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Home My WebLink AboutO 1231. -------------------- 2. December 2, 2016 3. January 14, 2017 4. ----------------- 5. April 4, 2017 6. May 24, 2017 7. June 9, 2017 8. June 12, 2017 9. June 22, 2017 10. June 27, 2017 11. August 14, 2017 12. August 14, 2017 13. September 11, 2017 14. September 19, 2017 15. September 20, 2017 OTHER ORDER 123 NordAq Energy, Inc. Docket Number: OTH-16-031 Background information Notice of Enforcement Action — Shadura 1 Notice of public hearing, affidavit of publication, email distribution, mailings Emails Transcript, Sign -in sheet, exhibits Revised Notice of Enforcement Action — Shadura 1 NordAq's letter not concurring with the proposed enforcement action AOGCC's letter: Informal Review Scheduling NordAq's informal review submittal Sign in Sheet for Informal Review Entry of Appearance Brena, Bell & Clarkson NordAq Energy's Request for Oral Argument and Application for Reconsideration and Exhibits Hearing Notice to NordAq Notice of public hearing, affidavit of publication, email distribution, bulk mailing list Hearing Transcript, Sign in Sheet and Exhibits Internal Documents held in Secure Storage ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) Other Order No. 123 (Permit No. 211-014) Before Expiration of ) Docket No. OTH-16-031 Owner's Rights in CIRI Lease C-061648 ) July 21, 2017 Failure to Respond to Notice of Proposed ) Enforcement Action ) DECISION AND ORDER On December 2, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to NordAq Energy Inc. (NordAq) regarding Shadura-1 exploratory well (Shadura-1). The Notice was based upon a regulatory violation pertaining to NordAq's failure to permanently abandon Shadura-1 before expiration of NordAq's rights in Cook Inlet Region, Inc. (CIRI) oil and gas lease C-061648. The Notice proposed specific corrective actions and a $621,000 civil penalty under AS 31.05.150(a). The Notice also proposed that NordAq provide a check in the amount of $1,200,000, AOGCC's projected cost to plug and abandon Shadura-1 if NordAq did not uphold its obligation to do so. NordAq failed to respond to the Notice. The AOGCC scheduled a public hearing for April 4, 2017, at 10:00 a.m. On January 14, 2017, the AOGCC published a public notice for that hearing in the ALASKA DISPATCH NEWS. After the AOGCC noticed the public hearing, NordAq contacted AOGCC with a proposed plan to plug and abandon Shadura-1. AOGCC approved the plan on February 15, 2017. The public hearing was held on April 4, 2017. Summary of Revised Proposed Enforcement Action After the hearing, on May 24, 2017, the AOGCC issued a Revised Notice of Proposed Enforcement Action (Revised Notice) to NordAq regarding Shadura-1. The Revised Notice changed the requirement of a check for $1,200,000 to a bond in that amount in the sole favor of the AOGCC and lowered the civil penalty to $100,000. The Revised Notice specified that the bond shall be forfeited if Shadura-1 had not been permanently plugged and abandoned and the well location cleared within one year of the date of the Revised Notice. The bond was due within 30 days of the Revised Notice. Other Order No. 123 July 21, 2017 Page 2 of 4 NordAq requested an informal review. That review was held at the AOGCC offices on June 27, 2017. Preliminary Findings On February 1, 2011, NordAq was issued Permit to Drill No. 211-014 for Shadura-1. During February and March of 2011, Shadura-1 was drilled, briefly tested, and then temporarily suspended in April 2011 due to deteriorating winter -access conditions at the well location. Further logging and testing of the well occurred in January and February 2012. The well was suspended on February 26, 2012. At the time, NordAq was the owner of CIRI lease C-061648. The Shadura-1 is only accessible during winter months. NordAq's rights in lease C-061648 terminated on June 30, 2015. NordAq does not dispute that Shadura-1 was not properly plugged and abandoned at the time of the expiration of NordAq's rights in C-061648. NordAq has violated 20 AAC 25.105(a). Mitigating Circumstances Presented by the Operator At the public hearing on April 4, 2017 and the informal review on June 27, 2017, NordAq offered the following in mitigation of its noncompliance: NordAq's delay was due in part to its attempt to negotiate transfer of Shadura-1 to an alternate operator after termination of the CIRI lease; Shadura-1 well site is only accessible during winter months; NordAq's operations to permanently abandon Shadura-1 began in March 2017, but deteriorating winter -access conditions at the well location forced NordAq to postpone further operations until December 2017; NordAq's failure to respond to the initial Notice was due to a robbery that occurred at NordAq's offices; and The delay in plugging and abandoning the well resulted in no hydrocarbon leakage, well integrity problems, or other problems other than a time delay. Other Order No. 123 July 21, 2017 Page 3 of 4 Additional Findings NordAq failed to properly plug and abandon Shadura-1 and clear the well site in accordance with AOGCC's regulatory requirements prior to termination of its rights in the lease upon which Shadura-1 is sited. Following termination of lease C-061648, NordAq did not notify the AOGCC or discuss Shadura- 1 with the AOGCC. NordAq failed to respond to the initial Notice. Bonds held by other state agencies cannot be appropriated by the AOGCC to cover the costs of bringing Shadura-1 into compliance with AOGCC regulations. Canvincinnc The surety bond must reflect all costs that will be incurred by the State in the event NordAq defaults on its obligations to plug and abandon Shadura-1 and clear the well site. NordAq has presented no evidence that a reduction in the bond amount is appropriate. Now Therefore It Is Ordered That: After consideration of the criteria set forth in AS 31.05.150(g) to the matters set forth above, NordAq shall pay a civil penalty of $100,000 for violating 20 AAC 25.105(a) by failing to permanently abandon Shadura-1 before expiration of owner's rights in CIRI lease C-061648. The total civil penalty is $100,000. In addition, within 30 days of receipt of this letter, NordAq shall submit a surety bond for $1,200,000 issued on Form 10-402A in the sole favor of the AOGCC by an authorized insurer under AS 21.09 whose certificate of authority is in good standing with the State of Alaska. This bond will be returned to NordAq following permanent abandonment of Shadura-1 and clearance of well location. This bond shall be forfeited to the AOGCC if Shadura-1 is not permanently plugged and abandoned and the well location is not cleared within one year of the date of this Decision and Order. Other Order No. 123 July 21, 2017 Page 4 of 4 As an Operator involved in an enforcement action, you are required to preserve documents concerning the above action until after resolution of the procee " Done at Anchorage, AlaskZaniel ted July 2 2017. Hollis French T. Seamount, Jr. Chair, Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on 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 period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Robert Warthen _ Senior Advisor NordAq Energy, Inc. 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 �1'V1-v Postal X ❑ Addressee CERTIFIED o . C3 Domestic Mail Only III rq I I P- For delivery information, visit our website at www.usps.como. I U-1 I I I I I II I III ❑Adult Signature ❑Registered MaiIT"' ,o Certified Mail Fee t -q $ ul Extra Services & Fees (check box, add tee as appropriate) ❑ Return Receipt (hardcopy) $ ❑ Adult Signature Restricted Delivery M 1-3 ❑ Return Receipt (electronic) $ Certified Mail® ❑ Certified Mail Restricted Delivery Postmark C3 ❑ Certified Mail Restricted Delivery $ Merchandise ElSignature Confirmation"' ❑ Signature Confirmation Here O ❑Adult Signature Required $ ❑Adult Signature Restricted Delivery $ Domestic ReturrrReceipt ; C3 Postage - $ .A Total Postage and Fees C3 Robert Warthen U-) $ Senior Advisor Sent To - - - - -------------------- NordAq Energy, Inc. O r Street and Apt. No., or PO Box No. 560 E. 34th Ave., Ste. 2001 City, State; 2iP+4®--------------------------- Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Robert Warthen _ Senior Advisor NordAq Energy, Inc. 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 �1'V1-v E3 Agent X ❑ Addressee B. Received by (,P~ --N O) C.' [ of.Delluery II D. Is delivery address different from item 1? ❑ Yes If e[:INo JUL 2 6 2017 H 3. Service Type ❑ Priority Mail Express® II III II IIII I I I II I VIII I I I I I I I I I II I III ❑Adult Signature ❑Registered MaiIT"' ❑ Adult Signature Restricted Delivery ❑ Registered Mail Restricted 9590 9402 1823 6104 6488 18 Certified Mail® ❑ Certified Mail Restricted Delivery Delivery 4epturn Receipt for ❑ Collect on Delivery 11Collect on Delivery Restricted Delivery ' Merchandise ElSignature Confirmation"' ❑ Signature Confirmation 2. Article Number ransfer from service label Sail 7 015 0640 0003 5185 5 710 Oj it Restricted Delivery Restricted Delivery PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic ReturrrReceipt ; in CID r'1 Ln M C3 C3 C3 C3 C3 un a C3 Dostal ServiceTIM TiFiFD MAIL® RECEI Domestic Mail only For delivery information, visit our website at www.usps.com". Extra Services & Fees (check box, add tee as appropnare� E] Return Receipt (hardcopy) $ ❑ Return Receipt (electronic) $ ❑ Certified Mail Restricted Delivery $5ig ❑ Adult Signature Required $ ❑ Adult Signature Restricted Delivery $ or PO Box No. - ----- ------------------------ State, ZIP+4 Postmark Here David Pfeiffer Chief Financial Officer NordAq Energy, Inc. 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. David Pfeiffer A, O Chief Financial Officer NordAq Energy, Inc. 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 A. §l!' � y E3 Agent x / . ❑ Addressee B. Received by (Printed Name) C. Date of Delivery /fir) 0. D. Is delivery address different from item 1? ❑ Yes If YES, enter deliveryaddressbelow: ❑ No \ ECEI r CLD JUL 2 6 2017 111 MRR-�� 3. Sordull Si gnat re w ❑ Priority Mail Express® ❑ Adult Signature ❑ Registered Mail ❑ Adult Signature Restricted Delivery ❑ Reglstered Mail Restricted ®-Certified Mail® Delivery 9590 9402 1823 6104 6488 32 ❑ Certified Mail Restricted Delivery ErR-eturn Receipt for ❑ Collect on Delivery Merchandise ❑ Collect on Delivery Restricted Delivery ❑ Signature ConfirmationTM 2. Article Number (Transfer from service label) _ . sail ❑ Signature Confirmation 715 0640 0003 5185 5697 -all Restricted Delivery Restricted Delivery PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) Other Order No. 123 (Permit No. 211-014) Before Expiration of ) Docket No. OTH-16-031 Owner's Rights in CIRI Lease C-061648 ) July 21, 2017 Failure to Respond to Notice of Proposed ) Enforcement Action ) DECISION AND ORDER On December 2, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to NordAq Energy Inc. (NordAq) regarding Shadura-1 exploratory well (Shadura-1). The Notice was based upon a regulatory violation pertaining to NordAq's failure to permanently abandon Shadura-1 before expiration of NordAq's rights in Cook Inlet Region, Inc. (CIRI) oil and gas lease C-061648. The Notice proposed specific corrective actions and a $621,000 civil penalty under AS 31.05.150(a). The Notice also proposed that NordAq provide a check in the amount of $1,200,000, AOGCC's projected cost to plug and abandon Shadura-1 if NordAq did not uphold its obligation to do so. NordAq failed to respond to the Notice. The AOGCC scheduled a public hearing for April 4, 2017, at 10:00 a.m. On January 14, 2017, the AOGCC published a public notice for that hearing in the ALASKA DISPATCH NEWS. After the AOGCC noticed the public hearing, NordAq contacted AOGCC with a proposed plan to plug and abandon Shadura-1. AOGCC approved the plan on February 15, 2017. The public hearing was held on April 4, 2017. Summary of Revised Proposed Enforcement Action After the hearing, on May 24, 2017, the AOGCC issued a Revised Notice of Proposed Enforcement Action (Revised Notice) to NordAq regarding Shadura-1. The Revised Notice changed the requirement of a check for $1,200,000 to a bond in that amount in the sole favor of the AOGCC and lowered the civil penalty to $100,000. The Revised Notice specified that the bond shall be forfeited if Shadura-1 had not been permanently plugged and abandoned and the well location cleared within one year of the date of the Revised Notice. The bond was due within 30 days of the Revised Notice. Other Order No. 123 July 21, 2017 Page 2 of 4 NordAq requested an informal review. That review was held at the AOGCC offices on June 27, 2017. Preliminary Findings On February 1, 2011, NordAq was issued Permit to Drill No. 211-014 for Shadura-1. During February and March of 2011, Shadura-1 was drilled, briefly tested, and then temporarily suspended in April 2011 due to deteriorating winter -access conditions at the well location. Further logging and testing of the well occurred in January and February 2012. The well was suspended on February 26, 2012. At the time, NordAq was the owner of CIRI lease C-061648. The Shadura-1 is only accessible during winter months. NordAq's rights in lease C-061648 terminated on June 30, 2015. NordAq does not dispute that Shadura-1 was not properly plugged and abandoned at the time of the expiration of NordAq's rights in C-061648. NordAq has violated 20 AAC 25.105(a). Mitigating Circumstances Presented by the Operator At the public hearing on April 4, 2017 and the informal review on June 27, 2017, NordAq offered the following in mitigation of its noncompliance: NordAq's delay was due in part to its attempt to negotiate transfer of Shadura-1 to an alternate operator after termination of the CIRI lease; Shadura-1 well site is only accessible during winter months; NordAq's operations to permanently abandon Shadura-1 began in March 2017, but deteriorating winter -access conditions at the well location forced NordAq to postpone further operations until December 2017; NordAq's failure to respond to the initial Notice was due to a robbery that occurred at NordAq's offices; and The delay in plugging and abandoning the well resulted in no hydrocarbon leakage, well integrity problems, or other problems other than a time delay. Other Order No. 123 July 21, 2017 Page 3 of 4 Additional Findings NordAq failed to properly plug and abandon Shadura-1 and clear the well site in accordance with AOGCC's regulatory requirements prior to termination of its rights in the lease upon which Shadura-1 is sited. Following termination of lease C-061648, NordAq did not notify the AOGCC or discuss Shadura- 1 with the AOGCC. NordAq failed to respond to the initial Notice. Bonds'held by other state agencies cannot be appropriated by the AOGCC to cover the costs of bringing Shadura-1 into compliance with AOGCC regulations. Conclusions The surety bond must reflect all costs that will be incurred by the State in the event NordAq defaults on its obligations to plug and abandon Shadura-1 and clear the well site. NordAq has presented no evidence that a reduction in the bond amount is appropriate. Now Therefore It Is Ordered That: After consideration of the criteria set forth in AS 31.05.150(g) to the matters set forth above, NordAq shall pay a civil penalty of $100,000 for violating 20 AAC 25.105(a) by failing to permanently abandon Shadura-1 before expiration of owner's rights in CIRI lease C-061648. The total civil penalty is $100,000. In addition, within 30 days of receipt of this letter, NordAq shall submit a surety bond for $1,200,000 issued on Form 10-402A in the sole favor of the AOGCC by an authorized insurer under AS 21.09 whose certificate of authority is in good standing with the State of Alaska. This bond will be returned to NordAq following permanent abandonment of Shadura-1 and clearance of well location. This bond shall be forfeited to the AOGCC if Shadura-1 is not permanently plugged and abandoned and the well location is not cleared within one year of the date of this Decision and Order. Other Order No. 123 July 21, 2017 Page 4 of 4 As an Operator involved in an enforcement action, you are required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage,.Alaska and dated July 21, 2017. //signature on file// //signature on file// //signature on file// Hollis French Daniel T. Seamount, Jr. Cathy P. Foerster Chair, Commissioner Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be tiled within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on 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 period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Fairbanks, AK 99711-0055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639-0309 Fairbanks, AK 99706-0868 fA6��O L 7-2\- 2 c.�k7 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, July 21, 2017 1:39 PM To: aogcc.inspectors@alaska.gov; Bender, Makana K (DOA) (makana.bender@alaska.gov); Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov); Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA) Oody.colombie@alaska.gov); Davies, Stephen F (DOA) (steve.davies@alaska.gov); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov); French, Hollis (DOA); Frystacky, Michal (michal.frystacky@alaska.gov); Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored) Ooseph.mumm@alaska.gov); Paladijczuk, Tracie L (DOA) (tracie.paladijczuk@alaska.gov); Pasqual, Maria (DOA) (maria.pasqual@alaska.gov); Quick, Michael (DOA sponsored); Regg, James B (DOA) Oim.regg@alaska.gov); Roby, David S (DOA) (dave.roby@alaska.gov); Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov); Seamount, Dan T (DOA) (dan.seamount@alaska.gov); Singh, Angela K (DOA); Wallace, Chris D (DOA) (chris.wallace@alaska.gov); Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Corey Munk; D. McCraine; Don Shaw; Eppie Hogan ; Eric Lidji; Garrett Haag; Graham Smith; Heusser, Heather A (DNR); Holly Fair, Hyun, James J (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Jim Shine; Joe Longo; John Martineck; Jon Stuart; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Louisiana Cutler; Marc Kuck; Marcia Hobson; Marie Steele; Matt Armstrong; Melonnie Amundson; Mike Franger; Morgan, Kirk A (DNR); Pascal Umekwe; Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis; Radio Kenai; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Susan Pollard; Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke; AK, GWO Projects Well Integrity; AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Alicia Showalter; Allen Huckabay; Andrew VanderJack; Ann Danielson; Anna Raff; Barbara F Fullmer; bbritch; Becky Bohrer; Ben Boettger; Bill Bredar; Bob; Brandon Viator; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller; Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Darci Horner; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; ddonkel@cfl.rr.com; DNROG Units; Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Garrett Brown; George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff; Hunter Cox; Hurst, Rona D (DNR); Jacki Rose; Jason Brune; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Watt; Jim White; Joe Lastufka; John Burdick; John Easton; John Larsen; Jon Goltz; Josef Chmielowski; Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Kevin Frank; Kruse, Rebecca D (DNR); Kyla Choquette; Laura Silliphant (laura.gregersen@alaska.gov); Leslie Smith; Lori Nelson; Luke Keller; Marc Kovak; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; Mike Morgan; MJ Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); nelson; Nichole Saunders; Nick Ostrovsky; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Paul Decker (paul.decker@alaska.gov); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Robert Warthen; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R; Steve Moothart (steve.moothart@alaska.gov); Steve Quinn; Suzanne Gibson; Tamera Sheffield; Ted Kramer; Teresa Imm; Tim Jones; Tim Mayers; Todd Durkee; Tom Maloney; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity; Well Integrity; Weston Nash; Whitney Pettus Subject: Other Order 123 (NordAq Energy) Attachments: otherl23.pdf Please see attached. Re: Failure to Plug and Abandon Shadura-1 ) (Permit No. 211-014) Before Expiration of ) Owner's Rights in CIRI Lease C-061648 ) Failure to Respond to Notice of Proposed ) Enforcement Action ) Jody J. CoCombie AOqCC Specia(Assistant .Alaska Oi(and Gas Conservation Commission 333 'Vest 7`H Avenue .Anchorage, Alaska .9.9501 Office: (907) 793-1221 Fax: (907) 276-7542 Other Order No. 123 Docket No. OTH-16-031 July 21, 2017 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iody.colombie@alaska.gov. Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, July 21, 2017 1:35 PM To: rwarthen@nordaqenergy.com Subject: Other Order 123 (NordAq Energy) Attachments: other123.pdf Please see attached. Re: Failure to Plug and Abandon Shadura-1 (Permit No. 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Failure to Respond to Notice of Proposed Enforcement Action Jody J. Colombie AOqCC SpeciatAssistant Alaska Oil and Gas Conservation Commission 333 West,-` Avenue Anchorage, Alaska ,99501 Office: (907) 793-1221 fax: (907) 276-7542 Other Order No. 123 Docket No. OTH-16-031 July 21, 2017 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombie@alaska.gov. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) Other Order No. 123 Final (Permit No. 211-014) Before Expiration of ) Docket No. OTH-16-031 Owner's Rights in CIRI Lease C-061648 ) June 29, 2018 Failure to Respond to Notice of Proposed ) Enforcement Action ) DECISION AND ORDER ON RECONSIDERATION On December 2, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to NordAq Energy Inc. (NordAq) regarding Shadura-1 exploratory well (Shadura-1). The Notice was based on NordAq's failure to permanently plug and abandon Shadura-1 before expiration of NordAq's rights in Cook Inlet Region, Inc. (CIRI) oil and gas lease C-061648(the lease). The Notice proposed specific corrective actions and a $621,000 civil penalty under AS 31.05.150(a). The Notice also proposed that NordAq provide a check in the amount of $1,200,000, AOGCC's projected cost to plug and abandon Shadura-1 if NordAq did not uphold its obligation to do so. When NordAq failed to respond to the Notice, the AOGCC scheduled a public hearing for April 4, 2017, at 10:00 a.m. On January 14, 2017, the AOGCC published a public notice for that hearing in the ALASKA DISPATCH NEWS. After the AOGCC noticed the public hearing, NordAq contacted AOGCC with a proposed plan to plug and abandon Shadura-1. AOGCC approved the plan on February 15, 2017. The public hearing was held on April 4, 2017. Summary of Revised Proposed Enforcement Action After the hearing, on May 24, 2017, the AOGCC issued a Revised Notice of Proposed Enforcement Action (Revised Notice) to NordAq regarding Shadura-1. The Revised Notice changed the requirement of a check for $1,200,000 to a bond in that amount in the sole favor of the AOGCC and lowered the civil penalty to $100,000. The Revised Notice specified that the bond shall be forfeited if Shadura-1 had not been permanently plugged and abandoned and the well location cleared within one year of the date of the Revised Notice. The bond was due within 30 days of the Revised Notice. NordAq requested an informal review. That review was held at the AOGCC offices on June 27, 2017. Other Order No. 123 Final June 29, 2018 Page 2 of 3 Other Order No. 123 After informal review, on July 21, 2017 Other Order No. 123 (Order) was issued. Based on NordAq's admitted violation, the Order imposed a civil penalty in the amount of $100,000 and required NordAq submit a surety bond for $1,200,000 within 30 days. The bond would be deemed forfeited if NordAq did not plug and abandon Shadura-1 and clear the well location within a year. Subsequent Proceedings On August 14, 2017, NordAq requested reconsideration and oral argument of the Order. Oral argument was held on September 20, 2017. At oral argument, NordAq claimed Shadura-1 would be properly plugged and abandoned by February 28, 2018. NordAq admits it violated 20 AAC 25.105(a), but claims that a $10,000 civil penalty is more reasonable given NordAq's otherwise "rock -solid" compliance record and that failure to plug and abandon Shadura-1 did not harm the public and did not result in an increased risk to health, safety, or the environment. Findings NordAq failed to properly plug and abandon Shadura-1 and clear the well site prior to termination of its rights in the lease upon which Shadura-1 is sited. Shadura-1 was plugged and abandoned on March 19, 2018. Now Therefore It Is Ordered That: After application of the criteria set forth in AS 31.05.150(g) to the evidence presented, within 30 days of the date of this Final Decision and Order, NordAq shall pay a civil penalty of $25,000 for violating 20 AAC 25.105(a). Requirement for a $1,200,000 -dollar bond is rescinded. As an Operator involved in an enforcement action, NordAq is required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and dated June 29, 2018, Hollis French Daniel T. Seamount, Jr. Cathy . Foerster Chair, Commissioner Commissioner Commissioner Other Order No. 123 Final June 29, 2018 Page 3 of 3 AND APPEAL As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 erronaous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on 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 period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-I ) Other Order No. 123 Final (Permit No. 211-014) Before Expiration of ) Docket No. OTH-16-031 Owner's Rights in CIRI Lease C-061648 ) June 29, 2018 Failure to Respond to Notice of Proposed ) Enforcement Action ) DECISION AND ORDER ON RECONSIDERATION On December 2, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to NordAq Energy Inc. (NordAq) regarding Shadura-1 exploratory well (Shadura-1). The Notice was based on NordAq's failure to permanently plug and abandon Shadura-I before expiration of NordAq's rights in Cook Inlet Region, Inc. (CIRI) oil and gas lease C-061648(the lease). The Notice proposed specific corrective actions and a $621,000 civil penalty under AS 31.05.150(a). The Notice also proposed that NordAq provide a check in the amount of $1,200,000, AOGCC's projected cost to plug and abandon Shadura-1 if NordAq did not uphold its obligation to do so. When NordAq failed to respond to the Notice, the AOGCC scheduled a public hearing for April 4, 2017, at 10:00 a.m. On January 14, 2017, the AOGCC published a public notice for that hearing in the ALASKA DISPATCH NEWS. After the AOGCC noticed the public hearing, NordAq contacted AOGCC with a proposed plan to plug and abandon Shadura-1. AOGCC approved the plan on February 15, 2017. The public hearing was held on April 4, 2017. Summary of Revised Proposed Enforcement Action After the hearing, on May 24, 2017, the AOGCC issued a Revised Notice of Proposed Enforcement Action (Revised Notice) to NordAq regarding Shadura-1. The Revised Notice changed the requirement of a check for $1,200,000 to a bond in that amount in the sole favor of the AOGCC and lowered the civil penalty to $100,000. The Revised Notice specified that the bond shall be forfeited if Shadura-1 had not been permanently plugged and abandoned and the well location cleared within one year of the date of the Revised Notice. The bond was due within 30 days of the Revised Notice. NordAq requested an informal review. That review was held at the AOGCC offices on June 27, 2017. Other Order No. 123 Final June 29, 2018 Page 2 of 3 Other Order No. 123 After informal review, on July 21, 2017 Other Order No. 123 (Order) was issued. Based on NordAq's admitted violation, the Order imposed a civil penalty in the amount of $100,000 and required NordAq submit a surety bond for $1,200,000 within 30 days. The bond would be deemed forfeited if NordAq did not plug and abandon Shadura-1 and clear the well location within a year. Subsequent Proceedings On August 14, 2017, NordAq requested reconsideration and oral argument of the Order. Oral argument was held on September 20, 2017. At oral argument, NordAq claimed Shadura-1 would be properly plugged and abandoned by February 28, 2018. NordAq admits it violated 20 AAC 25.105(a), but claims that a $10,000 civil penalty is more reasonable given NordAq's otherwise "rock -solid" compliance record and that failure to plug and abandon Shadura-1 did not harm the public and did not result in an increased risk to health, safety, or the environment. Findings NordAq failed to properly plug and abandon Shadura-1 and clear the well site prior to termination of its rights in the lease upon which Shadura-1 is sited. Shadura-1 was plugged and abandoned on March 19, 2018. Now Therefore It Is Ordered That: After application of the criteria set forth in AS 31.05.150(g) to the evidence presented, within 30 days of the date of this Final Decision and Order, NordAq shall pay a civil penalty of $25,000 for violating 20 AAC 25.105(a). Requirement for a $1,200,000 -dollar bond is rescinded. As an Operator involved in an enforcement action, NordAq is required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and dated June 29, 2018. //signature on file// //signature on file// //signature on file// Hollis French Daniel T. Seamount, Jr. Cathy P. Foerster Chair, Commissioner Commissioner Commissioner Other Order No. 123 Final June 29, 2018 Page 3 of 3 AND As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on 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 period, 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 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, June 29, 2018 10:49 AM To: rwarthen@nordaqenergy.com; Bell, Abby E (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Earl, Adam G (DOA); Erickson, Tamara K (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Laubenstein, Lou (DOA); Loepp, Victoria T (DOA); Martin, Teddy 1 (DOA); McLeod, Austin (DOA); Mcphee, Megan S (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Rixse, Melvin G (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity; AKDCWellIntegrityCoordinator; Alan Bailey, Alex Demarban; Alicia Showalter; Allen Huckabay; Andrew Vandedack; Ann Danielson; Anna Lewallen; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Bonnie Bailey; Brandon Viator; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cody Gauer; Cody Terrell; Colleen Miller; Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Danielle Mercurio; Darci Horner, Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David Pascal; ddonkel@cfl.rr.com; Diemer, Kenneth J (DNR); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Brown, Garrett A (DNR); George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Greg Kvokov; Gretchen Stoddard; gspfoff, Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jason Brune; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Shine; Jim Watt; Jim White oim4thgn@gmail.com); Young, Jim P (DNR); Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); Jon Goltz; Joshua Stephen; Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin 1 (DNR); Kruse, Rebecca D (DNR); Kyla Choquette; Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Michael Bill; Michael Calkins; Michael Moora; Michael Quick; Michael Schoetz; Mike Morgan; MJ Loveland; Motteram, Luke A; Mueller, Marta R (DNR); Nathaniel Herz; knelson@petroleumnews.com; Nichole Saunders; Nick Ostrovsky; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Robert Tirpack; Ryan Gross; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smith, Kyle S (DNR); Spuhler, Jes J (DNR); Stephanie Klemmer; Stephen Hennigan; Stephen Ratcliff; Sternicki, Oliver R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Tanisha Gleason; Ted Kramer; Teresa Imm; Terry Caetano; Tim Mayers; Todd Durkee; Tom Maloney; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vern Johnson; Vinnie Catalano; Well Integrity; Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline 1; Bruce Williams; Casey Sullivan; Corey Munk, Don Shaw; Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Matt Armstrong; Melonnie Amundson; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Scott Pins; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke; Zachary Shulman Subject: Other Order 122 and Other Order 123 Final (NordAq) Attachments: Other123 Final.pdf, Other122 Final.pdf Please see attached. Re: Failure to Plug and Abandon Tiger Eye ) Other Order No. 122 Final Central -1 (Permit No. 212-102) Before ) Docket No. OTH-16-032 Termination of Owner's Rights in Oil and ) June 29, 2018 Gas Leases ADL 391104 and C-061677 ) Failure to Respond to Notice of Proposed ) Enforcement Action ) Re: Failure to Plug and Abandon Shadura-1 ) (Permit No. 211-014) Before Expiration of ) Owner's Rights in CIRI Lease C-061648 ) Failure to Respond to Notice of Proposed ) Enforcement Action ) Jody J, CoCombie .AOGCC SpeciaC.r'1_ssistant .Alaska OiCandGas Conservation Commission 333 'West ;," .Avenue .Anchorage, .Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 Other Order No. 123 Final Docket No. OTH-16-031 June 29, 2018 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from The Alaska Oil and Gas Conservation Commission (AOGCC(, State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are on unintended recipient of this e-mail, please delete it, without first saving or forwarding if, and, so that the AOGCC is aware of the mistake in sending if to you, contact Jody Colombie at 907.793.1221 or iodv. colombie@alaska gov. Bernie Karl K&K Recycling Inc. P.O. Box 58055 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Gordon Severson 3201 Westmar Cir. Anchorage, AK 99508-4336 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 0001411 11-24 ORme AU It 1210(8) Remitter. NORDAO ENERGY INC. Operator LD. u623190 u623190 CASHIER'S CHECK PAY TO THE ORDER OF ***STATE OF ALASKA'"* ***Fifty thousand dollars and no cents*** Payee Address Memo: OTX�0Lp_F p I 0`2 WELLS FARGO BANK, N.A. JJ 301 W NORTHERN LIGHTS BLVD ANCHORAGE, AK 99503 FOR INQUIRIES CALL (480) 394-3122 ((40 14 170 7 24 711' 1:1 2 1.000 2481:4861 51132 0141707247 June 29, 2018 **$50,001/10.00** _ AUTHORIZED SIGNATURE RECEI I E1) JUN 2 9 2098 A®GCC INDEXES 15 AOGCC 9/M019 DMO: PROPOSEDENFORCEWNTACTIONAGAMSTNordA,ENERGY Dodd No. OM 16-031/032 ALASKA OIL AND GAS CONSERVATION COMMISSION Before Commissioners: Hollis French, Chair Cathy Foerster Daniel T. Seamount In the Matter of the Proposed Enforcement ) Action Against NordAq Energy, Inc. for ) Failure to Permanently Abandon the Shadura ) 1 Before Expiration of Rights in CIRI Oil ) and Gas Lease C-061648 and 20 AAC 25.105(a) ) and Failure to Respond to Notice of ) Proposed Enforcement and for Failure to ) Permanently Abandon the Tiger Eye Central 1 ) Before Expiration of Rights Under State of ) Alaska Oil and Gas Lease ADL 391104 and ) 20 AAC 25.105(a) and Failure to Respond to ) Notice of Proposed Enforcement. ) Docket No.: OTH 16-031 OTH 16-032 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska September 20, 2017 10:00 o'clock a.m. M*j 30111 .1011C441Lei BEFORE: Hollis French Daniel T. Seamount Cathy Foerster ComPmm Manix, LLC Phone: 907-243-0668 135 Chmimsm Dr., Ste, 2.. Anch, AK 99501 Fac 909-243-1473 Emvl: sehJe�ygci.nd AOGCC 920/201/ IWO, PROPOSED ENFORCEh4ENTACTIONAGAINSTNooMgENERGY Do&d No, OTN I"31/032 Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Chair French 03 3 Oral argument by Mr. Brena 05 4 Testimony by Mr. Warthen 26 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Compute, Mmtix, LLC Mone 9()7-243-0668 135 Chtismnsen a., Ste. 2., Anch, AN 99501 F. 907-243-1473 Ete": snhJe6g'ioet A0G(C 9202017 ❑b10. PROPOSED ENPORCEMENI ACT ION .AGAINST NordAq ENERGY Wdet Nc, OTH 16-031032 Page 3 1 P R O C E E D I N G S 2 (On record) 3 CHAIRMAN FRENCH: It's 10:02 in the morning on 4 September 20, 2017. We're here at 333 West Seventh 5 Avenue, the offices of the Alaska Oil and Gas 6 Conservation Commission. Again September 20th, 10:00 7 a.m. here at the offices. To my right is Commissioner g Cathy Foerster, to my left is Commissioner Dan Seamount 9 and I am Hollis French, Commissioner of the AOGCC as 10 well. 11 We're here on docket number OTH 16-032 which is 12 NordAq Energy's application for reconsideration of the 13 decision and order issued in this matter by the AOGCC. 14 At the request of NordAq Energy we've scheduled this 15 oral argument. The subject of the hearing is our 16 decision and order on the civil penalty and the 17 reduction of the proposed bond amount. 18 We have the proceeding being recorded today by 19 our first rate staffer, Jody Colombie. You can get a 20 copy of the transcript from Computer Matrix which is -- 21 who actually handles the recordings when this hearing 22 is over. 23 NordAq is here to present. There won't be any 24 testimony today from anyone else, this is just an oral 25 argument. We will hear the presentation. Contpoter Matdx, LI C Phonc907-243-0663 135 Chnsmnse Dr, Ste 2., A nch. A A 99501 FazW7-243-1473 Finail. sahile!ogci nel AOGC( 9202019 1PMO- PROPOSED ENFORCEME F ACTION AGAIN ST NOrdAq ENERGY Dackc� NA 0 111 11-0101' Page 4 1 Commissioners may ask questions during the 2 presentation. We will certainly take a recess at the 3 end of the presentation, confer with our senior staff 4 and then come back and if we have any questions present 5 them at that time as well. 6 For you, Mr. Brena, keep in mind that you must 7 speak into the microphone so that those in the audience 8 and the court reporter can hear your testimony. 9 We do have some people online listening in I 10 think from the Peninsula Clarion, but perhaps not. 11 UNIDENTIFIED VOICE: That's correct. 12 CHAIRMAN FRENCH: I'm sorry. We just heard a 13 voice, yes? 14 (No audible response) 15 CHAIRMAN FRENCH: We've been given to 16 understand that the Peninsula Clarion was going to be 17 listening in, but doesn't appear that they're on the 18 line. 19 COMMISSIONER FOERSTER: In here. 20 CHAIRMAN FRENCH: Oh, I'm sorry. In the room. 21 Beg your pardon. Thanks for the clarification. 22 Mr. Brena. 23 (Off record comments) 24 MR. BRENA: Chairman French, Commissioners 25 Foerster and Seamount. First thank you for the Compmer Matrix, LLC Pho 907-243-0665 LS Chnstensrn IX. Sie 2,Anch. AK 99501 Fu 907-243-1473 L, aO s.hi]Ha.Bei.na 920 201] ITMO. PROPOSED ENFORCEMENT AC TION AGAINST NordAq ENERGY DoekG No, OTU 16-031'032 Page 5 1 opportunity for this oral argument, I realize that it 2 was discretionary. My name is Robin Brena with the 3 firm of Brena, Bell and Clarkson. 4 COMMISSIONER SEAMOUNT: Mr. Brena, perhaps you 5 could sit down and speak closer to the microphones 6 because our court recorder is deaf. 7 (Off record comments) g MR. BRENA: So thank you for the opportunity. 9 My name is Robin Brena, I'm with the firm of Brena, 10 Bell and Clarkson and I'm here on behalf of NordAq 11 Energy, Inc. With your permission I'd like to also 12 introduce, we have representatives of NordAq here, 13 Doris Chang, the vice chairman of (indiscernible - away 14 from microphone). She's sitting behind me in the 15 center. David Pfeiffer, the chief financial officer 16 for NordAq is here, sitting there. And then Robert or 17 Bob Warthen who's the senior advisor to NordAq and was 18 a former president and CEO of the company are with me. 19 And then Laura Gould is an attorney with our firm and 20 is also sitting behind me. 21 I'd like to spend a minute just talking about 22 NordAq so you get a better sense for who they are and 23 why we're here. NordAq is a small, independent 24 producer with a lease interest on the North Slope and 25 the Cook Inlet. NordAq is taking the risks to come to Compume M.m, LLC Phone_ 90]-243-0666 115 Ch— enran D4 -Ste 2, Andy_ AN 99501 F. 907 243-14]3 Email'.'Ank,o "i no AOGCC 920'_017 1"0 PKOPOSEDLNFORCF.MENT A(TIONAGAINS I Nord Ay ENERGA' Docket No.O"PII 16-031 032 Page 6 1 Alaska and to drill exploratory wells, oil and gas 2 wells, with the -- trying to expand the resource base 3 in Alaska. That is exactly the kind of company that we 4 want in Alaska more of. We want independent producers 5 coming up here and drilling exploratory wells, trying 6 to expand our resource base. I think that's a very 7 important point. g It's not just that they come to our state and 9 are doing exactly what we want the independent 10 companies to do, but it's the way they've done it. 11 They hire a third party compliance officer with regard 12 to their drilling and they coordinate very well with 13 people. They've tried to do it right with regard to 14 the Shadura well on the Kenai Peninsula. It has state 15 park land, it has state land, it has federal refuge 16 land, it has layer after layer after layer of 17 challenges, compliance challenges, and NordAq has never 18 received a single letter or comment of noncompliance in 19 the time that it's been operating in this state. 20 So they're a small, independent, they're not a 21 major, they need to be -- that means some things we'll 22 get into in a minute. They're here to expand our 23 resource base and drill exploratory wells, something 24 that many of the majors are not even doing in our 25 state. And they're doing -- they're trying to do it COmP91er Manu, LLC Phoni,'. 907-343 0668 135Chmlr sea Dr., Sle. 2, N¢h. AK 99501 Fax '9072431473 Email: sahilCra{ci net AOGCC 91=017 DmO: PROPOSED ENFORCEb TACTIONAGAINSTNordAq ENERGY DocketNo.OTH I6-0311032 Page 7 1 right. And they have a history of doing it right and 2 coordinating closely with this Commission and with its 3 inspectors as well as multiple other people that are 4 engaged with the complex challenges of developing our 5 resource in refuge and on state park land. 6 So I want to acknowledge as I would hope that 7 you do that these are the kind of good citizens, good 8 corporate citizens, that matter in Alaska and that are 9 trying to make a difference and they're trying to do it 10 right. 11 We're here today to talk with you about first 12 lifting the bonding requirement with regard to the 13 Tiger Eye well. The reason that we're going to ask you 14 to do that and I will detail that argument in a moment, 15 I'm just summarizing the argument now, is because the 16 work's done, it's been plugged and abandoned and 17 there's no reason for a bonding requirement to ensure 18 that work gets done that's already been done. So 19 that's with regard to Tiger Eye bonding. 20 With regard to Shadura we're here to ask you 21 for some flexibility with regard to the bonding 22 requirement so that we can get the job done without the 23 financial burden on the company of an unnecessary 24 bonding requirement. We think that you should give us 25 the flexibility because you were flexible with us with Compmer Mattie, LLC Mee: 907-243-0668 135 Christensm Dr., Ste. 2.. An& AK 99501 '.9 07-2434473 Email:sahJe ag net AOGCC 9^_0 2017 11MO. PROPOSE) tiNFORCEMEFT A( MN A6AI.NSI hordAq ENER6} Onck,t Nb 0111 16-031 032 1 regard to Tiger Eye and we've demonstrated our 2 willingness and ability to do the things that we said 3 we'd do for you. And so now they're done. I think 4 that should count for something here. So our 5 willingness and capacity to proper abandon, this has 6 been demonstrated, the work has been fully permitted, 7 the work has been fully contracted, there's an AFE 8 that's been approved by the company, the funds are 9 available to complete the work at Shadura to plug it 10 and abandon it properly. We've already spent between 11 40 and $50,000, it's fair to say that that project is 12 in mid project, it's not -- we're not promising 13 something in the future, we're doing it and we've done 14 the permitting, the permitting is complete, the 15 contracting is complete and all we're waiting for is an 16 opportunity for the weather to permit an 18 foot wide 17 snow road to be built so we can get eight foot light 18 equipment in there and do the job that we said that 19 we'd do and we currently plan to have that done by the 20 end of February. 21 So and then after I talk with you about each of 22 these wells and the bonding requirements and some of 23 the history and how you've worked with us and I'd like 24 to talk about the penalties for our failure to comply. 25 I mean, we're not here saying that we complied, we have Compew Matrix, LLC Phone'. 907-243-0668 135 Cbr tensLm @. Ste. 2, Anch. AK 99501 Fex'.907-241-14]3 Fen8fl s .Ila ,net 9/2N2017 1l 0 PROPOSED ENFORCEMENTAMON AGANST NT., Aq ENERGY Docks No. OM 16431/032 Page 9 1 1 an obligation to when the leases expire to properly 2 abandon these wells. We understand that, we 3 acknowledge that, we should have communicated with the 4 Commission, we should have explained why we were doing 5 what we were doing, asked for your permission for 6 relaxation of that requirement. We did not, but there 7 are circumstances, the mitigation circumstances set g forth in AS 31.3150(b). We think that they favor some 9 flexibility with regard to the penalty that's been 10 assessed. So that's a summary of what I'm going to 11 talk about today. 12 First let me just talk for a minute about Tiger 13 Eye. The Tiger Eye is a well on the west side. Any 14 well on the west side as you know is a little more 15 complicated, you have to have camps, you have to fly 16 parts and people in and fuel and you have to stockpile 17 things on the side. You have circumstances of weather 18 and transportation, you're off the road system, it's a 19 more complex sort of situation. Tiger Eye was intended 20 originally to be an exploratory well for oil and gas 21 and it turned out there were not signs of oil and so it 22 was converted into an exploratory well for gas only. 23 It was between 10 and 11,000 feet deep. As I mentioned 24 on both of our projects we had third party compliance 25 officers. All American Oil Field, a well respected Computer Munn, LLC Phone: 907-243-0668 135 Christcnsm@., Ste. 2., AnO. AK 99501 Fox: 907-243-1473 Email: sAi1. gd.nn AO(;(( 9 203017 ITMO. PROPOSED ENFORCEMLN I ACTION AGAINST No¢1Ay ENERGY Docket No. 01H 16-031,32 Page 10 1 third party provider of these sorts of services worked 2 with us every step of the way, we wanted to be sure we 3 were in compliance with the permitting, with the proper 4 drilling requirements and with all the requirements. 5 We found gas in Tiger Eye at about 6,000 feet, we found 6 about 3 million a day. And that's a pretty good well 7 all things considered, but we had problems with the 8 encroachment of water into the well and it was a saline 9 water, it wasn't a freshwater that gives more 10 flexibility in terms of what you do with it. It was a 11 saline water and so we didn't have an economic solution 12 for how to manage the water and so we were -- we did 13 everything that we could with it. We came to your 14 staff and we submitted an AFE that said it would take 15 us $666,602 to plug and properly abandon that work. 16 It's been done. The cost ultimately was slightly over 17 700, between 700 and 720. And the reason for that 18 additional cost had to do with -- there was an 800 foot 19 ice plug in the well that we had to that we had to 20 address, we had to bring up a special tool that they 21 use for dewaxing wells, we had to fly in a person with 22 it and so it ran the cost a little bit up. Important I 23 think for this conversation is that but for that 24 unusual circumstance of that ice plug we would have 25 come in under the AFE that we submitted to the Compote, Meeix. LLC Phone 907-243-0668 135 Chmhen,ch D,.. She 2.. Ah,h. AK 99501 Foc 907-243-1473 Enon] SahilY gci na AOGCC 9/2N2017 ITMO: PROPOSED ENFORCEMENTACTION AGAWSTNordAq ENERGY Docks No. OTH 16-03M32 Page 11 1 Commission as the AFE that -- to get the job done. And 2 that'll matter I think in a moment because we have an 3 AFE for Shadura and we're asking you to give 4 credibility to that AFE and we think that our 5 performance under the AFE at Tiger Eye gives you just 6 reason to do that. 7 So the Commission, I want to acknowledge its g work with us. I mean, it changed from a check to a 9 bonding requirement for example, trying to lessen the 10 impact on a smaller, independent company I think was 11 your intention. I just wanted to mention that we 12 appreciate the effort. Bonding is worse than the check 13 for a small company because unlike the majors if you 14 try to get -- or that have private facilities and 15 letters of credit and bonding capacity sometimes 16 through affiliates and efficiently and cheaply provide 17 those sorts of assurances, independents have to go out 18 on the insurance market and that's a difficult thing to 19 do here. Ultimately for a small, independent -- in our 20 case we checked on it, they wanted 100 percent of the 21 bond amount in cash plus they wanted a 2 or 3 percent 22 fee. So while you were trying to work with us, I -- 23 that was my sense of your shifting from check to 24 bonding, in fact it was -- had a greater financial 25 impact on a small independent. It would have been an Compumr Mauu, LLC Phone: %D-243-0668 135 Chow,... Dr., Sm. 2., And. AK 99501 F. 907-243-1473 Email. uahge(ygci.nel AOG( C 9 202017 ITMO- PROPOSE) ENFOR(-EMI NI ACTION AGAINST NordAq ENFRGI' Do&Ae N. 07 16-011012 Page 12 1 appropriate way to work with a major that had those 2 sorts of large credit facilities available, but in our 3 case it isn't. So I wanted to just bring that to your 4 attention. 5 The bond, you worked with us on the bond 6 amount. Based on our AFE you reduced the bond amount 7 from a 1,300,000 to 500,000. Thank you for that, the g AFE was 666,602. And we -- and you worked with us with 9 regard to the schedule on Tiger Eye. We asked you for 10 an opportunity to complete the work before the bonding 11 requirement was imposed on us and effectively that's 12 what's happened. And so we're here asking now for a 13 lifting of the bond requirement because the work is 14 completed. We filed with the Commission yesterday 15 afternoon all the paperwork to demonstrate proper 16 abandonment of this well. And our -- my understanding 17 is that all the work has been signed off on by 18 inspectors so I don't believe that there's an issue 19 about whether this well has -- there's not an issue 20 that I'm aware of about whether this well has been 21 properly plugged and abandoned. 22 COMMISSIONER FOERSTER: But, Mr. Brena, may I 23 please interrupt you for a second. Have you -- we know 24 that you've P&A'd the well, have you cleared the 25 location as well? ('craputer Matns. LLC Phone. 90]-243-0663 135('hnstrnscn D,-Sw 2. Anch AK 99101 Fax S07-243-1471 E—I sah Jera bci.net AO(AC 9 202013 ITNIO PROPOSED IN FOR( I.%I] N1 A( FION AGAINSI NordAy FNERGI' Docket No.0111 16 011 01 Page 13 1 MR. BRENA: Hmmm..... 2 COMMISSIONER FOERSTER: Okay. Thank you. 3 MR. BRENA: Yes. I'm sorry, Commissioner, but 4 I didn't know that answer, Commissioner Foerster. 5 So the work is complete and we appreciate you 6 working with us in terms of the check to bond, we 7 appreciate you working with us with regard to the 8 amount of the bond, we appreciate you showing the 9 flexibility and working with us with regard to the 10 timing of the bond. And the result is that it's worked 11 out perfectly for all of us. And so now we request 12 that the bonding requirement be lifted from Tiger Eye. 13 With regard to -- I start with Tiger Eye 14 because we do the things that we say we're going to do 15 and we've done them and we've demonstrated that and we 16 think that should stand for something. 17 With regard to Shadura, we have an AFE for 18 Shadura that's $483,826. We're..... 19 COMMISSIONER FOERSTER: Say that number again, 20 please. 21 MR. BRENA: 483,826. 22 COMMISSIONER FOERSTER: Thank you. 23 MR. BRENA: Shadura is a simpler well. Shadura 24 is 2.1 miles from the road system, it's on the east 25 side and not the west side of Cook Inlet, it was a Computer Matnx, LLC Phone. 907 243- 568 135 Chnstcnsn Dr., Ste_ 2., Anch, A%99501 Fac: 9D7-243-1471 Fmuil. snh lle agci vn AOGC( 9 202017 ITMO. PROPOSLD ENFORCLMLNT ACTION AOAINSI NosdA, EMRGY Docket No 0T 1 10 031 032 Page 14 1 straighter bore. We have stockedpiled in place cement 2 to manage the plugging. We have all the permitting in 3 place, we have all the contracting in place. We have 4 an approved AFE, we have the funds available to fund 5 that AFE. There is -- we have spent 40 or $50,000 6 already in terms of permitting and the other things 7 that are necessary to prepare properly, surveying, 8 engineering work. And all we want -- all we need now g is the weather to get cold enough to put in a snow 10 compacted road. So we're not ducking, we're not 11 weaving, we are -- we're in mid project and we're going 12 to be done by the end of February. The snow road, we 13 need a 2.1 mile snow road, we need it to be 18 feet 14 wide so we can move through eight foot equipment, it'll 15 take 10 to 13 days to complete. The well work is 16 relatively straightforward, it'll take seven to 10 days 17 to complete. It has fewer plugs, three, than are 18 required in Tiger Eye which took five. And there's no 19 camp necessary, the workers can go home, no barging, no 20 air transport of equipment, there are none of the 21 complications, logistical complications, that you often 22 find when we're discussing the west side, the west side 23 well. So we think that our AFE is rock solid, we think 24 that there are fewer risks associated with the AFE for 25 this well compared with the one on the other side. And Compote, W n., LLC Phone: 907-243-0668 135 Chtatensn t Dr_ Ste 2, Anch. AK 99501 Far_ 907-243-1471 9meiL svhilCN6ci.nn 91202017 ITMO: PROPOSED ENFORCEMENT ACTION AGAMSTNordAq ENERGY Docket No. OT M31/032 Page 15 1 we performed on the one on the other side and ran 2 across one unusual circumstance or we would have been 3 under budget on that one and we managed that unusual 4 circumstance within a reasonable range. 5 So the bond that's imposed on us for Shadura is 6 $1.2 million. And the holding by the Commission in the 7 decision and order was that we presented no evidence g that a reduction in the bond amount was appropriate. 9 We're confused by that whole thing because we presented 10 two AFEs, the AFE on Tiger Eye was taken into 14 11 consideration and our bond was lowered. The AFE that 12 we presented with regard to Shadura was not recognized 13 in the order and in fact the opposite was stated, that 14 there was no evidence that it should be reduced. So I 15 don't -- it's hard -- I assume that that was an 16 oversight, clearly an AFE detailing the timing and 17 amount that's necessary and the stage of the project 18 and affidavits of people are clearly evidence that 19 suggests that the bond amount is greater. The Shadura 20 bond amount and AFE are going to be less, they're going 21 to be less than the Tiger Eye one. 22 And so we want -- we're here to ask you for 23 some flexibility for the schedule for this bonding 24 requirement like you gave us on Tiger Eye. We're here 25 to ask you first and foremost if you can delay imposing Computer Menu, LEC Phone: 907-243-0668 135 Christen. Dr., Ste, 2., And AK 99501 Fax 907-243-1473 Euail: sand� gci.oa AOG(C 9 202011 11 MO PROPOS) 1) FNFORCEMFNI ACI 10N AGAINST NcrdAq ENERGY Docket No. OM 16-031 012 Page 16 1 that requirement until the end of February to give us 2 an opportunity to do what we're in the middle of 3 getting done. We think that you have assurances in 4 that we've already performed on Tiger Eye, we think you 5 have assurances because we have our contracting in 6 place, we have our permitting in place, we've already 7 spent 40 or $50,000, this project is a simple project, g we've demonstrated our willingness and capacity to 9 perform this work and we intend to perform it and we're 10 here to say that we intend to perform it. And so we're 11 asking for the same kind of flexibility you gave us on 12 Tiger Eye where you gave us, you know, a couple months 13 and gave us a chance to get the work done, otherwise 14 this is a tremendous financial hardship for this 15 company to come up with these kinds of funds 16 unnecessarily in the middle of a project. And so my 17 first request is that you give us -- that you allow us lg until the last day of February before this is imposed 19 and if we don't get the work done when we said we'll 20 get it done then we'll be back here explaining why not 21 to you. But we're doing it, we're in the middle of 22 getting it done and imposing such a financial hardship 23 on such a small company is from our point of view not a 24 commercially reasonable way to proceed. The second 25 thing is if that doesn't work, I mean, we just plugged Compute Mat i. LLC Phon,, 907 343- 668 115 Che icusLm D . Ste.?.. Anch, AK 99501 Fax'. 901243 1411 Email'. sahilem gcinet A(Xi(( 1) 202017 ❑MO. PROPOSED FNFORCEMRa ACEONAGAINSTNo,dA, ENERGY Docket No OT 16931'02 6 virtually no risk in you permitting that. 7 So first we'd ask you to take us at our word g and based on our performance and just give us until 9 February to get the job done and if we don't get it 10 done then we'll revisit the issue. Secondly if -- we'd 11 ask you to be flexible enough with the schedule so that 12 we can get the bond that already exists that will be 13 released because of our proper abandonment of Tiger Eye 14 and be able to use that facility to cover this. We 15 think that this is in the public interest, we think it 16 sends the Page 17 1 and abandoned Tiger Eye, we have a $500,000 bond that 2 is going to be released to us, and so allow us a couple 3 months to get that bond freed up from Tiger Eye so that 4 we can apply it over here. So, but 500,000 is more 5 than our AFE that's been contracted for, there is 6 virtually no risk in you permitting that. 7 So first we'd ask you to take us at our word g and based on our performance and just give us until 9 February to get the job done and if we don't get it 10 done then we'll revisit the issue. Secondly if -- we'd 11 ask you to be flexible enough with the schedule so that 12 we can get the bond that already exists that will be 13 released because of our proper abandonment of Tiger Eye 14 and be able to use that facility to cover this. We 15 think that this is in the public interest, we think it 16 sends the right signals to the community and so we 17 would ask you for that. 22 18 I want to turn now to the penalties. We were 19 assessed a penalty for an initial violation of failure 20 to properly abandon under 31.3O.15O(a) as set forth in 21 the regulation 20 AAC 25.1O5(a). So that penalty, the 22 maximum amount that can be assessed as an initial 23 violation is $100,000 under your regulations. We've 24 been assessed $100,000 for both of them, we've been 25 assessed the maximum fine both times. Computer Mat,ix, LLC Phone:907-243-0668 135 Clidoctsen Dr.. Seo- 2., Anch AK 99501 17ax:907-2411471 Emailaahile¢egci,net AOGCC 9/20W7 ITMO: PROPOSEDENFORCEMWACTIONAGAWSTNordAgE ERGY Dock&N.,O M31/032 Page 18 1 I'd like to just go through the mitigating 2 factors because we think that penalties should be -- 3 you know, should reflect the facts and circumstances of 4 an individual case. And in fact the statute requires 5 you to take into consideration these factors, it's not 6 discretionary, it says you shall consider these 7 factors. And so I'd like to just go through each 8 factor and talk with you about them for a minute 9 because a maximum penalty under this circumstance, I 10 mean, with Tiger Eye we thought there were other 11 commercial opportunities and people interested in 12 continuing the well and it really wouldn't have been in 13 the public interest to plug and abandon a well that may 14 be commercially viable and that other people may be 15 interested in. 16 In Shadura we had a similar circumstance and we 17 were intending to initially branch off of that well, 18 use that wellbore for additional drilling and that 19 didn't prove viable. So in both situations we weren't 20 ignoring anything, we were trying to make wells work in 21 Alaska which is in the public interest for you to 22 allow. And now we didn't communicate what we were 23 doing to you and so we're not asking for no penalty, 24 we're asking for a penalty to be assessed at $10,000 in 25 each case. And we'll make a commitment to you that -- Computer Matrix. E Phone: %7-243-0668 135 Chriermsm Dc, Ste. 2., Anch. AK 99501 Fax: 9P/-243-1473 Email: sahileCagci.o& AOGPC 920'1017 ITMO'. PROPOSED LNFORCEMENTAC➢ONAGAIN5P NmdA, ENERGY GoekG N..OTH 16031,032 Page 19 1 I mean, someone would have to be crazy to ignore a 2 notice from this Commission and we certainly don't 3 intend to and we intend to work with you and you will 4 not see us in here again for our failure to 5 communicate, in fact you might be standing at the door 6 with a bat because we're over here too darn much for 7 you. g So, but let me go through these mitigation 9 factors. It says in determining the amount of the 10 penalty assessed under (a), the Commission shall 11 consider the extent to which the person's acting in 12 good faith. I don't -- you know, there isn't a bad 13 faith finding in any of your orders, I don't -- I'm not 14 aware of any facts that even suggest one. 15 (2) says willfulness and knowing manner, I 16 mean, we were trying to extend the commercial viability 17 of two wells, we weren't walking away from them and not 18 fulfilling our duty to abandon properly, we were trying 19 to find a way to make them work for people involved. I 20 don't think that rises to sort of a willfulness. 21 (3), the extent and seriousness of the 22 violation, actual or potential threat to the public 23 health or environment. There's a specific fact holding 24 that there was no risk at all. The only thing that 25 happened was the delay of time. There's never been a Computer Mavis, LLC Phone 907243-0665 115 Chrisimsev Dr_ She 2., Areh AK 99101 Fax 907 24 3-14 8 lame sahll lagci net AOGCC 9 202019 ITMO. PROPOSED ENPORCHMENi ACTION AGAINST No dA, ENERGY Docket No OM 16 031 031 Page 20 1 safety risk, there hasn't been a pressure issue, there 2 hasn't been a blowout issue, there's no public health 3 issue in this case, these are just wells with a small, 4 independent trying to figure out how to make them work 5 when the leases expired. 6 Injury to the public, there is none. There is 7 absolutely no injury to the public. g Benefit derived. We are not getting any 9 benefit from not doing this whatsoever. 10 History of compliance or noncompliance. We 11 have a rock solid history of compliance. We think that 12 our Shadura efforts demonstrate that, I mean, we've 13 been under federal refuge, state park and state lands 14 and operating with third party compliance officers and 15 without one notice of noncompliance for several years. 16 We're not some fly-by-night company up here, you know, 17 trying to short circuit the rules and regulations and 18 not respect them. We're the opposite of that, we're 19 incurring additional expense and cost trying to do it 20 right. 21 Deter similar behavior. I don't know, you 22 know, the deterral impact, I think that's largely 23 diluted. I mean, the facts and circumstances of each 24 case are so unique that I'm not sure how that works, 25 but in terms of deterring similar behavior I think a Compule Matrix,LLC Phone_901-243-D66R 135 Chmoa sen U., Stu 2, Anch. AK 99501 Fu 90-.243-1413 Email sahilk gdan AOC,('C 9202017 ITMO. PROPOSFDFNFORCFMFN'IA(CTIONAOAINSTNovdAq ENERGI' Docks No. O➢I 1b 011 032 Page 21 1 $10,000 fine lets people know that if you're going to 2 try and find a way to extend the life of wells past the 3 expiration of the lease that we ought to be talking to 4 you and explaining what we're doing and getting your 5 permission to do it. 6 And so that's the behavior, this isn't putting 7 the public at risk, this isn't putting people at -- g there's no safety risk, there's no environmental risk, 9 there isn't any of the kind of bad acts behavior that 10 would bring up your guard hairs to impose a maximum 11 fine. An effort made by the person committing the 12 violation to correct it prevents future violations. I 13 don't know how you can get a better record than the one 14 that we've established, we've done the things we said 15 we'd do, we've spent the money we said we'd spend and 16 going forward we have contracts in place, we have a 17 timetable in place, we have the permitting in place, 18 we're acting as best a corporate citizen of Alaska as 19 we're able to and other factors considered relevant. I 20 -- you know, I thought about this one. I think this 21 Commission should care about the culture that it 22 creates in Alaska for independent producers, I think 23 you should care about that. We are not BP, these bond 24 impositions and penalties, they hurt us, they hurt our 25 ability to operate. And so the one size fits all Compmm M.,m. LLC Ph.— 907-243-0668 135 Chtl tmsm a . Ste 2, Anch. AK 99501 F. 907-243-1473 F,mail: sahile(46a na AOG( C 9202017 IWO. PROPOSED ENFORCEMENT ACTION AGA INS[ NordAq ENERGY DocketNu 0DI16-031031_ Page 22 1 really doesn't fit all. You know, what you need to do 2 to punish one person isn't what you need to do to 3 punish another, there are just different circumstances. 4 And I would -- and, you know, I don't use this as an 5 excuse because I'm not offering any excuses today for 6 not communicating properly to the AOGCC. I'm not 7 offering any, we didn't and we should have and we will 8 in the future. 9 But I think it's important for you to at least 10 be aware of that we had $9 million in credits that 11 should have flowed from the state to us that have not 12 been appropriated. So we're in Alaska, operating at 13 additional expense with third party compliance 14 officers, without any notices, without any 15 noncompliance in Alaska, trying to do our best in 16 Alaska drilling exploratory wells, we as Alaskans 17 should be begging companies to come up and do. And 18 we've done it even though the state of Alaska 19 ultimately -- it was expected that we were expected to 20 be paid $9 million and we aren't using a penny of that 21 money to suggest that any of that has anything to do 22 with this. I bring it forward not as an excuse, I 23 bring it forward because that's the culture that we're 24 operating in, small, independents were impacted by 25 those decisions and we are honoring our commitments to Computer Mara. LLC Phone'. 907-243-0665 135Chmna sen]X. Ste. 2. Anch_ AS 99501 1.907-243-1473 Email sah Aempfioet AOGC( 9202017 ❑'MO'. PROPOSEDFNFORCEMENIAC110➢AGAINSINordAy ENERGY DocAu No. 0111 1601193' Page 23 1 the state notwithstanding that being hammered by the 2 failure to appropriate funds to reimburse for $9 3 million in drilling costs. 4 So I don't know, you know, we're the people you 5 want here doing what we're doing and doing it the way 6 we're doing it. And so we have the only penalty that's 7 been assessed, it's for an initial violation of failure g to abandon properly and that initial violation has a 9 maximum of 100,000 and we've been assessed the maximum 10 of 100,000. And we don't think that that's a fair 11 assessment under these facts and circumstances and so 12 we would ask you to -- for some flexibility on that, 13 it's not like we're not stepping up to the plate and 14 swinging the bat and it's not like we're not hitting 15 the balls that are being thrown, we're doing both. 16 That's what we're here to ask you for, 17 continued flexibility working with us and, you know, 18 and rationalizing the fine to something that fits the 19 facts and circumstances of our case. 20 I'm happy to respond to any questions you have. 21 I understand we're going to take a break and you're 22 going to get a chance to talk to staff and then come 23 back and ask more questions, but our -- whatever, I'll 24 be happy to answer any questions that you have. 25 CHAIRMAN FRENCH: Mr. Brena, thank you for the Compumr Ma ru, LLC Phone, 907-243-0668 135 Chdmimsen Ur.. S1, 1, Anch. AK 99501 Fox907-243-1473 E..1 snhlivagci oe1 AOGC( 9 202017 JIM PROPOSFD FN FOR( 'EMENT ACTION AOAMST NortlAq ENEROI Dockc4 Na.OM 16-031'032 Page 24 1 presentation. Commissioner Foerster, any questions 2 now? 3 COMMISSIONER FOERSTER: I have several 4 questions, but I'll keep them until after the break. 5 CHAIRMAN FRENCH: Commissioner Seamount, any 6 questions now? 7 COMMISSIONER SEAMOUNT: Yeah, I have a few g questions before we take the break in case we need to 9 address them. First of all I'd like to say that I'm 10 sorry that you couldn't make these wells economic and I 11 assume that Mr. Warthen was the one who generated these 12 prospects. And I've known him for 30 years and I think 13 he's the foremost oil and gas explorer in Cook Inlet 14 over -- the majority of prospects drilled in Cook Inlet 15 have been Mr. Warthen's. 16 But having said that, I have a few questions 17 which probably will come up in the break, but I'd like 18 to bring them out right now. And that is -- well, 19 first of all does NortlAq have any production or 20 activities outside of Alaska? 21 MR. BRENA: (Indiscernible - away from 22 microphone)..... 23 UNIDENTIFIED VOICE: No. 24 COMMISSIONER SEAMOUNT: Okay. You're totally 25 Alaska based? CompuRn Matrix. LLC Phone. 909-243 0668 135Chla¢,� IX, Sre 2., An<h. A K 99501 Fax 907-241-1473 ®nail, sand,e, para AOGCC 9 20 2017 MR) PROPOSED ENFORCEMENI AC DON AGAINST NordAq ENER61 Docket No 0111 16-011012 Page 25 1 MR. BRENA: Okay. 2 COMMISSIONER SEAMOUNT: Our AFE, I mean, that's 3 what it would probably cost the state to plug these 4 wells if NordAq were to run off? So..... 5 MR. BRENA: I'm sorry, Commissioner, would you 6 please..... 7 COMMISSIONER SEAMOUNT: Which is $1.2 million. 8 Okay. Now you've got an AFE for $483,000. Does that 9 AFE include your ice road? 10 MR. BRENA: It's a snow road, Commissioner..... 11 COMMISSIONER SEAMOUNT: Yes. 12 MR. BRENA: .....and it does. And there's 13 seven to 10 days associated with the compaction of a 14 snow road. 15 COMMISSIONER SEAMOUNT: Okay. Does it..... 16 MR. BRENA: The equipment..... 17 COMMISSIONER SEAMOUNT: .....does it include 18 mob and demob? 19 MR. BRENA: My understanding is that's it's an 20 all in price. 21 COMMISSIONER SEAMOUNT: Okay. So is all the 22 equipment in place in Cook Inlet or do you have to 23 bring it in from North Slope or other places? 24 MR. WARTHEN: All in place. 25 CHAIRMAN FRENCH: Why don't we take a quick Computer Manu, LLC Phonc: 907-243-0669 135 Chretenscrt Dr., Ste. 2. Anch. AK 99501 Fu 907-241-1473 Email sahilvagai.nn A(X,CC 920 2019 ❑M0. PROPOSED ENPORCEMENI AC110N AGAINST NmJAq ENERGY De,km Ni, _OT1116-031X032 Page 26 1 pause here and identify this witness and have him sworn 2 in if we're going to get testimony from him. 3 MR. WARTHEN: Yes, I'm Bob Warthen senior 4 advisor for NordAq Energy. 5 CHAIRMAN FRENCH: Mr. Warthen, if you'd raise 6 your right hand. 7 (Oath administered) g MR. WARTHEN: Yes, I do. 9 CHAIRMAN FRENCH: Thank you. 10 BOB WARTHEN 11 called as a witness on behalf of NordAq Energy, 12 testified as follows on: 13 DIRECT EXAMINATION 14 CHAIRMAN FRENCH: Thank you. Commissioner 15 Seamount. 16 COMMISSIONER SEAMOUNT: One more question. Is 17 the crew guaranteed to be available when the road's 18 available? 19 MR. WARTHEN: Yes, they are. The crew are all 20 housed and domiciled in the -- on the Kenai Peninsula, 21 in the Kenai and Soldotna area. So, yes, they're -- 22 they will be available. 23 COMMISSIONER SEAMOUNT: Thankfully the low oil 24 prices I assume. 25 MR. WARTHEN: Well, correct. Computer Matrix, LLC Phime 909-243-0668 1S Chr%teomeo Dr.. Ste. 2., Anch AK 99101 Pax: 907-243-1411 Email sahilcu.eci.net AOGCC 9202011 11W PROPOSED ENI ORCEMENI ACTION AGAINST NoNAq ENERGY Do,ka No_OTH 16031032 Page 27 1 COMMISSIONER SEAMOUNT: Okay. That's all I 2 have. Thank you, Mr. Warthen and Mr. Brena. 3 MR. BRENA: Thank you. 4 CHAIRMAN FRENCH: I read the clock as saying 5 10:37. We'll take at least a 12 minute break and be 6 back at say no later than 10:55 a.m. 7 COMMISSIONER FOERSTER: As we go into recess I g notice that there are people in the room whose names 9 are not on the sign -in sheet. If you're one of those 10 people please add your name to the sign -in sheet so 11 that we have a record of all in attendance. 12 CHAIRMAN FRENCH: Thank you, Commissioner 13 Foerster, for that reminder. 14 COMMISSIONER SEAMOUNT: Oh, I..... 15 CHAIRMAN FRENCH: Commissioner Seamount. 16 COMMISSIONER SEAMOUNT: .....had one other 17 question. If the state were to have to do the work 18 would the contracts you have in place, would they 19 apply, could the state use them? 20 MR. WARTHEN: I assume that -- you know, we 21 have master service agreements with these companies so 22 I assume that the state has that opportunity to engage 23 with these companies also..... 24 COMMISSIONER SEAMOUNT: Okay. Thank you. 25 MR. WARTHEN: .....they would be willing to do Computer Mwm. LLC Pk- 907-243-0665 135 Chdtmsmm IX. Ste. 2. Anch. AN 99501 Pax -901-243-1473 Fmeil sWtllew4ci.na AOGC'(' 1 the work 9202011 1IA10. PROPOSFp ENFORCF MINT ACTION AGAINSTRordAq ENERGI' Docket N, 0 1 H 16-011 032 Page 28 2 COMMISSIONER SEAMOUNT: Thank you. 3 CHAIRMAN FRENCH: If nothing else we'll stand 4 in recess. 5 (Off record - 10:41 a.m.) 6 (On record - 10:53 a.m.) 7 CHAIRMAN FRENCH: We'll go back on the record. 8 The first thing I'm going to do is just correct that g while we -- I announced the docket number as OTH 16- 10 031, we have strayed into consideration of docket 11 number OTH 16-032. And so I just want to make sure 12 that folks are alerted to that because we've taken up 13 both Shadura and Tiger Eye here today. That's point 14 one. 15 Point two is, my question for you, Mr. Brena or 16 Mr. Warthen, any one of you can answer these questions, 17 where are you in the process of getting the return of 18 the DR&R bond from DNR and do you have any expectation 19 or any date at which you expect to receive the return 20 of that bond? 21 MR. WARTHEN: No, sir, we have not -- we have 22 not processed that yet. We wanted to get our paperwork 23 in to the Commission before we turned that plug and 24 abandonment documentation over to the DR -- the DOG. 25 CHAIRMAN FRENCH: Thank you. That's -- those Compute Matrix. LLC Phone: 907-243-0668 135Chr tmsm lk_Sic _2-. Anch. AK 99501 Far 907-243-1473 cLne AOGC( 9202017 ❑MO'. PROPOSE))FNFORCE, L"ACIIONAGAINSTNoAAq ENERCN Oo No OT 16-03103? Page 29 1 are my questions. Commissioner Foerster I think has a 2 couple questions. 3 COMMISSIONER FOERSTER: I do. 4 MR. BRENA: We would anticipate that to be a 5 month or two though. I mean..... 6 CHAIRMAN FRENCH: It's 30 to 60 days. Okay. 7 I'll -- thanks. Commissioner Foerster. 8 COMMISSIONER FOERSTER: Yes. First question, 9 did you put any contingency money into your AFE? 10 MR. WARTHEN: Sometimes we put 10 percent in. 11 COMMISSIONER FOERSTER: Did you? 12 MR. WARTHEN: Yes. 13 COMMISSIONER FOERSTER: Okay. Can you 14 demonstrate to us that the contracts that you say are 15 in place are in place? 16 MR. WARTHEN: Well, the only contracts that we 17 have are our master service agreement with All American 18 Oil Field. And then what they do is they subcontract 19 to various vendors in the Kenai area, you know, 20 Halliburton, Pollard Wireline, you know, whomever that 21 we have to use. The contract that we have in place 22 would be with Cardno Entrix which has been fulfilled 23 and that was for the permitting. The other contract 24 would be with Petroleum Engineers and that has been -- 25 that's ongoing from the standpoint that being sure that Compwn Mat-, LLC Phove 901-243-0668 135Ch-rensen R. Sm 2, An<h. A K 99501 Fa 907-243-1493 EmaW sahileagci no AOGCC 9'202019 1 MO', PROPOSEII FN I ORCEMEN I ACTION AGAINST NmdA, P.TERGY Docket No.OT 16-031032 Page 30 1 we use Mr. Hennigan, you know, he's provided the basic 2 documentation for the P&A approval and he will continue 3 to work with the project as the project is commenced 4 and do the plug and abandonment paperwork when it's 5 completed. 6 MR. BRENA: And, Commissioner, there are two 7 affidavits attached to the reconsideration that go to g this issue as well. There's an affidavit of Peter 9 Dickerson who is the president of All American that 10 states that he has contracts or agreements with all the 11 vendors listed on NordAq's authorization for 12 expenditure to plug and abandon Tiger Eye and the same 13 with Shadura. That's paragraph eight of his affidavit. 14 So we have a sworn affidavit by the third party who has 15 the contracts and there is a affidavit of Steven 16 Hennigan concerning -- who's the -- who is with 17 Petroleum Engineers and discusses the engineering work. 18 I've been contracted by NordAq to provide engineering 19 services and interaction efforts for the abandonment of 20 Shadura. So we have affidavits -- two affidavits that 21 go to your question as well. 22 COMMISSIONER FOERSTER: Thank you. Can you 23 demonstrate that you have an approved AFE that will 24 stay in force until the work is done? 25 MR. WARTHEN: That we have an approved AFE? ('ompmn Mmnx. LLC Phonr 90-'43 06bg 115 Chi ocosn Ih.. Sce2_ Anch. AK 99501 F 90]-24}148 Emad sa ldo gci nq AOG(( 9202017 1"NOO PROPOSED ENFORCEMEN I ACIONA GAINS1 NordAq ENERGY Dock, N._011{16-031/032 Computer Ma ,LLC Phone: 907-243-0669 115 Cla steasea Dv., Ste. 2, Anch. AK 99501 Fax 907-243-1473 EmnilsaIa,I1.,e1na Page 31 1 COMMISSIONER FOERSTER: You stated that you 2 have an..... 3 MR. WARTHEN: Yes. Yes. 4 COMMISSIONER FOERSTER: .....approved AFE, can 5 you demonstrate that other than by saying it? 6 MR. WARTHEN: Well, in our company the board of 7 directors approves the AFE and that has been done. g COMMISSIONER FOERSTER: So..... 9 MR. BRENA: If you..... 10 MR. WARTHEN: Are you looking for the actual 11 AFE itself or..... 12 COMMISSIONER FOERSTER: That would be one part. 13 MR. WARTHEN: Yes, we have that. 14 COMMISSIONER FOERSTER: Is that..... 15 MR. WARTHEN: And that we -- I believe we 16 submitted that to the Commission. 17 COMMISSIONER FOERSTER: Okay. 18 MR. WARTHEN: Yes. 19 COMMISSIONER FOERSTER: But then that's one 20 part, but having worked in an industry -- in the 21 industry..... 22 MR. WARTHEN: Right. 23 COMMISSIONER FOERSTER: .....before myself I'm 24 familiar with if you get an approved AFE and then you 25 have a budget cycle and then the budget cycle ends and Computer Ma ,LLC Phone: 907-243-0669 115 Cla steasea Dv., Ste. 2, Anch. AK 99501 Fax 907-243-1473 EmnilsaIa,I1.,e1na AOG(C' 9202017 IWO. PROPOSED ENFORCEMENT ACTION AGAINST NordAq ENERGY Docks No. OTp 16 011 Oil Page 32 1 you start a new budget cycle the AFE goes away. So 2 there's more to the demonstration that the AFE is 3 approved and will remain than simply having the AFE. 4 MR. WARTHEN: Well, we do -- the AFE has been 5 approved within NordAq's management and the funding is 6 in place, you know, for that effort. I guess that's -- 7 that would probably be the only thing -- you know, I g understand where you're coming from, you know, having 9 myself worked for a corporation as to the process, but 10 somewhat different in our organization is that, you 11 know, we build the AFE, we get approval from the board 12 of directors, the board of directors finds the money or 13 designates the money for that particular project and 14 that has been done. 15 MR. BRENA: And it's a small enough company so 16 that the process that you've described that is the -- 17 where you go through sort of an annual capital, you 18 know, we -- that isn't how this company works. This 19 company has an AFE in place and it's authorized the 20 expenditures and set the funds aside. 21 COMMISSIONER FOERSTER: Okay. So you say the 22 funds are in place, the funds have been set aside. So 23 the money to do the work, how is it set aside, 24 characterize that for me? 25 MR. WARTHEN: Bank accounts, cash. Compwer Mavis. LLC Phove.907-243 %68 135 (Tt i R,nsen Dr., Ste 2.. Aaeh_ AK 99501 Pax, 905-243-1413 Fin all'. sahlle( ycinm AOGCC 9 202017 IIMO_ PROPOSED) NI ORCEMENTAC110N AGAINS] NnrdAq ENERGY Decks No.OTII 16-011'01' Page 33 1 COMMISSIONER FOERSTER: So you have a savings 2 account..... 3 MR. WARTHEN: That's correct. 4 COMMISSIONER FOERSTER: .....with this money in 5 it for no other use than for this purpose? 6 MR. WARTHEN: That's correct. 7 COMMISSIONER FOERSTER: And you can demonstrate g that to us? 9 MR. WARTHEN: Yes, we -- yes. 10 UNIDENTIFIED VOICE: We don't have a separate 11 account, but we've got the funds set aside and I can -- 12 I can demonstrate that we have the money in 13 (indiscernible - away from microphone)..... 14 MR. WARTHEN: It's not an account designated 15 with the name on it, Shadura..... 16 COMMISSIONER FOERSTER: Okay. 17 MR. WARTHEN: .....funding, you know, it's a 18 general NordAq account. 19 COMMISSIONER FOERSTER: Okay. 20 MR. BRENA: Well, let me suggest too if it's a 21 requirement of the Commission that it be set up in such 22 an account that it be limited to that use, then we'd be 23 happy to do that just so that we can draw from that 24 account to do the job. 25 COMMISSIONER FOERSTER: Okay. Another question Compute+ Manx, LLC Phone 907-243-0668 135 Chm ensen Dr_ Ste 2-, Anch. AK 99501 Pax'. 907.243.1493 Iimail snh leu,, -e' AOGCC 9202017 ITMO. PROPOSED EN17ORCEMENI AC DON AGAINST NooiA,ENERGY Docket No. OTH 16L311012 Page 34 1 along those lines. Do you have the financial stability 2 to assure that that money will stay there and that 3 means do you have other -- do you have creditors that 4 you haven't paid yet, do you have other projects that 5 will be competing -- do you have a financial future 6 that guarantees that money won't be used someplace 7 else? g MR. BRENA: We will -- if it's a requirement of 9 the Commission we will set that fund aside for that use 10 only and provide those assurances..... 11 COMMISSIONER FOERSTER: Okay. 12 MR. BRENA: .....to the Commission in -- just 13 only subject to the ability to draw down to do that 14 work. 15 COMMISSIONER FOERSTER: And my last question is 16 what if next winter's a bad winter too and you don't 17 get the work -- can't get the work done next winter? 