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208-075
0 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. cz - 0 75 Well History File Identifier Organizing (done) Two -sided III III III IIII ❑ Rescan Needed 1 11111 1 1111 RE CAN DIGITAL DATA OVERSIZED (Scannable) V Color Items: ❑ Diskettes, No. ❑ Maps: ❑ Greyscale Items: ❑ Other, No/Type: ❑ Other Items Scannable by a Large Scanner ❑ Poor Quality Originals: OVERSIZED (Non - Scannable) ❑ Other: ❑ Logs of various kinds: NOTES: ❑ Other:: BY: Maria Date: Valli a, /s/ PIP Project Proofing II VII BY: (Maria Date: q j /� /s/ M �' t Scanning Preparation / x 30 = 30 + /5 = TOTAL PAGES (Count does not include cover sheet) 04 BY: Maria Date: g c2 ' ! a /s/ Production Scanning I 11E11111111111 Stage 1 Page Count from Scanned File: Cp (Count does include cover sheet) Pase Count Matches Number in Scanning Preparation: OYES NO BY: Date: U a /l� /s/ ! 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. I I ReScanned I 111111111 11111 BY: Maria Date: /s/ Comments about this file: Quality Checked II HLIIIIIIIlI 12/22/2011 Well History File Cover Page.doc DATA SUBMITTAL COMPLIANCE REPORT 8/7/2012 Permit to Drill 2080750 Well Name /No. WAINWRIGHT 07XX Operator U S DEPT OF INTERIOR API No. 50- 301 - 20009 -00 -00 MD TVD Completion Date Completion Status Current Status EXPIR UIC N REQUIRED INFORMATION Mud Log No Samples No Directional Survey No DATA INFORMATION Types Electric or Other Logs Run: (data taken from Logs Portion of Master Well Data Maint Well Log Information: Log/ Electr Data Digital Dataset Log Log Run Interval OH / Type Med /Frmt Number Name Scale Media No Start Stop CH Received Comments Well Cores /Samples Information: Sample Interval Set Name Start Stop Sent Received Number Comments ADDITIONAL INFORMATION Well Cored? Y / N Daily History Received? Y / N Chips Received? Y / N Formation Tops Y / N Analysis Y / N Received? -- — • Comments: –� � t Compliance Reviewed By: r; Date: ? 1 " ^) , 3 4 1 SARAH AALIN, GOVERNOR 1 � T ��++��tt ALASKA 3 W 7th AVENUE, SUITE 100 CONSERVATION COMMISSION ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 FAX (907) 276 -7542 Arthur Clark Supervising Geologist U.S. Geological Survey - DOI P.O. Box 25046 MS 406 Denver Federal Center Denver, CO 80225 Re: Exploratory Well Wainwright No. 7 U.S. Geological Survey - DOI Permit No: 208 -075 Surface Location: 760' FNL, 1890' FEL, SEC. 24, T15N, R32W, UM Bottomhole Location: 760' FNL, 1890' FEL, SEC. 24, T15N, R32W, UM Dear Mr. Clark: Enclosed is the approved application for a permit to drill the above - referenced exploration well. This permit to drill does not exempt you from obtaining additional permits and approvals required by law from the Commission and other governmental agencies and does not authorize conducting drilling operations until all other required permits and approvals have been issued. In addition, the Commission reserves the right to withdraw the permit in the event it was erroneously issued. A weekly status report is required from the time the well is spudded until it is suspended or plugged and abandoned. The report should be a generalized synopsis of the week's activities and is exclusively for the Commission's internal use. Conservation Order No. 604 (attached) grants a spacing exception to allow the drilling of this well as well as equipment exemptions requested by the U.S. Geological Survey - DOI associated with the drilling of this well. Please note that production testing and hydraulic fracturing must be approved by separate Commission action. Except as provided in this permit, operations must be conducted in accordance with AS 31.05; Title 20, Chapter 25 of the Alaska Administrative Code (e.g., 20 AAC 25.055); and any applicable orders or permits of the Commission. Failure to so comply may result in the revocation or suspension of the permit, other enforcement actions, and penalties. • Permit No: 208 -075 June 11, 2008 Page 2 of 2 When providing notice for a representative of the Commission to witness any required test, contact the Commission's petroleum field inspector at (907) 659- 3607 (pager). Sincerely, Cathy F Foerster Commissioner DATED this 1/ day of June, 2008 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. r • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage Alaska 99501 Re: THE APPLICATION OF THE U.S. DEPARTMENT ) Conservation Order No. 604 OF THE INTERIOR, U.S. GEOLOGICAL SURVEY ) Docket No. CO -08 -28 for waivers of the bonding requirements of 20 AAC 25.025, blowout prevention equipment requirements ) Department of the Interior Coalbed of 20 AAC 25.035, welibore survey requirements of ) Methane exploratory wells: 20 AAC 25.050(a)(2), well site seismic survey Wainwright wells No. 3, 4, 5, 6, 7, 8 requirements of 20 AAC 25.061(a), and gas detection ,) and 9. requirements of 20 AAC 25.066, and for exceptions to the spacing requirements of 20 AAC 25.055(a)(2) ) Wainwright, Alaska or 20 AAC 25.055(a)(4) or both to allow for drilling, ) completing, and testing the following proposed U.S. ) Department of the Interior Coalbed Methane ) June 6, 2008 exploratory wells: Wainwright Nos. 3, 4, 5, 6, 7, 8 ) and 9. IT APPEARING THAT: By letter dated and received on April 23, 2008, and as amended on April 25, 2008, and May 1, 2008, the U.S. Department of the Interior (USDOI), U.S. Geological Survey (USGS) applied to the Alaska Oil and Gas Conservation Commission (AOGCC or Commission) for permits to drill the Wainwright No. 3, 4, 5, 6, 7, 8 and 9 coalbed methane exploratory wells. In conjunction with the permit to drill applications the USGS applied for waivers of the following requirements: the bonding requirements of 20 AAC 25.025, blowout prevention equipment requirements of 20 AAC 25.035, welibore survey requirements of 20 AAC 25.050(aX2), well site seismic survey requirements of 20 AAC 25.061(a), and gas detection requirements of 20 AAC 25.066 as well as for exceptions to the spacing requirements of 20 AAC 25.055(a)(2) and 20 AAC 25.005(a)(4) for the proposed Wainwright wells No. 3, 4, 5, 6, 7 and 8 wells, and for an exception to the spacing requirement of 20 AAC 25.055(a)(2) for the proposed Wainwright No. 9 well. 1. The Commission published notice of opportunity to comment and request a public hearing in the ANCHORAGE DAILY NEWS on May 6, 2008, pursuant to 20 AAC 25.540. 2. One notice of objection was filed. No written comments or requests for a hearing were received. 3. The public hearing was vacated on June 3, 2008. FINDINGS: 1. The proposed Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will be onshore, vertical, coalbed methane exploration wells drilled in and near Wainwright, Alaska. The location of each proposed well is as follows: a. Wainwright No. 3: 1720' FEL, 640' FNL, Sec. 24, T15N, R32W, Umiat Meridian (UM) b. Wainwright No. 4: 1780' FEL, 540' FNL, Sec. 24, TI 5N, R32W, UM c. Wainwright No. 5: 1650' FEL, 630' FNL, Sec. 24, TI5N, R32W, UM 1 • • Conservation Order 604 June 6, 2008 Page 2 of 4 d. Wainwright No. 6: 1780' FEL, 660' FNL, Sec. 24, T15N, R32W, UM e. Wainwright No. 7: 1890' FEL, 760' FNL, Sec. 24, T15N, R32W, UM f. Wainwright No. 8: 2040' FEL, 970' FNL, Sec. 24, T15N, R32W, UM g. Wainwright No. 9: 5040' FEL, 3720' FNL, Sec. 8, T15N, R31 W, UM 2. The United States is the landowner, as that term is defined in AS 31.05.170(7), of Section 24, T15N, R32W, UM. The USDOI, Bureau of Land Management (BLM) administers Section 24. The Arctic Slope Regional Corporation (ASRC) is the landowner of Sec. 8, T15N, R3 IW, UM. The State of Alaska is the landowner of the offshore acreage adjacent to both sections. The USGS has been designated as the operator of the lands that Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 are located on. 3. Under AS 31.05.027, the Commission's authority extends to all land within the state, including federal land and native corporation land affected by the proposed activities, that are lawfully subject to the state's police powers. 4. Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will be within 1500' of a shoreline separating onshore federal lands from offshore State of Alaska lands. Wainwright wells No. 3, 4, 5, 6, 7 and 8 will be within the same governmental section as, and within 3000' of, one another and existing Wainwright wells No. 1 and 2. 