublegate on rack, spot under annular and nipple up. Rack, stack, bolt up and hammer up mud cross and single gate to the double gate and annular preventer. Install choke hardline and adaptor spool. Install check valve and kill line. Install quick connects on annular. Make up connects to blind rams. Nipple up pitcher nipple and flow line adaptor. Install bleeder lines. Install trip tank hose. Install trip tank valve and actuator. Chain up turnbuckles to stack and level out. Rig up panic line. Prepare to test BOPE. Pull wear ring. Set test plug. Rig up testing equipment. Test all gas alarms. Test all BOPE to 250psi Low / 3000psi High for 12 minutes (( #1: upper topdrive, check valve, annular, dart valve, CMVs 1,10,11,12) (Function pipe rams) ( #2: pipe rams, safety valve, lower topdrive, outside kill, CMVs 6,8,9) ( #3: inside kill, CMVs 2,5,7) (#4: HCR) ( #5: manual choke) (Perform accumulator drawdown test) (Function blinds) ( #6: blind rams, CMVs 3,4)). Continue building Flo -Pro mud system. Test PVT alarms. Test casing to 1500psi for 40 minutes. Rig down testing equipment. Pull test plug. Set in wear ring. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW: 585 • REPORT BY Craig Silva Marathon Oil Company EPOCIEI Kenai Gas Field DAILY WELLSITE REPORT 0 KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd DATE May 15, 2008 DEPTH 2305 PRESENT OPERATION Drilling TIME 24:00 YESTERDAY 1510 24 HOUR FOOTAGE 795 CASING INFORMATION 13 3/8" @ 1500' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 1559 0.47 354.27 1558.95 1749 4.93 036.72 1748.72 SURVEY DATA 1937 10.82 037.62 1934.78 2125 16.93 038.71 2117.36 2314 21.68 037.69 2295.90 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 3 12.25 HCC HCM 506Z 7013741 6x13 1510 795 5.66 In Hole DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 343.7 @ 1520 26.3 © 1867 157.5 149.9 FT /HR SURFACE TORQUE 4464 @ 2278 0 @ Sliding 1929.9 3124.3 AMPS WEIGHT ON BIT 14 @ 1614 0.7 @ 2207 4.7 5.5 KLBS ROTARY RPM 63 @ 1929 0 @ Sliding 60.2 51.1 RPM PUMP PRESSURE 1075 @ 2042 190 @ 1641 814.8 939.9 PSI DRILLING MUD REPORT DEPTH 2100 / 1993 TVD MW 9.1 VIS 51 PV 13 YP 17 FL 7.0 Gels 8/11/11 CL- 32000 FC 1 SOL 6.0 SD 0.33 OIL 0/94 MBL 1.5 pH 9.1 Ca+ 80 CCI 0 MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 15 @ 1762 1 @ 1513 7.2 TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY(ppm) SURVEY METHANE (C -1) 3072 @ 1762 200 @ 1513 1425.5 CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG 2 / 5 PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Install elevators. Pick up and prepare pipe handling tools on rig floor. Pick up, drift, make up, run in hole, pull out standing back in the derrick and strap two 42 joint batches (84 joints total) of pre- staged 5" drill pipe off the pipe racks. Pick up, make up and run in hole new directional bottom hole assembly (bit, motor, stabilizer, short NMDC, MWD collar). Orient MWD tools. Make up and run in hole remaining directional tools (2 DAILY NMCSDP flex joints, crossover). Make up crossover to first stand of HWDP from derrick and run in hole with HWDP and jars to 794'. Strap, pick ACTIVITY up, drift, make up, run in hole 18 more joints (9 stands) of pre- staged and prepared 5" drill pipe off the pipe racks to 1361'. Wash down with pipe SUMMARY out of derrick from 1361' and tag cement at 1446'. Drill cement from 1446' and tag float collar at 1456'. Drill out float equipment, remaining shoe tract (cement, shoe at 1500', rathole to 1510') and 20' of new hole from 1510' to 1530'. Circulate bottoms up. Displace spud mud with a 43 bbl Hi- Vis sweep followed by new 9.1ppg Flo -Pro mud. Perform Formation Integrity Test to 13.0ppg EMW. Drill ahead (sliding and rotating) from 1530' to 2305'. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW: 585 REPORT BY Craig Silva • Marathon Oil Field y EPOCIE[ Kenai Gas Field DAILY WELLSITE REPORT • KBU 14 -8 El REPORT FOR John Nicholson / Dan Byrd DATE May 16, 2008 DEPTH 3632 PRESENT OPERATION Wiper Trip to shoe (working on clutch) TIME 24:00 YESTERDAY 2305 24 HOUR FOOTAGE 1327 CASING INFORMATION 13 3/8" @ 1500' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 2377 21.67 037.60 2354.45 2631 23.84 035.98 2588.38 SURVEY DATA 2945 24.17 036.37 2875.30 3261 25.29 035.40 3161.57 3514 24.66 037.35 3390.52 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 3 12.25 HCC HCM506Z 7013741 6x13 1510 2122 16.68 In Hole DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 205.7 @ 3514 21.2 @ 3001 138.9 169.2 FT /HR SURFACE TORQUE 7150 @ 3456 761 @ 2518 3907.5 4341.2 AMPS WEIGHT ON BIT 22 @ 2464 0.7 @ 2335 7.7 9.3 KLBS ROTARY RPM 65 @ 2919 0 @ 2877 53.3 61.5 RPM PUMP PRESSURE 1384 @ 3538 783 @ 2832 1044.4 933.4 PSI DRILLING MUD REPORT DEPTH 3632 / 3497 TVD MW 9.1 VIS 50 PV 12 YP 21 FL 7.0 Gels 11/14/15 CL- 30000 FC 1 SOL 6.0 SD 0.33 OIL 1/94 MBL 2.0 pH 8.8 Ca+ 80 CCI ill MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 20 @ 3461 2 © 3136 7.4 TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 4091 @ 3461 417 @ 3136 1485.9 CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Drill ahead (sliding and rotating) from 2305' to 3569'. Circulate bottoms up in preparation for wiper trip. Observe minor lost circulation (7 bbls). DAILY Drill from 3569' to 3632'. Check for flow and monitor well. Observe slow loss (4 bbls per hour). Pump and spot 46 bbl LCM pill outside lower ACTIVITY string. Monitor well. Observe well is static. Pull out of hole wet from 3632' to 2987'. (Note cuttings returns from 3592' to 3632' not lagged up SUMMARY before pulling out of hole). Pump dry job. Continue pulling out of hole from 2987' to 1487' on wiper trip to 13 3/8" shoe. Lube and service rig (Topdrive, carrier, crown and blocks). Change out elevators. Run back in hole from 1487' to 2180'. Hear odd noise from clutch while running in. Pull back out of hole from 2180' to 1487' to troubleshoot clutch problem. Begin replacing clutch plates. