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209-047
0 • Image Project Well History File Cover Page XHVZE This page identifies those items that were not scanned during the initial production scanning phase. They are available in the original file, may be scanned during a special rescan activity or are viewable by direct inspection of the file. <Z - 0 4. 7 Well History File Identifier Organizing (done) ❑ Two -sided 1111111111111111111 ❑ Rescan Needed 111 I R ES AN DIGITAL DATA OVERSIZED (Scannable) Color Items: ❑ Diskettes, No. ❑ Maps: 7(Greyscale Items: ❑ Other, No/Type: ❑ Other Items Scannable by a Large Scanner ❑ Poor Quality Originals: OVERSIZED (Non - Scannable) ❑ Other: ❑ Logs of various kinds: NOTES: ❑ Other:: BY: M Date: f 1 /s/ \ Project Proofing I mf BY: Maria Date: 517/1 1 /s/ Scanning Preparation a x 30 = (a Q _ + 016, = TOTAL PAGES E -6) (Count does not include cover sheet) BY: Maria Date: q 1 /s/ 1 Production Scanning III 1E11E1111 Stage 1 Page Count from Scanned File: g 7 (Count does include cov sheet) Page Count Matches Number in Scanning Preparation: (/ YES NO BY: 41111, Date: / // /s/ 04 p 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 11E111111 1111 ReScanned IIIIIIIIIIIIIIIII BY: Maria Date: /s/ Comments about this file: Quality Checked 111111111111 111111 10/6/2005 Well History File Cover Page.doc DATA SUBMITTAL COMPLIANCE REPORT 4/27/2011 Permit to Drill 2090470 Well Name /No. KALOA 3 Operator AURORA GAS LLC API No. 50- 283 - 20132 -00 -00 MD 4709 TVD 4439 Completion Date 6/20/2009 Completion Status P &A Current Status P &A UIC N REQUIRED INFORMATION 4 Mud Log No Samples No Directional Surve Yes DATA INFORMATION Types Electric or Other Logs Run: Schlumberger hole logs: PM! Dipmeter, Platform Express, Horizon Mu (data taken from Logs Portion of Master Well Data Maint Well Log Information: Log/ Electr Data Digital Dataset Log Log Run Interval OH / III Ty Med /Frmt Number me Scale Media No Start Stop CH Received Comments ED C Las 18284 nduction /Resistivity 513 4715 7/14/2009 LAS and PDS graphics files for Induction, and resistivity Log Induction /Resistivity 25 Blu 666 4697 Open 7/14/2009 Array Induction, CNL, Trip - Lith, Dens, SP, GR, Caliper * *PlatformExpress ** 6 -Jun- 2009 Log Induction /Resistivity 5 Blu 666 4134 Open 7/14/2009 Array Induction, CNL, Trip - Lith, Dens, SP, GR, Caliper * *PlatformExpress ** 6 -Jun- 2009 Log Induction /Resistivity 5 Blu 666 4148 Open 7/14/2009 Fullbore MicroResisitivity Imager, Dip, GR 6-Jun- 1 2009 D 18495 Mud Log 0 4715 Open 9/2/2009 Mud Log (pdf), PEX III OH(pds), Electronic Transfer Log Mud Log 5 Col 95 4390 Open 7/31/2009 Mudlog by Horizon Well Logging, Inc. Well Cores /Samples Information: Sample Interval Set Name Start Stop Sent Received Number Comments DATA SUBMITTAL COMPLIANCE REPORT 4/27/2011 Permit to Drill 2090470 Well Name /No. KALOA 3 Operator AURORA GAS LLC API No. 50- 283 - 20132 -00 -00 MD 4709 TVD 4439 Completion Date 6/20/2009 Completion Status P &A Current Status P &A UIC N ADDITIONAL INFORMATION Well Cored? Y Daily History Received? . Chips Received? 'rYN ' Formation Tops CY7N Analysis Received? Comments: • Compliance Reviewed By: 1 _ - __— Date: r [' Page l of 1 Mahnken, Christine R (DOA) From: Davies, Stephen F (DOA) Sent: Wednesday, September 02, 2009 10:20 AM To: Mahnken, Christine R (DOA) Subject: FW: Kaloa 3 Additional log information. Attachments: MD INC AZI.xls; AURORA_ KALOA _3_PEX_4705FT_TO_CSG_SIN.PDS; Horizon Kaloa #3 Full Mud Log 4709TD.pdf Christine, Could you please copy these files to a DVD or CD, give the CD /DVD a volume number and enter it in the RBDMS log inventory? Please also check to make sure we did receive the paper copies of these logs. Thanks, Steve D. From: Bruce D Webb [mailto:bwebb @aurorapower.com] Sent: Tuesday, August 04, 2009 8:46 AM To: Davies, Stephen F (DOA); Okland, Howard D (DOA) Cc: 'Chris Gay' Subject: Kaloa 3 Additional log information. Steve and Howard, Attached is the electronic logs from Schlumberger and Horizon on Kaloa #3. The directional survey is also included. The paper copies of all the logs were dropped of last month. Ed Jones will be in Anchorage on Friday, he is working on the daily operations summary and formation tops. Take care, Bruce D. Webb Manager, Land and Regulatory Affairs Aurora Gas, LLC 1400 W. Benson Blvd., Suite 410 Anchorage, AK 99503 (907) 277 -1003 office (907) 229 -8398 cell (970) 277 -1006 fax aO9 - o i l? 9/2/2009 • • Page 1 of 1 Davies, Stephen F (DOA) From: Bruce D Webb [bwebb @aurorapower.com] Sent: Friday, August 28, 2009 11:16 AM To: Davies, Stephen F (DOA) Cc: Regg, James B (DOA) Subject: RE: Kaloa 3 Information Needed Attachments: KALOA #3 FINAL Definitive Survey - True.pdf; KALOA #3 FINAL Operations Summary.pdf Steve, Attached for your convenience are items 1 and 2 requested below. I have prepared a new 10 -407 on the revised form (7/09) with the information requested in item 3 below. I will drop the revised form off at lunch today, along with the printed versions of the attachments. Best Regards, -Bruce Bruce D. Webb Manager, Land and Regulatory Affairs Aurora Gas, LLC 1400 W. Benson Blvd., Suite 410 Anchorage, AK 99503 (907) 277 -1003 office (907) 229 -8398 cell (970) 277 -1006 fax From: Davies, Stephen F (DOA) [mailto:steve.davies @alaska.gov] Sent: Tuesday, July 14, 2009 1:02 PM To: Bruce D Webb Cc: Maunder, Thomas E (DOA) Subject: Kaloa 3 Information Needed Bruce, Received the Kaloa 3 well completion report. Lacking are: L� R 3 al 1. daily operations summary f� ��,c. 6 7 �� 2 7 ° 2. final directional survey o 3 a 3. list of geologic markers or formation tops (simply stating "none" is not acceptable) ° ( / `t 4. well log prints and digital data. Please refer to 20 AAC 25.071 for a complete listing of all geologic data and logs required. I will hold off on reviewing the completion report until items 1 to 3, above, are submitted. Thanks for your help, Steve Davies AOGCC 9/2/2009 Page 1 of 1 Davies, Stephen F (DOA) From: Davies, Stephen F (DOA) Sent: Tuesday, July 14, 2009 12:52 PM To: 'Bruce D Webb' Subject: Forms, Forms Bruce, The well completion report for Kaloa 3 was submitted using an obsolete 10-407 form. The latest versions of all of the Commission's forms are available at http : / /www.state.ak. us /local /akpages /ADM I N /oqc /forms /formsindex_shtmt. Please watch the forms page on the Commission's website for changes that will be occurring to several forms over the next month or two. Thanks, Steve Davies AOGCC 7/14/2009 ^. A .._ '+,gIT, Z°oq • STATE OF ALASKA , , , - 9 8 2009 ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOGS. Commisz,ion la. Well Status: Oil ❑ Gas ❑ SPLUG ❑ Plugged 0 Abandoned 0 Suspended ❑ 1b. Well Class: . r ., t , n 20AAC 25.105 2OAAC 25.110 Development LCJ ,� Exploratory GINJ ❑ WINJ ❑ WAG ❑ WDSPL ❑ Other ❑ No. of Completions: Service ❑ AO St ratigraphic Test ❑ 2. Operator Name: 5. Date Comp., Susp., or 12. Permit to Drill Number: 4teL� Aurora Gas, LLC Aband.: June 20 2009 209-047 , 50,--„,t6 p 3. Address: 6. Date Spud``d� d: Q pp 13. API Number. 1400 West Benson Blvd, Suite 410 Anchorage, AK. 99503 May ZOD9 910J5 50- 28340132 -00 -00 / 4a. Location of Well (Governmental Section): 7. Date TD Reached: 14. Well Name and Number. Surface: 2,700' FNL, 1,120' FWL, Sec 24, T11N, R12W, SM June 12, 2009 Kaloa #3 Top of Productive Horizon: 8. KB Elevation (ft) :A(,.4 15. Field /Pool(s): 1,800' FSL, 545' FWL, Sec 24, T11N, R12W, SM „201' AMSL (DF) sa.si, Total Depth: 9. Plug Back Depth(MD +TVD): Abert Kaloa Undefined Gas Field - 1,800' FSL, 545' FWL, Sec 24, T11N, R12W, SM plug @ 3,896 MD 4b. Location of Well (State Base Plane Coordinates): NAD 27 10. Total Depth (MD +�� g P/ T ggv Designation: Surface: x- 263674.95 • y- 2570628.89 - Zone- 4 MD 4,709'. TVD � . y C-- 61z9 TPI: x- y- Zone- 4 11. Depth Where SSSV Set: 17. Land Use Permit: Total Depth: x- 262970.29 y- 2569807.02 Zone- 4 N/A CIRI Lease 18. Directional Survey: Yes 0 No ❑ 19. Water Depth, if Offshore: 20. Thickness of Permafrost MD/TVD: (Submit electronic and printed information per 20 AAC 25.050) N/A (ft MSL) N/A 21. Logs Obtained (List all logs here and submit electronic and printed information per 20AAC25.071): 22.Re- drilllLateral Top Window MD/TVD: Schlumberger Hole Logs: PMI Dipmeter. Platform Express, Horizon Mug Logs. N/A 23. CASING, LINER AND CEMENTING RECORD WT. PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASING GRADE TOP BOTTOM TOP BOTTOM HOLE SIZE CEMENTING RECORD PULLED 13-3/8 68.0# K -5 3' below sfc. 92' 3' below sfc. 92' driven Drilled and Driven 0 9-5/8 36.0# K-55 3' below sfc. 670' 3' below sfc. 670' 12 -1/4" '72 bbls @ 100% OH excess 0 open hole 4,709' 4,429' 7 -7/8" see below 24. Open to production or injection? Yes ❑ No ❑ If Yes, list each 25. TUBING RECORD interval open (MD +TVD of Top & Bottom; Perforation Size and Number): SIZE DEPTH SET (MD) PACKER SET (MD/TVD) none 26. ACID, FRACTURE, CEMENT SQUEEZE, ETC. DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED 3,896' - 4,709' / 270 sx @ 14.8 ppg (1.35 cf /sk yield) none, all cemented off Type 1 cement w/ additives 524' - 700' ' 62 sx (a 12.0 ppg (2.27 cf /sk yield) Class G cement w/ poz. powder surface - 200' / 75 sx (§12.0 ppg (1.50 cf /sk yield) Accelerated Class G cement 27. PRODUCTION TEST Date First Production: Method of Operation (Fkowing, gas lift, etc.): NONE NONE Date of Test: Hours Tested: Production for Oil-Bbl: Gas -MCF: Water -Bbl: Choke Size: Gas -Oil Ratio: none N/A Test Period li. 0 0 mcf 0 bbls N/A N/A Flow Tubing Casing Press: Calculated Oil -Bbl: Gas -MCF: Water -Bbl: Oil Gravity - API (corr): Press. 24 -Hour Rate -► 28. CORE DATA Conventional Core(s) Acquired? Yes ❑ No 0 Sidewall Cores Acquired? Yes ❑ No 0 If Yes to either question, list formations and intervals cored (MD +TVD of top and bottom of each), and summarize lithology and presence of oil, gas or water (submit separate sheets with this form, if needed). Submit detailed descriptions, core chips, photographs and laboratory analytical results per 20 AAC 25.071. ;COMPLTION No cores taken. 6212 BFL :50) ) 2 2009 JAFEL\ Form 10-407 Revised 7/2009 CONTINUED ON REVERSE Submit original only • 28. GEOLOGIC MARKERS (List all formations and markers encountered): 29. FORMATION TESTS NAME MD TVD Well tested? L Yes U No If yes, list intervals and formations tested, briefly summarizing test results. Attach separate sheets to this form, if needed, Permafrost - Top n/a n/a and submit detailed test information per 20 AAC 25.071. Permafrost - Base n/a n/a Beluga Tsuga 2 -7 Coal Marker 1,756' 1,488' Beluga Tsuga 2 -8 Coal Marker 2,228' 1,864' Tyonek Carya 2 -1 Coal Marker 2,827' 2,365' D' Coal Marker 3,128' 2,653' E' Coal Marker 3,326' 2,850' G' Coal (top of Carya 2 -3) Marker 3,472' 3,097' 1' Coal Marker 3,732' 3,255' J' Coal (top of Carya 2-4) Marker 4,066' 3,588' Carya 2-4.2 Sand 4,308' 3,828' NONE Carya 2 -5 Coal Marker 4,505' 4,022' Formation at total depth: 4,709' 4,429' 30. List of Attachments: Daily Operation Summary and Final Directional Survey. Well Schematic and Logs (previously submitted under separate cover) 31. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Aurora Gas, LLC Printed Name: Bruce D. Webb Title: Manager, Land and Regulatory Affairs Signature: �(� Phone: 907 277 -1003 Date: 8/28/2009 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 la: Classification of Service wells: Gas Injection, Water Injection, Water - Alternating -Gas Injection, Salt Water Disposal, Water Supply for 1 njection, Observation, or Other. Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI (Top of Producing Interval). Item 8: The Kelly Bushing and Ground Level elevations in feet above mean sea level. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits (ex: 50- 029 - 20123- 00 -00). Item 20: Report true vertical thickness of permafrost in Box 20. Provide MD and TVD for the top and base of permafrost in Box 28. Item 22: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 23: If this well is completed for separate production from more than one interval (multiple completion), so state in item 1, and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced, showing the data pertinent to such interval). Item 26: Method of Operation: Flowing, Gas Lift, Rod Pump, Hydraulic Pump, Submersible, Water Injection, Gas Injection, Shut -in, or Other (explain). Item 27: Provide a listing of intervals cored and the corresponding formations, and a brief description in this box. Submit detailed description and analytical laboratory information required by 20 AAC 25.071. Item 29: Provide a listing of intervals tested and the corresponding formation, and a brief summary in this box. Submit detailed test and analytical laboratory information required by 20 AAC 25.071. Form 10-407 Revised 7/2009 e ♦ • AURORA GAS, LLC KALOA #3 (AOGCC PERMIT No. 209 -047) (API No. 50- 283 - 20132 -00) DRILLING AND ABANDONMENT OPERATIONS SUMMARY 5/10/09—Start moving in rig and equipment. 5/11/09 —Move in rig and related equipment and rig up. 5/12/09 -- Continue move in and rig up. 5/13/09 Continue move in and rig up. 5/14/09— Continue move in and rig up. Cut conductor and install slip -on head. Install diverter spool. 5/15/09 Continue rig up. NU diverter stack and system, function test. 5/16/09 Continue rig up. Mix spud mud. Test diverter system— witnessed by Lou Grimaldi. 5/17/09 —PU 12 -1/4" BHA. Clean out conductor to 94'. 10.5 ppg. 5/18/09 SPUD at 0200. Drill from 94' to 380', picking up BHA. 10.5 ppg. 5/19/09 —Drill to 685' w/ survey at 500'. Make wiper trip. Run ESS. POH, LD. 10.6. 5/20/09 —Fin POH, LD. RU to run surface casing. Run 17 jts. of 9 -5/8 ", 36 #, K -55, LTC casing to 670'. RU and cement w02 bbl Light Type I cement w/ 1.82 cf /sk yield and 13.0 ppg. Bumped plug, circ 30 bbl cmt to surface. WOC. RD cementers. ND diverter. 5/21/09 Finish ND diverter. Cut off 9-5/8" casing. Weld on head. Start NU BOP. 5 /22/09— Finish NU BOP. Test BOP's to 3000 psi. RU to drill out. 5/23/09 —Test casing to 1500 psi. RIM w/ remaining surface -hole BHA. POH, laying down. PU 7 -7/8" bit, motor, directional BHA, MWD and RIH. MW -10.4 ppg. 1 , • • 5/24/09 -R1H w/ directional BHA and tag at 619'. Displace spud mud w/ LSND system. Drill out float collar and shoe, then new formation to 705'. FIT to 204 psi w/ 10.4 ppg mud -16.0 EMW. Directionally drill to 1178'. 14 deg. MW-10.5 ppg. 5 /25 /09- Directionally drill to 1210'. 10 std wiper trip. Directionally drill to 1565'. 25 deg. MW -10.5 ppg. 5/26/09 -- Directionally drill to 1710'. 10 stand wiper trip. Drill and survey to 1914'. Pump 45 bbl high -vis sweep. 35 deg. MW -10.5 ppg. 5/27/09 -Drill and survey to 2238'. Pump 39 bbl high -vis sweep. 9 std short trip w/ no drag. Directionally drill to 2269'. 40 deg. 10.5 ppg. 5/28/09 -Drill and survey to 2589'. Mix and pump 25 bbl walnut hull sweep. Directionally drill to 2643'. 27 deg. 10.3 ppg. 5/29/09 -Drill and survey to 2662'. Mix and pump high -vis pill. POH for BOP test. Test BOP's to 3000 psi. PU new bit ( #3) and RIH. 5/30/09-Finish RIH. Wash to bottom. Drill and survey to 3087'. Mix and pump high - vis sweep to clean hole. 14 deg. MW -10.2 ppg. 5/31/09 -Drill to 3175'. Wiper trip up to 2662'. Drill and survey to 3423'. Repair pump #1. 2+ deg. 10.2 ppg. 6/1/09 -Drill and survey to 3671'. Pump high vis sweep. Wiper trip to 3702'. Pump repair. POH for pump repair. 3 deg. 10.2 ppg. 6/2/09 -Fin P011 to shoe, tight at 2958'. Repair pump. POH to change BHA. 10.3 ppg. 6/3/09- Finish POH, LD MWD. RIH. Drill to 3865'. Pump high -vis sweep. Drill to 3931'. 4 deg. 10.1 ppg. 6/4/09 -Drill to 3994'. Pump and rig repair. Drill to 4174'. Pump repairs. Pump high - vis sweep to POH. 6.5 deg. 10.0 ppg. 6/5/09 -POH w/ survey and washing & reaming 3830 - 3791'. Left 3 cones in hole. LD motor and flex collars. Test BOP. 10.0 ppg. 6 /6 /09- Finish BOP test. RU Schlumberger and run Platform Express log tool stopped at 3780'. Log OOH. LD SLB tools. RIH to 2844'-wash and ream to 4174'. 10.2 ppg. 6/7/09 -Work on junk at 4174'. Circ clean w/ high -vis sweep. 12 std wiper trip, tight at 4144'. Circ and condition hole. POH. RU SLB. Run FMI log. Run Platform Express log from 4150- 3700'. POOH, RD and release SLB. LD BHA and DC's. RIH open - ended w/ mule shoe. 2 • • 6/8/09 -W.O. cementers to plug well or new orders. 6/9/09 Decision made to fish cones and continue drilling. W.O. fishing tools. PU "poor boy" boot basket and RIH, tight at 2466', 3554', and 3771'. Ream to 4176'. Pump high -vis sweep. 10.2 ppg. 6/10/09 -Cut 6' core w/ boot basket, 4176 -82'. POH, recover 2 cones and junk. PU reverse -circ junk basket and RIH. Ream to 4179'. Cut core to 4183', POH. 10.2 ppg. 6 /11 /09 -PU mud motor and BHA. RIH. Drill 4183-4376'. Pump high -vis nut -plug sweep. Drill to 4474'. Unable to rotate. 7.5 deg. 10.1 ppg. . 6/12/09- Repair rig hydraulics. Drill to 4673'. Pump sweep. Drill to 4705'w/ high torque. Drill to 4708'. Pump sweep. Attempt to drill -no progress. 10.5 deg. 6/13/09-Attempt to drill, to 4709'. Wiper trip to 4100', tight at 4378'. Pump sweep. POH to 3780', back ream to 2399'. 10.2 ppg. 6/14/09-Back ream to 2243'. POH. Stuck pipe at 1989', but jarred free. Back ream to 1841'. Finish POH-1 cone lost in hole. Test BOP'RU Schlumberger. Run Platform Express tool- stopped at 2310'. POOH. PU BHA and RIH -ream at 2288'. 10.2 ppg. 6/15/09 -Ream and back ream, worked pipe thru 2288 - 2500'. RIH to 3785', ream 3785- 4709'. POH, worked thru tight spot at 3470'. LD BHA. RU SLB. Run Platform Express log. 4705-3700'. 10.1 ppg. 6 16 09-RD SLB. LD DC's and jars. PU 3 -1/2" tubing stinger. RIH to 4700'. Pump r 7, sx Type I cement w/ additives at 14.8 ppg and 1.35 cf/sk (64.9 bbl). Displace w/ 1 I ,1 water + 22 bbl 10.0 ppg mud. Pull 15 stds. Rev out 10 bbl cement. Pull another 15 stds to 3783' and rev out. POH. 6/17/09- W.O.C. RIH to 3617', wash and ream to 3896'. Tag cement and dress off top of plug. Set down 15,000# on it. Circ and condition hole. POH. Run cement retain and set in 9 -5/8" at 590'. Test to 1500 psi. Pump in at 4 BPM for 10 min. Pump x light Class G (12.0 ppg/ 2.27 cf/sk-25 bbl). Pump 20 bbl below retainer, pull out nd pump remaining 5 bbl on top. POH. (P& A witnessed by AOGCC, Lou Grimaldi). 6/18/09-L P = /2" tubing and drill pipe. Push wiper plug to 200'. RIH OE w/ DP to 200'. Pu i. 75 .x light Class G (15 bbl), bringing cement to surface. Wash out 3' below GL. ND B re . 