18 MR. BRENA: You know, if there's something 19 that's going to happen that's going to make us do 20 something different than what we're promising you we'll 21 do, we'll know about it ahead of time. So there will 22 be communication. I mean, who knows what the future 23 brings, but we're talking about 10 to 13 days to build 24 the compacted snow road and seven to 10 days, we're 25 talking about less than three weeks worth of work. So Computer Metrix, LLC Phcvc: 907-243-0668 115 Chdaensco Dr., Ste .2., Anch_ AK 99501 Put. 909-243-1493 Emailsa dea goo net 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 9/20/2017 ITMO: PROPOSEDENFORCEM NTACUONAGAINSTNordAq ENERGY Docks No, OTH 16-031/032 Page 35 it would have to be -- so I don't believe we've ever had a winter that hasn't permitted that scope of work to be done. COMMISSIONER FOERSTER: Okay. Those are all my questions. CHAIRMAN FRENCH: Anything else, Commissioner Seamount? COMMISSIONER SEAMOUNT: I have none. CHAIRMAN FRENCH: Mr. Brena, Mr. Warthen, thanks so much for being here. With that we're going to conclude this hearing and we are adjourned. (Hearing adjourned 11:02 a.m.) (END OF REQUESTED PORTION) ComPmw Metrix, LLC Phooe-06 9W-24368 135 Chrislmsrn Dr., Ste. 2., Aach. AK 99501 Fax: 9PF2434473 EmaO: sahi jBdnn AOG('C 9:202017 IWO, PROPOSED ENFORCEMENT ACTION AGAINST NoodA, ENERGY Docket Na. OTH 16 031 032 Page 36 1 C E R T I F I C A T E 2 UNITED STATES OF AMERICA ) )ss 3 STATE OF ALASKA ) 4 I, Salena A. Hile, Notary Public in and for the 5 state of Alaska, residing in Anchorage in said state, 6 do hereby certify that the foregoing matter; Docket 7 No.: OTH 16-031; OTH 16-032 was transcribed to the best 8 of our ability. 9 IN WITNESS WHEREOF I have hereunto set my hand 10 and affixed my seal this 26th day of September 2017. 11 12 Salena A. Hile 13 Notary Public, State of Alaska My Commission Expires: 09/16/2018 14 15 16 17 18 19 20 21 22 23 24 25 Compma Malnx, LLC Ph.ee_ 907243 0668 135 Chnsteosen Dr, Ste 2., Anch. AK 99501 Fax 907-241-1473 Email sahilN4ganel September 11, 2017 Mr. Hollis S. French, Chair Alaska. Oil and Gas Conservation Commission 333 West 7th Avenue, Suite 100 Anchorage, AK 99501 RE: Submittal of 10-404 for P&A— Sundry 317-083 NordAq Energy, LLC Tiger Eye Central (41-24) (PTD No. 212-102, Sundries 313-324,313-239, 313-172, 313-105) Dear Mr. French, RECEIVED SEP 2 0 2011 NordAq Energy, LLC is providing Sundry documentation for the plug and abandonment of the above referenced well. Documentation includes (numbered by electronic order) Form 10-404 Wellbore Diagram Operations Summary Pressure charts Cementing job reports Septic closure cert Pictures of casing cut off and welded plate Pictures of well location area. If you have any questions or require additional information, please contact Stephen Hannigan at (337) 849-5345 or Robert Warthen, SeniorAdvis r, NordAq Energy, LLC at (907) 646-9315. Sincer 0i R bert Warthen Senior Advisor NordAq Energy, LLC Enclosures Cc: Pete Dickinson All American Oilfield Stephen F. Hennigan Petroleum Engineers Consulting Project Engineer for NordAq Energy, LLC STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION REPORT OF SUNDRY WELL OPERATIONS 1. Operations Abandon Plug Perforators Fracture Stimulate Pull Tubing Operations shutdown Performed: Suspend Perforate Other Stimulate After Casing Change Approved Program Plug for Redrill Perforate New Pool Repair Well Re-enter Susp Well Other. 2. Operator 4. Well Class Before Work: 5. Permit to DOI] Number: Name: NordAq Energy, Inc Development Stmtgraphic Exploratory Service 1 212.102 3. Address: 6. API Number: 580 E. 34th St. Anchorage, AK 99503 50-133.20806-00-00 7. Property Designation (Lease Number): and Number: ADL 391104 and Private Fee land ��:=Well Tiger Eye Central (41-24) # 1 9. Loge (List logs and submit electronic and printed date per 20AAC25.071): 10. FlekWool(s): See attached Wildcat W Cook Inlet area 11. Present Well Condition Summary: Total Depth measured 10,750 feet Plugs measured See WBD kat 9u¢ vertical 10,157 feet Junk measured $eg WBD feel Effective Depth measured 0 feet Packer measured See WBD feet various true vertical D feet true vertical See WBD feet Casing Length Size MD TVD Burst Collapse Structural 141 20.00 141 141 no 770 Conductor BOB 13.36 BOB 807 2450 1950 Surface 4,560 9.82 4,580 3,968 5750 3090 Intm/Liner 3.557 7.00 7,945 7,353 7240 5410 Open Hole 0 0.00 10,750 10.157 0 0 Liner Perforation depth Measured depth See WBD feet Various True Vertical depth See WBD feet Tubing (size, grade, measured and true vertical depth) 6.4ppf N80 mold See WBD lockers and SSSV (type, measured and true vertical depth) See WBD 12. Stimulation or cement squeeze summary: Intervals treated (measured): For PBA, see plug summaries on WBD Treatment descriptions including volumes used and final pressure: For PBA., see plug summaries on WBD Prior to well 14. ATHIMMeme tmqu pxr20Mp 25070.25.071, &252891 10. Wes URNS aw WOM: Daily Report of Well Operations Expbrakry Development SaMce Sealgrapho Coples of Logs and Surveys Run 18. Well Statue after work: Oil Gas WDSPL —] Printed and Electronic Fracture Stimulation Data GSTOR WINJ WAG GINJ SUSP SPLUG Authorized Authorized Contact Name: Contact Email: Steget(%0eiin0.COw Contact Phone: (337) 849.5345 Logs Run 1 Tiger Eye 1 BHA 8-22-17 2 Tiger Eye 1 Tbg punchl 8-23-17 2a TIGER EYE 1 TAG1 8-27-17 3 TIGER EYE 1 CIBP1 8-28-17 3a TIGER EYE 1 TAG2 8-28-17 4 Tiger Eye 1 Tbg punch2 8-29-17 5 TIGER EYE 1 CIBP2 8-30-17 5a TIGER EYE 1 TAG3 8-30-17 5b TIGER EYE 1 TAG4 8-30-17 6 Tiger Eye 1 Tbg punch3 8-31-17 7 TIGER EYE 1 CIBP3 9-1-17 8 Tiger Eye 1 Tbg punch4 9-1-17 Final P&A Configuration e • !- Su 317-0 3 Tiger Eye Central #1 er k• 212102 621' FNL, 833' FWL AP R: 50.133-20W5.00-00 Structural Pix Proo. Des: 20" X-56 84 ppf S19 T8N R14W S.M. KB elevation: 30' (21' AGL) MD Top Bottom Latitude: 60A 34' 11,520" NO s 141' Witness: Herarra AW2017 Longitude: 151A 13' 27.868' Conductor Pipe 133/8cmtd to surface Casings ud: 9/21/2012 133/8' K55 e8 ppf TD: 11.21.2012 TOP BOTTOM cut 5' bgl. MD 0 eoe' Co Released; 12-11.2012 1pI4Whebmtkp6swMmadw Plate Completion Rig AAO 111 4n ry e�ywld a gra a sulx2 weldetl. 4/28/13.9118!13 surface cecina resb310go4ica11papfi9B%ggd 0^ 96/8" 480 40 ppt Top Bottom nd Wgl kbad r1107 " pd µ ug3 9/7/2017.08/05!2017 e' 4,560' a1r0sSGel9 ei ' atl81 t' VW ND 0' 3,866' Punch tbg 0 599'-601'. VI Banldl' rywtrJlMt7lpg 75 bbis gel pill In annulus 7" L If aMkhpbwaabalpiglbffi 13 3/8" Set clbp ®230'. Tag, punch 0200.2" L40 29PPt Top Bottom OP1tNM Zs@scamdbwlae Mlx &pump 40sx "G' ®15.8 g. pp MD 4,388' 7,945' 17a P'I�16 Cmt to surface. (Cmrd up tree/wellhead. TVD 3,708' 7,353' Chemical Injection, Tested erratically. Tubina \`., Nipple at 1800- AAD 27/8" L-80 6.4 ppf 2711'TV0 ./114" , Top Bottom control lines to surface. MD 0' 6140' ' TVD 0' 554T CHia I ' '_ . Plu 9/1/2017 ix & pump 450 s) Prem 'G' 0 15.8ppg r' Tieback L.80 29 ppf Max c 54 ottom Top Bottom des regia @ 4.5 b m/350 I WOO. Test t P Ps • MD sort TrzsooP:i-ac �,, 1000 psi/30 min 09/03/2017. CHT 5. ,` DaplAnpkxlpulrpedWmnhaled Spacer a � " utcsgs. Cmtblwout. Ran tbg. Stopped 10yp91011434 bb0 nsrosx Ime s 12.0 ppg WI b3 v \ at 46. Pump 5 bbls 15.8. Cmt to sud w/ 2 bbls pumped. 09/07/2017 'f, bblstaW300axe1511M.tml relums 034stas (,: 't \ sbwal p9rp rate 771.5103 bhh raltesan 6003114bMcDwpi,yandclispkcerfW&M%is--_- ,, - PLUG - 8/30/2017-08/31/2017 mebunpaddug 1632pdhddfa26inandasdoll BP ® 5607', Test CHT 2. Tag& punch ® 5591.3' Io clackuoals.Peurn IJ2bM+md.oms9bpaca 7" Tieba - Est inj rate G 3 bpm G 1012 psi. Mix & pump 2349 Hi I90bbm 0aneMrewrredtocWec9 10.2 bbis 15.8 ppg cvmt. Displ w/ H2O 0 884 psi. WOO. Baker flex Lok Liner H ger = 9 5 Tag TOC 0 5082'. Set eibp 05068'. Test tbg x ann to w/ ZxP Plr and PBR 1600 psi/30 min. CHT 4. Test cibp - CHT 4b. top ®4,389' MD PLUG 1 - 8/2412017-08 27,2017 ; 08/28/2017.08/30/2017 Baker Model D Prod. Packer set at Putsch Tubing 5920.22' 'Tagged 0 5818' 5895' MO 5304' NDEst InJ rate ®3.2 bpm. Mix & Test tbg to 1700 psi - bled back to Baker Model D Prod. Packer pump 15.5 bbls 15.8 ppg Cmt. 1550psi 0 30 min. OK. CHT 1 seta[ 5 ND I - pl w/33.87 bbls H2O. Final ,Test ann 1e09 psi/30 min. OK. CHT 3 Slee e a 078 Sliding Sleeve at 6078' MD "x"Profile at 6090" MD pressure of 851 psi. WOO. Model D Prod. Packer @ 6110' MD 55191 TVD. Wire -line set plug in _ Perforations tubing tail at UPP ONE '•..} 1 4-i8 1737.1786'j'(Q 6137'MD 5546'ND fell out .,c; 2010-2070 18631803' ,• 2280-2310 2035-2054' - - 2974-3020 2501 2535' LFJ ZONE 5379-5429 �„ .-": -6078 5473.5487 I}Celeta 2x awNp PJAA Rwsaa 91rd unae w45oo psi-ac •.. 6195 ` 8195,6204 5604 5613 6304 - 5713 6304 Rn,p W 8ble 3pecw a 125 tan. Pabw w/92.5 Blue lam o . -1-' 7530-592 6938 66990 990 14.5 RTi peYew w/.11.Bbk Tar a 16.8 PRew/r Ireaalbn a rbnden Snown&evanpi le drw w pw Pk9-ne2wout wl4.hau &hoe OEm 4' 0400' 8 na rebaee.lhd b fW/Oul M1e%nul 6 pry w/screw OrNwe p ., - 9.7 A97 Pe „ 7 M1d0 &eVeNONMd-B.1 PP3 in &9.1 Fm 9eledropbla9eWslen pu,rydlepbcwmnl cnasemphp- co:ervad lh8,mve,renl lMkelin9plup drop Thk ell look) �, out RlsM-TesIWWuflwSurlwelArek2900PaJ- &6rM-gepkcetl Plup mcabtl dapaoaKM-Sol O not bort,- Pruned addebnal 6.6 bleb for evrpnssbn&ek.dup q(-Rlnp200M N20Aknd, kk6tarry R *.�' 7811'MD 9006le(1063a1'&•QYR W/QO%CF99;O.SRhaMe- 4�:•ty""yy't::tihh n,d eMpagdd..b"np eelldnApa4anedkll M1eMlWne. ea flsnxreNoll emrerBenoy rekaee rwuan8lod-FtkhWS 7219'TVD 344,&oI6%9VpI00be9Nrry WIo1161FIRG ;;;:::' 1.15Y,4.91.gLLbk•robwedw/E.26 Bble Porn /QO cel 2xnJ Paclar- CLcuale rad, 200 able colnermelac'= 1Q,780'MD .. WWMpleceodaud1140ble Moonwl&Pogl Conant QP*14A0He &m9no0 10,157-TVD 'O n e w/113us Ig91-CNcubM Lap WeYm7/00'-dPa Ie:45 FYr Gbtl T/gM. 9000' Well Name & Number. Tiger Eye Central 81 Leaserl KenalLocip Coun or Pedsh: Kenai Penisula Borough Staia. I Counuirl utsA Perforations (MD): Ped D An le •dKOP and Depth anola 3, Pads venous KOp Date P&A'd September 8, 2017 RKB; RKB; 27' Prepared By: Stephen F. Hannigan Last Revision Dapirl September 11, 2017 NOTE for FILE Regarding NordAq Energy LLC PTD 212 102 Tiger Eye Central (41-24) #1 ADL 391104 612' FNL & 833' FWL Sec 19 8n 14w West Cook Inlet Area Wildcat Original Permit and subsequent Sundry permits had the following API no Permi[ to Dnll API Number lPermItApproval Plate welded on for P&A as noted by Mr. Matt Herrera of the AOGCC, has the incorrect API Nordaq Energy Tiger Eye Central (41-24) # 1 elocWSec 19 On 14w Wildcat (W Coak Inlet area) KPe, Alaska Ser #.: 212102 612'FNL&833'FWL Sec198ni4w 1122' FNL & 787' FEL Sec 24 8n 15w Daily Operations for P&A Sundry 317-083 --------------------------- _-------- — ----------------------- _------------------- ------- Au ust10 2017 Review Sundrq andl�stics._ Travel to west side. _—__—__—__—__—__________-_-_______ —4 ' —' — —' -------------- Aug_ust Offload barges —__— AAO Rstbts worklon H2O Lines - 2) MW, 1) GE, 2)PIES I to Tiger Eye - Got Water Well working w/existing August 12, 2017 pump, TOW Pull BPV w/ GE - 750 PSI on Well - Shuttin, Bleedldn GE Lubricater - No Fluid - Rigtdn Same - Release GE & MW Send PESI Crane Hands to Camp - Install 1" Hose to Waste Management F&cillty & 2" Pipe to Frac Tank PESI "E" Line Unit to Tiger Eye - Will be Ready In Morning Shut(dn for Night Mobilize Pollard Slickline & Mast Truck to Tiger Eye - PJSM - Rig/up Slickline Drive to Cell Range- Cord Call W/ Larry D, Steve H & Ed Hawkins - Drive back to Tiger Eye Tat Lub to 1500 Psi - OK - Tbg Press = -0- Psi - Fluid 0 Surface - RIH w/ Eq Prong to 3471'- Work to 3498' to Equalize plug - Tbg Press went to 900 Psi - Augusl 13, 2017 POOH -Plug is Equalized- RIH w/2 7/8: GS Pulling Tool to 3495', Latch A -Stop POOH w/ Stop - RIH to3496 - Latch Pk/off Plug - POOH - w/ Plug - No element - RIH w/ Braid Brush - POOH Psi now 1000 - RIH w/ GS to 3498 - Latch AD2 Stop - POOH Pk/off Element Inside G Fishing Neck - Tbg Press =1100 Psi - RIH w/2 74/8" Shift Tool to 6081'- Open Xa Sleeve 1150 Psi - R/dn S L - Rig/up E- Line - Unable to get -------- - -- -- ------------- below 90'- No Sudden Stops - Shut /dn f/ Night - — - ---------- -- -- -- — -- --- ---- --- -- -- - — --- -- ------- ---- - — --- - - Travel to Tiger Eye - Cut 200' W ire & Re -head - Cori Call - Decide to Bring SL Oper Back - M/u Ass'bly w/ SL W t Bars RKBTbg Press= 800 Psi -Unable to fight past 73' RKB - 4 Attempts - - POOH - Tbg = 650 Psi - P/u 2.12" LIB - Tbg = 400 Psi - RIH - Setldn 0 50' fight way to 62'- POOH - No Markings on LIB - R/dn E - August 14, 2017 Line - Travel to Glacier f/ S L Unit Retrieve S L Unit - R/u same & Wait on Slick Line Oper & Methanol Finish R/u S L - Tat Lub 2500 Psi - OK - RIH w/ Bull Plug - Slttdn 0 65'- Hand Spang - Tbg = 475 Psi - POOH - RIH WIT Bailer to 23- Hand Spang 3 times - POOH w/ HYDRATES - r/U Pump to Wing - Pump 25 gal - Tbg Press climbed to 2075 Psi - Lay/dn Lub - Secure well - tbg Press dropped to 1100 Psi - ShuUdn for --------------------------- Night --------"--------------------------------------------------- Travel to Tiger Eye - Inspect Well - Tbg = 700 Psi (f/ Guage on Arm w/ Arm, Mid, & L. Mstr Valves Closed) Wflan .Meth Conf Call Plop Meth f/ Plane - Transterlo Test Pump - Rlup S L - SPT Lub 1500 Psi -OK- Open Swab & Press Tbg 10 2000 Psi - RIH wl DD Bailer to 142', Tag & POOH - Tbg = 680 Psi - Pump 1500 August 15, 2017 Patin Lub - Open Swab - Press Tbg to 2000 Psi - RIH w/ 2" x 9" Dump Bailedilled w/ Ice -Melt H2O -Meth to 142W Tool to 159' - POOH -Fluid Dumped - RIH w/ Same&Filled w/ Same to 159'W/Tool to 211' . Tbg = 1300 Psi - POOH - Ad Dumped - RIH w/ 1.5" Stem w/ 1.75: Stem & 1.75" Star Drill to 216'w/ Tool to 250' POOH - RIH w/ Sme to Tool @ 283' - POOH RIH w/ D Bailer w/ lee/H2O/Meth to 2B3 - POOH - No Shear - ----------------------------' Re -run w/added stem & Dumped - POOH R/dn & Secure Tree & Nlte Cap - Shtldn for Night --------------------------------------------------------- ------------ --------------------------------------------- To To Tiger Eye - Cut Wire & Re -Head - Tbg - 1200 Psi - Open Swab - Tbg = 1000 Psi - Press/up Tbg to 1200 Psi - RIH w/ 1.75" Star Drill - Tag ® 291' POOH - Conf Call - Press/up Tbg to 2000 Psi - RIH w/ 2' dd Bailer w/ Ball Bottom - w/ Tool firm Surface to 291' Several times to Circulate Fluid - POOH - Tbg = 3200 Psi - RIH August 16, 2017 w/ 2" Star to 294'w/ Tool - POOH Tbg = 3200 Psi - RIH w/ 2.25" Star - Drill to 308' w/ Tool - POOH - Tbg = 2700 Psi - RIH w/1" Chisel to 358'w/ Tool - POOH Tbg = 1750 Psi - RIH w/ 2" Star to 326'w/ Tool POOH - RIH w/ 2"x9" Dump Bailerw/loe Melt to 326' w/ Tool Fluid Dump POOH - Tbg = 1350 Psi - Press/up Tbg to 2000 Psi - Close All Valves, Ly/dn Lub - Sroure Well for Night ----------------- --------------------------------------------------------------------- Conf Call - Drive to Glacier to P/u Tools f/ Chem Inj Line -Bailer w/ Ice Mlt& Meth to 398w/Tool-POOH - Dump Slurry POOH - Press/up Tbg to 4000 Psi & Pump 8 Gal Meth/dn ini Line As/per Conf Call - Tbg = 2600Psi - Press/up to 4000 Psi - Tbg bid to 26 Psi - Presa/bk/up to 4000 Psi - Tbg bl/bk to 2200 Psi - RIH August 17, 2017 w/1.75 Star Drill to 401'w/ Tool - POOH Bailer w/Ice Mit/Meth to 409'w/ Tool -Dump Slurry - POOH - RIH w/ 2" Bailer w/ Ball Bottom to 409'- Make Several Passes to Stir Slurry - POOH - Conf Call - RIH w/ 2"x9" Dump Bailer w/ Slurry to 409'w/ Tool - POOH Slurry Dumped Pump 10 Gall Meth Dn Inj Line - Ly/dn Lub - Bleed Tbg to 800 Psi As/per Conf Call - Secure Weil for Night --------------------------------------------------------------------------------------- Arrive Tiger Eye - Tbg = 900 Psi (up from 800 Psi last Nite) - Tat Lub - RIH w/ 1.75" Star - 417'- Work to 427' - POOH - RIH w/ 2" DD Bailer w/ Ball - Circulars Slurry (up & Dn) - Conf Call - 1000 Psi on Inj - Press/up to August 18, 2017 3000 Psi till broke & Pump 30 Gal Meth - Shut/in (no material f/ guage -will order - RIH w/ W/ Bailer & Dump Meth/Ice Mlt do to 42B' - 12381 Move Slick Line Unit & Crane to Glacier -Jockey Hands to Hilcorp Camp & Putton Plane as/per Pollard & AAO orders Unload 1) Bbl Meth from Plane. -------.. —..—..—..—..—.--.. —..—.. —.-_.. —.--..--. —.--.. —.. —.. —.. —..—..—..—..—..—..—.. —.. August 19, 2017 Checkton Tiger Location throughout day - All Secure - Tbg = 800 Psi - Loaded & Spread Soil on Road xing of H2O Hose to "La Latrine" -.'—..—..—.'—..—..-----------------------------------------------------.--------' ---- Mac to Tiger Eye - Secure & deserted - Not here w/ E -Line Unit, yet - P/u 1 PESI, 2)AAO, & 1) Hot Rod Tool Hand @ Air Strip - To Camp & to Tiger Eye - R/u E -Line & Gen - P/up Hot Rod & Test - OK - Test Lub - OK - RIH w/ Hot Rod Tag T/hydrates @ 435' - Work w/ Hot Rod (tool working good 290 Deg F) to 453.5 @ Conf August 20, 2017 Call @ 16:00 Hrs It was decided that we Work 2) Shifts - Swapped hands w/ town @ 19:30 - Continue Matt Hydrates w/ Hot Rod on E -tine (24' total ft. Ice melted 459' depth) POOH. w/ hot rod and add 5'x1.68" weight bar. Test tools on surface. RIH and continue w/ hot rod. Well is jugged tight w/ ice plug. Tubing pressure Fluctuates with line displacement. Continue w/ hot rod trying different methods (spudding and/or sitting on ice). Depth = 470'. (35' total ft.) --------------------------------------------------------------------------------------- Continued wireline work with hot rod. (depth= 47V/ 525psi -tubing). Tool set down high after teachings depth of 483', worked tool back down to 487'. POOH to run dump bailer w/ ice melt. OOH. Bled gas cap off and then fluid io 200 psi. RIH w/ 10'x2" OD dump bailer w/ 1.5 gal. of dryIce melt. Bailer set down at 4135', dumped ice melt, worked tool to 489', POOH. OOH, bled off gas cap w/ well open, all gas. Shut in well and August 21, 2017 prep hot rod, Pump down CIM 3 gal. RIH W hot rod and tag ice at 501.5'. Continue with hot rod, occassionally tagging sidewall ice. Pump methanol down tubing It 050 psi). POOH w/ hot rod, last tag = 542'. Load up dump bailer w/ ice melt, RIH and tag at 537', dump salt, work tool, no progress, POOH. MU hot rod, RIH and tag at 540', work tool progressively sitting at one spot for 30-45 min. then spudding up and down. 577' @ 06:00 to 2075 Psi - Lay/dn Lub - Secure well - tbg Press dropped to 1100 Psi - Shut/dn for Night ..--..—.....—.. -----------------------------------.----..-------..--------------------- Continue w/ wireline hot rod. POOH w/ hot rod and change out to 2" dump bailer. MU bailer and load w/ ice melt. RIH and dump at 580'.POOH. OOH. MU hot rod, RIH, (579)start heating process. (1100 psi tubing). At depth 598', pumped 15 gal. methanol down CIM. Check valve apparently not working (I500psi on CIM). August 22, 2017 Tubing rose to 1350 psi after pumping on CIM. POOH. OOH. RD wireline off tree. Cap tree and RU test pump. PT to 4000 psi. Pressure dropped off to 1720 psi after 15 min. No change on CIM. PT on CIM to check communication. Rehead wireline and add grease tube. MU bailer and load w/ ice mel. RIH and dump at 600'.POOH. OOH. Change out to hot rod. Set down at 605.e- While in the 'hole fit to 2000 psi and pressure drops off in 2 min. finished heating at 637'. POOH. OOH. W10 orders. --------------------------------------------------------------------------------------- RD hot rod. MU dump bailer wf ice melt and RIH. Tagged at 632' dumped and worked tool. POOH. MU tool string w/ 1.318" x 7' wt. bar, hot rod, RIH, tag ice at 634' (1275 psi). Hot rod burned through ice at 662' (1750 August 23, 2017 psi) @ 14:20. Tool set down again at 106T worked tool for 30 min. and then broke thru and fell free to 2150'. POOH. Conference call to town and MU 2.25' gauge ring and CCL. RIH w/ 2.25" gauge ring to 6205' PBTD. (1950 psi tubing). Logged BHA w/ CCL. POOH. Shut down for night. -------------- -----..----..--------.--- _. --..—.. —..—.. -------------------------.. —..—.. Hold PJSM and RU to perforate w/ tubing puncher. PT lubricator to 2500 psi and attend conference call. (1950 psi tubing). RIH w/ 1.11116" x 2' tubing puncher gun loaded with 10 shots. Correlate gun to BHA CCL August 24, 2017 log on 8.22.17. Log into position and set gun to shoot at 5920'-5922'. Fre gun .(Tubing 1925 psi), no annular change in pressure. 13:30 POCH. RD E -line. Mov a to Camp - Pk/up 3) E -Line Crew & 1) Safety Man to Air Strip Wait/on Haliburton --------------------------------------------------------------------------------------- August 25, 2017 Travel to Tiger Eye - Meet Ryan (Halco's Cementer) - He Stated that They would be ready for our Job @ +/- 15:00 Hrs But only if they were released (by Glacier) Wait/on Haliburton --------------------------------------------------------------------------------------- To Tiger Eye - No Haliburton - Scuttlebutt = Glacier, as/per "Armanda" & Conrad Perry will not release Haliburton crew for +/- 4) days Conference Call: Discuss situation & decide that Steve H will call Conrad, Larry D will call Halib urton & Larry Mac will call State Inspector Call Matt Herrera (St. Insp) & postpone his Flight to Kenai, Call from LarryD: Will start Cmt Job w/ Haliburton Sat, 26th (thanks to Mr Hannigan) - Called August 26, 2017 Inspector back & setlupSat AM Flight to Kenai. Anyhway,after he was Contac ted, he is going to Glacier first & hoprfully ujs Sun for Tag of Plug #1 Septic Destruction complete. (Thanks to Kevin Reed's Expertise) - Tank was full of Clean H2O w/ 4" Sludge - Tank destroyed wl top off & bottom tore open - Pumped tp Leach Field, Limed & Bk -Filled (Kevin has separate report) Haliburton was going to Rig/up on Well @ +1. 20:00 --------------------------------------------------------------------------------- His, but never Showed. Will Start @ 06:00 Sat. Thg =1900 Psi Wait/on Halliburton PJSM & R/up on Well - Tbg =1900 Psi Press Tat Surf Lines 3500 Psi - OK -Open Well & Est Inj Rate - 3.2 Bpm 0 1960 Psi - 2850 Psi - Mx & Pump 15.5 Bbls Cmt to Slurry Wt of 15.8 Ppg & Follow w/ 33.87 Bbls H2O Displacement - Calc'd T/Cmt = 5850' CIP 09:48 His Shutfin Wellhead Pressure = August 27, 2017 3222 Psi Wsfdup & Rigldn Halliburton - Release Same - They will E -Mail Me Charts & I'll Forward them General Pad Clean/up & Maintenance - Matt Herrera (AGCC Insp) Went Home - Said to Report Tag & PT,etc. to Jim Regg, Sunday. ------------------------------------------------------------------------- To Tiger Eye - W aitlon PESI E -Line Unit Rig/up E -Line - Tbg = 600 Psi - Bleed /dn to 0 Psi - Press Tat Wb to 1500 Psi - RIH w/ 2.25" Guage Ring/ CCL Ass'bly to T/Cmt Tag @ 5618' MD /RKB ( 232' Above Calculated) - Log/up & RIH & Re -tag X 5 - POOH R/up to Press Test Tbg w/ Chart Recorder - Unable to get August 28, 2017 Good Press Test - Full 10 Min ® 1500 Psi & Then would Meed down to 1400 Psi by 15 Min & would continue to Bleed. Press Tested to 2000 Psi & Bled/dn 1900 Psi in 13 Min 1800 Psi in 30 Min. - Decide to Shut/dn for Night & Report to AOGCC Mon Morning. --------------------------------------------------------------------------------------- To Tiger Eye - E -Line Am 09:15 - Attempt Pump/dn Inj Line - 40DO Psi - Bid/to 2000 Psi - No Pump - R/u PT T/Cmt - Many Attempts - 1700 Psi Bid to 1490 Psi in 30 Min - Accepted. CHT 1. RIH w/ E -Line to Re -tag & Brush - Tag T/Cmt @ 5617.5'- Re -tat 1700 Psi f/ 30 Min Bldho 1480 Psi & Stabilized - OK'd - Brush Tbg August 29, 2017 above Cmt - POOH - RIH w/ CIBP - Re -tag Cmt 0 Same & Set CIBP @ 5607"- POOH - PT Tbg & CIBP to 1700 Psi - Held solid for 30 Min - Good Test - CHT 2. R/dn Tdt Eq & E -line - Shut/dn f/ Night - E-Uners have many hours. ... —..—.--.....—. —..—..—..—..—..----..—..—..—..—..—.--..------------------------------ To Tiger Eye - PJSM - Riglup to PT 2 7/8" X 7" Ann - - Test 1600 Psi for 30 Min - Held 1600 Psi - Good Test -CHT 3. R/u E Une - P T Lub 250(Psi - OK - Conf. Call - M/u 10 Shot 1 9/16" RTG - RIH - Tag CIBP 0 5607' - Pull Tie/in Log - Re-RIH to CIBP - Log & Locate - Put 200 Psi on Tbg - Pert Tbg f/ 5590.7' to 5593' - August 30, 2017 POOH - Rldn Pollard E -Line R/u Halliburton to Pumprdn Tbg & Take Returns f/ 2 71W Ann - PT Surface Lines - Est Inj Rate of 3 BPM 0 1012 Psi - 6 bbis in Caught Circ - Pump 10 Bbls H2O - Mix & Pump 10.2 BBIs Cmt to a SlurryW t of 15.8 Ppg & Disp w/ 2 Bpm 0 884 Psi w/ 30.7 Bbls H2O - CIP = 14:18 Hrs - Caldd T/Cmt = 5298'- Length of Plug = 292.26' - Rig/dn Haliburton General Clean/up & Maintainan a of Pad To Tiger Eye - Work%n Tiger Eye #2 Conducter Casing - Whilst WOO & Cent Call 0 08:00 to 08:30 - Discuss new plan of Action for Tiger Eye #1 - Cut/oft #2 Conductor @ 5.5' BGL & Fill w/ Pad Gravel, Weld/install Top Metal Plate E -Line Rigged/up Whilst WOO - RIH w GR Ass'bly & Tag T/Cmt @ 5084.2' - August 31, 2017 Pull Tie/in Log & Tag T/Cmt 5081.2 X 4 - POOH - Stu & PT 2 7/8" X 7" Ann to 1600 Psi for 30 Min w/ Chart - CHT 4 RIH w/ Brush Ass'bly - Re -Tag T/Cmt 0 5082'- Pull Tie/tn Log & BrushrOtag f/ 15 Min POOH - M/u 2.16" CIBP - RIH - Log Into Position & Set CIBP ® 5067.6'- POOH - FIN to PT CIBP & Test Sameto 1600 Pat for 30 Min & Charted - Good Test - CHT 4b Rigldn ShuUdn for Night ---------------- --------------------------------------------------------------------- TGSM - R/u to PT Chem Inj Line - Cunt Call - Chem Inj Line failed Tat & is Taking Fluid. 7" x 9 5/8" annulus test- PT HI Press & Lo Press lines - Staged Pumps it 0.5 Bpm to 5 Bpm - @ 5 Bpm Max Press = 240 Psi - September 1, 2017 135 Bbis Fluid Pumped Total. R/u & Hand/pump w/ Pollard 4) Gal HES Cmt Down Chem Inj Une w/ 3000 Psi on it Flu E -Line PT Lub - RIH w/ 4"X 1.44" OD Guns & CCL - Stop & 650' PUH to 580'- RBIH & Standby for Orders f/ Town - Receive Orders to Continue - Log into Position & Fire Shots f/ 598.7' to 601' POOH - Rigldn - Shutldn f/ Night Secure Well & Location September 2, 2017 -------------- September 3, 2017 -------------- September 4, 2017 September 5, 2017 September 6, 2017 -------------- September 7.8017 to Tiger Eye - R/u to PT Chem Inj Line - Will not test • Will give Special Cmt another 24 Hrs - R/u E Line - PT Lub - RIH w/ 4" X 1.44' Setting Tool & CIBP & CCL - Conf Call - Log Into Position & Set CIBP @ 230' PUH to 185; RBIH & Tag CIBT At 230'- POOH - Wu 10 Shot 19/16" RTG - RIH w/ Pert Ass'bly - Tag CIBP 0 230' - Log Into Position & perf"d from 200' to 2023- POOH & Rigldn- R/u HES - Circ 2 718" Ann Thru Perfs Shot 0 21X1' - 202.2 to Clear Gel - Mixed & Pumped 450 SX Prem "G" 0 15.8 Ppg - 0 4.5 Bpm & 315 Psi do 9 5/8"X 7" Ann • Shuttin 0250 Psi -Pumped 1 Bbl H2O to Clean Wellbore Pumped/dn 2 7/8" X 7" Ann 40 Sx Prem "G" @ 15.8 Ppg - 2 Bible good Chit to Surface - CIP = 12.00 Hrs Prep Pad f/ Move - Start Bli-fill os Conductor on #2 - Brk/dn Pipeline to H2O Well _ "fo Tiger Eye -PJSM • Rlu to PT Chem I Line • Good Tst 1700 Psi f% 30 Min - Conf Call - CHT 6. Whilst WOC, Rlu To Tag TOC - PT Lub RIH -Tag TOC ® T/Swab Valve & Pollard XO -CEMENT TO SURFACE & Tree Cmt d / up • R/dn Lub, etc. FIN to Ann's whilst move Crane to H2O Well - Pump/into 7" X 9 5/8: Ann - NO Press - 2 7/8" X 7" Ann Jumps/up to as HI as 2500, R/u HES on 7" X 9 5/8" Ann - Use Pump System that will only buck Press to 135 Psi & then brought HT 400's on - results: w/ 4.5 Bbls pumped - Press = 1012 Psi (Equals +/-156' in Ann - CHT 5. Pollard's Air Pump just wasn't filling the Void- HES Strongly recommended to not Re-tst 2 7/8" X 7" Ann till Sunday AM as Chu in Tree is Very Green & to use Air Pump ForTests --------------------------------------------------------- To Tiger Eye - PJSM - Rlu to PT 2 7/8" Tbg to 1500 Psi f/ 30 Min w/ Pollard - Test Failed - Multipe Times. R/u to PT 2 7/8" X 7' Ann to 1500 Psi f/ 30 Min - Test Failed Multiple Times - Communication Established between Tbg & Ann Conf Call - Decide that Prior Day's PT by HES of T' X 9 516" Ann to (1000 Psi t/ 31 Min) good w/ 10% Bleed Test w/ HES ( w/ AAO's Chart - 3). Calls to Larry Driskill from AAO/Pollard/HES During Testing: 2 7/8"30 Min, 2 7/8' 30 Min, 2 7/8"X T'1.5 Hr, 2 7/9'1.6 Hr. Nipple/dnSwab Valve from Tree - "SOLID CEMENT" INC Wing - Snapshots of Tgest Charts E -Mailed to Larry & Steve NOTE: All Testing wl HES with no more than 1 % of Blot of fluid pumped with each test To Tiger Eye - RAr to PT 2 7/8" Tbg w/ Pollard - Woufd/not hold Test - HES told to PT 2 7/8" X 7" to 3000 Psi & Chart for 1.5 Hrs It Bled to +/- 500 Psi & never Stabilized - Conf Call - PT Tree to Btm Master - OK - SteveHennigan Located Mr Quick wl AOGCC & Presented Our Position Eloquently & He Gave us the "go ahead" w/ Plan to Cuttoff Tree - Hoorah! - Remove Wing Valve f/ Tree & Ready for Crane Hookup R/dn Pollard E -Line & HES - General Clean/up Around WH Area - Excavate Around Tree, Except Crane Area - Pull Cellar w/ Crane & Loader - Continue Excavation Around Tree/Wellhead - Ready for the Torch - Shutldn for Night ------------------------------------------------------------------------ To Tiger Eye - PJSM • Whilst Enlarging Space Around Tree, Cut Water Well Csg 3' BGL - Cut Wellhead Off using Torch - Supported Same w/ Pollard Crane & Recovered from Pit. 2 7/8" Tbg = Solid Cmt, 2 718" 000000x 7" Ann = Solid Cmt -T X 9 518" = Fluid -Tbg =7" = Collar (making access to Ann veryComped for T/job) - Fill Water Well w/ Plug Product & also on outside Csg below Top Soil & Gravel Meet Plane from Kenai w/ Supplies - Barge postponed till Wed AM - Ready for AOGCC Inspection - Have Photos right - Clesr 4) Trees off/road to Tiger Eye -Location Flooded -Wellhead Pit Sloughedlin &had 3172 Stomy N Ft Rainwater Above Csg Srump - Pump Water & Build Berm Around Pit Run Coiled 412" Copper Tubing Dn 7'ID 51e" ATm - Shcid Stop ® 45'_ RAr MES & to Copper Tubing -Boost t) fBbil"200 20 Psi - Mix & Pump 5) Bbls Cmt to 15.8 Ppg - Pump @ 56 Psi - Cmt to Surface after 2) Bbls Pumped 0 15:30 Hrs Rig/dn HES & __AAO_- Shutldn for Night--------------------•---------------------------------- To Tiger Eye - Cmt in 7" X 9 5/8" Ann Dropped (or drooped) Up to 21" on only 1/2 of the Circle "A Crescent" thu the night. Called it in & took Photos - Wait/on Mr Matt Herrera of AOGCC's Arrival Mr Herrera OK'd September 8, 2017 Plug w/ addition of 21" Patch Job - Escorted Said Inspector to Glacier Property, Where He Blessed Similar loons - Escorted Mr Herrera to Camp, where He caught a Plane to Kenai (along w/ 2) HES Hands) Began Clean/up of Tanks, & Bk(fiIling & Taxiing of WBI Trailers f/ Barge Landing to Location - Planning on 2) Barges Sat, Sept 91h @ 06:00 & 17:00 Hrs September 9, 2017 September 10, 2017 Load Trailers w/Driver & Haul Same to Barge Landing & General Clean/up of Tiger Eye Pad. All Looks Neat w/ the Exception of CIE / Glacier / HES 's Matter Stored on Samel I —' Barge #1 - Loaded w/ W bi Trailers Listed on Last Report w/ All AAO Eq & Rentals !no. Case Loader Barge#2 - Loaded w/ WBI Trir # 38.203 w/ HES Misc, 1) HES Pump Unit, 1) Cmt Pod Unit, 1) HES P/u, 1) Pollar E - Line Unit, 1) Pollard P/u, & 1) WBI Winch Truck - Shoved/off ® 19:50 His Chart Index Descriptions 5a CHT 1 5b CHT 2 5c CHT 3 5d CHT 4 sdx CHT 4b 5e CHT 5 5f CHT 6 5g CHT 7 /o l r r r r ----- ( H7 f k z i �.- i f r; I - Zps�i'1... I a yb .� Gr/?' % Halco and other Reports 6a PJR - V1- Tiger Eye Central 1 Tubing Job #1 - Perfs 6b PJR - V1- Tiger Eye Central 1 Tubing Job #2 Balanced plug deep 6c PJR - V1- Tiger Eye Central 1 Viscous Pill and Surface Cement 6d PJR - V1- Tiger Eye Central 1 Viscous Pill, OA Abandonment and Surface Cement 6e PJR - VS - Tiger Eye Central 1 Top Out 7 Nordaq Tiger Eye Septic Closure Record Drawing Elam Service NORDAQ ENERGY INC - EBUS United States of America For: Pete Dickinson Date: Wednesday, September 13t° 2017 Tubing Plug #1 Job Date: Saturday, August 26t°, 2017 Sincerely, savannah Afoa LCi'_<il f`�t111C� Warning Disclaimer Although the information contained in this report is based on sound engineering practices, the copyright owner(s) does (do) not accept any responsibility whatsoever, in negligence or otherwise, for any loss or damage arising from the possession or use of the report whether in terms of correctness or otherwise. The application, therefore, by the user of this report or any part thereof, is solely at the user's own risk. t iniiiaiions of) lability Except as expressly set forth herein, there are no representations or warranties by Halliburton, express or implied, including implied warranties of merchantability and/or fitness for a particular purpose. In no event will Halliburton or its suppliers be liable for consequential, incidental, special, punitive or exemplary damages (including, without limitation, loss of data, profits, use of hardware, or software). Customer accepts full responsibility for any investment made based on results from the Software. Any interpretations, analyses or modeling of any data, including, but not limited to Customer data, and any recommendation or decisions based upon such interpretations, analyses or modeling are opinions based upon inferences from measurements and empirical relationships and assumptions, which inferences and assumptions are not infallible, and with respect to which professional may differ. Accordingly, Halliburton cannot and does not warrant the accuracy, correctness or completeness of any such interpretation, recommendation, modeling or other products of the Software Product. As such, any interpretation, recommendation or modeling resulting from the Software for the purpose of any drilling, well treaunent, production or financial decision will be at the sole risk of Customer. Under no circumstances will Halliburton or its suppliers be liable for any damages. HALLIBURTON Table of Consents Page 3 Customer: Nordaq Tiger Eye 1 Tubing Plug #1 ............................. 4 ............................ 5 iCerrService (v. 4.2.393) Created: Wednesday, May 101° 2017 HALLIBURTON Customer: Nordaq Tiger Eye 1 Tubing Plug #1 Mr. Dickinson, Halliburton appreciates the opportunity to perform the cementing services on Tiger Eye Central 1. A pre job safety meeting was held where details of the job were discussed and potential safety hazards were reviewed. At 07:00 on August 25", Halliburton cement arrived on location and had a pre job safety meeting. Following the meeting the crew began preparing the mix water for the cementjob. At 08:59, the cement unit came online for a low pressure test to 337 psi and a high pressure test to 3717 psi. Both tests were successful so pressure was bled off. At 09:10, HAL broke circulation at 2300 psi, after which the pressure fell to 1900 psi at 3 bpm. An injection test was then performed with 20.7 bbl at 3 bpm and 1900 psi, and 6 bbl at 0.7 psi bpm. Cement was then pumped for a total of 36.5 bbl at 15.8 ppg and 3.1 bpm, followed by 33.8 bbl of water displacement pumped at 3 bpm. Displacement pressure was 3071 psi and the well was shut in at 3222 psi. Cement was in place at 09:52, and HAL left location at 11:00 Halliburton maintains a continuous quality improvement process and appreciates any comments or suggestions that you may have. Halliburton Energy Services again thanks you for the opportunity to perform services work on this well. We hope to be your solutions provider for future projects. Thank You, Savannah Afoa Technical Professional — Cement and Casing Equipment 6900 Arctic Blvd. Anchorage, AK 99518 Email' �a�.n ,,sh �fm�ibhalliburtun.com Mobile: +1907-223-9423 Office: +1907-273-3568 "dJe.:iy;n and Drdiver Depmrdoble Harricrr Tailored to 114ininei,-v Maly twd fl&virnite Productien" (v. 4.2.393) Created: Wednesday, May 10', 2017 Page 4 HAL LI S U RTO N Customer: Nordaq Tiger Eye 1 Tubing Plug #1 .J 1=ral 2.1 Job Event Lag Type seq. Activity Graph label Date Time Source Pspump DH Comb Comb Comments No. Press Density Pump Pump Total Rate (psi) (PP9) (bb(7min) (bbll Event 1 Start Job StartJob 8/26/2017 08:58:45 COMS -1.00 858 0.00 0.00 Pressure testing low pt 337psi, Event 2 Pressure Test Pressure Test 8/26/2017 08:5955 USER 317.00 8.58 0.00 0.20 High pt 3717 Injection test well broke over at 2300 psi, dropped to Event 3 Injection Test Injection Test 8/26/2017 09:10:15 USER 1918.00 8.19 0.00 0.30 1900 psi 3 bpm, pumped 20.7 bbl bpm 1900 psi, 6 bbl Injection at.7 bpm, Pumped 15.4 bbl 15.8 ppgcement Event 4 Pump Cement Pump Cement 8/26/2017 09:31:36 USER 855.00 15.d9 1.90 29.10 3bpm, 938 psi Pumped 33.8 bbl fresh water displacement, 3 bpm Event 5 Pump Displacement Pump Displacement 8/26/2017 09:36:34 USER 700.00 13.62 3.20 44.40 3071 psi, shut in well with 3222 psi, cement in place 09:52 Event 6 Shutdown Shutdown 8/26/2017 09:47:18 USER 3264.00 8.30 3.20 78.50 Event 7 End Job End Job 8/26/2017 09:51:08 COMS 8.0D 8.19 0.00 7880 Page 5 iCem" Service (v. 4.2.393) Created: Wednesday, May SO'", 2017 HALLIBURTION 3.1 Jab Chs Custom Resutts Customer: Nordaq Tiger Eye I Tubing Plug #1 OrMa Owwo Ow" iCemService (V. 4.2.393) Page 6 Created: Wednesday, May 101°, 2017 iCem Service NORDAQ ENERGY INC - EBUS United States of America For: Pete Dickinson Date: Tuesday, August W, 2017 Plug #2 Job Date: Wednesday, August 30�, 2017 Sincerely, Savannah Afoa Warning Disclaimer Although the information contained in this report is based on sound engineering practices, the copyright owner(s) does (do) not accept any responsibility whatsoever, in negligence or otherwise, for any loss or damage arising from the possession or use of the report whether in terms of correctness or otherwise. The application, therefore, by the user of this report or any part thereof, is solely at the user's own risk. Limitations ofhabilil:y Except as expressly set forth herein, there are no representations or warranties by Halliburton, express or implied, including implied warranties of merchantability and/or fitness for a particular purpose. In no event will Halliburton or its suppliers be liable for consequential, incidental, special, punitive or exemplary damages (including, without limitation, loss of data, profits, use of hardware, or software). Customer accepts full responsibility for any investment made based on results from the Software. Any interpretations, analyses or modeling of any data, including, but not limited to Customer data, and any recommendation or decisions based upon such interpretations, analyses or modeling are opinions based upon inferences from measurements and empirical relationships and assumptions, which inferences and assumptions are not infallible, and with respect to which professional may differ. Accordingly, Halliburton cannot and does not warrant the accuracy, correctness or completeness of any such interpretation, recommendation, modeling or other products of the Software Product. As such, any interpretation, recommendation or modeling resulting from the Software for the purpose of any drilling, well treatment, production or financial decision will be at the sole risk of Customer. Under no circumstances will Halliburton or its suppliers be liable for any damages. HALLIBURTION Table of Contents 1.0 EXeCUOVC SM11111"IN 2.0 Rea! -Time 10) SUIIIII[ktfti ........ ..... ... ... 2.1 Job Event Log .................. ..... . .... .......... ... ......... ....... 3,0 Attachilloilts .. .. .... .. 3.1 Job Chart ................................................ ................ I ....... I. ........ Page 3 Customer: Nordaq Tiger Eye Central 1 Tubing Plug #2 .....................................................9 I .... ... I ..... . .... 1.-1... 6 Cerri' Service (v. 4.2.393) Created: Wednesday, May 10", 2017 HALLIBURTON Customer: Nordaq Tiger Eye Central 1 Tubing Plug #2 Mr, Dickinson, Halliburton appreciates the opportunity to perform the cementing services on Tiger Eye Central 1. On August 29`", a pre -job safety meeting was held where details of thejob were discussed and potential safety hazards were reviewed. At 07:30 the Halliburton cement crew began loading the bulk truck with cement for the second cement plug. Rig -up began at 11:00, at which time the mix water was prepared. The cement job began at 13:10 with a low pressure test to 550 psi to test the iron following by a high pressure test to 3070 psi. Both tests were successful and pressure was filed off. An injection test was them perfomed, after which cement was batch mixed. At 13:52 the cement was ready and HAL began pumping cement down hole. The total volume pumped was 10.2 bbl at 2 bpm with 331 psi. Mix water used was 278 gallons. Cement was followed with 30.7 bbl of displacement pumped at 2 bpm. Job pressure was 884 psi. The job was completed at 14:17. Halliburton maintains a continuous quality improvement process and appreciates any comments or suggestions that you may have. Halliburton Energy Services again thanks you for the opportunity to perform services work on this well. We hope to be your solutions provider for future projects. Thank You, Savannah Afoa Technical Professional — Cement and Casing Equipment 6900 Arctic Blvd. Anchorage, AK 99518 Email: savinnah albaCwhaliiburon.com Mobile: +1907-223-9423 Office: +l 907-273-3568 "be.sig, all,/ Defrrer Dependable Bol rierr 'I oilured lu 3linimice Risk and Alaxillihe AOdilcdnrr" r.. (v. 4.2.393) Created: Wednesday, May 30°, 2017 Page 4 HALLIBURTON Customer: Nordaq Tiger Eye Central 1 Tubing Plug #2 2.1 Job Event Log Type Seq. Activit Graph label Date Time Source PS Pump DHI Comb Comb Comments No. Press Density Pump Pump Total Rate (pd) (PWJ) (bbl/mia) (bbl) Event 1 StartJob Start Job 8/29/2017 13:10:36 COMS 5.00 8.53 0.00 0.00 Event 2 Pressure Up Pressure Up 8/29/2017 13:24:05 USER 19.00 8.46 0.30 0.10 Pressure testing iron, Low Pt 550 Hlgh Pt 3070 psi, Injection test, pumped 10 bbl injection test, .5 bpm 177 psi,1 bpm 249 psi, 1.5 bpm 435 psi, 2 bpm Event 3 Injection Rate Injection Rate 8/29/2017 13:37:14 USER 143.00 8.56 0.40 0.20 650 psi, 2.5 bpm 848 psi, 3 bpm 1012 psi, Caught returns and 6.3 bbl pumped, Event 4 Shutdown Shutdown 8/29/2017 13:43:37 USER 320.00 8.27 0.00 10.20 Event 5 Other Batching Cement 8/29/2017 13:46:51 USER 288.00 8.10 0.00 10.20 Batch 15,8 ppg cement, Mixed and pumped 10.2 bbl Event 6 Pump Cement PumpCement 8/29/2017 1351:40 USER 346.00 8.15 1.00 10.30 15.8 ppg cement, 2 bpm, 331 psi, 278 gallons mix water used Pumped 30.7 bbl Event 7 Pump Displacement Pump Displacement 8/29/2017 13:58:26 USER 254.00 11.77 1.90 21.50 displacement, 2 bpm, 884psi Event 8 Shutdown Shutdown 8/29/2017 14:14:37 USER 791.00 8.27 0.70 52.30 Event 9 End Job EndJob 8/29/2017 14:17:59 COM5 99.00 8.23 0.00 52.30 Page 5 iCem Service (v. 4.2.393) Created: Wednesday, May 10", 2017 HALLIBURTON customer: Nordaq Tiger Eye Central 1 Tubing Plug #2 -�i±achi��cliir- 3.1 fob Chmt Custom Results o a o o a r7, o Page 6 >3 » IMAO �JfCfddO:x; Pj D,.r 2,am W,-''FNmm'i(Fgi; ikT:"— Pats l?eknx.i CC'abiur¢ICSIi�bi: iCem Service (v. 0.2393) Created: Wednesday, May le, 2017 a iCem Service NORDAQ ENERGY INC - EBUS United States of America For: Pete Dickinson Date: Wednesday, September 13'h 2037 Surface Plug Job Date: Friday, September 1", 2017 Sincerely, Savannah Afoa Warnim; Disclaimer Although the information contained in this report is based on sound engineering practices, the copyright owner(s) does (do) not accept any responsibility whatsoever, in negligence or otherwise, for any loss or damage arising from the possession or use of the report whether in terms of correctness or otherwise. The application, therefore, by the user of this report or any part thereof, is solely at the user's own risk. Limitation; of Liability Except as expressly set forth herein, there are no representations or warranties by Halliburton, express or implied, including implied warranties of merchantability and/or fitness for a particular purpose. In no event will Halliburton or its suppliers be liable for consequential, incidental, special, punitive or exemplary damages (including, without limitation, loss of data, profits, use of hardware, or software). Customer accepts full responsibility for any investment made based on results from the Software. Any interpretations, analyses or modeling of any data, including, but not limited to Customer data, and any recommendation or decisions based upon such interpretations, analyses or modeling are opinions based upon inferences from measurements and empirical relationships and assumptions, which inferences and assumptions are not infallible, and with respect to which professional may differ. Accordingly, Halliburton cannot and does not warrant the accuracy, correctness or completeness of any such interpretation, recommendation, modeling or other products of the Software Product. As such, any interpretation, recommendation or modeling resulting from the Software for the purpose of any drilling, well treatment, production or financial decision will be at the sole risk of Customer. Under no circumstances will Halliburton or its suppliers be liable for any damages. HALLIBURTION tustomecNo,daq Tiger Eye 1Surface Plug -[�Q(V[(�oO|tO[-� |/> [x�Cu|hCtumm^ry-.---.-.-......-~------^-,.--~--'----.------.-'4 2.0 kcu|-Tioir]"h�mnMmy....... ..... ...... .............. ............... ...... ........................ .................... ---... --� � oxws�nuw.~.-'.~.~.^-^^~^~-~~~-'~~~~~~-~.~~'-^—~^^`~--~~~~~~~^~~^-~~-'---^-^----~' ) /\!/uck/oouu............. --.... -.... ......... -....... ... ---....... .... ....... -'.... ....... .... -..... ----7 iCe°ServiCe pages Created: Wednesday, May Id h 2017 HAL LIBUATON Mr. Dickinson, Customer: Nordaq Tiger Eye 1 Surface Plug Halliburton appreciates the opportunity to perform the cementing services on Tiger Eye Central 1. A pre -job safety meeting was held where details of the job were discussed and potential safety hazards were reviewed. At 06:00 m1 September 10 the Halliburton cement arrived on location and had a pre job safety meeting. The pumps were primed at 06:30, after which 15 bbl of a viscous pill was prehydrated. Once the pill was ready, Halliburton broke circulation with 10 bbl of fresh water and pumped the viscous pill at 3 bpm, 125 psi. 0.9 bbl of water displacement was pumped after the pill to balance, and the cement unit was shut down and waited for Pollard to set a bridge plug and perforate robing. Halliburton circulated the tubing and annulus at 10:20 to get rid of excess viscous pill. The 45 bbls of fluid from the slop tank were then injected down hole followed by 10 bbl of fresh water. At 10:48, the cement unit pumped 93.2 bbl/ 450 sks of 15.8 ppg cement down the OA to bring cement to surface. The cement was pumped at 4.5 bpm and job pressure was 315 psi. Once cement was displaced with 0.75 bbl of fresh water per the customer, the well was shut in with 215 psi and Halliburton swapped to pump down the tubing. A total of 8.3 bbl/40 sks of cement was pumped down the tubing and out of the perforations to fill the 2-78" x T' annulus to surface. 2 bbls of cement returned to surface. The job was completed at 12:00 and the crew left location at 14:00. Halliburton maintains a continuous quality improvement process and appreciates any comments or suggestions that you may have. Halliburton Energy Services again thanks you for the opportunity to perform services work on this well. We hope to be your solutions provider for future projects. Thank You, Savannah Afea Technical Professional — Cement and Casing Equipment 6900 Arctic Blvd. Anchorage, AK 99518 Email: savannah ofcafidhallibtoron.com Mobile: +1907-223-9423 Office: +1907-273-3568 "Design and Deliver Dependable Itarriery Tdildred m ,Nbrimize Rah mrd Maximize Prmducrrea" Page 4 irf3rn Servi<:e (v. 4.2.393) Created: Wednesday, May 30'", 2017 HALLIBURTION Customer: Nordaq Tiger Eye l surface Plug Event 9 Pump Cement Pump Cement 9/1/2017 10:48:37 USER Page 5 2.00 0.00 0.00 8.34 ICem Service (v. 4.2.393) Created: Wednesday, May 30'", 2017 Comments Break circulation with 30 bbis of fresh water 3 bpm 135 psi Pump 15 bbl ; of gel pill 3 bpm 125 psi Pump 0.9 bbls of fresh water to balance.3 bpm 97psi Shut down pumps and check flow back to displacement tank. No flow back pill is balanced. Clean pumps and watt on Pollard to set bridge plug and pert holes Circulate tubing and annulus to surface through perfs at 200 to 202.2- to clear gel Inject 45 bbls from slop tank down annulus followed by 10 this fresh water Pump down 7" X 9.625 annulus - 93.2 bbls cement at 15.8 ppg, 450 sacks, 1.163 cf/sk, 5.085 gal/sk. Final pump pressure was 2.1 Job Event Log Type Seq. No. Activity Graph label Date Time Source PS Pump Press lPsJl Comb Pump Rate (bb!/min) Pump Stg Tot (bb)) Reclrc Density (PP9) Event 1 StartJob StartJob 9/1/2017 07:32:55 COM6 31.00 0.00 0.00 8.42 Event 2 Break Circulation Break Circulation 9/1/2017 07:33:04 USER 34.00 0.30 0.00 8.42 Event 3 Pump Gel Pill Pump Gel Pill 9/1/2017 07:39:05 USER 135.00 3.20 0.00 0.04 Event 4 Pump Displacement Pump Displacement 9/1/2017 07:44:34 USER 99.00 3.20 17.60 0.03 Event 5 Other Shutdown 9/1/2017 07:45:35 USER 20.00 0.00 1.00 0.03 Event 6 Clean Lines Wait on Pollard 9/1/2017 07:46:40 USER 17.00 0.00 1.00 0.03 Event 7 Circulate Well Circulate nultubing and an a 9/1/2017 10:20:29 USER 17.00 0.00 0.20 8.43 Event 8 Inject Down Annulus Inject 9/1/2017 10:29:40 USER 4.00 0.00 0.00 8.42 Event 9 Pump Cement Pump Cement 9/1/2017 10:48:37 USER Page 5 2.00 0.00 0.00 8.34 ICem Service (v. 4.2.393) Created: Wednesday, May 30'", 2017 Comments Break circulation with 30 bbis of fresh water 3 bpm 135 psi Pump 15 bbl ; of gel pill 3 bpm 125 psi Pump 0.9 bbls of fresh water to balance.3 bpm 97psi Shut down pumps and check flow back to displacement tank. No flow back pill is balanced. Clean pumps and watt on Pollard to set bridge plug and pert holes Circulate tubing and annulus to surface through perfs at 200 to 202.2- to clear gel Inject 45 bbls from slop tank down annulus followed by 10 this fresh water Pump down 7" X 9.625 annulus - 93.2 bbls cement at 15.8 ppg, 450 sacks, 1.163 cf/sk, 5.085 gal/sk. Final pump pressure was HALLIBURTON Customer: Nordaq Tiger Eye S Surface Plug 315psi at 4.5 bpm, shut in at 250 psi. As per customers request Event 10 Shutdown End O.A. down squeeze 9/1/2017 11:18:37 USER 457.00 3.50 89.70 1.36 chased cement with 0.75 bbl of water to clear well head. Pump through perfs in 2.675" X 7" to surface - 8.3 bbts cement at 15.8ppg, 40 sacks, 1.163 cf/sk 5.085 Event 11 Pump Cement Pump Cement 9/1/2017 11:32:39 USER 13.00 0.90 1.30 15.92 gal/sk. 2 bbls good cement to surface. As per customers request chased with 0.75 bbl of water to clearwell head Page 6 Recirc density charted on Event 12 Endlob End Job 9/1/2017 12:05:00 COM6 20.00 2.00 15.90 0.16 chart due erratic readings an HPVr caused from low back pressures. iCem Service )v. 4.2.393) Created: Wednesday, May W, 2017 HALLIBURTON 31 Vis=Ss Pitl7ob Cbart tj 7z I. I� Customer: Nordaq Tiger Eye 1 Surface Plug Nordaq Tiger eye nt PTA u 07313 PM09�J Si1:YJ W:iibl iCern Service Page 7 (v. 4.2.393) Created: Wednesday, May le, 2017 a , 1 I 1 I , I P4M WOW HALLIBURTON 32 Cement Job Chart f I I 4 I II .,, n " 2212 24M arm, 4� 4 I I I Customer: Nordaq Tiger Eye 1 Surface Plug Nordaoligereye lt PTA '193]0 +eaxn i1�MU 73Di70 www, Ord �+t iCern Service Page 8 (y. 4.2.393) Created: Wednesday, May 2d", 2017 iCem Service NORDAQ ENERGY INC - EBUS United States of America For: Pete Dickinson Date: Wednesday, September 13" 2017 Surface Plug Job Date: Friday, September 1", 2017 Sincerely, Savannah Afoa Warnin- Disclaimer Although the information contained in this report is based on sound engineering practices, the copyright owner(s) does (do) not accept any responsibility whatsoever, in negligence or otherwise, for any loss or damage arising from the possession or use of the report whether in terns of correctness or otherwise. The application, therefore, by the user of this report or any part thereof, is solely at the user's own risk. Linlitations of'L.iclhiiity Except as expressly set forth herein, there are no representations or warranties by Halliburton, express or implied, including implied warranties of merchantability and/or fitness for a particular purpose. In no event will Halliburton or its suppliers be liable for consequential, incidental, special, punitive or exemplary damages (including, without limitation, loss of data, profits, use of hardware, or software). Customer accepts full responsibility for any investment made based on results from the Software. Any interpretations, analyses or modeling of any data, including, but not limited to Customer data, and any recommendation or decisions based upon such interpretations, analyses or modeling are opinions based upon inferences from measurements and empirical relationships and assumptions, which inferences and assumptions are not infallible, and with respect to which professional may differ. Accordingly, Halliburton cannot and does not warrant the accuracy, correctness or completeness of any such interpretation, recommendation, modeling or other products of the Software Product. As such, any interpretation, recommendation or modeling resulting from the Software for the purpose of any drilling, well treatment, production or financial decision will be at the sole risk of Customer. Under no circumstances will Halliburton or its suppliers be liable for any damages. HALLIBURTON TAle of Contents 1.0 FNCCUhVO S1111101111'Y- - --- - , - - - ' ?.0 Reiti--nme ioii stininimy 2.1 Job Event Log .. .......... ....... ........ .... ........... . ...................... 3.0 Atwellilwill 9 ......... 3.1 Viscous Pill Job Chart ................... -- ............................................. 3.2 Cement Job Chart ..... .. .. . . .... .... ... .... ........ . ... . . . . ... - , Page 3 Customer: Norclaq Tiger Eye 1 Surface Plug ............. ..... I ................... I.. I .... I. .. ........... 4 ................ I ............ I ............. I. -I .... 5 Cem'Service (v. 4.2.393) Created: Wednesday, May 10", 2017 HALLIBURTON Customer: Nordaq Tiger Eye 1 Surface Plug Mr. Dickinson, Halliburton appreciates the opportunity to perform the cementing services on Tiger Eye Central 1. A pre job safety meeting was held where details of the job were discussed and potential safety hazards were reviewed. At 06:00 on September I" the Halliburton cement arrived on location and had a pre job safety meeting. The pumps were primed at 06:30, atter which 15 bbl of a viscous pill was prehydrated. Once the pill was ready, Halliburton broke circulation with 10 bbl of fresh water and pumped the viscous pill at 3 bpm, 125 psi. 0.9 bbl of water displacement was pumped after the pill to balance, and the cement unit was shut down and waited for Pollard to set a bridge plug and perforate tubing. After circulating the tubing through the perforations to get rid of excess viscous pill, HAL switched to pump cement down the 7" x 9- 5/8" OA. The 45 bbls of fluid from the slop tank were then injected down hole followed by 10 bbi of fresh water. At 10:48, the cement unit pumped 93.2 bbl/ 450 sks of 15.8 ppg cement down the OA to bring cement to surface. The cement was pumped at 4.5 bpm and job pressure was 315 psi. Once cement was displaced with 0.75 bbl of fresh water per the customer, the well was shut in with 215 psi and Halliburton swapped to pump down the tubing. A total of 8.3 bbl/40 sks of cement was pumped down the tubing and out of the perforations to fill the 2-7/8" x 7" annulus to surface. 2 bbis of cement returned to surface. The job was completed at 12:00 and the crew left location at 14:00. Halliburton maintains a continuous quality improvement process and appreciates any comments or suggestions that you may have. Halliburton Energy Services again thanks you for the opportunity to perform services work on this well. We hope to be your solutions provider for future projects. Thank You, Savannah Afoa Technical professional — Cement and Casing Equipment 6900 Arctic Blvd. Anchorage, AK 99518 Email:.. vannah alba iuhhdlit non cora Mobile: +1907-223-9423 Office: +1907-273-3568 "Design and Definer Dependable Barriers 1'1111rrrad huNiniwize RAA and }4uxhrdry 1'ro411f4iea" (v. 4.2.393) created: Wednesday, May 10'", 2017 Page 4 HALLIBURTON customer: Nordaq Tiger Eye 15urface Plug 2.1 Job Event Log Type Seq. Activity Graph label Date Time Source PS Pump Comb Pump Ste Recirc Comments No. Press Pump Tot Density Rate (Psi) (bbl/min) (6611 (,Pg) Event 1 Start Job StartJob 9/1/2017 07:32:55 COMB 31.00 0.00 0.00 8.42 Break circulation with 10 Event 2 Break Circulation Break Circulation 9/1/2017 07:33:04 USER 34.00 0.30 0.00 8.42 this of fresh water 3 hem 135 psi Event 3 Pump Gel Pill Pump Gel Pill 9/1/2017 07:39:05 USER 135.00 3.20 0.00 0.04 Pump 15 this of gel pill 3 bpm 125 psi Pump 0.9 bbls of fresh Event 4 Pump Displacement Pump Displacement 9/1/2017 07:44:34 USER 99.00 3.20 17.60 0.03 water to balance. 3 bpm 97psi Shut down pumps and Event 5 Other Shutdown 9/1/2017 07:45:35 USER 20.00 0.00 1.00 0.03 check flow back to displacement tank. No flow back pill is balanced. Clean pumps and wart on Event 6 Clean lines Wait on Pollard 9/1/2017 07:46:40 USER 17.00 0.00 1.00 0.03 Pollard to set bridge plug and pert holes Circulate tubing and Event 7 Circulate Well Circulate tubing and 9/1/2017 10:20:29 USER 17.00 0.00 0.20 8,43 annulus to surface through annulus perfs at 200 to 202.2- to cleargel Inject 45 bbls from slop tank Event 8 Inject Down Annulus Inject 9/1/2017 10:29:40 USER 4.00 0.00 0.00 8.42 down annulus followed by 10 this fresh water - Pump down 7" %9.625 annulus- 93.2 this cement Event 9 Pump Cement Pump Cement 9/1/2017 10:48:37 USER 2.00 0.00 0.00 834 at 15.8 poll, 450 sacks, 1.163 cf/sk, 5.085 gal/sk. Final pump pressure was iCem Service (v. 4.2.393) Page 5 Created: Wednesday, May 10', 2017 HALLIBURTON customer: Nordaq Tiger Eye 1 Surface Plug Cern' Service Page 6 (v. 4.2.393) Created: Wednesday, May 30'", 2017 31Spsi at 4.5 bpm, shut in at — 250 Psi. Event 10 Shutdown End O.A. down squeeze 9/1/2017 11:18:37 USER 457.00 3.50 89.70 1.36 As percustomers request chased cement with 0.75 bbl of water to clear well head. Pump through pens in 2.875" X 7" to surface - 8.3 bbls cement at 15.8ppg. 40 Event 11 Pump Cement Pump Cement 9/1/2017 11:32:39 USER 13.00s 0.90 1.30 1.1 63 cl/ 15.92 al/s, 6 sod cement to surface. As per customers request chased with 0.75 bbl of water to clear well head Event 12 End Job End Job 9/1/2017 12:05:00 COME 20.00 2.00 15.90 Recife density charted on chart due erratic readings 0.16 on HPVT caused from low back pressures. Cern' Service Page 6 (v. 4.2.393) Created: Wednesday, May 30'", 2017 HALLIBURTON Customer: Nordaq Tiger Eye 1 Surface Plug Page 7 iCem Service (v.4.2.393l created: Wednesday, May 10D, 2017 3.1 Viscous Pict Job Chaz Piorctao. i ioer eye #1 DTP. FIFZI 11 u 1 l ] CI I I D, 1 II II I I 1 I I II 1( If I f I I 1 I I I i I I 1 E 1 1 I t 1 I { 1 I I 1 I II I I 1 i II I I 1 - 1I 1 I 1 I I 11 1 I I t 11 I I I 1' II � 1 I I 11 it 11 I I I 1 1 li i II i I 1 1! 1 1 1 1 I ! I II i 1 I 1' px2D R=D Paw. "A *AYm D•MAD RON gt. o r*A 9,yZr.7 9;"AL, ^Lei Page 7 iCem Service (v.4.2.393l created: Wednesday, May 10D, 2017 HALLIBURTON 3.2 Cementlob Chart ,azz 10M wVVI; Customer: Nordaq Tiger Eye 1 Surface Plug Norday Tiger eye Rt PTA AWAO "ala Um .A xSMe PS F.nn?ass(as � comb Immo: a;9 cbli l -�a S:g v to :uc Jarssy ipz iCem Service (v. 4.2.393) Page Created: Wednesday. May l0b', 2017 rnmr , , ,azz 10M wVVI; Customer: Nordaq Tiger Eye 1 Surface Plug Norday Tiger eye Rt PTA AWAO "ala Um .A xSMe PS F.nn?ass(as � comb Immo: a;9 cbli l -�a S:g v to :uc Jarssy ipz iCem Service (v. 4.2.393) Page Created: Wednesday. May l0b', 2017 rnmr iCem Service NORDAQ ENERGY INC - EBUS United States of America For: Pete Dickinson Date: Wednesday, September 13" 2017 Top Out Job Date: Wednesday, September 6m1 2017 Sincerely, Savannah Afoa I .\ ...,. Warning Dix:iaimer Although the information contained in this report is based on sound engineering practices, the copyright owner(s) does (do) not accept any responsibility whatsoever, in negligence or otherwise, for any loss or damage arising from the possession or use of the report whether in terms of correctness or otherwise. The application, therefore, by the user of this report or any part thereof, is solely at the user's own risk. Limitations of Liatbi!ily Except as expressly set forth herein, there are no representations or warranties by Halliburton, express or implied, including implied warranties of merchantability and/or fitness for a particular purpose. In no event will Halliburton or its suppliers be liable for consequential, incidental, special, punitive or exemplary damages (including, without limitation, loss of data, profits, use of hardware, or software). Customer accepts full responsibility for any investment made based on results from the Software. Any interpretations, analyses or modeling of any data, including, but not limited to Customer data, and any recommendation or decisions based upon such interpretations, analyses or modeling are opinions based upon inferences from measurements and empirical relationships and assumptions, which inferences and assumptions are not infallible, and with respect to which professional may differ. Accordingly, Halliburton cannot and does not warrant the accuracy, correctness or completeness of any such interpretation, recommendation, modeling or other products of the Software Product. As such, any interpretation, recommendation or modeling resulting from the Software for the purpose of any drilling, well treatment, production or financial decision will be at the sole risk of Customer. Under no circumstances will Halliburton or its suppliers be liable for any damages. HALLIBURTON Table of C_; lcnt, customer: Nordaq Tiger Eye 1 Top Out ........................... _a Page 3 iCerri Service (v. 4.2.393) Created: Wednesday, May 10, 2017 HAL.L.IBURTON Mr. Dickinson, Customer: Nordaq Tiger Eye 1 Top Out Halliburton appreciates the opportunity to perforin the cementing services on Tiger Eye Central 1. A pre job safety meeting was held where details of the job were discussed and potential safety hazards were reviewed. At 13:00 the Halliburton cement arrived on location to pump topout cement. The cement job began at 15:16 with I bbl of water during which time maximum pressure was 20 psi. This was followed with 25 sks/5 bbls of 15.8 ppg cement, and 2 bbls returned to surface. At 15:41 the unit shutdown and lined up to wash up into an open -top tank. The job was completed at 16:00 and the crew left location at 17:30. Halliburton maintains a continuous quality improvement process and appreciates any comments or suggestions that you may have. Halliburton Energy Services again thanks you for the opportunity to perforin services work on this well. We hope to be your solutions provider for future projects. Thank You, Savannah Afoa Technical Professional — Cement and Casing Equipment 6900 Arctic Blvd. Anchorage, AK 99518 Email: sncannnh.afoalmhalliburtnn.cum Mobile: +1907-223-9423 Office: +1907-273-3568 " DesJAu and Definer Dependable Barrivrc 7'aill""'d to :111uhnice RG@ and r11axinn-v Prodnryiou" Page 4 (v. 4.2.393) Created: Wednesday, May 10ib, 2017 HALLIBURTON 2.1 lob Event Type Seq. Activity No. Event 1 StartJob Event 2 Other Event 3 Pump Cement Event 4 Shutdown Event 5 End Job Graph label Start Job Other Pump Cement Shutdown End Job Customer: Nordaq Tiger Eye 1 Top Out Date Time Source DSPump DH Comb Press Density Pump Rate (Psi) (PPA) (bbVmin) 9/6/2017 15:07:00 COMB -5.00 8.55 0.00 9/6/2017 15:16:24 USER -4.00 8.51 0.00 9/6/2017 15:19:48 USER 9/6/2017 15:41:17 USER 9/6/2017 16:00:00 COMB 55.00 15.83 0.00 5.00 16.14 0.00 22.00 9.32 0.00 Cern Service Page 5 (y. 4.2.393) Created: Wednesday, May 30i°, 2027 Comments BOOST 1BBL OF H2O 20PSI PUMP 25SK5 OF 15.80 LB/GAL 1.15 FT/SK 5.00 GAL/SK BOOSTED ATOTAL OF 58BLS 55P51 GOT 2BBL5 OF CEMENT TO SURFACE. SHUT DOWN AND WASH PUMP AND UNE TO OPEN TANK. HALLIBURTON Customer: Nordaq Tiger Eye I Top Out 3.1 Job Chat TOP OUT NORDAG, VVELL#1 iCem Service Page 6 (v. 4.2.393) Created: Wednesday, May 10, 201-1 NORDAQ ENERGY, INC. TIGER EYE CENTRAL SEPTIC SYSTEM CLOSURE PLAN NORTH SCALE I 1 VICINITY IMP I I I � I I I I - I I I i RECORD D2IWING NOTE. THIS DRAWING WAS PREPARED TO DOCUMENT THE CLOSURE OF A SOIL ADSORPTION SYSTEM ON 31 AUGUST Mt] THE SYSTEM WAB DISPOSED IN PLACE IN ACCORDANCE MTH THIS PLAN 6 S A. MCLANE CE1853 DATE PROJECT DISPOSE OF CONVENTIONAL SOIL ABSORPTION SYSTEM CONSISTING OF A 2.SOO GALLON STEEL TANK AND ABS PIPING. LOCATION: WK NV6% SECTION 19. TSN, R14W. S.M AK KUSTATAN AREA IN THE KENAI PENINSULA BOROUGH, LEGEND UtitCIRW: oEdWn ROM dIM1YJtCSF SFL:U:ILME COKi<WRU�kd TIti�T.lCi 4iZF . rnCPJS,n culvERr�csP: INDEX OF SHEETS dREEf ND _ DPSUUPTKM 1 PfIDJECid ICCAipM � BITE PLFN � +h'STpd PIAN 6t�5 � IYPK'A•_SECI!ON561d)id NORDAQ ENERGY INC. 3000 A STEET, SUITE 410 ANCHORAGE, AK 99501 I xw.M14 e 71 5 <G�LLS PAD WETLANDS WITH PERIODIC W SURFACE WATER K ®, — CJzU s QUU evsmeaiEti.c+eEo.w�nwcuroeexauwaev muss U 100 FT. SETBACK oc > w e w \ N e EXISTING SEPTIC SYSTEM gin- SEE SHEET ABANDONME>DEr�AIL •2 REMOVE 4 STANDPIPES AT EACH END OF EACH LEACH TRENCH. ABANDON TANK IN-PLACE (e PULL OUT ALL EXPOSED PIPES N [v\ GPOV�O SLT SEPTIC TANK, 250D GAL. STEEL REVISION ''— tr SOLIDS DIPOSAL AREN RECORD ABANDONMENT AND CLOSURE NOTES: 1. TANK WAS PUMPED BY OTHERS PRIOR TO ABANDONMENT 2. TANK WAS EXCAVATED AND EXPOSED. TOP WAS CUT OPEN TO EXPOSED BOTH COMPARTMENTS. 3. APPROXIMATELY 5 GALLONS OF SLUDGE WAS REMOVED AND SPREAD ON SOIL ADJACENT TO TANK. THIS I- THICK LAYER OF SLUDGE WAS COVERED WITH A OUSTING OF HYDRATED LIME, 4. TANK BOTTOM WAS PERFORATED, AOUSTING OF LIME APPLIED. THEN BACKFILLED WITH NATIVE SOIL. 5 ALL STANDPIPES AND MONITOR TUBES WERE PULLED AND VOIDS BACKFILLED WITH NATIVE SOIL. 6. SITE WAS GRADED TO PRE -DISTURBANCE CONTOURS. ABANDONMENT AND CLOSURE NOTES: 1 COMPLY WITH ALL REQUIREMENTS OF 18 AAC 72 S 80. 2 MAINTAIN SEPARATION DISTANCES PER 18 AAC 72,020 3. PUMP TANK LIOUIDS INTO SOIL ABSORPTION SYSTEM. 4. EXCAVATE AND EXPOSE STEEL SEPTIC TANK. REMOVE MANHOLE COVERS FROM EACH END. ESTIMATE SLUDGE AND SOLIDS VOLUME. THE FIRST COMPARTMENT HOLDS ABOUT CUBIC YARDS 5. EXCAVATE A TRENCH ADJACENT TO THE SEPTIC TANK TRENCH SHALL BE 6 FT. DEEP ALLOW FOR AT LEAST 3 FT OF SOIL COVER 6. OPEN TOP OF TANK BETWEEN THE MANHOLE COVERS TO EXPOSE BOTH COMPARTMENTS AND ALLOW ACCESS FOR SOLIDS REMOVAL. 7. REMOVE SLUDGE AND SOLIDS WITH EXCAVATOR. TRANSFER TO TRENCH IN LAYERS 12 INCH MAXIMUM DEPTH. SPRINKLE HYDRATED LIME OVER THE LAYERS PROVIDING LIGHTCOVERAGE REPEAT AS NECESSARY UNTIL ALL SOLIDS ARE BURIED 8. PERFORATE BOTTOM OF TANK IN EACH COMPARTMENT WITHEXCAVATOR. SPRINKLE LIGHT COVER OF LIME OVER TANK BOTTOM. THEN BACKFILL WITH NATIVE SOIL. 9. REMOVE ALL STAND PIPES BY SURFACE EXCAVATION THEN PULL OUT WITH EXCAVATOR. 10, BACKFILL AND GRADE TO MATCH NATURAL CONTOURS 11. TAKE DIGITAL PHOTOS TYPICAL OF EACH PHASE AND DELIVER TO ENGINEER. Picture Descriptions 8a IMG 1727 Cmt visible except 7 x 9 5-8 8b IMG -1736 Cmt to surface after top job 8c IMG -1745 name plate on casing 8d IMG -1740 ALL annuli cemented 9a IMG 1752 location cleared other eqpmt Glacier 9b IMG 1753 location, 9c IMG_1757 location 9c IMG 1757 location k1a "'Will or A .r, K,9 il IMP R Via, R fl IN `1 ly i ri,; ILI i I V ' n 1(, F I 1 R yK, a _r Vr I i I I If TIGER EYE CENTRAL #1 BHA LOG 8-22-17 Database File tiger eye central #1.db Dataset Pathname TIGER_EYE_CENTRAL #1/CCLIIPASSI Presentation Format ccl Dataset Creation Tue Aug 22 18:10:55 2017 Charted by Depth in Feet scaled 1:240 r g CCL 5� DIM i 4-L-2-70 TUBING JT �-- BAKER MODEL "D" PACKER 5900 5950 4=-2-7/8" TUBING JT 4-- 2-7/8" TUBING JT f— BAKER MODEL "D" PACKER N 2-7/8" TUBING JT. v TIGER EYE #1 8-23-17 TUBING PUNCH #1 5920' - 5922'(10 SHOTS) Database File tiger eye central #1.db Dataset Pathname TIGER_EYE_CENTRAL #1/tbgpunch11PASS7 Presentation Format CCI Dataset Creation Wed Aug 23 10:17:42 2017 Charted by Depth in Feet scaled 1:240 5 CCL -5 i-- BAKER MODEL "D" PACKER 5900 �-- CCL DEPTH (3.5' CCL TO TOP SHOT) TUBING PUNCH ' � I H 2-7V TUBING i I 5950 TIGER EYE 1 TAG1 8-27-17 TOC @ 5,618' MD Database File tiger eye central tlt.db Dataset Pathname TIGER _EYE _CENTRAL_#11TAG1/PASS12 Presentation Format ccl Dataset Creation Sun Aug 27 12:16:57 2017 Charted by Depth in Feel scaled 1:240 5 CCL -5 0 LTEN (lb) 5000 i 5450 i 5500 5550 moa +- CCL, BTS 8.2 BELOW CCL. +-- TOC @ 5,618' MQ CCL y TIGER EYE 1 CIBP1 8-28-17 CIBP SET @ 5,607' MD Database File tiger eye central #1.db Dataset Pathname TIGER—EYE_CENTRAL #1/CIBP1lPASS3 Presentation Format ccl Dataset Creation Mon Aug 28 17:29:512017 Charted by Depth in Feet Scaled 1:240 5 CCL -51 l0 LTEN (lb) 4— CCL STOP DEPTH 5,599.5' MD — 4—CCL PICKUP �-- CIBP SET @ 5,607' MD 15 CCL .51 j0 LTEN (lb) 5000 J TIGER EYE 1 TAG2 8-28-17 TOC @ 5;617.5 MD Database File tiger eye central #1.db Dataset Pathname TIGER_EYE_CENTRAL_WrAG21PASS9 Presentation Format ccl Dataset Creation Mon Aug 2815A9:13 2017 Charted by Depth in Feet scaled 1:240 15 CCL -5I 0 LTEN (Ib) 5000 � � I i I � I i 5450 5500 �.� 5550 TIGER EYE 1 TUBING PUNCH 2 (8-29-17) SHOTS FIRED FROM 5,590.7' MD -5,593' MD Database File tiger eye central #1,db Dataset Palhname TIGER -EYE -CENTRAL #1/PNCH2/PASS5 Presentation Format cc[ Dataset Creation Tue Aug 29 09:54:36 2017 Charted by Depth In Feet scaled 1:240 CCL 5550 .1i LIEN (Ib) --- - ------ .... --- - - — -- --------------- -- - 5 CCL -5� �0 -L--N (Ib) 500 TIGER EYE 1 CIBP2 5-30-17 CIBP SET @ 5,067.6' MD Database File tiger eye central #1.db Dalaset Pathname TIGER—EYE—CENTRAL #1lCIBP2JPASS4 Presentation Format ccl Dataset Creation Wed Aug 30 19:01:55 2017 Charted by Depth in Feet scaled 1:240 15 CCL -51 10 LTEN (lb) 5000 5050 4— CCL STOP DEPTH 5,060' MD F— CIBP SET @ 5,067.6 MD 5 CCL -51 10 LTEN (lb) 5000 TIGER EYE TAG3 8-30-17 TOC @ 5,081.2' MD Database File tiger eye central #1.db Dataset Pathname TIGER_EYE_CENTRAL_#1rrAG31PASS2 Presentation Format ccl Dataset Creation Wed Aug 30 14:55:412017 Charted by Depth in Feet scaled 1:240 5 CCL -5j 0 LTEN (lb) 5050 15 CCL -51 10 LTEN (lb) 5000 J TIGER EYE 1 TAG4 8-30-17 TOC @ 5,082' MD Database File tiger eye central #1.db Dataset Pathname TIGER_EYE_CENTRAL_#1/TAG4/PASS4 Presentation Format ccl Dataset Creation Wed Aug 3017:21:42 2017 Charted by Depth in Feet scaled 1;2---40�� 5 CCL -5 u LTEN (lb) 5000 1 5050 1 --CCL, BTS 9.5' BELOW CCL +-- TOC @ 5,082' MD 15 CCL 51 10 LTEN (lb) 5000 TIGER EYE 1 TUBING PUNCH 3 (8-31-17) SHOTS FRED FROM 598.7' MD TO 601' MD Database File tiger eye central #1.db Dataset Pathname TIGER_EYE_CENTRAL_#1/PNCH3/PASS3 Presentation Format col Dataset Creation Thu Aug 31 14:56:24 2017 Charted by Depth in Feet scaled 1:240 5 CCL -5 0 LTEN (lb) 5000 250 300 350 M 500 550 4 -CCL STOP DEPTH. TS 3.T BELOW CCL 600 �_ i CCL -51 10 LTEN (Ib) TIGER EYE CIBP3 9-1-17 CIBP SET @ 230' MD Database File tiger eye central #1.db Dataset Pathname TIGER EYE_CEt4TRAL #1lCIBP3/PASS4 Presentation Format ccl Dataset Creation Fri Sep 0108:45:42 2017 Charted by Depth in Feet scaled 1:240 CCL -51 10 LTEN (lb) i I 200 I II I �-- CCL STOP DEPTH 222.4' MO CIBP SET @ 230' MD I I i - 250 -- -- - - CCL -5r 0 LTEN(lb) TIGER EYE 1 TUBING PUNCH 4 (9-1-17) SHOTS FIRED FROM 200' MD TO 202.3' MD patahase File tiger eye central #1 -db Dataset Palhname TIGER_EYE_CENTRAL_#1/PNCH4/PASS2 Presentation Format ccl Dataset Creation Fri Sep 0109:27:46 2017 Charted by Depth in Feet scaled 1:240 5 CCL 5 0 LTEN (lb) 5000 1501 f I i 4— CCL STOP DEPTH, TS 37 BELOW CCL j 200 1 I I I 1 i 5 CCL 5 0 LTEN (lb) 5000 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket No. OTH-16-031 and OTH-16-032 Applications for Reconsideration September 20, 2017 at 10:00 am NAME AFFILIATION Testify (yes or no) JOA,,) (''o)6m Rfe F�n/,L- ygkr�wc, A GGCC +'Ve Kir%sken Nese o n Pero leurr, News A/(I /� 4? C (icier -5usar,, (A -I -ams)(+' FA -)s Nb C V -r iS AOC, C c fly 'C7cy@ 9-c, ,y 4,0 C-1 CC VAAL> ORIGINAL 14 Second Corrected Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: OTH-16-031 and OTH 16-032 NordAq Energy, Inc. The applications for Reconsideration of the Decision and Order's issued in this matter by the AOGCC. The AOGCC has scheduled oral argument on these applications for September 20, 2017, at 10:00 a.m. at 333 West 71h Avenue, Anchorage, Alaska 99501. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 19, 2017. Hollis S. French Chair, Commissioner David Pfeiffer Chief Financial Officer NordAq Energy, Inc. 560 E. 34' Ave., Ste. 200 Anchorage, AK 99503 Second Corrected Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: OTH-16-031 and OTH 16-032 NordAq Energy, Inc. The applications for Reconsideration of the Decision and Order's issued in this matter by the AOGCC. The AOGCC has scheduled oral argument on these applications for September 20, 2017, at 10:00 a.m. at 333 West 71' Avenue, Anchorage, Alaska 99501. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 19, 2017. //signature on file// Hollis S. French Chair, Commissioner Berrie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir, 399 W. Riverview Ave. Fairbanks, AK 99711-0055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith P.O. Box Richard Wagner 0 P.O. Box 39309 P.O. Box 60868 Denver, CO 8 80201-3557 Ninilchik, AK 99639-0309 Fairbanks, AK 99706-0868 Colombie, Jody 1 (DOA) From: Colombie, Jody J (DOA) Sent: Monday, September 18, 2017 8:07 AM To: 'rbrena@brenalaw.com'; 'aguerriero@brenalaw.com'; 'Igould@brenalaw.com' Subject: FW: Second Corrected Public Notice Attachments: CO 16-031 and CO 16-032 Oral Argument Second Corrected.pdf From: Colombie, Jody J (DOA) Sent: Monday, September 18, 2017 8:05 AM To: DOA AOGCC Prudhoe Bay <doa.aogcc.prudhoe.bay@alaska.gov>; Bender, Makana K (DOA) <makana.bender@alaska.gov>; Bettis, Patricia K (DOA) <patricia.bettis@alaska.gov>; Brooks, Phoebe L (DOA) <phoebe.brooks@alaska.gov>; Carlisle, Samantha J (DOA) <samantha.carlisle@alaska.gov>; Colombie, Jody J (DOA) <jody.colombie@alaska.gov>; Davies, Stephen F (DOA) <steve.davies@alaska.gov>; Foerster, Catherine P (DOA) <cathy.foerster@alaska.gov>, French, Hollis (DOA) <hollis.french@alaska.gov>; Frystacky, Michal (DOA) <michal.frystacky@alaska.gov>; Guhl, Meredith D (DOA) <meredith.guhl@alaska.gov>; Kair, Michael N (DOA) <michael.kair@alaska.gov>; Link, Liz M (DOA) <liz.link@alaska.gov>; Loepp, Victoria T (DOA) <victoria.loepp@alaska.gov>; Mumm, Joseph (DOA sponsored) <joseph.mumm@alaska.gov>; Paladijczuk, Tracie L (DOA)<tracie.paladijczuk@alaska.gov>; Pasqua], Maria (DOA) <maria.pasqual@alaska.gov>; Quick, Michael J (DOA) <michael.quick@alaska.gov>; Regg, James B (DOA) <jim.regg@alaska.gov>; Roby, David S (DOA) <dave.roby@alaska.gov>; Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov>; Seamount, Dan T (DOA) <dan.seamount@alaska.gov>; Singh, Angela K (DOA) <angela.singh@alaska.gov>; Wallace, Chris D (DOA) <chris.wallace@alaska.gov>; AK, GWO Projects Well Integrity <AKDCProjectsWelllntegrityEngineer@bp.com>; AKDCWelllntegrityCoordinator <AKDCWelllntegrityCoordinator@bp.com>; Alan Bailey <abailey@petroleumnews.com>; Alex Demarban <alex@alaskadispatch.com>; Alicia Showalter <ashowalter@hilcorp.com>; Allen Huckabay <allenhuckabay@hotmail.com>; Andrew Vandedack <AMV@vnf.com>; Ann Danielson <Ann.Danielson@bp.com>; Anna Raff <anna.raff@dowjones.com>; Barbara F Fullmer <barbara.f.fullmer@conocophillips.com>; bbritch <bbritch@alaska.net>; bbohrer@ap.org; Ben Boettger <benjamin. boettger@peninsulaclarion.com>; Bill Bredar <william.bredar@bp.com>; Bob Shavelson <bob@inletkeeper.org>; Brandon Viator <Brandon.S.Viator@conocophillips.com>; Brian Havelock <behavelock@gmail.com>; Bruce Webb <b.webb@furiealaska.com>; Caleb Conrad <caleb.conrad@bakerhughes.com>; Candi English <c.english@nsakllc.com>; Cocklan- Vendl, Mary E <mary.cocklan-vendl@bp.com>; Cody Gauer <cody.gauer@enipetroleum.com>; Colleen Miller <cmiller@ciri.com>; Connie Downing <cdowning@tyonek.com>; Crandall, Krissell <Krissell.Crandall@bp.com>; D Lawrence <DLawrence4@slb.com>; Dale Hoffman <dale.hoffman@caelusenergy.com>; Darci Horner <dhorner@hilcorp.com>; Dave Harbour <harbour@gci.net>; David Boelens <dboelens@aurorapower.com>; David Duffy <dduffy@hilcorp.com>; David House <d house@ usgs.gov>; David McCaleb <david.mccaleb@ihs.com>; David McCraine <d.mccraine@furiealaska.com>; ddonkel@cfl.rr.com; Diemer, Kenneth 1 (DNR) <ken.diemer@alaska.gov>; DNROG Units (DNR sponsored) <dog.units@alaska.gov>; Donna Ambruz <dambruz@hilcorp.com>; Ed Jones <jejones@aurorapower.com>; Elizabeth Harball <eharball@alaskapublic.org>; Elowe, Kristin <Kristin.Elowe@mms.gov>; Elwood Brehmer <elwood.brehmer@alaskajournal.com>; Evan Osborne <Osborne.Evan@epa.gov>; Evans, John R (LDZX) <John.R.Evans@conocophillips.com>; Brown, Garrett A (DNR) <garrett.brown@alaska.gov>; George Pollock <gpollock@aurorapower.com>; Gordon Pospisil <PospisG@BP.com>; Greeley, Destin M (DOR) <destin.greeley@alaska.gov>; Gretchen Stoddard <mgstoddard@gci.net>; gspfoff <gspfoff@aurorapower.com>; Hunter Cox <hcox@vnf.com>; Hurst, Rona D (DNR) <rona.hurst@alaska.gov>; Hyun, James J (DNR) <james.hyun@alaska.gov>; Jacki Rose <jrose@bluecrestenergy.com>; Jason Brune <JBrune@ciri.com>; Jdarlington (jarlington@gmail.com) <jarlington@gmail.com>; Jeanne McPherren <jmcpherren@brenalaw.com>; Jerry Hodgden <geodogs@comcast.net>; Jill Simek <Jill.Simek@conocophillips.com>; Jim Watt <jwatt@strongenergyresources.com>; Jim White <jimwhite@satx.rr.com>; Joe Lastufka <lastufjn@bp.com>; Radio Kenai <news@rad iokenai.com>, Burdick, John D (DNR) <john.burdick@alaska.gov>; Easton, John R (DNR) <john.easton@alaska.gov>; Larsen, John M (DOR) <john.larsen@alaska.gov>; John Stuart <j.stuart@furiealaska.com>; Jon Goltz <Jon.Goltz@conocophillips.com>; Chmielowski, Josef (DNR) <josef.chmielowski@alaska.gov>; Juanita Lovett <jlovett@hilcorp.com>; Judy Stanek <jstanek@hilcorp.com>; Kari Moriarty <moriarty@aoga.org>; Kasper Kowalewski <kasper.kowalewski@cop.com>; Kazeem Adegbola <kazeem.a.adegbola@conocophillips.com>; Keith Torrance <keith.torrance@uicumiaq.com>; Keith Wiles <kwiles@marathonoil.com>; Kelly Sperback <ksperbeck@slb.com>; Frank, Kevin 1 (DNR) <kevin.frank@alaska.gov>; Kruse, Rebecca D (DNR) <rebecca.kruse@alaska.gov>; Kyla Choquette <Kyla.Choquette@bp.com>; Gregersen, Laura S (DNR) <laura.gregersen@alaska.gov>; Leslie Smith <I.smith@furiealaska.com>; Lori Nelson <Inelson@hilcorp.com>; Luke Keller <Ikeller@hilcorp.com>; Marc Kovak <yesnoak@gmail.com>; Dalton, Mark (DOT sponsored) <Mark.Dalton@hdrinc.com>; Mark Hanley (mark.hanley@anadarko.com) <mark.hanley@anadarko.com>; Mark Landt <landtman4@yahoo.com>; Mark Wedman <mark.wedman@pxd.com>; Mealear Tauch <mzt@vnf.com>; Michael Bill <billmk@acsalaska.net>; Michael Calkins <mcalkins117@yahoo.com>; Michael Moora <mmoora@anvilcorp.com>; Mike Morgan <mike.morgan @caeIusenergy.com>; M1 Loveland <N1878@conocophillips.com>; mkm7200 <mkm7200@aol.com>; Motteram, Luke A <luke.a.motteram@exxonmobil.com>; Mueller, Marta R (DNR) <marta.mueller@alaska.gov>; knelson@petroleumnews.com; Nichole Saunders <nsaunders@edf.org>; Nick Ostrovsky <nostrovsky@ahtna.net>; Nikki Martin <martin@aoga.org>; NSK Problem Well Supv <n1617@conocophill1ps.com>; Patty Alfaro <palfaro@yahoo.com>; Paul Craig <drpaulcraig@gmail.com>; Decker, Paul L (DNR) <paul.decker@alaska.gov>; Paul Mazzolini <pmazzolini@hilcorp.com>; Pike, Kevin W (DNR) <kevin.pike@alaska.gov>; Randall Kanady <Randall.B.Kanady@conocophillips.com>; Renan Yanish <renan@astercanyon.com>; Richard Cool <cool.richard@epa.gov>; Robert Brelsford <robert.brelsford@argusmedia.com>; Robert Warthen <rwarthen@nordaqenergy.com>; Sara Leverette <saleverette@stoel.com>; Scott Griffith <scott_griffith@xtoenergy.com>; Shahla Farzan <shahla@kbbi.org>; Shannon Donnelly <shannon.donnelly@conocophillips.com>; Sharon Yarawsky <syarawsk@blm.gov>; Skutca, Joseph E (DNR) <joseph.skutca@alaska.gov>; Smart Energy Universe <ad min @smartenergyuniverse.com>; Smith, Kyle S (DNR) <kyle.smith@alaska.gov>; Stephanie Klemmer <sklemmer@hilcorp.com>; Stephen Hennigan <shennigan@peiinc.com>; Sternicki, Oliver R <Oliver.Sternicki@bp.com>; Moothart, Steve R (DNR) <steve.moothart@alaska.gov>; Steve Quinn <smgwrite@gmail.com>; Suzanne Gibson <sgibson@ciri.com>; Sheffield@aoga.org; Ted Kramer <tkramer@hilcorp.com>; Teresa Imm <timm@asrc.com>; Tim Jones <tjones@glacieroil.com>; Tim Mayers <mayers.timothy@epa.gov>; Todd Durkee <todd.durkee@anadarko.com>; Tom Maloney <tmaloney@ahtna.net>; trmjrl <trmjrl@aol.com>; Tyler Senden <r.tyler.senden@conocophillips.com>; Umekwe, Maduabuchi P (DNR) <pascal.umekwe@alaska.gov>; Vinnie Catalano <catalano@circac.org>; Well Integrity <n2550@conocophillips.com>; Well Integrity <n2549@conocophillips.com>; Weston Nash <Weston.Nash @bp.com>; Whitney Pettus <Whitney.Pettus@bp.com>; Aaron Gluzman <aaron.gluzman@gmail.com>; Aaron Sorrell <Aaron.Sorrell@BP.com>; Ajibola Adeyeye <Ajibola_Adeyeye@xtoenergy.com>; Alan Dennis <Alan.Dennis@bp.com>; Andy Bond <Andy.Bond@caelusenergy.com>; Bajsarowicz, Caroline J <Caroline.Bajsarowicz@bp.com>; Bruce Williams <bruce.williams@bp.com>; Bruno, Jeff (DNR) <jeff.bruno@alaska.gov>; Casey Sullivan <Casey.Sullivan@pxd.com>; Corey Munk <Corey.Munk@BP.com>; Don Shaw <shawmanseafoods@yahoo.com>; Eppie Hogan <eppie.hogan@bp.com>; Eric Lidji <ericlidji@mac.com>; Garrett Haag <Garrett.B.Haag@conocophillips.com>; Smith, Graham O (DNR) <graham.smith@alaska.gov>; Heusser, Heather A (DNR) <heather.heusser@alaska.gov>; Fair, Holly 5 (DNR) <holly.fair@alaska.gov>; Jamie M. Long <jamie.m.long@esso.ca>; Jason Bergerson <Jason.Bergerson@north-slope.org>; Jesse Chielowski <jchmielowski@blm.gov>; Jim Magill <jim_magill@platts.com>; Shine, Jim M (DNR) <jim.shine@alaska.gov>; Joe Longo <Joe. Longo@ hxrd rillingservices.com>; John Martineck <john@bluecrestenergy.com>; Josh Kindred <kindred@aoga.org>; Keith Lopez <Keith.Lopez@caelusenergy.com>; Laney Vazquez <LVazquez@chevron.com>; Lois Epstein <lois_epstein@tws.org>; Longan, Sara W (DNR) <sara.longan@alaska.gov>; Louisiana Cutler <louisiana.cutler@klgates.com>; Marc Kuck <Marc.kuck@enipetroleum.com>; Marcia Hobson <mhobson@eenews.net>; Steele, Marie C (DNR) <marie.steele@alaska.gov>; Matt Armstrong <Matt.Armstrong@bakerhughes.com>; Melonnie Amundson <Melonnie.Amundson@caelusenergy.com>; Franger, lames M (DNR) <mike.franger@alaska.gov>; Morgan, Kirk A (DNR) <kirk.morgan@alaska.gov>; Umekwe, Maduabuchi P (DNR) <pascal.umekwe@alaska.gov>; Pat Galvin <pat@greatbearpetro.com>; Pete Dickinson <pdickinson@allamericanoilfield.com>; Peter Contreras <contreras.peter@epa.gov>; Rachel Davis <Rachel.Davis@caelusenergy.com>; Richard Garrard <rgarrard@nordaqenergy.com>; Richmond, Diane M <Diane.Richmond@bp.com>; Robert Province <robert.province@en ipetroleum.com>; Ryan Daniel < Ryan. Daniel @bp.com>; Sandra Lemke <Sandra.D.Lem ke@conocophillips.com>; Pollard, Susan R (LAW) <susan.pollard@alaska.gov>; Talib Syed <talibs@ecentral.com>; Tina Grovier (tmgrovier@stoel.com) <tmgrovier@stoel.com>; William Van Dyke <bvandyke @petroa k.com> Subject: Second Corrected Public Notice I apologize for second corrected notice. Corrected the Docket Numbers as well as added Inc. to Operator's Name. JodyJ. colombie AOGCC Specia(9lssistant Alaska Oi(and(jas Conservation Commission 333 West 7"' Avenue Anchorage, Alaska 99501 Office: (907) 793-1221 Tax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv colombie@alaska aov. Corrected Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -16-031 and CO 16-032 NordAq Energy. The applications for Reconsideration of the Decision and Order's issued in this matter by the AOGCC. The AOGCC has scheduled oral argument on these applications for September 20, 2017, at 10:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 19, 2017, THollis S. French Chair, Commissioner David Pfeiffer Chief Financial Officer NordAq Energy, Inc. 560 E. 341h Ave., Ste. 200 Anchorage, AK 99503 Corrected Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -16-031 and CO 16-032 NordAq Energy, The applications for Reconsideration of the Decision and Order's issued in this matter by the AOGCC. The AOGCC has scheduled oral argument on these applications for September 20, 2017, at 10:00 a.m. at 333 West Ph Avenue, Anchorage, Alaska 99501. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 19, 2017. //signature on file// Hollis S. French Chair, Commissioner Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 Fairbanks, AK 99711-0055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639-0309 Fairbanks, AK 99706-0868 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, September 15, 2017 2:59 PM To: DOA AOGCC Prudhoe Bay; 'rbrena@brenalaw.com'; 'aguerriero@brenalaw.com'; 'Igould@brenalaw.com'; Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity, 'AKDCWeIIIntegrityCoordinator'; 'Alan Bailey'; 'Alex Demarban'; 'Alexander Bridge'; Alicia Showalter; 'Allen Huckabay'; 'Andrew VanderJack'; 'Ann Danielson'; Anna Raff; 'Barbara F Fullmer'; bbritch; bbohrer@ap.org; 'Ben Boettger'; 'Bill Bredar'; Bob Shavelson; Brandon Viator, 'Brian Havelock'; 'Bruce Webb'; 'Caleb Conrad'; 'Candi English'; Cocklan-Vendl, Mary E; Cody Gauer; Colleen Miller;'Connie Downing'; Crandall, Krissell;'D Lawrence';'Dale Hoffman';'Darci Horner'; 'Dave Harbour'; David Boelens; 'David Duffy'; David House; 'David McCaleb'; 'David McCraine'; 'ddonkel@cfl.rr.com'; Diemer, Kenneth J (DNR); DNROG Units (DNR sponsored); 'Donna Ambruz'; 'Ed Jones'; 'Elizabeth Harball'; Elowe, Kristin; 'Elwood Brehmer'; 'Evan Osborne'; Evans, John R (LDZX); Brown, Garrett A (DNR); 'George Pollock'; Gordon Pospisil; Greeley, Destin M (DOR); 'Gretchen Stoddard'; gspfoff; 'Hunter Cox'; Hurst, Rona D (DNR); Hyun, James 1 (DNR); 'Jacki Rose'; Jason Brune; Jdarlington oarlington@gmail.com); 'Jeanne McPherren'; 'Jerry Hodgden'; Jill Simek; 'Jim Watt'; Jim White; 'Joe Lastufka'; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); 'John Stuart'; Jon Goltz; Chmielowski, Josef (DNR); 'Juanita Lovett'; 'Judy Stanek'; Kari Moriarty; 'Kasper Kowalewski'; 'Kazeem Adegbola'; 'Keith Torrance'; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Kyla Choquette; Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Louisiana Cutler, -'Luke Keller'; 'Marc Kovak'; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); 'Mark Landt'; 'Mark Wedman'; 'Mealear Tauch'; 'Michael Bill'; Michael Calkins; 'Michael Moora'; Mike Morgan; MJ Loveland; mkm7200; 'Motteram, Luke A'; Mueller, Marta R (DNR); knelson@petroleumnews.com; Nichole Saunders; 'Nick Ostrovsky'; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; 'Paul Craig'; Decker, Paul L (DNR); 'Paul Mazzolini'; Pike, Kevin W (DNR); Randall Kanady; 'Renan Yanish; 'Richard Cool'; 'Robert Brelsford'; Robert Warthen; Sara Leverette; 'Scott Griffith'; Shahla Farzan; Shannon Donnelly; 'Sharon Yarawsky'; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); 'Stephanie Klemmer'; 'Stephen Hennigan'; Sternicki, Oliver R; Moothart, Steve R (DNR); 'Steve Quinn'; 'Suzanne Gibson'; sheffield@aoga.org; 'Ted Kramer'; Teresa Imm; Tim Jones; 'Tim Mayers'; Todd Durkee; 'Tom Maloney'; trmjrl; 'Tyler Senden'; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity; Well Integrity, Weston Nash; Whitney Pettus; 'Aaron Gluzman'; 'Aaron Sorrell'; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; 'Bruce Williams'; Bruno, Jeff J (DNR); Casey Sullivan; Corey Munk; 'Don Shaw'; Eppie Hogan ; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; 'Jason Bergerson'; Jesse Chielowski; 'Jim Magill'; Shine, Jim M (DNR); Joe Longo; John Martineck; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Melonnie Amundson; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; 'Pete Dickinson'; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; 'Ryan Daniel'; 'Sandra Lemke'; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); 'William Van Dyke' Subject: RE: Notice of Hearing - NordAq Energy, Inc. Applications for Reconsideration - Corrected Attachments: CO 16-031 and CO 16-032 Oral Argument - Corrected.pdf Please see attached. Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -16-031 and CO 16-032 The applications for Reconsideration of the Decision and Order's issued in this matter by the AOGCC. The AOGCC has scheduled oral argument on these applications for September 20, 2017, at 10:00 a.m. at 333 West 7`h Avenue, Anchorage, Alaska 99501. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 19, 2017. Hollis S. French Chair, Commissioner Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: CO -16-031 and CO 16-032 The applications for Reconsideration of the Decision and Order's issued in this matter by the AOGCC. The AOGCC has scheduled oral argument on these applications for September 20, 2017, at 10:00 a.m. at 333 West 7h Avenue, Anchorage, Alaska 99501. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at (907) 793-1221, no later than September 19, 2017. //signature on file// Hollis S. French Chair, Commissioner Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Friday, September 15, 2017 2:11 PM To: DOA AOGCC Prudhoe Bay, rbrena@brenalaw.com; aguerriero@brenalaw.com; Igould@brenalaw.com; Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity, AKDCWellintegrityCoordinator, Alan Bailey, Alex Demarban; Alexander Bridge; Alicia Showalter, Allen Huckabay; Andrew Vandedack; Ann Danielson; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Brandon Viator; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Cody Gauer; Colleen Miller, Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Darci Horner; Dave Harbour; David Boelens; David Duffy, David House; David McCaleb; David McCraine; ddonkel@cfl.rr.com; Diemer, Kenneth J (DNR); DNROG Units (DNR sponsored); Donna Ambruz, Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Brown, Garrett A (DNR); George Pollock, Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff, Hunter Cox; Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jason Brune; Jdarlington darlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Watt; Jim White, Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); John Stuart, Jon Goltz; Chmielowski, Josef (DNR); Juanita Lovett; Judy Stanek; Kari Moriarty, Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Kyla Choquette; Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Louisiana Cutler, Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; Mike Morgan; MJ Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); knelson@petroleumnews.com; Nichole Saunders; Nick Ostrovsky, Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Robert Warthen; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer; Teresa Imm; Tim Jones; Tim Mayers; Todd Durkee; Tom Maloney, trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity; Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Corey Munk; Don Shaw; Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham 0 (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Shine, Jim M (DNR); Joe Longo; John Martineck; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Melonnie Amundson; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke Subject: Notice of Hearing - NorclAq Energy, Inc. Applications for Reconsideration Attachments: CO 16-031 and CO 16-032 Oral Argument.pdf Please see attached. Jody J. co(ombie AOCI'Cc Spec ia(Assist ant Alaska Oi(andyas Conservation Commission 333 West 7"' Avenue Anchorage, Alaska 9g5111 Office: (9117) 793-1221 fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC(, State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv. colombie@alasko.00v. 13 THE STATE F0 • • GOVERNOR BILL WALKER September 11, 2017 Robin O. Brena BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, AK 99501 Re: Docket Number OTH-16-031 and OTH 16-032 Oral Argument Applications for Reconsideration Dear Mr. Brena: Alaska Gil and Gas Conservation Commission .333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907,279.1433 Fax: 907.276.7542 www.00gcc.aiaska.gov At the request of your office the Alaska Oil and Gas Conservation Commission has rescheduled the hearing on NordAq's Applications for Reconsideration for September 20, 2017 at 10:00 a.m. If you have any questions on this matter, please contact Ms. Jody Colombie Jodv.colombiegalaska.gov or(907)793-1221. Sincerely, Cathy P. Foerster Commissioner THE STATE Alaska Oil and Cas ofLASKA Conservation Commission GOVERNOR BILL WALKER August 16, 2017 Robin O. Brena BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, AK 99501 Re: Docket Number OTH-16-031 and OTH 16-032 Applications for Reconsideration Dear Mr. Brena: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fox: 907.276.7542 www.00gcc.alosko.gov The Alaska Oil and Gas Conservation Commission (AOGCC) has received NordAq Energy, Inc.'s (NordAq) August 13, 2017 Applications for Reconsideration. The AOGCC has scheduled a hearing on NordAq's Applications for Reconsideration for September 19, 2017 at 10:00 a.m. If you have any questions on this matter, please contact Ms. Jody Colombie Jody.colombie@a,alaska.aov or(907)793-1221. Sincerely, Cathy . Fo�te Commissioner 12 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchora&, Alaska 99501 Phone: (907)258-2000 Facsimile: )907)258-2001 RECEIVED AUG 14 2017 AOGCC STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) (Permit No. 211-014) Before Expiration) Docket No. OTH-16-031 of Owner's Rights in CIRI Lease ) C-061684 Failure to Respond to Notice ) of Proposed Enforcement Action ) REQUEST FOR ORAL ARGUMENT NordAq Energy, Inc., through its attorneys, Brena, Bell & Clarkson, P.C., requests oral argument on its Application for Reconsideration filed with this Commission on August 14, 2017. DATED this 141i day of August, 2017. BRENA, BELL & CLARKSON, P.C. Attorneys for NordAgtEnergy, Inc. By V�✓V" \ 6,VN . Robin O. Brena, ABA No. 8410089 Anthony S. Guerriero, ABA No. 8509123 Laura S. Gould, ABA No. 0310042 Request for Oral Argument Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page] of 2 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, Alesice 99501 Phone: (907)Z58.2000 Facsimile: (9(1])258-2001 Certificate of Service The undersigned hereby certifies that a copy of the foregoing document was mailed to the following on the 141 day of August, 2017: Hollis French, Chair/Commissioner Daniel T. Seamount, Jr., Commissioner Cathy P. Foerster, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501 �M-M 4, Avorma L. Murfitt /I Request for Oral Argument Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 2 of 2 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, Alaska 99501 Phone: (90))258-2000 Facsimile: (W7)MS-2001 RECEIVED AUG 14 2017 AOGCC: STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) (Permit No. 211-014) Before Expiration) Docket No. OTH-16-031 of Owner's Rights in CIRI Lease ) C-061684 Failure to Respond to Notice ) of Proposed Enforcement Action ) APPLICATION FOR RECONSIDERATION NordAq Energy, Inc. (NordAq), through its attorneys, Brena, Bell & Clarkson, P.C., applies for reconsideration of the Decision and Order (Decision) issued in this matter by the Commission on July 21, 2017. The Decision is erroneous because it fails to properly consider the evidence that NordAq presented to the Commission to support its position in this matter, and it fails to sufficiently consider the facts of this particular case and applicable case law. PROCEDURAL BACKGROUND On May 24, 2017, the Commission sent a Revised Notice of Proposed Enforcement to NordAq.1 The Revised Notice modified the requirement of a check in the amount of $1,200,000 to a surety bond in that amount in the sole favor of AOGCC.2 As a practical matter, ' Attachment A. The procedural history preceding the Revised Notice of Proposed Enforcement Action is set forth in the Decision at 1. 2 Attachment A at 3. Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 1 of 9 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, Alaska 99501 Phone: (907) 2583000 Facsimile: (901) 2583001 however, NordAq is required to pay cash to obtain such a bond. The Revised Notice also reduced the civil penalty to $100,000.3 On June 8, 2017, NordAq timely responded to the Commission and indicated that NordAq did not concur with the proposed action and requested informal review. On June 12, 2017, the Commission responded to NordAq and indicated that all written submissions and a summary of any oral statements planned by NordAq should be provided to AOGCC no later than noon on June 22, 2017, in advance of informal review. NordAq timely submitted its summary of position and written submissions to AOGCC on June 22, 2017.4 On June 27, 2017, informal review took place at the Commission's office in Anchorage. On July 21, 2017, the Commission issued its Decision that is the subject of this Application for Reconsideration. ARGUMENT I. The Decision is Erroneous Regarding the Evidence NordAq Presented that Supports a Reduction in the Bond Amount. In its Decision, the Commission requires NordAq to submit a surety bond in the amount of $1,200,000 within 30 days of receipt of the Decision.5 The Decision further states that "NordAq has presented no evidence that a reduction in the bond amount is appropriate.6 That finding is simply incorrect. Specifically, NordAq presented an authorization for expenditure 3 Attachment A at 3. 4 Attachment B. All exhibits referenced below are numbered exhibits that are included in Attachment B. 5 Attachment C at 3. 6 Attachment C at 3. Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 2 of 9 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, Alaska 99501 Phone: (907) 358.3000 Facsimile: (90))358-2001 (AFE) that shows an estimated total cost of $483,826 to plug and abandon Shadura-1 (Shadura).1 NordAq also presented an affidavit from Peter M. Dickinson, the president of All American Oilfield, LLC, the general contractor for NordAq for the work to plug and abandon the well. Mr. Dickinson affied that "All American has contracts or agreements with all of the vendors listed on the NordAq authorization for expenditure to plug and abandon Shadura, which is in a total amount of $483,826."S The finding that NordAq presented no evidence to support an appropriate reduction in the bond amount is simply incorrect and is not supported by the evidence. In declining to reduce the amount of the bond required, it appears the Commission did not consider the evidence NordAq presented to support a reduction in the bond. Moreover, the Commission did consider the evidence with respect to the amount of the bond required for Tiger Eye Central -1 (Tiger Eye) and reduced the amount from $1,300,000 to $800,000.9 The Commission found: Because Tiger Eye -1 well site has road access, construction and use of an ice road for plugging and abandonment operations are not required, thus lowering the total cost estimate to bring Tiger Eye -1 into compliance, and in turn, the amount of the bond required."10 The Commission, however, failed to make any findings whatsoever with respect to the evidence NordAq presented on the estimated cost to plug and abandon Shadura. The AFE for Shadura 7 Attachment B, Exhibit 1. 8 Attachment B, Exhibit 3. 9 Attachment D at 3-4. 10 Attachment D at 4. Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 3 of 9 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, Alaska 99501 Phone: (909)258-2000 Facsimile: (907) Zig 2001 and the affidavit of Mr. Dickinson show that the work to plug and abandon Shadura is estimated to be less expensive than the work to plug and abandon Tiger Eye. 11 This is the result of several factors, which are reflected in the AFE for each well." First, transportation services, location preparation, and labor -related costs are less expensive for Shadura than for Tiger Eye because Shadura requires no barging, no camp, and less trucking.13 Second, slickline/eline costs are less for Shadura than for Tiger Eye because Shadura is a straight well while Tiger Eye is a deviated well, and Shadura has fewer perforations than Tiger Eye. 11 Third, cementing services are less expensive for Shadura than for Tiger Eye for the same reasons that slickline/eline expenses are less expensive for Shadura. 15 In addition, NordAq has unused cement from previous jobs that it will use to plug and abandon Shadura.11 This will reduce the amount and cost of cement that NordAq will need to purchase to complete the work to plug and abandon the well. Because the estimated cost to plug and abandon Shadura is less than the estimated cost to plug and abandon Tiger Eye, the amount of the bond required for Shadura should be less than the amount of the bond required for Tiger Eye. The Commission's conclusion to the contrary is simply not tenable. An appropriate amount of the bond required for Shadura, based 11 Attachment B, Exhibit 1 and Exhibit 3, respectively. 12 Attachment B, Exhibit 1; Attachment E. 13 Attachment F. " Attachment F. 15 Attachment F. 16 Attachment F. Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 4 of 9 BRENA, BELL& CLARKSON, P.C. 810 N Street, Suite 100 Anchorage, Alaska 99501 Phone: (90])258-3000 Facsimile: (907) 258-2001 on the reduction made for Tiger Eye, is $580,648.17 NordAq respectfully requests that the Commission reduce the amount of the bond accordingly. This will allow NordAq to use its limited resources to plug and abandon the well as quickly as possible, rather than divert its limited resources from this goal to obtain a bond in an amount that significantly exceeds the estimated cost to plug and abandon the well. As mentioned previously, NordAq has a $500,000 bond in favor of the State that was obtained when NordAq unitized Tiger Eye.18 The work to plug and abandon Tiger Eye is currently in progress, and is expected to be completed by the end of this month or shortly thereafter.19 Once the work to plug and abandon Tiger Eye is complete, NordAq expects the bond funds will be returned upon request and NordAq can then use those funds to obtain security for Shadura. Thus, NordAq further requests that the Commission allow sufficient time for NordAq to request those funds as soon as the work to plug and abandon Tiger Eye is complete. NordAq is committed to fulfilling its obligations to plug and abandon both wells, as evidenced by the fact that NordAq is currently working to plug and abandon Tiger Eye. NordAq will similarly work to plug and abandon Shadura as soon as weather conditions permit. 17 The $800,000 bond amount for Tiger Eye is the amount of the AFE for Tiger Eye ($666,602) multiplied by a factor 1.200116. Similarly, the proposed $580,648 bond amount for Shadura is the amount of the AFE ($483,826) multiplied by a factor of 1.200116. " Attachment F; Attachment B, Exhibit 213. " Attachment F. Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 5 of 9 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suhe 100 Anchorage, Alaska 99501 Phone: (907(258-2000 fauimlle: (907)2S8-2001 II. The Decision is Erroneous Because it Fails to Address Mitigating Factors that Support a Significant Reduction in the Civil Penalty. Under AS 331.05.150(x), $100,000 is the maximum amount of a civil penalty for the initial violation. In its Decision, the Commission imposed a civil penalty of $100,000 "[a]fter consideration of the criteria set forth in AS 31.05.150(g)."20 The Decision, however, contains no discussion whatsoever of the criteria in AS 31.05.150(g). Moreover, most of the criteria set forth in subsection (g) favor NordAq in this matter. The following are mitigating factors under the relevant numbered criteria under AS 31.05.150(g): (1) NordAq acted in good faith when it suspended rather than plugged and abandoned Shadura; (2) NordAq did not willfully commit the violation; (3) the violation is not serious and there is no threat to public health or the environment from the violation; (4) there is no injury to the public resulting from the violation; (5) NordAq derived no benefits from the violation; (6) NordAq does not have a history of noncompliance with the Commission; and (8) NordAq has made and continues to make efforts to correct the violation. 21 In a separate case involving ConocoPhillips, AOGCC considered similar mitigating factors and reduced the civil penalty by over 50 percent 22 20 Attachment C at 3. 21 See AS 31.05.150(g)(1)-(6), (8). Subsection (7) concerns "the need to deter similar behavior by the person committing the violation and others similarly situated at the time of the violation or in the future." 22 Attachment G, ConocoPhillips Alaska, Inc., as Operator of the Kuparuk River Unit; Kuparuk River Field; Well DRU 1D-39 Enforcement Action, AOGCC Order No. 33 (May 20, 2005). Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 6 of 9 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 180 Anchorage, Alaska 99501 Phone: (90))258-2000 Facsimile: (902)258-2001 Shadura was suspended rather than plugged and abandoned because NordAq was actively discussing alternative uses of Shadura until late 2016.23 NordAq is now actively engaged in efforts to plug and abandon Shadura, and presented evidence of this to the Commission.24 In addition, NordAq has consistently cooperated with AOGCC in this matter. By way of example, the Decision notes that "[a]fter the AOGCC noticed the public hearing, NordAq contacted AOGCC with a proposed plan to plug and abandon Shadura-1. AOGCC approved the plan on February 15, 2017."25 Since that time, NordAq has continued to cooperate with AOGCC in this matter. The Decision, however, contains no discussion of these mitigating factors with respect to the civil penalty imposed. NordAq maintains that a significant reduction in the civil penalty is warranted under the facts of this case. Based on the mitigating factors set forth above, NordAq respectfully requests that the Commission reduce the amount of the civil penalty to $10,000—commensurate with the facts of this case and the evidence supporting those facts. CONCLUSION The Decision at issue in this matter is erroneous because it fails to properly consider the evidence that NordAq presented to the Commission to support its position in this matter. First, the Decision erroneously found that NordAq presented no evidence that a reduction in the bond amount for Shadura is appropriate. That finding is simply incorrect. NordAq presented an 23 Attachment B, Exhibit 4. 24 Attachment B, Exhibit 1 and Exhibit 3. 25 Attachment C at 1. Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 7 of 9 BRENA, BELL & CLARKSON, P.C. 810 N Street, Sulte 100 Anchorage, Alaska 99501 Phom:(W7)258-2000 Facsimile: (90])258-2001 AFE for Shadura that shows the total estimated cost to plug and abandon the well is $483,826, which is significantly lower than the required bond amount of $1,200,000. In addition, NordAq presented an affidavit from the general contractor for NordAq for the work to plug and abandon Shadura that supports the AFE. Second, the Decision erroneously fails to address mitigating factors in this particular case that support a significant reduction in the civil penalty in the maximum amount of $100,000. The Decision summarily refers to the criteria set forth in AS 31.05.150(g) as the basis for the penalty, but there is no discussion of those criteria and most of the criteria as applied to this case. Nearly all of the criteria favor NordAq under the facts of this case. NordAq thus respectfully requests a reduction in the amount of the bond required, consistent with the facts and the evidence in this case. NordAq further requests that the Commission allow sufficient time for NordAq to recover the return of a $500,000 bond once the work to plug and abandon Tiger Eye is complete, to allow NordAq to use those funds to obtain security for Shadura. Finally, NordAq requests that the Commission reduce the civil penalty to $10,000—commensurate with the facts and the evidence in this case. DATED this 141 day of August, 2017. BRENA, BELL & CLARKSON, P.C. Attorneys for NordAq Energy, Inc. By k1j� 1. . Robin O. Brena, ABA No. 8410089 Anthony S. Guerriero, ABA No. 8509123 Laura S. Gould, ABA No. 0310042 Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 8 of 9 BRENA, BELL & CLARKSON, P.C. 810 N Street, SuRe 100 Anchowe, Alaska 99501 Ph.n.:(907)259-2000 Facsimile: (90))258-2001 Certificate of Service The undersigned hereby certifies that a copy of the foregoing document was mailed to the following on the 141 day of August, 2017: Hollis French, Chair/Commissioner Daniel T. Seamount, Jr., Commissioner Cathy P. Foerster, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501 Application for Reconsideration Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 9 of 9 THE STATE r GOVERNOR BILL WALKER May 24, 2017 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7015 0640 0003 5185 5918 Robert Warthen, Senior Advisor NordAq Energy, Inc. 560 East 34th Avenue, Suite 200 Anchorage, AK 99503 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.olaska.gov Re: Docket Number: OTH-16-031 Revised Notice of Proposed Enforcement Action Failure to Plug and Abandon Shadura-1 (PTD 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Failure to Respond to Notice of Proposed Enforcement Action Dear Mr. Warthen: The Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies NordAq Energy Inc. (NordAq) of a revised proposed enforcement action. Nature of the Violations or Noncompliance (20 AAC 25.535(b)(1)). NordAq violated 20 AAC 25.105(a) by its failure to permanently abandon the Shadura-1 exploratory well (Shadura-1) before expiration of NordAq's rights in Cook Inlet Region, Inc. (CIRI) oil and gas lease C-061648. On February 1, 2011, NordAq was issued Permit to Drill No. 211-014 for the Shadura-1 exploratory well. During February and March of 2011, Shadura-I was drilled, briefly tested, and then temporarily suspended (on April 1, 2011) due to deteriorating winter -access conditions at the well location. Further logging and testing of the well occurred in January and February 2012. The well was suspended on February 26, 2012. The Shadura-1 well location is only accessible during winter months. ATTACHMENT A PAGE 1 of 4 Docket Number: OTH-16-31 May 24, 2017 Page 2 of 4 CIRI is the landowner' of lease C-061648. NordAq was the owner2 of that lease. CIRI lease C- 061648 was terminated effective June 30, 2015. In the event an operator defaults on its regulatory obligations to plug and abandon a well, the AOGCC looks to the landowner to fulfill those obligations. NordAq violated 20 AAC 25.105(a) when it failed to properly plug and abandon Shadura-I prior to termination of its rights in CIRI lease C-061648. On December 2, 2016, the AOGCC sent to NordAq, via certified mail, a Notice of Proposed Enforcement Action that allowed NordAq a period of 90 days to either: • Submit a Sundry Application to the AOGCC for the plugging and abandonment of Shadura-1 and properly plug and abandon Shadura-1 in accordance with AOGCC regulations; or • Submit a check in the amount of $1,200,000, which AOGCC estimates to be the cost to properly plug and abandon Shadura-1. The Notice of Proposed Enforcement Action proposed two civil penalties for violating 20 AAC 25.105(a) and 20 AAC 25.535(b)(2): 1. $100,000 for the initial violation: failure to permanently abandon Shadura-1 before expiration of owner's rights in CIRI lease C-061648; and 2. $521,000 for violating the requirement to plug and abandon and clear the well site to the satisfaction of the AOGCC as per 20 AAC 25.112 and 20 AAC 25.170 (521 days at $1,000 per day). On January 14, 2017, the AOGCC noticed a public hearing for April 4, 2017 at 10:00 a.m. concerning NordAq's failure to permanently abandon Shadura-1 and to respond to the Notice of Proposed Enforcement Action. On January 20, 2017, NordAq submitted a Sundry Application to permanently abandon Shadura- 1. On February 15, 2017, NordAq's Sundry Application to permanently abandon Shadura-1 was approved. At the April 4, 2017 public hearing, Robert Warthen of NordAq and Colleen Miller of CIRI testified at the hearing. Mr. Warthen testified that: • CIRI canceled NordAq's leases around July 15, 2015. • NordAq has obtained all federal, state, and local permits, certificates of liability, bonds, and land -use permit certificates to access the Shadura-1 well location; "Landowner" means the owner of the subsurfwe estate of the tract affected. '- "Owner" means the person who Ito the right to drill into and produce from a pool and to appropriate the oil and gas the person produces from a pool for that person and others. "Person" includes a natural person, corporation, association, partnership, receiver, trustee, executor. administrator, guardian, fiduciary or other representative of any kind, and includes a department, agency or instrumentality of the state or a governmental subdivision of the sate. ATTACHMENT A PAGE 2 of 4 Docket Number: OTH-16-31 May 24, 2017 Page 3 of 4 • NordAq has obtained letters of non -objection from Tesoro Corporation and Hilcorp Alaska, LLC (for crossing buried pipelines) and from the landowner, CIRI; • NordAq's operations to abandon permanently Shadura-1 began in March 2017, but deteriorating winter -access conditions at the well location forced NordAq to postpone further operations until December 2017; and • NordAq's failure to respond to the Notice of Proposed Enforcement Action was due to a robbery that occurred at NordAq's offices. Ms. Miller testified that: • CIRI terminated oil and gas leases C-061647, C-061648 and C-061649 because NordAq did not meet lease commitments; and • CIRI sees no current or future value in retaining Shadura-1 as an active well. The record closed at the end of the hearing. Proposed Enforcement Action (20 AAC 25.535(b)(3). Within 30 days of receipt of this letter, NordAq shall submit a surety bond for $1,200,000 issued on Form 10-402A in the sole favor of the AOGCC by an authorized insurer under AS 21.09 whose certificate of authority is in good standing with the State of Alaska. This bond will be returned to NordAq following permanent abandonment of Shadura-1 and clearance of well location. This bond shall be forfeited to the AOGCC if Shadura-1 is not permanently abandoned and the well location is not cleared within one year of the date of this Enforcement Action. After consideration of the criteria set forth in AS 31.05.150(g), the AOGCC proposes to impose one civil penalty on NordAq for violating 20 AAC 25.105(a) and 20 AAC 25.535(b)(2): $100,000 for the initial violation of failure to permanently abandon Shadura-1 before expiration of owner's rights in CIRI lease C-061648. The total civil penalty is $100,000. Riehts and Liabilities (20 AAC 25.535(b)(4)). Within 15 days after receipt of this notification — unless the AOGCC, in its discretion, grants an extension for good cause shown — NordAq may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide NordAq an opportunity to submit documentary material and make a written or oral statement. If NordAq disagrees with the AOGCC's proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10 -day period, the proposed decision or order will become final on the 11th day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If NordAq does not concur in the proposed action described herein, and the AOGCC finds that NordAq has violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other ATTACHMENT A PAGE 3 of 4 Docket Number: OTH-16-31 May 24, 2017 Page 4 of 4 approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action or remedial work; (ii) suspension or revocation of a permit or other approval; (iii) payment under the bond required by 20 AAC 25.025; and (iv) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as NordAq received reasonable notice and opportunity to be heard with respect to the AOGCC's action. Any action described hereto or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05. Sincerely, Cathy,P. Foerster Chair, Commissioner cc: Sophie Minich, CIRI President and CEO, Cook Inlet Region, Inc., (via Certified Mail) ATTACHMENT A PAGE 4 of 4 N0KDAQ ENE-KGY, INC. June 22, 2017 I. K"L f77 -M At Ms. Cathy P. Foerster, Chair Alaska Oil and Gas Conversation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Re: Docket Number: OTH-16-031 Revised Notice of Proposed Enforcement Action Failure to Plug and Abandon Shadura-1 (PTD 211-014) Before Expiration of Owner's Rights in CHU Lease C-061648 Dear Ms. Foerster: In accordance with your letter dated June 12, 2017, NordAq submits this summary of its position in this matter and all accompanying documentary material. With respect to the requirement for a surety bond, NordAq assumes the requirement is not in effect because it is part of the proposed enforcement action to which NordAq timely responded. NordAq respectfully requests that AOGCC reconsider the bonding requirement, and submits the following facts and attached documentary material to support these facts. The amount of the bond significantly exceeds the estimated cost to plug and abandon the Shadura-1 ("Shadura") well. Attached as Exhibit 1 is NordAq's authorization for expenditure to plug and abandon the well, which is in a total amount of $483,826. This is less than half of the proposed amount of the surety bond_ 560 E. 34"' Avenue, Anchorage, AK ! Main: 907.646.9315 Suite 200 99503 ATTACHMENT B PAGE 1 of 36 Fax_ 907.646.9317 www.nordagenergV.com Ms. Cathy P. Focrster June 22, 2017 Page 2 NORDAQ E=NEKGY, INC. 2. NordAq currently has a Personal Bond in the amount of $200,000 on file with AOGCC, a Statewide Oil and Gas Bond in the amount of $500,000 on file with the Department of Natural Resources ("DNR"), as well as a $19,000 bond on file with DNR that is specific to Shadura. Attached as Exhibit 2 are documents to demonstrate the existence and extent of these bonds. NordAq believes these bonds are applicable to the plugging and abandonment work that remains to be done. 3. NordAq is currently working with a general contractor and subcontractors to do the work necessary to plug and abandon the well. The work will begin after there is approximately one foot of frost and one foot of snow in the area. Attached as Exhibit 3 is an affidavit from the general contractor, Peter M. Dickinson of All American Oilfield, LLC, to attest to these facts. NordAq would appreciate your consideration of these facts with respect to its request for AOGCC to reconsider the bonding requirement To the extent the State wants a surety bond to protect against the risk of NordAq failing to plug and abandon Shedura, NordAq is actively moving forward to plug and abandon the well as quickly as possible (see Affidavit of Stephen F. Hennigan referenced below). In addition, NordAq currently has significant bonds on file with the State of Alaska that are designed to protect the State in the unlikely event of NordAq's failure to perform its obligations with respect to the well. NordAq is concerned that AOGCC's proposed level of bonding will divert valuable company resources such that it will detract from the goal to plug and abandon the well as quickly as possible. NordAq believes the foregoing facts are sufficient to justify no additional bonding. With respect to the proposed civil penalty, NordAq maintains that it should not be subject to the penalty under the facts of this case. Shadura was suspended rather than plugged and abandoned earlier because NordAq intended to drill a second well and use Shadura-1 as a sidetrack candidate or use it for other utility purposes. Attached as Exhibit 4 is an affidavit from of Stephen F. Hennigan, who was involved with the preparation and submittal of the 3000 A Street, Suite Anchorage, AK 1 Main: Fax 410 99503 907.646.9315 907.646.9317 www.nordagenergy.com ATTACHMENT B PAGE 2 of 36 Ms. Cathy P. Foerster June 22, 2017 Page 3 NORDAQ ENERGY, INC. end -of -well sundry for Shadura, to attest to this. NordAq was discussing alternative uses of the well with other parties until late 2016. The second well, however, was not drilled. In addition, NordAq has cooperated with AOGCC in this matter by timely submitting a Sundry Application to permanently plug and abandon Shadura as required by the original Notice of Proposed Enforcement Action dated December 2, 2016. As noted in the Revised Notice of Proposed Enforcement Action dated May 24, 2017, AOGCC approved that application. NordAq would appreciate your consideration of these facts with respect to the proposed civil penalty. NordAq reasonably intended to drill a second well and use Shadura-1 for other purposes, and NordAq has made a good -faith effort to cooperate with AOGCC. NordAq is again concerned that AOGCC's proposed penalty will divert valuable company resources such that it will detract from the goal to plug and abandon the well as quickly as possible. NordAq believes the foregoing facts are sufficient to justify no civil penalty. In the alternative, NordAq requests that AOGCC stay the bonding requirement and proposed civil penalty until February 28, 2018, at which time NordAq anticipates that the work on Shadura will be complete. If the work is complete at that time, NordAq requests that the Commission waive the bonding requirement and proposed civil penalty. Sincerely, NORDAQ ENERGY, C. B } Y David Pf Sffer Enclosures Chief Financial Officer 3000 A Street, Suite ! Anchorage, AK j Main: I Fax: 410 99503 ! 907.646.9315 ! 907.646.9317 www.nordagenergy.com ATTACHMENT 8 PAGE 3 of 36 NordAq Energy Shadura #1 Plug and Abandon WELL NAME: Shadura #1 POB DAYS: 21 OBJECTIVE: PSA OPERATING DAYS: 7 AFE #: ....... -- DATE: TOTAL: 6/14/2017 $483,826 TOTAL DAYS: 28 EXPENSE CATEGORY TOTAL COMMENTS VENDOR Expense Subcategory Permitting Permitting $ 22,000.00 AOGCC, Field Engineering PEI/ Sierra Hamilton Support and Personnel $ - Communications $ 1,500.00 plug number AAO Management Personnel $ 59,640.00 30 days x 1988 AAO Company man $ 41,748.00 21 days x 1988 AAO Surface rentals $ 10,000.00 sills, portable fuel tank, etc.. AAO Welding machine $ 2,000.00 2000 per month AAO Break shack $ 1,200.00 1200 per month Mag tech Excavator $ 3,100.00 3100 per month Airport Chieftan $ 25,000.00 25,000/ month Atigun Generators $ 7,000.00 28 days x 250 (two gens) AAO Bobcat $ 7,000.00 7000/ month Airport Transportation Services $ - East side Trucking $ 6,250.00 5 days x 1250 Weaver bros Location Preparation $ - Road, Pad labor Roustabouts $ 98,000.00 (1x 889 2x 679) X18 AAO Pad / Pit liner $ 5,000.00 Herculite DNOW Welding labor $ 3,896.00 4 days x 974 AAO Water Tank, hoses, and Pumps $ 12,600.00 28 x 450 Mag Tec, Rain 4 rent Hotel $ 10,500.00 5 x 100 per person 21 days, Main street Health, Safety and Environmental $ - Safety and Compliance $ 28,140.00 1005 days x 28 AAO Waste Management $ - Refuse Disposal $ 1,000.00 month rental and disposal Triangle recycling Septic Disposal $ 2,000.00 2 porta potties and disposal Peninsula Pumping Materials and Supplies $ - Fuel $ 7,500.00 2500 gallons x $3 Doyle's Slickline / Eline $ 24,320.00 8 runs x 3040 Pollard Downhole Tools $ - Plugs $ 1,600.00 2 CIBP's Pollard Perfs $ 2,500.00 2 x 1250 Pollard Cementing Services - P&A $ - Dump bail $ 5,250.00 7 x 750 Pollard P&A $ 76,000.00 2 plugs/pumping services Atigun Subtotal: $ 464,744 Management fee: $ 19,082.00 Cost+10% AAO TOTAL: $ 483,826 ATTACHMENT B EXHIBIT 1 (NORDAO) PAGE 4 of 36 Page 1 of 1 STATE OF ALASKA k F 'c,. �; ALASKA OIL AND GAS CONSERVATION COM1vv1ISSION CE1 :fLE-,k ASSIGNMENT OF CERTIFICATE(S) OF DEPOSIT AND JAN 2. 1 `tl() CONFIRMATION AND AGREEMENT OF ISSUING NK P � � <r?i} fa .T'sii8I0IY On T �wN -_ , 2011, ur,ttt ilp (PrinZciCpal, 'Igor) ` ^ A 1350 IVa �.it .7i" A= pale Ak giso7 (Address) � executed the following certificate(s) of deposit (Certificate(s)): I. 9 63G9b3clit in the amount of $ 2QP0 ow 2• in the amount of $ to secure, in accordance with 20 AAC 25.025, any default that may occur under State of Alaska, Alaska Oil and Gras Conservation Commission (AOGCC) Personal Bond No. 4636463`tl(IBond). WHEREAS, under 20 AAC 25.025, an operator submitting a personal bond on Form 10- 402B, must provide security, issued in the sole favor of the AOGCC, by a bank authorized to do business in the State of Alaska guaranteeing the operator's performance; NOW THEREFORE, to meet the requirements of 20 AAC 25.025, under this Assignment of Certificate(s) of Deposit and Confirmation and Agreement of Issuing Bank (Assigrunent), A. the Principal./Obligor agrees to the following: it assigns its rights to the Certificate(s) to the AOGCC; 2. the State of Alaska, by and through its duly authorized agents, is irrevocably constituted and appointed as its Attorney -in -Fact to do all things necessary to effectuate the purposes of this Assignment; and this Assignment shall remain in full force and effect until released in writing by the AOGCC in accordance with 20 AAC 25.025(c). B. The Issuing Bank confirms and agrees to the following: it is a bank authorized to do business in the State of Alaska; AOGCC — ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 1 of 5 ATTACHMENT B EXHIBIT 2A (NORDAQ) PAGE 5 of 36 Page 1 of 6 2. it is federally insured or a Federal Reserve Bank branch; 3. it has changed its records to show that' subject to its compliance with all applicable State of Alaska and federal laws, only the AOGCC may collect the principal amount(s) of the Certificate(s); 4. it has placed a hard hold or freeze on the Certificate(s) in accordance with this Assignment; 5. it shall, within 3 business days after the Certifacate(s) are issued, deliver the original Certificate(s)—or, if it does not issue original Certificate(s), other account documents, such as receipts, adequately showing that the Certificate(s) were issued—to the AOGCC (which shall hold them until this Assignment is released in writing by the AOGCC); 6. the Certificate(s) comply with the following requirements: (a) the principal of the Certificate(s) is/are in the sole favor and for the exclusive use of the AOGCC—i.e., the Certificate(s) will be held by the Issuing Band in trust for the AOGCC; (b) the Certificate(s) is/are assigned to the AOGCC in writing and upon the books of the Issuing Bank to secure any default, as determined by the AOGCC in its sole discretion, that may occur under the Bond, which accompanies the Certificate(s); (c) subject to the Issuing Bank's compliance with all applicable State of Alaska and federal laws, the AOGCC alone, in its sole discretion, shall authorize the release, in any form, to any party of any or all of the principal amount(s) of the Certificate(s); (d) the Certificate(s) is/are, at any time prior to maturity, redeemable, and the principal amount(s) of the Certificate(s) is/are payable, in whole or in part at the AOGCC's sole discretion, to the AOGCC immediately upon the AOGCC's written demand; (e) the Certificate(s) is/are in such amount(s) that liquidation prior to maturity will result in the full amount of the Bond, or the Certificate(s) is/are issued with the provision that all costs of liquidation (including, for example, penalties for early redemption) will be paid out of the interest earned of the PrincipaUObligor, not out of principal amount(s) of the Certificate(s); (f) the Certificates) is/are federally insured; (g) the Certificate(s) automatically renew; AOGCC — ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 2 of 5 ATTACHMENT B EXHIBIT 2A (NORDAQ) PAGE 6 of 36 Page 2 of 6 (h) the Certificate(s) is/are subject to no expiration date that would restrict the right of the AOGCC to collect the principal amount of the Certificate(s) at any time of default; and (i) the Certificate(s) is/are not, and will not be, subject to any rights of set-off or liens of the Issuing Bank; and 7. the State of Alaska, by and through its duly authorized agents, is irrevocably constituted and appointed as its Attomey-in-Fact to do all things necessary to effectuate the purposes of this Assignment; 8. this Assignment shall remain in full force and effect until released in writing by the AOGCC in accordance with 20 AAC 25.025(c); and 9. it shall immediately notify the AOGCC and Principal/obligor if it becomes unable, for any reason, to fulfill its obligations under the Certificate(s) or if it teams, or reasonably should have learned, that any confirmation or agreement above is or becomes inaccurate. IN WITNESS WHEREOF, the Principal/Obligor has set its signature and seal (if it has one) thisi. day of 21 ignature of •, •. Title: 11,t� A _ i ..ri- IN WITNESS WHEREOF, the Issuing Bank has set its signature and seal (if it has one) this.2 1 day of Zona _ 1201k (SignaboifofIss Bank) By:rJ ne. +mon Title: 1&9fn"s % As AOGCC — ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 3 of 5 ATTACHMENT B EXHIBIT 2A (NORDAQ) PAGE 7 of 36 Page 3 of 6 STATE OF ALASKA ) )ss. 3'4_ JUDICIAL DISTRICT ) ACKNOWLEDGEMENT OF PRINCIPAL/OBLIGOR On this;ZAay of 26y 1 , before me, a notary public in and for the State of Alaska, duly commissioned and sworn, appeared Faa.tx ' Y) • w a tu.. to me personally known, who, being by me duly sworn, said the following: (1) 4e/sbe is of -Dt—k 0 Y _.e�1C , the Principal/Obligor that executed the attached Assignment of Certificate(s) of Deposit and Confirmation and Agreement of Issuing Bank (Assignment); (2) the seal (if applicable) affixed to the Assignment is the PrincipaliObligor's corporation seal; (3) the Assignment was signed and sealed (if applicable) on behalf of the PrincipaVObligor by the authority of its Board of Directors; and (4) executing the Assignment is the free act and deed of the Principal/Obligor for the uses and purposes set forth in it. IN WITNESS WHEREOF, I have hereunto set my hand and official seal on the day, month, and year aforesaid. "t4p2�'� "��_ r�NOTARY Notary Public in and for the State of Alaska PUBLIC My Commission Expires: 02 - 4- — ?�O 1 L— AOGCC — ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 4 of 5 ATTACHMENT B EXHIBIT 2A (NORDAQ) PAGE 8 of 36 Page 4 of 6 STATE OF ALASKA ) 1 )ss. _ JUDICIAL DISTRICT ) ACKNOWLEDGEMENT OF ISSUING BANK On this day of 2D /1 , before me, a notary public in and for the State of Alaska, duly commissioned and sworn, appeared C to me personally known, who, being by me duly sworn, said the following: (1) he/she is C-1V—b% 1JtJ:i �Ou 1 OAC tP-U of t_( v' , the issuing Bank that executed the attached Assignment of Certificate(s) of Deposit and Confirmation and Agreement of Issuing Bank (Assignment); (2) the seal (if applicable) affixed to the Assignment is the Issuing Bank's corporation seal; (3) the Assignment was signed and sealed (if applicable) on behalf of the Issuing Bank by the authority of its Board of Directors; and (4) executing the Assignment is the free act and deed of the Issuing Bank for the uses and purposes set forth in it. IN WITNESS WHEREOF, I have hereunto set my hand and official seal on the day, month, and year aforesaid. 54 12A "oL•� (N(NOTARY Notary Public in and for the State of Alaska PUBLIC My Commission Expires: ©,2-� � � 'o---- AOGCC — ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 5 of 5 ATTACHMENT B EXHIBIT 2A (NORDAQ) PAGE 9 of 36 Page 5 of 6 Time Account Receipt/Disclosure 9638963911 a Banker Name: OlTicer/PdrtfolioNumber. Date: CHRISTIAN COSTELLO IF0605 101/25/2011 BarkerPhoram Rue Numbs Banker All: Banker MAC: 907/267-5565_ 103402 10001081 IK3207-011 Customer/Account Information Primary Custom Name: Customer Number JECN): NORDAQ ENERGY INC. 1428506192336118 COID: Product: Account Numbs Open Cate: Term: Maturitynate: 100569 ICDA 19636963911 101/25/2011 16 months 07/25/2011 Time Account Opening Deposit: bherest Rate: Annual Percentage Yield: FisedRate: Variable Rate: Renewal Tun[ 1$200, 000.00 _ 0.208_0_208 IYes INo 16 months Interestwillbepaid: The metladefpaymem witbe: EVERY O1 MONTHS AND AT WITHDRAWAL _ _ BY ADDING TO PRINCIPAL LOU WILL AUTOMATICALLY RENEW MY TIME ACCOUNT AT MATURITY UNLESS I NOTIFY YOU OTHERWISE Account Title and Mailing Information Customans) Listed on Account Maeemg Address: NORDAQ ENERGY INC. 9350 NORDIC ST Address Lire 2 ITF: ALASKA OIL AND GAS City State CONSERVATION COMMISSION ANCHORAGE JAK ZIP/Po"Cade: Country: 99507-6035 JUS This is a receipt. It need not be presented at the time you obtain payment from the Bank. W5 01 68 (1 1 -1 0 SVP) L Page 1 of 1 ATTACHMENT B EXHIBIT 2A (NORDAQ) PAGE 10 of 36 Page 6 of 6 November 6, 2012 THE STATE Department. of Natural Resources °fALASKA DIVISION of Oil & Anchorage Office r �9'.Y ;ver�e Sara 1 , i)' LtrNOR N $L'11'T^4A!d AnGFG�Gge, A'GS<G�G 669 rV u -. 997.269 asCC ;ox. v0-1,265 8939 Nordaq Energy Inc. Attn: Robert Warthen 3000 A street, Suite 410 Anchorage, AK 99503. RE: Nordaq Energy Inc. Statewide Oil and Gas Lease Bond Dear Mr. Warthen: The Statewide Oil and Gas Bond submitted by Nordaq Energy, Inc. in the form of a Certificate of Deposit with Wells Fargo Bank (Account # 9422389560) in the amount of $500,000 under the control of the State of Alaska is hereby accepted 09/17/2012 under I l AAC 83.160. The Bank has agreed to not alter or cancel the Certificate of Deposit without the State's concurrence and the Certificate of Deposit is subject to the following conditions: 1. The State of Alaska may require additional financial security as necessary. 2. Nordaq Energy Inc. Does hereby irrevocably constitute and appoint the State of Alaska, Department of Natural Resources, Division of Oil and Gas by and through its authorized agents and Attorney -in Fact as Beneficiary of the Certificate of Deposit. 3. Nordaq Energy Inc. agrees that only the State of Alaska, Department of Natural Resources, division of Oil and Gas, upon written notice shall cause the transfer of any and all funds in the Certificate of Deposit referenced above. The statewide bond satisfies all the bond requirements to which an oil and gas lease is subject under the Department of Natural Resources. All oil and gas bonds must comply with I 1 AAC 82.600. Thank you for providing the Certificate of Deposit to satisfy the Statewide Oil and Gas bond requirements. If you have any questions, contact David Edmunds at 907-269-8769 or email him at david.edmunds@alaska any. Sincerely, Kim Kruse Petroleum Land Manager ATTACHMENT B EXHIBIT 26 (NORDAQ) PAGE 11 of 36 Pagel of 6 cc. Rachelle Burnett Business Relationship Manager 1351 E. Huffman Road Suite 201 Anchorage, Alaska Jeremy Vance Wells Fargo Bank 301 W. Northern Lights Blvd., Suite 100 Anchorage, Alaska 99503 ATTACHMENT B EXHIBIT 2B (NORDAQ) PAGE 12 of 36 Page 2 of 6 Pone DOGiFM01 October 2011 FM STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES [rR��.�JJ�DIVISION OF OIL AND GAS uu �� tt�Er AUG 2 €} Cb1t 1 STATEWIDE OIL AND GAS BOND DIVISION OF OIL AND GAS ALL MEN BY THESE PRESENTS that we, as pnnotpai, aria a 0ypy , whose address is as surety, are held and firmly bound unto the State of Alaska in the `sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00), lawful money of the United States for the use and benefit of (1) the State of Alaska, (2) any owner of a portion of the land subject to the coverage of this bond who has a statutory right to compensation in connection with a reservation of the oil and gas deposits to the State of Alaska, and (3) any lessee or permittee under a lease or permit issued by the State of Alaska prior to the issuance of an oil or gas lease for same land subject to this bond, covering the use of the surface or the prospecting for or development of other mineral deposits in any portion of such land, to be paid to the State of Alaska. For such payment, well and truly to be made, we bind ourselves and each of us and each of our heirs, executors, administrators, successors and assigns, jointly and severally by these presents. THE CONDITIONS of the foregoing obligations are such that, WHEREAS: A. The principal in one or more of the following ways has an interest in oil and gas leases on lands of the State of Alaska under the jurisdiction of the Department of Natural Resources: (1) as the lessee of such leases, (2) as the approved holder of operating rights in all or part of the lands covered by such leases under operating agreements with the lessee, and (3) as designated operator or agent under such leases pending approval of an assignment or operating agreement; and, B. The principal is authorized to drill for, explore for, develop, produce, process, and market oil and gas deposits in or under the lands covered by such leases and is obligated to comply with certain covenants and agreements set forth in such leases; and, C. The principal and surety agree that the coverage of this bond shall extend to all of the principal's holdings under such leases in the State of Alaska, and without notice to the surety shall also extend to and include: 1. Any such oil and gas lease hereafter issued to or acquired by the principal, the coverage to become effective immediately upon such issuance or upon approval by the State of Alaska of a transfer in favor of the principal; and, ATTACHMENT B EXHIBIT 2B (NORDAQ) PAGE 13 of 36 Page 3 of 6 2. Any such operating agreement hereafter entered into or acquired by the principal, the coverage to become effective immediately upon approval by the State of Alaska of the agreement or of a transfer of such an agreement to the principal; and, 3. Any designation hereafter or the principal as operator or agent of a lessee under such a lease, the coverage to become effective immediately upon the filing of such a designation with the State of Alaska; and, 4. Any extension of a lease covered by this bond, such coverage to continue without any interruption due to the expiration of the term set forth in the lease; Provided however, that the surety may elect to have additional coverage authorized under this Paragraph C, to become inapplicable as to all interests of the principal acquired more than 30 days after the receipt of written notice of such election by the Division of Oil and Gas; and, D. The surety hereby waives any right to notice of, and agrees that this bond shall remain in full force and effect notwithstanding: 1. A transfer or transfers, either in whole or in part, of any or all of the leases or of the operating agreements, and further agrees to remain bound under this bond as to the interests, either in the leases or in the operating agreements or in both, retained by the principal when the approval of the transfer or transfer becomes effective; and, 2. Any modification of a lease or operating agreement or obligations thereunder whether made or effected by commitment of such lease or operating agreement to unit, cooperative, communitization, or storage agreements, or development contracts, suspensions of operations or production, waivers, suspensions or changes in rental, minimum royalty and royalties, compensatory royalty payments, or otherwise; and, E. The principal and surety agree that notwithstanding the termination of any lease or leases, operating agreements, or designations as operator or agent covered by this bond, whether the termination, in part or wholly is by operation of law or otherwise, the bond shall remain in full force and effect as to all remaining leases, operating agreements, or designations covered by this bond; and, F. The principal, as to any lease or part of a lease for lands as to which he has been designated as operator or agent or approved as operator in consideration of being permitted to furnish this bond in lieu of the lessees, agrees and by these presents does hereby bind himself to fulfill on behalf of each lessee all the obligations of each such lease for the entire leasehold in the same manner and to the same extent as though he were the lessee; and, G. The principal and surety agree that the neglect or forbearance of the lessor, in enforcing against the lessees of such lessor the payment of rentals or royalties or the performance of any other covenant, conditions, or agreement of the leases, shall not in any way release the principal and surety, or either of them, from any liability under this bond; and, ATTACHMENT B EXHIBIT 2B (NORDAQ) PAGE 14 of 36 Page 4 of 6 H. The principal and surety agree that, in the event of any default under the leases, the lessor may commence and prosecute any claim, suit, action, or other proceeding against the principal and surety or either of them without the necessity ofjoining the lessees. NOW THEREFORE, if said principal shall in all respects faithfully comply with all of the provisions of the leases referred to hereinabove, then the above obligations are to be void; OTHERWISE. to remain in full force and effect. Dated this 5 // 4ay of2&AyT 20/^ APPROVAL AND ACCEPTANCE BY THE STATE OF ALASKA By: (Yl u„A . /tie t/1JZ_ Dated: p� Z Department of Natural Resources, Division of Oil and Gas INSTRUCTIONS: I. The surety on the bond may be any corporation qualified to issue performance and reclamation bonds in the State of Alaska. 1 If the principals are partners, their individual names shall appear in the spaces provided, with recital that they are partners comprising a firm, naming it, and all members of the partnership shall execute the bond as individuals. 3. Where this bond is executed by a corporation, either as surety or as principal, the bond must be executed by a duly authorized officer, and the individual signing must submit evidence of their authority to act for the corporation. 4. When any party executes this bond through an agent, a power of attorney or other evidence of authority must accompany this bond. ATTACHMENT B EXHIBIT 2B (NOROAQ) PAGE 15 of 36 Page 5 of 6 South Anchorage Business Banking MAC K3211-020 1351 E. Huffman Road Suite 201 Anchorage. AK 99515 September 17, 2012 State of Alaska RE: Certificate of Deposit To Whom It May Concern: This letter is to inform you that Nordaq Energy, Inc. has one (1) Certificates of Deposit (CD) with Wells Fargo Bank, N.A. The CD listed below are located at branch 6759 (13 51 E Huffman Ste 202 Anchorage, AK 99515). Account Amount Maturity Date 9422389560 $500,000 01/31/2013 The above listed certificate of deposit is under the control of The State of Alaska. The Bank will not alter or cancel the certificate of deposit without the State's concurrence. Release of funds to the beneficiary, Nordaq Energy, Inc., is dependent upon the State's written instruction. The certificate of deposit is set to renew automatically. Please feel free to contact me at 907-348-5367 with any questions or concerns. Sincerely, CaRac llee Burnett Business Relationship Manager Together we'll go far �_:.r\:... _-...�.�___ fir• ATTACHMENT B EXHIBIT 2B (NORDAQ) PAGE 16 of 36 Page 6 of 6 THE STATE 01ALASKA GOVERNOR SEAN PAIINIA.l. September 4, 2013 Department of Natural Resources ECEIVFn Robert Warthen NordAq Energy, Inc. SEP 06 2013 400 A St, Suite 410 Anchorage, AK 99503 NQRDAQ ENEHGY, IINI,. Re: Section Line Easement Development Township 8 North, Range 10 West, Seward Meridian, Section 10 IaFkFiUrmwi.1I3'Ei Division of Mining, Land & Water Southcentral Regional Land Office 550 West 71h Avenue, Suite 900 Anchorage, Alaska 99501-3577 Main: 907.269.8503 TDD: 907.269.8411 Fax: 907.269.8913 The right to develop access within a section line easement is provided for under Alaska Statute 19.10.010. As described in the Regional Manager's Decision for ADL 231291, issued on 9/4/2013, NordAq Energy, Inc. is authorized to use a portion of the Section Line Easement adjacent to the east section line of the NE '/, of Section 10, Township 8 North, Range 10 West of the Seward Meridian, to complete construction of the access road described in that decision. The burden of locating your activities within the Section Line Easement lies with NordAq Energy, Inc. This letter does not exempt you from complying with all other applicable state, federal or municipal requirements associated with undertaking development. Before you proceed: • accurately locate the boundaries of the section line easement with a surveyor; • locate your development as close to the section line as is practical, or within that portion of Section 11 which is included in ADL 231291, and • secure all required local, state and/or federal authorizations. Locating and developing the road within the section line easement must be done in a reasonable manner. In other words, site preparation work (clearing, etc.) must be commensurate with the scope of your project. Any materials removed must be disposed of properly and may not be sold without prior authorization from DMLW. Logs greater than 4" in diameter shall be made available for public use by cutting them into no more than 8' lengths and placing them beside the road surface of ASLS 81-73 or in other locations within the ADL 231291 permit boundary that are publicly accessible by motor vehicle. Development involving wetlands, crossing streams, or affecting other protected areas must be authorized by the appropriate agencies. Questions concerning section line easements may be directed to me by emailing to Eric.Moore@alaska.gov. Sincerely, Eric Moore Natural Resource Specialist III ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 17 of 36 Page 1 of 15 STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINING, LAND AND WATER SOUTHCENTRAL REGION Regional Manager's Decision NordAq Energy, Inc. Private, Non -Exclusive Easement ADL 231291 AS 38.05.850 Project Overview The Department of Natural Resources (DNR), Division of Mining, Land and Water (DMLW), Southcentral Regional Office (SCRO) received an application on November 16, 2011 for a private non-exclusive easement to encompass an all season gravel road with associated pullouts, turnarounds and gravel storage and loading yards, as well as natural gas gathering lines and communications cables. The requested easement is located on State-owned lands between the Captain Cook State Recreation Area (CCSRA) and the Kenai National Wildlife Refuge (KNWR). The applicant, NordAq Energy, Inc. (NordAq), subsequently requested suspension of the application on April 27, 2012. At the applicant's request the natural gas gathering lines and communications cables were removed from consideration and adjudication resumed on March 26, 2013. Following these changes ADL 231291 encompasses the permanent all -season gravel road with associated permanent pullouts, temporary turnarounds and two temporary gravel storage and loading yards, one of which will be converted into a permanent turnaround and parking area. The road requested under ADL 231291 would provide access for NordAq's Shadura Natural Gas Development Project, located on mineral estate leased from Cook Inlet Region, Inc. (CIRI) within KNWR. As part of the project, NordAq requested authorization for a security gate to be installed at the beginning of the proposed road. The proposed road would cross State land to reach KNWR and would continue across federally owned lands within KNWR under authorization from the US Fish and Wildlife Service (USFWS). On June 28, 2013 the USFWS issued a Record of Decision (ROD) regarding the Shadura Natural Gas Development Project Final Environmental Impact Statement (FES). The ROD adopts NordAq's proposed action, including continuation of the road described herein onto KNWR lands. On May 23, 2013 NordAq submitted a seperate easement application to request authorization of the natural gas gathering lines and communications cables, serialized as ADL 231294. The two applications are being adjudicated separately because NordAq's access must be authorized prior to their drilling at the Shadura site, while the natural gas gathering lines and communications cables will only be installed if the applicant is able to begin producing natural gas from this site. NordAq has submitted their Plan of Development (POD) for the Shadura Natural Gas Development Project to SCRO as a source of supplementary information for this project and ADL 231294. This POD is incorporated by reference into the applications for ADL 231291 and 231294. ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 18 of 36 Page 2 of 15 COOKINLET ri Es 43 a 11,f ai � Proposed Shadura v 1. Development Well Pad Figure 1: Approximate location of the road proposed by NordAq, as well as the location of two gravel storage and staging areas to be constructed as part of the project. The portion of the road in blue and the Shadura Development Well Pad are outside of the scope of ADL 231291. Location • Geographic: The proposed project is located northeast of Nikiski, AK on State land adjacent to Captain Cook State Recreation Area (Kenai D-3 Quadrangle). ADL 231291— Regional Manager's Decision Page 2 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 19 of 36 Page 3 of 15 • Legal: The proposed easement is located within Lot 6 of Section 2, and Lots 2, 3 and the WY, SWX of Section 11, Township 8 North, Range 10 West of the Seward Meridian. • Width and Acreage: The requested easement for an access road is estimated to be 9504 feet in length and 80 feet in width, and also includes a gravel parking and turnaround area 200 feet in length and 150 feet in width, occupying approximately 18.1 acres of State land. The applicant has requested authorization of an additional temporary gravel storage area during the construction phase of this project, 200 feet in length and 150 feet in width, or an additional 0.5 acres. As requested, the project will occupy approximately 18.6 acres of State land during construction. Title The State of Alaska acquired title to the affected lands from the United States by Patent 50-65-0199 (GS 1199,9/21/1964). Authority DNR is authorized to execute easements on State-owned land under the provisions of AS 38.05.850. Also referenced in this decision are 11 AAC 05.010, 11 AAC 96.020, 11 AAC 96.060, 11 AAC 96.065 and 11 AAC 96.070. State Plans and Classifications The requested easement falls within Unit 165B of the Kenai Area Plan. This unit is designated for Public Recreation and Tourism — Public Use Site, with the entire unit to be retained in State ownership and Upper and Lower Salmo lakes to be managed for water -related recreation. The unit is recommended for addition to the State Park System as a part of the CCSRA. Despite the designation of this Unit and the recommendation for inclusion in the CCSRA there is no developed public use site within the affected lands. A short trail leads from parking areas in the CCSRA to the west side of Salmo Lake, crossing the proposed road as shown in Figure 3, but no facilities exist at the terminus of the trail aside from a small clearing and unimproved lake access. The Division of Parks and Outdoor Recreation (DPOR) has no plans to develop the area for public use and does not object to the proposed project. Furthermore, DPOR has stated that if a public use site is developed at either Upper or Lower Salmo Lake in the future the. proposed road could provide valuable public access to these areas. The implications of public use site development on the proposed project are further discussed in the Management Issues section of this decision. In consideration of the current and anticipated future uses of these lands, this project is considered to be compatible with the Kenai Area Plan, subject to amendments in the location of the security gate as described herein. Administrative Record The administrative record for this authorization consists of the casefile for ADL 231291. ADL 231291— Regional Manager's Decision Page 3 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 20 of 36 Page 4 of 15 Public and Agency Notice Public notice of the requested easement is not required under AS 38.05.850(c) as this authorization is not functionally irrevocable; however notice of the proposed easement was posted on the DNR Public Notice website and at Post Offices in Kenai, Soldotna and Nikiski. An agency notice of the proposed easement was submitted to state agencies including the Department of Environmental Conservation (DEC), Department of Transportation and Public Facilities (ADOT&PF), Department of Fish & Game (ADF&G), the DNR Division of Forestry, DMLW Land Development and Sales, DPOR and the State Historical Preservation Office. The US Army Corps of Engineers, USFWS and the Kenai Peninsula Borough's (KPB) Land Management Division and Road Service Area were also notified of the proposed easement. ADF&G submitted comments relating to two areas of concern regarding the requested easement. First, according to ADF&G the presence of salmon in Salmo Lake indicates that the unnamed stream connecting Salmo Lake to the Swanson River is used by anadromous species even though the stream is not listed in the Anadromous Waters Catalogue. ADF&G states that "any crossing structure of the unnamed stream will have to meet fish passage criteria and a bridge would be recommended." In addition, ADF&G states that "any activities below the line of ordinary high water, or that could affect the spawning, rearing or migration of anadromous fishes, or potentially provide blockages to the efficient passage of resident fish species are regulated by state law and may require a Fish Habitat Permit from ADF&G, Division of Habitat." SCRO's response to ADF&G's first comment is that NordAq's plan for addressing stream crossings meets ADF&G suggestions that bridges be used and that Fish Habitat Permits may be required. NordAq's POD states that "stream crossings will be accomplished by installing single lane, clear span bridges with gravel embankments." NordAq states that if streambank stabilization is required they will follow ADF&G's Streombank Revegetation and Protection: A GuideforAloska and that "detailed stream crossing plan designs will be provided to... [ADF&G] for review and approval before the start of construction activities." NordAq holds Fish Habitat Permit FH 11-V-0181, issued by ADF&G, for activities associated with the proposed project. Second, ADF&G recommends that the road be open to public use on State-owned land, referencing Mitigation Measure #5 from the DNR Division of Oil and Gas's (DOG) Cook InletAreawide Oil and Gas Lease Sale, Final Finding 2009, which states in part that "public access to, or use of, the lease area may not be restricted except within the immediate vicinity of drill sites, buildings and other related facilities. Areas of restricted access must be identified in the plan of operations..." SCRO's response to this comment is included in the Management Issues section of this decision as part of a broader discussion regarding public access in the project area. DEC commented that the proposed project does not intersect any public water system sources and the KPB Land Management Division stated that they have no objection to the proposed project. No other public or agency comments were received regarding the proposed project. ADL 231291 - Regional Manager's Decision Page 4 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 21 of 36 Page 5 of 15 Term The SCRO has determined that this authorization is not functionally irrevocable. The proposed easement described herein will be issued for an indefinite period that may be terminated if the area described is no longer used for the purpose intended, for non-compliance with the terms identified in relevant Departmental authorizations issued in association with the requested land use approval (e.g.: land use permit/early entry authorization and easement document), or if a higher and better use for the project site is established as determined by the DMLW Director (as per AS 38.05.850). The Land Use Permit / Early Entry Authorization (described below) will be issued for two years for the purpose of constructing and locating the road and associated facilities. Third Party Interests ASLS 81-73 (formerly ADL 209574) is an easement for a public access road issued to the KPB. The easement begins at the end of the right-of-way for the Kenai Spur Highway in the CCSRA and runs several miles to the northeast, accessing lands owned and/or disposed of by the KPB. The proposed project would require access across approximately the first 2000 feet of ASLS 81-73 in order to reach the beginning of the road to be constructed under ADL 231291. In addition, NordAq may perform maintenance and upgrade this portion of the route as necessary for their access to ADL 231291. Upgrades must be confined to the existing authorized road corridor, and public access to ASLS 81-73 north of the project area must be maintained throughout the construction period. The KPB Land Management Division has stated that they do not object to the proposed project. The KPB has selected the lands within Government Lot 6 of Section 2, Township 8 North, Range 10 West of the Seward Meridian, under ADL 227995 as part of their municipal entitlement. No decision has been made by the State since the selection application was received in August of 1999, but the selection file remains in Active status. The KPB Land Management Division has stated that they do not object to the proposed project. Two authorizations for oil and gas pipelines are impacted by the proposed project. ADL 37591 is a right- of-way permit held by Phillips Gas Supply Corporation (PGSC) for a 16" natural gas pipeline and appurtenances. ADL 69354 is a right-of-way lease held by Tesoro Alaska Pipeline Company (Tesoro) for the Nikiski Alaska Pipeline, a 10.75" pipeline for liquid petroleum products. These pipelines are parallel to each other and located 500-1000 feet east of ASLS 81-73 within the project area. Representatives of PGSC and Tesoro were notified of the proposed project. Tesoro commented that they have no objection to the proposed project, but that they must be notified immediately if additional crossings or exposure of their pipeline is anticipated during this, or any other, project. PGSC similarly commented that they reserve the right to review plans and approve the location of facilities within their right-of-way permit boundaries, but did not object to the proposed project. As third party interest holders, PGSC and Tesoro will be notified of any additional authorizations which directly affect their interests. In addition, this request has been passed on to NordAq for the purpose of activities which do not require additional State -issued authorizations. Management Issues ADL 231291—Regional Manager's Decision Page 5 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 22 of 36 Page 6 of 15 • Development of Section Line Easements As depicted in pre -construction drawings of the proposed road (Figure 2), about 100 feet of the requested easement would extend approximately 10 feet into the CCSRA within Section 10 of Township 8 North, Range 10 West of the Seward Meridian, utilizing a portion of the pre-existing Section Line Easement (SLE) that extends 50 feet from the Section Line into Section 10. DMLW will authorize the development of the SLE in this location to the extent necessary to complete construction of the access road. NordAq must notify SCRO prior to construction in any additional locations within the SLE inside CCSRA. SCRO reserves the right to impose additional conditions on NordAq's authorization in consideration of additional impacts to SLEs. Section Line Easements are reserved for highway purposes, to provide a route for the development of public access even in areas where the need for access is not apparent at the time of the SLE's reservation. In addition to the area of SLE within Section 10 that may be developed adjacent to ADL 231291, the proposed road will cross existing SLEs in a number of locations throughout the project area. Granting a private access easement overlapping an undeveloped SLE is allowable, however the private access use will be considered subordinate to the primary public road development use for which the section line easement is established. The easement granted under ADL 231291 will be subject to valid and existing rights of record in managing the SLE interest. 141 or SCALE. wew �y' ,�$ `,,rte ninagnrtrl: rwmwc twi Figure 2: Proposed project configuration within Sections 10 and 11 of Township 8 North, Range 10 West of the Seward Meridian. The portion of the project within Section 10 (shown in dark red) is within the CCSRA but within an existing SLE. Development of the SLE for road purposes is allowable within the CCSRA but the easement to be granted at the conclusion of the project will not include any lands within the CCSRA. • Security Gate Authorization and Placement ADL 231291— Regional Manager's Decision Page 6 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 23 of 36 Page 7 of 15 In their application and supporting materials, NordAq requested that DMLW authorize the installation of a security gate and fencing at the road -accessible start (north end) of the easement, as shown in Figure 3. Per their request, closing ADL 231291 to the public will provide security for NorclAq's operations and is in the interest of public safety. The applicant has indicated that due to the nature of construction and the equipment to be used during the operation of the Shadura Natural Gas Development Project, limiting public use of the road will reduce the public's risk for injury. As described above, ADF&G recommended that the road be open to public use on state-owned land in accordance with DOG's Cook InletAreawide Oil and Gas Lease Sole, Final Finding 2009. Although DMLW is not subject to DOG's final finding, DMLW does seek to minimize limitations on the public's ability to access or use public land. Existing public access and use of the project area is generally centered on 3 features, as depicted in Figure 3. First, the public access easement (ASLS 81-73) extending northeast from the parking area at mile 39 of the Kenai Spur Highway is used to access publicly- and privately - owned lands located north and northeast of the project area. Second, the pipeline corridor occupied by ADLs 37591 and 69354 is used recreationally in and south of the project area, and is collocated with ASLS 81-73 immediately north of the project area. Third, Salmo Lake, and particularly its western shore, are used recreationally for a variety of activities. A number of short trails conned these features to each other and to parking areas within the CCSRA. Placement of NorclAq's security gate in the alternative location would minimize the impact of ADL 231291 on the public's ability to access all 3 of these areas. Furthermore, the closed portion of the route will consist entirely of newly -constructed road and therefore will not block any existing access route. Placement of the security gate in the requested location would mean that members of the public could easily access the closed portion of ADL 231291 from either the pipeline corridor or the trail to Salmo Lake. By contrast, placement in the alternative gate location (the "alternative location") shown in Figure 3 would entail only dispersed use of the State-owned lands beyond the security gate, which will be further discussed below. Therefore, placement of the gate in the alternative location is likely to be more effective at restricting access to the closed portion of the road while at the same time being less disruptive to public access in the area. SCRO has reviewed the applicant's request and considers the alternative location, shown in Figure 3, to be preferable in terms of providing security and promoting public safety, while balancing these needs against protecting existing public access to, and use of, State lands. NordAq shall ensure that there is sufficient room for a personal highway vehicle, such as a pickup truck, to turn around safely at the publicly accessible west side of the gate. Although the primary public access corridors are all located west of the alternative gate location, some dispersed recreational use of the project area occurs beyond this point, particularly during the winter months. Such use is allowable and NordAq must not block the public's ability to cross the road corridor. NordAq may place signs within ADL 231291 at potential crossing locations, directing the public that they may cross but otherwise not travel on the roadway. Signs shall be no larger than 18" x 24" and shall ADL 231291—Regional Manager's Decision Page 7 of 14 ATTACHMENT B EXHIBIT 2C (NOROAQ) PAGE 24 of 36 Page 8 of 15 q14 � ter. t�k a -• • �` ' �. Staging Area 'm`f�+l �t� % yy+��-. '}� " q'.Z ^t� 4 • � 1 H '• -� 1'' •.31'T!t.' Of . �• {so y, ��• �„Iy�r�ait�rM� �; �I � 1� �rlyr,�.r "'e �. �"a•.7F�'jk�RClj�i�'lii rj�;�rk �•I 15 00 14 Vlf � n ?�� •moi �'a • _ �5,.✓. .. )' e „ "t��T�,.u�� T .h`+ • v;Yt��M, � J'! 1,'.�ipt- X`E� .1 ��i+�'��i � tr .I' �, r q,. E i gam. i i 1) �t�.,-� a � ` • •; y r�, �..