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW: 585 REPORT BY Craig Silva • Marathon Oil Field y 1 � Kenai Gas Field DAILY WELLSITE REPORT OCH HI III KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd DATE May 17, 2008 DEPTH 4283 PRESENT OPERATION Drilling TIME 24:00 YESTERDAY 3632 24 HOUR FOOTAGE 651 CASING INFORMATION 13 3/8" @ 1500' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 3577 25.16 037.28 3447.65 3766 26.02 036.00 3617.42 SURVEY DATA 3956 25.59 035.88 3788.32 4146 25.67 035.85 3959.84 4272 25.66 036.62 4073.51 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 3 12.25 HCC HCM506Z 7013741 6x13 1510 2773 23.06 In Hole DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 193.7 @ 4281 9.8 @ 4077 123.9 178.7 FT /HR SURFACE TORQUE 7972 @ 4023 774 @ 4086 5335.7 5363.9 AMPS WEIGHT ON BIT 25 @ 4007 1 @ 3690 11.8 16.0 KLBS ROTARY RPM 67 @ 3742 54 @ 4023 59.6 64.2 RPM PUMP PRESSURE 1387 @ 4181 744 @ 3688 1013.9 1045.8 PSI DRILLING MUD REPORT DEPTH 4262 / 4064 TVD MW 9.2 VIS 50 PV 14 YP 17 FL 6.8 Gels 10/13/14 CL- 30000 FC 1 SOL 6.5 SD 0.25 OIL 1/93 MBL 3.0 pH 8.8 Ca+ 80 CCI e l MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 66 @ 4065 5 @ 4085 26.6 TRIP GAS CUTTING GAS @ @ WIPER GAS 33 CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 13249 @ 4065 1068 @ 4085 5315.8 CONNECTION GAS HIGH ETHANE (C -2) 8 @ 3973 0 @ 4274 0.2 AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG 10 / 66 PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Finish changing out friction plate on clutch. Run back in hole from 1487' to 3569'. Wash down from 3569' to 3632' (with no fill). Drill from 3632' to DAILY 4262'. Report failure of MWD tool. Circulate bottoms up. Check for flow. Pull out of hole wet from 4262' to 3947'. Pump dry job. Pull out of hole ACTIVITY from 3947' to top of bottom hole assembly at 794'. Pull and stand back HWDP and jars. Pull to 34' handling directional tools. Change out the SUMMARY crossover sub, 1 flex collar and MWD collar. (Note bit is not pulled through rotary table). Run back in hole with new bottom hole assembly from 34' to 801'. Test MWD tools. Continue running in hole on 5" drill pipe from 801' to 1494'. Slip 33' of drill line. Check crown -o- matic. Continue running in hole from 1494' to 4142'. Wash down from 4142' to 4262' (with no fill). Record 33 units of wiper gas. Drill ahead from 4262' to 4283'. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2525 RW: 585 REPORT BY Craig Silva • Marathon Oil Company EPOCH Kenai Gas Field DAILY WELLSITE REPORT • KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd DATE May 18, 2008 DEPTH 5671 PRESENT OPERATION Drilling TIME 24:00 YESTERDAY 4283 24 HOUR FOOTAGE 1388 CASING INFORMATION 13 3/8" @ 1500' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 4336 25.70 36.03 4131.18 4651 25.41 36.81 4415.53 SURVEY DATA 5028 24.24 36.84 4757.63 5409 20.47 37.33 5108.10 5661 15.27 36.56 5347.74 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 3 12.25 HCC HCM506Z 7013741 6x13 1510 4161 39.16 In Hole DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 168.0 @ 4533 19.6 @ 5616 100.9 76.3 FT /HR SURFACE TORQUE 10859 @ 4688 0 @ Sliding 6314.5 787.6 AMPS WEIGHT ON BIT 27 @ 5665 0.9 @ 5216 12.3 25.6 KLBS ROTARY RPM 69 @ 4424 0 @ Sliding 57.9 1.2 RPM PUMP PRESSURE 1368 @ 5643 832 @ 5065 1110.0 1299.8 PSI DRILLING MUD REPORT DEPTH 5500 / 5194 TVD MW 9.2 VIS 52 PV 13 YP 24 FL 6.8 Gels 11/14/15 CL- 27000 FC 1 SOL 6.5 SD 0.25 OIL 3/91 MBL 4.0 pH 9.7 Ca+ 80 CCI 0 MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 248 @ 4514 5 @ 4913 37.7 TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 49672 @ 4514 1045 @ 4913 7533.4 CONNECTION GAS HIGH ETHANE (C -2) 35 @ 4514 0 @ 2.0 AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG 10 / 24 PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Drill ahead (sliding and rotating) from 4283' to 4986'. Begin losing circulation after 4986'. Lose 24 bbls while circulating. Pick up and stop DAILY circulating. Lose another 17 bbls with pumps off before static losses are reduced to near zero and well is stabilized . Pump 50 bbl LCM pill with ACTIVITY Mix II added. Resume drilling. (Continue to lose circulation during initial pumping after the pill, but continue to add small spot amounts of LCM, SUMMARY and observe rate of loss decrease from 13 bbls /hr to zero over the succeeding 6 hours. Note net loss of 130 bbls in 24 hour report period). Drill ahead (sliding and rotating) from 4986' to 5671'. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 ML: 585 REPORT BY Craig Silva • Marathon Oil Company �I�� V� Kenai Gas Field DAILY WELLSITE REPORT El KBU 14 -8 iii REPORT FOR John Nicholson / Dan Byrd DATE May 19, 2008 DEPTH 5748 PRESENT OPERATION Rigging up to run 9 5/8" Casing TIME 24:00 YESTERDAY 5671 24 HOUR FOOTAGE 77 CASING INFORMATION 13 3/8" @ 1500' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA 5748 (Projection) 13.35 35.56 5432.03 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 3 12.25 HCC HCM506Z 7013741 6x13 1510 5748 4238 40.51 1- 1- LT- N- X- 1 -WT -TD Casing point DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 111.2 © 5726 21.4 @ 5705 67.0 96.4 FT /HR SURFACE TORQUE 9765 @ 5709 0 @ Sliding 6703.6 6600.2 AMPS WEIGHT ON BIT 29 @ 5680 3 @ 5705 13.5 16.8 KLBS ROTARY RPM 67 @ 5694 0 @ Sliding 65.5 64.4 RPM PUMP PRESSURE 1316 @ 5680 992 @ 5683 1178.3 1174.4 PSI DRILLING MUD REPORT DEPTH 5478 / 5432 TVD MW 9.3 VIS 51 PV 14 YP 23 FL 7.0 Gels 10/14/15 CL- 25000 FC 1 SOL 6.5 SD 0.25 OIL 3/91 MBL 6.0 pH 9.1 Ca+ 140 CCI MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE fp DITCH GAS 35 @ 5747 10 @ 5720 19.9 TRIP GAS CUTTING GAS @ @ WIPER GAS 29 CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 7147 @ 5747 2073 @ 5720 3971.6 CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ © HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Drill (sliding) from 5671' to 5680'. Pick up and ream before drilling ahead (rotating) to 5705'. Begin losing mud after 5680' (from zero losses to 16 bbls /hour). Pick up and briefly monitor mud loss. Pump half of a pre -made pill (23 bbls) of LCM pill with Mix II into the annulus and stop mud losses. Continue drilling ahead (rotating) from 5705' to 5748'. Circulate bottoms up. Fill trip tank. Pull out of hole from 5748' to 4205' on wiper trip. Monitor well. Run back in hole from 4205' and tag tight spot at 5368'. Kelly up and ream and wash from 5368' to 5388'. Continue running in hole from 5388' to 5622' (working through 2 minor tight spots). Wash down from 5622' (and ream through very minor tight spots) to 5748' (with no fill). Circulate bottoms up. Record 29 units of wiper gas. Circulate, clean and condition hole. (Observe mud loss of 21 bbls per hour while circulating). Monitor well. Pump and spot on bottom a 50 bbl LCM pill (made with 50ppb 10 -20 -250 grade Safecarb, 20ppb G -Seal, 6ppb fine and medium Mix II). Pull out of hole wet (SLM) from 5748' to 5377', working through 6 minor tight spots along the way. Pump dry job. Fill trip tank. Pull out of hole from 5377' DAILY to 1480' (inside shoe). Fill trip tank and monitor well. Lose approximately 1 bbl /hour of mud while pulling out. Continue to pull out hole from 1480' to ACTIVITY top of bottom hole assembly at 801'. Pull and stand back HWDP and jars to 141'. Pull, break and lay down directional assembly (crossover sub, NM SUMMARY flex joints, NM crossover, MWD collar, short NMDC, string stabilizer, mudmotor and bit). Rig down, lay down and organize handling tools. Clean rig floor and cellar. Pull wear bushing. Hold pre -job meeting on changing rams. Close blind rams. Change out upper 2 7/8" by 5 1/2" variable pipe rams to 9 5/8" casing rams. Run test plug. Pick up, make up and install test joint. Rig up test equipment. Test casing rams to 250psi Low / 3000psi High. Rig down test equipment. Pull test plug. Close annulus valve. Using single joint elevators, drift BOPs with landing joint and hanger. Mark elevation on landing joint. Move breakout tongs to driller's side and install correct tong head. Remove elevators and short bails. Install Lafleur fill -up tool. Install long bails and pick -up sling -line. Install casing elevators. Move torque tube back in derrick for clearance. Rig up and function stabbing board. Rig up Weatherford casing tongs and tall snub post. Remove rotary bushings. Rig up casing spider slips. Make up EZ -turn valve onto casing swage (to act as a safety valve), function test and record in IADC. Pick up centralizers and lock rings and stage on rig floor. Tie one (red) tugger line back in derrick for picking up pipe, and the second (blue) tugger line back for hanging casing tongs. Hold pre -job meeting with all hands on procedures and safety for running intermediate casing string. I • EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW: 585 REPORT BY Craig Silva Marathon Oil Company EPOCIE[ Kenai Gas Field DAILY WELLSITE REPORT • KBU 14 -8 REPORT FOR John Nicholson / Dan Byrd DATE May 20, 2008 DEPTH 5748 PRESENT OPERATION Preparing to change rams and test BOPE TIME 24:00 YESTERDAY 5748 24 HOUR FOOTAGE 0 CASING INFORMATION 9 5/8" @ 5436' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 5748 / 5432 TVD MW 9.4 VIS 52 PV 15 YP 22 FL 7.2 Gels 10/15/16 CL- 25000 FC 1 SOL 7.6 SD 0.25 OIL 3/90 MBL 8.0 pH 8.9 Ca+ 160 CCI MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE ID DITCH GAS 11 @ Washing down casing 1 @ at plug bump 6 washing down casing TRIP GAS 11 CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) @ @ CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Finish pre -job meeting with Weatherford. Inspect rig -up. Run in hole with 9 5/8" casing as per Marathon program. Clean and Bakerlok casing threads on successive shoe track joints during make up. Pick