6/19/09-Fin ND BOP. RD and move out. 6/20/09- Cement 7' of 9 -5/8" surface casing and 4' of 13 -3/8" conductor from top. Weld ; on plate. AOGCC inspector approved P & A. Continue RD and move out rig. Ed Jones (8/26/09) 3 • • Aurora Gas, LLC ALBERT KALOA ALBERT KALOA KALOA 3 Sperry Drilling Services Definitive Survey Report 01 July, 2009 HALLIBURTON Sperry Drilling Services • Halliburton Company • Definitive Survey Report Company: Aurora Gas, LLC Local Co- ordinate Reference: Well KALOA 3 Protect: ALBERT KALOA TVD Reference: KALOA 3 cc 213.5ft (Aurora #1 (199.5 MSL + 14') Site: ALBERT KALOA MD Reference: KALOA 3 @ 213.5ft (Aurora #1 (199.5 MSL + 14') Well: KALOA 3 North Reference: True 7 Weilbore: KALOA 3 Survey Calculation Method: Minimum Curvature - Design: KALOA 3 Database: .Sperry 16.1 Production Protect ALBERT KALOA, COOK INLET BASIN Map System: US State Plane 1927 (Exact solution) System Datum: Mean Sea Level Geo Datum: NAD 1927 (NADCON CONUS) Using Well Reference Point Map Zone: Alaska Zone 04 Using geodetic scale factor Well KALOA 3 Well Position +NI-S 0.0 ft Northing: 2,570,628.89 ft - Latitude: 61°1' 46.124 N +E/ -W 0.0 ft Easting: 263,674.95 it • Longitude: 151° 19' 57.562 W Position Uncertainty 0.0 ft Wellhead Elevation: ft Ground Level: 199.5ft , Wellbore KALOA 3 Magnetics Model Name Sample Date Declination Dip Angle Field Strength ( °) r) (nT) BGGM2008 5/25/2009 18.66 73.81 55,620 BGGM2008 5/14/2009 18.67 73.81 55,619 Design KALOA 3 Audit Notes: Version: 1.0 Phase: ACTUAL Tie On Depth: 14.0 Vertical Section: Depth From (TVD) +NI-S +E/ -W Direction (ft) (ft) (ft) r) 14.0 0.0 0.0 219.44 Survey Program Date 7/1/2009 From To Survey (ft) (ft) Survey (Wellbore) Tool Name Description Start Date 87.0 613.0 KALOA 3 ESS ( KALOA 3) ESS Electromagnatic Single Shot 06/30/2009 701.2 3,599.7 KALOA 3 MWD ( KALOA 3) MWD MWD - Standard 06/30/2009 3,620.0 4,660.0 KALOA 3 SLB HGNS Deviation (KALOA INC Inclinometer (Totco/Teledrift) 06/30 /2009 Survey Map Map Vertical MD Inc Azi TVD TVDSS +N /S +E!-W Northing Easting DLS Section (ft) ( ( (ft) (ft) (ft) (ft) (ft) (ft) ( °/100') (ft) Survey Tool Name 14.0 0.00 0.00 14.0 -199.5 0.0 0.0 2,570,628.9 • 263,674.9 • 0.0 0.00 UNDEFINED 87.0 2.15 338.84 87.0 -126.5 1.3 -0.5 2,570,630.2 263,674.5 2.9 -0.67 ESS (1) 147.0 2.19 339.98 146.9 -66.6 3.4 -1.3 2,570,632.3 263,673.7 0.1 -1.81 ESS (1) 209.0 2.43 342.11 208.9 -4.6 5.8 -2.1 2,570,634.7 263,673.0 0.4 -3.12 ESS (1) 271.0 2.69 345.21 270.8 57.3 8.4 -2.9 2,570,637.4 263,672.2 0.5 -4.68 ESS (1) 332.0 2.86 349.16 331.8 118.3 11.3 -3.5 2,570,640.3 263,671.7 0.4 -6.49 ESS (1) 394.0 2.95 352.72 393.7 180.2 14.4 -4.0 2,570,643.4 263,671.2 0.3 -8.57 ESS (1) 457.0 3.12 354.71 456.6 243.1 17.7 -4.4 2,570,646.7 263,670.9 0.3 -10.90 ESS (1) 520.0 3.12 354.71 519.5 306.0 21.1 -4.7 2,570,650.1 263,670.7 0.0 -13.34 ESS (1) 582.0 3.33 356.11 581.4 367.9 24.6 -5.0 2,570,653.6 263,670.5 0.4 -15.84 ESS (1) 613.0 3.42 357.37 612.3 398.8 26.4 -5.1 2,570,655.4 263,670.4 0.4 -17.19 ESS (1) L I 7/1/2009 4:01:51PM Page 2 COMPASS 2003.16 Build 71 • Halliburton Company • Definitive Survey Report Company: Aurora Gas, LLC Local Co- ordinate Reference: Well KALOA 3 Project: ALBERT KALOA TVD Reference: KALOA 3 @ 213.5ft (Aurora #1 (199.5 MSL + 14') Site: ALBERT KALOA MD Reference: KALOA 3 © 213.5ft (Aurora #1 (199.5 MSL + 14') Well: KALOA 3 North Reference: True Wellbore: KALOA 3 Survey Calculation Method: Minimum Curvature Design: KALOA 3 Database: .Sperry 16.1 Production Survey Map Map Vertical MD Inc Azi TVD TVDS3 +N /S +E/ -W Northing Fasting DLS Section (ft) ( ( (ft) (ft (ft ) (ft ) (ft) (ft) ( "11001 (ft) Survey Tool Name 701.2 3.33 356.77 700.4 486.9 31.6 -5.3 2,570,660.6 263,670 0.1 -21.02 MWD (2) 795.5 1.64 255.55 794.6 5$1.1 34.0 -6.8 2,570,663.0 263,668.8 4.2 21.95 MWD (2) 889.3 6.69 222.97 888.1 674.6 29.7 -11.8 2,570,658.8 263,663.7 5.7 15.41 MWD (2) 982.5 9.93 223.53 980.4 766.9 19.9 -21.1 2,570,649.2 263,654.3 3.5 1.96 MWD (2) 1,075.7 12.02 211.99 1,071.9 858.4 5.8 -31.8 2,570,635.4 263,643.3 3.2 15.68 MWD (2) 1,169.5 13.95 207.23 1,163.3 949.8 12.5 -42.1 2,570,617.2 263,632.6 2.4 36 MWD (2) 1,262.9 17.04 211.83 1,253.3 1,039.8 -34.2 -54.5 2,570,595.8 263,619.8 3.6 61.00 MWD (2) 1,356.3 20.99 212.99 1,341.6 1,128.1 59.8 -70.8 2,570,570.5 263,602.9 4.3 91.18 MIND (2) 1,449.7 23.71 213.31 1,428.0 1,214.5 -89.6 -90.2 2,570,541.2 263,582.9 2.9 126.50 MWD (2) 1,543.8 24.85 209.67 1,513.7 1,300.2 -122.5 -110.4 2,570,508.6 263,562.1 2.0 164.79 MWD (2) 1,638.0 26.92 211.12 1,598.5 1,385.0 -158.0 -131.2 2,570,473.6 263,540.5 2.3 205.39 MWD (2) 1,731.6 29.75 212.09 1,680.8 1,467.3 195.8 -154.5 2,570,436.3 263,516.5 3.1 249.40 MWD (2) 1,828.2 33.07 217.07 1,763.3 1,549.8 237.2 -183.2 2,570,395.5 263,487.0 4.4 299.55 MWD (2) 1,922.4 35.21 212.69 1,841.3 1,627.8 280.5 -213.3 2,570,352.8 263,455.9 3.5 352.20 MWD (2) 2,015.8 38.49 214.00 1,916.0 1,702.5 327.3 -244.2 2,570,306.6 263,424.2 3.6 407.89 MWD (2) 2,108.9 41.45 213.63 1,987.4 1,773.9 -377.0 -277.4 2,570,257.6 263,389.9 3.2 467.42 MWD (2) 2,199.1 41.02 213.63 2,055.1 1,841.6 426.5 -310.3 2,570,208.8 263,356.0 0.5 526.51 MWD (2) 2,291.4 39.94 213.28 2,125.4 1,911.9 -476.5 343.4 2,570,159.5 263,321.9 1.2 586.12 MWD (2) 2,385.2 39.67 212.62 2,197.4 1,983.9 526.9 -376.1 2,570,109.8 263,288.3 0.5 645.78 MWD (2) 2,479.0 34.51 213.83 2,272.2 2,058.7 574.2 -407.0 2,570,063.1 263,256.3 5.6 702.01 MWD (2) 2,572.4 31.42 214.75 2,350.6 2,137.1 -616.2 -435.6 2,570,021.7 263,226.9 3.4 752.61 MWD (2) 2,666.0 27.02 216.03 2,432.2 2,218.7 -653.4 -462.0 2,569,985.0 263,199.7 4.8 798.15 MWD (2) 2,759.9 24.44 215.43 2,516.8 2,303.3 -686.5 -485.9 2,569,952.4 263,175.2 2.8 836.83 MWD (2) 2,853.9 21.63 216.08 2,603.3 2,389.8 -716.4 -507.3 2,569,923.0 263,153.1 3.0 875.54 MWD (2) 2,948.2 18.21 215.77 2,692.0 2,478.5 742.4 526.2 2,569,897.4 263,133.8 3.6 907.61 MWD (2) 3,043.1 14.22 214.12 2,783.1 2,569.6 -764.1 541.4 2,569,876.0 263,118.1 4.2 934.02 MWD (2) 3,135.5 8.84 213.69 2,873.6 2,660.1 -779.4 -551.7 2,569,860.9 263,107.5 5.8 952.40 MWD (2) 3,228.6 5.86 208.57 2,965.9 2,752.4 789.5 -558.0 2,569,850.9 263,101.0 3.3 964.18 MWD (2) 3,321.8 2.60 218.65 3,058.9 2,845.4 -795.3 561.6 2,569,845.2 263,097.3 3.6 970.97 MWD (2) 3,414.8 2.33 231.48 3,151.8 2,938.3 798.2 -564.4 2,569,842.4 263,094.5 0.7 974.93 MWD (2) 3,506.1 1.46 246.13 3,243.0 3,029.5 799.8 -566.9 2,569,840.8 263,091.9 1.1 977.79 MVVD (2) 3,599.7 1.89 253.36 3,336.6 3,123.1 800.7 -569.5 2,569,840.0 263,089.3 0.5 980.13 MWD (2) 3,620.0 2.75 253.36 3,356.9 3,143.4 800.9 -570.2 2,569,839.7 263,088.5 4.3 980.81 INC (3) 3,640.0 2.95 253.36 3,376.8 3,163.3 -801.2 -571.2 2,569,839.5 263,087.6 1.0 981.64 INC (3) 3,660.0 2.94 253.36 3,396.8 3,183.3 -801.5 -572.2 2,569,839.2 263,086.6 0.1 982.49 INC (3) 3,680.0 3.34 253.36 3,418.8 3,203.3 -801.8 -573.2 2,569,838.9 263,085.5 2.0 983.40 INC (3) 3,700.0 2.95 253.36 3,436.7 3,223.2 -802.1 -574.3 2,569,838.6 263,084.5 2.0 984.31 INC (3) 3,720.0 3.10 253.36 3,456.7 3,243.2 -802.5 -575.3 2,569,838.3 263,083.5 0.8 985.19 INC (3) 3,740.0 3.73 253.36 3,476.7 3,263.2 -802.8 -576.4 2,569,838.0 263,082.3 3.1 986.18 INC (3) 3,760.0 3.56 253.36 3,496.6 3,283.1 -803.2 -577.7 2,569,837.7 263,081.1 0.8 987.23 INC (3) 7/1/2009 4:01:51PM Page 3 COMPASS 2003.16 Build 71 • Halliburton Company • Definitive Survey Report Company: Aurora Gas, LLC Local Co- ordinate Reference: Well KALOA 3 Project: ALBERT KALOA TVD Reference: KALOA 3 @ 213.5ft (Aurora #1 (199.5 MSL + 14') Site: ALBERT KALOA MD Reference: KALOA 3 @ 213.5ft (Aurora #1 (199.5 MSL + 14') Well: KALOA 3 North Reference: True Wellbore: KALOA 3 Survey Calculation Method: Minimum Curvature Design: KALOA 3 Database: .Sperry 16.1 Production Survey MD Inc AA TVD TVDSS +NI-S +E/-W Map Map Vertical Northing Fasting DLS Section on (°) (1 on on (ft) (ft) (ft) (ft) ( (ft) Survey Tool Name 3,780.0 3.36 253.36 3,516.6 3,303.1 -803.5 -578.8 2,569,837.4 263,079.9 • 1.0 988.24 INC (3) 3,800.0 3.43 253.36 3,536.6 3,323.1 -803.8 -580.0 2,569,837.0 263,078.8 0.3 989.22 INC (3) 3,820.0 3.67 253.36 3,556.5 3,343.0 -804.2 -581.1 2,569,836.7 263,077.6 1.2 990.25 INC (3) 3,840.0 3.63 253.36 3,576.5 3,363.0 -804.6 -582.4 2,569,836.4 263,076.4 0.2 991.30 INC (3) 3,860.0 3.35 253.36 3,596.4 3,382.9 -804.9 -583.5 2,569,836.1 263,075.2 1.4 992.31 INC (3) 3,880.0 5.45 253.36 3,616.4 3,402.9 -805.3 -585.0 2,569,835.6 263,073.7 10.5 993.59 INC (3) 3,900.0 4.25 253.36 3,636.3 3,422.8 -805.8 -586.6 2,569,835.2 263,072.1 6.0 994.99 INC (3) 3,920.0 4.24 253.36 3,656.3 3,442.8 -806.3 -588.0 2,569,834.8 263,070.7 0.1 996.22 INC (3) 3,940.0 4.55 253.36 3,676.2 3,462.7 -806.7 -589.5 2,569,834.4 263,069.2 1.5 997.49 INC (3) 3,960.0 4.83 253.36 3,696.1 3,482.6 -807.2 -591.1 2,569,834.0 263,067.6 1.4 998.85 INC (3) 3,980.0 5.04 253.36 3,716.1 3,502.6 -807.7 -592.7 2,569,833.5 263,065.9 1.1 1,000.28 INC (3) 4,000.0 5.24 253.36 3,736.0 3,522.5 -808.2 -594.4 2,569,833.0 263,064.2 1.0 1,001.76 INC (3) 4,020.0 5.53 253.36 3,755.9 3,542.4 -808.7 -596.2 2,569,832.5 263,062.4 1.4 1,003.32 INC (3) 4,040.0 4.87 253.36 3,775.8 3,562.3 -809.2 -598.0 2,569,832.0 263,060.7 3.3 1,004.82 INC (3) 4,060.0 5.67 253.36 3,795.7 3,582.2 -809.7 -599.7 2,569,831.5 263,058.9 4.0 1,006.35 INC (3) 4,080.0 6.19 253.36 3,815.6 3,602.1 - 810.3 -601.7 2,569,831.0 263,056.9 2.6 1,008.08 INC (3) 4,100.0 6.74 253.36 3,835.5 3,622.0 -811.0 -603.9 2,569,830.4 263,054.7 2.7 1,009.93 INC (3) 4,120.0 6.47 253.36 3,855.4 3,641.9 - 811.6 -606.1 2,569,829.8 263,052.5 1.4 1,011.84 INC (3) 4,140.0 6.49 253.36 3,875.2 3,661.7 -812.3 -608.2 2,569,829.2 263,050.3 0.1 1,013.72 INC (3) 4,160.0 6.51 253.36 3,895.1 3,681.6 - 812.9 -610.4 2,569,828.6 263,048.2 0.1 1,015.59 INC (3) 4,180.0 6.65 253.36 3,915.0 3,701.5 -813.6 -612.6 2,569,828.0 263,045.9 0.7 1,017.50 INC (3) 4,200.0 6.99 253.36 3,934.8 3,721.3 -814.3 -614.9 2,569,827.3 263,043.7 1.7 1,019.47 INC (3) 4,220.0 7.29 253.36 3,954.7 3,741.2 -815.0 -617.3 2,569,826.7 263,041.3 1.5 1,021.53 INC (3) 4,240.0 7.32 253.36 3,974.5 3,761.0 -815.7 -619.7 2,569,826.0 263,038.8 0.1 1,023.64 INC (3) 4,260.0 8.26 253.36 3,994.3 3,780.8 -816.5 -622.3 2,569,825.3 263,036.2 4.7 1,025.89 INC (3) 4,280.0 8.15 253.36 4,014.1 3,800.6 - 817.3 -625.0 2,569,824.5 263,033.4 0.6 1,028.26 INC (3) 4,300.0 8.52 253.36 4,033.9 3,820.4 -818.1 -627.8 2,569,823.7 263,030.7 1.9 1,030.66 INC (3) 4,320.0 8.18 253.36 4,053.7 3,840.2 -819.0 -630.6 2,569,823.0 263,027.9 1.7 1,033.07 INC (3) 4,340.0 7.90 253.36 4,073.5 3,860.0 -819.8 -633.3 2,569,822.2 263,025.2 1.4 1,035.40 INC (3) 4,360.0 7.68 253.36 4,093.3 3,879.8 -820.5 -635.9 2,569,821.5 263,022.5 1.1 1,037.65 INC (3) 4,380.0 7.75 253.36 4,113.1 3,899.6 - 821.3 -638.4 2,569,820.8 263,020.0 0.3 1,039.87 INC (3) 4,400.0 7.78 253.36 4,133.0 3,919.5 - 822.1 -641.0 2,569,820.0 263,017.4 0.2 1,042.12 INC (3) 4,420.0 7.88 253.36 4,152.8 3,939.3 - 822.9 -643.6 2,569,819.3 263,014.7 0.5 1,044.38 INC (3) 4,440.0 7.92 253.36 4,172.6 3,959.1 -823.7 -646.3 2,569,818.6 263,012.1 0.2 1,046.66 INC (3) 4,460.0 7.26 253.36 4,192.4 3,978.9 -824.4 -648.8 2,569,817.9 263,009.5 3.3 1,048.85 INC (3) 4,480.0 7.63 253.36 4,212.2 3,998.7 - 825.2 -651.3 2,569,817.2 263,007.0 1.8 1,051.00 INC (3) 4,500.0 7.39 253.36 4,232.1 4,018.6 -825.9 -653.8 2,569,816.5 263,004.5 1.2 1,053.17 INC (3) 4,520.0 8.18 253.36 4,251.9 4,038.4 - 826.7 -656.4 2,569,815.8 263,001.9 3.9 1,055.42 INC (3) 4,540.0 9.74 253.36 4,271.6 4,058.1 -827.6 -659.4 2,569,814.9 262,998.9 7.8 1,058.00 INC (3) 4,560.0 9.63 253.36 4,291.3 4,077.8 -828.5 -662.6 2,569,814.0 262,995.7 0.6 1,060.79 INC (3) 711/20 /1/20 4;0 Page 4 COMPASS 2003.16 Build 71 • Halliburton Company • Definitive Survey Report Company: Aurora Gas, LLC Local Co- ordinate Reference: Well KALOA 3 Project: ALBERT KALOA TVD Reference: KALOA 3 © 213.5ft (Aurora #1 (199.5 MSL + 14) Site: ALBERT KALOA MD Reference: KALOA 3 © 213.5ft (Aurora #1 (199.5 MSL + 14') Well: KALOA 3 North Reference: True Welibore: KALOA 3 Survey Calculation Method: Minimum Curvature Design: KALOA 3 Database: .Sperry 16.1 Production Survey Map Map Vertical MD Inc Azi TVD TVDSS +NI-S +EI W Northing Easting DLS Section (ft) ( ( (ft) (ft) (ft) (ft) (ft) (ft) ( °/loo) (ft) Survey Tool Name 4,580.0 9.77 253.36 4,311.1 4,097.6 -829.5 -665.8 2,569,813.1 262,992.4 0.7 1,063.59 INC (3) 4,600.0 9.69 253.36 4,330.8 4,117.3 -830.5 -669.1 2,569,812.2 262,989.2 0.4 1,066.40 INC (3) 4,620.0 9.38 253.36 4,350.5 4,137.0 -831.4 -672.2 2,569,811.4 262,986.0 1.5 1,069.15 INC (3) 4,640.0 10.48 253.36 4,370.2 4,156.7 - 832.4 -675.5 2,569,810.4 262,982.6 5.5 1,072.01 INC (3) 4,660.0 10.55 253.36 4,389.9 4,176.4 -833.4 -679.0 2,569,809.5 262,979.1 0.3 1,075.04 INC (3) 4,710.0 10.55 253.36 4,439.0. 4,225.5 -836.1 -687.8 2,569,807.0 262,970.3 0.0 1,082.63 PROJECTED to TD 7/1/2009 4:01:51PM Page 5 COMPASS 2003.16 Build 71 STATE OF ALASKA ALAS OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOG la. Well Status: OiI ❑ Gas ❑ Plugged El Abandoned 0 Suspended ❑ WAG [] lb. Well Class: 20AAC 25.105 20AAC 25.110 Development 0 - Exploratory ❑ GINJ ❑ WINJ ❑ WDSPL ❑ No. of Completions Other Service ❑ Stratigraphic Test ❑ 2. Operator Name: 5. Date Comp., Susp., or 12. Permit to Drill Number: Aurora Gas, LLC Aband.: June 20, 2009 209-047 • 3. Address: 6. Date Spudded: 13. API Number: 1400 West Benson Blvd, Suite 410 Anchorage, AK. 99503 May 17, 2009 50 -283- 20132-00 -00 4a. Location of Well (Governmental Section): 7. Date TD Reached: 14. Well Name and Number Surface: 2,700' FNL, 1,120' FWL, Sec 24, T11N, R12W, SM June 12, 2009 Kaloa #3 • Top of Productive Horizon: 8. KB Elevation (ft): 15. Field/Pool(s): 1,800' FSL, 545' FWL, Sec 24, T11N, R12W, SM 207' AMSL (DF) Total Depth: 9. Plug Back Depth(MD +TVD): Abert Ka a Undefined Gas Field 1,800' FSL, 545' FWL, Sec 24, T11N, R12W, SM plug @ 3,896 MD 4b. Location of Well (State Base Plane Coordinates): NAD 27 ' 10. Total Depth (MD + TVD): 16. Pr. • - rty Designation: Surface: x- 263674.95 y- 2570628.89 - Zone- 4 MD 4,709' . TVD 4,429' • -61393 - TPI: x- y- Zone- 4 11. Depth Where SSSV Set: . Land Use Permit: Total Depth: x- 262970.29 y- 2569807.02 Zone- 4 N/A CIRI Lease 18. Directional Survey: Yes El No ❑ 19. Water Depth, if Offsh• -: 20. Thickness of Permafrost: N/A feet M N/A 21. Logs Run: Schlumberger Hole Logs: PM! Dipmeter. Platform Express, Horizon M • Logs. 22. CASING, LINER AND CEMENTING • CORD WT. PER SETTING DEPTH MD SETTING DEPTH ■ D AMOUNT CASING FT GRADE TOP BOTTOM TOP B� OM HOLE SIZE CEMENTING RECORD PULLED 13 -3/8 68.0# K -5 3' below sfc. 92' 3' below s . 92' driven Drilled and Driven 0 9 -5/8 36.0# K -55 3' below sfc. 670' 3' belo - fc. 670' 12 -1/4" 72 bbls @1m% OH excess 0 open hole 4,709' 4,429' 7 -7/8" see below I - 23. Perforations open to Production (MD + TVD of Top and Botto • 24. TUBING RECORD Interval, Size and Number; if none, state "none "): SIZE DEPTH SET (MD) PACKER SET (MD) i() A none 25. ACID, FRACTURE, CEMENT SQUEEZE, ETC. lie DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED none, all cemented o . ' ` V 3,896' - 4,709' 270 sx t 14.8 ppg (1.35 cf /sk yield) � / . Type 1 cement w/ additives • 524' - 700' 62 sx @ 12.0 ppg (2.27 cf /sk yield) L) /1. Class G cement w/ poz. powder e � surface - 200' 75 sx @ 12.0 ppg (1.50 cf /sk yield) Y / Accelerated Class G cement 26. PRODUCTION TEST Date First Production: Method of Operation (Flowing, gas lift, etc.): nonce none Date of Test: Hours Tested: Production for Oil -Bbl: Gas -MCF: Water -Bbl: Choke Size: Gas -Oil Ratio: none N/A Test Period ..* 0 0 mcf 0 bbls N/A N/A Flow Tubing Casing Press: Calculated Oil -Bbl: Gas -MCF: Water -Bbl: Oil Gravity - API (Corr): I Press. 24 -Hour Rate —. u. 27. CORE DATA Brief description of lithology, porosity, fractures, apparent dips and presence of oil, gas or water (attach separate sheet, if necessary). Submit core chips; if none, state "none ". No cores taken. ' Form 10-407 Revised 12/2003 CONTINUED ON REVERSE 28. GEOLOGIC MARKERS • • 29. ORMATION TESTS NAME MD TVD Include and briefly summarize test results. List intervals tested, and attach detailed supporting data as necessary. If no tests were conducted, state "None ". "NONE" "NONE" 30. List of Attachments: Formation Tops 31. 1 hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Aurora Gas, LLC Printed Name: Bruce D. Webb Title: Manager, Land and Regulatory Affairs 1 �� Signature:J_ �� F Phone: 907 277 -1003 Date: 7/13/2009 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 la: Classification of Service wells: Gas Injection, Water Injection, Water - Alternating -Gas Injection, Salt Water Disposal, Water Supply for /njection, Observation, or Other. Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI (Top of Producing Interval). Item 8: The Kelly Bushing elevation in feet above mean low low water. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits (ex: 50- 029 - 20123- 00 -00). Item 20: True vertical thickness. Item 22: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 23: If this well is completed for separate production from more than one interval (multiple completion), so state in item 1, and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced, showing the data pertinent to such interval). Item 26: Method of Operation: Flowing, Gas Lift, Rod Pump, Hydraulic Pump, Submersible, Water Injection, Gas Injection, Shut -in, or Other (explain). Item 27: If no cores taken, indicate "none ". Item 29: List all test information. If none, state "None ". Form 10-407 Revised 12/2003 • • Aurora Gas, LLC Y3" Welded Steel Plated w/ Well info. KALOA #3 641 tN " Cement Plug 3'below Surface to 200' MD P &A Configuration V ' r v 3 14;4 June 20, 2009 13 -3/8" 68# Structural i t,I; i ,• r 4 Conductor driven to 92' 4 i,4«+.4.,;j +., Cut -off 3' below surface GL Af t, f ti >* Sr 9 -5/8" 36# 3' below Surface 'o t. 1r- • Casing set to 670' Drill 12 -1/4" Hole to 670' A r� ,1 Cemented w/13.0 ppg Type I Cement Retainer @590' MD Ait -- Cement Plug 524' MD to 700' MD Drill 7 -7/8" Hole to 4709' MD Cement Plug 3896' MD to TVD V A PBTD @ 4709' MD / 4429' TVD ■ . . Aurora Gas, LLC www.aurorapower.com July 13, 2009 Mr. Dan Seamount, Chair Alaska Oil and Gas Conservation Commission 333 West 7 Ave., Suite 100 Anchorage, Alaska 99501 Attn: Mr. Winton Aubert Re: Kaloa #3 Well Completion Report, Form 10 -407 (209 -047) Dear Mr. Seamount: Aurora Gas, LLC ( "Aurora ") hereby submits AOGCC Form 10 -407, Well Completion Report for the Kaloa #3 well , PTD No. 209 -047 (API 50- 283 - 20132 -00). This well was plugged and abandoned on June 20, 2009. Attached are the AOGCC Form 10 -407 and a final well diagram showing all of the plugs and well identification marker /cap. Aurora did not take any core samples, and did not do any formation tests. If you have any questions or require additional information, please contact the undersigned at 277 -1003, or Mr. Ed Jones at (713) 977 -5799. Thank you for your time and consideration. Sincerely, c.