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208-073
0 • Image Project Well History File Cover Pa g e 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. ao 3 - 0 7 3 Well History File Identifier _ ' I IIIIIIIIII 1II Rescan Needed III III 111111111111 Organizing (done) wo sided I H ❑ R AN DIGITAL DATA OVERSIZED (Scannable) Color Items: ❑ Diskettes, No. ❑ Maps: Greyscale Items: ❑ Other, No/Type: ❑ Other Items Scannable by a Large Scanner ❑ Poor Quality Originals: OVERSIZED (Non - Scannable) ❑ Other: ❑ Logs of various kinds: NOTES: ❑ Other:: BY: Maria Date: .JOJ/3 /s/ fil r Project Proofing 11111111111 11111 BY: CM Date: c alaQ ! 3 /s/ rY Scanning Preparation a x 30 = LO (2 + = TOTAL PAGES Vt Count does not include cover sheet) i nA BY: Ct ... Date: c al ad 3 /s/ Production Scanning 1111111111111 Stage 1 Page Count from Scanned File: 75 (Count does include cover sheet) Page Count Matches Number in Scanning Preparation: YES NO BY: Maria Date: al t g,01 3 /s/ l in 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. 11111111111111111 ReScanned IIIIIIIIIIIIIIIIIII BY: Maria Date: /s/ Comments about this file: Quality Checked III IIIIII III IIII III 12/22/2011 Well History File Cover Page.doc DATA SUBMITTAL COMPLIANCE REPORT 2/11/2013 Permit to Drill 2080730 Well Name /No. WAINWRIGHT 05 Operator U S DEPT OF INTERIOR API No. 50- 301 - 20007 -00 -00 MD 1260 TVD 1260 Completion Date 7/18/2008 Completion Status SUSP Current Status P &A UIC N REQUIRED INFORMATION Mud Log No Samples No Directional Survey No DATA INFORMATION Types Electric or Other Logs Run: (data taken from Logs Portion of Master Well Data Maint Well Log Information: Log/ Electr Data Digital Dataset Log Log Run Interval OH / III Type Med /Frmt Number Name Scale Media No Start Stop CH Received Comments ED C 19309 See Notes 0 0 Daily Recs, Time Line, Completion Diagram Well Cores /Samples Information: Sample Interval Set Name Start Stop Sent Received Number Comments ADDITIONAL INFORMATION Well Cored? Y ate Daily History Received? N Chips Received? 1 Formation Tops / N Analysis ...1FfiGr Received? ��J Comments: t.7 I - S1 N o L „ 1\ ,„, • 1 Compliance Reviewed By: ` Date: 1 ` k - t..10 � t 1 • USGS - BLM Wells • Missing Required Information Well Name Permit to Drill Number Missing Information Prior Requests DOI -04 -1A (Ft. Yukon) 2040830 Core analysis Requested 11/5/2009 2040830 Core chips Requested 11/5/2009 2040830 Cuttings samples Requested 11/5/2009 2040830 Mud log Requested 11/5/2009 2040830 Open hole logs - Paper Print Requested 11/5/2009 2040830 Open hole logs - Reproducible Requested 11/5/2009 Franklin Bluffs 1 2051050 As built survey plat Requested 11/5/2009 2051050 Core description and analysis Requested 11/5/2009 2051050 Mud log Requested 11/5/2009 2051050 Open hole logs - Digital Requested 11/5/2009 2051050 Open hole logs - Paper Print Requested 11/5/2009 2051050 Open hole logs - Reproducible Requested 11/5/2009 Wainwright 01 2070650 Core analysis Requested 11/5/2009 2070650 Core chips Requested 11/5/2009 2070650 Location information (coordinates as metes & bounds, Required on Completion Report form coordinates in AK State Plane NAD 27) 2070650 Location information (lat /long datum) Wainwright 02 2071060 Cuttings samples Requested 11/5/2009 2071060 Inclination survey Requested 11/5/2009 2071060 Lithology log Requested 11/5/2009 2071060 Location information (coordinates as metes & bounds, Required on Completion Report form coordinates in AK State Plane NAD 27) 2071060 Location information (lat /long datum) Wainwright 09 2080770 Core chips Requested 11/5/2009 2080770 Core description and analysis Requested 11/5/2009 2080770 Lithology log - Paper Print Requested 11/5/2009 2080770 Location information (lat /long datum) Wainwright 10 2090350 Core chips Requested 11/5/2009 2090350 Core description and analysis Requested 11/5/2009 2090350 Cuttings samples Required on Completion Report form 2090350 Inclination survey Requested 11/5/2009 2090350 Location information (coordinates as metes & bounds, Required on Completion Report form coordinates in AK State Plane NAD 27) 2090350 Location information (lat /long datum) 2090350 Mud log (required by permit to drill; drilling history states "will Requested 11/5/2009 not collect mud -gas log at this site. ") Wainwright 03 2080710 In compliance Wainwright 04 2080720 In compliance Wainwright 05 2080730 In compliance Wainwright 06 2080740 In compliance Wainwright 07 2080750 Expired permit: never drilled Wainwright 08 2080760 In compliance Wainwright 11 2090360 Cancelled permti: never drilled II I AOGCC February 17, 2011 • pet roleuni FREE s>,BSI ' vv s e trirtri 5ubscripttons t'u6lication5 http://www.petroleumnews.com/pnads/891782894.shtml Vol. 16, No. 13 Week of March 27, 2011 Providing coverage of Alaska and northern Canada's oil and gas industry BLM admits to drilling safety lapse Federal agency concedes diverter wasn't used on well drilled near Alaska village of Wainwright; AOGC to -0G S continue probe ()* _ ko Wesley Loy a(),� 0' — 0'1 For Petroleum News The Bureau of Land Management has admitted responsibility for a failure to use a\ safety device called a diverter on a federal drilling project near the northwestern A `\ Alaska village of Wainwright. But the BLM also seemed to steer accountability for the lapse toward its designated operator on the project, the U.S. Geological Survey. t 'N The BLM stated its position in a March 15 letter to the Alaska Oil and Gas d — 03 Conservation Commission, which had been pushing the agency for months to show proof it had used the required diverter on the seven wells at issue. "BLM understands it is responsible for the actions of its operator," said the letter signed by Julia Dougan, the BLM's associate state director for Alaska. `BLM has no immediate plans for additional drilling but can assure the Commission if future drilling should be permitted, operations will be carried out in full compliance with state regulations." How conflict unfolded • • The letter is the latest twist in a long - running conflict between the BLM and the AOGCC. The Wainwright project, which began in 2007, was a joint effort involving the BLM, the USGS, the North Slope Borough and Arctic Slope Regional Corp. The goal was to test a local coalbed as a potential source of natural gas to meet energy needs in the remote village of about 550 people on the Chukchi Sea coast. The AOGCC has authority to regulate drilling statewide, whether on federal, state or private land. On June 22, 2010, the AOGCC hit the BLM with a "notice of violation" for possibly drilling wells without the required safety equipment. A diverter, which sits atop the well, is designed to direct any unexpected release of dangerous hydrocarbons safely away from the rig work area. Like blowout preventers, diverters are a last line of defense for drillers. The two agencies swapped letters over several months, with the AOGCC contending it was not seeing the verification it wanted on whether a diverter was used on the exploratory wells. On Dec. 9, the AOGCC threatened the BLM with a public hearing to get answers. Ultimately, Pat Pourchot, the U.S. Interior secretary's special assistant for Alaska affairs, was brought into the discussion. In its March 15 letter, the BLM said it was the applicant for the state permit to drill one of the wells, Wainwright No. 2, but that it had designated the USGS as operator. "Our documentation confirms no diverter was used on the Wainwright well #2," the letter said. But the BLM said the USGS was both the applicant and operator for the other wells, Wainwright Nos. 3, 4, 5, 6, 9 and 10, and it directed the AOGCC to send any correspondence about those wells to a USGS official. Investigation to continue Cathy Foerster, one of the three AOGCC commissioners, told Petroleum News the Alaska Department of Law had advised the agency it probably doesn't have the power to fine the BLM for failure to use a diverter on Wainwright No. 2. But Foerster said the BLM letter is significant, an indication "that the federal • 1 government is perfectly capable of self - correcting." The AOGCC now plans to make inquiries to the USGS regarding whether the safety gear was used on the other Wainwright wells. Foerster said the state's objective is plain. "When the federal government comes into our state to operate, we want their assurance that they will abide by our laws like any other operator," she said. The Wainwright matter isn't the only source of friction between the AOGCC and the BLM. The commission has pointedly questioned the federal agency's attention to dozens of derelict "legacy wells" located chiefly in the National Petroleum Reserve - Alaska. s # 0 Alaska regulators continue pressing BLM Lack of clarity on whether Wainwright gas wells had proper blowout prevention equipment could lead to public hearing, AOGCC warns Wesley Loy For Petroleum News For months now, Alaska drilling regulators have been asking federal officials to prove they used the required blowout prevention equipment on a series of test wells near the remote village of Wainwright. Thus far the issue remains unresolved — and it might be intensifying. The latest twist: Commissioners with the Alaska Oil and Gas Conservation Commission are threatening to hold a public inquiry in the conflict with the U.S. Bureau of Land Management. "In an effort to maintain a constructive relationship between State