� �� ; �$r S '1r. Hir �d+, ,_ iAt 1�7t_ y • .s ;. `. eiis ... r`.AIA{uK, • �� k t : �� ' 3:s1•`".." si� .. Placement of the gate in the alternative location is consistent with the designation of this land as a Public Use Site for public recreation and tourism under the Kenai Area Plan. Public access to the west shore Salmo Lake will not be hindered by the alternative gate location, should this area be added to the CCSRA and/or developed as a public use site. ADL 231291 leads to lands within KNWR, where continuation of the road is being permitted through the USFWS. It is SCRO's understanding that the USFWS does not intend for the road to be open to the public for motorized purposes (USFWS did not respond to notice of the proposed authorization), and that authorizing the installation of a security gate within ADL 231291 is consistent with USFWS' management objectives. SCRO considered recommending that placement of the security gate only be authorized at the at the boundary of KNWR (south end of ADL 231291) as a means of minimizing impact on public access to State lands, but this was rejected for several reasons. First the creation of a new public road which dead -ends in an unmanaged area would create additional management responsibilities which neither DMLW nor DPOR have the capacity to handle. Second, allowing public use of the entirety of ADL 231291 would require construction of an additional permanent turnaround in this location, would greatly increase NordAq's burden for road maintenance and would significantly affect the scope of their project. Third, the benefit of recommending this location would be minimal as closure of a previously non-existent route will have little impact on public access to the area. • Route Closure and Other Public Access During construction of the road to the north of the alternative gate location the applicant may temporarily close this portion of the route to public access for safety reasons. However NordAq must not block public access from the CCSRA parking area at mile 39 of the Kenai Spur Highway to either the pipeline corridor south of the project area or the public access route ASLS 81-73 north of the project area. If any detours are required on these routes during construction they must be safe, navigable on foot or by vehicle to the same degree as the existing routes, and well marked. Any detour greater than'/< mile in length or which will be in effect for more than 24 hours shall require prior written authorization from SCRO. • Road Design and Additional Areas NordAq's road design incorporates pullouts located approximately every Y. mile (closer in steep terrain or areas with limited visibility) to allow tractor trailers involved in construction to pull on and off the road safely, without having to back up, and will facilitate vehicles safely passing each other in opposite directions. Safety pullouts will be 10 feet wide (for a total road width of 28 feet in these locations) and 200 feet long (including a 50 foot transition at each end), and will be located entirely within NordAq's 80 -foot -wide easement. Under ADL 231291, NordAq will be authorized to use State-owned lands to construct two 150 -foot -wide by 200 -foot -long gravel staging areas (Figure 4). The first will be constructed at the north end of ADL 231291, adjacent to ASLS 81-73, and may remain in place for the life of ADL 231291 as a turnaround and ADL 231291— Regional Managers Decision Page 9 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 26 of 36 Page 10 of 15 parking area. The second will be located at the south end of ADL 231291, on State-owned land but adjacent to the KNWR boundary. This staging area will be removed and the area revegetated following construction. Temporary fencing may be placed in gravel storage and staging areas during construction in order to protect the public and enhance the security of NordAq's construction materials. Z r>v ,OWId ACCE ES ?CAD Figure 4: Planned configuration of Staging Areas (shown as "Gravel Storage and Loading Yard") relative to the proposed road. Under ADL 231291, NordAq will be authorized to use State-owned lands to construct approximately three 30 -foot -wide by 42 -foot -long vehicle turnarounds (Figure 5). The turnarounds will be accessed from the road pullouts described above, and will be constructed either with ice or with gravel placed on geofabric. The turnarounds shall be decommissioned prior to easement issuance. • Salmo Lake Development Although no development of a public recreation site at Salmo Lake is imminent, it is possible that such development will occur during the anticipated 30 -year life of the Shadura project. In this event, SCRO reserves the right to allow public use of the road as necessary to access Salmo Lake. ADL 231291— Regional Manager's Decision ATTACHMENT B PAGE 27 of 36 Page 10 of 14 EXHIBIT 2C (NORDAQ) Page 11 of 15 iY r>v ,OWId ACCE ES ?CAD Figure 4: Planned configuration of Staging Areas (shown as "Gravel Storage and Loading Yard") relative to the proposed road. Under ADL 231291, NordAq will be authorized to use State-owned lands to construct approximately three 30 -foot -wide by 42 -foot -long vehicle turnarounds (Figure 5). The turnarounds will be accessed from the road pullouts described above, and will be constructed either with ice or with gravel placed on geofabric. The turnarounds shall be decommissioned prior to easement issuance. • Salmo Lake Development Although no development of a public recreation site at Salmo Lake is imminent, it is possible that such development will occur during the anticipated 30 -year life of the Shadura project. In this event, SCRO reserves the right to allow public use of the road as necessary to access Salmo Lake. ADL 231291— Regional Manager's Decision ATTACHMENT B PAGE 27 of 36 Page 10 of 14 EXHIBIT 2C (NORDAQ) Page 11 of 15 • Road Decommissioning Following completion of the Shadura project, the applicant is required to decommission the road and all associated infrastructure authorized under ADL 231291 and restore the project area to its natural state. Any requested changes to this requirement will be evaluated by SCRD and must be approved in writing prior to implementation. :r _-i MANSIT ON GRA: /E: ACC[SS RD4D -- Figure 5: Planned configuration of the turnarounds to be used during construction. • Other Management issues The State of Alaska reserves the right to grant authorizations for compatible uses within, overlapping, or adjacent to this project area. The authorization issued under ADL 231291 may not be assigned to another party without prior notice to, and approval by, the Regional Manager or designee. In accordance with 11 AAC 96.070 DMLW may require that NordAq file annual reports regarding the operation of ADL 231291 and/or a completion statement describing the cleanup and restoration of areas impacted under the EEA for ADL 231291 but not included in the final easement under ADL 231291 (e.g.: turnarounds and staging areas used during construction). Survey A DNR approved as -built survey is required for ADL 231291 to determine the proper location and compute accurate acreage of improvements proposed for installation on DMLW-managed State lands. The applicant may be required to submit an Application for Survey Instructions to the DNR Cadastral Survey Unit (Survey Section) along with the survey instruction fee of $225 as per 11 AAC 05.010 (a)(13)(A). Survey Instructions for ADL 231291 will be provided to the Applicant upon receipt of the application and fee. SCRD recommends coordination with the Survey Section as early as possible to expedite the as -built process. A draft of the project as -built drawings must be submitted to the Survey Section prior to expiration of any Early Entry Authorization/Land Use Permit (EEA) issued by SCRD for ADL 231291, and must be approved of by SCRO before issuance of the final easement document. Fees The applicant's request for use of state-owned, DNR DMLW managed lands under ADL 231291 will be authorized in two phases. First, a Land Use Permit will be issued as an Early Entry Authorization (EEA) for ADL 231291 — Regional Managers Decision Page 11 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 28 of 36 Page 12 of 15 construction and survey activities within the approximately 18.6 acre site. Upon issuance of the EEA an annual fee will be charged in accordance with 11 AAC 05.010(e)(9), totaling $50 per acre orfractional acre, with a $100 minimum. The annual fee for activities authorized under the terms of NorclAq's EEA is estimated to be $950.00 per year for the term of the EEA and any extensions of the EEA. Second, upon completion of construction and survey activities in accordance with this decision and all terms and conditions of the EEA, an approximately 18.1 acre easement will be issued for operation and maintenance of the installed infrastructure as a private access road. The annual fee for authorization of a Private Non -Exclusive Easement issued in accordance with 11 AAC 05.010(e)(11)(A) is $100 per acre or fractional acre, with a $200 minimum. The annual fee for the issued easement will be determined after the easement has been constructed and surveyed, but is currently estimated to be $1,900.00 per year. Performance Guaranty Per 11 AAC 96.060, NordAq is required to submit a performance guaranty to DNR in the amount of $19,000. The Performance Guaranty will be subject to release upon the remittance of a DNR -approved as -built survey and fulfillment of all General and Special stipulations of this decision and the EEA. The guaranty may be adjusted to reflect updates and changes in the associated project and the Applicant may be required to furnish an additional bond, if DMLW determines there to be additional risk to the State. The guaranty may be utilized by DMLW to cover actual costs incurred by the State to pay for any necessary corrective action(s) in the event the Applicant does not comply with site utilization and restoration requirements and other stipulations contained in the authorization. An additional Performance Guaranty may be required if the Applicant applies for an extension of the Early Entry Authorization/Land Use Permit beyond the two years proposed under this decision. Insurance In accordance with 11 AAC 96.065, NordAq shall be required to submit proof of insurance to protect the State from risks associated with the planned activities. NordAq is responsible for maintaining the insurance necessary during the term of the EEA and during construction and survey activities. A certificate of insurance listing the State of Alaska, Department of Natural Resources as an additional named insured on the polity must be submitted to SCRO prior to entry onto State land for usages which are not generally allowed. Non-compliance DNR Land Administration System records indicate that NordAq is not in a state of non-compliance with the terms of any other DNR authorizations. Economic Benefit and Development of State Resources In accordance with AS 38.05.850, the SCRO considered three criteria to determine if this project provided the greatest economic benefit for the State and the development of its natural resources. These included direct economic benefit to the State, indirect economic benefit to the State, and encouragement of development of the State's resources. ADL 231291— Regional Manager's Decision Page 12 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 29 of 36 Page 13 of 15 The proposed project presents a direct benefit to the State of Alaska in the form of land use fees associated with the EEA and final Private Non -Exclusive Easement. This project also encourages development of the State's resources by providing access to the applicant's oil and gas lease. The proposed project has a small risk of negatively impacting the public's ability to access State-owned lands. However, placement of the security gate in the alternative location, the fact that the location of closed portion of the road is currently undeveloped for access and the requirement that the public be able to cross the road all serve to mitigate this risk. In consideration of the economic benefits versus the small risk associated with the project, DNR finds granting of the proposed easement provides the greatest economic benefit to the State. Proposal and Recommendation for Issuance of Land Use Permit I recommend granting a Land Use Permit as an Early Entry Authorization (EEA) to Nordaq for a term of two years for the purpose of constructing and locating an all -season gravel road with a permanent security gate installed at the location described herein. The road is to be constructed within a corridor 80 feet in width and centered on the roadway. In addition the permit will authorize the construction of vehicle turnarounds and staging areas, as described herein, which encompass additional State lands projecting beyond the 80 -foot -wide corridor. Temporary fencing of the staging areas will be permitted during construction, and the permit will also authorize NordAq to temporarily gate the portion of ADL 231291 to the north and west of the permanent security gate forthe purpose of protecting public safety during construction of this segment of the route. Per 11 AAC 05.010(e)(9), this EEA will be subject to an annual fee of $950. A finalized easement will not be granted until the applicant has conformed to all terms and conditions of this decision and the EEA. Extensions to the EEA may be granted at the request of the applicant, if granting the extension is deemed to be appropriate by SCRO. if an extension is required, the applicant must contact SCRO no later than 30 days prior to the expiration of the EEA and submit a non-refundable filing fee per 11 AAC 05.010(a)(5)(8), if applicable. Proposal and Recommendation for Issuance of Private Non -Exclusive Easement In consideration of all events and criteria listed above, it is my determination that this project is consistent with the overall classification and management intent for this land. Therefore, I recommend issuance of a Private Non -Exclusive Easement pursuant to AS 38.05.850 to Nordaq upon satisfactory completion of the project in conformance to all terms and conditions of this decision and the EEA. The easement will be issued for an indefinite period that may be terminated if a higher and better economic use for the project is established as determined by the DMLW Director (AS 38.05.850), if the land is no longer used for the above stated purpose or for non-compliance with the terms identified in relevant Departmental authorizations issued in association with the requested land use approval. If issued, the easement will be approximately 9504 feet in length and 80 feet in width, except as noted herein, occupying approximately 18.1 acres of State-owned land. It will authorize NordAq to operate and maintain an all -season gravel road with a permanent security gate, crossing State-owned lands northeast of Nikiski and east of the Captain Cook State Recreation Area, for the purpose of accessing the applicant's subsurface leases located within KNWR. NordAq will be responsible for the construction and ADL 231291— Regional Manager's Decision Page 13 of 14 ATTACHMENT B EXHIBIT 2C (NORDAQ) PAGE 30 of 36 Page 14 of 15 maintenance associated with ADL 231291, and shall notify DMLW of any additional construction or improvements associated with this project on State-owned lands. Such construction and/or improvements may also require additional authorizations from DMLW. Within 30 days following issuance of this easement, NorclAq shall pay the appropriate recording fee as determined based on current statute to have the document recorded by DMLW. se" '?, /a 9/a013 Eric Moore Date Natural Resource Specialist Decision When adjudicating an easement authorization pursuant to AS 38.05.850, DNR seeks "to responsibly develop Alaska's resources by making them available for maximum use and benefit consistent with the public interest." In consideration of all the events and criteria listed above, SCRO has determined that the authorizations to be granted under ADL 231291 are consistent with DNR's mission. It is my decision that this project is consistent with the overall classification and management intent for the land. SCRO will issue a Private Non -Exclusive Easement, pursuant to AS 38.05.850, once the applicant has conformed to all terms and conditions of this decision and the EEA. IVJ4�"YL Rich -d B. Thompson Regional Manager Southcentral Region Division of Mining, Land and Water U 210� Date i Appeal Process A person affected by this decision may appeal it in accordance with 11 AAC 02. Any appeal must be received within 20 calendar days after the date of "issuance" of this decision, as defined in 11 AAC 02(c) and (d). Appeals should be mailed or delivered to Daniel Sullivan, Commissioner, Department of Natural Resources, 550 W. 7" Avenue, Suite 1400, Anchorage, AK 99501, faxed to (907) 269-8918, or sent by electronic mail to dnr.appeals@alaska.gov. If no appeal is filed by that date, this decision goes into effect as a final order and decision on the 31" day after "issuance." An eligible person must first appeal this decision in accordance with 11 AAC 02 before appealing this decision to Superior Court. A copy of 11 AAC 02 may be obtained from any regional information office of the Department of Natural Resources. ADL 231291— Regional Manager's Decision ATTACHMENT B PAGE 31 of 36 Page 14 of 14 EXHIBIT 2C (NORDAQ) Page 15 of 15 Business Time Account (CD) Maturity Notice March 31, 2017 DCCDRTDTPB 002963 Illrllllllllrlrllllinllrllllllllrrlllllrllllllrllrlllllllrlllrrr y.y NORDAQ ENERGY INC. IC•,Zj� ITF: STATE OF ALASKA, DNR 560 E 34TH AVE STE 200 ANCHORAGE AK 99503-4161 Dear Customer: p 0 Thank you for banking with Wells Fargo. We are writing to remind you that your Wells Fargo Business Time Account S (CD) will mature on April 28, 2017 and renew automatically for the same term. Here are important details about your account: Account Number: 5511251505 Account Opened/Last Renewed: October 28, 2016 Value at Maturity: $19,010.44 Term: 6 months Current Maturity Date: April 28, 2017 Grace Period End Date: May 5, 2017 Next Maturity Date: October 28, 2017 Please refer to the back of this letter for additional terms and conditions. You made a sound decision opening your Wells Fargo Business CD with a guaranteed interest rate and the backing of N the Federal Deposit Insurance Corporation (FDIC). The interest rate for your automatic CD renewal will be set on your maturity date, April 28, 2017, and will be based on the value of the account and the term on that day. Other CD interest rates and terms will also be available to you from your maturity date through the grace period ending on May 5, 2017. If you wish to make changes to your CD when it matures, you will have an opportunity until May 5, 2017 to: • Add funds to the account- higher balances may earn higher interest rates - • Change the term - longer terms may earn higher interest rates • Close the account For information about current CD interest rates based on balance and term, special CD offers, or other products that may meet your needs, please: • Contact your Banker or • Call us at 1-800-225-5935, 24 hours a day, 7 days a week We appreciate your business and look forward to continuing to help you with your financial needs. Wells Fargo Bank Member FDIC. ATTACHMENT B EXHIBIT 2D (NORDAQ) PAGE 32 of 36 Page 1 of 1 ALASKA OIL AND GAS CONSERVATION COMMISSION DOCKET NUMBERS OTH-16-031 AND OTH 16-032 AFFIDAVIT OF PETER M. DICKINSON RE STATUS OF WORK TO PLUG AND ABANDON TIGER EYE CENTRAL -1 AND SHADURA-1 WELLS STATE OF TEXAS ) ) Ss. COUNTY OF ) PETER M. DICKINSON, being first duly sworn upon his oath, deposes and states: 1. I am the President of All American Oilfield, LLC ("All American"), a limited liability company based in Kenai, Alaska. 2. I have been involved in work for NordAq Energy, Inc. ("NordAq") on the Tiger Eye Central -I well ("Tiger Eye") and the Shadura-1 well ("Shadura") since their inception, and All American drilled both of the wells. 3. All American is the general contractor for NordAq for the work to plug and abandon Tiger Eye and Shadura. 4. All American has contracts or agreements with all of the vendors listed on the NordAq authorization for expenditure to plug and abandon Tiger Eye, which is in a total amount of $666,602. [Exhibit 1 to NordAq's First Supplemental Response to Revised Notice of Proposed Enforcement Action re Tiger Eye] 5. All American cannot begin work to plug and abandon Tiger Eye before August 1, 2017, because the necessary camp on the West side of Cook Inlet is currently in use and will not be available prior to that time. 1 ATTACHMENT B EXHIBIT 3 (NORDAQ) PAGE 33 of 36 Page I of 2 6. NordAq is also waiting for a few State permits before it can begin the work to plug and abandon Tiger Eye. 7. All American currently plans to begin the work to plug and abandon Tiger Eye after the necessary camp becomes available and after the remaining permits are obtained. The work is expected to last approximately 21 days. 8. All American has contracts or agreements with all of the vendors listed on the NordAq authorization for expenditure to plug and abandon Shadura, which is in a total amount of $483,826. [Exhibit I to NordAq's First Supplemental Response to Revised Notice of Proposed Enforcement Action re Shadura] 9. All American cannot begin the work to plug and abandon Shadura until there is approximately one foot of frost and one foot of snow in the area, because it is necessary to build a snow trail to the well in the absence of any existing roads. 10. With the approval of AOGCC, NordAq may try to plug and abandon Tiger Eye and Shadura consecutively in an effort to decrease costs and increase efficiency. DATED this �-,2 L day of June, 2017. PETER M. DICKINSON SUBSCRIBED AND SWORN TO before me this?'s day of June 2017. NOEMI OONZALEZ -Notary Public, firers of oxe@ - Comm. ExpIre$ 51.35.2015 OFNotary ID 128555551 (otary Public in for Texas My Commission Expires: 2 ATTACHMENT B EXHIBIT 3 (NOROAQ) PAGE 34 of 36 Page 2 of 2 ALASKA OIL AND GAS CONSERVATION COMMISSION DOCKET NUMBERS OTH-16-031 AND OTH 16-032 AFFIDAVIT OF STEPHEN F. HENNIGAN RE NORDAQ'S EFFORTS TO PLUG AND ABANDON TIGER EYE CENTRAL -1 AND SHADURA-1 WELLS STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) states: STEPHEN F. HENNIGAN, being first duly sworn upon his oath, deposes and 1. I am a project engineer and I work through and for Sierra Hamilton, LLC, of which my former company, Petroleum Engineers, Inc., has become a part. 2. I was contracted by NordAq to prepare and submit drilling permits, weekly and final reports, sundries, etc., to State agencies, primarily AOGCC, in the drilling of NordAq-operated Shadura-1 (PTD No. 211-014 ) ("Shadura") and Tiger Eye Central -1 (PTD No. 212-102) ("Tiger Eye"). 3. I was integrally involved with the preparation and submittal of the end -of - well sundries for the above wells—for Shadura Sundry 312-001, for Tiger Eye Sundry 313-239. 4. I have met with and had numerous telephone and email discussions with the AOGCC staff on behalf of NordAq in discussing Sundry data. 5. I have been integrally involved in submitting final data to the AOGCC via the required 10-407 forms and format on both wells. 1 ATTACHMENT B EXHIBIT 4 (NORDAQ) PAGE 35 of 36 Page 1 of 2 6. Shadura-1 was suspended rather than plugged and abandoned at that time, as it was intended that NordAq would drill a second Shadura well and use Shadura-1 as a sidetrack candidate or for other utility purposes. 7. Tiger Eye was secured rather than plugged and abandoned at that time because, in my understanding, NordAq had an understanding with Cook Inlet Energy to take over the well for utility purposes. 8. I have prepared and submitted to the AOGCC sundries for plugging and abandonment of both wells, which have been approved: a. Shadura - 317-027 b. Tiger Eye - 317-083 9. I have been contracted by NordAq to provide engineering services and interaction efforts in the abandonment of Shadura and Tiger Eye. In addition, I am to supply daily, weekly, and final reports, as required by the AOGCC, to them. DATED this /'' day of June, 2017. TEPHEN F. HENNIGAN SUBSCRIBED AND SWORN TO before me this 4/ -4 -'day of June, 2017. fzo- ry Public in and for Alaska My Commission Expires: ATTACHMENT B EXHIBIT 4 (NORDAQ) PAGE 36 of 36 Page 2 of 2 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) Other Order No. 123 (Permit No. 211-014) Before Expiration of ) Docket No. OTH-16-031 Owner's Rights in CIRI Lease C-061648 ) July 21, 2017 Failure to Respond to Notice of Proposed ) Enforcement Action ) DECISION AND ORDER On December 2, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to NordAq Energy Inc. (NordAq) regarding Shadura-1 exploratory well (Shadura-1). The Notice was based upon a regulatory violation pertaining to NordAq's failure to permanently abandon Shadura-I before expiration of NordAq's rights in Cook Inlet Region, Inc. (CIRI) oil and gas lease C-061648. The Notice proposed specific corrective actions and a $621,000 civil penalty under AS 31.05.150(a). The Notice also proposed that NordAq provide a check in the amount of $1,200,000, AOGCC's projected cost to plug and abandon Shadura-1 if NordAq did not uphold its obligation to do so. NordAq failed to respond to the Notice. The AOGCC scheduled a public hearing for April 4, 2017, at 10:00 a.m. On January 14, 2017, the AOGCC published a public notice for that hearing in the ALASKA DISPATCH NEWS. After the AOGCC noticed the public hearing, NordAq contacted AOGCC with a proposed plan to plug and abandon Shadura-1. AOGCC approved the plan on February 15, 2017. The public hearing was held on April 4, 2017. Summary of Revised Proposed Enforcement Action After the hearing, on May 24, 2017, the AOGCC issued a Revised Notice of Proposed Enforcement Action (Revised Notice) to NordAq regarding Shadura-1. The Revised Notice changed the requirement of a check for $1,200,000 to a bond in that amount in the sole favor of the AOGCC and lowered the civil penalty to $100,000. The Revised Notice specified that the bond shall be forfeited if Shadura-1 had not been permanently plugged and abandoned and the well location cleared within one year of the date of the Revised Notice. The bond was due within 30 days of the Revised Notice. ATTACHMENT C PAGE 1 of 4 Other Order No. 123 July 21, 2017 Page 2 of 4 NordAq requested an informal review. That review was held at the AOGCC offices on June 27, 2017. Preliminary Findines On February 1, 2011, NordAq was issued Permit to Drill No. 211-014 for Shadura-1. During February and March of 2011, Shadura-1 was drilled, briefly tested, and then temporarily suspended in April 2011 due to deteriorating winter -access conditions at the well location. Further logging and testing of the well occurred in January and February 2012. The well was suspended on February 26, 2012. At the time, NordAq was the owner of URI lease C-061648. The Shadura-1 is only accessible during winter months. NordAq's rights in lease C-061648 terminated on June 30, 2015. NordAq does not dispute that Shadura-1 was not properly plugged and abandoned at the time of the expiration of NordAq's rights in C-061648. NordAq has violated 20 AAC 25.105(a). Mitieatin¢ Circumstances Presented by the Ouerator At the public hearing on April 4, 2017 and the informal review on June 27, 2017, NordAq offered the following in mitigation of its noncompliance: NordAq's delay was due in part to its attempt to negotiate transfer of Shadura-I to an alternate operator after termination of the CIRI lease; Shadura-I well site is only accessible during winter months; NordAq's operations to permanently abandon Shadura-1 began in March 2017, but deteriorating winter -access conditions at the well location forced NordAq to postpone further operations until December 2017; NordAq's failure to respond to the initial Notice was due to a robbery that occurred at NordAq's offices; and The delay in plugging and abandoning the well resulted in no hydrocarbon leakage, well integrity problems, or other problems other than a time delay. ATTACHMENT C PAGE 2 of 4 Other Order No. 123 July 21, 2017 Page 3 of 4 Additional Findines NordAq failed to properly plug and abandon Shadura-1 and clear the well site in accordance with AOGCC's regulatory requirements prior to termination of its rights in the lease upon which Shadura-1 is sited. Following termination of lease C-061648, NordAq did not notify the AOGCC or discuss Shadura- I with the AOGCC. NordAq failed to respond to the initial Notice. Bonds held by other state agencies cannot be appropriated by the AOGCC to cover the costs of bringing Shadura-I into compliance with AOGCC regulations. Conclusions The surety bond must reflect all costs that will be incurred by the State in the event NordAq defaults on its obligations to plug and abandon Shadura-1 and clear the well site. NordAq has presented no evidence that a reduction in the bond amount is appropriate. Now Therefore It Is Ordered That: After consideration of the criteria set forth in AS 31.05.150(g) to the matters set forth above, NordAq shall pay a civil penalty of $100,000 for violating 20 AAC 25.105(a) by failing to permanently abandon Shadura-1 before expiration of owner's rights in CIRI lease C-061648. The total civil penalty is $100,000. In addition, within 30 days of receipt of this letter, NordAq shall submit a surety bond for $1,200,000 issued on Form 10-402A in the sole favor of the AOGCC by an authorized insurer under AS 21.09 whose certificate of authority is in good standing with the State of Alaska. This bond will be returned to NordAq following permanent abandonment of Shadura-1 and clearance of well location. This bond shall be forfeited to the AOGCC if Shadura-1 is not permanently plugged and abandoned and the well location is not cleared within one year of the date of this Decision and Order. ATTACHMENT C PAGE 3 of 4 Other Order No. 123 July 21, 2017 Page 4 of 4 As an Operator involved in an enforcement action, you are required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and dated July 21, 2017. //signature on file// //signature on file// //signature on file// Hollis French Daniel T. Seamount, Jr. Cathy P. Foerster Chair, Commissioner Commissioner Commissioner As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 mus[ set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure in act on it within I0 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on 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 period; 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 nest day ATTACHMENT C PAGE 4 of 4 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Tiger Eye ) Other Order No. 122 Central -I (Permit No. 212-102) Before ) Docket No. OTH-16-032 Termination of Owner's Rights in Oil and ) July 20, 2017 Gas Leases ADL 391104 and C-061677 ) Failure to Respond to Notice of Proposed ) Enforcement Action ) DECISION AND ORDER On December 2, 2016, the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to NordAq Energy Inc. (NordAq) regarding Tiger Eye Central -1 exploratory well (Tiger Eye -1). The Notice was based upon NordAq's failure to permanently abandon Tiger Eye -1 before expiration of NordAq's rights in leases through which Tiger Eye -I is drilled: State of Alaska lease ADL 391104 and Cook Inlet Region, Inc. (CIRI) lease C-061677. The termination of NordAq's rights in ADL 391104 was effective October 12, 2016. The CIRI lease was terminated effective July 1, 2015. (AOGCC did not learn of the termination of the CIRI lease until after issuance of the December 2, 2016, Notice.) The Notice proposed specific corrective actions and a $150,000 civil penalty under AS 31.05.150(a). The Notice also proposed that NordAq provide a check in the amount of $1,300,000, AOGCC's projected cost to plug and abandon Tiger Eye -1 if NordAq did not uphold its obligation to do so. NordAq failed to respond to the Notice. The AOGCC scheduled a public hearing for April 4, 2017, at 10:00 a.m. On January 14, 2017, the AOGCC published a public notice for that hearing in the ALASKA DISPATCH NEWS. After the AOGCC noticed the public hearing, NordAq contacted AOGCC with a proposed plan to plug and abandon the Tiger Eye -1. AOGCC approved that plan on March 7, 2017. The public hearing was held on April 4, 2017. NordAq appeared and presented evidence. Summary of Revised Proposed Enforcement Action After the hearing, on May 24, 2017, the AOGCC issued a Revised Notice of Proposed Enforcement Action (Revised Notice) regarding Tiger Eye -1. The Revised Notice changed the requirement of ATTACHMENT D PAGE 1 of 5 a check for $1,300,000 to a bond in that amount in the sole favor of the AOGCC and lowered the civil penalty to $100,000. The Revised Notice specified that the bond would be forfeited if Tiger Eye -1 had not been permanently plugged and abandoned and the well location cleared within one year of the date of the Revised Notice. The bond was to be due within 30 days of the Revised Notice. NordAq requested an informal review. That review was held at the AOGCC offices on June 27, 2017. Preliminary Findings On September 4, 2012, AOGCC issued Permit to Drill No. 212-102 for Tiger Eye -1. Tiger Eye -1 was drilled in 2012 and subsequently suspended. NordAq was the owner of CIRI lease C-061677 and State of Alaska lease ADL 391104. The surface location for Tiger Eye-] lies on acreage owned by Salamatof Native Association Inc. A portion of the wellbore crosses CIRI lease C- 061677. The bottom -hole location lies within ADL 391104. Tiger Eye -1 is located on the west side of Cook Inlet Basin and is only accessible during summer months. On October 14, 2016, DNR advised AOGCC that the termination of the Tiger Eye Unit on October 12, 2016, was the effective date of the termination of NordAq's rights in ADL 391104. CIRI lease C-061677 was terminated effective July 1, 2015. NordAq does not dispute that the Tiger Eye -1 was not properly plugged and abandoned at the time of the expiration of NordAq's rights in those leases. NordAq has violated 20 AAC 25.105(a). Mitieatin2 Circumstances Presented by the Operator At the public hearing on April 4, 2017 and the informal review on June 27, 2017, NordAq offered the following in mitigation of its noncompliance: NordAq's delay was due in part to its attempt to negotiate transfer of Tiger Eye -1 to Cook Inlet Energy (CIE) after termination of the CIRI lease; ATTACHMENT D PAGE 2 of 5 CIE informed NordAq around July 2016 that it was not interested in assuming responsibility for the Tiger Eye -1 well; Tiger Eye -1 is only accessible during summer months; NordAq's failure to respond to the initial Notice was due to a robbery that occurred at NordAq's offices; NordAq's effort to start work to plug and abandon Tiger Eye -1 in June 2017 has been delayed until August 1, 2017, due to Chevron's use of dock on west side of Cook Inlet; The delay in plugging and abandoning the well after termination of these oil and gas leases resulted in no hydrocarbon leakage, well integrity problems, or other problems other than a time delay; Tiger Eye -1 well site has road access from Cook Inlet dock area. As a result, the expense of reaching Tiger Eye -1 is less than contemplated by AOGCC's $1,300,000 bond; and Salamantof Native Corporation (surface estate owner) wants the existing road and pad left in place. Additional Findings NordAq failed to properly plug and abandon Tiger Eye -1 and clear the well site in accordance with AOGCC's regulatory requirements prior to termination of its rights in the leases upon which Tiger Eye -1 is sited. Following termination of leases C-061677 and ADL 391104, NordAq did not notify the AOGCC or discuss Tiger Eye -1 with the AOGCC. NordAq failed to respond to the initial Notice. Bonds on file with other State agencies cannot be appropriated by the AOGCC. ATTACHMENT D PAGE 3 of 5 Conclusions The surety bond must reflect all costs that will be incurred by the State in the event NordAq defaults on its regulatory obligations to plug and abandon Tiger Eye -1 and clear the well site. Because Tiger Eye -1 well site has road access, construction and use of an ice road for plugging and abandonment operations are not required, thus lowering the total cost estimate to bring Tiger Eye -1 into compliance, and in turn, the amount of the bond required. Now Therefore It Is Ordered That: After application of the criteria set forth in AS 31.05.150(8) to the matters set forth above, NordAq shall pay a civil penalty of $100,000 for violating 20 AAC 25.105(a) by failing to permanently abandon Tiger Eye -1 before expiration of its rights in State of Alaska oil and gas lease ADL 391104 and CIRI oil and gas lease C-061677. The total civil penalty is $100,000. In addition, within 30 days of receipt of this letter, NordAq shall submit a surety bond for $800,000 issued on Form 10-402A in the sole favor of the AOGCC by an authorized insurer under AS 21.09 whose certificate of authority is in good standing with the State of Alaska. This bond will be returned to NordAq following permanent abandonment of Tiger Eye -1 and clearance of well location. This bond shall be forfeited to the AOGCC if Tiger Eye -1 is not permanently plugged and abandoned and the well location cleared within one year of the date of this Decision and Order. As an Operator involved in an enforcement action, you are required to preserve documents concerning the above action until after resolution of the proceeding. Done at Anchorage, Alaska and dated July 20, 2017. ATTACHMENT D PAGE 4 of 5 //signature on file// Hollis S. French Chair, Commissioner //signature on file// Daniel T. Seamount, Jr Commissioner //signature on file// Cathy P. Foerster Commissioner As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC 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 AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within I0 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on 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 period; 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 ATTACHMENT D PAGE 5 of 5 WELL NAME: Tiger Eye #1 POB Days: 21 ® OBJECTIVE: P&A Operating Days: 14 AFE#: TP&A0417 Total Days: 24 .__._..._.. _.._ DATE: 5/1/2017 TOTAL: $666,602 EXPENSE CATEGORY TOTAL COMMENTS VENDOR Expense Subcategory Permitting Permitting $ 22,000.00 AOGCC, Field Engineering PEI/ Siena Hamilton Support and Personnel Communications $ 1,500.00 plug number AAO Management Personnel $ 59,640.00 30 days x 1988 AAO Company man $ 41,748.00 21 days x 1988 AAO Circulation pit $ 2,400.00 24 days x 100 AAO Surface rentals $ 10,000.00 sills, portable fuel tank, etc.. AAO Welding machine $ 2,000.00 2000 per month AAO Break shack $ 10,000.00 1200 per month Mag tech Excavator $ 3,100.00 3100 per month Airport Loader $ 17,500.00 17,500/ month AAO Generators $ 6,000.00 24 days x 250 (two gens) AAO Trucks $ 3,000.00 3 trucks x 1000/ month Mag tech Transportation Services Barging $ 20,000.00 4 loads x 5,000 Red Dog Dock call out $ 20,000.00 4 call outs x 5000 OSK Hilcorp call out $ 20,000.00 4 call outs x 5000, not verified Hiloorp Barge load out $ 4,800.00 4 loads x 1200 Weaver bros East side Trucking $ 5,000.00 4 days x 1250 Weaver bros West side tracking $ 15,680.00 8 Opr x 1460 +16 standby x 250 Weaver bros Air Charters $ 9,450.00 21 trips x 450 Kenai Aviation Location Preparation Pad labor Roustabouts $ 47,187.00 (1x 889 2x 679) x21 AAO Pad / Pit liner $ 5,000.00 Herculite DNOW Welding labor $ 3,896.00 4 days x 974 AAO Water Well, Tank, and Pumps $ 5,600.00 24 x 150, 2 days x 1000 M -W, Rain 4 rent Camp $ 36,750.00 0 x 175 per person 21 days, not verifie Hilcorp Health, Safety and Environmental Safety and Compliance $ 21,105.00 1005 days x 21 AAO Waste Management Refuse Disposal $ 1,000.00 month rental and disposal Triangle recycling Septic Disposal $ 10,000.00 2 porta potties and disposal Isaacs Honey wagon Materials and Supplies Fuel $ 12,000.00 4000 gallons x $3 Doyle's Drilling Fluids $ 4,000.00 2 pallets Bentonite chips AK Mineral supply ATTACHMENT E PAGE 1 of 2 / Eline $ 42,941.00 7 runs, + 4 days crew standby x 1650, 7 days equipment standby 350, 3 days operating x 3040 Pollard kDownholeTools 2,40000 3 CIBP's Pollard $ 3,75000 3 x 1250 Pollard g Services - P&A Dump bail $ 3,750.00 5 x 750 Pollard P&A $ 152,166.54 4 plugs Halliburton Subtotal: $ 625,364 Management fee $ 41,238.75 Cost+10% AAO TOTAL: $ 666,602 ATTACHMENT E PAGE 2 of 2 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) (Permit No. 211-014) Before Expiration) Docket No. OTH-16-031 of Owner's Rights in CIRI Lease ) C-061684 Failure to Respond to Notice ) of Proposed Enforcement Action ) AFFIDAVIT OF ROBERT C. WARTHEN IN SUPPORT OF APPLICATION FOR RECONSIDERATION STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT ) ROBERT C. WARTHEN, being first duly sworn upon oath, deposes and states: 1. I am a Senior Advisor for NordAq Energy, Inc. (NordAq). 2. On June 22, 2017, NordAq submitted documentary material to the Commission that included an authorization for expenditure for Shadura-1 (Shadura), which indicated the total estimated cost to plug and abandon the well is $483,826.' On the same day, NordAq submitted documentary material to the Commission that included an authorization for expenditure for Tiger Eye Central -1 (Tiger Eye), which indicated the total estimated cost to plug and abandon the well is $666,602.2 BBENA, BELL & CLARKSON, P.C. 810 N Shut, SUM* 100 Zh.rag." uk* 99501 Phone: X901) 1582000 P*nlml�.: (90'I, 159-:091 1 Attachment B, Exhibit 1 to Application for Reconsideration re Shadura. 2 Attachment B, Exhibit 1 to Application for Reconsideration re Tiger Eye. Affidavit of Robert C. Warthen Re. Failure to Plug Shadura-I, Docket No. OTH-16-031 Pagel of 3 ATTACNMlNTF BRENA, BELL & CIARKSON, P.0 810 N Stott, SWte 100 Anchme{e, AW.b 99501 Phunn (909 258-200D Fa almft: (907) 258-2001 3. The total estimated cost to plug and abandon Shadura is less than the total estimated cost to plug and abandon Tiger Eye for the reasons discussed below. 4. Shadura is located in the east side of Cook Inlet, close to an established road system and other infrastructure, while Tiger Eye is located in a remote part of the west side of Cook Inlet. Transportation services, location preparation, and labor -related costs are thus less expensive for Shadura than for Tiger Eye because there is less trucking, no barging, and no camp required for Shadura. 5. Slickline/Eline costs are less for Shadura than for Tiger Eye because Shadura is a straight well, Tiger Eye is a deviated well, and Shadura has fewer perforations than Tiger Eye. 6. Cementing services are less expensive for Shadura than for Tiger Eye for the same reasons that slickline/eline costs are less for Shadura than for Tiger Eye. 7. NordAq also has unused cement from previous jobs that it can use to plug and abandon Shadura, which reduces the amount and cost of cement that NordAq will need to purchase to complete the work to plug and abandon the well. 8. These cost differences are reflected in the respective authorizations for expenditure for Shadura and for Tiger Eye. 9. The work to plug and abandon Tiger Eye is currently in progress, and NordAq expects to complete the work by the end of the month or shortly thereafter. 10. Once the work to plug and abandon Tiger Eye is complete, NordAq expects to recover a $500,000 bond in favor of the State that NordAq obtained when it unitized Tiger Eye. kffidavit of Robert C. Warthen 2e. Failure to Plug Shadura-1, Docket No. OTH-16-031 Page 2 of 3 ATTACHMENT BRENA, BELL & CLARKSON, P.C. 810 N Sheet, Suite IN AO.h.t.e.,M.k. 99501 Ph .: (907)158-1000 P.ulmlk: (907)1SB-1001 11. NordAq plans to use those funds to obtain security for Shadura. 12. If required to submit the surety bond for $1,200,000, NordAq would be required to provide the full amount of $1,200,000 to obtain the bond rather than provide a much smaller percentage of the full amount to obtain the bond. DATED this 10 day of August, 2017. ROBERT C. WARTHEN SUBSCRIBED AND SWORN TO before me this 14e' day of August, 2017. Notary Public in and for Alaska ; My Commission Expires: 3 a3 z Affidavit of Robert C. Warthen Re. Failure to Plug Shadura-1, Docket No, OTH-16-031 A7TACHMENTI Page 3 of 3 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage Alaska 99501-3539 Re: ConocoPhillips Alaska, Inc., as Operator of the ) Kuparuk River Unit; Kuparuk River Field; ) Well KRU I D-39 Enforcement Action ) AOGCC Order No. 33 1 May 20, 2005 DECISION AND ORDER On March 31, 2005, the Alaska Oil and Gas Conservation Commission issued a Notice of Proposed Enforcement Action under 20 AAC 25.535(b), stating that it considered that ConocoPhillips Alaska, Inc. ("CPAI") may have violated provisions of regulation 20 AAC 25.402 and Area Injection Order No. 2B in connection with operating well Kuparuk River Unit ("KRU") 1D-39. The Commission proposed civil penalties under AS 31.05.150(a) in the total amount of $53,250, as well as specified corrective actions. Pursuant to CPAI's request for informal review under 20 AAC 25.535(c), CPAI met with the Commission on May 11, 2005. CPAI also provided by electronic mail written material referred to as "key points" for discussion at the May 11, 2005 meeting. A. Summary of Proposed Enforcement Action In its Notice of Proposed Enforcement Action, the Commission identified an apparent violation by CPAI of Rule 7 of Area Injection Order No. 2B ("AIO 213") and regulation 20 AAC 25.402 by failing to timely report a well integrity failure that occurred on August 24, 2004, by failing to obtain Commission approval of a plan of corrective action, and by failing to obtain Commission approval to continue injection. ATTACHMENT G PAGE 1 of 6 AOGCC Order #33 May 20, 2005 Page 2 of 6 The Commission proposed to order the following corrective actions by CPAI: (1) that within 30 days after the effective date of the enforcement order, CPAI correct deficiencies in its surveillance program; and (2) that within 30 days after the effective date of the enforcement order, CPAI provide the Commission with new protocols established to insure the timely identification and reporting of injection well mechanical integrity failures. In addition, the Commission proposed the following civil penalties under AS 31.05.150(a): (i) $5,000 for violating reporting requirements in AIO 213, Rule 7 and 20 AAC 25.402(f); (ii) $5,000 for violating corrective action plan requirements in AIO 2B, Rule 7; and (iii) $250 per day for each 173 days for violating requirements for obtaining approval to continue injecting in ATO 213, Rule 7 from August 25, 2005 through February 13, 2005, inclusive. The total of the proposed civil penalties was $53,250. B. Surveillance and Reporting Requirements for Injectors Commission requirements for demonstrating and monitoring mechanical integrity of injection wells are documented in regulation 20 AAC 25.402, and specifically for KRU in Area Injection Order 2B. CPAI does not dispute the facts of the case and acknowledges that KRU 1D- 39 did point out the existence of a gap in their annular pressure monitoring and surveillance program. However, CPAI raised several concerns about the proposed enforcement action: (1) the Notice of Proposed Enforcement Action references 173 days that had passed between leak initiation and observation; CPAI believes only 171 days passed; ATTACHMENT G PAGE 2 of 6 AOGCC Order #33 Page 3 of 6 May 20, 2005 (2) the Notice of Proposed Enforcement Action does not accurately reflect that CPAI reported tubing/annulus communication in KRU ID -39 to the Commission within 1 day following leak observation, and voluntarily self -disclosed that 171 days had passed between leak initiation and observation; and (3) the circumstances surrounding KRU 1D-39 are not the same as previous well integrity enforcements, warranting a different response than the Commission applied in this case. The Commission agrees that language in the notice does not accurately reflect the fact that CPAI self-reported the tubing/annulus communication in this injection well. We also agree that the correct interval between leak observation and reporting was 171 days, not 173 days, as determined from the pressure trends and data provided with CPAI's initial notice of well integrity failure. The circumstances CPAI alludes to were clarified in the May 11, 2005, informal meeting. CPAI stated that the significant differences were in the self -reporting of the well integrity failure and in the risk represented by the well integrity failure. The Commission does agree that, based on the evidence presented subsequent to the commencement of this review, KRU 1D-39 was not ever in danger of annulus overpressure or misinjection of fluids (fluids remained confined to the wellbore and the injection zone). However, the fact remains that the clear regulatory requirements for well integrity were violated, and CPAI does not dispute that fact. As acknowledged by CPAI, reliance on the allowable thresholds for development well annular pressures as provided by Conservation Order 494 ("CO 494") is not appropriate for injection wells, since the Commission has clearly established different and more stringent regulatory requirements for injectors. ATTACHMENT G PAGE 3of6 AOGCC Order #33 J Page 4 of 6 C. Workina Relationship May 20, 2005 CPAI expressed concerns that this enforcement action does little to improve well integrity, that it simply "adds strain" to the close and open working relationship that CPAI has endeavored to create with the Commission, particularly in the area of complex well integrity issues. The Commission recognizes CPAI's efforts to work well integrity issues collaboratively with the Commission. However, that collaborative work relationship between the regulatory agency (Commission) and the regulated community (CPAI) does not negate the Commission's clear mandate for enforcement when rules are violated. Of particular concern to the Commission is the fact that the Commission had questioned CPAI personnel about their internal well operating guidelines, and more specifically, the treatment of injection wells as if they were governed by production well integrity rules several times prior to this incident [beginning with the publication of Conservation Order 494 for public comment on June 30, 2003 effective date of CO 494 was September 4, 2003.] D. Corrective Actions In previous enforcement actions, the Commission has identified five factors that should be considered in determining appropriate penalties. These include: (1) the good or bad faith of the operator in violating the law; (2) the injury to the public resulting from the violation; (3) the benefits derived by the operator from its violation; (4) the operator's ability to pay any penalty; and (5) the need to deter similar behavior by the operator and others in the future. In addition, the Commission has considered the operator's voluntary remedial responses subsequent to the occurrence of a violation. ATTACHMENT G PAGE 4of6 AOGCC Order #33 Page 5 of 6 May 20, 2005 Several mitigating factors appear applicable in the present situation. First, the Commission acknowledges the good faith of CPAI throughout this investigation. Particularly noteworthy was the voluntary self -disclosure that 171 days passed between leak initiation and observation. In considering the injury to the public or environment resulting from the violation, the Commission is convinced that the risks during the 171 days of operation were minimal. Because of the low injection pressures, fluids being injected (water), and well design (multiple casing strings with pressure ratings exceeding injection pressure available to contain pressure communication or leakage), there was never any danger of annulus overpressure and no misinjection of fluids. The Commission also recognizes that CPAI has instituted corrective actions to improve compliance with applicable regulations and orders. These actions were instituted on CPAI's own initiative immediately following the identification of a gap in the annular pressure monitoring and surveillance program. F. Findines and Conclusions For the reasons stated above, the Commission finds that CPAI violated Area Injection Order 213, Rule 7, and regulation 20 AAC 25.402(f). To deter future violations by any operator, the Commission concludes that civil penalties are called for and that the corrective actions set out below should be ordered. The Commission further concludes that because of CPAI's self - reporting and self -disclosure, cooperation throughout the investigation, and absence of substantial risk associated with the violations, the penalty amount originally proposed should be significantly reduced. ATTACHMENT G PAGE 5of6 AOGCC Order #33 May 20, 2005 Page 6 of 6 NOW THEREFORE IT IS ORDERED THAT: 1. CPAI shall pay to the Commission a civil penalty in the amount of $25,000 within 30 days after the date this Decision and Order becomes final; 2. CPAI shall comply with the following corrective actions within 30 days from the date this Decision and Order becomes final: a. CPAI shall provide the Commission with a detailed description of actions completed to correct deficiencies in the annular pressure monitoring and surveillance program. CPAI shall also identify any remaining actions and the timeframe for completion. b. CPAI shall provide the Commission with a description of its new protocols established to ensure the timely identification and reporting of injection well mechanical integrity failures. 3. This Decision and Order becomes final on the 11th day after the date of its issuance shown below, unless within 10 days after the date of issuance CPAI files a written request for a hearing under 20 AAC 25.535(d). If CPAI timely files a written request for a hearing this Decision and Order will be of no effect. ATTACHMENT G PAGE 6 of 6 11 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suite 100 Mchoage, Alaska 99501 Phone: 190))M-2000 Facsimile: (90))]58-2001 AUG 14 2017 STATE OF ALASKA AOGCC ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Plug and Abandon Shadura-1 ) (Permit No. 211-014) Before Expiration) Docket No. OTH-16-031 of Owner's Rights in CIRI Lease ) C-061684 Failure to Respond to Notice ) of Proposed Enforcement Action ) ENTRY OF APPEARANCE Brena, Bell & Clarkson, P.C. enters its appearance as attorneys for NordAq Energy, Inc. in the above -entitled action. Copies of all communications and filings herein shall be addressed to the following attorneys: Robin O. Brena, Esq. Anthony S. Guerriero, Esq. Laura S. Gould, Esq. Brena, Bell & Clarkson, P.C. 810 N Street, Suite 100 Anchorage, Alaska 99501 Telephone: (907) 258-2000 Facsimile: (907) 258-2001 E-mail: rbrena(a,brenalaw.com E-mail: aguerrieronabrenalaw.com E-mail: Itzouldgbrenalaw.com DATED this 140' day of August, 2017. BRENA, BELL & CLARKSON, P.C. Attorneys for NordAq Energy, Inc. By I kI" 1/611 Ld I Robin O. Brena, ABA No. O. Brena, ABA No. 8410089 Anthony S. Guerriero, ABA No. 8509123 Laura S. Gould, ABA No. 0310042 Entry of Appearance Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 1 of 2 BRENA, BELL & CLARKSON, P.C. 810 N Street, Suhe 100 Anchorage, Alaska 99501 Phone: (902)258-2000 Facsimile: (90])258-2001 Certificate of Service The undersigned hereby certifies that a copy of the foregoing document was mailed to the following on the 14' day of August, 2017: Hollis French, Chair/Commissioner Daniel T. Seamount, Jr., Commissioner Cathy P. Foerster, Commissioner Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501 Entry of Appearance Re. Failure to Plug Shadura-1, Docket No. OTH-16-031 August 14, 2017 Page 2 of 2 10 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket No. OTH-16-031 and OTH-16-032 INFORMAL REVIEW June 27, 2017 at 10:00 am NAME AFFILIATION Testify (yes or no) R NORDAQ ENERGY INC. June 22, 2017 HAND DELIVERED Ms. Cathy P. Foerster, Chair Alaska Oil and Gas Conversation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Re: Docket Number: OTH-16-031 :DECEIVED JUN 27 2017 Revised Notice of Proposed Enforcement Action Failure to Plug and Abandon Shadura-1 (PTD 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Dear Ms. Foerster: In accordance with your letter dated June 12, 2017, NordAq submits this summary of its position in this matter and all accompanying documentary material. With respect to the requirement for a surety bond, NordAq assumes the requirement is not in effect because it is part of the proposed enforcement action to which NordAq timely responded. NordAq respectfully requests that AOGCC reconsider the bonding requirement, and submits the following facts and attached documentary material to support these facts. The amount of the bond significantly exceeds the estimated cost to plug and abandon the Shadura-1 ("Shadura") well. Attached as Exhibit 1 is NordAq's authorization for expenditure to plug and abandon the well, which is in a total amount of $483,826. This is less than half of the proposed amount of the surety bond. 560 E. 34th Avenue, Anchorage, AK i Fax: Suite 200 99503 Main: 907.646.9315 907.646.9317 www.nordagenergy.com Ms. Cathy P. Foerster June 22, 2017 Page 2 NORDAQ ENERGY, INC. 2. NordAq currently has a Personal Bond in the amount of $200,000 on file with AOGCC, a Statewide Oil and Gas Bond in the amount of $500,000 on file with the Department of Natural Resources ("DNR"), as well as a $19,000 bond on file with DNR that is specific to Shadura. Attached as Exhibit 2 are documents to demonstrate the existence and extent of these bonds. NordAq believes these bonds are applicable to the plugging and abandonment work that remains to be done. 3. NordAq is currently working with a general contractor and subcontractors to do the work necessary to plug and abandon the well. The work will begin after there is approximately one foot of frost and one foot of snow in the area. Attached as Exhibit 3 is an affidavit from the general contractor, Peter M. Dickinson of All American Oilfield, LLC, to attest to these facts. NordAq would appreciate your consideration of these facts with respect to its request for AOGCC to reconsider the bonding requirement. To the extent the State wants a surety bond to protect against the risk of NordAq failing to plug and abandon Shedura, NordAq is actively moving forward to plug and abandon the well as quickly as possible (see Affidavit of Stephen F. Hennigan referenced below). In addition, NordAq currently has significant bonds on file with the State of Alaska that are designed to protect the State in the unlikely event of NordAq's failure to perform its obligations with respect to the well. NordAq is concerned that AOGCC's proposed level of bonding will divert valuable company resources such that it will detract from the goal to plug and abandon the well as quickly as possible. NordAq believes the foregoing facts are sufficient to justify no additional bonding. With respect to the proposed civil penalty, NordAq maintains that it should not be subject to the penalty under the facts of this case. Shadura was suspended rather than plugged and abandoned earlier because NordAq intended to drill a second well and use Shadura-1 as a sidetrack candidate or use it for other utility purposes. Attached as Exhibit 4 is an affidavit from of Stephen F. Hennigan, who was involved with the preparation and submittal of the 3000 A Street, Suite Anchorage, AK Main: Fax: 410 99503 907.646.9315 907.646.9317 www.nordagenergy.com Ms. Cathy P. Foerster June 22, 2017 Page 3 NORDAQ ENERGY, INC.. end -of -well sundry for Shadura, to attest to this. NordAq was discussing alternative uses of the well with other parties until late 2016. The second well, however, was not drilled. In addition, NordAq has cooperated with AOGCC in this matter by timely submitting a Sundry Application to permanently plug and abandon Shadura as required by the original Notice of Proposed Enforcement Action dated December 2, 2016. As noted in the Revised Notice of Proposed Enforcement Action dated May 24, 2017, AOGCC approved that application. NordAq would appreciate your consideration of these facts with respect to the proposed civil penalty. NordAq reasonably intended to drill a second well and use Shadura-1 for other purposes, and NordAq has made a good -faith effort to cooperate with AOGCC. NordAq is again concerned that AOGCC's proposed penalty will divert valuable company resources such that it will detract from the goal to plug and abandon the well as quickly as possible. NordAq believes the foregoing facts are sufficient to justify no civil penalty. In the alternative, NordAq requests that AOGCC stay the bonding requirement and proposed civil penalty until February 28, 2018, at which time NordAq anticipates that the work on Shadura will be complete. If the work is complete at that time, NordAq requests that the Commission waive the bonding requirement and proposed civil penalty. Sincerely, NORDAQ ENERGY, I C. By David Pf iffer Chief Financial Officer Enclosures 3000 A Street, Suite Anchorage, AK Main: Fax: 410 99503 907.646.9315 907.646.9317 www•nordagenergy.com NORDAQ ENERGY INC Cathy P Foerster Alaska Oil & Gas Conversation Commission 333 West Seventh Avenue Anchorage, AK 99501 Dear Ms. Foerster— JUN 27 2017 June23rd, 2017 Please find enclosed the original response letters pertaining to the Revised Notice of Proposed Enforcement Action for the Plug & Abandonment for Tiger Eye & Shadura. Copies of these letters were hand delivered by Robert Warthen to your office earlier this week. Please do not hesitate to contact me at dpfeiffer@nordagenergy.com or 630-699-2175 with any questions. Sincerely, 0 M41 — David Pfeiffer Chief Financial Officer 560 East Avenue, Suiteto 200 Anchorage, AK 99503 Main: 907.646.9315 Fax: 907.646.9317 www.nordaqenergy.com �,JOFKDAQ LNE RGY, INC June 22, 2017 HAND DELIVERED Ms. Cathy P. Foerster, Chair Alaska Oil and Gas Conversation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Re: Docket Number: OTH-16-031 RECEIVED JUN 2 2 2017 OGC Revised Notice of Proposed Enforcement Action Failure to Plug and Abandon Shadura-1 (PTD 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Dear Ms. Foerster: In accordance with your letter dated June 12, 2017, NordAq submits this summary of its position in this matter and all accompanying documentary material. With respect to the requirement for a surety bond, NordAq assumes the requirement is not in effect because it is part of the proposed enforcement action to which NordAq timely responded. NordAq respectfully requests that AOGCC reconsider the bonding requirement, and submits the following facts and attached documentary material to support these facts. The amount of the bond significantly exceeds the estimated cost to plug and abandon the Shadura-1 ("Shadura") well. Attached as Exhibit 1 is NordAq's authorization for expenditure to plug and abandon the well, which is in a total amount of $483,826. This is less than half of the proposed amount of the surety bond. 560 E. 30 Avenue, Anchorage, AK i Main: 907.646.9315 Fax: Suite 200 99503 1 907.646.9317 www.nordagenergy.com Ms. Cathy P. Foerster June 22, 2017 Page 2 ^�OP\D, (-) L-NLKG',Y; INC.. 2. NordAq currently has a Personal Bond in the amount of $200,000 on file with AOGCC, a Statewide Oil and Gas Bond in the amount of $500,000 on file with the Department of Natural Resources ("DNR"), as well as a $19,000 bond on file with DNR that is specific to Shadura. Attached as Exhibit 2 are documents to demonstrate the existence and extent of these bonds. NordAq believes these bonds are applicable to the plugging and abandonment work that remains to be done. 3. NordAq is currently working with a general contractor and subcontractors to do the work necessary to plug and abandon the well. The work will begin after there is approximately one foot of frost and one foot of snow in the area. Attached as Exhibit 3 is an affidavit from the general contractor, Peter M. Dickinson of All American Oilfield, LLC, to attest to these facts. NordAq would appreciate your consideration of these facts with respect to its request for AOGCC to reconsider the bonding requirement. To the extent the State wants a surety bond to protect against the risk of NordAq failing to plug and abandon Shedura, NordAq is actively moving forward to plug and abandon the well as quickly as possible (see Affidavit of Stephen F. Hennigan referenced below). In addition, NordAq currently has significant bonds on file with the State of Alaska that are designed to protect the State in the unlikely event of NordAq's failure to perform its obligations with respect to the well. NordAq is concerned that AOGCC's proposed level of bonding will divert valuable company resources such that it will detract from the goal to plug and abandon the well as quickly as possible. NordAq believes the foregoing facts are sufficient to justify no additional bonding. With respect to the proposed civil penalty, NordAq maintains that it should not be subject to the penalty under the facts of this case. Shadura was suspended rather than plugged and abandoned earlier because NordAq intended to drill a second well and use Shadura-1 as a sidetrack candidate or use it for other utility purposes. Attached as Exhibit 4 is an affidavit from of Stephen F. Hennigan, who was involved with the preparation and submittal of the 3000 A Street, Suite Anchorage, AK Main: Fax: 410 99503 907.646.9315 907.646.9317 www.nordagenergy.com Ms. Cathy P. Foerster June 22, 2017 Page 3 N`__)RDA(_), E-_NL_RGI; lNC.. end -of -well sundry for Shadura, to attest to this. NordAq was discussing alternative uses of the well with other parties until late 2016. The second well, however, was not drilled. In addition, NordAq has cooperated with AOGCC in this matter by timely submitting a Sundry Application to permanently plug and abandon Shadura as required by the original Notice of Proposed Enforcement Action dated December 2, 2016. As noted in the Revised Notice of Proposed Enforcement Action dated May 24, 2017, AOGCC approved that application. NordAq would appreciate your consideration of these facts with respect to the proposed civil penalty. NordAq reasonably intended to drill a second well and use Shadura-1 for other purposes, and NordAq has made a good -faith effort to cooperate with AOGCC. NordAq is again concerned that AOGCC's proposed penalty will divert valuable company resources such that it will detract from the goal to plug and abandon the well as quickly as possible. NordAq believes the foregoing facts are sufficient to justify no civil penalty. In the alternative, NordAq requests that AOGCC stay the bonding requirement and proposed civil penalty until February 28, 2018, at which time NordAq anticipates that the work on Shadura will be complete. If the work is complete at that time, NordAq requests that the Commission waive the bonding requirement and proposed civil penalty. Enclosures 3000 A Street, Suite 410 Anchorage, AK 99503 Sincerely, NORDAQ ENERGY, ,C. B Y /r David Pf iffer Chief Financial Officer Main: Fax: 907.646.9315 � 907.646.9317 www.nordagenergy.com NordAq Energy Shadura #1 Plug and Abandon WELL NAME: OBJECTIVE: AFE #: DATE: Shadura #1 P&A 6/14/2017 POB DAYS: OPERATING DAYS: TOTAL DAYS: 21 7 28 TOTAL: $483,826 EXPENSE CATEGORY TOTAL COMMENTS VENDOR Expense Subcategory Permitting Permitting $ 22,000.00 AOGCC, Field Engineering PEI/ Sierra Hamilton Support and Personnel $ - Communications $ 1,500.00 plug number AAO Management Personnel $ 59,640.00 30 days x 1988 AAO Company man $ 41,748.00 21 days x 1988 AAO Surface rentals $ 10,000.00 sills, portable fuel tank, etc.. AAO Welding machine $ 2,000.00 2000 per month AAO Break shack $ 1,200.00 1200 per month Mag tech Excavator $ 3,100.00 3100 per month Airport Chieftan $ 25,000.00 25,000/ month Atigun Generators $ 7,000.00 28 days x 250 (two gens) AAO Bobcat $ 7,000.00 7000/ month Airport Transportation Services $ - East side Trucking $ 6,250.00 5 days x 1250 Weaver bros Location Preparation $ - Road, Pad labor Roustabouts $ 98,000.00 (1x 889 2x 679) x28 AAO Pad / Pit liner $ 5,000.00 Herculite DNOW Welding labor $ 3,896.00 4 days x 974 AAO Water Tank, hoses, and Pumps $ 12,600.00 28 x 450 Mag Tec, Rain 4 rent Hotel $ 10,500.00 5 x 100 per person 21 days, Main street Health, Safety and Environmental $ - Safety and Compliance $ 28,140.00 1005 days x 28 AAO Waste Management $ - Refuse Disposal $ 1,000.00 month rental and disposal Triangle recycling Septic Disposal $ 2,000.00 2 porta potties and disposal Peninsula Pumping Materials and Supplies $ - Fuel $ 7,500.00 2500 gallons x $3 Doyle's Slickline / Eline $ 24,320.00 8 runs x 3040 Pollard Downhole Tools $ - Plugs $ 1,600.00 2 CIBP's Pollard Perfs $ 2,500.00 2 x 1250 Pollard Cementing Services - P&A $ - Dump bail $ 5,250.00 7 x 750 Pollard P&A $ 76,000.00 2 plugs/pumping services Atigun Subtotal: $ 464,744 Management fee: $ 19,082.00 Cost +10% AAO TOTAL: $ 483,826 EXHIBIT 1 (NORDAQ) Paae 1 of 1 STATE OF ALASKA `�. �h..� ..9 �„�,,, las•}, ,,. ALASKA OIL AND GAS CONSERVATION COININJISSION I ".� ASSIGNMENT OF CERTIFICATE(S) OF DEPOSIT A?' D JAN C CONFIRINIATION AND AGREEMENT OF ISSUING BANKg ,�xy �• � �'''' ,� ter, i• On IAe�Ja_, 2011 (Principal; igoi) Q350 -0 -A k- ctgt.S07. _ (Address) executed the following certificate(s) of deposit (Certificate(s)): i. 96368639 t( in the amount of S 00 Ooo 2. in the amount of to secure, in accordance with 20 AAC 25.025, any default that may occur under State of Alaska, Alaska Oil and Gas Conservation Commission (AOGC(') Personal Bond No. 4 636 4 6 34 Bond). WHEREAS, under 20 AAC 25.025, an operator submitting a personal bond on Forni 10- 402B, must provide security, issued in the sole favor of the AOGCC, by a bank authorized to do business in the State of Alaska guaranteeing the operator's performance; NOW THEREFORE, to meet the requirements of 20 AAC 25.025, under this Assignment of Certificate(s) of Deposit and Confirmation and Agreement of Issuing Bank (Assignment), A. the PiincipaUObligor agrees to the following: 1. it assigns its rights to the Certificate(s) to the AOGCC; 2. the State of Alaska, by and through its duly authorized agents, is irrevocably constituted and appointed as its Attorney -in -Tact to do all things necessary to effectuate the purposes of this Assigrunent; and this Assignment shall remain in full force and effect until released in writing by the AOGCC in accordance with 20 AAC 25.025(c). B. The Issuing Bank confirms and agrees to the following: it is a bank authorized to do business in the State of Alaska-- AOGCC, laska; AOGCC — ASSIGNMENT OF CD(s) / CON1~IRMATION/AGREEMENT (4/2009) Page 1 of 5 EXHIBIT 2A (NORDAQ) Paae 1 of 6 2. it is federally insured or a Federal Reserve Bank branch; it has changed its records to show that, subject to its compliance with all applicable State of Alaska and federal laws, only the AOGCC may collect the principal amount(s) of the Certificate(s); 4. it has placed a hard hold or freeze on the Certificate(s) in accordance with this Assignment; 5. it shall, within 3 business days after the Certificate(s) are issued, deliver the original Certificate(s)—or, if it does not issue original Certificate(s), other account documents, such as receipts, adequately showing that the Certificate(s) were issued—to the AOGCC (which shall hold them until this Assignment is released in writing by the AOGCC); 6. the Certificate(s) comply with the following requirements: (a) the principal of the Certificate(s) is/are in the sole favor and for the exclusive use of the AOGCC—i.e., the Certificate(s) will be held by the Issuing Band in trust for the AOGCC; (b) the Certificate(s) is/are assigned to the AOGCC in writing and upon the books of the Issuing Bank to secure any default, as determined by the AOGCC in its sole discretion, that may occur under the Bond, which accompanies the Certificate(s); (c) subject to the Issuing Bank's compliance with all applicable State of Alaska and federal laws, the AOGCC alone, in its sole discretion, shall authorize the release, in any form, to any party of any or all of the principal amount(s) of the Certificate(s); (d) the Certificate(s) is/are, at any time prior to maturity, redeemable, and the principal amount(s) of the Certificate(s) is/are payable, in whole or in part at the AOGCC's sole discretion, to the AOGCC immediately upon the AOGCC's written demand; (e) the Certificate(s) is/are in such amount(s) that liquidation prior to maturity will result in the full amount of the Bond, or the Certificate(s) is/are issued with the provision that all costs of liquidation (including, for example, penalties for early redemption) will be paid out of the interest earned of the Principal/Obligor, not out of principal amount(s) of the Certificate(s); (f) the Certificate(s) is/are federally insured; (g) the Certificate(s) automatically renew; AOGCC -- ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 2 of 5 EXHIBIT 2A (NOROAQ) Paae 2 of 6 (h) the Certificate(s) is/are subject to no expiration date that would restrict the right of the AOGCC to collect the principal amount of the Certificate(s) at any time of default; and (i) the Certificate(s) is/are not, and will not be, subject to any rights of set-off or liens of the Issuing Bank; and 7. the State of Alaska, by and through its duly authorized agents, is irrevocably constituted and appointed as its Attorney -in -Fact to do all things necessary to effectuate the purposes of this Assignment; 8_ this Assignment shall remain in full force and effect until released in writing by the AOGCC in accordance with 20 AAC 25.025(c); and 9. it shall immediately notify the AOGCC and Principal/Obligor if it becomes unable, for any reason, to fulfill its obligations under the Certificate(s) or it it learns, or reasonably should have learned, that any confirmation or agreement above is or becomes inaccurate. IN WITNESS WHEREOF, the Principal/Obligor has set its signature and seal (if it has one) this day • ignature of !. /! '• By; J► _ / %1' I1 IN WITNESS WHEREOF, the Issuing Bank has set its signature and seal (if it has one) this day of (Signa of Iss Bank) By: p mon Title: i3vs/ncrs k, As'o / �C- AOGCC — ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 3 of 5 EXHIBIT 2A (NORDAQ) Paae 3 of 6 STATE OF ALASKA } )ss. �Y JUDICIAL DISTRICT ) ACKNOWLEDGEII,fENT OF PRINCIPAL/OBLIGOR On this2Aay of �yAn7m , gal I , before me, a notary public in and for the State of Alaska, duly commissioned and sworn, appeared _Fa,ca� • %1'� GQrj' n a,,t, to me personally known, who, being by me duly- sworn, said the following: (1) ke/she is 4v ,.ltr� of the Principal/Obligor that executed 043 the attached Assignment of Certificate(s) of Deposit and Confirmation and Agreement of Issuing Bank (Assignment); (2) the seal (if applicable) affixed to the Assignment is the PrincipaliObligor's corporation seal; (3) the Assignment was signed and sealed (if applicable) on behalf of the Principal/Obligor by the authority of its Board of Directors; and (4) executing the Assignment is the free act and deed of the Principal/Obligor for the uses and purposes set forth in it. IN WITNESS WHEREOF, I have hereunto set my hand and official seal on the day, month, and year aforesaid_ i NOTARY Notary Public in and for the State of Alaska PUBLIC My Commission Expires: 02. 14- -- 2.-012- — AOGCC – ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 4 of 5 EXHIBIT 2A (NORDAQ) Paue 4 of 6 STATE OF ALASKA ) 11 )ss. JUDICIAL DISTRICT ) ACKNOWLEDGEMENT OF ISSUING BANK On this,2-Tday of 2D I1 before tne, a notary i4.2 nd for the State of Alaska, duly conunissioned and sworn, appeared �C C., �'rt to me personally known, who, being by me duly sworn, said the following: (1) he/she is ri V_.bti !t!u p -_ O (A0j-q of rM` , the Issuing Bank that executed the attached Assignment of Certificate(s) of Deposit and Confirmation and Agreement of Issuing Bank (_Assignment); (2) the seal (if applicable) affixed to the Assignment is the Issuing Bank's corporation seal; (3) the Assignment was signed and sealed (if applicable) rity of its Board of Directors: and (4) executing on behalf of the Issuing Bank by the autho the Assignment is the free act and deed of the Issuing Bank for the uses and purposes set forth in it. IN WITNESS WHEREOF, I have hereunto set my hand and official seal on the day, month, and year aforesaid. Notary Public in and for the State of Alaska PUB1,IC My Commission Expires: Qom— L'Ir ^ 2 0I 2- -. AOGCC — ASSIGNMENT OF CD(s) / CONFIRMATION/AGREEMENT (4/2009) Page 5 of 5 EXHIBIT 2A (NORDAQ) Paae 5 of 6 9636963911 Time Account Receipt/Disclosure Banker Name: Officer/Portfolio Number. Date: CHRISTIAN COSTELLO �`F0605 01/25/2011 Banker Phone: 5tere Number. Banker AU: Banker MAC - 1907/267 -5565 103902 1000108.1 (K3207-011 CustomerlAccount Information Primary Customer Name: Customer Number (ECN): NORDAQ ENERGY INC. _ 1428506192336118 COLD: Product: Account Number. Open Date: Term: Maturity Date: 100569 jCDA j9636963911 101/25/2011 16 months (07/25/2011 Time Account Opening Deposit Interest Rate: Annual Percentage Yield: Fixed Rate: Variable Rate: Renewal Term: $200,000.00_ 1 0.205-�__0.205 1Yes _[ o 16 months Interest will be paid: The method of payment will be: (EVERY 01 MONTHS AND AT WITHDRAWAL 1BY ADDING TO PRINCIPAL Renewability. IYOU WILL AUTOMATICALLY RENEW MY TIME ACCOUNT AT MATURITY UNLESS I NOTIFY YCU OTHERWISE Account Title and Mailin! Information Customer(s) Listed on Account: Mailing Address: INORDAO ENERGY INC. 19350 NORDIC ST ITF: ALASKA OIL AND GAS CONSERVATION COMMISSION Address Line 2: City. State: ANCHORAGE ^ JA _ ZIP/Postal Code: Country: 99507-6035 US This is a receipt. It need not be presented at the time you obtain payment from the Bank. W6016B (1 1-10 SVP) Page 1 of 1 EXHIBIT 2A (NORDAQ) Paue 6 of 6 THE STATE (��% Dewirirl2ettt of 1A;atu al Resotlr(le�s 0 /�{ LA \ f( A D1 t.CA01! of Gil 0 G s 1. 1 ��lll llli�Jl\ iiilCFIfJ1`?.tN L�1TIC� November 6, 2012 Nordaq Energy Inc. Attn: Robert Warthen 3000 A street, Suite 410 Anchorage, AK 99503. RE: Nordaq Energy Inc. Statewide Oil and Gas Lease Bond Dear Mr. Warthen: The Statewide Oil and Gas Bond submitted by Nordaq Energy, Inc. in the form of a Certificate of Deposit with Wells Fargo Bank (Account # 9422389560) in the amount of $500,000 under the control of the State of Alaska is hereby accepted 09/17/2012 under 11 AAC 83.160. The Bank has agreed to not alter or cancel the Certificate of Deposit without the State's concurrence and the Certificate of Deposit is subject to the following conditions: 1. The State of Alaska may require additional financial security as necessary. 2. Nordaq Energy Inc. Does hereby irrevocably constitute and appoint the State of Alaska, Department of Natural Resources, Division of Oil and Gas by and through its authorized agents and Attorney -in Fact as Beneficiary of the Certificate of Deposit. 