__, Bruce D. Webb Manager, Land and Regulatory Affairs Attachments: AOGCC Form 10-407 Well Completion Report Current Abandoned Well Diagram 1400 West Benson Blvd., Suite 410 *Anchorage, AK 99503 • (907) 277 -1003 • Fax; (907) 277 -1006 6051 North Course Drive, Suite 200 • Houston, TX 77072 • (713) 977 -5799 • Fax: (713) 977 -1347 N y 1 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Surface Abandonment / Location Clearance / Suspended Well ( Title 20 AAC 25.170 ) FILE INFORMATION: Operator: Aurora Gas, LLC Well Name: Kaloa No.3 ' Address: 1400 W. Benson Blvd. Suite 410 PTD No.: 209 -047 ' Anchorage AK, 99503 API No. 50- 283 - 20132 -00 Surface Location (From Sec. Line): Unit or Lease Name: CIRI Lease C- 061393 North /South 2700 FNL East/West 1120 FWL Field and Pool: Kaloa Gas Field Section: 24 Township: 11N Range: 12A Meridian: S Downhole P&A Date: 6/16/2009 20 AAC 25.120 - ABANDONMENT MARKER: Insp. Date 1 Surface Monument 1 Approval Date: Post OD: (4" min) _ " Length: ft. Set on (Wellhead, Csg , In Cmt) Height above final grade (4' min.): ft. Casing stub _ ft. below final grade Top of Marker Post Closed ? _ All openings closed ? Inspector: Insp. Date 6/20/09 1 Subsurface Monument 1 Approval Date: .3- `3/5/0 Marker Plate Diameter: 13 " Distance below final grade Level: ? Thickness: 1/4 " Side Outlets removed or closed: Y Marker Plate Attached To Conductor Y (Y /N) Cement to surface (all strings)? Y Inspector: Lou Grimaldi Exact Information Beadwelded Directly to Marker Post or Blind Marker Plate: Insp. Date 6/20/09 1 1 Approval Date: 5ek 5/5 f (:T e7 Kaloa # Aurora Gas, LLC API #50- 283 - 20132 -00 ' P TD #209 -047 Inspector: Lou Grimaldi Insp. Date 1 20 AAC 25.170 - LOCATION CLEANUP: 1 Approval Date: Pit's filled in? Liners Removed or Buried? Debris Removed: Notes: General condition of pad /location: ( Rough, Smooth, Contoured, Flat, Natural ) Notes: Type of area surrounding location: ( Wooded, Tundra ,Grass,Brush,Dirt,Gravel,Sand) Debris on surrounding area: Notes: Access road present? Type road: ( Dirt, Gravel, Ice, Other) Condition: Condition of road: Notes: Cellar filled in? Type of fill: Height above grade: Notes: Type work needed at this location: Inspector: RECOMMENDED FOR APPROVAL OF ABANDONMENT Yes No X (If "No" See Reason ) Distribution: Reason: cellar box not removed; unable to verify depth csg cut below surface; photos attached J�'�'31/v7 orig - Well file c - Operator Final Inspection performed? Yes No X c - Database c - Inspector Final Approval By: DATE: Title: Sheet by L.G. 8/5/00 Surface Abandonment Aurora Kaloa 3 06 -20 -09 LG.xls 8/5/2009 • . MEMORANDUM State of Alaska Alaska Oil and Gas Conservation Commission TO: Jim Regg r ef? 5 / DATE: June 17, 2009 P.I. Supervisor SUBJECT: Plug & Abandonment THRU: Kaloa #3 Aurora Gas, LLC. Kaloa Pad FROM: Lou Grimaldi Kaloa Gas Field Petroleum Inspector 209 -047 • Section: 24 Township: 11N Range: 12W Meridian: Seward Drilling Rig: AWS #1 Rig Elevation: 14.5 Total Depth: 4709 ft MD " Lease No.: Ciri C- 061393 Operator Rep.: Gary Goerlich Casing/Tubing Data: Casing Removal: Conductor: 13 3/8" O.D. Shoe@ 92 ft MD Casing Cut@ Feet Surface: 9 5/8" O.D. Shoe@ 670 ft MD Casing Cut@ Feet Intermediate: O.D. Shoe@ Casing Cut@ Feet Production: O.D. Shoe@ Casing Cut@ Feet Liner: O.D. Shoe@ Casing Cut@ Feet Tubing: O.D. Tail@ Casing Cut@ Feet Plugging Data: Type Pluq Bottom of T.O.C. Mud Weight Pressure (bottom upl Founded on Cement T.O.C. Depth Verified? above plug Test Open Hole Bottom 4709 3896 ' Drillpipe tag ? No Shoe Retainer ? ? No ? 1500 psi Type Pluq Founded on: Verified? Open Hole Bottom Drillpipe tag Perforation Bridge plug Wireline tag Annulus Balanced C.T. Tag Casing Stub Retainer No Surface Rig had 61/4" bit on drillpipe for tag of open hole plug. I requested they dress off top 2' of plug which was accomplished and 15K down was applied to top of cement. POOH and pick up Weatherford 9 5/8" type "PCR" retainer. RIH and set retainer at 590' RKB. Unsting running tool and PT to 1500 psi (OK). Sting back in and pump 20 bbl's cement, unsting and lay 5 bbl's on top as per approved procedure. Hole stood full and had proper fill while POOH. cc: Attachments: none - Distribution: -Well File (original) -Read File -DNR /DOG Rev.:01/26/09 by L.R.G. P and A Aurora Kaloa 3 06 -17 -09 LG.xls 8/5/2009 • • Surface Abandonment — Kaloa #3 (Aurora) PTD 209 -047 Photos by AOGCC Inspector L. Grimaldi 6/20/2009 _. Kaloa #3 casing stub — - ,t7„,,,, no cement to surface , til J / Kaloa #3 cementing a `_` casing stub i i,lk , t ' fp 1 1; , 1 , fl!v f . di • 0 • r '- Cement to surface it .,;',f -‘, ifi,P , 1 0 ..- N101, ,.... . ., f ...., ._ , _ C 11 y I / 1 , \ � w µ Kaloa #3 marker ■ l' " } j f'..- ,,,i d `?. mate ate r ! a . ,r _.4 2 Kaloa #3 Surface P &A . 0 • Kaloa #3 marker plate installed s. • 4001 01,* ,soi t, y \ . �j�'u1p��. ` t P . Jr A - ■ - * iii - 4,., Cementing mousehole i It ilf 3 Kaloa #3 Surface P &A 4 t ro ci L 4,- r Mr, Howard Oakland I i _ ? 2009 Alaska °H and Gas ConsfervaLion Commission 333 W. 7 Avenue, Suite 100 Anchorage, AK 99501 RE: Kaloa #3 Dear Mr. Oakland: This letter in duplicate originals transmits the data to you identified below, pursuant to Aurora Gas, LLC's obligation to you. This data is relative to operations at the Kaloa Undefined Gas Field, Cook Inlet, Alaska. The enclosed data consists of one printed copy and a CD of each of the logs identified below. Enclosed herewith: SCHLUMBERGER LOGS Kaloa #3, Kaloa Undefined Gas Field, Cook Inlet Alaska PLATFORM EXPRESS, Array Induction / Compensated Neutron Triple -Litho Density / SP / GR / Caliper, dated June 6, 2009 PLATFORM EXPRESS, Array Induction / Compensated Neutron Triple -Litho Density / SP / GR / Caliper, dated June 15, 2009 Fullbore MicroResistivity Imager Dipmeter — GR CD — FMI / PEX / PEX Splice, PDS Graphics, and LAS Data Please signify that you have received and accepted this data by signing in the space below and returning this letter to me at the Anchorage address below or by fax to me at 907 - 277 -1006. If you have questions, please contact me, or Ed Jones at the Houston number below. Sincerely, Bruce D. Webb i •�°� Manager, Land and Regulatory Affairs !� By: RECEIVED AND ACCEPTED ABOVE DATA This ___ day of , 2009. • • r " y t � k p r SARAH PALIN, GOVERNOR ALASKA AND GAS ALASKA OIL AND / 333 W. 7th AVENUE, SUITE 100 CONSERVATION COMPIISSION / NCH 907 33 A ASKA9501 -3539 FAX (907) 276 -7542 Bruce D. Webb Manager, Land and Regulatory Affairs Aurora Gas, LLC. 1400 West Benson Blvd., Suite 410 Anchorage, AK 99503 Re: Albert Koloa, Undefined Gas, Kaloa #3 Sundry Number: 309 -203 Dear Mr. Webb: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. When providing notice for a representative of the Commission to witness any required test, contact the Commission's petroleum field inspector at (907) 659 -3607 (pager). As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for rehearing. A request for rehearing is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. A person may not appeal a Commission decision to Superior Court unless rehearing has been requested. Sincerely, Daniel T. Seamount, Jr. Chair DATED this/ /day of June, 2009 Encl. 069 -04-11' Co STATE OF ALASKA RECEIVED ALASIWOIL AND GAS CONSERVATION COMMIOON APPLICATION FOR SUNDRY APPROVALS JUN 6 20 AAC 25.280 Alka oil Gay Cnng cnmmiSSi0n 1. Type of Request: Abandon a Suspend ❑ Operational shutdown ❑ Perforate ❑ Waiver ` r AflCh0f8B Other . Alter casing ❑ Repair well ❑ Plug Perforations ❑ Stimulate ❑ Time Extension ❑ i Lu S Change approved program ❑ Pull Tubing ❑ Perforate New Pool 0 Re-enter Suspended Well ❑ 2. Operator Name: 4. Current Well Class: 61 L 1L - S q . Permit to Drill Number: E =1 / t AURORA GAS, LLC Development , Exploratory 209 -047 . 3. Address: Stratigraphic ❑ Service ❑ 6. API Number: 1400 W. Benson Blvd., Suite 410, Anchorage, AK 99503 50 -283- 20132 -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 0 No IN Kaloa No. 3 9. Property Designation: 10. KB Elevation (ft): 11. Field/Pool(s) : 4g, . e ,,-f- ke,k)a, L( i,d&�, ;ne J �3 CIRI Lease # C- 061393 ' 207' AMSL (DF) Kalo ,.sfi% 6,- (6. 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): 4,709' 4,429' 4,709' 4,429' none none Casing Length Size MD TVD Burst Collapse Structural Conductor 92' 13 -3/8" 92' 92' 1,530 psi 520 psi Surface 670' 9 -5/8" 670' 670' 3,580 psi 1,580 psi Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): none none none none none Packers and SSSV Type: none Packers and SSSV MD (ft): none none none 13. Attachments: Description Summary of Proposal © 14. Well Class after proposed lork: /� �� Detailed Operations Program IS BOP Sketch ❑ Exploratory 476:A L- Development [/t,, Service ❑ 15. Estimated Date for 16. Well Status after proposed work: Commencing Operations: Jun (16 009 Oil ❑ Gas ❑ Plugged Abandoned IS . 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 J. Edward Jones (713) 977 -5799 Printed Name Bruce D. Webb, Manager, Land and Regulatory Affairs Title Vice President, Engineering and Oper. Signature � Date June 16, 2009 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: O° -' 203 Plug Integrity [Kr BOP Test ❑ Mechanical Integrity Test ❑ Location Clearance (2' Other: Subsequent Form Required: (0 — (407, e n ", .__;- � APPROVED BY Approved by: COMMISSIONER THE COMMISSION Date: Cil/ Form 10 -403 Revised 06/2006 g441)4 (1 5 ORIGINAL Submit in Duplg , 4414/201 PI • • RECEIVED AURORA GAS, LLC. JUN 1 6 2009 Kaloa Alaska Oil & Gas Cons. Commission ce P &A Procedure 1.1 Anchorage Note: Inform AOGCC inspector of plans to plug and abandon well in order to give inspector ample opportunity to witness all or part of the abandonment. Open Hole Plug RIH w/ OEDP w/ mule shoe (or with 3 -1/2" tubing stinger on bottom of DP) to TD (4709' MD/ -4429' TVD) and place a balanced cement plug across the interval TD to 3900' to isolate the Upper Tyonek Carya 2 -4 section, which produces in the field (at Kaloa #2)— actual volume to be determined from caliper logs, but estimated at 8.5" average hole, about 0.40 cu. ft. / ft X 850 ft = 340 cu. ft, using the Type I cement w/ additives planned for the production casing tail cement, which yields 135 cf/sk at 14.8 ppg -252 sx. (From caliper log, actual volume from 4709' to 3900' appears to be 364 cf, so we need to pump 270 sx of 1.35 cf /sk yield cement). / Pull one stand above cement, reverse out and pull up another 15 stands (to 3000'), circulate at low rate and WOC for 12 hours. Run back in and tag plug. Record depth. Set down 2500# of weight on plug to confirm integrity. POH. Casing / Open Hole Segregation Plug MIU a 9 -5/8" cement retainer and stinger and RIH. Set retainer at590'MD (78' above the 9 -5/8" casing shoe) and establish injection below it. Un -sting from the retainer and pressure test above it to 1,500 psi for ten minutes to ensure retainer has set and sealed/Mix and pump 25+ bbls of Lightweight Class G cement (w/ poz. powder, the production lead blend, which yields 2.27 cf/sk at 12.0 ppg -60 -65 sx) and displace to the stinger. Sting into retainer and pump 20 bbls through it. Un -sting from the retainer and deposit the remaining 5 bbls on top of the retainer. Pull one stand above cement, reverse out and POH, laying down all except 200' of drill pipe. Surface Plug Install a 9 -5/8" cementing wiper plug in the 9 -5/8" casing and push it to 200' with tubing or drill pipe. Fill the 9 -5/8" casing from the cementing plug to the surface with accelerated Class G — cement. L/D drill pipe/tubing. Wellhead Abandonment and Well Marker N/D BOP stack and drilling rig and move to the next drilling location. N/D wellhead and send in to vendor for servicing for re -use. Excavate around cellar. Remove cellar and cut off all casing strings at least 5' below ground level. Check 9 -5/8" casing and outer annuli for cement to surface. Top off any voids with cement. Weld on marker plate as follows: Plate to be 1/4" steel cut in a circle measuring 18" in diameter with the following information bead welded to one side: Aurora Gas, LLC Kaloa #3 PTD # 209 -047 1 • • API # 50 -283- 20132 -00 Place the plate, wording side up, over the cut -ff casing subs and weld to the outer casing string. Fill in excavation, including casing stubs w/ marker plate, level pad and clean up all debris after -' rig and other drilling equipment has been demobed. Ed Jones (6/16/09) RECEIVED JUN 1 6 2009 Alaska Oil & Gas Cons. Commission Anchorage 2 • • AURORA GAS, LLC. Kaloa #3 P &A Procedure Note: Inform AOGCC inspector of plans to plug and abandon well in order • e inspector ample opportunity to witness all or part of the abandonment. U Open Hole Plug RIH w/ OEDP w/ mule shoe (or with 3-1/2" tubing stinger on b P 11 • of DP) to TD (4709' MD/ -4429' TVD) and place a balanced cement plug across the in - al TD to 3900' to isolate the Upper Tyonek Carya 2 -4 section, which produces in - fie', at Kaloa #2)— actual volume to be determined from caliper logs, but estimated at 8.5" a -r, ge hole, about 0.40 cu. ft. / ft X 850 ft = 340 cu. ft, using the Type 1 cement w/ addi 've,, ; . ed for the production casing tail cement, which yields 1.35 cf/sk at 14.8 ppg -252 sx. ' 41 one stand above cement, reverse out and pull up another 15 stands (to 3000'), circulate a, , rate and WOC for 12 hours. Run back in and tag plug. Record depth. Set down 2500# o " , Itr ght on Igug to confirm integrity. POH. Casing / Open Hole Segregation Plug it 0 ` D M/U a 9 -5/8" cement retainer and sting- .4 • . i► . . :et retainer at 590'MD (78' above the 9 -5/8" casing shoe) and establish injection .: • t. ' n - .ting from the retainer and pressure test above it to 1,500 psi for ten minutes to ens , - d eer has set and sealed. Mix and pump 25+ bbls of Lightweight Class G cement (w/ poz. I3bw, e r, the production lead blend, which yields 2.27 cf /sk at 12.0 ppg -60 -65 sx) and displace to the stinger. Sting into retainer and pump 20 bbls through it. Un -sting from the retainer and deposit the remaining 5 bbls on top of the retainer, Pull one stand above cement, reverse out and POH, laying down all except 200' of drill pipe. Surface Plug Install a 9 -5/8" cementing wiper plug in the 9 -5/8" casing and push it to 200' with tubing or drill pipe. Fill the 9 -5/8" casing from the cementing plug to the surface with accelerated class G cement. L/D drill pipe /tubing. Wellhead Abandonment and Well Marker N/D BOP stack and drilling rig and move to the next drilling location. N/D wellhead and send in to vendor for servicing for re -use. Excavate around cellar. Remove cellar and cut off all casing strings at least 5' b ow ground level. Check 9 -5/8" casing and outer annuli for cement to surface. Top off an voids with cement. Weld on marker ' late as follows: Plate to be 1/4" steel cut in a circle measuring 18" in diameter with the following information bead welded to one side: Aurora Gas, LLC Kaloa #3 PTD # 209 -047 API # 50- 283 - 20132 -00 1 • • Place the plate, wording side up, over the cut -ff casing subs and weld to the outer casing string. Fill in excavation, including casing stubs w/ marker plate, level pad and clean up all debris after rig and other drilling equipment has been demobed. Ed Jones (6/12/09) 2 • • 1. • • Aurora Gas, LLC www.aurorapower.com June 15, 2009 REJUN CE1 GIVED 6 2009 Mr. Dan Seamount, Chair Alaska Ail & Gas Cons. Commission Alaska Oil and Gas Conservation Commission Anchorage 333 West 7 Ave., Suite 100 Anchorage, Alaska 99501 Attn: Mr. Winton Aubert Re: Request for Sundry Approval: Kaloa No. 3 (209 -047) Plug and Abandonment Procedure Dear Mr. Seamount: Aurora Gas, LLC hereby requests a Sundry Approval for the Kaloa No. 3 well , PTD No. Z� 9- 0 47 2435 tr (API 50-283-20132-00). After logging the well, it was determined to be non- 1 /r productive. Attached is the AOGCC Form 10-403 and a detailed summary of the plugging and abandonment procedure. Aurora requests an expedited approval of this procedure, as the drilling rig and the cementing service contractor are on location rigging up for the cementing operation. If you have any questions or require additional information, please contact the undersigned at 277 -1003, or Mr. Ed Jones at (713) 977 -5799. Thank you for your time and consideration. Sincerely, 6 Bruce D. Webb Manager, Land and Regulatory Affairs Attachments: AOGCC Form 10 -403 Application for Sundry Approval Kaloa #3 Plug and Abandonment Procedure 1400 West Benson Blvd., Suite 410 • Anchorage, AK 99503 • (907) 277 -1003 • Fax: (907) 277 -1006 6051 North Course Drive, Suite 200 • Houston, TX 77072 • (713) 977 -5799 • Fax: (713) 977 -1347 • • • • NOTE TO FILE Aurora Gas, LLC Diverter Waiver Request Kaloa #3 (209 -047) Aurora as, LLC (Aurora) has applied for an exception to 20 AAC 25.035(c)(1)(B) that requires the dive = r line size to be equal to or greater than the drilled hole size. Aurora believes that sufficient • ding information is available in the general area to demonstrate that a 12 -1/4" hole may be sa - drilled employing a 10" diverter line. Aurora is proposing to employ the 10" diverter line \ ce that size is all that was available from their equipment supplier. Aurora has previously sec - d waivers for drilling surface hole with an area up to 13% greater than the diverter line size. In this case, the hole area is 50% greater than the diverter line size. Aurora applied for a simil- waiver when this well was originally permitted on 2005. That request was denied. This docu s. t considers Aurora's request and recommends that it be denied as well. When drilling the initial - .. ctions of a well, the earth does not generally have sufficient strength to contain energized fluids\ the wellbore. In order to allow some measure of personnel and equipment safety, equipm t and techniques have been developed to allow an uncontrolled flow to be diverted some h�izontal distance away from the welibore. Due to the unfavorable experiences from actual div situations on the North Slope (Cirque #1) and Cook Inlet (Steelhead), the Commission � . vised its diverter regulations requiring that the initial hole size must be less than the diverter ' e size. The Commission was given discretion to allow a variance if the variance provided a east equally effective means of diverting flow away from the drill rig or if drilling experience in he near vicinity indicates that a diverter system is not necessary [20 AAC 25.035 (h) (2)]. The requirement to have a diverter lin= size greater than the initially drilled hole size is to prevent the diverter line from acting like - choke if a divert situation were to occur. Where Aurora has previously proposed 12 -1/4" h. - with a 10" diverter line size (Nikolai Creek #9), they have rightly planned to drill a pilot hole. - urora cites the experience of past operators as well as their own in support of their reque Prior to September 2008, Aurora had not experienced problems while drilling surface ections. A surface blowout occurred on Moquawkie #4 with a planned surface hole dept similar to that proposed here. Aurora was drilling a 12 -1/4" hole with a 12" diverter line at Moq .wkie #4. Aurora is proposing to keep their mud weight high in order to prevent any more than d 1 -d gas entering the mud column. Due to the Moquawkie experience, they have increased their s . -ding mud weight by 1 ppg to 10.5 ppg. Similar requests were denied for Aspen #1 (205 -111) an the original permit for Kaloa #3 (205- 108). To my knowledge, there has only been 1 recent well drill . d with the 12 -1/4" hole 10" line combination, Pelican Hill's N. Beluga #1. That well was drilled , s a direct offset (< 200' distant) to a previously drilled (determined dry) well. Control for that • - rticular well was much better than exists for Kaloa #3 where the nearest well is over 3000' dist. nt. If this request is denied, the consequence will be that Aurora will have to drill and open a • lot hole. At 700', the time penalty should be less than a day. Aurora has demonstrated that hey can drill a pilot hole where required. I recommend denial of rora's request. ti"D ri hc,,S 1�� �iV�c��`c '. A er-A/"01\/? /4 1„ 61 I T I 'l Tom Maunder, PE Sr. Petroleum Engineer April 22, 2009 G:\AOGCC\ Common \tommaunder \WellInformation\By ubject\BOP- Diverter \Waivers \090422 -note Kaloa#3 diverter line.doc • SARAH PAL!N, GOVERNOR CONSERVATION OII, AND GA�S 333 W. 7th AVENUE, SUITE 100 CONSERVATION C®�IIS�SIO T ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 FAX (907) 276 -7542 Bruce Webb Manager, Land & Regulatory Affairs Aurora Gas LLC 1400 W. Benson Blvd. Ste 410 Anchorage AK 99503 Re: Kaloa Gas Field, Kaloa No. 3 Aurora Gas LLC Permit No: 209 -047 (revised) Surface Location: 2700' FNL, 1120' FWL, SEC. 24, T11N, R12W, SM Bottomhole Location: 1800' FSL, 545' FWL, SEC. 24, T11N, R12W, SM Dear Mr. Webb: Enclosed is the revised approved application for permit to drill the above referenced development well. This revision was necessary due to changes in the meets and bounds of the surface and bottomhole locations. All requirements of the original approval dated April 24, 2009 still apply. 