and Federal regulatory bodies, the AOGCC is extending the Bureau of Land Management one final opportunity to demonstrate that BLM's Wainwright wells number 2, 3, 4, 5, 6, 9 and 10 were drilled with appropriate blowout prevention equipment," said a Dec. 9 letter to BLM officials in Anchorage. "To date BLM has declined to provide the requested information. This correspondence marks AOGCC's final request prior to proceeding to convene a public hearing on the matter." The letter was copied to Alaska's congressional delegation, Gov. Sean Parnell and the U.S. Environmental Protection Agency. How it started Since the summer, the AOGCC has been trying to verify whether the BLM and its partners used a safety device known as a diverter on wells drilled to test for coalbed gas near the northwest Alaska village of Wainwright. The drilling project is a joint effort involving the BLM, the U.S. Geological Survey, the North Slope Borough and Arctic Slope Regional Corp. The Wainwright issue broke open on June 22 when the AOGCC hit the BLM with a "notice of violation," saying the federal agency appeared to be in violation of state regulations in drilling the wells without the required safety equipment, and improperly securing suspended wells. • • In response to letters from the AOGCC, officials with the BLM have attempted to supply proof that the diverter was used on at least some wells. On Nov. 16, the BLM supplied the AOGCC with drill site photos as evidence of the use of the diverter during the Wainwright project's 2007 and 2008 drilling seasons. "I hope this information is helpful and provides the clarification you are seeking," wrote Julia Dougan, the BLM's acting state director. Unsatisfactory response Commission Chairman Dan Seamount, in the AOGCC's Dec. 9 letter back to Dougan, said the photos were insufficient, as they were taken at Wainwright wells 1 and 8. Seamount wrote: "Neither of these wells was included in the AOGCC's notice of violation; the wells for which AOGCC requested documentation of diverter usage were the Wainwright No. 2, 3, 4, 5, 6, 9 and 10 wells." Seamount set a deadline of Jan. 31 for the BLM to show its wells were drilled with the proper blowout prevention gear. The AOGCC has authority to regulate drilling statewide, whether on federal, state or private land. Its relations with the BLM have been tenuous for some time, with the commission questioning the federal agency's handling not only of the Wainwright wells but also dozens of old "legacy wells" on Alaska's North Slope. 0 0 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOG la. Well Status: Oil Gas Plugged ❑ Abandoned is Suspended ❑ 1b. Well Class: 20AAC 25.105 20AAC 25.110 Development ❑ Exploratory El GINJ❑ WINJ❑ WDSPL❑ WAG Other No. of Completions: Service ❑ Stratigraphic Test ❑ 2. Operator Name: 5. Dat j ^° p., Susp., or $ Y' 12. Permit to Drill Number: U.S. Geological Survey 5r/ V142:1 0 "11422/201 208 -073 3. Address: 6. Date Spudded: 13. API Number: Box 25046 MS 939, DFC, Denver, CO 80225 7/15/2008 50- 301 - 20007 -00 4a. Location of Well (Governmental Section): 7. Date TD Reached: 14. Well Name and Number: Surface: N70, 38', 39.8" W160, 1', 17.8" (FNL =562, FEL= 1,602') 7/17/2008 Wainwright 5 (W- 0C4 -08) Top of Productive Horizon: 8. KB (ft above MSL): 25 15. Field /Pool(s): Ground (ft MSL): 20 Total Depth: 9. Plug Back Depth(MD +TVD): 1260 4b. Location of Well (State Base Plane Coordinates, NAD 27): 10. Total Depth (MD + TVD): 16. Property Designation: Surface: x- 462,337.48 y- 7,837,936.66 Zone- 4 1260 TPI: x- y- Zone- 11. SSSV Depth (MD + TVD): 17. Land Use Permit: Total Depth: x- y- Zone - 18. Directional Survey: Yes ❑ No El 19. Water Depth, if Offshore: 20. Thickness of Permafrost (TVD): (Submit electronic and printed information per 20 AAC 25.050) (ft MSL) - 900 ft 21. Logs Obtained (List all logs here and submit electronic and printed information per 20 AAC 25.071): none 22. CASING, LINER AND CEMENTING RECORD WT. PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASING GRADE TOP I BOTTOM TOP I BOTTOM HOLE SIZE CEMENTING RECORD FT PULLED 6 5/8 18.99 sch 40 0 50 0 50 9.875" cement from 50- surface 2.5 -in PVC sch 80 0 1260 0 1260 6.00" cement 1260 -1160 bentonite grout 1160 -100 • cement 100 - surface ID plate welded 86" bls 23. Open to production or injection? Yes ❑ No El If Yes, list each 24. TUBING RECORD interval open (MD +TVD of Top & Bottom; Perforation Size and Number): SIZE DEPTH SET (MD) PACKER SET (MD) 25. ACID, FRACTURE, CEMENT SQUEEZE, ETC. DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED 26. PRODUCTION TEST Date First Production: Method of Operation (Flowing, gas lift, etc.): Date of Test: Hours Tested: Production for Oil -Bbl: Gas -MCF: Water -Bbl: Choke Size: Gas -Oil Ratio: Test Period -► Flow Tubing Casing Press: Calculated Oil -Bbl: Gas -MCF: Water -Bbl: Oil Gravity - API (corr): Press. 24 -Hour Rate - 27. CORE DATA Conventional Core(s) Acquired? Yes ❑ No 151 Sidewall Cores Acquired? Yes ❑ No IS If Yes to either question, list formations and intervals cored (MD +TVD of top and bottom of each), and summarize lithology and presence of oil, gas or water (submit separate sheets with this form, if needed). Submit detailed descriptions, core chips, photographs and laboratory analytical results per 20 AAC 25.071. no cuttings or samples taken from this well. C r N0Vi 0 4 2010 v i aa�;a�oli ; . RBDMS NOV 04 a 1 ' Anchorage roil ill-4l)/ r evtsea L/LUU/ ULAN I !NULL) UN KtVtKJt 6 :,r /s/.a . • 28. GEOLOGIC MARKERS (List all formations and markers encountered): 29. FORMATION TESTS NAME MD TVD Well tested? ❑ Yes U No If yes, list intervals and formations tested, briefly summarizing test results. Attach separate sheets to this form, if needed, Permafrost - Top 0 0 and submit detailed test information per 20 AAC 25.071. Permafrost - Base -900 900 Drilling in Nanushuk Fm from top -bot Formation at total depth: Nanushuk 30. List of Attachments: 31. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: 4 j9 •? Printed Name: Arthur .ji rk Title: Supervisory Geologist Signature: / V -_ . Phone: 303- 236 -5793 Date: 11/1/2010 bb 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 Injection, Observation, or Other. Multiple completion is defined as a well producing from more than one pool with production from each pool completely segregated. Each segregated pool is a completion. Item 4b: TPI (Top of Producing Interval). Item 8: The Kelly Bushing and Ground Level elevations in feet above mean sea level. Use same as reference for depth measurements given in other spaces on this form and in any attachments. Item 13: The API number reported to AOGCC must be 14 digits (ex: 50- 029 - 20123- 00 -00). Item 20: Report true vertical thickness of permafrost in Box 20. Provide MD and TVD for the top and base of permafrost in Box 28. Item 22: Attached supplemental records for this well should show the details of any multiple stage cementing and the location of the cementing tool. Item 23: If this well is completed for separate production from more than one interval (multiple completion), so state in item 1, and in item 23 show the producing intervals for only the interval reported in item 26. (Submit a separate form for each additional interval to be separately produced, showing the data pertinent to such interval). Item 26: Method of Operation: Flowing, Gas Lift, Rod Pump, Hydraulic Pump, Submersible, Water Injection, Gas Injection, Shut -in, or Other (explain). Item 27: Provide a listing of intervals cored and the corresponding formations, and a brief description in this box. Submit detailed description and analytical laboratory information required by 20 AAC 25.071. Item 29: Provide a listing of intervals tested and the corresponding formation, and a brief summary in this box. Submit detailed test and analytical laboratory information required by 20 AAC 25.071. Form 10-407 Revised 2/2007 Abandonment schematic Wainwright -5 ID plate 86" bls 1 Arctic blend cement Drilled 9 7 /8 -in diameter I • 0. ■ , 6 5 /8 -in steel casing, 50 ft BLS borehole to 50 ft o 1 • I c I 0 I d I U I • 100ftBLS � I 1 c I Drilled 6 -in diameter borehole 1...- Bentonite abandonment 1 c I grout 100 -1225 ft t I 2.5 -in PVC casing 00 I � I Silica sand 1225 -1260 ft I o N C d l: �j • W coal bed, screened interval: 1245 -1255 ft • • 4 - Bottom of hole & bottom of PVC casing: 1260 ft • e .''''' ''' .., t .., .... .. b i i 14 4 • % ,. . . t • 'it ,,,), .., 4 . ■ . * ii ** 44 . * + V 0°, • . 4 * d A* ' . . , . . ,.. 0 44 . 4 **. • ..*4 ,* .4 4 , .... ..;.z.,... .. . . , .. „„ ... t. . . . . • ' 44'' t ■ L .., . , • \ lir .0 , ...4 ., it V t • it! 4 .0" . ' ' '*. * ' . •••■• - -, . 4%41ho•14*, 4 - , f- . . .-. ...... ,,, 014 .•... ;A, 4 .. . .... ; .., , , ...... ..,.. 1- , - - "" ' * ' . . 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" ,, Y R ° I ,��! • "It ,� to ` .4„,..e*': a . , {. <I r r � w r . f ' � �: �^ r '' , , r `s. � ' ' • e° { * . •" �'� ' , • s as ' . r !_ ' t * f . . < 'fr." • ih 7e .., , i ,.$...... ..,..,, 5 „I/A. , 3,.,,40.. t.„4,„„),.. , ,,, . '', .k$ * .. . N . ... .,,, ,... is,- ,,,*,. • • � �', 1 f• ' i �:�+ i . ': e ; .r, # "..,,,,.. � + «i . ' ..,, t t .. ., .. , .. , . . ,k,,,, . .,, , . , /ft . *} .. t Y . „ , . ..., , . ,, "! spry ' t Il'{ . 4 if • ! � r a* p { , * e f all "r.,. * - • { • x«.. , rcx fi }.f w ; r . F rs • . # ` 1 e r v :Ito. O. l y i iJ�`wA/, �,y * *,,,,,....,11.4.: f . fi i iirii. i ., i % ■ i a } , fi • l , , ... .. i %• ±� ! • {- '‘..!