5. Wainwright, Alaska, obtains drinking water from surface water sources according to the Alaska Department of Environmental Conservation, Division of Environmental Health, Drinking Water Program and the Alaska Department of Natural Resources, Land Administration System. These sources are in the northwest quarter of the southwest quarter of Section 9, T31N, R31 W, UM: over 1 mile from the proposed wells. 6. The expected depth of the base of the permafrost in Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is about 1,000 feet. (Because the USGS has yet to file completion reports for Wainwright wells No. 1 and 2, the actual depth is unknown.) If this is the case, subsurface aquifers will not likely be utilized for drinking water. 7. USGS is an agency of the United States. The credit of the United States renders a bond unnecessary for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9. 8. The proposed wells will be constructed by setting 6 -5/8" conductor in a 9 -7/8" hole drilled to approximately 80'. A 6" hole will be drilled below the conductor to a total depth between 2500' and 3000' for Wainwright No. 9 and about 1300' for the other wells. USGS plans to use a rotating drill head, which seals around the drill stem and directs the annular mudflow to the pits. If gas is encountered, the rotating drill head functions as a diverter. A similar rotating drill head was used successfully at the Franklin Bluffs No. 1, Wainwright No. 1, and Wainwright No. 2 exploratory gas wells (AOGCC Permits to Drill No. 205 -105, 207 -065, and 207 -106, respectively). 9. Seismic information obtained near Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 does not indicate shallow gas. In addition, drilling records and mud log information from the nearest exploration wells -i.e., Peard Test Well No. 1, which is 25 miles east; Kugrua No. 1, which is 30 miles east - southeast; and Tunalik No. 1, which is 37 miles southwest -do not indicate abnormal pressure. Because the USGS has not provided completion reports for Wainwright wells No. 1 and 2, drilling records and mud log information are not available to the AOGCC on these wells. • • 4111 Conservation Order 604 June 6, 2008 Page 3 of 4 10. Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will be drilled with a truck-mounted drilling rig. This equipment has no enclosures where sufficient quantities of methane can accumulate to pose a risk of explosion or fire, or where a methane detector can be placed. 11. The proposed wells are designed to test the lateral extent, deliverability, and water chemistry of coalbeds underlying the Wainwright area. CONCLUSIONS: 1. Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9- drilled near Wainwright, Alaska, to explore for coalbed methane -are subject to the Alaska Oil and Gas Conservation Act, 31.05, and the Commission's regulations, 20 AAC 25. 2. Exceptions to the well spacing requirements of 20 AAC 25.055 are necessary to allow for drilling, completing, and testing Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9. 3. A spacing exception to allow for drilling, completing, and testing Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will not result in waste or jeopardize correlative rights. 4. Exceptions to the gas detection requirements of 20 AAC 25.066 are necessary to allow for drilling, completing, and testing Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9. 5. Granting exceptions to the bonding requirements of 20 AAC 25.025, blowout prevention equipment requirements of 20 AAC 25.035, wellbore survey requirements of 20 AAC 25.050(aX2), well site seismic survey requirements of 20 AAC 25.061(a), and gas detection requirements of 20 AAC 25.066 to allow for drilling, completing, and testing Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will not likely result in a waste of hydrocarbons, risk harm to human safety or the environment (e.g., from an explosion or fire), prevent the subject wells from being properly abandoned, or interfere with the correlative rights of persons owning interests in adjoining or nearby tracts of land. 6. The requirements of AS 31.05.030(j)(1)(A) do not apply because Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will not be used to produce , -t: s from an aquifer that is a source of water for human consumption or agricultural purposes. 7. The requirements of AS 31.05.030(j)(2)(C) do not apply because Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 will not be used for regular production, only limited duration testing is proposed at this time, of coal bed methane nor are there any known water wells in the area. 8. Approval of the operator's requested exemptions conforms with AS 31.05.060(c)(1)-Le., because granting the exemptions is more appropriate than compliance with the subject requirements to the operation of the proposed wells and AS 31.05.060(c)(2) -i.e., because the subject requirements are not necessary or suited to the proposed wells taking into consideration the nature of the operation, the characteristics of the wells, and the reasonably anticipated risks (from granting the exemptions) to human safety and the environment. NOW, THEREFORE, IT IS ORDERED: 1. The USGS's application for an exception to the spacing requirements of 20 AAC 25.055 to allow for drilling, completing, and testing Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 2. USGS's application for waivers of the bonding requirements of 20 AAC 25.025 for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. • Conservation Order 604 June 6, 2008 Page 4 of 4 3. USGS's application for waivers of the blowout prevention equipment requirements of 20 AAC 25.035 for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 4. USGS's application for waivers of the wellbore survey requirements of 20 AAC 25.050(a)(2) for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 5. USGS's application for waivers of the well site seismic survey requirements of 20 AAC 25.061(a) for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 6. USGS's application for waivers of the gas detection requirements of 20 AAC 25.066 for Wainwright wells No. 3, 4, 5, 6, 7, 8 and 9 is granted. 7. These wells may not be hydraulically fractured without the Commission's separate approval. ENTERED at Anchorage, Alaska, and dated June 6 200 /�. a � � diL ANA s , Jo •'� , omnnssio a `' " d s Conservation Commission a lt if* ' ot 'ATI �� �• Ca y P. • erster, ommissioner Alaska ti II and Gas Conservation Commission RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for reconsideration of the matter determined by it if the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The Commission shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. lithe Commission denies reconsideration, upon denial, this order or decision and the denial of re- consideration arc FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Com- mission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by in- action, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the Commission grants an application for reconsideration, this order or decision does not become fund. Rather, the order or decision on re- consideration will be the FINAL order or decision of the Commission, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the Commission mails, OR 30 days if the Commission otherwise distributes, the order or decision on re- consideration. As provided in AS 31.05.080(6), "(tibe questions reviewed on appeal are limited to the questions presented to the Commission by the application for reconsideration." In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the pe- riod; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. ! • • RECEIVED STATE OF ALASKA APR 2 32008 ALASKA OIL AND GAS CONSERVATION COMMIS ION ( /34 142c. og o$ PERMIT TO DRILL (o Alaska Oil & Gas Cons. Commission 20 AAC 25.005 Anchorage 1 a. Type of Work: 1 b. Current Well Class: Exploratory ® Development Oil ❑ 1 c. Specify if well is proposed for: Drill ® Rem ill ❑ Stratigaphic Test ❑ Service ❑ Development Gas ❑ Coalbed Methane IN Gas Hydrates ❑ Re -entry ❑y Multiple Zone ❑ Single Zone ❑ Shale Gas ❑ 2. Operator Name: US Geological Survey - DOI 5. Bond: Blanket Single Well ❑ 11. Well Name and Number: PO Box 25046, MS 406, Bond No. Po) - SELF 4 43 4 , 0 fjDL Wainwright 7 3. Address: Denver Federal Center 6. Proposed Depth: 12. Field /Pool(s): Denver, CO 80225 MD 1300 ' TVD: 1300 ' 4a. Location of Well (Governmental Section): 7. Property Designation: Surface: MTRS: Umiat T15N R32W, Sec. 24. City of Wainwright Top of Productive I FNL: 