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, C Cathy Fjberster Commissioner 1 DATED this /7 day of May, 2009 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. • • Aurora Gas, LLC www.aurorapower.com May 12, 2009 RECEIVED MAY 1 2 ZOOS Mr. Dan Seamount, Chair Alaska Oil and Gas Conservation Commission Alaska Cif Fv Gas Cans, Commission 333 West 7 Ave., Suite 100 Anchorage Anchorage, Alaska 99501 Attn: Mr. Steve Davies Re: Revised Application for Permit to Drill: Kaloa No. 3 (209 - 047) Dear Mr. Seamount: Aurora Gas, LLC hereby amends the above referenced Permit to Drill No. 209 -047 (API 50- 283- 20132 -00), approved on April 24, 2009. The application submitted on April 8, 2009 contained an error in the surface and subsurface location in relation to the section lines. The error originated during the drafting of the plat by McLane Consulting Inc. During the drafting procedure, the location of the section lines were depicted erroneously. This error was subsequently discovered by Sperry Drilling Services. Please see the attached e -mail to Mr. Tom Maunder, dated May 11, 2009. Although the distances from the section lines have been recalculated, the actual well location (top and bottom hole) has not changed in reference to the State Base Plane Coordinates or the Latitude and Longitude positioning. The proposed spud date has also been revised to May 15, 2009. If you have any questions or require additional information, please contact the undersigned at 277 -1003, or Mr. Ed Jones at (713) 977 -5799. Thank you for your time and consideration. Sincerely, Bruce D. Webb Manager, Land and Regulatory Affairs Attachments: Revised 10 -401, Sperry Directional Drilling Proposal, Revised Kaloa #3 Plat 1400 West Benson Blvd., Suite 410 • Anchorage, AK 99503 • (907) 277 -1003 • Fax: (907) 277 -1006 6051 North Course Drive, Suite 200 • Houston, TX 77072 • (713) 977 -5799 • Fax: (713) 977 -1347 Page 1 of 7 A • Maunder, Thomas E (DOA) From: Davies, Stephen F (DOA) Sent: Tuesday, May 12, 2009 11:24 AM To: Bruce D Webb Cc: Maunder, Thomas E (DOA) Subject: RE: Kaloa #3, 209 -047 -- Here are the documents Bruce, To keep the Commission's records accurate, please submit a revised 10-401 form showing the corrected surface and bottom hole locations along with a brief cover letter stating the reason for re- submittal and the source of the error. Please also submit the corrected survey plat and revised directional survey. We'll simply re -issue the drilling permit using the same API and Permit to Drill numbers. This won't take long to process. Thanks, Steve Davies AOGCC From: Maunder, Thomas E (DOA) Sent: Monday, May 11, 2009 11:44 AM To: Davies, Stephen F (DOA) Subject: FW: Kaloa #3, 209 -047 -- Here are the documents Here are the documents From: aurorapower @gci.net [mailto:aurorapower @gci.net] On Behalf Of Bruce D Webb Sent: Monday, May 11, 2009 10:14 AM To: Maunder, Thomas E (DOA) Subject: Kaloa #3, 209 -047 Tom, Sperry Sun has finished their proposed directional drilling report. As a follow -up to our conversation a couple of weeks ago, Sperry had identified a calculation error on the Survey plat that was prepared by McLane Engineering. The location of the well, top and bottom, has not moved in terms of Latitude /Longitude or State Base Plane Coordinates. However, in terms of distances from section lines, those calculated distances have changed. The new location from the section lines, compared to what was originally submitted, are as follows: Original Submittal, approved 4/24/09 New calculated location Surface location: 2767 FNL 2700 FNL ( moved 67' towards the north ) 1118 FWL 1120 FWL ( moved 2' towards the east ) Bottom Hole: 1760 FSL 1,800 FSL ( moved 40' towards the north ) 535 FWL 545 FWL ( moved 10' towards the east ) Attached is the latest Sperry Sun Report and survey plat for you information. Please let me know if we need to submit anything officially, a revised 10 -401, or if we should just wait and report the actual distances and measurements on the 10 -407. Thank you for your time and guidance. 5/14/2009 RE EV D III STATE OF ALASKA j ALASKA OIL AND GAS CONSERVATION COMMISSION ivi/\'! 1 ?009 PERMIT TO DRILL 45 4; a , f;; gib. Gas Cons. Commission 20 AAC 25.005 j horsgo 1a. Type of Work: 1b. Current Well Class: Exploratory ❑ Development Oil ❑ 1c. Specify if well is proposed for: Drill 1151 Redrill ❑ Stratigraphic Test ❑ Service ❑ Development Gas - iti Coalbed Methane ❑ Gas Hydrates ❑ Re -entry ❑ Multiple Zone ❑ Single Zone ❑ Shale Gas ❑ 2. Operator Name: 5. Bond: Blanket is Single Well ❑ 11. Well Name and Number: Aurora Gas, LLC Bond No. NZS 429815 - Kaloa No. 3 3. Address: 6. Proposed Depth: 12. Field /Pool(s): 1400 W. Benson Blvd, Suite 410, Anchorage AK, 99503 MD: 4,750' - TVD: 4,500' 4a. Location of Well (Governmental Section): 7. Property Designation: Kaloa Gas Field . Surface: 2,700' FNL; 1,120' FWL, Sec. 24, T11 N, R12W, SM CIRI Lease C 061393 Top of Productive Horizon: 8. Land Use Permit: 13. Approximate Spud Date: 1,800' FSL, 545' FWL Sec. 24, T11 N, R12W, SM - Tyonek Native Corp., # AR 101765 5/15/2009 • Total Depth: 9. Acres in Property: 14. Dist. to Nearest Property: 1,800' FSL, 545' FWL, Sec. 24, T11 N, R12W, SM 3,435 Lease acres 535' to west section Line 3,200' to lease boundary 4b. Location of Well (State Base Plane Coordinates): 10. KB Elevation 207' MLLW 15. Distance to Nearest Well Surface: x - 263674.95 ' y- 2570628.89 • zone - 4 (Height above GL): 15' feet Within Pool: 3,700' @TD (K #2) 16. Deviated wells: Kickoff depth: 650 feet TVD ' 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) Maximum Hole Angle: 40.1 degrees • Downhole: 2,475 psi (TD PH) , Surface: 2,025 psi • 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 13 -3/8" 68# K -55 welded 94' 0 0 94' 94' driven, no cement 12 -1/4" 9 -5/8" 36# K -55 LTC 650' 0 0 650' 650' 72 bbls @ 100% OH excess 7 -7/8" 5 -1/2" 15.5# K -55 BTC 1,050' 0 0 1,050' 1,047' 7 -718" 5 -1/2" 17# J-55 LTC 1,050' 1,050' 1,047' 2,100' 1,985' 192 bbls @ 25% OH excess 7 -7/8" 5 -1/2" 17# N -80 LTC 2,650' 2,100' 1,985' 4,750' 4,500' 19. PRESENT WELL CONDITION SUMMARY (To be completed for Redrill and Re -Entry Operations) Total Depth MD (ft): Total Depth TVD (ft): Plugs (measured): Effect. Depth MD (ft): Effect. Depth TVD (ft): Junk (measured): Casing Length Size Cement Volume MD TVD Conductor /Structural 94' 13 -3/8" driven, no cement 94' 94' Surface Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): 20. Attachments: Filing Fee — BOP Sketch Drilling Program 7 Time v. Depth Plot . Shallow Hazard Analysis — Property Plat .. Diverter Sketch ❑ Seabed Report ❑ Drilling Fluid Program 4 20 AAC 25.050 requirements _ 21. Verbal Approval: Commission Representative: Date 22. I hereby certify that the foregoing is true and correct. Contact Printed Name Bruce D. Webb Title Manager, Land and Regulatory Affairs Signature ��ii �.-.- -, 1 ,._J Phone (907) 277 -1003 Dat May 12, 2009 Commission Use Only Permit to Drill L /_ API Number: ,,, Permit Approval q See cover letter for other Number: � ` 50.-2— - o - ' /3 ,- on, Date: z//0 requirements. Conditions of approval: If box checked, well may not to explore for, test, or produce coalbed ethane, gr hydrates, or gas contained in shale Other: 3O •ay..` S\ - Samples req'd: Yes❑ No 3 Mud log req'd: Yes❑ No[' \app eSl 4%."■ T•N h.5M dtANAAN- SA H measures: Yes❑ No Er Directional svy req'd: YesE No❑ t'D b \ ■Vtr-lac \ti •.4 `64 1 \a 1 hItli\t a"-CICe\-CA\A . , ? .°3 i M- as to S <...V. n APPROVED BY THE COMMISSION DATE: S '( '5 9 Y COMMI Form 10-401 Revised 12/2005 Submit in Duplicate 0 II SEC 14 SEC 13 SEC 23 SEC 24 y ' GRID N:2573351.160 GRID E:262609.680 LATITUDE: 61 °02'12.711 "N LONGITUDE: 151°20'20.310"W ) 1) BASIS OF COORDINATES IS ALASKA STATE rt' 7 �r PLANE NAD 27 ZONE 4 FROM A DIRECT TIE TO ADL NO. 31270. 2) BASIS OF ELEVATION IS FROM TIDAL OBSERVATION ON 9- 22 -93. DATUM IS MLLW. ALL ELEVATIONS SHOWN HEREON WERE TAKEN ON GROUND. 3) SECTION LINES SHOWN HEREON ARE BASED ON PROTRACTED VALUES , s 1120' FWL" a " ' F A Y , , , 4, 1 4w.,,:,0,-, KA ##3 WELL AS -BUILT L " GRID N:2570628.892 , , GRID E:263674.952 l LATITUDE: 61 °01'46.124 "N ' , LONGITUDE: 151 °19'57.562 "W. ELEV. 209' � . +� 3�� r a �� v �, ..l, ..... rat ��� n .r ENGINEERING - TESTING KALOA NO. 3 WELL P SURVEYING - MAPPING P.O. BOX 468 AS -BUILT SURFACE LOCATION DIAGRAM Mctg. SOLDOTNA, AK. 99669 APPLI �1 VOICE( (90j ,. - ) 283 -4218 A Gas, L FAX: 907 283 -3265 Consultirg Inc WWW.MCLANECG.COM PROJECT NO. DRAWN BY: DATE: SEC. LINE LOCATION: APRIL 28, 2009 OFFSETS: PROTRACTED SECTION 24 093019 MSM 2700' FNL • TOWNSHIP 11 NORTH, RANGE 12 WEST 1120' FWL SEWARD MERIDIAN, ALASKA • Page 1 of 1 Bruce D Webb From: Bruce D Webb [bwebb @aurorapower.com) Sent: Monday, May 11, 2009 10:14 AM To: 'Maunder, Thomas E (DOA)' Subject: Kaloa #3, 209 -047 Attachments: Kaloa #3 Final SperrySun Directional Proposal 5.10.09.pdf; Kaloa #3 Final Proposed location plat 5.10.09.pdf Tom, Sperry Sun has finished their proposed directional drilling report. As a follow -up to our conversation a couple of weeks ago, Sperry had identified a calculation error on the Survey plat that was prepared by McLane Engineering. The location of the well, top and bottom, has not moved in terms of Latitude /Longitude or State Base Plane Coordinates. However, in terms of distances from section lines, those calculated distances have changed. The new location from the section lines, compared to what was originally submitted, are as follows: Original Submittal, approved 4/24/09 New calculated location Surface location: 2767 FNL 2700 FNL ( moved 67' towards the north ) 1118 FWL 1120 FWL ( moved 2' towards the east ) Bottom Hole: 1760 FSL 1,800 FSL ( moved 40' towards the north ) 535 FWL 545 FWL ( moved 10' towards the east ) Attached is the latest Sperry Sun Report and survey plat for you information. Please let me know if we need to submit anything officially, a revised 10 -401, or if we should just wait and report the actual distances and measurements on the 10 -407. Thank you for your time and guidance. Bruce D. Webb Manager, Land and Regulatory Affairs Aurora Gas, LLC 1400 W. Benson Blvd., Suite 410 Anchorage, AK 99503 (907) 277 -1003 office (907) 229 -8398 cell (970) 277 -1006 fax 5/11/2009 • Aurora Gas LLC Cook Inlet Kaloa Unit Kaloa #3 Plan Kaloa #3 � Plan: wp01 A.� k7; Standard Proposal Report 03 April, 2009 �t. HALLIEUIRTON Sperry drilling Services HALLIBURT ®N Sperry Drilling Services - 320 . Aurofa GaS LLC _ 240 - - 160 WELL DETAILS: Kaloa 83 - 80 Ground Level: 196.0 Northing Easting Lat tude Longitude _ 0.0 0.0 2570628.89 • 263874.95 • 81° 1' 46.124 N 151° 19' 57.562 W • _ _ _ 9 5/8" - t -0 Start Dir 2.75 °/100' : 650' MD, 650'TVD 7� _ ID SECTION DETAILS _ Sec MD Inc Azi TVD +N/ -S +E/ -W DLeg TFace VSec Target - -80 1 0.0 0.00 0.00 0.0 0.0 0.0 0.00 0.00 0.0 - 2 650.0 0.00 0.00 650.0 0.0 0.0 0.00 0.00 0.0 3 2108.5 40.11 216.43 1992.3 -394.2 -291.0 2.75 216.43 490.0 4 2349.4 40.11 216.43 2176.5 -519.1 -383.2 0.00 0.00 646.2 6 3152.2 8.00 216.43 2900.0 -778.9 -575.0 4.00 - 180.00 968.1 Kaloa #3 T1 - -160 6 3352.2 0.00 0.00 3099.4 -790.1 -583.2 4.00 180.00 982.1 7 4752.8 0.00 0.00 4500.0 -790.1 -583.2 0.00 0.00 982.1 cn - -240 C SURVEY PROGRAM CY Date: 2009.04.02700:00:00 Validated: Yes Version: Depth From Depth To Survey /Plan Tool --320 a 0.0 4752.8 wp01 (Plan Kaloa 83) MWD End Dir : 2108 5' MD, 1992 3' TV13 iD + 2 - -400 N 0 CASING DETAILS Start Dir 4 °/100' . 2349.4' MD, 2176.5'TVD TVD MD Name Size E 650.0 650.0 95/8" 9-5/8 --480 - 4500.0 4752.8 5-112" 5 -1/2 End Du . 33522' MD, 3099 4' TVD - -560 DD1 =4.96 N COMPANY DETAILS Aurora Gas, LLC ■ Drilling 1 Calculation Method: Minimum Curvature Total Depth . 4752.8' MD, 4500' TVD 5 -1/2" Error System: ISCWSA Scan Method: Tray. Cylinder North ■ - Error Surface: Elliptical Conic ��, - - - I Warning Method: Rules Based 900 . 1 - / I / REFERENCE INFORMATION \ i \ / Co- ordinate (ME) Reference: Well Kaloa #3, Grid North i I Raba #3 Tl Vertical (TVD) Reference: K3 + 16' L 212.08 (212 8 (196' MSL + 18' KB)) i / Measured Depth Reference: K3 + 16' Q 212.0ft (212 ft (196' MSL + 16' KB)) Calculation Method: Minimum Curvature I F- -vnu Kaloa #3/Plan Kaloa #3/wp0 Protect: Cook Inlet Site: Kaloa �U{gnit i i i J 1 I 1 1 1 1 I 1 I 1 1 1 1 1 1 1 I I I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I I 1 1 1 1 1 1 1 1 I I 1 1 I 1 1 I 1 I 1 I I 1 1 I 1 I 1 1 I l 1 1 1 I 1 1 I I 1 1 1 1 1 1 1 1 1 Well: Kaloa #3 -1280 -1200 -1120 -1040 -960 -880 -800 -720 -640 - 560 - 480 -400 -320 -240 -160 -80 0 80 160 Wellbore: Plan Kaloa #3 west( - )/East( +) (200 ft/in) Plan: wp01 (Kaloa #3/Plan Kaloa #3) HALLIBURTON • Project: Cook Inlet WELL DETAILS: Kaloa #3 Sperry Drilling Services Site: Kaloa Unit Ground Level: 196.0 Well: Kaloa #3 +NI -S +E/ -W Northing Fasting Latittude Longitude Slot VVellbore: Plan Kaloa #3 0.0 0.0 2570628.89 263674.95 61° 1' 46.124 N 151° 19' 57.562 W Auuro a Gas, LLC Plan: wp01 (� REFERENCE INFORMATION D D I = 4.96 Co- ordinate (NIE) Reference: Welt Kaloa #3, Grid North Vertical (TVD) Reference: K3 + i6' ' 4 212.0# 212 ft ( 196' MSL+ 16' KB -600— Measured Depth Reference: K3 + 15 @ 212.OR 212 ft ( 196' MSL + 16' KB Calculation Method: Minimum Curvature SURVEY PROGRAM -300— Date: 2009- 04- 02T00:00:00 Validated: Yes Version: Depth From Depth To Survey /Plan Tool ttS 0.0 4752.8 wp01 (Plan Kaloa #3MAWD 0- 300- 9 5/8" CASING DETAILS TVD MD Name Size 600— 650.0 650.0 9 5/8" 9 -5/8 - 4500.0 4752.8 5 -1/2" 5 -1/2 Start Dir 2.75 °/100' : 650' MD, 650'TVD 900— FORMATION TOP DETAILS No formation data is available 1200 - 1500- 1 _ End Dir : 2108.5 MD, 1992.3' TV[ o - o - S 1800- 0 4) - tD _ I12100 U _ _ Start Dir 4 °/100' : 2349.4' MD, 2176.5'TVD 2 2400 — 1— L 2700— Kaloa #3 T1 3000— End Dir : 3352.2' MD, 3099.4' TVD 3300 — 3600 — 3900— 4200— Total Depth : 4752.8' MD, 4500' TVD • 5 -1/2" 4500— Kaloa #3/Plan Kaloa #3/uip01 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 7 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I 1 t I f T 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 -1500 -1200 -900 -600 -300 0 300 600 900 1200 1500 1800 2100 2400 2700 Vertical Section at 216.43° (600 ft/in) Sperry Drilling Services HALLIBURTON Standard Proposal Report Data .Sperry EDM .16 PRD Local Co- ordinate Reference: Well Kaloa #3 Company: Aurora Gas, LLC TVG Reference: ' K3 + 16' © 212.0ft (212 ft (196' MSL + 16' KB)) Project: Cook Inlet MD Re ference: K3 + 16' © 212.0ft (21211 (196' MSL + 16' KB)) Site: _L Kaloa Unit North Reference Grid Weft: Kaloa #3 Survey" Calculation Method: Minimum Curvature Welibore: Plan Kaloa #3 Design: wp01 Project Cook Inlet, USA Map System: US State Plane 1927 (Exact solution) System Datum: Mean Sea Level Geo Datum: NAD 1927 (NADCON CONUS) Map Zone: Alaska Zone 04 Using geodetic scale factor Site Kaloa Unit Site Position: Northing: 2,566,962.63ft Latitude: 61° 1' 9.438 N From: Map Easting: 260,749.55ft Longitude: 151° 20' 55.398 W Position Uncertainty: 0.0 ft Slot Radius: 0" Grid Convergence: -1.18 ° Welt `. Kaloa #3 Well Position +N /-S 0.0 ft Northing: 2,570,628.89 ft • Latitude: 61° 1' 46.124 N +E/ -W 0.011 Easting: 263,674.95 ft • Longitude: 151° 19' 57.562 W Position Uncertainty 0.0 ft Wellhead Elevation: ft Ground Level: 196.011 Wellbore', : Plan Kaloa #3 il,itigh tics. >- M■del'Name Sample Date ' i: ; ' ' ' 7Deecfination Dip Angie;; Fieldi Strength (tt1•) BGGM2008 4/2/2009 18.71 73.81 55,618 Design wp01 Audit Notes: Version: Phase: PLAN Tie On Depth: 0.0 Vertical Section Depth l rom (TVD) +#!NHS +E /MT Direetion 0.0 0.0 216.43 Plan Sections Measured Vertical TVl3 Dogleg -. Build i'Urn Depth lnclinati-on Az rinuth Depth System ... +N / +E/'W Rate Rate . Rate '`l'ool.ra (ft) (0) T.°) . (ft) ft :(ft) ,({t),` (110 09 (" /10nftj .;:': ( °C1DOft) (°}- 0.0 0.00 0.00 0.0 -212.0 0.0 0.0 0.00 0.00 0.00 0.00 650.0 • 0.00 0.00 650.0 438.0 0.0 0.0 0.00 0.00 0.00 0.00 2,108.5 40.11 216.43 1,992.3 1,780.3 -394.2 -291.0 2.75 2.75 0.00 216.43 2,349.4 40.11 216.43 2,176.5 1,964.5 -519.1 -383.2 0.00 0.00 0.00 0.00 3,152.2 8.00 216.43 2,900.0 2,688.0 -778.9 -575.0 4.00 -4.00 0.00 - 180.00 3,352.2 0.00 0.00 3,099.4 2,887.4 -790.1 -583.2 4.00 -4.00 0.00 180.00 4,752.8 0.00 0.00 4,500.0 4,288.0 -790.1 -583.2 0.00 0.00 0.00 0.00 4/3/2009 9:48 :44AM Page 2 COMPASS 2003.16 Build 431 Sperry Drilling Services HALLIBURTON Standard Proposal Report Database: .Sperry EDM .16 PRD Local Co-ordinate Reference: Well Kaloa #3 Company: Aurora Gas, LLC TVD Reference: K3 + 16' © 212.Oft (212 ft (196' MSL + 16' KB)) Project: Cook Inlet MD Reference::. K3 + 16' © 212.0ft (212 ft (196' MSL + 16' KB)) Site .. Kaloa Unit North Reference: Grid Welk' Kaloa #3 Survey Calculation Method: Minimum Curvature Welibore: Plan Kaloa #3 Design: wp01 Planned Survey Measured Vertical Map Map Depth inclination Azimuth '` Depth miss +N/-S +E/ -W Northing Ea sting DLS Vert Section (ft) (a) t°). (ft) ft (ft) (ft) (ft) (ft) -212.00 0.0 0.00 0.00 0.0 -212.0 0.0 0.0 2,570,828.89 263,674.95 0.00 0.00 100.0 0.00 0.00 100.0 -112.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 200.0 0.00 0.00 200.0 -12.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 300.0 0.00 0.00 300.0 88.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 400.0 0.00 0.00 400.0 188.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 500.0 0.00 0.00 500.0 288.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 600.0 0.00 0.00 600.0 388.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 650.0 0.00 0.00 650.0 438.