•:.' ; , .. • -• .4.41 i, . 1 : A Y " �% } • E { 4 ' • f F ti � a m• o r s ? 4, b ,. J, ' ^ 4: lc �, ti., aw ` 1 • It • tip, -• is • — • • ' . .. ' *M... 4. i , • • • • • r ti • • 4. 1 .: .0: ,,v4 .. rz?..; <.•_. '• A . i • 1 1 (' r4 -- \ . . , "1 } . { i R 4 x _ i 0. ` a , y ..., . \ .: ,: t ,,., .1 I. s t ` F ,� . - i e ` ♦ , ' s C 4"„.�� � . 1 - N. * 1 • ib t ; 1 ) : r i '• y,. i • r " .4 4 w w 4,. I - . • • DATE ACTIVITY Tuesday, June 01, 2010 USGS crew arrives in Wainwright. Begin digging out equipment. Wednesday, June 02, 2010 Digging out equipment. Loading equipment for backhaul flight to Anchorage. Thursday, June 03, 2010 Plowing snow and digging out equipment. Tag monitor wells W4, W5, W6, W8 - W4 is plugged at 660 ft, W5 at 641 ft. Friday, June 04, 2010 Preparing equipment. Give 72 -hour P &A notice to AOGCC for well W6. Request permission to P &A wells W4 &5 from plug to surface.. Still digging, starting, and moving equipment. Informed that AOGCC inspector will Saturday, June 05, 2010 arrive in Wainwright on Monday. Set rig over W4 and drop 1 1/4-in pipe to 660 ft to confirm solid plug. Sunday, June 06, 2010 Set rig over W5 and trip 1 1 /4-in pipe to 641 ft to confirm solid plug. C -130 arrives with YV 5 equipment from Deadhorse. Send equipment to Anchorage on backhaul. Monday, June 07, 2010 Informed that we can't P &A wells W4 or W5 from plug. Move rig to W6 for P&A. Trip 1 1/4-in pipe to 1260 ft in W6 and pump glycol to confirm open well. Receive new Tuesday, June 08, 2010 P &A procedures from AOGCC and told inspector must be present to tag top of Y V bentonite. Wednesday, June 09, 2010 Pump 100 ft cement across perfs, bentonite grout to within 100 ft of land surface. Inspector arrives. Thursday, June 10, 2010 Tag top of bentonite grout at 84 ft and cement from there to surface per inspector. Receive permission to P&A wells 4 &5 from plug to surface. Move rig from W6. We're Friday, June 11, 2010 informed that no further work can be done on any wells (including P &A) without the diverter assembly installed - diverter was backhauled to Anchorage. Inspector leaves Wainwright. Saturday, June 12, 2010 Waiting on diverter. Sunday, June 13, 2010 Waiting on diverter. Monday, June 14, 2010 Waiting on diverter. Tuesday, June 15, 2010 Waiting on diverter. Wednesday, June 16, 2010 Diverter arrives at 14:00. Install on well W3, center rig, begin reaming to bottom. Thursday, June 17, 2010 Reaming well. Friday, June 18, 2010 Ream to bottom, circulate, and stablize. Saturday, June 19, 2010 Trip pipe, insert tremie, cement bottom of well. Sunday, June 20, 2010 Ream to bottom but cement didn't set properly. Recement w /heavier mix. Monday, June 21, 2010 Drill out cement with 6-in bit to 1260 ft and flush well. Underream to 12 -in diameter from 1241 -1249 ft. Tuesday, June 22, 2010 underream coal to 12 -in diameter. Standby for Wood Group Production Group to assemble needed stimulation equipment Wednesday, June 23, 2010 Stimulate well. Flush well and fill with glycol mix Thursday, June 24, 2010 Trip in submersible PC pump, drive rods, transducers, heat trace etc. ` ^ �- Friday, June 25, 2010 Begin testing �/ U Saturday, June 26, 2010 Raise pump 8 ft in well. Continue test. Sunday, June 27, 2010 testing Monday, June 28, 2010 testing Tuesday, June 29, 2010 testing Wednesday, June 30, 2010 Raise pump 32 ft in well. Continue test. Thursday, July 01, 2010 testing Friday, July 02, 2010 testing Saturday, July 03, 2010 testing Sunday, July 04, 2010 Kill well with propylene glycol /water mix. Pull pump and all equipment from well. Monday, July 05, 2010 Secure wellhead and clean equipment. Test is on hold for now. Tuesday, July 06, 2010 Remaining drill crew return to Denver for break. Wednesday, July 07, 2010 no work Thursday, July 08, 2010 no work Friday, July 09, 2010 no work Saturday, July 10, 2010 no work Sunday, July 11, 2010 no work Monday, July 12, 2010 no work Tuesday, July 13, 2010 no work Wednesday, July 14, 2010 no work • • Thursday, July 15, 2010 no work Friday, July 16, 2010 no work Saturday, July 17, 2010 no work Sunday, July 18, 2010 no work Monday, July 19, 2010 no work Tuesday, July 20, 2010 no work Wednesday, July 21, 2010 no work Thursday, July 22, 2010 no work Friday, July 23, 2010 no work Saturday, July 24, 2010 no work Sunday, July 25, 2010 no work Monday, July 26, 2010 Crew returns to Wainwright. Move rig over well and equipment in place. Tuesday, July 27, 2010 Remove production head and install diverter. Clean hole to 1200 ft and circulate Wednesday, July 28, 2010 Finish circulating. Run caliper and gamma logs below 6-in casing. Cargo plane arrives. Thursday, July 29, 2010 Tremie 3 /8-in gravel in well from 1260 -1220 ft. Fill well with glycol /water. Pull diverter Friday, July 30, 2010 Set pump to 1216 ft and and wire in controls, heat traces, transducers. Saturday, July 31, 2010 Start production test. Sunday, August 01, 2010 testing Monday, August 02, 2010 testing. Move rig over Wainwright -1 and prepare for P &A. _ Tuesday, August 03, 2010 testing. AOGCC inspector arrives. Mix and pump cement into bottom of Wainwright -1. Wednesday, August 04, 2010 testing. Finish P &A of Wainwright -1. Move equipment off well. Thursday, August 05, 2010 testing. Set up over Wainwright -2, trip in tremie pipe and P &A well. ti` w- Z. Friday, August 06, 2010 testing. Move rig over Wainwright -5 and trip tremie in well. AOGCC inspector leaves but we have OK to continue P &A activities o Saturday, August 07, 2010 testing. P &A Wainwright -5. Move equipment and set up over Wainwright -8. Trip W-5 tremie in well. Y Sunday, August 08, 2010 testing. P &A Wainwright -8. Move equipment and set up over Wainwright -4. Monday, August 09, 2010 testing. Set up over Wainwright -4, trip tremie in tremie pipe and P&A well. ‘Al- Tuesday, August 10, 2010 testing Wednesday, August 11, 2010 testing Thursday, August 12, 2010 testing Friday, August 13, 2010 testing Saturday, August 14, 2010 testing Sunday, August 15, 2010 testing V � \ - 3 Monday, August 16, 2010 testing Tuesday, August 17, 2010 testing. Notify AOGCC of intent to abandon well. Wednesday, August 18, 2010 testing Thursday, August 19, 2010 testing Friday, August 20, 2010 testing Saturday, August 21, 2010 testing Sunday, August 22, 2010 end test. Kill well, pull pump and equipment from well. Monday, August 23, 2010 AOGCC inspector cant make it to Wainwright. Circulate fluid in well and standby. Tuesday, August 24, 2010 Cement bottom of well from 1220 -1040 ft Wednesday, August 25, 2010 tag cement and pump bentonite grout from 1040 -100 ft. Cement from 100 ft to 40 ft. Thursday, August 26, 2010 tag cement. Cement from 40 ft to land surface. Friday, August 27, 2010 pack equipment. Drill crew personnel leave Wainwright. F • 110 f MEMORANDUM State of Alaska Alaska Oil and Gas Conservation Commission TO: Jim Regg, let? DATE: October 22, 2010 P. I. Supervisor FROM: Chuck Scheve, SUBJECT: Surface Abandonment Petroleum Inspector Wainwright #5 - PTD# 2080730 Friday, October 22, 2010: I traveled to the USGS Wainwright #5 exploration location to inspect the casing cut off and abandonment of this well. All casing strings were cut off at approximately 4' below original ground level. Cement was found at surface in all casing stings. A cap was welded to the conductor covering all r strings. Due to the small diameter of the conductor casing a marker plate was welded to the cap vertically with the required information bead welded to it. SUMMARY: I inspected the casing cut off depth, and the P &A marker plate on the Wainwright #5 well and found all to be in order. Attachments: Photos (2) Surface Abandonment — Wainwright #5 10 -22 -10 j • • 0 • • I Surface Abandonment — Wainwright #5 PTD 2080730 Photos by AOGCC Inspector C. Scheve 10/22/2010 • Casing cut -off; cement to surface 1 I ) 'S .. x w iffy Well marker J t erg x Surface Abandonment — Wainwright #5 10 -22 -10 Page 1 of 1 Regg, James B (DOA) j ®ej From: Joseph Adami [jadami @OLGOONIK.COM] Sent: Tuesday, October 19, 2010 10:46 AM efi is VIAta _ To: Regg, James B (DOA) S r Subject: USGS Arrival in Wainwright \� ! Importance: High Mr. Regg, �� ✓ This e -mail is to inform you that today, 10- 19 -10, two (2) USGS personnel arrived in Wainwright with the intention of completing the abandonment of the Wainwright USGS wells. USGS sent one driller and a helper with no geologist or engineer. We have been informed by the driller that USGS intends to use NSB equipment and an NSB operator to assist them. They anticipate the start of work some -time this afternoon. Yesterday, 10- 18 -10, I was contacted by your Prudhoe Bay based Inspector who requested that I inform USGS personnel upon arrival that 24 hour notification would be required to him prior to placement of the well monuments. I have informed the USGS personnel of this request. Additionally, as a representative of the surface landowner, I informed them of the requirement to remove the casings and conductors to -3' of the tundra surface below the pad, and that in the event that the excavation exceeded four (4') feet in depth, a 1.5:1 side slope would be required per 29 CFR 1926, Subpart P. The USGS driller acknowledged this requirement. I am on site in Wainwright and will remain here until the operations have been completed to document the work. Respectfully, ,5604 