up and make up shoe track (shoe joint, spacer joint, float collar) and run in hole to 84'. Circulate casing volume through shoe track and check float equipment. Shut down running in casing to work on stabbing board. Troubleshoot and repair stabbing board. Resume running 9 5/8" casing in hole. Attach centralizers as per tally and fill every joint on way in. Run casing from 84' to 1490' (inside shoe). Fill pipe and place 32 bbl LCM pill in casing from 973' to 1490'. Continue running 9 5/8" casing in hole at slow rate from I 1490' and tag tight spot at 5664'. Position fill -up tool so joint can be circulated down. Open and remove spider slips. Break circulation and wash down from 5664' to landing depth of 5736'. Record 11 units maximum gas while washing down. Land hanger on load shoulder in multi -bowl wellhead. Drain stack and verify landing. Make up cementing head with top and bottom plugs pre - installed. Continue circulating and conditioning. DAILY Hold pre -job meeting with BJ on procedures and safety for cement job. Continue circulating through cementing head while BJ batches up cement. ACTIVITY Finish circulating with rig pumps. Blow air through cement valves and lines to clear. Switch to BJ pumping unit. Pump 2 bbls of water and pressure SUMMARY test lines to 3528psi. Drop first (bottom) plug. Mix and pump 22.5 bbls of 10.0ppg Seal Bond sweep (using 21.48 bbls of mix water and adding 225 Ibs of Ultra Seal Plus LCM material before pumping), and follow with 184.0 bbls of batched up 10.5ppg cement slurry (294 sacks of Class G cement plus accelerator chemicals mixed with 88.56 bbls water to yield 12.658 gal /sk and 3.314 cu- ft/sk). Drop second (top) plug. Pump 4.8 bbls of water to kick out the top plug. Switch over to rig pumps. Displace with 429.16 bbls (9108 strokes) of mud (and 433.96 bbls total displacement). Bump plug at close to calculated strokes with 758psi over - pressure (and 1419psi total pressure). Bleed off. Check floats. Cement in place. Begin 24 hour wait on cement. (Note cementing lines flushed with 3.6 bbls of water by BJ after last plug kick out). Blow down and rig down BJ cementing head and cement lines. Blow down Topdrive, mud lines and mud pumps. Back out and lay down casing hanger landing joint. Make up 9 5/8" pack -off and run in on 1 joint of HWDP. Energize seals and test pack -off to 5000psi for 10 minutes. Remove sling line. Rig down, lay down and load off the casing spider slips, casing elevators, long bails and Lafleur fill -up tool. Rig up short bails and drill pipe elevators. Move tong hanging sheave and hang rig tongs. Offload remaining Weatherford equipment. Rig down and fold up stabbing board. Reset and realign torque tube. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW: 585 REPORT BY Craig Silva Marathon Oil Company EPOCIE[ Kenai Gas Field DAILY WELLSITE REPORT • KBU 14 -8 REPORT FOR John Nicholson / Mitch Burns DATE May 21, 2008 DEPTH 5777 PRESENT OPERATION Drilling TIME 24:00 YESTERDAY 5748 24 HOUR FOOTAGE 29 CASING INFORMATION 9 518" @ 5736' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA 5792 13.76 37.10 5474.56 5855 13.50 39.20 5535.78 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 4 8.5 HCC HCM605 7110657 5x15 5748 29 0.48 In Hole DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 103.7 @ 5775 42.5 @ 5749 68.6 76.9 FT /HR SURFACE TORQUE 6542 @ 5774 5473 © 5749 6184.2 5551.5 AMPS WEIGHT ON BIT 16 @ 5748 3 @ 5768 6.5 7.9 KLBS ROTARY RPM 64 @ 5748 38 @ 5772 42.6 39.6 RPM PUMP PRESSURE 1488 @ 5776 814 @ 5749 1125.4 1436.6 PSI DRILLING MUD REPORT DEPTH 5776 / 5459 TVD MW 9.4 VIS 51 PV 14 YP 22 FL 7.0 Gels 9/14/16 CL- 25000 FC 1 SOL 7.0 SD 0.25 OIL 2/91 MBL 7.0 pH 9.6 Ca+ 120 CCI MWD SUMMARY INTERVAL TO 0 TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 39 @ 5748.00000 9 @ 5749.00000 19.3 TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 7097 @ 5748.00000 1010 @ 5749.00000 3036.0 CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG 9 / 19 PENTANE (C -5) @ @ HYDROCARBON SHOWS NONE INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY Major Sandstone /Sand, Tuffaceous Siltstone, Tuffaceous Claystone. Minor Conglomeratic Sand /Conglomerate, Volcanic Ash, Carbonaceous Shale /Coal, Calcareous Tuff. PRESENT SAND /SANDSTONE CONGLOMERATIC SAND TUFFACEOUS CLAYSTONE LITHOLOGY Rig up Topdrive rail. Install bails and elevators. Change out upper 9 5/8" casing rams to 2 3/8" X 5 1/2" variable pipe rams. Clean rig floor. Run in test plug. Rig up testing equipment. Test all BOPE to 250psi Low /3500psi High for 5 minutes (annular preventer, upper pipe rams, check valve, dart valve, upper Topdrive IBOP, CMVs 1- 10- 11 -12, floor valve, lower Topdrive IBOP, outside kill valve, CMVs 6 -8 -9, inside kill valve, CMVs 2 -5 -7, HCR, manual choke CMVs 3 -4, blind rams). Do accumulator drawdown test. Inspect mud pumps and service carrier while testing. Blow down mud DAILY lines. Rig down testing equipment. Pull test plug. Install wear bushing. Prepare rig floor for picking up directional bottom hole assembly. Prepare ACTIVITY drill pipe on the pipe rack. Pick up, make up and run in hole directional assembly (8 1/2" bit, mudmotor, NM string stabilizer, short NMDC, MWD, SUMMARY NM crossover , 2 NMCSDPs, NM