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 Start Dir 2.75 °1100' : 650' MD, 6501VD - 9 5/8" • 700.0 1.38 216.43 700.0 488.0 -0.5 -0.4 2,570,628.41 263,674.59 2.75 0.60 800.0 4.13 216.43 799.9 587.9 -4.3 -3.2 2,570,624.55 263,671.74 2.75 5.40 900.0 6.88 216.43 899.4 687.4 -12.1 -8.9 2,570,616.84 263,666.05 2.75 14.98 1,000.0 9.63 216.43 998.4 786.4 -23.6 -17.4 2,570,605.29 263,657.53 2.75 29.33 1,100.0 12.38 216.43 1,096.5 884.5 -38.9 -28.7 2,570,589.95 263,646.20 2.75 48.41 1,200.0 15.13 216.43 1,193.6 981.6 -58.1 -42.9 2,570,570.82 263,632.09 2.75 72.17 1,300.0 17.88 216.43 1,289.5 1,077.5 -80.9 -59.7 2,570,547.98 263,615.22 2.75 100.57 1,400.0 20.63 216.43 1,383.9 1,171.9 -107.4 -79.3 2,570,521.46 263,595.65 2.75 133.54 1,500.0 23.38 216.43 1,476.6 1,264.6 -137.6 -101.6 2,570,491.32 263,573.40 2.75 171.00 1,600.0 26.13 216.43 1,567.4 1,355.4 -171.3 -126.4 2,570,457.64 263,548.54 2.75 212.86 1,700.0 28.88 216.43 1,656.1 1,444.1 -208.4 -153.8 2,570,420.50 263,521.12 2.75 259.03 1,800.0 31.63 216.43 1,742.5 1,530.5 -248.9 -183.8 2,570,379.97 263,491.21 2.75 309.40 1,900.0 34.38 216.43 1,826.3 1,614.3 -292.7 -216.1 2,570,336.16 263,458.86 2.75 363.86 2,000.0 37.13 216.43 1,907.5 1,695.5 -339.7 -250.8 2,570,289.16 263,424.17 2.75 422.28 2,100.0 39.88 216.43 1,985.8 1,773.8 -389.8 -287.8 2,570,239.08 263,387.21 2.75 484.52 2,108.5 40.11 216.43 1,992.3 1,780.3 -394.2 -291.0 2,570,234.69 263,383.96 2.75 489.99 End Dir : 2108.5' MD, 1992.3' TVD 2,200.0 40.11 216.43 2,062.2 1,850.2 -441.6 -326.0 2,570,187.26 263,348.95 0.00 548.94 2,300.0 40.11 216.43 2,138.7 1,926.7 -493.5 -364.3 2,570,135.43 263,310.69 0.00 613.36 2,349.4 40.11 216.43 2,176.5 1,964.5 -519.1 -383.2 2,570,109.83 263,291.79 0.00 645.19 Start Dir 4 °/100' : 2349.4' MD, 2176.5'TVD 2,400.0 38.09 216.43 2,215.8 2,003.8 -544.8 -402.1 2,570,084.15 263,272.84 4.00 677.10 2,500.0 34.09 216.43 2,296.6 2,084.6 -592.1 -437.1 2,570,036.78 263,237.87 4.00 735.99 2,600.0 30.09 216.43 2,381.3 2,169.3 -634.9 -468.6 2,569,994.05 263,206.33 4.00 789.10 2,700.0 26.09 216.43 2,469.5 2,257.5 -672.7 -496.6 2,569,956.18 263,178.38 4.00 836.17 2,800.0 22.09 216.43 2,560.8 2,348.8 -705.6 -520.8 2,569,923.35 263,154.14 4.00 876.97 2,900.0 18.09 216.43 2,654.7 2,442.7 -733.2 -541.2 2,569,895.73 263,133.75 4.00 911.31 3,000.0 14.09 216.43 2,750.7 2,538.7 -755.5 -557.7 2,569,873.44 263,117.30 4.00 939.01 3,100.0 10.09 216.43 2,848.5 2,636.5 -772.3 -570.1 2,569,856.60 263,104.87 4.00 959.95 3,152.2 8.00 216.43 2,900.0 2,688.0 -778.9 -575.0 2,569,850.00 263,100.00 4.00 968.15 Kaioa #3 T1 3,200.0 6.09 216.43 2,947.5 2,735.5 -783.6 -578.5 2,569,845.28 263,096.52 4.00 974.01 3,300.0 2.09 216.43 3,047.2 2,835.2 -789.4 -582.7 2,569,839.55 263,092.29 4.00 981.14 3,352.2 0.00 0.00 3,099.4 2,887.4 -790.1 -583.2 2,569,838.78 263,091.72 4.00 982.09 End Dir : 3352.2' MD, 3099.4' TVD 3,400.0 0.00 0.00 3,147.2 2,935.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4/3/2009 9:48:44,4M Page 3 COMPASS 2003.16 Build 431 Sperry Drilling Services HALLIBURTOFY Standard Proposal Report Database: .Sperry EDM .16 PRD LocaICo- ordinate Reference: ` Well Kaloa #3 Company: Aurora Gas, LLC TVD Reference: K3 + 16' @ 212.0ft (212 ft (196' MSL + 16' KB)) Protect: Cook Inlet MD Reference :_ K3 + 16' © 212.0ft (212 ft (196' MSL + 16' KB)) Site: ' ` ` Kaloa Unit North Reference: Grid Welts Kaloa #3 Surve_y Calculation Method: Minimum Curvature Welilbore: Plan Kaloa #3 'Design; ' wp01 Planned Survey .' Measured Vertical Map Map . Depth. . Inclination Azimuth Depth TV-Dss +Nt-S +E/.W Northing East!ng '' D.LS Ve rt Section (ft) (0) (a) ' (ft)' ft (ft) (ft) (ft) (ft) 3,0308 3,500.0 0.00 0.00 3,247.2 3,035.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,600.0 0.00 0.00 3,347.2 3,135.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,700.0 0.00 0.00 3,447.2 3,235.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,800.0 0.00 0.00 3,547.2 3,335.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,900.0 0.00 0.00 3,647.2 3,435.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,000.0 0.00 0.00 3,747.2 3,535.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,100.0 0.00 0.00 3,847.2 3,635.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,200.0 0.00 0.00 3,947.2 3,735.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,300.0 0.00 0.00 4,047.2 3,835.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,400.0 0.00 0.00 4,147.2 3,935.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,500.0 0.00 0.00 4,247.2 4,035.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,600.0 0.00 0.00 4,347.2 4,135.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,700.0 0.00 0.00 4,447.2 4,235.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,752.8 . 0.00 0.00 4,500.0 • 4,288.0 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 Total Depth : 4752.8' MD, 4500' TVD . Targets - Targ `hithms( rg ,taet . _. Ittp Artgfe Dip Diir TVD +N0-S, +EI W Northirn , asting Shape fah _ (°6 :(ft) (ft) `: '(ft)` : (ft -} Kaloa #3 T1 0.00 0.00 2,900.0 -778.9 -575.0 2,569,850.00 263,100.00 - plan hits target center - Circle (radius 150.0) Casing Points Measured Vertica Caamg _': Hole Depth Depth , Dfan[eter Diameter (ft) ' (ft)' Name C) . ($) 650.0 650.0 9 518" 9 -5/8 12 -1/4 4,752.8 4,500.0 5 -1/2" 5 -1/2 7 -7/8 Plan- Annotation3' Measured Vertical Local Coordinates • Depth Depth +N1.8 +Et (ft) (ft) (ft) (ft} Comment 650.0 650.0 0.0 0.0 Start Dir 2.75° /100' : 650' MD, 650'TVD 2,108.5 1,992.3 -394.2 -291.0 End Dir : 2108.5' MD, 1992.3' TVD 2,349.4 2,176.5 -519.1 -383.2 Start Dir 4 °1100' : 2349.4' MD, 2176.5'TVD 3,352.2 3,099.4 -790.1 -583.2 End Dir : 3352.2' MD, 3099.4' TVD 4,752.8 4,500.0 -790.1 -583.2 Total Depth : 4752.8' MD, 4500' TVD 4/3!2009 9:48:44AM Page 4 COMPASS 2003.16 Build 431 ■ Aurora Gas, LLC Cook Inlet Kaloa Unit Kaloa #3 Plan Kaloa #3 wp01 Sperry Drilling Services Clearance Summary Anticollision Report 03 April, 2009 Tray. Cylinder North Proximity Scan on Current Survey Data (North Reference) Reference Design: Kaloa Unit - Kaloa #3 - Plan Kaloa #3 - wp01 Well Coordinates: 2,570,628.89 N, 263,674.95 E (61° 01' 46.12" N, 151° 19' 57.56" W) • Datum Height: K3 + 16' @ 212.0ft (212 ft (196' MSL + 16' KB)) Scan Range: 0.0 to 4,752.8 ft. Measured Depth. Scan Radius is 675.3 ft . Clearance Factor cutoff is Unlimited. Max Ellipse Separation is Unlimited Geodetic Scale Factor Applied Version: 2003.16 Build: 431 Scan Type: GLOBAL FILTER APPLIED: All wellpaths within 200'+ 100/1000 of reference Scan Type: 25.00 HALLIBURTDN Sperry Drilling Services • LLC SURVEY PROGRAM ANTI- COLLISION SETTINGS Aurora Gas, LLC 1�g�4 02700:00:00 Validated: Yes Version: Interpolation Method: MD, interval: 100.0 • Depth Range From: 0.0 To 4752.8 Depth From Depth To Survey/Plan Tool Results Limited By: Centre Distance: 675.3 0.0 4752.8 wp01(Plan halos #3) MWD Reference: Plan: wp01 (Kaloa #3/Plan Kaloa #3) "�ALLr� BuRT� Scan Type: Sperry Drilling Services 0 0 30 330 30 a330 30 10• 20 300 60 300 60 - 270 90 • Mr 240 120 20 270. 90 - 210 150 30 180 50 Travelling Cylinder Azimuth (TFO +AZI) 11 vs Centre to Centre Separation [20 ft/in] Aurora Gas, LLC zao 120 Drilling Calculation Method: Minimum Curvature Error System: ISCWSA • Scan Method: Tray. Cylinder North Error Surface: Elliptical Conic • • Warning Method: Rules Based 210 150 SECTION DETAILS Sec MD Inc Azi TVD +N / -S +EJ-W DLeg TFace VSec Target 125 1 0.0 0.00 0.00 0.0 0.0 0.0 0.00 0.00 0.0 180 2 650.0 0.00 0.00 650.0 0.0 0.0 0.00 0.00 0.0 3 2108.5 40.11 216.43 1992.3 -394.2 -291.0 2.75 216.43 490.0 4 2349.4 40.11 218.43 2176.5 -519.1 -383.2 0.00 0.00 645.2 5 3152.2 8.00 216.43 2900.0 -778.9 -575.0 4.00 - 180.00 968.1 Kaloa 83 T1 6 3352.2 0.00 0.00 3099.4 -790.1 -583.2 4.00 180.00 982.1 Travelling Cylinder Azimuth (TFO +AZI) [ °] vs Centre to Centre Separation [50 ft/in] 7 4752.8 0.00 0.00 4500.0 - 790.1 - 583.2 0.00 0.00 982.1 NAD 27 ASP Zone 4 : WELL DETAILS: Kaloa 93 REFERENCE INFORMATION Ground Level: 196.0 From Color To MD Co-ordinate (N /E) Reference: Well Kaloa 93, Grid North +N /.S +E 0. 0 Northing 263674.95 Latittude Longitude Slot 0.0 Vertical (TVD) Reference: 10+16'@ 212.Oft (212 ft (196' MSL + 16' KB)) 0.0 2670628.89 263674.96 61° V 46.124 N 15V 16' 67.662 W 0 - woo Section (VS) Reference: Slot - 0.0E) 0 moo t00° Measured Depth Reference: K3 + 16' i 212.0ft (212 ft (196' MSL + 16' KB)) 200° 70 Calculation Method: Minimum Curvature 3000 - moo 4000 --- 5000 HALLIBURTDN Anticollision Report for Kaloa #3 - wp01 Tray. Cylinder North Proximity Scan on Current Survey Data (North Reference) Reference Design: Kaloa Unit • )(aloe #3 - Plan Kaloa #3 - wp01 Scan Range: 0,0 to 4,752.8 ft. Measured Depth. Scan Radius is 675.3 ft . Clearance Factor cutoff is Unlimited. Max Ellipse Separation is Unlimited Measured Minimum @Measured Ellipse @Measured Clearance Summary Based on Site Name Depth Distance Depth Separation Depth Factor Minimum Separation Warning Comparison Weil Name - Welibore Name • Design (ft) (ft) (ft) (ft) ft Kaloa Unit • Kaloa #5 (alternate SHL) - Plan Kaloa #5 (alternate SH Kaloa #5 (alternate SHL) - Plan Kaloa #5 (alternate SH Survey tool oroaren From To Survey /Plan Survey Tool (ft) (ft) 0.0 4,752.8 wp01 MWD Ellipse error terms are correlated across survey tool tie -on points. Calculated ellipses incorporate surface errors. Separation is the actual distance between ellipsoids. Distance Between centres is the straight line distance between welibore centres. Clearance Factor = Distance Between Profiles / (Distance Between Profiles - Ellipse Separation). All station coordinates were calculated using the Minimum Curvature method. • Page 2 of 4 COMPASS Aurora Gas, LLC HALLIBURTON Cook Inlet Anticollision Report for Kaloa #3 - wp01 Direction and Coordinates are relative to Grid North Reference. Vertical Depths are relative to K3 + 16' @ 212.0ft (212 ft (196' MSL + 16' KB)). Northing and Easting are relative to Kaloa #3. Coordinate System is US State Plane 1927 (Exact solution), Alaska Zone 04. Central Meridian is - 150.00 °, Grid Convergence at Surface is: -1.17 °. Ladder ,r)r • I I I I I I I I I I I t I I I I I 1 210- r-- 1 1 1 I 1 1 0 I I 1 I I I 140 ' a 1 1 LEGEND tl) 1 1 1 1 1 I CO 1 1 I 1 1 I Qy 1 1 1 1 1 I —0. Kaloa N5 (alternate SHL), Plan Kaloa N5 (alternate SHL; L C 1 1 1 f , -e w p 01 a.) U 1 I 1 1 1 I I 1 I I 1 I O 70 — • �' 1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 I I 1 1 I 1 I 0 O` !` '►. 1. 1 1 1 0 600 1200 1800 2400 3000 Measured Depth (600 ft/in) 03 April, 2009 - 9:57 Page 3 of 4 COMPASS Aurora Gas, LLC HALLIBURTON Cook Inlet Anticollision Report for Kaloa #3 - wpOl Clearance Factor Plot: Measured Depth versus Separation(Clearance) Factor .. 10.06 y ! . 7.50 CIS _ " LEGEND 0 5.00 ly cts _ - K a S HL), Plan Kaloa N5 (alternate SHL), ti 1 CU -- p i sx � - w 0 cD C4 3 . . . . 2.54 f •v' _. - ,.- - 1. - "' - r . - - . 0.00 - . , , 1 I r f ' a 300 600 900 1200 1500 1800 2100 2400 2700 3000 3300 3600 M easured Depth (600 itlin) 03 April, 2009 - 9:57 Page 4 of 4 COMPASS WELL PERMIT CHECKLIST Field & Pool ALBERT KALOA, UNDEFINED GAS -40500 Well Name: BOA 3 Program DEV Well bore seg ❑ PTD#: 2090470 Company AURORA GAS LLC Initial Class/Type DEV / 1 -GAS GeoArea 2200__ Unit On /Off Shore On Annular Disposal ❑ Administration 1 Permit fee attached NA 2 Lease number appropriate Yes CIRI Fee lease C- 061393; notice of change of ownership fled with AOGQC on 11/4/2003 3 Unique well name and number Yes Previously permitted under number 2051080, which expired on 8/17/2007, 4 Well located in a_definedpool Yes ALBERT KALOA,IJNDEFINED GAS - 40500, which is governed by 20 AAC 25.055 5 Well located proper distance_ from drilling unit boundary Yes Kaloa 3 will be the only well in Section 24. The only well within 3,000' is P&A'd exploratory well Kaloa 4. 6 Well located proper distance from other wells Yes 7 Sufficient acreage available in drilling u nit Yes 8 if deviated, is_wellbore plat_included Yes 9 Operator only_ affected party Yes 10 Operator has_apprppriate_bond in force Yes 11 Permitcan be issued without conservation order Yes Appr Date 12 Permit_can be issued without administrativ_eapproval Yes SFD 5/12/2009 13 Can permit be approved before 15-day waft Yes 14 Well located within area and strata authorized by Injection Order # (put IQ# in comments) _(For NA 15 All welis_within 1 14_mile area of review identified (For service well only) NA 16 Pre - produced injector; duration of pre production less than 3 months_ (For service welt only) _ NA 17 Nonconven, gas conforms to AS31,05030(j,1.A),(j.2.A -D) NA 18 Conductor string_prQvided Yes Engineering 19 Surface casing protects all known IJSDWs Yes Surface and production casing will protect fresh water sands. 20 CMT_vol adequate_to circulate on conductor & surf csg Yes 21 CMTvot adequate_to tie -in long string to surf csg Yes 22 CMTwill cover all knownproductiye horizons Yes 23 Casing designs adequate for C,_T, SA_ permafrost Yes 24 Adequate tankage_or reserve pit Yes Rig is_equipped with steeipits. Although small, Aurora has successfully_ drilled similar wells using this rig 25 if are- drill, has a_ 10-403 for abandonment been approved NA Drilling waste to Aspen_ disposal wel l. 26 Adequate wellbore separation proposed Yes '27 if diverter required, does it meet regulations Yes 12 -1/4" hole with 12" diverter line planned. This has been appro previously. Appr Date 28 Drilling fluid program schematic & equip list adequate Yes Maximum expected formation pressure 19.6 EMW at TD and up to 10.0 EMW in surface_hoie, Surface hole cautio TE 5/18/2009 29 BOPE5, do they meet regulation Yes noted. Spud MW - 1 ppg higher than_previously planned. Up to 11.0 ppg planned in both hole sections. 30 BOPE_press rating appropriate; test to_(put psig in comments) Yes MASP calculated at 2025 psi._ 3000_psi130P testptanned, 31 Choke _manifold complies w/API RP -53 (May 84) Yes 32 Work will occur without opera tion shutdown Yes 33 is presence_ of H28 gas probable No H2S has not been reported in gas produced without oil. Rig has sensors and alar ms. 34 Mechanical condition Owens within AOR verified For service well only.) NA 35 Perrnitcan be issued w/o hydrogen_ sulfide measures Yes None expected; however, well will be mud logged and H2S detectors will be installed at floor, shaker_& cellar, _ _ _ Geology 36 Data_presented on potential overpressure zones Yes Expected pressure is 10.6 ppg EMW (0.55psi/ftgradient);_will be drilled with 9.6 to 11.0 ppg mud. Appr Date 37 Seismic analysis of shallow gas zones NA Offset exploratory well_Kaloa 4,_ f3H42000' SE, was_drilled_without incident to 3700' TVD using < 10.0 ppgmud, _ _ SFD 5/12/2009 38 Seabed condition survey (if off- shore) NA Shallow gas and coal seam hazards are discussed on pages 8 &11_ of the drilling program. 39 Contact name /phone for weekiy_prog_ress reports_ [exploratory only] NA Geologic Engineering Public REVISION DUE TO CHANGE IN SURFACE AND BOTTOMHOLE LOCATION MEEDS AND BOUNDS COORDINATES DUE TO SURVEYOR DRAFTING Commissioner: Date: Commissioner: Date Commissioner Date ERROR. NO OTHER CHANGES FROM PERMITTED OPERATIONS. SFD 5/12/2009 �1( DTS 6j) q 09 CPF JKN • 0 [1. li A\ CS' - ' 3 A Lif 7 --ml I t- ; L Irk 1 ,3 L1 - - 1 -, ) ,) r_ l �� SARAH PALIN, GOVERNOR r ALASKA OIL AND GAS 333 W. 7th AVENUE, SUITE 100 CONSERVATION COMMISSION ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 FAX (907) 276-7542 Bruce Webb Manager, Land & Regulatory Affairs Aurora Gas LLC 1400 W. Benson Blvd. Ste 410 Anchorage AK 99503 Re: Kaloa Gas Field, Kaloa No. 3 Aurora Gas LLC Permit No: 209 -047 Surface Location: 2767' FNL, 1118' FWL, SEC. 24, Ti 1N, R12W, SM Bottomhole Location: 1760' FSL, 535' FWL, SEC. 24, T11N, R12W, SM Dear Mr. Webb: 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). _ 'ncerely, Daniel T. Seamount, Jr. Chair DATED this Z day of April, 2009 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. STATE OF ALASKA ALA OIL AND GAS CONSERVATION COMM SSW PERMIT TO DRILL 20 AAC 25.005 ,A ; vk 1 a. Type of Work: 1 b. Current Well Class: Exploratory Eri Development Oil E 1 c. Specify if well ispr... , 0 " ► NxstO Drill 0 Redrill E Stratigraphic Test fl Service In Development Gas . C 10 6 pl `a . Gas Hydrates Li Re -entry LI Multiple Zone In Single Zone 0 Shilg as fl 2. Operator Name: 5. Bond: Blanket isi Single Well 0 11. Well Name and Number: Aurora Gas, LLC Bond No. NZS 429815 - Kaloa No. 3 3. Address: 6. Proposed Depth: 12. Field /Pool(s): 1400 W. Benson Blvd, Suite 410, Anchorage AK, 99503 MD: 4,750'. ' TVD: 4,500' " 4a. Location of Well (Governmental Section): 7. Property Designation: Kaloa Gas Field Surface: 2,767' FNL, 1,118' FWL, Sec. 24, T11 N, R12W, SM CIRI Lease C 061393 Top of Productive Horizon: 8. Land Use Permit: 13. Approximate Spud Date: 1,760' FSL, 535' FWL, Sec. 24, T11N, R12W, SM Tyonek Native Corp., # AR 101765 5/12/2009 Total Depth: 9. Acres in Property: 14. Dist. to Nearest Property: 1,760' FSL, 535' FWL, Sec. 24, T11 N, R12W, SM 3,435 Lease acres 535' to west section Line 3,200' to lease boundary • 4b. Location of Well (State Base Plane Coordinates): 10. KB Elevation 207' MLLW 15. Distance to Nearest Well Surface: x - 263674.95 y- 2570628.89 zone - 4 (Height above GL): 15' feet Within Pool: 3,700' @TD (K #2) 16. Deviated wells: Kickoff depth: 650 feet TVD 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) Maximum Hole Angle: 40.1 degrees Downhole: 2,475 psi (TD PH) Surface: 2,025 psi • 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 13 -3/8" 68# K -55 welded 94' 0 0 94' 94' driven, no cement 12 -1/4" 9-5/8" 36# K -55 LTC 650' 0 0 650' 650' 72 bbls @ 100% OH excess 7 -7/8" 5 -1/2" 15.5# K -55 BTC 1,050' 0 0 1,050' 1,047' 7 -7/8" 5 -1/2" 17# J -55 LTC 1,050' 1,050' 1,047' 2,100' 1,985' 192 bbls @ 25% OH excess 7 -7/8" 5 -1/2" 17# N -80 LTC 2,650' 2,100' 1,985' 4,750' 4,500' 19. PRESENT WELL CONDITION SUMMARY (To be completed for Redrill and Re -Entry Operations) Total Depth MD (ft): Total Depth TVD (ft): Plugs (measured): Effect. Depth MD (ft): Effect. Depth TVD (ft): Junk (measured): Casing Length Size Cement Volume MD TVD Conductor /Structural 94' 13 -3/8" driven, no cement 94' 94' Surface Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): 20. Attachments: Filing Fee — BOP Sketch = Drilling Program 7 Time v. Depth Plot 7 Shallow Hazard Analysis — Property Plat .1 Diverter Sketch _ Seabed Report Drilling Fluid Program ✓ 20 AAC 25.050 requirements _ 21. Verbal Approval: Commission Representative: Date 22. I hereby certify that the foregoing is true and correct. Contact Printed Name Bruce D. Webb Title Manager, Land and Regulatory Affairs Signature ` L) Phone (907) 277 -1003 Date April 8, 2009 Commission Use Only Permit to Drill ,-- API Number: . ,� Permit Approval �/� See cover letter for other Number: `� / f_51.. Zc _,� 71) 13Zc Date: .<4 . a`'f' •b11 requirements. Conditions of approval: If box checked, well may not to explore for, test, or produce coalbed methane, gas hydrates, or gas contained in shale& Other: '30GO ry1 c ., k (1__ Samples req'd: Yes❑ No [?1 Mud log req'd: Yes [1] No ?f %S OO pS ∎ +.+∎ \nC ►''�*� � v`'^r^v k(k - ke-S H measures: Yes❑ No © Directional svy req'd: Yes[ No[ 1'a" &,) t -- \t_r- \‘ r.E.'.41 V ' ' ' h•k ¢ aecl`0 c,b \t % a0 A Rc_as - .O'35<h <a> APPROVED BY THE COMMISSION ir . / / 2- . l .�t ? 