35n9rdand SR. HSEQ CONSULTANT OES, INC. 360 WEST BENSON BLVD, STE. 302 ANCHORAGE, AK 99503 907 - 444 -0745 10/22/2010 r � � S sim ALASEA SEAN PARNELL, GOVERNOR ALASKA OIL AND GAS 333 W. 7th AVENUE, SUITE 100 CONSERVATION COMMISSION ANCHORAGE, ALASKA 99501 -3539 PHONE (907) 279 -1433 FAX (907) 276 -7542 Arthur Clark Supervisory Geologist US Geological Survey P.O. Box 25046 Denver, CO 80225 Re: Exploratory Field, Wainwright Undefined Gas Pool, Wainwright -5 Sundry Number: 310 -128 Dear Mr. Clark: Enclosed is the approved Application for Sundry Approval relating to the above referenced well. Please note the conditions of approval set out in the enclosed form. As provided in AS 31.05.080, within 20 days after written notice of this decision, or such further time as the Commission grants for good cause shown, a person affected by it may file with the Commission an application for rehearing. A request for rehearing is considered timely if it is received by 4:30 PM on the 23rd day following the date of this letter, or the next working day if the 23rd day falls on a holiday or weekend. A person may not appeal a Commission decision to Superior Court unless rehearing has been requested. Sincerely, � Daniel T. Seamount, Jr. Chair DATED this /6 day of April, 2010. Encl. 2c-63 r � � c,D • RECEIVED b l 44 � � STATE OF ALASKA APR 1 4 2010 ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS AIaska Oil &Gas(s•' nies' ion' 20 AAC 25.280 Anehmage 1. Type of Request: Abandon E - Plug for Redrill ❑ Perforate New Pool ❑ Repair Well ❑ Change Approved Program ❑ Suspend ❑ Plug Perforations ❑ Perforate ❑ Pull Tubing El Time Extension ❑ Operations Shutdown ❑ Re -enter Susp. Well ❑ Stimulate ❑ Alter Casing ❑ Other: ❑ 2. Operator Name: 4. Current Well Class: 5. Permit to Drill Number: US Geological Survey Development ❑ Exploratory el 208 -073 • 3. Address: Stratigraphic ❑ Service ❑ 6. API Number: PO Box 25046 MS 911 DFC Denver, CO 80225 50- 301 - 20007 -00 ' 7. If perforating, closest approach in pool(s) opened by this operation to nearest 8. Well Name and Number: property line where ownership or landownership changes: Spacing Exception Required? Yes ❑ No ❑ Wainwright -5 • 9. Property Designation (Lease Number): 10. Field / Pool(s): r .>2. -("t i:, : • ,, ,--+ E " y7------4 47-vc-t ;.tom v ,—,L 11. PRESENT WELL CONDITION SUMMARY / Total Depth MD (ft): Total Depth ND (ft): Effective Depth MD (ft): Effective Depth ND (ft): Plugs (measured): Junk (measured): 1260 ft . 1260 ft . 1260 ft 1260 ft Casing Length Size MD ND Burst Collapse Structural Conductor 50 ft 6 5 /8 -in Surface Intermediate Production Liner 1260 ft 2 1 /2 -in PVC Perforation Depth MD (ft): Perforation Depth ND (ft): Tubing Size: Tubing Grade: Tubing MD (ft): 1245 -1255 ft Packers and SSSV Type: Packers and SSSV MD (ft) and ND (ft): 12. Attachments: Description Summary of Proposal El 13. Well Class after proposed work: Detailed Operations Program El BOP Sketch ❑ Exploratory El Development ❑ Service ❑ 14. Estimated Date for 8/15/2010 15. Well Status after proposed work: Commencing Operations: Oil ❑ Gas El WDSPL ❑ Suspended ❑ 16. Verbal Approval: Date: WINJ ❑ GINJ ❑ WAG ❑ Abandoned el Commission Representative: GSTOR ❑ SPLUG ❑ 17. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact Printed Name Art rk Title Supv Geologist Signature / /Phone 303-236-5793 Date 3/23/2010 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may witness Sundry Number: 510— \g, Plug Integrity V BOP Test ❑ Mechanical Integrity Test ❑ // Location Clearance [ �/ ) / • Other: •AL //' 04_ �/Le G(OGC.t,/h0= rt.T4.Ti0�l be. rP £ ct 44- i i. / ih I �fZa/ Cc1a. 1- /Uo ;� Leh im.ss;oh ca; Ce' e.. - is, O C �acc..11K. c1e-2radrwe.._ Subsequent Form Required: / CO • ` D 7 1 APPROVED BY Approved by / COMMISSIONER THE COMMISSION Date: 41/ ` Bo APR 19 201 � / /) y .�4 . rid Form 10-403 Revised 1/20 0 RIG \ N A L `' j� i t/S -46 Submit in Duplicate ,,..t07 405/v 1 t • I Plug and Abandon procedures for Wainwright wells 1,2,4,5,6,8 • Drill rig will be positioned over well • 1 '/4 -in steel pipe will be lowered into the 2 ' /2 -in PVC pipe to bottom of well • High - solids bentonite grout will be mixed in a high - pressure grouter and pumped through the 1 ' /4 -in pipe to the bottom of well • Grout will be pumped from the bottom of the well upward towards land surface, displacing the water and propylene - glycol that are currently in the well. These fluids will be contained at surface and disposed of at the approved fluid disposal pit. • The 1 1/4-in will be removed from the well as mixing and pumping continue (the bottom of the pipe is always kept below grout level) until the grout and pipe are 100 ft below land surface (bls). • Arctic -blend cement will be mixed and pumped from 100 ft bls to land surface: All 1 ' /4 -in pipe is removed from well. 14 I /464 cc _ • Conductor and liner casings are cut off 3 ft bls • A steel plate, with pertinent well information welded to its surface, is welded to ' *'" $r the top of the conductor casing • Hole is filled with native material and site is leveled to grade • Rig is removed from well ■ Reflective marker to -8 ft ALS Current wellbore drawing Wainwright -5 3ftALS —0. 1 ft ALS 11 1M111 6 5 /8 -in steel well enclosure 1 I I 1 Arctic blend cement Drilled 9 7 /8 -in diameter 4 1 6 5 /8 -in steel casing, 50 ft BLS borehole to 50 ft ► 1 1 1 • 1 I Antifreeze: 1/3 propylene glycol, 1 ■ I 2/3 water: -50 ft - 1260 ft 1 4 100 ft BLS I I ! 4---- Drilled 6 -in diameter borehole I Bentonite abandonment 1 grout 100 -1225 ft � ► 2.5 -in PVC casing I • ! Silica sand 1225 -1260 ft 1 ■ I 4 W coal bed, screened interval: 1245 -1255 ft . 4 Bottom of hole & bottom of PVC casing: 1260 ft r -, STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION WELL COMPLETION OR RECOMPLETION REPORT AND LOG la. Well Status: Oil ❑ Gas ❑ Plugged ❑ Abandoned ❑ Suspended El , lb. Well Class: 20AAC 25 105 20AAC 25 110 Development ❑ Exploratory la • GINJ WINJ❑ WDSPL WAG E Other❑ No. of Completions: Service ❑ StratigraphicTest❑ 2. Operator Name: 5. Date Comp., Susp., or L �,,,. 12. Permit to Drill Number: U.S. Geological Survey Aband.: 8/ f � eft ` 208 -073 ' 3. Address: 6. Date Spudd-•. 13. API Number: 0000�� x�ccc Box 25046 MS 939, DFC, Denver, CO 80225 7/1 +18 1.1G.' ` � .•�' i So 3o /- < 7 -z� 4a. Location of Well (Governmental Section): 7. Date TD Reached: 14. Well Name and Number: Surface: N70, 38', 39.8" W160, 1', 17.8" (FNL =562, FEL= 1,602') 7/17/2008 Wainwright 5 (W- 0C4 -08) • Top of Productive Horizon: 8. KB (ft above MSL): 25 15. Field /Pool(s): Ground (ft MSL): 20 Total Depth: 9. Plug Back Depth(MD +TVD): 1260 AP •;„ f., ` q 4b. Location of Well (State Base Plane Coordinates, NAD 27): ' 7 10. Total Depth (MD + TVD): 16. Property Designation: Surface: x- 48 y- 1,83 6 Zone- . ,.4V 1260 TPI: x- 'j'/(2 V y - G' Cl BIZ 5•s Zone 11. SSSV Depth (MD + TVD): 17. Land Use Permit: Total Depth: x- . , /;3-c y- /' ifs cI3 Zone - 18. Directional Survey: Yes ❑ No 0 . 19. Water Depth, if Offshore: 20. Thickness of Permafrost (TVD): (Submit electronic and printed information per 20 AAC 25.050) (ft MSL) - 900 ft • 21. Logs Obtained (List all logs here and submit electronic and printed information per 20 AAC 25.071): none 22. CASING, LINER AND CEMENTING RECORD WT. PER SETTING DEPTH MD SETTING DEPTH TVD AMOUNT CASING FT GRADE TOP I BOTTOM TOP I BOTTOM HOLE SIZE CEMENTING RECORD PULLED 6 5/8 18.99 sch 40 0 50 0 50 . 9.875" cement from 50- surface 2 7/8 PVC sch 80 0 1260 0 1260 6.00" silica sand 1260 -1225 bentonite grout 1225 -100 cement 100 - surface 23. Open to production or injection? Yes Ei No ❑ If Yes, list each 24. TUBING RECORD interval open (MD +TVD of Top & Bottom; Perforation Size and Number): SIZE DEPTH SET (MD) PACKER SET (MD) Yes. Screened interval from 1246- 1255'. PVC slotted pipe, .020" slots • 25. ACID, FRACTURE, CEMENT SQUEEZE, ETC. DEPTH INTERVAL (MD) AMOUNT AND KIND OF MATERIAL USED 26. PRODUCTION TEST Date First Production: Method of Operation (Flowing, gas lift, etc.): Date of Test: Hours Tested: Production for Oil -Bbl: Gas -MCF: Water -Bbl: Choke Size: Gas -Oil Ratio: Test Period Flow Tubing Casing Press: Calculated Oil -Bbl: Gas -MCF: Water -Bbl: Oil Gravity - API (corr): Press. 