crossover, 21 joints 5" HWDP plus jars) to 789'. Surface test MWD tool. Pick up off pipe rack, drift, make up and run in joints of 5" drill pipe to 3892'. Continue running in hole with stands of 5" drill pipe from derrick to 5270'. Adjust torque tube rail. Test 9 5/8" casing to 1500psi for 30 minutes. Run in hole from 5270' and tag float collar at 5648'. Drill out float collar and remaining shoe tract (cement, shoe, rathole) to bottom at 5748'. Drill 20' of new hole to 5768'. Circulate bottoms up. Rig up and perform Formation Integrity Test to 13.0 EMW (9.4ppg, 5451tvd, 1023psi). Offload 120 bbls of old Flo -Pro mud. Drill (rotating) from 5768' to 5777'. EPOCH PERSONNEL ON BOARD 3 DAILY COST ML: 3200 RW:585 III REPORT BY Craig Silva Marathon Oil Company Kenai Gas Field DAILY WELLSITE REPORT EINJCIE.[ • KBU 14 -8 REPORT FOR John Nicholson / Mitch Burns DATE May 22, 2008 DEPTH 6967 PRESENT OPERATION Drilling TIME 24:00 YESTERDAY 5777 24 HOUR FOOTAGE 1190 CASING INFORMATION 9 5/8" @ 5736' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 5917 12.06 401.14 5596.21 6169 7.02 041.97 5844.94 SURVEY DATA 6485 0.74 004.18 6159.63 6738 0.61 296.49 6412.61 6990 0.70 292.98 6664.60 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 4 8.5 HCC HCM605 7110657 5x15 5748 1219 16.15 In Hole DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 193.8 @ 6792 8.7 @ 6474 113.8 89.3 FT /HR SURFACE TORQUE 12936 @ 6816 0 @ Sliding 7064.7 9189.3 AMPS WEIGHT ON BIT 45.1 @ 6305 0.8 @ 6218 12.0 5.7 KLBS ROTARY RPM 78 @ 6576 0 @ Sliding 72.1 72.1 RPM PUMP PRESSURE 1886 @ 5901 1276 @ 6963 1572.8 1384.5 PSI DRILLING MUD REPORT DEPTH 6975 / 6650 TVD MW 9.3 VIS 51 PV 15 YP 22 FL 5.4 Gels 8/13/14 CL- 29000 FC 1 SOL 6.5 SD Tr OIL 3/91 MBL 6.0 pH 9.7 Ca+ 100 CCI 0 MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 184 @ 6643 2 @ 6416 39.8 TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 36954 @ 6643 511 @ 6416 7913.8 CONNECTION GAS HIGH ETHANE (C -2) 22 @ 6643 0 @ 1.4 AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG 4 / 58 PENTANE (C -5) @ @ HYDROCARBON Note 10 sand zones of 112' total thickness with gas over 100 units. Mostly Poor shows. SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION 10 Zones, 112'total All zones have mix of v calcareous marginally hard ss, and tuf Max 184u, avg SS /Sd = med gry,dom fn -med, mod srtd to m w Thickest: 6120 -6153, cly matrix spprtd ss; gen apps to be significant intergrain fil, but thru zns, 118u, srtd in gas sds, fria -hd when calc cmtd, ang- 6622 -6658 some pcs app to be more permeable. Poor to pons fair Por. before -after sbang, mix calc -ash intgr mat, gen poor vis Por, bkgrnd 5 -10u but sptty G Por. LITHOLOGY Major Sand /Sandstone, Tuffaceous Claystone, Tuffaceous Siltstone, Tuffaceous Sandstone. Minor Volcanic Ash, Coal /Carbonaceous Shale, Conglomeratic Sand, Calcareous Tuff. PRESENT SAND /SANDSTONE TUFFACEOUS SANDSTONE TUFFACEOUS CLAYSTONE LITHOLOGY DAILY ACTIVITY SUMMARY Drill (sliding and rotating) from 5777' to 6967'. EPOCH PERSONNEL ON BOARD 4 DAILY COST ML: 3200 RW: 585 REPORT BY Craig Silva • Marathon Oil Company Kenai Gas Field DAILY WELLSITE REPORT EPOS KBU 14 -8 • REPORT FOR John Nicholson / Mitch Burns 8072 PRESENT OPERATION Circulating out high gas after drilling DATE May 23, 2008 DEPTH 80 9 9 9 9 to TD TIME 24:00 YESTERDAY 6967 24 HOUR FOOTAGE 1105 CASING INFORMATION 9 5/8" @ 5736' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH 7115 0.76 293.89 6789.59 7368 0.95 285.31 7042.55 SURVEY DATA 7620 1.13 297.47 7294.51 7872 1.17 299.39 7546.45 8072 (Projection) 1.22 295.58 7746.41 BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 4 8.5 HCC HCM605 7110657 5x15 5748 8072 2324 25.90 In Hole TD of well DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION 207.6 @ 7940 13.5 @ 7795 128.8 95.3 FT /HR SURFACE TORQUE 12943 @ 7216 6826 @ 7223 9622.5 8399.6 AMPS WEIGHT ON BIT 40 @ 7944 1 @ 6976 13.6 21.4 KLBS ROTARY RPM 74 @ 6970 58 @ 6980 67.6 62.5 RPM PUMP PRESSURE 2283 @ 8070 221 @ 7871 1860.6 2112.5 PSI DRILLING MUD REPORT DEPTH 8047 / 7721 TVD MW 10.3 VIS 50 PV 16 YP 23 FL 5.4 Gels 9/14/15 CL- 29000 FC 1 SOL 11.0 SD Tr OIL 4/85 MBL 7.0 pH 9.7 Ca+ 80 CCI MWD SUMMARY 0 INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 659 @ 8052 9 @ 7764 156.1 TRIP GAS CUTTING GAS @ @ WIPER GAS 2035, 400 CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) 131316 @ 8052 1937 @ 7764 31179.5 CONNECTION GAS HIGH ETHANE (C -2) 178 @ 8052 0 @ 18.4 AVG PROPANE (C -3) 90 @ 8052 0 @ 3.4 CURRENT BUTANE (C-4) 15 @ 8052 0 @ 0.4 CURRENT BACKGROUND /AVG 33 / 750 PENTANE (C -5) @ @ HYDROCARBON Note 778' of interval in 43 sand zones with gas over 100 units. Shows range from poor to good. SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION Many sand zones, and Wide range of sand /ss types. No zones were resistant. Generally 659u Max, Sd /SS/Tuff SS = med gray, vf- med,dom mod w 5 zones with more than large fraction of intergrain material. Most sands appear to be tight, 365u in interval; srtd, ang- sbang, many variations of gr and mtrx 500u clayey and and a poor show candidate, but some sands have good 20 -30u before spprtd, abnt calc cmted ss, lith aren -comp show characteristics, and these sands are also abundant. and