3 ✓ ' i m , COMMISSIONER :� \ I n i ti e 't P�d� ` / Form 10-401 Revised 12/2005 Submit • Aurora Gas ' LLC www.aurorapower,com April 8, 2009 lasa 1ii ;ask,: �° ftiuct semossion Anchorage Mr. Dan Seamount, Chair Alaska Oil and Gas Conservation Commission 333 West 7 Ave., Suite 100 Anchorage, Alaska 99501 Attn: Mr. Tom Maunder P.E. Re: Application for Permit to Drill: Kaloa No. 3 (205 -108); and Waiver Request for Size of Diverter Line Dear Mr. Seamount: Aurora Gas, LLC hereby applies for a Permit to Drill an onshore development well in the Kaloa Gas Field of Alaska. The Kaloa No. 3 well was previously permitted as a directional well under PTD No. 205 -108 (API 50- 283 - 20113 -700), and subsequently expired. A partial pad was constructed and the conductor pipe set under the previous permit, however, no actual drilling had occurred. The well Kaloa No. 3 well is located approximately 7 '/2 miles southwest of Tyonek, Alaska. Aurora Gas, LLC proposes to spud the Kaloa No. 3 on May 12, 2009. The Kaloa No. 3 well will be drilled on the northwest end of the Kaloa Airstrip constructed in the 1960's to support exploration activities in the region. Access will be via existing gravel roads. The well surface location is approximately 4900 feet northeast of the Kaloa No. 2 well. The well is currently proposed to be deviated to the southwest towards the Kaloa No. 2 well, with bottom -hole location approximately 3,700 feet from the Kaloa No. 2 well. The well program is essentially the same as previously permitted. The bottom -hole location has been adjusted slightly from the original location. The proposed wellbore geometry includes the previous installation of a 13 3 /8" conductor, drilling 12 1/4" surface hole and setting 9 5 /8" surface casing, and drilling out to TD w/ 7 7 /g" bit. _ 5 , cvcc� - -- —= : _ _ _..�._._. - -- ._....... ��,., :...�..�:�.....�..�..�:..,..... Per 20 CC MC,A k AAC 25.035 (c)(1)(A) there is a requirement that the diverter line outlet size be at least 16" in `�laa &t diameter or (B) at least as large as the hole size being drilled, unless one can show through historical precedent or other that drilling a hole size larger than the diverter line outlet size can be done safely. Aurora is requesting a waiver of the diverter line size requirements as required / in the above mentioned regulations because of Aurora's knowledge of the area and recent work history in the immediate vicinity. - 1400 West Benson Blvd., Suite 410 • Anchorage, AK 99503 • (907) 277 -1003 • Fax: (907) 277 -1006 6051 North Course Drive, Suite 200 • Houston, TX 77072 • (713) 977 -5799 • Fax: (713) 977 -1347 • Mr. Seamount April 8, 2009 Page 2 Drilling records for offset wells in the Kaloa Gas Field, namely the Albert Kaloa No. 1 drilled by the Pan American Oil Company in 1967 and the Kaloa No. 2 which was drilled by Aurora Gas, LLC in 2004, Aurora feels the intervals to be drilled through do not pose a well - control risk, and further Aurora feels there is enough information available to safely drill the surface hole interval without benefit of first drilling a pilot hole. Based on the historical well information indicated above, Aurora hereby requests a waiver of the pilot hole requirement per both 20 AAC 25.035 (c)(1)(B) and 20 AAC 25.035 (h)(2). Aurora has determined that a spacing exception for this well is not required per 20 AAC 25.055. The well will be the only well located in governmental section 24. The surface location is 1,118 feet (bottom -hole location is approximately 535 feet) from the nearest section line; however, the lessee, land owner and surface owner are the same in the adjoining sections. • The surface location is approximately 3,300 feet (bottom -hole location is approximately 3,200 feet) from the nearest lease boundary and the bottom -hole location is approximately 3,700 feet - from the nearest well capable of production (Albert Kaloa #2). Pertinent information in and attached to this application includes the following: 1) Form 10 -401 Application for Permit to Drill — 2 copies 2) Location As -Built plat 3) Days vs. Depth drilling curve 4) Drilling Procedure 5) Wellbore Schematic 6) Pressure and casing design and property information. 7) Description of the BOP equipment per 20 AAC 25.035 (a)(1) and (b) 8) Cement program description 9) Drilling fluid program description 10) A summary of potential well hazards. 11) Sperry Drilling Services Directional Well Plan If you have any questions or require additional information, please contact the undersigned at 277 -1003, or Mr. Ed Jones at (713) 977 -5799. Thank you for your time and consideration. Sincerely, Bruce D. Webb Manager, Land and Regulatory Affairs Page 1 of 2 Maunder, Thomas E (DOA) From: aurorapower @gci.net on behalf of Bruce D Webb [bwebb @aurorapower.com] Sent: Wednesday, April 22, 2009 2:17 PM To: Maunder, Thomas E (DOA); 'Ed Jones' Subject: RE: Kaloa #3 (revised diverter language) Dear Mr. Maunder, Aurora Gas, LLC would like to amend the diverter line variance request for Kaloa #3 to read as follows: "Aurora intends on installing 9 -5/8" diameter surface casing with a 12 -1/4" drilled hole diameter. Due to the 12- 1/4" hole size, Aurora hereby requests a variance to allow a 12" diverter line in accordance with 20 AAC 25.035 (h)( Thank you for your time and consideration. Sincerely, -Bruce Webb From: Maunder, Thomas E (DOA) [mailto:tom.maunder @alaska.gov] Sent: Wednesday, April 22, 2009 1:53 PM To: Ed Jones; Bruce Webb Subject: RE: Kaloa #3 (revised) Ed, Could you include the 12" line wording from either the Lone Creek #4 or Moquawkie #4 in a response to this message? If I have a complete statement that supersedes the 12 -1/4" — 10" statements in the cover letter, I believe I can include that and proceed with the application I have in hand. Call or message with any questions. Tom Maunder, PE AOGCC From: aurorapower @gci.net [mailto :aurorapower @gci.net] On Behalf Of Ed Jones Sent: Wednesday, April 22, 2009 1:46 PM To: Maunder, Thomas E (DOA); 'Bruce Webb' Subject: RE: Kaloa #3 (revised) Tom, We missed that one - -we have a 12" diverter line -- purchased in 2006, so that should have been changed. Thus, we request a waiver for a 12" diverter, as we did at Lone Creek 4 and Moquawkie 4. What do we need to resubmit? Thanks, Ed From: Maunder, Thomas E (DOA) [mailto:tom.maunder@alaska.gov] Sent: Wednesday, April 22, 2009 4:38 PM To: Bruce Webb; Ed Jones Subject: Kaloa #3 (revised) Ed and Bruce, I am reviewing the permit application for the revised Kaloa #3. Aurora is requesting a waiver of the diverter line size requirement (line sizet. hole size) to allow drilling a 12 -1/4" hole with a 10" line size similar to the original 2005 application. A similar request was made for Aspen #1. The request was denied for both of those wells. Please be advised, that my recommendation to the Commissioners will be that your request here also be denied. 4/24/2009 • Page 2 of 2 Would you please provide a revised procedure that includes a pilot hole in the surface section? Thanks in advance. Call or message with any questions. Tom Maunder, PE AOGCC 4/24/2009 . Aurora Gas, LLC Kaloa #3 Drilling Program KALOA #3 Kaloa #3 is a grass -roots well targeting Tyonek Gas Production. It is located in the Kaloa Gas Field, directionally drilled from a new pad at the north end of the "here strip" in the Kaloa Field to a BHL +/ -3700' NNE of the Kaloa #2 well. It will target Upper Tyonek Carya 2 -4 thru 2 -5 sands that have produced more than 3 BCF from the #2 well. Pre Rig work 1. The site was surveyed in 2005 for the Kaloa #3 —GL is about 207'. The conductor was driven to 94' from GL at that time. 2. Clear the proposed pad area and add gravel as necessary for a 200' x 300' pad configured for AWS #1 with drilling support. Build sufficient emergency cuttings containment for planned drilling program, and build containment for diverter line. 3. Install cellar & mousehole. Cut off conductor as needed to accommodate diverter system. Drilling Procedure 1. File & insure all necessary permits and applications are in place. 2. MIRU AWS #1 in drilling configuration. 94' of 13 -3/8" conductor has been pre - installed. Install 13 -5/8" VG LOK head. 3. Rig up diverter & mud loggers. Test & calibrate all PVT / gas sensor equipment. Provide 24 -hr notice to AOGCC inspectors for chance to witness diverter test. 4. Notify AOGCC & pertinent agencies when ready to start drilling operations. 5. Prepare spud mud system / weight up to 10.5 ppg. Load, strap & drift 650' of 9 -5/8" surface casing. 6. PU 12 -1/4" mill tooth bit & drill to –650', using 8" stabilized BHA. Watch for gas in shallow coals and sands. Attempt to TD in siltstone or claystone, avoid setting surface shoe in a coal bed or sand. If possible, adjust TD to put cement head at floor. 7. Condition hole for running 9 -5/8" surface casing, POOH, LD 12 -1/4" BHA. 8. Run & cement new 9 -5/8" 36 #, K -55 LTC casing @ 650', installing 1 centralizer / joint centered on the 1 4 joints above shoe, & 1 centralizer every 2 joint across the collars there after. Shoe joint connection at float shoe and float collar must be Baker - Locked. Cementing will be single stage using 13.0 ppg accelerated Type I cement at 100% excess volume. Be prepared to treat cement returns with retarder. 9. RD cementers, nipple down diverter, cut casing and install 11" 3M wellhead. 10. RU and test 11" 3M BOP stack and 5M choke manifold. Test stack and surface equipment to 3,000 psi. Pressure test 9 -5/8" casing to 1,500 psi for 15 minutes or as Prepared by Ed Jones Page 1 of 11 Rev. 1.0 Aurora Gas, LLC Kaloa #3 Drilling Program required on approved Permit to Drill. Mud weight to drill out should be at least 10 ppg at this point, do not cut back if higher, up to 10.5 ppg. 11. PU 7 -7/8" Mill Tooth Bit & RIH w/ 6 -1/4" collars. Drill out shoetrack. Condition / treat mud as needed for cement contamination, drill 20' new formation. Pull back into shoe & perform FIT / LOT up to 16.0 ppg EMW maximum with low volume test pump. Record results. POH & LD 6-1/4" collars. 12. PU 4 - directional drilling assembly w/ 7 -7/8" bit, motor & DIR MWD assembly, non- mag DC's, jars & HWDP as specified by Sperry proposal. 13. RIH and directionally drill 7 -7/8" hole to 4750' MD (4,500' TVD) TD per Sperry directional plan, or other depth as directed by Aurora Gas geologist (may as shallow as 4250'MD depending upon top of Carya 2 -6). Monitor well and volumes carefully. Be prepared to shut well in and weight up immediately if flow or excessive gas build up in mud is noticed. Monitor hole cleaning and drilling trends, prepare to short trip if needed. Anticipated mud weights required are 9.8 ppg – 11.0 ppg. Do not exceed fracture gradient determined in step 11. If possible, adjust TD to put cement head on floor. While drilling, load, tally & drift 5 -%2" casing on racks. 14. Condition hole, short trip and prepare for running wireline logs. 15. POOH, rack back drillstring and RU wireline BOP's and lubricator and logging tools. Log 9 -5/8" cased hole section w /gamma ray sensor, Log 011 section with logging suite including resistivity and porosity logs as directed by Aurora Gas. RD wireline. 16. RIH w/ 7 -7/8" drilling assembly to TD & condition hole for running 5 -' /2" casing. Ensure cementing head has proper connections or proper cross -over and is available for quick rig up. 17. POOH while laying down drillpipe & BHA, RU to run casing. Verify cementer's equipment is ready. 18. Install 5 -'/2" pipe rams. 4 kr,i, At 19. Run 2650' of 5 -%2" 17# N -80 LTC casing, then 1050' of 5 -1/2" 17# J -55 LTC casing, X- 0 LTC to BTC, then 1050' of 5 -1/2" 15.5# K -55 BTC casing, installing 1 centralizer per joint centered on 1 4 joints above shoe, 1 centralizer every 2nd joint in open hole & every 3 joint inside surface casing (use Turbolator centralizers below /thru each pay sand and where directional inclination is greater than 10 deg). Shoe joint connection at float shoe, float collar & stage tool landing collar must be Baker- Locked (80' shoetrack). While running casing, fill every 3 joint. Be prepared to wash to bottom. 20. RU cementers, cement per attached cementing program from TD to surface. A sufficient amount of accelerated 12.0 ppg light weight Class G lead cement will be pumped to cover from 2000' up thru the annulus from the 9 -5/8" shoe to surface. This will be followed by sufficient amount of 14.8 ppg Class G tail blend cement to cover from TD back to 2000'. Excess will be calculated using caliper log data —top of tail slurry will be determined following evaluation of the logs. Plug will be bumped with clean brine. If possible reciprocate pipe while displacing cement. Land casing & WOC. 21. RD cementers, nipple down stack, land casing in slips & cut casing. Prepared by Ed Jones Page 2 of 11 Rev. 1.0 Aurora Gas, LLC Kaloa #3 Drilling Program 22. Install 11" X 7- 1/16" tubing spool, 7- 1/16" X 11" DSA, mud cross and reinstall BOP stack. Pressure test BOP and surface equipment to 3,000 psi. Pressure test casing to 2,000 psi for 15 minutes and record results. 23. Install 2 -7/8" pipe rams. 24. RIH w/ bit & casing scraper on 2 -7/8" tubing to float collar. Displace well w/ filtered KC1/NaC1 brine (wt. to be determined from XPT data). Continue to clean brine for perforating by running through centrifuge & filtering. POOH. Strap tubing on TOH to validate tally. A MORE DETAILED PROCEDURE WILL BE PROVIDED AT THIS POINT INCLUDING PERFS 25. PU wireline BOP' s & lubricator, pressure test all against casing to 1500 psi (or higher if XPT indicated higher gradients). PU GR/CBL /CCL & log 5 -1/2" casing to surface. LD logging tools & PU perforating guns, RIH to depth as determined from OH logs and perforate zones of interest. Watch for pressures in casing after shooting. POOH, LD perf gun, RD wireline. 26. RIH w/ bit & casing scraper on 2 -7/8" tubing to float collar. Circulate perforating debris from hole. Continue centrifuging & filtering brine until cleaned up. POOH. LD bit & scraper. RU Aurora well test unit, including flare stack. 27. Pick up & assemble completion assembly which will consist of mechanical set packer w/ on -off tool for sump packer to be set above deepest perforated zone, then 2 (or 3) hydraulic packers w/ sliding sleeves between packers —all sliding sleeves are to be closed and a pump -out ball -seat below deepest packer. RIH with completion on new 2 -7/8" 6.5# J -55 8 rd tubing & set completion at appropriate depth, filling tubing as running. Space out, hang off in tubing head & lock down. Drop ball and pressure tubing to 3000 psi (or as required) to test and to set packers. Install BPV. ND BOP. NU and test tree. 28. Pull BPV and RIH w/ slick line and pull blanking plug. 29. RU & swab in deepest zone. After well cleans up, perform flow test —get stabilized rate (1 hour minimum). Shut in well & record pressure buildup until stabilized with no change in one hour. DO NOT KILL, but run blanking plug and set in XN nipple below deepest packer. 30. Add needed KC1 water cushion to tubing (1000' above sliding sleeve). Open deepest sliding sleeve. Test well as per Step 29. DO NOT KILL, but close sliding sleeve. 31. Repeat Step 30 for remaining shallower intervals (1 or 2). 32. Open zones for initial production (depending upon pressures and test results — likely the 2 -4.2 and deeper) —flow to clean up. Shut in. Set BPV in tree. Release rig, RD, and move rig. 33. Pull BPV. Run 4 -point test of initial production zone as per Procedure provided at that time. RD test unit. 34. Clear & clean location. Hand well over to production. 35. File completion reports with proper agencies. Prepared by Ed Jones Page 3 of 11 Rev. 1.0 40 Aurora Gas, LLC Kaloa #3 Drilling Program Site Access Kaloa #3 will be accessible via existing gravel roads currently in use to support production operations at the Kaloa #2 drillsite and the #8105 meter site. Rig Aurora Well Service, Rig No. 1 (AWS 1) will be used to drill the Kaloa #3 well. The Alaska Oil & Gas Conservation Commission has information on this rig and equipment as it has been in use for the last (6) years on other Aurora Gas operations. The pits, BOP system & mud equipment configuration will be the same as that used for previous work. Survey Program The 12 -1/4" surface hole will be drilled vertically and the survey program will consist of Sperry multi -shot survey and supplemented with single -shot surveys as required to be obtained at 500' intervals in accordance with rules laid out in 20 AAC 25.050 (a) (1) & (2). The 7 -7/8" production hole will be drilled directionally. For all directional work, directional MWD will be utilized with supplemental wellbore surveys taken at maximum of 100 ft intervals as needed, per AAC 25.050 (a)(1). Logging Program Mud loggers will be on site for the duration of drilling activities. Schlumberger will provide wireline logging services as proposed below: Kaloa #3 Proposed Logging Program Well Section Depths (ft) OH CH Log Type 12 -1/4" Surface 0' — 650' 1 N /A: No open -hole logs planned for surface at this time. GR only in cased hole. 7 -7/8 1 " Production 650' —4750' Ai Platform Express: Array Induction, Compensated Neutron, , Hole Litho - Density, SP, GR, and possibly DSI and/or FMI/DM.. Also XPT and, possibly, Sidewall cores. 5 -1/2" Int. Csg 650' —4750' I GR/CBL /CCL Surface — TD 94' — 4750' Mud Logging Services BOP Equipment Aurora Gas, LLC will use the same BOP system they have been using for the last (5) years which will consist of the following: Prepared by Ed Jones Page 4 of 11 Rev. 1.0 411 i Aurora Gas, LLC Kaloa #3 Drilling Program 12 -1/4" Surface Hole While drilling the 12 -1/4" surface hole, a 13 -5/8" 5M annular w/ 13 -5/8" diverter spool & 12" diverter line will be used: an exception to 20 AAC 25.035 (c)(1)(A), requiring that the diverter line outlet size be at least 16" diameter or (B) at least as large as the hole size being drilled, will be requested. 7 -7/8" Production Hole An 11" 3000 PSI WP Schafco (Shaffer Equivalent) BOP system will be used which is configured with an 11" 3000 PSI WP annular preventer, (1) 3000 PSI WP double gate with a set of pipe rams installed sized to fit the pipe being run and a set of blind rams and (1) 11" 3000 PSI WP rated drilling spool. BOP tests will be performed to 3000 psi. The annular preventer will be tested to 1500 psi. Again, this is the same equipment Aurora has been using all along and information on the system is on file at the AOGCC. Drilling Fluids The drilling fluids will be furnished by Baroid, who has extensive experience with drilling activities in this area. An experienced mud engineer will be on site at all times while drilling to monitor properties and make recommendations. Drilling Fluid Properties While Drilling 12 -1/4" interval to 650' Beluga Formation Base Fluid Fresh or produced water Density 10 -11 ppg , PV 10 -30 YP 30 -40 API Filtrate not controlled Total Solids 15 — 25 % Bentonite Gel (Aquagel) mud system Drilling Fluid Properties While Drilling 7 -7/8" interval to 4750' Beluga and Tyonek Formations Base Fluid 3% KC1 Density 9.6 -11.0 ppg PV 6 -15 YP 13 -20 API Filtrate < 5 Total Solids 10 —15 % Low Solids Non - Dispersed (LSND) System Prepared by Ed Jones Page 5 of 11 Rev. 1.0 10 II Aurora Gas, LLC Kaloa #3 Drilling Program Drilling Fluid Handling System Shale Shaker, Mud Cleaner, Centrifuge, PVT monitors Drilling Waste Disposal The cuttings will be mixed with Portland cement, put into Super Sacks and transported to the Kenai Borough landfill on the Kenai Peninsula. Drilling mud will be held in tanks for reuse or injection at the Aspen Disposal Well. Brine will be placed in tanks for use in future wells. Casing / Cementing Program All casing is new. Analysis (attached) indicates casing program as designed provides adequate safety factors for this well. All casing strings with the exception of the 13 -3/8" conductor will be cemented in place using industry standard casing cementing techniques utilizing a casing shoe, float equipment, top and bottom wiper plugs and centralizers installed as needed. 