24 -Hour Rate - 27. CORE DATA Conventional Core(s) Acquired? Yes ❑ No 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. no cuttings or samples taken from this well. Form 10 -407 Revised 2/2007 CONTINUED ON REVERSE ,r, 9/rA*, • 28. GEOLOGIC MARKERS (List all formations and markers encountered): 29. FORMATION TESTS NAME MD TVD Well tested? Li Yes L No ' If yes, list intervals and formations tested, briefly summarizing test results. Attach separate sheets to this form, if needed, Permafrost - Top 0 0 and submit detailed test information per 20 AAC 25.071. Permafrost - Base —900 900 Drilling in Nanushuk Fm from top -boti Formation at total depth: Nanushuk 30. List of Attachments: 31. I hereby certify that the foregoing is true and correct to the best of my knowledge. Contact: Printed Name: Arthur ark ' Title: Supervisory Geologist Signature: fAIRF / A Phone: 303-236-5793 Date: 8/22/2008 � II Form 10 -407 Revised 2/2007 • Page 1 of 1 Maunder, Thomas E (DOA) From: Maunder, Thomas E (DOA) Sent: Wednesday, June 24, 2009 3:47 PM To: 'Tom Mortensen' Subject: RE: Wainwright CBM. 2008 Completion Reports (10-407) for Wells 3, 4, 5, 6 and 8. MTRS added. Thanks Tom. I can add that information to the originals we have here. Hope you continue on the mend. Tom Maunder, PE AOGCC From: Tom Mortensen [mailto:tom@mortensen.com] Sent: Wednesday, June 24, 2009 3:18 PM To: Maunder, Thomas E (DOA) Subject: Wainwright CBM. 2008 Completion Reports (10-407) for Wells 3, 4, 5, 6 and 8. MTRS added. Tom, The MTRS for Wainwright CBM Wells 3, 4, 5, 6 and 8 are all: T15N R32W Sec. 24, Umiat Meridian. Noted and initialed in Box 4a on the attached 10-407 forms for the wells. Best, Tom Mortensen 907-345-3400 907-345-3575 fax 7/6/2009 • • TOM MORTENSEN ASSOCIATES, LLC ENVIRONMENTAL PERMITTING & MANAGEMENT P.O. Box 113192 ANCHORAGE, ALASKA 99511-3192 • TEL (907) 345 -5789 • Fax (907) 345 -3575 October 6, 2008 Alaska Oil & Gas Conservation Commission 333 W. 7th Ave., Ste. 100 Anchorage, Alaska 99501 Attn.: Mr. Dan Seamount, Chairman Re: USGS Coal Bed Methane Exploration Program, 2008 Season, Wainwright, AK. Well Completion Reports (Form 10 -407) for Drill Permits 208 -071 through 074, and 208 -076. AKA Wainwright #'s 3-6, 8. Attached are five signed original Well Completion Reports for the 2008 coal bed methane exploration done by the USGS at Wainwright, Alaska. The five completion reports are for wells that were drilled in Wainwright for CBM production testing and monitoring. Two of the permitted wells (208 -075, 208 -077) were not drilled. A location map of the well locations in the village of Wainwright is included. Logs Logs were run for wells Wainwright #'s 3 and 8 (208 -071, 208 -076). Paper copies of the gamma/caliper logs for Wainwright #3, and the gamma, resistivity, sonic and mud gas logs for Wainwright #8 are attached. Digital copies of the Togs are included on the enclosed CD in PDF, LAS, and excel format. Cuttings Cuttings were taken from Wainwright #8 at 20' intervals from 1,600' to 2,450'. The required representative cuttings will be submitted at a later time under separate cover. Please contact me at 907 -345 -5789 or via email at tom @mortensen.com if you have any questions, or require any additional information. Sincerely, Thomas W. Mortensen attachments: as stated. cc: Arthur C. Clark, USGS, Denver. Bob Fisk, BLM, Anchorage. Teresa lmm, ASRC, Anchorage. A ,. WainvghtCBM Drilling Programs <:> ..2007 - 2008 �> , R ^► 47.- - ,:e. 1 Wainwright 1 & 2 (2007) Q 1 a • 4.* ' . Wainwright 4 (2008) +I • ' Wainwright 3 (2008) Wainwright 5 (2008) Wainwright 6 (2008) a ., ' Wainwright 8 (2008) } z. 0= �, :: to Copyright- Protected Material lli Abb , 4 4 oi I 0 pl . I Do NOT Scan into Laserfiche t Imege®2C09 Dfg,talGlobe lir ' ` Goog1e 70'38'44.07" N 16C'01'31 55" W JLI 10 2006 Eye alt 1489 It 1 / g 457 • Wainwright -2008 Daily Record July 10, 2008 On break July 11, 2008 Crews arrive in Wainwright and reassemble equipment. July 12, 2008 Ream ice from well and drill to 1000 ft. July 13, 2008 Drill to 1260 ft. Trip steel and ream hole. Finish reaming hole. Set and complete monitor well. Begin air development. July 14, 2008 Finish air development. Fill well with antifreeze and move equipment to W- July 15, 2008 , 0C4 -08 (Wainwright 5). Drill, set, and cement conductor casing to 50 ft. July 16, 2008 Standby for cement to cure. Drill to 600 ft. July 17, 2008 Drill to 1260 ft. Trip steel and ream well. Set and complete monitor well. Begin air July 18, 2008 development. Finish air development. Fill well with antifreeze. Move equipment to W -OCP- July 19, 2008 08 (Wainwright 3) and drill to 40 ft. Drill to 50 ft, set and cement 10" conductor casing. Standby for cement to July 20, 2008 cure. Drill 10" hole to 180 ft. July 21, 2008 Drill to 480 ft. July 22, 2008 Drill to 545 ft. Trip steel and ream hole. July 23, 2008 Finish reaming. Drill to 620 ft. July 24, 2008 Drill to 780 ft. Trip steel and ream. July 25, 2008 Trip to 840 ft. Trip steel and install new bit. July 26, 2008 Ream to bottom and drill to 1020 ft. July 27, 2008 Drill to 1160 ft. Pull steel and install new bit. July 28, 2008 Ream to bottom and drill to 1235 ft. Trip steel and begin reaming. Finish reaming. Trip steel and run gamma - caliper logs. Begin setting 6" steel July 29, 2008 casing. July 30, 2008 Finish setting casing to 1234 ft. Cement and grout casing to surface. July 31, 2008 Install production head. Insert 6" bit and drill to 1260 ft. Under -ream to 10" diameter from 1241 -1252 ft. Trip steel and begin air August 1, 2008 development. Install pressure transducers in monitor wells. August 2, 2008 Finish air devleopment. Begin installing submesible pump. Finish installing pump and transducers. Begin programing control panel. Test August 3, 2008 system. August 4, 2008 Finish programing control panel. Begin production test. August 5, 2008 Conduct production test. Clean, organize, and pack drilling equipment. August 6, 2008 Conduct production test. Clean, organize, and pack drilling equipment. August 7, 2008 Conduct production test. Clean, organize, and pack drilling equipment. August 8, 2008 Finish production test. Fill well with water and pull pump. August 9, 2008 Finish packing and storing equipment. August 10, 2008 Drill personnel leave Wainwright. August 11, 2008 Scientific personnel leave Wainwright. • • SARAH PALIN, GOVERNOR ALASKA OIL AND GAS 333 W 7th AVENUE, SUITE 100 CONSERVATION COMMISSION ANCHORAGE, ALASKA 99501 -3539 �+ id►e77��II s dais s� ►7 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. 5 U.S. Geological Survey - DOI Permit No: 208 -073 Surface Location: 630' FNL, 1650' FEL, SEC. 24, T15N, R32W, UM Bottomhole Location: 630' FNL, 1650' 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. 1 Permit No: 208 -073 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, /).-21,„,,,iry — Cathy j Foerster Commissioner DATED this /// of June, 2008 cc: Department of Fish & Game, Habitat Section w/o encl. Department of Environmental Conservation w/o encl. • • 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, wellbore 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, 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 as well as for exceptions to the spacing requirements of 20 AAC 25.055(x)(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, T15N, R32W, UM • • 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, T 15N, R3 I W, 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, T3 1N, 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. • • • 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 gas 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. III • II 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 25.06I(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: Ott ANp / L. 4 � �'� Jo • n 1 , r: , � om d .: s Conservation Commission 4. O ' w.. zil/r( 4" M'Atin t �' Ca + y P. ; • erster, ommissioner Alaska ti it and Gas Conservation Commission RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice afire 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 muse the application for reconsideration in whole or in part within 10 days after it is fded. Failure to act on it within 10 -days is a denial of reconsideration. If the Commission denies reconsideration, upon denial, this order or decision and the denial of re- consideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the Com- mission mails, OR 30 days if the Commission otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by in- action, in which cast 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 final. 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 ceder or decision on re- consideration. As provided in AS 31.05.080(b), "[tlhe 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 fail on a weekend or state holiday. REC . STATE OF ALASKA ii R 2 3 20�$ K o$ ALASKA OIL AND GAS CONSERVATION COMMISSION AP PERMIT TO DRILL Xr-41 � 20 AAC 25.005 t Alaska Oil & Gas Co ns. Co Co Anchorage 1 a. Type of Work: 1 b. Current Well Class: Exploratory ® Development Oil El 1 c. Specify if well is proposed for: Drill ® Redrill ❑ Stratigraphic Test ❑ Service ❑ Development Gas ❑ Coalbed Methane ® Gas Hydrates ❑ Re -entry ❑ Multiple Zone ❑ Single Zone ❑ Shale Gas ❑ 2. Operator Name: 5. Bond: Blanket Single Well ❑ 11. Well Name and Number: US Geological Survey - DOI Wainwright 5 PO Box 25046, MS 406, Bond No. Ddv — 5 J3 sip c 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: City of Wainwright MT Umiat T15N R32W, Sec. 24 . g Land Use Permit: 13. Approximate Spud Date: Top of Productiv FNL: 630', FEL: 1,650' June 1, 2008 Total Depth: 9. Acres in Property: 14. Distance to Nearest Vertical Well: 1300' Property: SQ' 4b. Location of Well (State Base Plane Coordinates): 10. KB Elevation 15. Distance to Nearest Well Surface: x- y- Fil 3 9 L$ Zone- 9 (Height above GL): 3 0 MSL feet Within Pool: 91S+i 16. Deviated wells: Kickoff depth: feet 17. Maximum Anticipated Pressures in psig (see 20 AAC 25.035) Maximum Hole Angle: degrees Downhole: S3 7 Surface: -9- 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. pp f '' L. S 1. ad. pr/cIo /0 0 / 3a 40)70 u,r 6/4447 r ?IF etNP C -9i 70 SiiRFAco! 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 MI Shallow Hazard Analysis Property Plat ® 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 tk AAA U r C c.,, `k Title S IV, v G--9--t ` ,"('- Signature ' Y r i`-1 � Phone 3Q "'2.3 (!