after. gywke, many examples of sds with good vis Por- Perm . LITHOLOGY Major Sand /Sandstone, Tuffaceous Sandstone, Tuffaceous Claystone, Tuffaceous Siltstone, Carbonaceous Shale /Coal, Volcanic Ash, Calcareous Tuff. Minor Conglomeratic Sand /Conglomerate. PRESENT SAND /SANDSTONE CONGLOMERATIC SAND LITHOLOGY Drill from 6967' to 8047'. Record consistently high formation gas during this interval. Build mud weight up from 9.3ppg to 10.0ppg. (Rack, pull protectors, drift and strap 3 1./2" production casing while drilling progresses). Circulate bottoms up at 8047'. Weight up from 10.0ppg to 10.2ppg and continue to circulate and condition mud. Stop circulating and check for flow. Pull out of hole from 8047' to 5716' on wiper trip to shoe. Service DAILY rig. Change out brake handle pin bushing. Run back in hole from 5716' to 7920'. Wash down from 7920' to 8047'. Drill from 8047' to 8072'. Begin ACTIVITY circulating bottoms up. Observe high coming up rapidly while drilling the last 10' of hole. Record 2035 units of gas (2220 strokes before anticipated SUMMARY trip gas). Shut in well, and continue circulating through open choke and through degasser. Gas immediately decreases to 396 units when first on choke, then gradually increases to 818 units at anticipated wiper gas. (Note that speculative normalized gas if NOT put on the choke projected to 4151units). Circulate gas through choke down to 129 units. Open choke, bypass degasser and begin circulating up returns from drilled interval. • Record 659 units maximum gas (from 8052'). Continue circulating up cuttings form 8047' to 8072'. EPOCH PERSONNEL ON BOARD 4 DAILY COST ML: 3200 RW: 585 REPORT BY Craig Silva Marathon Company Kenai G EPJCF[ Kenai Gas Field DAILY WELLSITE REPORT HI KBU 14 -8 REPORT FOR John Nicholson / Mitch Burns DATE May 24, 2008 DEPTH 8072 PRESENT OPERATION Wireline logging TIME 24:00 YESTERDAY 8072 24 HOUR FOOTAGE 0 CASING INFORMATION 9 5/8" @ 5736' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 4 8.5 HCC HCM605 7110657 5x15 5748 8072 2324 25.90 0- 0- NO- A- X- 1 -NO -TD TD of well DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 8072 / 7746 TVD MW 10.3 VIS 15 PV 15 YP 25 FL 5.8 Gels 10/15/16 CL- 29000 FC 1 SOL 10.5 SD Tr OIL 4/86 MBL 8.0 pH 9.3 Ca+ 80 CCI MWD SUMMARY INTERVAL TO TOOLS 411 GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 400 @ WG at 8072 18 @ at last pump shut down 125 during last wiper run TRIP GAS CUTTING GAS @ @ WIPER GAS 400 CHROMATOGRAPHY(ppm) SURVEY METHANE (C -1) @ @ CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ • HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Finish circulating up cuttings from 8047' to 8072'. Circulate and condition hole and build mud weight up from 10.2ppg to 10.3ppg. Circulate gas down from 398 units to 28 units. Shut down pumps and check for flow. Pull out of hole on 10 stand wiper trip from 8072' to 7445'. Run back in hole from 7445' to 8047'. Wash down from 8047' to 8072'. Start pumping sweep. Circulate bottoms up and record 400 units of wiper gas. Circulate sweep around. Observe successive slight surge and drop off of returns, and a gas decrease from 135 units to 33 units. Continue to circulate and condition (for equivalent of 2 bottoms up) Make up (94 sack) heavy dry job for extra hydrostatic during wireline operations. Circulate gas down to 18 units. Shut down pumps and check for flow. Pump heavy dry job. Pull out of hole (SLM) from 8072'. Pull cleanly to top of HWDP at 789'. Pull out of hole to 130' standing back HWDP and jars. Pull out of hole breaking and laying down directional assembly (crossover sub, 2 NM flex joints, DAILY MWD collar, short NMDC, string stabilizer, motor and bit). Dump MWD memory before laying down. Lay down and load off handling tools. Service ACTIVITY Topdrive. Clear and clean rig floor. Pick up wireline handling tools. Hold 2 successive pre -job meetings with Weatherford Wireline Services' loggers SUMMARY on procedures and safety for wireline logging operations. Hang sheaves and rig up Weatherford's wireline running equipment. Pick up, make up and run in hole with Quad -Combo logging assembly. Load sources for neutron tools. Run in hole to 5650' inside casing. Open calipers and attempt to log down find logger's shoe depth. A continuous log would be created for only 2 to 10 seconds before shutting off and signaling a "terminate logging" message. Telemetered data transmission was being interrupted for unknown reasons. (WWS was using new software and also required a new telemetry default due a recently shortened and re- headed logging cable). Begin troubleshooting problem. Monitor well with trip tank. Telemetry problem solved after many repeated attempts. Regain full function of surface logging system. Run Quad -Combo logging assembly down and find intermediate shoe at 5730' (logger's depth). Continue running in with logging assembly and tag bottom at 8063' (logger's depth). Log up from with Quad -Combo assembly from 8063' to 3000'. 