760', FEL: 1,890' 8. Land Use Permit: 13. Approximate Spud Date: June 1, 2008 Total Depth: 9. Acres in Property: 14. Distance to Nearest Vertical Well: 1300' Property: LjL10 4b. Location of Well (State Base Plane Coordinates): 10. KB Elevation 15. Distance to Nearest Well Surface: x 1 y 7 837 sgy Zone- 4 (Height above GL): 30' MSL feet Within Pool: Z On 1 16. Deviated wells: Kickoff depth: feet 17. Maximum A ticipated Pressures in psig (see 20 AAC 25.035) Maximum Hole Angle: degrees Downhole: 3 9 Surface: 1- 18. Casing Program: Specifications Top - Setting Depth - Bottom Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Length MD TVD MD TVD (including stage data) 9 7/8 6 5/8 18.97 20 0 80 30 cu. ft. PPf " 2.5 1. PVC Bo /0 0 / 3od 13 e'5vriwire 6Roil PM APP cememr SKRFAcc 19. PRESENT WELL CONDITION SUMMARY (To be completed for Redrill and Re -Entry Operations) Total Depth MD (ft): Total Depth TVD (ft): Plugs (measured): Effect. Depth MD (ft): Effect. Depth TVD (ft): Junk (measured): Casing Length Size Cement Volume MD TVD Conductor /Structural Surface Intermediate Production Liner Perforation Depth MD (ft): Perforation Depth TVD (ft): 20. Attachments: Filing Fee ❑ BOP Sketch ❑ Drilling Program © Time v. Depth Plot ® Shallow Hazard Analysis El Property Plat M 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 , A k.„r t c 1 Title l (3 ( ` '#"•- Signature Phone 3 2.36- %---/ ¶ 3 Date ®( (II �i() r Commission Use Only Permit to Drill ' e API Number: � * Permit A,pprov I See cover letter for othe Number: !�-' �' / 50 �• -•' 1 Date: �Q Q$ requirements. Conditions of approval : If box is checked, well may not be used to explore for, test, or produce coalbed methane, gas hydrates, or gas contained in shales: ❑ Other: Samples req'd: Yes❑ No [v/ Mud log req'd: Yes NoR . �`-ld� P erot J O ok o.14,,m-ktir� YesE No 2 Directional svy req'd: Yes Noffr / / 7I 4 ) `, 1 �l APPROVED BY THE COMMISSION DATE: (J '(/ - (if. , /_ / , COMMISSIONER Form 10 -401 Revised 12/2005 Submit in Duplicate • • RECEIVED Application for Permit to Drill. MAY 0 2 2008 State of Alaska, Alaska Oil & Gas Conservation Commission Alaska Oil & Gas Cons. Commission Permit to Drill. Application Summary. Anchorage Well Name and Number: Wainwright #7, (Exploration, Production Test Monitor) Well Location Area: Village of Wainwright. Well Location Legal: MTRS: Umiat T15N R32W, Sec. 24. FNL: 760' FEL: 1,890' NAD83 Lat.: 70 °38'38.46 "N Long.: 160° 1'24.48 "W Purpose of Well: Coal Bed Methane, production test pressure monitoring Waivers Requested: Bonding requirements of 20 AAC 25.025, • Blowout prevention equipment requirements of 20 AAC 25.035. • Well bore survey requirements of 20 AAC 25.050(a)(2). • Well site seismic survey requirements of 20 AAC 25.061(a). • Gas detection requirements of 20 AAC 25.066. Well Spacing Exemption Requested: • Requested exception for the well spacing requirements of 20 AAC 25.055(a) for proposed wells Wainwright #3 through #9. Proposed Depth: MD: 1,300' TVD: 1,300' Monitoring Well Interval: 8' coal seam at depth of —1242 to 1250 ft Property Ownership: Surface: Olgoonik Corp. Sub - surface: BLM Applicant / Operator: USGS. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 1 of 30 • • Application for Permit to Drill. State of Alaska, Alaska Oil & Gas Conservation Commission Permit to Drill. Application Summary. Well Name and Number: Wainwright #7, (Exploration, , roduction Test Monitor) Well Location Area: Village of Wainwright. Well Location Legal: MTRS: Umiat T15N R W, Sec. 24. FNL: 760' FEL: 1,890' SUPERSEMO " NAD83 Q' (9 Lat.: 70 °38'38.4. ; N°- °y�Y` Long.: 160° 1'2 148 "W Purpose of Well: Coal Bed Methane, production test pressure monitoring / Waivers Requested: Bonding requirements of 20 AAp 25.025, • Blowout prevention equipment requirements of 20 AAC 25.035. • Well bore survey requi/rements of 20 AAC 25.050(a)(2). • Well site seismic survey requirements of 20 AAC 25.061(a). • Gas detection requirements of 20 AAC 25.066. Well S • acin • Exem • tion ' e • uested: • Requested excepts • n for the well spacing requirements of 20 AAC 25.055(a j for proposed wells Wainwright #3 through #8. Proposed Depth: D: 1,300' !'TVD: 1,300' Monitoring Well Interval: 8' coal seam at depth of -1242 to 1250 ft Property Ownership: Surface: Olgoonik Corp. Sub- surface: BLM Applicant / Operator: USGS. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 1 of 30 • Application for Permit to Drill. Contents of Application Application Summary. Contents of Application. Project Description and Overview. Permit to Drill, Form 10 -401. Designation of Operator, Form 10 -411. Figure #1. Wainwright Townsite. Plat T15N R32W UM. Figure #2. Location of Proposed Production Test and Monitoring Wells. Wells #3 -8. Wainwright Townsite. Plat T15N R32W, Sec 24, UM. Figure #3. Location of Proposed Production Test and Monitoring Wells. Wells #3 -8. Wainwright, Aerial Photo. Figure #4. Location of Proposed Offset Well at the NSB Landfill. Well #9. Plat T15N R31W,UM Figure #5. Location of Proposed Offset Well at the NSB Landfill. Detail View. Well #9. Plat T15N R31 W, UM Figure #6. Location of Proposed Offset Well at the NSB Landfill. Aerial Photo. Well #9. Explanation of land Ownership shown on Figures #1 and #2. Plat T15N R32W. Wells #3-8. Explanation of land Ownership shown on Figures #4 and #5. Plat T15N R31 W. Well #9. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 2 of 30 • • + \E, Permission to Enter Lands and Drill from the Surface Land Owner. MAY 0 2 2008 Requested Waivers and Drill Spacing Exemptions. Alaska pit & Gas C crnmissian Bonding requirements of 20 AAC 25.025, Anchorag • Blowout prevention equipment requirements of 20 AAC 25.035. • Well bore survey requirements of 20 AAC 25.050(a)(2). • Well site seismic survey requirements of 20 AAC 25.061(a). • Gas detection requirements of 20 AAC 25.066. Well Spacing Exemption Requested: • Requested exception for the well spacing requirements of 20 AAC 25.055(a) for proposed wells Wainwright #3 through #9. Figure #7. Diverter Diagram. Figure #8. Well Spacing Exemption Checklist. Figure #9. Letter from the President of Olgoonik Corp. regarding the public involvement and knowledge of the drilling program in Wainwright. Drilling Plan • Landfill Offset Well. • Production Test Monitoring Wells. • Durability of Pressure Monitoring Downhole Components: • Production Test Well. • Production Test. • Decommission wells in 2008 • Decommission wells in 2009, alternative. Drilling Fluid Plan Figure #10. Depth v Time Graph, Offset Well at the NSB Landfill. Borehole Sampling. Well Closure Procedures. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 3 of 30 • • Permission to Enter Lands and Drill from the Surface Land Owner. Requested Waivers and Drill Spacing Exemptions. Bonding requirements of 20 AAC 25.025, , • Blowout prevention equipment requirements of 20 AAC 25.03 • Well bore survey requirements of 20 AAC 25.050(a)(2). • Well site seismic survey requirements of 20 AAC 25.061 :). • Gas detection requirements of 20 AAC 25.066. Well Spacing Exemption Requested: • Requested exception for the well spacing req "rements of < 20 AAC 25.055(a) for proposed wells Wain ight #3 through #8.0. 0 Figure #7. Diverter Diagram. - y Figure #8. Well Spacing Exemption C ecklist. Figure #9. Letter from the Preside of Olgoonik Corp. regarding the " public involvement an knowledge of the drilling program in Wainwright. Drilling Plan • Landfill Offset Well. • Production Test Monitoring ells. • Durability of Pressure Mo oring Downhole Components: • Production Test Well. • Production Test. • Decommission wells in 008 • Decommission wells i 2009, alternative. Drilling Fluid Plan Figure #10. Dept; v Time Graph, Offset Well at the NSB Landfill. Borehole Sampling. Well Closure Procedur-s. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 3 of 30 • Other Permits • DNR Temporary Water Use Authorization for 4,000gpd, 150,000 gal total. ACMP B -List GCD -8, and No Review Required decision. • ADEC ODPCP Exemption. • ADEC Solid Waste Disposal for cuttings, Plan Review • ADEC Drill Fluids and Produced Water Disposal. • NSB Development Permit, Planning Department. • NSB Dept. of Civil Works, approval to use of landfill for cuttings disposal. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 4 of 30 • 1 Project Description and Overview Alaska Rural Energy Project Wainwright, Alaska, 2008 The Alaska Rural Energy Project will be conducting a multi -well production test in Wainwright at the same location (Olgoonik Wareyard) as where exploration and testing activities occurred in June -July 2007. All wells will be completed in an 8 ft - coal seam encountered at a depth of -1242 to 1250 ft. The test array will consist - of one central production well (10" hole with 6" steel casing cemented to -1240 ft, 6" open -hole completion through the coal zone) and 5 monitor wells (6" hole with 2.5" PVC casing, 10 ft of slotted PVC screen in the coal, sand packed around screen, annular area grouted (abandonment bentonite) to land surface). See Figures 2 and 3 for diagram of well placement and spacing of wells #3- #9. Additionally, a separate well will be drilled at the Wainwright landfill. 6 inch steel surface casing will be set and cemented to a depth of -50 ft and a 6 inch open hole drilled to a depth of -2500-3000 ft. Geophysical Togs (caliper, resistivity, gamma, density, sonic) will be run in the well which will then be plugged and abandoned with bentonite grout and cement. The following information will be gathered from these wells: • Lateral extent and continuity of individual coal seams between original site - and landfill site (- 2 miles) • Accurate determination of hydraulic conductivity and transmissivity • Hydraulic conditions bounding 1250' coal seam o Vertical and lateral leakage • Storage coefficient (amount of water to be produced) • Detailed produced water chemistry • Shape and orientation of permeability ellipse Drilling is scheduled to begin on or about June 1, 2008 and completed on or about August 10, 2008. The first well drilled will likely be the landfill well with the production test array to follow. Exact start and finish dates for each well cannot be accurately predicted at this time. It is anticipated that all drilling will be completed and wells installed by -July 15 -20 with the production test occurring the week of July 21. Upon completion of the test, all wells will be reentered in 2008 and abandoned - using abandonment grout and cement. Alternative Well Abandonment, 2009. An alternative to well abandonment in the summer of 2008 would be to leave the 2" PVC pressure monitor wells open for pressure- monitoring purposes over the winter, rather than plugging /abandoning at the end of a one -week test. The wells AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 5 of 30 • would be completed /isolated in the coal bed and hydraulically connected via slotted pipe at the bottom of the well as described in the Drilling Plan. Well abandonment would be done in late- spring or early- summer of 2009 rather than the summer of 2008. This alternative would leave the production well in an operational manner rather than plugging- abandoning at the end of the 2008 work as described. The offset well would be abandoned in 2008. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 6 of 30 • • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION PERMIT TO DRILL 20 AAC 25.005 18. Work lb. Current Well Class: Exploratory ® Development 05 0 lc. Specify if well 15 proposed for Drill ® Redrill ❑ Stradgraphio Test ❑ Service ❑ Development Gas ❑ Coalbed Methane ® Gas Hydrates ❑ Re-entry ❑ Mutilate Zone ❑ Single Zone ❑ Shale Gas ❑ 2. Operator Name: 5. Bond: Blanket ❑ Single Well ❑ 11. Wei Name and Number Bond No. Wainwright 7 3. Address: 6. Proposed Depth: 0 1 O 0 12. Field/Pool(s): MM 4a Location of Wei (Govemmenral $a onk 7. Property Designation: Surface: City of Wainwright Top of Productive Horizon: 8. Land Use Permit 19- Approximate Spud [Ls June 1, 2008 Tots) Depth: 9_ Ades in Property: 14. Distance to Nearest Vertical We11: 1300' Property: 4b. Location of Well (State = -- e Plane Coordinatesk 10. KB Elevaion 15. Distance b Nearest Well Surface: x- y. Zane- (Height above GL): 30 ' MSLr feet Within Pool: 16. Deviated wells: Koff depth: feet 17. Maxim re Anticipated Pressures In pslg (ere 20 AAC 25.035) Maximum Hole Angle: degrees Dornnhhole: Surface: 18. Casing Program: Sp lions Top - letting Depth - Bottom Cement Quantity, c.f. or sacks Hole Casing Weight Grade Coupling Length MD TVD MO YVD (including stage data) 3 7/8 6 5/8 18. 20 0 80 30 cu. ft. ppf 19. PRESENT WELL CONbmON SUMMARY (To be oompleted for Redd and Re -Entry Operations) Total Depth MD (It): Total Depth TVD (ft): Plugs (measured): Effect Depth MD (ft): Effect Depth TVD (Rk Junk (measured): Casing Length Sae Cement Volume MD 7vD Conductor/Structural Surface Mtarmediaa Production — Liner Perforation Depth Mb (S)): Perforation Depth TVD (ft): 20. Attachments: Filing Fee Attachments: BOP Sketch g Drilling Program III Time v. Depth Prot ® Shallow Hated Analysis gl Property Pmt ® Diverted Sketch Seabed Report ❑ Drilling Fluid Program ® 20 AAC 25.050 regtd eme nts Ei 21, Verbal Approval: Commission Representative: . - Date 22. 1 hereby certify that the foregoing b true and corned. 'fl Contact Printed Name AM- car CJ cvL. Title SU . l� '1"DL 0 .1 I 5 Signature / ti n Phone 4— 2:36- Date 0 $ 0 Commission Use Only Panm t to Drill API Number: ' 'Permit Approval 'See cover letter for other Number, 50- Date: requirements. Conditions of approval : If box is checked, well may not be used to explore for test. or produce coalbed methane, gas hydrates. or gm contained in shales: ❑ Other: Samples req'd: YesD No ❑ Mud lag req'd: Veep No❑ . H measures: Yes❑ No ❑ Directional svy req d: Yea❑ No❑ APPROVED BY THE COMMISSION DATE: . COMMISSIONER Form 10401 Revised 12/2005 Submit in Duplicate AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 7 of 30 • 4110 SURVEYED TOWNSHIP 15 NORTH.RANGE 32 WEST OF THE UMIAT MERIDIAN, ALASKA STATUS OF PUBUC DOMAIN LAND AND MINERAL TITLES / 21911 03211 r< 0. 24 MTP r 442 324 01 899 n 12992) % '—'11.:-.2='!'‘, _ , SUPPL See 24,25 /',L / a 198812 t . , INDEX TD SEGREGATED TRACTS / Ma 9 O.1 mum. .9.M1 .1aieox / 9[ 01 9 9 9814 Corp .1¢ 9u 898 001 7 r / ' " / ZrAt.. 5 1 / 098 4418, Tr A �, \ 4!'[.." ..44 MR 0170E09 PFFELT /N8 6V If OASPOSA d' 4 / 29 NWOENT/f( /4100 9277.2•9/N 2R LYI05f - t /' 1/5.4_4• h[ LYI LuIe¢4.s MFipro OT/NR__ `r 0 / a..nt. -'F::"" M,SC L<P D lr. a' / ssL PLO MU Pd 41 of Lp E a exseN LbANM M / #14, *V llo ii s.n V ii ' SSE / @tom 5 It l L 90/ TO 1161 A., ROR UUR 0tALE M 28-1999 Cam. T ._11.11. i Q x .a ,1 M1. /+. =OM Y . � � � R ...AEA N .rams. 8M� = r a .wrbw e..eem A Figure #1. Wainwright Townsite. Plat T15N R32W UM. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 8 of 30 • • / T15N R32W UM Sec. 24 F Wainwright #1 and #2 (2007) A Production Well 1 c(Total = 1) • 145 / • • F--- Monitoring Well p ' . (Total = 5) ELM SSE Only /f / Olgoonik Corp. // ELM SSE Only ,p A OS 2 40 1 1. P87312 / D m S 0 // PLO 5188 \`� \ 6 I Public Tnteresf \ l5J 96 'MS 4418, Tr A PL Chukchi S 7 �\ / 24 / / \ �US8 4416 1r E G �' 1 61 � `" 1� (Wainwright j /' Townsite) -- �TS8c4416 / 2.09 ‘1/4,'. , - 051'6 SSE /y ■ Figure #2. Location of Proposed Production Test and Monitoring Wells. Wells #3 -8. Wainwright Townsite. Plat T15N R32W, Sec 24, UM. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 9 of 30 O C wainwright #1 and #2 (2007) f . #4 (Monitor well) #3 (Production Test well) #5 (Monitor well) #6 (Monitor well) Proposed 2008 PRODUCTION WELL #7 (Monitor well) MONITOR WELL T15N R32w, Sec, 24 UM 4 #8 (Monitor well (Location under leas- olgoonik corp. to olgoonik corp_) 50 -41 -0562 SSE BLM SSE Only USS 4418 city of wainwright SsE BLM 55E Only 1,000 tn, 0 Figure #3. Location of Proposed Production Test and Monitoring Wells. Wells #3 -8. Wainwright, Aerial Photo. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 10 of 30 • 0 SURVEYED TOWNSHIP 15 NORTH RANGE 31 WEST OF THE UMIAT MERIDIAN, ALASKA STATUS OF PUBLIC DOWN LAND AND MINERAL TITLES MTP 6 ''' 5 / ,,,,, , 4 3 2 1 AZ 7.:( 917 1 ,, ',CET .7- COZ.,1,0 To pa ars 11 ■ ■ 7 wa.,,, 4r . 8 9 10 11 L 12 6.611 UN Only 1.-637 ' 18 17 16 15 14 13 , .....M Dill.ARUEVENT ■,...,-, 7,7 lik ....•••■•111111111111111 , 13 20 21 22 23 24 27 MA --- r. E111l•FGE .. 1.,. 1 30 29 26 ic-.,” 26 25 blip f a 33 35 i l l 36 34 , r.rs if 0 TRENT Tr.1 U 1/er > 1, 31 1T ii Figure #4. Location of Proposed Offset Well at the NSB Landfill. Well #9. Plat T15N R31W,UM _..........._ AOGCC Permit to Drill Wainwright #7 April 22, 2008, Page 11 of 30 • • ■ `�� 0a L "ert 50-39 / l� 0/C NA Cen 96 -00 �/ \ \1 ��G 6 5 • D/c \ OCD to US F92297 4 All Min Except Cool OG OCD to US SSE Only _ All Mn Except Coo/ 00 IC 1456 V SSE Only • 1 -214 IC 1456 50-98 -0036 NA Cert D/C / USS 11587 F92313 159.96 OCD to US 1 -510 All Min Except Cool OG SSE Only IC 1631 _ 1 -607 • Offset Well. T15N R31W UM 7 Wainwright #9. 