` 5 - 3 c3 Date Ott / Q Commission Use Only Permit to Drill ...,„,„ ,,L,', ,,. , ---7 -I API Number: / Permit Approval See cover letter for of Number: - � 50- 3f/l — L 7-ti6 Date: (9 • I (• 0 g requirements. Conditions of approval : If box is checked, well may not be used to explore for, test, or produce coalbed methane, gas hydrates, or gas contained in shales: ❑ Other: Samples req'd: Yes❑ No V Mud log req'd: Yes❑ No Q' c ti - ' 4 `.3 \ 11 Ze v Art) c:NX C),\)04 (Ntkti \ \----, H S measures: Yesill No Directional svy req'd: Yes0 No DATE: -`l a p APPROVED BY T COMMISSIONER E I Form 10 -401 Revised 12/2005 f - ., t , Submit in Duplicate \ .,s 1 \ , 1 I t A L / i Y ,/„.,-, ,... Application for Permit to Drill. State of Alaska, Alaska Oil & Gas Conservation Commission Permit to Drill. Application Summary. RECEIVFD MAY 0 2 2008 Well Name and Number: Wainwright #5, (Exploration, Produc iiea<fcciop i pr) S• tiommission Well Location Area: Village of Wainwright. Anchorage Well Location Legal: MTRS: Umiat T15N R32W, Sec. 24. FNL: 630' FEL: 1,650' NAD83 Lat.: 70 °38'39.62 "N Long.: 160° 1'18.23 "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 # 5 April 22, 2008, Page 1 of 30 • i Application for Permit to Drill. State of Alaska, Alaska Oil & Gas Conservation Commission Permit to Drill. Application Summary. Well Name and Number: Wainwright #5, (Exploration, Productio• est Monitor) Well Location Area: Village of Wainwright. Well Location Legal: MTRS: Umiat T15N R32W, -c. 24. FNL: 630' FEL: 1,650' NAD83 Lat.: 70 °38'39.62" Long.: 160° 1'18. "W Purpose of Well: Coal Bed Me ane, production test pressure monitoring Waivers Requested: Bonding requirements of 20 C 25.025, • Blowout prevention -quipment requirements of 20 AAC 25.035. • Well bore survey requirements of 20 AAC 25.050(a)(2). • Well site seismic -urvey requirements of 20 AAC 25.061(a). • Gas detection r: quirements of 20 AAC 25.066. Well Spacing Exem • ion Requested: • Requested -xception for the well spacing requirements of 20 AAC 2 .055(a) for proposed wells Wainwright #3 through #8. Proposed Depth: MD: 1,300' TVD: 1,300' Monitoring Well terval: 8' coal seam at depth of -1242 to 1250 ft Property Owne ship: Surface: Olgoonik Corp. Sub - surface: BLM Applicant / ' perator: USGS. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 1 of 30 1 • 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 # 5 April 22, 2008, Page 2 of 30 Permission to Enter Lands and Drill from the Land Owner. Requested Waivers and Drill Spacing Exemptions. aka dir Gas 6'118 ch0 age m s , Bonding requirements of 20 AAC 25.025, ,. C scar • 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 # 5 April 22, 2008, Page 3 of 30 • Permission to Enter Lands and Drill from the Land Owner. Requested Waivers and Drill Spacing Exemptions. Bonding requirements of 20 AAC 25.025, `j • 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 requireme► s of 20 AAC 25.055(a) for proposed wells Wainwright through #8. Figure #7. Diverter Diagram. Figure #8. Well Spacing Exemption Chec . st. Figure #9. Letter from the President of 4Igoonik Corp. regarding the public involvement and k •wledge of the drilling program in Wainwright. Drilling Plan • Landfill Offset Well. • Production Test Monitoring -11s. • Durability of Pressure Monit ►-ring Downhole Components: • Production Test Well. • Production Test. • Decommission wells in 008 • Decommission wells i 2009, alternative. Drilling Fluid Plan Figure #10. De. h v Time Graph, Offset Well at the NSB Landfill. Borehole Sampling. Well Closure Proceoures. AOGCC Permit to Drill. Wainwright # 5 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 # 5 April 22, 2008, Page 4 of 30 • • Project Description and Overview Alaska Rural Energy Project Wainwright, Alaska, 2008 The Alaska Rural Energy Project will be conducting 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 # 5 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 Tate- 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 # 5 April 22, 2008, Page 6 of 30 III • STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION PERMIT TO DRILL �� 20 AAC 25.005 1a. Typed Work 1b. Current Well Class: Exploratory as Development Oil ❑ 1c Specify if well is proposed for, Drill ® Redr®I ❑ Siratipraphic Test ❑ Service 0 Development Gas ❑ Cabbed Methane ® Gas Hydrates ❑ Re -entry ❑ Multiple Zone ❑ Single Zone ❑ Shale Gas ❑ 2. Operator Name: 5. Bond: Blanket ❑ Single Wen ❑ 11. Well Name and Number. Bond No. Wainwright 5 3. Address: 6. Proposed Depth: 12. Field/Pool(s): MD 1300' TvD 1300' 4a, Location of Well (Governmental Section): 7- Propar y Designetian: Surface: City of Wainwright Top of Pave Horizon: B. Land Use Permit 15. Approximate Spud Date: June 1, 2008 Total Depth: 9. Acres in Property: 14. Distance to Nearest Vertical Well: 1300' Prouty: 4b. Location of Wen (State Base Plana t:bordr ses)_ 10. KB Elevation 3 0 , MSL iWahin 15. Distance b Nearest Well Surfa a: x- y' Zone- (Haight above GL): feet Pod: 16. Deviated wells: IGCkoS depth: feet 17. Maximum Anticipated Pressures In pelg (sae 20 AAC 25.035) Maximum Hole Angle; degrees Downhole: Surface; 16. Casing Program: Specifications To - Setting Depth - Bottom Cement Quantity, c.f. or sacks Hole Castng Weight Grade Coupling Length MD TVD MD TVD I (indudkig stage data) 9 7/8 6 5/8 18.97 20 U 80 30 cu. ft. ppf - 19. PRESENT WELL CONDMON SUMMARY (To be complelsd for Redrin and Re-Entry Operations) Total Depth MD (R); Total Depth TVD (it): Plugs (rnaas,aed) Effect, Depth MD (it): Effect. Dhgith TVD (ft); Junk (measured): Casing Length San Cement Volume MD TVO Conductor/Structural Surface Intermediate Production Liner Perforation Depth MD It Perforation Dapth /VD (ft); _ 20. Attachments; FSng Fee ❑ BOP Sketch Drilling ® Drilling Program Time v. Depth Plot ® Shallow Hazard Analysis J Property Plat ® Diverter Sketch IJ Seabed Report ❑ Drilling Fluid Program ® 20 AAC 25.050 requirements 21. Verbal Approval: Commission Representative: Data 22, I hereby certify that time foregoing is hue and correct. Contact Printed Name l r ay. Titre S uIv G toCl44 Signature •' Phone 301-2 - Mg - S713 Date 0 1 f t/ 0 r Commission USE Only Permit to Drill API Number. Fo Approval See cover letter for other Number Rh (Date; r ti n requirements. Conditions of approval : If bus is checked. wan may not be used to explore for. test, or produce coated methane, gas hydrates, or gas contained in shales: ❑ Other: Samples read; YesD No ❑ Mud 109 req'd: Yes No❑ HA nwaewes: Yes❑ No p Directional sty req'd: Yes{ No❑ APPROVED BY THE COMMISSION DATE , COMMISSIONER Form 10 -401 Revised 1212005 Submit in Duplicate AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 7 of 30 • • SURVEYED TOWNSHIP 15 NORTH,RANGE 32 WEST OF THE UMIAT MERIDIAN, ALASKA STATUS Of PUBLIC DOMAIN LAND AND MINERAL TITLES Y19311334 m Sac. s, MTP F 1011310.901C 01 m n /soon / SUPPL Sec 24. 25 Y.<mRC1 w.11 Yw3 /',✓ ,3 �- . E-- smiso To a w13 INDEX TO SEGREGATED TRACTS % Ara Dm . 511 sue3 3 + s c ,Iromul 00)9001). MKT car Sax oar BLS MB 0015 — ‘ � / r ISO me . / 1 �. I.. FOR 080075 FFFECT /NG O /SPOS4(1M_19'LPL Lta Lag! f17NORA * FOR CGIRY/- 241b.% ur 4? 24 . � urea lla ! MR9 ae as. .s�. oT/rE/s__ P1112 P0ffX Reiff W MDEe mss. OF / ea. PLO 515.3 rx,sr w Lw e d afscN cwRw.sN Ae/ may a 90-25171K4 n sr� e ea a �Qa 9 V• C 2 sir 341 m 4 _ 1 -If f/ 25 1 L +W f 10 FWR h.^5M4 R U T MK GFZ. IS N aca.E b Figure #1. Wainwright Townsite. Plat T15N R32W UM. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 8 of 30 • • i e T15N R32W UM Sec. 24 r . Wainwright #1 and #2 (2007) / /" Production Well ,/ (Total = 1) ,- 1�5 • / *- . . E--_ Monitoring Well (Total = 5) / BLM SSE Only /,/ O 50 - N - 0 i Corp. /� BLM SSE Only P. / / 009 2401 I.80 pj � F OOD from U$ / INC All Mk � PLO 5118& wat c11 8 Pvbltc Interest ■ % f• i. USS 4418, Tr A PL 96- \uss 4418 war Ak Mor/fbns NN? cnatan, saw Unil G` \ / 24 i r 5 1 // (Wainwright uaa 4418 *' Townsite) fit. c GX 2.09 �% / 50-85-0526 SSE Figure #2. Location of Proposed Production Test and Monitoring Wells. Wells #3 -8. Wainwright Townsite. Plat T15N R32W, Sec 24, UM. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 9 of 30 • • INF o [ Wainwright #1 and #2 {2 007) 114 (Monitor Well) #3 (Production Test well) „ #5 {Monitor Well) 4111.11 - #6 {Monitor Well) 4 Proposed 2002 PRODUCPION WELL #7 (Monitor Well) }.pNITOR WELL T15N R32W, Sec, 24 UM #8 (Monitor Well) {Location under leas / olgoonik Corp. to Olgoonik Corp.) / 50 -31 -0562 SSE BLM SSE Only USS 4412 city of wainwright SSE BLM SSE only 1,000. Figure #3. Location of Proposed Production Test and Monitoring Wells. Wells #3 -8. Wainwright, Aerial Photo. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 10 of 30 0 0 SURVEYED TOWNSHIP 15 NORTH RANGE 31 WEST OF THE UMIAT MERIDIAN. ALASKA STATUS Or PUBLIC MANN LAND AND MINERAL TITLES r ..,. - ;:i..„.. 1 MTP i •1•00 3 2 1 1 :-.3•2'f" r.:.. Z.,. .r... ,t.'.,g7 7:11 , ' :::/, :,,,,,,,,, Z am , ,,, , , ,ror, , ,, ,, , , q , ■-,-,,,....” '''' ..,--- 5VZ 7 Z: 10 Ei "''' ‘"' .i= tr... f... 4 % , ''''''' ' ... 04.8• 4440 A 9 30,1-0367 371.7 0 10 gw 12 15 SEE DILA.F.'ENT 111E V Y i 17111 ir . . • ....., 4 , 1 . .. ,_.. , .. 19 20 21 22 . - - 23 24 10 np ENL,PC2221.12 2.3.7• , 1 28 A i'447, . 26 25 -... e, T .\, SCALZ r mots .. , -. 33 I 38 I 34 :9 f I CI 73111 13 U Mar r 13 N > N 31 W il Figure #4. #4. Location of Proposed Offset Well at the NSB Landfill. Well #9. Plat T15N R31W,UM ....