3. Nordaq Energy Inc. agrees that only the State of Alaska, Department of Natural Resources, division of Oil and Gas, upon written notice shall cause the transfer of any and all funds in the Certificate of Deposit referenced above. The statewide bond satisfies all the bond requirements to which an oil and gas lease is subject under the Department of Natural Resources. All oil and gas bonds must comply with I 1 AAC 82.600. Thank you for providing the Certificate of Deposit to satisfy the Statewide Oil and Gas bond requirements. If you have any questions, contact David Edmunds at 907-269-8769 or email him at david.edmunds@alaska. oy. Sincerely, Kim Kruse Petroleum Land Manager EXHIBIT 2B (NORDAQ) Pane 1 of 6 cc. Rachelle Burnett Business Relationship Manager 1351 E. Huffman Road Suite 201 Anchorage, Alaska Jeremy Vance Wells Fargo Bank 301 W. Northern Lights Blvd., Suite 100 Anchorage, Alaska 99503 EXHIBIT 2B (NORDAQ) Paae 2 of 6 Force DOGIPCU-01 October 2011 File No, STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF OIL AND GAS STATEWIDE OIL AND GAS BOND DIVISION OF ALL MEN BY THESE PRESENTS that we, OIL AM GAS as principal, whose address is as surety, are held and firmly bound unto the State of Alaska in the sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00), lawful money of the United States for the use and benefit of (1) the State of Alaska, (2) any owner of a portion of the land subject to the coverage of this bond who has a statutory right to compensation in connection with a reservation of the oil and gas deposits to the State of Alaska, and (3) any lessee or permittee under a lease or permit issued by the State of Alaska prior to the issuance of an oil or gas lease for same land subject to this bond, covering the use of the surface or the prospecting for or development of other mineral deposits in any portion of such land, to be paid to the State of Alaska. For such payment, well and truly to be made, we bind ourselves and each of us and each of our heirs, executors, administrators, successors and assigns, jointly and severally by these presents. THE CONDITIONS of the foregoing obligations are such that, WHEREAS: A. The principal in one or more of the following ways has an interest in oil and gas leases on lands of the State of Alaska under the jurisdiction of the Department of Natural Resources: (1) as the lessee of such leases, (2) as the approved holder of operating rights in all or part of the lands covered by such leases under operating agreements with the lessee, and (3) as designated operator or agent under such leases pending approval of an assignment or operating agreement; and, B. The principal is authorized to drill for, explore for, develop, produce, process, and market oil and gas deposits in or under the lands covered by such leases and is obligated to comply with certain covenants and agreements set forth in such leases; and, C. The principal and surety agree that the coverage of this bond shall extend to all of the principal's holdings under such leases in the State of Alaska, and without notice to the surety shall also extend to and include: 1. Any such oil and gas lease hereafter issued to or acquired by the principal, the coverage to become effective immediately upon such issuance or upon approval by the State of Alaska of a transfer in favor of the principal; and, EXHIBIT 2B (NORDAQ) Paae 3 of 6 2. Any such operating agreement hereafter entered into or acquired by the principal, the coverage to become effective immediately upon approval by the State of Alaska of the agreement or of a transfer of such an agreement to the principal; and, 3. Any designation hereafter or the principal as operator or agent of a lessee under such a lease, the coverage to become effective immediately upon the filing of such a designation with the State of Alaska; and, 4. Any extension of a lease covered by this bond, such coverage to continue without any interruption due to the expiration of the term set forth in the lease; Provided however, that the surety may elect to have additional coverage authorized under this Paragraph C, to become inapplicable as to all interests of the principal acquired more than 30 days after the receipt of written notice of such election by the Division of Oil and Gas; and, D. The surety hereby waives any right to notice of, and agrees that this bond shall remain in full force and effect notwithstanding: 1. A transfer or transfers, either in whole or in part, of any or all of the leases or of the operating agreements, and further agrees to remain bound under this bond as to the interests, either in the leases or in the operating agreements or in both, retained by the principal when the approval of the transfer or transfer becomes effective; and, 2. Any modification of a lease or operating agreement or obligations thereunder whether made or effected by commitment of such lease or operating agreement to unit, cooperative, communitization, or storage agreements, or development contracts, suspensions of operations or production, waivers, suspensions or changes in rental, minimum royalty and royalties, compensatory royalty payments, or otherwise; and, E. The principal and surety agree that notwithstanding the termination of any lease or leases, operating agreements, or designations as operator or agent covered by this bond, whether the termination, in part or wholly is by operation of law or otherwise, the bond shall remain in full force and effect as to all remaining leases, operating agreements, or designations covered by this bond; and, F. The principal, as to any lease or part of a lease for lands as to which he has been designated as operator or agent or approved as operator in consideration of being permitted to furnish this bond in lieu of the lessees, agrees and by these presents does hereby bind himself to fulfill on behalf of each lessee all the obligations of each such lease for the entire leasehold in the same manner and to the same extent as though he were the lessee; and, G. The principal and surety agree that the neglect or forbearance of the lessor, in enforcing against the lessees of such lessor the payment of rentals or royalties or the performance of any other covenant, conditions, or agreement of the leases, shall not in any way release the principal and surety, or either- of them, from any liability under this bond; and, EXHIBIT 2B (NORDAQ) Paae 4 of 6 H. The principal and surety agree that; in the event of any default under the leases, the lessor may commence and prosecute any claim, suit, action, or other proceeding against the principal and surety or either of them without the necessity of joining the lessees. NOW THEREFORE, if said principal shall in all respects faithfully comply with all of the provisions of the leases referred to hereinabove, then the above obligations are to be void; OTHERWISE, to remain in full force and effect. APPROVAL AND ACCEPTANCE BY THE STATE OF ALASKA By: Dated: t Department of Natural Resources, Division of Oil and Gas INSTRUCTIONS: 1. The surety on the bond may be any corporation qualified to issue performance and reclamation bonds in the State of Alaska. 2. If the principals are partners, their individual names shall appear in the spaces provided, with recital that they are partners comprising a firm, naming it, and all members of the partnership shall execute the bond as individuals. 3. Where this bond is executed by a corporation, either as surety or as principal, the bond must be executed by a duly authorized officer, and the individual signing must submit evidence of their authority to act for the corporation. 4. When any party executes this bond through an agent, a power of attorney or other evidence of authority must accompany this bond. EXHIBIT 2B (NORDAQ) Paae 5 of 6 South Anchorage Business Banking MAC K3211-020 1351 E. Huffman Road Suite 201 Anchoraae, AK 99515 September 17, 2012 State of Alaska RE: Certificate of Deposit To Whom It May Concern: This letter is to inform you that Nordaq Energy, Inc. has one (1) Certificates of Deposit (CD) with Wells Fargo Bank, N.A. The CD listed below are located at branch 6759 (13 51 E Huffman Ste 202 Anchorage, AK 99515). Account Amount Maturity Date 9422389560 $500,000 01/31/2013 The above listed certificate of deposit is under the control of The State of Alaska. The Bank will not alter or cancel the certificate of deposit without the State's concurrence. Release of funds to the beneficiary, Nordaq Energy, Inc., is dependent upon the State's written instruction. The certificate of deposit is set to renew automatically. Please feel free to contact me at 907-348-5367 with any questions or concerns_ Sincerely, =te >> CaRac llee Burnett Business Relationship Manager Together we'll go far EXHIBIT 2B (NORDAQ) Paae 6 of 6 THE STATE Department of Natural Resources 0fALA Division of Mining, Land R Water Southcentral Regional Land Office GOVLRNOR SEAN PARNE1.1, September 4, 2013 RECENFri Robert Warthen SEP 06 NordAq Energy, Inc. 400 A St, Suite 410 Anchorage, AK 99503 NORD 'D ENEH V, u� . Re: Section Line Easement Development Township 8 North, Range 10 West, Seward Meridian, Section 10 Dear Mr. Warthen: 550 West 7th Avenue, Suite 900 Anchorage, Alaska 99501-3577 Main: 907.269.8503 TDD: 907.269.8411 Fax: 907.269.8913 The right to develop access within a section line easement is provided for under Alaska Statute 19.10.010. As described in the Regional Manager's Decision for ADL 231291, issued on 9/4/2013, NordAq Energy, Inc. is authorized to use a portion of the Section Line Easement adjacent to the east section line of the NE '/ of Section 10, Township 8 North, Range 10 West of the Seward Meridian, to complete construction of the access road described in that decision. The burden of locating your activities within the Section Line Easement lies with NordAq Energy, Inc. This letter does not exempt you from complying with all other applicable state, federal or municipal requirements associated with undertaking development. Before you proceed: • accurately locate the boundaries of the section line easement with a surveyor; • locate your development as close to the section line as is practical, or within that portion of Section 11 which is included in ADL 231291, and • secure all required local, state and/or federal authorizations. Locating and developing the road within the section line easement must be done in a reasonable manner. In other words, site preparation work (clearing, etc.) must be commensurate with the scope of your project. Any materials removed must be disposed of properly and may not be sold without prior authorization from DMLW. Logs greater than 4" in diameter shall be made available for public use by cutting them into no more than 8' lengths and placing them beside the road surface of ASLS 81-73 or in other locations within the ADL 231291 permit boundary that are publicly accessible by motor vehicle. Development involving wetlands, crossing streams, or affecting other protected areas must be authorized by the appropriate agencies. Questions concerning section line easements may be directed to me by emailing to Eric.Moore@alaska.gov. Sincerely, Eric Moore Natural Resource Specialist III EXHIBIT 2C (NORDAQ) Page 1 of 15 STATE OF ALASKA DEPARTMENT OF NATURAL RESOURCES DIVISION OF MINING, LAND AND WATER SOUTHCENTRAL REGION Regional Manager's Decision NordAq Energy, Inc. Private, Non -Exclusive Easement ADL 231291 AS 38.05.850 Project Overview The Department of Natural Resources (DNR), Division of Mining, Land and Water (DMLW), Southcentral Regional Office (SCRO) received an application on November 16, 2011 for a private non-exclusive easement to encompass an all season gravel road with associated pullouts, turnarounds and gravel storage and loading yards, as well as natural gas gathering lines and communications cables. The requested easement is located on State-owned lands between the Captain Cook State Recreation Area (CCSRA) and the Kenai National Wildlife Refuge (KNWR). The applicant, NordAq Energy, Inc. (NordAq), subsequently requested suspension of the application on April 27, 2012. At the applicant's request the natural gas gathering lines and communications cables were removed from consideration and adjudication resumed on March 26, 2013. Following these changes ADL 231291 encompasses the permanent all -season gravel road with associated permanent pullouts, temporary turnarounds and two temporary gravel storage and loading yards, one of which will be converted into a permanent turnaround and parking area. The road requested under ADL 231291 would provide access for NorclAq's Shadura Natural Gas Development Project, located on mineral estate leased from Cook Inlet Region, Inc. (CIRI) within KNWR. As part of the project, NordAq requested authorization for a security gate to be installed at the beginning of the proposed road. The proposed road would cross State land to reach KNWR and would continue across federally owned lands within KNWR under authorization from the US Fish and Wildlife Service (USFWS). On June 28, 2013 the USFWS issued a Record of Decision (ROD) regarding the Shadura Natural Gas Development Project Final Environmental Impact Statement (FEIS). The ROD adopts NordlAq's proposed action, including continuation of the road described herein onto KNWR lands. On May 23, 2013 NordAq submitted a seperate easement application to request authorization of the natural gas gathering lines and communications cables, serialized as ADL 231294. The two applications are being adjudicated separately because NorclAq's access must be authorized prior to their drilling at the Shadura site, while the natural gas gathering lines and communications cables will only be installed if the applicant is able to begin producing natural gas from this site. NordAq has submitted their Plan of Development (POD) for the Shadura Natural Gas Development Project to SCRO as a source of supplementary information for this project and ADL 231294. This POD is incorporated by reference into the applications for ADL 231291 and 231294. EXHIBIT 2C (NORDAQ) Page 2 of 15 COOK INLET Figure 1: Approximate location of the road proposed by NordAq, as well as the location of two gravel storage and staging areas to be constructed as part of the project. The portion of the road in blue and the Shadura Development Well Pad are outside of the scope of ADL 231291. Location • Geographic: The proposed project is located northeast of Nikiski, AK on State land adjacent to Captain Cook State Recreation Area (Kenai D-3 Quadrangle). ADL 231291— Regional Manager's Decision Page 2 of 14 EXHIBIT 2C (NORDAQ) Page 3 of 15 • Legal: The proposed easement is located within Lot 6 of Section 2, and Lots 2, 3 and the W% SW% of Section 11, Township 8 North, Range 10 West of the Seward Meridian. • Width and Acreage: The requested easement for an access road is estimated to be 9504 feet in length and 80 feet in width, and also includes a gravel parking and turnaround area 200 feet in length and 150 feet in width, occupying approximately 18.1 acres of State land. The applicant has requested authorization of an additional temporary gravel storage area during the construction phase of this project, 200 feet in length and 150 feet in width, or an additional 0.5 acres. As requested, the project will occupy approximately 18.6 acres of State land during construction. Title The State of Alaska acquired title to the affected lands from the United States by Patent 50-65-0199 (GS 1199,9/21/1964). Authority DNR is authorized to execute easements on State-owned land under the provisions of AS 38.05.850. Also referenced in this decision are 11 AAC 05.010, 11 AAC 96.020, 11 AAC 96.060, 11 AAC 96.065 and 11 AAC 96.070, State Plans and Classifications The requested easement falls within Unit 1658 of the Kenai Area Plan. This unit is designated for Public Recreation and Tourism — Public Use Site, with the entire unit to be retained in State ownership and Upper and Lower Salmo lakes to be managed for water -related recreation. The unit is recommended for addition to the State Park System as a part of the CCSRA. Despite the designation of this Unit and the recommendation for inclusion in the CCSRA there is no developed public use site within the affected lands. A short trail leads from parking areas in the CCSRA to the west side of Salmo Lake, crossing the proposed road as shown in Figure 3, but no facilities exist at the terminus of the trail aside from a small clearing and unimproved lake access. The Division of Parks and Outdoor Recreation (DPOR) has no plans to develop the area for public use and does not object to the proposed project. Furthermore, DPOR has stated that if a public use site is developed at either Upper or Lower Salmo Lake in the future the. proposed road could provide valuable public access to these areas. The implications of public use site development on the proposed project are further discussed in the Management Issues section of this decision. In consideration of the current and anticipated future uses of these lands, this project is considered to be compatible with the Kenai Area Plan, subject to amendments in the location of the security gate as described herein. Administrative Record The administrative record for this authorization consists of the casefile for ADL 231291. ADL 231291— Regional Manager's Decision Page 3 of 14 EXHIBIT 2C (NORDAQ) Page 4 of 15 Public and Agency Notice Public notice of the requested easement is not required under AS 38.05.850(c) as this authorization is not functionally irrevocable; however notice of the proposed easement was posted on the DNR Public Notice website and at Post Offices in Kenai, Soldotna and Nikiski. An agency notice of the proposed easement was submitted to state agencies including the Department of Environmental Conservation (DEC), Department of Transportation and Public Facilities (ADOT&PF), Department of Fish & Game (ADF&G), the DNR Division of Forestry, DMLW Land Development and Sales, DPOR and the State Historical Preservation Office. The US Army Corps of Engineers, USFWS and the Kenai Peninsula Borough's (KPB) Land Management Division and Road Service Area were also notified of the proposed easement. ADF&G submitted comments relating to two areas of concern regarding the requested easement. First, according to ADF&G the presence of salmon in Salmo Lake indicates that the unnamed stream connecting Salmo Lake to the Swanson River is used by anadromous species even though the stream is not listed in the Anadromous Waters Catalogue. ADF&G states that "any crossing structure of the unnamed stream will have to meet fish passage criteria and a bridge would be recommended." In addition, ADF&G states that "any activities below the line of ordinary high water, or that could affect the spawning, rearing or migration of anadromous fishes, or potentially provide blockages to the efficient passage of resident fish species are regulated by state law and may require a Fish Habitat Permit from ADF&G, Division of Habitat." SCRO's response to ADF&G's first comment is that NordAq's plan for addressing stream crossings meets ADF&G suggestions that bridges be used and that Fish Habitat Permits may be required. NorclAq's POD states that "stream crossings will be accomplished by installing single lane, clear span bridges with gravel embankments." NordAq states that if streambank stabilization is required they will follow ADF&G's Streambonk Revegetation and Protection: A Guide forAlaska and that "detailed stream crossing plan designs will be provided to... [ADF&G] for review and approval before the start of construction activities." NordAq holds Fish Habitat Permit FH 11-V-0181, issued by ADF&G, for activities associated with the proposed project. Second, ADF&G recommends that the road be open to public use on State-owned land, referencing Mitigation Measure #5 from the DNR Division of Oil and Gas's (DOG) Cook lnletAreawide Oil and Gas Lease Sale, Final Finding 2009, which states in part that "public access to, or use of, the lease area may not be restricted except within the immediate vicinity of drill sites, buildings and other related facilities. Areas of restricted access must be identified in the plan of operations..." SCRO's response to this comment is included in the Management Issues section of this decision as part of a broader discussion regarding public access in the project area. DEC commented that the proposed project does not intersect any public water system sources and the KPB Land Management Division stated that they have no objection to the proposed project. No other public or agency comments were received regarding the proposed project. ADL 231291 — Regional Manager's Decision Page 4 of 14 EXHIBIT 2C (NORDAQ) Page 5 of 15 Term The SCRO has determined that this authorization is not functionally irrevocable. The proposed easement described herein will be issued for an indefinite period that may be terminated if the area described is no longer used for the purpose intended, for non-compliance with the terms identified in relevant Departmental authorizations issued in association with the requested land use approval (e.g.: land use permit/early entry authorization and easement document), or if a higher and better use for the project site is established as determined by the DMLW Director (as per AS 38.05.850). The Land Use Permit / Early Entry Authorization (described below) will be issued for two years for the purpose of constructing and locating the road and associated facilities. Third Party Interests ASLS 81-73 (formerly ADL 209574) is an easement for a public access road issued to the KPB. The easement begins at the end of the right-of-way for the Kenai Spur Highway in the CCSRA and runs several miles to the northeast, accessing lands owned and/or disposed of by the KPB. The proposed project would require access across approximately the first 2000 feet of ASLS 81-73 in order to reach the beginning of the road to be constructed under ADL 231291. In addition, NordAq may perform maintenance and upgrade this portion of the route as necessary for their access to ADL 231291. Upgrades must be confined to the existing authorized road corridor, and public access to ASLS 81-73 north of the project area must be maintained throughout the construction period. The KPB Land Management Division has stated that they do not object to the proposed project. The KPB has selected the lands within Government Lot 6 of Section 2, Township 8 North, Range 10 West of the Seward Meridian, under ADL 227995 as part of their municipal entitlement. No decision has been made by the State since the selection application was received in August of 1999, but the selection file remains in Active status. The KPB Land Management Division has stated that they do not object to the proposed project. Two authorizations for oil and gas pipelines are impacted by the proposed project. ADL 37591 is a right- of-way permit held by Phillips Gas Supply Corporation (PGSC) for a 16" natural gas pipeline and appurtenances. ADL 69354 is a right-of-way lease held by Tesoro Alaska Pipeline Company (Tesoro) for the Nikiski Alaska Pipeline, a 10.75" pipeline for liquid petroleum products. These pipelines are parallel to each other and located 500-1000 feet east of ASLS 81-73 within the project area. Representatives of PGSC and Tesoro were notified of the proposed project. Tesoro commented that they have no objection to the proposed project, but that they must be notified immediately if additional crossings or exposure of their pipeline is anticipated during this, or any other, project. PGSC similarly commented that they reserve the right to review plans and approve the location of facilities within their right-of-way permit boundaries, but did not object to the proposed project. As third party interest holders, PGSC and Tesoro will be notified of any additional authorizations which directly affect their interests. In addition, this request has been passed on to NordAq for the purpose of activities which do not require additional State -issued authorizations. Management Issues ADL 231291 — Regional Manager's Decision Page 5 of 14 EXHIBIT 2C (NORDAQ) Page 6 of 15 • Development of Section Line Easements As depicted in pre -construction drawings of the proposed road (Figure 2), about 100 feet of the requested easement would extend approximately 10 feet into the CCSRA within Section 10 of Township 8 North, Range 10 West of the Seward Meridian, utilizing a portion of the pre-existing Section Line Easement (SLE) that extends 50 feet from the Section Line into Section 10. DMLW will authorize the development of the SLE in this location to the extent necessary to complete construction of the access road. NordAq must notify SCRO prior to construction in any additional locations within the SLE inside CCSRA. SCRO reserves the right to impose additional conditions on NordAq's authorization in consideration of additional impacts to SLEs. Section Line Easements are reserved for highway purposes, to provide a route for the development of public access even in areas where the need for access is not apparent at the time of the SLE's reservation. in addition to the area of SLE within Section 10 that may be developed adjacent to ADL 231291, the proposed road will cross existing SLEs in a number of locations throughout the project area. Granting a private access easement overlapping an undeveloped SLE is allowable, however the private access use will be considered subordinate to the primary public road development use for which the section line easement is established. The easement granted under ADL 231291 will be subject to valid and existing rights of record in managing the SLE interest. 0 lOJ 20'l Frtl Y.�rF�iJ l:.t+dim {l�daFa�lr�: A&y Ix. 2197 Agrcym: NADU. SU1..e K)w Ian d rml Figure 2: Proposed project configuration within Sections 10 and 11 of Township 8 North, Range 10 West of the Seward Meridian. The portion of the project within Section 10 (shown in dark red) is within the CCSRA but within an existing SLE. Development of the SLE for road purposes is allowable within the CCSRA but the easement to be granted at the conclusion of the project will not include any lands within the CCSRA. • Security Gate Authorization and Placement ADL 231291— Regional Manager's Decision Page 6 of 14 EXHIBIT 2C (NORDAQ) Page 7 of 15 In their application and supporting materials, NordAq requested that DMLW authorize the installation of a security gate and fencing at the road -accessible start (north end) of the easement, as shown in Figure 3. Per their request, closing ADL 231291 to the public will provide security for NordAq's operations and is in the interest of public safety. The applicant has indicated that due to the nature of construction and the equipment to be used during the operation of the Shadura Natural Gas Development Project, limiting public use of the road will reduce the public's risk for injury. As described above, ADF&G recommended that the road be open to public use on State-owned land in accordance with DOG'S Cook InletAreawide Oil and Gas Lease Sale, Final Finding 2009. Although DMLW is not subject to DOG's final finding, DMLW does seek to minimize limitations on the public's ability to access or use public land. Existing public access and use of the project area is generally centered on 3 features, as depicted in Figure 3. First, the public access easement (ASLS 81-73) extending northeast from the parking area at mile 39 of the Kenai Spur Highway is used to access publicly- and privately - owned lands located north and northeast of the project area. Second, the pipeline corridor occupied by ADLs 37591 and 69354 is used recreationally in and south of the project area, and is collocated with ASLS 81-73 immediately north of the project area. Third, Salmo Lake, and particularly its western shore, are used recreationally for a variety of activities. A number of short trails connect these features to each other and to parking areas within the CCSRA. Placement of NordAq's security gate in the alternative location would minimize the impact of ADL 231291 on the public's ability to access all 3 of these areas. Furthermore, the closed portion of the route will consist entirely of newly -constructed road and therefore will not block any existing access route. Placement of the security gate in the requested location would mean that members of the public could easily access the closed portion of ADL 231291 from either the pipeline corridor or the trail to Salmo Lake. By contrast, placement in the alternative gate location (the "alternative location") shown in Figure 3 would entail only dispersed use of the State-owned lands beyond the security gate, which will be further discussed below. Therefore, placement of the gate in the alternative location is likely to be more effective at restricting access to the closed portion of the road while at the same time being less disruptive to public access in the area. SCRO has reviewed the applicant's request and considers the alternative location, shown in Figure 3, to be preferable in terms of providing security and promoting public safety, while balancing these needs against protecting existing public access to, and use of, State lands. NordAq shall ensure that there is sufficient room for a personal highway vehicle, such as a pickup truck, to turn around safely at the publicly accessible west side of the gate. Although the primary public access corridors are all located west of the alternative gate location, some dispersed recreational use of the project area occurs beyond this point, particularly during the winter months. Such use is allowable and NordAq must not block the public's ability to cross the road corridor. NordAq may place signs within ADL 231291 at potential crossing locations, directing the public that they may cross but otherwise not travel on the roadway. Signs shall be no larger than 18" x 24" and shall ADL 231291— Regional Manager's Decision Page 7 of 14 EXHIBIT 2C (NORDAQ) Page 8 of 15 conform to the standards set forth in the DPOR's "Alaska Guidelines for Snomobiling Trail Signage and Placement." Only flexible sign posts shall be used. Figure 3: Proposed location of ADL 231291, including the requested gate location, the alternative gate location and one of two staging areas. The figure also shows existing pipeline and access corridors in the project area, as described in the Management Issues section of this decision. ADL 231291— Regional Manager's Decision Page 8 of 14 EXHIBIT 2C (NORDAQ) Page 9 of 15 Placement of the gate in the alternative location is consistent with the designation of this land as a Public Use Site for public recreation and tourism under the Kenai Area Plan. Public access to the west shore Salmo Lake will not be hindered by the alternative gate location, should this area be added to the CCSRA and/or developed as a public use site. ADL 231291 leads to lands within KNWR, where continuation of the road is being permitted through the USFWS. It is SCRO's understanding that the USFWS does not intend for the road to be open to the public for motorized purposes (USFWS did not respond to notice of the proposed authorization), and that authorizing the installation of a security gate within ADL 231291 is consistent with USFWS' management objectives. SCRO considered recommending that placement of the security gate only be authorized at the at the boundary of KNWR (south end of ADL 231291) as a means of minimizing impact on public access to State lands, but this was rejected for several reasons. First the creation of a new public road which dead -ends in an unmanaged area would create additional management responsibilities which neither DMLW nor DPOR have the capacity to handle. Second, allowing public use of the entirety of ADL 231291 would require construction of an additional permanent turnaround in this location, would greatly increase NorclAq's burden for road maintenance and would significantly affect the scope of their project. Third, the benefit of recommending this location would be minimal as closure of a previously non-existent route will have little impact on public access to the area. • Route Closure and Other Public Access During construction of the road to the north of the alternative gate location the applicant may temporarily close this portion of the route to public access for safety reasons. However NordAq must not block public access from the CCSRA parking area at mile 39 of the Kenai Spur Highway to either the pipeline corridor south of the project area or the public access route ASLS 81-73 north of the project area. If any detours are required on these routes during construction they must be safe, navigable on foot or by vehicle to the same degree as the existing routes, and well marked. Any detour greater than mile in length or which will be in effect for more than 24 hours shall require prior written authorization from SCRO. • Road Design and Additional Areas NordAq's road design incorporates pullouts located approximately every % mile (closer in steep terrain or areas with limited visibility) to allow tractor trailers involved in construction to pull on and off the road safely, without having to back up, and will facilitate vehicles safely passing each other in opposite directions. Safety pullouts will be 10 feet wide (for a total road width of 28 feet in these locations) and 200 feet long (including a 50 foot transition at each end), and will be located entirely within NordAq's 80 -foot -wide easement. Under ADL 231291, NordAq will be authorized to use State-owned lands to construct two 150 -foot -wide by 200 -foot -long gravel staging areas (Figure 4). The first will be constructed at the north end of ADL 231291, adjacent to ASLS 81-73, and may remain in place for the life of ADL 231291 as a turnaround and ADL 231291— Regional Manager's Decision Page 9 of 14 EXHIBIT 2C (NORDAQ) Page 10 of 15 parking area. The second will be located at the south end of ADL 231291, on State-owned land but adjacent to the KNWR boundary. This staging area will be removed and the area revegetated following construction. Temporary fencing may be placed in gravel storage and staging areas during construction in order to protect the public and enhance the security of NorclAq's construction materials. Figure 4: Planned configuration of Staging Areas (shown as "Gravel Storage and Loading Yard") relative to the proposed road. Under ADL 231291, NordAq will be authorized to use State-owned lands to construct approximately three 30 -foot -wide by 42 -foot -long vehicle turnarounds (Figure 5). The turnarounds will be accessed from the road pullouts described above, and will be constructed either with ice or with gravel placed on geofabric. The turnarounds shall be decommissioned prior to easement issuance. • Salmo Cake Development Although no development of a public recreation site at Salmo Lake is imminent, it is possible that such development will occur during the anticipated 30 -year life of the Shadura project. In this event, SCRO reserves the right to allow public use of the road as necessary to access Salmo Lake. ADL 231291— Regional Manager's Decision Page 10 of 14 EXHIBIT 2C (NORDAQ) Page 11 of 15 • Road Decommissioning Following completion of the Shadura project, the applicant is required to decommission the road and all associated infrastructure authorized under ADL 231291 and restore the project area to its natural state. Any requested changes to this requirement will be evaluated by SCRO and must be approved in writing prior to implementation. 1 GFAVEI r,CCESS RO.:G to Figure 5: Planned configuration of the turnarounds to be used during construction. • Other Management Issues The State of Alaska reserves the right to grant authorizations for compatible uses within, overlapping, or adjacent to this project area. The authorization issued under ADL 231291 may not be assigned to another party without prior notice to, and approval by, the Regional Manager or designee. In accordance with 11 AAC 96.070 DMLW may require that NordAq file annual reports regarding the operation of ADL 231291 and/or a completion statement describing the cleanup and restoration of areas impacted under the EEA for ADL 231291 but not included in the final easement under ADL 231291 (e.g.: turnarounds and staging areas used during construction). Survey A DNR approved as -built survey is required for ADL 231291 to determine the proper location and compute accurate acreage of improvements proposed for installation on DMLW-managed State lands. The applicant may be required to submit an Application for Survey Instructions to the DNR Cadastral Survey Unit (Survey Section) along with the survey instruction fee of $225 as per 11 AAC 05.010 (a)(13)(A). Survey Instructions for ADL 231291 will be provided to the Applicant upon receipt of the application and fee. SCRO recommends coordination with the Survey Section as early as possible to expedite the as -built process. A draft of the project as -built drawings must be submitted to the Survey Section prior to expiration of any Early Entry Authorization/Land Use Permit (EEA) issued by SCRO for ADL 231291, and must be approved of by SCRO before issuance of the final easement document. Fees The applicant's request for use of state-owned, DNR DMLW managed lands under ADL 231291 will be authorized in two phases. First, a Land Use Permit will be issued as an Early Entry Authorization (EEA) for ADL 231291— Regional Manager's Decision Page 11 of 14 EXHIBIT 2C (NORDAQ) Page 12 of 15 construction and survey activities within the approximately 18.6 acre site. Upon issuance of the EEA an annual fee will be charged in accordance with 11 AAC 05.010(e)(9), totaling $50 per acre or fractional acre, with a $100 minimum. The annual fee for activities authorized under the terms of NordAq's EEA is estimated to be $950.00 per year for the term of the EEA and any extensions of the EEA. Second, upon completion of construction and survey activities in accordance with this decision and all terms and conditions of the EEA, an approximately 18.1 acre easement will be issued for operation and maintenance of the installed infrastructure as a private access road. The annual fee for authorization of a Private Non -Exclusive Easement issued in accordance with 11 RAC 05.010(e)(11)(A) is $100 per acre or fractional acre, with a $200 minimum. The annual fee for the issued easement will be determined after the easement has been constructed and surveyed, but is currently estimated to be $1,900.00 per year. Performance Guaranty Per 11 AAC 96.060, NordAq is required to submit a performance guaranty to DNR in the amount of $19,000. The Performance Guaranty will be subject to release upon the remittance of a DNR -approved as -built survey and fulfillment of all General and Special stipulations of this decision and the EEA. The guaranty may be adjusted to reflect updates and changes in the associated project and the Applicant may be required to furnish an additional bond, if DMLW determines there to be additional risk to the State. The guaranty may be utilized by DMLW to cover actual costs incurred by the State to pay for any necessary corrective action(s) in the event the Applicant does not comply with site utilization and restoration requirements and other stipulations contained in the authorization. An additional Performance Guaranty may be required if the Applicant applies for an extension of the Early Entry Authorization/Land Use Permit beyond the two years proposed under this decision. Insurance In accordance with 11 AAC 96.065, NordAq shall be required to submit proof of insurance to protect the State from risks associated with the planned activities. NordAq is responsible for maintaining the insurance necessary during the term of the EEA and during construction and survey activities. A certificate of insurance listing the State of Alaska, Department of Natural Resources as an additional named insured on the policy must be submitted to SCRO prior to entry onto State land for usages which are not generally allowed. Non-compliance DNR Land Administration System records indicate that NordAq is not in a state of non-compliance with the terms of any other DNR authorizations. Economic Benefit and Development of State Resources In accordance with AS 38.05.850, the SCRO considered three criteria to determine if this project provided the greatest economic benefit for the State and the development of its natural resources. These included direct economic benefit to the State, indirect economic benefit to the State, and encouragement of development of the State's resources. ADL 231291— Regional Manager's Decision Page 12 of 14 EXHIBIT 2C (NORDAQ) Page 13 of 15 The proposed project presents a direct benefit to the State of Alaska in the form of land use fees associated with the EEA and final Private Non -Exclusive Easement. This project also encourages development of the State's resources by providing access to the applicant's oil and gas lease. The proposed project has a small risk of negatively impacting the public's ability to access State-owned lands. However, placement of the security gate in the alternative location, the fact that the location of closed portion of the road is currently undeveloped for access and the requirement that the public be able to cross the road all serve to mitigate this risk. In consideration of the economic benefits versus the small risk associated with the project, DNR finds granting of the proposed easement provides the greatest economic benefit to the State. Proposal and Recommendation for Issuance of Land Use Permit 1 recommend granting a Land Use Permit as an Early Entry Authorization (EEA) to Nordaq for a term of two years for the purpose of constructing and locating an all -season gravel road with a permanent security gate installed at the location described herein. The road is to be constructed within a corridor 80 feet in width and centered on the roadway. In addition the permit will authorize the construction of vehicle turnarounds and staging areas, as described herein, which encompass additional State lands projecting beyond the 80 -foot -wide corridor. Temporary fencing of the staging areas will be permitted during construction, and the permit will also authorize NordAq to temporarily gate the portion of ADL 231291 to the north and west of the permanent security gate for the purpose of protecting public safety during construction of this segment of the route. Per 11 AAC 05.010(e)(9), this EEA will be subject to an annual fee of $950. A finalized easement will not be granted until the applicant has conformed to all terms and conditions of this decision and the EEA. Extensions to the EEA may be granted at the request of the applicant, if granting the extension is deemed to be appropriate by SCRO. If an extension is required, the applicant must contact SCRO no later than 30 days prior to the expiration of the EEA and submit a non-refundable filing fee per 11 AAC 05.010(a)(5)(B), if applicable. Proposal and Recommendation for Issuance of Private Non -Exclusive Easement In consideration of all events and criteria listed above, it is my determination that this project is consistent with the overall classification and management intent for this land. Therefore, I recommend issuance of a Private Non -Exclusive Easement pursuant to AS 38.05.850 to Nordaq upon satisfactory completion of the project in conformance to all terms and conditions of this decision and the EEA. The easement will be issued for an indefinite period that may be terminated if a higher and better economic use for the project is established as determined by the DMLW Director (AS 38.05.850), if the land is no longer used for the above stated purpose or for non-compliance with the terms identified in relevant Departmental authorizations issued in association with the requested land use approval. If issued, the easement will be approximately 9504 feet in length and 80 feet in width, except as noted herein, occupying approximately 18.1 acres of State-owned land. It will authorize NordAq to operate and maintain an all -season gravel road with a permanent security gate, crossing State-owned lands northeast of Nikiski and east of the Captain Cook State Recreation Area, for the purpose of accessing the applicant's subsurface leases located within KNWR. NordAq will be responsible for the construction and ADL 231291 — Regional Manager's Decision Page 13 of 14 EXHIBIT 2C (NORDAQ) Page 14 of 15 maintenance associated with ADL 231291, and shall notify DMLW of any additional construction or improvements associated with this project on State-owned lands. Such construction and/or improvements may also require additional authorizations from DMLW. Within 30 days following issuance of this easement, NordAq shall pay the appropriate recording fee as determined based on current statute to have the document recorded by DMLW. sol,� Eric Moore Natural Resource Specialist Decision 9/actio Date When adjudicating an easement authorization pursuant to AS 38.05.850, DNR seeks "to responsibly develop Alaska's resources by making them available for maximum use and benefit consistent with the public interest." In consideration of all the events and criteria listed above, SCRO has determined that the authorizations to be granted under ADL 231291 are consistent with DNB's mission. It is my decision that this project is consistent with the overall classification and management intent for the land. SCRO will issue a Private Non -Exclusive Easement, pursuant to AS 38.05.850, once the applicant has conformed to all terms and conditions of this decision and the EEA. I J � Richard B. Thompson Regional Manager Southcentral Region Division of Mining, Land and Water Appeal Process _. �6eL2-1` �3 Date A person affected by this decision may appeal it in accordance with 11 AAC 02. Any appeal must be received within 20 calendar days after the date of "issuance" of this decision, as defined in 11 AAC 02(c) and (d). Appeals should be mailed or delivered to Daniel Sullivan, Commissioner, Department of Natural Resources, 550 W. 7th Avenue, Suite 1400, Anchorage, AK 99501, faxed to (907) 269-8918, or sent by electronic mail to dnr.appeals@alaska.gov. If no appeal is filed by that date, this decision goes into effect as a final order and decision on the 31" day after "issuance." An eligible person must first appeal this decision in accordance with 11 AAC 02 before appealing this decision to Superior Court. A copy of 11 AAC 02 may be obtained from any regional information office of the Department of Natural Resources, ADL 231291— Regional Manager's Decision Page 14 of 14 EXHIBIT 2C (NOROAQ) Page 15 of 15 Business Time Account (CD) Maturity Notice March 31, 2017 U DCCDRTDTPB 002963 llrllllllll�rlllll��ll�llllll lr�llll I�llllll�ll�lllllll�llr�� NORDAQ ENERGY INC. ITF: STATE OF ALASKA, DNR 560 E 34TH AVE STE 200 ANCHORAGE AK 99503-4161 Dear Customer: Thank you for banking with Wells Fargo. We are writing to remind you that your Wells Fargo Business Time Account (CD) will mature on April 28, 2017 and renew automatically for the same term. Here are important details about your account: Account Number: 551 1251505 Account Opened/Last Renewed: I October 28, 2016 Value at Maturity: $19,010.44 Term: 6 months Current Maturity Date: April 28, 2017 Grace Period End Date: May 5, 2017 Next Maturity Date: October 28, 2017 Please refer to the back of this letter for additional terms and conditions. You made a sound decision opening your Wells Fargo Business CD with a guaranteed interest rate and the backing of the Federal Deposit Insurance Corporation (FDIC). The interest rate for your automatic CD renewal will be set on your maturity date, April 28, 2017, and will be based on the value of the account and the term on that day. Other CD interest rates and terms will also be available to you from your maturity date through the grace period ending on May 5, 2017. If you wish to make changes to your CD when it matures, you will have an opportunity until May 5, 2017 to: • Add funds to the account - higher balances may earn higher interest rates • Change the term - longer terms may earn higher interest rates • Close the account For information about current CD interest rates based on balance and term, special CD offers, or other products that may meet your needs, please: • Contact your Banker or • Call us at 1-800-225-5935, 24 hours a day, 7 days a week We appreciate your business and look forward to continuing to help you with your financial needs. Wells Fargo Bank Member FDIC. EXHIBIT 2D (NORDAQ) Pane 1 of 1 ALASKA OIL AND GAS CONSERVATION COMMISSION DOCKET 1'giJMBERS OTH-16-031 AND OTH 16-032 AI{'F 1DAV1T OI{' Pl1J;TER M. DICKINSON RE STATUS 01' WORTO PLUG AND ABANDON TIGER EYE CENTRAL -1 AND SHADURA-1 WELLS STATE OF TEXAS ) � ss. COUNTY OF PETER M. DICKINSON', being first duly sworn upon his oath, deposes and states: 1. I am the President of All American Oilfield, LLC ("All American"), a limited liability company based in Kenai, Alaska. 2. I have been involved in work for NordAq Energy, Inc. ("NordAq") on the Tiger Eye Central -1 well ("Tiger Eye") and the Shadura-I well ("Shadura") since their inception, and All American drilled both of the wells. 3. All American is the general contractor for NordAq for the work to plug and abandon Tiger Eye and Shadura. 4. All American has contracts or agreements with all of the vendors listed on the NordAq authorization for expenditure to plug and abandon Tiger Eye, which is in a total amount of $666,602. [Exhibit 1 to NordAq's First Supplemental Response to Revised Notice of Proposed Enforcement Action re Tiger Eye] 5. All American cannot begin work to plug; and abandon Tiger Eye before August 1, 2017, because th.e necessary camp on the Nest side of Cook Inlet is currently in use and will not be available prior to that time. I EXHIBIT 3 (NORDAQ) Paae 1 of 2 6, NordAq is also waiting for a few State pe=rmits before it can begin the work to plug and abandon Tiger Eye, 7. All American currently plans to begin the work to plug and abandon Tiger Eye after the necessary camp becomes available and after the remaining permits are obtained. The; work is expected to last approximately 21 days. 8. All American has contracts or agreements with all of the vendors listed on the NordAq auth.or-•i2ation for expenditure to plug and abandon Shadura, which is in a total amount of $483,826. [Exhibit 1 to NordAq's first ,Supplemental Response to Devised. Notice of Proposed Enforcement Action re Shadura] 9. All American cannot begin the work to plug and abandon Shadura until there is approximately one foot of frost and one foot of snow in the area, because it is necessary to build a snow trail to the well in the absence of any existing roads. 10. With the approval. of A0GCC, NordAq may try to plug and abandon Tiger Eye and Shadura consecutively in an effort to decrease casts and increase efficiency. DATED this L day of June, 2017. - -------------------- - - ---- - - PE' RSI. DICKINSON a - SUB SCRIBED AND S�Jfl1�.N TO before me this " -22 /s day of June 2017. µn�rq NOEMI GO�Z �N v 6%jo of T@x9e oter Public, Comm. ExPir*e p1-2A-2olp Notary ID 1200066BI otary Pblic in an far Texas My Commission Expires: d/ 2 EXHIBIT 3 (NORDAQ) Paae 2 of 2 ALASKA OIL AND GAS CONSERVATION COMMISSION DOCKET NUMBERS OTH-16-031 AND OTH 16-032 AFFIDAVIT OF STEPHEN F. HENNIGAN RE NORDAQ'S EFFORTS TO PLUG AND ABANDON TIGER EYE CENTRAL -1 AND SHADURA-1 WELLS STATE OF ALASKA } ) ss. THIRD JUDICIAL DISTRICT ) states: STEPHEN F. HENNIGAN, being first duly sworn upon his oath, deposes and 1. I am a project engineer and I work through and for Sierra Hamilton, LLC, of which my former company, Petroleum Engineers, Inc., has become a part. 2. I was contracted by NordAq to prepare and submit drilling permits, weekly and final reports, sundries, etc., to State agencies, primarily AOGCC, in the drilling of NordAq-operated Shadura-1 (PTD No. 211-014 ) ("Shadura") and Tiger Eye Central -1 (PTD No. 212-102) ("Tiger Eye"). 3. I was integrally involved with the preparation and submittal of the end -of - well sundries for the above wells—for Shadura Sundry 312-001, for Tiger Eye Sundry 313-239. 4. I have met with and had numerous telephone and email discussions with the AOGCC staff on behalf of NordAq in discussing Sundry data. 5. I have been integrally involved in submitting final data to the AOGCC via the required 10-407 forms and format on both wells. EXHIBIT 4 (NORDAQ) Paae 1 of 2 1 6. Shadura-1 was suspended rather than plugged and abandoned at that time, as it was intended that NordAq would drill a second Shadura well and use Shadura-1 as a sidetrack candidate or for other utility purposes. 7. Tiger Eye was secured rather than plugged and abandoned at that time because, in my understanding, NordAq had an understanding with Cook Inlet Energy to take over the well for utility purposes. 8. I have prepared and submitted to the AOGCC sundries for plugging and abandonment of both wells, which have been approved: a. Shadura - 317-027 b. Tiger Eye - 317-083 9. I have been contracted by NordAq to provide engineering services and interaction efforts in the abandonment of Shadura and Tiger Eye. In addition, I am to supply daily, weekly, and final reports, as required by the AOGCC, to them. DATED this , r day of June, 2017. �. TEPHEN F. HENNIGAN SUBSCRIBED AND SWORN TO before me this ay of June, 2017. otary Public in and for Alaska My Commission Expires: 3 �� 2 EXHIBIT 4 (NORDAQ) Paae 2 of 2 THE STATE af., S GOVERNOR BILL WALKER June 12, 2017 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 0640 0003 5185 6014 David Pfeiffer Chief Financial Officer Nordaq Energy, Inc. 560 East 34th Avenue, Suite 200 Anchorage, Alaska 99503 Alaska (til and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.olaska.gov Re: Docket Number: OTH 16-031 Failure to Plug and Abandon Shadura-1 (PTD 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Failure to Respond to Notice of Proposed Enforcement Action Docket Number: OTH 16-032 Failure to Plug and Abandon Tiger Eye Central -1 (PTD 212-102) Before Expiration of Owner's Rights in Oil and Gas Leases ADL 391104 and C-061677 Failure to Respond to Notice of Proposed Enforcement Action Informal Reviews Dear Mr. Pfeiffer: As part of the informal review process, the Alaska Oil and Gas Conservation Commission (AOGCC) is providing Nordaq Energy, Inc. (Nordaq) an opportunity to submit documentary material and make written and oral statements regarding the above -referenced Notices of Proposed Enforcement Action. There will be no formal record kept of the review and the review will not involve the presence of counsel, either for the Alaska Oil and Gas Conservation Commission (AOGCC) or the operator. The informal review meeting is scheduled for June 27, 2017 at 10:00am in the AOGCC's Anchorage office at 333 West 7th Avenue. Mr. David Pfeiffer June 12, 2017 Page 2 of 2 Copies of all written submissions and a summary of any oral statements planned by Nordaq should be provided to the AOGCC no later than 12:OOpm June 22, 2017 so we can make best use of the informal review. Sincerely, 04 1946� Cathy f Foerster Chair, Commissioner a Domestic 3, uype ❑ Priority Mail Expres s 0For delivery information, visit our website at wwwwsps.corno. I'll lII II II I Il Lrl ll I II lI I cr) Certified Mail Fee I l 11Addull Adult Signature ri $ V'! Extra Services R Fees (checkbox, add tee as appropriate) M E]Return Receipt (hardcopy) $ 0 ❑ Return Receipt (electronic) $ Postmark 1--3 ❑ Certified Mail Restricted Delivery $ Here O ❑ Adult Signature Required $ []Adult Signature Restricted Delivery $ C3 Postage $ flsertifiedMailO Delivery E3 Total Postage and Fees David Pfeiffer Ln $ Sent To Chief Financial Officer ❑ Collect on Delivery Restricted Delivery 11 Signature Confirmation- ____ NordAq Energy, Inc- 1-1 Signature Confirmation E3 r Street an ApElVo.,orPOBozlVo. 560 E. 34th Ave., Ste. 200 I ver $500) City, State, ZIP+4® Anchorage, AK 99503 Domestic Return Receipt SECTIONSENDER: COMPLETE THIS .MPLETE THIS SECTION ON DELIVERY ■ Complete items 1, 2, and 3. A. 9f t±:td` ■ Print your name and address on the reverse X{� ❑ Agent so that we can return the card to you. ❑ Addressee ■ Attach this card to the back of the mailpiece, B. Received by(, sine) ) C. are f Delivery 13 or on the front if space permits. y D. Is delivery address different from item 1? 11 Yes David Pfeiffer jIf YES, enter delivery address below: V E I• E D ❑ No Chief Financial Officer NordAq Energy, Inc. JUN 16 2017 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 3, uype ❑ Priority Mail Expres s Il I'III'I I'll lII II II I Il I III ll I II lI I II' I I l 11Addull Adult Signature ❑Registered Mail - 0 Adult Signature Restricted Delivery ❑ Registered Mail Restricted flsertifiedMailO Delivery 9590 9401 0057 50711 0136 66 Certified Mail Restricted DeliveryEJ�:R'eturn C1 Certified Receipt for ❑ Collect on Delivery Merchandise 2. Article Number (Transfer from service label) ❑ Collect on Delivery Restricted Delivery 11 Signature Confirmation- - sured Mail 1-1 Signature Confirmation 7 015 0640 000.3 5185 6 014 sured Mail Restricted Delivery Restricted Delivery I ver $500) PS Form 3811, April 2015 PSN 7530-02-000-9053 Domestic Return Receipt NORDAQ ENERGY, INC. June Stn, 2017 Cathy P Foerster Alaska Oil & Gas Conversation Commission 333 West Seventh Avenue Anchorage, AK 99501 Dear Ms. Foerster— Please find enclosed the original response letters pertaining to the Plug & Abandonment for Tiger Eye & Shadura. Copies of these letters were hand delivered by Robert Warthen to your office on June 81h, which were stamped as being received; however, he was notified that you required the original letters for your files. Please do not hesitate to contact me at dpfeiffer@nordagenergy.com or 630-699-2175 with any questions. Sincerely, j, David Pfeiffer Chief Financial Officer 560 East 34th Avenue, Suite h A j Anchorage, AK 99503 Main: 907.646.9315 Fax: 907.646.9317 www.nordaqenergy.com N0KDAQ E NEtRGY, INC. June 8th, 2017 Cathy P. Foerster, Chair Alaska Oil and Gas Conversation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Re: Docket Number: OTH-16-031 Revised Notice of Proposed Enforcement Action Failure to Plug and Abandon Shadura-1 (PTD 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Dear Ms. Foerster: This letter is NordAq's timely written response to the letter in this matter from the Alaska Oil and Gas Conversation Commission ("AOGCC") dated May 24, 2017. NordAq does not concur with the proposed action described in that letter and requests informal review. Consistent with that letter, NordAq will avail itself of the opportunity to submit documentary material and make a written or oral statement during that review. If NordAq disagrees with the AOGCC's proposed decision or order after that review, then NordAq intends to file a written request for a hearing within ten days after the proposed decision or order is issued. In the interim, NordAq respectfully requests a stay of the bonding requirement set forth in the letter referenced above. NordAq will submit evidence that the bonding requirement significantly exceeds the estimated cost to plug and abandon the Shadura-1 well. Sincerely, NORDAQ ENER Y INC. By Davi feiffer Chief Financial Officer 560 East 34`h Avenue, I Suite 200 Anchorage, AK 99503 Main: 907.646.9315 Fax: 907.646.9317 www.nordagenergy.com C ath� 1'. I cacrstcr. ( hair Alaska (hl unci (0% Ccrneenation (Amunk inn nclunaay, Alaska cM9Jl.31"-1 RECEIVE® JUN' 08 2017 ACC June 81. 2017 kc• 1), ket NunaNv ('t 111-Iti-tt,,I Revised Notier of Prolmoscd Vnforccntrnt Action 1 -ailuro it) Plug and ixhaaradv.n 1hadura- I t t'l 1) 21 1-U l4 t licl'orc Fxtrirattc,aa , Ft ()N% tier's Rights in (IRI I ease C-061648 Maar Ms- Ucacr,tcr I hi, letter is NordA44 tin -10 rcrittcn resr-nsc it, (lie tetter in this matter front the ,Vaskaa Oil and (ias Ce menatiun C'camnussion ("Ao t iC-'C""t dated .kJa% 24, 201?. NurdAq docs rul amcaar "hh the IarorNvsed action descriNd in that letter and rvgIjests intiarrnaal roti icae. Gnisistcan with that Qum, %mdA4 "IN 7a%kl itsclfut°thc opfuirtanwt to 4uhanit dtwctjracntar� anawrial and ataaks a wrhwn or mal statement during that rcwON 11 NurdAq disagrees Keith the A(M K.'C"s Proposed decision or ewrdc r alter that res iecc. thcr; Ne MAq intends ta7 lilt a "Wen rcyucst W a limr-ing ctiithin ten does alter the propx) .ed decision or ardor iw issuctl In [tic interian. ` ordrly respccitull� r"ucsts a staff of the tuanding rcynircnicnt Oct lorth if] the letter rctcrcncctl aho%c. NordAq e% ill suhnait cvidencc that the txnaditiv rvg1nrcnacn1 sisrraaticantlk Cxcceik (tic estimated cost to lthig anti aahandon the: Sh,adtara 1 tech. Sinccrcle. tit)1i1)A(„►jtjyNVR(aNr INC. 1);aeadri"atcat`tcr Chict' l- inaanc•i<al Otl icer NO U ' Ati•a,,,.,.,! Too 2M archMUKO AK 995173 M7,am 407 649,'3 Y W hot, 4311 Www noadacenmgv 00 TIE STATE GOVERNOR BILL WALKER May 24, 2017 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7015 0640 0003 5185 5918 Robert Warthen, Senior Advisor NordAq Energy, Inc. 560 East 34th Avenue, Suite 200 Anchorage, AK 99503 Re: Docket Number: OTH-16-031 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov Revised Notice of Proposed Enforcement Action Failure to Plug and Abandon Shadura-1 (PTD 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Failure to Respond to Notice of Proposed Enforcement Action Dear Mr. Warthen: The Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies NordAq Energy Inc. (NordAq) of a revised proposed enforcement action. Nature of the Violations or Noncompliance (20 AAC 25.535(b)(1)). NordAq violated 20 AAC 25.105(a) by its failure to permanently abandon the Shadura-1 exploratory well (Shadura-1) before expiration of NordAq's rights in Cook Inlet Region, Inc. (CIRI) oil and gas lease C-061648. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)) On February 1, 2011, NordAq was issued Permit to Drill No. 211-014 for the Shadura-1 exploratory well. During February and March of 2011, Shadura-1 was drilled, briefly tested, and then temporarily suspended (on April 1, 2011) due to deteriorating winter -access conditions at the well location. Further logging and testing of the well occurred in January and February 2012. The well was suspended on February 26, 2012. The Shadura-1 well location is only accessible during winter months. Docket Number: OTH-16-3 Y May 24, 2017 Page 2 of 4 CIRI is the landowner' of lease C-061648. NordAq was the owner of that lease. CIRI lease C- 061648 was terminated effective June 30, 2015. In the event an operator defaults on its regulatory obligations to plug and abandon a well, the AOGCC looks to the landowner to fulfill those obligations. NordAq violated 20 AAC 25.105(x) when it failed to properly plug and abandon Shadura-1 prior to termination of its rights in CIRI lease C-061648. On December 2, 2016, the AOGCC sent to NordAq, via certified mail, a Notice of Proposed Enforcement Action that allowed NordAq a period of 90 days to either: • Submit a Sundry Application to the AOGCC for the plugging and abandonment of Shadura-1 and properly plug and abandon Shadura-1 in accordance with AOGCC regulations; or • Submit a check in the amount of $1,200,000, which AOGCC estimates to be the cost to properly plug and abandon Shadura-1. The Notice of Proposed Enforcement Action proposed two civil penalties for violating 20 AAC 25.105(a) and 20 AAC 25.535(b)(2): 1. $100,000 for the initial violation: failure to permanently abandon Shadura-1 before expiration of owner's rights in CIRI lease C-061648; and 2. $521,000 for violating the requirement to plug and abandon and clear the well site to the satisfaction of the AOGCC as per 20 AAC 25.112 and 20 AAC 25.170 (521 days at $1,000 per day). On January 14, 2017, the AOGCC noticed a public hearing for April 4, 2017 at 10:00 a.m. concerning NordAq's failure to permanently abandon Shadura-1 and to respond to the Notice of Proposed Enforcement Action. On January 20, 2017, NordAq submitted a Sundry Application to permanently abandon Shadura- 1. On February 15, 2017, NordAq's Sundry Application to permanently abandon Shadura-1 was approved. At the April 4, 2017 public hearing, Robert Warthen of NordAq and Colleen Miller of CIRI testified at the hearing. Mr. Warthen testified that: • CIRI canceled NordAq's leases around July 15, 2015. • NordAq has obtained all federal, state, and local permits, certificates of liability, bonds, and land -use permit certificates to access the Shadura-1 well location; r "Landowner" means the owner of the subsurfxe estate of the tract affected. z "Owner" means the person who has the right to drill into and produce from a pool and to appropriate the oil and gas the person produces from a pool for that person and others. 'Person" includes a natural person, corporation, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary or other representative of any kind, and includes a department, agency or instrumentality of the state or a governmental subdivision of the sate. 1 Docket Number: OTH-16-31 May 24, 2017 Page 3 of 4 • NordAq has obtained letters of non -objection from Tesoro Corporation and Hilcorp Alaska, LLC (for crossing buried pipelines) and from the landowner, CIRI; • NordAq's operations to abandon permanently Shadura-1 began in March 2017, but deteriorating winter -access conditions at the well location forced NordAq to postpone further operations until December 2017; and • NordAq's failure to respond to the Notice of Proposed Enforcement Action was due to a robbery that occurred at NordAq's offices. Ms. Miller testified that: • CIRI terminated oil and gas leases C-061647, C-061648 and C-061649 because NordAq did not meet lease commitments; and • CIRI sees no current or future value in retaining Shadura-1 as an active well. The record closed at the end of the hearing. Proposed Enforcement Action (20 AAC 25.535(b)(3). Within 30 days of receipt of this letter, NordAq shall submit a surety bond for $1,200,000 issued on Form 10-402A in the sole favor of the AOGCC by an authorized insurer under AS 21.09 whose certificate of authority is in good standing with the State of Alaska. This bond will be returned to NordAq following permanent abandonment of Shadura-1 and clearance of well location. This bond shall be forfeited to the AOGCC if Shadura-1 is not permanently abandoned and the well location is not cleared within one year of the date of this Enforcement Action. After consideration of the criteria set forth in AS 31.05.150(g), the AOGCC proposes to impose one civil penalty on NordAq for violating 20 AAC 25.105(a) and 20 AAC 25.535(b)(2): $100,000 for the initial violation of failure to permanently abandon Shadura-1 before expiration of owner's rights in CIRI lease C-061648. The total civil penalty is $100,000. Rights and Liabilities (20 AAC 25.535(b)(4)). Within 15 days after receipt of this notification — unless the AOGCC, in its discretion, grants an extension for good cause shown — NordAq may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide NordAq an opportunity to submit documentary material and make a written or oral statement. If NordAq disagrees with the AOGCC's proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10 -day period, the proposed decision or order will become final on the 11th day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If NordAq does not concur in the proposed action described herein, and the AOGCC finds that NordAq has violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other Docket Number: OTH-16-31� May 24, 2017 Page 4 of 4 approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action or remedial work; (ii) suspension or revocation of a permit or other approval; (iii) payment under the bond required by 20 AAC 25.025; and (iv) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as NordAq received reasonable notice and opportunity to be heard with respect to the AOGCC's action. Any action described hereto or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05. Sincerely, Cathy. . Foerster Chair, Commissioner cc: Sophie Minich, CIRI President and CEO, Cook Inlet Region, Inc., (via Certified Mail) ro Domestic Mail Only e e ved by (PrWe' me) Tr -q For delivery information, visit our website at wwwxS—P—S.Co-@Y Ln 1 . ❑ Y s eot� ess below: ❑ No Ln co Certified Mail Fee r -q $ U1 Extra Services R Fees (check box, add fee as appropriate) El Receipt (hardcopy) $ M ❑ Return Receipt (electronic) $ Postmark Q O []Certified Mail Restricted Delivery $ Here r3❑Adult Signature Required $ ❑Adult Signature Restricted Delivery $ E3 Postage -I- $ —0 Total Postage and Fees O $ Robert Warthen, Senior Advisor — U-) Sent To r-1 NordAq Energy, Inc. O Street and Apt. No., or-t'Oi3ozN 560 East 34th Ave., Ste. 200 City, State, 2115;4® Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. 1 Articles Aririrascari tn' Robert Warthen, Senior Advisor NordAq Energy, Inc. 560 East 34th Ave., Ste. 200 Anchorage, AK 99503 A. Sign r X /EYAgent ❑ Addressee e e ved by (PrWe' me) C. D e of -De ivery -&,/7- D. Is delivery address different from item 1 . ❑ Y s eot� ess below: ❑ No JUN 12 2017 3. Service Type ❑ Priority Mail Express@ ll I'lll'I I'll I'I Il II I III I III II I II i I I'I II II I III 1,--,l Adult Signature El Registered MailT" ❑ Aqui Signature Restricted Delivery El Registered Mail Restricted ertified Mail@ Delivery El Certified Mail Restricted Delivery 'turn Receipt for 9590 9401 0057 5071 0135 98 [1 Collect on Delivery Merchandise E-1Collecton Delivery Restricted Delivery 0 Signature Confirmation T"' 9 Article Number (Transfer from service label) -- ed Mail ❑ Signature Confirmation 7 015 0640 0003 5185 5 918 A Mail Restricted Delivery Restricted Delivery $500) PS Form 3811 , April 2015 PSN 7530-02-000-9053 Domestic Return Receipt Lrl ^ Domestic 1 Y 117 Ln LT) co Certified Mail Fee r- $ Extra Services R Fees (check box, add fee as appropriate) M [I Return Receipt (hardcopy) $ 0 F1Retum Receipt (electronic) $ Postmark r3 ❑ Certified Mail Restricted Delivery $ Here E:3 ❑ Adult Signature Required $ ❑Adult Signature Restricted Delivery $ O Postage -I- $ Total Postage and Fees Sophie Minich $ CIRI President and CEO t r1 Sent To _ Cook Inlet Region, Inc. Street and Apt IVo., or PO Box /Jo. r 725 E. Fireweed Ln., Ste. 800 City, State, ziP+a® Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. t Artlrlp A,+a—,.__' - A. tine ❑Agent X ❑ Addressee B. Received b tf-NG ) �I,VD. Is delivery ad ess different from ite If YES, enter delivery address below: ❑ No Sophie Minich 'R'31ECE,vE. CIRI President and CEO Cook Inlet Region, Inc. JUN 12 2017 725 E. fireweed Ln., Ste. 800 Anchorage, AK 99503 3. Service Typ"WWWW ❑ Priority Mail Expresso ❑Adult Signature ❑ Registered Mail IIIIII IIII III II II I III I III I I II I I I I I I III III cult Signature Restricted Delivery ❑RRegistered Mail Restricted 9590 9401 0057 5071 0136 04 ertified Mail® El Certified Mail Restricted Delivery Delivery itOMurr Receipt for Merchandise 71 Collect on Delivery ❑ Collect on Delivery Restricted Delivery 0 Signature Confirmation - ❑ Signature Confirmation 2. Article Number (Transfer from service label) 7015 0640 0003 518 5 5925 ed Mail ed Mail Restricted Delivery Restricted Delivery $500) PS Form 3811, April 2015 PSN 7530-02-000-9053 Domestic Return Receipt AOGCC 4/4/2017 Docket No. OTH-16-032 ALASKA OIL AND GAS CONSERVATION COMMISSION Before Commissioners: Cathy Foerster, Chair Daniel T. Seamount Hollis French In the Matter of the Proposed Enforcement Action Against NordAq Energy, Inc. for Failure to Permanently Abandon the Tiger Eye Central 1 Before Expiration of Rights Under State of Alaska Oil and Gas Lease ADL 391104 and 20 AAC 25.105(a) and Failure to Respond to Notice of Proposed Enforcement. Docket No.: OTH 16-032 ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska April 4, 2017 9:00 o'clock a.m. PUBLIC HEARING BEFORE: Cathy Foerster Daniel T. Seamount Hollis French Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahileggci.net Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Chair Foerster 03 3 Testimony by Mr. Warthen 09 4 Testimony by Mr. Easton 21 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahileggci.net AOGCC 4/4/2017 Docket No. OTH-1 6-032 Page 3 1 P R O C E E D I N G S 2 (On record - 9:16 a.m.) 3 CHAIR FOERSTER: All right. I will call this 4 hearing to order. It's April 4, 2017, the time is 9:16 5 a.m. We're off to a late start because one of our -- 6 the representative of the operator just arrived. We 7 are located in the offices of the Alaska Oil and Gas 8 Conservation Commission, 333 West Seventh Avenue, 9 Anchorage, Alaska. To my left is Commissioner Dan 10 Seamount, to my right is Commissioner Hollis French and 11 I'm Cathy Foerster, the Chair. 12 We're here today on docket number OTH 16-032, 13 failure to plug and abandon Tiger Eye Central number 1, 14 permit to drill 212-102 and failure to respond to 15 notice of proposed enforcement action. The subject of 16 the hearing is AOGCC's proposed enforcement action 17 against NordAq Energy, Inc. for failure to permanently 18 abandon the Tiger Eye Central number 1 exploratory well 19 before expiration of rights in State of Alaska oil and 20 gas lease ADL 391104. The surface location for the 21 well lies on private land and the bottom hole location 22 for the well lies within ADL 3911004, Section 24, 23 Township 8 North, Range 15 West, Seward Meridian. 24 Computer Matrix will be recording today's 25 proceedings and you can get a copy of the transcript Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 4 1 from them. 2 We only have one person intending to testify 3 and that's the representative of NordAq. The 4 Commission will ask questions during testimony, we may 5 also take a recess to consult with staff to determine 6 whether additional questions are necessary. If a 7 member of the audience has a question he or she feels 8 should be asked please submit that question in writing 9 to Jody Colombie. She will provide the question to the 10 Commission and if we feel that asking the question will 11 assist us in making our determination we will ask it. 12 When you testify please keep in mind that you 13 must speak into the microphone so that..... 14 (Off record comments - connecting 15 teleconference) 16 CHAIR FOERSTER: Has someone called in? 17 (No comments) 18 CHAIR FOERSTER: If you've called in, please 19 identify yourself. 20 MS. SETTLE: Hi, this is Suzanne Settle at 21 CIRI . 22 CHAIR FOERSTER: Okay. Well, I'll go back and 23 restate some of the things I've already stated for your 24 benefit. Is CIRI -- CIRI's not an affected party in 25 the Tiger Eye well, are they? Okay. They are. All Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 5 1 right. So I'll go back. 2 We're here to address the proposed enforcement 3 action against NordAq for failure to permanently 4 abandon the Tiger Eye Central number 1 exploratory well 5 before expiration of rights in State of Alaska oil and 6 gas lease ADL 391104. 7 We have three Commissioners -- all three 8 Commissioners here, Commissioner Seamount, Commissioner 9 French and I'm Commissioner Foerster. We only have a 10 sign in that NordAq wishes to testify. Does the CIRI 11 representative wish to testify over the phone? 12 MS. SETTLE: No, thank you. 13 CHAIR FOERSTER: Okay. During testimony the 14 Commissioners will ask questions, we may take a recess 15 to consult with staff to determine if any additional 16 questions are necessary. If anyone in the audience has 17 a -- desires that a question be asked he or she needs 18 to get that question in writing to Jody Colombie. If 19 CIRI has a question I think you'll probably need to 20 send it via email to either Sam Carlisle or Jody 21 Colombie, whichever email address you have. If we get 22 any questions the Commission will consider them and if 23 we feel that asking the questions will assist us in 24 reaching our final determination we will ask the 25 questions that are submitted by people from the Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 6 1 audience. 2 All right. If you're testifying please keep in 3 mind that you must speak into the microphone so that 4 those in the audience and the court reporter can hear 5 your testimony. Also remember to reference any slides 6 you use so that anyone reading the public record later 7 can follow along. All testimony must be relevant to 8 the purposes of today's hearing that was outlined 9 before. Anyone desiring to testify may do so, but if 10 the testimony drifts off subject we will limit the 11 testimony to three minutes. Testimony cannot take the 12 form of cross examination. The Commissioners will be 13 asking the questions. And all testimony must be 14 respectful. 15 All right. Commissioner Seamount, do you have 16 anything to add for the good of the order before we 17 begin? 18 COMMISSIONER SEAMOUNT: I have nothing. 19 CHAIR FOERSTER: Commissioner French? 20 COMMISSIONER FRENCH: No. Thank you. 21 CHAIR FOERSTER: All right. I see that Mr. Bob 22 Warthen from NordAq wishes to testify. Mr. Warthen, 23 will you please come forward, have a seat and..... 24 MR. WARTHEN: (Indiscernible - away from 25 microphone)..... Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 7 1 CHAIR FOERSTER: Either one. And make sure the 2 microphones -- the green lights are on for both 3 microphones. 4 MR. WARTHEN: Yes, they are. 5 CHAIR FOERSTER: All right. Mr. Warthen, will 6 you raise your right hand. 7 (Oath administered) 8 MR. WARTHEN: I do. 9 CHAIR FOERSTER: All right. And, Mr. Warthen 10 do you desire to be recognized as an expert in an area 11 of relevance or are you just going to give testimony as 12 a general representative of the company? 13 MR. WARTHEN: Yes, I do, expert and general, 14 general purpose for the company. 15 CHAIR FOERSTER: What area of expertise are you 16 wanting to be recognized in? 17 MR. WARTHEN: Geological. 18 CHAIR FOERSTER: And you need to give us your 19 credentials that support recognizing you as a 20 geological expert. 21 MR. WARTHEN: I have a bachelor's and master's 22 of science degree in geology, post graduate studies. 23 My experience is prior to my arrival in Alaska I worked 24 as a geologist in various endeavors for the North 25 Dakota Geological Survey, Sinclair Oil and Gas, Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 8 1 Continental Oil Company. When I arrived in Alaska some 2 50 years ago I worked -- I came up here on behalf of 3 Union Oil Company of California. I worked for them for 4 some 27 years in various functions, management, 5 operational geology, development geology, exploration 6 geology. And post that time I was an independent 7 contractor. I started NordAq Energy Partners in 2005 8 which morphed into NordAq Energy a few years later and 9 it was incorporated in January of 2009. And I've been 10 connected with NordAq since that time. 11 CHAIR FOERSTER: Commissioner Seamount, do you 12 have any questions? 13 COMMISSIONER SEAMOUNT: I have known Mr. 14 Warthen for 27 years and I can definitely attest that 15 he's an expert witness in geologic sciences. 16 CHAIR FOERSTER: Thank you. Commissioner 17 French? 18 COMMISSIONER FRENCH: No questions. 19 CHAIR FOERSTER: Mr. Warthen, where did you get 20 your degrees? 21 MR. WARTHEN: Southern Illinois University and 22 I started at the University of Illinois, but both 23 degrees are from SIU. 24 CHAIR FOERSTER: And are you the principal for 25 NordAq? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email sahiie@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 9 1 MR. WARTHEN: Yes, ma'am. 2 CHAIR FOERSTER: Okay. All right. I have no 3 problem with accepting you as an expert witness either. 4 So please proceed with your testimony. 5 BOB WARTHEN 6 previously sworn, called as a witness on behalf of 7 NordAq, testified as follows on: 8 DIRECT EXAMINATION 9 MR. WARTHEN: First of all I apologize for my 10 tardiness. I obviously didn't look at the earlier 11 docket hearing, I looked at the second one which was at 12 10:00 o'clock. I assumed that both hearing would be 13 conducted at that time. 14 With Tiger Eye and both projects, Shadura also, 15 these are seasonal ventures. 16 CHAIR FOERSTER: Okay. So let's stick to Tiger 17 Eye as much..... 18 MR. WARTHEN: Okay. 19 CHAIR FOERSTER: .....as you can because we may 20 have other people..... 21 MR. WARTHEN: I will do that. 22 CHAIR FOERSTER: .....interested just in the 23 Shadura and we want to make sure that everything that 24 is relevant to that one is captured in that hearing. 25 MR. WARTHEN: Sure thing. Thank you. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 10 1 CHAIR FOERSTER: Please proceed. 2 MR. WARTHEN: As you know Tiger Eye Central was 3 drilled -- it surfaced as you said earlier in your 4 preface that it was surfaced on private land, Selemtof 5 (ph) owns the surface, CIRI has the subsurface mineral 6 estate on that particular lease and the well was 7 directed from the surface location on the private land 8 directed through Cook Inlet Region's mineral estate 9 some 2,000 feet and then penetrated State lease 391104. 10 After the well was drilled we had encouragement 11 to keep the well as a utility well, we had an agreement 12 in place with Cook Inlet Energy, CIE, at the time, 13 prior to their bankruptcy to drill a follow-up well and 14 to use this well as a utility well. Post bankruptcy 15 Cook Inlet Energy, the current management hesitated as 16 to whether they want to keep that well as a utility 17 well. NordAq was notified in later October, early 18 November of 2015 that they were not interested in using 19 that well and that if NordAq had desires to plug and 20 abandon which we did at the time to go ahead and 21 proceed with that operation. 22 Being a seasonal operation over on the west 23 side of the Inlet over there in the West Foreland area 24 we were able -- we were only able to occupy that 25 location in the summertime to conduct all operations, Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 11 1 drilling or whatever operations we had. At the time -- 2 at that time we conducted -- we contracted our -- 3 contacted and contracted our petroleum engineer that 4 we've used for all our projects, especially Tiger Eye, 5 Mr. Steve Hennigan, to prepare a sundry notice to 6 conduct plugging and abandoning operations. Since that 7 time we received a letter of non -objection from Cook 8 Inlet Region, CIRI, that they had no objection for us 9 to plug and abandon that well, recognizing that as part 10 of the sundry there would be cement plugs placed in the 11 State portion of the well as well as the shallow 12 portion of the well that penetrated Cook Inlet Region's 13 land and they had no objection to that. We contracted 14 our permitting company, Cardno-ENTRIX, who also was 15 part of the permitting process for that project early 16 on. We also contacted Selemtof of which we have a land 17 use -- surface land use access permit that allows us to 18 drill a well and to plug and abandon the well and they 19 had no objections to us to conduct that operation. 20 So the sundry was approved by the Commission 21 and we plan on proceeding with that operation right 22 after breakup in the May, June time frame with one 23 condition from the standpoint that the Migratory Bird 24 Treaty Act allows for the fact that we -- that if we -- 25 that we will not do any construction between April and Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 12 1 July 15th and since the road is already there and the 2 pad is already there we don't anticipate that. However 3 eagles are in the area, we have to go out in late 4 April, early May, to see if there's any new nesting 5 within 600 feet of the road or the pad and if there is 6 we won't be able to start work until July 15th. Our 7 plan is to get in there as soon as possible, our 8 operations people will be over there in April checking 9 on eagle nesting and short of that if there is no new 10 eagle nesting we will commence operations in early 11 June. 12 CHAIR FOERSTER: Is that..... 13 MR. WARTHEN: That's all I have for Tiger Eye. 14 CHAIR FOERSTER: Okay. Okay. Commissioner 15 Seamount, do you have any questions? 16 COMMISSIONER SEAMOUNT: I have no questions. 17 CHAIR FOERSTER: Commissioner French, do you 18 have any questions? 19 COMMISSIONER FRENCH: It may not be relevant, 20 but I don't know what a utility well is? 21 MR. WARTHEN: Pardon me, sir. 22 COMMISSIONER FRENCH: You referred to this well 23 as being a utility well or potentially being a utility 24 well, I just don't understand in the context..... 25 MR. WARTHEN: The..... Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 13 1 COMMISSIONER FRENCH: .....of that sentence 2 what utility means. 3 MR. WARTHEN: Yes. What the intent was that 4 Cook Inlet Energy has -- is -- or does produce a 5 significant amount of water from their current wells at 6 West McArthur River. And they were possibly going to 7 use this well for injection purposes to rid their 8 produced waters from West Mac. 9 COMMISSIONER FRENCH: I understand. 10 MR. WARTHEN: Yeah. And so in that light we 11 just call it a utility well or a water disposal well or 12 water injection well. 13 COMMISSIONER FRENCH: I understand now, Mr. 14 Warthen, thank you. 15 MR. WARTHEN: Okay. 16 COMMISSIONER FRENCH: But this was intended to 17 be a gas production well? 18 MR. WARTHEN: It was intended to be an oil 19 well. 20 COMMISSIONER FRENCH: Oil well. 21 MR. WARTHEN: The prospect was an oil prospect. 