0 EPOCH PERSONNEL ON BOARD 4 DAILY COST ML: 3200 ML: 585 Consulting: 1300 REPORT BY Craig Silva Marathon Oil Field y EPOCH Kenai Gas Field DAILY WELLSITE REPORT • KBU 14 -8 El REPORT FOR John Nicholson / Mitch Burns DATE May 25, 2008 DEPTH 8072 PRESENT OPERATION Preparing to run EXCAPE completion string TIME 24:00 YESTERDAY 8072 24 HOUR FOOTAGE 0 CASING INFORMATION 9 518" @ 5736' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED 8.5 8.5 HCC MX -09DX 6005345 Open 8072 8072 0 n/a NG Clean out run only DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 8072 / 7746 TVD MW 10.4 VIS 60 PV 18 YP 28 FL 5.4 Gels 9/14/15 CL- 27000 FC 1 SOL 11.5 SD Tr OIL 4/85 MBL 9.0 pH 9.7 Ca+ 60 CCI MWD SUMMARY INTERVAL TO TOOLS ao GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 2012 @ TG at 8072 14 @ before dry job 35 after hi gas TRIP GAS 2012 CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C-1) CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Finish logging up (in cased hole section) with Quad -Combo assembly on run from 8063' to 3000'. Pull logging assembly rest of the way to the surface. Hold pre -job meeting on safety and procedures for handling logging assembly. Unload sources in neutron tools. Pull, handle, break and lay down Quad -Combo logging assembly. Load off tools onto catwalk. Rig down and load off sheaves and wireline surface running equipment. Finish drilling phase of well, and start production phase. Troubleshoot problems with rig electrical system. Repair broken wire under #2 carrier motor between the bell housing and the motor mount. Make up bit and bit sub to first stand of HWDP. Run in hole to 3119' and fill pipe. Record 2 units of gas. Continue running in hole from 3119' to 5710' (just inside shoe). Circulate bottoms up from 5710'. Record 90 units maximum gas. Slip 33' of drill line. Continue running in hole from 5710' to 8043'. Fill pipe and wash down from 8043' to bottom at 8072' with no fill. Circulate bottoms DAILY up. Record initial high peak 011732 units at 7412 strokes (more 1700 strokes before expected trip gas) and maximum peak of 2012 units at 9438 ACTIVITY strokes (260 strokes after expected trip gas). Circulate out high gas and continue circulate and condition mud. Mud weight in and out at 10.4ppg. SUMMARY Mix up 100 sack dry job with 1 drum of Conqor 404 added. Circulate gas down to 14 units. Shut down pumps and check for flow. Pump heavy dry job. Pull out of hole laying down 5" drill pipe from 8072' to 662'. Run in hole with extra 12 stands of 5" drill pipe in derrick. Pull out of hole laying down last 24 joints of 5" drill pipe. Pull corrosion ring. Pull out of hole laying down 5" HWDP and jars. Break and lay down bit and bit sub. Blow down mud lines and flush mud pumps. Lay down make up tongs. Rig down and load off all rig floor bit subs, drill pipe tools, spinners, and tongs. Pull wear bushing. Load off remaining rotary tools. Clear and clean rig floor. Prepare for highline operations running in EXCAPE production modules and tubing. Pull wear ring. Change out bails and elevators. Pick up, install and rig up Weatherford tongs, casing running tools, handling tools and accessory equipment. Install fill -up tool. Hold pre -job meeting with all hands on procedures and safety for running 3 1/2" EXCAPE completion string. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 RW: 585 Consulting: 1300 REPORT BY Craig Silva F Marathon Oil Company Kenai Gas Field DAILY WELLSITE REPORT EPIJ KBU 14 -8 REPORT FOR John Nicholson / Mitch Burns. 0 DATE May 26, 2008 DEPTH 8072 PRESENT OPERATION Wireline correlation logging for module placement TIME 24:00 YESTERDAY 8072 24 HOUR FOOTAGE 0 CASING INFORMATION 9 5/8" @ 5736' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 8072 / 7046 TVD MW 10.5 VIS 70 PV 21 YP 27 FL 5.4 Gels 11/17/ CL- 23500 FC 1 SOL 12.0 SD 0.65 OIL 3/85 MBL 7.5 pH 9.6 Ca+ 160 CCI MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 230 @ TG at 8048 13 @ just after pump start up 140 during pre- cement circulating TRIP GAS 230 CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY(ppm) SURVEY VI METHANE (C -1) @ @ CONNECTION GAS HIGH ETHANE (C -2) @ @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Conclude pre -job meeting on procedures and safety for running 3 1/2" EXCAPE completion string. Rig up Weatherford fill -up line, circulating line, and floor valves. Use crane to position sheave with control lines previously fed through and aligned. Pull down to floor and tie off the 3 control lines and a protector dummy line. Rig up Pollard Wireline Service to perform banding of control lines. Inspect and insure that previously staged out modules are in correct order on short pipe rack. Begin running in hole with 3 1/2" EXCAPE completion string as per Marathon program. Pick up, DAILY make up and run in shoe tract with Davis Lynch Float Shoe and Float Collar. Check floats. Carefully pick up, make up and run in hole 3 1/2" ACTIVITY completion section with 13 EXCAPE modules (plus 38 pups and recloser assembly) to 1572'. Circulate and fill pipe. Continue running 3 1/2" SUMMARY EXCAPE completion string in hole from 1572' to 8042'. Rig up circulating head and line. Begin circulating, bringing pumps up slowly. Terminate control lines and cable. Lower down sheave with crane and then rig down and load off. Continue circulating (at 880psi, 105spm) while reciprocating pipe (from 8039' to 8048'). Circulate bottoms up and record 230 units of trip gas (with 10.5 mud all around). Continue