______. AOGCC Permit to Drill. Wainwright #5 April 22, 2008, Page 11 of 30 I • • NA cert 50-98 -0039 \ � 6 OCD to 5 v OCD to US F92297 4 r G A// Min Except Coo/ 00 OCD to US • SSE Only • All Alen Except Coo/ OC /C 1455 / SSE Only ' 1 -214 /C 1455 r 50-98 -0036 ©/C Cert `/ USS 11587 F92313 159.96\ QCD to US 1 -510 Ad Min Except Coo / OG SSE Only IC' 1631 * Offset Well. T15N R31W UM 7 / Wainwright #9. 8 , 9 �-� y y" y , • � �' 2 -130W PL 96 -487 AV/ Alaska Maritime NWR /P ) 1 (Chukchi sea unit) Olgoonik Corp. ASRC ./ SSE SSE Only 4 50 -91 -0567 IC 1460 = _ , 2- 296.73 1- 591.59 j F , PL 94 -258 rr WO/ NPR —A 18 17 16 SEE ENLARGEMENT USS 5252 N0. 1 3 - 14.57 USS 5252 3 84.36 2-22.83 46.52 Figure #5. Location of Proposed Offset Well at the NSB Landfill. Detail View. Well #9. Plat T15N R31W,UM AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 12 of 30 • • r sec. 7 Sec. 8 T15N R31N UM Olgoonik Corp. SSE .' 50 -91 -0562 r. AS RC SSE Only ' IC 145e 2009 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 # 5 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 # 5 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 # 5 April 22, 2008, Page 15 of 30 • • Permission to Enter Lands and Drill from the Surface Land Owner Surface Estate: Olgoonik Corp. 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 arc 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, v.-Rt vai Lucille Mayer President, OIgoonik Corporation Cc; Teresa Imm, Arctic Slope Regional Corporation AOGCC Permit to Drill. Wainwright # 5 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 # 5 April 22, 2008, Page 17 of 30 D *D '0 m O -• 5 O r. C) o -I. C0 (Q i 0o *3 = `o "` g Rig Dr illin Ri DOI Drilling Operation Diverter Head A o co ° Mfg. Washington Rotating Head 0o t— 3.5 core rod • 0 o • 0 Valve m 100 psi rubber seal o la —lir . , co Diverter T - fitting 4 ' : ' <at To holding pit N head . • - ► Threaded coupler E s i. :n, 6 5/8" OD valve • 2 Miw,mi Conductor , ° : . casing .8 it �, :yam • Fluid discharge to recirculation pit •' i 40' -80' bls ---- -i Diverter photograph • The proposed 2008 drilling of Wainwright #' 3 through 9 will use *icc system typically ranging from 9.0 ppg -9.8 ppg. If over - pressured g� `' wl%oi/ 2 2006 encountered, a 10.5+ ppg mud will be circulated down the well to stop the Bess Co from venting. Optionally, a cement slurry weighing from 13 ppg -15 ppg co Aro �'is• Comm�:s mixed and pumped through the drill steel from the bottom to the surface to kill theq° s /on 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 3W 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, white 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 # 5 April 22, 2008, Page 19 of 30 • • 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 t : t can safely be vented during drilling is considerable. The operator is • oposing to utilize a Washington stripping head sealing 3' " drill pipe on • 5/8" cas g, and 00 foot by 4" ID blooey line. ts • 44 ° Well Site Seismic Survey Waiver Request. DOI, the operator, has examined two seis ' is surveys in the Wainwright are . The first is an E -W line that runs from the S. Meade well to the Arctic coast approximately 5 -10 miles SW of Wain fight. The second is a NE -SW line that parallels the coastline from north of t Peard Bay well to north of the Tunalik well and runs directly through Wain right. These surveys, while shot for deeper targets, do not show any shallow :zards in the vicinity of the proposed drill site. Gas Detection Requirements, 2S and Methane Waiver Request For the previous permit to dr II at this location at the Village of Wainwright (207- 065, Wainwright #1) the o•,-rator (DOI) examined all well logs for the wells within the general vicinity of the ainwright #1 well. They included Tunalik, Kugrua, and Peard Bay. In the u • per 3,500 feet of each of these wells, measurable gas readings were associat = d with coal seams only. Mud weights were kept between 9 -10 pounds per gallo (ppg) above 3,500 feet in each well indicating that no overpressured conditi • ns were expected or encountered. The drilling will be •,•ne with a portable truck - mounted drilling rig. This equipment has no enclosures here methane could accumulate sufficiently to pose a risk of explosion or fire, • r where a methane detector could practicably be located. Additionally, the ainwright #1 and #2 wells that were drilled in 2007 encountered n • gas kicks. Requested e ception for the well spacing requirements of 20 AAC 25.055(a) for proposed w Its Wainwright #3 through #8. AOGCC P mit to Drill. Wainwright # 5 April 22, 2008, Page 19 of 30 4 The pressure monitoring wells (#4- #8) will need to be located horizontay between 75' and 400'from the production test well ( #3). The proposed IdI fido of the production test well is about 100' from the exploration wells #1 and #2 efdtd �� in Wainwright in 2007. The 2008 proposed wells must be drilled in this location, �ks 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 MC 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. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 20 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 locatio., and in the proposed configuration and spacing, in order to assess the • - •ed gas resource. An exception to the well spacing requirements in 20 C 25.055(a) is required in order to proceed with the purpose o - 2008 drilling program. CJ. iS' AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 20 of 30 • 111 'Sae_ d � q �` CHECKLIST — SPACING EXCEPTION APPLICATION "V OPERATOR USGS PROPERTY ID/ LEASE S: N/A C A p O s ad, FIELD/POOL Wainwright, Coal Bed Methane PI /BH: o C O , W ainwright #3 - #9. WELL NAME 3s 0„l' 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 drifting 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 drihing 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 spacing 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 fads verifying that all fads are true and that the plat correctly portrays pertinent and required data. if 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 # 5 April 22, 2008, Page 21 of 30 • S bAJPERSEDED 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 G:- X DEVIATED DELINEATION • IL DEVELOPMENT SURFACE LOCATION 'F L and 'F L, S ,T , R , M PRODUCTIVE INTERVALS ' F L and ' F S. , T , R M (Top and Bottom) See BOTTOM HOLE ' F L and ' i L, S. , T , R , M Applications Check applicable reason(s) for spacing exceptio per 20 AAC 25.055(a): (1) to drill a well for oil within 500 feet of a • • perry line where ownership or landownership changes, x (2) to drill a well for gas within 1500 fee •f a property line where ownership or landownership changes, (3) to drill and complete more than o e oil well in a governmental quarter section; or to drill and complete an oil we closer than 1000' to any well drilling to or capable of producing from he same pool, X (4) to drill and complete more I an one gas well in a governmental section; or or to drill and complete a • as well closer than 3000' to any well drilling to or capable of producing rom the same pool. Does the application contain: X A brief explanation for y the operator has chosen to drill the specified location. A plat drawn to a sca : of one inch equaling 2,640 feet or larger, showing the location of the well or • • rtion of the well for which the exception is sought, all other x completed and drilli g wells on the property, and all adjoining properties and wells within 1,000 feet • a well or portion of the well requiring the spacing exception that is drilling for oil • 'thin 3,000 feet of a well or portion of the well requiring the spacing excepti • that is drilling for gas. The names of . I owners, landowners, and operators of all properties within 1,000 feet of a well • r portion of the well requiring the spacing exception that is drilling for X oil or within ,000 feet of a well or portion of the well requiring the spacing exception that is drilli s for gas. A copy of e notice sent by certified mail to the owners, landowners and operators describ above, the date of mailing, and the addresses to which the notice was sent. x An affi • = vit by a person acquainted with the facts verifying that all facts are true and that plat correctly portrays pertinent and required data. if th : operator requests a variance from the notice requirements of x 20 C25.055(d), sufficient information to demonstrate that it is not feasible to co t ply with the notice requirements because of the complexity of ownership within the notice area. Figure # Well Spacing Exemption Checklist. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 21 of 30 S 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, i 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 # 5 April 22, 2008, Page 22 of 30 • M 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 lbs/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 # 5 April 22, 2008, Page 23 of 30 • Production Test Well 1. Drill 14 3/4" hole through surficial deposits to depth of -50'. Set and cement 10 3/4" schedule 40 steel surface casing. 2. Mud rotary 9 7/8" open hole (no core) to 1240 ft. 3. Set and cement 6 5/8" schedule 40 steel surface casing to 1240 ft. 4. Mud rotary 6" hole to 1260 ft. 5. Develop well using bailer and air lift methods 6. Fill well with 75/25% mixture of water /propylene glycol from -1100 ft to land surface. 