22 We never really drilled the basic part of the prospect 23 which is a little further to the south. And there was 24 some issues with Redoubt, a critical habitat area, as 25 to how we would actually access that. We found this Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 14 1 area north where there's a window in the critical 2 habitat area where we could drill. And as far as the 3 oil productive zones, we did have significant oil 4 shows, but failed to yield any production on test. 5 We did see a gas zone up shallow, we tested 6 that gas zone at approximately 3 million cubic feet of 7 gas a day which in all rights is a commercial well. 8 However we coned in a significant amount of water and 9 we were producing 2,000 barrels of water a day and 10 decided it was a no go situation. 11 So rather than plug at the time the intent was 12 to suspend it and come back at a later date and use it 13 as an injection well or disposal well. 14 COMMISSIONER FRENCH: I understand. Thank you 15 for the history. 16 MR. WARTHEN: Yes. Thank you, sir. 17 CHAIR FOERSTER: I have a question. Why didn't 18 you P&A the well in 2016? 19 MR. WARTHEN: At the time when we finally got 20 an okay from the new management of Cook Inlet Energy it 21 was too late to conduct operations, you know, the 22 weather was getting bad, we already had some snow on 23 the pad and on the location and it was just too late to 24 start the process. 25 CHAIR FOERSTER: Okay. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: while@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 15 1 MR. WARTHEN: And if we -- and if we -- you 2 know, we got that approval from their vice president 3 and I -- my memory..... 4 CHAIR FOERSTER: Perhaps I misunderstood you. 5 I thought you said that you got that notification in 6 2015? 7 MR. WARTHEN: No, 2016, I'm sorry. It was -- 8 we got the notification in October or November of 2016. 9 CHAIR FOERSTER: 116. 10 MR. WARTHEN: Yes. 11 CHAIR FOERSTER: Okay. Okay. Thank you. I'd 12 like to take a short recess and talk with staff for a 13 second before we continue. So it's 9:35, we will come 14 back at 9:45. And we're recessed. 15 (Off record) 16 (On record) 17 CHAIR FOERSTER: We'll go back on the record at 18 9.44. 19 Mr. Warthen, I have a few questions for you 20 that are kind of fuzzy -- trying to eliminate the fuzz. 21 You say that it wasn't until late 2016 that you 22 realized that Cook Inlet wasn't going to use the 23 disposal well? 24 MR. WARTHEN: That's post bankruptcy and that's 25 when they called us and told us they weren't going to Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 16 1 use the well, right. 2 CHAIR FOERSTER: Okay. Well, according to our 3 records you lost the CIRI lease on July 1st of 2015 and 4 the State lease on October 12th of 2016 and all you had 5 was the surface agreement with Selemtof at that time. 6 How were you planning on using a well that penetrated 7 lands that you did not have active leases on? 8 MR. WARTHEN: Well, that's a good question. I 9 guess we'd have to go back to CIRI and talk to them. 10 Is that what you're referencing to, the CIRI lease? 11 CHAIR FOERSTER: The CIRI lease and the 12 State..... 13 MR. WARTHEN: Right. 14 CHAIR FOERSTER: .....lease. 15 MR. WARTHEN: Right. 16 COMMISSIONER FRENCH: All right. I guess the 17 fuzz will remain. 18 COMMISSIONER SEAMOUNT: Don't we have CIRI and 19 DNR here or just them? 20 CHAIR FOERSTER: I don't think it's a question 21 for them. 22 What is the current condition of the well, Mr. 23 Warthen? 24 MR. WARTHEN: It's shut in. The -- there have 25 been plugs in the bottom hole. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 17 1 CHAIR FOERSTER: Are there open perforations 2 anywhere in the well? 3 MR. WARTHEN: I don't believe there are. 4 CHAIR FOERSTER: Well, that's contrary to what 5 our records show. Our records show that there are open 6 perforations in the well. So you might want to check 7 that..... 8 MR. WARTHEN: There..... 9 CHAIR FOERSTER: .....and get back with me. 10 MR. WARTHEN: I'll check that sundry. I think 11 you're -- yeah, I think you are -- you're correct, 12 right, at 6,000 feet. 13 CHAIR FOERSTER: And my records show that there 14 are open perforations up to about 1,900 feet. So you 15 might want to check and get back to us. 16 So I had one other question for you. Do you 17 foresee any further delays? 18 MR. WARTHEN: No, ma'am. 19 CHAIR FOERSTER: Okay. Commissioner Seamount, 20 do you have any additional questions? 21 COMMISSIONER SEAMOUNT: I have none. 22 MR. WARTHEN: Along with those lines, we have 23 contracted with our project management team that was 24 responsible for drilling the well and we have a master 25 service agreement with them in place. They have been Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 18 1 contacted and contracted. So, you know, they will be 2 the ones along with Cardno that will look for the eagle 3 nests, that's one of the first things, and monitor the 4 access to the site, the snow off the road, et cetera, 5 and barge opportunities to barge some equipment over 6 there and we will move as soon as we can get the go 7 ahead on that. The limiting factor would be the eagle 8 nesting. Short of -- when we drilled the well there 9 was an eagle nest there, but it was an abandoned nest 10 and we monitored that to see if eagles come back. And 11 that's what we will do again. If the eagles do not 12 return to that nest or do not build another nest we 13 will operate as soon as we can get access to that site, 14 as soon as the snow is off the site and as soon as we 15 can get barge access. 16 CHAIR FOERSTER: I do have one other question 17 for you. This hearing is also to address your failure 18 to respond to our initial notice of proposed 19 enforcement action and you did not address that. Can 20 you explain to us why you failed to respond to our 21 initial..... 22 MR. WARTHEN: Well..... 23 CHAIR FOERSTER: .....proposed enforcement 24 action? 25 MR. WARTHEN: .....yes, I guess I can. From Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email• sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-1 6-032 Page 19 1 the standpoint that perhaps this is a little awkward, 2 we had a robbery in our office and the floor -- the 3 tenant on the same floor also was robbed and as a 4 result the building went in lock down and any notices 5 that were received, you know, they were in this case 6 was signed by someone downstairs at the first floor and 7 I never received the notice until just before New 8 Year's. 9 CHAIR FOERSTER: Okay. Commissioner Seamount, 10 do you have additional questions? 11 COMMISSIONER SEAMOUNT: Yes, I have -- I 12 appreciate your problems with the robbery, my house was 13 robbed in September and a lot of paperwork was missing. 14 But my question is what's the estimate of -- on 15 the cost of abandoning this well? 16 MR. WARTHEN: In the $400,000 range. 17 COMMISSIONER SEAMOUNT: Okay. Thank you. 18 That's valuable to us to know. 19 That's all. 20 CHAIR FOERSTER: Commissioner French, do you 21 have any additional questions? 22 COMMISSIONER FRENCH: No, I don't. Thank you. 23 CHAIR FOERSTER: Okay. Does your company have 24 sufficient funds to cover the cost of plugging and 25 abandoning? Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 20 1 MR. WARTHEN: Yes, ma'am, we do. We do have -- 2 yes, we do. 3 CHAIR FOERSTER: Okay. Do you have any active 4 bonds besides the one with AOGCC? 5 MR. WARTHEN: Yes, ma'am. The bonds for this 6 project are in place..... 7 CHAIR FOERSTER: And..... 8 MR. WARTHEN: .....the fees will be paid for 9 the various permits. There's an active bond, the unit 10 bond actually I think, of some $500,000. 11 CHAIR FOERSTER: With the DNR? 12 MR. WARTHEN: With DNR, DOR -- yeah, DNR, 13 correct. 14 CHAIR FOERSTER: I would encourage DNR to 15 maintain that bond until the well is properly P&A'd. 16 MR. WARTHEN: I believe that's the regulation. 17 CHAIR FOERSTER: Is there a DNR rep in the room 18 who would like to discuss that? Can you come up to the 19 front. Use the other table. 20 Okay. Thank you. Have a seat. Introduce 21 yourself for the record and then I'm going to swear you 22 in. 23 MR. EASTON: Okay. 24 CHAIR FOERSTER: Are they turned on? 25 MR. EASTON: Yes, they are. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 21 1 CHAIR FOERSTER: The green light is live? 2 MR. EASTON: I'm sorry. The green light is now 3 on. 4 CHAIR FOERSTER: Okay. 5 MR. EASTON: My name is John Easton, I work 6 with the Division of Oil and Gas in the Department of 7 Natural Resources. 8 CHAIR FOERSTER: Okay. Raise your right hand. 9 (Oath administered) 10 MR. EASTON: Yes. 11 JOHN EASTON 12 called as a witness on behalf of DNR, testified as 13 follows on: 14 DIRECT EXAMINATION 15 CHAIR FOERSTER: Okay. Mr. Easton, does DNR 16 have an active bond for this well? 17 MR. EASTON: We have a certificate of deposit 18 on file. I've given you the paperwork that was signed 19 by..... 20 CHAIR FOERSTER: Okay. And do you intend to 21 keep this until the well is properly plugged and 22 abandoned? 23 MR. EASTON: Yeah. I'm over here attending 24 just to -- we're holding on to that performance 25 guarantee. I think we've gotten a request for that Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH- 16-032 Page 22 1 release, but we've been waiting to see if action were 2 going to be taken on this lease. 3 CHAIR FOERSTER: Okay. Is it DNR's intent to 4 hang on to the $500,000 until the well's properly 5 P&A'd? 6 MR. EASTON: I believe so. 7 CHAIR FOERSTER: Thank you. Do you have any 8 questions for Mr. Easton. 9 COMMISSIONER SEAMOUNT: No. 10 CHAIR FOERSTER: Commissioner French? 11 COMMISSIONER FRENCH: No. 12 CHAIR FOERSTER: All right. Thank you very 13 much for sharing that information with us. 14 Is there anyone else who wishes to testify? 15 (No comments) 16 CHAIR FOERSTER: Is there anything else you 17 have to say, Mr. Warthen? 18 MR. WARTHEN: No, ma'am. 19 CHAIR FOERSTER: All right. Final comments for 20 the good of the order, Commissioner Seamount? 21 CHAIR FOERSTER: No. 22 CHAIR FOERSTER: Commissioner French? 23 COMMISSIONER FRENCH: No, thank you. 24 CHAIR FOERSTER: Okay. At 10 minutes until 25 10:00 this hearing is adjourned and the next hearing Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH-16-032 Page 23 1 will start in 10 minutes. 2 (Hearing adjourned 9:50 a.m.) 3 (END OF REQUESTED PORTION) 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net AOGCC 4/4/2017 Docket No. OTH- 16-032 Page 241 1 TRANSCRIBER'S CERTIFICATE 2 I, Salena A. Hile, hereby certify that the 3 foregoing pages numbered 02 through 24 are a true, 4 accurate, and complete transcript of proceedings in re: 5 Docket No.: OTH 16-032 public hearing, transcribed 6 under my direction from a copy of an electronic sound 7 recording to the best of our knowledge and ability. 8 Date 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Salena A. Hile, Transcriber Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net NAME STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket No. OTH-16-031 April 4, 2017 at 10:00 am AFFILIATION Testify (yes or no) jein LA r -o wlS ; . s. RSA I w� �d �; N o Ile r s� Nilson � rol'e' u Ne�S Ac)(zCc N March 30, 2017 Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, AK 99503 RE: NordAq Energy Inc. Shadura #1 Plug and Abandonment Project Final Permitting Status Report Dear Mr. Warthen: G Z11 -'-;t' 3, s Caralno® Shaping the Future RECEIVED APR 0 4 2017 A0GC+G NordAq Energy, Inc. (NordAq) is proposing to plug and abandon its Shadura #1 Prospect within the Kenai National Wildlife Refuge. A 100 foot by 200 foot winter use pad will be constructed on the Shadura #1 well site using liners, mats, and snow. Access to the site will be accomplished through construction of a packed snow trail (i.e., 1.16 miles on State lands including 1,500 feet within the Captain Cook Recreation Area, and 2.38 miles within the Kenai National Wildlife Refuge). The trail will utilize a similar route used for the winter 2011 exploration drilling operations of the Shadura #1, with a minor adjustment to the entry and access route to Salmo Lake. The snow trail will require crossings two streams (one of which is anadromous). Water for trail and pad construction and maintenance and to support project plug and abandonment will be obtained from Salmo Lake. The table below identifies all of the permits required and obtained for the Shadura #1 Plug and Abandonment Project. Copies of these permits as well as the Operations Plan are attached. Table 1 — Permit Authorizations Agency permit Status Federal U.S. Fish and Wildlife Service, Kenai National Wildlife Special Use Permit Effective 2/14/17 Refuge Expires 4/30/18 State Alaska Department of Environmental Conservation, Water Discharge Authorization Not Required Division of Water Alaska Department of Fish and Game, Division of Habitat Title 16 Fish Habitat Permit Effective 2/8/17 Expires 4/30/18 Alaska Department of Natural Resources, Division of Land Use Permit Effective 2/1/17 Mining, Land, and Water, Southcentral Region Land Office Expires 4/30/19 Alaska Department of Natural Resources, Division of Temporary Water Use Effective 2/14/17 Mining, Land, and Water, Water Resources Section Authorization Expires 4/4/18 Alaska Department of Natural Resources, Division of Parks Park Use Permit Effective 2/13/17 and Outdoor Recreation, Captain Cook Recreation Area Expires 4/30/18 Alaska Oil and Gas Conservation Commission Sundry Approval Effective 2/15/17 Expires 2/15/18 Local Kenai Peninsula Borough, River Center Habitat Protection District Permit Effective 2/7/17 Expires 6/30/18 Australia Belgium • Canada • Ecuador • Indonesia • Kenya • New Zealand • Papua New Guinea Peru United Arab Emirates • United Kingdom • United States • Operations in 70 countries Cardno® Shaping the Future Table 1 — Permit Authorizations Agency Permit Status Kenai Peninsula Borough, River Center Floodplain Development Permit Not Required Kenai Peninsula Borough, Road Service Area Encroachment Permit Effective 2/28/17 Expires 4/30/17 Letters of Non -Objection CIRI Letter of Non Objection Obtained 2/7/17 Harvest Alaska LLC Letter of Non Objection Obtained 2/13/17 Tesoro Alaska Pipeline Company Letter of Non Objection Obtained 2/23/17 If you have any questions or comments, please call me at (907) 227-5569. Sincerely, I Jeanette Brena Project Manager for Cardno Mobile: 907-227-5569 Attachments: Operations Plan Permits March 30, 2017 Page 2 www.cardno.com �� Cardno® Shaping the Future NordAq Energy, Inc. Shadura #1 Plug and Abandonment Project Operations Plan Operations Plan NordAq Energy, Inc. Shadura #1 Plug and Abandonment Project NordAq Energy, Inc. 560 East 34th Street, Suite 200 Anchorage, Alaska 99503 Febraury 2017 Table of Contents Section 1: Project Introduction...............................................................................................3 Table1: Location Information.............................................................................................................................. 3 Figure1: Regional Map.......................................................................................................................................4 Section 2: Project Schedule...................................................................................................6 Table2: Timeline..................................................................................................................................................6 Section 3: Project Details....................................................................................................... 7 3.1 Equipment..................................................................................................................................... 7 Table3: Proposed Equipment.............................................................................................................................. 7 3.2 Trail Packing..................................................................................................................................8 3.3 Stream Crossings..........................................................................................................................8 3.4 Well Pad........................................................................................................................................ 9 3.5 Well Plugging and Abandonment.................................................................................................. 9 3.6 Water Usage.................................................................................................................................. 9 3.7 Fuel Transfers and Storage........................................................................................................... 9 3.8 Waste Management.................................................................................................................... 10 3.9 Demobilization and Rehabilitation............................................................................................... 10 Section 4: General Considerations.......................................................................................11 4.1 Permitting.................................................................................................................................... 11 Table 4: Permits and Authorizations..................................................................................................................11 4.2 Personnel and Training............................................................................................................... 11 Table5: Personnel..............................................................................................................................................11 4.3 Wildlife Interaction and Bear Avoidance...................................................................................... 12 4.4 Safety...........................................................................................................................................12 Plan of Operations 2 NordAq Energy, Inc. Section 1: Proiect Introduction NordAq Energy, Inc. (NordAq) is proposing to plug and abandon its Shadura #1 Prospect within the Kenai National Wildlife Refuge. Access to the Shadura #1 well site will be accomplished through construction of packed snow trail (i.e., 1.16 miles on State lands including 1,500 feet within the Captain Cook Recreation Area, and 2.38 miles within the Kenai National Wildlife Refuge). The snow trail will utilize a similar route used for the winter 2011 drilling operations of the Shadura #1, with a minor adjustment on the entry and access to Salmo Lake. Equipment and materials will be mobilized to the head of the proposed snow trail using the existing road system maintained by the Kenai Peninsula Borough (KPB). See Table 1 below and Figures 1 and 2 for location information. Table 1: Location Information Description Location State Land Starting at T8N, R10W, Section 10, Seward Meridian Packed Snow Trail (1.16 mile) Ending at T8N, R10W, Section 11, Seward Meridian Kenai National Wildlife Refuge Starting at T8N, R10W, Section 14, Seward Meridian Packed now Trail (2.38 miles) Ending at T8N, R10W, Section 23, Seward Meridian Shadura #1 Well Pad (100 by 200 feet) Located at T8N, R10W, Section 23, Seward Meridian Plan of Operations 3 NordAq Energy, Inc. V -- J`h4 'I Y ,�°100 +mow... § Turnagain Arm Chickaioon v. &9Yq Sala ,- r ry ten, .a . spfieG S /R+t 'Re ynj PROJECT LOCATION j•r 'I p f Sala ,- r ry � .. .a . S PM1 DLIFE F S rit �idkodatr y An Y f;» COOK iR� L f �a s. e 4 c f{ F ., GULF OF ALASKA • Cities/Villages Project location SCALE - 0 s to 20 m Roads Kenai National Wildlife Refuge o 10 q 40 KM "''-`* L+—r Rivers/Streams Prgecbw State Plane Alwl$ta Zone 4 (feet), NA083 Seward Men*an Figure 1: Regional Map Plan of Operations 4 NordAq Energy, Inc. Figure 2: Project Location Map Plan of Operations 5 NordAq Energy, Inc. Section 2: Project Schedule Surveying, staking, and pre -packing of the snow trail are expected to begin as soon as permits are obtained in order to complete the well abandonment before snow melts. Table 2 below lays out the anticipated schedule. Project delays that are not anticipated may alter the schedule slightly. Table 2: Timeline Action Duration Proposed Start Date Proposed End Date Surveying and Staking 4 days February 13, 2017 February 16, 2017 Pre -Packing 16 days February 17, 2017 March 4, 2017 Mobilization 8 days March 5, 2017 March 12, 2017 Well Work 15 days March 13, 2017 March 27, 2017 Demobilization 8 days March 28, 2017 April 4, 2017 TOTAL 51 days Plan of Operations 6 NordAq Energy, Inc. Section 3: Proiect Details 3.1 Equipment Site access will be accomplished through the use of low pressure vehicles (LPV) and trailers. These LPVs are tracked vehicles that distribute loads so that the maximum pressure at any location on the track does not exceed 6 pounds per square inch (psi) with the majority of the activity with vehicles that do not exceed 2 psi. A list of LPVs expected to be used for this operation is provided in Table 3. Each of these vehicles is approved for tundra travel by the Bureau of Land Management (BLM) and State of Alaska Division of Natural Resources (ADNR) and have carried loads equivalent to the use proposed in this program. Their use minimizes disturbance to vegetation beneath the snow pack. The numbers of round -trips anticipated to complete the program are also provided in Table 3. Mobilization and demobilization periods will require the most frequent use of the trail. Table 3: Proposed Equipment Plan of Operations 7 NordAq Energy, Inc. Total Gross Vehicle Name Number Round Vehicle Description Ground Pressure Per of Units Trips Weight Inch, Fully Loaded lbs Bobcat T250 1 1 9,400 Used on pad to move around 4.0 psi heavy items. Used for pre -packing trail, Bombardier GT- 1 20 11,000 transporting material/water, 3.33 psi, loaded at 1000 pulling lighter loads with sleds, 10,000 lbs and grading trail. Used to carry two 250 -gallon 2.73 psi, loaded at Bombardier 1 40 8,000 DOT approved TransCube 8,000 lbs (500 gallons Muskeg Track Rig double wall tanks for daily of diesel is 3,575 lbs) fueling. Excavator 1 1 30,000 Used digging out the cellar in the 4.2 psi well. Foremost 1 10 29,000 Used to pull large loads. 3.8 psi, loaded at Chieftain C 30,000 lbs Longtrack 2 75 500 Used for pre -packing trail with 1.44 psi Snowmachine repeated trips. Used for transporting equipment; 2.1 psi loaded at Staging Tracked 1 20 30,000 pulled by Chieftain or Bombardier 30,000 lbs (no rating Sleigh GT -1000. provided for lighter loads, all loads will be Plan of Operations 7 NordAq Energy, Inc. Besides the mobile LPVs, the well pad will have a mobile temporary shelter, wireline mast (with derrick), cementing unit (with pump and mixer), mud pit, temporary generator, boiler, heater, light plant, and porta potties. A staging area and guard shack will be located in the KPB right-of-way off of the Kenai Spur Highway prior to entry of the snow trail. The guard will restrict public access on the snow trail. 3.2 Trail Packing Pre -packing and trail setting will be conducted with snow machines, a Tucker trail groomer, and a Tucker personnel carrier, which all have rated ground pressures of approximately 1.4 psi. Pre - packing will be conducted by making multiple passes of the route to pack and set the snow on a trail that is 16 feet wide. Time will transpire between repeated passes to allow the snow to set to a firm surface. Once a trail is firm, the Tucker machines will use a snow -grader that sets an even and firm surface. The pre -packing accomplishes two key elements of trail development. First, it collapses the air and binds the snow to itself setting a firm surface. Second, it reduces the insulating quality of the snowpack and drives the frost depth deeper. Upon completion of the pre -packing, measurements will be collected beneath the trail to verify the frost is a minimum of 12 -inches beneath the ground surface. If the frost is not sufficiently deep, travel with the snow machines and Tuckers will continue to drive the frost down and firm the trail with any new fallen snow; or mats will be used. Once a firm snow surface is prepared, mobilization of the heaver equipment with ground pressure ratings up to 5.8 psi will commence. It is not expected that construction of snow trail will require cutting of trees. If required, it would be done in accordance with permit requirements. The snow trail will be maintained daily through the application of water. 3.3 Stream Crossings The access route to the Shadura #1 well pad location will require crossings of 2 streams (refer to Figure 2). Should current weather and snow conditions prevail; no additional application of ice for buffering is anticipated to be applied to the stream crossings. The pre -packing described above will drive the frost in the stream channel and freeze any free water to the bottom of the channel. In extreme cases where safe crossing cannot be conducted with snow and ice buildup, road mats will be placed and covered with snow. Plan of Operations 8 NordAq Energy, Inc. Total Gross Vehicle Name Number Roundite— Vehicle Description Ground Pressure Per of Units Trips Inch, Fully Loaded muchlower than the rated load) Self-propelled and tracked; used Track Crane 1 1 42,000 to hold up wireline sheave at the 3.5 psi work pad and various unloading. Used for pre-packing trail and the Tucker Personnel two times per day for daily psi, loaded at Carrier 1 60 13,500 mobilization and demobilization 2,400 lbs 2,40 from site. Also acts as emergency shelter and escape. Tucker Trail 1 40 10,200 Used for pre-packing and 1.41 psi, loaded at Groomer maintaining trail. 1,500 lbs Besides the mobile LPVs, the well pad will have a mobile temporary shelter, wireline mast (with derrick), cementing unit (with pump and mixer), mud pit, temporary generator, boiler, heater, light plant, and porta potties. A staging area and guard shack will be located in the KPB right-of-way off of the Kenai Spur Highway prior to entry of the snow trail. The guard will restrict public access on the snow trail. 3.2 Trail Packing Pre -packing and trail setting will be conducted with snow machines, a Tucker trail groomer, and a Tucker personnel carrier, which all have rated ground pressures of approximately 1.4 psi. Pre - packing will be conducted by making multiple passes of the route to pack and set the snow on a trail that is 16 feet wide. Time will transpire between repeated passes to allow the snow to set to a firm surface. Once a trail is firm, the Tucker machines will use a snow -grader that sets an even and firm surface. The pre -packing accomplishes two key elements of trail development. First, it collapses the air and binds the snow to itself setting a firm surface. Second, it reduces the insulating quality of the snowpack and drives the frost depth deeper. Upon completion of the pre -packing, measurements will be collected beneath the trail to verify the frost is a minimum of 12 -inches beneath the ground surface. If the frost is not sufficiently deep, travel with the snow machines and Tuckers will continue to drive the frost down and firm the trail with any new fallen snow; or mats will be used. Once a firm snow surface is prepared, mobilization of the heaver equipment with ground pressure ratings up to 5.8 psi will commence. It is not expected that construction of snow trail will require cutting of trees. If required, it would be done in accordance with permit requirements. The snow trail will be maintained daily through the application of water. 3.3 Stream Crossings The access route to the Shadura #1 well pad location will require crossings of 2 streams (refer to Figure 2). Should current weather and snow conditions prevail; no additional application of ice for buffering is anticipated to be applied to the stream crossings. The pre -packing described above will drive the frost in the stream channel and freeze any free water to the bottom of the channel. In extreme cases where safe crossing cannot be conducted with snow and ice buildup, road mats will be placed and covered with snow. Plan of Operations 8 NordAq Energy, Inc. 3.4 Well Pad All operations will take place on the Shadura #1 well location. A winter use pad will be constructed in the following manner: • The existing snow cover will be packed with tracked vehicles and allowed to harden. • A Herculite© liner will be placed on the snow over a 100 foot by 200 foot area around the existing well; mats will be placed on the Herculite© liner to create a firm and safe working surface. • Snow berms will be constructed at the edge of the liner to contain any fluids inadvertently released. The well pad will have a mobile temporary shelter, wireline mast (with derrick), cementing unit (with pump and mixer), mud pit, temporary generator, boiler, heater, light plant, and porta potties. The toilet facilities will require neither the discharge nor the withdrawal of water to operate and waste from these facilities will be hauled out on an as -needed basis to an approved disposal facility. 3.5 Well Plugging and Abandonment The plugging and abandonment program is described in detail in NordAq's Sundry Application filed with the Alaska Oil and Gas Conservation Commission (AOGCC). Plugging and abandonment includes cutting the casing below grade and retrieving the stub. The process is detailed as follows: • Set cement plug • Perforate casing and tubing • Mix and pump cement plug • Cut casings 3.6 Water Usage Construction of the snow trail and pad and use of cement in abandonment will require the use of water. Water will be obtained from Salmo Lake as permitted by the ADNR and Alaska Department of Fish and Game (ADF&G). NordAq anticipates approximately 400,000 gallons of water will be required for trail packing and maintenance, and well plugging and abandonment (up to 15,000 gallons per day). Salmo Lake will be accessed by snow trail off of the main trail, and by running a 350 foot hose with pump (2 intake; 425 gallon per minute) to a 2,500 gallon water storage tank near the lake. Water will be transported using a 1,000 gallon tank carried via LPV. A light plant will be placed near the lake for safety. 3.7 Fuel Transfers and Storage In an effort to eliminate fuel spills, fueling will occur at the staging area in the KPB right-of-way or on the well pad as much as possible. The project will utilize two 250 -gallon DOT approved double- wall tanks for fuel storage that will be carried via LPV. NordAq proposes to use established fuel transfer procedures including placing drip basins beneath fueling ports and using two qualified personnel conducting fuel transfer operations. All personnel associated with fuel delivery, Plan of Operations 9 NordAq Energy, Inc. transfer, and handling will also be knowledgeable of Best Management Practices related to fuel transfer and handing, drum labeling, secondary containment guidelines, and the use of liners/drip trays. Fuel storage facilities will not be placed within 100 feet of a water body. 3.8 Waste Management Small quantities of non -hazardous waste will be generated at the site. Garbage, domestic combustible refuse, and putrescible waste will be stored on location in approved containers to prevent wildlife access until transport for disposal off site. Solid, non -burnable waste will be deposited in approved waste containers. All waste will be hauled to a permitted facility, typically on a daily basis. No waste is anticipated to be generated by the well plugging and abandonment activities. 3.9 Demobilization and Rehabilitation Demobilization will occur during frozen conditions prior to the end of the winter season 2017 and will be followed by a final clean up and site inspection during the summer months of 2017. Prior to leaving the well site, all equipment and supplies will be removed and debris will be cleared and hauled to an approved waste disposal location. All debris containers will be secured to avoid potential impact to persons, environment, and wildlife. Additional debris removal, if required, and general clean-up will take place after demobilization during the summer months to inspect for final clearance. Plan of Operations 10 NordAq Energy, Inc. Section 4: General Considerations 4.1 Permitting The permits and authorizations required for the project are listed in Table 4. Table 4: Permits and Authorizations Agency Permit/Authorization Federal Authorizations Kenai Wildlife Refuge Special Use Permit State of Alaska and Local Authorizations AOGCC Sundry Approval ADF&G Title 16 Fish Habitat Permit ADNR, Division of Mining, Land, and Water Land Use Permit Temporary Water Use Permit ADNR, Department of Parks and Outdoor Recreation Park Use Permit Kenai Peninsula Borough Right -of -Way Easement Use Letters of Non Objection Harvest Alaska LLC, a wholly owned subsidiary of Hilcorp Letter of Non Objection Tesoro Alaska Pipeline Company Letter of Non Objection 4.2 Personnel and Training NordAq anticipates 15 project personnel per shift, with two shifts in a 24 hour period as needed. Project personnel will lodge in the Kenai and Nikiski area at existing facilities. Table 5 below identifies key subcontractors that will be working on the project. Table 5: Personnel Business/Names Address Function All American Oilfield 14896 Kenai Spur Highway, Suite 203 Project management and well Pete Dickinson / Larry Driskill Kenai, AK 99611 operations 907-230-6541 McLane Consulting, Inc. 38240 Kenai Spur Highway Surveying and staking Iain Brown / Laine Landt / Brian Soldotna, AK 99699 Cameron 907-283-4218 Sterling Enterprises P.O. Box 3143 Equipment rental and Names to be determined Soldotna, AK 99669 operation 907-262-4359 Atigun Inc. 54735 Industrial Avenue Equipment rental and Names to be determined Kenai, AK 99611 operation 907-776-3371 Magtec Alaska 43385 Kenai Spur Highway Equipment rental and Names to be determined Kenai, AK 99611 operation 907-335-6305 Plan of Operations 11 NordAq Energy, Inc. Business/Names Address Function L & J Enterprises 51155 Island Lake Road Equipment rental and Names to be determined Kenai, AK 99611 operation 907-776-8656 Pollard Wireline 4230 Kenai Spur Hwy, P.O. Box 1360 Equipment rental and Names to be determined Kenai, AK 99611 operation 907-283-7006 All project personnel will successfully complete a safety, health, and environment class of the Cook Inlet Training Standard (CITS) (or equivalent) prior to starting work on the program. All personnel will receive wildlife interaction training and other pertinent safety procedures applicable to this operation. All project personnel must also have completed all other applicable regulatory (i.e. OSHA) and technical training requirements specific to their assigned job task prior to commencing work. 4.3 Wildlife Interaction and Bear Avoidance NordAq will instruct all project personnel on how to avoid attracting, harassing, or injuring wildlife. Common human -wildlife interactions include unintentional attraction due to improper containment or disposal of anthropogenic food sources; deliberate feeding of wildlife; approaching sick, injured or apparently orphaned wildlife to give assistance; or unintentional injury of wildlife due to collisions with vehicles. Improper garbage handing or foods left in pickup beds may attract ravens, red foxes, wolves, coyotes, weasels, or mink. If feeding of wildlife occurs, animals will likely change their behavior and willingly approach humans, potentially exposing project personnel to wildlife diseases or aggression. 4.4 Safety All employees agree to abide by applicable regulatory health and safety requirements and NordAq safety operating procedures. Should unsafe working conditions occur, it is the responsibility of the employee to immediately report the condition to the representative. Safety meetings will be held with the work crews prior to commencement of daily activities to discuss upcoming operations, associated job risks, and related preventative measures. Persons in attendance, the safety topic discussed, and the weather conditions at the time of the meeting will be documented amongst other pertinent information. All personnel will have the appropriate Personal Protective Equipment (PPE) for the job task being undertaken. All PPE will be free of rips, tears, and stains that would impact its effectiveness. American National Standard Institute requirements for PPE will be followed. Material Safety Data Sheets will be available on location for all fluids expected to be used. The proposed operations are scheduled for a period when high winds and extreme temperatures are most common. Frostbite (and subsequent deteriorating medical conditions) is the most common witnessed ailment associated with cold temperatures. Weather conditions existing at the time of all operations will be monitored. Should high winds result in frostbite exposures within 5 minutes, a hazard assessment will be conducted and mitigative steps immediately undertaken to address such possible exposure for all personnel. Plan of Operations 12 NordAq Energy, Inc. NordAq will ensure that appropriate signage is on location for the protection of health and safety of employees and of the environment. NordAq requires all employees to abide by the posted signage. NordAq will ensure that smoking is permitted only within specific areas by designating an area of the well pad location for 'smoking only' activities. This location may change due to weather conditions. Appropriate lighting shall be provided to crews for optimization of visibility throughout the project. NordAq will promote good housekeeping rules throughout the program. All debris will be picked up and contained in provided refuse containers. Plan of Operations 13 NordAq Energy, Inc. GR ;�P Cardno® Shaping the Future U.S. Fish and Wildlife Service Kenai National Wildlife Refuge Special Use Permit Lo w— Kenai National Wildlife Refuge Permit#:2017-oilGas- � General Activities NordAq-5468 ' Special Use Permit (For Official Use Only) Permit Term From: 2!1412017 To: 4/30/2018 1) Permittee Name/Business: [Robert Warthen/NordAq Energy, Inc 2) Permit Activity Type: oil and Gas Activities 3) Permit Status: 0 Approved If approved, provide special conditions (if any) in the text box below. ❑ Denied If denied, provide justification in the text box below. See 2017-0ilGas-NordAq-5468 "Special 8 Standard Conditions" attached. 4) Are there additional special Yes (' No (' N/A conditions attached to the permit? 5) Are other licenses/permits required, �o Yes C No (' N/A and have they been verified? 6) Are Insurance and/or Certification(s) G Yes i No C N/A required, and verified? 7 Record of Payments: Y (' Full (' Partial Amount of full (: Exempt payment: 8) Is a surety bond or security G Yes C No C N/A deposit required? This permit is issued by the U.S. Fish and Wildlife Service and accepted by the applicant signed below, subject to the terms, covenants, obligations, and reservations, expressed or implied herein, and to the notice, conditions, and requirements included or attached. A copy of this permit should be kept on -hand so that it may be shown at any time to any refuge staff. 9) Permit approved/issued by: (Signature and title) 71) Date:`��-0� 10) Pe t afcce ted Sighature or permittee) Date: e�1 United States Department of the Interior U.S. Fish and Wildlife Service National Wildlife Refuge System Special Use Permit Description and Conditions Permittee Information Name: Robert Warthen Organization: NordAq Energy, Inc Address: 560 East 34th Street, Suite 200 City/State/Zip: Anchorage, AK 99503 Permit Information Start Date: 2/13/2017 End Date: 4/30/2018 Copermittees: None Permit #: 2017-0ilGas-NordAq-5468 Kenai National Wildlife Refuge PO Box 2139 Soldotna, AK 99669 Phone: (907) 262-7021 Fax: (907) 262-3599 Phone: (907) 646-9315 Fax: email: rwarthen@nordaqenergy.com Requirements: KRC Multi -Agency Permits, Liability Insurance, Notification of work commencement, Pre- and post -project photo documentation, Notification of work completion, Post -construction site investigation Purpose: Shadura #1 winter plugging and abandonment project on the Kenai National Wildlife Refuge (Refuge). Description: NordAq Energy, Inc. plans to permanently plug and abandon the Shadura #1 exploratory well, that was drilled in 2011 and has remained in suspended status since that time. Work will involve construction of an approximate 3.54 mile temporary packed snow trail, 2.38 miles of which will be located on the Refuge. The Refuge -portion of the snow trail will be constructed along the same route previously evaluated in the Shadura #1 Final EA, completed in Nov. 2010 and approved by the Refuge. A temporary 100 -ft x 200 -ft packed snow pad will also be constructed in conjunction with the plugging and abandonment operations. All work is to be performed in accordance with the attached Special Conditions and Region 7 Standard Conditions, as well as the Operations Plan submitted with the Permit Application and made a valid part of this Permit. Conditions: See 2017-0ilGas-NordAq-5468 "Special Conditions" and "Region 7 - Standard Conditions" attached. Figure 2: Project Location Map Plan of Operations 5 NordAq Energy, Inc. NordAq Energy Inc., Shadura #1 Plug and Abandonment Project Special Conditions Permit 2017-0i1Gas-NordAq-5468 Reporting Requirements 1. For the purpose of undertaking activities authorized by this Special Use Permit (Permit), NordAq Energy Inc., herein referred to as the "Permittee", shall notify the Kenai National Wildlife Refuge (Refuge) Authorized Officer Ms. Lynnda Kahn, via phone (907-260-2818) or email (lynnda_kahn@fws.gov) at least 3 business days prior to commencement of work on the Refuge. 2. Permittee shall notify Ms. Kahn via email within 2 business days following completion of all work authorized by this Permit. 3. The Refuge Authorized Officer must be kept informed in a timely manner of all operations conducted on Refuge lands and a progress report of field operations must be submitted daily (faxed or email copy of Daily Reports is acceptable) as well. In the event of a spill, the spill and corrective action taken shall be described in the Daily Report. All spill reporting shall be in accordance with State and Federal regulations. 4. Permittee must report without delay any surface damage along or beyond the authorized snow trail route and reclaim surface damage as rapidly as practicable to the Refuge Authorized Officer's satisfaction. 5. The Permittee will immediately notify the Refuge Authorized Officer of any emergencies including accidents involving serious injury or fatalities, aircraft accidents, wildland fire ignitions, or other serious incidents. Permitting/Procedural Requirements 6. Prior to commencement of any activities authorized under this Permit, the Permittee will provide to the U.S. Fish and Wildlife Service (USFWS) [attention Chief, Division of Realty, Fish and Wildlife Service, 1011 E. Tudor Road, Anchorage, AK 99503-6199] a minimum $50,000 surety bond. This bond assures compliance with mitigation measures by the Permittee, and assures cleanup of all debris and facilities, and restoration activities as required. Liability is not limited to the dollar amount of the surety bond. This bond must meet the requirements of 31 U.S.C. 9301-9309. 7. Permittee must provide proof of liability insurance, and such insurance must include coverage for environmental damages. 8. Permittee will provide a single point of contact for coordination between field crews and Refuge staff during all phases of project operations. This employee will be responsible for ensuring adherence to all Permit stipulations, checking avoidance buffers, holding pre -project meetings with key operations staff, answering USFWS questions regarding the project, providing written Daily Reports of field operations, and reporting all spills as referenced above in Condition 3. In addition, this point of contact will coordinate with the Refuge Authorized Officer for transportation to the project area for routine inspections of ongoing activities (as necessary), in addition to a final inspection of the project area to determine compliance with the terms of this Permit. 9. Prior to any work occurring on Refuge land, the Permittee, contractors, and key employees shall attend a "pre -project" meeting with the Refuge Authorized Officer to discuss the conditions of this Permit (extent of the project, work schedules, equipment and materials involved, staging of materials, and responsibilities of each party). 10. A letter of non -objection from Cook Inlet Region, Inc. (CIRI) must be obtained by the Permittee and submitted to the Refuge Authorized Officer before any activities occur over the conveyed subsurface estate, on Native -selected or conveyed lands. 11. The Refuge Authorized Officer shall be notified immediately if substantial changes to the schedule are encountered. 12. The Permittee will not use any water source within the Permit area without advance approval or use equipment under conditions and in a manner that will, in the opinion of the Refuge Authorized Office, damage lakes, streams or other fish and wildlife habitat. Permittee is therefore responsible for obtaining all necessary State and Federal permits (including a Temporary Water Use Permit from Alaska Department of Natural Resources), and submitting copies to the Refuge Authorized Officer prior to the start of work and use of water from any Refuge water sources for project activities. 13. A copy of this Permit will be kept on-site and shall be in the possession of the on-site project manager/supervisor at all times during work activities. 14. Snow trail construction and plugging/abandonment operations support are the only activities allowed under this Permit. Employees and contractors of the Permittee are prohibited from fishing, hunting, and trapping when access to the area is obtained by use of the snow trail. 15. Permittee shall contact the Refuge to obtain locations of all known bear dens and shall maintain a minimum 660 -foot radius of any known den. In the case that a bear den is discovered by Permittee, the Refuge shall be contacted immediately. 16. Due to the potential long-term impact to the Refuge from the introduction and dispersal of non-native plants, Permittee shall utilize weed -free staging areas for crews and equipment to be used for those project operations occurring within the Refuge. Prior to their use on or transport into the Refuge, specific best management practices will be developed and implemented to clean and decontaminate all equipment, crew clothing and other potential vectors of injurious invasive species. Power washing or steam -cleaning of all potential seed transport surfaces (equipment, snowmachine skids and boots of work crews) prior to entering the Refuge will be required. Any equipment and vehicles initially accessing the Refuge off the paved highway are required to be cleaned of all attached mud, dirt, and plant parts to reduce introduction of non-native and invasive plants. Cleaning will occur at a vehicle r2 washing station or steam cleaning facility (power or high-pressure wash) off of Refuge lands. 17. If applicable, the Permittee shall develop and have onsite a Spill Prevention Control and Countermeasure Plan (SPCC). A copy of this plan will be submitted to the Refuge Manager before construction begins. 18. The refueling of any equipment and/or the placement of stationary fuel storage facilities shall not occur within 100 -feet of the annual floodplain of a watercourse or closer than 100 -feet to any water body. Where applicable, stationary fuel storage facilities must be placed within approved, secondary containment enclosures, e.g. an impermeable barrier, providing 110 percent capacity of the largest independent fuel storage container. 19. Duck ponds or catch tarps shall be placed beneath any equipment to be utilized for the project, while not actively being operated, through project duration, while on Refuge land. 20. All gray and black water or chemical toilet refuse generated at construction facilities will be transported off the Refuge to permitted treatment or disposal facilities. 21. Burning of trash, solid waste or any other substances or materials on the Refuge is prohibited. All trash and non -petroleum solid waste imported to or generated during project will be hauled off the Refuge and disposed of in accordance with 18 AAC 60 (Solid Waste Regulations) and with 18 AAC 62 (Hazardous Waste Regulations). 22. All hazardous wastes (as defined by the Resource Conservation and Recovery Act of 1976, as amended) will be stored, transported, and disposed in accordance with regulation requirements. All bulk hazardous material and all hazardous waste containers will be marked with the contents and contractor's name. 23. Seasonal constraints and weather may require suspension of activities within the Permit area to protect public health and safety, or the environment. If the Refuge Manager determines that an immediate temporary suspension of all or a portion of activities within the Permit area is necessary, he may suspend such activities without administrative proceedings. 24. A post -project site investigation with the Refuge Authorized Officer shall be conducted as soon as practicable after completion but no later than 90 days from plugging/abandonment completion. If it is determined that unauthorized ground and/or vegetation disturbance impacts have occurred, timely erosion control and site restoration may be required, after consultation with the Refuge Authorized Officer. 25. Endorsement of this Permit signifies the Permittee's complete understanding and concurrence with all the conditions set forth in the General Stipulations found on the reverse side of the permit application, the Special and Standard Conditions in this document and procedures described in the Environmental Assessment completed for this project in Nov. 2010. Any amendments or deviations to this Permit must be authorized by the Refuge Authorized Officer prior to such associated work occurring. 26. Should violation(s) of any General, Special or Standard Conditions of this Permit occur, or should operations result in adverse impacts to fish and wildlife resources and/or their habitat, cultural resources, and/or public safety, the Refuge Manager may revoke or revise this Permit at any time. Surface Use Requirements 27. The Permittee shall comply with the Archaeological Resources Protection Act (16 USC 470aa). The disturbance of archaeological or historical sites and the removal of artifacts from Federal land is prohibited. If the Permittee discovers any historic, prehistoric, or archaeological sites or artifacts during the course of field operations, all activity at that site shall cease and the SHPO and the Refuge shall be contacted immediately. 28. The Permittee shall not use snow and/or ice that is trucked in or gathered from other areas off the Refuge without prior written approval from the Refuge Authorized Officer. 29. The Permittee shall design, construct and operate the temporary snow trail so that, after demobilization and breakup, the former route does not become a permanent trail for motorized vehicles. This will include replacing cleared trees and re -installing standing deadwood within the former footprint. 30. The snow trail is closed for use by anyone except employees and contractors of the Permittee and the Refuge. Any associated gates must be closed and locked at all times except during moments of ingress or egress. The Permittee is responsible for enforcing this restriction. 31. Areas of minimal frost shall be covered with rig mats during the snow trail and pad construction, and plugging/abandonment operations. 32. All operations shall be conducted in a manner which maximizes preservation of the natural scene, and avoids unnecessary clearing and ground disturbance. 33. Surface vehicles will not be used off the agreed upon snow trail route without prior approval of the Refuge Authorized Officer. 34. The following mitigation measures, previously adopted in the Nov. 2010 Final Shadura #1 Exploration Project Environmental Assessment (EA), shall be implemented to ensure stream banks and fisheries habitat are adequately protected. Temporary spans shall be constructed: a. By placing several rig mats across incised creeks, all less than 10 -feet wide, at proposed crossings; and b. By placing rig mats along approaches to support the snow trail through any bogs. 35. The Permittee shall take all precautions with heavy equipment to avoid settling by placing rig mats directly under the equipment. 36. Thermal blankets and tented heaters may be used to thaw rig mats before removal. 37. Limited vegetation clearing, e.g. only that which is necessary to construct the temporary packed snow access trail, is authorized. Care shall be taken to minimize disturbance of previous trees and shrubs that were transplanted as part of the restoration/mitigation effort completed in September 2011. 38. Disturbance and/or destruction of eagles' nests or nesting trees are strictly prohibited. All activity shall be prohibited within a 660 -foot radius of eagle nests during February and March. During other months of the year, and unless an Eagle "Take" Permit has been secured, the Refuge Authorized Officer may require separation distances of up to Y2 mile if activities conflict with nesting activities. It is the Permittee's responsibility to ensure disturbance, even if unintentional, does not result in the unauthorized "take" of an eagle. Final accountability lies with the party responsible for conducting activities that may impact eagles. 39. Any encounters with wildlife shall be reported immediately to the Refuge Authorized Officer. The Permittee, its contractors, and its employees shall not feed animals or leave food accessible to wildlife. Wildlife shall not be harassed or intentionally approached closely enough to disrupt the animal's activity or to endanger human life. 40. The Permittee shall be responsible for keeping the project area clean. All trash, survey laths and/or flagging, and other debris shall not be stored, placed or allowed to be blown off-site. All trash, unneeded survey laths and other debris shall be picked up daily and properly disposed of during the job. At the completion of construction, a final cleanup effort shall be conducted by the Permittee and inspected by the Refuge Authorized Officer. 41. All activities shall be conducted with due regard to the protection of all wildlife resources, including prevention of erosion of the land, water pollution and damage to watersheds, in accordance with the directions and instructions of the Refuge Authorized Officer. 42. In the event of unanticipated impacts to the Refuge resources, including those caused by introduced invasive plant species, the Permittee must take such soil and resource conservation and protection measures, including weed control, as the Refuge Manager may require. 43. The Permittee shall provide the Refuge Authorized Officer with a project report summarizing field operations and an electronic shape file containing the packed snow trail and snow pad location within 15 days of project completion. 3/31/2016 Region 7 -- Special Use Permits Standard Conditions Failure to abide by any part of this special use permit; violation of any refuge related provision in Titles 43 (Part 36) or 50 (Subchapters B and C) Code of Federal Regulations; or violation of any pertinent state regulation (e.g., fish or game violation) will, with due process, be considered grounds for immediate revocation of this permit and could result in denial of future permit requests for lands administered by the U.S. Fish and Wildlife Service. This provision applies to all persons working under the authority of this permit (e.g., assistants). Appeals of decisions relative to permits are handled in accordance with 50 Code of Federal Regulations 36.41. 2. The permittee is responsible for ensuring that all employees, party members, aircraftpilots, and any other persons working for the permittee and conducting activities allowed by this permit are familiar with and adhere to the conditions of this permit. 3. The permittee may not sublet any part of the authorized use area and is prohibited from subcontracting clients with any other guide. The permittee must also be personally present with each client in the refuge designated use area at least once during each contracted hunt. 4. Any problems with wildlife and/or animals taken in defense of life or property must be reported immediately to the refuge manager and Alaska Department of Fish and Game, and be salvaged in accordance with State regulations. 5. The permittee and permittee's clients do not have the exclusive use of the site(s) orlands covered by this permit, except for the authorized camp facilities. 6. This permit maybe cancelled or revised at any time by the refuge manager in case of emergency (e.g., high fire danger, flooding, unusual resource problems, etc.). The permittee shall notify the refuge manager during refuge working hours in person or by telephone before beginning and upon completion of annual activities allowed by thispermit. & The permittee shall maintain comprehensive general liability insurance ($300,000 each occurrence, $500,000 annual aggregate) throughout the use period specified on the permit, with the Fish and Wildlife Service named ascoinsured. 9. Annually, prior to beginning any activities allowed by this permit, the permittee must provide the refuge manager with: 1) list of all aircraft and other vehicles or vessels to be used, with identification information; 2) names of assistant guides and other employees, or any person providing services to clients on refuge lands; and 3) anyother changes in information provided in the original permit/proposed operations plan. 10. The permittee is responsible for accurate record keeping. By December 31 each year, the permittee must provide the refuge manager with a client use report showing the numberof clients; the dates each client was on the Refuge; the species each client hunted; and the number of each species harvested. The permittee must also provide a legible copy of the State's "Hunt Record" for each client. This report shall be certified by the permittee as being complete and accurate. 3/31/2016 11. The Permittee will remit all required annual fees (e.g., client use day, reserved land site) within 30 days after receiving a bill for collection. 12. This permit authorizes use on State selected lands. If any of these lands are conveyed during the term of this permit, the permittee will no longer be authorized to use those State lands, and must seek authorization from the Alaska Department of Natural Resources. For permits issued for multiple years, it is the responsibility of the permit holder to re -check land status with the permitting office to ensure selected lands authorized for use under this permit continue to remain under the jurisdiction of the U.S. Fish and Wildlife Service. 13. This permit authorizes use of the Native selected lands. If any of these selected lands are conveyed during the term of this permit, the permittee will no longer be authorized to use those lands. For permits issued for multiple years, it is the responsibility of the permit holder to re- check land status with the permitting office to ensure selected lands authorized for use under this permit continue to remain under the jurisdiction of the U.S. Fish and Wildlife Service. 14. In accordance with the Archaeological Resources Protection Act (16 U.S.C. 470aa), the removal or disturbance of archeological or historic artifacts is prohibited. The excavation, disturbance, collection, or purchase of historical or archaeological specimens or artifacts on refuge lands is prohibited. 15. Permittee's shall maintain their use areas in a neat and sanitary condition. Latrines must be located at least 150 feet from springs, lakes, and streams to avoid contamination of water resources. All property (except cabins and/or tent frames) and garbage associated with the permitted activity must be removed from refuge lands upon departingfor the season. 16. The construction or clearing of landing strips or pads is prohibited. Incidental hand removal of rocks and other minor obstructions may bepermitted. 17. The use of off-highway vehicles is prohibited unless specifically authorized in writing inthis permit. 18. The operation of aircraft at altitudes and in flight paths resulting in the herding, harassment, hazing, or driving of wildlife is prohibited. It is recommended that all aircraft, except for take- off and landing, maintain a minimum altitude of 2,000 feet above ground level(AGL). 19. Aircraft use must be conducted in accordance with the authorized plan of operation, and in compliance with FAA regulations. All aircraft being used in a commercial guiding operation must have 12 inch identification numbers in easily visible contrasting colors. 20. Construction of cabins or other permanent structures isprohibited. 21. The permittee's operation plan, as amended and accepted by the U.S. Fish and Wildlife Service, is hereby incorporated in its entirety as a special condition: All deviations from the operations plan must receive prior written approval by the Refuge Manager or his designee. 22. Any action by a permittee or the permittee's employees which unduly interferes with or harasses other refuge visitors or impedes access to any site is strictly prohibited. Examples of prohibited acts include, but are not limited to, low flights over camps or persons at less than 500 feet (unless landing), parking aircraft or placing other objects (rocks, tents, etc.) on any area so as to restrict landing use by other aircraft or persons, and the placement of ghost camps (i.e., unoccupied tents) to falsely indicate the use of an area. 23. Fuel storage sites must be approved in advance by the Refuge Manager. Preparations to prevent and respond to a fuel spill must be fully adequate at all sites for the amount offuel stored on site. 3/31/2016 24. All food and garbage will be secured in a manner that minimizes attraction to wildlife and must be removed from the field before vacating the site for the season. 25. As soon as practicable, but in no case to exceed 30 days, the permittee shall notify the refuge manager of any state or federal fish or wildlife related violations by the permittee or persons employed by the permittee as a guide or assistant guide (if known to the permittee), who have been convicted, pled nolo contendere, forfeited collateral, or had a guiding license suspended or revoked. Notification is required for violations without regard to where theyoccurred. 26. As soon as practicable, but in no case to exceed 30 days, the permittee shall notify the refuge manager of any accidents or other safety related incidents associated with permitted activities on the refuge. Reportable incidents include those that result in a death or physical injury requiring immediate medical attention beyond basic first aid, or that involve significant property damage or loss. Cardno® Shaping the Future Alaska Department of Environmental Conservation Division of Water Water Discharge Authorization (Not Required) From: Brown. Gerry R (DEC) To: Jeanette Brena Subject: RE: Pumping water for snow road Date: Tuesday, February 07, 2017 5:44:29 PM Hi Jeanette, You are correct a permit is not currently required to use lake water. I say currently because there is pending litigation that could require NPDES permits for basin transfers (i.e., lake water to tundra) but as of now, we only cover active gravel pit water used for ice roads and not lakes. See You Later. Gerry -----Original Message ----- From: Jeanette Brena [mailto:Jeanette.Brena c(e cardno.c( Sent: Tuesday, February 07, 2017 4:24 PM To: Brown, Gerry R (DEC) <gerry.brown@alaska.gov> Subject: Pumping water for snow road Hi Gerry, I wanted to confirm that removing lake water via pump to make a snow road does not require a wastewater permit. I don't think we got a permit in the past but wanted to double check. Thanks for your help! Jeanette Brena Cardno 907-227-5569 CarcInae Shaping the Future Alaska Department of Fish and Game Division of Habitat Title 16 Fish Habitat Permit THE STATE Department of a f Fish and Game SKA DIVISION OF HABITAT Kenai Peninsula Office GOVERNOR DILL WALKER 514 Funny River Road Soldotna, Alaska 99669-8255 Main: 907.714.2475 Fax: 907.260.5992 FISH HABITAT PERMIT FH 17-V-0099 ISSUED: February 8, 2017 EXPIRES: April 30, 2018 NordAq Energy, Inc. Robert Warthen 560 East 34" Street, Suite 200 Anchorage, AK 99503 Dear Mr. War -then: Re: Stream Crossings/ Water Withdrawal Salmo Creek — Stream No. 247-90-10020-2001 Salmo Lake - Stream No. 247-90-10020-2001-0010 Section 11 & 14, T 8N, R IOW, S.M. River Center Tracking No. 11808 Pursuant to AS 16.05.871(b), the Alaska Department of Fish and Game (ADF&G), Division of Habitat, has reviewed your proposal to pump water from Salmo Lake and cross Salmo Creek at the referenced location. The proposed project is in support of the Shadura #1 Plug and Abandonment Plan. Project Description Access to the site will be accomplished with the use of low-pressure vehicles (LPVs) and trailers. The LPVs and associated trailers are designed to exert less than six pounds per square inch (psi) to prevent damage to underlying vegetation or stream banks. The vehicles shown in Figure 1 (attached) will cross Salmo Creek. some of them on low pressure trailers, for the transport of personnel and equipment. The proposed project will be supported by water withdrawals from Salmo Lake. The water pump has an intake of 2 -inches with a maximum output of 425 gallons per minute. Water withdrawn will be used for plugging the well. NordAq Energy, Inc. 2 Issued: February 8, 2017 FH 17-V-0099 Expires: April 30, 2018 Anadromous Fish Act Salmo Creek and Salmo Lake have been specified as being important for the migration, spawning and rearing of anadromous fish pursuant to AS 16.05.871 (a). Salmo Creek and Salmo Lake provide spawning and migration habitat for coho salmon and other species of resident fish. In accordance with AS 16.05.871(d), project approval is hereby given subject to the project description above and the following stipulations: I The Division of Habitat shall be contacted at (907) 714-2475 three days prior to project initiation. 2. The water intake structure shall be designed to prevent intake, impingement, or entrapment of fish. Preferred methods of water intake include well points, sumps, or infiltration galleries. As an alternative, the water intake structure must be enclosed and centered within a screened box with a maximum screen -mesh size of 1/8 inch. To reduce fish impingement at the screen/water interface, water velocity may not exceed 0.5 feet per second when the pump is operating. Intake screens shall be inspected for damage (torn screen, crushed screen, screen separated from intake ends, etc.) before and after each use. Any damage observed must be repaired prior to use of the structure. The structure must always conform to the original design specifications while in use. 4. Waterbodies shall not be altered to facilitate water appropriation or disturbed in any way to facilitate crossings. The Division of Habitat, or the applicable land manager, shall be notified within three working days of any disturbances. Corrective action may be stipulated as applicable and necessary. Stream crossings shall be made from bank to bank in a direction substantially perpendicular to the direction of stream flow. Stream crossings shall be made only at locations with gradually sloping banks. There shall be no crossings at locations with sheer or cut banks. 6. All snow ramps shall be constructed in such a manner and monitored so as to not impede or divert stream flow during winter and spring break-up. 7. No vehicles leaking fuels, oils, hydraulic, or cooling fluids shall be operated below the ordinary high water line of Salmo Creek or Salmo Lake. You are responsible for the actions of contractors, agents, or other persons who perform work to accomplish the approved project. For any activity that significantly deviates from the approved plan, you shall notify the Division of Habitat and obtain written approval in the form of a permit amendment before beginning the activity. Any action that increases the project's overall scope or that negates, alters, or minimizes the intent or effectiveness of any stipulation contained in this permit will be deemed a significant deviation from the approved plan. The final determination as NordAq Energy, Inc. FH 17-V-0099 Issued: February 8, 2017 Expires: April 30, 2018 to the significance of any deviation and the need for a permit amendment is the responsibility of the Division of Habitat. Therefore, it is recommended you consult the Division of Habitat immediately when a deviation from the approved plan is being considered. For the purpose of inspecting or monitoring compliance with any condition of this permit, you shall give an authorized representative of the state free and unobstructed access, at safe and reasonable times, to the project site. You shall furnish whatever assistance and information as the authorized representative reasonably requires for monitoring and inspection purposes. This letter constitutes a permit issued under the authority of AS 16.05.871 and must be retained on site during project activities. Please be advised that this determination applies only to activities regulated by the Division of Habitat; other agencies also may have jurisdiction under their respective authorities. This determination does not relieve you of your responsibility to secure other state, federal, or local permits. You are still required to comply with all other applicable laws. In addition to the penalties provided by law, this permit may be terminated or revoked for failure to comply with its provisions or failure to comply with applicable statutes and regulations. The department reserves the right to require mitigation measures to correct disruption to fish and game created by the project and which was a direct result of the failure to comply with this permit or any applicable law. You shall indemnify, save harmless, and defend the department, its agents, and its employees from any and all claims, actions, or liabilities for injuries or damages sustained by any person or property arising directly or indirectly from permitted activities or your performance under this permit. However, this provision has no effect if, and only if, the sole proximate cause of the injury is the department's negligence. This permit decision may be appealed in accordance with the provisions of AS 44.62.330-630. Any questions or concerns about this permit may be emailed to lucas.b k}�er@alaska.goy or call (907) 714-2478. Sincerely, Sam Cotten, Commissioner qn�L r By: Ginny Litchfield Kenai Peninsula Area Manager ADF&G, Division of Habitat Enclosures: Figure 1 cc: KRC File NordAq Energy, Inc. 4 Issued: February 8, 2017 FH 17-V-0099 Expires: April 30, 2018 By email only: AWT Soldotna ADF&G Soldotna Figure 1. Vehicle access details COE — KFO Vehicle Name NL Number Of Units Total Round Gross Vehicle Weight Description Ground Pressure Per Trips Inch, Fully Loaded (lbs) Bobcat T250 1 1 9.400 Used on pad to move around 4,0 psi heavy items. Bombardier GT- 20 i 1.000 Used for pre -packing trail transporting malenallwai�r, 3,33 psi, loaded at pulling lighter loads with sleds, 10,000 lbs and grading trail. Bombardier Used to carry two 250 -gallon DOT approved TransCube 2,73 psi, loaded at Muskeg Track Rig 1 40 8,000 double wall tanks for daily 8M0 lbs (500 gallons fueling. of diesel is 3.575 lbs) Excavator 1 1 30.000 Used digging out the cellar in the 42 psi well- Foremost Chieftain C 1 10 29.000 Used to pull large loads. 3.8 psi, loaded at 30,000 lbs Longtrack 2 75 500 Used for pre -packing trail with Snowmachine repeated trips, 1,44 psi Staging Tracked Used for transporting equipment; 2.1 psi loaded at Sleigh 20 30,000 pulled by Chieftain or Bombardier 30,000 lbs (no rating GT -1000. Provided for lighter I loads, all loads will be NordAq Energy, Inc. FH 17-V-0099 Figure 1. Continued Issued: February 8, 2017 Expires: April 30, 2018 much folder than the rated load) Self-propelled and tracked; used Track Crane 1 1 42,000 to hold up wireline sheave at the 3.5 psi work pad and various unloading_ Used for pre -packing trail and the Tucker Personnel Carrier 1 &0 '13,500 two times per day for daily mobilization and demobilization 1.67 psi, loaded at from site. Also acts as 2.400 lbs emergency shelter and escape. Tucker Trail i F40 t 0,200 Used for pre -packing and 1.41 psi, loaded at Groomer maintaining trail_ 1.500 lbs Cardno® Shaping the Future Alaska Department of Natural Resources Division of Mining, Land, and Water Land Use Permit THE STAT G °fALAS Department of Natural Resources GOV,ERNOit Bii-I, WALKER Division of Mining Land & Water Southcentral Region Land Office LAND USE PERMIT AS 38.05.850 550 West 7th Ave Anchorage, Alaska 99501 Main: (907) 269-8503 Fax: (907) 269-8913 PERMIT # LAS 27501 Nordaq Energy Inc, herein known as the Permittee, is issued this permit authorizing the use of state land within: Legal Description: Sections 10 & 11, Township 008 North, Range 010 West, Seward Meridian This permit is issued for the purpose of authorizing the following: • Ice road construction (Attachment A) and movement of heavy equipment consisting of (1) Crane, (1) Formost Chieftan C, Tucker Personal Carrier, Bombardier GT 1000, Tucker Trail Groomer, Bombardier Muskeg Track Rig, and (1) staging sled across State lands for the purpose of supporting exploratory drilling for natural gas. This permit is effective beginning February 1, 2017 and ending April 30, 2019 unless sooner terminated at the state's discretion. This permit does not convey an interest in state land and as such is revocable, with or without cause. The department will give 30 days' notice before revoking a permit at will. A revocation for cause is effective immediately. No preference right for use or conveyance of the land is granted or implied by this authorization. All activities shall be conducted in accordance with the following stipulations: 1. Authorized Officer: The Authorized Officer (AO) for the Department of Natural Resources is the Regional Manager or designee. The AO may be contacted at the address and phone number on the front of the authorization. The AO reserves the right to modify these stipulations or use additional stipulations as deemed necessary. The permittee will be advised before any such modifications or additions are finalized. 2. Seasonal Use Dates: Expiration and effective dates of use authorized by a permit shall not extend beyond the seasonal use necessary to support the activity. Land Use Permit LAS 27501 3. Posting Placard: The posting notice included with this permit shall be placed on-site in a conspicuous location visible from the most common access route or vantage point. 4. Change of Address: The permittee shall maintain current contact information with the Division of Mining, Land and Water. Any change of address must be submitted in writing to the AO. S. Amendments: To conduct activities other than that in the approved plan of operations or development plan, the permittee must have prior authorization from the A0. A map of the new location or an amended plan of operations or development plan is required and a $100 amendment fee, per 11 AAC05.010(a)(5)(B). 6. Permit Extensions/Renewal: Any request for permit extension or renewal should be submitted at least 90 days prior to the end of the authorized term. A written statement requesting a 1 -year extension confirming there will be no changes to the development/operations plan, including photographs clearly depicting the current condition of the site and any improvements must be submitted to the AO including a non-refundable $100 filing fee. A new Land Use Permit application and $100 non-refundable filing fee is required for renewals of up to 5 years or for modifications to the approved development/operations plan on file with DMLW. 7. Assignment: This permit may not be transferred or assigned. 8. Revocable at Will: This permit does not convey an interest in state land and as such is revocable, with or without cause. The department will give 30 days' notice before revoking a permit at will. A revocation for cause is effective immediately. 9. Preference Right: No preference right for use or conveyance of the land is granted or implied by this authorization. 10. Destruction of Markers: All survey monuments, witness corners, reference monuments, mining claim posts, bearing trees, and unsurveyed lease corner posts shall be protected against damage, destruction, or obliteration. The permittee shall notify the AO of any damaged, destroyed, or obliterated markers and shall reestablish the markers at the permittee's expense in accordance with accepted survey practices of the Division of Mining, Land and Water. Page 2 of 14 LAS 27501 11. Alaska Historic Preservation Act: The Alaska Historic Preservation Act (AS 41.35.200) prohibits the appropriation, excavation, removal, injury, or destruction of any state-owned historic, prehistoric (paleontological) or archaeological site without a permit from the commissioner. Should any sites be discovered during the course of field operations, activities that may damage the site will cease and the Office of History and Archaeology in the Division of Parks and Outdoor Recreation (907) 269-8721 shall be notified immediately. 12. Public Trust Doctrine: The Public Trust Doctrine guarantees public access to, and the public right to use, all navigable and public waters and the land beneath them for navigation, commerce, fishing, and other purposes. Permittee may not preclude or restrict public access on and through the permitted area. This authorization is issued subject to the principles of the Public Trust Doctrine regarding navigable or public waters. The Division of Mining, Land and Water reserves the right to grant other interests consistent with the Public Trust Doctrine. 13. Public Access: The Permittee shall not close landing areas or trails. The ability of all users to use or access state land or public water must not be restricted in any manner. Neither the construction of this project nor the use of the proposed facility shall interfere with free public use of public roads, trails, waters or public access easements in the area of their activities. 14. Reservation of Rights: The Division reserves the right to grant additional authorizations to third parties for compatible uses on or adjacent to the land under this authorization. Authorized concurrent users of state land, their agents, employees, contractors, subcontractors, and licensees, shall not interfere with the operation or maintenance activities of each user. 15. Valid Existing Rights: This authorization is subject to all valid existing rights in and to the land. The State of Alaska makes no representations or warranties whatsoever, either expressed or implied, as to the existence, number, or nature of such valid existing rights. 16. Inspections: Authorized representatives of the State of Alaska shall have reasonable access to the subject parcel for purposes of inspection and may inspect the permitted area at any time without notice. The permittee may be charged fees under 11 AAC 05.010(a)(7)(M) for routine inspections of the subject parcel, inspections concerning non-compliance, and a final close-out inspection. Page 3 of 14 LAS 27501 17. Other Authorizations: The issuance of this authorization does not alleviate the necessity of the permittee to obtain authorizations required by other agencies for this activity. 18. Compliance with Governmental Requirements; Recovery of Costs: Permittee shall, at its expense, comply with all applicable laws, regulations, rules and orders, and the requirements and stipulations included in this authorization. Permittee shall ensure compliance by its employees, agents, contractors, subcontractors, licensees, or invitees. 19. Registration of Commercial "Day Use" Activities: Prior to beginning seasonal operations each calendar year covered under this permit, Permittee shall register commercial recreation "day use" activities in accordance with 11 AAC 96.018. Registration may be completed on line at www.dnr.state.ak.us/commrec or at one of the DNR public information offices. For more information call 269-8400 or email dnr.pic@alaska.gov. 20. Violations: This authorization is revocable immediately upon violation of any of its terms, conditions, stipulations, nonpayment of fees, or upon failure to comply with any other applicable laws, statutes and regulations (federal and state). Should any unlawful discharge, leakage, spillage, emission, or pollution of any type occur due to permittee's, or its employees', agents', contractors', subcontractors', licensees', or invitees' act or omission, permittee, at its expense shall be obligated to clean the area to the reasonable satisfaction of the State of Alaska. A permittee who is charged and convicted of any violation of state hunting, trapping or fishing laws and regulations may be subject to revocation of this permit. 21. Directives: Directives may be issued for corrective actions that are required to correct a deviation from design criteria, project specifications, stipulations, state statutes, or state regulations. Work at the area subject to the Directive may continue while implementing the corrective action. Corrective action may include halting or avoiding specific conduct, implementing alternative measures, repairing any damage to state resources that may have resulted from the conduct, or other action as determined by DNR. 22. Use Fees: The permittee shall pay to the Division an annual use fee of $250.00. The use fee is due on or before the annual anniversary of the effective date of this permit without the necessity of any billing by the Division. The annual land use fee is subject to adjustments in the fee schedule as set forth in 11 AAC 05.010. 