13 -3/8" 68# K -55 Conductor Analysis and Cementing Program The conductor for Kaloa #3 has been installed by drilling/driving the 13 -3/8" pipe to 94'SS/109' RKB. Joints are welded together and a drilling shoe was welded to the bottom joint. No cementing is required. 9 -5/8" 36# K -55 LTC Surface Casing Analysis and Cementing Program The 9 -5/8" surface casing will be cemented from the proposed setting depth of 650' to surface with an accelerated 13.0 ppg accelerated Type I cement system. Capacities: 9 -5/8" Csg. Capacity = .0773 bbl /ft 9 -5/8" Csg X 13 -3/8" Conductor Capacity = 0.0597 bbl/ft 9 -5/8" Csg. x 12 -1/4" OH Capacity= .0558 bbl /ft System Volume: 9 -5/8" X 13 -3/8" Annulus: 80 X 0. 0597= 4.8 bbl 12 -1/4" OH x 9 -5/8" Csg: (650' -80) x .0558 bbl/ft x 2 (100 % excess) = 63.6 bbls Shoe Jt: 47' x .0773 bbl/ft = 3.6 bbls Total Surface Cement Volume =72.0 bbl Actual volumes to be re- calculated at time of running casing due to potential variation in actual depth from planned. Cement System Weight (ppg) bbl cf sx Accelerated Class G 13.0 72.0 404 221 Yield 1.83 cf /sx Please see attached 9 -5/8" surface casing analysis and specifications. Prepared by Ed Jones Page 6 of 11 Rev. 1.0 1110 • Aurora Gas, LLC Kaloa #3 Drilling Program 5 -1/2" 15.5# K -55 BTC, 17# J -55 LTC, & 17# N -80 LTC Production Casing Cementing Program The 5 -1/2" production casing will be cemented in fully from the proposed set depth of 4750' to surface. A 12.0 ppg accelerated lead light- weight "G" cement followed with a 12.0 ppg light- weight "G" tail cement system will be used. (The top of the tail may be adjusted upward following the logging program, dependent upon the location of upper most potential pay). This program is designed to insure the intended perforating / production intervals are isolated with tail "G" blend. Capacities: 5 -'/2" 15.5# csg capacity = .0238 bbl/ft 5 -%2' 15.5# csg X 7 -7/8" OH capacity = .0309 bbl /ft 5 -'/2" 15.5# csg X 9 -5/8" 36# annular capacity = .0479 bbl /ft Lead System: 9 -5/8" x 5- ' /2 "Csg: 650' + (2600 -650') 7 -7/8" open hole 650' x .0479 bbls /ft x 1 (0% excess) = 31.1 bbls Lead Cement Volume = 31.1 bbl +1950' X .0309 X 1.25 (25% excess) =106.4 bbl Tail System: 7 -7/8" OH x 5 -'/2' Csg: 4750' -2600' = 2150' 2,150' x .0309 bbl/ft x 1.25(25% excess) =83.0 bbls Shoe Joint: 85' x .0238 bbl /ft = 2.0 bbls Total Tail Cement Volume = 85.0 bbls Actual volumes will be calculated at time of running casing due to potential variation in depth from planned. Cement System Type Cement Weight (ppg) bbl cf sx Lead @ 2.26 cf/sx G 12.0 106.4 597 265 Tail @ 1.35 cf /sx G 14.8 85.0 477 353 Please see attached 5 1/2" production casing analysis and specifications. Pressure Calculations Maximum Anticipated Surface Pressure From offset wells in the immediate area and actual pressure data from the nearby offset well Kaloa #2, maximum anticipated bottom -hole pressures should not exceed 1,785 psi at 3,500 ft. Pressures measured at the Kaloa #2 well indicated a gradient of -.548 psi /ft with a bottom -hole pressure of 1604 psi recorded at 2,903' (may have been supercharged, but maximum observed). Maximum anticipated surface pressures "MASP" can be calculated by subtracting the gas gradient of .1 psi /ft from pore pressure gradient of .55 psi / ft and multiplying by the total TVD depth. Maximum Anticipated Surface Pressure = (.55 - .1) * 4500' = 2025 psi Prepared by Ed Jones Page 7 of 11 Rev. 1.0 Aurora Gas, LLC Kaloa #3 Drilling Program A formation integrity test to 17.0 ppg EMW @ 640' was conducted while drilling Kaloa #2. Assuming casing shoe strength of 17.0 ppg EMW (or 0.88 psi /ft) our estimated Maximum Allowable Surface Pressure during the 7 -7/8" interval is expected to be Maximum Allowable Surface Pressure = (.88 -.1) *650' =507 psi Drilling Hazards Shallow gas Shallow gas is a known hazard which exists throughout the area. The northwest side of Cook Inlet is noteworthy for its shallow gas hazard. All responsible personnel will be made aware and a notice of such hazards will be posted in the rig doghouse. There is no record of H2S in the region, however; a gas detection system capable of detecting H2S as well as methane will be installed on the rig with detectors at the floor level, the shale shaker and in the cellar. Coal Seams The Cook Inlet region is rich in coal seams, inter - bedded between the sands, gravels and shales that make up the Beluga and Tyonek formations. Drilling into a coal seam will appear to be a drilling break when drilled with a tri -cone bit. The major hazard of drilling into a coal seam , without observing the proper response is the risk of stuck pipe. The proper course of action for preventing stuck pipe is two -fold. First, prior to drilling, insure the drilling fluid system is up to par, per recommendations from the on -site mud engineer. The second step to successfully drilling through coals in the Cook Inlet area is to not get greedy when coals are encountered. When a coal has been encountered, pull back above coal after drilling into it, and circulate, allowing the coal to stabilize. Re- enter, drill some more, and pull back out again. Continue in this fashion until successfully through the coal bed. The key word in successfully drilling the coal beds is patience. It should be remembered that coals behave plastically, and will flow under the weight of the overburden. The deeper the coal, the more pronounced this tendency becomes. For this reason it is critical to maintain the proper weight and viscosity of the drilling fluid to properly remove the coal cuttings, and to hold flowing coals in place. Again, heed the recommended drilling fluid program and advice offered by the on -site Mud Engineer. Well Proximity Risk There are 4 existing wellbores in this field, the Albert Kaloa #1, the Ka loa #2, the Kaloa #4, and the Simpco Kaloa #1, all with surface locations about 3 miles or more to the southwest of the projected #3 BHL. Also, about 3 miles to the SSE in the section to the south, 25- 11N -12W, the old Tyonek State 175862 well was drilled and abandoned. However, the closest well bore is the PseAa Kaloa #4 BHL, which will be about 1950' from the BHL of the #3. Thus, there is no well proximity risk. Other Risks Sticky bentonitic clays, boulders, lost returns & differential sticking with overbalanced muds and gas influx while cementing or swabbing while tripping pipe. Prepared by Ed Jones Page 8 of 11 Rev. 1.0 410/ 111, Aurora Gas, LLC Kaloa #3 Drilling Program 2 7/8 6.5# 8rd EUE J -55 Tubing Aurora Gas, LLC w w �� •e $� KALOA #3 � r9 ; A .� , =� µ • 13 -3/8" 68# Structural Proposed Configuration «� Conductor driven to 94' GL Drill 12 -1/4" Hole to 650' 9 -5/8" 36# Surface Casing set at 650' Cement w /13.0 ppg Type I 2 -7/8" x 5 -'/ :" annulus to be Accelerated displaced over to inhibited packer? '? fluid through sleeve @1445' :,+k a. 1 ProspectiveTyonek Pay Tops Carya 2 -3.2 3250' MD / 3000' TVD Carya 2 -4.1 3400 ' MD/ 3150' TVD _ Hydraulic Set Packer @ 3350' Carya 2-4.2 3500' MD/ 3250' TVD — Carya 2 -5.1 – 3650' MD /3400' TVD Carya 2 -5.2 3775' MD/ 3520' TVD Carya 2-6 - 4100' MD/ 3850' TVD Sliding Sleeve @ –3430' elk Carya 2-4.1 d� Tyonek Perforation Intervals to be 11— Hydraulic Set Packer @3470' determined by open -hole logging. Carya 2 -4.2 Sliding Sleeve @ –3550' MD tgl 2 7/8" 6.5# EUE 8rd Tubing w/ On- Off Tool on Mechanical Packer @ 3600'MD w/ 2.31 profile X nipple Carya 2 -5.1 e Carya 2 -5.2 ..r Drill 7 -7/8" Hole to 4750' MD 5'/:" 15.5# K -55 & 17# J -55 & N -80 Casing to 4750' MD/ 4500' (TVD) Estimated PBTD @ 4665' Prepared by Ed Jones Page 9 of 11 Rev. 1.0 • Aurora Gas, LLC Kaloa #3 Drilling Program KALOA 3 DRILLING TIME 0 1 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 -500 ------ • -1000 I -1500 4— -2000 16. -2500 _1 – nes11 0 -3000 -3500 — - -4000 -4500 -5000 • • • • • DAY Days 1-3: Drill 12-1/4" Hole Days 3-6: Run and cement 9-5/8" casing Day 6: Test casing, drill out w/ 7-7/8" bit and run FIT, kick off directional 7-7/8" hole. Days 6-16: drill directional 7-7/8" hole to 47500' MD / 4500' TVD Days 17-18: Log Days 19-20: Run 5-1/2" casing and cement. Days: 21---: Complete and test well. Prepared by Ed Jones Page 10 of 11 Rev. 1.0 • 11 0 Aurora Gas, LLC Kaloa #3 Drilling Program KALOA #3 Summary of Drilling Hazards POST THIS NOTICE IN DOGHOUSE There is potential for abnormal pressured shallow gas. Ai There is potential for stuck pipe in coals encountered while drilling from surface to TD. Short trips as dictated by drilling trends. Ai There is no H2S risk anticipated for this well. Due to potential for shallow gas kick, very little response time will be afforded to respond. PVT and gas detection systems must be fully operational and functioning at all times, visual flow checks and pit level monitoring are critical. CONSULT THE KALOA #3 WELL PLAN FOR ADDITIONAL INFORMATION Prepared by Ed Jones Page 11 of 11 Rev. 1.0 SEC 14 SEC 13 SEC 23 SEC 24 GRID N:2573418.310 GRID E:262612.010 LATITUDE: 61 °02'13.373 "N LONGITUDE: 151°20'20.291'W , , .�, Z 1) BASILANE S OF COORDINATES E 4 FROM IS A ALAS STATE .4%., P NAD 27 ZONIRECT TIE j TO ADL NO. 31270. _' "` 2) ELEVATION IS FROM TIDAL . • N OB BASIS SERVAT ION ON 9- 22 -93. DATUM IS MLLW. 'il s ' ' ALL ELEVATIONS SHOWN HEREON WERE TAKEN ON GROUND. ' 3) SECTION LINES SHOWN HEREON ARE 414 - — --Z4 BA SED ON PROTRACTED VALUES. �y a . y ': -. y 2SM. ;8 _ . .. rw �1118'FWL ,44,., _ w A obit K ALOA #3 WELL AS -BUILT � . H GRID N:2570628.892 ?�-9....> , GRID E:263674.952 LATITUDE: 61 °01'46.124 "N . LONGITUDE: 151 °19'57.562 "W ELEV.207'. g y i A may yy ' v y . & w /' \ KALOA NO. 3 WELL A S -BUILT SURFAC LOCATION DIAGRAM McLane Consult Inc APPLICANT: Aurora EN PI P.O. BOX 468 AK. 99 669 Gas, LLC VOICE: (907) 283 -4218 FAX (907) 283 -3265 EMAIL: msmclane®mclanecg.com SEC PROJECT NO. DRAWN BY: DATE: . LINE LOCATION: July 7, 05 OFFSETS 2767' FNL PROTRACTED SER CTIONGE N 24 053031 MSM TOWNSHIP 11 , A W EST 1118' FWL SEWARD MERIDIAN, ALASKA KALOA #3 Casing Properties and Design Verification Casing Performance Properties: Aurora Gas Kaloa #3 Tensile Strength Section Internal Collapse Size Weight Yield Resistance TVD MD MW MASP (Inches) lb /ft Grade Cnxn (psi) (psi) Joint Body Length (ft RKB) (ft RKB) (ppM) BF (psi) 9 -5/8" 36 K -55 LTC 3520 2020 489000 564000 650 650 650 10.5 0.84 507 • 5 -1/2" 15.5 K -55 BTC 4810 4040 300000 248000 1050 1047 1050 11 0.83 2025 5 -1/2" 17 J -55 LTC 5320 4910 247000 273000 1050 1986 2100 11 0.83 2025 5 -1/2" 17 N -80 LTC 7740 6280 348000 397000 2650 4500 4750 11 0.83 2025 Design Safety Factor* Size Tensile Burst Collapse 9 -5/8" 24.9 6.9 7.0 5.5, 15.5 3.8 2.4 8.2 5.5,17J 3.7 2.6 5.2 5.5 17 N 9.3 3.8 3.0 * Tensile design safety factors are calculated using pipe weight less buoyancy. Burst design safety factors are calculated at the surface using zero backup on the outside and MASP on the inside. S Collapse design safety factors are calculated at the casing shoe using the maximum expected mud weight to be used at the ❑ shoe depth on the outside and the entire cased hole evacuated except for a gas gradient on the inside. Casing Setting Depth Rationale 9 -5/8" 650' MD / 650' TVD Surface casing to stabilize shallow formations provide an anchor for the BOP stack and provide shoe strength in the event of a kick. 5 -1/2" 4750' MD / 4500' TVD Production casing to stabilize and isolate producing interval for production operations. AURORA GAS 9 -5/8" X 5 -1/2" X 2 -7/8" OD, 3,000/5,000 PSI ASSY \f" SP- 6833 -2; KALOA #5 5- 3/4 "-4 ACME 2 -7/8 UP TBG BOX LIFT THD in Ea rn 2 -9/16 5M 16.62" PO sx <o 0 alma Aim 2-1/16 5M 9.00 4.50" 1 " f 1. .tsinet ,., 16.62" 2 -9/16 5M imam unimo 4,0 Pil 16.62" pot 2 -9/16 5M I., 151 .� 2 -9/16 3M CONNECTION 7.31" si n t 7 - 1/16 3M i� ' 1• (67.00 ") II II -11 1 kr 1 . 1 21.25" - I a. 1■1 ' 4 -!'-' ® I. } L ' . ; ■1 I - i t 1 ■1 � L. sfi Nu it , -,..- i -- 9 -5/8" OD CSG ' .al i 5 -1/2" OD CSG 2 -7/8" OD TBG — It CAE imagination at work VetCOgC'a)/ a GE Oil & Gas business • • Aurora Gas, LLC Cook Inlet Kaloa Unit Kaloa #3 Plan Kaloa #3 Plan: wp01 Standard Proposal Report 03 April, 2009 HALLIBURTON Sperry Drilling Services HALLIBURTON . Sperry Drilling Services _ - 320 Aurora Gas, LLC - 2ao - 160 WELL DETAILS: Kaloa 83 - 80 Ground Level: 196.0 - Northing Easting L 46.1e Longitude - 0.0 0.0 2570628.89 263674.95 61 ° 1' 46.124 N 151" 19' 57.562 W - _ - 9 5/8" - t - Start Dir 2.75 ° /I00' 650' MD, 6501 VD J000 SECTION DETAILS _ See MD Inc Azi TVD 41/ -8 +E/ -W DLeg TFace VSec Target -� 1 0.0 0.00 0.00 0.0 0.0 0.0 0.00 0.00 0.0 2 650.0 0.00 0.00 650.0 0.0 0.0 0.00 0.00 0.0 - 3 2108.5 40.11 216.43 1992.3 -394.2 -291.0 2.75 216.43 490.0 - 4 2349.4 40.11 216.43 2176.5 -519.1 -383.2 0.00 0.00 645.2 - 5 3152.2 8.00 216.43 2900.0 -778.9 -575.0 4.00 - 180.00 968.1 Kaloa #3 T1 - -160 6 3352.2 0.00 0.00 3099.4 -790.1 -583.2 4.00 180.00 982.1 - 7 4752.6 0.00 0.00 4500.0 -790.1 -583.2 0.00 0.00 982.1 - _ - y - - -- - -240 0� SURVEY PROGRAM _ iT Date: 2009- 04- 02T00:00:00 Validated: Yes Version: _ - j Depth From Depth To Survey /Plan Tool - -320 0 0.0 4752.8 wp01 (Plan Kaloa #3) MWD End Dir : 2108.5' MD, 1992.3' TVD - a - -400 nr 2p O '0 _ o CASING DETAILS _ TVD MD Name Size Start Dir 4° /100' : 2349.4' MD, 2176.5'TVD --4 . - 650.0 650.0 9 5/8" 9 -5/8 - - _ 4500.0 4752.8 5-1/2" 5 -1/2 End Dir : 3352.2' MD, 3099.4' TVD - - -560 D D I =4.96 CO MPANY DETAI S: Aurora Gas, LLC ■ • Drilling Calculation Method: Minimum Curvature Total Depth : 4752.8' MD, 4500' TVD , 5 -1/2" Error System: ISCWSA Scan Method: Tray. Cylinder North Error Surface: Elliptical Conic I Warning Method: Rules Based ' - - 'v 4,1300 ' ....- / REFERENCE INFORMATION Co-ordinate (N/E) Reference: Well Kaloa #3, Grid North �� Kaloa #3 TI o Vertical (TVD) Reference: K3 + 16' (8 212.011 (212 6 (196' MSL + 18' KB)) \ i / . Measured Depth Reference: K3 + 16' CI (212 ft (196' MSL + 16' KB)) \ ∎` ' � � Calculation Method: Minimum Curvature I, Kaloa #3/Plan ' -96U Kaloa #3 /wp0 Project: Cook Inlet Site: Kaloa ��Unit I l f 1 l l l l i l I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I I I 1 l 1 I I 1 I 1 1 1 I I 1 1 I I 1 I 1 1 i l 1 1 1 1 1 1 1 1 1 1 1 1 1 I I I r 1 1 T I 1 f l 1 1 1 1 I I I 1 I I 1 I 1 I I 1 1 f - Well: Kaloa #3 -1280 -1200 -1120 -1040 -960 -880 -800 -720 -640 - 560 -480 -400 -320 -240 -160 -80 0 BO 160 Wellbore: Plan Kaloa #3 west( - )/East( +) (200 ft/in) Plan: wp01 (Kaloa #3 /Plan Kaloa #3) HALLIBURTON ,.e.,(a Ltip r _ Site: Kaloa Unit Gro Sperry Orillln6i Services uadt.�wd 1�Hd Well: Kaloa #3 +N/-S +E/ = W Northing past)nit 101#44 LaWalk t VVeNpore: Plan Kaloa #3 0 0 2570628 263674 93 al� 1 ? 4Nl2 ^ag Shit 4s1 Aurora Gas, LLC .., Plan: Wp01 REFERENCE INFORMATION Co ordinate (WE) Reference: Well Kaloa #3, Grid North Dt' 4.96 dical ( T VD ) Ref erence: K3+ 16' 212.09 (212 a ( 196' MSL+ 18' KB - 600 --�-- —' - Measu Ve re Callcu u lation method Minimum Curvature 212.09 (212 8 (196' MSL+ 16' KB SURVEY PROGRAM -300 Date: 2009- 04- 02T00:00:00 Validated: Yes Version: Depth From Depth To Survey /Plan Tod 0.0 4752.8 wp01 (Plan Kaloa #4AWD 0 300 9 5/8" CASING DETAILS TVD MD Name Size 600 650.0 650.0 9 5/8" 9 -5/8 J _ 4500.0 4752.8 5 -1/2" 5 -1/2 Start Dir 2.75 °/100' : 650' MD, 650'TVD 900 FORMATION TOP DETAILS No formation data is available 1200 1500 c_ End Dir : 2108.5' MD, 1992.3' TVE 1800 _c r]) 0 Tp 2100 v Start Dir 4° /100' : 2349.4' MD, 2176.5'TVD ( 2400 I� 2700 Kaloa #3 T1 3000 3300 End Dir : 3352.2' MD, 3099.4' TVD 3600 3900 4200 Total Depth : 4752.8' MD, 4500' TVD 5-1/2" 4500 Kaloa #3 /Plan Kaloa #3/wp01 1 1 1 , 1 1 1 1 1 I i 1 1 l l l 1 1 I l i l l I l r r i i I r l l I 1 l i l l l l r r 1 1 l ti 1 1 1 1 1 1 I i l 1 1 1 1 1 1 1 1 1 1 1 1 1 -1500 -1200 -900 -600 -300 0 300 600 900 1200 1500 1800 2100 2400 2700 Vertical Section at 216.43° (600 ft/in) • 0 Sperry Drilling Services HALL 1 B 11 RTO N Standard Proposal Report Database: .Sperry EDM .16 PRD Local Co- ordinate Reference: Well Kaloa #3 Company: Aurora Gas, LLC TVD Reference: K3 + 16' @ 212.Oft (212 ft (196' MSL + 16' KB)) Project: Cook Inlet MD Reference: K3 + 16' ( 212.Oft (212 ft (196' MSL + 16' KB)) Site: Kaloa Unit North Reference: Grid Well: Kaloa #3 Survey Calculation Method: Minimum Curvature Wetlbore: Plan Kaloa #3 Design: wp01 Project Cook Inlet, USA Map System: US State Plane 1927 (Exact solution) System Datum: Mean Sea Level Geo Datum: NAD 1927 (NADCON CONUS) Map Zone: Alaska Zone 04 Using geodetic scale factor Site Kaloa Unit Site Position: Northing: 2,566,962.63ft Latitude: 61° 1' 9.438 N From: Map Easting: 260,749.55ft Longitude: 151° 20' 55.398 W Position Uncertainty: 0.0 ft Slot Radius: 0" Grid Convergence: -1.18 ° Well Kaloa #3 Well Position +NI-S 0.0 ft Northing: 2,570,628.89 ft Latitude: 61° 1' 46.124 N +E/-W 0.0 ft Easting: 263,674.95 ft Longitude: 151° 19' 57.562 W Position Uncertainty 0.0 ft Wellhead Elevation: ft Ground Level: 196.Oft Wellbore Plan Kaloa #3 Magnetics Model Name Sample Date Declination Dip Angle Field Strength (°) (°) (nT) BGGM2008 4/2/2009 18.71 73.81 55,618 Design wp01 Audit Notes: Version: Phase: PLAN Tie On Depth: 0.0 Vertical Section: Depth From (TVD) +NI-S +E/ -W Direction (ft) (ft) (ft) (°) 0.0 0.0 0.0 216.43 Plan Sections Measured Vertical TVD Dogleg Build Turn Depth Inclination Azimuth Depth System +N/-S +E/ -W Rate Rate Rate Tool Face (ft) ( ( (ft) ft (ft) (ft) ( °/100ft) ( 1100ft) ( 1100ft) ( 0.0 0.00 0.00 0.0 -212.0 0.0 0.0 0.00 0.00 0.00 0.00 650.0 0.00 0.00 650.0 438.0 0.0 0.0 0.00 0.00 0.00 0.00 2,108.5 40.11 216.43 1,992.3 1,780.3 -394.2 -291.0 2.75 2.75 0.00 216.43 2,349.4 40.11 216.43 2,176.5 1,964.5 -519.1 -383.2 0.00 0.00 0.00 0.00 3,152.2 8.00 216.43 2,900.0 2,688.0 -778.9 -575.0 4.00 -4.00 0.00 - 180.00 3,352.2 0.00 0.00 3,099.4 2,887.4 -790.1 -583.2 4.00 -4.00 0.00 180.00 4,752.8 0.00 0.00 4,500.0 4,288.0 -790.1 -583.2 0.00 0.00 0.00 0.00 4/3/2009 9:48:44AM Page 2 COMPASS 2003.16 Build 431 • Sperry Drilling Services H,rA LL B U RT®N Standard Proposal Report Database: .Sperry EDM .16 PRD Local Co- ordinate Reference: Well Kaloa #3 Company: Aurora Gas, LLC TVD Reference: K3 + 16' © 212.0ft (212 ft (196' MSL + 16' KB)) Project: Cook Inlet MD Reference: K3 + 16' c(,'@ 212.0ft (212 ft (196' MSL + 16' KB)) Site: Kaloa Unit North Reference: Grid Well: Kaloa #3 Survey Calculation Method: Minimum Curvature WeHbore: Plan Kaloa #3 Design: wp01 Planned Survey Measured Vertical Map Map Depth Inclination Azimuth Depth TVDss +N!-S +EI-W Northing Easting DLS Vert Section (ft) ( (°) (ft) ft (ft) (ft) (ft) (ft) - 212.00 0.0 0.00 0.00 0.0 -212.0 0.0 0.0 2,570,628.89 . 263,674.95. 0.00 0.00 100.0 0.00 0.00 100.0 -112.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 200.0 0.00 0.00 200.0 -12.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 300.0 0.00 0.00 300.0 88.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 400.0 0.00 0.00 400.0 188.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 500.0 0.00 0.00 500.0 288.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 600.0 0.00 0.00 600.0 388.