to circulate and condition mud (for 12016 strokes total). Stop pumping and monitor well. Rig up Expro Wireline Service equipment and hold brief pre -job meeting on wireline operations. Run in hole with gamma correlation log to determine perforating positions of EXCAPE modules. EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2425 ML: 585 REPORT BY Craig Silva • Marathon Oil Field y EPOCIHI Kenai Gas Field DAILY WELLSITE REPORT KBU 14 -8 REPORT FOR John Nicholson / Mitch Bums • 0 DATE May 27, 2008 DEPTH 8072 PRESENT OPERATION General rig down operations for move to GO7 TIME 24:00 YESTERDAY 8072 24 HOUR FOOTAGE 0 CASING INFORMATION 3 1/2" @ 8058.59' DEPTH INCLINATION AZIMUTH VERTICAL DEPTH SURVEY DATA BIT INFORMATION INTERVAL CONDITION REASON NO. SIZE TYPE S/N JETS IN OUT FOOTAGE HOURS T /B /C PULLED DRILLING PARAMETERS HIGH LOW AVERAGE CURRENT AVG RATE OF PENETRATION @ @ FT /HR SURFACE TORQUE @ @ AMPS WEIGHT ON BIT @ @ KLBS ROTARY RPM @ @ RPM PUMP PRESSURE @ @ PSI DRILLING MUD REPORT DEPTH 8072/ 7746 TVD MW 8.65 VIS 28 PV 1 YP 1 FL Gels CL- 30000 FC KCL Brine SOL SD OIL MBL pH 8.5 Ca+ CCI MWD SUMMARY INTERVAL TO TOOLS GAS SUMMARY (units) HIGH LOW AVERAGE DITCH GAS 354 @ Displacing with brine 2 @ spotting inhibited fluid 185 Displacing with brine TRIP GAS CUTTING GAS @ @ WIPER GAS CHROMATOGRAPHY (ppm) SURVEY METHANE (C -1) @ @ CONNECTION GAS HIGH ETHANE C -2 @ AVG PROPANE (C -3) @ @ CURRENT BUTANE (C -4) @ @ CURRENT BACKGROUND /AVG N/A PENTANE (C -5) @ @ HYDROCARBON SHOWS INTERVAL LITHOLOGY /REMARKS GAS DESCRIPTION LITHOLOGY PRESENT LITHOLOGY Continue loading up trailers and hauling non - essential equipment off to next location. Log up and pull out of hole with wireline gamma tool assembly. Do correlation determination with gamma log. Note that the the shoe will be adjusted down 10.00' to 8058.59'. Rig down Expro WLS. Rig up circulating line and head. Resume circulating and conditioning well while mixing inhibited mud. Pump 90 bbls (1883 strokes at 100spm, 198gpm, 685psi) of mud treated with Conqor 404 to be spotted as a corrosion inhibitor in the annulus and record 6 units maximum gas. Finish pumping inhibitor. Rig down circulating head. Rig up cementing head and line up to BJ cementers. Head will have plug installed and a wash -up tee. Hold pre -job safety meeting with BJ on cementing procedures and safety for cement job. Pump 5.2 bbls of water to fill lines. Pressure test cementing lines to 4048psi. Mix and pump 47.8 bbls of 11.Oppg Sealbond Sweep, using 42.34 bbls of water. After sweep, pump 212 bbls of batched 15.8ppg cement slurry (1018 sacks of Class G cement plus accelerator chemicals mixed with 119.24 bbls water to yield 4.919 gal /sk and 1.169 cuft/sk). Close valve to head and open wash -up valve. Pump 20 bbls water to wash lines from floor out to slop tank until returns are clean. Close wash up valve and open to head. Drop plug and pump out with 5.7 bbs of KCL brine. Displace cement with 64.7 bbls of 6% KCI brine. (Total displacement is 70.4. bbls). Record maximum 354 units of gas while displacing. Bump plug with 1095psi over displacement pressure (2722psi total). No losses DAILY during cement job. Bleed off. Check floats. Cement in place at 04:45 hours. Begin waiting on cement and monitoring well. Flush, blow down and rig ACTIVITY down cementing head and lines. Lay down cementing head. Clear and clean rig floor. Flush and blow down all mud pumps and pump lines, choke SUMMARY and choke lines, mud manifold and all mud lines, and fill and trip lines. Flush and washout stack. Pump out and clean trip tank. Start pumping mud and other fluids out to vac trucks for haul -off. Begin cleaning pits. Lay down mousehole. Remove and load off drip pan. Fuel camp generator. Fill camp water. Continue partial rig -down procedures and loading off and transporting of non - critical rig and third party equipment and facilities. Clean up location as transport loads are hauled away. Rig down flow nipple, riser, choke line, kill line, fill -up line and turnbuckles. Rig down accumulator lines and panic line. Rig up bridge cranes to BOP stack. Rig down standpipe manifold. Pick up BOP stack. Finish cleaning all pits and hauling off remaining fluids. Run control and electric lines out tubing head outlet. Set weight on slips. Rough cut 3 1/2" casing above slips and lay down landing joints. Set stack on rack. Nipple down and remove BOP stack and spools. Rig down #3 mud pump. Make final clean cut on 3 1/2" casing. Run control lines through 3 1/2" packoff and terminate. Set and install packoff. Install Swagelok fittings around control lines. Run in lock -down pins. Test packoff to 5000psi. Nipple up 13 5/8" by 3 1/8" 5M tubing head adaptor to the 3 1/8" 5M tree, terminating control lines through the bottom flange. Set 2 -way check valve in tubing hanger. Fill tree with methanol and test to 5000psi. Install BPV. Install EXCAPE control line warning sign. Completion is to be done without a rig. Begin rig down and move of all Glacier No.1 rig modules, rig equipment, support trailers,' communication equipment, camp trailers and camp accessory equipment to the GO7 location. 411 EPOCH PERSONNEL ON BOARD 2 DAILY COST ML: 2050 RW: 585 Rig down: 2025 REPORT BY Craig Silva