23. Visitor Day Use Fees: This permit will be subject to a $2.00/day "Visitor Day" fee for each client present at any time during a calendar day authorized under this permit. Visitor Day fees are due within the thirty -day period following the end of the last authorized term of use in Page 4 of 14 LAS 27501 each calendar year covered under the permit. Definition of Visitor Day (11 AAC 96.250(18)): "Visitor Day" means all or any part of a calendar day which a commercial recreation client is present, with each client representing a separate visitor day if multiple clients are present at any time during a calendar day. 24. Failure to Pay: Failure to pay either the annual permit fee and/or Visitor Day fees when due is a default of the terms and condition of this permit. Failure to pay fees subjects this permit to termination. 25. Late Payment Penalty Charges: The permittee shall pay a fee for any late payment. The amount is the greater of either the fee specified in 11 AAC 05.010 or interest at the rate set by AS 45.45.010(a) and will be assessed on a past -due account until payment is received by the state. 26. Returned Check Penalty: A returned check fee as provided in 11 AAC 05.010 will be assessed for any check on which the bank refuses payment. Late payment penalties shall continue to accumulate. 27. Indemnification: Permittee assumes all responsibility, risk and liability for its activities and those of its employees, agents, contractors, subcontractors, licensees, or invitees, directly or indirectly related to this permit, including environmental and hazardous substance risk and liability, whether accruing during or after the term of this permit. Permittee shall defend, indemnify, and hold harmless the State of Alaska, its agents and employees, from and against any and all suits, claims, actions, losses, costs, penalties, and damages of whatever kind or nature, including all attorney's fees and litigation costs, arising out of, in connection with, or incident to any act or omission by Permittee, its employees, agents, contractors, subcontractors, licensees, or invitees, unless the proximate cause of the injury or damage is the sole negligence or willful misconduct of the State or a person acting on the State's behalf. Within 15 days, Permittee shall accept any such cause, action or proceeding upon tender by the State. This indemnification shall survive the termination of the permit. 28. Insurance: Pursuant to 11 AAC 96.065 the permittee shall secure or purchase at its own expense, and maintain in force at all times during the term of this permit, the following policies of insurance to protect both the permittee and the permittor (the State, its officers, agents and employees). If the permittee's policy contains higher limits, the State shall be entitled to coverage to the extent of such higher limits. Certificates of Insurance must be furnished to the AO prior to the issuance of this permit and must provide for a notice of cancellation, non -renewal, or material change of conditions in accordance with policy Page 5 of 14 LAS 27501 provisions. The permittee must provide for a 60 -day prior notice to the State before they cancel, not renew or make material changes to conditions to the policy. Failure to furnish satisfactory evidence of insurance, or lapse of the policy, are material breaches of this permit and shall be grounds, at the option of the State, for termination of the permit. All insurance policies shall comply with, and be issued by, insurers licensed to transact the business of insurance under Alaska Statute, Title 21. The policy shall be written on an "occurrence" form and shall not be written as a "claims -made" form unless specifically reviewed and agreed to by the Division of Risk Management, Department of Administration. The State must be named as an additional named insured on the policy with respect to the operations of the permittee on or in conjunction with the permitted premises, referred to as LAS 30120.Commercial General Liability Insurance: Such policy shall have minimum coverage limits of $300,000.00 combined single limit per occurrence. 29. Performance Guaranty: Pursuant to 11 AAC 96.060, the Permittee shall provide a surety bond or other form of security acceptable to the Division in the amount of $1,000.00 payable to the State of Alaska. Such performance guaranty shall remain in effect for the term of this authorization and shall secure performance of Permittee's obligations hereunder. The amount of the performance guaranty may be adjusted by the AO in the event of approved amendments to this authorization, changes in the development plan, or any change in the activities or operations conducted on the premises. The guaranty may be utilized by the DMLW to cover actual costs incurred by the State of Alaska to pay for any necessary corrective actions in the event the Permittee does not comply with the site utilization, restoration requirements and other stipulations contained in this permit agreement. If the Permittee fails to perform the obligations under this permit within a reasonable timeframe, the State may perform the Permittee's obligations at the Permittee's expense. The Permittee agrees to pay within 20 days following demand, all costs and expenses incurred by the State of Alaska as a result of the failure of the Permittee to comply with the terms and conditions of this permit. Failure to do so may result in the termination of an authorization and/or forfeiture of the performance guaranty. The provisions of this permit shall not prejudice the State's right to obtain a remedy under any law or regulation. If the Regional Manager determines that Permittee has satisfied the terms and conditions of this authorization, the performance guaranty will be subject to release. The performance guaranty may only be released in writing by the AO. 30. Site Improvements: The State assumes no responsibility for maintenance of improvements constructed on state land nor liability for injuries or damages attributable to that construction. Page 6 of 14 LAS 27501 31. Notification of Discharge: The lessee or permittee shall immediately notify Alaska Department of Environmental Conservation by telephone, and immediately afterwards send Alaska Department of Environmental Conservation a written notice by facsimile, hand delivery, or first class mail, informing Alaska Department of Environmental Conservation of: any unauthorized discharges of oil to water, any discharge of hazardous substances other than oil; and any discharge or cumulative discharge of oil greater than 55 gallons solely to land and outside an impermeable containment area. If a discharge, including a cumulative discharge, of oil is greater than 10 gallons but less than 55 gallons, or a discharge of oil greater than 55 gallons is made to an impermeable secondary containment area, the lessee or permittee shall report the discharge within 48 hours, and immediately afterwards send Alaska Department of Environmental Conservation a written notice by facsimile, hand delivery, or first class mail. Any discharge of oil, including a cumulative discharge, solely to land greater than one gallon up to 10 gallons must be reported in writing on a monthly basis. The posting of information requirements of 18 AAC75.305 shall be met. The provisions of 18 AAC 75.310 (Scope and Duration of Initial Response Actions) and other reporting requirements of 18 AAC 75.300 - 18 AAC 75.396 also apply. The lessee or permittee shall supply Alaska Department of Environmental Conservation with all follow-up incident reports. Notification of a discharge must be made to the nearest Alaska Department of Environmental Conservation Area Response Team during working hours: Anchorage (907) 269-3063, fax (907) 269-7648; Fairbanks (907) 451-2121, fax (907) 451-2362; Juneau (907) 465-5340, fax (907) 465-2237. The Alaska Department of Environmental Conservation oil spill report number outside normal business hours is (800) 478-9300. The lessee or permittee shall supply Alaska Department of Environmental Conservation with all follow-up incident reports. Notification of a discharge must be made to the nearest Alaska Department of Environmental Conservation Area Response Team during working hours: Anchorage (907) 269-3063, fax (907) 269-7648; Fairbanks (907) 451-2121, fax (907) 451-2362; Juneau (907) 465-5340, fax (907) 465-2237. The Alaska Department of Environmental Conservation oil spill report number outside normal business hours is (800) 478-9300. All fires and explosions must also be reported. The DNR 24-hour report number is (907) 451-2678; the fax number is (907) 451- 2751. DNR or the appropriate land manager and Alaska Department of Environmental Conservation shall be supplied with all follow-up incident reports. 32. Fuel and Hazardous Substances: The storage of petroleum products below Ordinary High Water (OHW) or Mean High Water Mark (MHWM) is prohibited. The use of hazardous substances by Permittee must be done in accordance with existing federal, state and local laws, regulations and ordinances. Hazardous substances must be removed from the site and managed in accordance with state and federal law. Debris (such as soil) contaminated with used motor oil, solvents, or other chemicals may be classified as a hazardous substance and Page 7 of 14 LAS 27501 must be recovered from the site and managed and disposed of in accordance with state and federal law. 33. Fuel and Hazardous Substance Storage: A. The use and/or storage of hazardous substances by the permittee must be done in accordance with existing federal, state and local laws, regulations and ordinances. Debris (such as soil) contaminated with used motor oil, solvents, or other chemicals may be classified as a hazardous substance and must be removed and disposed of in accordance with existing federal, state and local laws, regulations and ordinances. B. Storing containers within 100 feet of waterbodies. Containers with a total capacity larger than 55 gallons which contain fuel or hazardous substances shall not be stored within 100 feet of a waterbody. C. Exceptions. The AO may under unique or special circumstances grant exceptions to this stipulation on a case-by-case basis. Requests for exceptions should be made to the AO. D. Definitions. "Containers" means any item which is used to hold fuel or hazardous substances. This includes tanks, drums, double -walled tanks, portable testing facilities, fuel tanks on small equipment such as light plants and generators, flow test holding tanks, slop oil tanks, bladders, and bags. Manifolded tanks or any tanks in a series must be considered as single independent containers. Vehicles, including mobile seismic tanks, are not intended to be included under this definition. "Hazardous substances" are defined under AS 46.03.826(5) as (a) an element or compound which, when it enters the atmosphere, water, or land, presents an imminent and substantial danger to the public health or welfare, including fish, animals, or vegetation; (b) oil; or (c) a substance defined as a hazardous substance under 42 U.S.C. 9601(14). "Secondary containment" means an impermeable diked area or portable impermeable containment structure capable of containing 110 percent of the volume of the largest independent container. Double -walled tanks do not qualify as secondary containment unless an exception is granted for a particular tank. All piping and manifolds shall be within secondary containment. "Surface liner" means any safe, non -permeable container (e.g., drips pans, fold -a -tanks, etc.) designed to catch and hold fluids for the purpose of preventing spills. Surface liners should be of adequate size and volume based on worst-case spill risk. Page 8 of 14 LAS 27501 Fuel storage containers, including flow test holding tanks and hazardous substances, with a total combined capacity larger than 55 gallons shall not be placed within 100 feet (500 feet in the Bering Straits CRSA) from the ordinary high water mark of waterbodies. Fuel containers which exceed a total combined capacity of 110 gallons must be stored within an impermeable diked area or portable impermeable containment structure capable of containing 110 percent (115 Percent in the Aleutians West CRSA) capacity of the largest independent container (plus 12 inches of freeboard in the Kenai Peninsula Coastal District and Aleutians West CRSA). All containers must be clearly marked with the contents and the permittee's name. Drip pans and materials, such as sorbent pads, must be on hand to contain and clean up spills from any transfer or handling of fuel. All fuel storage containers and associated materials must be removed by the permit expiration date. Secondary containment shall be provided for fuel or hazardous substances. E. All independent fuel and hazardous substance containers shall be marked with the contents and the permittee's name using paint or a permanent label. 34. Fuel and Hazardous Substances: Vehicle refueling shall not occur within the annual floodplain or below OHW/MHWM. This restriction does not apply to water -borne vessels provided no more than 30 gallons of fuel are transferred at any given time. 35. Wastewater Disposal: All greywater and human waste must be disposed of in a pit, or containment which can easily be transported and disposed of at a Alaska Department of Environmental Conservation approved disposal site. If a pit is used, it must be located at least 100 feet from the ordinary high water mark or any water body, limed and back-filled on or before permit expiration. 36. Solid Waste: All solid waste and debris generated from the activities conducted under this authorization shall be removed to a facility approved by the Alaska Department of Environmental Conservation prior to the expiration, completion, or termination of the authorization or activities. All solid waste and debris shall be removed after cessation of each site visit. Paper products may be burned on site provided that measures (e.g. burn barrels, clearing of burn area to mineral soil) are taken to prevent wildfires. 37. Site Conditions: The site shall be kept in a orderly, clean and safe condition, free of any solid waste, debris or litter acceptable to the AO. All solid waste debris and any hazardous wastes that are used and stored on the site shall be removed and backhauled to an Alaska Department of Environmental Conservation approved solid waste facility. Page 9 of 14 LAS 27501 38. Site Disturbance: A. Site disturbance shall be kept to a minimum to protect local habitats. All activities at the site shall be conducted in a manner that will minimize the disturbance of soil and vegetation and changes in the character of natural drainage systems. Additionally, any ground disturbances which may have occurred shall be contoured to blend with the natural topography to protect human and wildlife health and safety. Particular attentions must be paid to prevent pollution and siltation of streams, lakes, ponds, waterholes seeps and marshes, and disturbances to fish and wildlife populations and habitats. B. Brush clearing is allowed, but should be kept to the minimum necessary. Removal or destruction of the vegetative mat is not authorized under this permit. C. Establishment of or improvements to landing areas (i.e. leveling the ground or removing or modifying a substantial amount of vegetation) is prohibited. 39. Restoration of Site: A. Restoration of Vegetative Mat. The permittee shall immediately restore areas where soil has been disturbed, or the vegetative mat has been damaged or destroyed. Restoration shall be accomplished in accordance with the directives of the Department of Natural Resources Plant Materials Center, Bodenburg Road, HC 02, Box 7440, Palmer, AK 99645, (907) 745-4469. B. On or before the termination of seasonal use, all holes shall be backfilled with sand, gravel native materials, or a substitute approved by the AO. 40. Site Restoration Plan: A Restoration Plan must be approved by the AO at least 30 days prior to expiration, completion, or termination of this authorization, whichever is sooner. 41. Annual Report: An annual report shall be submitted within 30 days after the seasonally authorized term of use or the annual anniversary date of the authorization, whichever is applicable. The report shall include: A. a series of before, during and after use aerial view of ground level photographs confirming compliance with site development and restoration guidelines, and B. a written report disclosing: the date the temporary facility was established; the date the temporary facility was dismantled and removed or cached; the approximate number of clients accommodated at the site; the average number of days a client was served; the restoration of damaged vegetation or disturbed soil; and the dates of any hydrocarbon or hazardous substance spills; and, the dates such spills were reported to DNR and Alaska Department of Environmental Conservation. Page 10 of 14 LAS 27501 42. Completion Report: Pursuant to 11 AAC 96.070, a completion report shall be submitted prior to relinquishment, or within 30 days after expiration or termination of the authorization. The report shall include: A. series of before, during and after use aerial view of ground level photographs confirming compliance with site development and restoration guidelines, and B. a written report disclosing: the date the temporary facility was established; the date the temporary facility was dismantled and removed or cached; the approximate number of clients accommodated at the site; the average number of days a client was served; the restoration of damaged vegetation or disturbed soil; and the dates of any hydrocarbon or hazardous substance spills; and, the dates such spills were reported to DNR and Alaska Department of Environmental Conservation, C. Failure to submit a satisfactory report subjects the site to a field inspection requirement for which the permittee may be assessed, at the AO's discretion, either the actual cost incurred by the Division of Mining, Land and Water or a minimum of $100.00. (11 AAC 05.010). 43. Improvements: Any improvements/structures that may be authorized under this permit must be constructed in a manner that will allow for removal from the permitted site within 48 hours of receiving a notice to vacate. The establishment of permanent foundations and structures is prohibited under this permit. 44. Authorized Use of Improvements: Any use of these improvements for purposes other than those explicitly authorized by this permit are prohibited. 45. Food Storage: Prior to removal, all garbage and debris will be stored so it does not attract wildlife. Food and refuse will be stored in bear -proof containers. Sites will be kept clean. 46. Storage of Equipment: A. Tent and weather port frames must be disassembled while not in use. B. Small miscellaneous camp gear, if authorized, must be stored in durable containers. Camp gear used in the preparation of food must be stored in bear resistant containers (i.e. lock top barrels). C. Disassembled ten/weather port frames, platforms, and other approved items must be consolidated in one area, stored in a manner requiring minimal space, and securely covered. The material used to cover the items should visually blend in with the natural surroundings. 47. Siting: Improvements must be sited in a manner which impacts the least amount of ground consistent with the purpose of the facility, and shall be consolidated on no more than one Page 11 of 14 LAS 27501 acre of land unless additional acreage has been explicitly approved in writing. All structures (e.g., tent frames, caches, outhouses) will be sited to minimize evidence of human use and will be located with a vegetated (if naturally occurring) minimum setback of 100 feet (200 feet is recommended) landward of ordinary high water mark. Temporary camps will not be sited within one-half mile of important shore recreational fishing sites, high use public camping sites, or on identified traditional public access trails as identified in DNR area plans or during review. 48. Timber Use: The permittee may use dead and down timber, but shall not cut standing timber on the premises unless specifically allowed by the AO, in consultation with the Division of Forestry. 49. Short Term Portable Camps: The permittee is authorized to use short-term (portable) camps in conjunction with: A. Big game hunting on state land located in up to three Guide Use Areas authorized annually through the Division of Occupational Licensing, and B. Other commercial recreation activities (other than big game guiding) on state land located in areas (i.e. guide use areas, game management units, river drainages, lakes, etc.) registered on the Division of Mining, Land and Water registration site: www.state.ak.us/mlw/commrec. Quantity. This permit authorizes the simultaneous use a combined total of two (2) short term (portable) camps by the permittee and one additional short term (portable) camps for each assistant guide employed by the permittee at any point in time during the term of this permit. Duration and Relocation. Siting. Short-term (portable) camps must be sited in a manner that impacts the least amount of ground necessary. Site Disturbance. Site disturbance shall be kept to a minimum to protect local habitats. All activities shall be conducted in a manner that will minimize the disturbance of the soil and vegetation and changes in the character of natural drainage systems. Particular attention must be paid to prevent pollution and siltation of streams, lakes, ponds, seeps and marshes, and to disturbances to fish and wildlife populations and habitats. Solid Waste. Prior to removal, all garbage and debris will be stored so it does not attract wildlife. All solid/hazardous waste and foreign debris must be eliminated by removal to a Alaska Department of Environmental Conservation approved site. Sites will be kept clean. Greywater and Human Waste Disposal. Page 12 of 14 LAS 27501 Fuel Storage. The total combined fuel stored at a short-term (portable) campsite shall not exceed 50 gallons. All containers must be clearly marked with the contents and the grantee's name. The grantee is responsible for preventing spillage and contamination of contiguous land and water as well as cleaning up any oil or other pollutants that result from authorized activities. Drip pans and absorbent pads must be available to contain and clean up spills from any transfer or handling of fuel. Removal of Property. All short-term (portable) camp structures, personal property (Le. camp gear, fuel storage containers), hazardous substances, and solid waste must be removed from State-owned land on or before the expiration of the permit. 50. Fire Prevention, Protection, and Liability: The State of Alaska is not liable for damage to the permittee's personal property and is not responsible for forest fire protection of the permittee's activity. The permittee shall take all reasonable precautions to prevent and suppress forest, brush, and grass fires and shall assume full liability for any damages to state land resulting from the negligent use of fire. Page 13 of 14 LAS 27501 The Authorized Officer reserves the right to modify these stipulations or use additional stipulations as deemed necessary. The permittee will be advised before any such modifications or additions are finalized. DNR has the authority to implement and enforce these conditions under AS 38.05.850. Any correspondence on this permit may be directed to the Department of Natural Resources, Division of Mining, Land and Water, Southcentral Region Land Office, 550 West 7th Ave, Anchorage, AK 99501, (907) 269-8503. I have read and understand all of the foregoing and attached stipulations. By signing this permit, I agree to conduct the authorized activity in accordance with the terms and conditions .nr,na wIC V I -CI nn LICC ut AUMUnfeU mepreSentauve ime UaLe � � :, r .7 P/r`�mitt e's Address City State Zip( �` e t �_JP /M /♦/I � ♦s / Contac] son Home Phone Work Phone ign re of Authorized State Representative Title D e Page 14 of 14 G' Cardno® Shaping the Future Alaska Department of Natural Resources Division of Mining, Land, and Water Temporary Water Use Authorization ALASKA DEPARTMENT OF NATURAL RESOURCES Division of Mining, Land, and Water Water Resources Section 550 West 71 Avenue, Suite 1020, Anchorage, AK 99501-3562 TEMPORARY WATER USE AUTHORIZATION TWUA A2017-12 Pursuant to AS 46.15, as amended and the rules and regulations promulgated thereunder, permission is hereby granted to NordAq Energy Incorporated (authorization holder), 560 E 341' St, Suite 200, Anchorage, AK 99503, and its contractors, to withdraw up to 15,000 gallons of water per day (subject to a combined seasonal maximum of 405,000 gallons of water) from February 15 through April 4 from the below described source of water. Water will be used for winter trail construction and plug and abandonment work during the Shadura #1 Plug & Abandonment Project on the Kenai Peninsula. SOURCE OF WATER: Salmo Lake in Sections 2 and 11 of Township 8 North, Range 10 West, Seward Meridian. STRUCTURES TO BE CONSTRUCTED AND USED: Screened water intake structure, water truck or tanker, pump, ice auger, pipe and/or hose, and other water removal, distribution and discharge equipment. Changes in the natural state of water are to be made as stated herein and for the purposes indicated. The authorization holder shall comply with the following conditions: CONDITIONS: 1. This authorization does not authorize the authorization holder to enter upon any lands until proper rights-of-way, easements or permission documents from the appropriate landowner have been obtained. 2. Follow acceptable engineering standards in exercising the privilege granted herein. 3. Comply with all applicable laws, and any rules and/or regulations issued thereunder. 4. Except for claims or losses arising from negligence of the State, defend and indemnify the State, the State's agents and the State's employees against and hold each of them harmless from any and all claims, demands, suits, loss, liability and expense, including attorney fees, for injury to or death of persons and damages to or loss of property arising out of or connected with the exercise of the privileges covered by this authorization. 5. Notify the Water Resources Section upon change of address. 6. The authorization holder is responsible for obtaining and complying with other permits/approvals (state, federal or local) that may be required prior to beginning activities pursuant to this authorization including, but not limited to, fish habitat permits from the Alaska Department of Fish and Game (ADF&G), Habitat Division and any adjacent landowner or agency. 7. The authorization holder shall allow an authorized representative of the Water Resources Section to inspect at reasonable times any facilities, equipment, practices or operators regulated or required under this authorization. 8. Failure to respond to a request for additional information during the term of the authorization may result in the termination of this authorization. This authorization, or a copy thereof, shall be kept at the site of the authorized project described herein. The authorization holder is responsible for the actions of contractors, agents or other persons who perform work to accomplish the approved project, and shall ensure that workers are familiar with the requirements and conditions of this authorization. For any activity that significantly deviates from the approved project during its siting, construction or operation, the authorization holder is required to contact the Water Resources Section and obtain approval before beginning the activity. 10. The Water Resources Section may modify this authorization to include different limitations, expand monitoring requirements, evaluate impacts or require restoration at the site. 11. Any false statements or representations in any application, record, report, plan or other document filed or required to be maintained under this authorization may result in the termination of this authorization. 12. Pursuant to 11 AAC 93.220(f), this authorization may be suspended or terminated by the Department of Natural Resources to protect the water rights of other persons or the public interest. 13. Monitor water withdrawals and/or diversions for each day of actual use for each authorized water source. When withdrawals and/or diversions for each authorized water source reach 90% of the authorized limit for that water source, submit this information to this office prior to the initiation of any further withdrawals and/or diversions of the respective water source. 14. Water pumping operations shall not cause or contribute to the spread of preexisting or authorization holder caused contaminate plumes. Operations shall be conducted in such a way as to prevent any petroleum products or other hazardous substances from contaminating surface or ground water. Pumps and equipment will not be fueled or serviced within 100 feet of a pond, lake, stream or river unless they are situated within a catch basin designed to contain any spills. Vehicles will not be fueled or serviced within 100 feet of a pond, lake, stream or river. In case of accidental spills, absorbent pads shall be readily available at the water collection point. All spills must be reported to the Alaska Department of Environmental Conservation and the Alaska Department of Natural Resources (ADNR). Authorization holder shall cooperate with lawful prohibitions, restrictions, instructions or work plan requirements issued by ADEC Contaminated Sites/Response for authorization holder's projects. 15. There shall be no wheeled, tracked, excavating, other machinery or equipment (with the exception of the non -motorized screened intake and ice auger) operated in open water below ordinary high water line. lb. All equipment used at or adjacent to water bodies must be clean and free from contamination and invasive species (terrestrial and aquatic) at all times to prevent the introduction of contamination and invasive species to the water body. 17. Any suction hose used should be in water of sufficient depth so that sediments are not disturbed during any water extraction process. Temporary Water Use Authorization TWUA A2017-12 Page 2 of 4 18. Water bodies shall not be altered to facilitate water withdrawal or disturbed in any way. If banks, shores or beds are inadvertently disturbed, excavated, compacted or filled by activities attributable to this project, they shall be immediately stabilized to prevent erosion and resultant sedimentation of water body which could occur both during and after operations. The Water Resources Section is to be notified immediately if the above occurs. Additional corrective action may be required by ADNR. 19. Issuance of this authorization does not give the authorization holder the right to block or dam a water course. 20. Any water intake structure in fish bearing waters, including a screened enclosure, well -point, sump, or infiltration gallery, must be designed, operated, and maintained to prevent fish entrapment, entrainment, or injury at the maximum diversion rate, unless specifically exempted by the Alaska Department of Fish and Game, Habitat Division. 21. Adequate flow and water levels, as determined by ADF&G Habitat Division, must remain to support indigenous aquatic life and provide for the efficient passage and movement of fish. 22. The authorization holder shall inspect the intake screen for damage (torn screen, crushed screen, screen separated from intake ends, etc.) after each use and prior to each deployment. Any damage observed must be repaired prior to use of the structure. The structure must always conform to the original design specifications while in use. 23. Water discharge (including runoff shall not be discharged at a rate or location resulting in sedimentation, erosion or other disruptions to the bed or banks of water bodies, causing water quality degradation. 24. Deviations from the project description submitted with the application which affect water amounts, operation or point of discharge must be approved by ADNR in writing prior to implementation. 25. Record and report to this office all complaints relating to groundwater and surface discharge, including requests for information on water data from local residents, should the situation occur 26. The placement of water pumping equipment shall not unnecessarily hinder public access. 27. Per 11 AAC 05.010 (a) (8) (M), an annual administrative service fee shall be assessed on this authorization. Temporary Water Use Authorization TWUA A2017-12 Page 3 of 4 This Temporary Water Use Authorization is issued pursuant to 11 AAC 93.220. No water right or priority is established by a temporary water use authorization issued pursuant to 11 AAC 93.220. Water so used is subject to appropriation by others (11 AAC 93.210 (b)). Pursuant to 11 AAC 93.210 (b), authorized temporary water use is subject to amendment, modification or revocation by the Department of Natural Resources if the Department of Natural Resources determines that amendment, modification or revocation is necessary to supply water to lawful appropriators of record or to protect the public interest. This authorization shall expire on April 4, 2018. Date issued: i -A7 1 10 r7 Approved: Manager, South Central Region, Water Resources Section ADNR/DMLW Temporary Water Use Authorization TWUA A2017-12 Page 4 of 4 Shaping the Future Alaska Department of Natural Resources Division of Parks and Outdoor Recreation Park Use Permit Division of Parks and Outdoor Recreation Alaska Department of Natural Resources Park Use Permit PERMIT #: 17 -KA -2640/11808 Name of Permittee: Robert Warthen Business Name (if applicable): Nordaq Energy, Inc Address: 560 East 34th St., Suite 200 City/State/Zip Code: Anchorage, AK 99503 Location of Authorized Activity: T8N, R10W, SEC 2 S.M. KN SW1/4 OF SEC 2 & SE 1/4 OF SEC 2. Captain Cook State Recreation Area This permit authorizes Nordaq Energy to access Captain State Park to plug and abandon its Shadura #1 well site within the Kenai National Wildlife Refuge. The access would originate at the terminus of the existing Kenai Spur Highway. This will include approximately 1800 feet of State Park Land. A list of equipment is on file with State Parks. 1. Any damage that may occur to state land will be the responsibility of the applicant to restore the area to its original state. Restoration may include planting of seedlings and planting trees up to 8 feet in height. All revegetation must first be approved by state park staff. 2. The permittee shall remove all surveying, staking material and any litter caused by their activities. 3. The ability of all users to use or access park land must not be restricted in any manner. A report will be sent to Alaska State Parks at pamela.russell@alaska.gov upon completion of the project. For any changes to the permit please contact Pam Russell at 907-714-2471. Please review the following special stipulation. The permittee is solely responsible for obtaining all necessary local, state and federal permits before beginning Issue Date: 02N3/17 Expiration Date: 04/30/18 The per mitee agrees to abide by a terms and conditions of this permit, including any attached stipulati' S, and II o me hi er activities to those described herein. Permit required by 11 AAC 8.01Q� Permit ee signature Lis cial Tide �T Date Date Special Stipulations 1. NordAq is responsible for the actions of contractors, agents, or other persons who perform work to accomplish the approved project. For any activity that significantly deviates from the approved plan, you shall notify Alaska State Parks' and obtain written approval before the activity begins. 2. Spill Notification. The lessee or permittee shall immediately notify DEC by telephone, and immediately afterwards send DEC a written notice by facsimile, hand delivery, or first class mail, informing DEC of: any unauthorized discharges of oil to water, any discharge of hazardous substances other than oil; and any discharge or cumulative discharge of oil greater than 55 gallons solely to land and outside an impermeable containment area. If a discharge, including a cumulative discharge, of oil is greater than 10 gallons but less than 55 gallons, or a discharge of oil greater than 55 gallons is made to an impermeable secondary containment area, the lessee or permittee shall report the discharge within 48 hours, and immediately afterwards send DEC a written notice by facsimile, hand delivery, or first class mail. Any discharge of oil, including a cumulative discharge, solely to land greater than one gallon up to 10 gallons must be reported in writing on a monthly basis. The posting of information requirements of 18 AAC75.305 shall be met. The provisions of 18 AAC 75.310 (Scope and Duration of Initial Response Actions) and other reporting requirements of 18 AAC 75.300 — 18 AAC 75.396 also apply. The permittee shall supply DEC with all follow-up incident reports. Notification of a discharge must be made to the nearest DEC Area Response Team during working hours: Anchorage (907) 269- 7500, fax (907) 269-7648; Fairbanks (907) 451-2121, fax (907) 451-2362; Juneau (907) 465-5340, fax (907) 465-2237. The DEC oil spill report number outside normal business hours is (800) 478- 9300. All foes and explosions must also be reported. The DNR 24 hour report number is (907) 714-2471 or 907-262-5581 ext. 0; DNR or the appropriate land manager and DEC shall be supplied with all follow-up incident reports. 3. Operation of Vehicles. Vehicles shall be operated without disturbing the vegetative mat and underlying substrate. The permittee must obtain a permit from DPOR for any off road vehicular travel. 4. "No vehicles or equipment shall be operated in the Captain Cook State Park recreation Area unless there is a minimum of 12 inches of snow cover and sufficient ground frost to prevent penetration of, or disturbance to, the soil surface or plant roots" 5. Cutting of vegetation is not allowed on State Park Land. 6. The DPOR shall be notified at the Gilman River Center at 907-714-2471 at least 3 days prior to project startup. 7. Public Access. The permittee shall not close landing areas or trails or otherwise prevent overland access used by the public. The ability of all users to use or access park land or park water must not be restricted in any manner. GENERAL STIPULATIONS 1. NON -ASSIGNMENT. This permit may not be assigned without the written approval and acceptance of the assignee by the director or his/her designee. Further, the licensee shall not sublet or enter into any third party agreements involving the privileges authorized by this permit. 2. STATE HELD HARMLESS. The permittee agrees to indemnify, defend and hold harmless the State of Alaska from any and all liability claims arising from the actions of the permittee or his/her agents, employees or clients while conducting activities under this permit on state park lands or waters. 3. FORFEITURE. The permittee shall forfeit the permit if he/she defaults in the performance or observance of any of the permit terms, covenants, stipulations, or of a statute or regulation. 4. LITTER REMOVAL. The permittee shall remove all litter caused by their activities and shall make a reasonable effort to pick up and remove from the park litter which they find in the vicinity of their activities within the park. 5. PROTECTION OF PARK LAND OR PROPERTY FROM DAMAGE. The permittee shall exercise diligence in protecting from damage the land, property and resources of the Division of Parks and Outdoor Recreation in the area covered by and used in connection with this permit and shall pay the division for any damage resulting from negligence or from the violation of the terms of this permit or any law or regulation applicable to the use of state parks by the permittee or by his/her agents and employees when acting within the scope of their employment. 6. GEOGRAPHIC LIMITATION. This permit is applicable only for the use areas described. 7. NO PREFERENTIAL RIGHT OF RENEWAL. No rights of renewal or preferential rights for renewal are attached to this permit. 8. CANCELLATION BY THE STATE. It is understood and agreed that this permit may be revoked at any time at the discretion of the director or his/her designee without compensation to the permittee or liability to the state. 9. DISTURBANCE OF PARK RESOURCES. All activities shall be conducted in a manner that will avoid or minimize disturbance of park resources including natural drainage systems. 10. ACTIVITY AREA. All activity areas and campsites shall be kept clean and maintained in an orderly manner. 11. NATURAL HAZARDS. The permittee recognizes and understands that natural hazards are likely to exist within the area of his/her operation. The permittee agrees to take all reasonable precautions to make himself/herself aware of these hazards and to avoid injury to persons or property. 12. AESTHETICS. The permittee shall protect the scenic aesthetic values of the area under this permit, and the adjacent land, as far as possible while conducting activities authorized under this permit. 13. STATE INSPECTION OF PERMIT AREA. The state reserves the right to inspect areas of activity under this permit. It is understood, however, that the state will only inspect the site during normal periods of activity by the permittee or at other times that are convenient to the permittee unless in an emergency situation. 14. STRUCTURES. Permanent structures are prohibited from being placed by the permittee on state park lands or waters, unless otherwise authorized by permit. 15. PERSONAL PROPERTY. If personal property is authorized to be placed or located on park lands or waters under the provisions of this permit, the personal property shall be removed prior to the expiration of the permit or it will be impounded by the state. 16. VALID CLAIMS. This permit is subject to all valid claims and applicable laws and regulations. 17. FIRES. The permittee and his/her agents/employees agree to take all reasonable precautions to prevent, suppress and report promptly all fires on or endangering state park lands. No material shall be disposed of by burning during a closed season established by law or regulation without a written permit from the state forester. 18. PUBLIC ACCESS. The permittee, employees, agents or clients shall not interfere with free public use of roads and trails in the area or their activities except as may be authorized by special stipulation of this permit. 19. OTHER AUTHORIZATIONS: The issuance of this authorization does not alleviate the necessity ofthe permittee to obtain authorizations required by other agencies for this activity. .: Cardno® Shaping the Future Alaska Oil and Gas Conservation Commission Sundry Approval THE STATE Alaska Oil and Gas of ALASKA Conservation Commission GOVERNOR BILL WALKER Robert Warthen Senior Advisor Nordaq Energy, Inc. 560 E 34`h Street Anchorage, AK 99503 Re: Exploratory Field, Exploratory Pool, Shadura 1 Permit to Drill Number: 211-014 Sundry Number: 317-027 Dear Mr. Warthen: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279, 1433 Fax: 907.276.7542 www.00gcc.olasko.gov 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 AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration. A request for reconsideration 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. S� DATED this ! day of February, 2017. Sincerely, -0 Daniel T. Seamount, Jr. Commissioner STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION APPLICATION FOR SUNDRY APPROVALS 20 AAC 25280 AECEIVED JAN 2 0 2017 1. Type of Request: Abandon Q Plug Perforations ❑ Fracture Stimulate ❑ Repair Well ❑ Operations shutdown ❑ Suspend ❑ Perforate ❑ Other Stimulate ❑ Pull Tubing ❑ Change Approved Program ❑ Plug for Redrill ❑ Perforate New Pool ❑ Re-enter Susp Well ❑ Alter Casing ❑ Other: ❑ 2. Operator Name: 4. Current Well Class: 5. Permit to Drill Number. Nordag Energy, Inc. Exploratory ❑ Development ❑ Stratigraphic ❑ Service ❑ 211 014 3. Address: 6. API Number. 560 E. 34th St Anchorage, AK 99503 50-133205930000 7. If perforating: 8. Well Name and Number. What Regulation or Conservation Order governs well spacing in this pool? na Shadura #1 (14-23) WIII planned perforations require a spacing exception? Yes ❑ No ❑ 9. Property Designation (Lease Number): 10. Field/Pool(s): CIRI C061647,48,49 Kenai Peninsula Exploration 11. PRESENT WELL CONDITION SUMMARY X Plug set in Nipple at 9954' MD. Total Depth MD (it): Total Depth TVD (ft): Effective Depth MD: Effective Depth TVD: MPSP (psi): Plugs (MD): Junk (MD): 14624 14,361 9954 9,718 0 9954 14481 Casing Length Size MD TVD Burst Collapse Structural 100 1 100 100 na na Conductor 0 0 0 0 0 Surface 3227 10.75 3227 3182 3563 m£t Intermediate 10233 7.625 10233 10001 6890 4790 Production 9990 4.5 9990 9752 8430 7500 Liner 14614 4.5 14614 14361 8430 7500 Perforation Depth MD (h): Perforation Depth TVD (ft): Tubing Size: Tubing Grade: Tubing MD (ft): 10240 9996 na na na Packers and SSSV Type: Packers and SSSV MD (ft) and TVD (ft): na na 12. Attachments: Proposal Summary V Wellbore schematic F7i 13. Well Class after proposed work: Detailed Operations Program ❑ BOP Sketch Exploratory ❑ Stratigraphic Development n service ❑ 14. Estimated Date for 15. Well Status after proposed work: Commencing Operations: OIL ❑ WINJ [] WDSPL ❑ Suspended ❑ GAS ❑ WAG ❑ GSTOR L1SPLUG ❑ 16. Verbal Approval: Date: Commission Representative: GINJ [] Op Shutdown ElAbandoned 17 17. 1 hereby certify that the foregoing is true and the procedure approved herein will not be deviated from without prior written approval. Contact Stephen Henrigan ph 337 849-5345 Email §Leve "nc,Com Printed Name Title Rob rf C. W hen Senior Advisor, NordAq Energy, LLC r Phone Date(337) Signawvj5x� 849-5345 12/11/14 COMMISSION USE ONLY Conditions of approval: Notify Commission so that a representative may w1ness Sundry Number. 0 —T Plug Integrity [ BOP Test ❑ Mechanical Integrity Test ❑ Location Clearance 'S Z4I�• Other kud, "7 �ti =� us to 41.�r0. Post India+ Injection MIT Req'd? Yes ❑ No ❑ Spacing Exception Required? Yes ❑ No Subsequent Form Requ;re& /0–'/07 APPROVED BY Approved by,4:J54�� COMMISSIONER THE COMMISSION Date: +' VSubmit Forth acid Form 10.403 Revised 11/2015 U Ljpp+d scat' i v 'Afor 12 months from the date of approval. Attachments in Duplicate January 5, 2017 Ms. Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7t" Avenue, Suite 100 Anchorage, AK 99501 RE: Request for Sundry Approval to Plug and Abandon NordAq Energy, LLC SHADURA #1 (14-23) SEc 23 8N 10w SM KENAI PENNISULA BOROUGH (PTD No. 211-014) Dear Ms. Foerster, JAN 2 0 2017 AOGCC NordAq Energy, LLC hereby applies for Sundry documentation to plug and abandon the above referenced well. The Shadura was drilled in 2011 as an exploration well on the Kenai Wildlife Refuge to evaluate the Beluga and Tyonek sands. Due to ice road melt, the well was suspended until winter of 2012 where the well was tested under Sundry 312-001. Subsequently, the well was secured waiting on an EIS for further development in the area. After EIS approval, the project was terminated. Hence, the need for P&A approval. Dailly drilling and testing summaries are provided for AOGCC perusal. If you have any questions or require additional information, please contact me at (337) 849-5345 or Robert Warthen, President of NordAq Energy, LLC @ (907) 646-9315. Sinc,,ei obert C. Warthen NordAq Senior Advisor Enclosures Cc: Robert Warthen — NordAq Energy, LLC Current WBS for P&A NordAq Energy, Inc 0 Shadura # 7 Block/Sec 23 sN 11 W Wildcat Q Kenai Peninsula 0 Alaska Ser #,: 211 014 Sundry #312-001 x.l ?7.h 9.8 8S'Ixn.._.••••..i•l ROP/Cms log Cond/D ivu to TD. LOT#1 tlg,tl.ppg emw 4,8 4,47 16.1 Lw.) 181' Test surface lines to 50015000 psi Pump 25 bbis spa followed by 1295 sacks Type l Cement + 0.05% bw StaticFree + 0.6%bwoc CD -32 + 1 gals/100 sack FP -6L + 15% bwoc LW -5E, 1,00# Carton + 20T'a bwoc MPA -1 + 83.8% Fresh Water mired 0 12.0 ppg, yid 2.30 Dsp w/ mud, 30 bbis cmt rtns to surface Mud I,oggmg: Msnnud: 2 sx retry NY. 100'(o Ti) �awiXl Holt Logs Jan/}eh 2012 nipuk/tiueic/(i:unnm R-Y&TI. ((722 12) CNL (0172118(i12) RMT / CCL Ipma ars)(01agno12) Tieback! 41 " )) BOT 5-1/2" 17# x 7-5/8 " 29.7 - 39# 12.6# L80 TC tl 80 KSI Hyd Flex Lock Liner hanger w/ ZXP LT Packer It collar 10150' ITOL 99901 MD, 9752 -TVD sg shoe 102 3'MD 9.5` rrrarker jt 13069' - 9.6 16:5 ;.war 102 ' Stephen F. (Steve) Hannigan wtr. Dpth X-56 Welded Drive Sz» 16 iTd" SS 0.049 wall chem in I,ne Mandrel ID 3.930" EXPRO 02-14-2011 K55 BTC 13 1/2" 10 314' :)T #2 ® 3497' MD 12.4 ppg emw iiaruro Ito)P+�' Ar 8 a KCL TOC siSW'Md CBL EXPRO 02.24-2011 X Plug nipple 0 9971'MD ID 3.810" Seal Assembly Size 192-47 3 88" 2 29.7# L80 BTC 97/8" tSG� ump 30' cmt TOC 10189' 7 5/8" 20 ( � �� P 10220' (02/2512012) Proposed WBS for P&A Stephen F. (Steve) Hannigan NordAq Energy, inc 0 Shadura # 1 Block/Sec 23 BN 11 W Wildcat 0 a S Kenai Peninsula 0 r p� Alaska 1 Ser A 211 014 Sundry #312-001 _ MN �rA kt- E veriwcets' t+tii. « fie: x � � b`3+4t=i:oric� xtnrtlt� iflt cw tt�a�:,rs ��*+i SDW,lest Rkh-MSL 119' Air Gap .. Wtr. Dpth r li 4 86 9.8 85' —TOT t SAX -56 Welded Drive sz» 16 ROPfGas t 'vc to TD. Cut off all casings 5.5.5' BGL "rye Tag previous cement plug. Take pictures of all. WELDED PLATE r5' BCL ............................................... ............ ...................... I ..... --------- ' ! ! Set TTBP x70' below equivalent driver If cement is not visible, lag cement, then mix and dump cement until mhn:1' of top ! Pert right above TTBP. Take pictures. 1/4° SS 0.049 wall chem inj line ! M&P balanced tint plug to bring cmt to :5'BGL in & OUl Weld plate across all casing tops. Mandrel ID 3.930° Wal on cement Wth welding tools enscnbe on the plate per the following ! l Install per 20 AAC 25.120, well abandonment marker ! A ! ! ,�� (c)(3) CA ) CBL EXPRO 02-14.2011 -- ! LOT#1 i emw I I . ' 0,0 16.1 LwD l '45.5#K55 BTC t3 1/2" 181' 10 3/J Test surface lines to 500/5000 psi Pump 25 bbls sp ! intro casing annulus*. RU on surface casing x ra followed by 1295<sacks .Type I Cement + 0.05% bwoat ! ( Test to lonapsi. StaticFree + 0.6% bwoc CD -32 + 1 gals/100 sack FP -6L ! 1 If no lest, purrgt:050' of ant Repeat until test s obtained. + 15%bwoc LW -5E, 100# Carton + 20% bwoc MPA -1 + ! ! Tag previous plug. 83.8% Fresh Water mixed 0 12.0 ppg, yid 2.30 Disp ! Set TTBP ®:100' below equivalent surf csg depth (33271. w/ mud, 30'Bbls Slurry to Surface 0 end of Displacement ! r Pert right aboveTTBP. M&P 200' balanced cement plug (200' m, 200' out). LOT #2 @ 3497' MO 12A ppg emw I wain on collum, Tv,t a)1001) psi. Mott Logging Manncd• 2 sx ewry 30' 1 M to Tri Cakvl Hole fmJas h 2012 ' ppg KCl, lupi/—dGa R2yJCCL(02N2I20 121 I I CNL (012x12012; 1 I RKPICCUlim,uR 1uv0(oir-vrom Tieback' ! :TOC 265ee'md !EXPRO 02-24-2011 j) BOT 5-1/2" 176 x 7-5/8 "' 29.7 - 39# 12.6# L80 TC 11 60 KSI Hyd Flex Lock Liner hanger w/ ! of ! Ped casing/tuting:9970'. ZXP LT Packer M&P 200' balanced cement plug (200'm . 20d out!, 71 ruflur /0150' O 9990- MD, 975ZTVDWa on cement. Test to 1000 psi Z sg shoe 10233'MD x nipple 0 99 1' 0" ,—T f9.5'rnurkerjr8069' Tcsrcdw3000psi �ndmimued022Ntote ` ! X Plug Seal Assembly Size 192-47 3,88" ?. 9.5 165 LwD 1 29.7#L80 BTC 9 718" 99 0' (� 20 ump 30' tint TOC 10189' 75/6 !2wt v �nr�n' rn9M49M?I To: TBD DATE: DECEMBER 11,2014 Au Aw.wi iN Omrnr'i i) NORDAQ ENERGY I FROM: STEVE HENNIGAN SUBJECT: SHADURA #1 (14-23) NOMAQ ENGINEER P&A Procedure PE wou'UM ExamiRS, /Nc. Objective: P&A existing T&A'd wellbore Comments: Directional hole Sec 23 8n 10w An ice road and pad were built in late 2010 and early 2011. Glacier Rig 1 was moved in. The well was drilled and cased. Rig was moved out and well test equipment moved in. Subsequently 2 lower "marginal" zones were perforated for attempted well tests. The tests were unsuccessful. Note: Because of ice melt concerns, the schedule for well testing was rushed. A third zone was perforated and the pert tool was lost. Several days were spent in fishing with subsequent recovery. Ice melt required demobe of all equipment. Some issues with traces of sand, eroded perf tool, tight spot @+-10000', etc. could potentially exist. In February of 2012 several zones were tested. Following each test, BP's were set within t50' of each zone and at least 30' of cement placed on top. Services: Well was secured per Sundry 312-001 on 02 26&27 2012. See WBD for details Reference Log: Baker Hughes Memory Loa Composite Final Wire line Unit TBD Slick Line TBD Mast TBD Eline tools TBD Wellhead/Tres GE-Vetco Transportation TBD Misc rentals (including pressure pumps, tanks, etc.) TBD Housing Uptown Motel (Kenai), Hunger Hut (Nikiski) Supervision TBD NOTE: All vendors are to have a current MSA in place. Last operational note related to existing perfs 02/27/2012: Ty Knutson w/ Vetco Installed NordAq's back pressure valve NOTES from Final Report to AOGCC 23 Feb 24 -Feb 25 -Feb 26 -Feb Swab well until no progress - Fluid Level @ 2030' & well making 6.99 Bbls/hr (454') - decide to open well & attempt to flow - RIH & dumped liquid soap across perfs @ 10,240' to 10,252' - POOH & RD - Swabbed 44 Bbls Open Well & Monitor same - Shut/in @ 03:00 & Monitor Press/Temp Monitor Shut/in well Press built to 20 Psi - Catch Gas Sample w/ IISCO - Open & R/u Pollard Slickline - +/- 2 gal fluid/gas/air Swab well to NO GO Point @ +/- 1850' - RD Slickline - RU E -Line & PJSM Re: Explosives - RIH w/ 18' x 3 3/8" 6 HPF Gun & Perf from 10,258' to 10,240' POOH - Fluid Level @ 940' - RD E -Line & RU Slickline w/ Soap Bailer@ 06:00 Well was left open until CIBP was set - Fluid to surface @ 16:30 - Flowed a total of 2 bbl before stopping. Tagged 1st cmt plug @ 11,347' - Dumped 15' of cmt, making top of cmt @ 11,332' - Set Halliburton EZ -Drill CIBP @ 10,220' @ 03:00 - Dumping 30' of cmt on top of bridge plug Mix &RIH w/ 2 Bailers of 10 gal Each f/ 30' of Cmt on T/BP @ 10,220' - RD E -Line - RIH w/ 4 1/2" Brush or, Slickiine to 10,001' to clear ID of X nipplo @ 9954' Tbg Meas - Ri w/ 3.7 Blind Box & Tag T/cmt @ 10,189' - RIH w/ BX Plug & set/in profile @ 9954' Tbg Meas /9971' WLM - Witnessed by AOGCC - RIH & set prong in same - POOH into lubricator & close swab Viv & Test Tbg to 3000 Psi f/ 3 Min & charted ok - w/ Jeff Jones of AOGCC _ Began De-mobe 27 Feb Vetco set NorclAq's BPV in tree - Rigged do equipt & hauled to staging area - All of PTS testing equipt has been hauled to staging area. 2 Pre service work Procedure: 1. Review with all vendors and be sure logistics are predetermined. 2. Be sure permits are applied for and in place. 3. Tree and wellhead were installed in 2011. Review details. 4. Remove fence. Reinstall valves, gauges, etc. 5. Review and record all pressures 6. Prep for cased hole work. General Procedure: Part I 1. Notify regulatory agencies at least 48 hours prior to operations. All operations will comply with AOGCC regulations. All access will comply with KNWR as possible. 2. Mobilize initial service equipment to location. 3. Mobe to location, conduct pre job safety meeting, perform JSA's, begin RU of equipment and establish RKB. Adiust all elevations to RKB indicated on wellbore diagrams unless noted otherwise in the daily reports. Note: KB on log is 211. 4. Check all tubing and casing strings for pressure and record. 5. Conduct safety and operations meeting.0 All pressure tests to be recorded on a chart. ((�''� Call AOGCC to witness if desired. E-• T ` f Part II 6. Remove BPV. a. Test tubingd bin, x 7 5/8" annuli to 1500 psi on a chart for 30 min. 7. Liner top area a. Tag x plug @ ±9971' b. Dump bail 30' cement on top of plug. c. Wait on cement. Test to 1500 psi for 30 min on a chart. 8. Equivalent surface casing shoe depth. o� 04 [a. RU on surface casing x intm casing annulus and attempt to establish injection*. b. If injection is established, set TTBP @ ±3327'. c. RIH w/ heavy guns and attempt to perforate 4 '/2" and 7 5/8" @ ±3327' (depth estimated on research and correspondence with Mr. Steve Davies in Oct/Nov 2014 - ±3275'TVD) with xxspf from ±3327'-3317'. d. Attempt to establish circulation. A A e. Mix and pump a 250' balanced plug into open hole annulus and the 7 5/8" x 4 %" annulus K N. e, 4* - Z f. WOC. Test to 1000 psi on a chart fbpW min. J + -f-v t- 4,.- 6,,,3 / IA CoA 3 3347 -r<a �-o�� s� 1104.— g. If injection cannot be established in 8a h. Tag previous plug. i. Set TTBP @ ±100' below equivalent surface casing depth (±3327'). j. Use a tubing punch perf right above TTBP. Mix and pump 200' balanced cement plug (200' in casing/tubing, 200' in tubing x casing annulus). j A r1-01 . k. Wait on cement. Test to 1000 psi for 30 min on a chart. *If there is a valve on the conductor (drive p n perform the same operation as in 8a, but test only to 50 psi -if no test, pump ±s 150Lcement and repeat until a test is obtained. 9. Surface plug 0 cc_ a. Tag previous cement plug. b. Set TTBP ±70' below equivalent drive pipe (conductor) depth. (±I55'BGL) c. Punch holes in tubing right above TTBP. C q,� r 7 k d. Mix and pump balanced cement plug to bring cement to f5'BGL in tubing and tubing x �,, se e ` �,_� °' casing annulus. 4v e. Wait on cement. 10. Cut casings a. Check casing annuli again for pressure. Lubricate full with water. b. Cut off all casings 5-5.5' BGL. c. Take pictures of all. - ,?Aoh.o A, : — A-� d. If cement is not visible, tag cement, then mix and dump cement until within ±1' of top of cut casings. e. Takeip ctures. f. Weld plate across all casing tops. g. With welding tools enscribe on the plate per the following h. 20 AAC 25.120. Well abandonment marker The exact surface location of an abandoned onshore well must be shown by a well abandonment marker plate that (1) is constructed of steel that is at least 1/4 inch thick; (2) is welded to, and covers, the outermost casing string, including the conductor casing; (3) does not extend beyond the outermost casing string; and (4) contains the following information bead -welded directly to the marker plate: (A) The name of the operator that plugged and abandoned the well; (B) the number assigned by the commission to the Permit to Drill (Form 10-401) for the well under 20 AAC 25.040(b); (C) the name designated for the well by the operator under 20 AAC 25.005(f); (D) the API number for the well, with any suffix appended to the number under 20 AAC 25.005(f). Part III 11. Fill and restore a. Pull tinhorn (cellar). b. Backfill c. Restore to original conditions or those approved by the AOGCC and surface land owner. d. Take pictures. ,/ 12. Demobe 13. Clean and secure location access. Pre service work Procedure: 1. Review with all vendors and be sure logistics are predetermined. 2. Be sure permits are applied for and in place. 3. Tree and wellhead were installed in 2011. Review details. 4. Remove fence. Reinstall valves, gauges, etc. 5. Review and record all pressures 6. Prep for caseole work. General Procedure: Part I 1. Notify regulatory agencies at le t48 hours prior to operations. I operations will comply with AOGCC regulations. All access ill comply with KNWR as ssible. 2. Mobilize initial service equipment location. 3. Mobe to location, conduct pre job sa y meeting, perfo JSA's, begin RU of equipment and establish RKB. Adiust all elevations t RKB indic d on wellbore diagrams unless noted otherwise in the dail-Y reports. 4. Check all tubing and casing strings for pres re d record. 5. Conduct safety and operations meeting. All pressure tests to be recorded on a chart. Call AOGCC to witness if desired. Part !I 6. Remove BPV. 7. Liner top a. Tag x plug @ ±9971' b. Perf casing/tubing 970'. c. Mix and pump 2 ' balanced cement plug (200' in to `ng, 200' in tubing x casing annulus). d. Wait on cem t. Test to 1000 psi. 8. Equivalent surface asing shoe depth. a. RU on s ace casing x intro casing annulus*. b. Test to 000 psi. C . If tes oes not hold, pump ±150' of cement. Repeat until test is obtained. d. Ta revious plug. e. S TTBP @ ±100' below equivalent surface casing depth (3327'). f. Perf right above TTBP. Mix and pump 200' balanced cement plug (200' in casing/tubing, 200' in tubing x casing annulus). g. Wait on cement. Test to 1000 psi. 3 'rIf there is a valve on the conductor (drive pipe) perform the same operation but test only to 50 psi —if no test, pump ±150' cement and repeat until a test is obtained. 9. Surface plug a. Tag previous cement plug. b. Set TTBP ±70' below equivalent drive pipe (conductor) depth. (±155') c. Perf right above TTBP. d. Mi and pump balanced cement plug to bring cement to t51BGL in tubing and tubing x casir?t� annulus. z e. Wait o cement. 10. Cut casings a. Cut off all c ings 5-5.5' BGL. b. Take pictures all. c. If cement is not 'sit cut casings. d. Take pictures. e. Weld plate across all f. With welding tools e g. 20 AAC 25.124. We tag cement, then mix tops. on th abandoned onshore well m t be constructed of steel that is at t outermost casing string, incl g outermost casing string; an (4) to the marker plate: (A) a nam (B) the number assigne by the co well under 20 AAC 2".040(b); (C) 20 AAC 25.005(f); ) the API nu number under 20 AC 25.005(f). Part III 11. Fill and restore a. Pull tinho (cellar). b. Backfill c. Restore original conditions or those d. Take pictures. 12. Demobe 13. Clean and ecurc coca cement until within ±1' of top of ete per the following Mt marker The exact surface location of an own by a well abandonment marker plate that (1) is 1/4 inch thick; (2) is welded to, and covers, the the conductor casing; (3) does not extend beyond the ontains the following information bead -welded directly of the operator that plugged and abandoned the well; ission to the Permit to Drill (Form 10-401) for the t name designated for the well by the operator under mb for the well, with any suffix appended to the 4 the AOGCC and surface land owner. G' f Cardno® Shaping the Future Kenai Peninsula Borough River Center Habitat Protection District Permit Kenai Peninsula Borough MR CENTER, 514 Funny River Road • Soldotna, AK 99669 • (907) 714-2460 • Fax: (907) 260-5992 Mike Navarre Borough Mayor KENAI PENINSULA BOROUGH — HABITAT PROTECTION DISTRICT PERMIT 2/10/2017 NordAq Energy, Inc. 560 East 34th St., Suite 200 Anchorage, AK 99503 Dear Applicant: RC Number: 11808 Issued: 2/7/2017 Expires: 6/30/2018 Pursuant to KPB 21.18, the Kenai Peninsula Borough (KPB) River Center has reviewed and approved your permit application. The project must be completed as described in the submitted application and subject to the terms and conditions stated below. The location of the work is as follows: Parcel ID: Multiple Legal Desc: Sec 11, T 8N, R IOW, S.M. Waterbody: Salmo Creek Applicant's Protect Description The applicant is proposing to plug and abandon its Shadura #1 well site within the Kenai National Wildlife Refuge. Access to the well site will be accomplished through construction of a packed snow trail. The snow trail will utilize a similar route used in 2011, with a minor adjustment on the entry and access to Salmo Lake. The access route to the well pad location will require crossing two streams and water usage from Salmo Lake. Should current weather and snow conditions prevail; no additional application of ice for buffering is anticipated to be applied to the stream crossings. Pre -packing as described in the application will drive the frost in the stream channel and freeze any free water to the bottom of the channel. In extreme cases where safe crossing cannot be conducted with snow and ice buildup, road mats will be placed and covered with snow. Applicant is proposing to begin by 2/13/17, and is requesting the permit be extended through 4/30/2018. Permitted Activity within the Habitat Protection District This project is within the 50 -foot habitat protection area and is allowable under KPB 21.18. In accordance with KPB 21.18, the following minimum requirements must be followed: 1. Minimize damage to vegetation within 50 -feet of all water crossing. 2. No storage or usage of fuel within 50 -feet of all water bodies. Conditions of the Permit If changes to the approved project described above are proposed prior to or during its siting, construction, or operation the permittee is required to notify the Kenai Peninsula Borough at the River Center to determine if additional approval will be required. The permittee shall minimize damage to all vegetation and shall revegetate any disturbed areas, from Ordinary High Water, landward to 50 -feet, resulting from the construction project. Revegetation shall be accomplished according to approved River Center methods. Construction techniques and best management practices shall be utilized to ensure that runoff is detained, diverted or filtered prior to reaching a water body. For the purpose of inspecting or monitoring compliance with any condition of this permit, you shall give authorized representatives of the Kenai Peninsula Borough free and unobstructed access, at safe and reasonable times, to the project site. You shall furnish whatever assistance and information as the authorized representative reasonably requires for monitoring and inspection purposes. The permittee is responsible for the actions of the contractors, agents, or other persons who perform work to accomplish the approved activity. For any activity that deviates from the approved plan, the permittee shall notify the Kenai River Center and obtain written approval before beginning the activity. The permittee is solely responsible for obtaining all necessary local, state, and federal permits before beginning work. Issuance of this specific permit does not constitute final approval. Trees or other vegetation used in restoration work shall not be obtained within 50 -feet of borough regulated anadromous water bodies. hi addition, the following conditions are necessary to ensure project consistency with the Kenai Coastal Management Program: o 2.2. Erosion. Developers shall retain existing vegetative cover in designated erosion -prone areas to the greatest extent practicable. In cases where development or other activities lead to removal of vegetation, erosion shall be prevented or, if it occurs, shall be remedied through revegetation (with native species if available) or by other suitable measures. Advisories 1. Minimize damage to vegetation within 50 -feet of all water crossing. 2. No storage or usage of fuel within 50 -feet of all water bodies. If you have any questions regarding this permit, you can contact me at 907-714-2463. Sincerely, Nancy Carver Resource Planner Donald E. Gilman River Center PLEASE DISPLAY THIS SIGN SO IT IS VISIBLE FROM THE RIVER. THIS SIGN SHOULD BE POSTED DURING ALL PHASES OF CONSTRUCTION. • 1 • RIVER CENTER PERMITTED PROJECT Applicant NordAq Energy, Inc. Legal Description : Sec 11, T 8N, R 10W, S.M. Authorized Work: Snow trail construction to have two stream crossings and water usage from Salmo Lake. Work proposed to begin 2/13/17. Requesting permit through 4/30/2018. Permits Issued: KPB Floodplain KPB Habitat Protection ANDR Park Use Permit ADFG Division of Habitat Expiration: Not Required 6/30/2018 4/30/2018 4/30/2018 Questions regarding this permit should be directed to the Gilman River Center, (907) 714-2460 Menai Peninsula Borolialr 10ER--CFN'1'EK, 514 Fun0y River Road • Soldotra. AK 99669 + (907) 714-2460 . Fax: (907) 260-5992 Nlike Navarre Borraigh AIayur Dear NordAq Energy, Inc.: PROJECT DESCRIPTION: Snow trail construction to have two stream crossings and water usage from Salmo Lake. Work proposed to begin 2/13/17. Requesting permit through 4/30/2018. Enclosed please find the individual permits from the following River Center Agencies: Expiration Agency ❑ 6/30/2018 Kenai Peninsula Borough, Habitat Protection ❑ Not Required Kenai Peninsula Borough, Floodplain Development ❑ 4/30/2018 State of Alaska, Division of Parks & Outdoor Recreation ❑ 4/30/2018 State of Alaska, Department of Fish & Game Habitat Division Each of these permits have expiration dates. Please review them carefully. If you are unable to complete your project by the expiration dates, you must apply for an extension to your permits. The permittee is responsible for the actions of the contractors, agents, or other persons who perform work to accomplish the approved plan. For any activity that deviates from the approved plan, the permittee shall notify the River Center and obtain written approval before beginning the activity. If you have any questions regarding your project please contact the River Center at (907) 714- 2460. Gy Cardno® Shaping the Future Kenai Peninsula Borough River Center Floodplain Development Permit (Not Required) Kenai Peninsula Borough RCENTER. 514 Funny River Road • Soldotna, AK 99669 • (907) 714-2460 • Fax: (907) 260-5992 Mike Navarre Borough Mayor FLOODPLAIN DEVELOPMENT PERMIT — NOT REQUIRED RC# 11808 2/16/2017 NordAq Energy, Inc. 560 East 34th St., Suite 200 Anchorage, AK 99503 Dear NordAq Energy, Inc.: Pursuant to KPB Chapter 21.06, the Kenai Peninsula Borough (KPB) Floodplain Administrator has reviewed your permit application and finds that your project is not currently within the borough's regulatory floodplain or your project activities do not currently require a floodplain permit. Other borough, state, and federal permits may still be required and must be secured before work can begin. The location of the work is as follows: Parcel ID: N/A Legal Description: Sec 11, T 8N, R IOW, S.M. Project Description Snow trail construction to cross Salmo Creek and water usage from Salmo Lake Advisories The borough regulates development in the floodplain throughout the Kenai Peninsula, with the exceptions of the cities of Homer and Seward, who manage their own floodplain programs, and the cities of Soldotna and Kenai, who do not participate in the National Flood Insurance Program (NFIP). The regulatory floodplain is determined by KPB 21.06.030 and does not include all areas of the peninsula that may be subject to flood hazard. This document does not imply the referenced project areas will or will not be free from flooding or damage, nor does it imply that the location of this project may not be within the regulatory floodplain in the future. This information does not create liability on the part of Kenai Peninsula Borough, or its officers or employees, for any damage that may result from reliance on this information. Please contact me with any questions at (907) 714-2464 or bharris@kpb.us. Sincerely, 161�D Bryr Harris Floodplain Administrator, CFM Donald E. Gilman River Center Cardno® Shaping the Future Kenai Peninsula Borough Road Service Area Encroachment Permit Road Service Area 47140 E. Poppy Lane • Soldotna, Alaska 99669 262-4427 office, 262-6090 fax www.borough.kena i, ak. usiroads ENCROACHMENT PERMIT *This permit is to be completed by the RSA Road Names: Kenai Spur Highway (end of North Road) Region/Unit NIA MIKE NAVARRE BOROUGH MAYOR Applicant Name: NordAa Energy. Inc. Contractor: same . Inspector Name: Chris Erb RSA Phone # 262-4427 NOTE: It is the applicant's responsibility to determine the need for, and acquire any other local, state, or federal permits and to ensure all construction activity complies with all federal, state, and local laws. The RSA director may revoke an encroachment permit or require removal of a permitted encroachment if at any time the encroachment impacts borough duties such as road construction, improvements or maintenance, or otherwise impairs or impedes public safety or access to the right-of-way. Removal of an encroachment due to revocation of an encroachment permit shall comply with the requirements of KPB 14.40.115(E). Issuance of an encroachment permit does not create a property right in the continuing RSA Special Provisions: $100 fee due upon issuance of permit. Applicant proposes to temporarily close and utilize a portion of the Kenai Spur Highway right of way as a temporary equipment staging area and employee parking (needed to conduct the work necessary to plug and abandon the Shadura #1 well located generally south east of the right-of-way). Temporary equipment staging and parking area shall be as described in the attached application. Approved: Denied: ❑ Revoked: ❑ Permit # 17 —OOL4 Permit Issue Date: 2.28.17 Permit Expires: 4.30.17 (may be extended by request) By RSA Director: c "— - -- Date: 2.28.17 Date approved by RSA Board (if required): NIA Regulation of Traffic Flow During Construction, Permit holder may regulate traffic by (signagel regulatory device/ barricade) during hours of: N/A from (date) to (date) KENAI PENINSULA BOROUGH j Road Service Area 47140 E. Poppy Lane • Soidotna, Alaska 99669 r Toll-free within the Borough: 1-800-478-4427 PHONE: (907) 262-4427 • FAX: (907) 262-6090 www.kpb.us ENCROACHMENT PERMIT APPLICATION KPB 14.40.115 ✓7 New Encroachment MExisting Encroachment (existing prior to October 27, 2015) Any proposed encroachment must adhere with KPB Code Section 14.40 and the following minimum standards: 1. The encroachment may not interfere with road maintenance. 2. The encroachment may not block access to normal travel along the right-of-way. 3. The encroachment may not interfere with sight lines or distance. 4. The encroachment may not create a safety hazard. 5. The encroachment may not be a permanent structure, meaning any structure of a permanent nature that requires footings, foundations or pilings. It is the applicant's responsibility to determine the need for any other local, state, or federal permits and acquire the same. Similarly, it is the applicant's responsibility to ensure all construction activity complies with all federal, state, and local laws. APPLICANT NAME NordAq Energy, Inc., Robert Warthen 560 East 34th St., Suite 200 APPLICANT MAILING ADDRESS CITY Anchorage STATE Alaska ZIP 99503 907-646-9315 TELEPHONE CELL FAX CONTRACTOR NAME Kenai Spur Highway (End ROAD NAME of North Road) SUBDIVISION EMAIL rWarthen@nordagenergy.com REGION/UNIT (Determined by RSA) APPROXIMATE START DATE 3/1/2017 APPROXIMATE COMPLETION DATE 4!30/2017 Page 1 of 3 Revised 9121!2016 Permit Agent: McLane Consulting, Inc. 907-283-4218 REQUIRED ATTACHN19NTS OTHER ATTACHMENTS (if applicable) 1-7 Attachment A n Engineering Design Preliminary Plat or Final Plat 00ther Government Agency Applications/ oMap or Drawing of Affected Area Permits nAs-Built Survey Where information provided by existing topographic maps, aerial photography, and photographs is inadequate to accurately reflect conditions of the right-of-way or potential problems created or exacerbated by the encroachment, additional information, surveys, or engineering analysis may be required prior to issuance of a permit. Road passage or alternate access must be maintained or provided to residents at all times. Incomplete permit forms will be returned to applicants. ..... .r ... ... . . r .e r ® .. .. . ... ....® ® .® ... By signing this application, I hereby acknowledge: 1. The permittee shall indemnify, defend, and hold and save the borough, its elected and appointed officers, agents and employees harmless from any and all claims, demands, suits, or liability of any nature, kind or character Including costs, expenses, and attorneys fees. The permittee shall be responsible under this clause for any and all legal actions or claims of any character arising from applicant or applicant's agents' performance or failure to perform this permit in any way whatsoever. This defense and indemnification responsibility includes claims alleging acts or omissions of the borough or its agents, which are said to have contributed to the losses, failure, violations, or damages; and 2. The RSA director may revoke an encroachment permit or require removal of a permitted encroachment if at any time the encroachment impacts borough duties such as road construction, improvements or maintenance, or otherwise impairs or impedes public safety or access to the right-of-way. Removal of an encroachment due to revocation of an encroachment permit shall comply with the requirements of KPB 14.40.115(E). issuance of an encroachment permit does not create a property right in the continuing encroachment; and 3. Any damages to a public right-of-way, dedication, easement or borough land which Is caused by an encroachment, authorized or unauthorized are subject to Immediate repair by the borough, at the owner's expense. The borough may require the owner to repair the damage within a timeframe specified by the RSA director If notice is given to the owner. The owner shall be subject to a fine as set forth in KPB 14.40.380 and liable for all costs incurred by the borough from the repair, including overhead costs. OTE: 40 •r ndah 'fee is required upon issuance of the permit. Sign ture of Applicant Date Revised 912112096 Page 2 of 3 RSA ENCROACHMENT DESCRIPTION ATTACHMENT A (PURSUANT TO KPB Chapter 14.40.115) PROJECT DESCRIPTION: Use extra pages or provide pertinent attachments as necessary. 1. Brief narrative describing proposed or existing encroachment: This application is for temporary closure and limited access of the Kenai Spur Highway (KSH) right-of-way from MP 39 (Captain Cook Recreational parking area) to the turnaround at the end of the "new road This portion of the KSH is utilized by recreational vehicles accessing Gray Cliff Subdivision and Moose Point. There are 2 large parking areas immediately before the proposed temporary closure and limited access area. NordAq Energy is required to plug and abandon the Shadura #1 well located generally south east of the right-of-way, in KNWR. The well closure will require a temporary equipment staging and contractor parking area. Project is anticipated to begin in February 15 and be completed March 31, 2017. 2. Proposed design and method of construction (if applicable): NordAq proposes to install a hi -visibility (orange construction) fence at the mid -point of the parking area to segregate construction parking from public users. The fence will have a drivable opening and clearly posted, "Temporary Road Closure, Through Traffic Only". A photo example of a fence installed previously at this location for similar purpose is attached. 3. Proposed usage: Temporary equipment staging & employee parking. 4. Identify all properties (other than KPB Right -of -Way) affected, served or accessed by the proposed construction by owner name and parcel number: Properties include Gray Cliff Subdivision, Revised 912112016 Page 3 of 3 I PROPOSED EQUIPMENT STAGING AREA EXISTING UR AROO UND 1 a SCALE I I --_.— wLE-----��---------------.---- SEC 3 T8N R10W t--'— — SEC — — — 2 TSN R1DW — — — — — — - SEC10T8NR10W /�r- SEC 11 TBN R10W U Z ¢ w 0- G � 20`13 ROAD EXTENSION /�-[ �, 40 � I< U 4 O CONTRACTOR PARKING AREA ADD'L STAGING \ ,' /•' I / / I \ PROPOSED HI-VISTSILITY TRAFFIC y CONTROL FENCE & SIGNAGE \ ./ I Mc \ \ Canwtbnq Inc CCSRA PARKING LOT mic" i�iaa�' «s PARKING LOT wcra / ADNR CAPTAIN COOK STATE RECREATION AREA / �, .q [�t.. � � 'F �* � � - ; � A w,_. r 7 . �, j - : � i � � � �j �s .....� f,' �_ .. � ; ,� , . . .. .., r i . ' .� � � � � .�f ! f�. � "� t G. t � ''<<' v •��y � i � a� ` � _ � ,��,. t 3� �.. may, i �� e � .. -. �� ,, �, ,� a n��,. "� R. f _ F �•'' , �, .q [�t.. � � 'F �* � � - ; � A w,_. r 7 . �, j - : � i � � � �j �s .....� f,' �_ .. � ; ,� , . . .. .., r i . ' .� � � � � .�f ! f�. � "� t G. t � ''<<' v •��y � i � a� ` � _ r Cardno® Shaping the Future Letters of Non -Objection CIRI Harvest Alaska LLC Tesoro Alaska Pipeline Company �CIRI February 7, 2017 Robert Warthen Nordaq Energy, Inc. 560 East 34th Street, Suite 200 Anchorage, AK 99503 Re: Letter of Non -Objection, plugging and abandoning Shadura #1 Dear Robert Warthen, On January 25, 2017 CIRI received notice from Nordaq Energy that it would be plugging and abandoning the Shadura #1 well located on CIRI lands. The well was drilled and previously covered under the terms of CIRI lease Nos. C061647, C061648, and C061649. CIRI does not object to the plugging and abandoning of the Shadura #1 well in accordance with any applicable State regulation requirements (20 AAC 25.112). 41 'Colleen Miller Manager, Resources P.O. Box 93330, Anchorage, AK 99509-3330 • P: 907-274-8638 • F: 907-279-8836 • www.ciri.com HARVEST ALASKA, LLC February 13, 2017 Robert Warthen Sr. Advisor NordAq Energy, Inc. 560 East 340' Street, Suite 200 Anchorage, AK 99503 RE: Letter of Non -Objection Tyonek Pipeline Allowing Transit of the Tyonke Pipeline Dear Mr. Warthen: 3800 Centerpoint Drive, Suite 1400 Anchorage, AK 99503 Phone: 907/777-8300 Fax: 907/777-8301 Harvest Alaska, Inc. (Harvest Alaska), the Owner of the Tyonek Pipeline, received your email request dated February 9, 2017 requesting a Letter of Non -Objection (LNO) for transit over the Tyonek Pipeline. Harvest Alaska has reviewed the equipment list provided and has no objection to this equipment crossing over the Tyonek Pipeline subject to the conditions below. If NordAq Energy intends to crossover the Tyonek Pipeline in any vehicle other than is contained in that February 91h equipment list, NordAq Energy must contact the Kenai Pipeline Superintendent for permission and such permission is also subject the following conditions. Approval is subject to the following conditions: 1. NordAq Energy has obtained all approvals and permits from federal, state and local government agencies, as appropriate, for its activities within the pipeline right-of-way. 2. No cost or liability will accrue to Harvest Alaska arising from or related to NordAq Energy's activities on the right-of-way. NordAq Energy hereby agrees to defend, hold harmless and indemnify Harvest Alaska, its members, officers, employees or agents ("Harvest Alaska Group") against any and all Claims caused by, resulting from or incidental to the activities, regardless of the basis of the Claim, including without limitation the active, passive, sole, joint, concurrent, contributory, comparative or gross negligence of any member of Harvest Alaska Group. "Claims" shall mean any and all losses, deaths, injuries, liabilities, spills, damages (including without limitation punitive or exemplary damages), natural resource damages, obligations, expenses, fines, penalties, costs, claims, causes of action and judgments, including all attorney's fees, court costs, and other costs and expenses arising from or associated with a Claim or Claims. 