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 650.0 0.00 0.00 650.0 438.0 0.0 0.0 2,570,628.89 263,674.95 0.00 0.00 Start Dir 2.75 °1100' : 650' MD, 650'TVD - 9 5/8" 700.0 1.38 216.43 700.0 488.0 -0.5 -0.4 2,570,628.41 263,674.59 2.75 0.60 800.0 4.13 216.43 799.9 587.9 -4.3 -3.2 2,570,624.55 263,671.74 2.75 5.40 900.0 6.88 216.43 899.4 687.4 -12.1 -8.9 2,570,616.84 263,666.05 2.75 14.98 1,000.0 9.63 216.43 998.4 786.4 -23.6 -17.4 2,570,605.29 263,657.53 2.75 29.33 1,100.0 12.38 216.43 1,096.5 884.5 -38.9 -28.7 2,570,589.95 263,646.20 2.75 48.41 1,200.0 15.13 216.43 1,193.6 981.6 -58.1 -42.9 2,570,570.82 263,632.09 2.75 72.17 1,300.0 17.88 216.43 1,289.5 1,077.5 -80.9 -59.7 2,570,547.98 263,615.22 2.75 100.57 1,400.0 20.63 216.43 1,383.9 1,171.9 -107.4 -79.3 2,570,521.46 263,595.65 2.75 133.54 1,500.0 23.38 216.43 1,476.6 1,264.6 -137.6 -101.6 2,570,491.32 263,573.40 2.75 171.00 1,600.0 26.13 216.43 1,567.4 1,355.4 -171.3 -126.4 2,570,457.64 263,548.54 2.75 212.86 1,700.0 28.88 216.43 1,656.1 1,444.1 -208.4 -153.8 2,570,420.50 263,521.12 2.75 259.03 1,800.0 31.63 216.43 1,742.5 1,530.5 -248.9 -183.8 2,570,379.97 263,491.21 2.75 309.40 1,900.0 34.38 216.43 1,826.3 1,614.3 -292.7 -216.1 2,570,336.16 263,458.86 2.75 363.86 2,000.0 37.13 216.43 1,907.5 1,695.5 -339.7 -250.8 2,570,289.16 263,424.17 2.75 422.28 2,100.0 39.88 216.43 1,985.8 1,773.8 -389.8 -287.8 2,570,239.08 263,387.21 2.75 484.52 2,108.5 40.11 216.43 1,992.3 1,780.3 -394.2 -291.0 2,570,234.69 263,383.96 2.75 489.99 End Dir : 2108.5' MD, 1992.3' TVD 2,200.0 40.11 216.43 2,062.2 1,850.2 -441.6 -326.0 2,570,187.26 263,348.95 0.00 548.94 2,300.0 40.11 216.43 2,138.7 1,926.7 -493.5 -364.3 2,570,135.43 263,310.69 0.00 613.36 2,349.4 40.11 216.43 2,176.5 1,964.5 -519.1 -383.2 2,570,109.83 263,291.79 0.00 645.19 Start Dir 4 °/100' : 2349.4' MD, 2176.5'TVD 2,400.0 38.09 216.43 2,215.8 2,003.8 -544.8 -402.1 2,570,084.15 263,272.84 4.00 677.10 2,500.0 34.09 216.43 2,296.6 2,084.6 -592.1 -437.1 2,570,036.78 263,237.87 4.00 735.99 2,600.0 30.09 216.43 2,381.3 2,169.3 -634.9 -468.6 2,569,994.05 263,206.33 4.00 789.10 2,700.0 26.09 216.43 2,469.5 2,257.5 -672.7 -496.6 2,569,956.18 263,178.38 4.00 836.17 2,800.0 22.09 216.43 2,560.8 2,348.8 -705.6 -520.8 2,569,923.35 263,154.14 4.00 876.97 2,900.0 18.09 216.43 2,654.7 2,442.7 -733.2 -541.2 2,569,895.73 263,133.75 4.00 911.31 3,000.0 14.09 216.43 2,750.7 2,538.7 -755.5 -557.7 2,569,873.44 263,117.30 4.00 939.01 3,100.0 10.09 216.43 2,848.5 2,636.5 -772.3 -570.1 2,569,856.60 263,104.87 4.00 959.95 3,152.2 8.00 216.43 2,900.0 2,688.0 -778.9 -575.0 2,569,850.00 263,100.00 4.00 968.15 Kaloa #3 T1 3,200.0 6.09 216.43 2,947.5 2,735.5 -783.6 -578.5 2,569,845.28 263,096.52 4.00 974.01 3,300.0 2.09 216.43 3,047.2 2,835.2 -789.4 -582.7 2,569,839.55 263,092.29 4.00 981.14 3,352.2 0.00 0.00 3,099.4 2,887.4 -790.1 -583.2 2,569,838.78 263,091.72 4.00 982.09 End Dir : 3352.2' MD, 3099.4' TVD 3,400.0 0.00 0.00 3,147.2 2,935.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4/3/2009 9:48:44AM Page 3 COMPASS 2003.16 Build 431 • Sperry Drilling Services HA►LLI B U R'TD id Standard Proposal Report Database: .Sperry EDM .16 PRD Local Co- ordinate Reference: Well Kaloa #3 Company: Aurora Gas, LLC TVD Reference: K3 + 16' @ 212.0ft (212 ft (196' MSL + 16' KB)) Project: Cook Inlet MD Reference: K3 + 16' @ 212.0ft (212 ft (196' MSL + 16' KB)) Site: Kaioa Unit North Reference: Grid Well: Kaloa #3 Survey Calculation Method: Minimum Curvature Wellbore: Plan Kaloa #3 Design: wp01 Planned Survey - ---- - - - - -- --------- - - - - -- - - - - -- -- -- - - - - - -- Measured Vertical Map Map Depth Inclination Azimuth Depth TVDss +N /S +E/ -W Northing Easting DLS Vert Section (ft) ( °) ( °) (ft) ft (ft) (ft) (ft) (ft) 3,035.18 3,500.0 0.00 0.00 3,247.2 3,035.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,600.0 0.00 0.00 3,347.2 3,135.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,700.0 0.00 0.00 3,447.2 3,235.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,800.0 0.00 0.00 3,547.2 3,335.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 3,900.0 0.00 0.00 3,647.2 3,435.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,000.0 0.00 0.00 3,747.2 3,535.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,100.0 0.00 0.00 3,847.2 3,635.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,200.0 0.00 0.00 3,947.2 3,735.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,300.0 0.00 0.00 4,047.2 3,835.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,400.0 0.00 0.00 4,147.2 3,935.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,500.0 0.00 0.00 4,247.2 4,035.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,600.0 0.00 0.00 4,347.2 4,135.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,700.0 0.00 0.00 4,447.2 4,235.2 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 4,752.8 0.00 0.00 4,500.0 ' 4,288.0 -790.1 -583.2 2,569,838.78 263,091.72 0.00 982.09 Total Depth : 4752.8' MD, 4500' TVD , Targets Target Name - hit/miss target Dip Angle Dip Dir. TVD +N /-S +E/ -W Northing Easting - Shape (1 ( °) (ft) (ft) (ft) (ft) (ft) Kaloa #3 T1 0.00 0.00 2,900.0 -778.9 -575.0 2,569,850.00 263,100.00 - plan hits target center - Circle (radius 150.0) Casing Points Measured Vertical Casing Hole Depth Depth Diameter Diameter (ft) (ft) Name C9 ( ") 650.0 650.0 9 5/8" 9 -5/8 12 -1/4 4,752.8 4,500.0 5 -1/2" 5 -1/2 7 -7/8 Plan Annotations Measured Vertical Local Coordinates Depth Depth +N/-S +E! -W (ft) (ft) (ft) (ft) Comment 650.0 650.0 0.0 0.0 Start Dir 2.75 °/100' : 650' MD, 650'TVD 2,108.5 1,992.3 -394.2 -291.0 End Dir : 2108.5' MD, 1992.3' TVD 2,349.4 2,176.5 -519.1 -383.2 Start Dir 4 °/100' : 2349.4' MD, 2176.5'TVD 3,352.2 3,099.4 -790.1 -583.2 End Dir : 3352.2' MD, 3099.4' TVD 4,752.8 4,500.0 -790.1 -583.2 Total Depth : 4752.8' MD, 4500' TVD 4/3/2009 9:48:44AM Page 4 COMPASS 2003.16 Build 431 Aurora Gas, LLC Cook Inlet Kaloa Unit Kaloa #3 Plan Kaloa #3 wp01 • Sperry Drilling Services Clearance Summary Anticollision Report 03 April, 2009 Tray. Cylinder North Proximity Scan on Current Survey Data (North Reference) Reference Design: Kaloa Unit - Kaloa #3 - Plan Kaloa #3 - wp01 Well Coordinates: 2,570,628.89 N, 263,674.95 E (61° 01' 46.12" N, 151° 19' 57.56" W) Datum Height: K3 + 16' @ 212.0ft (212 ft (196' MSL + 16' KB)) Scan Range: 0.0 to 4,752.8 ft. Measured Depth. Scan Radius is 675.3 ft . Clearance Factor cutoff is Unlimited. Max Ellipse Separation is Unlimited Geodetic Scale Factor Applied Version: 2003.16 Build: 431 Scan Type: GLOBAL FILTER APPLIED: All wellpaths within 200'+ 100/1000 of reference Scan Type: 25.00 HALLIBURTON Sperry Drilling Services / LLC SURVEY PROGRAM ANTI- COLLISION SETTINGS -- Aurora Gas, LLC 2009.04 02TO0 :0o:0o Validated: Yes Version: Interpolation Method: MD, interval: 100.0 Depth Range From: 0.0 To 4752.8 Depth From Depth To Survey/Plan Toot Results Limited By: Centre Distance: 675.3 0.0 4752.8 wp01 (Plan Kaloa #3) MWD HALLI B U RT ®N Scan Type: Plan: wp01 (Kaloa #3 /Plan Kaloa #3) Sperry Drilling Services 0 30 330/ 30 330 30 20 „ 300 60 • 4 300 60 \\\. 270 90 .. il ‘1111117 ,) 240 \ /2o • , ,_ ___ 4 20 270 90 210 150 30 180 S 41I 5Trav elling Cylinder Azimuth (TFO +AZI) 1 ° 1 vs Centre to Centre Separation 120 ft /ink Aurora Gas, LLC 240 Drilling Calculation Method: Minimum Curvature Error System: ISCWSA Scan Method: Tray. Cylinder North • Error Surface: Elliptical Conic Warning Method: Rules Based 210 SECTION DETAILS Sec MD Inc Azi TVD +NI -S +E/ -W DLeg TFace VSec Target 1 0.0 0.00 0.00 0.0 0.0 0.0 0.00 0.00 0.0 180 2 650.0 0.00 0.00 650.0 0.0 0.0 0.00 0.00 0.0 3 2108.5 40.11 216.43 1992.3 -394.2 -291.0 2.75 216.43 490.0 4 2349.4 40.11 216.43 2176.5 -519.1 -383.2 0.00 0.00 645.2 5 3152.2 8.00 216.43 2900.0 -778.9 -575.0 4.00 - 180.00 968.1 Kaloa #3 T1 6 3352.2 0.00 0.00 3099.4 -790.1 -583.2 4.00 180.00 982.1 Travelling Cylinder Azimuth (TFO +AZI) 1 vs Centre to Centre Separation 150 ft /in( 7 4752.8 0.00 0.00 4500.0 - 790.1 - 583.2 0.00 0.00 982.1 NAD 27 ASP Zone 4 : WELL DETAILS: Kaloa #3 REFERENCE INFORMATION Ground Level: 196.0 From Color To MD +N/-S +E/-W Northing Easting Latittude Longitude Slot Coordinate (N /E) Reference: Well Kaloa #3, Grid North Vertical (TVD) Reference: K3 +16' @ 212.0ft (212 ft (196' MSL +16' KB)) 0.0 0.0 2570628.89 263674.95 61° 1' 46.124 N 151° 19' 57.562 W 0 - 1000 Section (VS) Reference: Slot - (0.ON, 0.0E) 1000 - 2000 Measured Depth Reference: K3 + 16' @ 212.Oft (212 ft (196' MSL + 16' KB)) 2000 3000 Calculation Method: Minimum Curvature 3000 - 4000 4000 5000 Aurora Gas, LLC HALLIBURTON Cook Inlet Anticollision Report for Kaloa #3 - wp01 Tray. Cylinder North Proximity Scan on Current Survey Data (North Reference) Reference Design: Kaloa Unit - Kaloa #3 - Plan Kaloa #3 - wp01 Scan Range: 0.0 to 4,752.8 ft. Measured Depth. Scan Radius is 675.3 ft . Clearance Factor cutoff is Unlimited. Max Ellipse Separation is Unlimited Measured Minimum @Measured Ellipse @Measured Clearance Summary Based on Site Name Depth Distance Depth Separation Depth Factor Minimum Separation Warning Comparison Well Name - Wellbore Name - Design (ft) (ft) (ft) (ft) ft Kaloa Unit Kaloa #5 (alternate SHL) - Plan Kaloa #5 (alternate SH 856.1 0.3 856.1 -7.0 875.0 0.041 Centre Distance FAIL - No Errors • Kaloa #5 (alternate SHL) - Plan Kaloa #5 (alternate SH 1,330.3 0.9 1,330.3 -7.4 1,350.0 0.112 Clearance Factor FAIL - No Errors Survey tool program From To Survey /Plan Survey Tool (ft) (ft) 0.0 4,752.8 wp01 MWD Ellipse error terms are correlated across survey tool tie -on points. Calculated ellipses incorporate surface errors. Separation is the actual distance between ellipsoids. Distance Between centres is the straight line distance between wellbore centres. Clearance Factor = Distance Between Profiles / (Distance Between Profiles - Ellipse Separation). All station coordinates were calculated using the Minimum Curvature method. • 03 April, 2009 - 9:57 Page 2 of 4 COMPASS Aurora Gas, LLC HALLIBURTON Cook Inlet Anticollision Report for Kaloa #3 - wp01 Direction and Coordinates are relative to Grid North Reference. Vertical Depths are relative to K3 + 16' @ 212.0ft (212 ft (196' MSL + 16' KB)). Northing and Easting are relative to Kaloa #3. Coordinate System is US State Plane 1927 (Exact solution), Alaska Zone 04. Central Meridian is - 150.00 °, Grid Convergence at Surface is: -1.17 °. Ladder Pict 210— CD 0 Q140 LEGEND a) 1 1 1 1 a) i 1 $ Kaloa N5 (alternate SHL), Plan Kaloa ip5 (alternate S L, wp01 a) o 70_ 1 1 1 1 • V 1 1 1 1 1 1 0 I 0 600 1200 1800 2400 3000 Measured Depth (600 ft/in) 03 April, 2009 - 9:57 Page 3 of 4 COMPASS Aurora Gas, LLC HALLIBURTON Cook Inlet Anticollision Report for Kaloa #3 - wp01 Clearance Factor Plot: Measured Depth versus Separation(Clearance) Factor 10.40 1 I r t _ it 111, .4�i` I 1 C _ O _ I i V ko ^-' 6.25 1 03 - 4 L E G E N D u_ - ' . C 5.OG— O _ I 1 ; i 1 � i $ Kaloa N5 (altemate S HL), Plan Kaloa N5 (ahem ate SHL),1 1a -a- w p o t co 3'5 -_r .T - i 10• ■mi■ ■i ■• t ■■••••••••_•• 1 . a■maaauuus. , t I ■ ■■ ■ ■ ■■ i 1 _ i III . i . 0, 40 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I I I 1 1 I 1 1 1 1 1 1 1 1 1 1 0 300 600 900 1200 1500 1300 2100 2100 2 7 00 3000 3300 3600 Measured Depth (600 ftfin) 03 April, 2009 - 9.57 Page 4 of 4 COMPASS S • MD (ft) Inc ( °) Azi ( °) TVD (ft) N/S (ft) E/W (ft) V.Sec. (ft) DLeg ( °/1 Tool 1 0 0 0 0 0 0 0 0 UNDEFINED 2 100 0 0 100 0 0 0 0 MWD (1) 3 200 0 0 200 0 0 0 0 MWD (1) 4 300 0 0 300 0 0 0 0 MWD (1) 5 400 0 0 400 0 0 0 0 MWD (1) 6 500 0 0 500 0 0 0 0 MWD (1) 7 600 0 0 600 0 0 0 0 MWD (1) 8 650 0 0 650 0 0 0 0 MWD (1) 9 700 1.38 216.43 700 -0.5 -0.4 0.6 2.75 MWD (1) 10 800 4.13 216.43 799.9 -4.3 -3.2 5.4 2.75 MWD (1) 11 900 6.88 216.43 899.4 -12.1 -8.9 15 2.75 MWD (1) 12 1000 9.63 216.43 998.4 -23.6 -17.4 29.3 2.75 MWD (1) 13 1100 12.38 216.43 1096.5 -38.9 -28.7 48.4 2.75 MWD (1) 14 1200 15.13 216.43 1193.6 -58.1 -42.9 72.2 2.75 MWD (1) 15 1300 17.88 216.43 1289.5 -80.9 -59.7 100.6 2.75 MWD (1) 16 1400 20.63 216.43 1383.9 -107.4 -79.3 133.5 2.75 MWD (1) 17 1500 23.38 216.43 1476.6 -137.6 -101.6 171 2.75 MWD (1) 18 1600 26.13 216.43 1567.4 -171.3 -126.4 212.9 2.75 MWD (1) 19 1700 28.88 216.43 1656.1 -208.4 -153.8 259 2.75 MWD (1) 20 1800 31.63 216.43 1742.5 -248.9 -183.8 309.4 2.75 MWD (1) 21 1900 34.38 216.43 1826.3 -292.7 -216.1 363.9 2.75 MWD (1) 22 2000 37.13 216.43 1907.5 -339.7 -250.8 422.3 2.75 MWD (1) 23 2108.5 40.11 216.43 1992.3 -394.2 -291 490 2.75 MWD (1) 24 2200 40.11 216.43 2062.2 -441.6 -326 548.9 0 MWD (1) 25 2300 40.11 216.43 2138.7 -493.5 -364.3 613.4 0 MWD (1) 26 2349.4 40.11 216.43 2176.5 -519.1 -383.2 645.2 0 MWD (1) 27 2400 38.09 216.43 2215.8 -544.8 -402.1 677.1 4 MWD (1) 28 2500 34.09 216.43 2296.6 -592.1 -437.1 736 4 MWD (1) 29 2600 30.09 216.43 2381.3 - 634.9 -468.6 789.1 4 MWD (1) 30 2700 26.09 216.43 2469.5 - 672.7 -496.6 836.2 4 MWD (1) 31 2800 22.09 216.43 2560.8 -705.6 -520.8 877 4 MWD (1) 32 2900 18.09 216.43 2654.7 -733.2 -541.2 911.3 4 MWD (1) 33 3000 14.09 216.43 2750.7 -755.5 -557.7 939 4 MWD (1) 34 3100 10.09 216.43 2848.5 -772.3 -570.1 959.9 4 MWD (1) 35 3152.2 8 216.43 2900 -778.9 -575 968.1 4 MWD (1) 36 3200 6.09 216.43 2947.5 -783.6 -578.5 974 4 MWD (1) 37 3300 2.09 216.43 3047.2 -789.4 -582.7 981.1 4 MWD (1) 38 3352.2 0 0 3099.4 -790.1 -583.2 982.1 4 MWD (1) 39 3400 0 0 3147.2 -790.1 -583.2 982.1 0 MWD (1) 40 3500 0 0 3247.2 -790.1 -583.2 982.1 0 MWD (1) 41 3600 0 0 3347.2 -790.1 -583.2 982.1 0 MWD (1) 42 3700 0 0 3447.2 -790.1 -583.2 982.1 0 MWD (1) 43 3800 0 0 3547.2 -790.1 -583.2 982.1 0 MWD (1) 44 3900 0 0 3647.2 -790.1 -583.2 982.1 0 MWD (1) 45 4000 0 0 3747.2 -790.1 -583.2 982.1 0 MWD (1) 46 4100 0 0 3847.2 -790.1 -583.2 982.1 0 MWD (1) 47 4200 0 0 3947.2 -790.1 -583.2 982.1 0 MWD (1) 48 4300 0 0 4047.2 -790.1 -583.2 982.1 0 MWD (1) 49 4400 0 0 4147.2 -790.1 -583.2 982.1 0 MWD (1) 50 4500 0 0 4247.2 -790.1 -583.2 982.1 0 MWD (1) 51 4600 0 0 4347.2 -790.1 -583.2 982.1 0 MWD (1) 52 4700 0 0 4447.2 -790.1 -583.2 982.1 0 MWD (1) 53 4752.8 0 0 4500 -790.1 -583.2 982.1 0 MWD (1) 54 Kaloa 3 Development Gas Well Index Map CIRI C- 0613 3 - , , a* '.00 1 I. 01 587 ----------.-.'.4N. ..■,‘. oA, ; �. • /I f I 1 :1. !s ►Ji1+ 1._0A 18 'f � I 'L` gy I • • }CTY `) ' �ONr T 17 8 ! ' rr vK • , 5 �� Y ,, T - • y 4 . iL-7---------,_H ♦4I, : 4 �" � t 1, l TYNK ;;,74' 4 SFD 4/20/09 090420_MAP_2090470_Kal oa_3_Index. ppt • • TRANSMITTAL LETTER CHECKLIST WELL NAME Li,� PTD # - Development Service Exploratory Stratigraphic Test Non - Conventional Well / FIELD: `- POOL: A/Z Circle Appropriate Letter / Paragraphs to be Included in Transmittal Letter CHECK ADD -ONS WHAT (OPTIONS) TEXT FOR APPROVAL LETTER APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well (If last two digits in Permit No. , API No. 50- - - API number are between 60 -69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(f), all records, data and 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 throuzh target zones. Non - Conventional Pleas.; 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 wa!,T quality and quantity. (Company Name) must contact the Commission to obtain advance approval of such water well testing program. Rev: 1/11/2008 WELL PERMIT CHECKLIST Field & Pool ALBERT KALOA, UNDEFINED GAS - 40500 Well Name: KALOA 3 Program DEV Well bore seg ❑ PTD#: 2090470 Company AURORA GAS LLC Initial Class/Type DEV / PEND GeoArea 820 Unit On /Off Shore On Annular Disposal ❑ Administration 1 Permit_fee attached NA 2 Lease number appropriate Yes CIRI Fee lease C- 061393: notice of change of ownership fled with AOGCC Qn_11/4/2003 3 Unique well name and number Yes Previously permitted under number 2051080, which expired on 8/17/2007. 4 Web located in a_defined_pool Yes ALBERT KALOA, UNDEFINED GAS - 40500, which is governed by 20 AAC 25.055 5 Well located proper distance from drilling unit boundary Yes Kaloa 3 will be the only well in Section 24. The only well within 3,000' is P&A'd exploratory well Kaloa 4. 6 Welllocated proper distance from other wells Yes 7 Sufficient acreage _available in drilling unit 8 If deviated, is_wellbore plat included Yes 9 Operator only affected party Yes 10 Operator has_approprate bond in force - Yes - 11 Permit can be issued without conservation order Yes Appr Data 12 Perrnitcan be issued without administrative app roval Yes SFD 4/20/2009 13 Can permit be approved before 15-day w ait Yes 14 Well _located within area and strata authorized by Injection Order # (put 10 # in comments) (For NA 15 All wells within 1/4 mile area of review identified (F or service well only) NA 16 Pre - produced injector: duration of pre -production less than 3 months_ (For service well only) NA 17 _Nonconven, gas conforms to A$31,05 03Q(L1.A),(j.2.A -D) NA - - __ Conductor string provided Yes Engineering 19 Surface casing protects all known USDWs Yes Surface and production casing will protect fresh water sands. 20 CMT vol adequate_to circulate on conductor & surf csg Yes - 21 CMT_votadequate_to tie -in Jong string to surf csg Yes 22 CMT_will coyer all knownproductive horizons Yes 23 Casing designs adequate for C,_T, B &_permafrost - Yes 24 Adequate tankage_or reserve pit Yes Rig is equipped with steel pits. Although small, Aurora has successfully_ drilled similar wells using this rig 25 Ifare- drill, has_a 10-403 for abandonment been approved NA Drilling waste to Aspen disposal well. 26 Adequate weilbore separationproposed Yes 27 if diverter required, does it .meet regulations Yes 12 -1/4" hole with 12" diverter line planned. This has been appro previously. Appr Date 28 Drilling fluid_ program schematic & equip list adequate Yes Maximum expected formation pressure 10.6 EMW at TD and up to 10,0 EMW in su_rface_hole, Surface hole cautio TEM 4/24/2009 29 BOPEs, do they meet regulation Yes noted. Spud MW - 1 ppg higher than previously planned. _ Up to 11.0 ppg planned in both hole sections. 30 BOPE_press rating appropriate; test to_(put psis in comments) Yes MASP calculated at 2025 psi, 3000 psi Bop testpla 31 Choke_manifold compiles w /API_RP -53 (May 8 4) Yes i.J 32 Work will occur without operat shutdown Yes • 33 Is presence of H2S gas probable No H2S has not been reported in gas produced without oil. Rig has sensors and alarms. 34 Mechanical condition of wells within AOR verified (For service well only) NA 35 Perrnit_can be issued w/o hydrogen_sulfide measures Yes None expected;howev_er, well will be mud logged and H28 detectors will be installed at floor, shaker & cellar. Geology 36 Data_presented on potential overpressure zones Yes Expected pressure is 10.6 ppg EMW (0,55psi /ft gradient);_ will be drilled with 9,6 to 11.0 ppg mud. Appr Date 37 Seismic analysis of shallow gas zones - NA Offset exploratory_ well_Kaloa 4, 61 SE, was_drilled_without incident to_ 3700' TVD using < 10.0 ppg mud, _ _ SFD 4/20/2009 38 Seabed condition survey(if off- shore) NA Shallow gas and coal seam_ hazards are discussed on pages 8 &-11 _ of the drilling program. 39 Contact name /phone for weekly_ progress reports [exploratory only] NA Geologic Engineering P • • Operator is requesting a waiver of diverter line size requirements. Mud log and samples not required because Kaloa 4, located 1950' to SW was mudlogged Commissioner: Date: Commissioner: Date g ii op , ner Date and sampled from 67' to 4431' MD /3700' TVD and Albert Kaloa 4, located 3800' to the SW, was mudlogged and sampled from 70' to 13600' MD/ 13500 ei 4-2 s'.-7 4, —Z