8 9 1 -99 • , y.. -13ow PL 96 -467 " Wd/ Alaska Maritime NWR i Ol ik Cor (Chukchi Sea Unit) g oon ASRC zx SSE SSE Only 50 -91 -0567 IC 1460 , A. 2- 296.73 1- 591.59 f ,. J FL 94 -258 p Wdl NPR -A ' ___ 18 17 16 • SEE ENLARGEMENT uss 5252 N0. 1 3 -14.57 • 1 USS 5252 _ 2 -_._ 3 2 -22.83 46.52 184.36 Figure #5. Location of Proposed Offset Well at the NSB Landfill. Detail View. Well #9. Plat T15N R31 W,UM AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 12 of 30 • • sec. 7 sec. 8 T15N R31W UM olgoonik Corp. SSE 50 -91 -0582 • ASRC SSE Only �. Ib * IC 145g ` ` 2008 Offset Well at NSB Landfill 70 °39'53,02 "N 159 °57'57.18 "W NAD83 1,000' Figure #6. Location of Proposed Offset Well at the NSB Landfill. Aerial Photo. Well #9. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 13 of 30 • • Explanation of Land Ownership. Plat of T15N R32W. UM Section 24. Section 24, TI5N, R32W contains the boundaries of the village of Wainwright. Six of the proposed 2008 drill sites will be located near the northeast portion of - Section 24. Patent Number 50 -91 -0562 conveyed surface estate to Olgoonik Corporation on - the following parcels of land (refer to plat): The northern part of Section 24 Southwest comer of Section 24 Southeast comer of Section 24 The subsurface estate was reserved to the Federal Government. Patent Number 50 -85 -0526 conveyed the surface estate to Olgoonik Corporation on the following parcels of land (refer to plat): Blk 22, Lot I, located in the northeastern part of Section 24. USS 4418, Tr E, located adjacted to Blk 22 in Section 24 USS 4418 Tr C, located southwest of Blk 22 in Section 24 USS 4418 Tr F, located southwest ofTr C in Section 24 USS 4418, Tr G, located southwest ofTr F in Section 24 The subsurface estate was reserved to the Federal Government. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 14 of 30 • • Explanation of Land Ownership. Plat of T15N R31W. UM Section 8. Section 8, TI5N, R31 W contains the eastern portion of the NSB landfill. The offset well will be drilled at the landfill within Section 8. Patent Number 50 -91 -0568 conveyed surface estate to Olgoonik Corporation to Section 8. Interim Conveyance (IC) 1460 conveyed the subsurface ownership, including coal, to the Arctic Slope Regional Corporation. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 15 of 30 • • Permission to Enter Lands and Drill from the Surface Land Owner Surface Estate: Olgoonik Corp. Jute 7.2007 Ms. Beth Maclean Bureau of Land Management 222 West Seventh Avenue, #13 Anchorage, AK 99513 Dear Ms. Maclean: Olgoonik Corporation (OC) is supportive of your efforts to evaluate coalbed natural gas potential of Wainwright as outlined in the town meetings you have held in Wainwright. We appreciate the effort that you have put forth on this project on behalf of our community. OC has land entitlements within the city limits of Wainwright and also outside of these boundaries. OC recognizes the benefits that could occur from having a local, energy source available for the community. We recognize the cooperative work planned between Federal, State, and the private sector and are pleased to be a part of this effort in conjunction with Arctic Slope Regional Corporation. We appreciate the fact that the Bureau of Land Management and US Geological Survey are making a good faith effort to involve local communities in Locating local sources of energy in rural Alaska. Sincerely, Vivat. Vel Lucille Mayer President, Olgoonik Corporation Cc: Teresa Imm, Arctic Slope Regional Corporation AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 16 of 30 • Waivers and Drill Spacing Exceptions Alaska Rural Energy Project Wainwright, Alaska, 2008 The Permit to Drill application includes requests for waivers for proposed wells Wainwright #3 through #9 for the following: • The bonding requirements of 20 AAC 25.025, • The blowout prevention equipment requirements of 20 AAC 25.035 • The well bore surveys requirements of 20 AAC 25.050(a)(2), • The well site seismic survey requirements of 20 AAC 25.061(a), • The gas detection requirements of 20 AAC 25.066. The Permit to Drill application includes a requested exception for the well spacing requirements of 20 AAC 25.055(a) for proposed wells Wainwright #3 through #8. " Information in Support of Requested Waivers and Well Spacing Exemptions Bonding Waiver Request The operator is the US Department of the Interior, Bureau of Land Management. The Department is self- insured under the Federal Tort Claims Act, 28 USC Sec. 26.71. BOP Waiver Request. For the previous permit to drill at this location at the Village of Wainwright (207- 065, Wainwright #1) the operator (DOI) examined all well logs for the wells within the general vicinity of the Wainwright #1 well. They included Tunalik, Kugrua, and Peard Bay. In the upper 3,500 feet of each of these wells, measurable gas readings were associated with coal seams only. Mud weights were kept between 9 -10 pounds per gallon (ppg) above 3,500 feet in each well indicating that no overpressured conditions were expected or encountered. Seismic information shows no indication of the presence of shallow gas. In addition, drilling records and mud log information from the nearest exploration wells show no indication of abnormal pressure. Additionally, the Wainwright #1 and #2 wells that were drilled to a depth of 1,613' in 2007 encountered no gas kicks. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 17 of 30 Imo o 0 "c-a O , 0 -. x Drilling Rig 1 DOI Drilling Operation Diverter Head o ~ 4--- a.s ° core rod Mfg. Washington Rotating Head co °* v ° R valve • m 100 psi rubber seal (p Diverter _� T- fitting „ . . -. To holding pit N head Threaded coupler ---- . ., 6 518" OD valve Conductor al - ° ` °• casing P III Fluid discharge to .:' t.,,,, recirculation pit • 40' -80' bls "--- -► Diverter photograph IW L, L J V I LJ • • MAY 0 2 200$ Alaska Oil & Gas Cons. Commission Anchorage The proposed 2008 drilling of Wainwright #' 3 through 9 will use a weighted mud system typically ranging from 9.0 ppg -9.8 ppg. If over - pressured gas is encountered, a 10.5+ ppg mud will be circulated down the well to stop the gas from venting. Optionally, a cement slurry weighing from 13 ppg -15 ppg could be mixed and pumped through the drill steel from the bottom to the surface to kill the well. In this situation, the well would be considered abandoned. If a gas kick were to be encountered, the amount of gas that can safely be vented during drilling is considerable. The operator is proposing to utilize a Washington stripping head sealing 3'/" drill pipe on 6 5/8" casing, and a 40 foot by 4" ID blooey line. Well Site Seismic Survey Waiver Request. DOI, the operator, has examined two seismic surveys in the Wainwright area. The first is an E -W line that runs from the S. Meade well to the Arctic coast approximately 5 -10 miles SW of Wainwright. The second is a NE -SW line that parallels the coastline from north of the Peard Bay well to north of the Tunalik well and runs directly through Wainwright. These surveys, while shot for deeper targets, do not show any shallow hazards in the vicinity of the proposed drill site. Gas Detection Requirements, H2S and Methane Waiver Request For the previous permit to drill at this location at the Village of Wainwright (207- 065, Wainwright #1) the operator (DOI) examined all well logs for the wells within the general vicinity of the Wainwright #1 well. They included Tunalik, Kugrua, and Peard Bay. In the upper 3,500 feet of each of these wells, measurable gas readings were associated with coal seams only. Mud weights were kept between 9 -10 pounds per gallon (ppg) above 3,500 feet in each well indicating that no overpressured conditions were expected or encountered. The drilling will be done with a portable truck - mounted drilling rig. This equipment has no enclosures where methane could accumulate sufficiently to pose a risk of explosion or fire, or where a methane detector could practicably be located. Additionally, the Wainwright #1 and #2 wells that were drilled in 2007 encountered no gas kicks. Requested exception for the well spacing requirements of 20 AAC 25.055(a) for proposed wells Wainwright #3 through #9. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 19 of 30 • f ,. The proposed 2008 drilling of Wainwright #' 3 through / use a weighted mud system typically ranging from 9.0 ppg -9.8 ppg. If over- pressured gas is encountered, a 10.5+ ppg mud will be circulated down the well to stop the gas from venting. Optionally, a cement slurry weighing from 13 ppg -15 ppg could be mixed and pumped through the drill steel from the bottom to the surface to kill the well. In this situation, the well would be considered abandoned. If a gas kick were to be encountered, the amount of gas that can safely be vented during drilling is considerable. The operator is proposing to utilize a � ;; Washington stripping head sealing 3'/ "' drill pipe on 6 5/8" casing, and a 40 foot by 4" ID blooey line. e �� rA a Well Site Seismic Survey Waiver, Request. °° J DOI, the operator, has examined two seismic surveys in the Wainwright area. The first is an E -W line that n.rhs from the S. Meade well to the Arctic coast/ approximately 5 -10 miles SW of Wainwright. The second is a NE -SW line that parallels the coastline from north of the Peard Bay well to north of the Tunalik well and runs directly through Wainwright. These surveys, while shot for deeper targets, do not show any shallow hazards in the vicinity of the proposed drill site. Gas Detection Requireinents, H2S and Methane Waiver Request For the previous perr/jit to drill at this location at the Village of Wainwright (207- 065, Wainwright #1) he operator (DOI) examined all well logs for the wells within the general vicinity •;f the Wainwright #1 well. They included Tunalik, Kugrua, and Peard Bay. In he upper 3,500 feet of each of these wells, measurable gas readings were associated with coal seams only. Mud weights were kept between 9 -10 pounds per Callon (ppg) above 3,500 feet in each well indicating that no overpressured co ditions were expected or encountered. The drilling will done with a portable truck - mounted drilling rig. This equipment has no enclosur • s where methane could accumulate sufficiently to pose a risk of explosion or fir= or where a methane detector could practicably be located. Additionally, th, Wainwright #1 and #2 wells that were drilled in 2007 encountered no gas kicks. Requested e -ption for the well spacing requirements of 20 AAC 25.055(a) for proposed wel s Wainwright #3 through #8. AOGCC Permit o Drill. Wainwright # 7 April 22, 2008, • age 19 of 30 The pressure monitoring wells (#4- #8) will need to be located horizontally between 75' and 400'from the production test well ( #3). The proposed location of the production test well is about 100' from the exploration wells #1 and #2 drilled in Wainwright in 2007. The 2008 proposed wells must be drilled in this location, and in the proposed configuration and spacing, in order to assess the coal bed gas resource. An exception to the well spacing requirements in 20 AAC 25.055(a) is required in order to proceed with the purpose of the 2008 drilling program. Well #9 requires a spacing exception because it is closer that 3,000' to state submerged lands, Chukchi Sea. RECEIVED MAY 0 2 2008 Alaska Oil & Gas Cons, Commission Anchorage AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 20 of 30 • The pressure monitoring wells (#4- #8) will need to be located horizont y between 75' and 4OO'from the production test well ( #3). The propos - . location of the production test well is about 100' from the exploration wells # /and #2 drilled in Wainwright in 2007. The 2008 proposed wells must be drill :. in this location, and in the proposed configuration and spacing, in order to sess the coal bed gas resource. An exception to the well spacing require - nts in 20 AAC 25.O55(a) is required in order to proceed with the purpose of the 2008 drilling program. co 616 r f f rl / t AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 20 of 30 • RECEIVED MAY 0 2 2008 Al CHECKLIST — SPACING EXCEPTION APPLICATI 8 Oil & Gas Cons. Commission Anchorage OPERATOR USGS PROPERTY ID/ LEASE S: N/A FIELD/POOL Wainwright, Coal Bed Methane PI /BH: WELL NAME Wainwright #3 - #9. VERTICAL X EXPLORATORY X GAS x DEVIATED DELINEATION OIL DEVELOPMENT SURFACE LOCATION ' F L and ' F L, S. , T , R , M PRODUCTIVE INTERVALS ' F L and ' F L, S. , T , R , M (Top and Bottom) See BOTTOM HOLE ' F L and ' F L, S. , T , R , M Applications Check applicable reason(s) for spacing exception per 20 AAC 25.055(a): (1) to drill a well for oil within 500 feet of a property line where ownership or landownership changes, x (2) to drill a well for gas within 1500 feet of a property line where ownership or landownership changes, (3) to drill and complete more than one oil well in a governmental quarter section; or to drill and complete an oil well doser than 1000' to any well drilling to or capable of producing from the same pool, X (4) to drill and complete more than one gas well in a governmental section; or or to drill and complete a gas well closer than 3000' to any well drilling to or capable of producing from the same pool. Does the application contain: X A brief explanation for why the operator has chosen to drill the specified location. A plat drawn to a scale of one inch equaling 2,640 feet or larger, showing the location of the well or portion of the well for which the exception is sought, all other x completed and drilling wells on the property, and all adjoining properties and wells within 1,000 feet of a well or portion of the well requiring the spacing exception that is drilling for oil or within 3,000 feet of a well or portion of the well requiring the spacing exception that is drilling for gas. The names of all owners, landowners, and operators of all properties within 1,000 feet of a well or portion of the well requiring the spadng exception that is drilling for x oil or within 3,000 feet of a well or portion of the well requiring the spacing exception that is drilling for gas. A copy of the notice sent by certified mail to the owners, landowners and operators x described above, the date of mailing, and the addresses to which the notice was sent. x An affidavit by a person acquainted with the facts verifying that all facts are true and that the plat correctly portrays pertinent and required data. ff the operator requests a variance from the notice requirements of x 20AAC25.055(d), sufficient information to demonstrate that it is not feasible to comply with the notice requirements because of the complexity of ownership within the notice area. Figure #8. Well Spacing Exemption Checklist. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 21 of 30 • • 4 , , !`� y VV 0 CHECKLIST - SPACING EXCEPTION APPLICATION OPERATOR BLM / USGS PROPERTY ID/ LEASE S: N/A FIELD/POOL Wainwright, Coal Bed Methane PI /BH: WELL NAME Wainwright #3 - #8. VERTICAL X EXPLORATORY X GAS X DEVIATED DELINEATION OIL DEVELOPMENT SURFACE LOCATION ' F L and ' F L, , T , R , M PRODUCTIVE INTERVALS ' F L and ' F , S. , T , R , M (Top and Bottom) see BOTTOM HOLE ' F L and F L, S. , T , R M Applications Check applicable reason(s) for spacing exce on per 20 AAC 25.055(a): (1) to drill a well for oil within 500 feet •• a property line where ownership or landownership changes, x (2) to drill a well for gas within 1 • • eet of a property line where ownership or landownership changes, (3) to drill and complete more t+ . n one oil well in a governmental quarter section; or to drill and complete an • well closer than 1000' to any well drilling to or capable of producin • from the same pool, X (4) to drill and complete ore than one gas well in a govemmental section; or or to drill and comp -te a gas well closer than 3000' to any well drilling to or capable of pr• • cing from the same pool. Does the application conta' : X A brief expianatio , for why the operator has chosen to drill the specified location. A plat drawn to . scale of one inch equaling 2,640 feet or larger, showing the location of the ell or portion of the well for which the exception is sought, all other x completed an drilling wells on the property, and all adjoining properties and wells within 1,000 '- -t of a well or portion of the well requiring the spacing exception that is drilling to' oil or within 3,000 feet of a well or portion of the well requiring the spacing e • ption that is drilling for gas. The nam s of all owners, landowners, and operators of all properties within 1,0Q0 feet of a ell or portion of the well requiring the spacing exception that is drilling for X