3. NordAq Energy's weight and load specifications will not exceed the specifications contained in their February 9"h email attached hereto. 4. Harvest Alaska has no obligation or responsibility to NordAq Energy other than permitting NordAq Energy access to the right-of-way to perform activities consistent with this LNO. 23 February 2017 Mr. Robert Warthen, President NordAq Energy, Inc. 3000 A Street, Suite 410 Anchorage, Alaska 99503 (907) 646 9315 rcw@nordagenerey.com Tesoro Logistics Operations LLC PO Box 339 Kenai, AK 99611 Mr. Scott Rosin Area Manager, Terminals and Pipelines Tesoro Logistics GP, LLC PO. Box 3369 Kenai, Alaska 99611 (907)-776-3520 Scott.D.Rosin@)tsocorp.com Re: Request for Letter of Non -objection to Allow NordAq Energy, Inc. to Cross the Tesoro Alaska Pipeline (TAPL) Right -of- Way (ADL 37951) for plug and abandonment of the Shadura ##1 well on State ADNR Land (ADL 391569) Dear Mr. Warthen: Tesoro Logistics LLC, (TESORO), the Managing Partner of the Tesoro Alaska Pipeline Company (TAPL), has received a letter (email) dated February 22, 2017 from NordAq Energy, Inc. (NordAq) requesting a letter of non -objection (LNO) to cross the TAPL right-of-way as described in your most recent letter (email) attached hereto. TESORO on behalf of TAPL does not object to NordAq crossing the pipeline right-of-way at the designated location on the condition that: 1) Prior to entering and crossing the TAPL pipeline right-of-way, NordAq will review with the Tesoro Logistics, Manager Oils Movement (Tom Angleton) the scope and timing of the proposed activities, and the route of the proposed activities. NordAq will add the Manager as additional contacts within the TAPL ROW. The telephone numbers for the Manager are 907-776-3849 or mobile 907-394-8746. 2) NordAq will utilize single layer rig matting directly above the TAPL pipeline while crossing with aforementioned equipment as outlined in your letter (email) dated February 22, 2017. Any deviation from this scope shall be submitted for approval to Tesoro PRIOR to implementation. 3) TESORO and TAPL activities take precedence and NordAq has no recourse against TESORO or TAPL in the event NorclAq's activities cannot proceed. 4) TESORO, on behalf of the Tesoro Alaska Pipeline Company, has the right to stop NordAq activity on the pipeline right-of-way if it believes such activity poses a threat to the Tesoro Alaska Pipeline System. NordAq shall have no recourse against TESORO or TAPL in the event of such stoppage. 5) NordAq will obtain all approvals and permits from federal, State, and local government agencies, as appropriate, for the proposed activities within the pipeline right-of-way. 6) NordAq's activities within the right-of-way will be consistent with all practices and procedures contained in the Alaska Safety Handbook. 7) No cost or liability will accrue to TESORO or the TAPL regarding NordAq`s activities on the pipeline right-of-way, and NordAq hereby agrees to defend, hold harmless, and indemnify TESORO and TAPL against any and all Claims caused by, resulting from or incidental to the activities. "Claims" shall mean any and all losses, injuries, liabilities, spills, damages, natural resource damages, obligations, expenses, fines, penalties, costs, claims, causes of action and judgments, including all attorney's fees, court costs, and other costs and expenses arising from or associated with a Claim or Claims. 8) TESORO and the TAPL have no obligations or responsibilities to NordAq other than permitting NordAq access to the pipeline right-of-way to perform the proposed activities. 9) NordAq will not store or stage any materials or equipment on the pipeline right-of-way. 10) NordAq will leave any portion of the pipeline right-of-way that it uses free of trash and debris. 11) This letter of non -objection is not effective unless acknowledged and signed by an officer of NordAq having the authority to agree to the above conditions. The executed letter is to be sent to the attention of me at the address on the letterhead. If you have any question, please call me at 907-776-3520 or Tom Angleton at 907-776-3849. Sincerely, Scott .Rosin rea Manager, Terminals and Pipelines in -F P IX and Dater, - Printed Name and Title Letter of Non -Objection Page 2 5. NordAq Energy will not store or stage any equipment on the right-of-way. 6. NordAq Energy will leave any portion of the right-of-way that it uses free from trash and debris. 7. Prior to crossing the pipeline right-of-way for the first time, NordAq Energy will contact the Keani Pipeline Superintendent. NordAq Energy will coordinate its activities with the Kenai Pipeline Superintendent and will follow directions and instructions. You may contact them at: Glen Faulkner, Keani Pipeline Superintendent: (907) 776-6871 or (907) 398-0750 8. Harvest Alaska activities take precedence and NordAq Energy has no recourse against Harvest Alaska or Hilcorp Alaska in the event NordAq Energey's activities cannot proceed. 9. Harvest Alaska has the right to stop any activity on the pipeline right-of-way if it believes such activity poses a threat to the Tyonek Pipeline. 10. This LNO is not effective unless acknowledged and signed by an individual within NordAq Energey having the authority to agree to the above conditions. The provisions of this LNO shall remain in effect as long as NordAq Energy is performing the work within the Tyonek Pipeline right-of-way, and the obligations set forth in Section 3 shall survive the termination of the work. If you have any questions, please contact me at (907) 777-8459 Sincerely, Michelle K. Brown Regulatory Compliance Specialist Harvest Alaska, Inc. cc: Glen Faulkner RECEIVED and AGREED Signed: f ! G Printed Name: Title: MASTER SERVICE AGREEMENT THIS AGREEMENT ("Agreement") made and entered into this, day ofbetween NORDAQ ENERGY ("Company"), a corporat INC.ion having its principal place ofAsiness at 000 A Street, Suite 410, Anchorage, AK 99503, an v,`; ` t3ntractor", a LG having its principal place of business at / / 2 Contractor and Company may be referred to herein as a "Party" or collectively as the "Parties.". PREAMBLE This Master Service Agreement controls and governs the Work (as defined below) performed by Contractor for Company. It may be used in conjunction with oral or written Work Orders between the parties. Only the particular terms included in the Master Service Agreement that have application to the type of Work that is covered by a particular Work Order will apply. This Master Service Agreement does not obligate Company to order Work from Contractor and does not obligate Contractor to accept orders for Work from Company. ARTICLE 1 Definitions The following terms, shall have the following meanings in this Agreement: 1. "Company" means, Company's contractors and their Subcontractors (other than Contractor and Contractor's Subcontractors), Company's Affiliates, Joint Interest Owners and Company's Invitees and the shareholders, officers, directors, employees, agents, consultants, servants and insurers of all of the foregoing. 2. "Contractor" means Contractor, Contractor's Subcontractors, Contractor's Affiliates, Participants, and Contractor's Invitees, and the shareholders, officers, directors, employees, agents, consultants, servants and insurers of all of the foregoing. 3. "Confidential Information" means all information and data obtained by Contractor under this Agreement from Company, in the performance of or derived from the Work, or under this Agreement, which information is the property of or obtained on behalf of any member of Company or is owned by a third party which any member of the Company has agreed to hold confidential, including without limitation, drawings, data and computer software. 4. "Claim(s)" shall, unless specifically provided otherwise, mean all claims, damages (including punitive and exemplary damages), liabilities, losses, demands, liens, encumbrances, causes of action of any kind, settlements, obligations, costs, judgments, interest and awards (including, without limitation, reasonable legal counsel fees and costs of litigation), whether created by law, contract, tort, voluntary settlement, or otherwise, arising out of, related to, or in any way connected with this Agreement or the performance of the Work. 5. "Force Majuro" means any event or circumstance (excluding the inability to pay compensation due under this Agreement) beyond the reasonable control of the Party which prevents or impedes the due performance of this Agreement and which, by the exercise of reasonable diligence, such Party is unable to prevent, including, without limitation, act of war, act of terrorism, riot, rebellion or civil unrest, act of God, flood, earthquake, lightning or other natural physical disaster, explosion, fire, or expropriation, nationalization, requisition or other Page 1of15 interference by any government authority, the enactment or amendment after the effective date of any statute, order, by-law or other rule or regulation having the force of law in the Area of Operations hereunder or promulgated by the government body claiming to have jurisdiction over a Party, and national or regional strikes or similar labor disputes (official or not). The mere shortage of labor or equipment shall not constitute Force Majuro unless caused by events or circumstances that are themselves Force Majeure. 6. "Goods" shall mean the goods sold or rented by Contractor to Company under the terms of this Agreement. 7. "Joint Interest Owner" means any co -interest owners, joint venturers, partners or co -lessees of Company for the property related to the Work or any other Person (other than Contractor or Contractor's Subcontractors or its or their Affiliates) that shares an interest with Company in the right(s) to explore, develop, or produce within the Area of Operations 8. "Participants" means any co-owners, joint venturers, or partners of Contractor in connection with performance of the Work or any other Person participating in Contractor's economic risk connection with performance of the Work (other than any member of Company). 9. "Person" means an individual, partnership, joint venture, corporation, limited liability company, unincorporated organization, government entity, or any other entity. 10. "Subcontractors" means a subcontractor of any tier. 11. "Work" means that which is, identified, described, or requested in the Agreement or any appendix, or schedule or exhibit attached or the Agreement, including, without limitation, the entirety of the operations conducted by Contractor under, arising out of, relating to, or In any way connected with this Agreement, and all services to be rendered and any equipment and Goods to be provided by Contractor under this Agreement. U. "Worksite" means the area where Work is intended to be performed, such as the drilling location, including, without limitation, the drilling rig, and the immediate area adjacent thereto that is utilized for the Work. 13. "Work order" means the directions from Company to Contractor, which may be oral (which may be followed by a writing within ten (10) days of the oral request) or written, to provide or furnish Company with equipment (including, without limitation, equipment fabricated by Contractor), material or services at a specific time, place and cost; such directions are incorporated in this Master Service Agreement by reference. ARTICLE II Nature of Agreement This Agreement shall govern and control all Goods and Work provided by Contractor to Company and shall govern and control the rights and obligations of Company and Contractor during the term hereof. Should the provisions of *any oral or written work order, purchase order, rental order or other instrument or agreement between the parties covering Goods or Work provided by Contractor to Company conflict with the provisions hereof, then the provisions of this Agreement shall govern and control to the extent the same are in conflict. Page 2 of 15 ARTICLE III Conduct of Work 1. Commencement of Work. When the terms of a Work Order for the materials, services and/or equipment desired by Company are agreed upon, Contractor will commence furnishing same at the agreed time, and continue such operations safely, diligently and without delay, in strict conformity with the specifications and requirements contained herein and in such Work Order until complete. 2. Performance or Work. Contractor warrants that it is qualified to and shall perform the Work and provide the Goods under the terms and conditions set forth in this Agreement. Contractor shall act as an independent contractor and shall undertake all responsibilities in connection with the Work in its own name and not in the name of the Company. Contractor shall perform its obligations under this Agreement in a good, safe and workmanlike manner as rapidly as conditions permit without interruption (except in the event of Force Majeure or as may be directed by Company) and in accordance with good oilfield standards and all applicable laws, rules and regulations. Contractor shall maintain at all times the minimum personnel, who shall be trained, competent and experienced in their assigned tasks, necessary to perform the Work. Company shall provide Contractor and its Subcontractors access to the Worksite. The Work and all Contractor Provided Equipment will be covered by all implied warranties available at law unless expressly provided to the contrary by the Master Service Agreement or expressly disdaimed in a separate writing signed by an authorized representative of the Company. In addition to all rights and remedies available to Company by law, all of which are reserved, any portion of the materials, equipment, services, or Work found defective or unsuitable will be removed, replaced or corrected by Contractor with no additional cost or risk to Company. Contractor agrees to inspect all materials and equipment furnished by Company and will notify Company of any apparent defects therein before using the materials and equipment. Should the Contractor use such materials and equipment without notifying Company of any such defect, Contractor will be deemed to have assumed all risk and liability for any mishap that may occur in operations conducted hereunder by reason of failure or defects in such material and equipment. Contractor will not be liable for claims due solely to latent defects. 3. Time and Quality. Time and quality of work shall be the essence of this Agreement. ARTICLE IV Responsibilities of the Parties 1. Contractor's Responsibilities. Contractor, at its sole cost, risk and expense will: a. Furnish the services of all personnel required to perform and completed the Work. b. Supply all machinery, equipment, tools, materials and expendable construction items, transportation, and supplies that are required to perform and complete the Work, unless Company has agreed in writing to supply such materials and equipment. c. Provide all necessary safeguards for the protection of all aspects of the Work and all persons employed directly or indirectly by the Contractor or third parties. d. Obtain and provide evidence to Company of all permits, licenses that are required to perform the Work, except for air permits and EPA permits. Page 3 of 35 e. Pay (i) any occupation or similar taxes which arise from the Work and which are required under the law; (ii) all payroll taxes, all taxes measured by payrolls, all assessments or charges for social security purposes, unemployment compensation, old -age pensions or benefits, annuities or other charges that are required to be made with respect to or measured by the wages and salaries of persons employed by the Contractor that are imposed by or under the laws of either the United States or the State in which the Work is performed; and (Iii) for all labor and materials furnished by Contractor for the Work. Contractor agrees to require this same agreement from each of its Subcontractors and to indemnify the Company for any breach or failure to obtain such agreements. Immediately notify Company of any incident arising out of or relating to the Work resulting in death or personal injury to any person or property damage or loss, including, but not limited to, environmental damages or losses, and will furnish Company a written report within 72 hours of the incident detailing all relevant facts. Contractor will furnish Company with a copy of all documents made by Contractor to any insurer or governmental authority regarding such accidents or occurrences. g. Contractor will be responsible for Work performed and for all materials, services and equipment provided by the Contractor or any member thereof, and any vendor or supplier of the Contractor incidental to the Work. 2. Company's Responsibilities. Companywill: a. Furnish materials and equipment that Company has agreed to furnish. b. Provide access to the Site. c. Provide other goods and/or services as agreed in writing by the Parties. ARTICLE V Payment and Audit Rights 1. Contract Price. Company will pay Contractor for the Work based on the rate and terms in the Work Orders. Unless otherwise provided in this Agreement and subject to any liens (Article VII) hereof and retention rights permitted by law, payment will be due 45 days after Company's receipt of the Invoice thereof. 2. Invoices. Invoices must be presented to the Company's address set forth in Attachment 3 Notification Addresses. Invoices must contain sufficient detail to support all charges, including Company approvals, names, Work Order number, applicable pricing, dates and times. Invoice submittals must be supported by a copy of Contractor's priced service/delivery ticket that has been signed by an authorized Company representative. Invoices must include clear reference to all applicable Contract, Work Order, AFE # and such other information as required by the Work Order. Contractor rates must be provided to Company along with the executed Master Service Agreement. Valid Invoices. No invoice received more than 90 days after goods/services are rendered will be valid, and no payment will be due from Company to Contractor. Page 4 of 15 4. Payment. Contractor may be paid with a check or electronic funds transfer. Provide Contractor bank name, address, routing number, account number, and account name below if electronic funds transfer is requested: 5. Audit Rights. Company will have the right to audit all of the books and records of the Contractor in any way relating to this Agreement. Contractor agrees to maintain such books and records, and will cause its vendors and Subcontractors likewise to maintain all records related to the Work, for 2 years following the end of the year in which the costs were incurred, and to make such books and records available to Company during normal business hours within such 2 years. The Parties will promptly adjust and correct any errors determined to exist as a result of an audit or otherwise. ARTICLE VI Confidential Information 1, Company's Confidential Information. Contractor shall hold Confidential Information strictly confidential and shall not disclose Confidential Information to any Person, including, without limitation, an Affiliate of Contractor, without the prior written consent of Company. Each member of Contractor shall take all reasonable measures to protect the confidentiality of such Confidential Information. Except as is necessary to enable Contractor to perform its obligations under this Agreement, no member of Contractor shall, without the prior written agreement of Company, use, reproduce, copy, disclose to, place at the disposal of or use of behalf of Contractor or any third party or enable any third party to use, peruse or copy any of the Confidential Information which (I) is provided to Contractor by or on behalf of Company, or member thereof, in or in relation to this Agreement; (ii) becomes the property of or vested in Company in accordance with this Contract; or (iii) Contractor, or member thereof, prepares in connection with the Work. If Contractor discloses any of the Confidential Information to any third party as provided above, Contractor shall ensure that such third party maintains such Confidential Information, complies with this Article, and returns or destroys the Confidential Information upon completion of the third party's use necessary for contractor's performance of the Work hereunder. Contractor shall prevent Confidential Information form in appropriately leaving the Worksite and Contractor's premises. ARTICLE VII Gens Contractor will make timely and full payments to all workmen, materialmen and Subcontractors and take all other action necessary to keep the Site and the Work free of liens. Contractor agrees to Indemnify, protect, defend and hold harmless the Company from and against all such charges, claims and liens unless caused by Company's failure to pay Contractor. Company may withhold payment of amounts due to Contractor until it has been furnished with proof satisfactory to it that either all amounts have been paid or Contractor has provided for satisfactory payment. If an lien arising from the Work attaches to the Site or the Work, Company may, at its sole option, make any payment necessary to discharge the lien, and it may offset the amount of the lien, together with damages and costs, including court costs and reasonable attorneys' fees, that it incurs because of the lien or its discharge against any payment owing or to be owed to Contractor. Contractor will furnish, on request by Company, receipts and releases with respect to the Work that show that costs and expenses of the Work have paid and that no claims, liens, or rights to liens exist against the Company or its property. Contractor agrees to Page 5 of 15 require this same agreement from each of its Subcontractors and to defend and indemnify the Company for any breach of such agreements by any of its Subcontractors. ARTICLE Vill Indemnity 1. Contractor's Obligations. Contractor shall release from any liability for, and shall protect, defend, indemnify, and hold harmless Company from an against all Claims (including Punitive Damages), without limit and without regard to the cause or causes thereof or the negligence of any Party or Parties arising in connection herewith in favor of Contractor's on account of bodily injury, death or damage to property arising out of or resulting from performance of work by Contractor on behalf of Company. Contractor's indemnity shall be without regard to and without any right to contribution from any insurance maintained by Company. Contractor shall maintain insurance sufficient to cover its indemnity obligation and shall provide evidence of such insurance to Company upon request: In the event Company must bring legal action in order to enforce Contractor's indemnification, Contractor shall reimburse Company for all such costs, including attorney's fees. To the extent not covered in Article VIII, Contractor hereby further agrees to protect, release, defend, indemnify and hold the Company harmless from and against any and all Indemnifiable Claims arising out of the emission, discharge or release of pollutants or substance prohibited by law to the extent that such emission, discharge or release arises out of the sole, gross, joint or concurrent negligence, willful misconduct, strict liability, or other act and/or omission of any one or more members of the Contractor, which is in any manner incident to, connected with or arises out of the performance of the Work. Contractor agrees that its indemnity obligations herein will be supported by insurance with at least the minimum amounts provided in Article X, which insurance will be primary to any other Insurance provided by or available to any one or more members of the Company and shall provide waivers or subrogation against all members of the Company. To the extent that applicable law prohibits the monetary limits of insurance required or the indemnities voluntarily assumed hereunder, the requirements will automatically be revised to conform, to the maximum extent permitted, with applicable law. 2. Company's Obligations. Company hereby agrees to release, defend, indemnify and hold the Contractor harmless from and against any and all Indemnifiable Claims arising out of, without limitation, any physical or mental injury, illness, and/or death of any one or more members of the Company, and/or loss of or damage to property or interest in property of any one or more members of the Company in any manner incident to, connected with or arising out of the performance of the Work. This obligation Is without regard to the cause or causes of such physical or mental Injury, illness, death, or loss of or damage to property or interest in property and includes, but is not limited to, Indemnifiable Claims resulting from any sole, gross, joint or concurrent negligence, willful misconduct, strict liability, or other act and/or omission of any one or more members of the Contractor. To the extent not covered in Article VIII, Company hereby further agrees to protect, release, defend, indemnify and hold the Contractor harmless from and against any and all Indemnifiable Claims arising out of the emission, discharge or release of pollutants or substance prohibited by law to the extent that such emission, discharge or release arises out of the sole, gross, joint or concurrent negligence, willful misconduct, strict liability, or other act and/or omission of any one or more Page 6 of 35 members of the Company, which is in any manner incident to, connected with or arises out of the performance of the Work. 3. Intellectual Property. Contractor shall release, defend, indemnify and hold harmless Company from and against any and all claims for infringement of any third party intellectual property rights related to the purchase, rental or use of Goods provided by Contractor hereunder that Contractor customarily supplies and that are contained in Contractor's published price list; provided, however, Contractor shall not be required to defend and indemnify Company under this paragraph 3 for Goods and services not customarily supplied by Contractor and not contained in Contractor's published price list but which Company specifies Contractor shall nonetheless provide. ARTICLE IX Drilling of Oil or Gas Well The following provisions will apply to operation involved in the drilling of an oil or gas well: 1. Company hereby releases and agrees to defend, indemnify and hold the Contractor harmless from and against any and all indemnifiable Claims arising from pollution or contamination below the surface of the land, seabed or water, resulting from blowout, fire, cratering, seepage or any other uncontrolled flow of oil, gas or mineral substance during the performance of the Work, except to the extent such loss or damage is caused by the Contractor's gross negligence or willful misconduct. 2. Company hereby release and agrees to defend, indemnify and hold the Contractor harmless from and against the loss or damage (i) to any geological formation, strata or oil or gas reservoir or minerals resource beneath the surface of the land or water, (ii) for the loss of or damage to any hole(s) or well(s), and (iii) for any impairment of any property rights or other interests in or to any oil, gas or minerals resources resulting from blowout, fire, cratering or any other cause, which may result during the performance of the Work, except to the extent such loss of damage is caused by the Contractor's gross negligence or willful misconduct. 3. If equipment or instruments of the Contractor become lost in the well, Company will either recover them without cost to the Contractor or pay the Contractor for the equipment or instruments (depreciated to date of loss); PROVIDED HOWEVER, IF THE LOSS IS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE CONTRACTOR, COMPANY WILL NOT BE LIABLE TO ANY EXTENT FOR THE LOSS AND THE CONTRACTOR WILL RELEASE, DEFEND, INDEMNIFY AND HOLD HARMLESS THE HCOPANY FROM AND.GAINST ANY LOSS, COST OR EXPENSE, INCLUDING COURT COSTS AND RESAONABLE ATTORNEY'S FEES, SUFFEREED OR INCURRED BY THE COMPANY THAT AIRSES OR RESULTS THEREFROM. Contractor will be required to furnish backup documentation to support the calculation or reimbursable costs for equipment or instruments lost in the hole. 4. To the extent any provision in this Article IX applicable to the drilling of an oil or gas well is in conflict with any other provision of this Article VIII, then such provision of this Article IX will prevail, but in the event there is no such conflict the entire Article VIII will apply. ARTICLE X Insurance Coverages. Subject to the provisions of Article Vlll, Section 2, Contractor will secure and maintain, and will require its Subcontractors to secure and maintain, during the term of this Agreement the following insurance coverages with limits not less than the amounts specified, and with companies satisfactory to Page 7 of 15 Company who are authorized to do business in the jurisdiction where the Work is to be performed, and will furnish certificates of such insurance satisfactory to Company before commencing the Work; provided, however, that no waiver of the provisions of this Article VIII will occur to any extent merely from a failure on the part of Company to object or complain about Contractor's failure to furnish certificates of insurance satisfactory to Company. 1. Commercial General Liability. $1,000,000 combined single limit per occurrence for bodily injury, property damage, personal injury and advertising injury. The general aggregate limit shall be $2,000,000. The general aggregate limits shall apply separately to each project. General liability insurance shall be maintained in effect until final acceptance by Company of the completed work and, for products liability and completed operations liability, at least five years thereafter. If the general liability insurance is written on a claims -made form, the Contractor shall provide insurance for a period of five years after final payment of this agreement. The policy(s) shall evidence a retroactive date, no later than the beginning of this agreement. If the Contractor utilizes a subcontractor(s) to perform any part of the work under this contract, the general liability insurance shall not contain any endorsements that exclude the work of the subcontractor(s). 2. Auto Liability. $1,000,000 combined single limit per occurrence for bodily injury, death and property damage covering owned, hired and non -owned vehicles used by Contractor. Workers' Compensation and Employer's Liability. Workers' Compensation shall be statutory as required by the State of Alaska. Employer's Liability shall be endorsed to the following minimum limits: Bodily Injury By Accident - $1,000,000 each accident; Bodily Injury By Disease - $1,000,000 each employee; Bodily Injury By Disease - $1,000,000 policy limit. 4. Excess Liability. $5,000,000 limit per occurrence and $5,000,000 limit annual aggregate by an excess liability policy. This policy shall provide bodily injury, property damage, personal injury and advertising injury in excess of the general liability policy and bodily injury and property damage in excess of the auto liability polity. This policy may provide employer's liability to conform with the limits required. Excess liability insurance shall be maintained in effect until final acceptance by the Company of the completed work and, for products liability and completed operations liability, at least five years thereafter. if the excess liability insurance is written on a claims -made form, the Contractor shall provide insurance for a period of five years after final payment of this agreement. The policy(s) shall evidence a retroactive date, no later than the beginning of this agreement. 5. Limit Adiustments. Company may at any time upon prior written notice require Contractor to increase the limits set forth to such amounts as inflation, industry practice or other factors. The foregoing insurance requirements will apply whether or not required by any other provision of this Agreement and the limits of coverage do not alter the indemnities and allocation of responsibilities in this Agreement. 6. Primary Coverages and Additional Insureds. ALL insurance policies and coverages listed in this Article VIII will extend to and protect the Company to the full extent and amount of such coverage, including excess or umbrella insurances and will be primary to, and receive no contribution from, any other insurance or self-insurance programs maintained by or on behalf of or benefiting the Company. The limits and coverages of the insurances obtained by Contractor will in no way limit the liabilities or obligations assumed by Contractor under this Agreement. All of Contractor's liability insurance policies Page 8of15 will name the Company as an additional insured and contain a waver on the part of the insurer, by subrogation or otherwise, of all rights against the Company. 7. If applicable, for all aircraft owned, operated, chartered, or brokered by or for the Contractor in connection with Its Work under the Agreement, the Contractor shall carry or require the owner or operator of such aircraft to carry (i) All Risks Hull Insurance for replacement cost value, including but not limited to coverage for collision liability; (ii) Aircraft Liability Insurance with limits of $5,000,000 combined single limit per occurrence, including but not limited to coverage for bodily Injury, death and property damage, Passenger Liability, and contractual liability for those liabilities assumed by the Contractor. B. Certificate of Insurance. Contractor's insurance carrier(s) will provide, as evidence that the required insurance coverage has been obtained and maintained, a certificate of insurance and declaration sheet reflecting the amount of any deductibles and stating as follows: "It Is hereby agreed that the Company are Additional Insureds under this Policy and underwriters expressly waive any and all rights of subrogation that they might otherwise have had against the Company." All policies will provide that they may not be canceled without at least 30 days prior written notice to Company. No waiver of the provisions of this Article VIII will be inferred from any failure on the part of the Company to object or complain about any failure of Contractor's insurance carrier to provide such certificate of insurance and declaration sheet. Contractor shall provide Company notice and evidence of any modification to, or extension or cancellation of, Contractor's required insurance coverage. ARTICLE XI Compliance 1. Safety. Safe operations are of paramount importance to the Company. Accordingly, Company has established a safety and environmental program for its own employees and requires that all members of the Contractor have an appropriate safety and environmental program. Contractor understands that the Work may involve danger and risk on injury, and the inherent danger is understood and assumed by Contractor. Contractor shall have sole responsibility for the safety of the Contractor employees, agents, and representatives, and acknowledges and agrees that the Company has no duty to supervise the work of, or to provide a safe place to work for, the employees, agents or representatives of the Contractor. Contractor shall adequately instruct all its employees and those of its Subcontractors or other members of the Contractor in the use of safety equipment and proper work procedures for the purpose of doing everything reasonably possible to protect against (i) personal injury or illness and (ii) damage to property or equipment. Contractor shall take all reasonable measure necessary to provide safe working conditions. Contractor shall furnish Company promptly with a report of any and all accidents involving the Work and shall notify all government agencies of accidents as required by law. Contractor agrees to provide Company with any reasonable information about any member of the Contractor that Company requires for its internal use in evaluating the safety environmental record of the Contractor. 2. Company Regulations and Policies. Contractor will comply with all applicable Company rules and regulations that relate to the safety and security of persons and property, protection of the environment, housekeeping and plant work hours, including but not limited to, Company Drug, Alcohol, Firearms, Vehicle Search and Contraband Policy attached hereto as Attachment 1 and Page 9of15 Company's HSE Manual attached hereto as Attachment 2, both of which are incorporated by reference herein. Depending upon the scope and nature of the Work to be performed, Company may require Contractor to execute other Company safety policies or to complete policy questionnaires or surveys. Company may revise, amend or alter its rules or policies or adopt new or additional rules or policies and they will become a part of the Agreement when Contractor receives a copy. 3. Compliance with Laws. Contractor will comply with all federal, state, and local laws, rules regulations, ordinances, executive orders and other applicable requirements of all governmental agencies having jurisdiction over the Work which no or in the future may be (1) applicable to all Work performed hereunder or (ii) applicable to Contractor's business, equipment or employees engaged in or in any manner connected with its performance hereunder. All of the provisions of this Agreement shall be expressly subject to all applicable laws, orders, rules and regulations of any governmental body or agency having jurisdiction over the premises, and all Work contemplated hereunder shall be conducted in conformity therewith. Any provision of this Agreement which is inconsistent with any such laws, orders, rules or regulations shall be modified so as to conform therewith, and this Agreement, as so modified, shall continue in full force and effect. ARTICLE XII General Provisions 1. Term. This Master Service Agreement will be for a term of 1 year from the date hereof and from year to year thereafter until terminated. Either Party may terminate this Agreement at any time, with or without cause; provided, however that Contractor will provide 30 days written notice of any such termination. Any termination will not affect any rights or obligations that have accrued under this Agreement. 2. Assignments and Subcontractors. Neither Party may assign or subcontract its rights or duties under this Agreement, except to an Affiliate, without the prior written consent of the other Party. Any consent given by a Party will not relieve the other Party of responsibility for performance of its obligations under this Agreement. Any assignee of this Agreement shall expressly assume all obligations of the Party hereunder making the assignment, including, but not limited to, indemnity obligations, upon acceptance of assignment of this Agreement. 3. Complete Agreement. This Agreement represents a final, complete and exclusive statement of the agreement between the Parties and supersedes any prior agreement or understanding between the Parties whether written or oral, between them with respect to the subject matter contained herein. 4. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Alaska including all matters of construction, validity, performance and enforcement, without giving effect to principles of conflict of law. 5. Force Maieure. Without prejudice to the risk of loss, release and indemnity obligations under this Agreement, each Party shall be excused from complying with the terms of this Agreement, except for the payment of monies when due, if and for so long as such compliance is hindered or prevented by Force Majeure. Neither Company nor Contractor shall be required against its will to adjust any labor or similar disputes except in accordance with applicable law. In the event that either Party hereto is rendered unable, wholly or in part, by any of these causes to carry out its obligation under this Agreement, such Party shall give notice and details of Force Majeure in writing to the other Page 10 of 15 party as promptly as possible after its occurrence. In such cases, the obligation of the Party giving the notice shall be suspended during the continuance of any inability so caused: 6. Waiver. No waiver of any breach of this Agreement shall be deemed to be effective or binding unless the waiver is in writing and signed by an authorized representative of the Party purporting to have waived the breach and, unless otherwise provided in this Agreement, such waiver shall be limited to the specific breach waived. A Party's failure to enforce or delay in enforcing any of the terms and conditions of this Contract shall not constitute or be deemed to constitute a waiver of such terms of conditions. 7. Survival. In the event of termination or expiring of this Agreement, the provisions pertaining to indemnity, confidentiality, insurance, and governing law shall remain in full force and effect. 8. Counterparts and Facsimile Execution. This Agreement may be executed in any number of counterparts, including facsimile and electronic transmittals, each of which shall be deemed an original of this Agreement and which together shall constitute one and the same instrument; provided that neither Party shall be bound to this Agreement unless and until both Parties have executed a counterpart. IN WITNESS WHEREOF, the parties have executed this Agreement on the dates indicated below; however, this agreement is effective for all purposes as of the Effective Date. NORDAQ ENERGY, INC. Date: Printed Name: Signature: Contractor: def%� // ..�" .�lt'rw�'�''`"7�1`� iC'�'0�3' r �''�r•r Date: Printed Name: Signature:= :� /` ```' �, . A'°..r"'"a1 1� Federal Tax I.D. M Page 11 of 15 a� CERTIFICATE QF LIABILITY INSURANCE DATE(MMIDDIYYYY) 12R)9I2011 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Marsh 8 McLennan Agency 1031 W. 4th Avenue Suits 400 Anchorage, AK 99501 CONTACT` E' PHONE IC Not: EMAIL ADDRESS: INSURER(s) AFFORDING COVERAGE NAIC III IPJ1012011 INSURER A c Insurance Company Of The Stale Of PA 19429100 101950,IE-GAWU-11.12 INSURED AD American 011field Associates, LLC 14896 Kenai Spur Highway, Suite 203 INSURERS: IOnsale Insurance Company INSURER C: Navigators Specialty Insurance Company 36056 INSURER D: National Union Fre Ins Cc Pittsburgh PA 19445100 Kenai, AK 99611 INSURER E: PRODUCTS -COMPIOPAGG $ 2,000,0070 INSURER F D COVERAGES CERTIFICATF N1IMBFR- SFA-m91g4anr m RFVRfi1nN rt11MRFR- 9 THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. IN R TYPE OF INSURANCE ADDLISUSH POLICY NUMBER POLICY O UID EFF MMMIDD EXP LIMITS B GENERAL LIABILITY X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE O OCCUR 010OW12142 IPJ1012011 12110/2012 EACHOCCURRENCE $ 1,000,000 DAMAGE 'URENTED PREM/ Eaoccurt ce $ 100' MED EXP (Arty oneperson) $ EXCLUDED PERSONAL& ADV INJURY $ 1,000,000 GENERALAGGREGATE $ 2,000,000 G XEN'LAGGREGATELIMITAPPLIESPER, POLICY PRO- LOC1 PRODUCTS -COMPIOPAGG $ 2,000,0070 $ D AUTOMOBILE X IX LIABILITY ANY AUTO ALLOWNED AUAUTOS OSCHEDULED NON -OWNED HIREDAUTOS X AUTOS CA011190683 12/1012011 12)10/2012 COMBINED SINGLE LIMB 1 id nt _ JU BODILY INRY (Per person) $ BODILY I JURY(Par accident) $ PROPERTY DAMAGE $ M $ C X UMBRELLA I"OCCUR EXCESS LIAB HDED CLAIMS•MADE CH11EXC7205941C 12N0/2011 12/1012012 EACH OCCURRENCE Is 4,000,000 AGGREGATE $ 4,000,W0 RETENTIONS Is A WORKERS COMPENSATION AND EMPLOYERS' LIABILITYER ANY PROPRIETORIPARTNERIEXECUTIVE YIN OFFICERIMEMBER EXCLUDED? �N (Mandatory In NH) If yrs, deaerlbe under DESCRIPTION OF OPERATIONS below N I A 13979160 12/22)2011 1211012012 X I WC STATU- OTH- E.L. EACH ACCIDENT $ 1,000,000 E SEASE - EA EMPLOYE $ 1,000,000 E.L.DISEASE - POLICY LIMIT $ 1,000,000 Comprehensive/Coillsion Cov. DESCRIPTION OF OPERATIONS 1 LOCATIONS I VEHICLES (Attach ACORD 101, Additional Remarks Schedule, If More space is required) CERTIFICATE HOLDER StateofAlaska, DepartmentofCommene And Economic Development Division of Occupational Licensing PO Box 110806 Juneau, AK 99611-0806 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE of Marsh USA Inc. Kirk C. Leadbetter ®1988-2010 ACORD CORPORATION. All rights reserved, ACORD25 (2010105) The ACORD name and logo are registered marks of ACORD ACORL70 �� CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) 3/24/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Rebecca Stinson -Lane NAME: PHCNN Ext: (907)276-5617 No:(907)276-6292 Marsh & McLennan Agency, LLC E-MAIL ADDRESS: rebecca.a.stinson-lane@marshmc.com 1031 West 4th Ave., Suite 400 INSURER(S) AFFORDING COVERAGE NAIC # INSURERA:Kinsale Insurance Com an Anchorage AK 99501 INSURED INSURER 8 INSURER C: NordAq Energy, Inc. INSURER D: 560 E. 34th Ave INSURER E Ste 200 INSURER F: Anchorage AK 99503 COVFRAGFS CFRTIFICATF NIIMRFP-17-18 GL onlv - Well Pluo RFVICIAN NI IMRFR- THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL IN D SUBR WVD POLICY NUMBER POLICY EFF MM/DDIYYYY POLICY EXP MM/DD(YYYY LIMITS X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ 1,000,000 A CLAIMS -MADE ❑X OCCUR DPREMISES AMAGE TOEa RENToccurrence) $ 100,000 MED EXP (Any one person) $ N/A X Y 01000492490 3/23/2017 3/23/2018 PERSONAL & ADV INJURY $ 1,000,000 GENT AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2,000,000 POLICY � PRO - X X ❑ LOC PRODUCTS - COMP/OP AGG $ 2,000,000 Underground Resources & $ 250,000 OTHER: AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ Ea accident BODILY INJURY (Per person) $ ANY AUTO ALL OWNED SCHEDULED AUTOS AUTOS BODILY INJURY (Per accident) $ HIRED AUTOS NON -OWNED AUTOS PROPERTY DAMAGE $ Per accident $ UMBRELLA LIAB OCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESS LIAB CLAIMS -MADE DED J RETENTION $ $ WORKERS COMPENSATION AND EMPLOYERS' LIABILITY Y / N PER OTH- STATUTE ER E.L. EACH ACCIDENT $ ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? ❑ N / A E.L. DISEASE - EA EMPLOYE $ (Mandatory in NH) R yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $ DESCRIPTION OF OPERATIONS I LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Re: Well Plugging; Lat: 60 degrees 45'43.978" N, Long: 150 degrees 58' 12.424" W; Where required by contract, Certificate Holder is an Additional Insured on the General Liability policy, subject to the terms, conditions and limitations of said policies and the additional insured endorsement. Waiver of Subrogation applies to the General Liability policy where required by contract, subject to the terms, conditions and limitations of said policies and the waiver of subrogation endorsement. GtK 11tR Alt MULUtK GANGtLLAI IUN Kenai National Wildlife Refuge PO Box 2139 Soldotna, AK 99669-2139 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE San Spindler/FFRAZE 43_ - ©1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25 (2014/01) The ACORD name and logo are registered marks of ACORD INS02512n1401i ACORO� CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DDNYYY) 3/24/2017 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT Rebecca Stinson -Lane Marsh & McLennan Agency, LLC 1031 West 4th Ave., Suite 400 PHOE C No:(907)276-6292 WCNNo. Ext: (907)276-5617 FAC, E-MAIL ADDRESS: rebecca.a.stinson-lane@marshmc.com INSURER(S) AFFORDING COVERAGE NAIC # X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE ❑X OCCUR Anchorage AK 99501 INSURERA:Kinsale Insurance INSURED -Company INSURER B NordAq Energy, Inc. INSURER C: 560 E. 34th Ave INSURER D: Ste 200 INSURER E Anchorage AK 99503 INSURER F: COVERAGES CERTIFICATE NUMBER:17-18 GL only - Well Plug REVISION NUMBER: THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR I TYPE OF INSURANCE ADDL INSD SUBR WVD POLICY NUMBER POLICY EFF MM/DD/YYYYI POLICY EXP (MM/DD/YYYYI LIMITS A X COMMERCIAL GENERAL LIABILITY CLAIMS -MADE ❑X OCCUR EACH OCCURRENCE $ 1,000,000 DAMAGE TO RENTED 100,000 PREMISES Ea occurrence $ MED EXP (Any one person) $ N/A X Y 01000492490 3/23/2017 3/23/2018 PERSONAL B ADV INJURY $ 1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: X POLICY ❑ PRO- JECT LOC GENERAL AGGREGATE $ 2,000,000 PRODUCTS - COMP/OP AGG $ 2,000,000 Underground Resources S, $ 250,000 OTHER: AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $ Ea accident BODILY INJURY (Per person) $ ANY AUTO ALL OWNED SCHEDULED AUTOS AUTOS -. BODILY INJURY Per accident $ ( ) HIRED AUTOS NON -OWNED AUTOS PROPERTY DAMAGE $ Per accident UMBRELLA LIAB OCCUR EACH OCCURRENCE $ EXCESS LIAB CLAIMS -MADE AGGREGATE $ DED RETENTION $ $ WORKERS COMPENSATION ANDEMPLOYERS'LIABILITY �,/N ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? ❑ N/A PER OTH- STATUTE ER E.L. EACH ACCIDENT $ E.L. DISEASE - EA EMPLOYE $ (Mandatory in NH) If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $ DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Re: Well Plugging; Lat: 60 degrees 45'43.978" N, Long: 150 degrees 58' 12.424" W; Where required by contract, Certificate Holder is an Additional Insured on the General Liability policy, subject to the terms, conditions and limitations of said policies and the additional insured endorsement. Waiver of Subrogation applies to the General Liability policy where required by contract, subject to the terms, conditions and limitations of said policies and the waiver of subrogation endorsement. ... .Vf r1 -"M State Of Alaska 550 W. 7th Ave Suite 1260 Anchorage, AK 99501-3557 ACORD 25 (2014/01) INS025 (9n14n1 i l.AF49,r LLA I IU14 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. AUTHORIZED REPRESENTATIVE Susan Spindler/FFRAZE ©1988-2014 ACORD CORPORATION. All rights reserved. The ACORD name and logo are registered marks of ACORD Colombie, Jody J (DOA) From: Regg, James B (DOA) Sent: Friday, June 22, 2018 3:47 PM To: Foerster, Catherine P (DOA); French, Hollis (DOA); Seamount, Dan T (DOA) Cc: Colombie, Jody J (DOA); Ballantine, Tab A (LAW) Subject: FW: Equipment Tiger Eye Pad. Attachments: 2017-1218 TigerEye Location.jpg; TigerEye Location photos - equip removed 6-21-2018.docx Recall the Tiger Eye location clearance approval was waiting on Nordaq to remove cementing equipment. Attached is a photo of the equipment at Tiger Eye pad that Hollis and I observed during location inspection 12/18/17, and photos taken by Halliburton and Cook Inlet Energy after the cement plant was removed on 6/21/18. 1 have asked Chris Monfor (President/CEO, Salamatof Native Association) for confirmation that they are satisfied with the location. Per our Docket, there are 2 notice of proposed enforcement actions against Nordaq for Shadura (OTH 16-031) and Tiger Eye (0TH 16-032) — missing data, failure to abandon, and fail to respond to enforcement action. Both remain open. Nordaq has completed P&A and location inspections at both well locations (AOGCC witnessed). Meredith confirmed we have received all required data from Nordaq. Do these enforcement actions need to be closed out before we issue location clearance and release Nordaq's bond? Jim Regg Supervisor, Inspections AOGCC 333 W.7t' Ave, Suite 100 Anchorage, AK 99501 907-793-1236 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jim Regg at 907-793-1236 or im.reee(@alaska.eov. From: Robert Warthen lmailto:rwarthen@nordaqenergy.com) Sent: Friday, June 22, 2018 8:12 AM To: cmonfor@salamatof.com; Regg, James B (DOA) <jim.regg@alaska.gov> Cc: Colleen Miller <cmiller@ciri.com> Subject: Fwd: Equipment Tiger Eye Pad. Chris / Jim: An additional photo of the cleared Tiger Eye Pad that Halliburton took yesterday when the removal operation was completed. Bob. Robert Warthen Senior Advisor NorclAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 9Q7.375.1816 direct 907.646.9317 fax rwarthen(@nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. Begin forwarded message: From: Mark Dean <Chris.Dean(a)Halliburton.com> Subject: RE: Equipment Tiger Eye Pad. Date: June 21, 2018 at 5:02:10 PM AKDT To: Robert Warthen <rwarthenta)nordaoenergy.com> Cc: Scott Odell <SCOtt.ODelI()Halliburton.com>, Jeremy Talarovich <Jeremy.Talarovich(o)Halliburton.com>, Raymond Wonders <Raymond.Wonders(a)Hall iburton.com> Hi Bob, Everything has gone to plan thus far and Tiger Eye is officially clear. Attached is a picture. Wish I could have snagged an Arial view, but we're fresh out of drones. We're catching the last barge out tonight and all of our equipment will be back to OSK tomorrow. The long wait is finally over! Thanks again for your patience. We look forward to working with you in the future. Mark Dean Cement Service Coordinator Email: chris.dean(ftalliburton.00m 6900 Arctic Boulevard Anchorage, AK Office: +1907-275-2613 Mobile: +1 303-506-8462 Follow Halliburton: Linkedln I Facebook I Twitter I YouTube I Blog 41111, HAWBURTON -----Original Message ----- From: Robert Warthen[mailto:rwarthen@nordageneray.com] Sent: Thursday, lune 21, 2018 3:42 PM To: Mark Dean Cc: Scott Odell; Jeremy Talarovich Subject: [EXTERNAL] Re: Equipment Tiger Eye Pad. External Sender: Use caution with links/attachments. Hi Mark: Did everything go as planned at Tiger Eye? Any photos taken would be greatly appreciated if you could forward a copy to me. Thanks, Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen@nordaoenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. > On Jun 20, 2018, at 2:20 PM, Mark Dean <Chris.Dean (a)Halliburton.com> wrote: > Hi Bob, > Our Supervisor in Charge (Ryan Moat) has been in contact with Glacier. Hilcorp has offered to take them if Glacier falls through, so the mats shouldn't be an issue. We've made great progress out there and everything should be off of Tiger Eye by morning. I'll make sure to send some pictures when complete. Thanks for your patience on this move. > Mark Dean > Cement Service Coordinator > Email: chris.deanPhalliburton.com > 6900 Arctic Boulevard Anchorage, AK > Office: +1907-275-2613 > Mobile: +1303-506-8462 > Follow Halliburton: Linkedln I Facebook I Twitter I YouTube I Blog > -----Original Message----- > From: Robert Warthen[mailto:rwarthenCa)nordaoenergy.com] > Sent: Wednesday, June 20, 2018 2:11 PM > To: Mark Dean > Cc: Scott Odell > Subject: [EXTERNAL] Equipment Tiger Eye Pad. > External Sender: Use caution with links/attachments. > Hi Mark: > I assume that the silos, etc are currently being moved off of the Tiger Eye Pad. In contact > with Glacier, they have told me that they will remove the rig mats (on which your equipment sets on), > once everything is moved. Has any Glacier employee from West Mac contacted your crew to > coordinate this mat issue? Thanks, > Bob. > Robert Warthen > Senior Advisor > NordAq Energy, Inc. > 560 East 34th St. Suite 200 > Anchorage, Alaska 99503 > 907.646.9315 main > 907.375.1816 direct > 907.646.9317 fax > rwarthen0nordagenerev.com > This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. > This e-mail, including any attached files, may contain confidential and privileged information for the sole use of the intended recipient. Any review, use, distribution, or disclosure by others is strictly prohibited. If you are not the intended recipient (or authorized to receive information for the intended recipient), please contact the sender by reply e-mail and delete all copies of this message. 71 r r, Location Clearance - Tiger Eye Pad Photos (June 2018) Email dated 6/21/2018 (R. Wathen, Nordaq Energy Inc.) Tiger Eye Pad — Location Photos 6/2018 Page 1 of 2 Tiger Eye Pad — Location Photos 6/2018 Page 2 of 2 Colombie, Jody J (DOA) From: Bettis, Patricia K (DOA) Sent: Thursday, June 29, 2017 1:24 PM To: Colombie, Jody J (DOA) Subject: FW: Shadura AFE Clarification For OTH-16-031 records From: Robert Warthen[mailto:rwarthen@nordagenergy.comj Sent: Thursday, June 29, 2017 1:12 PM To: Bettis, Patricia K (DOA) <patricia.bettis@alaska.gov>; Davies, Stephen F (DOA) <steve.davies@alaska.gov>; Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov>; Quick, Michael J (DOA) <michael.quick@alaska.gov> Cc: David Pfeiffer <dpfeiffer@nordaqenergy.com> Subject: Shadura AFE Clarification Hi Everyone: One last point of clarification on the Shadura AFE P&A Project; The actual volume of cement used for the plugging at Shadura will be much less than the volume used at Tiger Eye; thus less costs. Thanks, Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(a)nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. Colombie, Jody J (DOA) From: Bettis, Patricia K (DOA) Sent: Thursday, June 29, 2017 1:23 PM To: Colombie, Jody J (DOA) Subject: FW: Shadura AFE Clarifications For OTH-16-031 records From: Robert Warthen [mailto:rwarthen@nordaqenergy.com] Sent: Thursday, June 29, 2017 12:06 PM To: Bettis, Patricia K (DOA) <patricia.bettis@alaska.gov>; Davies, Stephen F (DOA) <steve.davies@alaska.gov>; Schwartz, Guy L (DOA) <guy.schwartz@alaska.gov>; Quick, Michael J (DOA) <michael.quick@alaska.gov> Cc: David Pfeiffer <dpfeiffer@nordaqenergy.com> Subject: Shadura AFE Clarifications Hi Everyone: I just finished a conversation with Pete Dickinson of All American Oilfield Services concerning the Cementing and Snow road at the Shadura P&A project. 1) Snow Road Costs: The costs are accurate and reflect pre -packing a trail with low pressure vehicles (LPV), sprinkling water on the route and then moving all equipment to the site again using LPV's. 2) Cementing: Neither Halliburton or Schlumberger have pumping equipment on LPV's. Atigun has this equipment which has been used to P&A remote wells at Barrow, Franklin Bluffs, etc, with Solsten, Marsh Creek, and Oolgunik operating. This equipment was re -designed from an old Baker Hughes pumping unit and built as an LPV unit. Actual cement will come from Halliburton and will be the same mixture as to be Used at Tiger Eye. The costs on the AFE are accurate. :•• Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(aD-nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Wednesday, January 25, 2017 11:22 AM To: 'Robert Warthen' Subject: RE: Meeting. Great, I will add it to the calendar. Thank you. From: Robert Warthen[mailto:rwarthen@nordagenergy.com) Sent: Wednesday, January 25, 2017 11:21 AM To: Carlisle, Samantha J (DOA) <samantha.carlisle @alaska.gov> Subject: Re: Meeting. Thanks Samantha, this will work fine for me. Bob Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(cr-nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. On Jan 25, 2017, at 10:54 AM, Carlisle, Samantha J (DOA) wrote: Bob - is 2pni tomorrow a good time for you? From: Robert Warthen [mailto:rwarthen@nordagenergy.com] Sent: Wednesday, January 25, 2017 9:11 AM To: Carlisle, Samantha J (DOA) <samantha.carlisle@alaska.gov> Subject: Re: Meeting. Much appreciated Samantha. Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen@nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. On Jan 25, 2017, at 8:50 AM, Carlisle, Samantha J (DOA) wrote: Hi Bob, I will be in touch with you soon, I ani waiting to see what Guy Schwartz's schedule is like and then we can set up a meeting. Thanks! From: Robert Warthen [mailto:rwarthen@nordagenergy.com] Sent: Tuesday, January 24, 2017 10:05 AM 2 To: Carlisle, Samanftna J (DOA) <samantha.carlisle@alaska.gov, Subject: Re: Meeting. Thanks Samantha. I'd really like to talk with Staff on the scheduled hearing on April 4th. Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(a)-nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. On Jan 24, 2017, at 8:40 AM, Carlisle, Samantha J (DOA) wrote: Bob, Staff is reviewing the Sundry's and have said that if they need to have a. meeting to get More information that we will be in touch next week to arrange that. Please let me know if you have any questions. Thank you, 3 Samantha Carlisle FYeculive Secretary III AOGCC (907) 793-1223 From: Robert Warthen[mailto:rwarthen@nordagenergy.com] Sent: Friday, January 20, 2017 1:27 PM To: Carlisle, Samantha J (DOA) <samantha.carlisle@alaska.gov> Subject: Meeting. Hi Samantha: Commissioner Foerster suggested I have a meeting with Mike Quick and Guy Schwartz. Can you arrange that for sometime next week please? Thanks, Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwa rthen (a-)- nordagen ergy. com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. 4 Carlisle, Samantha J (DOA) From: Carlisle, Samantha J (DOA) Sent: Tuesday, January 24, 2017 8:41 AM To: 'Robert Warthen' Subject: RE: Meeting. Bob, Staff is reviewing the Sundry's and have said that if they need to have a meeting to get more information that we will be in touch next week to arrange that. Please let me know if you have any questions. Thank you, Samantha Carlisle l�xecuLive Secretary Ill AO )G(X- (907) 793-1223 From: Robert Warthen[mailto:rwarthen@nordagenergy.comj Sent: Friday, January 20, 2017 1:27 PM To: Carlisle, Samantha J (DOA) <samantha.carlisle@alaska.gov> Subject: Meeting. Hi Samantha: Commissioner Foerster suggested I have a meeting with Mike Quick and Guy Schwartz. Can you arrange that for sometime next week please? Thanks, Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(a-)-nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If Carlisle, Samantha J (DOA) From: Robert Warthen <rwarthen@nordaqenergy.com> Sent: Monday, January 23, 2017 1:31 PM To: Carlisle, Samantha J (DOA) Subject: Meeting Hi Samantha: On the proposed meeting with Mike Quick and Guy Schwartz, my best time would be Thursday or Friday late morning and all afternoon. Thanks, Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(a�nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. Carlisle, Samantha J (DOA) From: Robert Warthen <rwarthen@nordaqenergy.com> Sent: Friday, January 20, 2017 1:27 PM To: Carlisle, Samantha J (DOA) Subject: Meeting. Hi Samantha: Commissioner Foerster suggested I have a meeting with Mike Quick and Guy Schwartz. Can you arrange that for sometime next week please? Thanks, Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 East 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(a-).nordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. Colombie, Jody J (DOA) From: Foerster, Catherine P (DOA) Sent: Friday, January 20, 2017 1:18 PM To: French, Hollis (DOA); Seamount, Dan T (DOA); Ballantine, Tab A (LAW); Colombie, Jody J (DOA) Subject: FW: Abandonments FYI. Jody, please put this into the appropriate files. Thanks. From: Foerster, Catherine P (DOA) Sent: Friday, January 20, 2017 1:17 PM To: 'Robert Warthen' <rwarthen@nordaqenergy.com> Cc: Carlisle, Samantha J (DOA) <samantha.carlisle@alaska.gov> Subject: RE: Abandonments Mr. Warthen, A commissioner may not have a private meeting with a party concerning a subject under adjudication. If you would like to meet with any of our staff to discuss the proposed abandonments, please contact my secretary (copied on this email), and she can assist you in making the necessary arrangements. Thank you. Cathy Foerster From: Robert Warthen [mailto:rwarthen@nordaqenergy.com] Sent: Friday, January 20, 2017 10:23 AM To: Foerster, Catherine P (DOA) <cathy.foerster@alaska.gov> Subject: Abandonments Dear Commissioner Foerster: On behalf of NordAq Energy, I apologize for giving the Commission the impression that NordAq is ignoring its responsibilities in Abandonment Orders for the two wells it has drilled. There have been circumstances previous, and up to December 30th, 2016, that caused NordAq to delay abandonments until third party decisions were made. NordAq has no intention to be remiss in its duties to abandon Tiger Eye Central #1 and Shadura #1. This morning, an Abandonment Sundry for Shadura #1 was delivered to the Commission for review and approval. The Sundry for Tiger Eye Central #1 will be delivered early next week. I would like to have an informal meeting with you to discuss and review these proposed abandonments. Is it possible to meet with you next week at your convenience? Thanks, Sincerely, Bob. Robert Warthen Senior Advisor NordAq Energy, Inc. 560 mast 34th St. Suite 200 Anchorage, Alaska 99503 907.646.9315 main 907.375.1816 direct 907.646.9317 fax rwarthen(aOordagenergy.com This message and any attachments are the property of NordAq Energy Inc. and are intended solely for the named recipients or entity to whom this message is addressed. If you have received this message in error, please inform the sender via e-mail and destroy the message. If you are not the intended recipient, you are not allowed to use, copy, or disclose the contents or attachments in whole or in part. N Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. OTH-16-031 Failure to Plug and Abandon Shadura-1 (PTD 211-014) Failure to Respond to Notice of Proposed Enforcement Action Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) has scheduled a public hearing for April 4, 2017 at 10:00 a.m. at the offices of the AOGCC at 333 West 7th Avenue, Anchorage, Alaska 99501. The subject of the hearing is AOGCC's proposed enforcement action against NordAq Energy Inc. (NordAq) for failure to permanently abandon the Shadura-1 exploratory well before expiration of rights in CIRI Oil and Gas Lease C-061648, 20 AAC 25.105(a). Shadura-1 was drilled within Section 23, Township 8 North, Range 10 West, Seward Meridian. Written comments regarding NordAq's failure to plug and abandon the Shadura-1 well may be submitted to the AOGCC at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than the conclusion of the April 4, 2017 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than April 2, 2017. D Cathy . Foerster Chair, Commissioner Complete items 1, 2, and 3. ■ Com p on the reverse Postal - ■ Print your name and address -. 13 Addressee CERTIFIED ° RECOT N Domestic Mol � on thefront if spacepermits.very ra - - In delivery address below: ❑ No v SeniorAdvisor U') ., tD� 2017 co Certified Mail Fee Anchorage, AK 99503 3 Mail Express® II I IIIIII IIII Ln Extra Services & Fees (check box, add tee as appropriate) I II I VIII ❑ Return Receipt (hardcopy) $ I II I I II M ❑ Retum Receipt (electronic) $ I I I Postmark E3F1Certified Mail Restricted Delivery $ 9590 9402 1823 6104 6490 37 Here E:3 ❑ Adult Signature Required $ 7 Artiria Nit imhor tTrnnefar from carvlra lahi-1) 7015 0640 0003 5185 5147 Isured Mail tsured Mail Restricted Delivery Restricted Delivery ❑ Adult Signature Restricted Delivery $ wer $500) PS Form 3811, July 2015 PSN 7530-02-000-9053 E-3 Postage $ -3 Total Postage and Fees Robert Warthen o $ Senior Advisor L.n rq Sent To NordAq Energy, Inc. O Street and Apt No., or Po 6oXNo: 560 E. 34th Ave., Ste. 200 r` City, State, ZIP+4® Anchorage, AK 99503 Complete items 1, 2, and 3. ■ Com p on the reverse A" / - ❑ Agent X �� ■ Print your name and address -. 13 Addressee so that we can return the card to you. d b" am� ceiveytedN G. Dor ■ Attach this card to the back of the mailpiecl3, Mol � on thefront if spacepermits.very Is delivery address different from item 1? EIes Robert Warthen delivery address below: ❑ No v SeniorAdvisor NordAq Energy, Inc. JAN tD� 2017 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 3 Mail Express® II I IIIIII IIII III I II I VIII I II I I II I III II I I I I III 3. Service Type ❑ Priority istered Mail ❑ Adutt SiSlgnatu a Restricted Delivery ❑ Registered Mail Restricted 9590 9402 1823 6104 6490 37 Certified Mail® Delivery ❑ Certified Mail Restricted Delivery ❑ Return Receipt for Merchandise ❑ Collect on Delivery ❑ Collect on Delivery Restricted Delivery ❑ Signature ConfirmationTM ❑ Signature Confirmation 7 Artiria Nit imhor tTrnnefar from carvlra lahi-1) 7015 0640 0003 5185 5147 Isured Mail tsured Mail Restricted Delivery Restricted Delivery wer $500) PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. OTH-16-031 Failure to Plug and Abandon Shadura-1 (PTD 211-014) Failure to Respond to Notice of Proposed Enforcement Action Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) has scheduled a public hearing for April 4, 2017 at 10:00 a.m. at the offices of the AOGCC at 333 West 7th Avenue, Anchorage, Alaska 99501. The subject of the hearing is AOGCC's proposed enforcement action against NordAq Energy Inc. (NordAq) for failure to permanently abandon the Shadura-1 exploratory well before expiration of rights in CIRI Oil and Gas Lease C-061648, 20 AAC 25.105(a). Shadura-1 was drilled within Section 23, Township 8 North, Range 10 West, Seward Meridian. Written comments regarding NordAq's failure to plug and abandon the Shadura-1 well may be submitted to the AOGCC at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than the conclusion of the April 4, 2017 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than April 2, 2017. //signature on fileH Cathy P. Foerster Chair, Commissioner STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWNG ADVERIISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OFADVERTISMENT' ADVERTISING OMERNUMBER AO-17-017 FROM: AGENCY CONTACT: Jody Colo mbie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A. 0. AGENCY PHONE: 333 West 7th Avenue 01/13/17 1(907) 279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OI ADVERT.ISEMENT: LEGAL DISPLAY CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE O th-16-031 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SblilNii:iNVESieESH6*i.N.6A6.vikii.w T.zo Department of Administration ORDER AIO.; CERTIFIED AFFIDAVTI OF.::: Division of AOGCC :::PUBLTOATIDNW.IIH:A7TACHEDCOP.Y.OF:: 333 West 7th Avenue .................................... ADYERIISICIENI:To::::::•:::::: Anchorage, Alaska 99501 Total of Pae 1 of 1 All Pa es $ - REF Type Number Amount Date Comments 1 PVN ADN89311 2 Ao AO-17-017 3 4 FIN AMOUNT SY Ap r Unit PGM LGR Object FY DIST LIQ 1 17 021147717 3046 17 2 3 4 Purc i in me: Title: Purchasing Authority's Signature Telephone Number 1. A . and receiving agen name kust appear on all invoices and documents relating to this purchase. 2 T e state is registered for tax free transactions under Chapter 32, IRS code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not for s e. ...... vis ci c LO f iii Co le5i: Publisher faxed :...... i. Fiscal` ReceiV P ::::::::: ............................... ::::::::::: : D► rt FTs al .r �....A :: ::::.....1>...................7r..............r.........g............................................. Form: 02-901 Revised: 1/13/2017 270227 0001398782 $169.34 STATE OF ALASKA RECEIVED JAN 2 0 2017 A` OGGC AFFIDAVIT OF PUBLICATION THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on January 14, 2017 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed Subscribed and sworn to before me this 17th day of Janua 017 / n sn'J Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska Aw MY COMMISSION EXPIRES �-3 19 Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: Docket No. OTH-16-031 Failure to Plug and Abandon Shadura-1 (PTD 211-014) Failure to Respond to Notice of Proposed Enforcement Action Pursuant to 20 AAC 25.540, the Alaska Oil and Gas Conservation Commission (AOGCC) has scheduled a public hearing for April 4, 2017 at 10:00 a.m. at the offices of the AOGCC at 333 West 7th Avenue, Anchorage, Alaska 99501. The subject of the hearing is AOGCC's proposed enforcement action against NordAq Energy Inc. (NordAq) for failure to permanently abandon the Shadura-1 exploratory well before expiration of rights in CIRI Oil and Gas Lease C-061648, 20 AAC 25.105(a). Shadura-1 was drilled within Section 23, Township 8 North, Range 10 West, Seward Meridian. Written comments regarding NordAq's failure to plug and abandon the Shadura-1 well may be submitted to the AOGCC at 333 West 7th Avenue, Anchorage, Alaska 99501. Comments must be received no later than the conclusion of the April 4, 2017 hearing. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC's Special Assistant, Jody Colombie, at 793-1221, no later than April 2, 2017. //si nature on file// �athy P. Foerster Chair, Commissioner Published: January 14, 2017 Morry► Pt* k SRITNEV L. THOMPSON State of Alaski 0� My Commission Expires Fob 29. 2019 Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Cir. 399 W. Riverview Ave. Fairbanks, AK 99711 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 VA'aL Singh, Angela K (DOA) From: Colombie, Jody 1 (DOA) Sent: Friday, January 13, 2017 1:12 PM To: DOA AOGCC Prudhoe Bay; Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael 1 (DOA); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity, AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew Vanderlack; Ann Danielson; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Ben Boettger, Bill Bredar; Bob Shavelson; Brandon Viator; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller, Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Dave Harbour, David Boelens; David Duffy; David House; David Johnston; David McCaleb; David McCraine; David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Evan Osborne; Evans, John R (LDZX); Gary Oskolkosf, George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff; Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); John Stuart; Jon Goltz; Chmielowski, Josef (DNR); Juanita Lovett; Judy Stanek, Julie Little; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Louisiana Cutler; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Rena Delbridge; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly, Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R, Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer; Davidson, Temple (DNR); Teresa Imm; Thor Cutler; Tim Jones; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Assmann, Aaron A; Bajsarowicz, Caroline J; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Catie Quinn; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Neusser, Heather A (DNR); Fair, Holly S (DNR); Holly Pearen; Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster; William Van Dyke Subject: NorclAq's Public Hearing Notices Docket No.'s OTH-16-031 and OTH 16-032 Attachments: Public Hearing Notice Tiger Eye-l.pdf, Public Hearing Notice Shadura-l.pdf Re: Docket No. OTH-16-031 Failure to Plug and Abandon Shadura-1 (PTD 211-014) Failure to Respond to Notice of Proposed Enforcement Action Re: Docket No. OTH-16-032 Failure to Plug and Abandon Tiger Eye Central -1 (PTD 212-102) Failure to Respond to Notice of Proposed Enforcement Action Jody J. CoCombie AOGCC SpeciaCAssistant Alaska OiCand Gas Conservation Commission 333 West 76 Avenue Anchorage, .Alaska 995o1 Office: (907) 793-1221 .fax: (907) 276-7542 CONFIDENTIALITY NOTICE. This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iody.colombie@alaska.gov. THE STATE � "A I "CA, M MA �1011 � GOVERNOR BILL WALKER Robert Warthen Senior Advisor NordAq Energy Inc. 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 December 2, 2016 CERTIFIED MAIL RETURN RECEIPT REQUESTED 7015 0640 0003 5185 5529 Re: Docket Number: OTH-16-031 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov Notice of Proposed Enforcement Action Failure to Plug and Abandon Shadura-I (PTD 211-014) Before Expiration of Owner's Rights in CIRI Lease C-061648 Dear Mr. Warthen: The Alaska Oil and Gas Conservation Commission (AOGCC) herby notifies NordAq Energy Inc. (NordAq) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)). NordAq violated 20 AAC 25.105(a) by its failure to permanently abandon the Shadura-1 exploratory well (Shadura-1) before expiration of rights in that property. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). On October 21, 2016 Cook Inlet Region, Incorporated (CIRI) advised AOGCC that CIRI oil and gas leases C-061647, C-061648 and C-061649 were terminated effective June 30, 2015. Shadura- 1 was drilled within Section 23, Township 8 North, Range 10 West, Seward Meridian. According to the CIRI plat of NordAq Leases that accompanied the Permit to Drill Application, Shadura-1 was drilled on CIRI lease C-061648. The AOGCC issued Permit to Drill No. 211-014 for the Shadura-1 exploratory well to NordAq on February 1, 2011. The Shadura-1 well was drilled in 2012 and subsequently suspended. The entire wellbore lies within CIRI lease C-061648. Shadura-1 has not been properly plugged and abandoned. NordAq has violated 20 AAC 25.105(a). Proposed Action (20 AAC 25.535(b)(3). Within ninety (90) days of receipt of this letter, NordAq shall either: Submit a Sundry Application to the AOGCC for the plugging and abandonment of Shadura-1 and properly plug and abandon Shadura-1 in accordance with AOGCC regulations; or submit a check in the amount of $ 1,200,000 which AOGCC estimates to be the cost to properly plug and abandon Shadura-1. After consideration of the criteria set forth in AS 31.05.150(g), for these violations, the AOGCC intends to impose civil penalties as follows: 1. $100,000 for the initial violation: failure to permanently abandon Shadura-1 before expiration of owner's rights in CIRI Lease C-061648. 2. $521,000 for violating the requirement to plug and abandon and clear the well site to the satisfaction of the AOGCC as per 20 AAC 25.112 and 20 AAC 25.170 (521 days at $1,000 per day). The total proposed civil penalty is $621,000. Rights and Liabilities (20 AAC 25.535(b)(4)). Within 15 days after receipt of this notification — unless the AOGCC, in its discretion, grants an extension for good cause shown — NordAq may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide NordAq an opportunity to submit documentary material and make a written or oral statement. If NordAq disagrees with the AOGCC's proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10 -day period, the proposed decision or order will become final on the 11 d, day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If NordAq does not concur in the proposed action described herein, and the AOGCC finds that NordAq has violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action or remedial work; (ii) suspension or revocation of a permit or other approval; (iii) payment under the bond required by 20 AAC 25.025; and (iv) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as NordAq received reasonable notice and opportunity to be heard with respect to the AOGCC's action. Any action described hereto or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05. Sincerely, Caty P. oerster Chair, Commissioner cc: Chantal Walsh, Director Department of Natural Resources, Division of Oil and Gas Dostal Service'" TIFIFD MAIL° RECEIF ' Domestic Mail Only For delivery information, visit our website at www.usps.corn®. U1 co r-1 Lr) M Cl O —0 Cl ra C3 N Xtra Services & Fees (check box, add tee as appropnare/ ❑ Return Receipt (hardcopy) $ ❑ Return Receipt (electronic) $ ❑ Certified Mail Restricted Delivery $ ❑ Adult Signature Required $ ❑ Adult Signature Restricted Delivery $ Postmark Here roscagn anu- Robert Warthen To Senior Advisor NordAq Energy Inc. t and Apt. No., or PO Box No. 560 E. 34th Ave., Ste. 200 --------- . ware, zrP+a® Anchorage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Robert Warthen Senior Advisor NordAq Energy Inc. 560 E. 34th Ave., Ste. 200 Anchorage, AK 99503 A. ❑ Agent ❑ Addressee ceived by (Prfnf Name) C:i{late of Delivery � n 411"ll1 V0V? •xAl,-PA D. Is delivery address different from item 1? 0 Yes If YES, enter delivery address below: ❑ No 3. Service Type ❑ Priority Mail Express@ II I IIIIII IIII III II II I III I II I I II II I I'll I I III ❑ Adult Signature ❑ Registered Mail - El Adult ailT"❑Adult Signature Restricted Delivery ❑Registered Mail Restricted LZ'Certified Mail@ Delivery 9590 9401 0057 5071 0133 90 LJ Certified Mail Restricted Delivery V Return Receipt for ❑ Collect on Delivery Merchandise ❑ Collect on Delivery Restricted Delivery El Signature Confirmation- A..:.,- rug �mhar (Transfer from service label) ❑Insured Mail ❑ Signature Confirmation 7 015 0640 0003 5185 5529 5 0)il Restricted Delivery Restricted Delivery PS Form 3811, April 2015 PSN 7530-02-000-9053 Domestic Return Receipt 2015-009961-0 A S Recording District 302 KENAI K A 11102/201511:13 AM Page i of 3 Atter rec"ft retwn to: CM* !n/et Rpov% Ina Albs Lwd d R"orarea Deparbnant 715EFhtiw"o Lsnd, Skoft &V Anch"p AK 99503 RELEASE OF OIL AND GAS LEASE C-061648 Kenai Recording District Original Recording Information• Title: Memorandum of Amendment No. 2 to Oil and Gas lease C-061648 Recording District: Kenai Serial Number: 2011-007914-0 Recording Date: 8/22/2011 WHEREAS, Cook Inlet Region, Inc. ("CIRI") as LESSOR, entered into an Oil and Gas Lease (the "Lease") with Nordaq Energy, Inc. (Nordaq) as LESSEE, effective and covering the subsurface rights in the lands described on EXHIBIT A hereto (the "Lease") and; WHEREAS, the Lease was terminated effective June 30, 2015 and it is the desire of CIRI and Nordaq that Nordaq acknowledge release of the Lease; THEREFORE, Nordaq hereby releases all rights in the Lease DATED this day of�, 2015 Norda rg , nc. r By: I Robert C. Warthen Its: President, Nordaq Energy, Inc. Page 1 of 3 STATE OF ALASKA ) ) ss. THIRD JUDICIAL DISTRICT The foregoing instrument was acknowledged before me this, day of (k4n ✓ , 2015, by Robert C. Warthen, President, Nordaq Energy, Inc. STATE OF ALASKA . NOTARY PUBLIC' Notary Pu lic in and for the State of Alaska Tanisha Gleason _' �`' My Commission Expires: -)drA My Commission Expires: June 1, 2018 Page 2 of 3 Page 2 of 3 2015-009961-0 RELEASE OF OIL AND GAS LEASE C-061648 Exhibit A — LEASED AREA Legal Description Township 8 North, Range 9 West, Seward Meridian Section 7: Surveyed, All; Section 18: Surveyed, All; Section 19: Surveyed, All; Township 8 North, Range 10 West, Seward Meridian, Alaska Section 12: Surveyed, All; Section 13: Surveyed, All; Section 14: Surveyed, All; Section 23: Surveyed, All; Section 24: Surveyed, All; Section 12: Unsurveyed, the beds of Crane Lake and Dunlin Lake; Section 13: Unsurveyed, the bed of Crane Lake; Section 23: Unsurveyed, the bed of Snipe Lake. Containing approximately 5,000.15 acres, more or less Page 3 of 3 Page 3 of 3 2015— 009961-0