7. Install submersible pump, cable, pressure transducers etc. 8. Make surface connections, prepare equipment for pump test Production Test Conduct 7 -day production test. (see alternative testing and well abandonment described in the section: Decommission Wells in 2009. Alternative, below.) Decommission Wells 1. Remove pump and cable from production well. 2. Remove glycol from well. 3. Abandon well with abandonment bentonite grout and cement. 4. Reposition rig over observation well. 5. Remove glycol from well. 6. Abandon well with abandonment bentonite grout and cement. 7. Repeat steps 4 through 6 for remaining four monitor wells. Clean and Pack equipment. Transport equipment from Wainwright via barge. Decommission Wells in 2009, Alternative An alternative to well abandonment in the summer of 2008 would be to leave the 2" PVC pressure monitor wells open for pressure- monitoring purposes over the winter, rather than plugging /abandoning at the end of a one -week test. The wells would be completed /isolated in the coal bed and hydraulically connected via slotted pipe at the bottom of the well as described in the Drilling Plan. Well abandonment would be done in late- spring or early- summer of 2009 rather than the summer of 2008. This alternative would leave the production well in an operational manner rather than plugging- abandoning at the end of the 2008 work as described. The offset well would be abandoned in 2008. AOGCC Permit to Drill. Wainwright # 5 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 # 5 April 22, 2008, Page 25 of 30 • Wainwright 2008 Offset Well: Depth vs Time Days 0 0 1 12 3 4 5 6 7 9 -500 — Set and cement surface casing -1000 Well abandonment -1500 d ° -2000 -2500 -3000 Geophysical logging -3500 Figure #10. Depth v Time Graph, Offset Well at the Wainwright NSB Landfill. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 26 of 30 • • Drilling Fluid Plan Alaska Rural Energy Project Wainwright, Alaska, Summer 2008 The hole will be drilled using standard fresh water bentonite drilling fluids. Additives to be used include (all listed products are NL Baroid trade names): • Quick -Gel high yield bentonite (hole stability, circulation control, clay -shale control) • Aqua -Gel bentonite (hole stability, circulation control, mud - density control) • Pac -L and Pac -R powdered cellulose polymer (clay -shale control, water loss, viscosity control) • EZ mud liquid polymer (clay -shale control, water loss, viscosity control) • Pennetrol liquid detergent (bit cleaning, control clay build up around bit face and teeth) Drill fluids will be monitored for viscosity, weight, and temperature on a full -time basis. Drilling fluids will have cuttings removed and will be recirculated via a 1000 gallon trailer- mounted shaker system incorporating shaker screens and centrifugal desilting cones. Cuttings and used drill mud will be contained in above - ground tanks. At project's end, cuttings /mud will be disposed of at the Wainwright wastewater disposal pond. Rotary drilling and reaming operations will be conducted using a rig- mounted 5 '/2" X 8" 350 gpm, duplex mudpump and a Gardner - Denver 5" x 6 ", 200 gpm, duplex mudpump. AOGCC Permit to Drill. Wainwright # 5 April 22, 2008, Page 27 of 30 • 0 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 %" bento ite pellets will then be placed on top of the sand using tremie methods. The ann lar 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 wit Arctic -blend cement. After well development, the PVC pipe will be filled with a 67/ 3% mixture of water and propylene glycol from a depth of 1100 ft to land surface t• prevent freezing during testing procedures. Upon completion of testing procedures, the PVC well will be illed with abandonment bentonite grout, mixed at land surface with a g out plant and pumped through tremie pipe from the bottom up, to a depth o 100 ft bls. The top 100 ft of the well will be filled with Arctic -blend cement. Production test well After drilling is completed to 1240 ft, 6 5/8" schedule 40 steel casing will be welded and set. Arctic -blend cement will then be mixed in a •rout plant and pumped through tremie pipe into the annular area from 1240 1000 ft bls. Abandonment bentonite grout will then be mixed and pumpeo from 1000 to 100 ft bls, and Arctic -blend cement mixed and pumped from 100 ft • land surface. After drilling a 6" hole below the casing to a depth of 1260 ft, the ell will be AOGCC Permit to Drill. Wainwright # 5 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 # 5 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 # 5 April 22, 2008, Page 30 of 30 TRANSMITTAL LETTER CHECKLIST WELL NAME l aat) PTD# 2-06' /Development, Service (Exploratory Stratigraphic Test y Non- Conventional Well FIELD: E lo POOL: Circle Appropriate Letter / Paragraphs to be Included in Transmittal Letter CHECK ADD -ONS WHAT (OPTIONS) TEXT FOR APPROVAL LETTER APPLIES MULTI LATERAL The permit is for a new wellbore segment of existing well (If last two digits in Permit No , API No 50- - - API number are between 60 -69) Production should continue to be reported as a function of the original API number stated above. PILOT HOLE In accordance with 20 AAC 25.005(0, all records, data and logs acquired for the pilot hole must be clearly differentiated in both well name ( PH) and API number (50- - - ) from records, data and logs acquired for well SPACING The permit is approved subject to �ompliance with 20 AAC EXCEPTION 25.055. Approval to perforate . • roduce / in'ect is contingent upon issuance/ 9f a con ervati• • • app v spacing exception. g.„,. . 1� ��'✓" a mes the liability of any protest t pacing exceptio 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 well testing 1 program. / - // G�( Cofr Rev: 1/11/2008 - 1 WELL PERMIT CHECKLIST Field & P001 Well Name: WAINWRIGHT 5 Program EXP Well bore seg ❑ PTD#: 2080730 Company U S DEPT OF INTERIOR Initial Class/Type EXP / PEND GeoArea 890 Unit On /Off Shore On Annular Disposal ❑ Administration 1 Perrnitfee attached NA 2 Lease number appropriate No No tease_invoived: _BLM land. SPACING EXCEPTION REQUIRED because of nearby coastline (state - federal bou 3 Unique well name and number Yes 4 Welllocated in a defined pool No Exploratory coalbed methane well. 5 Welllocated proper distance_from drilling unit boundary No SPACING EXCEPTION REQURED due to_coastline,_which is -500' to NW. 6 Welllocated proper distance from other wells No Wainwright 1 and 2 are located about 135' to NE. Production and monitor wells will be drilled within 75'. 7 Sufficient acreage_available in drilling unit No SPACING EXCEPTION REQUIRED 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_requirernenls. 11 Permit can be issued without conservation order No Appr Date 12 Permit can be issued without administrative approval No SFD 6/10/2008 13 Can permit be approved before 15-day wait No 14 Well located within area and_strata authorized by Injection Order # (put 10# in comments) (For I'tA 15 All wetls_within 1 /4_mile_area of review identified (For service well only) NA III 16 Pre- produced injector; duration of pre - production less than 3 months (For_service well only) _ _ _NA Monitor well for CBM test._ Per CO 582, Wainwright Village water supply is surface source and 17 _Ptonconven. gas _conforms to A531.05.030(j.1.A),(y2.A -D) Yes permafrost is -1000' thick No freshwater aquifers serve or will serve as sources of drinking water. Engineering 18 Conductor string_provided Yes 6-5/8" 80'. 19 Surface casingprotec_ts all known USDWs NA No known USDWs. 20 CMT v_ol adequate to circulate_on conductor & surf csg Yes Adequate excess for conductor. 21 CMT_v_ol adequate to tie -in long string to surf csg Yes Plan is to use bentonite groutto seal in PVC casing to test coal gas. 22 CMT_will cover all known_productive horizons Yes 23 Casing designs adequate for C, T B & permafrost Yes Low pressure operation planned._ Interior freeze protected with propylene glycol. 24 Adequate tankage_or reserve pit Yes Plan states rig equipped with tanks. 25 _Ito_ re- drill, has_a 10-403 for abandonment been approved NA 26 Adequate wellbore separationproposed Yes This well located - 7' from Wainwright #3. Colision unlikely. 27 Ifdiverter requited, does it meet regulations Yes Will employ a rotating head. Rotating_ head will protect drillers area and divert flow. Appr Date 28 Drilling fluid program schematic_& equip list_adequate Yes expected formaiton_ pressure 9._0_- 9.8_EMW_ Provision to weight_up to 10.5 ppg if needed. TEM 6/10/2008 29 BOPEs,_do theymeet regulation NA BOP exception requested. Granted by CO 604. hy__QM BOPE_press rating appropriate; test to_(put psig in comments) NA 31 Choke manifold complies w /API RP -53 (May 84) NA ilk 32 Work will occur without operation shutdown Yes 33 is presence of H25 gas probable No 34 _Mechanical_condition of wells within AOR verified (For service well only) NA Geology 35 Permitcan be issued w/o hydrogen_ sulfide measures Yes None encountered in Wainwright 1 or 2, which were drilled thru same section about 150' away. 36 Data_presented on potential overpressure _zones Yes None anticipated based on Wainwright 1, Wainwright 2, Tunalik 1, Kugrua 1,PeardBay 1, and seismic data. Appr Date 37 Seismic analysis of shallow gas zones Yes Wainwright 1 and_ 2 and offset seismic data do not indicate the presence of shallowgas. SFD 4/29/2008 38 Seabed condition survey (if off- shore) NA 39 Contact name /phone for weeklyprog_ress reports [exploratory only] Yes Art Clark, USGS, 303- 236 -5793 Geologic Engineering is Commissioner: Date: Commissioner Date -•ner Date 0#9 -4:_oi t