oil or w' hin 3,000 feet of a well or portion of the well requiring the spacing exception that is • rilling for gas. A co • of the notice sent by certified mail to the owners, landowners and operators des • 'bed above, the date of mailing, and the addresses to which the notice was se . x A affidavit by a person acquainted with the facts verifying that all facts are true and t : the plat correctly portrays pertinent and required data. the operator requests a variance from the notice requirements of 'OAAC25.055(d), sufficient information to demonstrate that it is not feasible to comply with the notice requirements because of the complexity of ownership within the notice area. Figure • 8. Well Spacing Exemption Checklist. AOGCC Permi to Drill. Wainwright # 7 April 22, 2008, Page 21 of 30 • • June 7, 2007 Ms. Beth Maclean Bureau of Land Management 222 West Seventh Avenue, #13 Anchorage, AK 99513 Dear Ms. Maclean: Olgoonik Corporation (OC) is supportive of your efforts to evaluate coalbed natural gas potential of Wainwright as outlined in the town meetings you have held in Wainwright. We appreciate the effort that you have put forth on this project on behalf of our community. OC has land entitlements within the city limits of Wainwright and also outside of these boundaries. OC recognizes the benefits that could occur from having a local, energy source available for the community. We recognize the cooperative work planned between Federal, State, and the private sector and are pleased to be a part of this effort in conjunction with Arctic Slope Regional Corporation. We appreciate the fact that the Bureau of Land Management and US Geological Survey are making a good faith effort to involve local communities in locating local sources of energy in rural Alaska. Sincerely, vo Lucille Mayer President, Olgoonik Corporation Cc: Teresa Imm, Arctic Slope Regional Corporation Figure #9. Letter from the President of Olgoonik Corp. regarding the public involvement and knowledge of the drilling program in Wainwright. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 22 of 30 • • Drilling Plan. Alaska Rural Energy Project Wainwright, Alaska, 2008 Landfill Offset Well 1. Transport rotary rig and other equipment from Deadhorse to Wainwright . 2. Move equipment to landfill site. Drill 9 7/8" hole through surficial deposits to depth of -50'. Set and cement 6 5/8" schedule 40 steel surface casing. 3. Mud rotary 6" open hole (no core) to between 2500 and 3000 ft. 4. Conduct geophysical logs (caliper, gamma, resistivity, density, sonic) 5. Abandon well with abandonment bentonite grout and cement. Production Test Monitor Wells 1. Move equipment to Olgoonik wareyard to begin installing wells for production test. 2. Drill 9 7/8" hole through surficial deposits to depth of -50'. Set and cement 6 5/8" schedule 40 steel surface casing. 3. Mud rotary 6" open hole (no core) to 1260 ft. 4. Run geophysical logs (density, gamma, resistivity) to confirm coal bed depth. 5. Install 2.5" schedule 80 PVC monitor well with 10' PVC 10 -slot screen at bottom. Sand -pack around screen, install bentonite pellet seal above sand, grout to surface using abandonment bentonite grout and cement. 6. Develop well using bailer and air lift methods. 7. Fill PVC well with 67/33% mixture of water /propylene glycol from -1100 ft to land surface. 8. Install pressure transducer. 9. Repeat steps 7 through 11 at four other locations (see attached diagram) Durability of Pressure Monitoring Downhole Components: The tensile strength of 2.5" schedule 80 PVC is 2,125 ft vertical suspension in a dry hole. In a fluid - filled hole, it is considerably higher. The operator (USGS) has used this exact pipe as monitor well casing to depths in excess of 2500 ft in New Mexico. The maximum external pressure differential is -340 psi, maximum internal pressure differential is -670 psi. Wall thickness is .276 ", weight is 1.46 Ibs /ft. The bentonite grout never sets up as a true solid. Rather, it sets up to a jelly -like consistency that retains its low -perm characteristics even when frozen. The cement used is Arctic cement blended in Fairbanks, AK for north slope conditions by Haliburton. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 23 of 30 1 Production Test Well 1. Drill 14 3/4" hole through surficial deposits to depth of -50'. Set and cement 10 3/4" schedule 40 steel surface casing. " 2. Mud rotary 9 7/8 open hole (no core) to 1240 ft. 3. Set and cement 6 5/8" schedule 40 steel surface casing to 1240 ft. 4. Mud rotary 6" hole to 1260 ft. 5. Develop well using bailer and air lift methods 6. Fill well with 75/25% mixture of water /propylene glycol from -1100 ft to land surface. 7. Install submersible pump, cable, pressure transducers etc. 8. Make surface connections, prepare equipment for pump test Production Test Conduct 7 -day production test. (see alternative testing and well abandonment described in the section: Decommission Wells in 2009. Alternative, below.) Decommission Wells 1. Remove pump and cable from production well. 2. Remove glycol from well. 3. Abandon well with abandonment bentonite grout and cement. 4. Reposition rig over observation well. 5. Remove glycol from well. 6. Abandon well with abandonment bentonite grout and cement. 7. Repeat steps 4 through 6 for remaining four monitor wells. Clean and Pack equipment. Transport equipment from Wainwright via barge. Decommission Wells in 2009, Alternative An alternative to well abandonment in the summer of 2008 would be to leave the 2" PVC pressure monitor wells open for pressure- monitoring purposes over the winter, rather than plugging /abandoning at the end of a one -week test. The wells would be completed /isolated in the coal bed and hydraulically connected via slotted pipe at the bottom of the well as described in the Drilling Plan. Well abandonment would be done in late- spring or early- summer of 2009 rather than the summer of 2008. This alternative would leave the production well in an operational manner rather than plugging- abandoning at the end of the 2008 work as described. The offset well would be abandoned in 2008. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 24 of 30 • Borehole Sampling. Alaska Rural Energy Project Wainwright, Alaska, 2008 Landfill Offset Well During the drilling of the landfill offset well, mud -gas will be continuously monitored to detect the presence of hydrocarbons in the drill mud. Borehole cuttings will be collected, described, washed, and bagged at 10 -ft intervals. Production Test Wells As continuous core was collected from the production test site during 2007 drilling operations, no samples will be taken during the drilling of the production test wells. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 25 of 30 • • Wainwright 2008 Offset Well: Depth vs Time Days 0 0 1 A 2 3 4 5 6 7 8 9 -500 — Setandoement surface casing - 1000 Well abandonment -1500 ° -2000 -2500 -3000 Geophysical logging -3500 - Figure #10. Depth v Time Graph, Offset Well at the Wainwright NSB Landfill. AOGCC Permit to Drill. Wainwright #7 April 22, 2008, Page 26 of 30 0 1 Drilling Fluid Plan Alaska Rural Energy Project Wainwright, Alaska, Summer 2008 The hole will be drilled using standard fresh water bentonite drilling fluids. Additives to be used include (all listed products are NL Baroid trade names): • Quick -Gel high yield bentonite (hole stability, circulation control, clay -shale control) • Aqua -Gel bentonite (hole stability, circulation control, mud - density control) • Pac -L and Pac -R powdered cellulose polymer (clay -shale control, water Toss, viscosity control) • EZ mud liquid polymer (clay -shale control, water loss, viscosity control) • Pennetrol liquid detergent (bit cleaning, control clay build up around bit face and teeth) Drill fluids will be monitored for viscosity, weight, and temperature on a full -time basis. Drilling fluids will have cuttings removed and will be recirculated via a 1000 gallon trailer- mounted shaker system incorporating shaker screens and centrifugal desilting cones. Cuttings and used drill mud will be contained in above - ground tanks. At project's end, cuttings /mud will be disposed of at the Wainwright wastewater disposal pond. Rotary drilling and reaming operations will be conducted using a rig- mounted 5 1 /" X 8" 350 gpm, duplex mudpump and a Gardner - Denver 5" x 6 ", 200 gpm, duplex mudpump. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 27 of 30 . III Well Closure Procedures Alaska Rural Energy Project Wainwright, Alaska, Summer 2008, or 2009 During drilling and coring operations, aquifers will be protected by mixing bentonite and polymer additives in the drill mud specifically designed to seal and protect water - bearing strata. Encountering water bearing strata that could contain a useable aquifer is not expected since the drilling will be within the permafrost. Landfill offset well Upon completion of the landfill offset well, the well will be plugged from total depth to 100 ft below land surface (bls) with an abandonment bentonite grout mixture mixed at land surface with a grout plant and pumped from the bottom up. The top 100 ft of the well will be filled with Arctic -blend cement. Production test monitor wells After drilling is completed, 2.5" schedule 80 flush joint PVC casing and screen will be set in the well. The annular area between the well screen and the borehole wall will be filled with 8 -12 silica sand using tremie placement methods to 20 ft above the top of the screen. A 10 ft layer of W bentonite pellets will then be placed on top of the sand using tremie methods. The annular area from the top of the pellets to 100 bls will be filled with abandonment bentonite grout, mixed at land surface with a grout plant and pumped through tremie pipe from the bottom up. The top 100 ft of the annular area will be filled with Arctic -blend cement. After well development, the PVC pipe will be filled with a 67/33% mixture of water and propylene glycol from a depth of 1100 ft to land surface to prevent freezing during testing procedures. Upon completion of testing procedures, the PVC well will be filled with abandonment bentonite grout, mixed at land surface with a grout plant and pumped through tremie pipe from the bottom up, to a depth of 100 ft bis. The top 100 ft of the well will be filled with Arctic -blend cement. Production test well After drilling is completed to 1240 ft, 6 5/8" schedule 40 steel casing will be welded and set. Arctic -blend cement will then be mixed in a grout plant and pumped through tremie pipe into the annular area from 1240 -1000 ft bis. Abandonment bentonite grout will then be mixed and pumped from 1000 to 100 ft bls, and Arctic -blend cement mixed and pumped from 100 ft to land surface. After drilling a 6" hole below the casing to a depth of 1260 ft, the well will be AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 28 of 30 • . developed, a submersible pump set, and the inside of the casing filled with a water /propylene glycol mixture to prevent freezing. After the pump test is completed, the pump will be pulled and the glycol removed from the well by pumping abandonment bentonite grout through 2" pipe from the bottom of the well to 100 bls. The top 100 ft of the well will be filled with Arctic -blend cement. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 29 of 30 • • Other Permits Alaska Rural Energy Project Wainwright, Alaska, Summer 2008 DNR Temporary Water Use Authorization for 4,000gpd, 150,000 gal total. ACMP B -List GCD -8, and No Review Required decision. ADEC ODPCP Exemption. ADEC Solid Waste Disposal for cuttings, Plan Review ADEC Drill Fluids and Produced Water Disposal. NSB Development Permit, Planning Department. NSB Dept. of Public Works, approval to use of landfill for cuttings disposal. AOGCC Permit to Drill. Wainwright # 7 April 22, 2008, Page 30 of 30 • TRANSMITTAL LETTER CHECKLIST WELL NAME m GC.-r. 1 7 PTD# 268 'D 7.5" . / Development, Service /Exploratory Stratigraphic Test Y Non- Conventional Well FIELD: C;er1 POOL: 4 Circle Appropriate Lett r / 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 _• pliance with 20 AAC EXCEPTION 25.055. Approval to perforate an . roduce in'ec is contingent upon issuance a co serve() • • - ap r vin a spacing exception. ,j td'+"G� assumes the liability of any protest o t12%'pacing exception that may occur. DRY DITCH All dry ditch sample sets submitted to the Commission must be in SAMPLE no greater than 30' sample intervals from below the permafrost or from where samples are first caught and 10' sample intervals through target zones. Non - Conventional Please note the following special condition of this permit: Well production or production testing of coal bed methane is not allowed for (name of well) until after (Company Name) has designed and implemented a water well testing program to provide baseline data on water quality and quantity. (Company Name) must contact the Commission to obtain advance approval of such water we testing program. . - (e -7 AD to 44P (ee- t__t/5 S$ Z.- a- Gam) Rev: 1/1 1/2008 WELL PERMIT CHECKLIST Field & P001 Well Name: WAINWRIGHT 7 Program EXP Well bore seg ❑ PTD#: 2080750 Company U S DEPT OF INTERIOR Initial Class/Type EXP / PEND GeoArea 890 _ Unit On /Off Shore On Annular Disposal ❑ Administration 1 Permit fee attached NA 2 Lease number appropriate No No lease_involved: _BLM land, SPACING EXCEPTIONREQUIRED because of nearby coastline (state - federal bou 3 Unique welt name and number Yes 4 Well located in a defined pool No Exploratory coalbed methane well. 5 Welllocated proper distance from drilling unit boundary No SPACING EXCEPTION REQUIRED due to coastline, which is —509' to NW. 6 Welllocated proper distance from other wells No Production_ and monitor wells will be drilled within 250'. 7 Sufficient acreage available in drilling unit No SPACING EXCEPTION REQUJRED because of close proximity of planned production and monitor wells. 8 if deviated, is wellbore plat included NA Vertical well 9 Operator only affected party No Landowner is BLM* state acreage lies_about '500' away _(coastline) 10 Operator has_ appropriate bond in force No WAIVER REQUESTED from bonding_requirements. 11 Permit can be issued without conservation order No Appr Date 12 Perrnitcan be issued without administrative_approval No SFD 6/10/2008 13 Can permit be approved before 15 -day wait No 14 Welllocated 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 (For 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 AS31.05 03Q(1.1.A),(1.2.A -D) Yes Monitor well for CBM test. Per CO 582, Wainwright Village water supply is surf_ ace source and Engineering 18 Conductor string_provided Yes 6 -5/8" @ 80'. 19 Surface casing_ protec_ts all_known USDWs NA No known USDWs. 20 CMT_v_ol adequate to circulateon conductor & surf csg Yes Adequate excess for conductor. 21 CMT voi_ adequate to tie -in Jong string to surf csg Yes Plan is to use bentonite grount to seat in PVC casing_tQ testcoal_gas. 22 CMT_witl coverall known_productive horizons Yes 23 Casing designs adequate for C,_T, B & permafrost Yes Low pressure operation planned, Interior Breeze protected with propylene glycol. 24 Adequate tankage_ or reserve pit Yes Plan states rig equipped with tanks. 25 If are- drill, has_a 10-403 for abandonment been approved NA 26 Adequate wellbore separation_proposed Yes This well located !-1-48' from Wainright 6. Colission chance unlikely. 27 if diverter required, does it meet regulations Yes Will employ a rotating head. Rotating head will protect driller's area and divert flow. Appr Date 28 Drilling fluid_ program schematic & equiplist adequate Yes Expected formation pressure 9.0 - 9.8 EMW. Provision to weight up to 10.5 ppg if needed. TEM 6/10/2008 29 BQPEs,_do they meet regulation NA BOP exception requested. Granted by CO 604. Ae 30 BOPE_press rating appropriate; test to (put psig in comments) NA /" `"Y 31 Choke_ manifold complies w /API_ RP -53 (May 84) NA II- 32 Work will occur without operation shutdown Yes 33 is presence of H2$ gas probable No 34 _Mechanical_condition of wells within AQR verged (For service well only) NA Geology 35 Permit can be issued w/o hydrogen sulfide measures Yes None encountered in Wainwright 1 or 2, which were drilled thrusame section about 350' away. 36 Data_presented on potential overpressure zones Yes None anticipated based on W_ainwright 1, Wainwright 2, Tunaiik 1, Kugnia 1,_Peard_Bay 1, and seismic data. Appr Date 37 Seisrnic_analysis of shallow gas zones Yes Wainwright 1 and 2 and offset seismic data do not indicate the presence of shallow gas. SFD 4/30/2008 38 Seabed condition survey (if off- shore) NA 39 Contact name /phone for weekly_ Progress reports [exploratory only] Yes Art Clark, U$QS, 303- 236 -5793 Geologic P - Date: Engineering Date Date Commissioner: Commissioner: C. / - r -/� r. , / / ?O -0f %A pr
